COST OF LIVING ADJUSTMENTS - CIA RETIREMENT ACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP71B00364R000500220035-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 9, 2016
• Document Release Date: August 21, 2000
• Sequence Number: 35
• Publication Date: April 22, 1966
• Content Type: MFR

Approved For Release 2000/09/14: CIA-RDP71 B00364R000500220035-1
MEMORANDUM FOR THE RECORD
22 April 1966
SUBJECT: Cost of Living Adjustments - CIA Retirement Act
1. An opportunity to liberalize the Agency's pending legislation
on cost-of-living adjustments has resulted from the introduction of
S. 324 7, a bill to amend the Foreign Service R--t rerz ent Fund. With
Administration backing, this bill proposes to apply to Foreign Retire-
ment Act retirees the recently enacted 6.1% annuity increase enacted
for the benefit of Civil Service retirees (Daniels bill), but on a pro-
spective basis.
2. While the Agency's pending legislation is identical in language
to the Daniels bill, its application in the first instance to CIA Retirement
Act retirees is substantially different. This is because the Daniels bill
was slightly prospective and gave those eligible for voluntary retirement
an opportunity to retire and to benefit from the first and substantial 6.1%
increase authorized by it. Under the Agency's pending legislation only
those who retired under the CIA Retirement Act on or before 30 December
1965 would receive the 6.1% increase. Further, those who did retire on
or before that date, had no assurance that Congress would pass similar
legislation for their benefit.
3. Under these circumstances it appears that it is now timely
to seek an Agency determination on whether our pending cost-of-living
legislation should be brought into line with the Administration backed
prospective dates set forth in S. 3247. This determination also involves
the tactical aspect as to whether, this, adjustment should be accomplished
formally through the Bureau of the Budget or informally by committee action.
Office o Legislative Counsel
Attachment: Introduction of S. 3247 (Congressional Record)
OGC
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C: LLM:acw (22 April 1966)
Distribution:
Original - Subject, wj att
1 - Chrono
CIA Retirement Act
Approved For Release 2000/09/14: CIA-RDP71 B00364R000500220035-1
 ,Approved For Release 2000/09/14: CIA-RDP71B00364R0. 00500220035-1
8186 CONGRESSIONAL RECORD - SENATE April 20, 1966
By Mr. PROUTY: submit, for appropriate reference, a con- Relations, and ordered to be printed. in
S. 3246. A bill for the relief of Massoud current resolution authorizing the.print- the RECORD, as follows:
Philip Sissi; to the Committee on the Judi- frig of 5,000 additional copies of its hear- S. 3247
ciary. ings entitled "Twentieth Anniversary of Be it enacted by the Senate and House of
B7 A Mr. bill llto provide ert request) : the Employment Act of 1946 an Economic Representatives of the United States of ain S. 3nui a prm he For increases Symposium." America in Congress assembled, That (a)
in annuities payable and Disability fthe Foreign Foreign Fund, Sxv- and The VICE PRESIDENT. The concur- section 804(b) of the Foreign Service Act of
1946, as amended (22 U.S.C. 1064 (b) is
ice Retirement
for other purposes; to the Committee on rent resolution will be received and ap- amended by adding the following: ""
For Relations. propriately referred. "4. The term 'price index' shall mean the
(See See the remarks of Mr. FULBRIGHT when The concurrent resolution (S. Con. Res. Consumer Price Index (all items-United
he introduced the above bill, which appear 86) was referred to the Committee on States city average) published monthly by
under a separate heading.) Rules and Administration, as follows: the Bureau of Labor Statistics. The teen
Mr. RIl to amend section Cm-T. RES. 86 'base month' shall mean the month for which
By
5. 3e Housing nto am relating 4 to th the price index showed a per centum rise
concurring ring ), (the That tuse of there Rob be e forming the basis for a cost-of-living in-
resetatintatlve s by the Senate
of the definition of educational ftof 1950 in Institution; ; to to the the Resolved
definition
Committee on Banking and Currency. printed for the use of the Joint Economic crease." (b) Section 8II2 of such Act, as amended
(See the remarks of Mr. RIBIco when he Committee five thousand additional copies of (22 is amended to read as follows:
682 (a) Subject to the provisions y follows:
Introduced the above bill, which appear un- Its hearings of the Eighty-ninth Congress, 2 U.S.C.-),
der a separate heading.) second session, entitled "Twentieth Anniver- . 88 ((a) each annuity 1966 shall pay s increased t 1,
FANNIN, Mr. KUCI3EL, and Mr. nomic Symposium." by 6.1 per centum. Each annuity payable
MURPssY) : from the Fund (other than the immediate
S. 3249. A bill to consent to the interstate annuity of an annuitant's survivor or of a
compact defining the boundary between the RESOLUTION child under section 821(c)) which has a of y States Anzona and California; to the INVESTIGATION OF THE TRADING commencing date after April 1, 1966 and not
Committee the Judiciary. WITH THE ENEMY ACT later than the first day of the sixth month
B
By Mr. . MAGNUSON (by request) : which begins after the date of enactment of
S. 3250. A b to establish minimum re is- Mr. DIRKSEN, from the Committee on this amendment shall be increased by 6.1 per
erns for passen l nger vessels s and to require d pis- the Judiciary, reported an original reso- centum.
closure of construction details on passenger lution (S. Res. 251) to investigate the "(b) Those annuities increased by the
vessels; and oreign Serv-
ice-of-Annuityliving Adj provisions ustment of Act the F F 1065 shall
S. 3251. A bill to repeal the laws author- Trading With The Enemy Act, which was cost
lung limitation of shipowners' liability for referred to the Committee on Rules and be adjusted to reflect the percentage in-
personal injury or death, to require evidence Administration. crease under paragraph (a) had it been ap-
of adequate financial responsibility to pay (See the above resolution printed in plied to the annuity on April 1, 1906 or its
judgments for personal Injury or death, or full when reported by Mr. DIRKSEN, subsequent commencing date.
to repay fares in the event of nonperform- " Each month after April 1966 the Sec-:
ante of voyages, and for other purposes; to which appears under the heading "Re- retary shall determine the per centum
the committee on Commerce, ports of Committees.") change in the price index. Effective the first
(See the remarks of Mr. M N when day of the third mouth which begins after
he introduced the above bills, , which appear the price index shall have equaled a rise of
under a separate heading.) INCREASES IN ANNUITIES FROM at least 3 per centum for three consecutive
By Mr. WILLIAMS of New Jersey: FOREIGN SERVICE RETIREMENT months over the price index for the base
S. 3252. A bill for for the relief of Micaela month, each annuity payable from the Fund
Jud diciciarLlagostera; to the Committee on the AND DISABILITY FUND which has a commencing date not later than
Judiciary. Mr. FULBRIGHT. Mr. President, by such effective date shall be increased by the
By Mr. BREWSTER: amend request, I introduce for appropriate ref- per centum rise in the price index (calcu-
5er2l Employees' section 33 of the lated on the highest level of the price index
to provide fo de for the he Co establishment t of Act a Fed- In erence annuities an a tiesnuities payable yable from om the Foreign or ign during the three consecutive months) ad-
to
coal employee accident prevention program; Service Retirement and Disability Fund, justed to the nearest one-tenth of 1 per
centum. The month of July 1965 shall be
to the Committee on Labor and Public and for other purposes. the base month for determining the per
Welfare. The proposed legislation has been re- contum change in the price index until the
(See the remarks of Mr. BREWSTER when he next succeeding increase occurs.
Introduced the above bill, which appear un- quested by the Assistant Secretary of "(d) Eligibility for an annuity increase
der a separate heading.) State for Congressional Relations for under this section shall be governed by the
By Mr. TYDINGS: the Secretary of State, and I am intro- commencing date of each annuity payable
S. 3254. A bill to amend sections 2072 and during it in order that there may be a from the Fund as of the effective date of an
2112 of title 28, United States Code, with specific bill to which Members of the increase, except as follows:
respect to the scope of the Federal Rules of Senate and the public may direct their "(1) Effective from its commencing date,
Civil Procedure and to repeal inconsistent attention and comments. an annuity payable from the Fund to an
legislation; to the Committee on the Judi- annuitant's survivor (other than a child
ciary. I reserve my right to support or op- under section 821(c)) which annuity com-
(See the remarks of Mr. TYDINCS when he pose this bill, as Well as any suggested menses after April 1, 1966, shall be increased
Introduced the above bill, which appear un amendments to it, when the matter is by the total per centum increase the an-
der a separate heading.) considered by the Committee on Foreign nuitant was receiving under this section
By Mr. JAVITS (for himself and Mr. Relatitons. at death; or if death occurred between April
PROUTY) : I ask unanimous consent that the bill 1, 1966? and date of enactment, the per
fort a establish merit of an Office of D putt' may be printed in the RECORD at this centum increase the annuitant would have
received;
Superintendent of the Arts within the Rec- point, together with the letter from the (2) For purposes of computing an annuity
reation Board for the District of Columbia Assistant Secretary of State for Con- which commences after April 1, 1966, to a
to develop and conduct a program of the _vressional Relations to the Vice Presi- child under section 821(c), the items $600,
arts for the District of Columbia; to the dent, in regard to it, as well as with the $720, $1,800, and $2,160 appearing in sec-
Committee on the District of Columbia. t_c~:_,u.._b~, tenon analysis and the ex- tion 821(c) shall be increased by the total
(Soo the remarks of Mr. JAVTTS when he in- ~::ltioll of the bill. per centum increase allowed and in force
appear the above joint resolution, which I3, under this section, and in case of a de-
appear under a separate heading.) The VICE Yr:.ESIDENT. The bill will ceased annuitant, the items 40 per centum
be received and appropriately referred; and 50 per centum appearing in section
and, without objection, the bill, letter, 821(c) (1) and (2) shall be. increased by
CONCURRENT RESOLUTION section-by-section analysis, and expla- the total per centum increase allowed and
PRINTING OF ADDITIONAL COPIES nation will be printed in the RECORD. In force under this section to the annuitant
The bill (S. 3247) to provide certain at death.
OF HEARINGS ENTITLED "TWEN- increases in annuities payable from the "(e) No increase in annuity provided by
TIETH ANNIVERSARY OF THE EM- this section shall be computed on any addi-
PLOYMENT ACT OF 1946 AN ECO- foreign service retirement and disa- tional annuity purchased at retirement by
bility fund, and for other purposes in- voluntary contributions.
APPrOM61RIMbse 2000/09/1#olieIA-RDP7T~ '4 isA5 22(~035 e monthly installment of annuity
Mr. DOUGLAS. Mr. President, on be- was received, read wise by tit e, e after adj stment under this section shall
half of the Joint Economic Committee, I ferred to the Committee on Foreign be fixed at the nearest dollar, except that
 . Approved For Relea g 2000/09/14: CIA-RDP71 B00364ROQ4500?r2003S-1_
April 20, 1966 CONGRESSIONAL RECORD - SENATE
8187.
such installment shall after adjustment re- if the annuitant dies between April 1, 1966, AMENDMENT OF SECTION 404(b)
fleet an increase of at least $1." and date of enactment, the survivor would OF HOUSING ACT OF 1950, RELAT-
section-by-section analy- receive 0.1 percent in lieu of 4.3 percent, and ING TO THE DEFINITION OF ED
t
l
l
tt
h
percen
er,
e
T
e
in the case of children the tota
sis, and explanation presented by Mr. increase allowed and in force under this
FULBRIGHT, are as follows: section will be added to annuities which
DEPARTMENT OF STATE, begin after April 1, 1966, whether the child's
Washington. annuity results from a death in service ease,
The VICE PRESIDENT,
U.S. Senate.
DEAR MR. VICE PRESIDENT: Enclosed is draft
legislation to provide cost-of-living increases
in annuities payable from the Foreign Serv-
ice Retirement and Disability Fund that will
match, as nearly as possible, benefits recently
granted civil service annuitants.
A recommendation to this end made by
the Cabinet Committee on Federal Staff Re-
tirement Systems has been endorsed by the.
President.
It was intended that Public Law 89-308,
the Foreign Service Annuity Adjustment Act
of 1005, provide P. formula for cost-of-living
increases to Foreign Service annuitants iden-
tical with those authorized for civil service
annuitants, however, Public Law 80-308
was in the process of action by the Sonata
and House committees before Public Law 89-
205 containing an improved cost-of-living
formula for civil service annuitants was
drafted and ultimately approved. As a con-
sequence the improved formula applicable
to civil service annuitants is not applicable
to Foreign Service annuitants.
It is hoped that this legislation may be
given consideration during the 2d session of
the 89th Congress and that it may receive
the support of the Senate Foreign Relations
and the House Foreign Affairs Committees.
The Department has been informed by the
Bureau of the Budget that there would be
no objection, from the standpoint of the
administration's program, to the presenta-
tion of this draft legislation to the Congress
for its consideration.
Sincerely yours,
For the Secretary of State:
DOUGLAS MACARTHUR IT,
Assistant Secretary for Congressional
Relations.
SECTION-BY-SECTION ANALYSIS
Section 1(a) redefines the Consumer Price
Index to mean the monthly price average
instead of the average over a full calendar
year. It also. defines a new term "base
month" to mean the month referred to for
determining an increase In annuities after
the first increase granted by this act.
Section 1(b) provides that on April 1, 1966,
each annuity payable from the fund on that
date shall be increased by 6.1 percent,
and further that each annuity which begins
after April 1, 1966, and not later than the
first day of the sixth month after enactment
will also be increased by the same percentage.
Any cost-of-living increase which may be
effected under the provisions of the Foreign
Service Annuity Adjustment Act of 1965 will
be absorbed by the 6.1-percent increase.
Under existing law, a percentage increase is
due April 1, 1966, of 4.3 and if this proposed
amendment is not enacted before that date,
such increase will be adjusted to 6.1, but
will not be added to the 4.3-percent increase.
Section 1(b) guarantees a cost-of-living
increase whenever the price index shall have
equaled a rise of at least 3 percent for 3 con-
secutive months over the price Index for
the base month. The base month, as a take-
off point, is established as July 1965, from
which to determine the next increase after
April 1, 1966, to coincide with the formula
established by Public Law 89-205 for the
cost-of-living increases now applicable to
civil service annuities.
Provision is made for the passing on to
survivors of annuitants the total percent
or the death of an annuitant.
Section 1(b) also prohibits inclusion of.
annuity purchase by voluntary contributions
from the annuity upon which the increases
are calculated.
The adjusted monthly annuity rate would
be fixed at the nearest dollar, but the
monthly rate would be increased by at least
$1. The last clause would apply in a case
involving.a number of children. One family
of 10 children annuitants now receives $180
annually for each child. If an increase is
only 3 percent, this would be only 45 cents
per month except for this proviso, which
would make it $1 per month.
DRAFT BILL To INCREASE FOREIGN SERVICE
ANNUITIES
PURPOSE
1. To authorize a 6.1 percent annuity in-
crease effective April 1, 1966, to all annuities
payable as of that date.
2. To extend this 6.1 percent Increase to all
annuities commencing after April 1, 1066,
and ntd, la'Ler than the first day of the sixth
month which begins after enactment of this
amendment.
3. To substitute 6.1 percent Increase effec-
tive April 1, 1966, for the increase of 4.3 per-
cent duo April 1, 1066, under exlstin~ law.
4. To provide future cost-of-living annuity
increases based on the same formula now
applicable to civil service annuities. _
EXPLANATION
Under existing law, section 9 of Public Law
89-308, Foreign Service annuities which
commenced prior to January 2, 1965, will be
increased on April 1, 1966, by 4.3 percent.
Certain survivor annuities which commenced
after January 2, 1965, will also be Increased
by this percentage.
Similar law, applicable to civil service an-
nuities, was enacted in 1962 but never be-
came operative since it was superseded in
1965. The proposed amendment seeks to
adopt the same type of formula for Foreign
Service annuities, as 1s now applicable to
civil service annuities, and to grant the same
percentage increase effective April 1, 1966, as
was granted to certain civil service annui-
tants on December 1, 1965.
Those annuities which under existing law
will be increased on April 1, 1906, would be
adjusted to reflect the 6.1 percent increase in
lieu of the 4.3 increase. In other words, the
new percentage rate of 6.1 would be substi-
tuted for, but not added to, the 4.3 percent.
In order that persons desiring to retire in
the near future have the advantage of the 6.1
Increase, it is proposed to extend it to those
annuities which commence not later than
the first day of the sixth month which begins
after enactment. Thus, if the bill should be
enacted during the month of June 1966,
those annuities which commence on or be-
fore December 1, 1966, would be increased,
This period is proposed because of employees
being located abroad and the time necessary
to plan ahead.
The month of July 1965 is designated as
the base month for the next Increase after
April 1, 1966, to coincide with the base month
indicated in Public Law 89-205, which au-
thorized a 8.1 percent increase to certain
civil service annuitants, The figure of 6.1
percent is derived from the price index
change from 1962 to July 1965 of 4.6 percent,
plus an additional 1.5 percent.
UCATIONAL INSTITUTION
Mr. RIBICOFF. Mr. President, I in-
troduce for appropriate reference, a bill.
to make clear that State agencies and.
authorities established to provide or fi-
nance housing or other educational fa-
cilities for public or private institutions
of higher education may borrow under
the college housing loan program for
private as well as public institutions.
Section 404(b) of the Housing Act of
1950 defines the term "educational in-
stitution" and thereby determines what
institutions are qualified to borrow funds
imder the college housing loan program.
The first clause of this subsection makes
qualified borrowers of substantially all
private and public institutions of higher
education.
The second clause makes qualified bor-
rowers of private and public hospitals
operating a school of nursing.
The third clause makes qualified bor-
rowers of nonprofit corporations estab-
lished to provide housing or other edu-
cational facilities for any institution,
private or public, which is included in
the first clause,
The fourth clause makes qualified bor-
rowers of State agencies and authori-
ties established to provide or finance
housing or other educational facilities
for any public institution which is in-
eluded in clause 1. Herein lies the
trouble. This Is the category of quali-
fied borrowers which may be restricted
to public institutions of higher educa-
tion and does not include private insti-
tutions,
An examination of the legislative his-
tory of section 404(b) makes clear that
the inclusion of the word "public" was
not designed to prevent State authori-
ties from borrowing under the college
housing loan program for construction
of facilities of private institutions. The
use of the word was merely descriptive.
It reflected the fact that the State au-
thorities in existance in 1957 were en-
gaged in providing or financing facilities
only ' for public institutions-primarily
State university systems. The word
"public" was not intended to disqualify
an authority established to provide or
finance facilities for private institutions
from borrowing on behalf of these insti-
tutions under the college housing loan
program.
Now, the State of Connecticut Edu-
bational Facilities Authority, established
in. 1965, is authorized to provide and
finance facilities for all institutions of
higher education in Connecticut, both
private and public. Similar authorities
exist in New York and Vermont, There-
fore, it Is important that the eligibility
of these authorities as qualified borrow-
ers under the college housing loan pro-
gram be clarified. Although private
institutions may qualify as borrowers di-
rectly, in many cases, it will be necessary
to obtain part of the financing for their
construction from the authority. It will
be more efficient, less costly, and simpler
the needed funds in
being reo pproveeior'eIease 1odo164/ "'v1CeG?Y - Z6P71 B00364R00S5nbVf0 69-1