RETIREMENT TESTIMONY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87M00539R002704450005-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 16
• Document Creation Date: December 22, 2016
• Document Release Date: August 12, 2009
• Sequence Number: 5
• Publication Date: April 18, 1985
• Content Type: MEMO

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ROUTING AND RECORD SHEET
SUBJECT: (Optional)
FROM:
EXTENSION
NO,
Robert W. Magee
Director of Personnel
DATE APR 18 1985
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building)
DATE
OFFICER'S
COMMENTS (Number each comment to show from whom
STAT
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FORWARDED
INITIALS
to whom. Draw a line across column after each comment.)
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FORM 61 O USE PREVIOUS
I-79 EDITIONS
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APR 18 1985
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
Executive Director
Deputy Director for Administration
Director, Office of Legislative Liaison
FROM: Robert W. Magee
Director of Personnel
SUBJECT: , Retirement Testimony
1. The Agency has been invited to testify before the Ford Committee on
25 April on the retirement issue. It is my understanding from OLL that
contrary to the invitation letter from Chairman Ford we need not circulate
in advance copies of the testimony.
2. Attached is a suggested draft for the Agency's statement which I
think includes no classified data. Also attached are a series of answers
to questions we anticipate may be asked. Finally, Chairman Ford's
invitation letter is also attached.
3. We will welcome any comments on thq proposed testimony.
Robert W. ee
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Mr. Chairman:
Thank you for the opportunity to appear before this Committee to discuss
the retirement system of the Central Intelligence Agency. It is an issue
which is vital to the continued health of the Nation's professional
intelligence service.
The United States is a world power. Developments anywhere in the world,
and indeed now in outer space, can affect the national security of the
United States. It is the mission of Central Intelligence to understand
these developments and provide our Nation's leaders with the advance
knowledge so critical to successful foreign policy. The intelligence
responsibility is continually expanding. In its early days Central
Intelligence dealt primarily with the threat to the United.States from our
major antagonists in the world. While this threat has remained our
principal concern, new issues constantly arise which demand intelligence
attention: technology transfer, economic and financial stability of foreign
governments, world petroleum production, narcotics, terrorism, the explosion
of developments in the scientific and technological fields are just some of
the issues which now require daily intelligence vigilance. The United
States is indeed a world power and its citizens expect this Nation to have a
world class intelligence service. I am pleased to be able to say to you
today, Mr. Chairman, that this Nation does have a world class intelligence
service and that the leaders of this Nation are the best informed
individuals in the world.
Recognizing that CIA's job is different from the rest of the Government,
Congress historically has supported Agency efforts to recruit and retain
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career-oriented employees dedicated to the mission of this Agency and
responsive to the demands security must impose on their professional and
personal lives. Such a career service now exists. Attrition rates among
the lowest in the Government attest to a healthy career organization. The
creation of this work force did not happen overnight or by accident. It
exists because Congress and a series of Administrations were sensitive to
the needs of people who spend their professional lives in the intelligence
shadows.
In recognition of the unique mission of the Central Intelligence Agency,
Congress has provided the Director of Central Intelligence with special
authorities with respect to personnel. These authorities have no
counterpart'in the Federal Government. CIA is an excepted Government
Agency. Consequently, CIA employees are statutorily excluded from tenure
and from the protection and benefits derived by status under Civil Service
laws, rules and regulations. This is as it must be since the Director must
have full and final authority to say when and where an employee will serve,
at what duties, and for how long. '
To understand the role played by retirement in the CIA personnel system,
it is first necessary to have an appreciation of the process which recruits
and retains a CIA employee, a process which in some ways is similar to other
organizations but which in the aggregate is unique. CIA has the most
rigorous pre-employment screening process in the United States. Nowhere
else is each applicant subject to such scrutiny.
A typical applicant first takes an eight-hour Agency-unique exam
developed by the Office of Strategic Services in World War II and modified
through the years by some of the best minds in the fields of education and
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psychology. This test provides insights into an applicant's intellectual
capability, temperament, work attitudes, vocational interest, writing
ability and psychological profile. Those who do well on the test, who have
demonstrated high achievement either in their academic or professional
careers, and who have favorable personal interviews are placed into the
medical/security clearance procedure.
Deployment by the Central Intelligence Agency carries with it
extraordinary health risks. These risks are inherent both in geographic and
socio-political environments to which employees are liable for assignment.
The stresses involved in highly classified work and overseas environments
require us to have an extraordinarily detailed clinical and psychiatric
screening for all applicants. We require not only that applicants
themselves pass this medical exam, but for those in the overseas career
track, dependents must be similarly cleared.
Our security/suitability screening is the most detailed in the United
States Government. Every employee, from the highest to the lowest, is
investigated by our own security officers in a process that covers the last
15 years of an applicant's life. Again, dependent factors can be
disqualifying for the applicant. When all of the data are accumulated, we
have a very thorough understanding of the applicant's entire life style.
These data are validated during a polygraph interview given all applicants.
At the end of a three-year trial period, the medical/security process is
repeated. It is gratifying to note that 99% of our employees successfully
complete this trial period.
It is perhaps not surprising that we must consider large numbers of
applicants to find the precious few who meet these demanding standards.
Despite enormous difficulties, we have attracted analysts, attorneys,
3
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doctors, case officers, engineers and scientists of the highest caliber.
Meeting our recruitment requirements, however, remains one of our principal
priorities. It is a never-ending struggle which can only get more difficult
as we compete in the marketplace with major U.S. industries for the best and
the brightest.
Entering on duty, the CIA employee becomes part of a world which is
generally isolated, nomadic, idealistic, secretive and increasingly
dangerous. In addition to those personal constraints common to the few in
Government who hold clearances at the CIA level, our employees must endure
even more severe conditions. Every five years, they are subject to a full
security reinvestigation. They have no job tenure. They may not travel
abroad, publish articles, marry a non-U.S. citizen, or attend international
conferences without advance Agency approval. They can receive no public
recognition for their professional achievements but, on the contrary, must
suffer in silence innumerable calumnies.
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Most will agree that in these tense times our Nation's first line in
defense is in intelligence. Recognizing this, in the past four years the
government has improved immeasurably the intelligence capabilities of this
Government. It would be extremely unwise to threaten this achievement by
severely reducing our ability to recruit and retain the caliber of
individuals we have historically attracted. The Director of Central
Intelligence must have the authority to move the right people into the right
places at the right time. This requires a core of personnel who are
prepared to go anywhere in the world as the national interest requires.
Ultimately, it also means that we must move people into retirement so that
we can prepare the next generation of intelligence officials. The mandatory
retirement provision in CIARDS is an important management tool which has
worked well and which should be retained in any new legislation.
We find, for example, that after age 50 nearly 50 percent of our
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employees are not eligible for full service medical clearances. Were we to
include those who cannot travel due to family medical constraints, the
figure would be even more stark. In addition to the purely clinical health
hazards involved in worldwide service, Agency personnel are confronted with
psychological stresses which over the long haul extract a health toll just
as great. In addition to the subtle factors of cultural translocation and
family disruption, there are not infrequently highly traumatic events.
Scores of employees have been in foreign prisons, sometimes for years, or
otherwise harassed when their Agency affiliation became known. Employees
and their families confront the more diffuse.crises associated with civil
disorder, terrorism, and other local circumstances which are not even
remotely comparable to life in the typical American suburban setting in
which our employees otherwise would have remained.
One must also appreciate what the current world wide-epidemic of
terrorism means in trying to manage an organization whose employees must
daily confront this reality and who, because of their Agency affiliation,
are particularly vulnerable. Since 1968, there have been over 8,500
terrorist incidents worldwide, over 3,500 of which were targetted against
Americans. Regrettably, the end to this scourge is not yet in sight.
Indeed, it is one of this Agency's most pressing responsibilities to help
negate this menace. To do it we need a young and vigorous work force
medically and psychologically able to handle the stress and sufficiently
courageous to accept the obvious dangers involved.
Several security considerations unique to our profession buttress
further our need for a flow-through personnel system allowing for early
retirement. Prolonged service in operational environments increases the
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risk of identification of our operatives to hostile intelligence, internal
security, or terrorist organizations. Anonymity is a critical ingredient
for a successful intelligence officer. Personal security inevitably erodes
with time and new operatives must constantly be put into the system. To
maintain balance in the personnel structure, older, more exposed individuals
must be allowed to retire.
Ironically, some of the retirement proposals would cause our older
employees who should leave, to stay, and our younger employees, who should
stay, to leave. Our officer corps is recruited generally from the recent
college graduate pool, roughly the 20 to 25 year-old age group. While it is
to the Government's disadvantage to keep these people for 40 years for the
reasons previously stated, it is equally disadvantageous from a security
standpoint to permit them to leave our service in less than 20 to 30 years
without an adequate retirement. Agency employees have access to highly
classified information from the beginning of their employment. We have long
recognized the inherent security risks to national security of a short-term,
transient work force. Given the extraordinary sensitivity of our mission,
we must have a career track which retains staff for a full career but
promises them the early opportunity to retire with financial security.
Therefore, continuation of eligibility for retirement with full benefits at
age 50 for employees in CIARDS is essential.
Employment at CIA means work overseas, whether qualified for CIARDS or
-- Only bf CIA employees currently serving overseas have qualified for
CIARDS; the remaining a are covered under the Civil Service Retirement
System (CSRS). Unlike members of the Foreign Service, all of whom are
eligible for early retirement benefits from the moment they begin their
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careers, CIA employees must earn their way into CIARDS by serving five
years overseas. Given our policy of rotating people to and from the
field, it takes time for employees to earn the five year credit.
Obviously some never do, which explains why, in this overseas oriented
organization, only a small percentage of the staff is in CIARDS.
-- Nearly of the officers in our clandestine service presently
have not qualified for CIARDS and are under CSRS.
-- CIA has thousands of employees who have served abroad but have not yet
qualified for CIARDS.
-- Nearly of Agency employees bear the lifelong burden of cover; yet, a
majority of those under cover are not qualified for CIARDS.
Overseas service is becoming more dangerous for all Americans, but
especially for employees of CIA. The mortality figures for our people are
grim.
-- Since the early 50s, of the nearlc::]Agency employees who have died
serving abroad, less than were CIARDS qualified.
-- We have 50 gold stars in our entry foyer honoring our colleagues who
died from hostile action or while participating in highly dangerous
Agency activities. Onl ere CIARDS qualified.
-- One of the two most senior CIA officers slain in hostile action overseas
was the director of a headquarters analytical office.
CIA is a single and indivisible Agency with a single culture and ethic.
At present there is an esprit de corps among all our employees, an
Agency-wide team approach, a general state of mind that timeliness is
critical, accuracy is imperative and absorption with the task at hand takes
priority over personal distractions. Advancing years often bring about a
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lessening of work vigor and enthusiasm. The larger the proportion of older
employees, the greater the debilitating effect on the tenor of the Agency.
A healthy career organization now exists. Fundamental to this health has
been the successful policy which recognizes burnout as a reality and allows
our employees to retire early and with dignity.
The special overseas mission of CIA justifies continuation of
eligibility for retirement with full benefits at age 50 for employees in
CIARDS. This is as it should be; however, the special requirements and
mission of CIA involve all of our employees in a number of ways unique in
the Government. This legislatively mandated special status for CIA impacts
on all our people and is the basis for a personnel system different from any
other agency--from recruitment to retirement. Any changes in the current
retirement systems will have to be very carefully considered to ensure that
potential repercussions are fully understood. We are confident that working
in close consultation with our Oversight Committeeq we can achieve our
mutual goals.
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POTENTIAL QUESTIONS FROM
HOUSE POST OFFICE AND CIVIL SERVICE COMMITTEE
. AT 25 APRIL HEARING
Question:
How many civilian employees are in your organization, and
how many are covered by Social Security?
Answer:
Although we are getting into some areas which are
classified, I can say that something less than 10% of our
population is now under Social Security.
Question:
What are you advising the new hires and has there been any
impact on your recruitment effort?
Answer:
We are generally advising new hires that while their
retirement system is as yet undefined, every effort is
being made to provide them with a system which will provide
an adequate retirement benefit. We don't have any hard
data to say specifically that employees are turning us down
because of this issue. However, we do get a lot of
questions about what is happening on retirement with
expression of concern. It is definitely an issue of high
interest to prospective employees.
Question:
Has the retirement issue had any impact on morale within
the Agency?
Employees read in the newspaper about proposed retirement
changes and are very much concerned about what will
ultimately take place. Their anxiety level is very high
and there have been many expressions that if changes are
made they will leave. Most feel there is a social contract
and obligation for the government to provide the benefits
which influenced their decision to come to work for the
government. They feel changes would be a breach of that
contract. There is a feeling of general uncertainty that
if changes are made now, will there be more the next year
and the year after that and so on.
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POTENTIAL QUESTIONS FROM
HOUSE POST OFFICE AND CIVIL SERVICE COMMITTEE
AT 25 APRIL HEARING
Question:
What has been your recent experience with Voluntary
Retirements? If it has increased, is this because of fears
of changes to the Retirement Systems?
Voluntary Retirements have been higher. While not all
retirements would be attributable to the current situation,
the uncertainty over pending changes is causing decisions
to retire which employees otherwise would not make. This
is despite our efforts to explain grandfachering provisions.
Question:
How should employees under special categories (law
enforcement, fire fighters, air traffic controllers, and
the foreign service) be treated under the new supplemental
plan?
Response:
The special categories cited are provided with special
retirement provisions and coverage based upon Congressional
recognition of the special nature of the missions and
functions of the organizations involved and circumstances
of employee service in these types of special activities.
Supplemental plans must provide the same special provisions
for these categories as well as for the Agency.
The CIA's mission imposes unique demands and employment
circumstances on all Agency employees, liable for service
anywhere in the world as Agency requirements dictate. In
recognition of these conditions and the work force
management needs of the Agency, the CIA needs special
provisions in future supplemental retirement system
coverages specifically tailored to our future CIARDS
employees and CSRS-type personnel.
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POTENTIAL QUESTIONS FROM
HOUSE POST. OFFICE AND CIVIL SERVICE COMMITTEE
AT 25 APRIL HEARING
Question:
Should current age and service requirements be continued
for the Agency's special system?
Response:
Yes
Question:
If early retirement is continued should we somehow
compensate early retirees for the fact that Social Security
benefits will not begin until age 62?
Response:
Yes. Early retirement must be accompanied by an adequate
annuity to sustain such retirements. If benefit levels are
to be maintained, a supplement must be provided until
Social Security benefits become available.
Question:
How much, if any, of the Social Security tilt should be
offset by the new supplemental plan?
Response:
There are certain social objectives associated with Social
Security and we would defer to Congress' judgment on the
merits of applying this to the government at large. From
the Agency's standpoint, some offset may be required to
achieve desired retirement benefit levels.
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POTENTIAL QUESTIONS FROM
HOUSE POST. OFFICE AND CIVIL SERVICE COMMITTEE
AT 25 APRIL HEARING
Question:
What should be the vesting requirement under the new
supplemental plan?
Response:
The current 5 year vesting has proven to be sufficient to
influence employees to stay on-board with CIA for the
desired full career needed.
The portability features of Social Security and defined
contribution plans would encourage greater turnover. A
high turnover rate creates security problems through
greater exposure to classified information to a larger
number of people and would put extreme pressure on our
ability to recruit, train, and maintain needed expertise in
the intelligence profession.
Question:
What should be the normal cost for the supplemental system?
Response:
In order to recruit and maintain the type and quality of
both the CIA overseas and domestic employee cadres required
to effectively fulfill the Agency's unique intelligence
mission, CIA's current retirement systems have and must
continue to serve as critical management cools in
maintaining the characteristics of the Agency's total work
force.
The cost of the new coverage therefore should be based on
the cost flowing from the provisions required to maintain
the full effectiveness of the system in serving our
organizational needs.
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POTENTIAL QUESTIONS FROM
HOUSE POST OFFICE AND CIVIL SERVICE COMMITTEE
. AT 25 APRIL HEARING
EMPLOYEE CONTRIBUTIONS
Question:
Should employees under the new supplemental plan be
required to pay contributions, and, if so, what level of
contribution should be required?
Response:
We support a supplemental plan with an annuity base
established on the defined benefit concept with essentially
the same early retirement eligibility and benefit
provisions now in the current systems. We believe its
important and equitable that new employees contribute to
the retirement plan. The aggregate contributions to Social
Security and the retirement plan should equate to the
amounts contributed by employees covered by the current
systems.
Question:
If the supplemental system is fully funded, should the
funding come from Agency appropriations or from the
Treasury?
Response:
The present financing system which blends an organization's
appropriations to cover specific costs and Treasury funds
for others appears reasonable and we have no
recommendations for changing that system.
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