NOTE TO JSW FROM(Sanitized)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000700120036-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 16, 2016
• Document Release Date: June 1, 2005
• Sequence Number: 36
• Publication Date: February 15, 1967
• Content Type: NOTES

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15 February 1967
1. Attached deals with the cost-of-living adjustments of annuity
proposal.
2. There are three separate papers. The first one analyses the
increases granted under the so-called Daniels Bill and sets forth the
specific increases which to date are granted to the various classes
of retirees and survivors in which we are interested.
3. The second analysis deals with the specific increases which
to date are granted to the various classes of retirees and survivors
in which we are interested under both the so-called Daniels Bill and
P.L. 87-793 which earlier provided a 2 percent and a 1 percent
annuity increase for 1965 and 1966 retirees respectively.
4. The third is the legislative proposal which would provide for
CIA Retirement System retirees and survivors as of 1 January 1967
the full increases in force and in effect had retirement been effected
under the Civil Service Act rather than the CIA Retirement Act.
The proposal also puts the CIA Retirement System in full phase with
the Civil Service Retirement System.
5. I would like to discuss this with you at your convenience.
STAT
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INSERT FOR PROPOSED COST-OF-LIVING ADJUSTMENT AMENDMENT
This insert is necessary to offset annuity increases payable
1 April 1967 under existing law which may become effective prior to
enactment of the proposed cost-of-living adjustment amendment.
The following subsection should be inserted as Subsection 291(a)(2)
and the present 291(a)(2) will become 291(a)(3).
"SEC. 291. (a)...
(1) ...
(2) Those annuities increased by the cost-of-living
provisions of the Central Intelligence Agency Retirement
Act of 1964 for Certain Employees prior to the enactment
of this amendment shall be adjusted to reflect the percentage
increase under subsection (1)."
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CIVIL SERVICE RETIREMENT ACT
ANALYSIS OF INCREASES GRANTED UNDER P. L. 87-793 and P.L. 89-205
(Participants in the CIA retirement system were first designated in
April 1965. Thus this analysis deals with increases accruing to
contemporary retirees and survivors under CSRA.)
I. Existing and Survivor Annuities
Section 1101 of P.L. 87-793 provides as follows:
"(b) The annuity of each person who receives or is entitled to receive
an annuity from the civil service retirement and disability fund com-
mencing during the period which begins on the day following the
effective date of this section and ends five years after such date,
shall be increased in accordance with the following table:
"If the annuity commences between--
The annuity shall be
increased by--
January 1, 1965,
and December 31,
1965
--
2 per centum
January 1, 1966,
and December 31,
1966
--
1 per centum
"(c) In lieu of any other increase provided by this section, the annuity
of a survivor of a retired employee or Member of Congress who received
an increase under this section shall be increased by a percentage equal
to the percentage by which the annuity of such employee or Member was
so increased. "
1
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II. Summary
(a) Annuities Commencing on or between 1 January 1965 and 31 Dec-
ember 1965. Annuities commencing on or between 1 January 1965
and 31 December 1965 were increased by 2 percent under P.L. 87-793.
However, such annuities have also been subjected to two further
increases under P.L. 89-205 of 6. 1 percent and 3. 9 percent. Con-
sequently, the effective increase in force for such annuities is
12.4 percent. / (241.6. 1). (8. 1 +3.9) + 2 + 6. 1 + 3.9`/
(b) Annuities Commencing Between 1 January 1966 and 31 December
1966. Annuities commencing between 1 January 1966 and 31 Dec-
ember 1966 were increased by 1 percent under P. L. 87-793.
However, such annuities have also been increased by 3. 9 percent
under P. L. 89-205. Consequently, the effective increase in force
for such annuities is 4. 9 percent. / (1 x 3. 9) + 1 + 3. 9./
(c) Under P. L. 87-793 and P. L. 89-205 survivors annuities are
increased by the percentage increase afforded the retiree annuity
from which it was derived.
2
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CIVIL SERVICE RETIREMENT ACT
ANALYSIS OF INCREASES GRANTED UNDER P. L. 89-205 and P. L. 89-314
(Participants in the CIA retirement system were first designated in
April 1965. Thus this analysis deals with increases accruing to
contemporary retirees and survivors under CSRA.)
I. Initial Adjustment
All existing annuities with a commencing date on or before 31 December
1965 were increased by 6. 1 percent.
II. Subsequent Adjustment
All existing annuities commencing on or before 1 January 1967 were
increased by 3. 9 percent and this is the increase in force for annuities
commencing on or between 1 January 1966 and 1 January 1967. However,
the increase in force for existing annuities with a commencing date earlier
than 1 January 1966 is 10.2 percent, r(6. 1 x 3. 9) + 6. 1 + 3.9.7
III. Exception for Survivors
Generally the eligibility for cost of living increases is governed by the
commencing date of each annuity payable as of the effective date of
each increase. Exceptions for survivors do apply however.
a. 8 retiree Survivor (other than a child) receives whatever percentage
increase the retiree had been allowed at time of death.
1. If the survivor annuity is derived from a retiree's annuity commenc-
ing on or before 31 December 1965, the increase in force would be
10.2 percent to date. If it is derived from an annuity commencing
on or between 1 January 1966 and 1 January 1967, the increase in
force would be 3. 9 percent to date.
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b. Child survivor. All cost of living increases are built into the
annuity benefit formula. The fixed dollar factors in the formula
are increased in all cases by the total percentage increase
granted under the adjustment plan. The formula factor dealing
with the percentage of five year average salary is increased in
deceased retiree cases by the total percentage of increase the
retiree was receiving at time of death.
1. For example, the total percentage increase in force under
P. L. 89-205 is 10. 2 percent so that the dollar fixed factors
$1, 800, $600, $2, 160, and $720 are increased to $1, 983. 60,
$661. 20, $2, 380.32 and $793. 44.
2. However, the average salary factor is raised only by the per-
cent of cost-of-living increase allowed the deceased retiree
while he was receiving an annuity. (See I and II above for
specific percentages. )
The difference in b. 1. and b. 2. above is that average salary reflects
living cost pay increments to the point of retirement whereas the
fixed dollar factor does not.
IV. Summary
For annuities commencing*
Increase in force
Effective date
1. a. before 1 January 1966
6.
1%
1 Dec 1965 -
31 Dec 1965
b. before 1 January 1966
10.
2%
1 Jan 1967
2. on or between 1 Jan 66- 1 Jan 67
3.
9%
1 Jan 1967
* including derivative survivor annuities
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