COMMENTS ON H .R. 10706, A BILL TO AMEND THE CIVIL SERVICE RETIREMENT ACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP64B00346R000400160003-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 15, 2016
• Document Release Date: October 27, 2003
• Sequence Number: 3
• Publication Date: April 16, 1962
• Content Type: MF

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16 APR 1962
1CMORAM FOR: Legislative Counsel
SUBJECT . Comments on H. R. 10706, A Bill to Amend the Civil
Service Retirement Act
1. House Resolution 10706 proposes to add three new Sections to the
"Civil Service Retirement Act". Present Section 18, titled, "Short Title",
under this proposal would become new Section 21, and new Sections 18, 19
and 20 would be added and entitled, "Increases in Annuity", "Transfer of
Social Security Credits", and "Transfer of Civil Service Credits" respectively.
These Sections will be commented on separately since they propose distinctly
different subject matter. Comment will not be made regarding routine technical
features unless they are considered ambiguous.
2. Section 18, INCREASES IN AzUITY
A. This Section proposes the following:
(1) That the Civil Service Commission will at the first general
adjustment of the rates of compensation of classified employees also
effect an increase (approximately equalto the average increase in
the rates of compensation) in the annuities of persons retired under
the Civil Service Retirement Act (including those receiving survivor
annuities).
(2) An increase in the annuities of those persons who retire in
the five year period iumediately subsequent to the effective date of
the general adjustment. This is on a decreasing percentage basis
depending on the length of time after the effective date of the general
pay adjustment that the person retires.
(3) That dependant on a rise in the cost of living, based on
the Consumer Price Index of the Bureau of Labor Statistics, the
Civil Service Commission would determine and apply a commensurate
percentage increase in annuities. The Civil Service Commission
would make this determination a year after the effective date of
the adjustment and annually thereafter.
B. It is recommended that the Agency take a favorable position with
regard to these three provisions. For a long period of time most pay
studies, and recently the President's pay plan proposal, have shown that
the pay structure of classified employees is out of balance and below
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comparable rates for industry. It is considered that it would be
inequitable to effect a pay adjustment under these conditions if
consideration was not given to those persons who had given long and
faithful service and who had earned and were receiving an annuity.
The enmiai review by the Civil Service Commission in relation to the
Consumer Price Index would serve to keep annuities in line with the
cost of living. This is considered particularly pertinent because
generally annuities are well below the annuitants normal earned income.
While no provision is made for a downward adjustment in the event of
a decrease in the cost of living the current long range trend points
to continued increase.
3. Section 19, TRANSFER OF SOCIAL SECURITY CREDITS
A. The proposals in this Section would make it possible for a person
retiring under the Civil Service Retirement System to have credited to
their federal service one or more quarters of social security eligibility
provided they were not fully insured under Title II of the Social Security
Act. Civil Service Retirement Credit of three months for each quarter
would be given. This would occur at the time of computing the annuity
if the retiree was 62 years of age or older. The annuity would be recom-
puted for this purpose at age 62 for those persons who became annuitants
prior to age 62. This provision would not be retroactive and would apply
only to those persons who retired after the enactment of this bill. This
is a desirable feature which the Agency should endorse. This permits
an individual to determine whether he wants to pay a reasonable amount
to have added to his federal service a period of employment creditable
under Social Security which otherwise would be lost under Federal Civil
Service. Experience indicates that such crediting would generally be
advantageous to both the individual and the Agency.
B. Section 19 (c), (2), (1) requires clarification with regard to
which "average salary" and which "quarter" there is reference to here.
4. Section 20, TRANSFER OF CIVIL SERVICE CmDITS
A. This feature is the converse of Section 19 above in that it
permits the crediting under the Social Security System of a period of
less than five years of creditable service under the Civil Service
Retirement Act. It is also considered that the Agency should favorably
endorse this feature of the subject bill to permit coverage of up to
five years of federal service not otherwise covered under a retirement
program.
5. H. R. 10706 also proposes to emend Section 9 (g) of the Civil Service
Retirement Act to take away the option presently residing with all male employees,
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and with female employees with dependant husbands,of providing their respective
wives or dependant husbands with a survivor annuity.
It is recommended that the Agency take a position adverse to this proposed
amendment for the following reasons:
A. The number of husbands and wives with dependant husbands who do
not elect a survivor annuity is very small.
B. There are many cases where there is no necessity for the wife
to be provided with a survivor annuity and, of course, the husband
would unnecessarily be receiving a reduced annuity during the
remainder of his lifetime.
C It is believed that the desired result can be achieved by having
a survivor annuity automatically provided unless there is a positive
statement signed by the employee to the effect that he does not
wish to provide a survivor annuity. This could be taken care of
routinely on forms completed at time of making application for
retirement.
6. This review did not take into consideration the question of whether
as a result of the proposal in H. R. 10706, change should also be made in
the Social Security Act. The costs of these additional features was not
taken into consideration in making these coc?nents. This is considered a
matter of comment for the Board of Actuaries of the Civil Service (! nm1 sat nn _
STAT
Emett D D. Echols
Director of Personnel
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TRI3NS iTTAL SLIP
DATE 6 APR 1962
TO:
Legislative Counsel
ROAM NO.
BUILDING
(Doi
HQ
REMARKS:
FROM:
Director of Personnel
ROOM NO.
5 E 56
BUILDING
L9ngl.ey
I FEB 55 2`t 1
REPLACES FORM 36-8
WHICH MAY BE USED.
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