RETIREMENT ACT DISABILITY PROVISION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP72-00337R000400010027-5
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 9
• Document Creation Date: December 16, 2016
• Document Release Date: May 16, 2005
• Sequence Number: 27
• Publication Date: March 18, 1970
• Content Type: MFR

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SUBJECT: Retirement Act Disability Provision
1. The Director of Personnel has proposed that our Retirement
Act disability provision be amended to conform to the restored earning
capacity proviso for terminating such annuities to conform to the Civil
Service provision. Since our Actts present provision was developed from
the Foreign Service system, I asked Robert Hull, Department of State,
whether they had ever considered a similar change. He said that it had
been considered, but no action taken. He said it would only apply to very
few cases, but recognized the merits of the Civil Service provision,
particularly in view of the fact that Foreign Service disability annuities
are tax exempt.
2. On another subject, Hull said that if we are preparing a new
legislative package he hopes for its success so they could ride our
coattails. He said their pointing out our success to their committees was
instrumental in passage of a Daniels /McGee benefits amendment for the
Foreign Service. I told him that I was sure that Mr. Helms was glad to
be of help.
Assistant Legislative ounse
Distribution:
Orig. - Subj.
1 - State subj.
1 - Chrono
OLC/LLM:rw (19 Mar 70)
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PROPOSED AMENDMENTS TO THE CIA RETIREMENT ACT OF 1964
Item Purpose
1. Repeal the present limitation of 400
retirements from 1 July 1969 through
30 June 1974.
In view of the anticipated number of mandatory
retirements during this period, and based on the
experience factor in projecting voluntary retire-
ments, the quota will expire prior to the cut-off
date of 30 June 1974.
2. Raise eligibility age for student sur-
vivor annuitant from 21 to 22 and in-
crease authorized maximum absence
from school from 4 to 5 months.
3. Clarifies commencement and termination
date for child survivor annuity.
This change will permit our Act to be consistent
with the current provisions of the Civil Service
Law.
This is a minor amendment to bring the section
in line with existing Civil Service provisions for
the commencement and termination dates for a
child survivor annuity and assures that the sur-
vivor annuity of a student may be granted even
though it previously had been terminated. Under
existing authority, once an annuity had been ter-
minated because of an absence between school
terms in excess of the maximum absence auth-
orized, the annuity could not be resumed. Many
legitimate interruptions such as compulsory mil-
itary service, sickness, or interim full-time
employment, would require absence from school
for a period of time. A similar technical amend-
ment to the Civil Service Retirement Act was
approved by the 89th Congress.
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Item Purpose
4. Authorize annuity for retiree to begin This is a technical change to authorize the com-
as soon as he enters non-pay status. mencement of annuities and payment from the re-
tirement fund as soon as the individual enters
a non-pay status. Under the present CIA Retire-
ment and Disability System, an annuitant who is
fully qualified to retire and receive an immediate
annuity must wait until the beginning of the month
following his date of separation from the service
to be eligible for such annuity. In an agency such
as CIA where employees may be members of
either of two separate retirement systems, a
difference in so simple a matter as the beginning
date of the annuity is a confusing one. The pro-
posed change would conform the CIA Retirement
System to the Civil Service Retirement System
with respect to the beginning date of the annuity.
In addition it would avoid the inconvenience to
employees who are eligible and desire to retire
earlier than the last day of the month.
5. Permit direct transfer of retirement The "Transfer of Contributions" provision auth-
funds - employee and Government - orizes the transfer of employer contributions to
from other retirement funds to the the Government retirement fund from which the
CIARDS and from the CIARDS to other employee will receive his retirement benefits.
funds. At present, when an individual transfers into the
CIA Retirement and Disability System from some
other Government retirement system, there is
provision for the transfer of the employee's con-
tributions from the other Government retirement
fund to the CIA fund, but there is no provision for
transfer of the contributions made by the Govern-
ment to such fund on the employee's behalf.
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Item Purpose
Further, there is at present no provision for the
transfer of an employee's contributions from the
CIA retirement fund to some other Government
retirement fund in the event he changes employ-
ment. The result is that if an employee wishes
to obtain credit for his prior Government service,
he must obtain a refund of his contributions and
any interest applicable thereto, pay tax on such
interest, and then re-purchase service credit on
the basis of his contributions plus the applicable
interest rate under the retirement system which
he has entered. In certain situations this could
result in tax cost to the individual. In any event,
it is a cumbersome problem. In addition, it den-
ies to the receiving retirement system the benefit
of the Government's contributions toward the re-
tirement benefits ultimately to be granted to the
employee. The proposed change would correct the
inequity to the employee and make it possible for
the Government's contributions toward his retire-
ment to be credited to the Government retirement
fund from which his retirement benefits will ulti-
mately be paid. It is intended that this provision
apply to all employees who have been transferred
into the CIA Retirement and Disability System as
well as those to be transferred out.
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Item Purpose Remarks
6. Authorize the CIA annuitant who is reemployed This provision will authorize an annuitant who has
in the Federal Government to retain the salary retired from the Agency to be reemployed in the
of the new position plus so much of his annuity Government and to retain the salary of the new
which when added to his new salary will not ex- position, plus so much of his annuity, which when
ceed his salary at the time of retirement. added to the new salary, does not exceed the salary
at the time of retirement. Under the present Agency
authority, for example, if one of our GS-13 (salary
of $15, 812) retires with an annuity of $6, 000 and
then enters other Federal employment at the GS-11
level, ($11, 233), he would actually receive only
$5, 233 for his services. The provision which we
propose would permit him to receive the full salary
of his GS-11 position plus so much of his annuity as
does not exceed salary at time of retirement. Thus,
this amendment would permit this retiree to receive
his earned salary of $11, 233 plus $4, 579 of his
$6, 000 annuity bringing him up to his previous salary
level of $15, 812. The practical effect is to authorize
the individual who is seeking less strenuous work
and does not want to return overseas to retire vol-
untarily--or involuntarily- -and to find other Federal
employment, possibly at a grade or more below his
salary, but which when coupled with his retirement
annuity will maintain his standard of living. As he
rises in his new employment, the retirement annuity
will be eliminated on his again reaching his former
salary level. We feel that our retirees, with few
exceptions, need to seek a second career and
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Item Purpose
may well desire such a career elsewhere in
Government. CIA employees do not acquire
status in the competitive service, however,
and much of their experience and competence
cannot readily be related to normal Govern-
ment positions. The total offset of annuity
upon reemployment in Government service,
as it is now required tends to limit second car-
eer employment opportunities for CIA retirees
to the private sector. It thus tends to deny to
the Government, the services of individuals who,
even though they have completed their CIA car-
eers, are highly competent. Retirees under the
CIA Retirement and Disability System have
earned their annuities at the time when they re-
tire. This principle appears to have been establ-
ished for the Reserve military officer, and more
recently, the retired regular military officer,
and for the retired Foreign Service Officer. With
respect to retired military officers, I would like
to note that a reservist can retain both his civilian
salary and his entire annuity, and a regular officer
can retain his salary plus the first $2, 359. 87 of
his annuity and 50% of the balance thereof.
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Item Purpose
7. Require an agency which employs a CIARDS
annuitant to notify CIA of such employments.
8. Provide an option to participant who has
prior creditable non-deduction service to
use the time in computing his annuity but
reduce the annuity by ten percent of the
sum due to cover the service if he decided
not to make the deposit.
9. Permit application for disability retire-
ment within one year from date of sep-
aration (provided participant did not with-
draw funds from CLARDS). If participant
was mentally incompetent at the time of
separation or within one year thereafter,
time limit may be waived.
10. Eliminate requirement that step-child or
recognized natural child be dependent upon
retiree to qualify for survivor annuity.
11. Permit a natural child and an adopted child,
but not a step-child, to share in the distrib-
ution of any money (Lump-sum) left in the
CIARDS fund.
If item 6 is approved, this provision will be
required so that appropriate adjustment can
be made in the retiree's annuity.
Under current provisions of the CIARDS law,
both refund service and non-deduction service
must be covered by contributions to the fund
in order for the time to be counted in com-
puting the annuity. This change will permit
our Act to be consistent with the provisions
of the Civil Service law.
This provision will permit our Act to be con-
sistent with the Civil Service law.
This change makes our provision consistent
with the Civil Service law.
To define the term "child. " This definition is
consistent with the Civil Service law.
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Item Purpose
12. Change in eligibility age for a deferred This change will conform to the Foreign Service
annuity from age 62 to 60. Act rather than the Civil Service Retirement Act.
It appears logical, however, that since the Agency's
Retirement System provides for mandatory retire-
ment at age 60, the deferred annuitant under that
System should begin receiving his annuity at that
age.
13. Discontinuance of the disability annuity Even if he remains totally disabled, an annuitant
payment if the earning capacity is re- whose earning capacity is restored before he
stored. reaches age 60 will have his annuity discontinued.
Earning capacity is considered restored if in
each of 2 consecutive calendar years the ann-
uitant's income from wages or self-employment,
or both, is at least 80 percent of the current
salary of the position from which he retired.
N. B. Item 4 on document originated by OLC concerning proposed amendments to the CIARDS law
should be withdrawn. P. L. 91-185 contains a similar provision.
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