IMMEDIATE RETIREMENT OF CERTAIN FEDERAL EMPLOYEES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000500170001-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 9, 2016
• Document Release Date: August 24, 2001
• Sequence Number: 1
• Publication Date: March 29, 1973
• Content Type: REPORT

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93n CONGRESS HOUSE OF REPRESENTATIVES DEPORT
1st Session I No. 93-98
IMMEDIATE RETIREMENT OF CERTAIN FEDERAL
EMPLOYEES
MAaoti 29, 1973-Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. WV.1LDIL, from the Committee on Post Office and Civil Service,
submitted the following
REPORT
The Committee on Post Office and Civil Service, to whom was re-
ferred the bill (H.R. 6077) to permit immediate retirement of cer-
tain Federal employees, having considered the same, report favorably
thereon without amendment and recommend that the bill do pass.
The purpose of this legislation is to permit the voluntary retirement
of a Federal. employee who has completed 25 years of service, or who
is age 50 and has completed 20 years of service, during a period while
his agency is undergoing a major reduction in force.
COIVIMITTF:n ACTION
H.R. 0077 is based upon an official recommendation of the United
States Civil Service Commission. It was approved by a unanimous
vote of the Subcommittee on Retirement and Employee Benefits, and
ordered reported by unanimous voice vote of the full committee.
Hearings (Committee No. 92-25) were conducted in the 92d Con-
gress on a similar proposal, which was incorporated into the provisions
of H.R. 11255 and reported to the House. While action thereon. was
not scheduled by the House, an identical measure, S. 3380, was passed
by the Senate.
Existing law (section 8336(d) of title 5, United States Code) pro-
vides for the payment of an immediate annuity when an employee is
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involuntarily separated (other than on charges of misconduct or
delinquency) after completing 25 year=s of service or after becoming
age 50 and completing 20 years of service.
The bill will permit an employee who meets such age and/or service
r?equirernexrts, but who would not be eligible to retire under the optional
ago 55--30 years or age 60-20 years retirement provisions, to retire
voluntarily during a limited period while his agency is undergoing
a major reduction of personnel. It will allow such an employee to
v olunteer for retirement before a reduction-in-force actually is effected,
thereby perruittinrr the employing agrency to ascertain in advance the
overall effect of retrenchment in a particular geographic area.
deductions in personnel usually r^sult in the termination or down-
;'rading of those employees tivlno have the least seniority or retention
of eferenc.e. Accordingly, many younger employees are separated from
Federal employment while older employees, a number of whom may
desire to retire in such circumstances, are retained.
1 finder this proposal, the employee of an agency or installation un-
dergoing a major reduction-in-force would be permitted to retire op-
tionally if he is at least age 50 and has served for 20 years. or regard-
less of age if he has served for 25 years, before the retrenchment action
is actually effected. The Civil Service Commission would make the de-
termination as to when a reduction in force is major, and would fix the
time and the geographic area within which employees could exercise
the option to retire. In determining when a reduction in force is a ma-
jor one, the Commission would take into account such things as the
impact it will have upon the local economy, the degree of disruption
of the operations of an agency or installation, and the effect on the
agency's or installation's future capability to effectively carry out its
mission.
In approving this proposal, the Committee intends that before an
eligible employee exercises his option to retire thereunder he be fully
inforrued of his retention rights before or while the reduction proce-
dures are is process. It Is the Committee's further intent that the con-
cerrred agencies and the Civil Service Commission exercise vigilance
in assnrins: that any retirement under this provision be a truly volun-
tary action by the employee, and free of any coercion. It does not,
however, contemplate an employee'.ss deferral of a decision to so retire
until the reduction is nearly completed.
The hill amends subsection (d) of section 8336 of title 5, United
Mates Code, to permitan employee who has completed 25 years of serv-
ice or who is at least 50 years of age and has completed at least 20
years of service to retire voluntarily during the period while his
agency, or subdivision thereof, is undergoing a major reduction in
force. The existing law provides for retirement after 25 years of serv-
ice or after age 50 with 20 years of service only in the case of an em-
ployee. who is involuntarily separated from the service for reasons
other than misconduct or delinquency.
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Under the amended provision, the Civil Service Commission is re-
quired to determine when a reduction in force is "major" and would
fix the time within which employees could exercise the option to retire.
The Commission also will determine in each case whether eligible em-
ployees throughout the agency may exercise the option to retire or
whether the option will be limited to eligible employees within specific
geographic areas or specific organizational units.
Employees who exercise the option to retire under this provision will
have their annuities reduced for each. month they are under age 55 in
accordance with section 8339 (h) of title 5.
EFFECTIVE DATE
H.R. 6077 would become effective on and after the date of
enactment.
ESTIMATED COST
While the number of employees eligible to retire from time to time
will depend upon whether voluntary retirement under the amend-
ment is authorized on an agency-wide basis, or upon a limited geo-
graphic basis, the Civil Service Commission is unable to provide
more than speculative cost estimates.
However, assuming that 1,000 employees retire under this pro-
vision, the Committee estimates an increase in the unfunded liability
of the Civil Service Retirement System of approximately $10.1 mil-
lion. Any such additional deficit would be financed in accordance
with Section 8348(f) of title 5, United States Code, by an annual
appropriation of $600,000 in each of the following 30 years.
AGENCY VIEWS
Following is a letter from the Chairman of the United States
Civil Service Commission recommending the enactment of this legis-
lation, and a supporting letter from the Assistant Secretary of De-
fense for Manpower and Reserve Affairs.
U.S. CIVIL SERVICE COMMISSION,
TVashington, D.C., February 26, 1973.
11011. CARL ALBERT,
Speaker of the House of Representatives.
DEAR MR. SPEAKER: The Commission submits for the consideration
of the Congress, and recommends prompt favorable action on, the
attached legislative proposal which, during a major reduction in force
in a department or agency, would permit the optional retirement on
reduced annuity of Federal employees with at least 25 years of serv-
ice, or, after becoming 50 years of age, with at least 20 years of
service.
The proposed legislation would be inestimable benefit to employees,
management, and the community in which an installation undergoing
a reduction in force is located. Reductions in force have a depressing
effect on employee morale and result in severe personal hardships
caused by loss of income and uncertainty regarding future employ-
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meat. Major reductions in force, through multiple "bumping" actions,
also have it disruptive effect on agency management. To the extent
i hat attrition, particularly retirement, reduces the need for involuntary
separations and the chain-effect displacement of employees with lower
zetention rights by those with higher retention rights, these hardships
and disruptions are mitigated.
In a smaller community where a Federal installation is a main
source ok employrnent, a major reduction in force may adversely affect
the Community's economy. In a larger community, the release of many
employees in some occupational categories may place on an already
troubled labor market people for whom there are no comparable oc-
cupations in the private sector. Permitting people to retire on annuity
income and spreading voluntary retirements throughout an entire
department or agency, or a subdivision of a department or agency,
as the attached legislation proposes, would at least rnoderatethese ad-
verse effects of reductions in force on the community.
Another benefit to be derived from the proposed legislation is that
it will enhance the agency's future effectiveness in carrying out its
mission by helping to retain younger employees. Nothing raises the
average ago of an organization no-,,e quickly than it substantial re-
duction in -Force in which the youngest employees with the lowest re-
tention standing are separated and the oldest employees are retained.
Under present law, an employee who is at least age 50 and has at
least 20 veers' service, or 25 years' service regardless of age, may re-
f ire on an imnnrediate annuity if he is involuntarily separated, as when
ho is reached by reduction in force. Unless the employee is old enough
a.nd has sufficient service to retire opldionally (age 55 with 30 years of
service, age 60 with 20, or age 62 with 5), if he is not reached for
reduction in force, he does not have the right to retire even if he is
desirous of doing so, and thus permit an employee who wants to con-
tinne to work to be retained. The proposed legislation would simply
:.rive the long service em,:)loyee who is not eligible to retire under
the regular optional retirement provision of the law the opportunity
to retire voluntarily during a limited period when his agency is under-
going a major reduction in force.
Under the proposed legislation, the Commission would make the
determination as to when a reduction in force is major and would
fix the time within which employees could exercise the option to re-
tire. In determining when it reduction in force is a major one, the
Commission intends to take into account such things its the impact
it will have upon the local economy. the degree of disruption of the
c pe.rations of an agency or installation, and the effect on its future
capability to effectively carry out its mission. A reduction in force
which affects a large number of employees in relation to the total
number in the agency, or a large number of employees in the same
competitive area or in a community would clearly be a major one. the
time within the option to voluntarily retire could be exercised would
To set by the Commission so that employees could not defer a decision
until the, reduction in force had been nearly completed. The Commis-
sion will also make a determination as to whether eligible employees
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throughout the agency could exercise the option to retire, or whether
the option to retire would be restricted to eligible employees of the
agency who are employed in specific geographic areas or, organza-
tional units where the effects of the reduction in force arc particularly
severe. Like employees who are involuntarily separated, those who
exercise the option to retire voluntarily in a major reduction in force
will have their annuities reduced by 1/6 of 1 percent (2 percent a
year) for each month they are under age 55.
As in regular optional retirement cases, the Commission would be
vigilant in enforcing the requirement that 'a retirement under the
proposed legislation is the result of the employee's voluntary action
rather than of coercion by his agency. Also in situations where volun-
tary retirements are not confined to designated geographic areas, the
Commission would require an agency to try to place an employee
adversely affected by a reduction in force in one geographic area in
a job vacated by retirement in another area.
Inasmuch as the number of employees eligible to retire if the-pro-
posed legislation were enacted would depend on whether the Commis-
sion authorized voluntary retirement on an agency-wide, or on a more
restrictive geographic basis, it is not possible to provide more than
speculative cost estimates.
The Office of Management and Budget advises that there is no ob-
jection from the standpoint of the Administration's program to submis-
sion 'of this draft bill to Congress.
A similar letter is being sent to the President of the Senate.
By direction of the Commission :
Sincerely yours,
ROBERT HAMPTON,
Chairman.
ASSISTANT SECRETARY OF DEFENSE,
WTrashington., D.C.., March 8,1973.
Hon. TIIADDEUS J. Dul.sici,
C, Ihairman, C, ommnittee on Post O Bice and Civil Service,
house of Representatives, Washi'zgton; D.C.
DEAR MR. CHAIRMAN : The Chairman of the U.S. Civil Service Com-
mission submitted to the Speaker of the House of Representatives on
Februar 26, 1973, a legislative proposal which, during a major reduc-
tion in force in a department or agency, would permit the optional
retirement on reduced annuity of Federal employees with at least 25
years of service, or, after becoming 50 years of age, with at least 20
years of -service.
Since October 1969 the Defense Department has been in a continu-
ing period of declining civilian employment with approximately
300,000 civilian positions being eliminated. In light of current and
projected budgetary restrictions and the need to adjust the predomi-
nantly civilian staffed support structure to the reductionstaking place
in the organization and size of the armed forces, it is anticipated that
the incumbents of many civilian positions will be affected by elimina-
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6
Lion or relocation of their positions. Every effort is being made within
the Department to effect required civilian reductions through volun-
tary attrition, and where. this is not feasible, by the reassignment of
displaced employees into other vacaii.cies within the Department.
The proposed legislation would have the effect of permitting long
service employees who desire to retire, but are not yet eligible to do
so under present optional retirement provisions, to retire during a
major reduction in force.
The benefits which would result from this legislation are four-
fold; the older employee who wishes to retire gets the opportunity to
do so; the employee vulnerable in reductions in force-usually a
younger worker with major family responsibilities--is able to con-
tinue working; inaaagement is benefited by the increased vigor of the
work force that results from a reduction in the average age of the
work force (which has been increasing in recent years as the size of
the work force. has been steadily reduced) ; and finally, lines of pro-
gression blocked by senior employees who can neither move up nor
prove out are opened up to the benefit of the entire work force.
It is estimated that approximately 25% of our total civilian work
force of about one rnilliori employees would be eligible to retire under
the provisions of the proposed legislation. Assuming, (luring a period
of major reductions in force, 10% of the eligible employees (about
25,000) elected optional retirement under these provisions, a like num-
ber of employees could be spared the personal hardships associated
with involuntary separations.
Past experience with the "request'ed resignation" procedure per-
mitted for a limited time by the Civil. Service Commission indicates
that many employees do elect to take advantage of an opportunity to
retire (luring a reduction in force and that these retirements greatly
minimize the adverse impact of reductions in force. For example, dur-
ing 1970 in an Army headquarters organization, approximately 800
civilian positions were eliminated, and in 1971 another 86 were elimi-
nated. Through the "requested! resignation" procedure and resulting
discontinued service retirements, the reduction-in-force situation was
eased by 17% in 1970 and alleviated entirely in 1971. It is emphasized
that retirements under this legislation would be at the election of the
employee, and no employee not reached for reduction in force will be
forced to retire.
The Department of Defense strongly endorses the legislation pro-
posed in the U.S. Civil Service Commission Chairman's letter of
February 26, 1973, and urges early favorable action by the Congress.
Sincerely,
(Signed) ROGER T. KELLEY.
CHANGES IN EXISTING LAw MAnE BY TIIE Bun, AS REPOuTPII
In compliance w Al clause 3 of rule XIII of the Rules of the House
of Representatives. changes in existing law made by the bill, as re-
ported, are shown as follows (existing law proposed to be omitted is
enclosed in black brackets, new matter is printed in italic, existing law
in which no change is proposed is shown in roman) :
A.R. as
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SECTION 8336 OF TITLE 5, UNITED STATES CODE
CHAPTER 83-RETIREMENT
SUBCHAPTER, III-CIVIL SERVICE RETIREMENT
ti 8336. Immediate retirement
(a) * * *
[(d) An employee who is involuntarily separated from the service,
except by removal for cause on charges of misconduct or delinquency,
after completing 25 years of service or after becoming 50 years of age
and completing 20 years of service is entitled to a reduced annuity.]
(d) An employee who is separated from the service-
(1) involuntarily, except by removal for cause on charges of
misconduct or delinquency; or
(2) during a period when the agency in which he is employed is
undergoing a major reduction in force, as determined by the Com-
mission, and who is serving in such geographic areas as may be
design,nated by the Commission;
after completing twenty- fve years of service or after becoming fifty
years of age and completing twenty years of service is entitled to a
reduced annuity.
* * * * * * *
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