COST ESTIMATES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-03091A000100030025-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 19, 2016
• Document Release Date: July 12, 2006
• Sequence Number: 25
• Publication Date: January 1, 1967
• Content Type: REPORT

Approved For Release 2006/08/08: CIA-RDP78-03091A000100030025-9
N"W
COST ESTMATES
pute that a maximum additional Government contribution of
annually would be required. However, it has not been government practice
for many years to fully fund its retirement programs. Further, there have
1. There will be certain increased costs for the administration of the
retirement system. For reasons of efficiency and security, it is considered
essential that full administration of the program excluding maintenance of
the fund by the Department of the Treasury (as required by law in the case
of the Foreign Service Retirement Fund) be accomplished within the Agency.
It is estimated that by the end of the first five years the administration
of the proposed program would cost approximately $80,000 per year with an
increase of approximately eight man years. Internal administration of the
program would include determinations of eligibility and entitlements, pay-
ment of retirement benefits, and all related administrative matters.
2. Program costs cannot be estimated with comparable precision.
Detailed actuarial analyses have not been made of the proposed retirement
system as it would apply to Agency personnel.
The most recent annual report of the Chairman of the Civil Service
Commission presents coat factors indicating that in addition to the 13% of
payroll contributed by the employee and the employing Agency the Government
would be required to contribute an additional .83% of the annual payroll of
covered employees to support the benefits accruing on account of current
service.
Similar, although not fully comparable data pertaining to the Foreign
Service etirement system, indicates that additional contributions by the
Government of 10.69% would be required. Using the difference between these
two estimates as reflecting the cost differentials of the differing benefits
of the two programs and applying it to the estimated annual payroll of the
Agency employees eligible for the proposed retirements tem we com-
been special charges against the Foreign Service Retirement Fund which go 25X9
beyond the basic benefits of the proposed CIA system.
3. A more realistic estimate can be made of the increased payout in
basic annuity benefits under the proposed system over the Civil Service
retirement system for the next five fiscal years. In making this estimate
it is assumed that the same number of individuals will request or be induced
or required to retire regardless of the retirement system applicable. Other
assumptions based upon manpower studies and age and grade characteristics of
the eligible group contemplate average retirement age of 55 years with 25
years of service and an average high five salary of $11,000 (about the 2nd
step of grade GS-13). Basic annuities computed under the new system would
be $5,500 as against $1+,829 under the Civil Service system. The difference
of $671 applied to the estimated average of 67 retirements per year would
result in the following total increased annuity payments for the years shown:
MORUCIDIF
Approved For Release 2006/08/08: CIA-RDP78-03091A000100030025-9
 Approved For Release 2006/08/08: CIA-RDP78-03091AO00100030025-9
FY Year
Increased
Annuitants Annuity Payments
(Cumulative Totals) (Cumulative Totals)
1963 (one-half year) 31+ $ 22,81+
1961+ 101 67,771
1965 168 112,728
1966 235 157,685
1967 302 20261+2
TOTAL 5 3, 0
The chain of recruitment, reassignment, and promotion actions created
by this annual retirement of officers would result in a considerable saving in
salaries. Assuming an average lapse of six months in this process, the saving
would approximate $2,300 per retirement and would total approximately $414+,000
over a five-year period. This saving would-almost offset the estimated in-'
crease in annuity payments for the first five years that the new system was in
operation.
Approved For Release 2006/08/08: CIA-RDP78-03091AO00100030025-9