JUSTIFICATION AND EXPLANATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-03092A000200010006-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 9, 2016
• Document Release Date: May 14, 2001
• Sequence Number: 6
• Content Type: STATEMENT

Approved For Release 2001/07/28 : CIA-RDP78-03092A000200010006-0
JUSTZFlCA'TIOI'i ATi F-XV .A AT'I
_FIur,)ose. The purpose of the proposed legislation is to pr-.snide
for the adjustment of annuities on the basis of monthly Consumer Price Index
indicators and to accelerate the cost- of-livin adjustment of annuities under
the Central Intelligence Agency Retirement Act of 1964 for certain employees.
2. 'sa roe nd Stcternent. The Central Intelligence Agency Retire.
ment .ct of 1964 authorizes automatic cost.of?livinv, adjustments on the basis
of Consumer 1--,rice Index rises by an annual average of 3 per cent x or more
for a calendar year and establishes I April 1966 as the earliest effective
date for the first such annuity increase. The aut3rnatic adjustment principle
was incorporated into the Civil Service Retirement Act in 1962. The Civil
service f.etirement Act automatic adjustment provisir was incorporated
into the Central Intelligence Agency Retirement Act when it was passed in
1964. The Senate Report su p soxt1i g the bill to provide for the Central Intel.
UL, ence A eency Retirement yatem states that the Senate Committee 'a... adopted
new language autlhar izing increases in the retired pay of annuitants based u -"n
the idcatical system now In effect for retired Civil Service ern loyees pro.
viding for periodic increases in retired pay based on minimum 3 per conturn
advances in the Consumer Price Index." (83th Conareas. Second Session,
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venate Report 1589).. Similar reference to this cost.of?livin feature was
made during Senate consideration of the amended bill which became law.
At the time a similar basis for adjustment existed for the benefit of military
members of the armed forces.
3. Recent Con ;ressional Consideration.. Recently, the 89th Co Gress.
at the request of the Secretary of Defense. amended the cost-of-living pro-
vision affecting military retirees. This amendment ;ears increases to
.7onthly rather than averase calendar year Consumer Price Indexes and
accelerates the cost?of-Iivin, adjustment due on 1 April 19&( to a more
current date. This amendment has become law (P. L. 89-132). Similar
legislation for the benefit of Civil Service retirees has passed the House of
;cpresentativaa and has been favorably reported out of the Senate Commit-
tee. The Chairman of the Civil Service Commission has stated that he does
not object to this proposed cban;o in law. SinAlar legislation is also being
processed for the benefit of foreign service personnel under the foreign
Service Retirement system.
4. Central intelli Bence Agenc tietirernent Syste*_zx. The Central
Intelligence Agency Retirement vystem provides an early retirement pro.
gram for a limited number of career Central Intelligence Agency employees
who are at least 50 years old and have at least 20 years of service. As
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coritrastead with normal Civil Service annuities, no reduction is made for ae
and the mUltiplicant factor against hilh five average salary is set at a flat
2 per cent rather than 1.5 per cent for the first five years of service, 1.75
per cent for the next five years, and 2 per cent for succeeding years. These
features are not unique in the Federal Government and eidat under the Civil
Service Retirement Act for law enforcement officers and under the Foreign
Services ystom for foreign service personnel. O.`nly those career ern?loyees
of the Central Intelligence Agency who meet the statutory conditions of elide
gibility are eligible for annuities under the Central Intelligence Agency
Zzetivem ent Act. The remaining career Central lntellig,ertce Agency employ
cos are covered by the Civil Service Retirement Act. The statutory conditions
for elieAbility under the Central Intelligence Agency Retirement Act cover
those employees "whose duties are cetcrrnined by the tirector to be (I) in
eu;?port of Agency activities abroad, hazardous to life or health and (U) so
specialized because of security requirements as to be clearly eiatinguisbable
frurra norm-aal Government emaloyment.'#
5. Justification. It is felt that the case made for the char a to
monthly Consumer Price Index indicators and for the acceleration of cost-of.
living 40
increase for Civil Service retirees, foreign service, and military
.per
ennui applies with equal force to Central Intelligence Agency Retiremeent
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yatem retirees. The ,roarizzed amendment Is to assure that the cost.-of.
livia adjustment features of the Central Intelligence Agency Retirement
3yater is in line with Administration policy. While the Central Intelligence
A-ancy Ileti,rement Act contains the Identical -principles enunciated in the
Civil Service Rettrement Act and Military retirern.ent system, this principle
will be rendered inoffectivo L practice unless char cs in the mechanics of
compsuting cost-of-living increases adopted by the 39th Congress are enacted
for Central Intelligence Agency .ix.-etirexnent System retirees.
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