LETTER TO DAVID E. BELL FROM JOHN A. MCCONE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R002800070003-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 152
• Document Creation Date: December 15, 2016
• Document Release Date: September 17, 2002
• Sequence Number: 3
• Publication Date: December 10, 1962
• Content Type: LETTER

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 ; RDF OB01676R00.28000700?3.-4:
1='or yaur info tion.and .in order to ssist in the coordination
process, we have 'orrdM cos ;of tom, current proposed bill to the
amts of state azd `rea .' the;;Civil Service Co &ni sion.
-
3 consider the; ict. to . 7~f -proposed bill into law essential
.the effective perfoi ince"of o tit'. ffiiesion and desire to submit it
3 `a: he consideration of . , ae as passible after the nth
~oz~gress ec Knee. If there i ndditiortal info tic n needed or
is
iat in your consideration of
gay -tttiet,:
_
e x,o ed b 3.3.y?' 2 ".sum f ?:' ril.3 it ems to cooperate in
iT7 W57 paestble.:
Sincerely,
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CENTRAL INTELLIGENCE AGENCY ACT OF 1963
1. Proposed Bill
2. Explanation and Justification
Appendix A, Sectional. Analysis and Explanation
Appendix B, Comparison of Foreign Service Retirement
and Disability System with Pertinent Provisions of
the Civil Service Retirement System
3. Draft Transmittal Letters to President of the Senate
and Speaker of the House of Representatives
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A BILL
To amend the Central Intelligence Agency Act of 1949, as
amended, and for other purposes.
1. Be it enacted by the Senate and House of Representatives of
2. the United States of America in Congress assembled, That this Act
3. may be cited as the "Central Intelligence Agency Act Amendments
4. of 1963."
5. Section 2. The Central Intelligence Agency Act of 191+9, as amended
6. (50 U.S.C. 403 (a) et seq.), is further amended as follows:
7. (1) Amend section 3 by deletion of subsections (a) and (b)
8. and substitute therefore:
9. "(a) In the performance of its functions, the Central Intelli-
10. gence Agency is authorized to exercise the authorities contained in
11. sections 2301; 2302(2) and (3); 2303 (b) and (c); 2304 (a)(1), (2),
12. (3), (4), (5), (6), (10), (12), (15), and (17); 2305; 2306; 2307;
13. 2312; and 2383 of title 10, United States Code."
14. "(b) In the exercise of the authorities granted in subsection
15. (a) of this section, the term "Agency head" shall mean the Director
16. and the Deputy Director."
17. (2) Amend section 3(d) by deletion of the wording "section 2(c)
18. and section 5(a) of the Armed Services Procurement Act of 1947" from
19. the first sentence and substitute therefor, "section 2304 (a) and
20. section 2307 of title 10, United States Code." Further amend section
21. 3(d) by deletion of the wording "section 2(c), by section 4 or by
22. section 5(a) of the Armed Services Procurement Act of 1947" from the
23. second sentence and substitute therefor, "section 2304 (a), by
24. section 2306 or by section 2307 of title 10, United States Code."
25. (3) In section 4 add the following new paragraphs (1)(G) and
26. (1)(H), and (8);
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1. "(1)(G) Pay the travel expenses of officers and employees of
2. the Agency and members of their families, while serving at posts
3. specifically designated by the Director for purposes of this para-
4. graph, for rest and recuperation to other locations abroad having
5. different environmental conditions than those at the post at which
6. such officers and employees are serving, provided that such travel
7. expenses shall be limited to the cost for each officer or employee
8. and members of his family of one round trip during any continuous
9. two-year tour unbroken by home leave and two round trips during any
10. continuous three-year tour unbroken by home leave."
11. "(1)(H) Pay the travel expenses of members of the family
12. accompanying, preceding, or following an officer or employee if, while
13. lie is erxoute to his post of assignment, he is ordered temporarily for
14. orientation and training or is given other temporary duty;"
15. "(8) Provide appropriate orientation and language training to
16. members of family of officers and employees of the Agency in anticipa-
17. tion of the assignment abroad of such officers and employees, or
18. while abroad."
19. (4) Amend section 4(3)(A) to read as follows:
20. "(3)(A) Order to any of the several States of the United States of
21. America (including the District of Columbia, the Commonwealth of Puerto
22. Rico, and any territory or possession of the United States) on
23. statutory leave of absence each officer or employee of the Agency who
24. was a resident of the United States (as described above) at the
25. time of employment, upon completion of three years' continuous
26. service abroad or as soon as possible thereafter and may so order
27. after completion of eighteen months such service."
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(5) Amend section 1.(5) by striking out subsections (A) and
2. (C) and inserting in lieu thereof the following new paragraphs (A) and
3? (C):
4. "(A) In the event an officer or employee of the Agency or one of
his dependents, requires medical care, for illness or injury not the
5?
6. result of vicious habits, intemperance,or misconduct, while on
7. assignment abroad in a locality where there is no qualified person or
8. facility to provide such care, pay the travel expenses of such officer,
9. employee, or dependent by whatever means deemed appropriate by the
10. Agency, including the furnishing of transportation, and without regard
U. to the Standardized Government Travel Regulations and section 10 of the
12. Act of March 3, 1933, as amended (60 Stat. 808; 5 U.S.C.73b), to the
13. nearest locality where suitable medical care can be obtained and on his
14. recovery pay for the travel expenses of his return to his post of duty.
15. If any such person is too ill to travel unattended, or in the case of
16. a dependent too young to travel alone, the Agency may also pay the
17. round-trip travel expenses of an attendant or attendants."
18. "(C)(i) In the event of illness or injury requiring hospitali-
19. zation or similar treatment of an officer or employee of the Agency,
20. not the result of vicious habits, intemperance, or misconduct on
21. his part, pay for the cost of treatment of such illness or injury.
22. "(ii) In the event a dependent of an officer or employee of
23. the Agency who is stationed abroad, incurs an illness or injury
24. while such dependent is located abroad, which requires hospitalization
25. or similar treatment, and which is not the result of vicious habits,
26. intemperance, or misconduct on his part, pay for that portion of the
27. cost of treatment of each such illness or injury that exceeds $35
3
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1. up to a maximum limitation of one hundred and twenty days of
2. treatment for each such illness or injury, except that such
3. maximum limitation shall not apply whenever the Agency, on the
4. basis of professional medical advice, shall determine that such
5. illness or injury clearly is caused by the fact that such dependent
6. is or has been located abroad."
7. (6) In section 5, add the following new paragraphs (g) and (h):
8.
9. "(g) Where an officer or employee of another Government agency
10. transfers with the consent of such agency and is appointed to a
11. position in the Agency, such an officer or employee shall be entitled
12. upon separation from the Agency, to reinstatement to the position
13. occupied at the time of appointment or to a position of comparable
14. or higher salary in such other Government agency."
15. "(h) Settle and pay, whenever the Director determines that
16. payment will further the purposes of this Act, without regard to
17. any other provisions of law and under such regulations as the
18. Director may prescribe, in an amount not exceeding $10,000, any
19. claim against the United States for loss of or damage to real or
20. personal property (including loss of occupancy or use thereof),
21. belonging to, or for personal injury or death of, any person not
22. a citizen or resident of the United States, where such claim
23. arises abroad out of the act or omission of any Agency employee or
24. out of the act or omission of any person acting on behalf of the
25. Agency but only if such claim is presented in writing to the Agency
26. activity involved within one year after it accrues."
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1. (7),Paragraph (4) of section 104(a) of the Internal Revenue
2. Code of 1954 (26 U.S.C. 1O4(a)(4) ) (relating to the exclusion from
3. gross income of compensation for injuries and sickness) is hereby
4. amended to read as follows:
5. "(4) amounts received as a pension, annuity, or similar allow-
6. ance for personal injuries or sickness resulting from active service
7. in the armed forces of any country or in the Coast and Geodetic
8. Survey or the Public Health Service, or as a disability annuity
9. payable under the provisions of section 831 of the Foreign Service
10. Act of 1946, as amended (22 U.S.C. 1081; 60 Stat. 1021), or as a
11. disability annuity payable under Title II of the Central Intelligence
12. Agency Act of 1949, as amended (50 U.S.C. 403(a) et seq.).
13. (8) Renumber section 7 to read section 8. Renumber section 8
14. to read section 9, APPROPRIATIONS. Renumber section 9 to read
15. section 10, SEPARABILITY OF PROVISIONS. Renumber section 10 to read
16. section 11, SHORT TITLE. Add a new section 7 as follows:
17. "(7) (a) The Director of Central Intelligence is authorized
18. to receive gifts to the Agency and in his discretion to accept,
19. receive, hold, administer, and expend such gifts and bequests of
20. personal property, from individuals or others, for the benefit of,
21. or for use in connection with, the Central Intelligence Agency and
22. its personnel. Gifts or bequests of money or the profits from sales
23. of other property received as gifts shall be subject to disburse-
24. ment by the Director in accordance with the terms and conditions
25. of the acceptance of any particular gift or bequest.
26. "(b) The Director is authorized to invest, reinvest, or retain
27. investments of the money or securities as he shall deem advisable
5
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1. and the interest or profits accruing from such use shall be
2. available for disbursement as provided in (a) above. For the
3. purpose of Federal income, estate and gift taxes, gifts and
4. bequests accepted by the Director shall be deemed to be a gift
5. or bequest to or for the use of the United States."
6. Section 3. Insert the heading "TITLE I -- DEFINITIONS AND
7. GENERAL AUTHORITIES" before the section title, "DEFINITIONS",
8. of section 1 of the Central Intelligence Agency Act of 1949,
9. as amended.
10. Section 4. The Central Intelligence Agency Act of 1949, as
11. amended, is further amended by the addition of TITLE II as
12. follows:
13. "TITLE II -- THE CENTRAL INTELLIGENCE AGENCY RETIREMENT
14. AND DISABILITY SYSTEM
15. "PART A -- ESTABLISHMENT OF SYSTEM
16. "Rules and Regulations
17. "Sec. 201. (a) The Director may prescribe rules and regulations
18. for the establishment and maintenance of a Central Intelligence
19. Agency Retirement and Disability System, referred to hereafter
20. as the System.
21. "(b) The Director shall administer the System in accord-
22. ance with such rules and regulations and with the principles
23. established by this Act.
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1. "Establishment and Maintenance of Fund
2. "Sec. 202. There is hereby created a special fund to be known as
3. the Central Intelligence Agency Retirement and Disability Fund which
1+. shall be maintained by the Secretary of the Treasury and classified
5. under section 20 of the Act of June 26, 1931, (1.8 Stat. ]233) as
6. amended. The Central Intelligence Agency Retirement and Disability
7. Fund is referred to hereafter in this title as the Fund.
8. "Participants
9. "Sec. 203. The Director may designate from time to time such Agency
10. officers and employees, hereafter referred to as participants, who
11. shall be entitled to the benefits of the System.
12. "Annuitants
13. "Sec. 201+. (a) Annuitants shall be persons who are receiving annuities
11i.. from the Fund and all persons, including surviving wives and husbands,
15. widows, dependent widowers, children and beneficiaries of participants
16. or annuitants who shall become entitled to receive annuities in
17. accordance with the provisions of this Act..
18. "(b) When used in this title the term --
19. "(1) "Widow" means the surviving wife of a participant who was
20. married to such participant for at least two years immediately preceding
21. his death or is the mother of issue by such marriage.
22. "(2) "Dependent widower" means the surviving husband of a partici-
23. pant who was married to such participant for at least two years
24. immediately preceding her death or is the father of issue by such
25. marriage, and who is incapable of self-support by reason of mental or
26. physical disability, and who received more than one-half of his support
27. from such participant.
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1. "(3) "Child" means an unmarried child, under the age of
2. eighteen years, or such unmarried child regardless of age who
3. because of physical or mental disability incurred before age
4. eighteen is incapable of self-support. In addition to the off-
5. spring of the participant and his or her spouse the term includes
6. (a) an adopted child, and (b) a step-child or recognized natural
7. child who received more than one-half of his support from the
8. participant.
9. "PART B -- COMPULSORY CONTRIBUTIONS
10. "Sec. 211. (a) Six and one-half per centum of the basic salary
11. received by each participant shall be contributed to the Fund for
12. the payment of annuities, cash benefits, refunds, and allowances.
13. An equal sum shall also be contributed from the respective appro-
14. priation or fund which is used for payment of his salary. The
15. amounts deducted and withheld from basic salary together with the
16. amounts so contributed from the appropriation or fund, shall be
17. deposited by the Central Intelligence Agency in the Treasury of the
18. United States to the credit of the Fund.
19. "(b) Each participant shall be deemed to consent and agree to
20. such deductions from basic salary, and payment less such deductions
21. shall be a full and complete discharge and acquittance of all claims
22. and demands whatsoever for all regular services during the period
23. covered by such payment, except the right to the benefits to which
24+. he shall be entitled under this Act, notwithstanding any law, rule,
25. or regulation affecting the individual's salary.
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1. "PART C -- COMPUTATION OF ANNUITIES
2. "Sec. 221. (a) The annuity of a participant shall be equal to
3. 2 per centum of his average basic salary for the highest five
4. consecutive years of service, for which full contributions have
5. been made to the Fund, multiplied by the number of years, not
6. exceeding thirty-five, of service credit obtained in accordance
7. with the provisions of sections 251 and 252. In determining the
8. aggregate period of service upon which the annuity is to be based,
9. the fractional part of a month, if any, shall not be counted.
10. "(b) At the time of retirement, any married participant may
11. elect to receive a reduced annuity and to provide for an annuity
12. Payable to his wife or her husband, commencing on the date following
13. such participant's death and terminating upon the death of such
11+. surviving wife or husband. The annuity payable'to the surviving
15. wife or husband after such participant's death shall be 50 per centum
16. of the amount of the participant's annuity computed as prescribed
17. in paragraph (a) of this section, up to the full amount of such
18. annuity specified by him as the base for the survivor benefits.
19. The annuity of the participant making such election shall be reduced
20. by 2- per centum of any amount up to $2,1+00 he specifies as the base
21. for the survivor benefit plus 10 per centum of any amount over
22. $2,400 so specified.
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1. "(c) (1) If an annuitant dies and is survived by a wife or
2. husband and by a child or children, in addition to the annuity
3. payable to the surviving wife or husband, there shall be paid to
4. or on behalf of each child an annuity equal to the smallest of:
5. (1) 40 per centum of the annuitant's average basic salary, as
6. determined under paragraph (a) of this section, divided by the
7. number of children; (ii) $600; or (iii) $1,800 divided by the
8. number of children.
9. "(2) If an annuitant dies and is not survived by a wife or
10. husband but by a child or children, each surviving child shall be
U. paid an annuity equal to the smallest of: (i) 50 per centum of the
12. annuitant's average basic salary, as determined under paragraph (a)
13. of this section, divided by the number of children; (ii) $720; or
14. (iii) $2,160 divided by the number of children.
15. "(d) If a surviving wife or husband dies or the annuity of a
16. child is terminated, the annuities of any remaining children shall
17. be recomputed and paid as though such wife, husband, or child had
18. not survived the participant.
19. "(e) The annuity payable to a child, under paragraph (c) or (d)
20. of this section shall begin on the first day of the next month after
21. the participant dies and such annuity or any right thereto shall be
22. terminated upon death, marriage, or attainment of the age of
23. eighteen years, except that, if a child is incapable of self-support
24. by reasons of mental or physical disability, the annuity shall be
25. terminated only when such child dies, marries, or recovers from such
26. disability.
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1. "(f) At the time of retirement an unmarried participant may
2. elect to receive a reduced annuity and to provide for an annuity
3. equal to 50 per centum of the reduced annuity payable after his or
4. her death to a beneficiary whose name shall be designated in writing
5. to the Director. The annuity payable to a participant making such
6. election shall be reduced by 10 per centum of an annuity computed
7. as provided in paragraph (a) of this section and by 5 per centum of
8. an annuity so computed for each full five years the person designated
9. is younger than the retiring participant, but such total reduction
10. shall not exceed 40 per centum. No such election of a reduced
11. annuity payable to a beneficiary shall be valid until the participant
12. shall have satisfactorily passed a physical examination as prescribed
13. by the Director. The annuity payable to a beneficiary under the
14+. provisions of this paragraph shall begin on the first day of the next
15. month after the participant dies. Upon the death of the surviving
16. beneficiary all payments shall cease and no further annuity payments
17. authorized under this paragraph shall be due or payable.
18. "PART D -- BENEFITS ACCRUING TO CERTAIN PARTICIPANTS
19. "Retirement for Disability or Incapacity --
20. Physical Examination -- Recovery
21. "Sec. 231. (a) Any participant who has five years of service
22. credit toward retirement under the System, excluding military or
23. naval service that is credited in accordance with provisions of
24. section 251 or 252(a)(2), and who becomes totally disabled or
25. incapacitated for useful and efficient service by reason of disease,
26. illness, or injury not due to vicious habits, intemperance, or willful
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1. misconduct on his part, shall, upon his own application or upon
2. order of the Director, be retired on an annuity computed as pre-
3. scribed in section 221. If the disabled or incapacitated
i. participant has less than twenty years of service credit toward
5. his retirement under the System at the time he is retired, his
6. annuity shall be computed on the assumption that he has had twenty
7. years of service, but the additional service credit that may accrue
8. to a participant under this provision shall in no case exceed the
9. difference between his age at the time of retirement and the
10. mandatory retirement age applicable to his grade in the Agency.
11. "(b) In each case, the participant shall be given a physical
12. examination by one or more duly qualified physicians or surgeons
13. designated by the Director to conduct examinations, and disability
14+. shall be determined by the Director on the basis of the advice of
15. such physicians pr surgeons. Unless the disability is permanent,
16. like examinations shall be made annually until the annuitant has
17. reached the statutory mandatory retirement age for his grade in the
18. Agency. If the Director determines, on the basis of the advice of
19. one or more duly qualified physicians or surgeons conducting such
20. examinations that an annuitant has recovered to the extent that he
21. can return to duty, the annuitant may apply for reinstatement or
22. reappointment in the Agency within one year from the date his recovery
23. is determined. Upon application the Director nay reinstate any such
24. recovered disability annuitant in the grade in which he was serving
25. at time of retirement, or the Director may, taking into consideration
26. the age, qualifications, and experience of such annuitant, and the
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1. present grade of his contemporaries in the Agency, appoint him to
2. a grade higher than the one in which he was serving prior to retire-
3. went. Payment of the annuity shall continue until a date six months
4. after the date of the examination showing recovery or until the date
5. of reinstatement or reappointment in the Agency, whichever is earlier.
6. Fees for examinations under this provision, together with reasonable
7. traveling and other expenses incurred in order to submit to examina-
8. tion, shall be paid out of the Fund. If the annuitant fails to
9. submit to examination as required under this section, payment of the
10. annuity shall be suspended until continuance of the disability is
11. satisfactorily established.
12. "(c) If a recovered disability annuitant whose annuity is
13. discontinued is for any reason not reinstated or reappointed in the
14+. Agency, he shall be considered to have been separated within the
15. meaning of section 234 as of the date he was retired for disability
16. and he shall, after the discontinuance of the disability annuity,
17. be entitled to the benefits of that section or of section 21+1(a)
18. except that he may elect voluntary retirement in accordance with the
19. provisions of section 233 if he can qualify under its provisions.
20. "(d) No participant shall be entitled to receive an annuity
21. under this Act and canpensation for injury or disability to himself
22. under the Federal Employees' Compensation Act of September 7, 1916,
23. as amended, covering the same period of time. This provision shall
24+. not bar the right of any claimant to the greater benefit conferred
25. by either Act for any part of the same period of time. Neither this
26. provision nor any provision of the said Act of September 7, 1916, as
. 13
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1. amended, shall be so construed as to deny the right of any person
2. to receive an annuity under this Act by reason of his own services
3. and to receive concurrently any payment under such Act of
4. September 7, 1916, as amended, by reason of the death of any other
5. person.
6. "(e) Notwithstanding any provision of law to the contrary, the
7. right of any person entitled to an annuity under this Act shall not
8. be affected because such person has received an award of compensation
9. in a lump sum under section 14 of the Federal Employees' Compensation
10. Act of September 7, 1916, as amended, except that where such annuity
11. is payable on account of the same disability for which compensation
12. under such section has been paid, so much of such compensation as has
13. been paid for any period extended beyond the date such annuity becomes
14. effective, as determined by the Secretary of Labor, shall be refunded
15. to the Department of Labor, to be paid into the Federal Employees'
16. Compensation Fund. Before such person shall receive such annuity he
17. shall (1) refund to the Department of Labor the amount representing such
18. computed payments for such extended period, or (2) authorize the
19. deduction of such amount from the annuity payable to him under this
20. Act, which amount shall be transmitted to such Department for reim-
21. bursement to such Fund. Deductions from such annuity may be made from
22. accrued and accruing payments, or may be prorated against and paid
23. from accruing payments in such manner as the Secretary of Labor shall
24. determine, whenever he finds that the financial circumstances of the
25. annuitant are such as to warrant such deferred refunding.
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2. "Sec. 232. (a) In case a participant dies and no claim for
3. annuity is payable under the provisions of this Act, his contribu-
4. tions to the Fund, with interest at the rates prescribed in sections
5. 241 (a) and 281 (a), shall be paid in the order of precedence shown
6. in section 241 (b).
7. "(b) If a participant, who has at least five years of service
8. credit toward retirement under the System, excluding military or
9. naval service that is credited in accordance with the provisions of
10. section 251 or 252 (a) (2), dies before separation or retirement from
11. the Agency and is survived by a widow or a dependent widower, as
12. defined in section 204, such widow or dependent widower shall be
13. entitled to an annuity equal to 50 per centum of the annuity computed
14. in accordance with the provisions of paragraph (e) of this section
15. and of section 221 (a). The annuity of such widow or dependent
16. widower shall commence on the date following death of the participant
17. and shall terminate upon death of the widow or dependent widower, or
18. upon the dependent widower's becoming capable of self-support.
19. "(c) If a participant who has at least five years of service
20. credit toward retirement under the System, excluding military or naval
21. service that is credited in accordance with the provisions of section
22. 251 or 252 (a) (2), dies before separation or retirement from the
23. Agency and is survived by a wife or a husband and a child or children,
24. each surviving child shall be entitled to an annuity computed in
25. accordance with the provisions of section 221(c)(1). The child's
26. annuity shall begin and be terminated in accordance with the previsions
15
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1. of section 221(e). Upon the death of the surviving wife or husband
2. or termination of the annuity of a child, the annuities of any
3. remaining children shall be recomputed and paid as though such wife
4. or husband or child had not survived the participant.
5. "(d) If a participant who has at least five years of service
6. credit toward retirement under the System, excluding military or
7. naval service that is credited in accordance with the provisions of
8. section 251 or 252(a)(2), dies before separation or retirement from
9. the Agency and is not survived by a wife or husband, but by a child
10. or children, each surviving child shall be entitled to an annuity
11. computed in accordance with the provisions of section 221(c)(2).
12. The child's annuity shall begin and terminate in accordance with the
13. provisions of section 221(e). Upon termination of the annuity of a
14. child, the annuities of any remaining children shall be recomputed
15. and paid as though that child had never been entitled to the benefit.
16. "(e) If, at the time of his or her death, the participant had
17. less than twenty years of service credit toward retirement under the
18. System, the annuities payable in accordance with paragraph (b) of
19. this section shall be computed in accordance with the provisions of
20. section 221 on the assumption he or she has had twenty years of
21. service, but the additional service credit that may accrue to a
22. deceased participant under this provision shall in no case exceed
23. the difference between his or her age on the date of death and the
24. mandatory retirement age applicable to his or her grade in the Agency.
25. In all cases arising under paragraphs (b), (c), (d), or (e) of this
26. section, it shall be assumed that the deceased participant was
27. qualified for retirement on the date of his death.
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1. "Voluntary Retirement
2. "Sec. 233. Any participant in the System who is at least
3. fifty years of age and has rendered twenty years of service,
4. including service within the meaning of section 253, may on
5. his own application and with the consent of the Director be
6. retired from the Agency and receive benefits in accordance
7. with the provisions of section 221.
8. "Discontinued Service Retirement
9. "Sec. 234. (a) Any participant who separates from the Agency
10. after obtaining at least five years of service credit toward re-
11. tirement under the System, excluding military or naval service
12. that is credited in accordance with the provisions of section
13. 251 or 252 (a)(2), may, upon separation from the Agency or at
14. any time prior to becoming eligible for an annuity, elect to
15. have his contributions to the Fund returned to him in accordance
16. with the provisions of section 24+1, or (except in cases where
17. the Director determines that separation was based in whole or in
18. part on the ground of disloyalty to the United States) to leave
19. his contributions in the Fund and receive an annuity, computed as
20. prescribed in section 221, commencing at the age of sixty years.
21. "(b) If a participant who has qualified in accordance with
22. the provisions of paragraph (a) of this section to receive a
23. deferred annuity commencing at the age of sixty dies before reach-
214. ing the age of sixty his contributions to the Fund, with interest,
25. shall be paid in accordance with the provisions of sections 241
26. and 281.
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1. "(c) The Director may in his discretion retire participants
2. in grade GS-14 and above to promote the efficiency of the Agency
3. and they shall receive retirement benefits in accordance with
4. the provisions of section 221.
5. "(d) The Director may in his discretion retire participants
6. in grade GS-13 and below to promote the efficiency of the Agency
7. and each such officer shall receive--
8. "(1) one-twelfth of a year's salary at his then current salary
9. rate for each year of service and proportionately for a fraction of
10. a year, but not exceeding a total of one year's salary at his then
11. current salary rate, payable without interest, from the Fund, in
12. three equal installments on the 1st day of January following the
13. officer's retirement and on the two anniversaries of this date
14. immediately following: Provided. That in special cases, the
15. Director may in his discretion accelerate or combine the install-
16. ments; and
17. "(2) a refund of the contributions raade to the Fund, with
18. interest as provided in section 241 (a), except that in lieu of
19. such refund such officer, if he has at least five years of ser-
20. vice credit toward retirement under the System, excluding military
21. or naval service that is credited in accordance with the provisions
22. of section 251 or 252 (a), may elect to receive retirement bene-
23. fits on reaching the age of sixty in accordance with the provisions
24. of section 221. In the event that an officer who was separated
25. from grade GS-13 or GS-12 and who has elected to receive retire-
26. ment benefits dies before reaching the age of sixty, his death
27. shall be considered a death in service within the meaning
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1. of section 232. In the event that an officer who was separated
2. from grade GS-11 or below and who has elected to receive retirement
3. benefits dies before reaching the age of sixty, the total amount of
4. his contributions made to the Fund, with interest as provided in
5. section 241(a), shall be paid in accordance with the provisions
6. of section 241(b).
7. "(e) Notwithstanding the provisions of section 3477 of the
8. Revised Statutes, as amended (31 U.S.C. 203) or the provisions of
9. any other law, an Agency officer who is retired in accordance with
10. the provisions of section 234 (d) shall have the right to assign to
11. any person or corporation the whole or any part of the benefits
12. receivable by him pursuant to paragraph (d) (1) of this section.
13. Any such assignment shall be on a form approved by the Secretary of
14. the Treasury and a copy thereof shall be deposited with the Secretary
15. of the Treasury by the officer executing the assignment.
16. "Mandatory Retirement for Age
17. "Sec. 235. (a) Any participant in the System in grade GS-18 or
18. above, shall upon reaching the age of sixty-five, be retired from
19. the Agency and receive retirement benefits in accordance with the
20. provisions of section 221, but whenever the Director shall determine
21. it to be in the public interest, he may extend such an officer's
22. service for a period not to exceed five years.
23. "(b) Any participant in the System, other than in grade GS-18
24. or above, shall upon reaching the age of.sixty, be retired from the
25. Agency and receive retirement benefits in accordance with the provisions
26. of section 221, but whenever the Director shall determine it to be
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1. in the public interest, he may extend such an officer's service
2. for a period not to exceed five years.
3. "PART E -- DISPOSITION OF CONTRIBUTIONS AND INTEREST
4. IN EXCESS OF BENEFITS RECEIVED
5. "Sec 241. (a) Whenever a participant becomes separated from
6. the Agency without becoming eligible for an annuity or a deferred
7. annuity in accordance with the provisions of this Act, the total
8. amount of contributions from his salary with interest thereon at
9. 4 per centum per annum, compounded annually as of December 31, and
10. proportionately for the period served during the year of separation
11. including all contributions made during or for such period, except
12. as provided in section 281, shall be returned to him.
13. "(b) In the event that the total contributions of a retired
14. participant, other than voluntary contributions made in accordance
15. with the provisions of section 281, with interest at 4 per centum
16. per annum compounded annually as is provided in paragraph (a) of
17. this section added thereto, exceed the total amount returned to such
18. participant or to an annuitant claiming through him, in the form of
19. annuities, accumulated at the same rate of interest up to the date
20. the annuity payments cease under the terms of the annuity, the excess
21. of the accumulated contributions over the accumulated annuity payments
22. shall be paid in the following order of precedence, upon the establish-
23. ment of a valid claim therefor, and such payment shall be a bar to
24. recovery by any other person:
25. "(1) To the beneficiary or beneficiaries designated by the
26. retired participant in writing to the Director;
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1. "(2) If there be no such beneficiary, to the surviving wife
2. or husband of such participant;
3. "(3) If none of the above, to the child or children of such
ii. participant and descendants of deceased children by representation;
5. "(I+) If none of the above, to the parents of such participant
6. or the survivor of them;
7. "(5) If none of the above, to the duly appointed executor or
8. administrator of the estate of such participant;
9. "(6) If none of the above, to other next of kin of such
10. participant as may be determined by the Director in his judgment
11. to be legally entitled thereto.
12. "(c) No payment shall be made pursuant to paragraph (b) (6) of
13. this section until after the expiration of thirty days from the
14. death of the retired participant or his surviving annuitant.
15. "PART F -- PERIOD FOR SERVICE FOR ANNUITIES
16. "Computation of Length of Service
17. "Sec. 251. For the purposes of this title, the period of
18. service of a participant shall be computed from the date he becomes
19. a participant under the provisions of this Act, but all periods of
20. separation from the Agency and so much of any leaves of absence
21. without pay as may exceed six months in the aggregate in any calendar
22. year shall be excluded, except leaves of absence while receiving
23. benefits under the Federal Employees' Compensation Act of
24+. September 7, 1916, as amended, and leaves of absence granted
25. participants while performing active and honorable military or
26. naval service in the Army, Navy, Air Force, Marine Corps, or Coast
27. Guard of the United States.
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1. "Prior Service Credit
2. "Sec. 252. (a) A participant may, subject to the provisions
3. of this section, include in his period of service --
4+. "(1) civilian service in the executive, judicial, and legislative
5. branches of the Federal Government and in the District of Columbia
6. government, prior to becoming a participant; and
7. "(2) active and honorable military or naval service in the
8. Army, Navy, Marine Corps, Air Force, or Coast Guard of the United
9. States.
10. "(b) A person may obtain prior civilian service credit in
11. accordance with the provisions of paragraph (a) (1) of this section
12. by making a special contribution to the Fund equal to 5 per centum
13. of his basic annual salary for each year of service for which credit
14+. is sought prior to November 8, 1960, and at 62 per centum thereafter
15. with interest compounded annually at 4 per centum per annum to the
16. date of payment. Any such person may, under such conditions as may
17. be determined in each instance by the Director, pay such special
18. contributions in installments.
19. "(c)(1) If an officer or employee under some other Government
20. retirement system, becomes a participant in the System by direct
21. transfer, such officer or employee's total contributions and deposits,
22. including interest accrued thereon, except voluntary contributions,
23. shall be transferred to the Fund effective as of the date such officer
24. or employee becomes a participant in the System. Each such officer
25. or employee shall be deemed to consent to the transfer of such funds
26. and such transfer shall be a complete discharge and acquittance of
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1. all claims and demands against the other Government retirement fund
2. on account of service rendered prior to becoming a participant in
3. the System.
4. "(2) No officer or employee, whose contributions are trans-
5. ferred to the Fund in accordance with the provisions of paragraph
6. (c)(1) of this section, shall be required to make contributions in
7. addition to those transferred, for periods of service for which full
8. contributions were made to the other Government retirement fund,
9. nor shall any refund be made to any such officer or employee on
10. account of contributions made during any period to the other Government
11. retirement fund, at a higher rate than that fixed by section 211 of
12. this Act for contributions to the Fund.
13. "(3) No officer or employee, whose contributions are transferred
14. to the Fund in accordance with the provisions of paragraph (c)(1)
15. of this section, shall receive credit for periods of service for which
16. a refund of contributions has been made, or for which no contributions
17. were made to the other Government retirement fund. A participant
18. may, however, obtain credit for such prior service by making a special
19. contribution to the Fund in accordance with the provisions of para-
20. graph (b) of this section.
21. "(d) No participant may obtain prior civilian service credit
toward retirement under the System for any period of civilian service
23. on the basis of which he is receiving or will in the future be
24+. entitled to receive any annuity under another retirement system
25. covering civilian personnel of the Government.
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1. "(e) A participant may obtain prior military or naval service
2. credit in accordance with the provisions of paragraph (a) (2) of
3. this section by applying for it to the Director prior to retirement
4. or separation from the Agency. However, in the case of a participant
5. who is eligible for and receives retired pay on account of military
6. or naval service, the period of service upon which such retired pay
7. is. based shall not be included, except that in the case of a
8. participant who is eligible for and receives retired pay on account
9. of a service-connected disability incurred in combat with an enemy
10. of the United States or caused by an instrumentality of war and
11. incurred in line of duty during a period of war (as that term is used
12. in chapter 11 of title 38, United States Code), or is awarded under
13. chapter 67 of title 10 of the United States Code, the period of such
14+. military or naval service shall be included. No contributions to
15. the Fund shall be required in connection with military or naval
16. service credited to a participant in accordance with the provisions
17. of paragraph (a) (2) of this section.
18. "Credit for Service at Unhealthful Posts
19. "Sec. 253. The Director may from time to time establish a list
20. of places which by reason of climatic or other extreme conditions
21. are to be classed as unhealthful posts, and each year of duty at
22. such posts inclusive of regular leaves of absence, of participants
23. hereafter retired, shall be counted as one year and a half, and so
24+. on in like proportion in reckoning the length of service for the
25. purpose of retirement, fractional months being considered as full
26. months in computing such service. The Director may at any time
24
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1. cancel the designation of any places as unhealthful without affecting
2. any credit which has accrued for service at such posts prior to the
3. date of the cancellation.
4. "Credit for Service While on Military Leave
5. "Sec. 25k. Contributions shall not be required covering periods
6. of leave of absence from the Agency granted a participant while
7. performing active military or naval service in the Army, Navy, Air
8. Force, Marine Corps, or Coast Guard of the United States.
9. "PART G -- MONEYS
10. "Estimate of Appropriations Needed
11. "Sec. 261. The Secretary of the Treasury shall prepare the
12. estimates of the annual appropriations required to be made to the
13. Fund, and shall make actuarial valuations of such funds at intervals
11+. of five years, or oftener if deemed necessary by him.
15, "Investment of Moneys in the Fund
16. "Sec. 262. The Secretary of the Treasury shall invest from time
17. to time in interest-bearing securities of the United States such
18. portions of the Fund as in his judgment may not be immediately required
19. for the payment of annuities, cash benefits, refunds, and allowances,
20. and the income derived from such investments shall constitute a part
21. of such Fund.
22. "Attachment of Moneys
23. "Sec. 263. None of the moneys mentioned in this title shall
24+. be assignable either in law or equity, or be subject to execution,
25. levy, attachment, garnishment, or other legal process, except as
26. provided in section 234 (e).
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1. "PART H -- ANNUITANTS RECALLED, REINSTATED OR
2. REAPPOINTED IN THE AGENCY OR REEMPLOYED IN THE
3. GOVERNMENT
4. "Recall
5. "Sec. 271. (a) The Director may recall any annuitant to duty
6. in the Agency whenever he shall determine such recall is in the
7. public interest.
8. "(b) Any annuitant recalled to duty in the Agency or reinstated
9. or reappointed in accordance with the provisions of section 231(b)
10. shall, while so serving, be entitled in lieu of his annuity to the
11. full salary of the grade in which he is serving. During such service,
12. he shall make contributions to the Fund in accordance with the pro-
13. visions of section 211. When he reverts to his retired status, his
14. annuity shall be determined anew in accordance with the provisions
15. of section 221.
16. "Reemployment Compensation
17. "Sec. 272. (a) Notwithstanding any other provision of law,
18. any officer or employee of the Agency, who has retired under this
19. Act, as amended, and is receiving an annuity pursuant thereto, and
20. who is reemployed in the Federal Government service in any appointive
21. position either on a part-time or full-time basis, shall be entitled
22. to receive the salary of the position in which he is serving plus so
23. much of his annuity payable under this Act, as amended, which when
24. combined with such salary does not exceed during any calendar year
25. the basic salary such officer or employee was entitled to receive on
26. the date of his retirement from the Agency. Any such reemployed officer
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1. or employee who receives salary during any calendar year in excess of
2. the maximum amount which he may be entitled to receive under this
3. paragraph shall be entitled to such salary in lieu of benefits
4+. hereunder.
5? "(b) When any such retired officer or employee of the Agency is
6. reemployed, the employer shall send a notice to the Central
7. Intelligence Agency of such reemployment together with all pertinent
8. information relating thereto, and shall pay directly to such officer
9. or employee the salary of the position in which he is serving.
10. "(c) In the event of any overpayment under this section, such
11. overpayment shall be recovered by withholding the amount involved from
12. the salary payable to such reemployed officer or employee,or from any
13. other moneys, including his annuity, payable in accordance with the
14+. provisions of this title.
15. "Reemployment
16. "Sec. 273. Notwithstanding the provisions of title 5, United
17. States Code, section 62, and title 5, United States Code, section
18. 715a, an Agency officer or employee retired under the provisions
19. of this Act shall not, by reason of his retired status, be barred
20. from employment in Federal Government service in any appointive
21. position for which he is qualified. An annuitant so reemployed
22. shall serve at the will of the appointing officer.
23. "PART I -- VOLUNTARY CONTRIBUTIONS
24. "Sec. 281. (a) Any participant may, at his option and under such
25. regulations as may be prescribed by the Director, deposit additional
26. sums in multiples of 1 per centum of his basic salary, but not in
27. excess of 10 per centum of such salary, which amounts together with
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1. interest at 3 per centum per annum, compounded annually as of
2. December 31, and proportionately for the period served during the
3. year of his retirement, including all contributions made during or
4. for such period, shall, at the date of his retirement and at his
5. election, be--
6. "(1) returned to him in lump sum; or
7. "(2) used to purchase an additional life annuity; or
8. "(3) used to purchase an additional life annuity for himself
9. and to provide for a cash payment on his death to a beneficiary whose
10. name shall be notified in writing to the Director by the participant;
11. or
12. "(4) used to purchase an additional life annuity for himself
13. and a life annuity commencing on his death payable to a beneficiary
14. whose name shall be notified in writing to the Director by the
15. participant with a guaranteed return to the beneficiary or his legal
16. representative of an amount equal to the cash payment referred to in
17. subparagraph (3) above.
18. "(b) The benefits provided by subparagraphs (2), (3), or (4) of
19. paragraph (a) of this section shall be actuarially equivalent in
20. value to the payment provided for by subparagraph (a) (1) of this
21. section and shall be calculated upon such tables of mortality as may
22. be from time to time prescribed for this purpose by the Secretary of
23. the Treasury.
24. "(c) In case a participant shall become separated from the Agency
25. for any reason except retirement on an annuity, the amount of any
26. additional deposits with interest at 3 per centum per annum, compounded
27. as is provided in paragraph (a) of this section, made by him under the
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1. provisions of said paragraph (a) shall be refunded in the manner
2. provided in section 21+1 for the return of contributions and inter-
3. est in the case of death or separation from the Agency.
1+. "(d) Any benefits payable to an officer or to his beneficiary
5. in respect to the additional deposits provided under this section
6. shall be in addition to the benefits otherwise provided under this
7. title."
29
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S -E -C -R-E-T
CENTRAL INTELLIGENCE AGENCY ACT ANENI24EN OF 1963
EXPLANATION AND JUSTIFICATION
1. Purpose of Proposed Bill
a. The proposed bill permits the Agency to improve its retirement
program by authorizing the establishment of a retirement system corre-
sponding to that of the Foreign Service. The Central Intelligence Agency
needs to attract and retain a force of highly motivated careerists who
are intensively trained in unique skills. However, the Agency is unable
in fact to provide full-term careers for many individual officers. In
order to minimize the adverse effects of necessary programs of managed
attrition and to preserve its ability to recruit and retain the high cali-
ber personnel it needs, the Agency must make reasonable provision for the
futures of those individuals who must be separated before completing a
full-term career of thirty or so years. Therefore, the proposed bill
adds a new Title II to the Central Intelligence Agency Act of 191+9, as
amended, which establishes for a limited number of Agency employees a
retirement and disability system corresponding to that established for
persons serving in the Foreign Service of the Department of State.
b. Section 4 of the Central Intelligence Agency Act was originally
drafted to extend to Agency employees serving abroad travel expenses and
overseas allowances similar to those extended to Foreign Service person-
nel. Section 2 of the proposed bill makes appropriate modifications in
Section 4 of the Central Intelligence Agency Act to bring it up to date
in this regard. Certain other amendments have been determined to-be
necessary and have been explained in the Sectional Analysis and Explana-
tion, Appendix A.
2. Need for a Separate Retirement System for Certain Employees
a. Summary
All regular employees of the Central Intelligence Agency are at
present covered by the provisions of the Civil Service Retirement Act.
Such coverage is appropriate for those whose conditions, obligations, and
terms of service are comparable to those of federal employees generally.
However, the Agency has a serious problem in its need to make more ade-
quate provision for certain of its employees who should be retired at an
earlier age and with a more equitable annuity than can be provided under
the Civil Service Retirement Act. This need stems from the fact that the
Agency cannot provide to or expect from many individuals in its service a
full-term working career of thirty or so years.
b. Background
(1) The conditions underlying this situation are complex. For
some years the Agency has recognized that it faces a serious dilemma.
S-E-C-R-E-T GROUP 1. Excluded from automatic
downgrading and declassification.
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S-E-C-R-E-T
On the one hand, the nature of its mission requires the employment of
people who are highly motivated and who develop unique and special-
ized abilities through their continuing training and service over the
years. Moreover, the nature of the Agency's mission requires that a
substantial proportion of its personnel accept, as do members of the
military services, the obligation to serve anywhere in the world at
the Agency's direction---not at their own will---and to be available
for duty on a 21+-hour-a-day basis. In sum, the employment of people
to serve on a career basis is essential to fill the majority of the
Agency's requirements for personnel. On the other hand, factors
directly related to the nature and conditions of service in the intel-
ligence field and factors affecting the ability and desire of indi-
viduals to remain in such work on a long-term basis make it infeasible
to provide full-term employment for all careerists.
(2) The nature of the work involved in the Agency's operations
requires people who have a high degree of vigor, vitality, endurance,
resilience, and adaptability. Such traits are required to cope with
the stresses and strains occasioned by uneven and uncertain hours and
days of work, duty in unhealthful locations with less than adequate
medical facilities, or arduous, and not infrequently hazardous, assign-
ments. For example, the responsibility of the Agency for covert cold
war functions and continuance of counter-insurgency activities requires
the Agency to employ numbers of individuals whose skills are not neces-
(4+) There are other factors pertaining to the individuals them-
selves which, over the years, limit their ability and desire to con-
tinue in overseas service.
(a) First, there is "motivational exhaustion." This term
is used to describe a gradual lessening of interest and enthusi-
asm of an officer as a result of impingements on his personal and
family life. These stem from the transient nature of his assign-
ments, the complications and restrictions of security requirements,
and intrusions on his family life occasioned by the requirement
that he spend his apparent "leisure time" in performing additional
25X1
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25X1
25X1
. all
Agency employees are subject to security restrictions s which
l
T
hesfactors tend to lessen
asm and willingness of the family to accompany the
officer on further assignments overseas.
p
ace severe limitations on their personal freedoms, emp
serving 2255XX
Z5X~
(b) Second, our experience has shown that many officers or
members of their families will in time incur physical impediments
which limit or preclude their further assignment overseas. The
moderate climate and excellent medical facilities of the United
States make living in our own country healthier than living in
many areas abroad. It is accepted medical fact that there are
more disease hazards and a greater incidence of sickness abroad
than in the United States. Americans, because of the advances of
sanitation and public health in this country, have failed to
develop the natural immunities which most foreigners develop.
Consequently, Americans are more susceptible than local inhabi-
tants to the diseases of an area.
The wear and tear of repeated illness saps an individ-
ual's strength and resilience and affects his longevity. More-
over, ills which an employee encounters in one place often attach
themselves permanently as chronic and sometimes disabling condi-
tions. This contributes to the need for the earlier retirement
provisions now proposed for certain employees of the Agency.
(5) The dynamic nature of intelligence produces sudden and same-
times radical shifts in the types of personnel required. Completion
of a mission of a temporary nature or a shift in emphasis or direction
of operations may result in an overabundance of officers who are
skilled in a relatively narrow field. Their primary qualifications
thus become obsolete or unneeded and they become "occupationally
surplus."
c. Manpower Control
(1) The Agency finds it increasingly necessary to Impose manpower
controls to ensure appropriate alignment as to age, qualifications,
and other characteristics of its employees engaged in conducting or
supporting foreign intelligence operations. Insofar as possible,
imbalances should be and are corrected by the reassignment of officers,
who cannot or should not continue in such work,to other fields of work
in the Agency. It is a certainty, nonetheless, that encouraged and
induced attrition will continue to be necessary. A program of managed
attrition is feasible, however, only if it is linked with a system of
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retirement benefits which are sufficient to induce an employee or a
prospective employee to take the risk that he may be one of those
individuals who cannot serve a full term career.
(2) The seriousness of this risk to the individual is greatly
augmented by the difficulty which he will encounter in effecting a
transfer from intelligence activities to other Government or commer-
cial fields. The principal reason for this is that the special
skills required for intelligence work are not ordinarily required in
other fields. Other reasons are the inability of employees for
security reasons to describe or confirm to a prospective employer the
scope and level of his duties and responsibilities. Further, there
is a reluctance on the part of other employers, both Governmental and
private, who are engaged in business overseas to hire a former intel-
ligence officer. This reluctance stems from their concern that the
attitudes of foreign officials toward their enterprises might be ad-
versely affected if they were known to employ "former spies."
(3) As part of its manpower control program, the Agency has
instituted administrative procedures for identifying employees who
become surplus to its needs because of the several factors described
above and during the past year has separated some 125 such individu-
als. Many of these individuals had given long years of competent and
faithful service to the Agency and to the Government. The process of
terminating their employment was made the more painful because of the
relatively inadequate assistance which the Agency could offer them in
making occupational transfers or in retiring prematurely. The bene-
fits available were limited to those provided under the discontinued
service provisions of the Civil Service Retirement Act and to modest
separation compensation payments from the Agency which are related to
years of service and salary.
3. Proposed Retirement System
a. In order to minimize the adverse effects of such programs on the
Agency's ability to recruit and retain the caliber of personnel needed,
and particularly to minimize their effects on the dedicated personnel
already in the service of the Agency, better provision must be made for
the futures of those individuals who are separated before completing a
full-term career. An important means for doing so is to establish a re-
tirement system permitting earlier retirement with a more nearly adequate
and equitable annuity than is possible under the civil service retirement
system.
b. Careful study has been devoted to this matter. Recognizing the
difficulties in developing an entirely new retirement system, the Agency
examined existing systems. We have determined that the Foreign Service
system fulfills Agency requirements and is appropriate for those Agency
employees whose careers involve conditions of service comparable to those
-
---~~ ~ - 1YV1111G1?
25X1
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C. Appendix B compares the pertinent provisions of the Foreign Service
and the civil service retirement systems prior to the enactment of Public
Law 87-793 which liberalized certain annuity benefits under the civil ser-
vice retirement system. This chart is based on a similar chart appearing
in the Report of the House Committee on Foreign Affairs in the second ses-
sion of the 86th Congress. It was prepared at that time in connection
with proposed amendments to the Foreign Service Act of 1946, as amended,
relating to the retirement system, which proposals were subsequently
enacted into law.
d. All of the Agency's employees do not serve under conditions war-
ranting other than the normal retirement considerations. Consequently,
the Agency does not intend to place all of its personnel under the proposed
new system. Those who are to be designated for coverage will undergo a
rigid selection process, the essential criteria for coverage being as fol-
lows:
(1) Career employees whose duties and responsibilities are pre-
dominantly concerned with the conduct and support of intelligence
operations in foreign countries or with covert support in the United
States of such operations under comparable conditions; or,
(2) Career employees whose duties are so specialized that they
are placed at a special disadvantage when required to seek other
employment.
f. Normally, we would anticipate that an average of some 27 of those
employees who would be covered under the proposed system would become
eligible for optional retirement under the civil service retirement system
during each of the next five years. For the reasons presented above and
in order to correct imbalances in the age make-up of this group, we plan
under the proposed system to increase the average number of retirements
from this group by about 40 in each of these years. Also, during the
past year, the average age of Agency personnel who retired under the civil
service retirement system was 66. We plan in time to lower the average
retirement age of those covered under the proposed system to about 55
years, which is comparable to the average retirement age in the Foreign
Service.
25X1
25X1
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g. The specific provisions of the proposed retirement system and
other amendments to the Central Intelligence Agency Act and explanatory
notes are contained in Appendix A, Sectional Analysis and Explanation.
4. Cost Estimates
a. There will be certain increased costs for the administration of
the retirement system. For reasons of efficiency and security, it is con-
sidered essential that full administration of the program, excluding main-
tenance of the fund by the Department of the Treasury (as required by law
in the case of the Foreign Service Retirement Fund), be accomplished with-
in the Agency. It is estimated that by the end of the first five years
the administration of the proposed program would cost approximately $85,000
per year including an increased staffing requirement of approximately eight
man years. Internal administration of the program would include determina-
tions of eligibility and entitlements, payment of retirement benefits, and
all related administrative matters.
b. Program costs cannot be estimated with comparable precision.
Nevertheless, reasonably valid estimates have been made on the basis of
actuarial experience of the civil service and the Foreign Service systems.
(1) The most recent annual report of the Chairman of the Civil
Service Commission presents cost 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 bene-
fits accruing on account of current service. (Cost factors updated
to include the cost of increased annuity benefits provided under
Public Law 87-793 are not yet available. It can be anticipated, how-
ever, that they will increase the .83% of payroll additional contri-
bution by the Government and thus narrow the differential between the
civil service and Foreign Service systems stated below.)
(2) Similar, although not fully comparable data pertaining to
the Foreign Service retirement system, indicates that additional con-
tributions by the Government of 10.69% would be required. Using the
difference (9.86%) between these two estimates as reflecting the cost
differentials of the differing benefits of the two programs and apply-
ing this difference to the estimated annual payroll of the Agency 25X1
employees eligible for the proposed retirement system, we compute that
a maximum additional Government contribution of = million annually 25X1
would be required. However, it has not been Government practice for
many years to fully fund its retirement programs. Further, there have
been special charges against the Foreign Service Retirement Fund which
go beyond the basic benefits of the proposed system.
c. Increased payout costs for the next five years can be estimated
through comparison of the basic annuity benefits under the proposed system
over the civil service system. Our estimate assumes reduction in retire-
ment age of the eligible group to 55 years and attainment of the planned
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S-E-C-R-E-T
rate of 67 retirements per year. It also, based upon age and grade char-
acteristics of the group, assumes retirement with 25 years of service and
an average high-five salary at about the second step of QS-13. Lastly,
in computing the increased payout, the estimated high-five salary was
adjusted to reflect salary increases and the increases in civil service
annuities authorized by the Postal Service and Federal Employees Salary
Act of 1962.
Fiscal Year
Annuitants Increased Annuity Payments
(Cumulative Total) (Annual Payout)
1964 (2 year)
34
$ 17,612
1965
57,142
1966
168
100,022
1967
235
148,932
1968
197, 842
Total Increased Annuity Payments
$ 521,550
d. The chain of recruitment, reassignment, and promotion actions
created by this annual retirement of officers would result in a consider-
able lapse in salary expenses. Assuming an average lag of six months
in this process, the reduction of expenditures would approximate $2,516
per retirement and would total approximately $452,880 over a five-year
period. This amount would almost offset the estimated increase in annuity
payments for the first five years that the new system was in operation.
Appendix A, Sectional Analysis and Explanation
Appendix B, Comparison of Foreign Service Retirement and Disability
System with Pertinent Provisions of the Civil Service
Retirement System
7
S-E-C R-E-T
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 t "I
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APPENDIX A
CENTRAL IIJTELLIGENCE AGENCY ACT ANON] ENTS OF 1963
SECTIONAL ANALYSIS AND EXPLANATION
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CENTRAL INTELLIGENCE AGENCY ACT AMENTS OF 1963
(NOTE: Proposed legislation by section is set forth on the
left with the existing Central Intelligence Agency statutory
provision, if any, on the right.)
Proposed Legislation Existing Legislation
Be it enacted by the Senate and
House of Representatives of the Uni-
ted States of America in Congress
assembled, That this Act may be cited
as the "Central Intelligence Agency
Act Amendments of 1963."
The Central Intelligence Agency Act of
1949, as amended (50 U.S.C. 403(a) et
seq.), is further amended as follows:
(1) Amend section 3 by deletion of
subsections (a) and (b) and substitute
therefor :
"(a) In the performance of its fune- Sec. 3. (a) In the performance of its
tions, the Central Intelligence Agency functions the Central Intelligence
is authorized to exercise the authorities Agency is authorized to exercise the
contained in sections 2301; 2302(2) and authorities contained in sections
? 2303 (b ).and (c); 2504 (a)(1), 2 2(c)(l), (2), (3), (4), (5), (6),
(10), 12 (15), (10), (12), (15), (17), and sections
and (17); 2305; 2306; 23071 2312; and 3, 4, 5, 6, and 10 of the Armed
3 of title 10, United States Code." Services Procurement Act of 1947
(Public Law 413, Eightieth Congress,
second session).
"(b) In the exercise of the authori- (b) In the exercise of the author-
ties granted in subsection (a) of this ities granted in subsection (a) of
section, the term "Agency head" hall this section, the term "Agency head"
mean the Director and the Deputy shall mean the Director, the Deputy
Director." Director, or the Executive of the
Agency.
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Proposed Legislation
(2) Amend section 3(d) by deletion
of the wording "section 2(c) and sec-
tion 5(a) of the Armed Service Pro-
curement Act of 1247' from the first
sentence and substitute therefor,
"section 2304(a) and section 2307 of
title 10, United States Code." Further
amend section 3(d) by deletion of the
wording "section 2 c by section 4 or
by section 5(a) of the Armed Services
Procurement Act of 19 7 from the
second sentence and substitute therefor,
"section 2304(a), by section 2306 or by
section 2307 of title 10, United States
Code."
Existing Legislation
(d) The power of the Agency
head to make the determinations
or decisions specified in para-
graphs (12) and (15) of section
2(c) and section 5(a) of the
Armed Services Procurement Act
of 1947 shall not be delegable.
Each determination or decision
required by paragra hs (12) and
(15) of section 2(c), by section
4 or by section 5(a) of the Armed
Services Procurement Act of 1947,
shall be based upon written
findings made by the official
making such determinations, which
findings shall be final and shall
be available within the Agency
for a period of at least six
years following the date of the
determination.
Explanation: These sections update procurement authority references and
terms used in the Central Intelligence Agency Act of 1949. The Armed
Service Procurement Act of 1947 has been incorporated into title 10,
"Armed Forces," U. S. Code. The term "Executive" as set forth in 3(b)
of existing legislation is no longer used to designate a senior Agency
official and consequently has been eliminated.
(3) In section 4 add the following
new paragraphs (1)(G) and (1)(H), and
(8):
"(1)(G) Pay the travel expenses of
officers and employees of the Agency and
members of their families, while serving
at posts specifically designated by the
Director for purposes of this paragraph,
for rest and recuperation to other loca-
tions abroad having different environ-
mental conditions than those at the post
at which such officers and employees are
serving, provided that such travel ex-
penses shall be limited to the cost for
each officer or employee and members of
his family of one round trip during any
continuous two-year tour unbroken by home
leave and two round trams during any con-
tinuous three-year tour unbroken by home
leave .
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ZExplanatory note for sec. 4(1)(G)7
Explanation: This section provides for travel of the employee and his
dependents away from specifically designated posts for rest and recupera-
tion in other locations abroad having more favorable envirornnental con-
ditions. Such travel is necessary to the health and welfare of the
individual and his family as well as the maintenance of a high standard
of work productivity at the post of assignment. Similar authority has
been provided by section 911(9) of the Foreign Service Act for Foreign
Service personnel serving under comparable conditions.
Proposed Legislation Existing Legislation
"(1)(H) Pay the travel expenses
of members of the family accompanying,
preceding, or following an officer or
employee if, while he is enroute to his
post of assignment, he is ordered tem-
porarily for orientation and training
or is given other temporary duty"
Explanation: This section provides for payment of the cost of travel of
dependents to necessary temporary duty points enroute from one post of
assignment to another. Such authority is necessary for consultation and
restraining between assignments and is identical with section 911(10) of the
Foreign Service Act.
"(8) Provide appropriate orienta-
tion and language training to members
of family of officers and employees of
the Agency in anticipation of the assign-
ment abroad of such officers and em-
2loyees, or while abroad."
Explanation: This section provides for orientation and language training
for members of Agency families in regard to assignment abroad. It is sub-
stantively the same authority provided in section 701 of the Foreign
Service Act.
(4) Amend section 4(3)(A) to read
as follows:
"(3)(A) Order to any of the several
States of the United States of America
including the District of Columbia,
the Commonwealth of Puerto Rico, and
any territory or possession of the
United States) on statutory leave of
Sec. 4. (3)(A) Order to any of the
several States of the United States
of America (including the District of
Columbia, the Commonwealth of Puerto
Rico, and any territory or possession
of the United States) on leave of
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Proposed Legislation
Sec. 40)(A) continue]
absence each officer or employee
of the Agency who was a resident
of the United States as described
above at the time of employment,
upon completion of three years'
continuous service abroad or as
soon as possible thereafter and
4kaY so order after completion of
eighteen months such service.
Existing Legislation
CSec. l(3)(A) continue)
absence each officer or employee
of the Agency who was a resident
of the United States (as described
above) at time of employment, upon
completion of two years' continuous
service abroad, or as soon as
possible thereafter."
Explanation: This section realigns existing Agency authority for home leave
travel to bring it in accord with the authority set forth in section 933(a)
of the Foreign Service Act. This section also authorizes home leave travel
after c npletion of 18 months at selected hardship or notoriously unhealthful
posts.
(5) Amend section 4(5) by striking
out subsections (A) and (C) and in-
serting in lieu thereof the following
new paragraphs (A) and (C):
"(A) In the event an officer or
employee of the Agency or one of his
dependents, re ug ires medical care, (jr
fillness or ii:jury not the result of
vicious habits, intemperance, or mis-
conduct, while on assignment abroad
in a locality where there is no quali-
fied Rersor. or facility to provide
such care, pay the travel ea~ense,~ of
such officer, ernlojc~_or dependents
by whatever means deemed appropriate,
tithe Agency, inc, adiiig the furnishing
of transportation, and without regard
to the Standardized Government Travel
Regulations-and section 10 of the Act
of March 3 1933, as amended 60 Stat.
808; 5 U.S.C. 73h)_~to the nearest
locality where suitable medical care
can be obtained and on his recovery
pLiy for the travel_ expenses of his
return to his post of duty._
Sec. 4. (5)(A) In the event of illness
or injury requiring the hospitali-
zation of an officer or full time
employee of the Agency, not the
result of vicious habits, intem-
perance, or misconduct on his part,
incurred while on assignment
abroad, in a locality where there
does not exist a suitable hospital
or clinic, pay the travel expenses
of such officer or employee by
whatever means he shall deer
appropriate and without regard
to the Standardized Government
Travel Regulations and section 10
of the Act of March 3, 1933 (47
Stat. 1516; 5 U.S.C. 73b), to the
nearest locality where a suitable
hospital or clinic exists and on
his recovery pay for the travel
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Proposed Legislation
7
Sec. 4(5)(A) continued
"If any such person is too ill
to travel unattended, or in the
case of a dependent too young to
travel alone, the Agency may also
pay the round-trip travel expenses
of an attendant or attendants."
Existing Legislation
CSec. 4(5)(A) continue)
expenses of his return to his
post of duty. If the officer
or employee is too ill to travel
unattended, the Director may
also pay the travel expenses of
an attendant;
Explanation: This section extends to the dependents of Agency officers and
employees stationed abroad the present provisions of law permitting the
Director to pay expenses of transportation and authorizes such expenses to
the nearest locality where suitable medical care can be obtained. Similar
authority is provided at section 942 of the Foreign Service Act for depend-
ents of Foreign Service personnel.
"(C)(i) In the event of illness
or injury requiring hospitalization
or similar treatment of an officer
or employee of the Agency, not the
result of vicious habits, intemper-
ance, or misconduct on his part, pay
for the cost of treatment of such
illness or injury.
Sec.+ (5)(c) In the event of illness
or injury requiring hospitaliza-
tion of an officer or full time
employee of the Agency, not the
result of vicious habits, intem-
perance, or misconduct on his
part, incurred in the line of
duty while such person is assigned
abroad, pay for the cost of the
treatment of such illness or
injury at a suitable hospital
or clinic;
"(C)(ii) In the event a dependent
of an officer or employee of the
Agency who is stationed abroad, incurs
an illness or injury while such de-
pendent is located abroad, which re-
quires hospitalization or similar
treatment, and 'which is not the result
of vicious habits, intemperance, or
misconduct on his part,
pay for
that
portion of the cost of
treatment
of
each such illness or in that exceeds
35 up to a maximum limitation of one
hundred and twenty days of treatment
for each such illness or injury, except
that such maximum limitation shall not
apply whenever the Agency, on the basis
of professional medical advice, shall
determine that such illness or injury
clearly is caused by the fact that such
dependent is or has been located abroad."
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L Explanatory note for sec. 4(5)(C)J
Explanation: This provision amends existing law pertaining to medical
treatment of Agency officers and employees and extends medical treatment
to their dependents. The benefits provided are the same as those set
forth in section 941(a) and (b) of the Foreign Service Act. The amended
language affords protection where the illness or injury requires hospitali-
zation or "similar treatment" since at a number of posts hospital facili-
ties are lacking or are so inadequate that the individual is assured
better care by treatment at home.
Propose _Legislation Existing Legislation
(6) In section 5, add the follow-
ing new paragraphs (g) and (h):
"(g) Where an officer or employee None
of another Government agency transfers
with the consent of such agency and is
appointed to a position in the Agency,
such an officer or employee shall be
entitled upon separation from the Agency,
to reinstatement to the position occupied
at the time of appointment or to a posi-
tion of comparable or higher salary in
such other Government agency."
Explanation: This section provides reemployment rights with the former
employing agency for individuals who transfer to the Central Intelligence
Agency with the consent of the former employer. It is similar in sub-
stance to authority provided by section 528 of the Foreign Service Act and
section 625(b) of the Act for International Development of 1961.
'(h) Settle and pay, whenever the
Director determines that payment will
further the purposes of this Act, with-
out regard to any other provisions of
law and under such regulations as the
Director may prescribe, in an amount
not exceeding 0,000, any claim
against the United States for loss of
or damage to real or personal property
including loss of occupancy or use
thereof), belonging to, or for personal
injury or death of, any person not a
citizen or resident Of the United States,
where such claim arises abroad out of the
act or omission of any Agency employee or
out of the act or omission of any person
acting on behalf of the Agency but only
if such claim is presented in writing to
the Agency activity involved within one
year after it accrues
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icpianatory note for sec. 5(h)-/
Explanation: This section authorizes the payment of meritorious claims
arising in foreign countries from the acts or omissions of individuals
engaged in Agency activities. The authority as outlined is similar to
that granted the State Department for the settlement of claims up to
$2,500 under subsection 2(f) of P.L. 84-885; the authority of the military
departments for settlement of claims up to $15,000 as set forth in section 2734
of title 10, U.S.C.; and the authority for payment of claims up to $10,000
set forth at section 10(b) of the Peace Corps Act, P.L. 87-293. The Federal
Tort Claims Act does not apply in foreign countries and in keeping there-
with separate authority for the settlement of such claims in overseas
areas is required.
Proposed Legislation
(7) Paragraph (4) of section 104(a)
of the Internal Revenue Code of 1954
(26 U.S.C. 104(a)(4) ) (relating to the
exclusion from gross income of compensa-
tion for injuries Sand sickness) is hereby
amended to read as follows:
Existing Legislation
"(4) amounts received as a pension,
annuity, or similar allowance for personal
injuries or sickness resulting from active
service in the armed forces of any country
or in the Coast and Geodetic Survey or the
Public Health Service, or as a disability
annuity payable under the provisions of
section 831 of the Foreign Service Act of
1946, as amended (22 U.S.C. 1081; 60 Stat.
1021), or as a disability annuity payable None
under Title II of the Central Intelligence
Agency Act of 1949, as amended 50 U.S.C.
403(a) et seq.).
Explanation: This section amends paragraph 4 of section 104(a) of the
Internal Revenue Code of 1954 to exempt disability annuities under
Title II of this Act from Federal income tax. This is in keeping with
provisions relating to disability annuities payable under the authorities
set forth in section 104(a) of the Internal Revenue Code.
(8) Renumber section 7, to read section None
8. Renumber section 8 to read section 9,
APPROPRIATIONS. Renumber section 9 to
read section 10, SEPARABILITY OF PROVISIONS.
Renumber section 10 to read section 11,
SHORT TITLE. Add a new section 7 as follows:
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Proposed Legislation Existing Legislation
[-Sec. (8) continue]
"(7)(a) The Director of Central.,,-. None
Intelligence is authorized to receive
gifts to the Agency and in his discre-
tion to accept, receive, hold,_ admin-
ister, and expend such gifts and oe-
guests of personal property, from indi-
viduals or others, for the benefit of,
or for use in connection with, the
Central Intelligence Agency and its
personnel Gifts or bequests of money
or the profits from sales of other
property received as gifts shall be
subject to disbursement by the Direc-
tor in accordance with the terms and
conditions of the acceptance of Ey
particular gift or bequest.
"(b) The Director is authorized to None
invest, reinvest, or retain invest-
ments of the money or securities as he
shall deem advisable and the interest
or profits accruing from such use
shall be available for disbursement as
provided in a above. For the purpose
of Federal income, estate and gift
taxes, gifts and bequests accepted by
the Director shall be deemed to be a
gift or bequest to or for the use of
the United States."
Explanation: This section is similar to the authority granted the
Secretary of State in section 1021 of the Foreign Service Act, the
Secretary of Health, Education and Welfare at 42 U.S.C. 219, the Secre-
taries of the military departments, as set forth at section 2601 of
title 10, U.S.C. and numerous other authorities for the acceptance of
gifts. The purpose of the section is to make it possible for the
Director to accept gifts on behalf of the Agency, authority for which
must be specifically given by statute. The final sentence is comparable
to provisions in each of the cited authorities exempting the value of
such gifts from gross income for federal income tax purposes.
Insert the heading "TITLE I -- Defini-
tions and General Authorities" before
the section title, "DEFINITIONS," of
section 1 of the Central Intelligence
Agency Act of 1949, as amended.
Explanation: This section provides for technical adjustment in headings
and section numbers in accordance with the provisions enumerated in
this Act.
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Section 4. The Central Intelligence Agency Act of 1949, as amended, is
further amended by the addition of Title II as follows:
"The Central Intelligence Agency Retirement and Disability System
Explanation: Except for such changes as are necessary to reflect terminology
applicable to the Central Intelligence Agency, the proposed provisions are
substantively the same as, or identical with, the corresponding provisions
of the Foreign Service Act of 1946, as amended. The corresponding section
number under the Foreign Service Act of 1946, as amended, is furnished at the
end of each explanatory statement below (for example, "Section 801, FSA").
"Rules and Regulations
"Sec. 201. (a) The Director may prescribe rules and regulations for the es-
tablishment and maintenance of a Central Intelligence Agency Retirement and
Disability System, referred to hereafter as the System.
"(b) The Director shall administer the System in accordance with such
rules and regulations and with the principles established by this Act."
Explanation: This section gives the Director of Central Intelligence the
authority necessary to establish and maintain a retirement system and to pre-
scribe rules and regulations governing its administration. (Section 801, FSA)
"Sec. 202. There is hereby created a special fund to be known as the Central
Intelligence Agency Retirement and Disability Fund which shall be maintained
by the Secretary of the Treasury and classified under section 20 of the Act
of June 26, 1934 (48 Stat. 1233), as amended. The Central Intelligence Agency
Retirement and Disability Fund is referred to hereafter in this title as the
Fund."
Explanation: This section provides for establishment and for the maintenance
of the Central Intelligence Agency Retirement Fund by the Secretary of the
Treasury. (Section 802, FSA; and 43 Stat. 144)
"Participants
"Sec. 203. The Director may designate from time to time such Agency offi-
cers and employees, hereafter referred to as participants, who shall be
entitled to the benefits of the System."
Explanation: This section necessarily deviates from the comparable provision
of the Foreign Service Act of 1946, as amended, since Foreign Service Officers
are automatically covered by virtue of their appointments under the Foreign
Service Act. However, as indicated in the statement of justification, all
Agency employees will not serve under conditions which will warrant other
than normal retirement considerations. Those who are to be designated as
participants pursuant to this section will undergo a rigid selection process.
(Section 803, FSA)
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"Annuitants
"Sec. 204. (a) Annuitants shall be persons who are receiving annuities from
the Fund and all persons, including surviving wives and husbands, widows, de-
pendent widowers, children and beneficiaries of participants or annuitants
who shall become entitled to receive annuities in accordance with the provi-
sions of this Act.
"(b) When used in this title the term --
"(1) "Widow" means the surviving wife of a participant who was married
to such participant for at least two years immediately preceding his death or
is the mother of issue by such marriage.
"(2) "Dependent widower" means the surviving husband of a participant who
was married to such participant for at least two years immediately preceding
her death or is the father of issue by such marriage, and who is incapable of
self-support by reason of mental or physical disability, and who received more
than one-half of his support from such participant.
"(3) "Child" means an unmarried child, under the age of eighteen years,
or such unmarried child regardless of age who because of physical or mental
disability incurred before age eighteen is incapable of self-support. In
addition to the offspring of the participant and his or her spouse the term
includes (a) an adopted child, and (b) a step-child or recognized natural
child who received more than one-half of his support from the participant."
Explanation: This section defines annuitants who may be eligible for bene-
fits under the retirement system. (Section 801+, FSA)
"Sec. 211. (a) Six and one-half per centum of the basic salary received by
each participant shall be contributed to the Fund for the payment of annui-
ties, cash benefits, refunds, and allowances. An equal sum shall also be
contributed from the respective appropriation or fund which is used for pay-
ment of his salary. The amounts deducted and withheld from basic salary to-
gether with the amounts so contributed from the appropriation or fund, shall
be deposited by the Central Intelligence Agency in the Treasury of the United
States to the credit of the Fund.
"(b) Each participant shall be deemed to consent and agree to such deduc-
tions from basic salary, and payment less such deductions shall be a full and
complete discharge and acquittance of all claims and demands whatsoever for
all regular services during the period covered by such payment, except the
right to the benefits to which he shall be entitled under this Act, notwith-
standing any law, rule, or regulation affecting the individual's salary."
Explanation: This section provides for contributions to the retirement fund
by the employee and by the Agency at the rate of 6,21 per cent of basic salary,
which is the same under both the Foreign Service retirement system and the
civil service retirement system. (Section 811, FSA)
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"PART C -- COMPUTATION OF ANNUITIES
"Sec. 221. (a) The annuity of a participant shall be equal to 2 per centum
of his average basic salary for the highest five consecutive years of service,
for which full contributions have been made to the Fund, multiplied by the
number of years, not exceeding thirty-five, of service credit obtained in
accordance with the provisions of sections 251 and 252. In determining the
aggregate period of service upon which the annuity is to be based, the frac-
tional part of a month, if any, shall not be counted.
"(b) At the time of retirement, any married participant may elect to re-
ceive a reduced annuity and to provide for an annuity payable to his wife or
her husband, commencing on the date following such participant's death and
terminating upon the death of such surviving wife or husband. The annuity
payable to the surviving wife or husband after such participant's death shall
be 50 per centum of the amount of the participant's annuity computed as pre-
scribed in paragraph (a) of this section, up to the full amount of such annuity
specified by him as the base for the survivor benefits. The annuity of the
participant making such election shall be reduced by 2`1 per centum of any
amount up to $2,400 he specifies as the base for the survivor benefit plus
10 per centum of any amount over $2,400 so specified.
"(c)(1) If an annuitant dies and is survived by a wife or husband and
by a child or children, in addition to the annuity payable to the surviving
wife or husband, there shall be paid to or on behalf of each child an annuity
equal to the smallest of: (i) 40 per centum of the annuitant's average basic
salary, as determined under paragraph (a) of this section, divided by the
number of children; (ii) $600; or (iii) $1,800 divided by the number of chil-
dren.
"(2) If an annuitant dies and is not survived by a wife or husband but
by a child or children, each surviving child shall be paid an annuity equal
to the smallest of: (i) 50 per centum of the annuitant's average basic salary,
as determined under paragraph (a) of this section, divided by the number of
children; (ii) $720; or (iii) $2,160 divided by the number of children.
"(d) If a surviving wife or husband dies or the annuity of a child is
terminated, the annuities of any remaining children shall be recomputed and
paid as though such wife, husband, or child had not survived the participant.
"(e) The annuity payable to a child under paragraph (c) or (d) of this
section shall begin on the first day of the next month after the participant
dies and such annuity or any right thereto shall be terminated upon death,
marriage, or attainment of the age of eighteen years, except that, if a
child is incapable of self-support by reasons of mental or physical disability,
the annuity shall be terminated only when such child dies, marries, or recovers
from such disability.
"(f) At the time of retirement an unmarried participant may elect to re-
ceive a reduced annuity and to provide for an annuity equal to 50 per centum
of the reduced annuity payable after his or her death to a beneficiary whose
name shall be designated in writing to the Director. The annuity payable to
a participant making such election shall be reduced by 10 per centum of an
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Sec. 221 (f) continue]
annuity computed as provided in paragraph (a) of this section and by 5 per
centum of an annuity so computed for each full five years the person desig-
nated is younger than the retiring participant, but such total reduction shall
not exceed 40 per centum. No such election of a reduced annuity payable to a
beneficiary shall be valid until the participant shall have satisfactorily
passed a physical examination as prescribed by the Director. The annuity
payable to a beneficiary under the provisions of this paragraph shall begin
on the first day of the next month after the participant dies. Upon the
death of the surviving beneficiary all payments shall cease and no further
annuity payments authorized under this paragraph shall be due or payable."
Explanation: This section provides for the computation of annuities to be
paid to a participant or, upon his death, to a surviving wife, husband, and
children or, upon death of an unmarried participant, to a beneficiary named
by him. (Section 821, FSA)
"Retirement for Disability or Incapacity --
Physical Examination -- Recovery
"Sec. 231. (a) Any participant who has five years of service credit toward re-
tirement under the System, excluding military or naval service that is credited
in accordance with provisions of section 251 or 252(a)(2), and who becomes
totally disabled or incapacitated for useful and efficient service by reason
of disease, illness, or injury not due to vicious habits, intemperance, or
willful misconduct on his part, shall, upon his own application or upon order
of the Director, be retired on an annuity computed as prescribed in section
221. If the disabled or incapacitated participant has less than twenty years
of service credit toward his retirement under the System at the time he is
retired, his annuity shall be computed on the assumption that he has had
twenty years of service, but the additional service credit that may accrue
to a participant under this provision shall in no case exceed the difference
between his age at the time of retirement and the mandatory retirement age
applicable to his grade In the Agency.
"(b) In each case, the participant shall be given a physical examina-
tion by one or more duly qualified physicians or surgeons designated by the
Director to conduct examinations, and disability shall be determined by the
Director on the basis of the advice of such physicians or surgeons. Unless
the disability is permanent, like examinations shall be made annually until
the annuitant has reached the statutory mandatory retirement age for his
grade in the Agency. If the Director determines, on the basis of the advice
of one or more duly qualified physioians or surgeons conducting such exami-
nations that an annuitant has recovered to the extent that he can return to
duty, the annuitant may apply for reinstatement or reappointment in the
Agency within one year from the date his recovery is determined. Upon appli-
cation the Director may reinstate any such recovered disability annuitant in
the grade in which he was serving at time of retirement, or the Director may,
taking into consideration the age, qualifications, and experience of such
annuitant, and the present grade of his contemporaries in the Agency, appoint
him to a grade higher than the one in which he was serving prior to retirement.
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sec. 231 (b) continue
Payment of the annuity shall continue until a date six months after the date
of the examination showing recovery or until the date of reinstatement or re-
appointment in the Agency, whichever is earlier. Fees for examinations under
this provision, together with reasonable traveling and other expenses in-
curred in order to submit to examination, shall be paid out of the Fund. If
the annuitant fails to submit to examination as required under this section,
payment of the annuity shall be suspended until continuance of the disability
is satisfactorily established.
"(c) If a recovered disability annuitant whose annuity is discontinued
is for any reason not reinstated or reappointed in the Agency, he shall be
considered to have been separated within the meaning of section 234 as of the
date he was retired for disability and he shall, after the discontinuance of
the disabilit annuity, be entitled to the benefits of that section or of
section 241(a) except that he may elect voluntary retirement in accordance
with the provisions of section 233 if he can qualify under its provisions.
"(d) No participant shall be entitled to receive an annuity under this
Act and compensation for injury or disability to himself under the Federal
Employees' Compensation Act of September 7, 1916, as amended, covering the
same period of time. This provision shall not bar the right of any claimant
to the greater benefit conferred by either Act for any part of the same period
of time. Neither this provision nor any provision of the Act of September 7,
1916, as amended, shall be so construed as to deny the right of any person to
receive an annuity under this Act by reason of his own services and to re-
ceive concurrently any payment under such Act of September 7, 1916, as amended,
by reason of the death of any other person.
"(e) Notwithstanding any provision of law to the contrary, the right of
any person entitled to an annuity under this Act shall not be affected be-
cause such person has received an award of compensation in a lump sum under
section 14 of the Act of September 7, 1916, as amended, except that where
such annuity is payable on account of the same disability for which compen-
sation under such section has been paid, so much of such compensation as has
been paid for any period extended beyond the date such annuity becomes effec-
tive, as determined by the Secretary of Labor, shall be refunded to the De-
partment of Labor, to be paid into the Federal Employees' Compensation Fund.
Before such person shall receive such annuity he shall (1) refund to the De-
partment of labor the amount representing such computed payments for such
extended period, or (2) authorize the deduction of such amount from the annu-
ity payable to him under this Act, which amount shall be transmitted to such
Department for reimbursement to such Fund. Deductions from such annuity may
be made from accrued and accruing payments, or may be prorated against and
paid from accruing payments in such manner as the Secretary of Labor shall
determine, whenever he finds that the financial circumstances of the annuitant
are such as to warrant such deferred refunding."
Explanation: This section makes provision for retirement of employees who
become disabled or incapacitated for duty. It establishes procedures for
physical examinations and subsequent return to duty when an annuitant has re-
covered to the extent that he can return to duty. The section further bars
payment of a disability annuity if the employee is given an award of compen-
sation for disability under the Federal Employees' Compensation Act. (Section
831, FSA)
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"Death in Service
"Sec. 232.(a) In case a participant dies and no claim for annuity is payable
under the provisions of this Act, his contributions to the Fund, with interest
at the rates prescribed in sections 2ll(a) and 281(a), shall be paid in the
order of precedence shown in section 2l+1(b).
"(b) If a participant, who has at 'east five years of service credit
toward retirement under the System, excluding military or naval service that
is credited in accordance with the provisions of section 251 or 252(a)(2),
dies before separation or retirement from the Agency and is survived by a
widow or a dependent widower, as defined in section 201., such widow or depen-
dent widower shall be entitled to an annuity equal to 50 per centum of the
annuity computed in accordance with the provisions of paragraph (e) of this
section and of section 221(a). The annuity of such widow or dependent Vidower
shall commence on the date following death of the participant and shall termi-
nate upon death of the widow or dependent widower, or upon the dependent wi-
dower's becoming capable of self-support.
"(c) If a participant who has at least five years of service credit
toward retirement under the System, excluding military or naval service that
is credited in accordance with the provisions of section 251 or 252(a)(2),
dies before separation or retirement from the Agency and is survived by a
wife or a husband and a child or children, each surviving child shall be
entitled to an annuity computed in accordance with the provisions of section
221(c)(1). The child's annuity shall begin and be terminated in accordance
with the provisions of section 221(e). Upon the death of the surviving wife
or husband or termination of the annuity of a child, the annuities of any
remaining children shall be recomputed and paid as though such wife or hus-
band or child had not survived the participant.
"(d) If a participant who has at least five years of service credit
toward retirement under the System, excluding military or naval service that
is credited in accordance with the provisions of section 251 or 252(a)(2),
dies before separation or retirement from the Agency and is not survived by
a wife or husband, but by a child or children, each surviving child shall
be entitled to an annuity computed in accordance with the provisions of
section 221(c)(2). The child's annuity shall begin and terminate in accord-
ance with the provisions of section 221(e). Upon termination of the annuity
of a child, the annuities of any remaining children shall be recomputed and
paid as though that child had never been entitled to the benefit.
"(e) If, at the time of his or her death, the participant had less than
twenty years of service credit toward retirement under the System, the annu-
ities payable in accordance with paragraph (b) of this section shall be com-
puted in accordance with the provisions of section 221 on the assumption
he or she has had twenty years of service, but the additional service credit
that may accrue to a deceased participant under this provision shall in no
case exceed the difference between his or her age on the date of death and
the mandatory retirement age applicable to his or her grade in the Agency.
In all cases arising under paragraphs (b), (c), (d), or (e) of this section,
it shall be assumed that the deceased participant was qualified for retire-
ment on the date of his death."
l1.
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Explanation: This section provides for payment of an annuity to the survivor(s)
of an employee who dies while in active service. If no annuity is payable,
this section provides for payment of his contributions plus interest to the
surviving spouse or children, or to his estate, or to a named beneficiary in
a prescribed order of precedence. (Section 832, FSA)
"Voluntary Retirement
"Sec. 233. Any participant in the System who is at least fifty years of
age and has rendered twenty years of service, including service within the
meaning of section 253, may on his own application and with the consent of
the Director be retired from the Agency and receive benefits in accordance
with the provisions of section 221."
Explanation: This section provides for voluntary retirement of an officer when
he reaches age 50 and has at least 20 years of service. (Section 636, FSA)
"Discontinued Service Retirement
"Sec. 234. (a) Any participant who separates from the Agency after obtaining
at least five years of service credit toward retirement under the System, ex-
cluding military or naval service that is credited in accordance with the pro-
visions of section 251 or 252(a)(2), may, upon separation from the Agency or
at any time prior to becoming eligible for an annuity, elect to have his con-
tributions to the Fund returned to hies in accordance with the provisions of
section 241, or (except in cases where the Director determines that separa-
tion was based in whole or in part on the ground of disloyalty to the United
States) to leave his contributions in the Fund and receive an annuity, com-
puted as prescribed in section 221, commencing at the age of sixty years.
"(b) If a participant who has qualified in accordance with the provi-
sions of paragraph (a) of this section to receive a deferred annuity com-
mencing at the age of sixty dies before reaching the age of sixty his
contributions to the Fund, with interest, shall be paid in accordance with
the provisions of sections 241 and 281.
"(c) The Director may in his discretion retire participants in grade
GS-14 and above to promote the efficiency of the Agency and they shall re-
ceive retirement benefits in accordance with the provisions of section 221.
"(d) The Director may in his discretion retire participants in grade
GS-13 and below to promote the efficiency of the Agency and each such offi-
cer shall receive--
"(1) one-twelfth of a year's salary at his then current salary rate for
each year of service and proportionately for a fraction of a year, but not
exceeding a total of one year's salary at his then current salary rate, pay-
able without interest, from the Fund, in three equal installments on the
lst day of January following the officer's retirement and on the two anni-
versaries of this date immediately following: Provided, That in special
cases, the Director may in his discretion accelerate or combine the
installments; and
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n
"(2) a refund of the contributions made to the Fund, with interest as
provided in section 241(a), except that in lieu of such refund such officer,
if he has at least five years of service credit toward retirement under the
System, excluding military or naval service that is credited in accordance
with the provisions of section 251 or 252 (a), may elect to receive retire-
ment benefits on reaching the age of sixty in accordance with the provisions
of section 221. In the event that an officer who was separated from grade
GS-13 or GS-12 and who has elected to receive retirement benefits dies
before reaching the age of sixty, his death shall be considered a death in
service within the meaning of section 232. In the event that an officer who
was separated from grade GS-11 or below and who has elected to receive re-
tirement benefits dies before reaching the age of sixty, the total amount
of his contributions made to the Fund, with interest as provided in section
241(a), shall be paid in accordance with the provisions of section 241(b).
"(e) Notwithstanding the provisions of section 3477 of the Revised Sta-
tutes, as amended (31 U.S.C. 203) or the provisions of any other law, an
Agency officer who is retired in accordance with the provisions of section
234(d) shall have the right to assign to any person or corporation the whole
or any part of the benefits receivable by him pursuant to paragraph (d)(1)
of this section. Any such assignment shall be on a form approved by the
Secretary of the Treasury and a copy thereof shall be deposited with the
Secretary of the Treasury by the officer executing the assignment,"
Explanation: This section provides for the involuntary retirement of employ-
ees by the Director of Central Intelligence in order to promote the efficiency
of the Agency. The comparable provisions of the FSA relate to "selection-out"
of officers who fail of promotion or who do not meet required standards of
performance. Retirement benefits provided for employees in GS-14 and above
are the sane as those provided for Foreign Service Officers in Classes 1, 2,
and 3. Retirement benefits provided for employees in GS-13 and below are
the same as those provided for Foreign Service Officers in Class 4 and below.
The linkage levels established in the Federal Salary Reform Act of 1962 to
provide comparability for pay purposes have been used to relate Foreign
Service classes to the Agency's General Schedule grades.
This section also provides for the refund of an employee's contributions if
he leaves the service without qualifying for an immediate or deferred annuity.
Comparable sections of FSA are as follows:
CIA System
Forei
n S
i
S
g
erv
ce
ystem
Sec. 234(a)(Refund of Contributions)
S
2
4(b
Sec. 834(a) and 637(b)
ec.
3
)(Disposition of contributions upon
death prior to receipt of deferred annuity)
Sec. 834(b)
Sec. 234(c)(Involuntary retirement--employees
GS-14 and above)
Sec. 519; 633(b); 634(a)
Sec. 234(d)(Involuntary retirement--employees
GS-13 and below); (severance pay)
Sec. 633(b); 634(b)
Sec. 234(e)(Assignment of benefits)
Sec. 634(c)
16
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"Mandatory Retirement for Age
"Sec. 235. (a) Any participant in the System in grade GS-18 or above,
shall upon reaching the age of sixty-five, be retired from the Agency and
receive retirement benefits in accordance with the provisions of section
221, but whenever the Director shall determine it to be in the public
interest, he may extend such an officer's service for a period not to
exceed five years.
"(b) Any participant in the System, other than in grade GS-18 or
above, shall upon reaching the age of sixty, be retired from the Agency
and receive retirement benefits in accordance with the provisions of
section 221, but whenever the Director shall determine it to be in the
public interest, he may extend such an officer's service for a period
not to exceed five years."
Explanation: This section provides for the mandatory retirement of
employees in GS-18 or above upon reaching age 65 and of other employees
upon reaching age 60. As in the preceding section, conversion to Agency
grades was achieved by application of the linkage levels established in
the Federal Salary Reform Act of 1962. (Sections 631 and 632, FSA.)
"PART E -- DISPOSITION OF CONTRIBUTIONS AND INTEREST
IN EXCESS OF BENEFITS RECEIVED
"Sec. 21+1. (a) Whenever a participant becomes separated from the
Agency without becoming eligible for an annuity or a deferred annuity in
accordance with the provisions of this Act, the total amount of contri-
butions from his salary with interest thereon at 1+ per centum per annum,
compounded annually as of December 31, and proportionately for the period
served during the year of seljaration including all contributions made
during or for such period, except as provided in section 281, shall be
returned to him.
"(b) In the event that the total contributions of a retired partici-
pant, other than voluntary contributions made in accordance with the
provisions of section 281, with interest at 1+ per centum per annum com-
pounded annually as is provided in paragraph (a) of this section added
thereto, exceed the total amount returned to such participant or to an
annuitant claiming through him, in the form of annuities, accumulated
at the same rate of interest up to the date the annuity payments cease
under the terms of the annuity, the excess of the accumulated contributions
over the accumulated annuity payments shall be paid in the following order
of precedence, upon the establishment of a valid claim therefor, and such
payment shall be a bar to recovery by any other person:
"(i) To the beneficiary or beneficiaries designated by the retired
participant in writing to the Director;
"(2) If there be no such beneficiary, to the surviving wife or
husband of such participant;
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L?ec. 241 b) continued
"(3) If none of the above, to the child or-children of such participant
and descendants of deceased children by representation;
"(4) If none of the above, to the parents of such participant or the
survivor of them;
"(5) If none of the above, to the duly appointed executor or adminis-
trator of the estate of such participant;
"(6) If none of the above, to other next of kin of such participant
as may be determined by the Director in his judgment to be legally entitled
thereto.
"(c) No payment shall be made pursuant to paragraph (b)(6) of this
section until after the expiration of thirty days from the death of the
retired participant or his surviving annuitant."
Explanation: This section provides for the refund of contributions plus
interest at 4/o to an employee who is separated without attaining eligibility
for an annuity. The section further provides for the disposition of
contributions plus interest at 4% in excess of annuity benefits to a
surviving spouse, children, parents, or estate of a deceased employee or
to his named beneficiary in the same order of precedence as has been
established under the Foreign Service and the civil service retirement
systems. (Section 841, FSA)
"PART F -- PERIOD FOR SERVICE FOR ANNUITIES
"Computation of Length of Service
"Sec. 251. For the purposes of this title, the period of service of
a participant shall be computed from the date he becomes a participant
under the provisions of this Act, but all periods of separation from the
Agency and so much of any leaves of absence without pay as may exceed six
months in the aggregate in any calendar year shall be excluded, except
leaves of absence while receiving benefits under the Federal Employees'
Compensation Act of September 7, 1916, as amended, and leaves of absence
granted participants while performing active and honorable military or
naval service in the Army, Navy, Air Force, Marine Corps, or Coast Guard
of the United States."
Explanation: This section provides that the period of service of a partici-
pant under this system shall begin as of the date he becomes a participant
but excludes periods of separation from the Agency or leaves of absence
in excess of six months except when such leave is during a period when the
participant is receiving benefits under the Federal Employees' Compensation
Act (for illness or injury incurred in the performance of duty) or when such
leave is for military service. (Section 851, FSA)
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"Sec. 252. (a) A participant may, subject to the provisions of this
section, include in his period of service--
"(1) civilian service in the executive, judicial, and legislative
branches of the Federal Government and in the District of Columbia govern-
ment, prior to becoming a participant; and
"(2) active and honorable military or naval service in the Army, Navy,
Marine Corps, Air Force, or Coast Guard of the United States.
"(b) A person may obtain prior civilian service credit in accordance
with the provisions of paragraph (a)(l) of this section by making a
special contribution to the Fund equal to 5 per centum of his basic
annual. salary for each year of service for which credit is sought prior
to November 8, 1960, and at 62 per centum thereafter with interest com-
pounded annually at 4 per centum per annum to the date of payment. Any
such person may, under such conditions as may be determined in each
instance by the Director, pay such special contributions in installments.
"(c)(l) If an officer or employee under some other Government retire-
ment system becomes a participant in the System by direct transfer, such
officer or employee's total contributions and deposits, including interest
accrued thereon, except voluntary contributions, shall be transferred to
the Fund effective as of the date such officer or employee becomes a
participant in the System. Each such officer or employee shall be deemed
to consent to the transfer of such funds and such transfer shall be a
complete discharge and acquittance of all claims and demands against the
other Government retirement fund on account of service rendered prior to
becoming a participant in the System.
"(2) No officer or employee, whose contributions are transferred to
the Fund in accordance with the provisions of paragraph (c)(1) of this
section shall be required to make contributions in addition to those
transferred, for periods of service for which full contributions were made
to the other Government retirement fund, nor shall any refund be made to
any such officer or employee on account of contributions made during any
period to the other Government retirement fund, at a hiL;her rate than that
fixed by section 211 of this Act for contributions to the Fund.
"(3) No officer or employee, whose contributions are transferred to
the Fund in accordance with the provisions of paragraph (c)(l) of this
section, shall receive credit for periods of service for which a refund
of contributions has been made, or for which no contributions were made
to the other Government retirement fund. A participant may, however,
obtain credit for such prior service by making a special contribution to
the Fund in accordance with the provisions of paragraph (b) of this section.
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"(d) No participant may obtain prior civilian service credit toward
retirement under the System for any period of civilian service on the
basis of which he is receiving or will in the future be entitled to
receive any annuity under another retirement system covering civilian
personnel of the Government.
"(e) A participant may obtain prior military or naval service credit
in accordance with the provisions of paragraph (a)(2) of this section by
applying for it to the Director prior to retirement or separation from the
Agency. However, in the case of a participant who is eligible for and
receives retired pay on account of military or naval service, the period
of service upon which such retired pay is based shall not be included,
except that in the case of a participant who is eligible for and receives
retired pay on account of a service-connected disability incurred in
combat with an enemy of the United States or caused by an instrumentality
of war and incurred in line of duty during a period of war (as that term
is used in chapter 11 of title 38, United States Code), or is awarded
under chapter 67 of title 10 of the United States Code, the period of such
military or naval service shall be included. No contributions to the Fund
shall be required in connection with military or naval service credited to
a participant in accordance with the provisions of paragraph (a)(2) of
this section."
Explanation: This section provides for credit under the retirement system
of previous civilian and military service and for the transfer of an
individual's contributions from other Government retirement systems to the
Central Intelligence Agency Retirement and Disability Fund. (Section 852,
FSA)
"Credit for Service at Unhealthful Posts
"Sec. 253. The Director may from time to time establish a list of
places which by reason of climatic or other extreme conditions are to be
classed as unhealthful posts, amid each year of duty at such posts inclusive
of regular leaves of absence, of participants hereafter retired, shall be
counted as one year and a half, and so on in like proportion in reckoning
the length of service for the purpose of retirement, fractional months
being considered as full months in computing such service. The Director
may at any time cancel the designation of any places as unhealthful without
affecting any credit which has accrued for service at such posts prior to
the date of the cancellation."
Explanation: This section provides extra credit toward retirement for service
at unhealthful hosts. (Section 853, FSA)
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"Credit for Service While on Military Leave
"Sec. 254. Contributions shall not be required covering periods of
leave of absence from the Agency granted a participant while performing
active military or naval service in the Army, Navy, Air Force, Marine
Corps, or Coast Guard of the United States."
Explanation: This section waives any requirement for contributions to the
Fund during leave of absence for military or naval service. (Section 854,
FSA)
"Estimate of Appropriations Needed
"Sec. 261. The Secretary of the Treasury shall prepare the estimates
of the annual appropriations required to be made to the Fund, and shall
make actuarial valuations of such funds at intervals of five years, or
oftener if deemed necessary by him."
Explanation: This section provide: for estimates of annual appropriations
required to be made to the Fund and for actuarial valuation of the Fund
at least every five years. It is identical with section 861, FSA, except
that there has been deleted the authorization to expend money for adminis-
tering the program from the Fund since funds required for such purposes
would be provided by annual appropriations.
"Investment of Moneys in the Fund
"Sec. 262. The Secretary of the Treasury shall invest from time to
time in interest-bearing securities of the United States such portions
of the Fund as in his judLaent ma; not be immediately required for the
payment of annuities, cash benefits, refunds, and allowances, and the
income derived from such investments shall constitute a part of such Fund."
Explanation: This section provides necessary authority for the Secretary
of the Treasury to invest funds which are not immediately required and
to deposit the income produced by such investment to the Fund. (Section 863,
FSA)
"Attachment of Moneys
"Sec. 263. None of the moneys mentioned in this title shall be
assignable either in law or equity, or be subject to execution, levy,
attachment, garnishment, or other legal process, except as provided in
section 234(e)."
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Explanatory note for sec. 263
Explanation: This section provides necessary protection to moneys in the
Fund to preserve them for the payment of annuities, cash benefits, refunds,
and allowances as provided under the proposed retirement system. (Section
864, FSA)
t
"PART H -- ANNUITANTS RECALLED, REINSTATED OR REAPPOINTED IN
THE AGENCY OR REEMPLOYED IN THE GOVERNMENT
"Recall
"Sec. 271. (a) The Director may recall any annuitant to duty in the
Agency whenever he shall determine such recall is in the public interest.
"(b) Any annuitant recalled to duty in the Agency or reinstated or
reappointed in"accordance with the provisions of section 231(b) shall,
while so serving, be entitled in lieu of his annuity to the full salary
of the grade in which he is serving. During; such service, he shall make
contributions to the Fund in accordance with the provisions of section 211.
When he reverts to his retired status, his annuity shall be determined
anew in accordance with the provisions of section 221."
Explanation: This section provides for the recall to active service of an
annuitant when necessary in the public interest. It further provides
that such a recalled annuitant shall be entitled to the full salary of
the grade in which he serves upon recall and for recomputation of his
annuity upon completion of such service. (Sections 520(b) and 871, FSA)
"Reemployment Compensation
"Sec. 272. (a) Notwithstanding any other provision of law, any
officer or employee of the Agency who has retired under this Act, as
amended,. Aid is receiving an annuity pursuant thereto, and who is reemployed
in the Federal Government service in any appointive position either on a
part-time or full-time basis, shall be entitled to receive the salary
of the position in which he is serving plus so much of his annuity payable
under this Act, as amended, which when combined with such salary does not
exceed during any calendar year the basic salary such officer or employee
was entitled to receive on the date of his retirement from the Agency.
Any such reemployed officer or employee who receives salary during any
calendar year in excess of the maximum amount which he may be entitled
to receive under this paragraph shall be entitled to such salary in lieu
of benefits hereunder.
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fsec. 272 continue?
"(b) When any such retired officer or employee of the :agency is
reemployed, the employer shall send a notice to the Central Intelligence
Agency of such reemployment together with all pertinent information
relating thereto, and shall pay directly to such officer or employee
the salary of the position in which he is serving.
"(c) In the event of any overpayment under this section, such over-
payment shall be recovered by withholding the amount involved from the
salary payable to such reemployed officer or employee, or from any other
moneys, including his annuity, payable in accordance with the provisions
of this title."
Explanation: This section provides that an annuitant who is reemployed
in the federal service in an appointive position is entitled to retain
the salary of his position plus his annuity up to a combined amount which
does not exceed the basic salary of the grade which he held upon retire-
ment. In the event of an overpayment, the amount of such overpayment
may be withheld from either the salary or the annuity payable to the
reemployed annuitant. (Section 872,r'SA)
"Reemployment
"Sec. 273. Notwithstanding the provisions of title 5, United States
Code, section 62, and title 5, United States Code, section 715a, an
Agency officer or employee retired under the provisions of this Act shall
not, by reason of his retired status, be barred from employment in Federal
Government service in any appointive position for which he is qualified.
An annuitant so reemployed shall serve at the will of the appointing officer."
Explanation: This section authorizes the reemployment in Government of
an employee retired under the Agency system. This authority is similar
to that applicable to civil service retirees and is identical with section
520 (c) FSA.
"PART I -- VOLUNTARY CONTRIBUTIONS
"Sec. 281.(a) Any participant may, at his option and under such
regulations as may be prescribed by the Director, deposit additional sums
in multiples of 1 per centum of his basic salary, but not in excess of 10
per centum of such salary, which amounts together with interest at 3 per
centum per annum, compounded annually as of December 31, and proportionately
for the period served during the year of his retirement, including all
contributions made during or for such period, shall, at the date of his
retirement and at his election, be--
23
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Sec- 281 continue
"(1) returned to him in lump sum; or
"(2) used to purchase an additional life annuity; or
"(3) used to purchase an additional life annuity for himself and to
provide for a cash payment on his death to a beneficiary whose name shall
be notified in writing to the Director by the participant; or
"(4) used to purchase an additional life annuity for himself and a
life annuity commencing on his death payable to a beneficiary whose name
shall be notified in writing to the Director by the participant with a
guaranteed return to the beneficiary or his legal representative of an
amount equal to the cash payment referred to in subparagraph (3) above.
"(b) The benefits provided by subparagraphs (2), (3), or (4) of paragraph
(a) of this section shall be actuarially equivalent in value to the payment
provided for by subparagraph (a)(1) of this section and shall be calculated
upon such tables of mortality as may be from time to time prescribed for
this purpose by the Secretary of the Treasury.
"(c) In case a participant shall become separated from the Agency for
any reason except retirement on an annuity, the amount of any additional
deposits with interest at 3 per centum per annum, compounded as is
provided in paragraph (a) of this section, made by him under the provisions
of said paragraph (a) shall be refunded in the manner provided in section 241
for the return of contributions and interest in the case of death or
separation from the Agency.
"(d) Any benefits payable to an officer or to his beneficiary in
respect to the additional deposits provided under this section shall
be in addition to the benefits otherwise provided under this title."
Explanation: This section provides for an employee to make voluntary
contributions to the Fund if he wishes to do so in order to increase the
annuity to be paid to him or to a survivor upon his retirement or death.
Similar provision is contained in both the Foreign Service and the
civil service retirement systems. (Section 881, FSA)
24
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APPENDIX B
COMPARISON OF FOREIGN SERVICE RETIREMENT
AND DISABILITY SYSTEM WITH PERTI VT PROVISIONS
OF THE CIVIL SERVICE RETIREMENT SYSTEM
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COMPARISON OF FOREIGN SERVICE RETIREMENT AND DISABILITY SYSTEM
WITH PERTINENT PROVISIONS OF THE CIVIL SERVICE RETIREMENT SYSTEM*
(1)
Items
B. Contributions:
1. Compulsory ------------------?
C. Benefits:
1. Annuitants.-..-----------------
3. Survivor annuities:
(a) Married paetidpant__.
(2)
CSR
.lovernment employees gen-
erally, unless temporary, In-
termittent or subject to an-
other Federal retirement
system.
614 percent of employee's basic
salary.
Agency contribution of 614
percent of employee's basic
salary.
Maximum 10 percent of total
basic salary received since
Aug. 1, 1920. Payable in
multiples of $25.
Annuity.-Based on high 5
average years of salary 114
percent times 5 years. plus
134 percent times next S
years, plus 2 percent times
all years over 10 years of
creditable service. Annuity
not to exceed 80 percent of
high S average salary.
Reduced annuity with bene-
fits to widow or widower.
Corresponding benefits to
each dependent child.
Basic general formula.-Wid-
ow or widower (it survivor
annuity elected by retiring
employee): 14 of all or what-
ever portion of earned an-
nuity specified us base.
Annuity terminates on
death or remarriage.
Employee's annuity reduced
by 214 percent of let $2 400
of any amouf` specified as
base for sufVtvor benefits
plus 10 percent of the
amount over $2,400 up to
the full amount Of' em.
ployea's annuity, if specl-
Children:
A surviving wife or hus-
band: 40 percent of av-
erage salary divided by
number of children,
$600; or $1,800 divided
by number of children,
whichever is lesser.
No surviving wife or hus-
band: 14 average salary
divided by number of
children; $720; or $2,160
divided by number of
children, whichever to
lesser.
Children annuities terminate
at age 18 (or on recovery
from incapacity after 18),
marriage or death. On ter-
mination of any child's an-
nuity by death, wife or hus-
band's annuity by death.
(3)
FSR
All FSO's. plus non-FO's
who have served as chiefs of
mission for an aggregate pe-
riod of 21) years or more,
Foreign Service Staff
(FRS) officers and employ.
ees with 10 or more years of
continuous service in the
Foreign Service.
614 percent otemployoe's basic
salary.
Agency contribution of 814
percent of employee's basic
salary.
Maximum of 10 percent of
total basic salary received
sine July 1, 1939. Payable
in multiples of I percent.
Based on high 5 average years
of salary 2 percent times
total number years credit-
able service not to exceed 36
ye-Irs.
Surviving children, widowers,
and dependent widowers
may be included as survivor
annuitants.
Widow or widower (if survivor
annuity elected by retiring
employee): 14 of all or what-
ever portion of earned an-
nuity specified as bum. An-
nuity terminates only on
death of widow or widower.
Employee's annuity reduced
by 214 percent of 1st $2 400
of any amount specified as
base for survivor benefits
plus 10 percent of the
amount over $2,400 up to
the full amount of em-
ployee's annuity, if sped-
fled.
Children:
A surviving wife or hus-
band: 40 percent of av-
erage salary divided by
number of children;
$600; or $1,800 divided
by number of children,
whichever is lesser.
No surviving wife or hus-
band: 14 average salary
divided by number of
children; $720; or $2,160
div!ded by number of
children, whichever is
lesser.
Children annuities terminate
at age 18 (or on recovery
from incapacity after 18),
marriage or death. On ter-
mination of any child's an-
nuity by death, wife or hus-
band's annuity by death,
(4)
Section
Most Staff officers and em-
pPloyees and Foreign Service
Reserve officers are presently
covered by CSR.
CSR provides maximum 80
percent high 5 average. FS R
provides maximum 70 per-
cent high 5 average.
FOR provides survivorship
benefits comparable to those
of COR.
Important difference in the
FSR provision is that the
annuity of a surviving
widow or widower terminates
only on death of such sur-
vivor.
THE FOREIGN SERVICE RETIREMENT AND DISABILITY SYSTEM WITH PERTINENT PROVISIONS
OF THE CIVIL SERVICE RETIREMENT SYSTEM" APPEARING IN HOUSE OF REPRESENTATIVES
REPORTS NOS. 1890 AND 2104, 86TH CONGRESS, 2D SESSION, FOREIGN SERVICE ACT AMEND-
MENTS OF 1960.
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(1)
Items
4. Death in service:
(a) Widow-widower-------
(a) Tax exemption------
(b) Bar to double annuity
(2)
CSR
annuities of surviving chil-
dren are recomputed as
though person whose an-
nuity was terminated had
not survived deceased em-
ployee.
Person in whom annuitant
has insurable interest (itsur-
vivorship and reduced an-
nuity elected): i of partici-
pant's reduced annuity.
Retiring employee's annuity
reduced 10 to 40 percent de-
pending on difference be-
tween his age and age of
person designated to receive
survivor annuity. Survivor
annuity continues for life.
Widow or dependent widower:
3.? of participant's earned
annuity payable until death
or remarriage or until wid-
ower becomes capable of
self-support.
Children:
A surviving wife or hus-
band: 40 percent aver-
age salary divided by
number of children;
$6W; or $1,800 divided
by number of children,
whichever is lesser.
No surviving wife or hus-
band: ti average salary
divided by number of
children; $720; or $2,163
divided by the number
of children, whichever
Is lesser.
After 5 years of civilian serv-
ice: Same as full age and
service benefit. (Guaran-
teed 40 percent of average
salary or annuity projected
to age 60 whichever is
lesser.)
Elective survivor benefits
based on actual years of
service credit.
No provision------------------
If receiving disability com-
pensation under Federal
Employees' Compensation
Act, Sept. 7, 1916, is not
eligible for annuity for same
period but not barred from
greater benefit of either act.
Also is not barred from re-
ceiving. annuity under this
act by reason of own serv-
ices while receiving con-
currently any payment
under Federal Employees'
Compensation Act by rea-
son of death of some other
person. If awarded lum
sum under sec. 17 of FECp
,
amount covering period be-
yond effective date of an-
nuity must be refunded to
I),8. Employees' Compeo-
(3)
FSR
annuities of surviving chil-
dren are recomputed as
though person whose an-
nuity was terminated had
not survived deceased em-
ployee.
Designated beneficiary: 3. of
participant's reduced an-
nuity. Retiring employee's
annuity reduced 10 to 40
percent depending on differ-
ence between his ace and
age of person designated to
receive survivor annuity.
Survivor's annuity contin-
ues for life.
Widow or dependent widower:
1.4 of participant's earned
annuity payable until death
of surviving widow or de-
pendent widower or until
dependent widower becomes
capable of self-support.
Children:
A surviving wife or hus-
band: 40 percent of aver-
age salary divided by
number of children;
$603; or $1,810 divided
by number of children,
whichever is lesser.
No surviving wife or hus-
band: fi average salary
divided by number of
children; $723; or $2,160
divided by the number
of children, whichever
is lesser.
Excludes from initial 5 years'
free credit granted for mili-
tary service for which no
contribution has been made
to the fund. Limits amount
of extra service credit that
can be accredited to a dis-
ability annuitant to the
difference between his age
at the time of retirement
and the mandatory retire.
ment age applicable to his
class in the Service.
Elective survivor benefits
based on service credit upon
which participant's annuity
is computed.
Exempts disability annuity
from Federal income tax.
Same as civil service ---------
(4)
Section
(5)
Comments
FSR does not require that the
designated beneficiary have
an insurable Merest.
FSR provides continuation of
widow's annuity until death
and allows the survivor to
receive the annuity based on
at least 20 years of service.
FSR provides minmum serv-
ice credit of 20 years or differ-
ence between age of partici-
pant at time of retirement
and mandatory retirement
age, whichever is lesser.
FSR provides tax exemptions.
FSR same as CSR.
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(1)
Items
6. Discontinued service retire.
ment.
7. Disposition of contributions in
excess of benefits received.
D. Creditable service:
1. Leave without pay---------.
2. District of Columbia employ.
ment.
(2)
CSR
sation Commission or be
deducted from annuity pay-
ments for that purpose.
Deferred annuity payable at
62 if separated employee has
5 years of civilian service
credit.
If deceased individual's con-
tributions are not returned
in the form of annuity (to
individual or his survivors),
the unreturned contribu-
tions must be paid to a des-
ignated beneficiary; or In an
order of precedence to
widow, children, parents,
etc.
Includes: Leave of absence
without pay granted during
covered employment while
performing active honorable
military service;
Leave of absence without pay
granted during covered em-
ployment while receiving
FEC benefits;
Civilian employment with
District of Columbia gov-
ernment.
No provision -.----------------
N o provision exactly com-
parable.
Any annuitant reemployed
after retirement for age or
based on voluntary separa-
tion or an Involuntary sepa-
ration for cause, or if retired
for disability and is age 60
or over at the time of re-
employment, retains his
full annuity, but the salary
of his position must be re-
duced by the amount of
annuity received.
(3)
FSR
Deferred annuity payable at
age 60 if separated employee
has 5 years of civilian service
credit.
If deceased individual's con-
tributions are not returned
In the form of annuity (to
individual or his survivors),
the unreturned contribu-
tions must be paid to a des-
ignated beneficiary; or In
an order of precedence to
widow, children, parents,
etc.
Includes: Leave of absence
for active military or naval
service.
Includes leave of absence
granted during covered em-
ployment while receiving
FEC benefits.
Includes civilian employment
with District of Columbia
government.
Provides for direct transfer to
FSR fund of all regular con-
tributions (with interest)
made by officer or employee
to other Government re-
tirement system under
which previously covered.
Funds transfer discharges
other system of all benefit
obligations based on service
involved.
Recomputation of annuity of
an officer recalled in the
Service and retired a second
time.
Provides that reemployed
Foreign Service annuitants
receive full salary of the
position appointed plus por-
tion of their annuity which
when added to the salary
would equal the base salary
received at time of retire-
ment from the Foreign Serv-
ice.
(4)
Section
(5)
Comments
FSR provides payment of de-
ferred annuity at age 60.
FSR alines precedence provi-
sions with those of CSR.
At present persons becoming
participants in FSR system
may purchase prior service
credit by making_ a special
contribution to FSR fund
for such amount of service
credit as they elect to pur-
chase. The new provision
provides for the automatic
transfer of contributions in
another Government system
to the FSR fund when a
person becomes a participant
In the FSR system by trans-
fer from other Government
service.
FSR provides for potential
higher combined income for
reemployed Foreign Service
annuitants and provides au-
thority to reemploy FSO
retired for age.
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 Approved For Release 2002/10/10 : CIA-RDP80B01676R002800070003-4
Honorable Lyndon P. Johnson
President of the Senate
Washington, D. C.
This letter transmits for the consideration of the
Congress proposed amendments to the Central Intelligence
Agency Act of 1949, as amended. The principal purpose of
the proposed bill is to permit the Agency to improve its
retirement program by authorizing the establishment of a
retirement system corresponding to that of the Foreign
Service. Other provisions of the proposed bill would
bring existing provisions of law in the field of travel
expenses and overseas allowances into conformity with
those available to the Foreign Service. Certain other
provisions are included in the proposed bill to accomplish
purposes which we believe necessary.
We consider enactment of the proposed bill to be
essential to the effective performance of our mission
and would appreciate early and favorable consideration.
The Bureau of the Budget has advised that there is no
objection to the presentation of the proposed bill to
the Congress from the standpoint of the Administration's
program.
Sincerely,
John A. McCone
Director
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Honorable John W. McCormack
Speaker of the House of Representatives
Washington, D. C.
Dear Mr. Speaker:
This letter transmits for the consideration of the
Congress proposed amendments to the Central Intelligence
Agency Act of 1949, as amended. The principal purpose of
the proposed bill is to permit the Agency to improve its
retirement program by authorizing the establishment of a
retirement system corresponding to that of the Foreign
Service. Other provisions of the proposed bill would
bring existing provisions of law in the field of travel
expenses and overseas allowances into conformity with
those available to the Foreign Service. Certain other
provisions are included in the proposed bill to accomplish
purposes which we believe necessary.
We consider enactment of the proposed bill to be
essential to the effective performance of our mission
and would appreciate early and favorable consideration.
The Bureau of the Budget has advised that there is no
objection to the presentation of the proposed bill to
the Congress from the standpoint of the Administration's
program.
Sincerely,
John A. McCone
Director
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1nt 21,
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14
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the t 1ott.r
 For your inforeation aim in r to
pt?oces41 have fox~raz~ded co ieiw of r c mrt in the coordinatt ..n
L tttt .tits P
I consider the ev ac ~ vim riesion.
to the e~ ective perrolva tmsaat Of the propped bill into JAW
for the tteratiota tee of our aatiesion end desire to es ti .l.
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if there i:s . Syr there to any addition&l infca,'t~atiaaz nth 88th
the proposed this Agaat;y ai aseist in edted or
bill, I , $ You of t willingness COnsideratia of
eve,cy w V ptsasible. >