A POLICY AMBIGUITY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01720R000900090003-7
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 4
• Document Creation Date: December 16, 2016
• Document Release Date: November 3, 2004
• Sequence Number: 3
• Publication Date: April 25, 1974
• Content Type: MF

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MEMORANDUM FOR: Mr. Carl E. Duckett
Secretary
CIA Management Committee
SUBJECT : A Policy Ambiguity
1. Somewhat by chance, I recently learned of an,
ambiguity in the regulations governing the compensation of
retired personnel brought back to work on a contract basis.
This is something I wanted to flag to your attention. It
is a matter on which the Management Committee probably
should focus, but I would prefer not to be the sponsor of
any such Management Committee consideration.
2. The matter in question is this: Under operative
regulations -- or, perhaps more accurately, practice as
directed by presumed precedent -- retirees brought back on
a contract basis have their total compensation limited to
90 percent of their pre-retirement salary. What they are
actually paid is the difference between their retirement
income and that 90 percent ceiling figure. The ambiguity
lies in determining the time frame over which this 90
percent rule is supposed to apply, i.e., is it a per annum
compensation ceiling or a ceiling to be imposed on a
constructive hourly rate of pay. The overall intent of
the practice here involved appears to be that of insuring
that a retiree on contract does not receive more than
90 percent of his pre-retirement annual salary. The
mechanism by which this intent is given concrete effect
is to adjust the hourly rate of pay so that if the
individual in question were to work full time for an
entire year (calendar or fiscal), his total earnings would
not exceed the'90 percent ceiling figure. The question
has been rasied, however, whether this is equitable in
the case of a retiree whom the Agency, on its own initiative
and for its interests, has asked to continue on post-
retirement active duty under circumstances in which the
period of duty is clearly envisaged by both sides as being
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for some relatively brief span of time, measured in weeks
or months but in any event considerably less than a single
year. In such a case (and I have one) the point is under-
standably made that since the 90 percent ceiling for annual
salary is not going to be approached, an imposed curtailment
on the hourly rate is not equitable. Instead (so this line
of argument runs), the hourly rate should be the difference
between retirement compensation and pre-retirement salary
(computed on an hourly basis) with the understanding that
no matter what happened, the contract in question (and,
hence, compensation under it) would be terminated before the
individual hit the 90 percent ceiling imposed (without
challenge) on a full year's income. In the abstract, this
is not an easy argument to dismiss out of hand, particularly
in a case in which the initiative for performing the contractual
services was entirely the Agency's (pressed with some
insistence) and the level of responsibility in question is
unarguably commensurate with the grade at which the individual
in question retired.
AO/DCI's office), he found that the justification for the
current practice of hourly rate adjustment was indeed obscure
and seemed to be largely based on a general impression that
Colonel White had once laid down such a dictum. Appended
hereto is a note on the subject Don did for me which will
give you some of the background.
4. I yield to no one in my liking and admiration for
Red White. Even his rulings, however, ought to be re-
examined from time to time, even if such re-examination
produces a reconfirmation of them as sound. I do think
there should be a current Agency policy -- expressed in
official prose -- defining the ceiling on the contractual
earnings of retirees and spelling out clearly how this
definition is to affect the computation of pay rates in
concrete cases. Unless we are both equitable and (even
more important) consistent in this matter, we will
unintentionally be unfair in our treatment of different
individuals and generate unnecessary resentment. Also --
since this is a topic on which the emotions of the individuals
directly affected tend to be very strong -- if we are not
careful, we could inadvertently stimulate a legal challenge
to our whole retirement policy which could be extremely
When at my request this matter -was^looked into by
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awkward. Though on management considerations I strongly
endorse-our policy of mandatory retirement at age 60, I am
skeptical about whether it would stand up under legal
challenge in today's environment. I thus think it would
behoove us all to minimize unintended provocations which
could increase the risk of such a challenge's being made.
George'A. Carver, Jr.
Deputy for National Intelligence Officers
O/D/DCI/NIO:GACarver/mee
Distribution
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1 - D/NIO Chrono w/att
1 - Management Ctte file w/att
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