SEANTE APPROPRIATION COMMITTEE QUESTIONS ON NUMBER OF EMPLOYEES ELIGIBLE TO RETIRE BY 30 JUNE 1986

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89-00066R000400070010-3
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: January 10, 2011
• Sequence Number: 10
• Publication Date: March 11, 1986
• Content Type: MEMO

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ROUTING AND TRANSMITTAL SUP.
3-10-86
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OPTIONALbyFORM 41 (Rev. 7-76)
FP * ?1 C1 3 101-11.206
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Y
 TFROM: Robert W. Magee
STn
Di
f
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ROUTING AND RECORD SHEET
SUBJECT: (Optional)
Employees Eligible to Retire on or
before 30 June
NO.
rector o
Personnel
DATE .
TO: (Officer designation, room number, and
building)
OATS
OFFICER'S
COMMENTS (Number each comment to show from whom
RECEIVED
FORWARDED
INITIALS
to whom. Draw a line across column after each comment.)
1. Deputy Director for
Administration
FYI - Attached in
conjunction with the pension
2
taxation issue is a chart
depicting the number of Agen
employees who either are or
3
will be eligible to retire
by 30 June 1986. As you can
see from the figures the
4
DO has. the largest number an
highest percentage of its
people eligible to go by that
5,
date. Of particular interest
34% of Agency SISer's are
eligible and in the DO,
6.
60% could go.
The Senate Appropriatio
'
7.
Committee has requested
information from the Agency
as part of its effort on tax
8.
reform. Specifically they
have asked: (1) How many
Agency employees will be
9.
able to retire by 30 June;
(2) How many would retire
as a result of the proposed
10.
tax change; and (3) What
would be the impact of those
retirements. We plan to
11.
use the raw data in the
attached and formulate a
response along the lines of
12.
that given to Congressman
Frank Wolf when he asked
basically the same questions.
13.
14.
15.
Robert W. Magee
FORM L I O USE PREVIOUS
1.79 v EDITIONS
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 STAT
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t''. C_ (,Ez
25X1
hiummNDUM FOR:
OM:
Robert W. Magee
Director of Personnel
BJE:CT: Senate Appropriation Committee Questions
on Number of Employees Eligible to Retire
by 30 June 198
i4in OZ/,,
1. The following is offered in response to the Senate Appropriation
mmittee inquiry on Agency employees eligible to retire by 30 June 1986:
Q:
25X1
25X1
25X1
e igible to retire by 30 June 1986. The percentages jump) dramatically,
however, for the Agency's Senior Intelligence Service (the Agency
6.94' of the Agency's on--duty strength will be
e uivalent of the Government-wide Senior Executive Service) where
34/. will be eligible. In the G'3.-14 to 15, mid-level management
group, 15'! will be eligible. In the very important
overseas oriented components, the figures are even greater. 60?; o'
the SIS officers are eligible to retire and c8% of the GS--14/15
officers could leave.
0: How many would retire as a result of the proposed tax change-'
A: While we cannot predict exactly how many would retire, we do know that
employees are keenly aware of this issue and indications are that a
significant number would retire to avoid the change. Last year during
the 1 March through 30 June 1985 time-frame, 120 retired. In the same
period in 1984, 109 employees retired. This year we already have 60
employees who have expressed their intent to retire by 30 June 1986,
and another 138 who have stated they will leave if the tax change is
enacted. We anticipate this number will continue to rise as the
30 June date approaches. How dramatically will depend on what
direction Congress appears to be taking on the issue. If there is
no decision by 30 June, many employees will leave to avoid the
risk associated with the uncertainty.
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9.) f"1 is for ica ..y, be ,.ween C:_J G n d 21,31 peT'C@n of emp cep e Li_j 4o T' e t" 4 i E-
at the Agency in .3 given year will do so. This ratio has worked well
for the Agency in the past, with the predictability Of retir'ements
allowing for the timely and proper training and development or' our
up-and-coming junior officers. Any significant deviation from
this trend, particularly at the senior levels where the tax change
hits hardest, could have a very serious impact on our ability to
carry out our national intelligence mission. The potential loss of
experience in our intelligence cadre and senior officer core would
require the premature elevation of officers who lack the desirable
degree of experience to handle the added responsibilities in the same
manner as their predecessors.
/5/
Robert W. Magee
Richard J. Kerr
Robert W. Magee
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CONGRESSIONAL RECORD - Extensions of Remarks March 11, 1986
said Terry Anderson, an economist and nat-
uralist at Montana State University.
"They've spent years trying to save the griz-
zly in Yellowstone, and now a lawsuit could
undo the whole program."
The expansion of personal, corporate and
governmental liability and the contraction
of insurance have a salutary effect in one
regard: the liability crisis is making the
United Sttes a safer country.
"The evolution of the substantive law ...
has brought safety to the living standards
of America and created the highest safety
standards in the world." Sen. Ernest F. Ho]-
lings (D.S.C.) said. -
? A familiar example of the increasing con-
cern for public safety is the demise of an
Ameican tradition called "happy hour."
Fewer and fewer bars hold out the lure of
cheap or free drinks to attract customers
during the afternoon drive home from work;
bar owners are afraid to have happy hours
because they might be held liable for enor-
mous damages if a customer drives off
drunk and causes an accident. -
The development and expansion of the
bartender's responsibility for his customers'
accidents demonstrates the kind of growth
that has occurred throughout liability law.
The basic concept traces back to the early
days of the automobile. A few progressive
state legislatures enacted statutes known as
"dram shop" law ("dram shop" is an old
English term for bar) requiring an innkeep-
er to pay damages to the victim of a crash
caused by a driver who left the l ar drunk.
The rationale was that the negligent bar.
owner might have a "deeper pocket" than
the customer and was thus in better posi-
tion to compensate an accident victim.
Once unusual, this form of third-party li-
ability now applies in nearly every state; in
many jurisdictions (including.the District of
Columbia). judges have imposed the liability
.even where the legislature has not passed a
dram shop act.
Initially limited to bartenders, the scope
of the liability was gradually increased to
cover liquor stores, hotels that provide
drinks via room service, businesses that host
after-work social functions and individuals
who let guests drive away intoxicated from
a cocktail party.
Initially restricted to automobile acci-
dents. "dram shop" liability was extended to
cases where the drunken patron shot some-
one in the bar, then to shooting cases out-
side. A recent treatise in American Law Re-
ports includes a long roster of other circum-
stances where the third-party liability has
been applied: "fighting," "starting fire,"
"pushing party on stairs," "friendly scuf-
fle," "door closed on finger" and so on.
Much of the expanded liability-in dram
shop cases and countless others-has been
-borne by insurance companies. One " of .the
explicit messages of the current insurance
shortage is that the insurers are no longer
willing to'accept continually expanding li-
ability.
Faced with reduced liability coverage, gov-
ernments and businesses are taking steps to
reduce their exposure.
This movement has prompted the emer-
gence of a new professional discipline called
"risk management." Today nearly every
large business and every governmental body
from medium-size on up employs "risk man-
agers." Their job is to search out potential
hazards in corporate and governmental ac-
tivities and eliminate the risks before some-
one gets hurt and someone else gets sued.
You can see the results everywhere. Next
time you're in a hardware store, look at the
complex new safety switches built into vir-
weren't there before the November 1980 fire clining rates of voluntary compliance among
at the MGM Grand Hotel in Las Vegas and taxpayers. For every percentage point drop
the large liability settlements It spawned.
Next time you see a delivery truck backing
into the loading alley, listen for the beep
and watch for a "navigator" on the street
guiding the driver. Many trucking firms now
refuse to let their drivers back up unassist-
ed, and. most big trucks come with a
"beeper" that sounds a warning whenever
the transmission is put into reverse.
-The results of such "risk management"
initiatives can be dramatic. After Charlotte-
Mecklenburg County, N.C., set up a risk
management agency and strong safety rules,
injuries dropped markedly. The county's
workman's compensation bill fell 52 percent
in four years. Its auto liability payments
(for accidents caused by county vehicles)
fell 62 percent, all at a time when popula-
tion and county services were growing.
. Nearly every observer of the liability crisis
agrees that the United States has a long
way to go in improving risk management
practices. But no society can be made risk-
free. Accordingly, insurance remains a vital
commodity for the nation; right now, it's a
revenue is lost: Within the last three
months, 10 percent of the top executives at
the IRS have left the Service in response to
the annuity tax change proposal. Another
10 percent of the IRS executives have indi-
cated their plans to retire to avoid the tax
penalty created by the basis recovery rule
change. This tax proposal could further
impede the IRS' efforts to enhance compli-
ance. - . . '.
The director of personnel at the Central
Intelligence Agency has indicated, "I can
tell you that our employees are keenly
aware of this tax rule change issue and indi-
cations are that a significant number would
retire to avoid the changes. These are offi-
cers who would not otherwise be leaving at
this time. The potential loss of experience
in our intelligence cadre and senior officer
core would require the premature elevation
of officers who would lack the desirable
degree of experience to equip them to
handle the added responsibilities in the
commodity in acutely short supply. The
shortfall will be felt in numerous aspects of `same manner as their predecessors
daily life. The Department of State legislative af-
"An insurance shortage," said Robert fairs office reported: "Over 10 percent Of
Hunter of the National Insurance Consum- our Senior Foreign Service employees are el-
ers Organization, an Alexandria-based inter- igible to retire ... an unusually large
est group, "is just as critical to our society number of SFS retirements in the first half
as an oil shortage. Without insurance, the of 1986 would unquestionably strain our
whole economy just grinds to a halt." ability to manage the department."
The Federal Bureau of Investigation re-
TAX BILL PROVISION COULD ported: "The FBI's ability to carry out its
DISRUPT VIT.LL FEDERAL PRO- mission will be severely hampered if a sub-
GRAMS AND AGENCIES - stantial number of those employees eligible
1 86 A b
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1
1
HON. FRANK R. WOLF
OF VIRGINIA
IN THE HOUSE OF REPRESENTATIVES
Tuesday, March 11, 1986
Mr. WOLF. Mr. Speaker, I want to share
with my colleagues a letter which my col-
league from Maryland [M:. HOVER] and my
colleague from Virginia in the other Chamber,
Mr. TRIBLE, and I have authored on a very se-
rious problem in the House-passed tax reform
bill.
I ask that this letter to Senate. Finance
Committee Chairman BOB PACKWOOD be
printed in the RECORD so that my colleagues
who are concerned about the efficient and ef-
fective operation of Government may know of
the potential disruption in vital Federal pro-
grams and agencies if the 3-year basis recov-
ery rule is changed in the tax reform package.
We are facing a crisis in Government and I
urge my colleagues to take action to prevent
a mass exodus of Government's most experi-
enced personnel.
HOUSE OF REPRESENTATIVES,
Washington, DC, March 4, 1986.
Eon. BOB PACKWOOD, .
Chairman, Senate Finance Committee,
Washington, DC. -
DEAR Bow In follow-up to previous con-
tracts regarding proposed changes in the
tax reform legislation in the three-year
basis recovery tax rule, we are enclosing a
copy of budget estimates provided by the
Senior Executives Association as you re-
quested. We are also including information
demonstrating not only the potential
budget impact of such a measure if, enacted,
but also the likely, program disruption in
several vital federal agencies. We have in-
tually all power tools.' Next time you enter a_
hotel room, look up at the ceiling: You'll see
sprinklers and smoke alarms that probably
eluded the following examples:. --. ? --- - --- --
During the past several years, the Inter-
nal Revenue Service has been faced with de-
o so prior
su -
o re
ire
o
u y
,
atantial number- of employees retiring at
one time will result in a severe experience
drain which will take several -years to over-
come." ? -
According to the attached budget esti-
mates, if a surveyed population of federal
workers within the Social Security Adminis-
tration is used as an indicator of how many
federal employees governmentwide will
retire, the cost to the federal retirement
system (not including. those who will also
join the Social Security rolls, Medicare and
other -retirement-associated funds) would
exceed $3.15 billion in outlays for retire-
ment benefits in the first year. Any revenue
.increase from the tax law change would be
more than negated. The change could also
jeopardize certain revenue-raising activities
at the IRS, Savings Bonds Division and Cus-
toms Service while hampering the mission
of vital programs at the FBI and other
agencies because of the loss of experienced
personnel. -
Mr. Chairman, we hope this information
helps to clarify the real issue on the table.
This proposal could have serious ramifica-
tions on the efficient and effective oper-
ation of government and we hope you will
do everything possible to ensure this provi-
sion is not included by the Senate Finance
Committee in any forthcoming tax reform
measure. Gauging from the number of em-
ployees currently poised to retire by July 1,
1986, because of this provision, it is critical '
that the Senate Finance Committee indicate
early its intention on this issue..
We appreciate your consideration. "
Sincerely.
PAUL S. TRnu.g; . -
U.S. Senate.
FRANK R. WOLF,'
__ Member of Congress.-
STENY IL HoyEa.. .
Member of Congress.
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