I APPRECIATED THE CHANCE THE OTHER DAY TO PARTICIPATE IN THE DISCUSSION ON RETIREMENT.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89-00066R000900080010-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 22, 2016
• Document Release Date: January 14, 2011
• Sequence Number: 10
• Publication Date: February 13, 1985
• Content Type: LETTER

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ROUTING AND RECORD SHEET
SUBJECT: (Optional)
Retirement Changes
FROM: EXTENSION
NO.
Harry E. Fitzwater
DDA 85-0197/6
T Deputy Director for Administration
DATE
7D 24 H s
14 February 1985
TO: (Officer designation, room number, and
building)
DATE
OFFICER'S
COMMENTS (Number each comment to show from whom
RECEIVED
FORWARDED
INITIALS
to whom. Draw a line across column after each comment.)
Director of Personnel
T
~iCnxr~
7.
T 9.
10.
14 FE6 1 5
11.
12.
13.
14.
15.
STA
STA
STA
FORM 61 0 USE PREVIOUS
I-79 EDITIONS
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13 February 1985
Harry:
I appreciated the chance the other day to participate in the dis-
cussion on retirement. I've been thinking about it since and decided to
send you these additional comments and observations. I'm sure there is
nothing new here, but maybe another perspective might be of help.
Kathy was able to find in your files the attached copy of a paper I
wrote in Feb '83, when the retirement reforms were first announced. I
wrote other papers but they are probably buried in 0/P. Although the
attached is dated, e.g., the section on Social Security coverage, I
believe that much of the discussion on the impact of the retirement
reforms is still valid.
As I began my effort in early '83--within the Agency and with the
Committee staffs--I developed and had agreement from the top to some
basic guidelines for our pursuit of ways to avoid the full impact of the
proposed reforms. They are inherent in the attached paper, but let me
state them here more directly and expand on them:
1. First, the Agency would defend the current retirement equities
for all employees and not take the easy way and speak to CIARDS only. To
do oth rwise would have a crippling effect on the Agency's management of
about 80% of its employees. Moreover, isolating concern to CIARDS only
would seriously weaken what I believe is the Agency's strongest argument
in seeking relief--that the Agency needs a retirement system that allows
early retirement for all. Early here means the current ages for
voluntary retirement; under CIARDS, age 50; Civil Service, age 55.
2. Next, we would argue for relief from the proposed reforms not in
behalf of our employees but, rather, in behalf of the Agency and its
ability to fulfill its mission. Thus, we would talk about what the
Agency needed in order to do its vital mission. In turn, this would make
it easier to distinguish our mission from other agencies. By stressing
our mission and not our people, we could avoid the rebuttal that would
say our people aren't all that different than elsewhere. Sure the point
is a subtle one, but it is a real one; when we argue about not being able
to recruit needed talent and then retaining them, we can do so in the
context of not being able properly to collect and analyze intelligence;
when we talk about the problems of portability, we can talk about the
UNCLASSIFIED WHEN SEPARATED
FROM ATTACHMENT
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risks to the national security of having a short term workforce; when we
talk about not having to have RIFs, we do so in the context of not having
large numbers of disaffected employees on the street angry at us and the
obvious threat to security that represents. And so the arguments go.
3. Next, from the very beginning I had DCI, DDCI, and EXDIR agree-
ments that even though all of the reforms would hurt, there was only one
real gut issue--the lenghtening of retirement eligibility without
penalty from age 55 to age 65. Certainly, we would work hard to avoid
all the changes, but if the crunch comes we would give up on all but the
age issue. At the time, this was also State's emphasis.
--I argued successfully then and could do so again that
early retirement is one of the most important elements of
our personal management system because so many positive,
indeed vital, benefits accrue to the Agency when large
numbers of our employees retire at ages much earlier than
elsewehere in government: career opportunities we can offer
recruits, the rewards of promotion and advancement to
significant levels we can offer to promising officers; the
substantial headroom that has traditionally been created at
the mid to higher grades by a policy which encourages
employees to retire as soon as they are eligible and a
retirement system that allows them to do so; the avoidance
of RIFs for employees who are blocking the paths of more
productive officers; the attraction of serving a full career
yet being able to retire at an age early enough to allow a
second career.
--Our belief in this area is not a new one. I wrote a paper
which showed that as early as the mid-1950's, the Agency was
becoming deeply concerned about excessively long careers and
the impact this could have on the management of employees
and our mission fulfillment. In turn, the Agency began to
develop a policy that encouraged early retirement. The
effort led to what was then a dramatic and gutsy policy that
required all employees to retire at age 60. (At the time we
were all under the Civil Service Retirement System.)
--When the "mandatory" policy was first announced and for a
few years thereafter, there was violent reaction by
employees affected, and some even threatened to take us to
court. The Agency, convinced that what it was doing was
sound and best for the Agency, held firm and the policy
finally took hold. In large measure, the policy succeeded
because of an entirely new and innovative program, the
pre-retirement counselling program. Aimed at preparing
employees for the time of retirement, there was a dramatic
change in the attitude of the employee population; not only
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a E.' R C I
did the resistance to the "mandatory policy," which required
retirement generally at age 60, change but employees began
to retire at even earlier ages. Even when we eliminated the
policy in the mid-70's for Civil Service types (not because
our view on the benefits of early retirement had changed but
only as a price to pay for getting certain benefits for
CIARDS), employees still retired early, and at ages far
younger than elsewhere in government.
--This discussion on our old "mandatory" retirement policy
is relevant only to make the point that for about 30 years
of the Agency's 37 years of life, it has believed it crucial
to its mission to have a policy that encouraged retirements
at ages much earlier than elsewhere in govern- ment. One
need only review the statistics, some of which are attached
to my paper, to prove the point.
--One last point on the old policy. As part of the staff
papers associated with that "mandatory" policy a Retirement
Rationale was prepared. It sets forth the reasoning un er-
lying this policy in the event we were ever taken to court.
You should get this paper and read it because it is a strong
statement and the substance is as valid today as it was
then. In fact I used it to advantage in my preliminary
discussions in 1983 with staff of our committees.
--From all of this you can see that while the Congress might
not now accept as valid our concerns about retirement ages
they cannot accuse us of emotionally creating the concerns
merely because the reforms will hurt our people. History is
on our side, and we should crank our thirty year track
record into any oral or written presentations that are made.
Other comments, if I may:
1. Last week you mentioned certain views expressed by
Obviously, I have not seen his paper, but you mentioned three items:
--Uniqueness: I agree with Jim that pinning an argument for
an exemption on the uniqueness of our employees will not
wash. No matter how we feel about our employees and the
rigors of Agency employment, it is only our view about our
employees. Other agencies or departments could make the
same case for their employees and you end up with a debate
as to who is or is not unique; reasonable people can differ
with us. Indeed, some people might even suggest that we are
overworking our emphasis on the uniqueness of our
employees. Moreover, you run the serious risk of having the
Congress agree that our CIARDS people in fact are unique but
that the others are not and we could end up with an
exemption for only CIARDS type employees. As discussed
above, this could be fatal.
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--Where we can argue uniqueness forcefully is on our mission
and here we can beat down most other efforts at comparison.
Our enabling statute, our special authorities, our existing
exemptions from other statutes make the case for us: Con-
gress has already recognized that CIA's mission is unique,
is crucial, is different from the rest of government. An
exemption from the retirement reforms is merely another
manifestation of Congress' acceptance of this fact.
--Portability: Being able to take your retirement system
wit you within government and between government and the
private sector was cited as a positive feature of the 1983
social security reform. For us it is a disadvantage; more
than that it represents a potentially serious security
problem. See my paper, para. f, page 3 of the first attach-
ment to my memorandum.
--CIA Funding: As I understood this, Jim wondered if it
would he a selling point, in seeking an exemption from the
retirement proposals and for a special supplemental system,
for us to agree to absorb the costs involved without special
appropriations. 0/P is now costing out the idea, but unless
I'm gravely mistaken, this is a bullet you'd better bite
very carefully. You need only look at the actuarial pro-
jections of CIARDS, which Finance gets every five years,
multiply them by 4 or five times, and in the long term, you
may be talking about billions. Add to these costs the
administrative costs of running another system. Now for the
Civil Service types, by far the larger number of retirees
and annuitants, the budgeting and funding problems belong to
OPM1 .
2. Supplemental System:
--I know there has been a lot of staff work prepared on the
form and substance of a supplemental system and perhaps for
changes in existing retirement coverages. I haven't seen
any papers but understand that a range of options has been
discussed. Let me only suggest to you that this is not the
time to be greedy. At a time when budget deficits are
getting intense attention and at a time when employees and
their organizations will be fighting for their lives to keep
what they have it would be, in my judgement, unwise at best
and arrogant at worst to try to get more. I understand
there was some discussion about trying for a 2 1/2% formula
for CIARDS and a straight 2% formula for Civil Service
types. You might be able to pull this off. More likely,
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you will get laughed out of the room and lose all credi-
bility. These additional benefits carry a very heavy price
tag and I don't see how the Congress could possibly consider
any program that adds, not reduces, to the costs of retire-
ment.
--In my own preparation and thinking on the form and sub-
stance of a supplemental system, and staying with the
conviction that the existing systems and retirement ages
best served the Agency, I got approval to develop a supple-
mental system that paralleled the existing Civil Service
Retirement and CIARDS system, modified in such a way to
dovetail with Social Security benefits. Just before I left
Perennnol gust 1983 I had meetings with
an an actuary. Both are still being used by
0/P. Both said that developing such a system was feasible.
.More importantly, Hustead was then working on a contract for
the House Civil Service Committee and he had similar
instructions from them. Develop a supplemental system that
was equivalent to the current Civil Service benefits but
modified in such a way as to also draw on Social Security
benefits, when payable. The advantages are clear. The
Agency could draw on all of the arguments for early retire-
ment, discussed in detail above; as far as the affected
employees are concerned they wouldn't be all that different
from those on board prior to 1 January 1984. I still think
this approach has merit, but perhaps the others being
considered have more merit.
3. Timing:
--I strongly agree with you and Bob Magee that you have to
convince everyone that there is no need to panic, no need to
rush. Two years ago I was pressured into moving forward at
a time when it was clear that nothing was going to happen
and I told everyone that. Nothing did happen, and I think
we are in much the same posture today as then. That is not
to say we should sit still; obviously, we should do our
homework, and for that matter start some kind of an effort
with the Congress.
--If Bob's soundings from the Hill indicate that nothing
will happen on the retirement reforms, we can then
concentrate on the supplemental. At the same time, however,
the formal Agency position on the retirement package can be
worked on but more carefully and deliberately. If the
soundings indicate that the Congress will be taking on both
the supplemental and the retirement reforms, then obviously
we have to prepare for both and our work will be cut out for
us. My own view is that the Administration will not be able
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to sell its entire retirement package, but that the Congress
will find some of the proposals attractive, e.g., change
from high 3 to high 5, additional costs to employees, and
perhaps the sick leave proposals. In some ways it may be
harder to prepare to fight incremental changes than it would
the entire package.
--We are not without support for relief from the retirement
proposals and for a supplemental retirement package suited
to our needs. Specific commitments were made to me by staff
members of both Committees. In fact, at my request, Ed
Levine, then the aide to Sen Durenburger got the Senator to
put a strong statement of support in the Congressional
Record; similarly, Mike O'Neil got Chairman Boland to send
the DCI a strong letter of support and understanding. Once
we prepare the scenario, the plan you and Magee were talking
about, I suggest you start with those two expressions of
support in initiating the Agency's legislative effort on the
retirement reforms, the supplemental system, or both.
1. Lastly, you need to get everyone out of this business except
those charged with the responsibility, the point Bob made last week. We
need a single Agency position--the best and strongest that can be
developed--and it serves no purpose, indeed it can be dangerous, to have
all kinds of people flailing away and expressing uninformed views to
Congress and elsewhere. Things are going to be rough enough for you and
Magee as it is.
5. I hope these comments are helpful. I have offered them only for
that purpose.
Attachment;
As Stated
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