EXECUTIVE SUMMARY RETIREMENT REFORM AND IT'S IMPACT ON CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89-00066R000900110016-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: January 11, 2011
• Sequence Number: 16
• Content Type: MISC

Approved For Release 2011/01/11: CIA-RDP89-00066R000900110016-7
EXECUTIVE SUMMARY
RETIREMENT REFORM AND IS IMPACT ON CIA
It can be expected that in 1984 the Administration or Congress will-introduce
special supplemental retirement plan proposals for participation by federal
employees hired after 31 December 1983. Serious future problems for CIA are
foreseen unless the early retirement provisions of such a plan are essentially
the same as under current Civil Service and CIARDS law.
The institution of a future plan which imposes heavily reduced benefits for
early retirement and/or extends the eligibility age for reasonable annuities
will:
Essentially eliminate early retirement by employees who decide to spend
their careers in the federal service. Typical retirements will be at
65 years of age or older with 35 to 40 years of service in order to qualify
for full annuity and pension benefits.
Conversely, through establishing the portability of Social Security
coverage from federal service to the private sector, will stimulate move-
ment of younger officers to non-government employers offering higher
inducements.
Eliminate a vital management tool to CIA--the current provisions of
both Civil Service and CIARDS law--which has provided the Agency with
a capability to recruit and maintain the quality workforce in both
the domestic and foreign sides of the Agency so essential to serving
the Nation's vital intelligence needs.
Eliminate one of the strongest inducements for recruitment--the ability
to offer, in return for service in demanding and often hazardous
circumstances, the prospects of a career with developmental opportunities,
timely promotions, and retirement with non-reduced annuities at a
relatively young age.
Create severe blo6kages in our career paths and seriously impair the
ability of management to move promising individuals through needed
rotational and developmental assignments.
Essentially re uce promotion headroom in future years as employees
defer their retirement to age 65 or later with 35 or 40 years of
service. /
Nullify the/understanding and intent of Congress when it enacted the
CIARDS Actin 1964 in recognition of the special circumstances of
service with the Clandestine side of the Agency abroad. The
circumstances of frequently dangerous and adverse conditions can lead
to early burnout or compromise. The absence of early retirement
incentives for these employees would be severly incompatible with
effective staffing of our overseas stations.
Approved For Release 2011/01/11 : CIA-RDP89-00066R000900110016-7
 Approved For Release 2011/01/11: CIA-RDP89-00066R000900110016-7
0 . k D12r1}f~iUTY
of Social Security coverage would result in. increased
turnover of intelligence personnel and present increased security
threats to safeguarding national security information.
, _xiettisiw At CIA personnel,. whether overt, covert, or potentially
covert in the Social Security p data base Vu (DOSsS
ses evere security risks
in terms of protecting the identities of individuals and the access
by unauthorized persons to complete listings of all CIA personnel.
Approved For Release 2011/01/11: CIA-RDP89-00066R000900110016-7
 Approved For Release 2011/01/11: CIA-RDP89-00066R000900110016-7
COMPARISONS OF REfIREMII?Nr OPTIONS AND BENEFITS
Federal Employee Under Current Civil Service
Compared With
Federal Employee Under Proposed Social Security
Coverage and Supplemental Retirement Plan
CURRENT CIVIL SERVICE (CSR)
I
Employee Cost - ;% of Salary
High-3 Average - $30,331
Basic Annuity - $17,061 per year (b)
$ 1,421 per month
Penalty for Early Retirement - 0%
Monthly Annuity at Age 55 - $1,421 per month
COMIBINED SOCIAL SECURITY AND SUPPLI:TQ:NTAL RE1?IREMIENf PLAN (sRP)
Employee Cost - 11.3% (5.7% Social Security and 5.6% SRP) of Salary
PART I - Supplemental Retirement Plan
High-5 Average - $28,088 (a)
Basic Annuity - $12,640 (c)
Less 50% Penalty for Early Retirement - $6,320 (d)
$ 527 per month
PART II - Social Security
Annual Salary Last Year of Work - $33,290 (e)
Eligibility for Reduced Benefits at Age 62 - $6,108 per year (e)
$ 509 per month
? Eligibility for Full Benefits at Age 67 - $8,748 per year (e)
$ 729 per month
Monthly Supplemental Retirement plan at Age 55 - $527 per month
Total Combined Nutuity/Social Security at Age 67 - $1,256 per month
N (a) A high-5'-average salary base for annuity computation rather than high-3 can be assumed based upon the
retirement proposals announced by the Administration.
(b) Currently based on 7% employee contributions..
(c) Supplemental Retirement Plan is proposed at 5.6o employee contribution. This can he assumed to produce
a reduced basic annuity in proportion to the difference between what the current 7o employee contribution
may earn compared to a 5.6$ contribution.
(d) E rr.ly retirement penalty of 50% of annuity.
(e) Current (1983) maximum annual earnings allowed for Social Security benefit computation is $35,700.
Maximum annuity at age 62 is $509 per month and maximum at age 65 is $729 per month. Full benefit age
will be extended to age 66 in the year 2009 and'to age 67 in 2027. Age 62 for reduced benefits
(70% of full benefits) will continue to be retained.
Approved For Release 2011/01/11: CIA-RDP89-00066R000900110016-7
 Approved For Release 2011/01/11: CIA-RDP89-00066R000900110016-7
COMPARISONS OF RL-TIRIW;NF OPTIONS AND BENEFITS
Federal Employee Under Current Civil Service
Compared With
Federal Employee Under Proposed Social Security
Coverage and Supplemental Retirement Plan
CASE EXAMPLE: 55 Year Old with 30 Years of Service--Retired as GS-12, Step 5
CURRENT CIVIL SERVICE (CSR)
I
Employee Cost - 2% of Salary
Iligh-3 Average - $30,331
Basic Annuity - $17,061 per year (b)
$ 1,421 per month
Penalty for Early Retirement - 0%
Monthly Annuity at Age 55 - $1,421 per month
COMBINED SOCIAL SECURITY AND SUPPLE1'IENI'AL RETIRITILNI' PLAN (SRP)
Fngloyee Cost - 11.3% (5.7% Social Security and 5.6% SRI') of Salary
PART I - Supplemental Retirement Plan
High-5 Average - $28,088 (a)
Basic Annuity - $12,640 (c)
Less 50% Penalty for Early Retirement - $6,320 (d)
$ 527 per month
PARE 11 - Social Security
Annual Salary Last Year of Work - $33,290 (c)
Eligibility for Reduced Benefits at Age 62 - $6,108 per year (e)
$ 509 per month
Eligibility for Full Benefits at Age 67 - $8,748 per year (e)
$ 729 per month
Monthly Supplemental Retirement elan at Age 55 - $527 per month
Total Combined Annuity/Social Security at Age 67 - $1,256 per month
A Ili (a) A high-5 average salary base for annuity computation rather than high-3 can be assigned based upon the
retirement proposals announced by the Administration.
(b) Currently based on 7% employee contributions.
(c) Supplemental Retirement Plan is proposed at 5.61 employee contribution. This can he assumed to produce
a reduced basic annuity in proportion to the difference between what the current 7e employee contribution
may earn compared to a 5.6% contribution.
(d) Early retirement penalty of 501 of annuity.
(c) Current (1983) maximum annual earnings allowed for Social Security benefit computation is $35,700.
Maximum annuity at age 62 is $509 per month and maximum at age 65 is $729 per month. Full benefit age
will be extended to age 66 in the year 2009 and to age 67 in 2027. Age 62 for reduced benefits
(70% of full benefits) will continue to be retained.
Approved For Release 2011/01/11: CIA-RDP89-00066R000900110016-7
 rt\,AfAnTQnkIQ nr?: nr'rTnr94r rr ArYPTf MQ AAlil U1:Upr7TTC
Approved For Release 2011/01/11: CIA-RDP89-00066R000900110016-7
Federal Employee Under Current Civil Service
Compared With
Federal Employee Under Proposed Social Security
Coverage and Supplemental Retirement Plan
CASE EXAMPLE: 55 Year Old with 30 Years of Service--Retired as GS-12, Step 5
CURRENT CIVIL SERVICE (CSR)
Employee Cost - 7% of Salary
High-3 Average - $30,331
Basic Annuity - $17,061 per year (b)
$ 1,421 per month
Penalty for Early Retirement - 0%
Monthly Annuity at Age 55 - $1,421 per month
COMBINED SOCIAL SECURITY AND SUPPLEMENTAL RETIREMENT PLAN (SRP)
Employee Cost - 11.3% (5.7% Social Security and 5.6% SRP) of Salary
PART I - Supplemental Retirement Plan
High-5 Average - $28,088 (a)
Basic Annuity - $12,640 (c)
Less 50% Penalty for Early Retirement - $6,320 (d)
$ 527 per month
PART II - Social Security
Annual Salary Last Year of Work - $33,290 (e)
Eligibility for Reduced Benefits at Age 62 - $6,108 per year (e)
$ 509 per month
Eligibility for Full Benefits at Age 67 - $8,748 per year (e)
$ 729 per month
Monthly Supplemental Retirement Plan at Ago 55 - $527 per month
Total. Combined Annuity/Social Security at Ago 67 - $1,256 per month
N'1I: ,,-(a--X ]gli--g~-average salary base for annuity computation rather than high-3 can be assumed based upon the
retirement proposals announced by the Administration.
(b) Currently based on 7% employee contributions.
(c) Supplemental Retirement Plan is proposed at 5.6% employee contribution. This can be assumed to produce
a reduced basic annuity in proportion to the difference between what the current 7% employee contribution
may earn compared to a 5.6% contribution.
(d) Early retirement penalty of 50% of annuity.
(o) Current (1983) muximuu uruuul eurnings allowed for Social Security benefit computation is $35,700.
Maximum wmnulty at ago 62 is $509 lies' month tuid mu.xhuuin at ago 65 is $729 per month, Full benefit age
will bo oxt.oiulocl to a lo 66 in the year 2009 trnd' to ago 67 in 2027.9- Ago 62 for reduced bco11o.1itis
(70% of full boinafl.tg wil.J C011ti.nue to be rota,l1nod.
Approved For Release 2011/01/11: CIA-RDP89-00066R000900110016-7
 Approved For Release 2011/01/11: CIA-RDP89-00066R000900110016-7
COMPARISONS OF RETIREMENT OPTIONS AND BENEFITS
Federal Employee Under Current Civil Service
Compared With
Federal Employee Under Proposed Social Security
Coverage and Supplemental Retirement Plan
CASE EXAMPLE: 55 Year Old with 30 Years of Service--Retired as GS-12, Step 5
CURRENT CIVIL SERVICE (CSR)
Employee Cost - 7% of Salary
High-3 Average - $30,331
-sic Annuity - $17,061 per year (b)
$ 1,421 per month
Penalty for Early Retirement - 0%
Monthly Annuity at Age 55 - $1,421 per month
COMBINED SOCIAL SECURITY AND SUPPLEMENTAL RETIREMENT PLAN (SRP)
Employee Cost - 11.3% (5.7% Social Security and 5.6% SRP) of Salary
PART I - Supplemental Retirement Plan
High-5 Average - $28,088 (a)
Basic Annuity - $12,640 (c)
Less 50% Penalty for Early Retirement - $6,320 (d)
$ 527 per month
PART II - Social Security
Annual Salary Last Year of Work - $33,290 (e)
Eligibility for Reduced Benefits at Age 62 - $6,108 per year (e)
$ 509 per month
Eligibility for Full Benefits at Age 67 - $8,748 per year (e)
$ 729 per month
Monthly Supplemental Retirement Plan at Age 55 - $527 per month
Total Combined Annuity/Social Security at Age 67 - $1,256 per month
NOTES: (a) A high-5 average salary base for annuity computation rather than high-3 can be assumed based upon the
retirement proposals announced by the Administration.
(b) Currently based on 7% employee contributions.
(c) Supplemental Retirement Plan is proposed at 5.6% employee contribution. This can be assumed to produce
a reduced basic annuity in proportion to the difference between what the current 7% employee contribution
may earn compared to a 5.6% contribution.
(d) Early retirement penalty of 50% of annuity.
(e) Current (1983) maximum annual earnings allowed for Social Security benefit computation is $35,700.
Maximum annuity at age 62 is $509 per month and maximum at age 65 is $729 per month. Full benefit age
will be extended to age 66 in the year 2009 and to age 67 in 2027. Age 62 for reduced benefits
(70% of full benefits) will continue to be retained.
Approved For Release 2011/01/11: CIA-RDP89-00066R000900110016-7