LETTER TO JAMES S. COWAN FROM WILLIAM J. CASEY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90B01390R000100130013-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: September 27, 2011
• Sequence Number: 13
• Publication Date: June 6, 1986
• Content Type: LETTER

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Mr. James S. Cowan, Special Counsel
Subcommittee on Civil Service, Post
Office and General Services
Committee on Governmental Affairs
United States Senate
Washington, D.C. 20510
OCA 86-1962
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1 3 JUN 1986
We at CIA are pleased to see that the Federal Employees
Retirement Act of 1986 has passed Congress and has been
signed into law by the President.
I want to thank you for your unstinting efforts on this
bill on behalf of all Federal employees. I especially
appreciate your help with the several crucial issues that
relate to the special needs of the Agency. This new
legislation will have a direct and positive impact on our
ability to recruit and retain the kind of people needed to
maintain our national security.
Thank you for your help.
Sincerely,
JsJ William J. Casey
William J. Casey
Director of Central Intelligence
cc: Senator Ted Stevens
Senator William V. Roth
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S 6200
-GONGRESS10hAL RECORD -SENATE may t0, 7986
that double coverage and refund the
6.7 percent back to the employees.
On November 7 of last year, the
Senate voted 99-1 for athree-tier re-
tirement plan developed by the Oo~?-
ernmenul Affairs Committee. That
structure has been Dreaerved to the
conference report at a cost far below'
the outdated current system and !n ad-
dition results in an Immediate reduc-
tion !n the fiscal year 1987 deficit of
=300 million.
The new Federal employees' retire-
ment system 1s composed of a 6ocial
Security benefit, a defined benefit
plan structured after the current pen?
sion plan, and an employer-matched.
tax deferral LhrUt wtirtgs fund that
allows employees career flexibllity and
planning Lhat private sector and State
employees hate enjoyed for years.
H.R. 2872 does not alter that current
retirement system benefits. Dut does
aDoa' enrollees o! the present system
to invest up to 5 percent of their in-
comes into Federal Government secu-
rities, but without any matching con-
tribution by the employing agency.
Mr. President, even ii the Social Se-
curity Amendments of 1983 had not
mandated a nea? retirement system for
workers; hired after January 1, 1984, I
believe It was time for Congress to
design ? modern pension system for
Federal employees like Lhe one before
the Senate today. Why should the
civil servant be locked Into a archaic
retirement plan whlle his counterpart
tit the private sector or State govern-
ment participates in plans that pro-
vide both retirement security and
career flexibility? The Federal worker
competes in the fob market with the
rest of the Lbor force, and the US.
Government, as any employer, must
hire bright young workers by offering
attractive retirement benefits. It ib
unfair to the employee to have his or
her career opportunities limited by
Lhe current system and it handicaps
the II.S. Government when attempt-
ing to recruit needed talent.
The Federal Employees Retirement
Act of 1986 covers employees that will
retire in any year. That is why we
have tried to make the bill as forward
thinking as possible. However, we
think our nea? system will be ao attrac-
tive to Federal workers that we have
Included a transfer provision allowing
inditiduals in the current system to
enter the nea? plan.
IIn addition to the regular civilian
employees, the bill has benefits, tai-
loved in the same mariner as the cur-
rent pension plan, for certain classes
of employees that hold lobs with age
and service patterns different than the
mast employment. Among those catx-
garies are firefighters, law enforce-
ment officers, air traffic controllers,
foreign service officers, the CLi, Mem-
bets of Congress, and congressional
staff. The decision to include Members
and staff into this special group tivss
decided years ago when it was realized
that these fobs did not lend them-
selves to the usual long-term retire-
went formula. In this bal. etc the cur?
rent plan, the Members send other spc~
vial clas+ea a'lll pay one-half Percent
more for their plan smd trt r"turn
accrue benefits at a higher 1'atl.
The COLA, for all Dartiepnts >a the
same' No COLA until alter age tit and
then at a CPI-1 me widen Inflation is
about i percent. The doet to the Lax?
payer will be much less than It b
noa~-a change the Congress has ur?
gently needed to make for rears.
In closing. I wish to avtno~a?ledge the
superb leadership to Se:tator STivLNS.
the Chairman of the 8uboommittee on
Cftil Service, Post fine, and General
tlervitxs, Without .lam sun we
would not have come to such a suc?
oessfu] ooncluslon. I s+ant to thank
him and Chairman Brtu. 1Poan of the
House Post Office and Clril t3ervlce
Committee for their coa~paatlon.
lln the next few weeks, the commit-
tee will produce a section-by-section
analysis of this legislation 1n a com-
mittee Drint to provide )llembera with
more details on this legislation.
The new Federal Employees' Retire-
ment Act reforms an ootdated entltle~
mane program, protects the worker.
saves the taxpayer stoney, and
strengthens the Federal Gotrerttment's
Job Recruitment Program. It 4 not
often the Congress has an opportunity
to satisfy so many Do134 needs cor-
rectly. Iurge the Senate Ito adopt the
conference report.
Mr. t3TEVENS. )Igr. Fnsldent, I
would like to speak to atiapport oI t15e
conference agreement on S.R. 2872,
the Federal Employees' Itetiremeni
Act of 1986. This bill acts up a new re-
tirement system for Federal employ-
ees hired beginning to 198! who are
covered under Social 6eeitrlty.
First of all, I want to ezpr'ess my
deep appreciation to Senator Rorx.
the chairman of Lhe Governmental Af-
fairs Committee, for his tireless ef-
iorts in developing and moving this
most complex piece of legislation
through the entire process. I also want
to pass along a special thaaka to my
good friend and distinguished col-
league, f3enator E~cr.rrota, for his lead-
ership. abiding interest and longtime
support in setting up this retirement
Plan- I would like to commend these
two gentlemen, and the other mem-
bers of the Gover7amental Affairs
Committee, as well as the large
number of other Senators without
who?e support getting this bill moved
would have not been possible. And, of
course. I want to ackno~rledge Repre-
sentative But FORD, c-~rtns-n of the
counterpart House oommitxee, for his
superior leadership in the House in de-
signing anew retirement system and
for the unparalleled spirit of coopera-
tion he has fostered during this con-
ference which was so accessary for the
Senate and House to reach final agree-
ment on this bill.
P'laaily, sited certainly most 1lnpor-
ttantly. I tlvaat to commend the Chief
Counsel of our subcommittee, Jamie
mho ve cosered b3' BoMal Security as man?
dated by the Bocial 6ecurity Amendments
of 1983
H.R 26'12 would violate section >f03~s~ of
the Consressiona) Budget Act of 197 De-
quse the bill pro~?~des new entitlement tu?
thorlt~ to become effectve during tlscal
Ye-r 1987 and would result In a ehsrtge fn
rrtienues effective during fiscal Year 1987,
before the first concurrent resolution on the
budget for fiscal Year 1987 DaF been ag'rYed
to
The budget sulhority protyded >n S.R.
2672 authorises contributions from the an
ployee and the employing agency to the
pension system to fund future retirement
benefits and authorises the payment of enti-
Uement benefits to lndisiduals pualifying
!or such benefits under Lhe pro~isiona of
~_
FEDERAL EMPLOYEES RETIRE-
MENT SYSTEM ACT OF 1986-
CONFERENCE REPORT
?Mr. DOLE. Mr. President, I ask
unanimous consent the 6enate now
turn to the conference report to ac-
company S.R. 4872, the Federal
Employees Retirement S)-stem Act of
1986.
The PRESIDING OFFICER. The
clerk will report.
The legislative clerk read as follows:
The oommsttee of oonferenoe on the dis-
a;recing votes of the two Houses on the
amendments of the Renate to the Dill (H.R.
2674) to redesignate the New Yort Inter?rta?
Ilona) wad Bull Udall Center is Jersey City.
lNew? Jersey, as the "lieu Jersey lnternatlon-
al and Bulk 1ldall Center." and to honor the
memory of a former postal employee Dy
deditxtiag a portion of a street at the Nea?
Yort lnternatfonas and Bulk lilaU Denier !n
Jersey' City. lies Jersey. ac "fi[lchae)
licDermott Place: ' paving met. after full
and free conference. Lave agreed to recom-
mend and do recommend W their respective
Houses this report, signed by a tma,ioritY of
the conferees
The PRESIDING OFFICER. With-
out objection, the Senate wt71 proceed
to the consideration of the conference
report.
(The conference report is printed in
the House proceedings of the Rtcoxn
of May 19, 1986.)
Mr. ROTH. Mr. President, ft has
been 7 years since the Senate first
began hearings on a new retirement
system to replace the expensive and
outdated pension plan that has existed
since 1920. Today, I am pleased to
bring before the Senate, the confer-
ence report on S.R. 2672, the Federal
Employees' Retirement Act of 1986
which enjoys the full support of the
House and Senate conferees and the
administration.
It is crucial that the Congress move
to adopt this legislation swiftly. Time
has run out for the interim legislation
that was enacted after Social Security
began covering new employees hired
beginning January 1984. As of April
30, some individuals have had an addi-
tional 5.7 percent taken from their
paychecks to pay for the unnecessary
double coverage of Social Sectuity and
the current civil service retirement
plan. This conference report will end
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play YD, 1986 OONGRESSIONAL RECORD -SENATE
Conan. Jamie has worked with me
through this whole period. We have
spent many hours !n meetings, at
night, on weekends, at early morning
breakfasts and at dinners to my home
to confer with leaders of various seg-
men4 0! our national oommuNty In-
terested in this legislation. Jamie de?
iayed hfa departure from Senate em-
ployment with a commitment that he
would stay until this bill became law.
He will now enter the minlatry on
almost afull-time basis, although I be-
lieve he will be besieged by those who
wlll implement this bill or fashion the
entitles to assure Its success, for Jamie
Cowan ttnderst.ands this legislation
better than any person involved. I give
him my heartfelt thanks for the effort
he has made to bring thin to a success-
ful conclusion, and I readily admit I
could not have brought this bill Lo the
final conclusion without his advice,
counsel and commitment.
Final agreement in the case of this
conference Dlll would not have been
'possible without the administration
and I would like to recognize ?OMB,
OPM and members of the White
House staff for their invaluable contri-
butions and participation in this
effort.
The bill before ua was most certainly
not put together In haste. As a matter
of fact, work on this retirement
system has spanned folu Congresses,
with my involvement beginning 7
years ago. Since that time, we have
had study upon study, untold hours of
testimony on retirement system bene-
fits and design from top pension es-
perts in the public and private sector,
and considerable input from employee
and management groups. Hearings
were first held about b years ago. It
was during that time that the Con-
gressional Research Service conducted
? major study of alternative designs
for Federal retirement programs and
in December 1981, Issued a report de-
scribing four options for coordinating
Federal retirement with Social 6ecuri?
ty. Based on the CRS report, IIntro-
duced abill in the fall of 1982 to setup
a three-tiered retirement plan with
6ocia] Security as the base although
Federal employees were not yet cov-
ered under 6ocial Security. The Dill
was not acted upon during that Con-
gress, but the Social Security Amend-
ments of 1983, a few months later, cre-
ated the immediate need for a new re-
tirement system. We held a series of
five pensions forums in 198! which led
to the introduction of S. 1527 wad sub-
sequent passage of a new Federal re-
tirement system in the 6enate 1n No-
vember 1985.
When I consider how long this has
taken, the tremendous amount of time
and energy requUed of so many
people, and the various frustrations
along the way, I can honestly say it
was all worth It. I say that because of
the result-a top notclt, economical re-
tirement system for the Federal wort-
force which 1s on par with the best In
the Drlvate sector.
Th1s bell provides for a there-Uerrd
system-Social Security. a basic annu?
ity plan. and a voluntary thrift savings
plan, following a proven and popular
private hector model. The plan pro-
vides soUd retUement beneffta which
coordinate well with Social Security.
offering financial security to Federal
retirees, protection in the event of dls~
ability and sound coverage for suni-
vora. It offers the Federal employee
for the first time, an opportunity to
partlclpate in a tax deferred thrift sav-
ings plan with a generous employee
match, something previously avWable
to private sector employees.
This new system encourages employ-
ee participation in retirement plan-
ning, provides greater portability of
Deneflta enabling greater movement in
and out of Government service at all
levels, encourages career services.
offers employee options for retirement
planning and provides t financially
sound and fully funded retirement
system.
The new system provides for a grad?
usJ move to age b7 for a minimum re-
tirement age, allowing many current
employees to continue to retire at 55.~
It allows payment of an annuity sup-
plement until age 62, subject to an
earnings test similar to Social Security
practice. COLA's will be equal to CPI
minus i after d2 with no COLA's
before. Ewen with these few changes
from the current system, I believe
Federal employees will De very plesaed
with this new system and I suspect
that many employees in the current
system will find the new one attractive
enough to transfer.
With this new retirement plan, ev-
eryone 1a a winner-the Federal em-
ployees because of the benefits and op-
portunities 1t offers, the Government
because of the positive influence on
the makeup of the work force: and the
taxpayer because tt casts considerably
less than the current system. I, too,
think we have Dome up with a winner
and urge that we adopt Lhe conference
agreement for H.R. 2672.
Itdr. F.AGLETOid. ]Hr. President, It
has been 66 years wince Congress first
enacted a retirement system for Feder-
al civilian employees. That system, the
civil service retirement system, created
what is known as a defined benefit
plan and set pension standards for
both the private sector and State and
local governments for decades.
While CSRS was amended and modi-
fied many times over the years, its
basic structure and philosophy never
changed. The Federal Government
made a commitment to its employees
that it they retire from government
after a significant number of yearn of
service to their country, then the Gov-
ernment would guarantee them a life-
time annuity. The annuity was specifi-
tally defined: The employee would re-
ceive an annual amount equal to the
average of h1s high S years salary,
times his number of years of service,
times ~ percent thus, the term "de-
fined benefit." The employee had to
s 6zo~
contribute a perantage of hla salary,
but U the employee derided Oo leave
government and withdraw lrom the
plan, hla oontribut.tom would be re?
tunded. Basically, the hderal Govern-
ment, as an employer, was taking care
Of Its long-term employees by provid~
1ng deferred compensation for yeah of
performance.
Between 1920 and 1086 pension phi-
losophy, pension needs, penalon Lrs ,
and pens: in design underwent marked
changes. What did not change, hoR?ev-
er, and what became a widespread em-
ployee right, wan the CSRS philoso-
phy that an employer should provide
an anr-uity to employees upon cessa-
tion of full service careers.
Following enactment of the Civil
Service Retirement Bystem In 1020.
the next major hlstork change !n pen-
dons came in 1955 whin Congress es-
tablished the Social Becarity Program.
That program, originally designed as a
pension foundation to be supplements
ed by personal savings and small pen-
sion plans !or certain categories of
workers, Quickly, as we all know.
became nearly universal
Since the Civil Bernice Retirement
System pre-dated Bodal Security,
there was ao reason to restructure the
CSRS, and consequently Federal em-
ployees were not covered by the Social
Becurity Program. Although Social Se-
curity coverage of Pbderal civilian em-
ployees was frequently suggested, it
wasn't until 68 yenta sett 6Qcial Secu-
rity began that the Pbderal work force
was included. In a mains overhaul of
Social Security in 1fR3. Federal em-
ployees hired after January 1, 108,
were included in the 8oc[al Security
Program. since it was readily apparent
that the Federal Ciove:nment oaild
not ask its employees to contribute to
two retirement plane, the 1083 Lw
provided an interim anzngement for
new employees untB a aevv Federal
employees retirement plan could be
enacted. The deadline for completion
of the new plea was December 11,
1985. We didn't quite make 1t, so last
December Congress a=tended the
deadline until May 1, i986. We have
not extended the deadline again, wad
until this conference report before us
becomes law, Federal employees hired
niter January 1, 19t3l, will be paying
Into both the Civil Service Retirement
System and Social BeGU'ity.
K tell to the ~ralsdction of the
Senate Governmental Affairs Commit?
tee to design the new retirement plan.
Luckily for the committee, my good
friend and colleague from Alaska, Sen-
ator Tan Sravtxs, had seen as far back
as 1979 the inevitability of Federal em-
ployees tong Social Becurity, and
through his position s+n the Civil Sen?-
Ice ? Subcommittee, Le had already
commenced what for the rest of us on
the committee became a long and for
focus Tourney.
In 1982 Tea Brcvsars introduced S.
1905, the Civil Service Amsion Reform
Act of 1982. Tn preparation for his bill,
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CenUal Intell~enoe /~cncy
1 3 JUN 1986
Mr. Thomas R. DeYulia, Staff Director
Committee on Post Office and Civil
Service
Rouse of Representatives
Washington, D.C. 20515
We at CIA are pleased that the Federal Employees
Retirement Act of 1986 has passed Congress and has been
signed into law by the President.
I want to thank you for your unstinting efforts on this
bill on behalf of all Federal employees. I especially
appreciate your help with the several crucial issues that
relate to the special needs of the Agency. This new
legislation will have a direct and positive impact on our
ability to recruit and retain the kind of people needed to
maintain our national security.
Thank you for your help.
Sincerely,
(sJ William J. Case
William J. Casey
Director of Central Intelligence
cc: Rep. William D. Ford
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OCA 86-1964
1 3 JUN 1986
The Honorable Lee H. Hamilton
Chairman
Permanent Select Committee on
Intelligence
House of Representatives
Washington, D.C. 20515
We at CIA are pleased that the Federal Employees
Retirement Act of 1986 has passed the Congress and has been
signed into law by the President.
I would like to thank you and your Committee staff,
especially David Addington, Mike O'Neil and Bernie Raimo,
for your consistent help through the long process. This new
legislation will enable us to recruit and retain the high
quality of people needed to maintain our national security.
Thank you for your help.
Sincerely,
~s~ V'Jilliam J. Casey
William J. Casey
Director of Central Intelligence
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Central Intelli~rncc A~cncy
OCA 86-1965
1 3 JUN 1986
The Honorable Dave Durenberger
Chairman
Select Committee on Intelligence
United States Senate
Washington, D.C. 20510
Dear Mr. Chairman:
We at CIA are pleased that the Federal Employees
Retirement Act of 1986 has passed the Congress and has been
signed into law by the President.
I would like to thank you and your Committee staff,
especially John Nelson, for your consistent help through the
long process. This new legislation will enable us to
recruit and retain the high quality of people needed to
maintain our national security.
Thank you for your help.
Sincerely,
~s! William J. Casey
William J. Casey
Director of Central Intelligence
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