DEPARTMENT OF STATE DRAFT BILL, EARLY RETIREMENT FOR THE FOREIGN SERVICE.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90M00004R001000170010-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: January 4, 2012
• Sequence Number: 10
• Publication Date: November 23, 1987
• Content Type: MEMO

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ACT To:
OCA
OFFICE OF CONGRESSIONAL AFFAIRS
Routing Slip
ACTION
INFO
1. D/OCA
X
2. DD/Legislation
V
3. DD/Senate Affairs
V
4. Ch/Senate Affairs
5. DD/House Affairs
x
6. Ch/House Affairs
7. Admin Officer
8. Executive Officer
9. FOIA Officer
10. Constituent Inquiries
Officer
11.
12.
STAT
18 DEC A7
Date
1DEC8?
Actiofl'Officer:
Remarks:
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%A FILL `_
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
November 23, 1987
LEGISLATIVE REFERRAL MEMORANDUM
TO: Legislative Liaison Officer -
Office of Personnel Management
Agency for International Development
U.S. Information Agency
Department of Agriculture
Department of Commerce
Central Intelligence Agency
SUBJECT: Department of State draft bill, "Early Retirement for
the Foreign Service."
The Office of Management and Budget requests the views of your
agency on the above subject before advising on its relationship
to the program of the President, in accordance with OMB
Circular A-19.
A response to this request for your views is needed no later than
Friday, December la. 1987.
Questions should be referred to Hilda Schreiber (395-7362), the
legislative analyst in this office.
eAf'ej~
Naomi R. Sweeney for
Assistant Director for
Legislative Reference
IMIMgESSIqUI I~FAIiS
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United States Department of State
Washington, AC 20520
Dear Mr. Speaker:
I am writing to request consideration by the Congress of
legislation that would establish early retirement authority for
the Foreign Service. The Department of State seeks this
legislation as part of a plan to reduce expenditures and live
within our mandated budget levels. Attaining that goal will
inevitably mean reducing the size of our workforce.
If we are to achieve the needed reductions in an orderly
fashion, it is critical that we emphasize voluntary action, in
order to avoid the costs, tangible and intangible, that are
associated with compulsory Reductions in Force (RIF). We are
already doing all that we can administratively: a limited
hiring freeze is in place and we have obtained approval from
the office of Personnel Managment for an 'early out' for our
Civil Service employees. But in order to offer early
retirement to the majority of our workforce who are in the
Foreign Service, we need new legislation.
You will find enclosed draft legislative language to amend
the Foreign Service Act of 1980. The proposed amendment would
allow Foreign Service employees with 20_or more years of
service to retire voluntarily, regardless of age, in place of
the normal age 50/ 20 years of service requirements. Annuities
of such retirees would be reduced by two percent for each year
of age below 50.
This proposal would provide a rough parallel to the
existing early retirement authority for Civil Service
employees, which allows them to retire early with 25 years of
service at any age, or with 20 years of service at age 50, in
lieu of the normal voluntary retirement requirement of age 55/
30 years of service. Civil Service early retirees also accept
a two percent annuity reduction for each year of age below
their normal threshold.
Enactment of the early retirement authority described
above would make about 1200 Foreign Service employees eligible
for retirement, and would probably result in between 120 and
180 separations sooner than they would normally occur. Savings
would be realized to the extent that this additional attrition
would not lead to additional new hires, but would rather be
used to reduce permanently the size of the Foreign Service
organization.
The Honorable
Jim Wright,
Speaker of the House of Representatives,
Washington, D.C.
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Our hope is that early retirement legislation could be
obtained relatively early in the 1988 legislative session, and
that early retirement would then be offered to employees for a
four to six month period as soon as possible thereafter.
Under this scenario, we would not expect to realize any
significant savings during FY'88--payment of separation
benefits and repatriation of employees retiring from overseas
would neutralize salary savings. However, in FY'89 and
subsequent years we could reduce our costs by between seven and
eleven million dollars, depending on the volume of early
retirements.
Accordingly, we view early retirement legislation as a
vital part of our multi-year plan to reshape the Department of
State's budget and expenditure profile. While the entire plan
is not yet in place, we would like to proceed now with the
early retirement legislation since reducing the size of our
workforce will surely be a necessary part of any conceivable
cost-cutting package.
I am advised that the Administration has no objection to
the submission of this legislative proposal.
Sincerely,
J. Edward Fox
Assistant Secretary
Legislative Affairs
Enclosure:
Draft Amendment to the Foreign Service Act of 1980
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Early Retirement Authority for the
Foreign Service.
Section 811 of the Foreign Service Act of 1980 is
amended--
(1)By redesignating the existing text as subsection
(a); and
(2)By inserting a new subsection (b), as follows:
"(b) A member of the service who is a participant
either under section 803 or section 852(4) of this
Act, and --
(1) is separated voluntarily, during a period in
which the Secretary determines that the agency
in which the employee is serving is undergoing a
major reorganization, a major reduction in the
Foreign Service workforce, or a major transfer
of function, and who has completed 20 years of
creditable service, and
(2) is not entitled to an annuity under sections
609(a)(2)(b), 808, or 811(a) of the Foreign
Service Act,
is entitled to an annuity under this chapter, except
that the annuity authorized by this subsection, and
computed under paragraph 806(a) of this Act for a
participant in the Foreign Service Retirement and
Disability System, or under subsection 855 (b) for a
participant in the Foreign Service Pension System, is
reduced by one-sixth of one per cent for each full
month the member of the Service is under fifty years
of age at the date of separation."
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Sectional Analysis:
This bill amends the voluntary retirement provisions of
the Foreign Service Act to extend early-out coverage to
participants in both the Foreign Service Retirement and
Disability System and the Foreign Service Pension System.
The bill would allow Foreign Service employees with 20
years of service to retire regardless of age, with an annuity
reduction of 2 per cent for each year of age below 50. Since
this is the normal voluntary retirement age for FS personnel,
the reduction would apply from that age, as a parallel measure
to the age 55 standard applied to Civil Service employees.
Authority to offer early retirement would be vested in the
Secretary of State, in his capacity as administrator of the
Foreign Service Retirement and Disability System, as well as
the Foreign Service Pension System. The Secretary would be
permitted to authorize early retirement under conditions
similar to those specified in 5 USC 8336 for the Director of
OPM with respect to Civil Service employees.
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