CENTRAL INTELLIGENCE AGENCY RETIREMENT ACT OF 1963 SECTIONAL ANALYSIS AND EXPLANATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-03721A000300010047-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 23
• Document Creation Date: December 12, 2016
• Document Release Date: February 21, 2002
• Sequence Number: 47
• Content Type: REGULATION

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CENTRAL INTELLIGENCE AGENCY RETIREMENT ACT OF 1963
SECTIONAL ANALYSIS AND EXPLANATION
(NOTE: Except for such changes as are necessary to reflect terminology appli-
cable to the Central Intelligence Agency, most of the proposed provisions are
substantively the same as, or identical with, the corresponding provisions of
the Foreign Service Act of 1946, as amended. For convenient reference, the
corresponding section number under the Foreign Service Act of 1946, as amended,
is furnished at the end of each explanatory statement below (for example, "Sec-
tion 801, FSA") where applicable.
_Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled,
TITLE I - SHORT TITLE AND DEFINITIONS
PART A -SHORT TITLE
Sec. 101. Titles I to III inclusive of this Act xnay be cited as the "Central Intelli~
Bence Agency Retirement Act of 1963".
Explanation: This section provides a short title for this bill.
PART B -DEFINITIONS
Sec. 111. When used in this Act, the term--
(1) "Agency" means the Central Intelligence Agency; and
(2) "Director" means the Director of central Intelligence or the Deputy Director
of Central Intelligence.
Explanation: This section defines the terms ''Agency" and "Director" as these
terms are used throughout the bill.
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TITLE II -THE CENTRAL INTELLIGENCE AGENCY RETIREMENT
AND DISABILITY SYSTEM
PART A -ESTABLISHMENT OF SYSTEM
Rules and Regulations
Sec. 201. (a) The Director may prescribe rules and regulations for the estab-
lishment and maintenance of a Central Intelligence. Agency Retirement and
Disability System for a limited number of employees, referred to hereafter
as the system.
(b) The Director shall administer the system in accordance with. such
rules and regulations and with the principles established by this Act.
(c) In the interests of the security of the foreign intelligence activities
of the United States and in order further to implement the proviso of section
102(d)(3) of the National Security Act of 1947, as amended, (50 U. S. G. 403(d)(3))
that the Director of Central Intelligence shall be responsible for protecting
intelligence sources and methods from unauthorized disclosure, and notwith-
standing the provisions of the Administrative Procedure Act {5 U. S. C. 1001
et. se~{c .) or any other provisions of law, any determinations by the Director
authorized by the provisions of this title shall be deemed to be final and con-
clusive and not subject to review by any court.
Explanation: This section gives the Director of Central Intelligence the authority
necessary to establish and maintain a retirement system for a limited number
of .employees and to prescribe rules and regulations governing its administration.
{Section 801, FSA)
In view of the security classification of information concerning the service
of Agency employees, the facts pertinent to determinations made under this
Act will ordinarily be of such a nature that they cannot be publicly disclosed.
Accordingly the section provides that determinations of the Director under
this Act are final and conclusive and not subject to review. Legislative prece-
dent for this provision is contained in the Civil Service Retirement Act which
provides in section 16(c) that determinations by the Commission of questions
of dependency and disability under that Act are not reviewable. Other precedents
are contained in the Atomic Energy Act which provides that where Restricted
Data are involved determinations of the Commission will not be subject to
judicial review and in the Foreign Claims Settlement Act of 1949. (See 42 U. S. C.
2231 and 22 U.S. C. 1623{h). )
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Establishment and Mainteon.anc.e of Fund
Sec. 202. There is hereby created a fund to be known as the Central Intelligence
Agency Retirement and Disability Fund which shall be maintained by the Director.
The Central Intelligence Agency Retirement and Disability Fund is referred to
hereafter in this title as the fund.
Explanation: This section provides for establishment and maintenance of the
Central'Intelligence Agency Retirement and Disability Fund by the Director.
(Section 802, FSA, and 4~ Stat. 144)
Participants
Sec. 203. The Director may designate from time to time such Agency officers
and employees, hereafter referred to as participants, who shall be entitled to the
benefits of the system. Any participant who has completed fifteen years of serv-
ice with the Agency and whose career at that time is adjudged by the Director
to be qualifying for the system may elect to remain a participant of such system
for the duration of his employment by the Agency.
Explanation: This section necessarily deviates from the comparable provision
of the Foreign Service Act of 1946, as amended, since Foreign Service Officers
are automatically covered by virtue of their appointments under the Foreign
Service Act. However, only a limited number of Agency employees will serve
under conditions which will warrant other than normal retirement considera-
tions and those who are to be designated as participants pursuant to this section
will undergo a rigid selection process. (Sec. 803, FSA)
This retirement system is designed for those officers whose careers. over
the years are predominantly concerned with the conduct and support of intelli-
gence activities in foreign countries. It is intended to designate an employee
as a participant in this system at the earliest time after he has gained full
career employee status in the Agency that it can be determined that his career
field of work is in the conduct and support of intelligence activities in foreign
countries. Thereafter, his service record will be reviewed periodically to
verify that his career has remained in this field and that he is in fact performing
qualifying service. If on such review it should be determined that an officer's
career specialization has permanently shifted to a different field, he will be
transferred to the civil service retirement system. However, when an employee
who has been designated as a participant has met all of the minimum require-
ments for retirement under this system and then shifts to another field of career
specialization, he would ordinarily be viewed as having acquired a right to the
benefits he has already earned under this system and would be permitted to remain
in it. Consequently, the section provides that an employee who has coxripleted
fifteen years of service in the Agency and whose career at that time is adjudged
to be qualifying for this system may elect to remain in this system for the duration
of his employment by the Agency.
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Sec. 204. (a} Annuitants shall be participants who are receiving annuities from
the fund and all persons, including surviving wives and husbands, widows, depen-
dent widowers, children, and beneficiaries of participants or annuitants who
shall become entitled to receive annuities in accordance with the provisions of
this Act.
(b) When used i~ this title the term--
(1) "Widow" means the surviving wife of a participant who was married to
such participant for at least two years immediately preceding his death or who
is the mother of issue by such marriage.
(2) "Dependent widower" .means the surviving husband of a participant who
was married to such participant for at least two years immediately preceding
her death or who is the father of issue by such marriage, and who is incapable
of self-support by reason of mental or physical disability, and who received
more than one-half of his support from such participant.
(3) "Child" means an unmarried child, under the age of eighteen years, or
such unmarried child regardless of age who, because of physical or mental dis-
ability incurred before age eighteen, is incapable of self-support. In addition
to the offspring of the participant and his or her spouse, the term includes
(i) an adopted child, and (ii) a stepchild or recognized natural child who received
more than one-half of his support from the participant.
Explanation: This section defines annuitants who may be eligible for benefits
under the retirement system. (Section 804, FSA)
PART B - GOMPULSpRY GONTRIBUTIONS
Sec. 211. (a) Six and one-half per centum of the basic salary received by each
participant shall be contributed to the fund for the payment of annuities, cash
benefits, refunds, and allowances. An equal sum shall also be contributed from
the respective appropriation or fund which is used for payment of his salary.
The amounts deducted and withheld from basic salary together with the amounts
so contributed from the appropriation or fund, shall be deposited by the Agency
to the credit of the fund.
(b) Each participant shall be deemed to consent and agree to such deduc-
tions from basic salary, and payment less such deductions shall be a full and
complete discharge and acquittance of all claims and demands whatsoever for
all regular services during the period covered by such payment, except the right
to the benefits to which he shall be entitled under this Act, notwithstanding any
law, rule, or regulation affecting- the individual's salary.
Explanation: This section provides for contributions to the retirement fund by
the employee and by the Agency at the rate of six and one-half per cent of basic
salary, which is the same under both the Foreigun_ServAice retirement system and
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Sec. 221. (a) The annuity of a participant shall be equal to two per centum of
his average basic salary for the highest five consecutive years of service, for
which full contributions have been made to the fund, multipled by the number of
years, not exceeding thirty-five, of service credit obtained in accordance with
the provisions of sections 251 and 252. In determining the aggregate period of
service upon which the annuity is to be based, the fractional part of a month,
if any, shall be not be counted.
(b) At the time of retirement, any married participant may elect to receive
a reduced annuity and to provide for an annuity payable to his wife or her husband,
commencing on the date following such participant's death and terminating upon
the death of such surviving wife or husband. The annuity. payable to the surviving
-wife or husband after such participant's death shall be 50 per centum of the
amount of the participant's annuity computed as prescribed in paragraph (a) of
this section, up to the full amount of such annuity specified by him as the base
for the survivor benefits. The annuity of the participant making such election
shall be reduced by 2 1/2 per centum of any amount up to $2, 400 he specifies as
-the base for the survivor benefit plus 10 per centum of any amount over $2, 400
so specified.
(c)(1} If an annuitant dies and is survived by a wife or husband. and by a
child or children, in addition to the annuity payable to the surviving wife or hus -
band, there shall be paid to or on behalf of each child an annuity equal to the
~,, smallest of: (i) 40 per centum of the annuitant's average basic salary, as deter-
mined under paragraph (a) of this section, divided by the number of children;
(ii) $600 ;or {iii) $1, 800 divided by the number of children.
(2) If an annuitant dies and is not survived by a wife or husband but by a
child or children, each surviving child shall be paid an annuity equal to the
smallest of: (i) 50 per. centum of the annuitant's average basic salary, as deter-
mined under paragraph (a) of this section, divided by the number of children;
(ii} $720; or (iii)- $2, 160 divided by the number of children.
(d) If a surviving wife or husband dies or the annuity of a child is terminated,
the annuities of any remaining children shall be recomputed and paid as though such
wife, husband, or child had not survived the participant.
(e) The annuity payable to a child under paragraph (c) or (d) of this section;
shall begin on the first day of the next month after the participant dies and such
annuity or any right thereto shall be terminated upon death, marriage, or attain-
ment of the age of eighteen years, except that, if a child is incapable of self-
support by reasons of mental or physical disability, the annuity shall be termin-
ated only when-such child dies, marries, or recovers from such disability.
(f) Any unmarried participant retiring under the provisions of this Act and
found by the Director to be i,n good health may at the time of retirement elect
a reduced annuity, in lieu of the annuity as hereinbefore provided, and designate
in writing a person having an insurable interest (as that term is used in 5 U. S. C.
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2259(h)) in the participant to receive an annuity after the participant s death. The
annuity payable to the participant making such election shall be reduced by 10, per
centum of an annuity computed as provided in paragraph (a) of this section, and
by 5 per centum of an annuity so computed fox each full five years the person
designated is younger than the participant, but such total reduction shall not
exceed 40 per centum. The annuity of a survivor designated under this paragraph
shall be 50 per centum of the reduced annuity computed as prescribed above.
The annuity payable to a beneficiary under the provisions of this paragraph shall
begin on the first day of the next month after the participant dies. Upon the
death of the suxviving.'.b.e:neficiary all payments shall cease and no further annuity
payments authorized under this paragraph shall be due ar payable.
Explanation: This section defines annuitants who may be eligible for benefits
under the retirement system. Comparable provision is made in section 804
of the Foreign Service Act except that the first sentence of paragraph (f),
regarding the designation of a beneficiary by an unmarried participant, uses
language employed for the cornparabl~ provision in the Civil Service Retirement
Act (section 9(h) ). which provides that such individual must have an insurable
interest in -the participant.
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PART D -BENEFITS ACCRUING TO CERTAIN PARTICIPANTS
Retirement for Disability or Incapacity -- Medical
Examination -- Recovery
Sec. 231, (a) Any participant who has five years of service credit toward retire-
ment under the system, excluding military or naval service that is credited in
accordance with provisions of section 251 or 252(a)(2), and who becomes totally ,
disabled or incapacitated for useful and efficient service by reason of disease,
illness, or injury not due to vicious habits, intemperance, or willful misconduct
on his part, shall, upon his own application or upon order of the Director, be
retired on an annuity computed as prescribed in section 221. If the disabled
or incapacitated participant has less than twenty years of service credit toward
his retirement under the system at the time he is retired, his annuity shall be
computed on the assumption that he has had twenty years of service, but the
additional service credit that may accrue to a participant under this provision
shall in no case exceed the difference between his age at the time. of retirement
and the mandatory retirement age applicable to his grade in the Agency.
(b) In each case, the participant shall be given a medical examination by one
or more duly qualified physicians or surgeons designated by the Director to con-
duct examinations, and disability shall be determined by the Director on the basis
of the advice of such physicians or surgeons. Unless the disability is permanent,
like examinations shall be made annually until the annuitant has reached the
statutory mandatory retirement age far his grade in the Agency. If the Director
determines on the basis of the advice of one or more duly qualified physicians
or surgeons conducting such examinations that an annuitant has recovered to
the extent that he can return to duty, the annuitant may apply for reinstatement
or reappointment in the Agency within one year from the date his recovery is
determined. Upon application the Director may reinstate any such recovered
disability annuitant in the grade in which he was serving at time of retirement, or
the Director may, taking into consideration the age, qualifications, and experience
of such annuitant, and the present grade of his contemporaries in the Agency,
appoint him to a grade higher than the one in which he was serving prior to retire-
ment... Payment of the annuity shall continue until a date six months after the da~e
of the examination showing recovery or until the date of reinstatement or reappoint-
ment in the Agency, whichever is earlier. Fees for examinations under this
provision, together with reasonable traveling and other expenses incurred in order
to submit to examination, shall be paid out of the fund. If the annuitant fails to
submit to examination as required under this section, payment of the annuity shall
be suspended until continuance of the disability is satisfactorily established.
(c) If a recovered disability annuitant whose annuity is discontinued is for
any reason not reinstated or reappointed in the Agency, he shall be considered
to have been separated within the meaning of paragraphs (a) and (b) of section.234
as of the date he was retired for disability and he shall, after the discontinuance
~~ of the disability annuity, be entitled to the benefits of that section or of section
241(a) except that he may elect voluntary retirement in accordance with the pro-
visions of section 233 if he can qualify under its provisions.
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(d) No participant shall be entitled to receive an annuity under this Act and
compensation for injury or disability to himself under the Federal Employees'
Compensation Act of September 7, 1916, as amended, (5 U. S. C. 751 et seq. )
covering the same period of time. This provision shall not bar the right of any
claimant to the greater benefit conferred by either Act for any part of the same
period of time. Neither this provision nor any provision of the said Act of
September 7, 1916, as amended, shall be so construed as to deny the right of
any person to receive an annuity under this Act by reason of his own services
and to receive concurrently any payment under such Act of September 7, 1916,
as amended, by reason of the death of any other person.
(e) Notwithstanding any provision of law to the contrary, the right of any
person entitled to an annuity under this Act shall not be affected because such
person has received an award of compensation in a lump sum under section 14
of the Federal Employees' Compensation Act of September 7, 1916, as amended,
(5 U. S. G. 764) except that where such annuity is payable on account of the same
disability for which compensation under such section has been paid, so much of
such compensation as has been paid for any period extended beyond the date such
annuity becomes effective, as determined by the Secretary of Labor, shall be
refunded to the Department of Labor, to be paid into the Federal Employees'
Compensation Fund. Before such person shall receive such annuity he shall
(1) refund to the Department of Labor the amount representing such commuted
payments for such extended period, or (2) authorize the deduction of such
amount from the annuity payable to him under this Act, which amount shall be
transmitted to such Department for reimbursement to such Fund. Deductions
from such annuity may be made from accrued and accruing payments, or may be.
prorated against and paid from accruing payments in such manner as the Secre-
tary of Labor shall determine, whenever he finds that the financial circumstances
of the annuitant are such as to warrant such deferred refunding.
Explanation: This section makes provision for retirement of employees who
become disabled or incapacitated for duty. It establishes procedures for physical
examinations and subsequent return to duty when an annuitant has recovered to
the- extent that he can return to duty. The section further bars payment of a
disability annuity if the employee is given an award of compensation for the same
disability under the Federal Employees' Compensation Act. (Section 831, FSA)
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Death in Service
Sec. 232. (a) In case a participant dies and no claim for annuity is payable
under the provisions of this Act, his contributions to the fund, with interest
at the rates prescribed in sections 241(a) and 281(a), shall be-paid in the order of
precedeiace shown in section 241(b).
{b) . If a participant, who has at least five years of service credit toward
retirement under the system, excluding military or naval service that is
credited in accordance with the provisions of section 251 or 25.2(a)(2), dies before
separation or retirement from the Agency and is survived by a widow or a depen-
dent widower, as defined in section 204, such widow or dependent widower shall
be entitled to an annuity equal to 50 per centum of the annuity computed in accord-
ance with the provisions of paragraph (e) of this section and of section 221(a).
The annuity of such widow or dependent widower shall commence on the date
following. death of the participant and shall terminate upon death of the widow
or dependent widower, or upon the dependent widower's. becoming capable of
self-support.
(c) If a participant who has at least five years of service credit toward
retirement under the system, excluding military or naval service that is credited
in accordance with the provisions of section 251 or 252(a)(2), dies before separa-
tion or retirement from the Agency and is survived by a wife or a husband and
a -child or children, each surviving child shall be entitled to an annuity computed
in accordance with the provisions of sectioxi 221(c)(1). The child's annuity
shall begin and be terminated in accordance with the provisions of section 221(e}.
Upon the death of the surviving wife or husband or termination of the annuity
of a child, the annuities of any remaining children shall be recomputed and paid
as though such wife or husband or child had not survived the participant.
(d) If a participant who has at least five years of service credit toward
retirement under the system, excluding military or naval service that is credited
in accordance with the provisions of section 251 or 252(a)(2), dies before separa-
tion or retirement from the Agency and is not survived by a wife or husband, but
by a child or children, each surviving child shall-be entitled to an annuity com-
puted in accordance with the provisions of section 221(c)(2). The child's annuity
shall begin and .terminate in accordance with the provisions of section 221(e).
Upon termination of the annuity of a child, the annuities of any remaining children
shall be recomputed and paid as though that child had never been entitled to the
benefit.
(e) If, at the time of his or her death, the participant had less than twenty
years of service credit toward retirement under the system, the annuities
payable in accordance with paragraph (b) of this section shall be computed in
accordance with the provisions of section 221 on the assumption he or she has had
twenty years of service, but the additional service credit that may accrue to a
deceased participant under this provision.-shall in no case exceed the difference
between his or her age on the date of death and the mandatory retirement age appli-
cable to his or her grade in the Agency. In all cases arising under paragraphs' (b),
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(c), (d), or (e) of this section, it shall be assumed that the deceased participant
was qualified for retirement on the date of his death.
Explanation: This section provides for payment of an annuity to the survivor(s)
of an employee who dies while in active service. If no annuity is payable, this
section provides for payment of his contributions plus interest to a named bene-
ficiary, or to specified survivors, or to his estate, in a prescribed order of
precedence. (Section 832, FSA)
Voluntary Retirement
Sec. 233. Any participant in the System who is at least fifty years of age and
has rendered twenty years of service may on his own application and with the
consent of the Director be retired from the Agency and receive benefits in
accordance with the provisions of section 221 provided he has not less than five
years of service with the Agency.
Explanation: This section provides for voluntary retirement of an officer when
he reaches age 50 and has at least five years of Agency service and a total of
twenty years of service credit under the system. (Section 636, FSA)
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Sec. 234. (a) Any participant who separates from the Agency after obtaining
at least five years of service credit toward retirement under the system, ex-
cluding military or naval service that is credited in accordance with the pro-
visions of section 251 or 252(a)(2), may, upon separation from the Agency or at
any time prior to becoming eligible for an annuity, elect to have his contributions
to the fund returned to him in accordance with the provisions of section 241, or
(except in cases where the Director determines that separation was based in
whole or in part on the ground of disloyalty to the United States) to leave his
contributions in the fund and receive an annuity, computed as prescribed in
section 221, commending at the age of sixty years.
(b) If a participant who has qualified in accordance with the provisions
of paragraph (a) of this section to receive a deferred annuity commencing at
the age of sixty dies before reaching the age of sixty his contributions to the
fund, with interest, shall be paid in accordance with the provisions of sections
241 and 281.
(c) The Director may in his discretion retire participants in grade GS-14
and above to promote the efficiency of the Agency. If so retired, they shall
receive retirement benefits in accordance with the provisions of section 221,
provided they have in each case not less than five years of qualifying and a total
of ten years of service with the Agency. Any individual so retired who does not
meet these service requirements shall receive the benefits provided for indi-
viduals in grade GS-13 as set out in paragraph (d) of this section.
(d) The Director may in his discretion retire participants in grade GS-13
and below to promote the efficiency of the Agency and each such participant
shall receive--
(1) one-twelfth of a year's salary at his then current salary rate for each
year of service and proportionately for a fraction of a year, but not exceeding
a total of one year's salary at his then. current salary rate, payable without
interest, from the fund, in three equal installments on the 1st day of January
following the participant's retirement and on the two anniversaries of this date
immediately following: Provided, That in special cases, the Director may in
his discretion accelerate or combine the installments; and
(2) a refund of the contributions made to the fund, with interest as pro-
vided in section 241(a), except that in lieu of such refund such participant, if
he has at least five years of service credit toward retirement under the system
excluding military or naval service that is credited in accordance with the
provisions of section 251 or 252(a)(2), may elect to receive retirement benefits
on reaching the age of sixty in accordance with the provisions of section 221.
In the event that a participant who was separated from grade GS-13 or GS-12
and who has elected to receive retirement benefits dies before reaching the
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age of sixty, his death shall be considered a death in service within the meaning
of section 232. In the event that a participant who was separated from grade
GS-11 or below and who has elected to receive retirement benefits dies before
reaching the age of sixty, the total amount of his contributions made to the fund,
with interest as provided in section 241(a), shall be paid in accordance with the
provisions of section 241(b). .
(e) Notwithstanding the provisions of section 3477 of the Revised Statutes,
as amended,(31 U. S. C. 203) or the provisions of any other law, a participant
who is retired in accordance with the provisions of paragraph (d) of this section
shall have the right to assign to any person or corporation the whole or any part
of the benefits receivable by him pursuant to paragraph (d)(1) of this section.
Explanation: This section provides for the involuntary retirement of employees
by the Director in order to promote the efficiency of the Agency. The compar-
able provisions of the FSA relate to "selection-out" of officers who fail of
promotion or who do not meet required standards of performance.
Retirement benefits provided. for employees in GS-14 and above are the same
as those provided for Foreign Service Officers in Classes 1, 2, and 3 except that
more stringent service requirements have been established for this system.
In order to be retired with an immediate annuity, an employee in GS-14 and
above must have at least ten years of service with the Agency which includes at
least five years of service of a nature qualifying him for coverage under this
system. Employees in GS-14 and above who do not meet these service require-
ments will receive the benefits provided for employees in GS-13. The retire-
ment benefits provided for employees in GS-13 and below are the same as those
provided for Foreign Service Officers in Class 4 and below. The linkage levels
established in the Federal Salary Reform Act of 1962 (Public Law 87-793) to
provide comparability for pay purposes have been used to relate Foreign Service
classes to the P.~gency's General Schedule grades.
Comparable sections of FSA are as follows:
.CIA System
Foreign Service System
Sec. 234(a) (Refund of contributions)
Sec. 834(a} and 637(b)
Sec. 234(b) (Disposition of contribu-
tions upon death prior to receipt of
deferred annuity)
Sec. 834(b)
Sec. 234(c} (Involuntary retirement--
employees in grades GS-14 and above)
Sec. 519, 633(b), and 634(a)
Sec. 234(d) (Involuntary retirement--
employees in grades GS-13 and below)
Sec. 633(b) and 634(b)
Sec.. 234(e) (Assignment of benefits)
Sec. 634(c)
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Mandatory Retirement for Age
Sec. 235. (a) Any participant in the system in grade GS-18 or above shall .
upon- reaching the age of sixty-five be retired from the Agency and receive
retirement benefits in accordance with the provisions of section 221, but
whenever the Director shall determine it to be in the public interest, he may
extend such a participant's service for a period not to exceed five years.
(b) Any participant in the system, other than in grade GS-18 or above,
shall upon reaching the age of sixty be retired from the Agency and receive
retirement benefits in accordance with the provisions of section 221, but
whenever the Director shall determine it to be in the public interest, he may
extend such a participant's service for a period not to exceed five years.
Explanation: This section provides for the mandatory retirement of employees
in GS-18 or above upon reaching age 65 and of other employees upon reaching
age 60. As in the preceding section, conversion to Agency grades was achieved
by application of the linkage levels established in the Federal Salary Reform
Act of 1862. (Sections 631 and 632, FSA)
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PART E -DISPOSITION OF
INTEREST IN EXCESS OF BENEFITS RECEIVED
Sec. 241. (a) Whenever a participant becomes separated from the Agency
without becoming eligible for an annuity or a deferred annuity in accordance
with the provisions of this Act, the total amount of contributions from his salary
with interest thereon at 4 per centum per annum, compounded annually as of
December 31, and proportionately for the period served during the year of sep-
aration including all contributions made during or for such period, except as
provided in section 281, shall be returned to him.
(b) In the event that the total contributions of a retired participant, other
than voluntary contributions made in accordance with the provisions of section
281, with interest at 4 per centum per annum compounded annually as is pro-
vided in paragraph (a) of this section added thereto, exceed the total amount
returned to such participant or to an annuitant claiming through him, in the form
of annuities, accumulated at the same rate of interest up to the date the annuity
payments cease under the terms of the annuity, the excess of the accumulated
contributions over the accumulated annuity payments shall be paid in the
following order of precedence, upon the establishment of a valid claim therefor,
and such payment shall be a bar to recovery by any other person:
(1) To the beneficiary or beneficiaries designated by such participant
in writing to the Director;
(2) If there be no such beneficiary, to the surviving wife or husband of
such participant;
{3) If none of the above, to the child or children of such participant and
descendants of deceased children by representation;
(4) If none of the above, to the parents of such participant or the survivor
of them;
(5) If none of the above; to the duly appointed executor or administrator
of the estate of such participant;
(6) If none of the above, to other next of kin of such participant as may be
determined by the Director in his judgment to be legally entitled thereto.
(c) No payment shall be made pursuant to paragraph (b)(6) of this section
until after the expiration of thirty days from the death of the retired participant
or his surviving annuitant.
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Explanation: This section provides for the refund of contributions, plus interest
at 4 per cent to an employee who is separated without attaining eligibility for an
immediate or deferred annuity.
The section further provides for the disposition of contributions, plus in-
terest at 4 per cent, which axe in excess of the amounts paid to a participant
or to an annuitant claiming through him. If at the time annuity payments cease,
the accumulated annuities paid to the participant or to an annuitant claiming
through him, or both, are less than the total amount of the contributions of the
participant, plus interest at 4 per cent, the excess of such contributions and
interest is payable to a surviving spouse, children, parents, or estate of a
deceased participant or to his named beneficiary in the same order of precedence
as leas been. established under the Foreign Service and the Civil Service retire-
ment systems. {Section 841, FSA}
Computation of Length of Service.
Sec. 251. For the purpose of this title, the period of service of a participant
shall be computed from the date he becomes a participant under the provisions
of this Act, but all periods of separation from the Agency and so much of any
leaves of absence without pay as may exceed six months in the aggregate in
any calendar year shall be excluded, except leaves of absence while receiving
benefits under the Federal Employees' Compensation Act of September 7, 1916,
as amended, (5 U. S. C. 751 et. secy. }and leaves of absence granted participants
while performing active and honorable military or naval service in the Army,
Navy, Air Force, Marine Corps, or Coast Guard of the United States.
Explanation: This section provides that the period of service of a participant
under this system shall begin as of the date he becomes a participant but
excludes periods of separation from the Agency or leaves of absence in excess
of six months except when such leave is dta.ring a period when the participant is
receiving benefits under the Federal Employees' Compensation Act {for illness
or injury incurred in the performance of duty) or when such leave is for mili-
tary service. (Section 851, FSA)
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Sec. 252. (a) A participant may, subject to the provisions of this section,
include in his period of service--
(1} civilian service in the executive, judicial, and legislative branches of
the Federal Government and in the District of Columbia government, prior to
becoming a participant; and
(2) active and honorable military or naval service in the Army, Navy,
Air Force, Marine Corps, or Coast Guard of the United States.
(b) A participant may obtain prior civilian service credit in accordance
with the provisions of paragraph (a)(1) of this section by making a special con-
tribution to the fund equal to 5 per centum of his basic annual salary for each
year of service for which credit is sought prior to November 8, 1960, and at
6 1 /2 per centum thereafter with interest compounded annually at 4 per centum
per annum to the date of payment. Any such participant may, under such con-
ditions as may be determined in each instance by the Director, pay such special
contributions in installments.
(c)(1) If an officer or employee under some other Government retirement
system becomes a participant in the system by direct transfer, such officer
or employee's total contributions and deposits, including interest accrued
thereon, except voluntary contributions, shall be transferred to the fund effec-
tive as of the date such officer or employee becomes a participant in the sys-
tem. Each such officer or employee shall be deemed to consent to the transfer
of such funds and such transfer shall be a complete discharge and acquittance
of all claims and demands against the other Government retirement fund on
account of service rendered prior to becoming a participant in the system.
(2) No participant, whose contributions are transferred to the fund in
accordance with the provisions of paragraph (c)(1) of this section shall be
required to make contributions in addition to those transferred, for periods of
service for which full contributions were made to the other Government retire-
ment fund, nor shall any refund be made to any such officer or employee on
account of contributions made during any period to the other Governrzient retire-
ment fund, at a higher rate than that fixed by section 211 of this Act for con-
tributions to the fund.
(3) No officer or employee, whose contributions are transferred to the
fund in accordance with the provisions of paragraph (c) (1) of this section, shall
receive credit for periods of service for which a refund of contributions has
been made, o,~ for which no contributions were made to the other Government
retirement find. A participant may, however, obtain credit for such prior
service by making a special contribution to the fund in accordance with the
provisions of paragraph (b) of this section.
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(d) No participant may obtain prior civilian service credit toward retire-
ment under the system for any period of civilian service on the basis of which
he is receiving or will in the future be entitled to receive any annuity under
another retirement system covering civilian personnel of the Government.
(e) A participant may obtain prior military or naval service credit in
accordance with the provisions of paragraph (a)(2) of this section by applying
for it to the Director prior to retirement or separation from the Agency. How-
ever, i:n the case of a participant who is eligible for and receives retired pay on
account of xnilitar~y or naval service, the period of service-upon which such
retired pay is based shall not be included, except that ix~ the case of a partici-
pant who is eligible for and receives retired pay on account of a service-con-
nected disability incurred in combat with an enemy of the United States or
caused by an instrumentality of war and incurred in line .of duty during a
period of war (as that term is used in chapter 11 of title 38, United States Code),
or is awarded under chapter 67 of title 10 of the United States Code, the period
of such military or naval service shall be included. No contributions to the
fund shall be required in connection with military or naval service credited to
a participant in accordance with the provisions of paragraph (a)(2) of this
section.
Explanation: This section provides for credit under the retirement system of
previous civilian and military service and for the transfer of an individual's
contributions from other Government retirement .systems to the Central Intelli-
gence Agency Retirement and Disability Fund. Generally, these provisions
are comparable to those under the civil service retirement system. (Section
8 52 , FSA)
Credit for Service While on Military Leave
Sec. 253. Contributions shall not be required covering periods of leave of
absence from the Agency granted a participant while performing active military
or naval service in the Army, Navy, Air Force, Marine Corps, or Coast Guard
of the United States.
Explanation: This section waives any requirement for contributions to the fund
during leave of absence for military or naval service. (Section 854, FSA)
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Estimate of Appropriations Needed
Sec. 261. The Director shall prepare the estimates of the annual appropriations
required to be made. to the fund, and shall cause to be made actuarial valuations
of the fund at intervals of five years, or oftener if deemed necessary by him.
Explanation: This section provides for estimates of annual appropriations
required to be made to the fund and for actuarial valuation of the fund at least
every five years. It is identical with section 861, FSA, except that there has
been deleted the authorization to expend money for administering the progr~,i~n
from the fund since funds required for such purposes would be provided by
annual appropriations.
Investment of Moneys in the Fund
Sec. 262. The Director may, with the approval of the Secretary of the Treasury,
invest from time to time in interest bearing securities of the United States such
portions of the fund as in his judgment may not be immediately required for the
payment of annuities, cash benefits, refunds, and allowances, and the income
derived frpm such investments shall constitute a part of such fund.
Explanation: This section provides necessary authority for the Director to
invest funds which are not immediately required and to deposit the income pro-
,~ duced by such investment to the fund. (Section $63, FSA)
Attachment of Moneys
Sec. 263. None of the moneys mentioned in this title shall be assignable either
in law or equity, or be subject to execution, levy, attachment, garnishment, or
other legal process, except as provided in section 234(e).
Explanation: This section provides necessary protection to moneys in the fund
to preserve them for the payment of annuities, cash benefits, refunds, and
allowances as provided under the proposed retirement system. (Section 864,
FSA)
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PART H -RETIRED PARTICIPANTS RECALLED, REINSTATED
OR REAPPOINTED IN THE AGENCY OR REEMPLOYED IN THE
GOVERNMENT
Sec. 271. (a) The Director may recall any retired participant to duty in the Agency
whenever he shall determine such recall is in the public interest.
(b) Any such participant recalled to duty in the Agency in accordance with the
provisions of paragraph (a) of this section or reinstated or reappointed in accord-
ance with the provisions of section 231(b) shall, while so serving, be entitled in
lieu of his annuity to the full salary of the grade in which he is serving. During
such service, he shall make contributions to the fund in accordance with the pro-
visions of section 211. When he reverts to his retired status, his annuity shall
be determined anew in accordance with the provisions of section 221.
Explanation: This section provides for the recall to active service of an annui-
tant when necessary in the public interest. It further provides that such a
recalled annuitant shall be entitled to the full salary of the grade in which he
serves upon recall and for recomputation of his annuity upon completion of
such service. (Sections 520(b) and 871, FSA)
Reemployment
Sec. 272. Notwithstanding any ocher;provision of law, a participant. retired under
the provisions of this Act shall not, by reason of his retired status, be barred
from employment in Federal Government service in any appointive position for
which he is qualified. An annuitant so reemployed shall serve at the will of the
appointing officer.
Explanation: This section authorizes the reemployment in Government of an
employee retired under the Agency system. This authority is similar to that
applicable to civil service retirees and is comparable to section 520 (c) FSA.
Reemployment Compensation
Sec. 273. (a) Notwithstanding any other provision of law, any annuitant who has
retired under this Act and who is reemployed in the Federal Government serv-
ice in any appointive position either on a part-time or full-time basis shall be
entitled to receive the salary of the position in which he is serving plus so much
of his annuity payable under this Act which when combined with such salary does
not exceed during any calendar year the basic salary such annuitant was entitled
to receive on the date of his retirement from the Agency. Any such reemployed
annuitant who receives salary during any calendar year in excess of the maximum
amount which he may be entitled to receive under this paragraph shall be entitled
to such salary in lieu of benefits hereunder.
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(b) When any such retired annuitant is reemployed, the employer shall send
a native to the Agency of such reemployment together with all pertinent informa-
tion relating thereto, and shall pay directly to such annuitant the salary of the
position in which he is serving.
(c) In the event of any overpayment under this section, such overpayment
shall be recovered by withholding the amount involved from the salary payable
to such reemployed annuitant, or from any other moneys, including his annuity,
payable in accordance with the provisions of this title.
Explanation: This section provides that an annuitant who is reemployed in the
federal service in an appointive position is entitled to retain the salary of his
position plus his annuity up to a combined amount which does not exceed the
basic salary of the grade which he held upon retirement. In the event of an
overpayment, the amount of such overpayment may be withheld from either the
salary or the annuity payable to the reemployed annuitant.. (Section 872, FSA)
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PART I -VOLUNTARY CONTRIBUTIONS
. Sec.. 281. (a) Any participant may, at his option and under such regulations as
may be prescribed by the Director, deposit additional sums in multiples of 1
per centum. of his basic salary, but not in excess of 10 per centum of such
salary, which amounts together with interest at 3 per centum per annum, com-
pounded annually as of December 31, and proportionately for the period served
during the year of his retirement, including all contributions made during or
for such period, shall, at the date of his retirement and at his election, be--
(1)
returned to him in lump sum; or
(2) used to purchase an additional life annuity; or
(3) used to purchase an additional life annuity for himself and to provide
for a cash payment on his death to a beneficiary whose name shall be notified in
writing to the Director by the participant; or
(4) used to purchase an additional life annuity for himself and a life annuity
commencing on his death payable to a beneficiary whose name shall be notified
in writing to the Director by the participant with a guaranteed return to the ben-
eficiary or his legal representative of an amount equal to the cash payment
referred to in subparagraph (3) above.
(b) The benefits provided by subparagraphs (2), (3), or (4) of paragraph
(a) of this section shall be actuarially equivalent in value to the payment pro-
vided far by subparagraph {a)(1) of this section and shall be calculated upon such
tables of mortality as may be from time to time prescribed for, this purpose
by the Director.
(c) In case a participant shall become separated from the Agency for any
reason except retirement on an annuity, the amount of any additional deposits
with interest at 3 per centum per annum, compounded as is provided in para-
graph {a} of this section, made by him under the provisions of said paragraph
(a) shall be refunded in the manner provided in section 241 for the return of
contributions and interest in the case of death or separtion from the Agency.
(d) Any benefits payable to a participant or to his beneficiary in respect
to the additional deposits provided under this section shall be in addition to
the benefits otherwise provided under this title.
Explanation: This section provides for an employee to make voluntary contri-
butions to the fund if he wishes to do so in order to increase the annuity to be
paid to him or to a survivor upon his retirement or death. Similar provision
is contained in both`:the Foreign Service and the civil service retirement systems.
(Section 881, FSA)
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TITLE III -INTERNAL REVENUE CODE AMENDMENT
Pars.graph (4) of section 104(a) of the Internal Revenue Code of 1954, as
amended, (26 U. S. C. 104(a)(4)) (relating to the exclusion from gross income
of compensation for injuries and sickness) is hereby amended to read as
follows:
"(4) amounts received as a pension, annuity, or similar allowance for per-
sonal injuries or sickness resulting from active service in the armed forces
of any country or in, the Coast and Geodetic Survey or the Public- Health Serv-
ice, ar as a disability annuity payable under the provisions of section 831 of the
Foreign Service AGt of 1946, as amended (22 U. S. C. 1081, 60 Stat. 1021), or as
a disability annuity payable under the provisions of section 231 of the Central
Intelligence Agency Retirement Act of 1963. "
Explanation: This section amends paragraph 4 of section 104(a) of the Internal
Revenue Code of 1954 to exempt disability annuities under Title II of this Act
from Federal income tax. This is the same exemption already accorded similar
annuities for participants under the Foreign Service Disability and Retirement
System and for members of the uniformed services. (This section was favorably
reviewed by the Department of Treasury in processing within the Executive
Branch. )
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