SPECIAL REPORT ON THE CIA RETIREMENT POLICY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R001600190004-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 15, 2016
• Document Release Date: September 17, 2002
• Sequence Number: 4
• Publication Date: October 24, 1967
• Content Type: MF

Approved For Release 2002/10/09: CIA-RDP80B01676
t
MP ?RMT JN FOR: Director of Central Intelligence
THROUGH : Deputy Director for Support
Executive Director-Comptroller
F,~, ac/5t
01600190004-3
21 L ~ Ittt:?`
SUBJECT . Special Report on the CIA Retirement Policy
1. This report is for your information. It also requests your approval
in paragraph 6 to proceed with general and specific studies already under;;ay
and seeks any guidance you may consider appropriate.
By way of background, my basic concern relates to the Agency retire-
ment policy which since 1959- has "expected" all employees to retire as soon
as they become eligible to do so without a penalty reduction in their annuity.
Until recently this policy meant retirement at age 60 with 30 or more years
of service or at age 62 with less than 30 but more than five years of service.
The Civil Service Retirement Act was amended in 1!)66, hoz.ever, to permit em-
ployees to retire optionally without penalty at ale 60 if they had at least
",0 vears of service. Agency policy was thereupon revised to establish age 60
an the "expected" retirement age for all employees having 20 or m years of
service. For those with less than 20 years of service expected retirement age
was established at 6'r'. During this eight-year period, the CIA Retirement Sys-
tem was 'Ming developed. As finally enacted in 1965 it has a mandatory retire-
mont age of 60 (excepting GS-18s). The system is similar to the Civil Service
Retirement System with the major exception of a 3.75% higher multiplier of high-
five-year salary in the computation of annuities. The system is only available
to personnel whose careers are deeply involved in foreign intelligence opera-
tions.
3Historically, Agency records reflect that the "expected" early retire-
ment policy was adopted because of long-range concern and conviction that the
Clandestine Services could not be effectively manned with a substantial number
of employees over age 60 and because there was a pronounced age hump in its
population. The policy wes made Agency-wide for the sake of uniformity of
policy. `'here is no record of discussions as to the need for or the ultimate
impact of a eingle policy applicable to all elements of the Agency and all
levels anti fields of employment. In the absence of questions being raised on
this point at the time the CIA Retirement System was authorized, it can be
assumed that early retirement (age 60) was generally thought to be in the best
interests of the Agency in its entirety.
k=. My exposure to the workings of the "expected" retirement policy and
of the CIA Retirement System, together with my sensing of employee attitudes
en( uao rele, has gradually brought into focus a series of questions, challenges,
and, imbalances ,hich appear to call for intensive etudy leading to reaffirma-
tion or modification of the basic policy or at least significant changes in
Agency practices and employee benefits. I have identified the items listed
below for intensive study:
Approved For Release 2002/10/09, Ct4=RDP80B01676$0A'160 19 +U4-3
 Appromed Rem I804M?S' k6I ti $8 6 RQQ1 1g0WO1 cept and
as to enforceability. To the extent that employees are reluctantly
complying under duress or through misunderstanding, it is discrimi-
natory and inequitable. I have been told the Agency will not enforce
the retirement policy, but employees do not know this. At the same
time, the number of extensions in service of employees who do not wish
to retire is growing rapidly. It seems inevitable that the effective-
ness of the policy will deteriorate rapidly. At the very least, the
policy will become known as being one merely of suasion with the option
of compliance vested in the individual.
b. Resistance to and resentment of an age 60 retirement nolicy
applied on an Agency-wide basis appears to be mounting rapidly. In the
absence of legal and regulatory clarification or the provision of com-
pensatory benefits, the Agency must expect its policy to be challenged
in the courts and to be protested to members of the Congress. The
Agency must be prepared to respond to inquiries.
c. The policy is fundamentally unfair to all employees to whom it
was not a known and accepted condition of employment at the time of
original employment. There appears to be a strong case for compensatory
payments to employees who comply with Agency policy. I have a tentative
proposal for such payments which I believe is politically feasible and
which I believe would not require legislation. This might provide suf-
ficient incentive to support the policy on a voluntary acceptance basis
and thereby compensate for the unenforceability of the policy if such is
the case.
d. The practice of reemploying annuitants or extending employees in
service is reported to be generating resentment and poor morale. This
could be particularly divisive and dangerous since most reemployed
annuitants and some of those extended in service have been relatively
senior officers believed by the little fellow to be in a -position to
"engineer ` their retention in employment or reemployment.
There is voiced doubt among numerous senior Agency officials
that an all-employee age 60 retirement policy is in the beat interests
of the Agency. They point out that the establishment of the CIA Retire-
ment System satisfied the original objectives of the policy and are
calling for a reassessment of the need for and effect of the policy and
its possible modification.
f. Current compensation practices for reemployed annuitants are in
many cases resulting in an employment status that is financially more
remunerative than that held before retirement. (I discovered this fact
only recently and have evolved new compensation concepts to avoid this.
They will be presented for approval promptly.) I mention this as being
a possibly contra-productive influence affecting the retirement policy.
g. The extension in service of participants in the CIA Retirement
System (which provides a more favorable annuity primarily in considera-
tion for a short career span) seems contrary to the spirit and intent o1
the law and Congress. In at least some such cases I believe the indi-
vidual. should be returned to the Civil Service Retirement System prior
to retirement as a requisite to reemployment; otherwise he mould appear
to be receiving an unwarranted premium in his ultimate annuity computa-
tion. The same reasoning applies to a lesser degree -there post-retire-
ment contractual employment is contemplated. It is reported that quite
pp ovedor' eFease 061W8?l: CIA-RDP8OBO1676R001600190004-3
 Approved For Release 2002/10/09 CIA-I DP80BO1676R001600190004-3
5. The preceding items are to varying degrees currently being studied
by myself, my staff ofiticers, the CIA Retirement Board, and by a senior
officer of the Intelligence Directorate. Although I assume primary respon-
sibility for all aspects of these matters, I believe the issues involved
warrant highest level Agency policy consideration in view of their impact
upon Agency morale, staffing plans,, legal authorities, and Congressional
relationships. I also believe there is a high degree of urgency in the
present situation. If there are to be any modifications in Agency retire-
ment policy or in its application, it is highly desirable to do so quickly
in the race of the rapid growth in the number of impending retirements.
Accordingly, I believe them to be beyond the purview of the CIA Retirement
Board as it is presently constituted.
6. In view of the extreme importance of these issues to the Agency and
its e:ployees and their possib3y varying impact on the several Directorates,
it is suggested that you may wish to appoint a very senior Task Force whose
individual members are directly representative of the Deputy Directors and
appropriate senior Agency staff officers to guide the overall study and
consider the various proposals which will be developed. In any event, your
approval to proceed with studies on the issues raised is requested together
with any guidance you may consider appropriate.
Emmett D. Echols
Director of Personnel
The recommendation contained in -paragraph 6 is approved.
Richard Helms
Director of Central Intelligence
Distribution:
0 - Return to D/Pers
1 - DDCI
X - ER
2 - DD/S
.1 - D/Pers
1 - C/BBD/OP (w/held)
OD/Pers/EDEchols:he (25 Oct 67)
31
Approved For Release 2002/10/09 Cl
As you knz, DCI has
approved of this problem
being reviewed by the
Deputies, Gen. Counsel,
and I. G. / s/LKW
18 Nov 67
 ILLEGIB Approved For Release 2002/10/09 : CIA-RDP80BO1676R001600190004-3
Approved For Release 2002/10/09 : CIA-RDP80BO1676R001600190004-3
 Approved For Release 2002/10/09 : CIA-RDP80BO1676R001600190004-3
T C
AviZbje
Approved For Release 2002/10/09 : CIA-RDP80BO1676R001600190004-3
 Approved For Release 2002/10/09 : CIA-RDP80BO1676R001600190004-3
ONLY
NOUM FOR:
Wt e we can expect retirement complaints: - -ga:rd-
-?e-:s (if the policy ;t c:mld well be that we hav=.
i n ties in our syst:,-rri and we should accor tingly
provide some balance against these incquitie .
25X1
.;:L_ 6c i
* ~ ~ a 4fDATE )
REP1'ACES FORM 10.101
qk? 71 MAY BE USED.
Approved For Release 2002/10/09 : CIA-RDP80BO1676R001600190004-3
 .kpp
'SE
R 1 Ll- CHE
(TfIV t' ENTIAL SECRET
OFFICIAL ROUTING SLIP
TO
NAME AND ADDRESS
DATE
INITIALS
I
Executive Director
2
3
4
5
6
ACTION
DIRECT REPLY
PREPARE REPLY
APPROVAL
DISPATCH
RECOMMENDATION
COMMENT
FILE
RETURN
CONCURRENCE
INFORMATION
SIGNATURE
Remarks: DDCI handwritten note:
"Wouldn't the SEG be a good forum in
which to develop recommendations to Director
on this?"
Is/ T
FOLD HERE TO RETURN TO SENDER
FROM: NAME, ADDRESS AND PHONE NO.
DATE
A
rovedE ase
FORM NO. 237 Use previous editions
1-67