LETTER TO HONORABLE MORGAN F. MURPHY FROM JOHN F. BLAKE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00473A000600040001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 43
• Document Creation Date: December 12, 2016
• Document Release Date: October 19, 2001
• Sequence Number: 1
• Publication Date: October 31, 1977
• Content Type: LETTER

The Deputy Director
Central intelli once A envy
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DD/A Registry
file
Honorable Morgan F. Murphy, Chairman 3 1 OCT 1977
Subcommittee on Legislation
Permanent Select Committee on
Intelligence
House of Representatives
Washington, D. C. 20515
Enclosed (Tab A) are the responses to the sets of questions that
you referred to during the hearing on our Retirement Act before your
Subcommittee. The questions and answers are individually noted as (U),
Unclassified; or classified as (S), Secret; or (C), Confidential.
Also enclosed (Tab B) per your request is a statement concerning
payment for hazardous duty and (Tab C) a copy of the last audit of the
Agency's retirement fund.
You also requested a copy of any medical study done on adverse
effects of service in the operational cadre. No overall study exists
which we can provide; however, there are numerous individual case studies.
These studies support the medical view that such service over extended
periods has a debilitating effect on one's health. As a result, the
members of the cadre are examined periodically by our staff doctors.
This allows continual awareness of any problems by carefully studying
individual medical case histories.
The unclassified questions and answers in Tab A and the statement
on hazardous pay, Tab B, may be included in the open transcript. I will
be happy to provide the Subcommittee any further information deemed
necessary.
Sincerely,
isl o)in F O'ake
John F. Blake
Acting Deputy Director
Enclosures
This document is unclassified
,z_
when separated from enclosures.
6
Classified by: 25X1A
Exempt from general declassification
schedule of E.O. 11652, exemption
category (2). Automatically
declassified on: Impossible to
determine.
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Distribution:
Orig - Addressee
1 - A/DDCI
1-ER
,X- A/DDA
Originator:
25X1A
Acting Director o Personnel
1 - OLC 25X1A
1 - D/Fin
1 - D/Pers
1 - C/RAD Concur:
1 - DD/Pers/SP -office of Lesislative Counsel
3 Q -II 1J77
DD/Pers (31 Oct 77) Date :
,Phu=, 7ubject
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ANSWERS TO QUESTIONS IN GROUP A
1. (U) For purposes of the record, how many employees - both Civil
Service and CIARDS - are presently at the Agency?
(S) As of 3 er 1977, the number of persons
in the Agency was
2. (U) Of these, how many currently participate in CIARDS?
(S) There are currently _ participants in 25X9
CIARDS.
3. (U) Of that number, what does your review of CIARDS partici-
pants in light of the change you contemplate making in actual
qualifying service show? That is, how many CIARDS participants
would not currently qualify as participants if the new regula-
tion requiring 60 months of qualifying service were presently
in effect?
(S) of current 25X9
participants, do not have 60 months.
4. (U) In connection with the above, when do you contemplate that
the 60-month requirement as well as other changes will. be
promulgated as revised regulation H.R.- 25X1A
(U) This will be promulgated in regulation before
the end of this year, possibly within the next month.
In any event, employees have already been advised of
this policy change by way of a Headquarters Notice
issued in January of 1977.
5. (U) As a general rule, how often are the CIARDS regulations
re-examined or revised? Who has the responsibility for this?
How is this process coordinated?
(U) The regulations are revised as often as
necessary, and the impetus for revisions could come
from various sources such as changes in public law, 25X1A
Classified by: 25X1 A
Exempt from genera ec assification
schedule of E.O. 11652, exemption
S - Secret category (2). Automatically
C - Confidential n declassified on: Impossible to
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revisions of Agency policy, findings of the Inspector
General, or advice from General Counsel. The Director
of Personnel has the responsibility. The process of
effecting revisions involves coordination with all the
Offices of the Agency which have a substantive responsi-
bility in the issue of the moment and also with each
Directorate.
6. (U) As an example, why has i almost two years to
revise Section (r) (3) of H.R dealing with the garnish- 25X1A
ment of funds?
(U) Based upon oral advice of the Civil Service
Commission, the Agency promptly began implementing the
new Federal law permitting garnishment of Federal pay
and annuities. However, in view of the provisions of
Executive Order 11881 the Agency has delayed issuing
formal regulations. Executive Order 11881 empowered
the Civil Service Commission, in conjunction with the
Department of Justice, to issue regulations for the
implementation of the law. Section 3 of the Executive
Order stated that "each executive agency. shall issue
such rules, regulations and directives pursuant to and
in accordance with those issued by the Civil Service
Commission pursuant to this Order, as are necessary to
implement the regulations of the Civil Service Commis-
sion." In April 1977 the Civil Service Commission pro-
posed draft regulations but to date final regulations
have not been issued.
7. (C) Going back to the numbers of CIARDS participants, do your
figures reflect contract or proprietary employees as well as
CIA employees? What are the numbers here?
(C) The figures for the CIARDS participants included
26 contract employees. Proprietary hires are not partici-
pants in CIARDS because they are not employees of the
United States Government.
8. (U) Of the CIARDS participants that you have enumerated for
us, how many actually serve in the Directorate of Operations?
25X9 (S) Currently M
9. (U) Do analysts participate in CIARDS? How many?
(C) CIARDS was not designed to cover employees
engaged purely in analysis. There have been some occa-
sions, however, in which analysts have been assigned
overseas. Our large-scale involvement in Vietnam, for
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example, required support of some analysts, and they were
sent there for duty. Over a period of time, therefore,
some analysts were able to complete five years overseas
and thus qualify for CIARDS. In addition, some individ-
uals, careerists in the Directorate of Operations,
qualified for CIARDS and later transferred to the
Directorate of Intelligence and became analysts. The
total number of analysts in CIARDS is currently 35.
10. (U) In Mr. Ruddock's 1977 report, on page 26, he refers to
"Non-staff." Who are these people?
(U) Mr. Ruddock's reference to "Non-staff"
personnel was intended to mean contract personnel.
11. (U) The figures submitted in your testimony today reflect
an average retirement age under CIARDS of 51 and, under Civil
Service,of 53.9 for the most recent period. In fact the
difference between the two average retirement ages usually
falls in and around the average of 3 years no matter what
fiscal period you're speaking of. These statistics seem to
suggest that, given the opportunity to retire early, people
will do so without being otherwise induced. If this is true,
why do you need a mandatory retirement age at age 60? Before
you answer this., please phrase your answer in light of the
ability the DCI has under CIARDS and the National Security
Act to involuntarily retire someone at almost any time.
(U) As stated by Mr. Blake in his testimony before
the Committee, the presence of a mandatory retirement age
has had the effect of influencing employees to retire
voluntarily at lower ages while still young enough to be
competitive in the labor market as they search for other
employment. It should be noted that until recently the
Agency had also a mandatory retirement age of 65 for
employees covered by the Civil Service Retirement Act
and that earlier this age was 60. This accounts for the
similarity of average ages of retirees in both Systems.
Mr. Blake also noted that the Agency has eliminated the
mandatory age of 65 for employees covered by Civil Service
retirement. We can now predict that the disparity between
the average ages of retirement under the Civil Service and
CIARDS Systems will increase.
Mr. Blake noted that the CIARDS mandatory
retirement age is a vital feature of the management of
the Agency's operational cadre because it provides
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managers with the ability to project and predict retire-
ment, influences voluntary retirements at earlier ages,
avoids the aging of the operational cadre, permits a
flow-through of new employees who can fit cover require-
ments and who are not identified to opposition services,
effects drain-off at the upper grades thus improving
opportunities for career development and promotions of
younger officers, and of meeting reduced personnel
ceilings.
While it is true that the Director, both under
CIARDS and the National Security Act, can involuntarily
separate employees, the use of involuntary retirement
to resolve the problems noted above would have serious
implications for the operational cadre and their morale.
12. (U) The justifications that have been cited for CIARDS include
consistent reference to a young, active, physically resilient
and adaptable corps of operatives. Several questions occur
to me in connection with this assertion. Are you saying that
none of your operatives is over 50? 55? 60? Does the CIA
experience any present and significant problem in attracting
good recruits? At what ages do you recruit?
(U) We are not saying that we do not have or do
not need operatives over 50. Nevertheless, we must keep
the operational cadre young, active and resilient for
the reasons stated by Mr. Blake in his testimony. The
Agency has not had any problem in attracting good recruits.
We recruit on the basis of skills and potential for
service in the operational cadre rather than on age.
13. (U) Is it really true that only younger people can be fit
into the kinds of cover jobs your agents hold overseas? If
yes - isn't this in itself a tip-off to the other side as to
their probable identity?
(U) It is not true that only younger people can
fit into cover jobs overseas. There is a limited number
of cover slots which can accommodate older officers, but
most cover slots are geared to younger officers. The
mix of younger to older officers, cover discipline and
other techniques contribute to a blending of officers
into appropriate cover slots, thus making it difficult
for the opposition to pinpoint which persons, younger
or older, are Agency employees.
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14. (U) What is the average age of your agents abroad today?
What was the average age in 1964? Has there been a change?
Breaking it down further - what is the average age of the
actual operations people versus the administrative people
overseas? What about supervisory or control people? Heads
of station?
25X1A
15. (U) As to domestic service which you feel constitutes
qualifying service for CIARDS, what is the average age here?
If you can't give an exact figure, does this average age
come closer to 60 than 50?
(U) Average age 52 when put into the System.
16. (U) The phrase "tradecraft" is used in section b(l1)-(c) of
25X1A H. R What does it mean?
(U) Mr. Blake provided a definition of "tradecraft"
in his testimony.
17. (U) The practice of tradecraft seems to have figured in a
number of those cases where domestic service was considered
qualifying service for CIARDS. Were these individuals in any
distinct age group?
(U) No.
18. (U) The thrust of these past few questions - as you no doubt
have ascertained - has been to examine whether it is agility
and other physical powers that are important for an operating
agent, or whether stealth and excellence in securing necessary
intelligence are the actual test of an agent's worth to the
CIA. Is age always a factor here? If it is, how do you know
that it is?
(U) Members of the operational cadre perform a
variety of functions ranging from clandestine support
to clandestine operations. To the extent that agility,
physical powers and stamina are related to age, age is
a factor. These activities put a premium on physical
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stamina and agility. Members engaged in clandestine
support or in operations must be of ages that enable
them to blend into their cover situations and at the
same time be endowed with the stamina and vigor neces-
sary to withstand the pressures of living a double life,
often in dangerous and hostile environments.
19. (U) Going further, is the CIA presently satisfied with the
overall abilities - not productivity necessarily - of its
agents? How can CIARDS bring about any improvement, if such
is needed? Are there any suggestions you have which would
bring in a different sort of recruit than the one you now
bring on board?
(U) Yes. The maintenance of the high level of
capability found among the employees therein is a
function of careful screening and recruitment and
training rather than a function of CIARDS itself.
CIARDS later assists in the eventual removal from the
service of those persons who for various reasons should
retire or be retired. We have no basis for believing
that we should bring in a different type of recruit
from that which we have recruited in the past.
20. (U) What was the average span of service for CIARDS retirees
in 1977? In 1970? Over the 13-year history of the System?
How did this compare to that of all other Agency employees
during those periods? Does the Agency plan to ask the
President to provide by executive order that CIARDS retirees
may earn as much as 80% of their high three years' salary,
as Civil Service retirees may?
(U) The average span of service for CIARDS
retirees in FY-1977 was 27.7 years; in 1970 it was 26.2
years; and over the 13-year period was 26.6 years. For
our retirees under the Civil Service Retirement System
the average span of service for 1977 retirees was 27.5
years; in 1970 it was 24.4 years; and in 1965 it was
22.2 years. We are unable to recover data on Civil
Service retirees for the 13-year period. (The average
service given here includes military service.)
We do not plan to seek a change of the limita-
tion on CIARDS annuities from 70% to 80o as this would be
'inconsistent with the concept of early retirement.
21. (S) Qualifying service for designation as a participant in
CIARDS is described. as service
". (i) in support of Agency activities abroad hazardous
to life and health or (ii) so specialized because of security
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figures quoted in the question, there still remain Agency
activities of other types, such as espionage and clandes-
tine collection.
25X9 25.
(U) How will the erson reduction in manpower announced
recently by Admira urner be accomplished? Will CIARDS
participants be involved? If so, how many? Has the Retire-
ment Board seen an increase in the number of participants as
a result of this announcement?
(U) The reduction of mployees from the
Directorate of Operations wi take place over the span
of two fiscal years and will be accomplished by a
combination of anticipated attrition, involuntary
termination and retirements.
The Directorate has redefined current and
future missions and will reorganize its Headquarters
elements accordingly. Next, all personnel at each
grade will be reviewed to consider their skills,
abilities and potential in relation to future missions
and the reorganized structure. Those employees who
will not be needed and who are not expected to leave
by way of normal attrition (resignation and retirement)
will be terminated involuntarily but only if a suitable
assignment cannot be located elsewhere in the Agency.
We expect that some participants in CIARDS
will be involved, but the exact number is not known at
this time. The actual number will be furnished to the
Committee at a later date. In this connection, the
Director, has stated that he will not relax the stringent
application of the criteria for participation in CIARDS.
26. (U) How is the Retirement Board constituted? Who are its
members and what has been the average term of service of its
members? Are deputies ever sent in place of members? What
has been the grade of the average member? How many CIARDS
participants sit on the Board?
(U) The Retirement Board is composed of a Chairman
and four other voting members in addition to a Finance
.Advisor, a Technical Advisor, a Legal Advisor and an
Executive Secretary. There are also four alternates.
The current Chairman of the Board is the
Deputy Director of Personnel. The other four principal
members represent the major Directorates of the Agency.
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All of the principal members and their alternates are
senior personnel in the GS-16 to GS-18 grade range. The
average term of the current members of the Board is 4
years and 6 months. The average term of all members of
the Board. over the past 12-1/2 years is 3 years and 5
months.
In the absence of the principal member, the
alternate attends the meeting.
The average grade of the members of the Board
throughout this 12-1/2 year period is GS-17. The
current Board is composed of: principal members, two
GS-18's and three GS-17's; alternate members, one GS-18,
one GS-17, and two GS-16's.
Of those on the current Board, four principal
members and two alternates are participants in CIARDS.
The Chairman and two of the alternates are under the
Civil Service Retirement System.
27. (U) How does the Board go about deciding cases that come
before it? Do the members - other than the Chairman - have
an institutional memory of cases that the Board has decided
in the past? If so, how do they acquire or refer back to
such cases?
(U) Prior to each Board meeting the members and
advisors are provided with the papers submitted by the
employee seeking approval of periods of domestic service
as qualifying service. In addition to these papers,
there is usually a submission from the employee's super-
visor, office head or someone who is knowledgeable of
the facts in the case. The Board then discusses the
merits of the case, taking into consideration the
criteria specified in the regulation and the history of
other such similar cases. In many cases the Board
asks the employee to appear to testify regarding his/her
claimed service; occasionally expert witnesses are
invited to testify regarding their particular fields
as applied to the claimed service.
Based on the information obtained from all
sources and the Board's knowledge of other such cases,
the Board arrives at a conclusion as to whether this
service meets the criteria specified in the regulation.
If the Board reaches an affirmative conclusion, this
conclusion is then presented to the Director of Personnel
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in the form of a recommendation. The Director of
Personnel has final approving authority.
In those cases where the Board concludes
that the service is not qualifying, the employee is
advised of the Board's tentative conclusion and is
given the opportunity to submit additional information,
either in writing or orally before the Board. The
Board then again meets on the case to consider the
additional information. If, after considering this
additional information, the Board still concludes that
the claimed service is not qualifying, a recommendation
for disapproval of the case is submitted to the Director
of Personnel. The employee is then notified by the
Director of Personnel of his disapproval of the case
and of the employee's right to appeal the decision to
the Director of Central Intelligence. By Agency
regulation, all appeals are received by the Inspector
General who will make an independent investigation and
recommendation to the Director.
One of the current members of the Board has
been a member since the inception of the Board in 1965.
Members and alternates are provided with a Policy Book
which details the major policies approved over the
years. In addition, a codification of all cases is
maintained by the Executive Secretary, who has been in
this position for 11 years, and the updated information
contained in this file is provided for each Board
member's use. As the need arises in consideration of
a specific case, the Executive Secretary provides
samples of other such cases, which include the conclu-
sions reached by the prior Board. One member has been
on the Board for more than 12 years and the Executive
Secretary has been with the Board for 11 years; two
other members have more than four years of service.
These individuals have accumulated a knowledge of most
of the types of cases which have been and are now being
submitted for adjudication and can provide the other
members with a historical background of the types of
decisions reached.
28. (U) A number of CIARDS participants with some domestic
service have been held to have qualified - in whole or part -
by virtue of that service since the System was authorized.
The regulations make reference to several types of domestic
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service which are qualifying:
(1) that which "requires a substantial risk to life or
health of the employee,
(2) that which "requires the continued practice of
tradecraft under conditions of most stringent
security for the purpose of maintaining personal
cover in support of Agency activities and
(3) that which "when retirement is imminent, is adjudged
to have been so sensitive or so specialized that
security requirements forbid disclosure of this
duty, and that, as a result, it is unlikely the
employee will be able to obtain employment for which
he is otherwise qualified."
As to the first category of service, why is it not related
to the conduct of operations abroad, as in the language of
the statute? Or is it meant to qualify under that language
of the statute which refers to duties "clearly distinguish-
able from normal government employment"?
Under which of the two categories in the statute does the
"tradecraft" provision fall? If the first, must not these
activities be related to the conduct of operations abroad
and be hazardous to health? If the second, is all "trade-_
craft" activity "clearly distinguishable from normal govern-
ment employment"? Do you - ought you - to apply the "resume
test" to tradecraft employees?
Finall what about the resume test embodied in Sections
What questions do you ask to make this
e ermina ion. Do you look to see if there are jobs outside
CIA that fit the skills your people have learned? Or do you
decide on the basis of what a retiree would be allowed to
put in his/her resume? What if you were a bodyguard or
armed courier? Perhaps you can't say what or whom you
guarded, but does that mean you can't get a job as a body-
guard outside government? Lastly, doesn't the language in
b(ll)(d) constitute a conclusion? Isn't the determination
of when retirement is imminent a factor of whether a person
qualifies for CIARDS?
(U) It has been understood that in order to be
qualifying, hazardous duty had to be related to the
conduct or support of operations abroad. To reassure
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the Committee, we are including the phrase "in support
of Agency activities abroad" to this criterion in our
forthcoming revision of the regulation.
The element of tradecraft falls under the
second of the statutory criteria, namely that specify-
ing activity "clearly distinguishable from normal
government employment." It is not necessary to apply
the "resume test" to employees who qualify on the basis
of tradecraft.
The."resume test" is used to identify service
that is clearly distinguishable from normal Federal
employment but which does not require the practice
of tradecraft. While sensitivity alone is not justifi-
cation for participation in CIARDS, there are a few
limited types of activities that are peculiar only to
this Agency and thus to normal Federal employment and
which are not, as already indicated, covered under the
criteria relating to tradecraft.
The "resume test" is a technique used by the
Board to determine whether a prospective retiree can
describe sufficient portions of his Agency employment
to prospective employers in order to obtain post-
retirement employment. There have been a few cases
in which participation in CIARDS was granted on the
basis of this criterion.. In applying this technique,
the Board reviews the individual's overall employment
record to determine what portion can be publicly
acknowledged.
The fact that the employment history of an
individual did not prepare him for positions in the
private sector, or that there is an absence in the
private sector of jobs that relate to his Agency
employment, would not be considered by the Board in
determining whether the individual should be put in
CIARDS. The only factor which the Board considers is
whether the employee is unable, because of security
requirements, to include in his resume a description
of his skills and experiences which would allow a
prospective employer to make a hiring decision. Thus,
a bodyguard or armed courier is able to describe
sufficiently the nature of his work and would not,
therefore, qualify under this criterion.
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It is only when retirement is imminent that
the resume test is applied, because only at that point
can the Board judge the effect of security requirements
on the prospective retiree's search for post-retirement
employment.
29. (U) To implement the regulations as they apply to domestic
service for CIARDS, the Agency has recently published an
employee bulletin. Was there any published document that
predated this July 1977 bulletin? If not, how did the
Retirement Board justify and coordinate its decisions? Do
you have plans to write formal guidelines or expand your
regulations in this direction?
(U) In June of 1977, the Agency published an
Employee Bulletin advising employees that examples
of domestic service which had been judged qualifying
and examples which had been judged non-qualifying
under CIARDS had been sent to the five principal
Career Service Offices in the Agency. The Bulletin
itself did not specify these examples but did advise
employees of the availability of these examples in
their respective Career Service Offices. No document
pertaining solely to domestic qualifying service had
been published prior to June 1977; however, copies of
the regulation on CIARDS are widely available through-
out the Agency and have been since the inception of
CIARDS.
The Retirement Board has a variety of guidance
for its actions and decisions. In addition to the
regulations and the basic law, the Board makes reference
to a codification of prior decisions and precedent
cases and a digest of previous cases by types of service
approved and disapproved. In addition, guidance has
been obtained from the Director. We will continue to
develop additional guidelines and to expand the regula-
tions as required.
30. (U) Summaries of domestic service found to be qualifying
service for CIARDS suggest various activities and proceedings
in this country which concerns this Committee greatly. Beyond
the provisions of Section 0(5) of H.R dealing with 25X1A
certain criminal offenses, what policies, 1 any, exist at
the Agency towards actions which otherwise raise the Spector
of illegality of impropriety?
(U) answered this question in his
testimony.
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31. (U) Finally, what does CIARDS cost the Federal government
yearly? What were the appropriated amounts necessary to
meet unfunded liability, interest and current obligations
in the most recent fiscal year for which figures are avail-
able? Would there be any comparable expenses if CIARDS
retirees were covered as Civil Service retirees instead?
Are there projections for the size of the annual appropria-
tion that will be needed in years to come as CIARDS retirees
continue to come on board at the rate in which they are now
retiring?
(U) The direct cost of CIARDS to the Federal
government is comprised of:
(1) the Agency's direct cost of administration and
(2) the annual appropriation to the fund
as authorized by PL 94-522. Direct administration costs
are estimated at approximately comprising salary 25X1A
cost oeople assigned wholly to t e administration of
CIARDS an an estimated annual computer cost of
$25 000. This does not include the salary cost Agin,=
o eople who support Civil Service and CIARDS retire-
men matters jointly whose services would be required.
regardless of whether a separate system is maintained 25X1A
for CIARDS.
The FY-1978 appropriation for CIARDS is
If CIARDS participants were covered by the Civil
Service System and their entitlements were continued
unchanged, the appropriation for the Civil Service fund
could be expected to increase by amounts corresponding
to the appropriations required for CIARDS; correspondingly
the administrative costs of the Civil Service Commission
could be expected to increase but we have no way of deter-
mining the amount of the increase in relation to present
Agency administrative costs.
The appropriation projections for fiscal years 1979-
1982, prepared at the time of the FY-1978 budget request,
were as follows:
FY-79
FY-80
FY- 81
FY- 82
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32. (U) Do you have any idea of what quotas you will. request for
CIARDS retirements from FY 79 - 84?
(U) We have no plans to request a quota after
30 June 1979.
33. (U) Returning to the question of the age of your agents -
when you bring them home from overseas, do you do that because,
and only until, their cover has been blown? Or do you bring
them home or change them at regular intervals or tours of
duty? What factors other than the ones I've just suggested
influence these decisions?
(S) No. Employees are brought home from overseas
for a variety of reasons ranging from the granting of
home leave and return to post, assignment to Headquarters,
assignment to other stations, for training courses, or
for compelling family problems.
34. (U) Why can't you simply pay your agents more? Wouldn't
that be cheaper than a CIARDS? Use the analogy of flight
or hazardous pay in the military?
(U) The idea of substituting various types of
special payments to employees who perform services
that are hazardous or are clearly distinguishable from
normal Government employment is contrary to the basic
concept of CIARDS. CIARDS is not designed as a system
for rewarding employees; it was designed as a tool to
be used by the Agency for the management of the opera-
tional cadre. Mr. Ruddock made an especial point of
this fact in his report of 1976, on page 31.
Establishing a system of special payments in
lieu of CIARDS would deny the Agency the management
features of CIARDS which Mr. Blake described in his
prepared statement, Moreover, our judgment is that
a system of special payments reflects the concept of
paid mercenaries rather than a cadre of dedicated and
committed professionals. We believe the morale of our
CIARDS participants would suffer grievously if the
recognition of not only their service but their dedica-
tion were to be in the form of outright payments rather
than from a system that reflects a long-term, career
and professional commitment.
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35. (U) In table 1, your figures suggest that nearly 45% of
present retirees are CIARDS retirees. Isn't that dispro-
portionate considering only a 30% CIARDS representation
among your employees?
(S) We suggest the Committee not attempt to relate
retirements under CIARDS to the percentage of CIARDS
participation as a portion of Agency strength. There
are a number of reasons why 45% of Agency retirees are
under CIARDS although participation is generally limited
to about 30% of the Agency personnel strength. Employees
under CIARDS may, do, and must retire at ages earlier
than are permitted under the Civil Service System.
Consequently, there is a more rapid rate of retirement
under CIARDS than under the Civil Service System. The
age 60 requirement in CIARDS and the earlier age for
voluntary retirement encourage retirements at ages
earlier than ages that are found among our Civil Service
employees.
36. (U) Also, table 4 shows that your retirees have higher grade
averages than the Civil Service. Why is that?
(U) The average grade of CIARDS retirees is higher than
that of our Civil- Service retirees because there is a
smaller number of lower-grade employees overseas.. Agency
employees under the Civil Service Retirement Act include
large numbers of lower-grade workers such as couriers,
payroll clerks, keypunch operators, mail and file clerks,
etc., who are a part of the administrative infrastructure
at Headquarters; the numbers of such personnel have the
effect of keeping the average retirement grade low. The
same sittiation.does not exist overseas because the pro-
fessional officers and supporting personnel assigned
overseas are generally of higher grades.
SECRET
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ANSWERS TO QUESTIONS IN GROUP B
1. (U) It appears that the Operations and Administrative
Directorates provide the bulk of retirement in the current
year. Has this always been the case? Why is the Intelli-
gence Directorate so low? And the Administrative Directorate
so high?
(S) It is true that the Directorates of Operations
and Administration provide the bulk of retirements under
CIARDS. Members of these two Directorates comprise the
largest numbers of participants in CIARDS, and this has
always been the case because they are the operational
cadre referred to earlier. The Operations Directorate
is heavily represented because the officers who engage
in the various intelligence functions overseas are from
that career service. Personnel in the Directorate of
Administration are in CIARDS because this Directorate
provides direct support to overseas operations; e.g.,
including communications, finance, logistics and
security functions. Many domestic services, such as
demolitions training and covert investigations, are
performed by members of that same Directorate.
Personnel of the Intelligence Directorate
(now known as the National Foreign Assessment Center)
are not normally engaged in duties of the type that
qualify for participation in CIARDS.
2. (S) In the tables provided, I note that table No. 1 states
that the total retirement since the inception of CIARDS is
however, table No. 6 indicates only quota spaces 25X9
have been utilized during a comparable period. Please explain
the difference.
(U) There is no conflict between the figures in
these tables. The difference is that in CIARDS retire-
ments for disability do not count against quota whereas
411 other types of retirements do.
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Exempt from general declassification
schedule of E.O. 11652, exemption
category (2). Automatically
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3. (U) What are the CIARDS dollar costs in FY 1978 and what do
you estimate it will be in FY 1979?
(S) Total CIARDS dollar costs are estimated as
follows for FY 78 and FY 79:
FY-78 FY-79
Annuities to beneficiaries
Refunds of employee contri-
butions and transfers of
employee/employer contribu-
tions to other retirement
systems
25X1A
4. (U) For the current year, what is the average retirement age
for CIARDS as compared to Civil Service retirement for the
same period? What has been the trend in earlier years? How
does the current year average compare with the FBI or State
Department?
(U) For fiscal year 1977, which ended 30 September
1977, the average retirement age for CIARDS was 51.6 as
compared with 55.1 for Civil Service, The trend in
earlier years is shown from table No, 1 which was
supplied by Mr. Blake. We have been advised by the
State Department that while they do not have the figure
for the fiscal year just ended, retirements under the
Foreign Service System have been averaging around age
55. We have been advised by the Civil Service Commis-
sion that data on retirements for FY-77 have not yet
been compiled and so are unable to give us the average
retirement age in the FBI. In the general Civil Service,
however, the average age for all retirements under that
System in 1976 was 58.2 years.
5. (S) In Mr. Ruddock's August 1977 report, his table No. 1
compares CIARDS participation with overseas strength. For
1968 CIARDS was with an overseas strength of _ The 25X9
1977 percentage for CIARDS was with an overseas strength 25X9
of The CIARDS participation has increased while the
overseas strength has decreased. Please explain the CIARDS
increase. What impact does this have on qualifications via
domestic service?
CR
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(S) The percentage of Agency employees in CIARDS
and the percentage of Agency employees overseas at any
one time are not identical. Many employees serve over-
seas but do not compile sufficient qualifying service
to be eligible for CIARDS. In 1968, participants in
CIARDS accounted for- of total Agency strength.
were on duty in the United States. The figure of 25X1A
of Agency strength overseas in that year includes
CIARDS participants as well as employees who were not
participants.
Beginning in 1965, large numbers of Agency
personnel were sent overseas, particularly to Vietnam
From that time
on, therefore, large num ers o personnel began to
qualify for CIARDS. This is the basic reason for the
increase, shown in Mr. Ruddock's report, in CIARDS
participation between 1968 and 1975. Many of those
participants who entered the System during the period
1968-1975 have retired, thus starting the downward
trend of participation. The Agency is now designating
into CIARDS only those persons who have completed 60
months of qualifying service and is also gradually
removing from the System those present participants
who have not attained this level of qualifying service.
These developments account for the decrease in CIARDS
participation from the peak year of 1974.
Qualification based on domestic service is
not affected.
6. (U) What kinds of temporary duties (TDY's) are considered
creditable for qualifying service? Differentiate these types.
(U) All TDY's to foreign countries are creditable
for qualifying service in CIARDS.
7. (S) What number or percentage of CIARDS designated employees
have been injured, killed through intentional actions of a
foreign nation?
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8. (U) Please explain how the Director of the CIA works with
the Board that evaluates qualifying service. Does the
Director or the Board have final approval authority?
(U) While the Director does not work with the
Board on a daily or case-by-case basis, he is involved
with the administration of CIARDS in a managerial sense.
He has received occasional briefings on various aspects
of the System, he is directly involved in individual
cases that are referred to him on appeal from the Board's
action, he transmits 'the annual reports to the Congress,
and he is involved in legislative proposals affecting
CIARDS.
In the day-to-day operation of the System,
the Director of Personnel has the authority for approving
qualifying service.
SEC T
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ANSWERS TO QUESTIONS IN GROUP C
1. What procedures are used in estimating requests for
appropriations?
Appropriation requests for CIARDS have been
based on an update of data used for the most recently
completed Actuarial Evaluation as of 31 December
1973 prepared under the guidance of the U.S. Treasury
Actuary.
2. What was the initial year CIARDS appropriations were
made and what was authorized for FY-78?
An initial appropriation for CIARDS was made
for FY-77 in the amount of The FY-78
appropriation is fo
3. How did you arrive at the estimated levels required for
CIARDS? Were these static or dynamic? What would be the
impact upon 1978 and 1979?
As stated in the answer to Question 1, the
appropriation estimates were based on an update of
data used for the Actuarial Evaluation as of
31 December 1973, using static assumptions. A
comparison of estimated appropriation requirements
under static and dynamic assumptions, respectively,
follows for fiscal years 1978 and 1979:
STATIC DYNAMIC
FY-78
FY-79
4. What are your projected CIARDS outlays for FY-1978?
See our classified answer to Question No. 3 in
Group B.
5. How much does it cost to support administration of CIARDS
and who budgets for this support?
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The annual cost of administration of CIARDS is
estimated at ap imatel uprising 25X1A
salary cost foi eople assigne w o ly to the
administration IARDS and an estimated annual
computer cost of about $25 000, This not
include the salary cost of people 1A
who support Civil Service and CIARDS retirement
matters jointly whose services would be required
regardless of whether a system is maintained for
CIARDS.
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ANSWERS TO QUESTIONS IN GROUP D
1. Would you please explain the functions and responsibilities
of the CIA Retirement Board? How is the Director of CIA
kept informed on the proceedings/findings of board actions?
Who has the final approval authority on designation of
participants and qualifying service? If final approval
authority is not vested with the Director/Deputy Director,
should it be?
The CIA Retirement Board assists and advises
the Director of Personnel in the administration of
the System, in acting upon applications for disa-
bility or voluntary retirement, in making recommenda-
tions to the Director for involuntary retirement, or
any other matter pertaining to the administration of
the System. On cases involving requests to credit
domestic service, the Board considers each case on
an individual basis and arrives at a conclusion as
to whether this service meets one or more of the
criteria specified in the regulation. This conclusion
is then presented to the Director of Personnel in the
form of a recommendation for approval or disapproval.
By occasional briefings or reports, by acting
on appeals, by involvement in proposed legislation,
by Ruddock's two annual reports.
The Director of Personnel; however, the Director
acts on appeals.
It is not feasible for the Director to get
involved in the normal, day-to-day administration
and he has delegated authority to the Director of
Personnel.
2. Briefly describe CIA procedures for periodic review of
the eligibility of an employee to remain a participant
in the System.
Prior to the change in the Agency's designation
policy, employees were designated as participants in
CIARDS:
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After they had completed five years of
Agency service if they had performed a minimum
of 18 months of qualifying service; or
After 10 years of Agency service if they
had performed a minimum of 36 months of qualify-
ing service; or
After 15 years of Agency service if they
had performed a minimum of 60 months of qualify-
ing service.
The records of employees designated as participants
prior to the completion of 15 years of Agency service
were reviewed when the participants completed 10 or 15
years of Agency service to ensure that employees
continued to meet qualifying service standards for
the number of years of Agency service completed. If
the review indicated minimum periods of qualifying
service were no longer met, the employees were removed
from CIARDS participation.
We have discontinued the practice of designating
as participants in CIARDS those employees with 18 and
36 months of qualifying service. Employees must now
complete a minimum of 60 months of qualifying service
before they can be designated as participants in CIARDS.
Employees who are currently participants, but
have completed less than 60 months of qualifying
service, will be allowed to remain in CIARDS until
their next regular review date, If they have not
completed the required 60 months of qualifying service
at that time, they will be removed from CIARDS. These
reviews will continue until all participants with less
than 60 months of qualifying service are either
removed or attain permanent participation in CIARDS.
This process will be completed within the next four
years. It should be noted that participants with
less than 60 months of qualifying service will not
meet the criteria for retirement under the System.
3. Approximately what number or percentage of personnel
considered are disapproved as participants?
Of those employees considered for participation
on the basis of some period of domestic service, 29%
were disapproved.
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Under the earlier method used for designating
participants, all employees who were 25 years of age
and had completed at least five years of Agency
service had been considered by their particular
components for participation in CIARDS. These
reviews were made by the components to determine if
the employees had completed the required overseas
service. If the required service had been performed,
the employees were nominated for participation and
the cases were adjudicated and presented to the CIA
Retirement Board for approval. Of those employees
considered by the components in these reviews over
the years, approximately 70% were found to lack the
required overseas service and were therefore informed
that they did not meet the criteria for participation
at that time of their career. Even after initial
designation, employees were reviewed periodically
to ensure that they continued to meet the prescribed
periods of qualifying service; those who failed to
satisfy the continuing requirements were removed
from CIARDS.
From the inception of CIARDS, 252 participants
were removed from CIARDS for failure to complete the
required periods of qualifying service.
4. Under CIARDS the mandatory retirement age is 60? How
many participants are presently serving beyond age 60?
The mandatory retirement age is 60 for GS-17's
and below and 65 for GS-18's and above.
There are currently five participants who are
serving beyond age 60. Two of these are GS-18's
who have not yet attained mandatory retirement age (65).
The other three were extended beyond their mandatory
retirement age (60) on the basis of operational need
for their services.
S. Please explain the procedures for involuntary retirement
under CIARDS? How frequently is this procedure used?
Any participant who has completed at least 25
years of creditable service or who is age 50 and has
completed 20 years' creditable service may be retired
under the provision providing for involuntary retire-
ment from the System.
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A recommendation for involuntary retirement
originates with the head of the participant's career
service. The participant so recommended has recourse
to established appeals procedures.
Four-hundred twenty-three (423) participants
have been retired under this provision.
6. Computation of Annuities -
Please contrast the computation of annuities under
CIARDS with that of ordinary Civil Service. Outside of
earlier retirement privileges what is the $ advantage for
an employee of grade GS-15/25 years' service in CIARDS
vs. an equivalency in CSR?
CIARDS - 2% of average basic salary for highest three
consecutive years of service multiplied by the number
of years not exceeding 35.
CSR - 1-1/2% of high three for first 5 years' service
1-3/4% of high three for second 5 years' service
2% of high three for over 10 years' service
To retire in Civil Service (ordinarily) requires
(a)
30
years'
service,
age
55
(b)
20
years'
service,
age
60
(c)
5
years'
service,
age
62
ANSWER
Examples of different annuity rates:
Civil Service
CIARDS
High-3 Salary
$36,171 (GS-15)
$36,171 (GS-15)
Length of Service
25 years
25 years
Basic Annuity/Age 50*
$15,084*
$18,086
Basic Annuity/Age 55
$16,729
$18,086
*Includes reduction for age
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7. Assuming a need to seek methods/means to reduce costs of
CIARDS, what methods would you apply?
The costs of administering CIARDS vary directly
with the accumulation of qualifying service by the
operational cadre. Any reductions in the costs of
CIARDS would have to result from reductions in Agency
activities that qualify employees for participation
in CIARDS. The Agency does make a conscientious
effort to control and minimize administrative costs.
The only way we can see to reduce the cost of CIARDS
would be a basic change in the statutory criteria
dealing with qualifying service and retirement
eligibility.
8. What would be the impact of a reduction of 10% in the
number of authorized participants? An increase in
mandatory retirement to age 65?
CIARDS participation will be reduced by more
than 10% by the removal from the System of those
_ employees who have not yet completed 60 months
of qualifying service. This reduction should not
have any impact. Other than that, the number of
participants who fully qualified for CIARDS could
not be reduced other than by way of involuntary
retirements.
Increasing the mandatory age to 65 would have
a serious impact. By removing the influence on
participants to retire voluntarily at earlier ages
if they planned to work after age 60, this would
result in an aging of the operational cadre. As
Mr. Blake pointed out in his testimony, the alter-
native would be to resort to involuntary retirements
in order to keep the operational cadre young, vigorous,
adaptable and resilient. The use of involuntary
retirement would have a deleterious effect on our
efforts to recruit and maintain the calibre of persons
we want in the operational cadre.
We believe that increasing the mandatory retire-
ment age to 65 would also bring increased pressure to
change the limitation on CIARDS annuities from a
maximum of 70% to 80%. While such pressure would
be consistent with raising the mandatory age, it
would tend to complicate further the management of
the manpower in the operational cadre.
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9. Is the Agency satisfied that the regulations and standards
for qualification/participation in CIARDS is unambiguously
clear to eligible employees?
While the Agency has made every effort to inform
employees regarding the standards and qualifications
for participation in CIARDS, nonetheless, it will
continue to seek improvements in this regard.
The regulation pertaining to CIARDS is widely
available to Agency employees. The regular Retire-
ment Information Seminars and the services of retire-
ment counselors in our Retirement Affairs Division
continue to be valuable sources of information to
employees. A Question and Answer booklet on CIARDS,
first published in 1969, has been completely revised
and should be published soon. An Agency-wide Notice
in June 1977 informed employees of the availability,
in their own Career Service Offices, of information
on domestic qualifying service.
We believe all these sources of information are
helpful to employees in promoting their continuing
understanding of the System.
10. In order to assure this Committee that CIARDS is being
managed in the most efficient manner, we would expect
periodic reports be submitted similar to Mr. Ruddock's.
We would also recommend that the CIA Inspector General
direct a current survey/study effort in improvements to
CIARDS. Do you have any thoughts on this?
We welcome the opportunity to provide the
Committee with periodic reports on our administra-
tion of CIARDS. The two reports prepared by
Mr. Ruddock were sent to the House Armed Services
Committee. We assume that in future years the
annual report on CIARDS will be sent to the Permanent
Select Committee on Intelligence. Insofar as the
1976 and 1977 reports on CIARDS disclose no major
areas of abuse, we believe that an Inspector General
survey/study is unnecessary at this time. Were
major problems to be uncovered, we would request the
Inspector General to conduct an appropriate review.
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AGENCY EMPLOYEES CURRENTLY DRAWING
HAZARD PAY DIFFERENTIAL OR ENVIRONMENTAL PAY DIFFERENTIAL
FOR HAZARDOUS DUTY
In response to your query, the following information
is submitted concerning the extent to which pay differentials
for hazardous duty or duty involving physical hardship, and
environmental pay differentials for exposure to hazards,
physical hardships and working conditions of an unusually
severe nature, are authorized in CIA:
(a) Agency payroll records indicate that nine
General Schedule employees are currently drawing a 25%
hazard pay differential for performing hazardous duties
which is authorized at the rate of compensation pre-
scribed in the Federal Personnel Manual Book 550,
Subchapter 59, Appendix A. This Agency complies fully
with the criteria prescribed in the FPM in determining
the eligibility of these employees for such pay differen-
tial; namely, that such duty is performed on an irregular
or intermittent basis, and was not.taken into account in
determining the grade of the position. Operating
officials and supervisory personnel are responsible for
recognizing duties performed by GS employees for which
a hazard pay differential is authorized under Federal
pay regulations, and for submitting proposals for payment
of such differentials through administrative channels to
the Director of Personnel for approval. None of these
employees is a participant in CIARDS.
(b) Likewise, our payroll records indicate that
nine wage board employees are drawing an environmental
pay differential for handling hazardous materials, and
seven wage board employees are also drawing an environ-
mental pay differential for performing work which
subjects the employees to soil of body or clothing
beyond that normally to be expected in performing the
duties of their wage classification. Protective devices
and clothing either do not alleviate the condition or
cannot be used because of health considerations or would
result in an unusual degree of discomfort. As with
management decisions pertaining to hazard pay differen-
tials for GS employees, the Agency adheres to the
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criteria set forth in the Federal Personnel Manual,
Supplement 532-1 in determining the eligibility of
wage employees for an environmental pay differential.
Specifically, the hazards or working conditions of an
unusually severe nature to which the employees are
exposed are consistent with the categories contained
in Appendix J (Schedule of Environmental Differentials)
in the FPM, and such exposures were not taken into
consideration in the job-grading process. Operating
officials and supervisory personnel are responsible
for initiating positive action to eliminate or reduce
to the lowest level possible all hazards, physical
hardships and working conditions of an unusually severe
nature; for recognizing the extent to which wage employees
are subjected to exposures for which an environmental
pay differential is authorized; and for submitting
proposals for payment of such differentials through
administrative channels to the Director of Personnel
for approval. None of these employees is a CIARDS
participant.
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2 6 AUG 1977
MEMORANDUM FOR: Director of Finance
THROUGH Inspector General
ie Audit Staff
SUBJECT . Report of Audit of CIA Retirement and
Disability Fund (U).,
1 January 1975 31 December 1976
1. (U) Attached is subject report for your review
and consideration. Please advise this office of the action
taken on the recommendations contained in paragraphs 8, 9,
and 11 of the report.
2. (U) We appreciate the cooperation extended.the
auditors during the audit.
Distribution:
vbrig - D/Fin
1 - DDA
1 - O/Compt/DCI
1 - 0/IG
25X1A
25X1A
25X1A
Automatically Declassified
when separated. from
attachments
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REPORT OF AUDIT
CIA Retirement and Disability Fund (U)
For the Period
1 January 1975 - 31 December 1976
GENERAL
1. (U) The CIA Retirement and Disability Fund (Fund)
was established in June 1965 to administer the financial aspects
of the CIA Retirement and Disability System (CIARDS). The Fund
is administered by the Office of Finance. A separate system of
accounts is maintained for the Fund, but all cash transactions
and the Treasury cash balance available for disbursement are
recorded and controlled in a reciprocal account in the Agency
system of accounts (Account 3126 - Due to CIA Retirement and
Disability System).
.SCOPE OF AUDIT
2. (U) Our audit included a review of Fund controls,
procedures, and records, a verification of asset and liability
accounts and a test examination of Fund receipts and disburse-
ments. It did not include the Office of Personnel procedures
for approving participation in CIARDS, an independent confir-
mation of the investment portfolio, or an evaluation of the
actuarial soundness of.the fund.
SUMMARY OF FINANCIAL INFORMATION
3. (C) The net worth of the by
25X1A
during the two year audit period to at 31 December 25X1A
1976. At that date CIARDS had 11 active participants, and 25X1A
2,436 annuitants and survivors receivin payments f m the
Fund. The Fund received an appropriation o or 25X1A
Fiscal Year 1977. The appropriation is the irst for Re Fund
and is separate from appropriations for Agency operations.
Further financial information may be found in the attached
financial statements as revised by the auditors.
SUMMARY COMMENTS
4. (U) Controls, procedures, and records are generally
adequate for the safeguarding and utilization of Fund resources.
Annuities are accurately computed and paid on a timely basis.
I ill
NIL
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Recommendations for the strengthening of controls over the
annuity payroll, the recording of Federal contributions, and
the reconciliation of subsidiary and general ledger accounts
are discussed in the following paragraphs.
DETAILED COMMENTS
Annuity Payroll Control (U)
5. (U) There is insufficient control over the process
for establishing new annuitants on the monthly Treasury check
annuity payroll and for making changes to the pay of established
annuitants. Annuitants are established on the payroll, or
changes are made to the pay of those already established, by
payroll change notices (PCNs) prepared by Retirement Pay Branch
(RPB) of Compensation Division. RPB sends the PCNs to the
Office of Data Processing (ODP) which uses them in producing
a master check tape. The master check tape is used to print
the Treasury check payroll.
6. (U) RPB keeps the PCNs in a file prior to batching
and sending them to ODP. PCNs establishing new annuitants are
reviewed by the Deputy Chief of RPB before being placed in the
file. PCNs for other changes are placed directly into the file
by RPB personnel without review.
7. (U) The PCN file is not controlled. It is possible to
put a PCN establishing an unauthorized annuitant directly into
the file without review or to make an unauthorized change to the
pay of a previously established annuitant. If such an improper
PCN was put into the file and passed to ODP the system would
automatically produce a monthly Treasury check.
8. (U) Review and control of PCNs before dispatch to ODP
should be strengthened.
Recommendation: Establish procedures for the
Chief - RPB to verify authorizing documentation
for all PCNs establishing new annuitants or in-
creasing the pay of established annuitants. The
PCNs should then be released directly to ODP from
the Chief of RPB.
Recording Federal Contributions (U)
9. (U) The CIARDS method of recording Federal contributions
from the FY 1977 appropriation did not correspond to the way in
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which the amounts were recorded on Agency financial records.
The Office of Finance determined that the proper procedure for
obligating the allotment for CIARDS was on a 1/12 basis each
month. At 3 76 the Agency's records showed an
25X1A obligation o for the first three months of FY 1977.
25X1A
The funds we to CIARDS until January 1977. As
CIARDS financial records are on an accrual basis ou d
have recorded a receivable and accrued income of to 25X1A
match the Agency's records at 31 December 1976. Failure o do
ted CIARDS 1976 income and overstates 1977 income by
Recommendation: Record income from Federal
contributions on CIARDS records to match the
corresponding obligations and liquidations on
Agency records.
Errors in General Ledger and
Subsidiary Accounts
10. (U) During the audit period several errors were made
in the recording of amortization of discounts and premiums on
investments. The subsidiary ledgers for these accounts were
not in agreement with the general ledger accounts. Adjusting
entries were prepared by the auditors and provided to CIARDS
personnel.
11. (U) Reconciliation of the subsidiary ledgers to the
general ledger accounts would have disclosed the errors in
amortization. Similar problems occurred in the previous audit
period, and our 31 December 1974 audit report recommended that
the subsidiary ledgers be reconciled at least quarterly to the
general ledger accounts.
Recommendation: Reconcile the investment
subsidiary ledgers to the general ledger
accounts quarterly.
SU
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 Approved For1R l $? 'QMQ"J/n-: Tl 4TM , OQ4g*WQ?Q0040001-5
2 8 SEP 1277
I?i;ORANDUA1 FOR: Chief, Audit Staff
FRO1?I :
finance
SUBJECT: Audit of CIA Retirement and Disability Fund
1 January 1975 - 31 December 1976
Thank you for the subject audit report and the recommenda-
tions for improvements. We are particularly appreciative of your
observations regarding system controls on establishing new
annuitants. Actions taken are summarized below.
Annuity Payroll Control
We have established internal audit procedures and a
copy of CD Instruction Notice 13 is attached. In addition
to day-to-day verification, a disinterested Branch. or
Deputy branch Chief will perforn at least a 10go review each
month of all transactions establishing new annuitants
and/or increasing annuities for existing annuitants/sur-
vivors. These attested reports will remain in Chief,
'Compensation Divisionts office until after your audit.
July and August transactions have been attested.
Recording Federal Contributions
In the future we will record income for Federal
contributions in a manner which will relate income to
corresponding obligations and liquidations.
Errors in General Ledger and Subsidiary Accounts
These errors are the direct result of the absence
of written procedures regarding liquidation of unamortized
discounts and premiums. We are in the process of writing
indepth procedures to cover all aspects of the Retirement 25X1A
Pay Branch/Compensation Division. The reconciliation
recommended will be an internal part of our procedures.
ADAiI.NISTR.ATIVE INTERNAL USE ONLY
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10 August 1977
INSTRUCTION NO: 13
SUBJECT: CIARDS Payroll System Controls
Effective immediately the Chief, Retirement Pay Branch or
in absence of the chief the Deputy Chief will review, initial,
and date each payroll change notice, as to attest proper author-'
ization exist prior to updating data into the CIARDS pay system
for the following Transaction Codes:
Transaction Code 28
Source documents to establish an annuitant on the
payroll must include:
SF 1150 from Office of Personnel (OP)
Retirement Application from OP
Form 3111 - Creditable Service Verification
from OP
Valid Retirement Card from NOCB or AOB/CD
Source document to record death of an annuitant:
Memorandum from OP
? Source document to adjust creditable service:
Memorandum from OP
? Source document to change election of survivor:
Memorandum from OP
? Source document needed to stop election of survivor:
Memorandum from OP
Transaction Code 29
? Source documents needed to establish a survivor
Annuitant:
Memorandum from OP
Original Retirement Application
ADMINISTRATIVE INTERNAL USE ONLY
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? Source document needed to pay lump-sum-payment:
Memorandum from OP
Transaction Code 27,
? Source documents needed to establish a disability
Retiree on payroll:
SF 1150 from OP
Retirement Application from OP
Form 3111 - Creditable Service Verification from OP
Valid Retirement Card from NOCB or AOB/CD
? Source document needed-to change election of survivor:
Memorandum from OP
? Source document to stop election for survivor benefits:
Memorandum from OP
Transaction Code 26
Terminate payments to survivor children because of age
and/or non-student status:
Memorandum from OP
? Remove one or more child from roll because of age and/or
student status:
Memorandum from OP
0 Add one or more child because of student status:
Memorandum from OP
In addition to above guidelines the CIARDS system will
provide a report each month, eyes only, to the Chief, Compensation
Division of all transactions processed. The Chief or in the ab-
sence of the chief the Deputy Chief will take at least a ten per-
cent sample of those transactions establishing new annuitants and/or
increasing annuities for existing annuitant/survivors. These
reports and written verification as to the review will be re-
tained until after audit.
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