AMENDING THE CENTRAL INTELLIGENCE AGENCY RETIREMENT ACT OF 1964 FOR CERTAIN EMPLOYEES, AS AMENDED

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP72-00337R000400020049-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 13
• Document Creation Date: December 16, 2016
• Document Release Date: June 1, 2005
• Sequence Number: 49
• Publication Date: December 3, 1970
• Content Type: REGULATION

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3 'Fr, X970
91st Congress
2nd Session
SENATE
Report
No.
AMENDING THE CENTRAL INTELLIGENCE AGENCY RETIREMENT ACT OF
1964 FOR CER
TAIN EMPLOYEES, AS AMENDED
REPORT
[To accompany S.
The Committee on Armed Services, to which was referred the bill (S.
to amend the Central Intelligence Agency Retirement Act of 1964 for Certain
Employees, as amended, and for other purposes, having considered the same,
reports favorably thereon without amendment and recommends that the bill do
pass.
Purpose of the Bill
The bill makes certain changes in the CIA Retirement Act of 1964 which will
conform to,provisions enacted into law with respect to the Civil Service
Retirement Act. The bill also makes two other changes.
The conforming amendments deal with definitions relating to child survivors,
commencement date of annuities, and a formula for crediting prior Federal
service not covered by contributions. The remaining two changes provide
for transfer of employer contributions into and out of the CIA Retirement
Fund and increase the ceiling on retirements.
Background
The CIA Retirement Act was enacted to provide a comprehensive retirement
and disability program for a limited number of employees whose duties either
were in support of Agency activities abroad, hazardous to life or health, or so
specialized as to be clearly distinguishable from normal Government employment.
The Central Intelligence Agency operates under two retirement systems--the
regular civil service retirement system for the majority of its employees and
the one established under the CIA Retirement Act for a smaller number. The
primary purpose of the latter system is to sustain a shorter career base for
service where the conditions of employment are substantially different from
those associated with normal Government employment. Key provisions of the
CIA Retirement Act include a straight 2-percent factor in the computation
formula and retirement eligibility at age 50 after 20 years of service, both
modeled after civil service provision for certain personnel involved in law
enforcement activities (5 U. S. C. 8336(c) ). Other provisions of the CIA Retire-
ment Act are, for the most part also t
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As the principal features of the CIA and the civil service systems are the
same, failure to keep pace with civil service improvements tends to dilute
the effectiveness of the CIA retirement system, especially where comparability
once existed.
Public Law 90-539 (bringing the cost-of-living provision of the CIA Retire-
ment Act back into consonance with the civil service retirement system) and
Public Law 91-185 (incorporating the benefits of the McGee-Daniels bill)
serve as precedent for the approval of conforming amendments for the CIA
Retirement Act as proposed in this report.
Sectional Analysis
Section 1
Section 1 does three things: First, it eliminates the requirement
that a child be dependent upon a parent retiree in order to receive
a survivor annuity. The present definition of a child requires that
the child receive more than half his support from the participant
to be eligible. This requirement could defeat it survivor annuity
based on the service of it working mother. This support requirement
was eliminated from the Civil Service Retirement Act by the 89th
Congress. (P. L. 89-504)
Second, it also raises from 21 to 22 the maximum age for receiving
survivor annuity payments as a student and increases from 4 to 5
months as the maximum absence from school which may be permitted
without terminating the survivor annuity. This will aid survivor
children enrolled in trisemest,er programs to secure employment and
earn money without losing their annuity. '
This same action was taken by the 89th Congress for student beiie-
ficiaries under the Civil Service Retirement Act. (P. L. 89-407, 504)
Lastly, it permits a natural child to share in the distribution of any
money in the CIA retirement and disability fund. The act today
clearly perinits a natural child to receive an annuity but it is not en-
tirely clear with respect to lump-sum benefits. This would correct
this deficiency.
A similar provision amending the Civil Service Retirement Act was
approved by the 89th Congress. (P. L. 89-407)
CHILD's ANNUITY
Section ,2
This section provides for the commencement and termination date
for a child survivor annuity and assures that the survivor annuity of
a student may be resumed even though it had previously been ter-
minated, as for example, because of military service. Today once an
annuity has been terminated because of an absence between school
terms in excess of the maximum absence authorized, the annuity
cannot be resumed.
A similar., aniendment to the Civil Service Retirement Act was
approved by the 89th.Congress. (P. L. 89-504)
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Section 3
This section males a technical change in the law which will author-
ize the commencoin ent of an annuity as soon as the individual enters
a nonpay status. Under existing law, an annuitant must wait until
the beginning of the mnonth following his date of separation.
It also incorporates specific provisions for termination of
annuities to retirees and survivors.
This. will conform the CIA retirement system to the civil
service retirement system in this respect. (5 U. S. C. 8345)
Prior Service Credit (Participants)
Section 3 also makes a technical change in the law which will provide
an option to credit prior civilian service for which no deductions have been
made by reducing the resulting annuity by 10 percent of the amount owed.
This will conform the CIA retirement system to the civil service system
in this respect. (5 U. S. C. 8339(h) )
Retirement Ceiling
Section 4
Section 4 increases to 800 the retirement ceiling which is imposed
until 30 June 1974. Under existing law, retirements during the formative
years of the system were limited to 400 for the first five-year period ending
30 June 1969 and 400 for the second five-year period ending 30 June 1974. The
ceiling for the second five years is insufficient for a number of reasons. At
the time the ceiling was established in 1964, it was assumed that the work force
in the areas covered by the retirement system would remain stable and not
decrease. Furthermore, the level of retirement activity under the CIA retire-
ment system illustrates how well the primary objective of the Act --to minimize
the adverse effect of early retirement on individuals for whom the Agency is
unable to provide full-term careers--is being served.
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TRANSFER Of, CONTRIBUTIONS
Section 5
Under existing law, an individual who transfers into the CIA retire-
ment fund from some other Government retirement system can trans-
fer his contributions from the other fund to the CIA fund, but there
is no provision for transfer of the Government contribution to such
fund.
Also, when an individual transfers from the CIA retirement fund
to some other Government retirement fund, there is no provision for
the transfer of either the Government's contribution or his own con-
tribution to the non-CIA retirement fund. This section would correct
the inequities of this situation.
The Civil Service Commission is wholly in accord with this change.
Prior Service Credit (Survivors)
Section 6
Section 6 makes a technical change in the law granting to survivors
the same right afforded participants to purchase prior civilian service.
This will conform the CIA retirement system to the civil service
retirement system in this respect. (5 U. S. C. 8334)
There will be no additional cost for either fiscal year 1971 or fiscal
year 1972.
Departmental Data
Enactment of this legislation has the support of the Central Intelligence
Agency and the approval of the Office of Management and Budget as evidenced
by the letter from the Acting Director of the Central Intelligence Agency dated
13 October 1970 which is set out below and made a part of this report.
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CENTRAL INTELLIGENCE AGENCY
WASHINGTON, D. C. 20505
OFFICE OF THE DIRECTOR
13 OCT 99'10
The Honorable Spiro T. Agnew
President of the Senate
My dear Mr. President:
Washington, D. C. 20510
This letter transmits for the consideration of the Congress a
draft bill amending the Central Intelligence Agency Retirement Act
of 1964 for Certain Employees.
is
The proposed legislation brings the CIA Retirement Act into
analysis and explanation which is enclosed.
of the Act. The proposals are explained in detail in the sectional
consonance with certain provisions of the Civil Service retirement
system. Also included are several adjustments which have been
7 r1AY1tifi Ad .1R imnortant during the first six years of the administration
We would appreciate early and favorable consideration of the
proposed legislation. The Office of Management and Budget has
tion to the Congress from the standpoint of*'the Administration's
advised that there is no objection to presenting the proposed legisla-
program..
Sincerely,
SIGN'LD
. R. E. Cushman,. Jr.
Lieutenant General, USMC
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Acting Director:
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In compliance with. subscctio n 4 of rule XX1?~ of the St.aanding
Rules of the Sen~tite, e}a,a.nges in existing law made by the bill ns re-
ported are shown as follows (existing law in w'hic`h no change is pro-
posed is shown in roman; existing law proposed to be omitted is en-
closed in black brackets; new matter is shown in italic)
Central Intelligence Agency Retirement Act of 1964 for
Certain Employees, as amended (78 Stat. 1043; 50 U. S. C.
403 note).
TITLE II -- THE CENTRAL INTELLIGENCE AGENCY
RETIREMENT AND DISABILITY SYSTEM
CHANGES IN EXISTING LAW
Part A--Establishment of System,
Rules and Regulations
SEC. 204. (a) Annuitants shall be participants who are
receiving annuities from the fund and all persons, including
surviving wives and husbands, widows, dependent 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 in this Act 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 is the mother of issue
by marriage to the participant.
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(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 is the father of issue by
marriage to the participant, 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", for the purposes of sections 221 and 232 of this
Act, means an unmarried child, including (i) an adopted child, and
(ii) a stepchild or recognized natural child who f received more than
one-half of his support from and I lived with the participant in a
regular parent-child relationship, under the age of eighteen years,
or such unmarried child regardless of age who because of physical or
mental disability incurred before age eighteen is incapable of self-
support, or such unmarried child between eighteen and Qtwenty-onejj
twenty-two years of age who is a student regularly pursuing a full-time
course of study or training in residence in a high school, trade school,
technical or vocational institute, junior college, college, university, or
comparable recognized educational institution. A child whose twenty-
firstjJ twenty-second birthday occurs prior to July 1 or after August 31
of any calendar year, and while he is regularly pursuing such a course
of study or training, shall be deemed for the purposes of this paragraph
and section 221(e) of this Act to have attained the age of Qtwenty-one]j
twenty-two on the first day of July following such birthday. A child who
is a student shall not be deemed to have ceased to be a student during any
interim between school years if the interim does not exceed Qfour]] five
months and if he shows to the satisfaction of the Director that he has a
bona fide intention of continuing to pursue a course of study or training in
the same or different school during the school semester (or other period
into which the school year is divided) immediately following the interim.
The term "child", for purposes of section 241, shall include an adopted
child and a natural child, but shall not include a stepchild.
Part C--Computation of Annuities
SEC. 221.
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(e) The annuity payable to a child under paragraph (c) or (d) of
this section shall begin on the day after the participant dies, and such
annuity or any right thereto shall terminate on the last day of the month
before (1) his attaining age eighteen unless incapable of self-support,
(2) his becoming capable of self-support after age eighteen, (3) his
marriage, or (4) his death, except that the annuity of a child who is a
student as described in section 204(b)(3) of this Act shall terminate on
the last day of the month before (1) his marriage, (2) his death, (3) his
ceasing to be such a student, or (4) his attaining age twenty-one. I
The commencing date of an annuity payable to a child under
paragraph (c) or (d) of this section, or (c) or (d) of section 232, shall be
deemed to be the day after the annuitant or participant dies, with pay-
ment beginning on that day or beginning or resuming on the first day of
the month in which the child later becomes or again becomes a student
as described in section 204(b)(3), . provided the lump-sum credit, if paid,
is returned to the fund. Such annuity shall terminate on the last day of
the month before (1) the child's attaining age eighteen unless he is then
a student as described or incapable of self-support, (2) his becoming
capable of self-support after attaining age eighteen unless he is then such
a student, (3) his attaining age twenty-two if he is then such a student and
not incapable of self-support, (4) his ceasing to be such a student after
attaining age eighteen unless he is then incapable of self-support, (5).his
marriage, or (6) his death, whichever first occurs.
(f) Any unmarried participant retiring under the provisions of this
Act and found by the Director to be in 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 section 9(h) of the Civil Service Retirement Act
(5 U. S. C. 2259(h))) in the participant to receive an annuity after the
participant's death. The annuity payable to the participant making such
eleetion shall be reduced by 10 percentum of an annuity computed as provided
in paragraph (a) of this section, and by 5 percentum of an annuity so
computed for each full five years the person designated is younger than the
participant, but such total reduction shall not exceed 40 percentum. The
annuity of a survivor designated under this paragraph shall be 55 percentum
of the reduced annuity computed as prescribed above. QThe 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
surviving beneficiary all payments shall cease and no further annuity pay-
ments authorized under this paragraph shall be due or payable. jJ
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(i) Except as otherwise provided, the annuity of a participant shall
commence on the day after separation from the service, or on the day
after salary ceases and the participant meets the service and the age or
disability requirements for title thereto. .The annuity of a participant
under section 234 shall commence on the day after the occurrence of the
event on which a_yment thereof is based. An annuity otherwise payable
from the fund allowed on or after date of enactment of this provision shall
commence on the day after the occurrence of the event on which payment
thereof is based.
(,j) An annuity payable from the fund on or after date of enactment
of this provision shall terminate (1) in the case of a retired
participant,
on the day death or any other terminating event occurs, or (2) in the case
of a survivor, on the last day of the month before death or any other
terminating event occurs.
(k) The annuity computed under this section is reduced by 10 per-
cent of a special contribution described by section 252(b) remaining unpaid
for civilian service for which retirement deductions have not been made,
unless the participant elects to eliminate the service involved for the ur ose
of annuity computation.
Part D--Benefits Accruing to Certain Participants
Limitation on Number of Retirements
SEC. 236. The number of participants retiring on an annuity
purpuant to sections 233, 234, and 235 of this Act shall not exceed a total
of four hundred during the period ending on June 30, 1969, nor a total of
Qfour hundredjj eight hundred during the period beginning on July 1, 1969,
and ending on June 30, 1974.
Part F--Period of Service for Annuities
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Prior Service Credit
SEC." 252.
(b) A participant may obtain prior civilian service credit in accord-
ance with the provisions of paragraph (a) (1) of this section by making a
special contribution to the fund equal to the percentage of his basic annual
salary for each year of service for which credit is sought specified with
respect to such year in the table relating to employees contained in section
4(c) of the Civil Service Retirement Act (5 U. S. C. 2254(c)), together with
interest computed as provided in section 4 (e) of such Act (5 U. S.-C. 2254
(e) ). Any such participant may, under such conditions as may be deter-
mined in each instance by the Director, pay such special contributions in
installments.
(c)(1) If an officer or employee under some other Government retire-
ment system becomes a participant in the system by direct transfer, the
Government's contributions (including interest accrued thereon computed
at the rate of 3 percent a year compounded annually) under such retirement
system on behalf of the officer or employee shall be transferred to the fund
and such officer or employee's total contributions and deposits f, ]J (including
interest accrued thereon), except voluntary contributions, shall be trans-
ferred to his credit in the fund effective as of the date such officer or
employee becomes a participant in the system. 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.
If an officer or employee under some other Government retirement
system becomes a participant in the system by direct transfer, the
Government's contributions (including interest accrued thereon computed
at the rate of 3 percent a year compounded annually) under such retirement
system on behalf of the officer or employee shall be transferred to the fund
and such officer or employee's total contributions and deposits (including
interest accrued thereon), except voluntary contributions, shall be trans-
ferred to his credit in the fund effective as of the date such officer or employee
becomes a participant in the system. Each such officer or employee shall be
deemed to consent to the transfer of such funds and such transfer shall be a
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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) If a participant in the system becomes an employee under another
Government retirement system by direct transfer to employment covered
by such system, the Government's contributions (including interest accrued
thereon computed at the rate of 3 percent a year compounded annually) to
the fund on his behalf shall be transferred to the fund of the other system
and his total contributions and deposits, including interest accrued thereon,
except voluntary contributions, shall be transferred to his credit in the
fund of such other retirement system effective as of the date he becomes
eligible to participate in such other retirement system. 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 fund on account of service rendered prior to his
becoming eligible for participation in such other system.
Q (2) JJ (3) 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 retirement fund, nor shall any refund be made to
any such participant on account of contributions made during any period to
the other Government retirement fund at a higher rate than that fixed for
employees by section 4(c) of the Civil Service Retirement Act (5 U. S. C. 2254
(c)) for contributions to the fund.
Q (3) ~ (4) No participant, 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, or for which no contributions were made to
the other Government retirement fund. 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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(g) For the purpose of survivor annuity, special contributions
authorized by paragraph (b) of this section may also be made by the
survivor of a participant.
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 UNCLA SI FI ED INTERNAL CC~~
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ROUTING AND RECORD SHEET
TO: (Officer designation, room number, and
building)
OGC - Mr. Warne
Pers -
cc: DDS - Mr. Coffey
0
DATE 3 DsLef 1970
STMT
OFFICER'S COMMENTS (Number each comment to show from whom
INITIALS to whom. Draw a line across column after each comment,)
Arn d Servic..
p r ?dJour'a . oiVtllr
eif is board prssl
FORM
3-62
INTERNAL
61 O USEDITPREV IO S ^ SECRET ^ CONFIDENTIAL E] USE ONLY ^ UNCLASSIFIED
^ SECRET
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