RETIREMENT POLICIES AND PRACTICES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-03091A000200020004-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 24
• Document Creation Date: December 9, 2016
• Document Release Date: March 27, 2000
• Sequence Number: 4
• Content Type: REGULATION

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RETIREMENT POLICIES AND PRACTICES
A. Civil Service Retirement System
1. Prior to January 1960.
The Central Intelligence Agency did not have a formal
retirement policy prior to January 1960. Employees remained in
service until they elected to voluntarily apply for retirement
or were eligible for mandatory retirement under the provisions
of the Civil Service Retirement Act.
2. "Early retirement" policy.
The Agency's early retirement policy for employees
covered by the Civil Service Retirement Act makes it mandatory
for employees to retire when they first become eligible to do
so on a full annuity. "....it is the practice in this Agency
that an employee will normally retire when he becomes eligible
for retirement unless he Is asked to remain in service." This
is a direct quote from Agency Noticel Civil Service 25X1A
Retirement, published 5 January 1960.
The chronological history of the establishment of the
above policy is as follows. In 1959 the Career Council of the
Agency decided that, in the interests of sound and equitable
personnel management and from a manpower point of view, it should
become accepted practice for Agency employees to retire when they
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are eligible unless they are asked to remain in service. (This
was as a result of the "hump" survey.) The Career Council at that
time proposed to the Director of CIA that Notice] be
published stating the Agency retirement policy. The Director
approved the policy and the notice was issued.
Generally speaking, the new policy came as a shock to the
employees who were eligible at that time or would be eligible
during 1960. In the course of implementing this policy some of
the procedurestmed to help reduce the initial shock were:
(a) Deputy Directors were authorized to grant extensions
to those individuals under their Jurisdiction who posessed
unusual qualifications and skills.
(b) The Agency recognized the problem and hardships
which Immediate retirement would cause and established an
eighteen-month planning period for employees who considered
this necessary.
(c) The Agency Retirement Board was prepared to handle
cases involving compassionate circumstances.
(d) Eligible employees were encouraged and requested to
seek advice and guidance from the Executive Secretary of the
Board.
The activity resulting from the retirement notice immediately
focused attention on the need for pre-retirement planning on the part
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of the employee and counseling as a service of the Agency.
Executive Secretary of the Agency Retirement Board was charged.
with the function of notifying each individual five years in
advance of his pending retirement and inviting him to contact
the Executive Secretary of the Board for advisory service.
a. a 60-30 mss, age 62-5 years or more.
At the time, under the Civil Service Retirement Act, this
policy meant that employees would have to retire at age 60 if they
had at least 30 years of service or at age 62 with at least
of service. This same policy recognized the following two bases on
exceptions could be made to permit employees to remain on duty
beyond their scheduled retirement date: (1) If an employee's
services were needed or if he posessed special or unique qualif:
cations, or (2) If the employee would suffer undue personal hardshi
by being forced to retire at the scheduled time. This policy im-
mediately affected many employees who had not prepared for retirement
and for this reason the Agency was lenient in granting exceptions
the first few yeaars. By 1963, primaarilly because of the
practice of alerting employees five years in advance, the policy
became established and was generally accepted by those Agency
employees affected. Except in isolated instances, employees did
not resist when they received their five-year notification.
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b. Establishment of Agency Retirement Board.
In the late summer of 1959, The Director of Personnel
obtained the agreement of the Career Council to proceed with the
establishment of an Agency Retirement Board. 7be plan for such a
Board was to provide for careful consideration of the retirement
plans of Agency employees as they reach as age at which their
ngth of service qualifies them for optional retirement
the Civil Service Retirement Act. It would be designed to bring
tt a Judicious review of the individual's current and prospective
usefulness to the Agency if he were to resin until story
retirement, his own plane and personal arrangements for retiremen
The Retirement Board would be composed of three a em
one representing DDI, one DDP, and once DDS; the members would elect
the Board from among themselves. A ro"entat ive
edical Staff and the Chief, Benefits and Services Division,
would serve as advisors. A representative of the career service
be invited to discuss each case with the Board
The chief, Personnel Operations Division would serve as Executive
Secretary to the Board and POD would administratively support the
The procedure would be as follows:
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(1) Benefits, and Services Division will. ident
individuals whose age and length of service qualify them for
optional retirement. The names of such individuals would be
referred to the Personnel Operations Division.
(2) POD, working through the Clandestine Services
Personnel Division regarding individuals in the Clandestine
Services Career Service, would consult with each individual's
career service to determine whether he might be approached
concerning issss diate retirement, or, possibly, reassignment
to a less demanding job.
(3) POD would then refer those news selected by the
career services for retirement consideration to the Special
Assistant to the Director of Personnel (whose review will
include legal aspects),, to the Office of Security, the Medical
Staff, and the Assessment and Evaluation Staff for eosssnt or
information pertinent to the Board's consideration.
(4W) The names would then be brought up w
Retirement Board for discussion and determination regarding
whether the individuals should be approached concerning
optional retirement. No individual will be approached with-
out the approval of the Board and the concurrence of his
career servic
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(5) When it has been determined that an individual
should be approached, POD will do so, after confirmi
his supervisor has been informed of this intention. In dis-
cusaisg prospective retirement with the individual, POD will
refer him to RSD for specific advice on his retirement benefits
and counseling on personal planning for retir+eme
Also, If appropriate, he will be referred to the Out Plac
office for advice and assistance in locating other employment.
(6) When a reasonable period of time has elapsed and
an individual has not followed through on retirement or if he
has expressed reluctance or unwillingness to do no, be will be
unity to present his case to the Retirement
im whether he should be retained or
referred to the Special Assistant to the Director of Personnel
to institute involuntary separation proceedings.
Noticel __6 published 5 January 1960, established.
the Agency Retirement Board will the following functions:
(1) The counseling of all employees who have reached
voluntary retirement age and those who are about to reach
that age concerning their accrued benefits, privileges
(2) Discussion with the employee of his plane to retire.
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(3) The systematic review of the retirement plans of
each such employee.
(.) Ensure uniform application of the retirement Policy
and consider the cases of employees who feel that retirement
would create undue hardship for them.
initial appointments to the money Retirement Board
were: Mr. Lawrence H. Houston, Cha
giber,
and Mr. Otto E. Cuthe, Member.
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D. CIA Retirement and Disabilit? f &stem
The Agency decision to request "ftrly retirement legislation"
certain Of its employees was based on extensive study
problem of security, cover arrang:menta, and health which are en-
countered in carrying out many of the Agency missions in foreign
that these probes tend, in mat cases,
a acute beyond the age of 50, that the skills and experience
acquired abroad are not readily utilized in any quantity in head-
quarters, and that the interest of the Agency and the individual
would, in some cases, be served by the individual
the Agency at the time that his effectiveness in this ty of service
vas being reduced because of security, cover and health problems.
The basic provision of the CIA Retirement Act is that it permits
ndividual at age 50, with 20 years of rersae"nt service, including
10 years, of Agency service and 5 years of "
;ualilying a;
without a reduction in annuity for W. In cant
r the Civil Service system of comparative
(whether Agency or "qualifying" is not re3 Brant) is terming
.s not for cause, be becomes eligible for an Immediate
but reduced (10% - 15% to July 1966 - in the case of the individual
age 50) annuity. In Congressional hearings leading to the enactment
of "early retirement" legislation, the problem of security, cover,
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encountered and reduce the effectiveness o
beyond the age 50 were emphasised w A weighed heavily with
sessional sponsors and supporters of the act.
Early in an Agency career the individual who its the primary
of "'serving in a career field which normally requires
the performance of minim period of qualifying service
that field" will usually be moved out
of the Civil Service system and into the CIA system. To ensure
that he continue to qualify as a partticipent in the CIA s
will be reviewed periodically (at the fifth
anniversary of designation as a psticipan
anniversary of his entrance on duty in the Agency). S
i confirm that he meets the criteria for partieipeti
system and has in fact served required mini peri
service. When he has cosapleted fifteen years
and has met all of the requirements of the CIA system (norms
eluding 5 yean of qualifying service), he will be able to exercise
a choice to ruin in the CIA system for the remainder of his career
or to request his return to the Civil Service system.
The underlying premise of the CIA Retirement Act is that the
+bination of the problems encountered in performing qualifying
service" beyond the age of 50 and the inducements of early retire-
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service related to this act.
of voluntary retirements
*maintain an a c Sate balanc
the CIA system w
under the act is to ensure that
Ube can be safe with equitable AMMi
in the CIA Retirement Act then is the intent of the Agency to
achieve a higher incidence of retirement at or soon after 50
of the CIA system than from the Civil Service
exercised by the indiv id I. in the CIA
system after 15 yews of Agency service an ice:
to remain to the Agency system auto t cally Places him in
a category of careerists from which a higher rata of early retire
saute, whether voluntary or involuntary, will occur; this choice
him of w atever career advantages--including Y dose
provided by the CIA Retirement Act--accrue f ou being a member of
this group
areeriete. A choice not to remain, however, pro-
vides no assurance of a longer career.
, employees of the Agency have been c
Civil. Service Retirement System. The benefits of this system are
appropriate for those individuals whose conditions and terms
ccarabi
camas will continue to initiate their a
ar age 50 t
he Civil Service system. Those who we not designated to
the CIA system
in and be retired under the Civil
Service system.
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result in a sufficient
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To enter the CIA system the individual must have demonstrated
intent, early in his career, to perform what is described in the
broad language of section 203 of Public Law 88-63 as "qualifying
service." To remain in the CIA system he must periodically have
performed minimum periods of "qualifying service." And to be
eligible for retirement under the CIA system he met have completed
at least 5 years of "qualifying service."
25X1A II goes much further than Public Law 88-643 in defining
"qualifying service" and provides sufficient criteria for judging
in most instances the qualifications of an individual for entrance
into, remaining in, and being retired from the CIA system. However,
both the act and the regulation permit, and indeed require, con-
siderable interpretation in their application to a limited number
of employees whose duties do not, for one reason or another, fit
neatly into the easily identified types of "qualifying service."
For example, most duty performed overseas (outside of the 48
continental states and the District of Columbia) is "qualifying
service." However, there may be a few instances in which service
overseas will not be considered "qualifying service."
The act and the regulation also permit service in the United
States which is performed under conditions similar to those of
service overseas to be considered "qualifying service." Precise
criteria cannot be established for determining the conditions of
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domestic service which would place such service in a qual
Eying
category. These standards will evolve in a case-by-case review
of those few individuals nominated for participation on the
strength of domestic service believed by their Career Services
to be "qualifying." Such unusual circumstances as extremely
adverse living and working conditions, and demonstrable hazard to
life or health may be pertinent to these determinations.
0
also contains in subparagraph b(ll)(c) a criterion
ing service" based on the performance of duty "on a
continuing basis which would place the individual at a distinct
disadvantage in obtaining other employment...." Application of
this standard requires determinations based on conditions at a
time when the individual seeks to enter other employment and, on
retrospective consideration of his Agency career in light of
current conditions. This standard was included to provide for
those rare cases when the Agency might be obliged to release,
short of normal retirement age of 60 or so, an individual whose
Agency experience was completely unrelated to any other field of
employment or who could not be permitted to give even general
information defining the scope, level, and nature of his Agency
experience.
Clearly the Agency has been given the broadest possible
latitude for defining "qualifying service" to permit granting
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the benefits of the CIA system to those employees whose service
merits such benefits. While the standards for determining "qual-
ifying service" will be more clearly defined with experience in
applying the act and the regulation, it is unlikely that they will
become so precise that a factor of judgment will not be required.
Additionally, the dynamics of intelligence work in a changing
world demand that the criteria in making judgments in the context
of the act be periodically reviewed.
1. Legislation of 13 October 1964, Public Law 88-6Z3
Public Law 88-643, titled "The Central Intelligence Agency
Retirement Act of 1964 for Certain l loyees," represents the
first major action in establishing a "system" within the Agency
which recognizes the special character of the service performed by
employees concerned with the conduct or direct support of clandes-
tine and covert activities. This law, enacted by the 88th Congress,
offers special benefits to those Agency employees "whose duties are
determined by the Director to be (1) in support of Agency activities
abroad, hazardous to life or health and (ii) so specialized because
of security requirements as to be clearly distinguishable from
normal Government employment."
The CIA Retirewnt and Disability System not only provides sub-
stantially all of the benefits of the Civil Service Retirement
System but in addition offers the following distinct advantages:
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(A) Voluntary Early Retirement: A participant in the system may,
with the consent of the Director, retire upon reaching Me 50
if he has at least 20 years of creditable Federal service
including at least 10 years of Agency service which includes
at least 5 years of qualifying service.
(B) No Reduction in Annuity for Retirement Before Age 60:* "Under
the Civil Service Retirement System, all retirement below age
60, except disability retirement, requires a reduction in
annuity. The reduction is 2% of annuity for each year the
e is under age 55. There is no reduction in annuity
under the CIA Retirement System before reaching 60.
(C) More Liberal Annuity Computation Formula: Under both the CIA
and the Civil Service Retirement Systems, an annuity is based
on the individual's "high-5 salary," that is, his average
his highest paid 5 consecutive years of'service.
However, under the Civil Service Retirement System, the
annuity is computed at 1.5% for the first 5 years of service,
1.759 for the second 5 years, and 2% of high-5 for all re-
maining years of service. Under the CIA Retirement System,
the annuity is computed at 2% of high-5 for a
* Changed to age 55 by PL 89-M*, 18 July 1966
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2. Establishment of CIA Retirement Board
Effective 27 April 1965 a CIA Retirement Board was establ
and advise the Director of Personnel in the administration
CIA Retirement and Disability System
dated 24 June
1965).
Effective the same date Mr. Ees ett D. Echols was appointed
Cbsirm of the CIA Retirement Board. The other
appointed by the Director on the basis of proporti
by Directorate are as follows:
Plans Directorate
llige:nce Directorate
and Technology Directorate
Support Directorate
to provide staff f and secretariat support in the administration of the
CIA Retirement System.
In addition, the services of the following staff advisers were
table to the CIA Retirement Board:
?gal Adviser
Technical Adviser
Finances Adviser
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for initiation and administration of the System. Pro-
cedures were adopted to implement the System -- the first step being
the identification of on-duty employees eligible for participation.
The first group of employees to be screened were those who were
eligible for imediste retirement if they otherwise qualified as
participants. The Read of each Career Service was provided with a
computer listing of those employees in his Career Service who would
of age or over as of 31 December 1965 and who, would.
have 20 Years or o of Federal service and 10 years or more of
Agency ser+rice. (Subsequent listings included the younger age
grotaps.) The listing showed the total years and months of overseas
service with the Agency. In order to expedite the designation
process, the Board requested that the Career Services initially
3. Selection of Partici t$ into CIA Retirement S tem
In anticipation of the issuance of Headquarters Regulation
-rs of the CIA Retirement Beard and requested that they
CIA Retirement and Disability System, the Director designated
employees for whom all, or preponderantly all, qualifying
service has been "overseas" service. This was to facilitate the
prompt handling of the most probably eligible case in contrast to
oh may depend on a more precise examination of non-overseas
service which may be qualifying. However, the Career Services were
not precluded from submitting exceptional or urgent caws of the
latter nature to the Board for review and appropriate action.
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t many of the a loyees named in the
ctmputer listing would clearly not met the service criteria for
nomination as participants in the System. In ardor to s
the processing of those cases, it wes requested that the names of
such employees be "red-lined" or otherwise distinctively marked on
the roster and that a copy of the roster so marked be returned to
the CIA Retirement Staff. The CIA Retirement Staff saw responsible
or the preparation of a aaemorandum or dispatch, as appropriate,
notifying each of the employees of the determination that he does
not qualify for designation as a participant in the System and of
his right to appeal such determination to the Director. These
notices were forwarded to the individual through the Head of his
appeared to met the service criteria for designation as a partici-
tem an the basis of Tial.Ifying service Performed
Nomination and Designation, of Participant,,
Such forms, with supporting documentation vbe
to the CIA Retirement Staff for appr
prince process.ng.
An Important requirement for participation in the System is
the emplcayee'ss acceptance of a written undertaking obligating him
to serve anywhere and at any time according to the Agency's needs
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A special Service ant was developed for this purpose and
approved by the Board. It was determined, hour,
employee's previous Application for Membership in the
of the Central Intelligence Agency may be used in lieu
rvice Agreement in those cases where the non
over 15 years of Agency service, or is not available to alga such
Agreement, or, in the discretion of the Read of the Career
signation of an a mployea with less than 15
Agency service to the CIA system will be largely an ein
action on the direction of the Director of Personnel who
acts on the recommendation of the Read of the individual's Career
Service. While the procedure provides for prior notification and
individual appeal to the Director, the action of designation to
the CIA system, in contrast to the choice made by the employee in
the CIA system at the conclusion of 15 years of Agency service, is
not a critical milestone in the career of an Agency employee with
less than 15 yea's of Agency service. Its importance stem from
the fact that this action constitutes the formalization of status
as a participant in the CIA system. For the employee who has
already, achieved a minimum of 15 yews of Agency service, who is
otherwise qualified, and who Is designated to become a participant
in the CIA system, notification of his designation will in fact
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coincide with his opportunity to exercise the choice
at the 15th anniversary of the employee already in the CIA systems.
Any individual who has 15 or sore years of Agency service
and is otherwise qualified for participation in the CIA system but
f "qualifying service will. not be
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!*.." Once this requirement is net, his Career
the system until he has completed his 5 years of
Service y nominate his for designation if he is still o arwise
eligible. He must then exercise his choice between remaining in
the CIA system or completing his Agency service under the Civil
service system.
Any individual who is already eligible for optional retire-
ment under the Civil Service Retirement System and who is also
qualified to be designated a participant in the CIA system may
exercise the choice of becoming a participant and immediately
under the CIA system. However,. there are a few case
which Civil Service annuity would be larger than a CIA annuity
because the maximum annuity is higher under Civil Service (80%
rather than 70%). Generally, the higher maximum annuity makes
the Civil Service Retirement System more favorable to the employee
who has 36 years and 10 months or mare of service. The CIA Retire
sent Staff in processing these cases will advise the individual of
the respective annuities.
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a choice to remain within the CIA system on or
15th anniversary of Agency service, a participant may
not an a matter of ri&t elect to return to the Civil Service
Retirement System. Adorer, as a matter of policy, the CIA
Retirement Board has agreed that a participant who, at his mands-
tory retirement date under the CIA Retirement System, would
uity were he retired under thee .Civil Serve
on can only arise with an employee caho will have more
eme, may apply to be transferred to that system.
than 36 years and 10 moths of creditable Federal service at his
of providing the employee who has such seniority in
Fral service with a larger annuity, he will be expected to
retire the end of the month in which he reaches his mandatory
in the CIA Retirement ?pteu.
The Civil Service Retirement System requires that an employee
must have been under that system for at least one year during
two years immediately preceding rat' remen under that system.
Therefore, a participant who desires to apply for transfer to the
Civil Service system for the purpose of receiving a larger
under the conditions described above, should do so approx
15 months before his scheduled retirement date.
nutty
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Establishment of the Retirement Branch
The Director of Personnel determined that certain organizational
changes and reallocation of responsibility in connection with the
many aspects of retirement under both the Civil Service and the CIA
Retirement and Disability Systems was necessary in order for the
Office of Personnel to effectively discharge its responsibilities
these substantive programs.
Accordingly, effective 20 September 1965, a new branch to be
as the Retirement Branch was established in the Benefits
and Services Division. The Retirement Branch would be responsible
for the following:
(1) Various aspects of retirement for employees dovered
by the Civil Service Retirement Act, as are now handled in the
Benefits and Counseling Branch;
(2) Preretirement planning and counseling for employees
covered by the Civil Service Retirement Act, as now performed
by the Executive Secretary, Agency Retirement Board; and
(3) Preretirement planning and counseling for employees
covered by the CIA Retirement and Disability System.
Preretirement planning and counseling for employees covered by
IA Retirement System was a now function
I?,
necessary for the Chief, BSD and the Chief, CIA Retirement Staff to
lop implementing procedures for the integration of the per.
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The new Retirement Branch we staffed by pert
to retirement matters in the Benefits and Counseling
the CIA Retirement Staff . The Executive Secretary to t
Retirement Bcea was ai+pointed Chief of the Retirement
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Sion
The Federal Salary and Fringe Benefits Act of 1966 Included
rtsin changes in retireement - which premed the Agency to review
its retirement policy for employees covered by the Civil Service
. The specific retirement changes were:
Optional retirement on full annuity at
30 years of service. Prior to the cam.
55 with at least 30 years of service was permitted, but the
annuity wan reduced by 1% for each year he was under
(2) Optional retirement at age 60 with 20 years of
service. Prior to this change, the employee who had was
than 30 years of service had to wait until age 62 before be
could retire optionally.
The present retirement policy has been keyed to a standard of
retirement on a full annuity, i.e., employees are expected to retire
when eligible to do so with no reduction in annuity for . The
those employees at age 60 with 30
or at age 62 with at least 5 years of service so that sin 1959 the
Agency has considered age 60 as a am al retirement age.
M 1
policy, the Agency long has recognized Its departum
where, under Civil Service
nt, the
tt age is 70 with 15 years of service. The present
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not only became an accepted management tool but
rnal consequences, criticisms, or other political
d that broadening the current policy
new option of retirement at age 60 with 20 yea=
service should create no now problem for the Agency since such action
current policy.
On 29 bow 1967J w revised to incorporate this now
policy. ftragr+ -b reads as follow:
"POLICY. The Agency encourages employees to retire
voluntarily upon reaching Age 60 or as soon thereafter
as they are eligible for optimal retirement under the
Civil Service Retirement Systems. RaWlayees. are, there-
fore, expected to plan to retire upon completion of 20 years
of service at the a,ge of 60 or after a aiulmum of five yea"
of service at the age of 62."
The original Agency Retirement Board which van established
concerned with Civil Service Retirement vas
the Executive Secretary of the Agency Retirement Ord was also the
these functions were transferred to the CIA Retireaee
4.). This chs a-over operated very snootb4 because
there were two bears of the CIA Retire
memebers of the abolished Agency Retirement
Of continuity during the
Approved For Release 2002/05/01 : CIA-RDP78-03091A000200020004-2
SECRET