IMPACT OF SOCIAL SECURITY REFORM/FEDERAL RETIREMENT PROPOSALS ON THE CENTRAL INTELLIGENCE AGENCY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87-00868R000100110020-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 22, 2016
• Document Release Date: September 8, 2009
• Sequence Number: 20
• Content Type: REPORT

Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
7
IMPACT OF SOCIAL SECURITY REFORM/
FEDERAL RETIREMENT PROPOSALS ON THE
CENTRAL INTELLIGENCE AGENCY
Social Security Reform
The report of the National Commission on Social Security Reform which
will form the basis for Congressional action early in the 98th Congress
recommends that Social Security coverage be extended on a mandatory basis
as of1 January 1984 to all newly hired civilian employees of.the federal
government. The implication of this provision is that the Civil Service
Retirement System and special federal retirement systems such as the CIA
Retirement and Disability System will continue to exist only for individuals
who entered government service prior to 1 January 1984. In time, and when
the last beneficiary of these retirement systems dies, these systems will
disappear.
Changes to the Civil Service Retirement Act
The President's fiscal year 1984 budget recommends a number of changes
in federal employee. retirement and disability programs. Probably the most
significant of these would raise the retirement age for an annuity without
reduction from age 55 to age 65 phased in over a period of ten years.
Retirements would be permitted at earlier ages but employees who so retire
would have their annuities reduced by five percent for each year they are
under the prescribed age at the time of retirement; e.g., age 56 in 1984,
,age 57 in 1985, and so on. In ten years the age would be 65. Employees who
are age 55 at the time of enactment will not be affected. The Office of
Management and Budget already has indicated that the Administration will
seek to raise the CIARDS retirement age from 50 to 60 with the same five
percent per year penalty for early retirement. The. overall thrust of all
of the retirement changes is that employees will have to pay more for less
attractive annuities and will have to work longer in order. to qualify for
retirement without reduction.
Comment
The impact of the Social Security reform/federal retirement proposals
will be particularly heavy and adverse for the Central Intelligence Agency.
S E C R E T
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 25X1
25X1
25X1
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
a. There are currentl employees eligible for voluntary
retirement under the CSRA; of thes hold an SIS rank from I through 6.
CIARDS participants are immediately eligible for retirement; of these,
old the rank of SIS-1 through 6. While it. is not likely, because of
grandfather clauses protecting their current entitlements, that this large
number of employees will opt for retirement now, there is the risk that
because of general distrust of the legislative process some may choose to
leave now. The result could be a disastrous loss of experienced personnel,
package that the Government offers. We believe that it is this group that
is hardest hit by these proposals because they realize that they will have
to revise their future plans, taking into account that there will be no
substitution for the severe reduction in retirement benefits that they
will be required to accept by the changes. The particular problem here is
that in this group of employees there is a great deal of difficulty in
moving into a new career or employment position outside of the Agency except
for the most competent and highly gifted individuals. It is the cream of
our career staff that we will be likely to lose, a group that will be
extremely-difficult to replace. The devastating impact of this happening
will be reflected in the long term because we will not have successors to
replace the current leadership and it will take many years to replace the
mid-level career group.
b. We believe that an even more critical loss to this Nation and
the Agency would be in our extraordinarily competent and highly motivated
mid-career personnel in the 35 to 50 range. Certainly, a significant part
of their commitment to a career with the Agency is retirement/benefits
many of whom are in key positions.
2. We assure them of continuing advancement to positions of
the Agency's mission;
c. In its recruitment of the brightest young men and women to help
fulfill the CIA mission, the Agency has had much to offer:
1. We promise a meaningful career in an area of vital concern
to our Nation's welfare, a career which exposes them to the most sensitive
of information and which allows them to make a significant contribution to
increasing responsibility.if their performance warrants LL;
sector, academia or otherwise.
d. The proposed changes: would force us to offer employees and those
p I
productive years to pursue other interests, such as employment in the private
3. We provide the opportunity to serve a full career while
emitting them at the same time, full retirement at an age that leaves
e. The proposals would change the career nature of Agency employment
by dramatically lengthening the service of current Agency employees and
prospective hires. The lengthening of service of Agency employees by as
much as ten years would also have a devastating impact on promotions and
could require the Agency to conduct reductions in force in order to permit
the promotion of deserving younger officers.
we need to recruit considerably less.
S E C R E T
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
f. If the lA is to carry out its extremely important mission,
and particularly if it is to assure the utmost security of our Nation's
most important secrets, it cannot afford to be a short-term (3-5 years)
training facility for its work force. There are a number of agencies in
government which strive for a short-term work force. The U.S. Attorney's
Office and the Department of Justice, as well as regulatory agencies like
the FTC and the SEC, are good examples. Because of the private sector
demand for people,witH these experiences, individuals use these agencies as
a training ground. However, because of the sensitive intelligence which
Agency employees come into contact with, the Agency cannot afford to have a
population of short-term employees. The need for a highly motivated,
extraordinarily capable career-cadre able to serve?a full career, i.e.,
20-30 years, is an absolute necessity. It can only be achieved and maintained
by providing the necessary competitive remuneration along with a retirement
program similar to the one that now exists, allowing our essential careerists
to commit their careers to the defense of this Nation while at the same time
allowing those careerists to provide adequately for their future.
g. The proposals and objectives of OMB would cripple CIARDS for
current employees and eliminate it for prospective new hires. In 1964
Congress enacted CIARDS to recognize that CIA's operational cadre, because
of the special nature of their service, deserved retirement benefits
significantly different from other employees., ONE plans to insert an
annuity penalty reduction for early retirement which does not now exist.
.Such a change, as well as lengthening the age of CIAKDS participants before
they could retire without an annuity reduction, could destroy CIARDS as an
important management tool.. CIARDS has allowed the Agency to require or to
permit early retirement with no penalty reduction to members of this opera-
tional cadre who can no longer serve under the strenuous and hardship
circumstances required; such early retirements have provided managers
promotion headroom for deserving younger officers.
h. Because of these serious concerns, we strongly urge that the
Director take positive and aggressive action as recommended below.
Action Believed Necessary
For the reasons discussed above,. we have recommended that the. Director
obtain the.President'sapproval for an attempt to exempt CIA from the Social
Security Reform Act proposals, obtain the Presidents approval to exempt
CIA from the age and penalty changes proposed for the Civil Service Retirement
Act, and request the President to instruct 0MB to take no action to amend
CIARDS.
S E C R E T
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
A
RETIREMENT PROPOSALS
INTRODUCTION.
This paper identifies serious issues for the CIA created by current
efforts to revise existing retirement coverages and benefits. They could
impact on all Agency employees, both in the Civil Service Retirement Act
and in the CIA Retirement and Disability System, and could result in a mass
exodus of Agency employees in both Systems currently eligible for retirement
and seriously damage the aspirations of others not eligible. Further, the
changes could radically alter the career nature of employment with CIA
whereby we offer to the best we can hire an opportunity to embark on a
meaningful career, with reward of continuing advancement to those who
deserve it, and with the prospect for retirement at a reasonably young age
for those interested in pursuing a second career later in life. The result
could be a frightening loss of mid-level and younger personnel in hard-to-get
categories whom the Agency struggled to find, hire, and develop as well. as
an inability to recruit new personnel in these same categories. Moreover,
the proposals could impact on the Agency's management of its personnel as
in the case of the Agency's special retirement system, CIARDS, which allows
retirement as early as age.50 for those enduring special hardships associated
with operational service overseas and could render CIARDS useless as a
management tool for the operational cadre. The paper identifies and dis-
cusses these concerns and recommends that the Director take positive action
to prevent the application of the proposed changes to the CIA.
II BACKGROUND
A. There are two significant retirement reform efforts underway
which employees, including som ho are now. eligible for retirement,
see as potentially threatening: 1. Comprehensive changes in the Civil
Service Retirement Act; 2. 'Social Security coverage for new federal.
employees. Although the reforms are separate efforts, they are related..
Legislation to implement the Retirement Act changes is being drafted by the
Office of Management and Budget, but Congressional review is not expected
before spring at the earliest. Legislation to implement Social Security
reform is already being considered by the Congress; thus, an Agency position
on this legislation probably will be required in advance of the time the
Civil Service. Retirement proposals receive Congressional action.
B. Approximately 80% of Agency personnel are covered by the Civil
Service Retirement Act (CSRA.). 20% are participants in the CIA Retirement
and Disability System (CIARDS), which provides higher benefits for employees
S E C R E T
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
primarily serving oWseas or who are performing cerin types of service
in the United States, e,g., hazardous duty.
5 Currently the formula used to determine the percentage of
C. Since an understanding of the Social Security proposal impact
depends on some familiarity with our present Civil Service and CIARDS systems,
these are addressed first.
.III PROPOSED AMENDMENTS TO THE CIVIL SERVICE RETIREITE T ACT
,A. The President's budget message proposed the following major changes
to the Civil Service Retirement Act:
1. Under existing law, employees who are at least age 55 with
30 years of service, age 60 with 20 years of service, or age 62 with 5 years
of service may retire voluntarily with no reduction in benefits. Involuntary
retirement benefits are available to employees who are at least age 50 with
.20 years of service or who have 25 years of service regardless of age;
such employees have their annuities reduced by 2% for each year they are
under age 55.
mentswould be permitted at earlier ages but employees who so retire would
have their annuities reduced by 5% for each year they are under the prescribed
age at the time of retirement, e.g., age 56 in 1984, age 57 in 1985, and
so on.'In ten years the age would be 65. The reduction would not apply
to persons retiring because of disability. Please note:. employees 55 or
over at enactment would not be affected.
2. Employees currently pay 7% of their base salary for retirement
coverage.
The retirement age for an annuity without reduction would be
raised from age 55 to age 65, phased in over a period of 10 years. Retire-
The employee's contribution would be increased to 9% in 1984
and 11% in 1985.
3. Currently, annuity calculations are based on the employee's
highest three years of salary, referred to as the "High-three."
This would change to the highest five years of salary. Please
note: employees within 3 years of retirement eligibility would not be
.affected.
4. It is also proposed to eliminate the retiree cost-of-living
adjustment for 1984, and for 1985 and thereafter to make permanent current
legislation that allows only one-half cost-of-living adjustments for non-
disability retirees under age 62.
Y
"high 3" years of salary for the first 5 years, 1 3/4% for the next 5 years
and 2% for each year over 10. An employee who retires after 30 years of
service would receive 56.25% of his/her "high three." The Budget suggests
the possibility that this level could be lowered significantly but the
specific manner in which the reduction is to occur and the timing involved
salar that is replaced by retirement benefits is 1 1/2% of an employee's
S E C R E. T
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
has not been specified., One figure mentioned is a flat 1 1/2% for each year
of service. Thus, we are not yet able to describe accurately the annuity
reduction proposed, but there could be one and it could be very significant
in terms of dollar loss over current expectation.
1. None of the changes are without concern to employees: they
will have to pay more for less attractive annuities and will have to work
longer in order to qualify for retirement without reduction. Of all the
changes, the most serious to management and employees are those which raise
the retirement age for an annuity without reduction-to 65 and impose an
annuity reduction for early retirement. These changes need particular
attention.
2. Since the specific details of the proposal identified in
paragraph. III A 5 above are not yet known, we are unable at this time to
assess accurately its impact on those Agency employees covered by the CSRA
who are currently eligible to retire; they tota Exceptfor'that
uncertainty, employees in the Civil Service Retirement System age 55. and
above are protected from the age 65 proposal and the 5% penalty reduction
,for earlier retirement; employees in the Civil Service Retirement System who
are within 3 years of retirement eligibility are protected from change
from a "high 3". to a "high 5" basis for calculation. They total but
there is some overlap with the previous category. These two "grandfather"
clauses should ease the concern or minimize the passibility that the large
number of-Agency employees now eligible for CSRA retirement will in fact
opt for retirement since their entitlements, except for increased contribu-
tions, would not be immediately affected.
3. On the other hand, employees who are not protected from the
age-65, 5% penalty, and change to "high 5" proposals are immediately affected.
For them, especially those who just miss out, e.g., age 54, the retirement
changes--if enacted as proposed--could be demoralizing.
a. In 1982 the average of Agency employees retiring under
CSRA was 56.9. (See Tab A for prior years.) Elsewhere it was 61. Thus,
our CSRA employees retire well in advance of the average of retirements
elsewhere in Government. Many of our employees retire early to pursue a
second career in industry or in academia which adds additional income to
a retirement annuity. Our fear is that many of our very sharp personnel,
especially mid-level or younger analysts or certain high-tech employees,
might decide to resign now rather than have to wait for age 65.
b. Lengthening the service of Agency employees by as much as
10 years, or for that matter even 5 years, over. the current age 55 could have
a devastating-long-term impact. on the promotion and assignment aspirations
of our bright young men and women and would impair the ability of Agency
management'to move promising officers up through the ranks. (See Tab B,
which shows grade levels of retirees and promotion capability created by
such retirements.) The officers themselves will quickly perceive that their
advancement is seriously curtailed, blocked by senior officers who must work
S E C R E T
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
longer in order to Wlify for unreduced retirement.'One way to create the
headroom would be to conduct periodic reductions in force. These have
occurred rarely in the CIA; when they did the result was seriously reduced
morale and many cases of disaffected employees who were let go. The current
situation would be worse because under the proposal, separated employees
would also suffer significant reductions in annuities.
c. For the same reasons described above, we believe that-our
-.ability-to recruit new and essential personnel could be seriously impaired,
particularly since today's applicants appear to be more materialistically
oriented than our earlier employees.
d. Thus, while all of.the retirement proposals will have some
impact on employees, those concerning retirement age and penalty reductions
in annuities for early retirements should receive priority focus since those
directly impact on the Agency's management of its personnel.
e. OMB is drafting the necessary legislation to implement
the Budget proposals. The initial soundings from the Congress are-that
there is little enthusiasm for these retirement changes in their present
form although some downward revision of current benefits and some change in
retirement eligibility can be anticipated. Our understanding is that
Congressional consideration will not occur until late spring, at the earliest.
Nonetheless, we believe that there should be some DCI expression of concern
to-the President now, so that the legislation the Administration submits to
implement the Budget proposals can be tailored to our special requirements.
C. Impact of Amendments to the Civil Service Retirement Act on the
CIA Retirement and Disability System
1. The Central Intelligence Agency Retirement Act of 1964 (CIARDS)
was-designed to assist the Agency in improving its personnel management
program by authorizing the establishment of a retirement system that included
early retirement provisions. In authorizing this system, the Congress
attached special importance to the demanding nature of CIA positions, and
also recognized the special character of overseas intelligence work. CIA
does indeed have a crucial ongoing need to attract and retain a force of
highly motivated careerists who are capable of being trained in unique skills.
The demands of our overseas intelligence work generally require that these
-individuals be younger than what usually is called for in Government-service.-
These demands include unique duties performed under difficult and sometimes
dangerous conditions. The stresses and strains of uneven and uncertain hours
of work, of duty in unhealthy locations, and of arduous assignments require
personnel who possess a high degree of vigor, vitality, and endurance. An
operational cadre with such physical and emotional characteristics is.
absolutely. essential to the mission of the Agency. It has been demonstrated,
for example, that younger officers as a group are better at recruiting agents
than are older officers. Experience has taught us that the nature of certain
unique types of work in CIA requires a combination of mental, physical, and
psychological characteristics which are predominantly associated with the
younger band of the age spectrum and have been built in as a basic and vital
feature of this Agency's operational cadre management system.
S E C R E T
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
w
2. CIARDS participants can retire at age 50 with 20 years of
federal service, which includes 10 years of.Agency service, and of which
5 years must be qualifying service, e.g., overseas. A CIARDS participant
may be involuntarily retired with 25 years of service regardless of age;
in this case there is no penalty, i.e., no reduction in annuity, for retire-
e f fah ? 3,~ f
or
h
each year of service, or compared with the CSRA formula noted in paragrap
ment below age 50. Annuities are calculated at a flat 21, o ig
U
III A 5, page 2, above.
n
x
propose changes in CIARDS bearing some direct proportion to the changes in
the Civil Service Retirement Act. For example, if the retirement age without.
reduction for those covered by the Civil Service Retirement Act is raised to
age 65 from the current age 55, OMB will expect CIARDS retirement age to
rise, by 10 years to age 60 from the current age 50. Furthermore, OHS has
stated that it would strive to obtain reductions in annuities for each year
the individual is under the voluntary retirement age along the same lines it
has proposed for the Civil Service Retirement age. Since there is no provision
in CIARDS for a reduction in annuity for any kind of retirement, voluntary
or involuntary, and regardless of the age at retirement, this would be a
major revision to CIARDS and would remove the most important feature of
our System; it could render CIARDS useless as a management tool for reasons
discussed in paragraph 1 above. The increase in retirement contributions,
the change from a "high 3" to a "high 5" basis for calculating annuities,
the ultimate reduction. in total annuity, and the cost-of-living changes
will be applied as well to CIARDS.
4. The average age of CIARDS retirements in FY 82 was 52.8. (See
Tab A for prior years.) The early retirement features (lower age with no
penalty) of CIARDS as well as the higher annuity (flat 2%) benefits payable
hava'been an important, indeed essential, incentive for employees to serve
overseas. Since, as noted above, in enacting CIAP.DS Congress recognized
that service performed by the Agency's operational cadre is special enough
to warrant retirement benefits significantly different from employees covered
by the Civil Service Retirement Act, we believe that every effort must be
made to preserve CIARDS as it is.
5. In paragraph III B 2 above, page 3, we noted that employees
age 55 and those within 3 years of retirement eligibility would be "grand-
fathered" from the age, penalty, and "high 5" proposed changes in'the Civil
Service Retirement Act. Similar grandfather clauses should be obtained for
CIARDS as is proposed for CSRA, else we can anticipate that most, if not all,
current CIARDS participants eligible for retirement to opt for retirement.
There are 723 CIARDS participants eligible for voluntary retirement. Of.
those 236 are age 55 and above; 487. are age 50-54, and this is the group
that needs to be "grandfathered.''
f rmed a representative of our office of General Counsel that it will
I mt?, ,-o+?;,-omanr nrnnosals discussed in paragraph III, page 2
D. Recommendations
1. That the DCI report to the President that the proposed age and
penalty changes to the Civil Service Retirement Act present serious management.
concerns.
S E C R E T
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
2. BecausWf these concerns, that the JJut' quest the rresident
to instruct 0MB to exempt CIA from the proposed age-and penalty amendments
3. That the DCI request the President to instruct the D1OM3 to
take no action to amend CIARDS.
been submitted and hearings are underway. We understand that the House plans
to complete its work on the Bill by the Easter recess.
1. The concern to the Agency is a provision to bring all.new
hires to the federal work force after 1 January 1984 under the provision
of the Social Security Act, as it will be amended, and not under the CSRA
as is now the case. In addition, the National Commission on Social Security
Reform has suggested an accompanying program referred to as a supplemental
retirement plan for these new hires. Specific details of this supplemental
plan are.not available.now but we have learned that the. Office of Personnel
Management is working on such a plan. We.have recommended below a course
of action to resolve our concerns on this proposal. Failing this, our hope
is-that we can use the Director's authority to develop a supplemental plan
covering both categories of Agency employees, i.e.,'CSRA and CIARDS, and to
do so in such a way as to distinguish the benefits.
2.- The concerns expressed above with respect to a retirement age
of 65 and penalty of earlier retirement apply equally under this proposal
since no new hires after 1 January 1984 would be eligible for Social Security
benefits until age 65, or with reduced benefits at age 62.
3. Although both the existing CSRA coverage and CIARDS coverage
.are of concern, the more pressing concern is that CIARDS, the Agency's
preferred retirement system for selected personnel, would. gradually disappear,
as participants who entered CIA prior to 1 January 1984, or-their survivors,
die. Social Security coverage and the as yet undefined supplemental plan
are intended to'replace all currently existing federal retirement systems,
including the preferred systems, for employees entering the federal work
force subsequent to 1 January 1984.
4. We believe that a strong effort should be made for recognition
of CIA's management concerns that flow from any change in existing retirement
benefits-and eligibility, especially age, and to preserve the distinction,
in whatever form, between CIA's overseas cadre and other Agency and Federal
employees. To achieve these objectives, there is a range of possible options:
a. An outright exemption from the.provisions of the Social
Security Reform Act.for CIA employees, allowing us to maintain the same
coverage we now have, i.e., both Civil Service type retirement for approximately
80% of our people and CIARDS for the remainder.
A The second effort underway is a comprehensive amendment of the
SOCIAL SECURITY REFORM
Social Security System to implement the consensus recommendation of-the
National Commission on Social Security Reform. Legislation has already
S E C R E T
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
?, w
b. An alternative to the explicit exemption for CIA personnel
would be enactment of a provision that would give the President the right
to exempt classes.of employees or Agencies in the National Defense and
Foreign Affairs area. This option would not only protect the interests of
the CIA but also those of others in the Intelligence Community who may be
similarly concerned about the impact on their personnel. At the present
time, the Foreign Service Retirement System-provides benefits approximately
CIA, not the Community. DCI.)
the same as CIARDS. FBI, law enforcement personnel, and air traffic
controllers receive preferred retirement benefits under the provisions of
the CSRA. These and other groups might be included in any designation by
the President. (This is easier politically but. we are speaking of the
preservation of. Agency uniqueness and address in this paper the Director,
the Agency to provide CIARDS-type coverage to employees who qualify without
concerns of funding, Social Security credit implications, etc. (This, to a.
considerable extent, is what many outsiders think the CIA.Retirement System
two forms of coverage: CSRA and CIARDS. We would have one system, CIARDS,
but two sets of benefits equivalent to CSRA and CIARDS. This would permit.
c. Another option would be to amend the CIA Retirement and
Disability System in such a way as to cover all Agency employees but with
is now.)
d Failing any success in exempting CIA personnel from the
Recommendation
That the DCI obtain the President's approval and commitment for.
Social Security Reform provision, we will have, to try to. ensure that the
"supplemental retirement plan" referred to above provides the necessary
distinction for the Agency's operational cadre; by this, we mean the develop-
ment of two supplemental systems for the Agency with the higher benefit
accruing to those normally eligible for CIARDS benefits.
B.. The Social Security reforms are now being considered by the Congress.
We believe, therefore, that of the two reform efforts underway this is the
one that needs the Director's immediate attention. We understand that State
has also undertaken a study of the implications of the Social Security Reform
Act on its Foreign Service Retirement System.
a
from the Social Security Reform Act and preservation of CIARDS in its
n Administration initiative aimed at securing outright exemption for CIA
present form.
SECRET Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
7
Average Age of Retirees
Y
'''
CIARDS
Civil Sey-irice
o:t'~is?ed'
ear
1967.
551
57.1
57.0
1.968
54.3
55_6
56.5
.1969
S4.4
57.3
55.9
1370 ''
'54.9
56.7
56.3
1971
53.2
56.5
55:I.
1.972
52.7
_ 55.9
54_6
1973
53.3
55-3
1974
.7.
54.5
53.3
1975
.51.8.
54.3
5?.8
1976
51_ 0
53.9
52-2
1977--
52.0
55.0
53_2.
1978
51.4
54.6
5Z.6
7/1/78
9130/78.
52_$
54.E
53.7
1.979.
52.3-
54_7
53.4.:
1980
53.1.
57.1
54.8
1981
53.3
57.5
55.3
1982
52.8
56.9
.54.7
Year ending 30 June. through 1978, 30 Septer er thereafter-
S-E-C-R-E-T
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 STAT
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
W . . 1W_
Impact of Social Security Reform Proposals
on the Central Intelligence Agency
individuals who entered government service
Disability System (CIARDS), will contn _
rior to l January
1 January 1984. T e zmp
Civil Service Retirement System, and special federal retirement
systems such as the Central Intelligence Agency Retirement and
' to exisi- only for
OZ 7at~
lication of this provision is that the
to mandate Social Security coverage for all cl-vz -- e p y
Current cong
stational Commission on Social Security Reform appears certain
' m to ees
ressional action based. on the report of the.
1984.
t've'`of the need to cut government costs
i
- The impact of,Social Security coverage for all new employees
would be particularly heavy and adverse for the Central Intelli-
gence Agency.
--The Agency must recruit and retain a highly motivated corps
of careerists in both its operational .and analytical ranks. >
it is absolutely essential that CIA have a retirement program
that- can attract the calibre of personnel that the Agency must
have :. in- order to- successfully accomplish, its vital mission.
The::.retirement opportunities available under the Civil Service
Retirement System and CIARDS have served as key incentives for the
choice of a ,career- with the-Central Intelligence Agency.
b~Ie, are suppor
and reform the Social Security system, but we believe that,
in implementing these objectives, care must be taken to
ensure that other extremely important government programs
are not damaged.
ate1 20 percent of the. Agency's employees are
covered by y .
overseas, frequently under adverse and dangerous circumstances,
to collect the human intelligence so necessary for informed foreign
policy and defense decisions. It was in recognition of the unique
physical, mental, and emotional strains inherent in this type of
work, and to foster a young, vigorous cadre of individuals capable
.of functioning effectively under stressful circumstances, that the
CIA's special retirement system was established.
The:;Agency`s ability to offer upward mobility to outstanding
operations>:,:>officers, and to keep the ranks filled with individuals
possessing -the phy~' ic.al and emotional characteristics essential
s _
for--success-,-in.,arduous, assignments has depended directly upon
an ability to take advantage of an officer's most productive
years and then offer, a respectable retirement income through
spe retirement ~yste ? .featuring re_ativeiv early retirement
c ial retiren
a w =e~.- the operur~ona.l
opportunities. Termi nation of the abili{Y ' to f.~
uuld have a devastating
,Cadre. retirei:ien~c. with full benefits at ._ ace 50 wo
long-term impact on the Clandestine Se _ce.
- Approx I
'TARDS These are mainly individuals who serve
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
w
Ciu1~Servace'Retreitrent``SYstem has beery a key factor. in
-- The problems which the proposal to put all new federal
employees under-Social Security pose for the CIA are not
limited to CIARDS. There are many facets of intelligence work
which are equally as important as the efforts of our officers
collecting human intelligence overseas, and these require us to
have employees who embody the best expertise in numerous skills
and diverse fields of study. It is especially critical for our
nation's intelligence apparatus to be at the leading edge of
the state of the art in scientific and technological areas. To
do this, ts's essential ;to , attract and retain the .best
talent, lwhzch meansQi ltense-~impetition-~with the- private
sector-,FN#wh"ere'` higher salaries invariably- are -available.' The
our
ab ~t cav rac .. -
;cq- tlcaj to the, ma6interiancei&of nat onal. security.
ssential that our analytical and support personnel,
t
w
ser..vlce'-is- a conven].ent, training . group n
can increase his potential worth to private sector employers.
Increased turnover in the ranks of intelligence personnel
clearly will make it increasingly difficult to safeguard
sensitive national security information.
-- Anothersecurity concern.involves the Social Security
Administration data-base. This data base is designed and
programmed to maintain account records for individuals and-
their employeers, but it also serves as an informational
source for a wide array of reports and studies relative to
the work force. Inclusion of CIA personnel in this data
base, whether they are overt, covert, or potentially covert,
poses severe security risks, particularly in terms of the
protection of the identities of individuals under cover,
and with respect to access by unauthorized persons to-complete
y
T e. z:.po
r
SociaL,Secur,ity coverage wiZl?foster the..attitude that government
hich an individual
d
a
as we
R of benef its.:.that will, be. reated by universal
4- "L i t
2.s e
-- L
11 s our operational cadre, be intelligence
entering on duty subsequent to L oanuaLy -,U_
with efforts to enhance the intelligence capabilities of the
United States. Retirement benefits must be seen as program
costs that..., are integral to the intelligence revitalization
program, Disincentives in the personnel area will ultimately
be fatal to this program no matter how great the resources
devoted to its other aspects.
of fine it Security coverage to CIA employees
listings of all CIA personnel.
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
 Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2
In sum social Security coverage for new CIA personnel
would result in:
-- Loss of the necessary ability to attract and
-- Loss of the ability to compete with the private
l
sector for the brightest talent, in critica
Retirement Plan" which assumedly will complement Social
and serious strains inherent in intelligence
be special CIA provisions, including special retirement
Employees entering on duty with the Central
Intelligence Agency subsequent to 1 Janaury
1984 be covered exclusively by a retirement
program essentially similar to that currently provided
for Agency employees by the Civil Service Retirement
System and CIARDS. This would necessitate legislation
amending CIARDS to encompass all Agency employees ,rith._
different provisions and benefits for varying .types of
service.
-- If such an exemption from Social Security coverage
cannot be secured, it is urgently recommended that there
in the number of individuals exposed to the
sensitive workings of an intelligence agency.
maintain a cadre of personnel dedicated to a
lifetime intelligence. career, with the result
being a high turnover rate and a vast increase
scientific and technological areas.
Loss of the ability to attract and retain
individuals willing to undergo the unique
work overseas.
-- For these reasons it is recommended that:
Security for government employees entering on duty
and the best and brightest of the Agency s mid-career peop_e,
Curren
.provisions which would raise retirement ages and impose annuity
penalties for "early" retirement are concerned. In addition to
problems associated with recruitment of new personnel, these
latter proposals could. result in the loss-of key senior managers
- The concerns noted above are equally applicable. to changes
;-Which have been proposed for the Civil Service and other
t federal retirement programs, particularly insofar as
after. 1 January 1984.
in both operational and analytical area.
Approved For Release 2009/09/08: CIA-RDP87-00868R000100110020-2