A BILL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-03091A000200020024-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 9
• Document Creation Date: December 16, 2016
• Document Release Date: April 20, 2005
• Sequence Number: 24
• Content Type: REGULATION

-? Approved-For F leases- eO 5/04/2-7 :- C1A=RDP78-b3O9f 400&2 20024-0
To amend the Foreign Service Act of 1946, as amended, and
for other purposes.
Be it enacted by the Senate and House of. Representatives
of the United States of America in Congress assembled,
That the following new heading. and section be added immediately
following section 1112 of title XI of the Foreign Service Act
of 1946, as amended:
"RETIREMENT INCENTIVE
"SEC. 1113. (a) Any participant who retires voluntarily
under section 636 prior to .Apri1:1, 1969 shall have his
creditable service increased by the period of time between
the date of his separation from the Service and June 30, 1970:
Provided, That his total service credit does not exceed 40
years: and Provided further, That the projected service does
not extend past the date of his mandatory retirement pursuant
to section 631 or 632 or the date he would complete the maximum
period during which he would be permitted toremain.in the
..Service under regulations prescribed pursuant to section 633.
High-five average salary shall be computed for such.a
participant as if he performed service at his final salary
rate during the period of projected service.
State Dept. declassification & release instructions on file..
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OGC Has Reviewed
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"(b) Amounts equivalent to retirement deductions of
who retired.and received a benefit under subsection (a) hereof
shall be deducted from the annuity of each such former
participant. Such deductions shall be made from annuities,
accruing to the former participant during the period of the
projected service credited under subsection (a). All such
deductions shall be matched by contributions to the Foreign
Service Retirement and Disability Fund from the appropriation
.used to pay the former participant's final salary. Such
matching contributions shall be paid on the first of each
month in the same manner as matching contributions paid in
percent of the final salary rate of each. former participant
accordance with section 811."
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 Approved or FeIea [04/27 : eIA-RDP78-b3O9'fAOObfM_ 20024-O
Explanation and Justification of a bill
to provide a retirement incentive to
participants. in the Foreign Service
Retirement and Disability System
The Foreign Service Retirement and Disability System
was designed with the objective of accelerating retirement'
of more'senior officers in the Service in order to bring
men to the top-while still vigorous and receptive to new
ideas. With a Foreign Service officer corps of 1500 men
provisions for selection-out and voluntary retirement at
age 50 resulted in a satisfactory rate of separation of
the more senior officers. Beginning in the mid fifties
the Foreign Service officer category was expanded and is
now at the 3500 level. With.this larger number of Foreign
Service officers, the rate.of separation, particularly at
the senior level, has not kept pace with the expansion.
Approximately one year ago the Department announced a
reduction in the number of years a Foreign Service officer
may remain in class without promotion before becoming subject
to selection-out. This reduction in time-in-class regulations
will result in a substantial increase in the number of
officers separated from the Service by selection-out this
year. However, other means must be devised to effect an
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 /04/27: GIA-RDP78 30 A00 20024-0
additional number of separations and it, is believed that
this can be accomplished, by. the. provision of an incentive
to Foreign Service personnel to retire voluntarily. The
issuance of the President's January 18, 1968 directive
calling for a reduction of U. S. overseas personnel provides
an appropriate opportunity for the enactment of temporary
legislation that will result in accelerated retirement. The
accompanying bill would provide such an incentive.
If enacted the measure would permit an officer or
employee of the Service who is a participant in the Foreign
Service Retirement and Disability System, and who is-eligible
to retire voluntarily, to do so any time after enactment and.
before a specified date and receive an annuity on the basis
of service credit projected beyond his date of retirement.
The measure is designed so that no
benefit will accrue
to any officer or employee who. dies in Service or who retires,
because of disability, for age or because'of selection-out.
The measure will benefit only those who could remain in Service
but who choose to retire voluntarily before April 1, 1969.
The bill also provides for a reduction in the annuity
of each officer or employee benefited thereunder by an amount
equal to a retirement contribution of 62 percent of the parti-
cipant's final salary rate. This deduction from annuity would
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be continued for the duration of the period of the projected
service. This amount would be matched and paid into the
retirement fund by the Department exactly as' if the officer
or employee had remained in the Service during the period.of
the projected service.
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 Approved-For R !ea 200? /04/27 .: CtA-RDP78- 091400(9 020024-0-
COST AND SAVINGS ESTIMATE
Salary Savings
No. retiring under Estimated year Estimated salary
incentive
plan be-
tween July
1, 1968
and April
1, 1969
this group would savings resulting
retire without from early
incentive retirement
Number
FY
50
1969
$ 0
100
1970
2,200,000
75
1971
3,500,000
50
1972
3,600,000
25
1973
2,500,000
300
Total
$11,800,000
6:7 Retirement Contribution Cost
62% Dept. retirement
contribution for period
of projected service
Paid during FY 1969
Paid during FY 1970
$245,000
420,000
$665., 000
Terminal Leave Cost
Additional Terminal leave
payments accruing during
FY 1969 for 250 retirees
(50 retiring in FY 1969 $2,250,000
not included)
Retirement Fund Cost
(not an S&E expense)
Total cost to retirement
fund paid over lifetime
.of retirees
$6,000,000
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 Approved For Release 2005/04/27 : CIA-RDP78-03091A000200020024-0
PROJECTED-SERVICE RE TIRE 'NT INCENTIVE
Service Projected to 6/30/70 for those Retiring by 3/31/69
Salary rate July 1968
Annuity with service projected
to 6;30/70
Percentage increase in annuity
with retirement on :
Ch. of M. Career
Class 2 Minis ter FSO-I FSO-2 FSO-3
$29,500 $28,000. $27,990 $26,850 $21,500 $1:
19,700 18,350 18,200 13,900 ' 10,700
7/1/68 w/24 mos. projected service. 10% 15% 17% 26% 244
12/31/68 w/18 mos. " -' 7 10 11 18 1.7
3/31/69 W/15 mos. 5 7 8 14 14
6i% retirement contribution
per year for projected period $ 1,900 $ 1,800 $ 1,800- $ 1,750 $ 1,400 $
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 Approved For Release 2005/04/27 : CIA-RDP78-03091A000200020024-0,,
PROJECTED-SERVICE RETIE E T INCENTIVE
Service Projected to 6/30/70 for those Retiring by 3/31/69
Ch. of M,
Class 2
Career
Minister
FSO-1
FS0-2
FSO-3
FSS-3
FSS-6
68
$29,500
$28$000
$27,990
$26,850
$21,5000
$13, /50
$9,150
e projected
19,-100
18,350
18"200
13,900
10,700
8115)0
5,100
in annuity
projected service.
10%
15?!
17%
26%
24`,0
2-1
20%
if it
7
10
11
18
17
15
14
it
5
7
8
14
14
12
1.1
:ri bution
ected period
$ 1,900
$ 1,800-
, 8001
$ 1,800'
$ 1,750
$ 1,400
$ 900
$ 6001
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 Approved 'pr F 'eas4 2005/04/27: CIA-R[ P.78.7. 3092 420002.0024-0
25X1
",, ~ w o., nm~an~,A .w~..oa.< a,~ ~. ~, ~n ,, M,m. ? DATE
Legislative Counsel., CIA
INTERDEPARTMENTAL REFERENCE
~R,:fERRE.L1 TO
Retirement Incentive
Attached are the drafts relating to our
proposed retirement incentive plan..
I have purposely not classified, any of
this material but as I explained to you
until it has the Secretary' s approval.
and we are able to get it.through the
Bureau of the Budget, we would appreciate
your not going for=ward with a similar
proposal.
SIGNATUR
William E, Woc dyear
Legislative officer
WRITER C_1I HAS Cl HAS NOT BEEN !INFORMED OF THIS REFERENCE
Foreign Affairs Personnel. Planning Progra
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