USVI Public Records

Document text

ay , SN ee See ea Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 ROUTING AND RECORD SHEET SUBJECT: (Optional Status of Annual Report Administration of the CIA Retirement and Disability System FROM: Hugh E. Price EXTENSION | NO. DD/A Regiat 4 Director of Personnel BB - NOT! x _| TO: (Officer designation, room number, and = building) D/OCA cm 7B24 HOS SB YAN 1068, DouA DDA valle 7D18 HQS 06 JAN wey Executive Regist = ge + 25x11 1-7 Priority handling required for delivery to the House Permanent Select Committee on Intelligence. The report is sent to the Committee in early January each year. 7 | se detach the s origiial ae ehe“Hastead Report and the | letter to HPSCI for hand carry “Eo OCA. ' This memofandum may be down- graded!to UNCLASSIFIED when separgted from attachment. F-100-18 % U.S. Governmant Printing Office: 1888—404-034/49136 FORM 6] 0 USE PREVIOUS re Oe as Oe - Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 -. _.- Lore 06 We - Sf Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 25X11 attachment. SEC RET JAN A 1988 MEMORANDUM FOR: Director of Central Intelligence VIA: Deputy Director of Central Intelligence Executive Director Deputy Director for Administration Director of Congressional Affairs FROM: Hugh E. Price Director of Personnel SUBJECT: Review of the Administration of CIARDS (U) 1. Action Requested: That you transmit the annual report on the administration of the CIA Retirement and Disability System (CIARDS) to the House Permanent Select Committee on Intelligence. (U) 2. Background: Since 1978 the Agency has, pursuant to the requirement by the House Permanent Select Committee on Intelligence, submitted an annual report on the administration of CIARDS. The report for 1986 was prepared by Mr. Edwin C. Hustead, Senior Vice President, Hay/Huggins Company, and we were fortunate to have him again review our administration of CIARDS for the past year and prepare the report which is sent to the Committee in January. (U) 3. Staff Position: In his letter of transmittal to you, Mr. Hustead concludes that "the Agency administered the Central Intelligence Agency .- Retirement and Disability System in a manner wholly consistent with the intent of Congress." (U) 4. Recommendation: That you sign the attached letter transmitting the annual report to the Chairman of the House Permanent Select Committee on Intelligence. (U) : ./s/ Hugh E. Price Hugh E. Price Director of Personnel Attachments: A. Transmittal letter to Chairman, House Permanent Select Committee, House of Representatives B. Annual Review of Designation of Participants under Section 203 of the CIA Retirement Act This memorandum may be downgraded to UNCLASSIFIED when Separated from SE c R E T Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 - CIA- RDP90G01353R001800010006- -0 r on ret Ne eet te ae oo Ge RG A Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 ; CIA-RDP90G01353R001800010006-0 SUBJECT: . Review of the Administration of CIARDS (U) > CONCUR: 25X1 S _— be irector of Congressional Affairs Date '25X1 é ks Nex Ve Deputy Director for Administra\jon — Date ‘25X1 ; : Jk &8 Executive’Birector / . Date 25X1 /2. ols ‘a4 Deputy Director (i Central Intelligence Date APPROVED: v——, bur (ST ag Director of Central Intelligence Date 25XK1 OP/RD/RB, (12 Dec 1987) ' \ Distribution: ous ; i Orig - Addressee (w/o atts) (To be returned to Originating ’ Office for the Official File) _ : 2 - DDA (w/o report) 1 - DCI (w/o report) 1 - DDCI (w/o report) 1 - ExDir (w/o report) i 2 - ER (w/atts) 1 - OCA (w/atts) 1 - D/PERS (w/atts) 2 - DD/PERS/EBS (w/atts) 1 - RD (w/atts) SECRET ___ Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 QDR = COTA — ¥Q Declassified in Part - Sanitized Copy pppioves for Release 2012/08/07 : CIA- RDP90G01353R001800010006- 0 Central Intelligence Agency Washington, D.C.20505 28 JAN 1988 The Honorable Louis Stokes Chairman ; Permanent Select Committee on Intelligence House of Representatives Washington, D.C. 20515 Dear Mr. Chairman: Forwarded herewith is the annual report on the administration of the CIA Retirement and Disability System (CIARDS) for Fiscal Year 87. ‘This report on the administration of CIARDS was prepared by Mr. Edwin Cc. Hustead, as was last year's report. We believe that having Mr. Hustead again prepare the report is advantageous in terms of the continuity and ' expertise which he is able to bring to this. undertaking. I am pleased that Mr. Hustead once more concludes that the Agency is continuing to administer CIARDS in conformity with the law, the regulations, and the intent of Congress. Sincerely, ‘Sf William H. Webster William H. Webster Director of Central Intelligence Enclosure: Annual Review of Designation of Participants under Section 203 of the CIA Retirement Act, by Edwin C. Hustead, December 1987. 25X1 =. ‘This letter may be downgraded : to UNCLASSIFIED when separated from attachment. SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 Sing eo - oie Hee ST Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 The Honorable Louis Stokes Distribution: Orig - Addressee - ER , 3 - DCI - DDCI OCA - DDA - D/Pers - DD/Pers/EBS ~ C/RBS/RD/OP PNP RPP EEE \ 25X11 OP /RD/RBS 12Dec87) | = SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001 800010006-0 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 25X11 14 December 1987 The Honorable William H. Webster Director of Central Intelligence Washington, D.C. 20505 Dear. Mr. Webster: ‘The Central Intelligence Agency Retirement Act of 1964 for Certain Employees authorized the Director of Central Intelligence to establish and maintain a special retirement system for a limited number of employees. Both the Congress and the Agency contemplated that the new retirement system would apply to about thirty percent of Agency employees. In 1976 the House Armed Services Committee directed the Agency to make annual studies and to submit reports on its administration of the special retirement system, with particular reference to the manner in which the Agency has exercised its discretion to designate employees for participation. This is the twelfth in the series of studies and reports, which are now submitted annually to the House Permanent Select Committee on Intelligence. During the fiscal year 1987 the Director of Personnel, assisted by the Central Intelligence Agency Retirement Board, has continued to apply strict criteria in the exercise of discretion to determine what service is qualifying for participation in the CIA Retirement and Disability System (CIARDS). After extensive review, this writer has found no deviations from the law, the Ecoutetyonsy or established Agency policy. Participation of Agency employees in CIARDS has dropped from almost 35% in 1974 to about 16.6% in 1987. Employees retiring under CIARDS are about six years younger than Agency employees retiring under the Civil Service Retirement System. A total of employees have retired under CIARDS since . the system was established in 1964. , CIARDS continues to be a valuable tool of personnel management, helping to keep the intelligence service young by facilitating early retirement. ; It is my opinion that during Fiscal Year 1987 the Agency administered the Central Intelligence Agency Retirement and Disability System in a manner wholly consistent with the intent of Congress. Sincerely yours, see ee as eee Edwin C. Hustead Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA- RDP90G01353R001800010006- 0 -” Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 SECRET + ANALYSIS. OF DESIGNATION OF PARTICIPANTS UNDER SECTION 203 OF THE CIA RETIREMENT ACT Edwin C. Hustead December 1987 SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 ___ Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 A a | 4 me Part I. , Why this Study was Made... Scope of this Report ..... SECRET CON INTRODUCTION. How the Study was Conducted. . eae i Part II. How the Report is Organized. QUALIFYING SERVICE... TABLES ee @ @ 6 oo 8 8 @ eo e@ @ @ e o 8 e@ @ eo e e¢ #® © ee © A. CIARDS Retirees by Type of Qualifying Service Seed con he! Se B. D. E. F. G. Part III. PART IV. Months of Domestic Service Approved as Qualifying. C.° Months of Qualifying Service by Type... 6. ee. Domestic Service by Number of Retired Employee . . CIARDS Retirees by Months of Qualifying Service . o ¢ © © o e¢ 28 @ e CIARDS Participation Based in Part on Domestic QUaLLE VYING SSrViCee ais as 08, “sane, ee. 6 Se SS CIARDS Designation Since 1980. oe ee ee @ @ © © © © © #8 @ @ REVIEW of 1987... . CIA Retirement Board. .... Action of Board ....... Changes in CIA Retirement Act Executive Orders. . ....‘. Regulations ..... Annuity COLAS ... STATISTICAL DATA. ... Retirements in Fiscal Year 1987 Retirements from 1965 to 30 September 1987. Age Comparisons . .. 2... ee ee wees Participation in CIARDS .......... Change in Number of CIARDS Participants CIARDS Retirement Eligibility . SECRET eo ee e © @ @ oo © e@ @ @ @ o © # @ #8 @ _Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 ian in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 13. 14. 15. 16. 17. 18. co oo Z Part V. Findi ’ Concl — Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 SECRET Participation in CIARDS........6+se.seee0e-. « 635 CIARDS Designations and Removals .......ee - «36 CIARDS Retirement BUTS LOE LL EY ome. e me, Sena) BN cer Ge te « 37 Retirements ‘by Source... 4 wae arte en oe bs sive dt Retirements by Attained Age. «sw oo we co eee, a wes oe 38 CIARDS Retirements by Total Federal Service, ° ‘ * 239 Employees Retired under CIARDS at Age 50, by Years of Service. ......0 20s te ee eee -40 CIARDS Retirements and Deaths in Service .......2.. 41 Civil Service Retirements. .......0s0e.e.e-eces 42 Total Retirements by System. . 2... 6 2 se eee - 43 Average Age of Retirees, . 1... se ew ee wes - 44 Retirements by Age Groups... 2... 2. ee eee oe » 45 Retirements by Grade: sows. ww we Se eA ee - 47 Percent of Retirements at GS-12 and above. Bi. en Neiene » 48 Age and Grade Comparisons. .......+se.se-eaee » 49 Age Group Comparisons. . . 2... «eee ee nee » 290 Operations Career Service Personnel. ....... easy Comparative Age Distribution. ........ee-e 2 292 FINDINGS AND CONCLUSION. . 2... 2 ee ew ew we St cde 253 TGS 6 teenie, ie, ag a Se ee eS Si ee wl! Sb Edy a eS gos MIS POWs “ghia ca Wa eee Be 7k ay es ‘wb at hee, Ges E -ce. Jacede » 254 ii SECRET 2 ai a a ae am: eam N oO x< —_ ND on x —_ ~ Retirement Act for Certain Employees. ' Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 SECRET PART I INTRODUCTION WHY THIS STUDY WAS MADE This report is primarily a review of the manner in which the Central Intelligence Agency exercises its discretion to designate employees for participation in the Central Intelligence Agency Retirement and Disability System (CIARDS). It is the twelfth in a series of reports which the Agency submits annually to appropriate Committees of the Congress on its administration of the Central Intelligence Agency In 1964 the Congress enacted the Central Intelligence Agency Retirement Act for Certain Employees (50 U.S.C. 403). That Act authorized the Director of Central Teéldigence to establish a retirement system that would apply to some, but not all, Agency employees. The law provided very broad guidelines under which the Director could exercise discretion to designate employees for participation. The Agency, by regulation, has made these guidelines more specific. An employee must perform at least sixty months of qualifying service to be eligible for participation in CIARDS. All overseas service is qualifying regardless of location or of type of duties performed. Overseas means outside the fifty States, the District of Columbia, Puerto — Rico, the Virgin Islands, and Guam. Domestic service is qualifying only if it meets rigid requirements involving hazard or the exercise of 1 SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA- RDP90G01353R001800010006- 0 25X11 25X11 SECRET tradecraft,’or if it is so sensitive or specialized that an employee cannot disclose his or her duties in order to qualify for other employment. after retirement. During the hearings that led to enactment of the CIA Retirement Act, both the Congress and the Agency made it clear that not all employees would participate in the new retirement system. It was generally understood that the system would. cover about one-fourth to one-third of all Agency employees. In 1976, in the course of a hearing on a pending Bill, HR 13615, some members of the House Armed Services Committee expressed concern that the agency might be designating mabe employees for participation in CIARDS than the Congress had intended. This concern was expressed in a directive to the Agency contained in the committee report on HR. 13615: "When the CIA Retirement Act was originally considered by Congress in 1964 particular attention was focused on Section 203 of the Act, which authorizes the Director to designate 'such Agency officers and employees whose duties are determined by the Director to be (i) in support of Agency activities abroad hazardous to life or health or (ii) so specialized because of security requirements as to be clearly distinguishable from normal government employment, hereafter referred to as participants, who shall be entitled to the benefits of the system.’ Essentially that provision was the basis for creating © a separate retirement system, and it was the intent of Congress that this system should apply to. the relatively small percentage of Agency employees who were actually subjected to these very special hazards. "During the course of consideration of this legislation there have been indications that in recent years there may have been deviations on the part of the Agency in administrating this separate system from a strict application of the provisions of Section 203 in designating officers and employees as. participants in the CIA Retirement system in line with the original intent of Congress when that system was created. ’ SECRET Declassified in Part - -Sanitized Copy Approved for Release 2012/08/07 : CIA- RDP90G01353R001800010006- 0 — — ‘ee eee a: Ga oe: _Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 —. | | a 25 X NO ol : . =< ap am —_ 7 of ax ye N oO x< —_ ~ NO Oo. x<m Ol —_ | ma SECRET "Accordingly, in the exercise of its oversight function the Committee has directed that the CIA conduct a careful analysis of the application of the qualifying provisions of Section 203 of the CIA Retirement Act in designating participants with reference to the special circumstances justifying their inclusion, and that the results of such analysis be reported to the Committee by the Director of Central Intelligence not later than October 1, 1976, and on an annual basis thereafter." In 1976 and 1977 reports were submitted to the House Armed Services Committee. Reports for later years were submitted to the House Permanent Select Committee on Intelligence, which now is charged with an oversight function with respect to the Central. Intelligence Agency and which has expressed a desire that annual reports be continued. SCOPE OF THIS REPORT This report covers the fiscal year beginning 1 October 1986 and ending 30 September 1987, Tt is intended primarily as a review of the discretion exercised by the Agency in designating employees for Participation in the special CIARDS system, with particular reference to the law,. the eeauitartona: and Agency policy as established by decisions made over the years. Attention is focused on the handling of employee requests for approval of domestic service as qualifying for CIARDS. Statistical tables reflecting the end results of the Agency's Operation of CIARDS show clearly that the system is consistently Maintained for a limited number of Agency employees. Although not intended to be a complete historical presentation of CIARDS, the report deals briefly with some of the events during the year that affect administration of the System. SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 . SECRET HOW THE STUDY WAS CONDUCTED The writer had unrestricted access to all files and records | containing information related to the Agency's administration of CIARDS. This includes individual case records and the minutes, as well as the verbatim transcripts of meetings of the CIA Retirement Board. The recorded information was supplemented by personal contact with Agency officials and employees whose duties and responsibilities include aspects 25X1 of CIARDS Administration. HOW THE REPORT IS ORGANIZED | The report consists of five parts: | PART ‘I eceeesoees INTRODUCTION PART Picea cute QUALIFYING SERVICE “PART TL seul Gane .. REVIEW OF 1987 PART IV ....ecee+~- STATISTICAL DATA 25X1 PART V .eeeeeeeee- FINDINGS AND CONCLUSION Lo, eee gS BIS Rea eT Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 ve ia wa } => — , NO = N oO x< —_ Se. o — N Oo x — Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 SECRET PART II QUALIFYING SERVICE The Central Intelligence Agency Retirement Act of 1964 for Certain Employees contained very broad criteria for determining what service is qualifying for participation in this special retirement system. Section 203 reads in part as follows: "The Director may designated from time to time such Agency officers and employees whose duties are determined by the Director to be (i) in support of Agency activities abroad hazardous to life or health or (ii) so specialized because of security requirements as to be clearly distinguishable from normal government employment, hereafter referred to as participants, who shall be entitled to the benefits of the system." These criteria have been refined and made more specific by Agency Regulation which now reads as follows: 5 “SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 25x1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 25X11 25x1 of) 25x ~@& @ . 2 g 25X11 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 | ak aves St pia i see : in Part - Sanitized Copy Approved for elease 2012/08/07 : CIA-RDP90G01353R001800010006-0 ot SECRET NO Oo es ay 25X41 x 25X11 = f i | / H ——— From 1964 to 1976 employees were designated for participation in CIARDS with as little as eighteen months of qualifying service. They were later removed unless they continued to perform additional months of qualifying service. ‘The large majority, 86 percent, of the employees who have retired since CIARDS began have had more than 60 months of service overseas. Another 4 percent, had exactly 60 months overseas. Disability retirees have only been included in the tabulations after 1984 Since in earlier years they may have been able to retire under CIARDS with less than 60 months of service, The accumulated total retirees do not include employees who became disabled before 1985. ' Another 8 percent, had some months of service overseas and used enough months of qualifying domestic service to bring the total to Only of the retirees in the 23 years since CIARDS began have retired using only domestic service as qualifying. 30 years and 7 months overseas. employees the provisions of CIARDS. Of these batapess have served overseas for more than 20 years; for more than 25 years; one retiree holds the Agency record of retired during the year under 91 percent had completed 60 or more months of service overseas, and used no domestic service to qualify. “SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 | - Declassified in Part - Sanitized Copy Approved for Relea 25X11 25X11 25X11 25X11 25X11 25X11 25X11 25X11 25X11 25X11 25X11 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 these employees SECRET employees used domestic service to qualify. of had some overseas service. The employees who used a combination of overseas and domestic service, had an average of 33 months overseas. Only employees, or 2 percent of the retiring employees, had no overseas service but met the requirements by having completed 60 months of qualifying domestic service. The use of domestic service for retirement under CIARDS does not vary greatly from year to year. Last year, FY 1986, service to qualify, and of those only retirees used domestic had no overseas service. Those who used a combination of overseas and domestic had an average of 39 months overseas. During 1987, were approved. ~-SECRET employees applied to the CIA Retirement Board for participation in CIARDS based at least in part of domestic service. All se 2012/08/07 : CIA-RDP90G01353R001800010006-0 az | = bey = — oma au. iy ray ts ‘om _ Pay ae . in Part - Sanitized Copy Approved for Release 201 2/08/07 : CIA-RDP90G01353R001800010006-0 a ' SECRET 25X1 The Board has approved 76 percent of the applications for Bcd domestic service that it has considered since CIARDS began. Of the 26x disapproved, have appealed. -The finding of the CIA Retirement Board 25x1 has been reversed on 5 times. | | Additional data on qualifying service are shown in TABLES A through G 25X11 that follow. 9 SECRET | —s- Decclassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 25x11 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 ~@& V4 Next 6 Page(s) In Document Denied Pod Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 “SECRET REVIEW OF 1987 | The Fiscal Year 1987 was relatively uneventful so far as changes affecting designations under Section 203 are concerned, but a major a | ; change in the benefits for employees hired since 1983 was implemented. 25X11 r . The CIA Retirement Board continued to function effectively despite 25X1 some turnover of both Members and Staff. There are no changes in law, regulations, or Agency policy that will affect the exercise of discretion to designate employees under Section N oO x; —_— 203 or to determine what service is qualifying. The percentage of Agency employees who are participants in CIARDS continued to drop and reached a new low of 16.6 percent as of 30 = = f September 1987. This compares with participation of 34.6 percent in Oren O xx —_ 1974. The Central Intelligence Agency Spouses Retirement Equity Act of 1982 has not yet been amended to recognize certain more liberal provisions enacted in 1984 for employees who are under the Civil Service Retirement _— ot System. The Agency has prepared proposed legislation, to be introduced Lomas d NO oO x< —_ in 1988, that would amend CIARDS to be consistent with CSRS. Annuitants will receive a cost-of-living adjustment of 4.2 percent, effective 1 December 1987 and first reflected in check issued in January N oO x< —_ 1988. N es 17 SECRET =a 7 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA- RDP90G01353R001800010006- 0 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 25X11 oOo ow RG A landmark change in the retirement system resulted from the introduction of Social Security coverage for employees hired since 1983, A new retirement system, the Federal Employees’ Retirement System (FERS), now provides benefits for Federal snpieyees who also have Social Security coverage. In the future Agency employees designated under Section 203, who aieoears covered by Social Security, will receive benefits from FERS. The designated employees will receive benefits under the FERS Special provision of FERS. Employees who are in CIARDS, or are currently in the Civil Service Retirement System (CSRS) but will eventually be designated to CIARDS, have had an opportunity to transfer to FERS since 1 July 1987. The open season will close on 31 December 1987. The open season presented special problems to Agency employees who did not have the 60 months of qualifying service but might expect to qualify in che future, Their immediate choice was between CSRS and FERS but che. doneeteah choice might be between CIARDS and FERS Special. Unfortunately, in many cases, CSRS might be better than FERS but FERS Special might be better than CIARDS. And, these employees will not have a chance to revisit that decision when and if they accumulate 60 months of qualifying service. The Agency is very concerned about the fact that employees are being called on to make a lifetime decision without knowing whether they will eventually accumulate the 60 months of qualifying service. This problem could be solved by permitting employees to make a second election within Six months of the time that they receive the 60 months of qualifying 18 SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 es . i oa =a) ee me y a - i - ‘ a : , . n . . £3 = ae | 4 oo in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006- B a SECRET a service. The same mechanism is already in place for employees who return im. to the government after 1987 with more than five years of service. mm. Accordingly, the Agency is preparing a legislative proposal to correct this problem. _ . One result will be that there may be less reason for employees to decline Section 203 designation. Currently employees sometimes prefer CSRS over CIARDS because there is a higher limit on the maximum benefit or because there is no mandatory retirement age in CSRS (the CIARDS age _———, ye ‘is 60). Under FERS Special there will be no maximum benefit, but there will still be a mandatory retirement age. Employees will. have to | contribute 0.5 percent of pay more for FERS Special than for FERS, but the potential benefit is higher by 14 percent of high-three pay. CIARDS is only higher than CSRS by 3.75 percent of high-three pay. N we 19 “SECRET a Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA- RDP90G01353R001800010006- 0 25X11 25X11 25X11 25X11 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 | Ro i CIA RETIREMENT BOARD nes the CIA Retirement Act was passed in 1964, the Director of Central Tabet genes delegated to the Director of Personne! authority to act for him in a number of areas of administration of the new retirement system. These include authority to: (a) determine what services of employées are qualifying for CIARDS participation; (b) designate employees for participation, and (c) approve retirements under CIARDS. : The CIA Retirement Board was established in 1964.to assist the Director of Personnel in exercising authority delegated to him. Technically the CIA Retirement Board does not make final decisions on ’ CIARDS matters, but makes recommendations that become decisions when approved by the Director of Personnel. The Director of Personnel appoints a Chairman and four other members | of the Board. Each member is a senior official of the Agency, and each represents a Directorate. ; The Board is assisted by staff consisting of | (a) a Legal Advisor _(b) a Technical Advisor | (c) an Executive Secretary, and (d) a Recording Secretary who produces verbatim transcript of the proceedings of each meeting. All of the staff members attend Board meetings but do not have a vote. 20 | SECRET : . ——_ be on a — , e Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA- RDP90G01353R001800010006- 0 SECRET The most difficult task assigned to the CIA Retirement Board is the 5 1 | determination of whether a period of service is qualifying for CIARDS | purposes, — This requires a knowledge of the law and the regulations as | well as some familiarity with ie individual. cases have been decided over | the 23 year history of the system. Turnover can be a substantial problem — - for an advisory board dealing with highly technical subject matter with joe which new Members have little or no background Se experience. aa During the fiscal year that ended 30 September 1987, two Members were i replaced. The Board now consists of a Chairman appointed in May of 1987 | and four other Members appointed in August 1983, April 1984,- July 1986 25X14 and December 1986. . 1 The Director of Personnel and one Member of the Board are participants in CIARDS, Snes cis Chairman and the other three Members 25X1 | are in the Civil Service Retirement System. The current Executive Secretary was appointed in FY 1983, the current Legal Advisor was appointed in FY 1985, and the current Recording Secretary has assisted the Board for at least the past 12 years. The -— om i oO x< —_ Technical Adviser was replaced during FY 1987. fs a x : q i 4 y i > al 21 SECRET cs Bedlassitiad in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 25X11 25K1 25X11 25X11 25X11 SECRET ACTIONS OF BOARD The CIA Retirement Board held six regular meetings during the year, ranging in length from 30 minutes to two hours and thirty-five minutes. Total Board meeting time was six hours and fifteen minutes. Recommendations to Director of Personnel resulted in the following actions: designations for CIARDS participation domestic service cases allowed retirements. In most cases, the designation has become routine because 23 years have elapsed since the enactment of CIARDS; and it has been 11 years since the change to designation only after 60 months of service. For each period of overseas service, a form is submitted to the _ Qualification Section for maintaining records of total overseas service performed by Agency employees. For.PCS overseas periods, the overseas service is the elapsed time between the beginning and ending date of the PCS duty. For TDY, credit is given from date of arrival at post to date of departure from post. With one exception, the designation is based on the overseas location of the PCS or TDY assignment. The exception, implemented in 1986, is to permit full-time overseas service for employees serving as "Rovers." These employees spend over 90 percent of their time overseas, 22 GECRE®? | Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 am _ is é ia i . a n _ ae ‘ ; < . ; ‘ : . { : = ae in Part - Sanitized Copy Approved fal Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 SEC RET » oe but since they rove among different posts for relatively short periods, their official station is designated to an "overseas undetermined" category. The location of duty of the rovers will be monitored by the m= N oO x< —_ Agency to assure that the proportion overseas remains the 90 percent. The overseas service is accumulated by computer, and when it totals more than five years is reported to the Executive Secretary of the = om Board. The Executive Secretary reviews the case for satisfaction of other criteria and then prepares a list for routine approval at the succeeding Board meeting. g P on . = <m Employees who need domestic service to meet the 60 months criteria follow a different procedure. The employee prepares a request for certification and channels the request through the employee's office head and head of the Directorate who has career responsibility for the —_ om Position, to the Director of Personnel. The Director of Personnel sends the request to the Executive Secretary who then reviews the case to make sure that all domestic service is supported by the facts of the case and that any overseas service is identified. These cases are then presented N 1 x< —_ to the Board for review and approval or disapproval. Since the designations based on 60 or more months overseas have 25X1 become routine, the focus of this report is on the employees who have . Fin) been designated with less than 60 months overseas. Pe . In FY 87 there were no new designations based solely on category (b) | - in support of Agency activities abroad requiring a substantial Hee to 25X1 life or health. of the cases involved some category (b) services. 25X1 | | } ao * | 23 7 : | ‘SECRET ___ ~ Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 ee ee) One case involved some category (d) service. Category (d) is met if the duties were so sensitive as to forbid disclosure. As a Seeniiey the employee cannot include his or her primary qualifications on a Summary of Agency Employment (SAE), and as a result will find it difficult or impossible to obtain a comparable position outside the Agency. In these cases the Board is provided with a finding that the employee's duties cannot be disclosed, and in most cases, can look to similar precedents. | A review of the discussion and: selected case files confirms that there is 25X11 clear support for these designations. 25X11 24 SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 _ : . : M SECRET pense! in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 =. ~ the proportion has been established as 70 percent. The- Board relies on the review process ‘to establish he validity of the description of the service being claimed as qualifying service. For instance, the proportion of domestic earinee stated as being qualifying is enue the employee's office head and the head of the Directorate. A final check is performed by the Executive Secretary. The facts of the case can usually be supported by the periodic performance _reviews in the employee's file. In one category, DCI Protective Staff , One of the duties of the Executive Secretary is to make sure that the requirements are met. A review of the files and discussions with the Executive Secretary confirmed that these conditions were met. 25 SECRET _ ~Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 Declassified in Part - Sanitized Copy Approved for Peete ee ie CIA- RDP90G01353R001800010006- 0 CHANGES IN THE CIA RETIREMENT ACT The Central Intelligence Agency Retirement Act for Certain Employees may be amended in either of two ways: 1. Directly by enactment of an Act of Congress, or 2. Indirectly by enactment of an amendment to the Civil Service Retirement Act, followed by issuance of an Executive Order to | 25xX1 conform the CIA Retirement Act to the revised provisions. | The final step in the process of amendment is to revise Agency 25X1 Regulations to reflect the new provisions. 5 i | a ] | I a I 26 z "8.5 CRE? | a - Declassified in Part - Sanitized Copy sie for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 NO NO a we oe oe eS oe | Declassified in Part - Sanitized Copy entice for Release 2012/08/07 : CIA- RDP90G01353R001800010006- 0 SECRET EXECUTIVE ORDERS There were no Executive Orders to conform CIARDS to legislation { q a. an enacted to amend the Civil Service Retirement Act issued during fiscal —_ year 1987. _ The most recent Executive Order was Executive Order 12485 issued 13 July 1984, and this order brought CIARDS up to date with all CSRS —_ "amendments at that time. 27 “SECRET : 5 ), a ____Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 25X11 25X11 3.2 percent effective 1 December 1987. Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 SECRET _ REGULATIONS Agency regulations pertaining to CIARDS were completely reissued 27 August 1984 to include clarifying and technical changes and to reflect amendments to the law effected by eight Acts of Congress and two Executive Orders. ANNUITY COLAS During fiscal year 1987 there were no changes in the provisions of law affecting cost-of-living annuity adjustments. The amount of COLA for any year is the increase of the auaraee Consumer Price Index (CPI) for the third calendar quarter of that year over the average CPI for the third calendar quarter of the preceding year. The average is obtained by addition the CPI for the months of July, August, and September and dividing che cui by three. The increases are granted effective December 1 of each year. Annuitants under CIARDS will receive a 4.2 percent increase effective 1 December 1987 and first paid in annuity checks issued in January of 1988, Most annuitants indee FERS Special will receive an increase of CPI less 1 percent on the part . ‘of the annuity earned after transferring to FERS. This increase will be 28 “SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 a ee ee ee ee ee oe ee ee ae Declassified in Part - Sanitized Copy oe for Release 2012/08/07 : CIA- RP Rep’ lepok Oe tsoooronee 0 SECRET ao wa PART IV 2] STATISTICAL DATA The tables which follow, most of which are self-explanatory, reflect the end results of the Agency's administration of CIARDS. In some instances statistics for the Fiscal Year 1987 are augmented by figures for other years for purposes of comparison or to show total experience NO = since the System began. PARTICIPATION IN CIARDS While not prescribed by law or regulation, Congress and the Agency intended to limit participation in CIARDS or FERS Special to approximately 30 percent of employees. NO — All new employees of the Agency are under the Federal Employees' Retirement System or the Civil Service Retirement Systcl until they eae : . : on pana Sa eee ate aS oe oo No — qualify for participation in CIARDS or FERS Special Category, From 1964, when CIARDS was established, until 1976 participation by . employees required as little as 18 months of qualifying service. Employees were later removed from participation unless they performed additional qualifying service. Under this policy, participation grew q ; me. until it peaked at 34.6 percent in 1974. No. oO x< —_ In 1976 the regulations were revised to require 60 months of qualifying service before an employee may be designated for i e participation. Once designated an employee continues to be a participant N oO x —_ unless he or she elects to revert to coverage under CSRS or FERS. 29 “SECRET __._Deciassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 25X11 25X1 25X11 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 ee oe Participation has dropped sharply since the regulations were changed in 1976. As of 30 September 1987, only 16.6 percent of Agency employees are participants in CIARDS. This is the lowest participation since the original designations were processed in 1965. From 1970 through 1976, there were an average of _fesignations a year. From 1977 through 1981, the number of designations averaged a year. This sharp drop reflected the fact that few employees would have accumulated 60 months within the five years after the change in policy. Since 1981 there have been an average of designations a year. This increase over the earlier average of reflects a return to normality following the artificially depressed years of 1977 through 1981. There should be some increase in the number of designations in the future as the added hires which have increased Agency strength since 1981 move through the 60 months needed to qualify. However, there should not be any major long-term change in the average number of designations, because the basic 60 month rule has not changed since 1976. See TABLE 1.. CHANGE IN NUMBER OF CIARDS PARTICIPANTS There have been an average of retirees and deaths-in-service in each of the last five years, compared to the average of designations a year in the same period. Table 1 shows that the number of participants has held steady over the last five years; with in 30 September 1982 and on 30 September 1987. Because of lags in reporting and the 30 -SECRET y F | Ree aaa Se eee S, z Be pe one see in Part - Sanitized Copy Approved for Relea se 2012/08/07 : CIA-RDP90G01353R001800010006-0 SECRET ; a fact that the data do not include terminations other than retirement, Table 1 data do not directly correspond to the net change in designations, but the trends of net changes and total CIARDS participants NO = oa ‘ oOo = —_ is consistent. CIARDS RETIREMENT ELIGIBILITY Fifty-three percent of current CIARDS participants are eligible to retire. This includes 29 percent who could retire voluntarily at their own option, and another 24 percent who would be entitled to immediate annuity if euiciuneariis separated. The remaining 47 percent have not met eligibility requirements for either voluntary or involuntary N On x< —_ retirement. See TABLE 3. RETIREMENTS IN FISCAL YEAR 1987 More Agency employees retired under the CIA Retirement and Disability System than under the Civil Service Retirement System. The Directorates of Operations and Administration provide 82 percent of CIARDS retirements, but only 57 percent of retirements under CSRS. See — TABLE 4. The primary argument for establishment of CIARDS was the perceived need to retire certain employees at ages earlier than those experienced undér CSRS. CIARDS still meets that need was indicated by an average age of 53.7 years at retirement, compared with the CSRS average age of 59.4 years. 31 SECRET : i, : = ee Se se ek _ Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 25X11 25X11 25X11 25X11 25X11 25X11 SECRET Of all CIARDS retirements 2.0 percent were under age 50, 33.5 percent were at the age 50, 34.0 percent were at age 51 through 55, and 30.5 percent were age 56 or older. See TABLE 5. There were 23 mandatory age retirements under CIARDS in FY 1987. Their service ranged from 17 years to 38 years. retirees, or 85 percent of the total retired voluntarily. There were three disability retirements, two involuntary retirements and one who retired with rights to a deferred annuity. Eighty-eight percent of CIARDS retirees had completed 25 or more years of service, and 55 percent had 30 years or more. CIARDS retirees in 1987 averagéd 29.7 years of service. See TABLE 6. Employees who are participants in CIARDS may retire voluntarily if. they have attained age 50 and have at least 20 years of service. All of those who retired in FY 1987 under this provision had more than the’ required 20 years. The retiring employees who were age 50 had an average of 28.2 years of service. See TABLE 7. RETIREMENTS FROM 1965 to 30 SEPTEMBER 1987 CIARDS retirements have totalled Since the program began. As might be expected, the majority of retirements have been voluntary: or 71 percent have been voluntary. 12 percent have been involuntary, 8 percent were mandatory for age, 9 32 SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 s. in Part - Sanitized Copy Approved for Release 2012/08/07 - CIA-RDP90G01353R001800010006-0 25X11 25x11 SECRET percent were for disability. employees (less than one percent) were not eligible for immediate annuity when separated, but later qualified for deferred annuities. In additions,| _|CIARDS participants died in service. See TABLE 8, Of the employees who have retired under CIARDS, were still receiving annuity as of 30 September 1987. survivors of CIARDS employees and retirees were also receiving annuities at the end of the fiscal year. From 1965 through 1987, Agency employees retired under the Civil Service Retirement System... This is more than CIARDS ‘retirements for the same period. CSRS retirements break down into 48 percent under the optional provision, 25 percent for discontinued service, 17 percent for disability, and 10 percent mandatory for age. There is no longer a mandatory retirement provision under CSRS. See TABLE 9. About half of retirements are under CIARDS. In the last two years, more. employees had retired under CIARDS than under CSRS. While only 16.6 percent of Agency employees are CIARDS participants, 52 percent of Agency retirements in the fiscal year were under CIARDS. See TABLE 10. For Fiscal Year 1987 the average employee retiring under CIARDS was almost six years younger than the average CSRS retiree. The objective of maintaining a young and vigorous work force of employees assigned to carry out the principal mission of the Agency is still being served well by earlier retirements under CIARDS. See TABLE ll. 33 SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 25X1 25X11 25X11 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 eee ee In Fiscal Year 1987, 35 percent of CIARDS retirees were age 50 and under, 52 percent were age 51 through 59, 12 percent were 60 and over. A total of 53 percent of CSRS retirees had reached age 60 or over. See TABLE 12. Of all Agency employees retiring in FY 1987, 77 percent were at GS-12 or above, and 70 percent were at GS-13 or above. Eighty-six percent of CIARDS retirements were at GS-12 and above; 84 percent were at GS-13 and above. See TABLES 13 and 14, AGE COMPARISONS See TABLES 15, 16, 17, and 18 for comparisons of age and grade for active Agency employees including data for past years and projections for the future. 34 SECRET 25X11 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 ~& © Next 17 Page(s) In Document Denied Pod Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 eo = Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 — _retirement under CIARDS during 1987 was 53.7 years. eclassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 SECRET PART V FINDINGS AND CONCLUSION - FINDINGS 1. The number of Agency employees designated as participants continues to drop, reaching a new low of 16.6 in Fiscal Year 1987. Under current practice in staffing and designations, participation in future years will never exceed the thirty percent originally contemplated by. the Agency and the Wonarese as the maximum proportion who should participate.. "as About half of current retirements by Agency employees are under CIARDS. Only one in six Agency employees are under CIARDS; -but 52 percent of retirements in the fiscal year were under CIARDS. 3. An important justification for the CIARDS system is the need to retire certain employees at ages’ younger than are hormal ly experienced under the Civil Service Retirement System. The success of this policy. is shown by the fact that retirements under CIARDS averaged nearly six years younger than those under Civil Service Retirement. The average age of 4. During 1987 there were no changes in law, r regulations, or Agency policy that will have any bearing on. the Agency' Ss discretion to designate employees for participation in CIARDS or the FERS Special. 53 SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 SECRET. CONCLUSION The Agency continues to administer the Central Intelligence Agency Retirement and Disability System as a system for a limited number of employees, as intended by Congress and by the Agency when the enabling 25X1 _ legislation was enacted in 1964. The CIA Retirement Board continues strict application of the law and the regulations when determining what service is qualifying for CIARDS purposes and observes Agency policy as established by precedent 25X1 ‘decisions. Extensive review revealed no deviations or exceptions from law, the regulations, or established Agency policy during the fiscal year ending 25X1 ; ‘30 September 1987. 54 SECRET ® | | | : a ie | Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0 Ow SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/07 : CIA-RDP90G01353R001800010006-0