eee 
| 
'~ 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 — 
March 18, 1986 
AMENDMENT TO H. R. 3660 
TO ESTABLISH A NEW SUPPLEMENTAL RETIREMENT SYSTEM 
FOR MEMBERS OF THE FOREIGN SERVICE 
OF THE UNITED STATES 
Redesignate title 
IV as V and immediately following 
title 
Ill, insert 
the following: 
TITLE IV--FOREIGN SERVICE 
RETIREMENT 
SEC. 
401. 
SHORT TITLE. 
This title may be cited as the 
Foreign Service Supplemental Retirement System Act of 1986. 
SEC. 
410. 
REDESIGNATION OF CERTAIN PROVISIONS OF THE 
FOREIGN SERVICE ACT OF 1980. 
(a) Chapter 
8 of title 
I of the Foreign Service 
Act of 
1980 
(94 Stat. 
2102; 
22 U.S.C. 
4041 et seq.) 
is amended-- 
(1) by striking out the caption of such chapter 
and 
inserting 
in lieu thereof 
of the following: 
"CHAPTER 8--FOREIGN SERVICE 
RETIREMENT AND DISABILITY 
"SUBCHAPTER 
I--FOREIGN 
SERVICE 
RETIREMENT AND DISABILITY SYSTEM" 
(2) by striking out “this chapter" each place it appeérs 
and inserting 
in lieu thereof 
"this subchapter"; 
and 
(3) by inserting 
"under 
this subchapter" after 
“payable 
from the Fund" each place 
it appears. 
(b)(1) Section 804(3) 
of such Act 
(94 Stat. 
2103 
; 
22 U.S.C. 
4044(3)) 
relating to the definition of “court” 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
| 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 18, 1986 
-?2Q- 
is amended by striking out “or of the District of Columbia" and 
inserting 
in lieu thereof 
the following: 
°, the District 
of 
Columbia, 
the Commonwealth 
of Puerto Rico, 
Guam, 
the Northern 
Mariana 
Islands, 
or the Virgin Islands, 
and any Indian court 
as 
defined by section 201(3) 
of the Act entitled 
'An Act to 
prescribe penalties 
for certain acts of violence 
or 
intimidation, 
and for other purposes’, 
approved April 
ll, 1968 
(25° U.S... 
F301(3)7 
82 Stat. 
777" « 
(2) Section 808(d) 
of such Act 
(94 Stat. 
2110; 
22 
U.S.C. 
4048(d)) 
is amended-- 
(A) by striking out 
"such subchapter" each place it 
appears 
in the second and third sentences 
and inserting 
in lieu 
thereof "subchapter 
I of such chapter 
8"; and 
(B) by striking out "Act each place it appears and 
inserting 
in lieu thereof 
“subchapter”. 
(3) Section 809(e) of such Act 
(94 Stat. 
2111; 
22 U.S.C. 
4048(e) 
is amended by striking out 
"Act" each place 
it appeers 
and inserting 
in lieu thereof 
"subcherter®. 
(c) Section 
809(a) 
of such Act 
(94 Stat. 
2111; 
22 
U.S.C. 
4049(a)) 
is amended by striking out 
"Act ane inserting 
in lieu thereof 
“subchapter”. 
(d) Add the following at the end of paragraph 
(10) 
in section 
804 
(94 Stat. 
2104; 
22 U.S.C. 
4044(10)) 
of such Act 
and at the end of subsections 814(a)(1) and 
(b)(1) 
(94 Stat. 
2113 and 2115; 
22 U.S.C. 
4054(a)(1) 
and (b)(1), 
respectively), 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
————== Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 
18, 1986 
ah 
SS) ee 
and before the last sentence 
in subsection 815(i) 
(94 Stat. 
21173; 
22 U.S.C. 
4055(i1)) 
of Such Act: 
"(The 
‘creditable service’ 
referred 
to in the preceding 
sentence means service that 
is creditable 
under both 
subchapters 
I and 
II of this chapter.)”. 
SEC. 
411. 
CONTRIBUTIONS 
TO THE FOREIGN SERVICE 
RETIREMENT 
AND DISABILITY 
SYSTEM. 
Section 
805 of the Foreign 
Service 
Act of 1980 
(94 Stat. 
2104; 
22 U.S.C. 
4045) 
is amended-- 
(1) by inserting 
"Except 
as provided 
in subsection 
(g),” 
before 
"7 percent" 
in the first sentence of subsection 
(a); and 
(2) by adding at the end eherese the following new 
subsection 
(9): 
"(g) Effective with respect 
to pay periods 
peqinning after December 
31, 
1986, 
in administrating 
this 
section with respect 
to an employee 
or member 
of the Service 
whO was 
a participant subject 
to this subchapter before January 
1, 1984, 
and whose service-- 
"(A) 
is employment 
for 
tne purposes 
of titie 
II of the 
Social 
Security 
Act anc chapter 
21 of the Internal 
Revenue 
Code 
of 1954, 
and 
*(B) 
is not creditable service 
for any purpose 
under 
subchapter 
11 of this chapter 
or 
chapter 
84 of title 
5, United. 
States 
Code,-- 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
| 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 18, 1986 
- 
@- 
contributions 
to the fund and interest 
thereon shall be 
computed as 
if 5 Section 8334(k) 
of title 
5, United States 
Code, 
were applicable, 
unless 
such an individual 
has made 
an 
election Gescribed 
in paragraph 
(4) thereof.". 
SEC. 
412. 
OFFSET OF ANNUITY BY THE AMOUNT OF 
SOCIAL SECURITY BENEFITS. 
Section 
806 
of the Foreign Service 
Act of 1980 
(94 Stat. 
2106; 
22 U.S.C. 
4046) 
is amended by adding 
at the end thereof 
the following 
new subsection: 
"(m) 
The annuity or survivor 
annuity payable 
to any 
individua] 
under 
this subshapter beginning with the month 
in 
which such individual attains the minimum age for old age 
benefits, 
or first becomes eligible, 
or would upon proper 
application become eligible 
for disability 
or survivor benefits 
based 
on the service of any individual 
under 
this subchapter 
shall 
be computed 
as 
if section 
8349 
of title 
5, United States 
Code, were applicable, 
unless 
the individual 
on whose service 
the benefit 
is based has mace 
an election described 
in 
subsection 
(da) thereof.". 
SEC. 
413. 
TREATMENT OF CERTAIN RECALL SERVICE. 
Section 
823 of the Foreign Service 
Act of 1980 
(94 Stat. 
2122;22 U.S.C. 
4063) 
is amended 
by adding 
at the end thereof 
the follewine 
new subsection: 
*(c) 
If an annuitant becomes 
subject 
to subchapter 
II 
of this chapter by reason 
of recall service-- 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
| 
—~———~__ 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 
18, 1986 
et 
ae 
"(1) subsections 
(a) and 
(b) shall not apply to such 
annuitant: 
and 
"(2) section 
824 shall apply to the recall] service 
as if 
such service were reemplooyment.®*. 
SEC. 
414. 
REEMPLOYMENT, 
Section 
824 of the Foreign Service 
Act of 1980 
(94 Stat. 
2122; 
22 U.S.C. 
4064 
is amended 
to read as follows: 
"SEC. 
824 
REEMPLOYMENT.--(a)(1)(A) 
Except 
in the 
case of an annuitant who makes an election under subsection 
(b), if any employee 
or member of the Service who has retired 
and 
is receiving 
an annuity under this subchapter 
or subchapter 
Il of this chapter becomes employed 
in an appointive 
or 
elective position 
in the Government, 
payment of any annuity 
under either subchapter 
to the annuitant 
terminates effective 
on 
the date 
of the employment 
and the reemployment service 
is 
considered coverec sérvice under 
the rules 
of the system under 
which 
the éppointment 
is made. 
"(B) 
If annuity 
is terminated and the individual 
becomes 
covered uncer 
the same retirement 
system from which 
annuity 
is terminated pursuant to paragraph 
(A), the individual 
shali 
be entitled 
to a redetermination 
Bs -22Ghis under 
that 
system upon termination 
of the employment. 
"(C) 
If annuity 
is terminated and the individual 
becomes covered under another contributory retirement system 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
| 
P 
| 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 i 
March 18, 1986 
- 
6 - 
for Government employees pursuant 
to savagreph (A), 
the 
individual 
shall 
be entitled 
to an stanney under 
that system 
commencing 
on 
the first 
of the month following termination 
of 
the employment. 
Such annuity shall be computed under sections 
8415(a), 
8419 and 8420, 
as appropriate, 
of title 
5, United 
States Code, based on the reemployed salary and service. 
In 
addition, 
the individual 
shall 
be entitled 
to a resumption 
of 
any annuity terminated by reason 
of the employment. 
"(b)(1) 
An employee or member 
of the Service who is 
entitled 
to an annuity under 
this subchapter 
or subchapter 
II 
of this chapter 
and becomes employed 
in an appointive 
or 
elective position 
in the Government 
on a part-time, 
intermittent 
or temporary basis may elect to continue 
to 
receive either 
or both annuities 
as provided 
in this 
subsection. 
*"(2) 
The total annuity payable under this chapter 
to an 
annuitant making 
an election under paragraph 
(1) shall 
be 
reduced Guring the part-time, 
intermittent 
or temporary 
employment 
referred 
to in such paragraph 
as necessary 
to meet 
the requirements 
of paragraph 
(3). 
*(3) 
The sum of -- 
"(A) 
the total annuity payable under 
this chapter 
to an 
annuitant making an election under paragraph 
(1), and 
"(B) 
the annual 
rate of pay payable 
to the annuitant 
during the part-time 
or temporary employment referred 
to in 
such paragraph. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 18, 1986 
oh 
« 
May not exceed, 
in any year, 
the highest 
annual] 
rate of pay 
which 
is payable during such year 
for full-time employment 
in 
the position 
in which 
the annuitant 
is employed. 
*(4) 
Upon termination 
of the part-time, 
intermittent, 
or 
temporary employment referred 
to in paragraph 
(1), payment of 
the full annuity of an annuitant 
of an annuitant 
who has made 
an election under paragraph 
(1) of this subsection 
shall 
resume. 
"(c) The amount of annuity which 
has been terminated 
or 
reduced under 
this section by reason of the reemployment 
of the 
annuitant and is resumed under this section shall be the amount 
of the annuity which would have been payable 
if the annuitant 
had not accepted the reemployment. 
The amount 
of an annuity 
resulting 
from a redetermination 
of rights pursuant 
to 
subsection 
(a) shall 
not be less than the amount 
of an annuity 
resumed under 
the previous sentence. 
"(d) 
If an individual whose reemployed service 
is 
treated 
as covered service under subsection 
(@)(1)(A), 
dies 
while 
so reemployed, 
survivor 
benefits 
and lump sum benefits 
shall 
be paid under chapter 
84, of title 
5, United 
States 
Code, 
based on the reemployed salary, 
service 
and contributions, 
aé 
if the annuitant 
had resumed retired status 
on the dey of death. 
"(e) 
The annuity rights of any employee 
or member 
of the 
Service who 
is reemployed 
in the Federal Government 
shéll 
be 
determined under 
this section 
instead of section 
8463 of title 
5, United States 
Code. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
—~~—=—_ Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 ~ 
March 18, 1986 
- 
8 - 
"f) 
When any such retired employee 
or member 
of the 
Service 
is reemployed, 
the employer 
shall 
send 
a notice of such 
reemployment 
to the Secretary of State, 
together with all 
pertinent information relating 
to such employment, 
and shall 
pay directly to such member 
the salary of the position 
in which 
he or 
she 
is serving. 
*"(g) 
In the event 
of any overpayment 
under 
this section, 
such overpayment 
shall be recovered by withholding 
the amount 
involved from the salary payable 
to such reemployed member 
of 
the Service 
or from any other moneys, 
including annuity 
payments, payable under 
this chapter.". 
SEC. 
415. 
COMPARABILITY BETWEEN 
TEE CIVIL SERVICE 
SUPPLEMENTAL RETIREMENT SYSTEM AND THE FOREIGN SERVICE PENSION 
SYSTEM. 
. 
Section 
&27 of the Foreign Service 
Act of 1980 
(94 Stat. 
2124; 
22 U.S.C. 
4067) 
is amended by adding at the end thereof 
the following 
new subsection: 
"(c) The President 
shall maintain, 
under 
the same 
conéitions 
and in the same manner 
as provided 
in subsections 
(a) and 
(b) existing conformity between 
the Civil 
Service 
Supplemental Retirement 
System provided 
in chapter 
84 of title 
5, United States 
Code, 
and the Foreign Service Pension 
System 
provided 
in subchapter 
II of this chapter.”. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 18, 1986 
ot 
SEC. 
42]. 
FOREIGN SERVICE PENSION SYSTEM. 
Chapter 
8 of title 
1 of the Foreign Service 
Act of 1980 
(94 Stat. 
2102; 
22 U.S.C. 
4041 
et seq.) 
is amended by adding 
at 
the end thereof 
the following: 
"SUBCHAPTER 
JJ--FOREIGN SERVICE PENSION 
SYSTEM 
"SFC, 
851. 
Establishment.--(a) 
There 
is hereby 
established 
a Foreign Service 
Pension 
System. 
"(b)(1) 
Except 
as otherwise specifically provided 
in 
this subchapter 
or any other provision 
of law, 
all participants 
in the Foreign Service Pension System shall 
be subject 
to the 
provisions 
of chapter 
84 of title 
5, United States Code, and 
shall be treated 
in all respects 
as persons whose participation 
in the Civil Service Supplemental Retirement 
System provided 
in 
that chapter 
is required by its terms. 
"SEC, 
852. 
Definitions.--As 
used 
in this subchapter, 
unless otherwise specified-- 
"(1) 
the tern 
‘annuity’ 
means 
the nae which 
is 
described 
in subchapter 
I1 of chapter 
84 of title 
5, United 
States 
Code, 
anc is payable 
to @ participant; 
"(2) 
the tern 
‘court order’ 
has the same meaning given 
in section 804(4); 
"(3) 
the term 
‘dynamic assumptions’ 
has the same meaning 
as provided 
in section 
8401(9) 
of title 
5, United 
States Code. 
"(4) 
the term 
'Fund' means 
the Retirement and Disability 
Fund maintained by the Secretary of the Treasury 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
~ Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 ~ 
March 18, 1986 
-~ 10 
- 
pursuant 
to section 
802; 
"(5) 
the term 
'normal 
cost’ 
means 
the entry-age normal 
cost 
of the provisions 
of the System which relate 
to the Fund, 
computed by the Secretary 
of State 
in accordance with generally 
accepted actuarial practice and standards 
(using dynamic 
assumptions) 
and expressed 
as 
a level percentage 
of aggregate 
basic 
pay, 
and shall 
be usea 
to value 
the cost 
of the System 
for 
all purposes 
for which 
the cost 
of the System 
is required 
to be determined; 
"(6) 
the term 
‘participant’ 
means 
a person who 
participates 
in the Foreign Service Pension System; 
"(7) the term 
‘pro rata share’ 
in the case 
of any former 
spouse of any participant 
or former participant means 
the 
percentage which 
is ecual 
to the percentage 
that 
(A) the number 
of years during which 
the former spouse was married 
to the 
participant during the service 
of the participant which 
is 
creditable under 
this charter 
is of 
(B) the total 
number 
of 
years 
of such service, 
disregarding extra credit under section 
Sy es 
*"(§) 
the tern 
‘supplemental 
liabilityv' means 
the 
estimated excess 
of-- 
"(A) 
the actueriai present value 
of all future benefits 
payable 
from the 
Func under 
this subchapter, 
over 
*(B) 
the sum 
of 
-- 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-Q0066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 “~~ 
March 18, 1986 
- 
jl 
- 
*(i) the actuarial present value of deductions 
to be 
withheld 
from the future basic pay of participants pursuant 
to 
section 
855; 
*(ii) 
the actuarial present value of future 
contributions 
to be made pursuant to section 
856; and 
"(iii) 
the balance 
in the Fund attributable 
to the 
System on the date 
the supplemental 
liability 
is determined 
or 
to the contributions made under 
section 204(b) 
or 
205 of the 
Federal 
Employees' 
Retirement 
Contribution Temporary Adjustment 
act of 1983 (97 Stat. 1106; 5 U.S.C. 6331 note); and 
"(9) the term ‘System’ means 
the Foreign Service Pension 
System. 
"SEC. 
853. Participants.--(a) 
Except 
for persons 
excluded by subsection 
(b), 
(c), or 
(a), all members of the 
Foreign Service, 
any of whose eed after December 
31, 1983, 
is employment for the purpose 
of title 
II of the Social 
Security Act and chapter 
21 of the Internal Revenue 
Code of 
1954, 
who would, 
but 
for 
this section, 
be participants 
in the 
Foreign Service Retirement 
anc Disability System pursuant 
to 
section 
803 shall be participants in the Foreign Service 
Pension System. 
*(b) Members of the Service who were participants 
in the 
Foreign Service Retirement 
and Disability System on 
OF before 
December 
31, 1983, 
ana who have not had a break 
in service 
in 
excess 
of ] year since 
that date, 
are not made participants 
in 
the System by this section, without regard to whether 
they are 
subject 
to title 
II of the Social Security Act. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
ee 
| 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 18, 1986 
2.19. 
< 
*(c) Individuals who become members of the Service 
following 
a separation from Government employment during which 
they were subject 
for 
a total 
of at least 
5 years 
to the Civil 
Service, 
Foreign Service 
or other 
contributory retirement 
system for Government employees established prior to 1984 are 
not participants 
in the System. 
. 
*"(d) 
The Secretary may exclude 
from the operation of 
this chapter 
any member 
of the Foreign Service, 
or group of 
members, 
whose employment 
is temporary 
Or 
intermittent, 
except 
a member whose employment 
is part-time career employment. 
"SEC. 
854. Entitlement to Annuity.--(a) 
Any participant who retires voluntarily 
or mandatorily under 
section 
607, 
608, 
811, 
812 or 
813 under conditions authorizing 
an immediate annuity for participants 
in the Foreign Service 
Retirement 
and Disability System shall be entitled to an 
immediate annuity computed under section 815(d) 
of title 
5, 
United States 
Code. 
"b) A participant 
who is entitled 
to an immediate 
annuity under subsection 
(a) shall 
be entitled 
to receive 
an 
annuity supplement while 
the annuitant 
is under 
62 years 
of 
age. 
The annuity supplement shall 
be based 
on the total 
creditable service 
of the annuitant and shall 
be computed and 
increasecG 
in accordance with sections 
8421(b) 
ana 
(c) of title 
5, United States 
code. 
"(c)(1) Any participant may be retired under 
the 
conditions specified in section 
811 and shall be retired under 
the conditions specified 
in sections 
812 and 813 and receive 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
“=== Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 ~ 
March 18, 1986 
paar 
OF ae 
benefits under this subchapter. 
"(2) 
For the purposes 
of this subsection-- 
"(A) the term 
'participant', 
as used in the sections 
referred 
to in paragraph 
(1), means 
a participant 
in the 
Foreign Service Pension System; and 
*(B) the term 
'System', 
as used in those sections, 
means 
the Foreign Service Pension System. 
*(d) Any participant who is separated 
for cause 
under 
section 
610 shall 
not be entitled 
to an annuity under 
this 
System when the Secretary determines 
that the separation was 
based 
in whole or 
in part on disloyalty to the United States. 
"SEC. 
855. 
Deductions and Withholdings from Pay.-- 
(a) The employing agency shall deduct 
and withhold from 
basic pay of each participant the following percentage of basic 
pay: 
7 1/2 percent 
reduced by the percentage 
then 
in effect 
under section 3101(a) 
of the Internal Revenue Code of 1954 
(relating 
to the 
rate 
of tax 
for old age, 
Survivors 
ané 
Gisability insurance). 
"(b) Amounts deducted and withheld under 
this section 
shall 
be deposited 
in the Treasury of the United States 
to the 
credit 
of the Fund under 
such procedures 
as the Comptroller 
General 
of the U.S. 
may prescribe. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
pee eats 
| 
: 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 18, 1986 
a Pee 
"SEC, 
856. Government Contributions--(a) 
Each agency employing any participant shall contribute 
to the Fund the normal 
cost computed 
in a manner similar 
to 
that used under section 8423(a) 
of title 
5, United States 
Code. 
The normal 
cost percentage 
for the Foreign Service 
Pension System shall 
be determined by the Secretary of State. 
"(b) 
The Secretary of Health and Human Services, 
the 
Secretary 
of Commerce, 
anc the Secretary 
of Defense 
shall 
make 
contributions 
to the Fund 
to cover 
theneuee of funding benefits 
under 
this subchapter, 
as determined by the Secretary of State, 
relating 
to military and naval service. 
Determinations 
and 
payments under 
this subsection shall 
be similar 
to those under 
section 
8423(b) 
of title 
5, United States 
Code. 
. 
"(c)(1) 
The Secretary of State shall compute the amount 
of the supplemental 
liability of the Fund as of the close 
of 
each fiscal year beginning after 
September 
30, 1987. 
The 
amount 
of any such supplemental 
liability 
shell 
be amortized 
in 
30 equal annual 
instéllments 
with interest computed 
at the rate 
used 
in the most 
recent valuation 
of the System. 
"(2) 
At the end of each fiscal year, 
the Secretary of 
State shall notify the Secretary 
of the Treasury 
of the amount 
of the installment 
computed under 
this subsection. 
"(3) Before closing the accounts 
for 
a fiscal year, 
the 
Secretary 
of the Treasury 
shall 
credit 
to the Fund, 
as 
a 
Government 
contribution, 
out of any money 
in the Treasury of 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 “78st sEsts 
March 18, 1986 
a 1S. 
the United States 
not otherwise appropriated, 
the amount under 
paragraph 
(2) of this subsection for such year. 
"SEC. 
857. 
Cost-of-Living Adjustments-- 
Cost-of-living adjustments 
for annuitants under 
this System 
shall 
be granted under procedures 
in chapter 
84, title 
5, U.S. 
Code applicable 
to special groupe of employees under 
that 
System such 
as law enforcement, 
firefighter 
and air traffic 
controller 
personnel. 
"SEC. 
858. 
General 
And Administrative Provisions.--(a) 
The Secretary 
of State shall administer 
the Foreign Service 
Pension System except 
for matters relating to the Thrift 
Savings Plan provided in subchapters 
III and VII of chapter 
84 
of title 
5 U.S. 
Code. 
The Secretary of State shall, with 
respect to the Foreign Service Pension System, perform the 
functions 
and exercise 
the authority vested 
in the Office 
of 
Personnel Management’ 
or the Director 
of such Office by such 
chapter 
84, and may issue regulations 
for such purposes. 
"(b) Determinations 
of the Secretary 
of State under 
the 
Foreign Service Pension System which, 
if made by the Office of 
Personnel 
Management under 
chapter 
84 of title 
5, United States 
Code, 
or 
the Director 
of such Office, 
would 
be appealable 
to 
the Merit Systems Protection Board, 
to such Office, 
or to the 
Director 
of such Office shall, 
instead, 
be appealable 
to the 
Foreign Service Grievance 
Board. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
——----—~+---== Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 ™—~CSCST 
March 18, 1986 
= V6 
| 
"(c) At least every 5 years, 
the Secretary of the 
Treasury shall prepare periodic valuations 
of the Foreign 
Service 
Pension System and shall 
advise 
the Secretary of State 
of 
(1) the normal 
cost 
of the System, 
(2) the supplemental 
liability of the System, 
and 
(3) the amounts necessary 
to 
finance the costs 
of the System. 
"SEC. 
859. 
Transition Provisions.-- 
The Secretary 
of 
State 
shall 
issue regulations providing 
for 
the transition 
from 
the Foreign Service Retirement 
and Disability System to the 
Foreign Service Pension System in a manner comparable 
to the 
transition of employees now subject to the Civil Service 
Retirement 
and Disability System from that System to the Civil 
Service Supplemental Retirement System. 
For this and related 
purposes, 
references made to participation 
in the Civil Service 
Retirement 
and Disability System in title 
5, United States 
Code, 
the Social Security Act, 
and the Internal Revenue 
Code of 
1954 shall 
be deemed 
to refer 
to participation 
in the Foreign 
Service 
Pension 
System and the Foreign Service Retirement 
and 
Disability System, 
respectively. 
"SEC. 
660. 
Former Spouses.-- 
(a)(1) 
In the absence 
of a 
spousal agreement 
or court order governing disposition 
of 
benefits 
under 
this subchapter 
to a former spouse who was 
Married 
to 
a participant 
for at least 
10 years during service 
of the participant which 
is creditable under 
this chapter with 
at least 
5 of such years occurring while the participant was 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
| 
-~=~~-—~ Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 18, 1986 
-17- 
| 
a member 
of the Foreign Service, 
such former spouse 
is entitled 
to a share, determined under subsection 
(a)(2), 
of all benefits 
otherwise payable 
to such participant 
under this subchapter 
after 
the divorce 
or annulment becomes 
final and before 
the 
former spouse dies or remarries before age 55. 
"(2) The share referred 
to in subsection 
(a)(1) equals-- 
"(A) 
50 percent 
if such former spouse was married 
to the participant 
throughout 
the actual years of service 
of 
the participant which 
is creditable under 
this chapter; 
or 
"(B) 
a pro rata share of 50 percent 
if such former 
spouse was not married 
to the participant throughout 
such 
creditable service. 
"(3) A former spouse shall not be qualified for any 
benefit under this subsection if, before the commencement 
of 
any benefit, 
the former spouse remarries before becoming 
55 
years of age. 
"(4) Payments 
to a former 
spouse under 
this section 
represent 
income 
to the former spouse 
and not to the 
perticipant 
for purposes 
of the United States 
Internal Revenue 
Coce. 
Although payments 
to a former spouse under 
this 
Subsection reduce payments 
to a participant 
or former 
participant, 
such pegeeticn Shall 
be disregarded 
in calculatine 
the survivor annuity for any spouse, 
former 
spouse 
or other 
Survivor 
under this subchapter, 
and in Calculating any 
reduction 
in the annuity of the participant 
to provide survivor 
benefits 
under this subchapter. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
~=——~ Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
~ 
March 18, 1986 
-~ 18 
- 
*(5) icewiehebandine subsection 
(a)(l1), 
in the case of 
any former spouse 
of a disability annuitant-- 
"(A) 
the annuity of the former 
spouse shall commence 
on 
the date the participant would qualify, 
on the basis 
of his or 
her creditable service, 
for an annuity under this chapter 
(other than 
a disability annuity) 
or the date the disability 
annuity begins, 
whichever 
is later, 
ana 
"(B) 
the amount 
of the annuity of the former 
spouse 
shall 
be calculated 
on the basis 
of the annuity 
for which 
the 
participant would otherwise 
so qualify. 
*(6) Any former spouse who becomes entitled to receive 
any benefit under this subchapter which would otherwise be 
payable toa participant 
or former participant shall 
be 
entitled 
to make any election regarding method of payment 
to 
such former spouse that such participant would have otherwise 
been entitled 
to elect, 
ana the participant May elect 
an 
alternate method for the remaining share of benefits. 
Such 
elections shall not increase 
the actuarial present value 
of 
benefits expected to be paid under 
this subchapter. 
Notwithstanding 
the first sentence 
of this paragraph, 
4 former 
spouse may not elect 
a method of payment under subchapter 
II, 
chapter 
84, of title 
5, United States 
Code, providing 
for 
payment 
of a survivor annuity 
to any survivor 
of the former 
spouse. 
*(7) The maximum amount payable to any former 
spouse 
pursuant to this subsection shall be the aifference, 
if any, 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 18, 1986 
2 35-2 
between 
50 percent of the total benefits authorized 
to be paid 
to a former participant by this subchapter, Gisregarding 
any 
apportionment 
of these benefits 
to others, 
and the aggregate 
payable 
to all epnere at any one 
time. 
"(b)(1) 
In the absence of a spousal agreement 
or court 
order governing survivobenip benefits under 
this subchapter 
to 
a former 
spouse married 
to a participant 
or former participant 
for the periods specified in subsection 
(a)(1), 
such former 
spouse 
is entitled 
to a share, 
Getermined under 
subsection 
(b)(2), 
of all survivor benefits 
that would otherwise be 
payable under 
this subchapter 
to an eligible surviving spouse 
of the participant. 
*(2) 
The share referred 
to in subsection 
(b)(1) equals-- 
"(A) 
100 percent 
if such former spouse Was married 
to the participant throughout 
the entire period of service of 
the participant which 
is creditable under 
this chapter; 
or 
*(B) 
a pro rata share of 100 percent 
if such 
former spouse was 
not married 
to the perticipant 
throughout 
such creditable service. 
"(c) 
A participant 
or former participant 
shall not maeke 
any election 
or modification 
of election 
under 
5 U.S.C. 
6417, 
8433, 
or other section relating 
to the participant's account 
in 
the Thrift 
Plan 
or annuity under 
the basic plan that would 
diminish 
the entitlement 
of a former 
spouse 
to any benefit 
granted to the former spouse by this section 
or 
in a current 
spousal agreement. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
“~~ Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 18, 1986 
- 20 
- 
"(d) 
If a participant has more than one former spouse 
eligible 
for benefits under 
this section, 
benefits shall 
be 
awarded 
on 
a first-come first-served basis. 
"(e) 
If a member becomes 
a participant under this 
subchapter after qualifying for benefits under subchapter 
1] 
and, 
at the time of transfer, 
has 
a former 
spouse entitled 
to 
benefits under subchapter 
I which, 
as determined by the 
Secretary of State, 
are similar 
in amount 
to a pro rata share 
Givision under section 
614 or 815 and the service of the member 
as 
a participant under 
this subchapter 
is not recognized 
in 
determining that pro rata share, 
then subsections 
(a) and 
(b) 
of this section shall not apply to such former spouse. 
"(f) 
If a participant dies after completing at least 18 
months of service 
or 
a former participant dies entitled 
to a 
deferred annuity, 
but before becoming eligible 
to receive 
the 
annuity, 
and such participant 
or 
former 
participant 
has left 
with 
the Secretary 
of State 
a spousal agreement promising 
a 
Survivor 
annuity 
unéeér 
subchapter 
IV, chapter 
84, 
title 
5, U.S. 
Code, 
to 
a former 
spouse 
to whom marriec 
for 
the periods 
specified 
in subsection 
(a)(1), 
such survivor 
annuity will 
be 
paid under 
the terms 
of this subchapter 
as 
if the participant 
had retired 
on the day of death 
and elected 
the survivor 
annuity. 
"SEC. 
861. 
Spousal Agreements.-—A spousal agreement 
is 
any written agreement 
(properly authenticated 
as determined by 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
ee oe 
| 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 18, 1986 
- 
21 
- 
the Secretary of State) between 
a participant 
or former 
participant and his or her spouse 
or former spouse 
on file with 
the Secretary of State. 
A spousal agreement must 
be consistent 
with the terms 
of the Act and applicable regulations and, 
if 
executed 
at the time 
a participant 
or former participant 
is 
currently married, must be approved by such current spouse. 
It 
may be used 
to fix the level 
of benefits payable under 
this 
subchapter 
to a spouse 
or former 
spouse.”. 
SEC. 
422. 
TABLE OF CONTENTS. 
The table 
of contents 
in 
section 
2 of such Act is amended-- 
(a) by striking out the item relating to chapter 
8 and 
inserting 
in lieu thereof 
the following: 
"CHAPTER 8--FOREIGN SERVICE 
RETIREMENT AND DISABILITY 
"SUBCHAPTER 
I--FOREIGN SERVICE 
RETIREMENT AND DISABILITY SYSTEM" 
(6) by insertine 
after 
the item relating 
to section 
827 
the following: 
"SUBCHAPTER 
II-- FOREIGN SERVICE PENSION 
System 
"SEC. 
851. 
Establishment. 
"SEC. 
652. Definitions. 
"SEC. 
853. Participants. 
"SEC. 
854. 
Entitlement 
to annuity. 
"SEC, 
855. Reduction and withholding from pay. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
-—--~ Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 18, 1986 
- 22 
- 
"SEC. 
856. Government contributions. 
“sec, 
857. Cost-of-living adjustments. 
"SEC. 
858. 
General 
and administrative provisions. 
"sec, 
859. Transition provisions. 
"SEC. 
860. 
Former spouses. 
"SEC. 
861. Spousal agreements.". 
SEC. 
423. 
EFFECTIVE 
DATE. 
Notwithstanding section 
50l(a) 
of this Act, 
as 
redesignated by this amendment, 
the authority of the Secretary 
of State 
to issue regulations under subchapter 
I1 of title 
8 of 
the Foreign Service Act of 1980, 
as added by this title shall 
have effect 
on the date of enactment 
of this Act. 
Redesignate 
the succeeding title 
ana sections 
accordingly. 
Drafted:M/DGP/PC:RBHull :cf£f 
yang Doc 0705B 
3/13/86 
REVISED 
3/18/86 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
——-——-~  Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
ANALYSIS OF FOREIGN SERVICE AMENDMENT 
March 
18, 1986 
Summary 
This amendment 
adds 
a new title 
IV to H.R. 
3660 
to establish 
@ 
Foreign Service Pension 
System 
(FSPS). 
The new System would provide 
retirement benefits 
for members appointed after 
1983, 
and 
is very 
similar 
to the Civil 
Service Supplemental Retirement 
System 
(CSSRS) 
established by the bill 
for 
new appointees 
in the Civil 
Service 
after 
1983. 
All Foreign Service members 
who become participants 
in 
the FSPS would be subject 
to all provisions 
of the comparable CSSRS 
unless specifically provided otherwise by law. 
All 
the exceptions 
are 
stated 
in this proposed amendment 
to H.R. 
3660. 
The Foreign Service 
has always had 
its own retirement system 
separate 
from the Civil 
Service retirement system. 
The basic reason 
for 
this 
is that 
the Foreign Service needs special provisions 
for 
early retirement 
to permit operation 
of its up-or-out personnel 
system. 
A number 
of Foreign 
Service members 
are mandatorily retired 
every year 
to permit advancement 
of the more 
competitive 
and most 
able personnel 
This system was 
endorsed 
ance expanded by the Foreign 
Service 
Act Amendments 
of 1980. 
The spe QO ~ ) pp provisions 
are 
aiso 
necessary 
to permit 
the early retirement 
of members 
who, 
for various 
reasons, 
are 
no longer 
able 
to serve abroad after 
completing 
4 
career 
in dangerous 
and difficult environments. 
The FSPS proposed 
in this amendment would preserve 
the early 
retirement 
and other 
special 
features 
neeced by the Foreign 
Service. 
It would permit members 
to retire voluntarily 
at age 
50 
with 
20 or more years of service with 
the same benefit 
as provided 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 
18, 1986 
2 
by the bill 
for special category personnel 
such 
as 
law enforcement, 
firefighter 
and air traffic controller 
personnel. 
Secondly, 
like 
the bill 
the system would permit Foreign Service members who are 
retired mandatorily 
at an early age 
to receive 
the basic tae 
benefit based 
on high-3 salary without penalty for early 
retirement. 
The third basic special provision, substantialy like 
the bill, would provide 
an annuity supplement equivalent 
to 
a Social 
Security benefit 
based 
on salary and creditable service--from 
the 
date of retirement 
to ege 
62 when 
the annuitant would 
be eligible 
for 
the actual 
Social 
Security benefit. 
A defination-by-Section analysis 
follows: 
The amendment establishes 
a new title 
IV of the bill 
and 
renumbers existing 
title 
IV and sections accordingly. 
Section 
401 provides 
a short title 
for 
the new title 
IV for 
ease 
of furture reference. 
section 410(a) amends 
chapter 
8 of the Foreign Service 
Act 
of 
1980, 
which contains 
the authority 
for 
the existing FSRDS, 
to 
designate 
the existing portion 
as 
"Subchapter 
I" anGé makes several 
technical 
conforming amendments. 
Section 410(b)(1) 
amends 
tne definition 
of “court” 
in the 
current 
Act 
to broaden 
it to include 
territorial 
and Indian 
courts. 
The proposed definition 
is identicei 
to tne Gefinition 
under 
the 
Civil 
Service adopted by the Civil 
Service Spouse Equity Act of 
1984, 
The amendment 
is necessary 
to permit 
the Secretary 
to 
recognize 
orders by territorial 
and Indian courts affecting 
distribution 
of Foreign Service retirement benefits. 
Paragraphs 
(2) and 
(3) of subsection 410(b) 
make additional 
technical conforming amendments 
in section 
808 of the Foreign 
Service 
Act. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 
18, 1986 
3 
Section 410(c) makes 
a technical confirming change 
in section 
809 of such Act. 
Section 
410(d) 
makes an-indentical 
amendment 
to sections 
804, 
814, 
and 815 of such Act relating 
to "creditable 
service" 
to insure 
an equitable distribution 
of 
“pro rata share" benefits 
to former 
spouses. 
This amendment 
is related 
to proposed section 
860(e) being 
added 
to such Act by section 
421 
of the bill 
and 
is discussed 
furtner 
in the explanation 
of that 
section. 
RETIREMENT CONTRIBUTIONS 
UNDER 
FSRDS 
Section 
411 amends section 
805 of the Foreign Service Act of 
1980, 
relating 
to deductions 
from 
a participant's pay and 
contributions 
for 
prior service 
for Foreign Service Retirement 
and 
Disability System coverage. 
An employee who was covered by the 
FSRDS 
on December 
31, 1983, 
and who was subsequently covered by 
Social 
Security will continue 
in the FSRDS 
at 
a reduced 
contribution. 
The contribution 
to the FSRDS will 
be equal 
to the 
excess 
of the employee's normal 
FSRDS contribution 
over 
the OASDI 
portion 
of the Social 
Security tax. 
A similar 
rule 
will apply 
to 
those 
recalled 
to the Foreion 
Service 
after 
a break 
in service 
of 
more 
than 
one 
year 
and who have 
more 
than 
5 years prior 
service 
cregit. 
This provision 
an6 
the one Gescribed below added by section 
412 parallel comparable amendments 
in the bill 
for 
the Civil 
Service. 
OFFSET RELATING 
TO CERTAIN 
SOCIAL SECURITY BENEFITS - 
Section 
412 amends section 
806 of the Act 
to require 
that 
annuities 
of retirees 
and survivors 
under 
the current 
FSRDS who are 
entitled 
to Social 
Security benefits 
for Federal 
service have 
their 
annuities 
reduced when they first become eligible 
for such benefits. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
a 
| 
ieee 
et Se 
salsa 
ot mt Moat 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 pee eee 
4 
RECALL SERVICE 
Section 413 amends existing section 
823 of the Act which deals 
with retirement benefits 
of retired Foreign Service members who are 
recalled 
to active duty. 
The amendment 
provides 
that members who 
are 
realled 
in tne future 
and who come 
under 
FSPS will 
receive 
the 
same benefits 
as reemployed annuitants. 
REEMPLOYMENT 
Section 
414 amends existing section 
824 of the Act which 
concerns 
reemployed annuitants. 
The Foreign Service 
has long had 
a 
Gistinctive 
rule 
on reemployed annuitants 
to permit 
use of retired 
members 
who are uniquely qualified 
to perform certain essential 
tasks. 
The existing Civil Service 
rule 
on 
this subject offers 
next 
to no incentive 
for 
retired persons 
to return 
to work 
for the 
Government. 
This amendment would adapt 
the current Foreign Service 
rule 
in section 
824 of the Act for 
use under both FSRDS and the 
FSPS. 
This amendment recognizes 
that some reemployed annuitants 
will 
have 
an conadeg under both 
the new and old systems. 
It also 
recognizes 
that 
it would be difficult 
or inappropriate 
to recompute 
ie Foreign 
Service annuity following employment 
under 
the new Civil 
Service Supplemental 
Retirement 
System. 
Tris amendment would permit annuitants 
reemployed 
on 
a 
part-time, 
intermittent 
or temporary basis 
to elect 
to continue 
to 
receive 
their 
annuity while reemployed 
up to a ceiling amount. 
The 
annuity would be reduced 
as necessary so that in any year annuity 
peyments 
when added 
to salary does 
not cause 
the total 
to exceed 
the 
current 
annual 
salary rate 
for 
the reemployed position when occupied 
on 
a full-time basis. 
Such employees would receive 
no other 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
———~ 
_Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 
18, 1986 
5 
retirement benefits 
for 
the reemployed service. 
The proposed ciling 
amount 
is different 
from the ceiling currently specified 
in section 
827. 
The latter 
is the basic annual salary rate of the member 
at 
the time of initial retirement. 
The ceiling proposed herein 
is 
taken 
from section 
8468(b) 
of S. 1527, 
a Similar 
section. 
Reemployed annuitants 
not making 
the above election would have 
their service 
treated 
as covered service and make current 
contributions 
to the applicable retirement 
system, 
Their 
Federal 
annuity would be terminated during reemployment, 
Upon completion 
of 
the Federal 
employment, 
they would become eligible either 
to 
a 
recomputation 
of their annuity, 
if reemployed under 
the same 
retirement system, 
or 
if not, 
to an additional 
annuity based 
on 
salary and service during the period of reemployment. 
The 
additional 
annuity would be computed 
under 
the rules 
for 
the general 
Civil Service. 
This amendment 
covers 
reemployment under 
both 
the present FSRDS 
and the proposed FSPS. 
Tne phrase 
“employee 
or member" 
refers 
to 
members 
of the Foreign Service 
and 
to employees 
who are 
former 
members 
of 
the Service 
who elected 
under 
section 
2106 
of the Foreign 
Service 
Act 
of 1980 
to remain participants 
in the FSRDS. 
MAINTENANCE 
OF COMPARABILITY 
BETWEEN 
FSPS AND 
CSSRS 
Section 
415 amends section 
827 
of the Act 
to extend the 
existing 
"Executive order” procedure 
for maintaining conformity 
petween 
the Civil 
Service 
and Foreign Service retirement systems 
to 
the 
new CSSRS 
and FSPS. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
T=" Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
| 
March 18, 1986 
6 
FOREIGN SERVICE PENSION SYSTEM 
Section 
421 
is the major substantive amendment. 
It adds 
subchapter 
II of chapter 
8 of the Foreign Service 
Act 
of 1980, 
entitled 
"Foreign 
Service Pension 
System", 
comprised 
of sections 
85i 
through 
861. 
APPLICABILITY 
OF CHAPTER 
84, TITLE 
5 U.S. 
CODE 
Section 
851 provices 
that participants 
in the new FSPS shall 
be 
subject 
to all provisions 
in chapter 
84, title 
5, U«<S. 
Code 
governing 
CSSRS except where otherwise specifically provided by 
law. 
The exceptions 
are 
all stated 
in this amendment. 
DEFINITIONS 
Section 
852 provides Gefinitions 
of the following 
terms: 
annuity, 
court order, 
dynamic assumptions, 
Fund, 
normal 
cost, 
participant, 
pro rata share, 
supplemental 
liability, 
and System. 
| 
PARTICIPATION 
Section 853 provides, 
in general, that all members 
of the 
Foreign Service whose service after 
1983 brings 
them under 
Social 
Security and who would, 
save 
for 
this section, 
be participants 
in 
the 
PSRDS, 
shall 
be participants 
in the FSPS. 
Three exceprions 
are 
stated relating 
to continuity 
of employment 
and temparary 
or 
intermittent 
employees, 
which 
are 
identical 
to exceptions 
under 
CSSRS. 
ENTITLEMENT 
TO ANNUITY 
Section 
854 provides 
special 
rules governing entitlement 
to 
annuity under 
FSPS. 
Any entitlement 
or requirement 
not mentioned 
here would automatically, 
pursuant 
to section 
851, 
be governed by 
chapter 
84 of title 5, U.S. Code. | 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
| 
oy 
~~~ ==" Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 
18, 1986 
Subsection 
854(a) provides 
that members retiring voluntarily 
or 
.Mandatorily under 
the conditions 
of existing section 
607, 
608, 
811, 
812, 
or 
813 shall 
receive 
an annuity computed under 
proposed 
new 
section 8415(d) applicable 
to "special category” personnel 
in CSSRS. 
Subsection 
854(b) provides 
that those retired under 
subsection 
(a) above, 
will 
be entitled 
to an annuity supplement 
from the 
effective 
date of retirement 
to age 62 based 
on total 
creditable 
service 
of 
the member 
and computed 
under 
section 
8421 
of title 
5. 
Subsection 
854(c) 
makes participants 
in the new system subject 
to existing provisions 
for voluntary and mandatory retirement 
of 
existing section 
811, 
812 and 813. 
Subsection 
854(d) 
carries 
forward 
to the new System the 
provision denying pension benefits 
to a member 
separated 
on ground 
of disloyalty 
to the U.S. 
DEDUCTIONS 
FROM SALARY 
Section 
855 requires agencies employing members 
of the Foreign 
Service 
in FSPS 
to deduct 
and withhold 7-1/2 percent 
of their 
pay, 
reduced by the then current 
Social 
Security withnolding 
tay rate, 
for 
deposit 
in the Foreign 
Service Retirement 
Func, 
This 
is 
the 
percentabe applicable 
to special 
category personnel 
under 
CSSRS, 
GOVERNMENT PAYMENTS 
TO FUND 
Section 
856 provides 
for Government contributions 
to the Funé 
comparable 
to those made under 
CSSRS. 
Subsection 
(a) requires 
employing agencies 
to contribute 
the 
"normal 
cost" 
as determined 
by 
the Secretary of State, 
Subsections 
(b) and 
(c) provide 
for payment 
of the cost of military service 
and amortization 
of the 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 
18, 1986 
8 
supplemental 
liability, respectively. 
The term “military and naval 
service” 
used 
in section 856(b) 
is intended 
to be the same 
as that 
term 
is defined 
in section 
804(a) 
of the Foreign Service 
Act, 
COST-OF-LIVING 
Section 
857 provides 
that annuitants 
under 
FSPS receive 
cost-of-living adjustments 
under procedures applicable 
to special 
groups 
of employees 
(annuitants) 
under 
CSSRS. 
GENERAL 
AND ADMINISTRATIVE 
PROVISIONS 
Subsection 
858(a) 
provides 
that 
the Secretary 
of State 
shall 
administer 
the FSPS exclusive 
of matters pertéining 
to the Thrift 
Savings 
Plan. 
It also grants 
the Secretary 
the same authority 
granted 
to the Office 
of Personnel 
Management 
and its Director 
by 
chapter 
84, Title 
5, U.S. 
Code. 
For example, application 
of the 
cisability neiav cient provision 
by regulation might differ 
slightly 
from the similar 
CSSRS provision because 
of the Foreign Service 
being 
a rank-in-person 
and service-abroad System under 
which members 
aré appointed 
to 
a class, 
not 
to a position. 
The thrift plan would 
be administered 
as provided 
in subchapters 
II? 
anc VII of chapter 
6&4, 
title 
5, U.S. 
Coase. 
Subsection 
858(b) 
provides 
that matters 
in dispute 
under 
FSPS 
be appealed 
to the Foreign Service Grievance 
Board--a 
Board 
established 
by chapter 
ii of the Foreion 
Service 
Act 
of 1980 
experienced 
in Foreign Service matters--rather 
than 
the Merit 
Systems Protection 
Board 
or 
OPM. 
Subsection 
85&(c) 
provides 
that 
the Secretary of Treasury 
provide actuarial 
services 
for the FSPS similar 
to the services 
provided 
for 
the FSRDS. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 ~~~ 
March 
18, 1986 
9 
TRANSITION 
AND CONVERSION 
TO FSPS 
Section 
859 authorizes 
and directs 
the Secretary of State 
to 
issue regulations 
for 
the transition 
to the 
FSPS, 
and conversion 
of 
current 
employees, 
in a manner 
comparable 
to that provided 
for Civil 
Service employees. 
Under 
this authority, 
for example, 
members 
of 
the Foreign Service 
could be given 
an opportunity 
to make 
an 
election 
regarding participation 
in FSRDS or 
FSPS similar 
to the 
election afforded civil 
service personnel 
under 
section 
302 of the 
pad. 
FORMER 
SPOUSES 
Sections 
860 and 861 conform 
the FSPS with the existing 
provisions 
on former 
spouses added 
to the Foreign Service Retirement 
System by the landmark 
revision 
of the Foreign Service 
Act of 1980. 
These sections 
do two basis 
things: 
first, with respect 
to certain 
former spouses, 
section 
860 mandates 
a pro rata share division of 
retirement 
and survivor 
benefits 
when 
a different distribution 
has 
not 
been ordered 
or approved by a court 
or agreed 
to by the 
parties. 
Secondly, 
section 
861 authorizes 
a participant 
in the new 
mutually écreead upon Gistribution 
of benefits 
under 
the System. 
Section 
860 deals with benefits 
for 
certain 
former 
spouses. 
Supsection(a) 
covers 
all benefits otherwise payable under the 
Foreian 
Service Pension 
System 
to 
a partcipant, 
as distinguished 
from survivor 
penefits. 
It 
is applicable only to former 
spouses 
married 
to & participant 
for 
at least 
10 years which 
are creditable 
as service 
under 
either 
the existing Foreign Service Retirement 
System 
or 
the proposed Foreign Service Pension System provided 
at 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Ny eee 
_ 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 18, 1986 
10 
least 
5 of those years occurred while 
the participant 
was 
a member 
of the Foreign Service, 
It provides, 
in the absence 
of 
a court 
order 
or spousal agreement 
to the contrary, 
for payment 
to 
a 
qualified 
former 
spouse 
of up to 50 percent 
of the benefits 
otherwise payable 
to a former participant 
under 
the Foreign Service 
Pension 
System after 
the divorce becomes 
final 
and before 
the former 
spouse dies or remarries prior 
to becoming age 55, 
Subsection 
(a)(2) 
provides 
that 
the maximum share, 
50 percent, 
would 
be payable 
in case 
a marriage endured 
during 
the entire 
perioé 
of 
a former 
participant's Government 
career 
-- during all 
of the 
creditable 
service. 
In other 
cases, 
a pro rata share of 50 percent 
would be payable 
to the former 
spouse. 
Subsection 
(a)(3) makes 
a former 
spouse who remarries before 
age 
55 before commencement 
of benefits 
ineligible 
for benefits 
under 
this section. 
Subsection 
(a)(4) 
makes payments ee a former 
spouse 
under 
this 
section 
income 
for purposes 
of the U.S. 
Internal Revenue 
Code. 
Subsection 
(a)(5) 
makes 
a former 
spouse 
ineligible 
for 
any 
snare 
of 
&@ Gisapility annuity under 
the subsection, 
However, 
it 
provides 
that 
the former 
spouse would 
be eligible 
for 
a pro rata 
share 
distribution 
of the basic annuity under 
subchapter 
II, 
chapter 
64, 
title 
5, U.S. 
Code, 
that 
a disabled 
former participant 
eventually becomes entitled 
to receive. 
This subsection 
is similar 
tO existing 
subsection 
814(a)(6), 
the purpose 
of which 
is to base 
pro rata 
share payments 
to former 
spouses 
on earned benefits 
rather 
than subsidized payments based 
on disability. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
CO 
Sanitized Copy Approved for Release 2011/02/28 . CIA-RDP89-00066R000300070002-3 
March 
18, 1986 
11 
Subsection 
(a)(6) authorizes 
a former spouse 
to make any 
election regarding method 
of payment 
of benefits 
to which 
the former 
spouse becomes entitled which 
a participant 
may make. 
Subsection 
(a)(7) 
deals with 
the situation where 
there 
iS more 
than one 
former spouse entitled 
to benefits 
otherwise 
payable 
to a 
former 
participant 
under 
the Foreign Service Pension 
System. 
This 
subsection provides 
that 
the maximum payable pursuant 
to this 
subsection, 
i.e. 
in the absence 
of a court order 
or 
spousal 
agreement, 
is the difference between 
50 percent 
of the total benefit 
and 
the aggregate payable under 
this subchapter 
to all others. 
Subsection 
861(b) 
deals with survivor benefits 
to former 
spouses married 
to a participant 
for 
the same periods 
as specified 
in subsection 861(a)(1). 
Subsection 
(b)(1) authorizes payment 
to a qualified former 
spouse of a share 
of Survivor benefits 
otherwise payable 
to a 
surviving spouse unless 
a court order 
or spousal agreement governs 
the distribution 
of survivor benefits. 
Subsection 
(b)(2) provides 
that 
the share payable 
to 
a@ former 
spouse 
shall 
be equal 
to 100 percent 
of the benefits 
payable 
to 
a 
Surviving 
spouse 
if the former 
Spouse was married 
to the deceased 
for 
tne entire period of the deceased's creditable 
service, 
If the 
marriage 
did not endure throughout 
the creditable service, 
a pro 
rata share of 100 percent 
of the survivor benefit would be payable 
to the former 
spouse. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
~ Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 
18, 1986 
12 
Matters such 
as reduction 
of the member's annuity 
to provide 
the survivor. annuity, 
deposits, 
commencement, 
termination, 
and 
maximum payable 
in the event 
of more 
than one claim not deere with 
in this subchapter 
will 
be governed by the corresponding rules 
for 
survivor 
benefits 
to former 
spouses 
under 
chapter 
84, title 
5, U.S. 
Code pursuant 
to section 
851 establishing 
the Foreign Service 
Pension 
System. 
Subsection 
86l(c) prohibits 
a participant 
from making 
an 
election concerning payment 
of annuity 
or 
thrift account 
that woula 
diminish benefits provided 
to 
a former 
spouse pursuant 
to this 
section 
or 
a spousal agreement. 
Subsection 
861(da) states 
that 
if a participant 
has more 
than 
one 
former 
spouse, 
benefits 
shall 
be payable 
on 
a first 
come, 
first 
served basis. 
Subsection 86l(e) 
covers 
the situation where 
a member 
becomes 
entitled 
to benefits 
under 
both the Foreign Service Retirement 
System and the Foreign Service Pension System and has 
a former 
spouse 
at the time of transfer 
to the latter 
System. 
in the common 
situation 
vhere benefits 
are 
apportioned pusuant 
to 
@ court 
order 
or 
Spousal agreement, 
the 
intent 
may be 
to provide 
é pro rata share 
Gistribution 
but 
the language 
of the instrument 
may base 
tne share 
on length of the marriage during service 
creditable 
only under 
the 
Retirement 
System, 
and not under 
the Pension 
System. 
This will 
provide 
an especially large share 
of the Retirement 
System 
benefits. 
If such 
an order 
or 
spousal agreement 
is not amended, 
it 
would 
not be fair 
to provide, 
under 
this section, 
an additional 
pro 
rata share 
of Pension System benefits 
to the former 
spouse. 
The 
purpose of subsection(e) 
is to prohibit this possibility. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
March 
18, 1986 
13 
Similarly, 
in the case where 
a former 
spouse 
is entitled 
to 
a 
pro rata share of Retirement System benefits based 
on years married 
during 
the entire Government 
career, 
it would be unfair 
not 
to 
provide 
the former 
spouse 
the 
same 
Share 
of Pension 
System 
benefits. 
Section 
861] serves 
this purpose. 
A related amendment 
is 
made 
to existing sections 
of the Act by section 410(d) 
of the bill. 
The purpose 
is to assure 
that 
two former 
spouses married 
for 
the 
Same 
period 
to members who have identical 
careers, 
one 
of whom 
transfers 
to 
the new PenSion 
System and 
the other 
remains 
under 
the 
old Retirement 
System, 
will 
each receive 
the same 
share 
of benefits 
under 
this chapter, 
if payments 
are 
based 
on pro rata share 
Gistributions. 
; 
i 
Subsection 
861(f) authorizes payment 
of a Survivor 
annuity 
to 
@ 
former 
spouse 
following 
the death 
of 
a participant 
during active 
service 
or after 
separation with entitlement 
to a deferred annuity, 
but before 
commencement 
of the annuity. 
Payment 
woulda be made 
provided 
the deceased 
left with 
the Secretary 
of State 
@ valid 
spousal agreement 
providine 
for such survivor 
annuity 
and provided 
the marriage 
had endured 
for 
the periods 
specifiec 
in subsection 
(a)(1). 
Section 
862 defines 
"Spousal agreement” 
as 
an authenticates 
agreement between 
a participant 
and 
a spouse 
or 
former 
spouse. 
A 
participant who 
is currently married may not enter 
into 
a spousal 
agreement 
with 
a former 
spouse without 
the consent 
of 
the current 
spouse. 
A spousal agreement 
may be used 
to guarantee 
that 
certain 
benefits, 
otherwise payable under 
this gubehapter, 
will be paid 
to 
a 
spouse 
or former 
spouse, 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
- Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
= 
© 
March 
18, 1986 
14 
t 
TABLE OF CONTENTS 
Section 
422 of the bill amends 
the table of conents 
ja;-eeueien 
2 of the Foreign Service 
Act 
of 1980 
to reflect 
amendments 
made by 
the bill. 
EFFECTIVE 
DATE 
Section 
423 makes 
the Secretary's authority 
to regulate, 
granted by the bill, effective 
upon enactment 
to facilitate 
implementation 
of 
the new 
System. 
DGP/PC:RBRul] 
Wange 227G/GLWieckoski 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
11 OUT 1985+“ “et 
ASp|ees 
:
ere ees |e ee 
| 
Se 
ee es 
' 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89- 00066R000300070002- 3 v_. a) 
mews. 
COMMITTEE ON POST OFFICE 
AND CIVIL SERVICE 
_US, HOUSE OF REPRESENTATIVES 
Represenvative William D. Ford, Chairman 
. 309 Cannon House Office Building 
. 
: 
: 
Telephone 
; 
Washington, D.C. 20515 
, 
(202) 225-4054 
FOR IMMEDIATE RELEASE: 
FOR MORE -INFORMATION: 
October 9, 1985 
Contact Tom Joyce 
(202) 225-4054 
Details 
of a proposed supplemental retirement plan for 
Federal employees were unveiled today by Chairman William D. Ford 
of the House Post Office and Civil Service Committee and 
Congresswoman Mary Rose Oakar, Chair of ine Subeonml e eee: cn 
Compensation and Emp loyee sedetitas 
Since 1984 new Federal employees have been covered by the 
Social Security System. 
The plan announced today 
is the result of 
three years of study and 
is carefully designed 
to provide 
| 
equitable retirement benefits for’ those new employees. 
| When added to social security benefits, the proposed new plan 
would. 
provide retirees, 
disabled employees 
and survivots with 
total benefits comparable to the existing Civil Service Retirement 
System, 
said Chairman Ford and Representative Oakar. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
The total employer cost of the plan, 
including social 
security, would be about 25.5 percent of salary, higher than 
in 
the average private sector plan. 
"What must be kept in mind," said Ford and Oakar, 
"is that 
Federal employees, whose pay already has been frozen through 1986, 
will fall more than 16 percent behind workers 
in the private 
sector when total pay and benefits 
are compared. 
To reduce 
pension benefits 
for Federal workers would increase this unfair 
differential 
and make 
it even harder 
for the Federal government 
to 
compete with the private sector 
for the best and the brightest 
to 
design and operate space programs, 
fight disease and pestilence, 
guarantee 
the safety of our food and drugs, administer 
the law, 
and do all those other things 
so vital 
to our society.” 
When 
it was 
first proposed that new Federal employees be 
covered under social security Ford, 
along with House Speaker 
Thomas 
P. O'Neill and Ways and Means Committee Chairman Dan 
Rostenkowski, 
said 
in a letter 
to House members: 
"We believe that new Federal employees who become covered 
under social security should be provided retirement benefits 
comparable to those under the Civil Service Retirement System." 
Ford and Oakar said that the proposal presented today "keeps 
faith with that principle." 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
At the beginning of extensive and searching hearings earlier 
this year, 
Ford said a supplemental plan "must be designed 
in a 
manner which will not threaten 
in any way the integrity of the 
existing Federal retirement system." 
He said benefits earned 
"must be protected and that 
a supplemental system must be 
compatible with the existing space to preclude the situation 
where employees working side by side would perceive themselves 
as 
being treated differently." 
Today Ford said that he is "well satisfied" 
that those goals 
have been reached 
in this proposal. 
Both Ford and Oakar praised the éibecestenal Research 
Service and Hay/Huggins Company, 
Inc., 
a prestigious consulting 
firm with extensive experience 
in the area of private retirement 
plans, 
for their research on retirement system design and cost. 
The Hay/Huggins assistance stretched over 
a three-year period. 
Both Ford and Oakar stressed that the plan is a proposal 
being offered 
for full committee consideration. 
The proposed plan is based on three principles: 
. 
The system should have benefits of the same value 
as 
the 
Civil Service Retirement System (CSRS). 
. 
The system should include the best design features 
of 
private sector plans and CSRS. 
. 
The total cost 
-- 
including social security 
-- 
should 
approximate 
the cost of CSRS. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
It includes 
these key provisions: 
. 
Full eligibility 
to retire 
at the current CSRS retirement 
ages of 55 with 30 years of service; 
60 with 20 years 
of 
service; 
or 62 with 5 years 
of service. 
. 
Full protection against inflation after retirement 
or 
disability. 
- 
Continuation 
of mandatory employee contributions 
of 7% of 
pay to the total retirement 
system. 
; 
- 
Continuation of the same levels of protection against 
disability. 
. 
A thrift plan with matching contributions 
from the Federal 
government. 
Attached 
is a fact sheet and a copy of plan design 
specifications. 
Attachments 
Ht 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
October 
9, 
1985 
FACT SHEET ON PROPOSED 
CIVIL SERVICE SUPPLEMENTAL RETIREMENT SYSTEM 
(CSSRS) 
Retirement Benefits 
The Civil Service Supplemental Retirement System (CSSRS) 
provides retirement benefits 
of 1% of high-three average salary for 
each year of service. 
The benefits are payable in full at age 55 
with 30 years 
of service; 
age 60 with 20 years of service; 
or age 62 
with 5 years of service. 
To provide 
a steady level 
of retirement income for those 
eligible 
to retire before age 62, 
a supplement equal to the 
federally-earned social security benefit 
is paid up to that age. 
For the average employee retiring after 
a full career with the 
government, 
the combined benefits provided 
by CSSRS and social 
security are similar 
to the benefits 
of the Civil Service Retirement 
System (CSRS). 
However, 
because 
of the distribution of social 
security benefits, 
lower-paid employees receive somewhat more and 
the higher-paid employees 
somewhat 
less than under CSRS. 
CSRS has been carefully designed to provide for retirement 
of 
employees who face hazardous duty or strenuous conditions 
over their 
careers. 
It is in the best interest of the government 
to maintain 
a 
young, vigorous workforce 
in these categories. 
CSSRS continues 
this 
approach by providing for a consistent 
level 
of retirement income at 
earlier ages for Federal 
law enforcement personnel, 
firefighters, 
and air traffic controllers. 
The added cost of these benefits 
is 
paid by the employees and their agencies. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
= 
= 
| 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
‘Disability Benefits 
a 
A disabled employee 
who is unable to perform the duties 
of his 
or her current position will be eligible for disability benefits. 
The benefit will be the accrued retirement benefit, 
but with a 
minimum based 
on service Bposeckes for 20 years, 
or to age 60 if 
earlier. 
A disabled employee eligible 
for social security will typically 
receive replacement 
income of 50% of salary. 
This 
is somewhat 
higher than in CSRS, 
but lower than the: typical private ESCtOr 
-benefits 
of 60% to 75% of salary. 
se ameenies anabie to perform the duties 
of their current 
or similar. positions, 
but not qualifying under 
the stricter social 
security definition, will receive. a supplement to make up for the 
lack of a social security benefit. 
Survivors 
As in private sector plans and CSRS, 
the spouse of a deceased 
employee will 
be eligible to receive 50% of the employee's pension 
earned 
at death. 
The employee can continue this survivor protection 
after retirement by accepting approximately a 10% reduction in the 
basic retirement annuity... 
7 
Social security pays surviving spouse benefits averaging 20% to 
25% of salary. 
However, 
there is a “blackout period" 
between when 
the spouse's youngest child turns age 16 and the spouse reaches 
age 
60.- 
CSSRS provides a constant level of income throughout this 
blackout period. 
It ensures 
a minimum guarantee equal to the 
regular CSSRS benefit 
(up to 22% of high-three salary) plus the 
social security benefit 
that would be paid to the widow at age 60. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
The new system also recognizes that while adequate benefits are 
paid to eligible children under social security, 
these are 
discontinued at age 18, 
or age 19 if the child 
is in school. 
CSRS 
benefits are continued until age 22 if the child 
is in school. 
CSSRS fills 
in this gap by providing benefits 
as 
in CSRS from age 19 
to age 22 if the child 
is in school. 
Capital Accumulation Plan 
The new retirement system combines 
a traditional defined-benefit 
retirement plan with a Capital Accumulation Plan 
(CAP) 
to encourage 
employee participation 
in building retirement 
income. 
The CAP has 
the same design as 
the most common system provided 
by private sector 
employers. 
Employees 
can voluntarily contribute up to 10% of salary 
to the CAP with the government matching half 
of the first 
6% of 
salary. 
The employee contribution will be allocated, 
at the discretion 
of the employee, 
among investment funds maintained 
by an independent 
Civil Service Investment Board. 
The options will include funds that 
specialize 
in a particular type of investment such as Federal 
securities 
or equities. 
Matching government contributions will 
be 
invested 
in a Treasury bond fund for the first five years, 
and 
thereafter 
at the discretion of the employee. 
Employee Contributions 
Employees will 
be required to make contributions 
to the 
retirement fund equal 
to 7% of salary, 
less the contributions 
to 
OASDI 
(currently 5.7%). 
Employees will 
be fully vested 
in their contributions 
and 
entitled 
to withdraw the contributions, 
plus interest, 
at the time 
of leaving Federal service. 
After 
five years of service, 
employees 
will 
be vested ina deferred benefit, 
payable at age 62, 
reduced 
by 
the value of any withdrawn contributions. 
a 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Cost-of-Living Protection 
All benefits under CSSRS are fully protected against inflation 
by annual adjustments equal 
to the increase 
in the Consumer Price 
Index. 
The formula for the timing and amount 
of the increase 
is the 
same as under CSRS. 
Government Cost 
The total employer cost of the retirement system, 
including 
social security, 
will 
be about 25.5% of salary. 
Details 
of the cost 
are 
in the attached table. 
The additional 
.5% of salary over. the 
CSRS cost of 25% of salary 
is needed 
to compensate for the 
redistribution of benefits under 
the social security system. 
At its 
slightly higher cost, 
CSSRS provides benefits 
that are worth, 
in 
total, 
the same as the CSRS benefits. 
| 
The decision 
to provide 
a new system with the same value as CSRS 
was based on a detailed study of total compensation, 
including 
retirement, 
performed 
in 1984 
by Hay/Huggins. 
While retirement 
benefits provided 
by CSRS are worth 6.4% more than those 
of average 
private sector 
plans, 
the total Federal compensation package falls 
more than 16% behind that of the average private sector employer. 
Since 
1984, Federal employees have received one 3.5% pay increase 
and there 
is no increase scheduled through the end of 1986. 
It is 
expected that private sector pay will have increased 12.5% 
in 1985 
and 1986. 
Chairman Ford and Chair Oakar believe that it is important 
to 
preserve the value of the only major part of the compensation 
package that is more valuable than in the private sector. 
A strong 
retirement system will help to attract and retain employees who 
would otherwise 
look for other 
jobs with higher salaries and 
superior fringe benefits. 
Sa 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
. 
PLAN DESIGN SPECIFICATIONS 
: 
. 
FOR THE 
CIVIL SERVICE SUPPLEMENTAL RETIREMENT SYSTE 
. DEFINED BENEFIT RETIREMENT 
A. BASIC PLAN DESIGN 
. 
- Defined benefit, 
not explicitly 
, 
- 
dUntegrated with social security 
(add-on plan). 
B. REQUIRED EMPLOYEE 
7% of salary less OASDI 
CONTRIBUTION 
— 
contribution. 
C. VESTING 
| 
. 
| 
5 rere 
D. SALARY BASE. 
. 
| 
Average High-3 salary. 
E. RETIREMENT BENEFIT 
. 1.0% 
x years 
of devoid: 
_ FORMULA 
F. UNREDUCED seen 
‘mee 55 with 30 years of service; 
BENEFITS 
Age 60 with 20 years 
of service; 
Age 62 with 5 years 
of service. 
Supplement paid prior to age 62 
equal to social security benefit. 
G. INVOLUNTARY EARLY 
' 
Age 50 with 20 years 
of service. 
RETIREMENT BENEFITS 
Any age with 25 years 
of service. 
H. DEFERRED RETIREMENT 
. 
Full accrued benefit payable at 
age 62 with at least 
5 years 
of 
service. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Civil Service Retirement System 
The CSSRS deals exclusively with Federal employees covered by 
social security. 
While benefits were designed to be consistent with 
those 
of CSRS, 
the benefits 
of current annuitants and employee 
| 
members 
of CSRS are not affected by any of the provisions 
of CSSRS. 
The funding of CSSRS will be combined with CSRS 
in one 
retirement fund, 
in order 
to assure all annuitants, 
survivors and 
disabled employees 
that the funds needed 
for benefits from both CSRS 
and CSSRS will 
be available when needed. 
By fully funding the CSSRS 
benefits 
from the date of employee entrance into the system, 
the. 
plan guarantees 
a continuous flow of funds to provide retirement 
benefits 
to all Federal annuitants. 
-5- 
| 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
manera 
mes 
- I. REFUNDS 
J. COST-OF-LIVING 
ADJUSTMENT 
K. DISABILITY BENEFITS 
L. HAZARDOUS DUTY EMPLOYEES 
- 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
‘Employees may withdraw 
contributions plus interest. 
Any withdrawn contributions will 
be deducted from the vested 
benefit value. 
‘Annual adjustment equal to the 
increase 
in the Consumer 
Price 
Index. 
For employees eligible for 
social security benefits 
no less 
than the lesser of: 
(a) 
20% of high-three 
salary, 
or 
(b) 
the retirement 
benefit projected 
to 
age 60 
, 
Employees 
not eligible for 
social security benefits receive 
the above formula plus a 
supplemental benefit until 
old-age social security benefits 
become payable at age 62. 
Federal Law Enforcement officers 
May retire after age 50 with 20 
years 
of service. 
Firefighters may retire after 
age 50 with 20 years of service. 
Air Traffic Controllers may 
retire after 
25 years 
of service 
or after age 50 with 20 years 
of 
service. 
The annual retirement credit 
is» 
1.7% times years 
of service up’ 
to 20 years plus 1.5% for years. 
in excess 
of 20 years. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
HAZARDOUS DUTY EMPLOYEES 
(contd) 
M. POST-RETIREMENT SPOUSE 
SURVIVOR BENEFITS 
N. PRE-RETIREMENT SPOUSE 
SURVIVOR BENEFITS 
O. CHILDREN 
oe 
Supplement payable from 
retirement 
to age 62. 
Employee pays an additional 
.5% 
of pay for benefit. 
Automatic unless 
jointly waived. 
Those electing option have 
annuity reduced 
by 10%. 
Payment to surviving spouse 
is 
half 
of the unreduced annuity. 
Any age with 18 months 
of 
service. 
The same benefit 
that would 
be 
payable 
to a surviving spouse 
of 
a retired employee. 
The minimum surviving spouse's 
benefit is no less than the 
lesser 
of: 
(a) 
22% of high-three salary, 
or 
(b) 
the projected combined 
retirement system and 
social security benefit at 
the widow(er)'s 
age 60. 
less 
social security 
Annual benefit of $2,800 
increased 
by future CPI growth, 
and fully offset 
for 
the 
children's portion of any social 
security benefit. 
Benefits paid 
until age 18 for 
a child not 
in 
school and until age 22 for 
a 
child 
in school. 
Benefits 
are 
continued after age 22 for 
a 
disabled child. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
ace 
II. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
VOLUNTARY CAPITAL 
ACCUMULATION PLAN 
A. 
ALLOWABLE EMPLOYEE 
Up to 10% of pay to thrift plan. 
CONTRIBUTIONS 
B. 
GOVERNMENT MATCHING 
For each $1 contributed by 
CONTRIBUTIONS 
employee up to 6% of pay. 
Government 
contributes 
$0.50. 
C. 
VESTING 
Employee contributions 
immediately vested. 
Government 
matching contributions vested 
20% after 
1 year, 
40% after 
2 
years, 
60% after 
3 years, 
80% 
after 
4 years, 
and fully vested 
after 
5 years. 
D. 
INVESTMENT OPTIONS 
Employees may choose 
to invest 
their contributions 
in any of 
the investment vehicles provided 
in the Capital Accumulation 
Plan. 
Government contributions are 
invested 
in Treasury securities 
for the first five years of the 
Capital Accumulation Plan. 
After this period, Government 
contributions may be invested 
in 
any of the investment vehicles 
as elected 
by the employee. 
E. 
CURRENT EMPLOYEES 
Current employees may not elect 
into CSSRS. 
They may 
participate 
in the Capital 
Accumulation Plan, 
but do not 
receive Government matching 
contributions. 
-4- 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
7 
| 
(2) 
2 
se 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
III. 
SOCIAL SECURITY 
A. 
OLD AGE, 
SURVIVORS, 
AND 
All affected employees covered. 
DISABILITY INSURANCE 
B. 
EMPLOYEE CONTRIBUTION 
Employee contribution of 5.7% of 
pay (6.06% 
in 1988; 
6.2% 
in 
1990) 
for OASDI 
coverage, 
up to 
maximum taxable wage base 
($39,600 
in 1985.) 
x6 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3 
Civil Service Supplemental Retirement System 
PROGRAM COMPONENT 
ESTIMATED NORMAL COST 
(percentage 
of payroll) 
TOTAL DEFINED BENEFITS 
19.3% 
CAPITAL ACCUMULATION PLAN 
: 
4.3% 
SOCIAL SECURITY 
11.8% 
TOTAL BENEFITS 
35.4% 
EMPLOYEE CONTRIBUTIONS 
Defined Benefit 
-1.1% 
Capital Accumulation Pian 
-2.9% 
Social Security 
-5.9% 
Subtotal 
-9.9% 
TOTAL EMPLOYER COST 
25.5%** 
** Total cost 
to replicate current benefit levels 
is slightly higher 
than the current system costs. 
Sanitized Copy Approved for Release 2011/02/28 : CIA-RDP89-00066R000300070002-3