Executive Order 12326

By the authority vested in me as President of the United States of America by Section 292 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees, as amended (50 U.S.C. 403 note), and in order to conform further the Central Intelligence Agency Retirement and Disability System to certain amendments in the Civil Service Retirement and Disability System, it is hereby ordered as follows:

Section 1. Section 221(b)(1) of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees, as amended, shall be deemed to be amended by inserting the following after the last sentence of that paragraph: "Any written notification (or designation) by any participant under this section shall not be considered valid unless the participant establishes to the satisfaction of the Director (a) that the spouse has been notified of the loss of or reduction in survivor benefits or (b) that the participant has complied with such notification requirements as the Director shall, by regulation, prescribe.".

Sec. 2. Section 231(a) of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees, as amended, shall be deemed to be amended by deleting the first sentence thereof, and inserting in lieu thereof the following: "Any participant who has five years of service credit toward retirement under the system, excluding military or naval service that is credited in accordance with provisions of section 251 or 252(a)(2), and who has become disabled shall, upon his own application or upon order of the Director, be retired on an annuity computed as prescribed in section 221. A participant shall be considered to be disabled only if the participant is found by the Director to be unable, because of disease or injury, to render useful and efficient service in the participant's position and is not qualified for reassignment, under procedures prescribed by the Director, to a vacant position which is in the Agency at the same grade or level and in which the participant would be able to render useful and efficient service.". Sec. 3. Section 221 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees, as amended, shall be deemed to be amended by inserting after subsection (1) thereof the following new subsection: "(m) If a participant retiring under section 231 of this Act is receiving retired pay or retainer pay for military service (except that specified in section 252(e)) or Veterans Administration pension or compensation in lieu of such retired or retainer pay, the annuity of that participant shall be computed under subsection (a) of this section, excluding credit for such military service from that computation. If the amount of the annuity so computed, plus the retired or retainer pay which is received, or which would be received but for the application of the limitation in Section 5532 of Title 5 of the United States Code, or the Veterans Administration pension or compensation in lieu of such retired or retainer pay, is less than the annuity that would otherwise be payable under section 231, an amount equal to the difference shall be added to the annuity payable under subsection (a) of this Section.". Sec. 4. Section 291 (a) and (b)(1) of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees, as amended, shall be deemed to be amended to read as follows: "(a) On the basis of determination made by the Director pertaining to per centum change in the Price Index, the following adjustments shall be made:  "(1) Except as provided in subsection (b) of this Section, effective March 1 of each year each annuity payable from the Fund having a commencing date not later than such March 1 shall be increased by the percent change in the Price Index published for December of the preceding year, adjusted to the nearest one-tenth of one percent. "(b) Eligibility for an annuity increase under this Section shall be governed by the commencing date of each annuity payable from the Fund as of the effective date of an increase, except as follows: "(1) The first cost-of-living increase (if any) made under subsection (a) of this Section to an annuity which is payable from the Fund to a participant who retires or to the widow or widower of a deceased participant whose annuity has not been increased under this subsection or subsection (a) of this Section, shall be equal to the product (adjusted to the nearest one-tenth of one percent) of-  (A) one-twelfth of the applicable percent change computed under subsection (a) of this Section, multiplied by  (B) the number of months (counting any portion of a month as a month)-  (i) for which the annuity was payable from the Fund before the effective date of the increase, or  (ii) in the case of a widow or widower of a deceased annuitant whose annuity was first payable to the deceased annuitant.". Sec. 5. For the purpose of ensuring the accuracy of information used in the administration of the Central Intelligence Agency Retirement and Disability System, the Director of Central Intelligence may request, from the Secretary of State and the Administrator of Veterans Affairs such information as the Director deems necessary. To the extent permitted by law: (a) The Secretary of Defense shall provide information on retired or retainer pay provided under Title 10 of the United States Code; and  (b) The Administrator of Veterans Affairs shall provide information on pensions or compensation provided under Title 38 of the United States Code. The Director, in consultation with the officials from whom information is requested, shall ensure that information made available under this Section is used only for the purposes authorized. Sec. 6. Section 221 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees, as amended, shall be deemed to be amended by adding thereto a new subsection (e) as follows: "(e)(1) The Director shall, in accordance with this subsection, enter into an agreement with any State within 120 days of a request for agreement from the proper State official. The agreement shall provide that the Director shall withhold State income tax in the case of the monthly annuity of any annuitant who voluntarily requests, in writing, such withholding. The amounts withheld during any calendar quarter shall be held in the Fund and disbursed to the States during the month following that calendar quarter.  "(2) An annuitant may have in effect at any time only one request for withholding under this subsection, and an annuitant may not have more than two such requests in effect during any one calendar year. "(3) Subject to paragraph (2) of this subsection, an annuitant may change the State designated by that annuitant for purposes of having withholdings made, and may request that the withholdings be remitted in accordance with such change. An annuitant also may revoke any request of that annuitant for withholding. Any change in the State designated or revocation is effective on the first day of the month after the month in which the request or the revocation is processed by the Director, but in no event later than on the first day of the second month beginning after the day on which such request or revocation is received by the Director. "(4) This subsection does not give the consent of the United States to the application of a statute which imposes more burdensome requirements on the United States than on employers generally, or which subjects the United States or any annuitant to a penalty or liability because of this subsection. The Director may not accept pay from a State for services performed in withholding State income taxes from annuities. Any amount erroneously withheld from an annuity and paid to a State by the Director shall be repaid by the State in accordance with regulations issued by the Director. "(5) For the purpose of this subsection, 'State' means a State, the District of Columbia, or any territory or possession of the United States.". Sec. 7. The amendments made by Sections 1, 2, 3, 4, 5, and 6 of this Order shall be effective as follows: (a) Section 1 shall be effective as of January 5, 1981;  (b) Section 2 shall be effective as of March 5, 1981;  (c) Section 3 shall be effective as of this date for all participants who retire under Section 231 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees, as amended, on or after December 5, 1980. (d) Section 4 shall be effective as of the date of this Order. (e) Section 5 shall be effective as of August 13, 1981, and shall apply to annuities which commence before, on, or after such date. (f) Section 6 shall be effective as of October 1, 1981.

RONALD REAGAN The White House, September 30, 1981.

[Filed with the Office of the Federal Register, 8:45 a.m., October 2, 1981] Note: The text of the Executive order was released by the Office of the Press Secretary on October 1.