H.R. 1804 (111th): Federal Retirement Reform Act of 2009

111th Congress, 2009–2010. Text as of Mar 31, 2009 (Introduced).

Status & Summary | PDF | Source: GPO

I

111th CONGRESS

1st Session

H. R. 1804

IN THE HOUSE OF REPRESENTATIVES

March 31, 2009

(for himself, Mr. Skelton, Mr. Waxman, Mr. Lynch, and Mrs. Davis of California) introduced the following bill; which was referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Armed Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend title 5, United States Code, to make certain modifications in the Thrift Savings Plan, the Civil Service Retirement System, and the Federal Employees’ Retirement System, and for other purposes.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Federal Retirement Reform Act of 2009.

(b)

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Title I—PROVISIONS RELATING TO FEDERAL EMPLOYEES RETIREMENT

Subtitle A—Thrift Savings Plan Enhancement

Sec. 101. Short title.

Sec. 102. Automatic enrollments.

Sec. 103. Qualified Roth contribution program.

Sec. 104. Authority to establish self-directed investment window.

Sec. 105. Reporting requirements.

Sec. 106. Acknowledgement of risk.

Subtitle B—Other Retirement-Related Provisions

Sec. 111. Credit for unused sick leave.

Sec. 112. Exemption of certain CSRS repayments from the requirement that they be made with interest.

Sec. 113. Computation of certain annuities based on part-time service.

Sec. 114. Treatment of members of the uniformed services under the Thrift Savings Plan.

Sec. 115. Authority to deposit refunds under FERS.

Sec. 116. Retirement credit for service of certain employees transferred from District of Columbia service to Federal service.

Title II—SPECIAL SURVIVOR INDEMNITY ALLOWANCE FOR SURVIVING SPOUSES OF ARMED FORCES MEMBERS

Sec. 201. Increase in monthly amount of special survivor indemnity allowance for widows and widowers of deceased members of the Armed Forces affected by required Survivor Benefit Plan annuity offset for dependency and indemnity compensation.

I

PROVISIONS RELATING TO FEDERAL EMPLOYEES RETIREMENT

A

Thrift Savings Plan Enhancement

101.

Short title

This subtitle may be cited as the Thrift Savings Plan Enhancement Act of 2009.

102.

Automatic enrollments

(a)

In general

Section 8432(b) of title 5, United States Code, is amended by striking paragraphs (2) through (4) and inserting the following:

(2)
(A)

The Board shall by regulation provide for an eligible individual to be automatically enrolled to make contributions under subsection (a) at the default percentage of basic pay.

(B)

For purposes of this paragraph, the default percentage shall be equal to 3 percent or such other percentage, not less than 2 percent nor more than 5 percent, as the Board may by regulation prescribe.

(C)

The regulations shall include provisions under which any individual who would otherwise be automatically enrolled in accordance with subparagraph (A) may—

(i)

modify the percentage or amount to be contributed pursuant to automatic enrollment, effective from the start of such enrollment; or

(ii)

decline automatic enrollment altogether.

(D)

For purposes of this paragraph, the term eligible individual means any individual who, after any regulations under subparagraph (A) first take effect, is appointed, transferred, or reappointed to a position in which that individual is eligible to contribute to the Thrift Savings Fund.

(E)
(i)

Subject to clause (ii), sections 8351(a)(1), 8440a(a)(1), 8440b(a)(1), 8440c(a)(1), 8440d(a)(1), and 8440e(a)(1) shall be applied in a manner consistent with the purposes of this paragraph.

(ii)

The Secretary concerned may, with respect to members of the uniformed services under the authority of such Secretary, establish such special rules as such Secretary considers necessary for the administration of this subparagraph, including rules in accordance with which such Secretary may—

(I)

provide for delayed automatic enrollment; or

(II)

preclude or suspend the application of automatic enrollment.

.

(b)

Technical amendment

Section 8432(b)(1) of title 5, United States Code, is amended by striking the parenthetical matter in subparagraph (B).

103.

Qualified Roth contribution program

(a)

In general

Subchapter III of chapter 84 of title 5, United States Code, is amended by inserting after section 8432c the following:

8432d.

Qualified Roth contribution program

(a)

Definitions

For purposes of this section—

(1)

the term qualified Roth contribution program means a program described in paragraph (1) of section 402A(b) of the Internal Revenue Code of 1986 which meets the requirements of paragraph (2) of such section; and

(2)

the terms designated Roth contribution and elective deferral have the meanings given such terms in section 402A of the Internal Revenue Code of 1986.

(b)

Authority To establish

The Board shall by regulation provide for the inclusion in the Thrift Savings Plan of a qualified Roth contribution program, under such terms and conditions as the Board may prescribe.

(c)

Required provisions

The regulations under subsection (b) shall include—

(1)

provisions under which an election to make designated Roth contributions may be made—

(A)

by any individual who is eligible to make contributions under section 8351, 8432(a), 8440a, 8440b, 8440c, 8440d, or 8440e; and

(B)

by any individual, not described in subparagraph (A), who is otherwise eligible to make elective deferrals under the Thrift Savings Plan;

(2)

any provisions which may, as a result of enactment of this section, be necessary in order to clarify the meaning of any reference to an account made in section 8432(f), 8433, 8434(d), 8435, 8437, or any other provision of law; and

(3)

any other provisions which may be necessary to carry out this section.

.

(b)

Clerical amendment

The analysis for chapter 84 of title 5, United States Code, is amended by inserting after the item relating to section 8432c the following:

8432d. Qualified Roth contribution program.

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104.

Authority to establish self-directed investment window

(a)

In general

Section 8438(b)(1) of title 5, United States Code, is amended—

(1)

in subparagraph (D), by striking and at the end;

(2)

in subparagraph (E), by striking the period and inserting ; and; and

(3)

by adding after subparagraph (E) the following:

(F)

a self-directed investment window, if the Board authorizes such window under paragraph (5).

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(b)

Requirements

Section 8438(b) of title 5, United States Code, is amended by adding at the end the following:

(5)
(A)

The Board may authorize the addition of a self-directed investment window under the Thrift Savings Plan if the Board determines that such addition would be in the best interests of participants.

(B)

The self-directed investment window shall be limited to—

(i)

low-cost, passively-managed index funds that offer diversification benefits; and

(ii)

other investment options, if the Board determines the options to be appropriate retirement investment vehicles for participants.

(C)

The Board shall ensure that any administrative expenses related to use of the self-directed investment window are borne solely by the participants who use such window.

(D)

The Board may establish such other terms and conditions for the self-directed investment window as the Board considers appropriate to protect the interests of participants, including requirements relating to risk disclosure.

(E)

The Board shall consult with the Employee Thrift Advisory Council (established under section 8473) before establishing any self-directed investment window.

.

105.

Reporting requirements

(a)

Annual report

The Board shall, not later than June 30 of each year, submit to Congress an annual report on the operations of the Thrift Savings Plan. Such report shall include, for the prior calendar year, information on the number of participants as of the last day of such prior calendar year, the median balance in participants’ accounts as of such last day, demographic information on participants, the percentage allocation of amounts among investment funds or options, the status of the development and implementation of the self-directed investment window, the diversity demographics of any company, investment adviser, or other entity retained to invest and manage the assets of the Thrift Savings Fund, and such other information as the Board considers appropriate. A copy of each annual report under this subsection shall be made available to the public through an Internet website.

(b)

Reporting of fees and other information

(1)

In general

The Board shall include in the periodic statements provided to participants under section 8439(c) of title 5, United States Code, the amount of the investment management fees, administrative expenses, and any other fees or expenses paid with respect to each investment fund and option under the Thrift Savings Plan. Any such statement shall also provide a statement notifying participants as to how they may access the annual report described in subsection (a), as well as any other information concerning the Thrift Savings Plan that might be useful.

(2)

Use of estimates

For purposes of providing the information required under this subsection, the Executive Director may provide a reasonable and representative estimate of any fees or expenses described in paragraph (1) and shall indicate any such estimate as being such an estimate. Any such estimate shall be based on the previous year’s experience.

(c)

Definitions

For purposes of this section—

(1)

the term Board has the meaning given such term by 8401(5) of title 5, United States Code;

(2)

the term participant has the meaning given such term by section 8471(3) of title 5, United States Code; and

(3)

the term account means an account established under section 8439 of title 5, United States Code.

106.

Acknowledgement of risk

(a)

In general

Section 8439(d) of title 5, United States Code, is amended—

(1)

by striking the matter after who elects to invest in and before shall sign an acknowledgement and inserting any investment fund or option under this chapter, other than the Government Securities Investment Fund,; and

(2)

by striking either such Fund and inserting any such fund or option.

(b)

Coordination with provisions relating to fiduciary responsibilities, liabilities, and penalties

Section 8477(e)(1)(C) of title 5, United States Code, is amended—

(1)

by redesignating subparagraph (C) as subparagraph (C)(i); and

(2)

by adding at the end the following:

(ii)

A fiduciary shall not be liable under subparagraph (A), and no civil action may be brought against a fiduciary—

(I)

for providing for the automatic enrollment of a participant in accordance with section 8432(b)(2)(A);

(II)

for enrolling a participant in a default investment fund in accordance with section 8438(c)(2); or

(III)

for allowing a participant to invest through the self-directed investment window or for establishing restrictions applicable to participants’ ability to invest through the self-directed investment window.

.

B

Other Retirement-Related Provisions

111.

Credit for unused sick leave

(a)

In general

Section 8415 of title 5, United States Code, is amended—

(1)

by redesignating the second subsection (k) and subsection (l) as subsections (l) and (m), respectively; and

(2)

in subsection (l) (as so redesignated by paragraph (1))—

(A)

by striking (l) In computing and inserting (l)(1) In computing; and

(B)

by adding at the end the following:

(2)

Except as provided in paragraph (1), in computing an annuity under this subchapter, the total service of an employee who retires on an immediate annuity or who dies leaving a survivor or survivors entitled to annuity includes the days of unused sick leave to his credit under a formal leave system, except that these days will not be counted in determining average pay or annuity eligibility under this subchapter. For purposes of this subsection, in the case of any such employee who is excepted from subchapter I of chapter 63 under section 6301(2)(x)–(xiii), the days of unused sick leave to his credit include any unused sick leave standing to his credit when he was excepted from such subchapter.

.

(b)

Exception from deposit requirement

Section 8422(d)(2) of title 5, United States Code, is amended by striking section 8415(k) and inserting paragraph (1) or (2) of section 8415(l).

(c)

Effective date

The amendments made by this section shall apply with respect to annuities computed based on separations occurring on or after the date of enactment of this Act.

112.

Exemption of certain CSRS repayments from the requirement that they be made with interest

(a)

In general

Section 8334(d)(1) of title 5, United States Code, is amended—

(1)

by striking (d)(1) and inserting (d)(1)(A); and

(2)

by adding at the end the following:

(B)

No interest under subparagraph (A) shall be required in the case of any deposit to the extent that it represents the amount of any refund that was made to an employee or Member during the period beginning on October 1, 1990, and ending on February 28, 1991.

.

(b)

Applicability

The amendments made by subsection (a) shall be effective with respect to any annuity, entitlement to which is based on a separation from service occurring on or after the date of enactment of this Act.

113.

Computation of certain annuities based on part-time service

(a)

In general

Section 8339(p) of title 5, United States Code, is amended by adding at the end the following:

(3)

In the administration of paragraph (1)—

(A)

subparagraph (A) of such paragraph shall apply with respect to service performed before, on, or after April 7, 1986; and

(B)

subparagraph (B) of such paragraph—

(i)

shall apply with respect to that portion of any annuity which is attributable to service performed on or after April 7, 1986; and

(ii)

shall not apply with respect to that portion of any annuity which is attributable to service performed before April 7, 1986.

.

(b)

Applicability

The amendment made by subsection (a) shall be effective with respect to any annuity, entitlement to which is based on a separation from service occurring on or after the date of enactment of this Act.

114.

Treatment of members of the uniformed services under the Thrift Savings Plan

(a)

Sense of Congress

It is the sense of Congress that—

(1)

members of the uniformed services should have a retirement system that is at least as generous as the one which is available to Federal civilian employees; and

(2)

Federal civilian employees receive matching contributions from their employing agencies for their contributions to the Thrift Savings Fund, but the costs of requiring such a matching contribution from the Department of Defense could be significant.

(b)

Reporting requirement

Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense shall report to Congress on—

(1)

the cost to the Department of Defense of providing a matching payment with respect to contributions made to the Thrift Savings Fund by members of the Armed Forces;

(2)

the effect that requiring such a matching payment would have on recruitment and retention; and

(3)

any other information that the Secretary of Defense considers appropriate.

115.

Authority to deposit refunds under FERS

(a)

Deposit authority

Section 8422 of title 5, United States Code, is amended by adding at the end the following:

(i)
(1)

Each employee or Member who has received a refund of retirement deductions under this or any other retirement system established for employees of the Government covering service for which such employee or Member may be allowed credit under this chapter may deposit the amount received, with interest. Credit may not be allowed for the service covered by the refund until the deposit is made.

(2)

Interest under this subsection shall be computed in accordance with paragraphs (2) and (3) of section 8334(e) and regulations prescribed by the Office. The option under the third sentence of section 8334(e)(2) to make a deposit in one or more installments shall apply to deposits under this subsection.

(3)

For the purpose of survivor annuities, deposits authorized by this subsection may also be made by a survivor of an employee or Member.

.

(b)

Technical and conforming amendments

(1)

Definitional amendment

Section 8401(19)(C) of title 5, United States Code, is amended by striking 8411(f); and inserting 8411(f) or 8422(i);.

(2)

Crediting of Deposits

Section 8422(c) of title 5, United States Code, is amended by adding at the end the following: Deposits made by an employee, Member, or survivor also shall be credited to the Fund..

(3)

Section heading

(A)

The heading for section 8422 of title 5, United States Code, is amended to read as follows:

8422.

Deductions from pay; contributions for other service; deposits

.

(B)

The analysis for chapter 84 of title 5, United States Code, is amended by striking the item relating to section 8422 and inserting the following:

8422. Deductions from pay; contributions for other service; deposits.

.

(4)

Restoration of annuity rights

The last sentence of section 8424(a) of title 5, United States Code, is amended by striking based. and inserting based, until the employee or Member is reemployed in the service subject to this chapter..

116.

Retirement credit for service of certain employees transferred from District of Columbia service to Federal service

(a)

Retirement credit

(1)

In general

Any individual who is treated as an employee of the Federal Government for purposes of chapter 83 or chapter 84 of title 5, United States Code, on or after the date of enactment of this Act who performed qualifying District of Columbia service shall be entitled to have such service included in calculating the individual’s creditable service under sections 8332 or 8411 of title 5, United States Code, but only for purposes of the following provisions of such title:

(A)

Sections 8333 and 8410 (relating to eligibility for annuity).

(B)

Sections 8336 (other than subsections (d), (h), and (p) thereof) and 8412 (relating to immediate retirement).

(C)

Sections 8338 and 8413 (relating to deferred retirement).

(D)

Sections 8336(d), 8336(h), 8336(p), and 8414 (relating to early retirement).

(E)

Section 8341 and subchapter IV of chapter 84 (relating to survivor annuities).

(F)

Section 8337 and subchapter V of chapter 84 (relating to disability benefits).

(2)

Treatment of Detention Officer Service as Law Enforcement Officer Service

Any portion of an individual’s qualifying District of Columbia service which consisted of service as a detention officer under section 2604(2) of the District of Columbia Government Comprehensive Merit Personnel Act of 1978 (sec. 1–626.04(2), D.C. Official Code) shall be treated as service as a law enforcement officer under sections 8331(20) or 8401(17) of title 5, United States Code, for purposes of applying paragraph (1) with respect to the individual.

(3)

Service Not Included in Computing Amount of Any Annuity

Qualifying District of Columbia service shall not be taken into account for purposes of computing the amount of any benefit payable out of the Civil Service Retirement and Disability Fund.

(b)

Qualifying District of Columbia Service Defined

In this section, qualifying District of Columbia service means any of the following:

(1)

Service performed by an individual as a nonjudicial employee of the District of Columbia courts—

(A)

which was performed prior to the effective date of the amendments made by section 11246(b) of the Balanced Budget Act of 1997; and

(B)

for which the individual did not ever receive credit under the provisions of subchapter III of chapter 83 or chapter 84 of title 5, United States Code (other than by virtue of section 8331(1)(iv) of such title).

(2)

Service performed by an individual as an employee of an entity of the District of Columbia government whose functions were transferred to the Pretrial Services, Parole, Adult Supervision, and Offender Supervision Trustee under section 11232 of the Balanced Budget Act of 1997—

(A)

which was performed prior to the effective date of the individual’s coverage as an employee of the Federal Government under section 11232(f) of such Act; and

(B)

for which the individual did not ever receive credit under the provisions of subchapter III of chapter 83 or chapter 84 of title 5, United States Code (other than by virtue of section 8331(1)(iv) of such title).

(3)

Service performed by an individual as an employee of the District of Columbia Public Defender Service—

(A)

which was performed prior to the effective date of the amendments made by section 7(e) of the District of Columbia Courts and Justice Technical Corrections Act of 1998; and

(B)

for which the individual did not ever receive credit under the provisions of subchapter III of chapter 83 or chapter 84 of title 5, United States Code (other than by virtue of section 8331(1)(iv) of such title).

(4)

In the case of an individual who was an employee of the District of Columbia Department of Corrections who was separated from service as a result of the closing of the Lorton Correctional Complex and who was appointed to a position with the Bureau of Prisons, the District of Columbia courts, the Pretrial Services, Parole, Adult Supervision, and Offender Supervision Trustee, the United States Parole Commission, or the District of Columbia Public Defender Service, service performed by the individual as an employee of the District of Columbia Department of Corrections—

(A)

which was performed prior to the effective date of the individual’s coverage as an employee of the Federal Government; and

(B)

for which the individual did not ever receive credit under the provisions of subchapter III of chapter 83 or chapter 84 of title 5, United States Code (other than by virtue of section 8331(1)(iv) of such title).

(c)

Certification of Service

The Office of Personnel Management shall accept the certification of the appropriate personnel official of the government of the District of Columbia or other independent employing entity concerning whether an individual performed qualifying District of Columbia service and the length of the period of such service the individual performed.

II

SPECIAL SURVIVOR INDEMNITY ALLOWANCE FOR SURVIVING SPOUSES OF ARMED FORCES MEMBERS

201.

Increase in monthly amount of special survivor indemnity allowance for widows and widowers of deceased members of the Armed Forces affected by required Survivor Benefit Plan annuity offset for dependency and indemnity compensation

Section 1450(m)(2) of title 10, United States Code, is amended—

(1)

in subparagraph (B), by striking $60 and inserting $95;

(2)

in subparagraph (C), by striking $70 and inserting $105;

(3)

in subparagraph (D), by striking $80 and inserting $120;

(4)

in subparagraph (E), by striking $90; and and inserting $130; and

(5)

by striking subparagraph (F) and inserting the following new subparagraphs:

(F)

for months during fiscal year 2014, $330;

(G)

for months during fiscal year 2015, $335; and

(H)

for months during fiscal year 2016 ending before the termination date specified in paragraph (6), $345.

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