SENATE RETIREMENT PROPOSAL FOR NEW FEDERAL EMPLOYEES AND COMPARISON WITH CURRENT CIVIL SERVICE RETIREMENT SYSTEMS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87M01152R000200180009-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 155
• Document Creation Date: December 27, 2016
• Document Release Date: August 19, 2010
• Sequence Number: 9
• Publication Date: July 31, 1985
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
(b)(3)
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
SENATE RETIREMENT rNOF'OSAI.
for new federal employees
and comparison with current
Civil Service Retirement System
Current CSRS Senate bill (July 30, 1985)
-----------------... _ ----------------------------------------------
Eligibility Federal employees who are not Federal employees who are
---- covered by social security. covered by social security.
------------------- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Required employee it of total pay. None, except for social
contributions security.
-----------------------------------------------------------------
Vesting of retirement 5 years service, provided 5 years service.
benefits employee does not withdraw
his own contributions.
------------------------------------------------------------
-------------------------------
Salary base Average of high-3 yrs salary. Average of high-5 yrs salary.
---------------------------------------------------------
Retirement benefit
f
1.5%
x
first
5
yrs.
service,
1.0% times
years
of service
ormula (accrual
rate)
1.75%
x
next
5
yrs.
service,
.
2.0%
x
yrs.
of
svc.
over 10;
all times salary base.
--------------------------------------------------------------------------------
6 igibility for retirement
Age 55 L 30 years service. Age 62 & 5 years service.
Age 60 & 20 years service.
Age 62 & 5 years service.
3. Involuntary Age 50 6 20 yrs. service. Age 50 i 20 yrs. service.
Any age L 25 yrs. service. Any age L 25 yrs. service.
4. Deferred vested At least 5 yrs. service. At least 5 yrs. service when
and does not withdraw employment terminates.
employee contributions.
-------------------------------------------------------------------------------------------
Amount of retirement benefits
1. Unreduced Based on accrual rate. Based on accrual rate.
without reduction. without reduction.
2. Reduced No provisions. (A) Age 55 & 30 yrs. service.
benefit reduced 2t for
each year under age 62.
(B) Age 55 & 10 yrs. service.
benefit reduced 5% for
each year under age 62.
3. Involuntary Reduced 2t for each Reduced 2t for each year
year under age 55. under age 62.
4. Deferred vested Accrued benefit - Full accrued benefit-payable
payable at age 62. at age 62. Reduced benefit
can be elected when former
employee attains age 55
with the service needed for
early retirement (10 years
or 30 years), with reductions
-----------------------------at-5t-or 2t per year under 62.
---------- ------------------------
Refunds Option to withdraw at No contributions, thus
separation sums no refund.
contributed with
benefits forfeited.
------------------------------ ------------ -?---------------------------------------------
Cost-of-living Annually, 100t of Annually, equal to rate of
adjustments (COLAs) rate of inflation es increase in CPI, minus
measured by increase in 2 percentage points.
Consumer Price Index (CPI).
----------------------------------------7-------------------------------
-----------------
Optional forms of benefits Joint -&-survivor annuity. 1. Joint-L-survivor annuity.
(Survivor annuity is 55% of (Survivor annuity is 50% of
employee's unreduced annuity. employee's reduced annuity.
If spouse dies first, annuity If spouse dies first, annuity
to employee is restored to to employee is restored to
unreduced amount.) unreduced amount.)
2. Social security leveling
Subsidized (less than full option. (Benefits are higher
actuarial reduction). at age 55-62, lower after 62.)
------- ---Full-actuarial reduction.
----------------------------------------------- -------------------------
Suspension of benefits Applies only to involuntary Applies to all retirements.
during re-employment retirement cases.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
2. THRIFT-SAVINGS PLAN
------------------------
Current CSRS Senate bill (July 30, 19H5(
-------------------------------------------------------------------------------------------
Contributions
te from gross income
for tax purposes before
account is paid out);
1. Paid by employee and N/A Up to 5% of pay. with employer
matched by employer matching at $l for each $1.
2. Additional voluntary
employee contributions, N/A Up to 5% of pay.
not matched by employer
-------------------------------------------------------------------------------------------
Vesting N/A Employee is immediately vested
for own contributions.
employer contributions
vested at 20% after
1 year of service,
increasing to 100%
after 5th year, with any
investment gains/losses.
------------------------------------------------------- ------------------- -----------------
Investments
1. Employee may elect N/A
investment of own
account in:
2. Phase-in of private-
sector investment
option after thrift
plan contributions
begin:
Fund 8--Fixed-income securi-
ties, using insurance
company Guaranteed
Investment Contracts
(GICs) or other
private-sector assets.
Fund C--Equities, using an
index fund (invested
in proportion to a
diversified common
stock portfolio such
as Standard & Poor's
500 Stock Index).
Required to be in
Contrib-
utions in
cal. year
govt
Employee
securities
Employer
---------
1986 -
--------
? N/A
--------
N/A
1987
100%
100%
1988
80
100
1989
60
100
1990
40
100
1991
20
100
1992
0
100
1993
0
80
1994
0
60
1995
0
40
1996
0
20
Payout of employee N/A Employee may elect payout of
retirement accounts vested account balance:
1. As annuity.
2. In cash (at retirement
age or death).
3. As rollover to IRA (at
termination of employment
or death).
Active employees may not
withdraw funds.
Hardship loans to employees
are to be allowed on or
after January 1. 1988.
-----------------------------------------------------------------------------------------
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
Current CSRS Senate bill (July 30, 1985)
Preretirement death
benefit, spouse or
former spouse.
16 months service, (A) Any social security
surviving spouse benefits payable.
gets 55% of:
(8) Group life. Employer pays
(A) annuity earned at death, the full cost of basic
or, if larger, the group life amount equal to
lesser of (B) or (C). the basic amount under
current law. (This is
(B) 40% of salary base, or one times annual pay
rounded to next higher
(C) annuity earned with 51,000, plus $2,000, at
service projected to ages 45 and over, and
age 60 at same is higher for those
salary base. under age 45.)
Group life insurance (C) At death of individual who
benefits also are payable, is eligible to retire,
if employee elects to lifetime
contribute part of cost. pension equal to
50% of pension, , reduced
for early retirement and
for election of 50% joint-
and-survivor annuity.
(D) At death of individual who
is vested but not eligible
to retire, lifetime ben-
efit (commencing when the
individual first would
have been eligible to
retire) equal to 50% of
pension, reduced for early
retirement and for
election of 50% joint-and-
survivor annuity.
(E) Thrift plan account.
------------------------------------------ -------------------------------------------------
Preretirenent death Unrelated to annuity; None from plan; benefits
benefit, children annually adjusted dollar provided by social security.
amount varied by number
of children, and whether
or not orphaned.
--------------------------------------?-----?-------------------?? ------------------
Optional post- 55% of earned retirement Annuity to married retiree
retirement annuity unless choice is automatically reduced
death benefit, jointly rejected; actuarially as in a 50% joint-
spouse or option results in and-survivor option to provide
former spouse 2.5% reduction to spouse a survivor annuity.
first $3,600 of annuity (Automatic unless choice
and 10% reduction is jointly rejected.)
to annuity over $3,600.
--?--------------------- ------------------------------:----------
Children Same as for pre-retirement None from Lan; benefits
death benefit. provided from social security.
-------------------------------------------------------------------------------------------
Special provisions Benefits are the same Benefits are the same
for surviving as for surviving spouses, as for surviving spouses,
former spouses, subject to elections and subject to elections and
or new spouses deposits in certain cases. deposits in certain cases.
due to marriage
after retirement.
-------------------------------------------------------------------------------------------
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
Current CSRS Senate bill (July 10, 1985)
-------------------------------------------------------------------------------------------
Adainistration Provided from CSRS. Provided under separate
and eligibility it employee has 5 years Long-Ter. Disability (LTD)
of ^ervice for eligibility. plan with third-party
Customarily paid after administrator. Disability
sick leave is used up. benefits are paid first from
unused Dick leave. then
after no further waiting
period from LTD plea, if
employee has 18 months of
service for LTD eligibility.
---------------------------------------------------------------------------------------
Definition of disability Unable to do any g.ployee must meet one of two
job for which the definitions of disability--
employee is qualified I. Social Security definition:
in the ease agency at Unable to work in substeo-
the same grade level. tial gainful activity.
2. Occupational definition:
Unable to do any job for
which the employee is qual-
ified in the same agency
and commuting area, at the
same grade level.
During disability, total
income from work may not
exceed 60% of pay level for
former job. and employee may
be given physical amass.
---------------- ?------------------ ---------------------------------- --------------------
Disability benefit Annuity earned at onset, 60 percent of high-5, offset
aaouats or if greater, the lesser of: after 5-mooth waiting period
(a) 40% of salary base, or by 100% of social security
(b) annuity based on primary benefit, if any.
service projected payable to age 62.
to age 60 at the
same salary base. If employee meets only the
occupational definition of
disability, benefits are
reduced one year after they
begin to 40 percent of high-5,
payable to age 55.
Disability benefit amounts
have annual cost-of-living
adjustments (COLAs) that are
the ease as under the basic
pension plan.
-------------------------------------------------------------------------------------------
retirement benefits Disability pension During LTD benefit period.
after disability continues for life employee's service continues
if no recovery before to be credited toward basic
normal retirement age. retirement benefit formula.
high-5 goes up by the same
COLA used for the basic Pen-
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
Current .SRS
-------- --------------------------------- -
Retirement ages for law en- Law enforcement ufficers
forcemeat, firefighters, and firefighters may retire
air traffic controllers, Lit age 50 L 20 years service.
etc. Benefit is 2.r,,. of high-3
times first 20 years of
service, plus 2' times
service beyond 20 years.
Air traffic controllers
may retire after 25 years,
or at age 50 6 20 years,
with unreduced benefits
under the regular formula,
but not less than
50% of high-3.
Other groups have special
contributions, benefits.
Senate bill (July _lo. 19N5)
i..tw ?,nfor.urment, fit et t,hi.r,.
'tad air traffic control 1,-rs
may retire at age 55 with
years of service. hupplement
equal to social security
payable between ages 55-62.
`1attonal guard technicians
may retire at age 55 with
30 years service, with no
supplement payable.
These classes may retire
before age 55, if they have
25 years of service, with
reduction of 5% per year
below age 55, and with no
supplement payable before 55.
Other groups get the regular
-- -benefits of the plan.
------------------------------------------------------- -----------------------------
Treatment of non-federal Certain groups are Newly hired employees of the
employees as federal included. D.C. government are excluded
employees for purposes from this program. Other
of retirement non-federal employees retain
-
current coverage.
Transfers of current N/A Current employees may elect to
employees to new program join social security and new
program through Dec. 31, 1987.
Credit in current program
stops. except that the
high-3 pay continues to run.
Employee retains survivor
coverage from current plan.
but not disability coverage.
All service counts toward both
programs' eligibility for
retirement and vesting.
Employee is given credit for
prior federal service toward
eligibility for long-term
disability coverage.
and the social security
windfall-benefit reduction
and public-pension spouse
offset are waived.
-----------------------------------------------------------------------------------------
Effective date and Effective date is .1an.1. 1987.
transition from
interim plan Participants who contributed
toward interim plan after 1983
receive credit toward thrift
plan for these contributions
----sad meteb.ing-empioyer contri-
butions plus interest.
-------------------------------------------------------------------------------------------
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152ROO0200180009-7
Section-by-Section Analysis
The opening section (section 2) provides for the purpose
of the legislation. The purposes delineated include providing
a stable and flexible retirement plan which is comparable to
good private sector retirement benefits plans, enhancing porta-
bility of retirement assets between Federal jobs and jobs outside
the Federal government, and ensuring a fully funded and financially
sound federal retirement program.
TITLE I - CIVIL SERVICE PENSION SYSTEM
Section 101(a) amends title 5, United States Code, by
inserting a new chapter 84, entitled "Civil Service Pension
System" (CSPS).
Subchapter I of this chapter provides definitions for
administration of the CSPS, many of which are the same as or
similar to those used in chapter 83 of title S. New or
modified definitions include average pay (highest 5 years) and
basic pay (rate established pursuant to law, without regard to
any limits on authority to pay). Definitions of firefighter
and law enforcement officer are more specific than those
used in chapter 83. The subchapter also identifies the
participants in the new CSPS and specifies its relationship
to the Social Security Act. Employees of the District of
Columbia are specifically excluded. Employees of the current
Civil Service Retirement System (CSRS) are included if they
so choose pursuant to Section 8471.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152ROO0200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
Subchapter II describes the basic retirement plan, which
is a defined benefits plan applicable to all permanent employees
covered by the Social Security System on or after January 1, 1984'
and any employees subject to the CSRS who elect to join the CSPS.
. Section 8411 lists the combinations of age and service
which establish entitlement to an immediate annuity.
Subsections (a) and (b) provide for an immediate annuity
at age 55 with 10 years of service and age 62 with 5 years of
service.
Subsections (c) and (d) provide for an immediate annuity
to the special retirement classes (law enforcement officer,
firefighter, or air traffic controller) after 25 years of
service in the occupation.
Subsection (e) provides for an immediate annuity to an
employee who is separated from the service involuntarily and
who has completed 25 years of service or is not less than
age 50 with 20 years of service.
Subsection ('f;) provides that the annuity authorized by
this section is computed under sections 8413 through 8415 of
this title.
Section 8412 provides for deferred retirement at age 62
to a participant who is under age 62 and separates from Federal
employment after completing S years of service or at age SS
to a participant who is under age 55 and separates from Federal
employment after completing 10 years of service.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
-5-
Section 8413 provides the formula for computing the
annuity a participant is entitled to receive. The formula
is one percent of the average pay over the five highest
consecutive years multiplied by the number of years of
service. For the special retirement classes, an annuity
supplement equal to the estimated amount of Social Security
benefits payable at age 62 will be paid to annuitants from
age 55 until age 62. This supplement will be increased
annually by the percent increase in the Social Security Act
average wage index. A pro rata formula for part time service
is also specified.
Section 8414 provides for reduction of an immediate
annuity that begins before age 62. The reduction is two
percent for each year the participant is under age 62 on the
date of a voluntary retirement at age 55 with 30 years of
service or an involuntary retirement under section 8411(e).
The annuity is reduced by five percent for each year the
participant is under age 62 for a participant who elects to
receive an annuity after age 55 but before completing 30
years of service. A five percent reduction for each year
the participant is under age 55 applies to law enforcement
officers, firefighters, air traffic controllers, and military
reserve technicians.
Section 8415 provides for actuarially reducing an
annuity to provide for one or more survivor annuities.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
-4-
Subsection (a) provides for an automatic annuity reduction
to provide a survivor annuity to the spouse of a married
participant unless the participant and his or her spouse
jointly waive the spouse's right to a survivor annuity as
provided in section 8416.
Subsection (b) provides for an automatic annuity reduction
when the participant has elected to provide a survivor
annuity to a former spouse.
Section S416 provides that OP?\1 shall prescribe methods of
payment of annuities and participant election of the method
preferred. Included in those methods are a single life
annuity and a Joint-and-survivor annuity. An individual
designated as having an insurable interest in the annuitant
may receive an survivor annuity under this provision.
An individual who is married on the date he or she
applies for payment of the annuity to begin may elect a
method of payment other than a joint-and-survivor method
only if the indicidual and his or her spouse Jointly waive
an annuity under this method.
Section 8417 provides that a participant who retires
voluntarily prior to ape 62 may elect to have his or her
annuity payments adjusted in such a way that the total
amount received before and after receipt of Social Security
benefits begin is approximately the same. This does not
apply to deferred retirement or to the special retirement
classes.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152ROO0200180009-7
--
Section 8418 provides that each Federal agency shall
contribute an amount equal to the normal cost of the benefits
for the agency's employees, as determined by OPM. It also
provides for a yearly determination of the Fund's supplemental
liability which is to be amortized over 30 years by payments
from the Secretary of the Treasury or the Postmaster General
of the United States, as appropriate. OPM may use the current
CSRS Board of Actuaries for making actuarial determinations
and valuations for the CSPS.
Section 8419 provides that military service is creditable
service and that the Department of Defense Military Retirement
Fund shall reimburse the fund annually for the normal cost
relating to the military service of employees and members
who become participants during the fiscal year. This excludes
employees covered by the CSRS who elect under section 8471(a)
to join the CSPS.
Subchapter III describes the thrift savings plan, which
is an optional plan permitting participants to contribute a
percentage of their basic pay or disability benefits to a
selected investment vehicle and have those contributions
matched by the government.
Section 8421 allows participants to'contribute up to
10 percent of their basic pay to the thrift plan. Those
participants who are receiving disability benefits may
contribute up to 10 percent of the disability benefits
payable. An opportunity to change the contribution amount
will be provided at least annually. Employing agencies are
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152ROO0200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
-6-
required to match the participant's contribution, up to five
percent of the participant's annual rate of basic pay or the
disabled participant's disability benefits. Amounts contributed
to the thrift fund are not included in the employee's current
gross income for income tax purposes.
Section 8422 provides a vesting schedule for the thrift
plan. A participant immediately vests in his contributions
and their earnings. Beginning after one year of service,
the participant vests in 20 percent of the employer's con-
tribution. This increases by 20 percent for each additional
year of participation up to five years and beyond, when the
entire share contributed by the employer, plus interest, is
vested. A participant who dies while employed by the govern-
ment immediately vests in 100 percent of the employer's
contribution and the earnings on it. For a participant who
separates from employment before becoming entitled to an
immediate annuity, any employer contributions which he has
not vested in are transferred to the Treasury for credit to
Miscellaneous Receipts.
Section 8423 describes the optional ways an employee
may choose from to receive thrift account payments from the
thrift plan at separation from employment,, depending on his
or her status under the basic pension plan.
Subsection (a) permits a participant who is entitled to
an immediate annuity to elect one of the four methods
below:
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
(1) An immediate annuity
(2) A deferred annuity
(3) A lump sum or installment withdrawal
(4) Transfer to an individual retirement account
or other qualified retirement plan
Subsection (b) permits a participant who is entitled to
a deferred annuity to elect one of the methods described
above. For the first three methods, the money is not payable
until the date of the participant's eligibility for retirement.
Subsection (c) permits a participant who is not eligible
for any pension to elect one of the three methods below:
(1) An annuity at age 62
(2) A lump sum or installment withdrawal at age 62
(3) Transfer to an individual retirement account
or other qualified retirement plan
Subsection (d) permits a participant who elected to
defer an annuity payment to modify the date specified in
that election.
Section 5424 describes how annuities available from the
thrift plan will be computed and paid. The Thrift Investment
Board will prescribe methods of payment which must include a
single life annuity and a joint-and-survivor annuity. An
individual designated as having an insurable interest in the
annuitant is also covered under this provision. The amounts
will be determined actuarially. Methods for providing
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
-8-
annual increases in the annuity payable must also be
prescribed.
Section 8425 provides rules for elections by participants
entitled to payments or transfers from the thrift plan.
Section 8426 establishes the Thrift Savings Fund and
prescribes how monies in the Fund may be used. Included in
these uses is a requirement for the Board to establish a
program to make loans to participants in cases of hardship.
Section 8427 describes how employee and employer money
will be invested.
Subsection (a) defines terms used in application of
this section.
Subsection (h) requires the Board to establish three
funds under which sums in the Thrift Savings Fund may be
invested and provides an option to establish other funds.
The funds are:
(1) A Government Securities Investment Fund which is
invested in special issues of the Treasury.
(2) A Fixed Income Investment Fund which is invested
in insurance contracts, certificates of deposits, or other
instruments.
(3) A Common Stock Index Investment Fund which is
invested in common stock issues included in a commonly
recognized stock index, with the percentage invested in a
given stock to be the same as the percentage of that stock's
market value included in the index.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
Subsection (c) specifies that sums in the Thrift Fund
which are not designated or available to be invested in one
of the other investment funds will be invested in the,Govern-
ment Securities Investment Fund.
Subsection (d) states that participants may elect, at
least once each year, the investment funds into which they
wish to have their Thrift Savings Fund invested or reinvested.
Subsection (e) specifies that, during the implementation
phase of the Thrift Savings Fund, a certain percentage of
the contributions made by and for the participant must be
invested in the Government Securities Investment Fund. For
participant contributions, the initial amount is 1000,
reduced by 20? each year over a five year period, beginning
in 1988. For agency contributions, the same phasing schedule
applies, beginning in 1993. All amounts earned on these
contributions must be reinvested in the Government Securities
Investment Fund. Participants hired during the temporary
adjustment period will have contributions for that period,
as described in section 8473(b), invested in the Government
Securities Fund.
Subsection (f) provides for the Secretary of the Treasury
to issue, as needed by the Fund, two year notes bearing an
interest rate equal to the average market yield of all such
notes as of the end of the month preceding the date of
issue.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
Section 8425 prescribes how the Executive Director is
to account for the funds of each participant in the System
and requires that the participant be provided an annual
statement of his or her account. An annual audit report by
an independent qualified public accountant is also required.
Subchapter IV describes the benefits available to sur-
vivors of deceased participants and former participants from
the basic plan and the thrift plan.
Section 8431 provides for payment of death benefits
from the basic plan to the surviving spouse of a participant
or a former participant other than an annuitant if the
deceased had five or more years of service. If the participant
or former participant was eligible to retire, the survivor
gets 50 percent of the accrued annuity (computed as if he or
she had retired the day before death, with any applicable
reductions for early retirement and for election of a
survivor benefit). If he or she was not eligible to retire,
the benefit is computed as described above but payment is
delayed until the date he or she would have been eligible to
retire.
Section 8432 provides for payment of death benefits
from the basic plan to the survivor of an annuitant in accordance
with an election under section 8416, 8434(a), or 8436(c).
Section 8433 provides for survivor benefits from the
thrift savings plan. If the deceased participant or former
participant is not survived by a spouse, payment is made to
an individual designated as having an insurable interest or,
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
if no such designation was made, to the deceased individual's
estate. A surviving spouse entitled to payment of benefits
may elect to receive the money under one of three methods.
These are:
(1) An annuity
(2) Transfer of the money to an individual
retirement account
(3) Lump sum or installment withdrawal
Section 8434 provides for basic and thrift savings plan
survivor benefits to a spouse acquired after payment of the
annuity begins. The election is effective the first day of
the second month beginning after the election is received but
not earlier than nine months after the date of the marriage.
A deposit to retroactively fund this election is required as
needed. An election of a annuity reduction to provide this
benefit is not permitted if the spouse acquired after retire-
ment was married to the annuitant when payment of the annuity
began and the annuitant and spouse had jointly waived the right
to a survivor benefit.
Section 8435 states the entitlement of eligible former
spouses to receive survivor benefits from the basic plan
and the thrift plan. The benefits from the basic plan are
the same as for a surviving spouse under sections 8416, 8431,.
or 8432. Benefits from the thrift fund are determined
actuarially.
Section 8436 provides for an annuitant to elect a
survivor benefit from the basic plan and the thrift plan for
an eligible former spouse.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
1_-
Subsection (a) permits an annuitant who has a former
spouse to elect an annuity- reduction in order to provide a
survivor annuity to such former spouse. The election must be
made on or before the date the annuitant applies for payment
of an annuity from the basic plan or, if later, within two
years after the date on which the marriage of the former
spouse to the annuitant is dissolved. A deposit, computed
to reflect the amount by which the annuity would have been
reduced if it had been continuously in effect since the date
the annuity commenced, is required. An election of an
annuity reduction to provide a survivor benefit to a former
spouse shall not be effective if it:
(1) conflicts with a court order or decree,
(_) exceeds the funds available to pay it, or
(3) is made without the written consent of the
annuitant's spouse.
Subsection (b) provides that an annuitant whose annuity
is being reduced to provide a survivor benefit to a former
spouse may elect to provide or increase a survivor annuity
for any other former spouse. This election must occur within
two years after the former spouse's date of death or remarriage
before age 55.
Subsection (c) provides for an annuitant to elect to
provide a survivor annuity to his or her spouse if the
entitlement of an eligible former spouse is terminated or
reduced due to remarriage or death.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
-IJ-
Subsection (d) provides for a waiver of the requirement
that the spouse of a retiree waive a right to a survivor
benefit in certain situation.
Section 8437 provides for termination of a survivor
annuity on death of the spouse or former spouse, dissolution
of the marriage, or remarriage of the former spouse before
reaching age 55.
Section 8438 covers deposits to the Fund.
Subsection (a) requires a market rate of interest
payment on any deposit needed to fund an annuity election
under section 8434(c) or 8436.
Subsection (b) provides for offsetting the retiree's
annuity if the required deposit is not made.
Subsection (c) permits OPM to extend the time limit for
making the required deposit.
Subchapter V describes the disability benefits available
to a participant who has at least 18 months of service.
Section 8441 provides definitions for the administration
of this benefit.
Section 8442 provides that an eligible participant is
entitled to receive benefits under this subchapter if dis-
abled based on the Social Security definition and under 62
or if unable to work in his current position, not qualified
for reassignment, and under 55. At age 62/55, the annuity
is payable under the basic plan provisions of subchapter II
based on at least years actual service plus projected
service through age 62_ /55. .Average pay for the purpose of
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
-13-
converting the disabled person from the disability rolls to
the retirement rolls at age 62/55 is the average pay on the
date of disability, increased each time after that date by
the Consumer Price Index minus two percentage points.
Section 8443 provides the following methods for computing
disability benefits:
(1) If eligible for Social Security or ineligible
for Social Security only as a result of in-
sufficient quarters of coverage, 60 percent of
average pay minus 100 percent of the Social
Security benefit while the participant-is
under age 62.
(2) If occupationally disabled, 60 percent of average
pay for the first year. After the first year,
40 percent of average pay minus Social Security
benefits, if any, while the participant is
under 55 years of age.
Section S444 requires a claim for disability benefits
to be filed before the date the participant separates from
employment by the Federal Government or within 1 year after.
This time limit may be waived by the administrator of benefits.
Section 8445 requires the administrator to direct medical
examinations for disability retirement applicants or benefit
recipients.
Section 8446 requires that an applicant who is determined
able to perform; the work required in any position offered by
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
his employing agency- for which he is qualified, is at the same
grade or level as his current position, and is within his
commuting area, must he considered for appointment to such
position. The applicant is entitled to appeal a determination
that he is able to perform the work required of such position.
Section 844' provides for termination of disability
benefits to an individual who recovers from the disability
before reaching age 62 or, in the case of an employee who is
occupationally disabled, age 55. Recovery is presumed to
occur when income for one year equals 60 percent of the
current pay for the individual's former grade. These benefits
may be resumed if there is a recurrence of disability. In
the case of an individual whose benefits were terminated due
to restored earning capacity, benefits are resumed if he is
not reemployed within one year, his disability continues,
and his income for one year is less than the amount estab-
lishing his restored earning capacity.
Section 844S establishes that an individual is not
entitled to receive both disability benefits under this
chapter and injury compensation benefits under subchapter I
of chapter 81 of this title for the same period of time.
Section 8449 provides for disability benefits for a
O
military reserve technician who is separated from employment
as a technician due to a disability which disqualifies him
from membership in the National Guard or other reserve
component, as the case may be, or from holding the military
grade required for such employment and who is not placed in
another position.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152ROO0200180009-7
Section 8450 provides that OPM will contract with one
or more insurance companies or other firms to serve as a
third party administrator for the disability program provisions
which OPAL is not specifically required to administer. Each
contract awarded may not exceed 5 years and may include a
provision authorizing extensions for 1 year at a time.
Section 8451 provides requirements for an annual account-
ing by the third party administrator to OPM.
Section 845' provides for the establishment of an
Employees' Disability Insurance Fund in the U.S. Treasury
and requires agencies to make payments to the fund from
their salary appropriations.
Subchapter VI describes general provisions applicable
to the administration of the basic plan.
Section 846]. provides that OPM shall pay all benefits
payable under the basic plan from the Fund and shall administer
all provisions not specifically required to be administered
by the Board or any other agency. OPH is also authorized to
contract for the performance of any of these functions.
Section 8462 provides for an annual adjustment to the
basic pension as a result of an increase in the Consumer
Price Index (CPI). The increase will be the percentage
increase in CPI minus Z percentage points. The adjustment
is made in December (payable in January), and is based on
the change from September to September. A pro rata share of
the increase is payable to retirees or survivor annuitants
for whom this is the first increase.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152ROO0200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
Section 8463 provides that each annuity and disability
benefit is stated as an annual amount, one-twelfth of which
is the monthly rate payable.
Section 8464 provides that a participant's annuity
under the basic pension commences on the first day of the
first month after the participant separates from government
employment or such later date as he or she elects. It
terminates on the date of death or other terminating event
provided by law. It further provides that a survivor annuity
commences on the first day of the first month after the date
of death of the participant or retiree on whom the annuity
is based and terminates on the last day of the last month
ending before the surviving spouse dies or remarries before
age 55, unless another date is specified in accordance with
this chapter.
Section 8465 provides that an individual entitled to
receive a basic pension may waive receipt of all or part of
the benefits. An individual may also make allotments from
the benefit payment.
Section 8466 provides that an application for benefits
must be received before the former participant's 115th
birthday; for survivor benefits, the application must be
received within 30 years after the death or other event
which establishes entitlement to the benefit.
Section 8467 requires compliance with the terms of a
court order requiring payment of an annuity, in whole or in
part, to another person.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release-2012/11/15 : CIA-RDP87M0l 152R000200180009-7
Section 8468 provides for termination of an annuity
when an annuitant is reemployed by the Government. Upon
termination of the employment, his annuity rights are
redetermined. The amount of the annuity resulting from a
redetermination may not be less than the amount of the
terminated annuity plus any COLA increases.
Subchapter VII outlines the transition provisions for
individuals covered by the CSRS who choose to participate in
the CSPS.
Section 8471 permits participants in the current system
(CSRS), other than District of Columbia government employees,
to elect to participate in the new system (CSPS) during the
first year it is in effect and to retain accrued credit for
entitlement to benefits under the CSRS for service subject
to that system. It also provides that rehires who are
required to participate in the CSPS retain credit earned
under CSRS and are permitted to deposit to the CSRS fund
any amount previously refunded. Survivor benefits may be
payable based on conditions of eligibility and service under
both CSRS and CSPS.
Section 84'2 provides that CSRS participants who elect
to participate in the CSPS are allowed credit for service
under both systems for purposes of determining eligibility
to retire in both-systems and of vesting in the thrift plan.
Pay for such individuals subsequent to beginning participation
in the CSPS is taken into account in computing average pay
under both systems. Disability benefits are provided only
under the CSPS.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M0l 152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
Section 8473 provides that service by a participant
during the temporary adjustment period will be recognized as
years of participation for the purpose of vesting in the
employer's contributions to the Thrift Savings Fund under
section 8422. For such participants, monies will be trans-
ferred from the Fund to the Thrift Savings Fund in an amount
which equals twice his or her contributions plus interest
for any calendar year at the rate determined under section
8334(e) of title 5. The amount transferred will be in the
form of interest-bearing securities of the United States.
For vesting purposes, half of the amount will be treated as
a contribution from the participant and half as a contribution
by the employing agency. Participants hired during the
interim period who made a deposit to cover military service
will receive a refund of the deposit.
Section 8474 defines "reemployed annuitant" for various
Government retirement systems. This section provides that a
reemployed annuitant retains entitlement to the Government
retirement system under which he/she retired. It further
provides that service performed as a reemployed annuitant
under CSPS shall be credited only for eligibility to retire
under CSPS and cannot be considered creditable service for
the annuitant's previous retirement system. Also, pay
earned as an employee before and after reemployment is
considered in computing average pay under both the CSPS and
the annuitant's Government retirement system.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M01152R000200180009-7
Section S475 excludes former CSRS participants who join
the CSPS from the windfall reduction and the public pension
offset provisions of the Social Security Act.
Section 8476 authorizes OPAM to prescribe regulations to
carry out this subchapter.
Subchapter VIII describes the Civil Service Thrift
Investment Management System.
Section 8491 establishes a Civil Service Thrift Invest-
ment Board, composed of the Chairman of the Federal Reserve
Board, the Secretary of the Treasury, the Director of OPA1,
and two representatives of Federal employee organizations
appointed by the President, one of whom must be from a labor
organization and one of whom must be from a Federal employee
management organi:ation. The Chairman of the Federal
Reserve Board will chair the Board. Specific responsibilities
of the Board are detailed here.
Section S492' provides for the establishment of a Civil
Service Thrift Advisory Committee, composed of six members
appointed by the Board. Three are to be investment asset
managers and three are to be administrators of thrift savings
plans.
Section 8493 provides for the Board to appoint an
Executive Director to carry out the policies of the Board in
administering the Thrift Savings Fund. The Executive
Director is authorized to enter into contracts as necessary
to carry out these policies.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M01152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152ROO0200180009-7
Section 8494 states the investment policy governing the
Thrift Savings Fund. This includes a provision that investments
chosen are likely to receive broad acceptance by participants
and the public, and a provision that the two funds which
specifically provide for private sector investments should
not require a significant level of active investment decision-
making.
Section 8495 provides rules of administration for the
Board.
Section 8496 identifies fiduciaries and their responsi-
bilities, defines "party in interest," states basic standards
of fiduciary conduct, lists prohibited practices by
fiduciaries, and describes penalties for committing a pro-
hibited practice.
TITLE II - AMENDMENTS RELATING TO SOCIAL SECURITY.
Section 201 amends section 210(a)(5) of the Social
Security Act to cover service performed by an individual who
commences participation in the CSPS.
Section 202 amends section 3121(b)(5) of the Internal
Revenue Code of 1954 to tax the wages of an individual who
commences participation in the CSPS.
TITLE III - MISCELLANEOUS AND CONFORMING AMENDMENTS
Section 301 extends the Federal Employees' Retirement
Contribution Temporary Adjustment Act of 1983 from January 1,
1986 until January 1, 19S7.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152ROO0200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152ROO0200180009-7
Section 302(a) amends section 8331 of title 5, United
States Code, to limit coverage under the CSRS for District
of Columbia government employees to those first employed
before January 1, 1987.
Section 302(b) amends section 8332 of title 5, United
States Code, by adding a new subsection excluding partici-
pants in the CSPS from receiving service credit under the
CSRS, except in certain limited situations affecting partici-
pants retaining entitlement in the CSRS under section 8472.
Section 302(c) amends section 8333(b) of title 5,
United States Codes to modify the requirement that an employee
or Member must complete at least one year of creditable
service as a participant in the CSRS out of the last two
years before separation to include service under the CSRS. It
also amends section 8333(c) by making the contribution
requirements applicable only to service performed while not
a participant in the CSPS.
Section 302(d) amends section 8334(a) of title 5,
United States Code, relating to deductions from an employee's
pay for both CSRS and Social Security coverage. An employee
who was covered by the CSRS on December 31, 1983 and who was
subsequently covered by Social Security will continue in the
CSRS at a reduced contribution. The contribution to CSRS
will be equal to the excess of the employee's normal CSRS
contribution over the OASDI portion of the Social Security
tax.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152ROO0200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152ROO0200180009-7
o
Section 302(e) amends section 8339 of title 5, United
States Code, to specify that the CSRS benefit received by
those covered under subsection (d) will be offset by 1000 of
the Social Security benefit attributable to federal service.
Section 302(f) amends section 8347(a) of title 5,
United States Code, to permit OPA1 to contract for the
performance of administrative services necessary to carry
out its responsibilities under subchapter 83.
Section 302(g) amends section 8348(a) of title S,
United States Code, to clarify that the Civil Service
Retirement and Disability Fund is available to pay benefits
and administrative expenses for both chapters 83 and 84 of
such title.
Section 303 amends section 1005(d) of title 39, United
States Code, to include officers and employees of the Postal
Service for coverage under the provisions of chapters 83 and
84 of title 5.
Section 304 requires agencies to pay all group life
insurance basic plan costs for CSPS participants from salary
appropriations.
Section 305 amends sections 8901(10) and 8905(c) of
title 5, United States Code, to incorporate health benefit
plan eligibility requirements for former spouses as a
result of P.L. 98-615. It also amends section 8905(b)
to permit a family member of a deceased employee or
annuitant who was enrolled in a health benefits plan to
continue that enrollment.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152ROO0200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
Section 30b amends section 2105(c) of title 5 to provide
that chapter 84 does not apply to employees of certain non-
appropriated fund instrumentalities.
TITLE IV - AUTHORI:ATION AND EFFECTIVE DATES.
Section 401 provides for payment of the fiscal year
1986 and 1987 expenses of the Civil Service Thrift Investment
Board from appropriations.
Section 402 provides that this act takes effect January 1
1987, except for subchapter VIII of chapter 84 (relating to
the Civil Service Thrift Investment Board), which takes
effect on the date of enactment, and the loan program required
by section 8426(e) which must be established not later than
January 1, 1988.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
99th CONGRESS
1st Session S.
Mr. Stevens (for himself and tr. Roth) introduced the fo1lo:+11c
bill; which was read twice and referred to the Committee on
To amend title 5, United States Code, to establish a new
retirement ant disability clan for Federal employees, postal
employees, and 1emcers of Congress, and for other purposes.
Bg 11 gQaQ~e LY Lrg Egai=g 3Q-1 cQSg 21 E=Cg5g?1111Y?s
2 21 tr,g UQj*gq a1aJ12 of ArtgQfca In _ongcess assembled.
3 That this Act may be cited as the "Civil Service Pensio-
4 Reform Act of 1985'".
5 PURPOSES
6 Sec. 2. The purposes of this Act are--
7 (1) to provide Federal employees with a retirement
8 benefits plan whicn is comparahle to good private sector
9 retirement benefits plans;
10 (2) to promote financial stability and flexibility
11 for the future of each Federal employee;
12 (3) to ensure a fully funded and financially sound
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.C.
2
1 Federal Government retirement benefits plan;
2 (4) to ennance portability of retirement assets
3 between Federal jobs and jobs outside the Federal
4 Government;
5 (5) to increase the options of each Federal employee
6 with respect to retirement benefits plans;
7 (6) to encourage Federal employees to increase
8 personal savings for retirement;
9 (7) to include Federal employees in the investment
10 decisionmaking process with respect to the assets of tie
11 retirement system; and
12 (8) to extend financial protection from oisaoility to
13 additional Federal employees and to increase suci
14 protection for eligible Federal employees.
15 TITLE I--CIVIL SERVICE PENSION SYSTEM
15 ESTABLISHMENT
17 Sec. 101. (a) Title 5, United States Code, is amender dy
18 inserting after chapter 83 the following new oha;ter:
19 "CHAPTEcR. 84--CIVIL SERVICE PENSION SYSTEM
"SUBCHAPTER I--DEFINITIONS; CIVIL SERVICE PENSION SYSTEM
"Sec.
"8401. Definitions.
048402. Civil Service Pension System; participation.
" 8403. Relationship to the Social Security Act.
8411. Entitlement to immediate retirement.
" 8412. Entitlement to deferred retirement.
"5413. Computation of annuity.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.7.
3
9414. Reduction for early retirement.
8415. Reduction for survivor annuities.
"8416. Methods of payments.
'49417. Level benefits option.
448418. Funding.
"8419. Funding of annuity attributable to military service.
9421. Contributions.
" 8422. Vesting.
"8423. Entitlement and elections relating to entitlement.
4'8424. Annuities: methods of payment; election; and
computation.
"8425. Administrative provisions relating to payments and
elections.
"8426. Thrift Savings Find.
"8427. Investment of Thrift Savings Fund.
"8428- Accounting.
'45431. Easic plan spousal benefits relating to the teat, of
a participant or former participant otner tnan an
annuitant.
9432. Basic plan spousal and insurable interest benefits
relating to the death of an annuitant.
"8433. Survivor benefits under the thrift savings plan.
9434. Basic and thrift savings plan survivor benefits
relating to ia:riage after commencement of an
annuity.
149435. Survivor benefits for former spouses: entitlements;
amount.
48435. Survivor benefits for former spouses: elections,
deposits and collections, and administrative
provisions.
" 8437. Termination of entitlement.
8438. Deposits to the Fund.
"8441. Definitions.
"8442. Entitlement.
8443. Computation of benefits.
" 8444. Application.
"8445. Medical examinations.
" 8445. Offers of alternative employment.
'8447. Recovery or restoration of earnin; capacity.
" 8448. Relationship to corkers' compensation.
"8449. Military ceserve technicians.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L..
4
"8450. Administrative provisions.
18451. Annual accounting; special contingency reserve.
"8452. Federal Employees' Disability Insurance Fund.
"SUBCHAPTER VI--GENERAL AND ADMINISTRATIVE PROVISIONS
4 *8461. Authority of the Office of Personnel Management.
8462. Cost-of-living adjustment in basic plan annuities and
survivor annuities.
"8463. Rate of benefits.
48464. Commencement and termination of annuities.
" 8465. Waiver, allotment, and assignient of benefits.
" 8466. Application for benefits.
"8467. Court orders.
448468. Annuities and pay on reemployment.
"SUBCHAPTER VII--TRANSITION PROVISIONS
"8471. Treatment of certain individuals subject to the :ivil
Service Retirement and Disability System.
118472. Special rules for participants retaining entitlement
In the Civil Service Retirement and Disability
System.
"8473. Participants subject to the Federal Employees'
Retirement Contribution Temporary Adjustment Act of
1983.
" 8474. Reemployed annuitants under the Civil Service
Retirement and Disability System.
"8475. Exemption from certain offset provisions of the
Social Security Act.
"8476. Regulations.
"SUBCHAPTER VIII--CIVIL SERVICE'THRIFT INVESTMENT MANA EMENT
SYSTEM
"8491. Civil Service Thrift Investment coati.
"9492. Civil Service Thrift Advisory Committee.
"8493. Executive Director.
8494. Investment policy.
" 8495. Administrative provisions.
"8496. Fiduciary responsibilities; liability and penalty.
1
''SUBCHAPTER I--DEFINITIONS; CIVIL SERVICE PENSION SYSTEM
2
"S
8401. Definitions
3
"Except as otherwise provided in this cn3pter, for the
4
purposes of this chapter--
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079912.454 S.L.C.
5
1 "(1) the term 'account', when used with respect to a
2 participant or annuitant, means an account established
3 and maintained under section 8428(x) of this title;
4 "(2) the term 'annuitant' means a former participant
5 who is entitled to an annuity under this chapter and who
6 has applied under this chapter for the payment of the
7 annuity to commence;
8 "(3) the term 'average pay', when used with resoeot
9 to a participant, means the largest annual rate resulting
10 from averaging the participant's rates of basic pay in
11 effect over any 5 consecutive years of creditable service
12 or, in the case of an annuity under this chapter based on
13 service of less than 5 years, over the total service,
14 with eacn rate weighted by the period it was in effect;
15 '' (4) the ter'r "nasic pay', when used with respect `-o
16 a participant--
17 -(A) means the lesser of--
18 "(1) the basic pay of the participant
19 established pursuant to law, without regard to
20 any provision of law (except sections 5308 and
21 5382(b) of tells title) limiting the rate of pay
22 actually payable in any pay period (including any
23 provision of law restricting the use of
24 appropriated funds); or
25 '' (ii) the rate of basic pay payable for
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
279910.454 S.L.=.
6
1 level I of tie Executive Schedule; and
2 "(B) includes the items described in
3 subparagraphs (A) through (D) of paragraph (3) of
4 section 8331 of this title and does not include the
5 Items excluded by such paragraph;
6 "(5) the term `Board' means the Civil Service Tnrift
7 Investment Board established by section 8491(a) of this
8 title;
9 "(6) the term 'Civil Service Retirement and
10 Disability Fund' means the Civil Service Retirement aid
11 Disability Fund referred to in section 8348 of this
12 title;
13 "(7) the term 'court', when used with respect to a
14 judgment, decree, order, or other judicial action, Weans
15 any court of the United States, a State, the District of
16 Columbia, tie Commonwealth of Puerto Pico, or 3 territory
17 or possession of the United States, or any Indian court,
18 having jurisdiction to issue such judgment, decree, or
19 order or to take such other judicial action;
20 " (8) the term *Director' means the Director of the
21 Office of Personnel Management;
22 "(9) the term 'dynamic assumptions' means economic
23 assumptions that are used in determining actuarial costs
24 and liabilities of a retirement system and in
25 anticipating the effects of long-term future--
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
07991e.u5u ~.T.`.
7
1 "(A) investment yields,
2 "(B) increases in sates of basic pay, and
3 "(C) rates of price inflation;
4 "(10) the tern 'earnings', when used with respect to
5 the Thrift Savings Fund, means the amount of the gain
6 realized or yield received from the investment of sums in
such fund;
"(11) the term 'eligible former spouse', when used
with respect to a participant or former participant,
10 means a former spouse of the participant or former
11 participant who was harried to the participant or former
12 participant for at least 9 months;
13 ' . (12 ) the term ' employee' means--
14 " (A) each individual referred to in
15 subparagraphs (A), (E), (F), (H), (I), and (J) of
15 section 8331(1) of this title, including an employee
17 of the United States rack Police and an employee of
19 the United States Secret Service; and
19 "(3) a Congressional employee as defined in
20 section 2107 of this title, including a temporary
21 Congressional employee;
22 any of whose service after December 31, 1983, is
23 employment for the purposes of title II of the Social
24 Security Act and chapter 21 of the Internal Revenue Code
25 of 1954, except that such terry does not include any
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
8
1 individual referred to in clause (1), (ii), (v), (vi), or
2 (ix) of paragraph (1) of section 8331 of this title o in
3 the undesignated material after clause (ix) of such
4 paragraph, any individual excluded under section
5 8402(b)(2) of this title, or any individual who was
6 subject to subchapter III of chapter 83 of this title on
7 December 31, 1983, and has not commenced participation in
8 the System pursuant to section 8471 of tnis title;
9 "(13) (13) the term 'Executive Director' means the
10 Executive Director appointed under section 8493(a)(1) of
11 this title;
12 "(1u) the term 'firefighter' means an employee the
13 duties of whose position--
14 "M are primarily to perform work directly
15 connected with the control and extinguisiment of
15 fires; and
17 "(B) are sufficiently rigorous that employment
18 opportunities are required to oe limited to young and
19 physically vigorous individuals, as determined by the
20 Director considering the recommendation of the
21 employing agen:y;
22 "(15) the term 'Fund' -means the Civil Service
23 Retirement and Disability Fund;
24 "(16) the term 'Government' means the Federal
25 Government and Gallaudet College;
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
9
1 "(17) the tern 'law enforcement officer' means an
2 employee, the duties of whose position--
3 "M are primarily (1) the investigation,
4 apprehension, or detention of individuals suspected
5 or convicted of offenses against the criminal 1343 of
6 the United States, or (i1) the protection of
7 officials of the United States against threats to
8 personal safety; and
9 **(B) are sufficiently rigorous that employment
10 opportunities are required to be limited to young and
11 physically vigorous individuals, as determined by the
12 Director considering the recommendation of tie
13 employing agency;
14 "(18) (18) the tern 'loss', when used .With respect to the
15 Thrift Savings Fund, means the amount of the loss
16 realized from the Investment of sums in such fund;
17 "(19) (19) the term 'lump-sum credit' has the same
19 meaning as provided by section 8331(e) of this title;
19 "(20) the term 'Member' has the same meaning as
20 provided in section 2136 of this title, except that sucn
21 term does not include a person who (A) was a Member of
22 Congress on December 31, 1983, and (5) has not commenced
23 participation in the System pursuant to section 9471 of
24 this title;
25 ?4(21) the tern 'military reserve technician' means a
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M01152R000200180009-7
10
1 member of one of the reserve components of the Armed
2 Forces specified in section 261(a) of title 10 who--
3 "M Is assigned to a civilian position as a
4 technician in the administration and training of such
5 reserve components or in the maintenance and repair
6 of supplies issued to such reserve components; and
7 "(B) as a condition of employment in such
8 position, is required to be a member of one of suon
9 reserve components serving in a specified military
10 grade;
11 "(22) the term 'net earnings' means the excess of
12 earnings over losses;
13 "(23) the term 'net losses' means the excess of
14 losses over earnings;
15 "(24) the term 'normal cost' means the entry-age
16 r.ormal cost of the provisions of the System 4hici relate
17 to the Fund, computed by the Office in accordance with
12 generally accepted actuarial practice an! standards
19 (using dynamic assumptions) and expressed as a level
20 percentage of aggregate basic pay;
21 "(25) the term 'Office' means the Office of
22 Personnel Management;
23 "(26) the term 'participant' means an employee or
24 Member or a person who is receiving disability benefits
25 under subchapter V of this chapter;
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M01152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L..
11
1 "(27) the term 'price index' has the same meaning as
2 provided in section 8331(15) of this title;
3 44(28) the term 'service', when used with res?e:t to
4 a participant or former participant, means--
5 "M employment as a participant;
6 "(B) subject to section 8419(a) of this title,
7 military service as provided in section 8332(0) of
8 this title; and
9 **(C) service that is creditable under suoohapter,
10 III of chapter 83 of this title, but only to the
11 extent provided In section 8472(a) of this title;
12 "(29) the term 'supplemental liability' means tie
13 estimated excess of--
14 "M the actuarial present value of all future
15 benefits payable from the Fund under this chapter,
15 over
"(3) the sun of--
"*(I) the actuarial present value of tie
future contributions to be made on behalf of
participants pursuant to section 8418(a) of this
title; and
(ii) the balance in the Fund attributable
to the System on the date the supplemental
liability is determined; and
"(30) the term 'System' means the Civil Service
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
12
1 Pension system described in section 8u02(a) of tnis
2 title.
3 "S 8402. Civil Service Pension System; participation
4 "(a) The provisions of this chapter comprise the :ivil
5 Service Pension System.
5 "'(b)(1) Except as provided in paragraph (2) of this
7 suosection, each employee and Member snail be a participant
8 in the System.
9 "(2)(A) The Office ray exclude from the operation of
10 this chapter an employee or group of employees in or under an
11 Executive agency whose employment is temporary or
12 intermittent, except an employee whose employment is part-
13 time career employment (as definer in section 3401(2) of tnis
14 title).
15 `?(B) The Architect of the Capitol may exclude from the
16 operation of this chapter an employee under the Office of the
17 Architect of the Capitol wnose employment is temporary or of
18 uncertain duration.
19 "(C) The Librarian of Congress may exclude from the
20 operation of this chapter an employee under the Library of
21 Congress whose employment is temporary or of uncertain
22 duration.
24 "Except as otherwise
8403. Relationship to the Social Security Act
provided in this chapter, the
25 benefits payable under tie System are in addition to the
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 =.L."
13
1 benefits payable under tie Social Security A=t.
2 "SUBCHAPTER II--BASIC PLAN
3 "S 8411. Entitlement to immediate retirement
4 "(a) An employee or a Eember who is separated from
5 government employment after becoming 55 years of age and
6 completing 10 years of service is entitled to an immediate
7 annuity.
8 "(b) An employee or a Member who is separate' from
9 "ovecnment employment after becoming 52 years of age and
10 completing 5 years of service is entitled to an immediate
11 annuity.
12 "(c) An employee who is separated from, 3overnme-it
13 employment after completing 25 years of service as a lap
14 enforcement officer or firefighter, or any combination of
15 such service totaling at least 25 years, is entitled to an
16 immediate annuity.
17 ''(d) An employee who is separated from government
18 employment after completing 25 years as an air traffic
19 controller Is entitled to an immediate annuity.
20 "(e)(1) Except as provided in paragraphs (2) and (3) of
21 this subsection, any employee who has completed 25 years of
22 service, or is not less than 50 years of age and has
23 completed 20 years of service, and who--
24 "M is separated from Government employment
25 involuntarily, except by removal for cause on charges of
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
14
1 misconauct or delinquency, or
2 "M while serving in a geographic area designate]
3 by the Director, is voluntarily separated from Government
4 employment during a period that (as determined oy tie
5 Director)-
6 "(1) the agency in which the employee is serving
7 Is undergoing a major reorganization, a major
8 reduction in force, or a major transfer of function,
9 and
10 "(0) a significant percentage of the total
11 number of employees serving in such agency will be
12 separated or subject to an immediate reduction in the
13 rate of basic pay (without regard to subchapter VI of
14 chapter 53 of this title or comparable provisions),
15 is entitles to an immediate annuity.
16 "(2) An employee described in paragraph (1)(A) of this
17 suosection is not entitled to an annuity under this
18 subsection if the employee has declined a reasonable offer of
19 another position in the employee's agency for which the
20 employee is qualified and the offered position is not lower
21 than 2 grades or pay levels below the employee's grace or pay
22 level and is within the employee's commuting area.
23 "(3) Paragraph (1) of this subsection snall not apply to
24 a firefighter, law enforcement officer, or air traffic
25 controller who has completed 25 years of service.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.C.
15
1 "(f) An annuity aut-io:ized by this section is cDnputad
2 under sections 9413 though 9415 of tnis title.
3 "S 8412. Entitlement to deferred retirement
4 "(a) A participant who is under 55 years of age and
5 separates from ;overnment employment after completing 10
5 years of service is entitled to an annuity to commence on or
7 after the date the participant becomes 55 years of age but
8 not later tnan the date the participant becomes 62 years of
9 age, as elected by the participant under rules prescribed by
10 the office.
11 44(t) A participant who is under 62 years of age and
12 separates from Government employment after completing 5 years
13 of service and before conpleting 10 years of service is
14 entitleo to an annuity to commence on the date the
15 participant becomes 52 years of age.
16 *'(W An annuity awtnorized by this section is coTp::ted
17 under sections E413 t`:_ ough 6415 of tnis title.
18 ''S 6413. Computation of annuity
19 "(a)(1) Except as p_ovited in section 8414 or 8415 of
20 this title, the amount of the annuity an annuitant is
21 entitlea to receive under this subchapter shall be equal to
22 the product of 1 percent of the former participant's average
23 pay (while serving as an employee or !".ember) multiplied by
24 the participant's total service.
25 "(2) For the purposes of computing the amount of an
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
1 annuity under paragraph (1) of this subsection, the total
2 service of a participant who separates from ;overnment
3 employment entitled to an immediate annuity or who dies
4 leaving a survivor or survivors entitled to a survivor
5 annuity under this chapter includes days of unused sick leave
6 credited to the participant under a formal leave system to
7 the same extent that unused sick leave is credited in
8 computing an annuity of a person who is subject to sab:ha?ter
9 III of chapter 93 of this title, as provided in section
10 8339(m) of this title.
11 "(b)(1) A former participant who Is entitled to receive
12 an annuity under subsection (c) or (d) of section 8411 of
13 this title and is at least 55 years of age ani not More than
14 62 years of age snail oe entitlec to receive an annuity
15 supplement, in addition to the amount of the annuity compited
16 under subsection (a) of this section, while the former
17 participant is under 62 years of age.
18 4'(2) The amount of the annuity supplement payable to a
19 former participant under para;raph (1) of this subsection
20 shall be equal to the estimated amount of the benefits that--
21 "M the former participant would be entitled to
22 receive under title II of the Social Security Act if the
23 participant were 62 years of age on the date the annuity
24 referred to in such paragraph commences; and
25 "(B) is attributable to service referred to in
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454
17
1 section 8411(c) or 8411(d) of this title, as the case may
2 be,
3 computed on the date such annuity commences and increased as
4 Drovided In paragraph (3) of this subsection.
5 " (3) Effective on January 1 of each year, the amcunt of
6 the annuity supplement payable to a former participant under
7 this subsection shall be increased by the percentage
8 increase, if any, in the SSA average wage index (as defined
9 in section 215(i)(1)(G) of the Social Security !pct) rublished
10 for November of the preceding year over such index published
11 for November of the next preceding year.
12 `.(c) In computing under this section the annuity cf an
13 individual who has performed service on less than a full-time
14 basis, such service shall credited on a proportional basis
15 equal to the fraction that such service is of full-time
15 service, and the annual rate of basic pay that would be
17 payable for full-time service in the position shall be deemed
18 to be the rate of basic pay.
19 "S 8414. Reduction for early retirement
20 "The annuity computed under section 8413(a) of this
21 title (without regard to this section or section 8415 cf this
22 title)--
23 " (1) for an annuitant, other than an annuitant
24 referred to in paragraph (2) or (3) of this secticn, who
25 is under 62 years of age on the date on which the
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
19
1 annuitant's annuity commences shall be reduced by cne-
2 sixth of 1 percent for each month that the annuitant is
3 under such age on such date;
4 "(2) for an annuitant, other than an annuitant
5 entitled to an immediate annuity under section 8411(e) of
6 this title and an annuitant referred to in paragraph (3)
7 of this subsection, who is at least 55 years of age and
9 is under 62 years of age on the date on which the
9 annuitant's annuity commences and has not completed 3e
10 years of service shall be reduced by five-twelfths of 1
11 percent for each month that the annuitant is under 62
12 years of age on such date; and
13 "(3) for an annuitant who is entitled to an
14 immediate annuity under subsection (c) or (d) of section
15 8411 of this title or who separated from Government
16 employment as a military reserve technician shall be
17 reduced by five-twelfths of 1 percent for each north that
18 the annuitant is under 55 years of age on the date on
19 which the annuitant's annuity commences.
23 'IS 8415. Reduction for survivor annuities
21 "(a) The annuity of an annuitant computed under section
22 8413 of this title and, if appropriate, under section 8414 Of
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L..
19
1 this title shall be reduced by an estimated amount suTn that
2 the actuarial present value of the retirement benefit3
3 expected to be payable to the annuitant under this subchapter
4 and all survivor benefits expected to be payable out of the
5 And with respect to the annuitant is equal to tie a:tuarial
6 present value of the retirement benefits that Would be
7 expected to be payable under this subchapter to the 3nnaitant
8 pursuant to the method referred to in section 8416(a)(2)(..)
9 of this title, as determined under regulations prescribe) ny
10 the office.
11 .'(b) A reduction in the annuity of an annuitant pursuant
12 to subsection (a) of this section shall be adjusted, as
13 appropriate to carry out such subsection, to reflect any
14 change in circumstances relating to entitlement to a survivor
15 annuity, including any election mace pursuant to section
16 S434(a), 8435(b), or 00(c) of this title.
1 7 ' ' S E416. retnoas of Payment
18 '.(a)(1) Tne Office shall prescribe methods of payment of
19 annuities under this sub:hapner.
20 **(2) The methods of payment prescribed under paragraph
21 (1) of this subsection shall include, but not be limited to--
22 ''(A) a method wnich provides for the payment of 3
23 monthly annuity only tc an annuitant during the life of
24 the annuitant;
25 ''(B) a method wnich provides for the payment of a
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M01152R000200180009-7
20
1 monthly annuity to an annuitant and a monthly survivor
2 annuity equal to 53 percent of the annuitant's annuity on
3 the date of the annuitant's death (computed without
4 regard to an election under section 8417(a) of this
5 title) to the annuitant's surviving spouse, if any; and
6 "(C) a method which provides for the payment of a
7 monthly annuity to an annuitant and a monthly survivor
8 annuity equal to 58 percent of the annuitant's annuity on
9 the date of the annuitant's death (computed without
10 regard to an election under section 8417(a) of this
11 title) to an indiviCaal who is designated by the
12 annuitant and who ha- an insurable interest in tie
13 annuitant.
14 "(b)(1) Subject to paragraphs (2) and.(3) of this
15 subsection--
16 "M under such regulatior.s as the office snail
17 prescribe, a participant or former participant who is
18 applying for an annuity under this subchaoter to oonnence
19 shall elect one of the methods of payment prescribed by
20 the Office under subsection (a) of this section; and
21 "M the annuity of an annuitant under this
22 subchapter shall be oald in accordance witn the method of
23 payment elected by the annuitant pursuant to subparagraph
24 (A) of this paragraph.
25 "(2)(A) A participant or former participant who is
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M01152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L..
21
1 married on the date on which the participant or former
2 participant applies for an annuity under this suochapter to
3 commence may elect a method of payment other than the method
4 described in subsection (a)(2)(B) of this section only if the
5 participant or former participant and the spouse of the
6 participant or former participant jointly waive a survivor
7 annuity under the method described in such subsection
8 (a)(2)(B).
9 *'(B) A waiver shall not be effective for the purpose of
10 subparagraph (A) of this paragraph unless the waiver is made
11 in writing, is notarized, and is filed with the 3ffice on or
12 before the date the annuity to which the waiver relates
13 commences.
14 4'(C) A waiver made in accordance with tnis paragraph
15 shall be irrevocable.
16 ''(3) In the case of an annuitant who is subject to
17 paragraph (2)(A) of this subsection and fails to make an
18 election under paragraph (1) of this subsection, an annuity
19 and survivor annuity shall be paid under the metnod of
20 payment described in subsection (a)(2)(B) of this section.
21 44(4) A participant or former participant may elect the
22 method prescribed under subsection (a)(2)(C) of this section
23 only If the participant or former participant is in good
24 health on the date the election is made, as determined oy the
25 Office.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
22
1 **S 8417. Level benefits option
2 ""(a) Under regulations prescribed by the Office, an
3 annuity payable under this subchapter to a participant w!io is
4 separating from Government employment entitled to an
5 "immediate annuity under subsection (a) of section 8411 of
5 this title and is less tnan 62 years of age may be adjusted
7 as provided in subsection (b) of this section, if elected cy
8 the participant on or before the date of separation.
9 "(b)(1) Subject to paragraph (2) of this subsection, 3n
10 annuity payable under this subchapter to an annuitant who has
11 made an election authorized by subsection (a) of this section
12 may be increased during the period the annuitant is not less
13 than 55 years of age and is less than 52 years of age and may
14 be reduced on and after the date the annuitant is not less
15 than 62 years of age as appropriate to provide the annuitant
16 an annuity under this suochapter, during each month of such
17 period, in an amount which approximately equals the total
18 amount of the monthly benefits payable to the annuitant under
19 this subchapter and section 202(a) of the Social Sec.irity Oct
20 after such date.
21 "(2) The actuarial present value of the benefits
22 expected to be paid under this subchapter to the annuitant as
23 provided in paragraph (1) of this subsection on and after the
24 date the annuitant becomes 55 years of age may not exceed the
25 actuarial present value of the benefits that would oe
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M01152R000200180009-7
079910.454 O.L.Z.
23
1 expected to be paid under this subchapter to such parts;ipant
2 on and after such date if the adjustments authorized by such
3 paragraph were not made, as determined under regulations
4 prescribed by the Office.
5 "S 8418. Funding
6 "(a)(1) Each agency of the Government employing a
7 participant shall contribute to the Fund an amount equal to
8 the sum of--
9 "(A) the no-;nal cost, as determined by the Office,
10 of (1) eacn participant who is employed by the agency,
11 and (ii) eacn disabled participant who is entitled to
12 benefits uncer section 2442(a) of this title and was
13 employee by the agency on the date the participant Deane
14 disabled (computed using average pay as increased in
15 accordance with section 9442(b)(2)(C) of this title); and
16 "(8) the normal cost, as determined by the Dffice,
17 of the annuity supplement under section 3413(b) of this
18 title for each law enforcement officer, firefighter, and
19 air traffic controller who is employed by the agency.
20 '' (2) The contribution required by paragraph (1) of
21 this subsection to be made by an agency shall be made
22 from the appropriation or fund used to pay the agency's
23 participants, or, in the case of an elected particioant,
24 from an appropriation or fund available for payment of
25 other salaries of the office or establisnment of the
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M01152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M01152R000200180009-7
2u
1 participant. in the zase of a participant in the
2 legislative branch who is paid by the Clerk of tie House
3 of Representatives, contributions for the benefit of such
4 participant shall be paid from the contingent fund of the
5 House of Representatives.
6 "(b)(1) The office shall compute--
7 **(A) the amount of the supplemental liability of the
8 Fund relating to participants and annuitants other tian
9 participants and annuitants referred to in subparagraph
10 (B) of this paragraph, ano
11 '%(B) the amount of the supplemental liability of the
12 Fund relating to participants and annuitants who are
13 active or retired officers or employees of tie United
14 States Postal Service,
15 as of the close of eaci fiscal year beginning after September
16 30, 1987.
17 "(2) The a.rounts of any supplemental liability--
19 "M computed pursuant to paragraph (1)(A) of this
19 subsection with respect to participants and annuitants
20 referred to in such paragrapn (1)(A) of this.subsectioa,
21 and
22 "(B) computed pursuant to paragraph (1)(9) of tnis
23 subsection with respect to participants and annuitants
24 referred to in such paragraph (1)(B),
25 shall each be amortized in thirty annual installments.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M01152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.C.
25
1 44(3) At the ent of each fiscal year, the Office sh31l
2 notify--
3 "M the Secretary of the Treasury of tie amount of
4 the annual installment computed under paragraph (2)(A) of
5 this subsection for such fiscal year, and
6 "(8) the Postmaster General of the United States of
7 the amount of the annual installment computed pursuant to
8 paragraph (2)(9) of this subsection for such fiscal year.
9 .?(4)(A) Before closing the accounts for a fiscal yea:,
10 the Secretary of the Treasury shall credit the amount of the
11 annual installment computed for sucn fiscal gear pursuant to
12 paragraph (2)(A) to the Fund, as a Government contribution,
13 out of any money in the Treasury of the United States no:
14 otherwise appropriated.
15 ''(P) Upon receiving a notice required by paragrapn
15 (3)(E) of this subsection, the United States Postal 3ervl:
17 shall pay to the Fund the amount of the annual installment
18 specified in the notice.
'"(5) For the purpose of carrying out paragraph (1) of
20 this subsection with respect to any fiscal year, the office
21 may--
22 "M require the Board of Actuaries of the 2ivi1
23 Service Retirement System to make actuarial
24 determinations and valuations, mate recommendations, and
25 maintain records in the same manner as provided in
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
25
1 section 8347(f) of this title; and
2 "(S) may use the latest actuarial determinations and
3 valuations made by such Board of Actuaries.
4 "S 8419. Funding of a.inuity attributable to military service
5 "(a) Except in the case of an individual making an
6 election under section 8471(a)(1)(A) of this title, 3
7 participant's or former participant's service shall include
8 credit for military service as provided in section 8332(:) of
9 this title without regard to whether the participant or
10 former participant has made a deposit covering such military
11 service as provided in section. 8334(j) of this title.
12 "(b) Before closing the accounts for a fiscal year, the
13 Secretary of the Treasury shall reimburse the Fund from sums
14 in the Department of Defense Military Retirement Fund
15 (established by section 1451(a) of title 10), which are
16 hereby mace available to pay the reimbursement, for the
17 normal cost relating to the creditable military service of
18 employees and member= who became participants during sumi
19 fiscal year, actuarially adjusted to the date of payment, as
20 determined by the Office.
21 "(c) At the end of each fiscal year the Office shall
22 compute the amount of the reimbursement required by
23 subsection (b) of this section for the fiscal year and shall
24 notify the Secretary of the Treasury of that amount.
25 "SUBCHAPTER III--THRIFT SAVINGS PLAN
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.
27
1 "S ?421. Contributions
2 "(a)(1) Each participant may contribute to tie Thrift
3 Savings Fund in any year an amount not exceeding 10 percent
u of the participant's annual rate of basic pay.
5 ''(2) Each participant receiving disability oenefits
6 under subchapter V of this chapter may, until becoming 62
7 years of age (in the case of a person who is disabled witnin
8 the meaning of section 8441(4)(A) of tnis title) or until
9 becoming 55 years of age (in the case of a person who is
10 disabled within the meaning of section 8441(4)(B) of this
11 title), contribute to the Thrift Savings Fund in any year an
12 amount not exceeding 10 percent of the amount of the former
13 participant's disability benefits pavacle under such
14 subchapter during such year.
15 *4(3) Any contribution under this subsection shall be
16 7aie only pursuant to a program of :Ypolar contricutions
17 under regulations prescribed by the Board.
18 '' (u) At least once each year, a participant may modify
19 the amount contributed pursuant to paragraph (1)
20 this subsection, as the case may be, under regulations
21 prescribed by the Board.
22 *1(b) The employing agency of a participant who
23 contributes to the Thrift Savings Fund under subsection (a)
24 of this section for any pay period, or, in the case of a
25 disabled participant wio contributes to sucn fund under suci
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
28
1 subsection for any fisability benefits payment period, the
2 employing agency of the participant on the date the
3 participant became disabled (as defined in section 8441(4) Of
4 this title), shall contribute to the Thrift Savings Fund for
5 the benefit of such participant or disabled participant at
6 the end of such period an amount equal to such portion of the
7 amount of the participant's contribution as does not exceed 5
8 percent of the amount of the gross pay or gross lisaoility
9 benefits, as the case may be, payable for such period.
10 "(c) The sums required to be contributed to the Thrift
11 Savings Fund by an employing agency under subsection (5) of
12 this section for the oenefit of a participant shall oe paid
13 from the appropriations or funds available to such aiencv to
14 pay the basic pay of participants or, in the case of an
15 elected participant, from an appropriation or fund availaole
16 for payment of other salaries of the participant's office or
17 estatlishment. In the case of a participant in tie
18 legislative branch wno is'paid by the Clerk of tie House of
19 Representatives, contributions for the benefit of suci
20 participant shall be paid from the contingent fund of tie
21 House of Representatives.
22 " (d) For purposes of the Internal Revenue Code of 1954--
23 "M any amount of the participant's pay which is
24 contributed to the Thrift Savings Fund, and the 3,iont of
25 the employing agency's matcning contributions, stall not
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
279910.454 S.I.C.
29
1 be included in the gross income of the participant; and
2 "(2) the Thrift Savings Fund shall be treated, for
3 purposes of determining when amounts in such Fund are
4 included in the income of any participant, as described
5 in section 401(a) of such Code.
5 "(e) Subsection (d)(1) of this section shall not be
7 construed to provide that any amount of the participart's pay
8 which is contributed to the Thrift Savings Fund shall not be
9 included in the term 'wages' for purposes cf section 209 of
10 the Social Security Act or section 3121(a) of the internal
11 Revenue Code of 1954.
12 "S 8422. Vestinc
13 "(3)(1) A participant who separates from Governmer,t
14 employment shall be entitled to an amount equal to--
15 **(A) the total amount of the contributions mace
15 under section 8421(a) of this title plus the total amount
17 of the net earnings In the Thrift Savings Fund, or minus
18 the total amount of the net losses, attributable tc such
19 contributions; and
20 "(F) the applicable percentage of the amount equal
21 to the total amount contributed to the Thrift Savirgs
22 Fund for the benefit of the participant under section
23 8421(b) of this title plus the total amount of the net
24 earnings in the Thrift Savings Fund, or minus the total
25 amount of the net losses, attributable to such
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.C.
30
1 contributions, as provided ir, subsection (b) of this
2 section.
3 "(2) The amount to which a participant is eititled under
4 paragraph (1) of this subsection shall be payable in
5 accordance with the election made by the participant pursuant
6 to section 8423 of this title.
7 "(b)(1) For the purpose of subsection (a)(1)(8) of this
8 section, except as provided in paragraph (2) of this
9 suosection, the applicable percenta;e for a participant
10 separating from government employment after Having been a
11 participant in the System for a period set forth under column
12 I of the table below is the percertage set forth under column
13 II of the table below opposite the description of such
14 period:
. , i-L=L'n1 I. x_lumn 11
Period for which the participant has Applicable
been a participant in the System: percentage:
Less than 1 year . . . . . . . . . . . . . . . . . . . 2
Not less than 1 year, but less than 2 years . . . . . 27
Not less than 2 years, but less tnan 3 years. . . . . 43
Not less than 3 years, but less than 4 years. . . . . 60
Not less than u years, but less than 5 years. . . . . 88
Not less than 5 years . . . . . . . . . . . . . . . . 100.
15 "(2) For the purposes of subsection (a)(1)(8) of tits
16 section--
17 "m the percentage applicable in tie case of any
18 participant who dies while employed by the Government
19 shall be 100 percent; and
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
31
1 " (B) in the case of a participant making
2 contributions under section E421(a)(2) of this title, the
3 period for which the person hay teen a participant in the
4 System shall include periods for 4nicn such contributions
5 were made.
6 "(c) Wnen an election i- made by a participant under
7 section 8423(c) of this title, the amount equal to the excess
8 of--
9 " (1 ) the sum of--
10 (A) the amounts contributed to the Thrift
11 Savings Fund with respect to the participant under
12 SeCtior. 8421 of this title; and
13 "(2) the net earhin.;:; In the Thrift Savings Fund
14 attributable to suon contributions, over
15 " (2) the amount in the Thrift Savings Fund paid or
16 reserved fcr pAyTpnt to cc wit..r~ respect to the
17 participant ours.:ant to section 6423(c) of tnis title,
18 shall be transferrer to the Treasury of the United States for
19 credit to Miscellaneojs Receiotc.
20 "S 8423. Entitlement and elections relating to entitlement
21 " (a) Any participant who separates from covern:nent
22 employment entitled to an immediate annuity under section
23 8411 of this title is entitled and Tay elect--
24 " (1) to receive an immediate annuity from the Thrift
25 Savings Fund;
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
32
1 ''(2) to defer the commencement of the payment of an
2 annuity from the Thrift Savings Fund until such date as
3 the participant specifies;
4 "(3) to withdraw, in one or more payments, the
5 amount of the balance credited to the participant's
6 account in the Thrift Savings Fund; or
"M to transfer the amount of the oalance in the
8 account to an individual retirement account or other
9 qualified plan (within the meanin; of the Internal
10 Revenue Code of 1954) of the participant.
11 **(0) Any participant who separates from Government
12 employment entitled to a deferred annuity under section 3412
13 of this title is entitled and may elect--
14 "M to receive an annuity from the Thrift Savings
15 Fund to commence on the first date the participant is
15 entitled to receive the deferred annuity;
17 "(2) to defer the commencement of the payment of an
18 annuity from the Thrift Savings Fund until a date after
19 the first date the participant is entitled to receive the
20 deferred annuity, as specified by the participant;
21 "(3) to withdraw in one or more payments, on or
22 after the first date the participant is entitled to
23 receive the deferred annuity, the amount of the balance
24 credited to the participant's account in the Thrift
25 Savings Fund; or
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.C.
33
1 " (4) to transfer the amount of the oalance in the
2 account to an individual retirement account or otner
3 qualified plan (within the meaning of the Internal
4 Revenue Code of 1954) of the participant.
5 *'(c) Any participant who separates from Government
6 employment before becoming entitled to an annuity under
7 section 8411 or 9412 of this title is entitled and may
8 elect--
9 "(1) to receive an annuity from the Thrift Savings
10 Fund to commence when the participant becomes 62 years of
11 age;
12 "(2) to witndraw, in one or more payments, the
13 amount computed under section 6'22(a)(1) of this title,
14 payable when the participant becomes 62 years of age; or
15 "(3) to transfer such amount to an individual
16 retirement account o7 other qualified plan Within the
17 meaning of the Internal Fevenue Code of 1954) of the
18 participant.
19 "(d)(1) Sucject to paragraph (2) of this suosection, any
20 participant making an election pursuant to subseotion (a)(2)
21 or (b)(2) of this section may modify the date specified in
22 the election or in a previous modification under this
23 subsection.
24 ''(2) Any modification of an election under parag:apn (1)
25 of this subsection may not be made on or after the date
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
07991 0. 454 S. L. C.
3u
1 specified In the eleotion or the latest modification mad=
2 under such paragraph and may not specify a date for the
3 commencement of annuity payments earlier than one month after
4 the date the modification is filed with the Executive
5 'Director.
6 "S 8424. Annuities: methods of payment; election; and
7 computation
8 ''(a)(1) The Eoard shall prescribe methods of payment of
9 annuities under this subchapter.
10 ""(2) The methods of payment prescribed under parag^apn
11 (1) of this subsection snail include, but not be limited to--
12 "(A) a method which provides for the payment of a
13 monthly annuity only to an annuitant during the life of
14 the annuitant;
15 "(S) (F) a methoa which provides for the payment of 3
16 monthly annuity tc an annuitant for the joint lives of
17 the annuitant and the spouse of the annuitant and an
18 appropriate monthly annuity to the one of them wno
19 survives the other of them for the life of the survivor;
20 "M a method described in subparagraph (A) of this
21 paragraph which provides annual increases in the amount
22 of the annuity payable;
23 "'(D) a method described in subparagraph (?) of this
24 paragraph whicn provides annual increases in the amount
25 of the annuity payable; and
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.C.
35
1 *'(E) a method providing for the payment of a monthly
2 annuity--
3 *'(1) to the annuitant for the joint lives of the
4 annuitant and an individual, designated Dy the
5 annuitant under regulations prescribed by the Board,
6 who has an insurable interest in the annuitant; and
7 "(11) to the one of them who survives the other
8 of them for the life of the survivor.
9 ''(b) Subject to paragraph (2) of this subsection, under
10 such regulations as the Board stall prescribe, an annuitant
11 electing under section 8423 of this title to receive an
12 annuity from the T7rift Savings Fund snail elect, on or
13 before the date on ahioh the annuitant's annuity under this
suochaptec commences, one of the methods of payment
15 prescribed by the ioard under subsection (a) of this section.
15 ''(C) The amount of ar annuity payable under this
17 suocnapter pursuant tc the method elected under subsection
18 (b) of this section shall be determined on an actuarial basis
19 under regulations prescribed by the Board.
20 ''S 8425. Administrative provisions relating to payments and
21 elections
22 ''(a) The Executive Director shall make or provide for
23 payments and transfers in accordance with an election of a
24 participant under section 8423 or 8424(D) of tnis title.
25 -(b) Any election under section 8423 or 8424(b) of this
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
36
1 title shall be in writing and shall ce filed with the
2 Executive Director in accordance with regulations prescribed
3 by the Board.
4 "(c) Notwithstanding any other provision of this
5 section, an election or modification of an election under any
6 provision of this subchapter shall not be effective if the
7 election or modification would result in a violation of the
8 terms of an applicable court decree of divorce, annulment, or
9 legal separation, or the terms of any court order or court-
10 approved property settlement agreement incident to a court
11 decree of divorce, annulment, or legal separation, as
12 determined by the Executive Director.
13 "S 8426. Thrift Savings Fund
14 "(a) There is established in the Treasury of the United
15 States a Thrift Savings Fund.
16 ' ' (b) The Thrift Savings Fund consists of the sum of all
17 amounts contributed under section 8421 of this title
18 increased by the total net earnings from investments of suns
19 In the Thrift Savings Fund or reduced by the total net losses
20 from investments of the Tnrift Savings Fund.
21 "(c) The sums in the Thrift Savings Fund are
22 appropriated and shall remain available without fiscal year
23 limitation--
24 "'(1) to invest under section 9427 of this title;
25 " (2) to pay benefits under this subcnapter;
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.C.
37
1 ''(3) to pay the administrative expenses of the 3ivil
2 Service Thrift Investment Management system prescribed in
3 subchapter VIII of this chapter; and
4 *"(4) to make loans to participants as authorized
5 under subsection (e) of this section.
6 "(d)(1) Except as provided in paragraph (2) of this
7 subsection, sums In the Thrift Savings Fund are not subject
8 to execution, levy, attachment, garnishment, or other legal
9 process.
10 " (2) Moneys due or payable from the Thrift Savings Fund
11 to any individual and, in the case of an individual wno is a
12 participant, moneys which the Individual would be entitled to
13 receive uncer section 8422 of this title upon separation from
14 Government employment shall be subject to legal process fo7
15 the enforcement of the individual's legal ooligations to
15 provide child support or make aliTonv paymentz as provided In
17 section 459 of the Social Security Act (42 J.S.C. 550 or to
19 pay any incebtedness of the individual to the United States.
19 ''(e) Tne Board shall establish a progran to Tax= loans
20 from the Thrift Savings Fund to a participant in case of
21 financial hardship and snail prescribe regulations to :arty
22 out such program. Any such loan shall be made only out of
23 suns contriouted to the Thrift Savings Fund cy tee
24 participant and net earnings attributable to sucn suns.
25 '*(f) The sums in the Thrift Savings Fund shall not b=
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
1
appropriated and may not be used for any purpose otnec
teal
2
the purposes specified in this section.
3
'4S 8427. Investment of Thrift Savings Fund
4
'*(a) For the purposes of this section--
5
''(1) the term 'Common Stock Index Investment Fund'
6
means the Common Stock Investment Fund established under
7
subsection (o) (1) (C) of this section;
8
"*(2) the term 'equity capital' means common and
9
preferred stock, surplus, undivided profits, contingency
10
reserves, and other capital reserves;
11
*'(3) the term 'Fixed Income Investment Fund' means
12
the Fixed Income Investment Fund established under
13
subsection (b)(1)(3) of this section;
14
''(4) the term ';overnment Securities Investment
15
Fund' means the 3ove_nment Securities Investment Fund
16
established under suosection (b)(1)(A) of this section;
17
''(5) the term 'net worth' means capital, paid-in anc
contributed surplus, unassigned surplus, contingency
19
reserves, group contingency reserves, and special
20
reserves;
21
''(6) the term 'plan' means an employee benefit plan,
22
as defined in section 3(3) of the Employee Retirement
23
Income Security Act of 1974 (29 U.S.C. 1002(3));
24
*"(7) the term ' .;ua li f ied professional asset manager,
25
means--
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
?9
(A) a bank, az defined in section 202(a)(2) of
the investment Advisers Act of 1940 (15 U.S.C. 800-
2(a)(2)) which--
'' (1) nas the power to nanage, a:quire, or
5 dispose of assets of a plan; and
"(ii) has, as of the last day of its latest
fiscal year ending before the date of a
determination for the purpose of this clause,
equity capital in excess of 51,000,000;
"(R) a savings and loan association, the
accounts of which are insured by the Federal Savings
anc Loan Insur3n;e Corporation, whicn--
(I) nas applied for and been granted trust
powers to manage, acquire, or dispose of assets
of a plan cy a State or Government authority
having supervision over savings and loan
associations; and
"(1i) has, ar of the last day of its latest
fiscal year ending --=fore th_ --late of a
determination for the purpose of this clause,
equity capital or net worth in excess- of
S1,000,eee;
(C) an insurance company which--
" (I) is qualified under the laws of more
than one State to manage, acquire, or dispose sf
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 '?'?".
1 dny a;;S, t`a of a plan;
2 "(11) has, as of the last day of Its latest
3 fiscal year ending before the date of a
u determination for the purpose of this clause, net
5 worth in excess of S1,02C,021; and
6 " (iii) IS subject to s pecvisic*j ani
7 examination by a State authority n3ving
8 supervision over insurance companies; O-
9 "(D) an investment adviser registered unier
10 section 203 of tie Investment Advisers A:t of 194'
11 ( 15 J.S.C. 80b-3) if the invezt;Ten:t na', on
12 the the last day of its latest fiscal 'y'ea-
13 oefore the date of a determination for ti-1 pj-po-3? of
14 this subparagraph, total client a.;seti unuer its
15 management and control In excess of $50,32@,33 ,
16 and--
17 .'(1) the investment adviser has, on suon
day, shareholder's or partner's equity in excess
of 5750,20?; or
"M) payment of all of the investment
adviser's liabilities, including any liabilities
which may arise by reason of a breacn or
violation of a duty described in section 9497 of
this title, is unconditionally guaraiteei 5y--
(I) a person no directly or
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 5.L.`.
41
indirectly, through ono or more
intermediaries, controls, is controlled by,
or is under common control with the
investment adviser and who has, on the last
day of the person's latest fiscal year endin;
before the date of a determination for the
purpose of this clause, shareholder's or
partner's equity in an amount whicn, when
added to the amount of the snareholder's or
partner's equity of tn_ investment adviser on
such day, exceeds S750,000;
'' (II) a qualified professional asset
mana;er described in Subperacrapn (A), (9),
or (::) of this paragrapn; or
"(III) a bro.'er or dealer registers=
15 under se;tion 15 of t^.e Eocu rltiec EX^n3^;e
17 Act of 1;3u (15 ii.S.~. 7?o) tnat haS, on the
18 last day ofl the broker's or dealer's latest
19 fiscal year ending before the date of a
20 determination for the purpose of this clause,
21 net wortn in excess of 3750,008; and
22 "(8) the term 'shareholder's or partner's equity',
23 when used in paragraph (7)(D) of this subsection with
24 respect to an investment adviser or a person who is
25 affiliated with the investment adviser in a nanner-
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L..
42
1 described in clause (ii)(I) of such paragrapn (7)(D),
2 means the equity shown in the most recent balance sneet
3 prepared for such investment adviser or affiliated
4 person, in accordance with generally accepted accounting
5 principles, within 2 years before the date of which the
5 Investment adviser's status as a qualified professional
7 asset manager Is determined for the purposes of this
9 section.
9 "(o)(1) The Board snail establish--
10 "(A) a Government Securities Investment Fund under
11 which sums In the Thrift Savings Fund are invested in
12 securities of the United States Government issued 33
13 provided in subsection (g) of this section;
14 "(B) a Fixed Income Investment Fund under whicn sums
15 in the Thrift Savings Fund are invested in Insurance
16 contracts, certificates of deposits, or other ins;.rjTentz
17 or obligations which (1) are issued or selected by
18 qualified professional asset managers, and (ii) return
19 the amount invested and pay interest, at 3 specified rite
20 or rates, on that amount during aspecified period of
21 time;
22 "(C) a Common Stock Index Investment Fund as
23 provided in paragrapn (2) of this subsection; and
24 "(D) such other investment funds as the Board
25 determines to be appropriate for the purposes of this
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
1 subchapter.
2 ''(2)(A) The Board shall define an index which--
3 "M consists of all of the common stocks that are
4 publicly listed and traded on one or more national
5 securities exchanges, or
6 "(0) is a commonly recognized index comprised of
7 common stock ttne aggregate market value of wnich is at
8 least 50 percent of the aggregate market value of all
9 common stocks that are publicly listed and traded on one
10 or more national securities exchanges.
11 ''(B) The Common Stock Investment Fund shall be invested
12 in earn stock that is included in the index defined uncec
13 suoparagraph (A) of this paragraph such that, to the extant
14 practicable, the percentage of th= Common Stock Investment
15 Fund that is invested in that stock is the same as the
16 percentage determined oy dividir.; the aggregate market vale
17 of all shares of that stock by the aggregate market valus of
18 all shares of all stock included in such Index.
19 *'(c)(1) Tne Executive Director shall invest in the
20 Government Securities Investment Fund the sums wnich are 11
21 the Thrift Savings Fund, are available for investment, and
22 are not to be invested in an investment fund referred to in
23 subsection (b)(1)(n), (b)(1)(C), or (b)(1)(D) of this section
24 pursuant to an election made under suosection (d) of this
25 section.
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
44
1 ''(2) Except as provided in subsection (e) of this
2 section, the Executive Director shall invest sums available
3 in the Thrift Savings Fund for investment as provided in
4 elections made under subsection (d) of this section.
5 "(d)(1) Except as provided in subsection (e) of this
6 section, at least once each year, a participant or former
7 participant may elect the investment funds referred to in
8 subsection (b) of this section Into which the sums in the
9 Thrift Savings Fund credited to the account of such
10 participant or former participant are to be invested or
11 reinvested.
12 "(2) The election may be made by a participant or former
13 participant under paragraph (1) of this subsection only in
14 accordance with regulations prescribed by the Board and
15 within such period after the :ate the participant's or former
16 participant's annual stature^t- is transmitted to the
17
participant or former participant pursuant to section 9428(b)
18
of this title as the =oard shall prescribe in sucn
19
regulations.
20
" (e)(1)(A) The Executive Director shall invest a
21
percentage of the total amount that--
22
"M Is contributed to the Tnrift Savings Fund by a
23
participant under section 8421(a) of this title during
a
24
year described under column I of the first table of
25
minimum Government securities investments set out in
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
1
subparagraph
(B) of this paragraph, and
2
'*(11) is available for investment,
3
in the Government Se:unities Investment Fund as provided
4
under column II of the table opposite the description of such
5
year.
6
"(B) For the purposes of subparagraph (A) of this
7
paragraph, the first table of minimum ~overnlient securities
8
investments is as follows:
" col.ymn I Column iI
Year: `linimuT percentage of the
amounts contrioutea by
a participant for
cech c t^ of sucn Ve3
to be invested in the
Government Se:urities
Investment Fund:
1987
1988
1989
1990
1951
9 " (2) (A) The Executive Di: esto: ^,3i1 invest :1 pe: cehtage
10 of the total amount that--
11 "(1) is contribute. to the '"nrif~ Savings Fund by
12 the Government for the benefit of a participant pursuant
13 to section 8421(b) of this title during a year described
1u under column I of the second table of minimum Government
15 securities investments set out In sub-laragraph (a) of
16 this paragraph, and
17 ''(11) is availaole for Investment,
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
46
1 In the Government Securities Investment Fund as provided
2 under column II of the table opposite the description of such
3 year.
4 "M For the purposes of subparagraph (A) of this
5 paragraph, the second table of minimum Government securities
6 investments is as follows:
. . ~-OlL.mn I
Year: Minimum, percentage of the
amounts contriouted for the
benefit of a participant
for eacn month of such year
to be Invested in the
Government Securities
Investment Fund:
1987-1992
100
1993
80
1994
60
1995
42
1996
20
7 "(3) All sums credited to the Thrift Savings Fund
9 pursuant to section 6473(b) of this title shall to invested
9 in the Government Securities Investment Fund.
10 '?(u) The suns which are invested In the ;overnment
11 Securitie: Investment Fund as required by this subsection and
12 are returnee to the Thrift Savings Fund after maturity of the
13 securities purchased with such sums, and the amounts earned
14 on the investment of such sums, shall be reinvested In the
15 Government Securities Investment Fund.
16 "(f) The Secretary of the Treasury shall issue notes
17 under section 3103 of title 31 as appropriate to meet the
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.-C.
L47
1 investment needs of the Thrift Savings Fund under tniz
2 section. The notes shall have a 2-year maturity, shall oe
3 redeemable at par, ana mall tear interest at a rate egu3l to
4 the average market yield, computed as of the end of the
5 calendar month next preceding the cats of the issue, of 311
6 2-year notes then forming a part of the public debt of the
7 United States. If the average market yield is not a multiple
8 of 1/8 of 1 percent, the rate of interest on the ooligations
9 shall be the multiple of 1/6 of 1 percent nearest the ave-3;e
10 market yield.
11 "S 8428. Accounting
12 '' (a)(1) The .xacutlve Director shall establish anj
13 maintain an account for each participant making contrioutions
14 under section 8421(a) of this title.
15 '' (2) The balance in the account of a participant or
15 former participant at any tiT is the excess of--
17 " (A) the SUT of--
18 '' (i ) 311 contributions mate to the Thr'if
Savings Fund oy the participant or forme- pa-tiripant
under section 8421(a) of this title;
"'(1i) all contributions made to such fund for
the benefit of the participant or former participant
under section 8421(b) of this title;
(iii) the amounts transferred to such fund with
respect to the participant or former participant
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.Q.
4F
1 under section 6473(b) of this title; and
2 *'(iv) the total amount of the allocations made
3 to and reductions made In the account pursuant to
4 paragraph (3) of this section, over
5 "(B) the amounts paid out of the Thrift Savings Fund
5 with respect to such participant or former participant
7 under this subchapter and subchapter IV of this title.
8 "(3) Pursuant to regulations prescribed by the aoard,
9 the Executive Director shall allocate to the account of each
10 participant or former participant an amount equal to a pro
11 rata share of the net earnings and net losses from each
12 investment of sums in the Thrift Savings Fund attributaole to
13 sums credited to the account of such participant, reduced by
14 an appropriate share of the administrative expenses of the
15 Civil Service Thrift Investment Management System prescrioed
16 in subchapter VIII of the ch?pter, as determined by the
17 Executive Director.
18 "(W The Executive Director shall provide each
19 participant and former participant an annual statement of the
20 balance in the participant's or former participant's account.
21 "(c)(1) For the purposes of this subsection, the term
22 'qualified public accountant' shall have the same meaning as
23 provided in section 173(a)(3)(D) of the Employee Retirement
24 Income Security Act of 1974 (29 U.S.C. 1024(a)(3)(D)).
25 "(2) The Executive Director shall annually engage, on
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
49
1 behalf of all participants, an indeoendent qualified ouoli:
2 accountant, who shall conduct an examination of any accounts
3 established under subsection (a) of this section and of other
4 books and records maintained In the adTinist_ation of this
5 subchapter as the accountant considers necessary to enable
5 the accountant to make the determination required by
7 paragraph (3) of this subsection. The examination shall be
8 conducted in accordance with generally accepted auditing
9 standards and shall involve such tests of the accounts,
10 books, and records as the independent qualified public
11 accountant considers necessary.
12 "(3) The independent qualified public accountant
13 conducting an examination under paragraph (2) of this
14 subsection shall determine whether the accounts, oooKs, and
15 re;orris referred to in rich paragraph nave been maintained in
15 conformity with generally accepted accounting principles
17 applied on a basis consistent with the application of such
18 principles during the examination conducted under such
19 paragraph during the preceding year. ine accoJ-:t3nt small
20 transmit to the Board a report on his examination, including
21 his determination under this paragraph.
22 "(4) In making a determination under paragraph (3) of
23 this subsection, the accountant Tay rely
an the correctness
24 of any actuarial matte: certified by an enrolled actuary, if
25 the accountant states his reliance in the report transmitted
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.C.
50
1 to the Board under sucn paragraph.
2 "SUBCHAPTER IV--SURVIVOR BENEFITS
3 "S 8431. Basic plan spousal benefits relating to the death
4 of a participant or former participant other
5 than an annuitant
6 '' (a)(1) If a participant dies after performing 5 or more
7 years of service and before separating from Government
8 employment and the participant has satisfied the age and
9 service requirements for retirement entitled to an immediate
10 annuity under section 8411 of this title before the date of
11 death, the surviving spouse of a deceased participant shall
12 be entitlea to a survivor annuity payable out of the Fund.
(2) If a participant dies after performing 5 or more
14 years of service and before separating from :,overnment
15 employment and the participant has not satisfied the age and
15 service requirements for retirement entitled to an imlediate
17 annuity under section 8411 of this ti:.ie before the date of
1e death, the surviving spouse of a deceased participant snall
19 be entitled to a survivor annuity payable out of the Fund.
20 The survivor annuity snail commence on the first data the
21 participant could have retired entitled to an immediate
22 annuity under section 8411 of this title if the participant
23 had continued to live and had continued to be a part_i:ipant
24 until such date.
25 "(3) The amount of the survivor annuity payable under
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.C.
51
1 paragraph (1) or (2) of this subsection to the surviving
2 spouse of a deceased participant shall be equal to 50 percent
3 of the annuity computed with respect to the deceased
4 participant pursuant to sections 8413, 8414, and 8415 of this
5 title as if the participant had retired from Sovernne t
6 employment on the day before the date of death and had
7 elected the method of payment described in section
8 8416(a)(2)(E) of this title.
9 "(b)(1) If a former participant dies entitled to a
10 deferrea annuity under section 8412 of this title before
11 payment of an annuity under subchapter II of this chapter to
12 the former participant commences, the surviving spouse of the
13 aeceased former participant is entitled to a survivor annuity
14 payable out of the Fund.
15 " (2) The amount of the survivor annuity payable ender
15 paragraph (1) of this subsection to the surviving spouse of a
17 aeceased former participant shall ce equal to 50 percent of
18 the annuity which the deceased former participant would nave
19 been entitled to receive under such section if the deceased
20 former participant--
21 "M had been 55 years of age on the day before the
22 date of death, or
23 "(E) in the case of a former participant who was 55
24 years of age or older on such day and was not receiving
25 such annuity, had commenced to receive such deferred
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
1 annuity on such day,
2 computed under sections 9413, 8414, and 9415 of this title.
3 " S 8432. Basic plan spoisal and insurable interest benefits
4 relating to the death of an annuitant
5 "A survivor annuity shall be paid out of tie Fund with
6 respect to a deceased annuitant-
7 "M in accordance with the method of payment
8 elected by the annuitant under section 8416 of this
9 title;
10 "(2) as provided in subsection (b)(3) of such
11 section; or
12 "(3) in accordance with an election made by the
13 annuitant under section 8434(a) or 9436(c) of this title.
14 66S 8433. Survivor benefits under the thrift savings plan
15 *'(a) A survivor annuity shall be paid out of the Tnrift
16 Savings Fund with respect to a deceased annuitant as provide:
17 under a methoc of payment of annuities elected by the
18 annuitant under section 3424(b) of this title or in
19 accordance with an election made by the annuitant under
20 section 8434(a) or 8436(c) of this title. The amount of tie
21 survivor annuity shall be determined on an actuarial basis
22 under regulations prescribed by the Board.
23 '' (b)(1) Except as provided in subsection (d) of this
24 section, the amount in the account established and maintained
25 for a deceased participant or deceased former particioant
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
07991 0.454 S.L.C.
53
1 (other than a deceased annuitant) pursuant to se;tion 8428(a
2 of this title, tete:ml-ed on the date of an election under
3 subsection (c) of this section, shall, subject to the limits
4 of the entitlement set out in section 8422(a)(1) of this
5 title (without regard to section 8422(a)(2) of this title),
6 be paid as provided in paragraph (2) of this subsection.
7 "(2)(A) Except as provided in subparagraph (8) of this
8 paragraph, payment under paragraph (1) of this subsection
9 snail be made to the surviving spouse of the deceased
10 participant or former participant pursuant to the method
11 elected under subsection (c) of this section.
12 "(0 If a deceaced participant or former participant
13 referred to in paragraph (1) of this subsection is not
14 survived by a spouse, payment under such paragraph snail oe
15 made to--
16 "(1) any individual who has an insurable interest in
17 the participant or former participant and has oeen
18 designated by tn= participant for the purpose of such
19 paragraph under regulations prescribed by the Board; or
20 ''(11) if the deceased participant or former
21 participant did not make a designation as provided in
22 clause (1) of this subparagraph, to the estate of the
23 deceased participant or former participant.
24 "(W A surviving spouse entitled to payment of oenefits
25 under subsection (b) of this section may elect--
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
54
1
"(1) to receive an annuity from the Fund payable
2
monthly for life;
3
" (2) to transfer the amount referred to in sucn
4
subsection to an individual retirement account (witnin
5
the meaning of the Internal Revenue Code of 1954) of tie
6
surviving spouse; or
7
01(3) to withdraw such amount in one or more
8
payments.
9
'' (d) Any amount required for the payment of a survivor
10
annuity with respect to a deceaseo participant or deceased
11
former participant out of the Thrift Savings Fund pursuant to
12
section 8435 of this title shall be deducted and withheld
13
from a distribution made with respect to the deceased
14
participant or deceased former participant pursuant to
15
subsection (b) of this section. The amount deducted and
16
withheld shall be maintained in the Thrift Savings Fund until
17
expended in payment of tie survivor annuity or until the
18
survivor annuity terminates. Any sums remaining from the
19
amount deducted and withheld after the termination of the
20
survivor annuity, plus net earnings realized from investment
21
of such amount, shall be distributed as provided in
22
subsection (b) of this section.
23
"*S 8434. Basic and thrift savings plan survivor benefits
24
relating to marriage after commencement of an
25
annuity
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M01152R000200180009-7
379910.454
S.I.C.
1 "(a) If an annuitant--
2 "M Is married on the date that the annuitant
3 applies for payment of an annuity under subchapter II of
4 this chapter to commence, the marriage terminates, and
5 the annuitant remarries, or
6 "(2) is not married on such date and marries after
7 such date,
8 the annuitant may irrevocably elect during the later rrarriace
9 to provide an annuity for such annuitant's spouse under the
10 method of payment described In section 8416(a)(2)(B) cr
11 subparagraph (B) or (D) of section 8424(a)(2) of this title.
12 An election under this subparagraph shall be made in a signed
13 writing received by the Office within 2 years after the date
14 of the remarriage or marriage, as the case may be.
15 11(b) An election under subsection (a) of this section
16 shall be effective the first day of the second month
17 beginning after the election Is received by the office (in
18 the case of a survivor annuity payable out of the Fund) or
19 the Executive Director (in the case of a survivor annuity
20 payable out of the Thrift Savings Fund), but not earlier than
21 9 months after the date of the remarriage referred to In
22 paragraph (1) of such subsection or the date of the marriage
23 referred to in paragraph (2) of such subsection.
24 "(c) An annuitant making an election under subsection
25 (a) of this section to provide a survivor annuity payable out
26 of the Fund shall, within 2 years after the date of the
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M01152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 3.L.:.
55
1 remarriage referred to in paragraph (1) of such subsection or
2 the sate of the marriage referred to in paragrapi (2) of such
3 suosection, deposit in tie Fund an amount determined by tie
4 Office, as nearly as may be administratively feasible, to
5 reflect the amount by which the annuity of such annuitant
5 would have been reduced if the election had been in effect
7 since--
8 "(1) the date that payment of an annuity to the
9 annuitant under subchapter II of this cnapte: commenced,
10 or
11 "(2) if the annuity had previously been reduced to
12 provide for a survivor annuity under section 8432 of this
13 title, the late the previous reduction in such
14 annuitant's annuity was terminated under section 5415(o)
15 of this title,
15 plus interest computed as provided it section 9439(a) of *iis
17 title.
18 ''(d) Notwithstanding any other provision of this
19 section, an election under this Se^_tio. Tay not be made for
20 the purpose of providing a survivor annuity payaole from tie
21 Fund to a spouse of an annuitant by remarriage if--
22 "(A) such spouse was married to the annuitant on the
23 date that payment of an annuity to the annuitant under
24 subchapter II of this chapter commenced; and
25 " (P) rights to survivor benefits for such spouse
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 :.L.7.
57
1 basea on marriage to such annuitant were then waived
2 under section 8416(b)(2) of this title.
3 "S 6435. Survivor benefits for eligible former spouses:
4 entitlement; amount
5 "(a) Subject to subsections (b) through (g) of this
6 section, an eligible former spouse of a deceased participant
7 or deceased former participant wno dies entitled to an
8 immediate or deferred annuity under section 3411 or 1412 of
9 this title is entitled to a survivor annuity under tnis
10 section if and to the extent that--
(1) an election under section ?436 of this title,
12 "(2) any court decrees dissolving or annulling t-'e
13 marriage of the participant or former participant and the
14 eligible former spouse, or
15 "(3) any court order or court-approved property
15 settlement agreement incident to swcn decree,
17 expressly provides for sucn survivor annuity.
18 "(t)(1) The amount of the survivor annuity payaole from
19 the Fund to an eligible former spouse of a deceased
20 participant or deceased former participant under this section
21 may not exceed the excess, if any, of--
22 ''(A) the amount applicable in the case of su=n
23 eligible former spouse, as determined under para;;aon (2)
24 of this subsection, over
25 ''(3) the amount of all other survivor annuities
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
58
1 payable from the Fund under this section to other
2 eligible former Spouses of the participant or former
3 participant based on the order of precedence provided in
4 subsection (d) of this section.
5 "(2) (2) For the purposes of paragraph (1) (A) of this
6 subsection, the amount applicable in the case of an eligible
"M which is equal to 50 percent of the amount of
10 the deceased former participant's annuity payable to the
11 former participant on the day before the date of the
12 former participant's death, if the deceased former
13 participant was an annuitant on such day;
14 "(B) which would be applicable under paragraon (3)
15 of section 8431(3) of this title in the case of 3
16 surviving spouse of the deceasec, if the deceased was a
17 participant descrioed in paragraph (1) c (2) of such
18 section 8431(a); or
8 participant is the amount--
former spouse of a deceased participant or deceased former
"M which would be applicable under paragraph (2)
20 of section 8431(b) of this title in the case of a
21 surviving spouse of the deceased, if the deceased was a
22 former participant described in paragraph (1) of such
23 section 8431(b).
24 " (c) The total amount of all survivor annuities payable
25 from the Thrift Savings Fund to eligible former spouses of a
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
593
1 deceased participant or deceased former carttcipant pursuant
2 to this section may not exceed the amount of the survivor
3 annuities that would be payable to the former sDouse3 out of
4 100 percent of the balance in the account of the deceased
5 participant or deceased former participant, plus anticipated
b net earnings from investments allocable to such account,
7 determined on an actuarial basis in accordance with
8 regulations prescribed by the Board.
9 "(d) If more tnan one eligible former spouse is entitled
10 to a survivor annuity pursuant to this section, the amount of
11 each such survivor annuity shall be limited appropriately to
12 carry out subsection (b) or (c) of this section on a fi-st-
13 cone, first-served oasis oetermined by reference to the date
14 an election is properly made pursuant to section 8435 of tnis
15 title or the date the Director or Executive Director, as the
16 case may be, properly receives a copy of the court lecree,
17 order, or court-approved agreement applicable to the
18 entitlement.
19 " (e) The commencement an: termination dates of 3
20 survivor annuity payable under this section to an eligiole
21 former spouse of a deceased participant or deceased former
22 participant shall be the commencement and te-mination dates
23 determined under the provisions of the applicable court
24 order, decree, or agreement or an election, as the case nay
25 be (if provided in such order, decree, agreement, or
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
62
1 election), except that any such survivor annuity--
2 ''(1) shall not commence before--
" (R) the day after the participant or former
participant dies, or
"M the first day of the second month oe;inning
after the date on which the office receives written
7 notice of the court order, decree, or agreement or
8 the election, as the case may be, together with such
9 additional information or documentation as the Office
10 may prescribe,
11 whichever is later, and
12 4 *(2) shall terminate not later than the date
13 provided in section 8464(b)(2) of this: title.
14 "'(f) For the purposes of this section, a court decree,
15 order, or agreement or an election referred to in suoseotlon
16 (a) of this section shall not D? effective, in the case of a
17 survivor annuity payable out of the Fund tc a fo-r.er spouse,
18 to the extent that the el?ctinn is inconsistent with any
19 joint waiver previously executed with respect to such former
20 spouse under section 8416(b)(2) of this title.
21 4 *(g) Any payment under this section to a person bars
22 recovery by any other person.
23 "S 8436. Survivor benefits for former spouses: elections,
24 deposits and collections, and administrative
25 provisions
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
61
1 **(a)(1) If an annuitant has an eligible former spouse on
2 the date that the annuitant applies for payment of ai ainuity
3 to the annuitant under subchapter II of this chapter to
I. commence, the annuitant ray elect, under procedures
5 prescribed by the Office, to provide a survivor annuity `o-
6 such former spouse under section 8435 of this title. An
7 election under this paragraph shall be made on such late or,
8 if later, within 2 years after the date on which the marriage
9 of the former spouse to the annuitant was dissolved or
10 annulled. The election snail specify the amount of the
11 survivor annuity to be provided under this paragraph.
12 "(2) If an annuitant makes an election under parag:ann
13 (1) of this subsection to provide a survivor annuity oaya:,le
14 out of the Fund and the annuitant makes the election during
15 the 2-year period referred to in such paragraph, the
16 annuitant shall deposit in the Fund, within such period, an
17 amount determined by the Office, as nearly .3s may be
18 administratively feasible, to reflect the amount by which the
19 annuity of such an annuitant would have been reduced if the
22 election had been continuously in effect since the date the
21 annuity commenced, plus interest computed as provided in
22 section 8438(a) of this title.
23 "(3) An election under paragraph (1) of rhi
24 suosection--
25 "M shall not be effective to the extent that it
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.Z.
62
1 conflicts with--
2 "(1) any court decree or order referred to in
3 subsection (a) of section 8435 of this title, or
4 "(11) any agreement referred to in such
5 subsection,
6 which is received by the Office before the date on ahicn
7 such election is made;
e **(B) shall not be effective to the extent that tie
9 amount of the annuity specified in the election exceeds--
10 "M in the case of a survivor annuity pay3ole
11 from the Fund, the amount determined pursuant to
12 subsections (b)(2) and (d) of section 8435 of this
13 title; or
14 "(ii) in the case of a survivor annuity payable
15 from the Thrift Savings Fund, the amount determined
15 pursuant to subsections (c) and (d) of section 9435
17 of this title; and
18 '*(C) shall not he effective, in the case of an
19 annuitant who is married on the date of the election,
20 unless the election is made with the written consent of
21 the annuitant's spouse.
22 "(b) An annuitant who has elected to provide a survivor
23 annuity for an eligible former spouse pursuant to subsection
24 (a) of this section may make an election to provide or
25 increase a survivor annuity for any other eligible former
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079912.454 S.L.Z.
63
1 spouse of the annuitant within the same period that, ant
2 suoject to the same conditions under which, an election could
3 be made under subsection (c) of this section for a spouse of
4 the annuitant (subject to the provisions of subsection
5 (a)(3)(C) of this section relating to the consent of a
6 spouse, if the annuitant is then married). The opportunity to
7 make an election under the preceding sentence is in addition
8 to any opportunity otherwise provided under this subsection.
9 -(c) if the entitlement of an eligible former spouse of
10 an annuitant to a survivor annuity under this suochapter is
11 terminated or reduced by reason of the remarriage or death of
12 the fcrmer spouse, the annuitant may elect, in a si; ed
13 writing received by the office (in the case of a survivor
14 annuity to be pair out of the Fund) or the Executive Director
15 (in the case of a survivor annuity to be paid out of the
16 Th:ift Savings Fund) within 2 years after the former spouse's
17 date of deatn or remarriage, as the case may oe, to provide 3
18 survivor annuity under the method described in section
19 8u1E(a)(2)(B) of this title On the case of 3 terminated or
20 reduced entitlement payable out of the Fund) or in
21 subparagrapn (3) or (D) of section 8424(a)(2) of this title
22 (in the case of a terminated or reduced entitlement payable
23 from the Thrift Savings Fund).
24 "(d) The requirement that the spouse of an annuitant
25 waive a right to a survivor annuity under this subchapter as
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.C.
64
1 a condition for an election authorized by subsection
2 (a)(3)(C) of this section shall not apply if the participant
3 or annuitant establishes to the satisfaction of the office
4 that--
5 %%(1) the spouse's Whereabouts cannot reasonably be
6 determined; or
7 "(2) due to exceptional circumstances, it would be
8 inappropriate to require the participant or annuitant to
9 obtain the spouse's consent.
6437. Termination of entitlement
11 "(a) An election of an annuitant to provide a survivor
12 annuity to the annuitant's spouse under this subchapter
13 terminates on the first day of the first month beginning
14 after--
15 "(1) the date of the death of the spouse; or
16 "(2) the date of the dissolution of the spouse's
17 marriage to the annuitant.
18 "(b) The entitlement of an eligible former spouse of 3
19 former participant to a survivor annuity under section
20 8435(a) of this title terminates on the first day of the
21 first month beginning after--
22 "(1) the date of the death of the former spouse; or
23 %%(2) the date the former spouse remarries before
24 becoming 55 years of age.
25 "S 8438. Deposits to the Fund
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
079910.454 S.L.C.
65
1 *'(a) For the purposes of section 8434(:) or 9435(a)(2)
2 of this title, the annual rate of interest for each year
3 during which an annuity would have been reduced if the
4 election referred to in such section had been in effect on
5 Al after the applicable date referred to in suci section
5 shall be the percent determined for such year under section
7 8334(e) of this title.
8 "(b) If an annuitant does not make a deposit required by
9 section 8434(c) or 8436(a)(2) of this title, the Office snail
10 collect such amount by offset against the annuitant's annuity
11 payable from the Fund, up to a T3ximum of 25 percent of the
12 net annuity otherwise payable to the annuitant. The annuitant
13 is deemed to consent to such offset.
14 '*(c) The Office may extend the time limit for making a
15 deposit required by section 9434(c) or 1436(1)(2) of this
16 title in any case for good cause shown.
17 ''SUBCHAPTER V--DISAPILIrY BENEFITS
18 "S 8441. Definitions
19 ''For the purposes of this sutcnapter--
20 "M the term `administrator of benefits' means an
21 insurance company or other entity which--
22 "M offers claims payment services and related
23 administrative services under benefit plans provided
24 by employers in the private sector; and
25 *'(9) has entered into a contract with the Office
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
1 pursuant to section 8450 of this title;
2 '*(2) the term 'disability benefits under the Soci31
3 Security Act' means disability insurance benefits payable
4 under section 223 of the Social Security Act or benefits
5 payable under section 202 of such Act by reason of being
6 under a aisaoility;
7 ''(3) the term 'disability date', when used aitn
8 respect to an eligible participant, means the date the
9 eligible participant became disabled;
10 ''(4) the term 'disabled', when used with respect to
11 an eligible participant, means that the eligible
12 participant--
13 ''M is under a disability within the meanie; of
14 section 2.23 of the Social Security Act; or
15 **(B) is unable, because of disease or injury, to
16 render useful and efficient service in tie
17 participant's position and is not
au311fi_d for
18 reassignment, under procedures prescribed by the
19 Office, to a vacant position--
20 ''(1) which is in the participant's employing
21 agency and is in the participant's commuting
22 area;
23 I'M) which is at the same grade or pay
24 level as tie participant's position; and
25 ''(iii) in which the participant would be
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
1 -h1o to rence- useful ar.1 e`_f;c1Ant ~prvlce;
1 ' (c,) the term 'ell'i'.?i? r'articinant' means ar
3 ..ye
1. x.. ds 1 month 3r.?_. 3r.:4--
who--
M has arrlier for ' isability benefits
under the Social SecLr'ity Act and has beer
Bete: ins= tc c~ Ln~cr 5 isahility for trF
purpesFS Of t1t1?, of the Social Security Ac'_;
? ? ( i i ) i^ try o' an ernolovee cc y=!rtp-
w'`.o Is not i llt- Cena f itc u" er
trie a:cial securi t r^`_ ty reason of In
sufiiciPt
oua_ *ers Of Cov?rd;-, has tes deterrinec t-
acmi-i_trat_o_ -f o `i t_ -c he
the ;marline cf ra a _ (u) (= )
on the basis of r-:rort of examination recuire~
17 by S?OtiOfl RL'4c )f *` e *i~le; or
`? (F) Who has bE-en 'etprrirec
by an administrator
1; of benefits to he cisabled withir the meanir.^ of
23 parac_raph (4)(P) of this section on the basis of a
21 report of eX:Tlnetjc . r?CUir et ty section ftL'4~ O.`
:2 this titla;
23 "(6) the tear '--set average ,-.ay', when uses With
21 res"'Pct to ~'iSa` 19' el~ :-i ~le Darticioant, Tears thF
1
25 Marti _ i ^ c r ._ _'J=-~^c _ ;^ ~'a -,art' Ci~.r is IF a , " ,
y 1 V
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
a79~la.v~C .i.`'.
F4
1 _atc z January 1 of ?c r yoar - 'tcur' -at
2 hy t;ne sa,r.~ ..,_cer* by which annuities ref e-rPd t c ir.
3 para,raor. (1) of section 8462(b) of this *_itlp arP
U 1ncreaset u' -er such section 8L:52(t) In ~o^?.';,Pr cf t
5 oreceding yep:-, and compounded; and
6 "M tha tern 'protected service', when used witr,
7 res ct to a iisabled eligible Dartlci:~ant, Vary tho rur.
9 of the number of years cf service ;erfc, e: tv t;-
9 participant before the carticipant's disability de*.e 2n=
1' the number of years, if any, after suor. 'fatn ard' r=f^re
11 the date the oarticipant becomes--
12 "(A) in the case of ar. eli:lole carticir *_
13 re: erceJ to in subparagre-n (5)(:) of
14 5? years of age; or
15 "(2) in the case of an Fli le : -t1 cis ar?
15 rcfe.: e to In su paracranh (5) (D) tof c=c`.^-
17 55 yfacs of ace.
1 ~ ? ? E 8442. Entit1r-nen*_
19 " (a)(1) prrsor: who is an eligible particir.ar.t, is
22 disabled, and ha. used all sick leave accrued 3r.,~ accur!.;13ter4
21 under subchapter I of chapter 63 of this title or any ether
22 similar a7^licaclp
provision of law rel?tiny
73 em2loyment is ca'itlad tc receive disability oe-fits under
24 this suhcha; ;.er while--
25 `? (F.) in the case of a rer!::i whir is -11!:- -1R.1 wjr",l
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
1 the mear.ir.a .f
rr, 9""1(4)() cf triS title,
2 p?rsr n if: un :?r 62 yea-
r; ;zg ;
3 '" (") Ir the case of Lars
4 the meaning cf cecti cn ?uu 1 ( ) ( ) (n4' tr.i, title
5 person is ur,:.er 55 years of ace.
6 ' ` (2) When a person refers to in paragraph (1) cf this
7 subsection excee:s the maxiirurr ace at which the persor is
e qualified for ber?fits under surf', paragraph, try pees=:" r.`~l1
9 be tr4ated as an participant for the purpos-s cf
10 entitlementtc benefits under subsection (h) of this recti'?r..
11 " (b) (1) sr. __l;ihle ; articicant_ who--
12 " (A) is iisarle : within the means..^,c of secti c--
13 gt;41(4)(P) of this t=tle and: is not loss tr1ar. Al
14 age, cr
15 (^) is ::i title'' h'i_riin the rr.eanirc of sect! C"
16 A 1 (u) (?) 0' title anis not less than 5E yCF-f7
17 aoP,
18 and who has 5 or more y??,-'s if service ar-1 projected scnv+
19 shall be entitl_,' tc an annuity as provicec in subc~,~ r'Fr
22 of this title.
21 " (2) For the purposes cf apclyinc the provisions cf
22 subchapter 7I of this title in the case of an ell7itle
23 participant (;ursLant tc Yana;r_cr. (1) c: this Subsecti -r-_
2 4 (A) the eligible participant shell be iaetre tc
25 have secarat. 1 frog Government emrlcyiient on the Ca':
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MOl 152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
annuity pursuant to cares:raor (1) of t'l sunsecticn;
"(~) t.h-5, servIcc of trip participant shall lr.cluc~
4 the participant's prcjP-ted+ service; ar~
5 **CC) the participant's average day shall he Pruel tc
7k
1 before the tate the :3rticir.e t yard-?- anti,IF:' `
the Rert1rlpant'L onset average
'' 8443. Computation of benefits
9 "03) The anr1ual rate of the disability benefits r.evat]u
9 under section 84u2(a) of this title to an eli;ible
17, participant referred to in secticn 8441(5)(A) of this title
11 shall be equal tc tho excess of 57 percent of the
12 participant's onset average pay over the amount, if arv,
13 sayable to the partici;.ar,t as disability benefits ur!:Or *tjt-
14 Social Security sot.
15 "(b) The annual rato of the dIsatili*'v ben-fitF ray tic
15 under Section 8442(a) of tb12z title to an eligible
17 participant referred to in sa^tion 84u1(F)(P) of this titles--
19 "(1) durir.c the cerlcd ends rc 1 year after t "'E
19 eligible participant's disability date, shall be Pcuel to
22 the excess of 67 percent of the participant's onset_
21 average pay ever the amount, if any, payable to tt'c
22 participant as disability benefits under the Soci=1
23 Security Act; anc
24 "(2) after such period, while the pertici^ant is
25 under 55 years of ace, shall be equal to the excess rf 47
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
-7 1
1 percent cf the partici;^ant's or F. ?i ?vpr E-e -;y ,v; 2 amount, if any, payable tc the particlr=,nt aF, dic~~?i ?v
3 benefits under the Social Security Act.
8444. Aprlicetior,
5 "(a) Except as provided in subsection (b) of tr,ir
6 section, a claim of a participant for disatility benefit:
7 under this subchaoter may be allowed only If the cart i clrar,tt
files with the arpropriate administrator of benefits ar
9 acplicatlon for the disability benefits hefore th? date the
12 participant separates frcm Government errr loymer.t or wi trir 1
11 year after such rate.
r
12 "(b) An appropriate adRir.istcato of rc.?fits rr-v' -rive
13 the time 1.1^itation set out in subsectlor (a) :f thl^ ? ti,
15
the case of a participant if --
"(1) the administrator of benefits -,etE.rmireF *~~*
16 the P3rtic1pant was me-tally irc~)-et=nt :)n
17 participant separated from govern e. employment Cr
16 within 1 year after such date; and
1= "(2) ;.hE applicaticn for disability benefits i~-
27 filed within 1 year after the date the participan* it
21 restored to mental competency or the date a fiduciary is
22 appointed to manage the financial a'fairs of the
23 participant, whichever date is earlier.
24 "f 8445. Medical examinations
(a) A ^art~:ipant applyin; for or r,zceivin:? dlra 1l v
Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152R000200180009-7
72
1 ben-?fits under section 8442(a) of this title shall
Lz-
2 examined by a physician under the direction of the
3 appropriate administrator of benefits at such ties a<