CONGRESSIONAL RECORD S10430
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Publication Date:
July 30, 1985
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STAT
Continuation of House Proceedings of July 29, 1985, Issue
No. 103; and Proceedings of July 30, 1985, Issue No. 104.
WASHINGTON, TUESDAY, JULY 30, 1985 No. 104
congressional Rccor~
United States
of America
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PROCEEDINGS AND DEBATES OF THE 99th CONGRESS, FIRST SESSION
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duty 90, 1985 CONGRESSIONAL RECORD - SENATE S 10431
?'84911. Administrative provisions.
?8496. Fiduciary responsibilities; liability
and penalty.
"SVaCAArrsrl I-DD IIImORS: CIVIL UURVICI
TLaslolr sYSixri
y AIe1. I).1I Ml.w
--Except as otherwise provided in this
chapter. for the purposes of this chapter-
-?(1) the term 'account', when used with re-
spect to s participant or annuitant, means
an account established and maintained
under section 8428(a) of this title:
"(2) the term 'annuitant' means a former
participant who Is entitled to an annuity
under this chapter and who has applied
under this chapter for the payment of the
annuity to commence;
"(3) the term 'average pay', when used
with respect to a participant, means the
largest annual rate resulting from averaging
the participant's rates of basic pay in effect
over any 5 consecutive years of creditable
service or. In the Case of an annuity under
this chapter based on service of less than 5
years. over the total service, with each rate
weighted by the period it was in effect;
"(4) the term 'basic pay', when used with
respect to a participant-
? (A) means the lesser of-
"(1) the basic pay of the participant estab-
lished pursuant to law, without regard to
any provision of law (except sections 5308
and 5382(b) of this title) limiting the rate of
pay actually payable in any pay period (in-
cluding any provision of law restricting the
use of appropriated funds), or
??(ii) the rate of basic pay payable for level
I of the Executive Schedule; and
"(B) includes the items described in sub-
paragraphs (A) through (D) of paragraph
(3) of section 8331 of this title and does not
include the Items excluded by such pars-
graph;
"(5) the term 'Board' means the Civil
Service Thrift Investment Board estab-
lished by section 8491(a) of this title;
"(6) the term 'Civil Service Retirement
and Disability Fund' means the Civil Service
Retirement and Disability Fund referred to
in section 8348 of this title;
"(7) the term 'court'. when used with ae-
spect to a Judgment, decree. order, or other
Judicial action, means any court of the
United States, a State, the District of Co-
lumbia. the Commonwealth of Puerto Rico,
or a territory or possession of the United
States, or any Indian court, having jurisdic-
tion to issue such judgment, decree, or order
or to take such other judicial action;
"(8) the term 'Director' means the Direc-
tor of the Office of Personnel Management;
"(9) the term 'dynamic assumptions'
means economic assumptions that are used
in determining actuarial costs and liabilities
of a retirement system and in anticipating
the effects of long-term future-
'?(A) Investment yields,
??(B) increases in rates of basic pay, and
?(C) rates of price inflation:
"(10) the term' earnings% when used with
respect to the Thrift Savings Fund. means
the amount of the gain realized or yield re-
ceived from the investment of sums In such
fund:
"(11) the term 'eligible former spouse',
when used with .respect to a participant or
former participant, means a former spouse
of.the participant or former participant who
was married to the participant or former
participant for at least 9 months;
"(12) the term 'employee means-
"(A) each Individual referred to In sub-
paragraphs (A), (B), (F), (H), (I), and (J) of
section 8331(1) of this title, including an em-
ployee of the United States Park Police and
an employee- of the United States Secret
Service; and
"(B) a Congressional employee as defined
In section 2107 of this title, Including a tem-
porary Congressional employee:
any of whose service after December 31,
1983, is employment for the purposes of
title II of the Social Security Act and chap-
ter 21 of the Internal Revenue Code of 1954.
except that such term does not include any
individual referred to In clause (1). (U). (v),
(vi). or (ix) of paragraph (1) of section 8331
of this title or In the undesignated material
after clause (ix) of such paragraph, any in-
dividual excluded under section 8402(bX2)
of this title, or any individual who was sub-
ject to subchapter III of chapter 83 of this
title on December 31, 1983, and has not
commenced participation In the System pur-
suant to section 8471 of this title;
"(13) the term 'Executive Director' means
the Executive Director appointed under see-
tion 8493(aXl) of this title:
"(14) the term 'firefighter' means an em-
ployee the duties of whose position-
"(A) are primarily to perform work direct-
ly connected with the control and extin-
guishment of fires; and
"(B) are sufficiently rigorous that employ-
ment opportunities are required to be limit-
ed to young and physically vigorous Individ-
ualss, as determined by the Director consid-
ering the recommendation of the employing
"((115 the term 'Fund' mans the Civil
Service Retirement and Disability Fund.
"(16) the term 'Government' means the
Federal Government and Oallaudet College;
11(17) the term 'law enforcement officer'
means an employee, the duties of whose po-
sition-
"(A) are primarily (I) the investigation.
apprehension, or detention of individuals
suspected or convicted of offenses against
the criminal laws of the United States, or
(H) the protection of officials of the United
States against threats to personal safety:
and
??(B) are sufficiently rigorous that employ-
ment opportunities are required to be limit-
ed to young and physically vigorous individ-
uals. as determined by the Director consid-
ering the recommendation of the employing
agency.
"(18) the term loss'. when used with re-
spect to the Thrift Savings Fund, cleans the
amount of the loss realized from the invest-
ment of sums in such fund:
"(19) the term 'lump-sum credit' has the
same - meaning as provided by section
8331(8) of this title:
11(20) the term 'Member' has the same
meaning as provided in section 2106 of this
title, except that such term does not include
a person who (A) was a Member of Congress
on December 31, 1983, and (B) has not com-
menced participation In the System pursu-
ant to section 8471 of this title; -
"(21) the term 'military reserve techni-
clan' means a member of one of the reserve
components of the Armed Forces specified
in section 261(s) of title 10 who-
"(A) Is assigned to a civilian position as a
technician in the administration and train-
ing of such reserve components or in the
maintenance and repair of supplies issued to
such reserve components: and
"(B) as a condition of employment In such
position, is required to be a member of one
of such reserve components serving in a
specified military grade;
"(22) the -term 'net earnings' means the
excess of earnings over losses;
"(23) the term 'net losses' means the
excess of losses over earnings;
" (24) the term 'normal cost' means the
entry-age normal cost of the provisions of
the System which relate to the Fund, com-
puted by the Office in accordance with gen-
erally accepted actuarial practice and stand-
ards (using dynamic assumptions) and ex-
pressed a# a level percentage of aggregate
basic pay.
"(25) the term 'Office' means the Office of
Personnel Management;
"(26) the term 'participant' means an em-
ployee or Member or a person who Is receiv-
ing disability benefits under subchapter V
of this chapter,
?1(27) the term 'price index' has the same
meaning as provided in section 6331(15) of
this title;
"(28) the term 'service'. when used with
respect to a participant or former partici-
"(A)) means-
"(A) as a participant;
?'(B) subject to section 841646) of this title.
military aeMee as Prided in section
8332(c) o this title; and
s vie a that is ereditablp under sub-
,%C) e>
chapter # 11 of chapter 83 of this title. but
only to the extent provided in section
8472(a) o this title;
"(29) term 'supplemental liability'
means th esthnated excess of-
"(A) actuarial present value of all
future ~nefits payable from the Fund
under chapter. over
"(B) the sIm of- -
,,(i) the actuarial present value of the
future contributions to be made on behalf
of
parttlci~ants pursuant to section 8418(a)
of this ti e; and
"(u) balance in the Fund attributable
to the 8 on the date the supplemental
liability determined; and
"(30) t e term 'System' means the Civil
Service on System described In section
8402(s) o this title.
"68402. Civil Service Peasisa System: particiM-
tioa
"'(a) The provisions of this chapter com-
prise the Civil Service Pension System.
"(bXl) Except as provided in paragraph
(2) of this subsection. each employee and
Member shall be a participant in the
System-
"(2XA) The Office may exclude from the
operation of this chapter an employee or
group of employees In or under an Execu-
tive agency whose employment is temporary
or Intermittent, except as employee whose
employment Is part-time career employment
(as defin In section 3401(2) of this yule).
"(B) Architect of the Capitol may ex-
clude f the operation of this chapter an
employ under the Office of the Architect
of the tol whose employment Is tempo-
rary or of uncertain duration.
(C) The Librarian of Congress may ex-
clude from the operation of this chapter an
employee under the Library of Congress
whose employment In temporary or of un-
certain duration.
"8 0483. R4hlbai' y is tae Social Security Act
"Except as otherwise provided in this
chapter, the benefits payable under the
System sate In addition to the benefits pay-
able under the Social Security Act.
''SUBCHAPTER II-BASIC PLAN
"88411. Entitlement 10, mmediate retirement
"(a) An employee or & Member who Is sep-
arated from Government employment after
becoming 55 years of age and completing 10
yearq of service Is entitled to an Immediate
annuity.
"(b) An employee or a Member who is sep-
arated from Government employment after
becoming 62 years of age and completing 5
years of service Is entitled to an Immediate
annuity.
?'(c) AID employee who is separated from
Government employment after completing
25 years of service as a law enforcement of-
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? S 10432 CONGRESSIONAL RECORD - SENATE
ficer or firefighter. or any combination of
such service totaling at least 25 years, Is en-
titled to an Immediate annuity.
"(d) An employee who is separated from
Government employment after completing
25 years as an air traffic controller Is enti-
tled to an Immediate annuity.
"(eX f) Except as provided in paragraphs
(2) and (3) of this subsection, any employee
who has completed 25 years of service, or is
not less than 50 years of age and has com-
pleted 20 years of service. and who-
'?(A) is separated from Government em-
ployment involuntarily, except by removal
for cause on charges of misconduct or delin-
quency,or
"(B) while serving in a geographic area
designated by the Director. Is voluntarily
separated from Government employment
during a period that as determined by the
Director)-
"(I) the agency in which the employee Is
serving is undergoing a major reorganiza-
tion, a major reduction in force, or a major
transfer of function, and
"iii) a significant percentage of the total
number of employees serving In such agency
will be separated or subject to an Immediate
reduction In the rate of basic pay (without
regard to subchapter VI of chapter 53 of
this title or comparable provisions),
is entitled to an immediate annuity.
"(2) An employee described in paragraph
(1XA) of this subsection Is not entitled to an
annuity under this subsection if the employ-
ee has declined a reasonable offer of an-
other position In the employee's agency for
which the employee is qualified and the of-
fered position is not lower than 2 grades- or
pay levels below the employee's grade or
pay level and is within the employee's com-
muting area.
"(3) Paragraph (1) of this subsection shall
not apply to a firefighter, law enforcement
officer, or air traffic controller who has
completed 25 years of service.
?'(f) An annuity authorized by this section
is computed under sections 8413 through
8415 of this title.
'i 841L Entitlement to deferred retirement
"(a) A participant who is under 55 years of
age and separates from Government em-
ployment after completing 10 years of serv-
ice is entitled to an annuity to commence on
or after the date the participant becomes 55
years of age but not later than the date the
participant becomes 62 years of age, as
elected by the participant under rules pre-
scribed by the Office.
"(b) A participant who is under 62 years
of age and separates from Government em-
ployment after completing 5 years of service
and before completing 10 years of service Is
entitled to an annuity to commence on the
date the participant becomes 62 years of
age.
"(c) An annuity authorized by this section
is computed under sections 8413 through
8415 of this title.
"1841& Computation of annuity
?'(ax1) Except as provided In section 8414
or 8415 of this title, the amount of the an-
nuity an annuitant is entitled to receive
under this subchapter shall, be equal to the
product of 1 percent of the former partici-
pant's average pay (while serving as an em-
ployee or Member) multiplied by the par-
ticipant's total service.
"(2) For the purposes of computing the
amount of an annuity under paragraph (1)
of this subsection, the total service of a par-
ticipant who separates from Government
employment entitled to an Immediate annu-
ity or who dies leaving a survivor or survi-
vors entitled to a survivor annuity under
this chapter includes days of unused sick
leave credited to the participant under a
formal leave system to the same extent that
unused sick leave is credited in computing
an annuity of a person who Is publect to
subchapter III of chapter 83 of this title, as
provided in section 8339(m) of this title.
"(bXl) A former participant who In enti-
tled to receive an annuity under subsection
ce) or (d) of section 8411 of this title and Is
at least 55 years of age and not more than
62 years of age shall be entitled to receive
an annuity supplement, in addition to the
amount of the annuity computed under sub-
section (a) of this section, while the former
participant is under 62 years of age.
"(2) The amount of the annuity supple-
ment payable to a former participant under
paragraph (1) of this subsection shall be
equal to the estimated amount of the bene-
fits that-
"(A) the former participant would be enti-
tled to receive under title II of the Social
Security Act if the participant were 62 years
of age on the date the annuity referred to In
such paragraph commences; and
"(B) is attributable to service referred to
In section 8411(c) or 8411(d) of this title, as
the case may be.
computed on the date such annuity com-
mences and increased as provided in para-
graph (3) of this subsection.
?'(3) Effective on January 1 of each year,
the amount of the annuity supplement pay-
able to a former participant under this sub-
section shall be increased by the percentage
increase, if any, in the SSA average wage
index (as defined in section 215(1X1XO) of
the Social Security Act) published for No-
vember of the preceding year over such
Index published for November of the next
preceding year.
'?(c) In computing under this section the
annuity of an individual who has performed
service on less than a full-time basis, such
service shall credited on a proportional basis
equal to the fraction that such service is of
full-time service, and the annual rate of
basic pay that would be payable for full-
time service in the position shall be deemed
to be the rate of basic pay.
"18414. Reduction for early retirement
"The annuity computed under section
8413(a) of this title (without regard to this
section or section 8415 of this title)-
,U) for an annuitant, other than an annu-
Itant referred to in paragraph (2) or (3) of
this section, who is under 62 years of age on
the date on which the annuitant's annuity
commences shall be reduced by one-sixth of
1 percent for each month that the annul-.
tant is under such age on such date;
"(2) for an annuitant, other than an annu-
itant entitled to an immediate annuity
under section 8411(e) of this title and an an-
nuitant referred to in paragraph (3) of this
subsection, who Is at least 55 years of age
and is under 62 years of age on the date on
which the annuitant's annuity commences
and has not completed 30 years of service
shall be reduced 'by five-twelfths of 1 per-
cent for each month that the annuitant is
under 62 years of age on such date; and
"(3) for an annuitant who is entitled to an
immediate annuity under subsection (c) or
(d) of section 8411 of this title or who sepa-
rated from Government employment- as a
military reserve technician shall be reduced
by five-twelfths of 1 percent for each month
that the annuitant is under 65 years of age
on the date on which the annuitant's annu-
ity commences.
"i 8415. Reduction for survivor annuities
Na) The annuity of an annuitant comput-
ed under section 8413 of this title and, If ap-
propriate, under section 8414 of this title
shall be reduced by an estimated amount
such that the actuarial present value of the
retirement benefits expected to be payable
to the annuitant under this subchapter and
all survivor benefits expected to be payable
out of the Fund with respect to the annui-
tant is equal to the actuarial present value
of the retirement benefits that would be ex-
pected to be payable under this subchapter
to the annuitant pursuant to the method re-
ferred to in section 8416(aX2XA) of this
title, as determined under regulations pre-
scribed by the Office.
"(b) A reduction in the annuity of an an-
nuitant: pursuant to subsection (a) of this
section shall be adjusted, as appropriate to
carry out such subsection, to reflect any
change in circumstances relating to entitle-
ment to a survivor annuity,, including any
election, made pursuant *-section 8434(a),
8436(b), or 8436(c) of this title.
"18416. Methods of Payment
"(aX1) The Office shall pr4cribe methods
of payment of annuities under this subchap-
ter.
"(2) The methods of payment prescribed
under paragraph (1) of this subsection shall
Include, but not be limited to-
"(A) a method which provides for the pay-
ment of a monthly annuity only to an annu-
itant during the life of the annuitant;
"(B) a method which provides for the pay-
ment ofa monthly annuity to an annuitant
and a monthly survivor annuity equal to 50
percent of the annuitant's annuity on the
date of the annuitant's death (computed
without regard to an election under section
8417(a) Of this title) to the annuitant's sur-
viving spouse, if any; and
"(C) a method which provides for the pay-
ment of a monthly annuity to an annuitant
and a monthly survivor annuity equal to 50
percent of the annuitant's annuity on the
date of the annuitant's death (computed
without regard to an election under section
8417(a) of this title) to an individual who is
designatJed by the annuitant and who has an
Insurable interest in the annuitant.
"(bXl) Subject to paragraphs (2) and (3).
"(A) under such regulations as the Office
shall prescribe, a participant or former par-
ticipant who Is applying for an annuity
under this subchapter to commence shall
elect one of the methods of payment pre-
scribed ty the Office under subsection (a) of
this section; and
"(B) the annuity of an annuitant under
this subchapter shall be paid In accordance
with the method of payment elected by the
annuitant pursuant to subparagraph (A) of
this paragraph.
"(2)(A) A participant or former partici-
pant who is married on the date on which
the participant or former participant ap-
plies for an annuity under this subchapter
to commence may elect a method of pay-
ment other than the method described in
subsection (aX2XB) of this section only if
the participant or former participant and
the spouse of the participant or former par-
ticipant jointly waive a survivor annuity
under the method described in such subsec-
tion (a)($XB). f
"(B) A waiver shall not be effective for
the purpose of subparagraph (A) of this
paragraph unless the waiver is made in writ-
ing, is notarized, and is filed with the Office
on or before the date the annuity to which
the waiver relates commences.
"(C) A waiver made in accordance with
this paralgraph shall be irrevocable.
"(3) In the case of an annuitant 'who is
subject to paragraph (2XA) of this subsec-
tion and fails to make an election under
paragraph (1) of this subsection, an annuity
and survivor annuity.shall be paid under the
method Of payment described in subsection
(aX2XB)'of this section.
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CONGRESSIONAL RECORD - SENATE S 10433
"(4) A participant or former participant
may elect the method prescribed under sub-
section (aX2XC) of this section only If the
participant or former participant is in good
health on the date the election is made, as
determined by the Office.
"13417. level benefits option
"(a) Under regulations prescribed by the
Office, an annuity payable under this sub-
chapter to a participant who is separating
from Government employment entitled to
an immediate annuity under subsection (a)
of section 8411 of this title and is less than
62 years of age may be adjusted as provided
in subsection (b) of this section. If elected by
the participant on or before the date of sep-
aration.
"(bXl) Subject to paragraph (2) of this
subsection, an annuity payable under this
subchapter to an annuitant who has made
an election authorized by subsection (a) of
this section may be Increased during the
period the annuitant Is not less than 55
years of age and is less than 62 years of age
and may be reduced on and after the date
the annuitant is not less than 62 years of
age as appropriate to provide the annuitant
an annuity under this subchapter, during
each month of such period. In an amount
which approximately equals the total
amount of the monthly benefits payable to
the annuitant under this subchapter and
section 202(a) of the Social Security Act
after such date.
"(2) The actuarial present value of the
benefits expected to be paid under this sub-
chapter to the annuitant as provided in
paragraph (1) of this subsection an and
after the date the annuitant becomes 55
years of age may not exceed the actuarial
present value of the benefits that would be
expected to be paid under this subchapter
to such participant on and after such date if
the adjustments authorized by such para-
graph were not made, as determined under
regulations prescribed by the Office.
"I NIL yr.dis;
"(&X1) Each agency of-the Government
employing a participant shall contribute to
the Fund an amount equal to the sum of-
"(A) the normal cost, as determined by
.the Office, of (1) each participant who is em-
ployed by the agency. and (it) each disabled
participant who Is entitled to benefits under
section 8442(a) of this title and was em-
ployed by the agency on the date the Partic-
ipant became disslbied (computed using av-
erage pay as increased to accordance with
section 8442(bX2XC) of this title); and
"(B) the normal cost. as determined by
the Office, of the annuity supplement under
section 8413(b) of this title for each law en-
forcement officer, firefighter. and air traffic
controller who Is employed by the agency.
"(2) The contribution required by Para-
graph (1) of this subsection to be made by
an agency shall be made from the appro-
priation or fund used to pay the agency's
participants. or, in the case of an elected
participant, from an appropriation or fund
available for payment of other salaries of
the office or establishment of the partici-
pant. In the can of a participant in the leg-
islative branch who Is paid by the Clerk of
the House of Representatives. contributions
fdt the benefit of such participant shall be
paid from the contingent fund of the House
of Representatives.
"(bX 1) The Office shall compute-
"(A) the amount of the supplemental li-
ability of the Fund relating to participants
and annuitants other than participants and
annuitants referred to in subparagraph (B)
of this paragraph, and
"(B) the amount of the supplemental li-
ability of the Fund relating to participants
and annuitants who are active or retired of-
ficers or employees of the United States
Postal Service.
as of the close of each fiscal year beginning
after September 30. 1987.
"(2) The amounts of any supplemental It-
ability-
"(A) computed pursuant to paragraph
(1XA) of this subsection with respect to par-
ticipants and annuitants referred to In such
paragraph UXA) of this subsection. and
"(B) computed pursuant to paragraph
(1)(B) of this subsection with respect to par-
ticipants and annuitants referred to in such
paragraph (1XB).
shall each be amortized in thirty annual in-
stallments.
,.(3) At the end of each fiscal year. the
Office shall notify-
"(A) the Secretary of the Treasury of the
amount of the annual Installment computed
under paragraph (2XA) of this subsection
for such fiscal year, and
"(B) the Postmaster General of the
United States of the amount of the annual
installment computed pursuant to para-
graph (2XB) of this subsection for such
fiscal year.
"(4XA) Before closing the accounts for a
fiscal year. the Secretary of the Treasury
shall credit the amount of the annual In-
stallment computed for such fiscal year pur-
suant to paragraph (2XA) to the Fund, as a
Government contribution, out of any money
in the Treasury of the United States not
otherwise appropriated.
"(B) Upon receiving a notice required by
paragraph (3XB) of this subsection, the
United States Postal Service shall pay to
the Fund the amount of-the annual install-
ment specified in the notice.
"(5) For the purpose of carrying out para-
graph (1) of this subsection with respect to
any fiscal year, the Office may-
(A) require the Board of Actuaries of the
Civil Service Retirement System to make ac-
tuarial determinations and valuations, make
recommendations. and maintain records in
the same manner as provided In section
8347(f) of this title; and
"(B) may use the latest actuarial determi-
nations and valuations made by such Board
of Actuaries.
'6 $416. Funding of annuity attributable to mili-
tary service
"(a) Except In the case of an Individual
making an election under section
8471(aX1XA) of this title, a participant's or
former participant's service shall include
credit for military service as provided In sec-
tion 8332(e) of this title without regard to
whether the participant or former partici-
pant has made a deposit covering such mili-
tary service as provided In section 6334(j) of
this title. -
"(b) Before closing the accounts for a
fiscal year, the Secretary of the Treasury
shall reimburse the Fund from sums in the
Department of Defense Military Retirement
Fund (established by section 1461(a) of title
10). which are hereby made available to pay
the reimbursement, for the normal cost re-
lating to the creditable military service of
employees and Members who became par-
ticipants during such fiscal year, actuarially
adjusted to the date of payment, as deter-
mined by the Office.
"(c) At the end of each fiscal year the
Office shall compute the amount of the re-
imbursement required by subsection (b) of
this section for the fiscal year and shall
notify the Secretary of the Treasury of that
amount.
"SUBCHAPTER III-THRIFT SAVINGS
PLAN
"f 8421. Getribstions
"(aXl) Each participant may contribute to
the Thrift Savings Fund in any year an
amount not exceeding 10 percent of the par-
ticipant's annual rate of basic pay.
"(2) Each participant receiving disability
benefits under subchapter V of this chapter
may. until becoming 62 years of age (in the
case Of a person who is disabled within the
meaning of section 8441(41(A) of this title)
or until becoming 55 years of age (in the
case Of a person who is disabled within the
meaning of section 8441(4XB) of this title).
contribute to the Thrift Savings Fund in
any year an amount not exceeding 10 per-
cent of the amount of the former partici-
pant'$ disability benefits payable under
such bchapter during such year.
(3 Any contribution tinder this subsec-
tion shall be made ontVpursuant to a pro-
gram of regular contributions under regula-
tions prescribed by the Board.
"(4) At least once each year, a participant
may modify the amount contributed pursu-
ant to paragraph (1) or (2) of this subsec-
tion, as the case may be, under regulations
prescribed by the Board.
"(b) The employing agency of a partici-
pant Who contributes to the Thrift Savings
Fund' under subsection (a) of this section for
any pay period, or, in the case of a disabled
participant who contributes to such fund
unde such subsection for any disability
benefits payment period, the employing
agency of the participant on the date the
participant became disabled (as defined In
section 8441(4) of this title), shall contribute
to the Thrift Savings Fund for the benefit
of such participant or disabled participant
at the end of such period an amount equal
to such portion of the amount of the par-
ticipant's contribution as does not exceed 5
percent of the amount of the gross pay or
gross- disability benefits. as the case may be.
payable for such period.
"(c) The sums required to be contributed
to the Thrift Savings Fund by an employing
agency under subsection (b) of this section
for the benefit of a participant shall be paid
from the appropriations or funds available
to such agency to pay the basic pay of par-
ticipfnts or. in the case of an elected partici-
pant,. from an appropriation or fund avail-
able for payclent of other salaries of the
participant's office or establishment. in the
case of a participant In the legislative
branch who Is paid by the Clerk of the
House of Representatives, contributions for
the benefit of such participant shall be paid
from) the contingent fund of the House of
Reprlesentatives.
"(d) For purposes of the Internal Revenue
Code of 1954-
"(1) any amount of the participant's pay
which Is contributed to the Thrift Savings
Fund; and the amount of the employing
agency's matching contributions, shall not
be included in the gross income of the par-
ticipant; and
"(2) the Thrift Savings Fund shall be
treated, for purposes of determining when
amounts In such Fund are included in the
income of any participant. a; described in
section 401(a) of such Code.
"(e) Subsection (dX1) of this section shall
not be construed to provide that any
amount of the participant's pay which is
contributed to the Thrift Savings Fund
shall not be included in the term 'wages' for
purposes of section 209 of the Social Securi-
ty Act or section 3121(a) of the Internal
Revenue Code of 1954.
"g 84*2. Vesting
"(&Xi) A participant who separates from
-Government employment shall be entitled
to an amount equal to-
"(A) the total amount of the contributions
made under section 8421(a) of this title plus
the total amount of the net earnings in the
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Thrift Savings Fund, or minus the total
amount of the net losses, attributable to
such contributions: and
"(B) the applicable percentage of the
amount equal to the total amount contrib-
uted to the Thrift Savings Fund for the
benefit of the participant under section
8421(b) of this title plus the total amount of
the net earnings in the Thrift Savings Fund.
or minus the total amount of the net losses,
attributable to such contributions. as pro-
vided in subsection (b) of this section.
"(2) The amount to which a participant is
entitled under paragraph (1) of this subsec-
tion shall be payable in accordance with the
election made by the participant pursuant
to section 8423 of this title.
"(bXl) For the purpose of subsection
(SX1XB) of this section, except as provided
In paragraph (2) of this subsection, the ap-
plicable percentage for a participant sepa-
rating from Government employment after
having been a participant In the System for
a period set forth under column I of the
table below is the percentage set forth
under column II of the table below opposite
the description of such period:
"Column I Column II
Period for which the
participant has been
a participant In the Applicable
system: percentage
Less than 1 year .....................................
Not less than 1 year, but less than 2
years ..................................................... 20
Not less than 2 years, but leas than 3
years ..................................................... 40
Not less than 3 years, but less than 4
years ................................... ................ 80
Not leas than 4 years, but less than 5
years ..................................................... 80
Not less than 5 years ....................... ...... 100.
"(2) For the purposes of subsection
(aX1XB) of this section-
"(A) the percentage applicable In the case
of any participant who dies while employed
by the Government shall be 100 percent;
and
"(B) in the case of a participant making
contributions under section 8421(aX2) of
this title, the period for which the person
has been a participant In the System shall
include periods for which such- contribu-
tions were made.
"(c) When an election is made by a partici-
pant under section 8423(c) of this title, the
amount equal to the excess of-
"(1) the sum of-
"(A) the amounts contributed to the
Thrift Savings Fund with respect to the
participant under section 8421 of this title;
and
"(B) the net earnings in the Thrift Sav-
ings Fund attributable to such contribu-
tions, over
"(2) the amount in the Thrift Savings
Fund paid or reserved for payment to or
with respect to the participant pursuant to
section 8423(c) of this title,
shall be transferred to the Treasury of the
United States for credit to Miscellaneous
Receipts.
"18423. Entitlement and elections relating to en-
titlement
"(a) Any participant who separates from
Government employment entitled to an im-
mediate annuity under section 8411 of this
title is entitled and may elect-
"(1) to receive an immediate annuity from
the Thrift Savings Fund;
"(2) to defer the commencement of the
payment of an annuity from the Thrift Sav-
ings Fund until such date as the participant
specifies;
"(3) to withdraw, in one or more pay-
ments, the amount of the balance credited
to the participant's account In the Thrift
Savings Fund; or
"(4) to transfer the amount of the balance
in the account to an individual retirement
account or other qualified plan (within the
meaning of the Internal Revenue Code of
1954) of the participant.
"(b) Any participant who separates from
Government employment entitled to a de-
ferred annuity under section 8412 of this
title Is entitled and may elect-
"(1) to receive an annuity from the Thrift
Savings Fund to commence on the first date
the participant is entitled to receive the de-
ferred annuity:
"(2) to defer the commencement of the
payment of an annuity from the Thrift Sav-
ings Fund until a date after the first date
the participant is entitled to receive the de-
ferred annuity, as specified by the partici-
pant;
"(3) to withdraw in one or more payments,
on or after the first date the participant is
entitled to receive the deferred annuity, the
amount of the balance credited to the par-
ticipant's account in the Thrift Savings
Fund;. or
"(4) to transfer the amount of the balance
in the account to an Individual retirement
account or other qualified plan (within the
meaning of the Internal Revenue Code of
1954) of the participant.
"(e) Any participant who separates from
Government employment before becoming
entitled to an annuity under section 8411 or
8412 of this title is entitled and may elect-
"(1) to receive an annuity from the Thrift
Savings Fund to commence when the partic-
ipant becomes 62 years of age;
"(2) to withdraw, in one or more pay-
ments, the amount computed under section
8422(a)(l) of this title, payable when the
participant becomes 62 years of age; or
"(3) to transfer such amount to an individ-
ual retirement account or other qualified
plan (within the meaning of the Internal
Revenue Code of 1954) of the participant.
"(dXl) Subject to paragraph (2) of this
subsection, any participant making an elec-
tion pursuant to subsection (aX2) or (bX2)
of this section may modify the date speci-
fied in the election or in a previous modifi-
cation under this subsection.
"(2) Any modification of an election under
paragraph (1) of this subsection may not be
made on or after the date specified in the
election or the latest modification made
under such paragraph and may not specify
a date for the commencement of annuity
payments earlier than one month after the
date the modification is filed with the Exec-
utive Director.
"8 8424. Annuities: methods of payment; election;
and computation
"(aX1) The Board shall prescribe methods
of payment of annuities under this subchap-
ter.
"(2) The methods of payment prescribed
under paragraph (1) of this subsection shall
include, but not be limited to-
"(A) a method which provides for the pay-
ment of a monthly annuity only to an annu-
itant during thelife of the annuitant;
"(B) a method which provides for the pay-
ment of a monthly annuity to an annuitant
for the joint lives of the annuitant and the
spouse of the annuitant and an appropriate
monthly annuity to the one of them who
survives the other of them for the life of
the survivor;
"(C) a method described in subparagraph
(A) of this paragraph which provides annual
increases in the amount of the annuity pay-
able;
"(D) a method-described in subparagraph
(B) of this paragraph which provides annual
increases in the amount of the annuity pay-
able; and
"(E) a method providing for the payment
of a monthly annuity-
July 90, 1985
"(f) to the annuitant for the Joint lives of
the annuitant and an individual, designated
by the annuitant under regulations pre-
scribed by the Board, who has an insurable
Interest In the annultant; and
"(if) to the one of them who survives the
other of them for the life of the survivor.
"(b) Subject to paragraph (2) of this sub-
section. Under such regulations as the Board
shall proscribe, an annuitant electing under
section $423 of this title to receive an annu-
ity from the Thrift Savings Fund shall
elect, on: or before the date on which the an
nuitant's annuity under this subchapter
commences, one of the methqds of payment
prescri by the Board hider subsection
(a) of th section.
"(c) T e amount of ari annuity payable
under this subchapter purrs~uant to the
method elected under subsecCon (b) of this
section shall be determined on an actuarial
basis under regulations prescribed by the
Board.
"8 8425. Administrative provisions relating to
paymegts and elections
"(a) The Executive Director shall make or
provide for payments and transfers in ac-
cordance with an election of a participant
under section 8423 or 8424(b) of this title.
"(b) Any election under section 8423 or
8424(b) Of this title shall be in writing and
shall be filed with the Executive Director in
accordance with regulations prescribed by
the Board.
"(c) Notwithstanding any other provision
of this section, an election or modification
of an election under any provision of this
subchapter shall not be effective if the elec-
tion or modification would result in a viola.
tion of the terms of an applicable court
decree of divorce, annulment, or legal sepa
ration, olr the tercets of any court order of
court-approved property settlement agree-
ment Incident to a court decree of divorce.
annulment, or legal separation, as deter-
mined by the Executive Director.
"19426. Thrift Savings Fund
Na) There is established in the Treasury
of the United States a Thrift Savings Fund.
"(b) The Thrift Savings Fund consists of
the sum of all amounts contributed under
section 6421 of this title increased by the
total net earnings from investments of sums
in the Thrift Savings Fund or reduced by
the total: net losses from tpvestments of the
Thrift Savings Fund.
"(c) The sums in the Thrift Savings Fund
are appropriated and shall remain available
without fiscal year limitation-
"(1) to Invest under section 8427 of this
title;
"(2) to pay benefits under this subchapter;
"(3) to pay the administrative expenses of
the Civil Service Thrift Investment Manage.
ment System prescribed In subchapter VIII
of this chapter. and
"(4) to make loans to participants as au-
thorized under subsection (e) of this section.
"(d X 1) Except as provided In paragraph
(2) of this subsection, sums in the Thrift
Savings 1~'und are not subject to execution,
levy, attachment, garnishment, or other
legal process.
"(2) Moneys due or payable from the
Thrift Savings Fund to any individual and,
in the case of an individual who is a partici-
pant, motleys which the individual would be
entitled to receive under section 8422 of this
title upon separation from Government em-
ployment; shall be subject to legal process
for the enforcement of the Individual's legal
obligations to provide child support or make
alimony payments as provided in section 459
of the Social Security Act (42 U.S.C. 659) or
to pay any indebtedness of the individual to
the United States.
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"(e) The Board shall establish a program which may arise by reason of a breach or
to make loans from the Thrift Savings Fund violation of a duty described In section 8497
to a participant in case of financial hardship of this title. is unconditionally guaranteed
and shall prescribe regulations to carry out by-
such program. Any such loan shall be made "(I) a person who directly or indirectly,
only out of sums contributed to the Thrift through one or more intermediaries, con-
Savings Fund by the participant and net trols, is controlled by, or Is under common
earnings attributable to such sums. control with the investment adviser and
"(f) The sums in the Thrift Savings Fund who has, on the last day of the person's
shall not be appropriated and may not be latest fiscal year ending before the date of a
used for any purpose other than the pur- determination for the purpose of this
poses specified in this section. clause, shareholder's or partner's equity in
11127. Invemn ent of TArin 8sviogs Fund an amount which, when added to the
"(a) For the purposes of this section- amount of the shareholder's or partner's
"(1) the term 'Common Stock Index In- equity of the investment adviser on such
vestment Fund' means the Common Stock day, exceeds $750.000;
Investment Fund established under subsec- "(II) a qualified professional asset manag-
tion (b)(1)(C) of this section. er described In subparagraph (A), (B), or (C)
"(2) the term 'equity capital' means of this paragraph: or
common and preferred stock, surplus, undi- "(III) a broker or dealer registered under
vided profits, contingency reserves, and section 15 of the Securities Exchange Act of
other capital reserves; 1934 (15 U.S.C. 78o).that has, on the last
"(3) the term 'Fixed Income investment day of the broker's or dealer's latest fiscal
Fund' means the Fixed Income Investment Year ending before the date of a determina-
Fund established under subsection (bX1XB) tion for the purpose of this clause, net
of this section; worth in excess of $750.000; and
"(4) the term 'Government Securities In- "(8) the term 'shareholder's or partner's
vestment Fund' means the Government Se- equity', when used in paragraph (7XD) of
curities Investment Fund established under this subsection with respect to an invest-
subsection (bXIXA) of this section: ment adviser or a person who is affiliated
'(5) the term 'net worth' means capital, with the investment adviser in a manner de.
paid-in and contributed surplus, unassigned scribed in clause (tAXI) of such paragraph
surplus, contingency reserves, group contin- (7XD), means the equity shown in the most
gency reserves, and special reserves; recent balance sheet prepared for such in-
"(6) the term 'plan' means an employee vestment adviser or affiliated person, in ac-
benefit plan, as defined in section 3(3) of cordance with generally accepted account-
the Employee Retirement Income Security ins principles, within 2 years before the
Act of 1974 (29 U.S.C. 1002(3)); date on which the investment adviser's
"(7) the term 'qualified professional asset status as a qualified professional asset man-
manager' means- alter is determined for the purposes of this
(A) a bank, as defined in section 202(aX2) section.
of the Investment Advisers Act of 1940 (15 "(bX2) The Board shall establish-
U.S.C. 80b-2(a)(2)) which- "(A) a Government Securities Investment
"(i) has the power to manage, acquire, or Fund under which sums in the Thrift Sav-
dispose of assets of a plan; and ings Fund are invested in securities of the
(ii) has, as of the last day of its latest United States Government Issued as provid-
fiscal year ending before the date of a deter- ed in subsection (g) of this section;
mination for the purpose of this clause, "(B) a Fixed Income Investment Fund
equity capital in excess of $1.000,000; under which sums in the Thrift Savings
"(B) a savings and loan association, the ac- Fund are invested in insurance contracts,
counts of which are insured by the Federal certificates of deposits, or other instruments
Savings and Loan Insurance Corporation, or obligations which (1) are issued or select.
which- ed by qualified professional asset managers,
"(I) has applied for and been granted trust and (ii) return the amount invested and pay
powers to manage, acquire, or dispose of Interest, at a specified rate or rates, on that
assets of a plan by a State or Government amount duringa specified period of time;
authority having supervision over savings . "(C) a Common Stock Index Investment
and loan associations; and Fund as provided in paragraph (2) of this
"(ii) has, as of the last day of its latest subsection; and
fiscal year ending before the date of a deter- "(D) such other investment funds as the
Inlnation for the purpose of this clause, Board determines to be appropriate for the
equity capital or net worth in excess of purposes of this subchapter.
$1.000.000; "(2)(A) The Board shall define an index
"(C) an insurance company which- which-
"(I) Is qualified under the laws of more "(1) consists of all of the common stocks
than one State to manage, acquire, or dis- that are publicly listed and traded on one or
pose of any assets of a plan; more national securities exchanges, or
"(ii) has, as of the last day of Its latest "(ii) is a commonly recognized index com-
fiscal year ending before the date of a deter- prised of common . stock the aggregate
mination for the purpose of this clause, net market value of which is at least 50 percent
worth in excess of $1,000,000; and of the aggregate market value of all
"(Iii) is subject ,to supervision and exami- common stocks that are publicly listed and
nation by a State authority having supervi- traded on one or more national securities
Sion over insurance companies; or exchanges.
"(D) an investment adviser registered "(B) The Common Stock Investment
under section 203 of the Investment Advis- ? Fund shall be invested In each stock that is
ers Act of 1940 (15 U.S.C. 80b-3) If the in. included in the index defined under sub-
vestment adviser has. on the last day of its paragraph (A) of this paragraph such that,
latest fiscal year ending before the date of a to the extent practicable, the percentage of
determination for the purpose of this sub- the Common Stock Investment Fund that is
paragraph, total client assets under Its man- invested in that stock is the same as the per-
agement and control in excess of centage determined by dividing the aggre-
$50,000,000, and- gate market value of all shares of that stock
(I) the investment adviser has, on such by the aggregate market value of all shares
day, shareholder's or partner's equity in of all stock included In such index.
excess of $750,000; or "(cXl) The Executive Director shall invest
"(ii) payment of all of the investment ad- in the Government Securities Investment
viser's' liabilities.' including any liabilities Fund the sums which are in the Thrift Sav-
S 10435
ings Fund. are available for Investment, and
are not to be invested in an investment fund
referred to in subsection (b)(1)(B). (b)(1)(C).
or (bX:IXD) of this section pursuant to an
election made under subsection (d) of this
section.
"(2) Except as provided In subsection (e)
of this section, the Executive Director shall
invest sums available in the Thrift Savings
Fund for Investment as provided in elections
made under subsection (d) of this section.
"(d)(1) Except as provided in subsection
(e) of this section, at least once each year, a
participant or former participant may elect
the investment funds referred to in subset.
tion (b) of this section1ntg which the sums
in the Thrift Savings PtUld credited to the
account of such participant or former par-
ticipant are to be Invested or reinvested.
"(2) The election may be r>dade by a partic-
ipant or former participant under para-
graph (1) of this subsection only in accord-
ance with regulations prescribed by the
Board and within such period after the date
the participant's or former participant's
annual statement is transmitted to the par-
ticipant or former participant pursuant to
section 8428(b) of this title as the Board
shall prescribe in such regulations.
"(eXIXA) The Executive Director shall
invest a percentage of the total amount
that-
"(1) is contributed to the Thrift Savings
Fund by a participant under section 8421(a)
of this title during a year described under
column I of the first table of minimum Gov-
ernment securities investments set out in
subparagraph (B) of this paragraph, and
"(II) is available for investment.
in the Government Securities Investment
Fund as provided under column II of the
table opposite the description of such year.
"(B) For the purposes of subparagraph
(A) of this paragraph, the first table of min-
imum Government securities investments is
as follows:
Column II
Minimum percentage of
the amounts contrib-
uted by a participant
for each month of
such year to be in-
vested in the Gov-
ernment Securities
Investment Fund:
"Column I
Year.
1987 .................................................... 100
1988 .................................................... 80
1989 .................................................... 60
1990 .................................................... 40
1991.> ................................................. 20.
"(2)(A) The Executive Director shall
invest a percentage of the total amount
that-
"(I) is contributed to the Thrift Savings
Fund by the Government for the benefit of
a participant pursuant to section 8421(b) of
this title during a year described under
column I of the second table of minimum
Government securities investmerts set out
in subparagraph (B) of this paragraph. and
"(ii) is available for investment.
in the Government Securities Investment
Fund as provided under column II of the
table opposite the description of such year.
"(B) For the purposes of subparagraph
(A) of this paragraph, the second table of
minimum Government securities invest.
ments is as follows:
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CONGRESSIONAL RECORD - SENATE truly 80, 1985
'Voiuemn I Column if
Year Ufntrewn Percentage of
the ammats contrib-
sted for thZ Genet
of a participant for
each month of nub
year to be Invested
In the tiwernment
Securities invest-
muf Turd:
1987-1992._._._.__:__._._ 100
1995.... _.._... _......?..._ .~_ .... 40
1996_._ _....-.._,,-. _._,...... 20
"(3) All sums credited to the Thrift Sav-
ines Fund pursuant to section 8473(b) of
this title shall be invested In the Govern-
ment Securities Investment Fund.
"(4) The sums which are invested In the
Government Securities Investment Fund as
required by this subsection and are returned
to the Thrift Savings Pund after maturity
of the securities purchased with such sums,
and the amounts earned on the investment
of such sums, shall be reinvested in the
Government Securities Investment Fund.
"(f) The Secretary of the Treasury shall
issue notes under section 3108 of title 21 as
appropriate to meet the investment needs of
the Thrift Savings Fund under this section.
T .e notes shall have a 2-year maturity.
shall be redeemable at par, and shall bear
interest at a rate equal to the average
market yield, computed as of the and of the
calendar month next preceding the date of
the Issue. of all 2-year notes then forming a
part of the public debt of the United States.
If the average market yield is not a multiple
of 118 of 1 percent, the rate of Interest on
the obligations shall be the multiple of 1/8
of I percent nearest the average market
yield.
'I UK Acesaanaa
"(aXI) The Executive Director shall estab-
lish and maintain an account for each par
ticipant making contributions under section
8421(a) of this title.
"(2) The balance in the account of a par-
ticipant or former participant at any time is
the excess of-
"(A) the sum of-
U) 211 contributions made to the Thrift
Savings Fund by the participant or former
participant under section 8421(a) of this
title;
**Oil) all contributions made to such fund
for the benefit of the participant or former
participant under section 8421(b) of this
title;
"(Ili) the amounts transferred to such
fund with respect to the participant or
former participant under section 8473(b) of
this title; and
"(Iv) the total amount of the allocations
made to and reductions made in the account
pursuant to paragraph (3) of this section,
over
"(B) the amounts paid out of the Thrift
Savings Fund with respect to such partid-
pant or former participant under this sub-
chapter and subchapter IV of this title.
"(3) Pursuant to regulations prescribed by
the Board, the Executive Director shall allo-
Bate to the account of each participant or
former participant an amount equal to a pro
rats share of the net earnings and net losses
from each Investment of sums In the Thrift
Savings Fund attributable to sums -credited
to the account of such participant, reduced
by an appropriate share of the administra-
tive expenses of the Civil Service Thrift In-
vestment Management System prescribed In
subchapter VIII of this chapter. as deter-
mined by the i`secutive Director.
"(b) The Executive Director shall provide
each participant and former participant an
annual statement of the balance to the par-
ticipant's or former participant's account.
"(cXI) For the Purposes of this subsec-
tion, the term 'qualified public, accountant'
shall have the same meaning as provided in
section 103(IX3XD) of the klisnployee Re-
tirement Income Security Act of 1974 (20
U.S.C. 1024(aX3)(D)).
'Y2) The Executive Director shall annual-
ly engage, on behalf of all participants, an
independent qualified public accountant,
who shall conduct an examination of any
accounts established under subsection (a) of
this section and of other books and records
maintained in the administration of this
subchapter as the accountant considers nec-
essary to enable the accountant to make the
determination required by paragraph (3) of
this subsection. The examination shall be
conducted in accordance with generally ac-
cepted auditing standards and shall involve
such testa of the accounts. books, and
records as the independent qualified public
accountant considers necessary.
"(3) The independent qualified public sc-
countant conducting an examination under
paragraph (2) of this subsection shall deter-
mine whether the accounts, books, and
records referred to in such paragraph have
been maintained in conformity with gener-
ally accepted accounting principles applied
on a bests consistent with the application of
such principles during the examination con-
ducted under such paragraph during the
preceding year. The accountant shall trans-
mit to the Board a report on his examina-
tion, including his determination under this
paragraph.
"(4) In making s determination under
paragraph (3) of this subsection. the sc-
countant may rely on the correctness of any
actgarial matter certified by an enrolled ac-
tuary, if the accountant states his reliance
in the report transmitted to the Board
under such paragraph.
-SUBCHAPTER IV-SURVIVOR
BENEb3TS
-i nut. aselr aloe goasd bmb%s n6kau s? ire door
of a prtkipaw or foe psuieysd d/br
troy aa aaadtaat
"(aXi) If a Participant dies`aIter perform-
Ing 5 or more years of service and before
separating from Government employment
and the participant has satisfied the age
and service requirements for retirement en-
titled to an immediate annuity under sec-
tion 8411 of this title before the date of
death, the surviving spouse of a deceased
participant shall be entitled to a survivor
annuity payable out of the Fund.
"(2) U a participant dies after Performing
5 or more years of service and before sepa-
rating from Government employment and
the participant has not satisfied the age and
service requirements for retirement entitled
to an Immediate annuity under section 8411
of this title before the date of death, the
surviving spouse of a deceased participant
shall be entitled to a survivor annuity pay-
able out of the Fund. The survivor annuity
shall commence on the first date the partid-
pant could have retired entitled to an imme -
diate annuity under section 8411 of this title
it the participant had continued to live and
had continued to be a participant until such
date.
"(8) The amount of the survivor annuity
payable under paragraph (1) or (2) of this
subsection to the surviving spouse of a de-
ceased participant shall be equal to 50 per-
cent of the annuity computed with respect
to the deceased participant pursuant to sec-
tons 841$. 9414, and 9415 of this title as if
the participant had retired fioan t)overn.
ment employment on the day before the
date of death and had elected the method of
payment described in section $416(aX2XB)
of this title.
"(bXI) If a former participant dies enti.
tled to 4 deferred annuity under section
2412 of this title before payment of an an-
nuity under subchapter 11 of this chapter to
the forcer participant commences, the sur-
viving spouse of the deceased former partici-
pant is entitled to a survivor annuity Pay-
able out Of the Pund.
"(2) The amount of the survivor annuity
Payable under paragraph-(1) if this subsec-
tion to the surviving spouWof a deceased
former participant shall be`equal to 50 per-
cent of The annuity which the deceased
former participant would havgbeen entitled
to receive under such section lf.the deceased
former pNrticipant-
"(A) had been U years of age on the day
before the date of death, or
"(B) In; the case of a former participant
who was I11 years of age or older an such
day and was not receiving such annuity. had
commenced to receive such deferred annu-
ity on such day.
computed under sections 8413, 9414. and
9411 of this title.
`o sus a.4e /Isa yoasd mad eaaable lal ew bawrlu
edaleg a tae dada of sa Mo dtowt
"A survivor annuity shall be paid out of
the Fund with respect to a deceased annul.
..(I) to' accordance with the method of
payment elected by the annuitant under
section 8414 of this title;
"(2) as provided In subsection 1b)(3) of
such section; or
"(8) in accordance with an election made
by the annuitant coder section 8484(a) or
9489(c) of this title.
"I sus. 9alvor bem fhs aadw the thAft'WV%W Seen
"(a) A survivor annuity shall be paid out
of the Thrift Savings Fund with respect to a
deceased annuitant as provided under a
method of payment of annuities elected by
the annuitant under section 8424(b) of this
title or In accordance with an election made
by the annuitant under section 8434(a) or
8436(c) of this title. The amount of the sur-
vivor annuity shall be determined on an ac-
tuarial beds under regulations prescribed by
the Board.
"(bXl) Except as provided In subsection
(d) of this section. the amount in the so-
count established and maintained for a de-
ceased participant or deceased former par-
ticipant (Other than a deceased annuitant)
pursuant to section 1428(a) of this title. de-
termined an the date of an election under
subsection (C) of this section. shall, subject
to the limits of the entitlement met out in
section 8422(aXlI of this title (without
regard to section 1422(a)(2) of this title), be
paid as provided in paragraph (2) of this
subsection.
"(2XA) Except as provided iw subpara-
graph (B) of this paragraph, payment under
paragraph (1) of this subsection shall be
made to the surviving spouse of the de-
ceased participant or former participant
pursuant Is the method elected under sub-
section (c) of this section.
"(B) If a deceased participant or former
participant referred to In paragraph (1) of
this subsection Is not survived by a spouse,
payment under such paragraph shall be
made to-
"(I) any individual who has an hasurabie
Interest in the participant or former partici-
pant and has been designated by the partici-
pant for the purpose of such Paragraph
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CONGRESSIONAL RECORD - SENATE
under regulations prescribed by the Board.
or
"(ii) if the deceased participant or former
participant did not make a designation as
provided in clause (1) of this subparagraph.
to the estate of the deceased participant or
former participant.
"(c) A surviving spouse entitled to pay-
ment of benefits under subsection (b) of this
section may elect-
"(1) to receive an annuity from the Fund
payable monthly for life;
"(2) to transfer the amount referred to in
such subsection to an individual retirement
account (within the meaning of the Internal
Revenue Code of 1954) of the surviving
spouse; or
"(3) to withdraw such amount in one or
more payments.
"(d) Any amount required for the pay-
ment of a survivor annuity with respect to a
deceased participant or deceased former
participant out of the Thrift Savings Fund
pursuant to section 8435 of this title shall
be deducted and withheld from a distribu-
tion made with respect to the deceased par-
ticipant or deceased former participant pur-
suant to subsection (b) of this section. The
amount deducted and withheld shall be
maintained in the Thrift Savings Fund until
expended in payment of the survivor annu-
ity or until the survivor annuity terminates.
Any sums remaining from the amount de-
ducted and withheld after the termination
of the survivor annuity, plus net earnings
realized from investment of such amount.
shall be distributed as provided in subsec-
tion (b) of this section.
"I M31. Bank and thrift sviaaa plan twrvivor benenu re-
lating to n arriape after eomnaeneement of
an sanity
"(a) If an annuitant-
"(1) is married on the date that the annul-
tent applies for payment, of an annuity
under subchapter II of this chapter to com-
mence, the marriage terminates, and the an-
nuitant remarries, or
"(2) is not married on such date and mar-
ries after such date. '
the annuitant may irrevocably elect during
the later marriage to provide an annuity for
such annuitant's spouse tinder the method
of payment described in section
841G(&X2)(B) or subparagraph (B) or (D) of
section 8424(aX2) of this title. An election
under this subparagraph shall be made In a
signed writing received by the Office within
2 years after the date of the remarriage or
marriage, as the case may be.
'Yb) An election under subsection (a) of
this section shall be effective the first day
of the second month beginning after the
election is received by the Office (in the
case of a survivor annuity payable out of
the Fund) or the Executive Director (in the
case of a survivor annuity payable out of
the Thrift Savings Fund), but not earlier
than 9 months after the date of the remar-
riage referred to in paragraph (1) of such
subsection or the date of the marriage re-
ferred to in paragraph (2) of such subsec-
tion.
"(c) An annuitant making an election
under subsection (a) of this section to pro-
vide a survivor annuity payable out of the
Fund shall, within 2 years after the date of
the remarriage referred to In paragraph (1)
of such subsection or the date of the mar-
riage referred to in paragraph (2) of such
subsection, deposit in the Fund an amount
determined by the Office, as nearly as may
be administratively feasible, to reflect the
.amount by which the annuity of such annu-
itant would have been reduced if the elec-
tion had been in effect since-
"(1) the date that payment of an annuity
to the annuitant under subchapter II of this
chapter commenced, or
"(2) if the annuity had previously been re-
duced to provide for a survivor annuity
under section 8432 of this title, the date the
previous reduction in such annuitant's an-
nuity was terminated under section 8415(b)
of this title.
plus interest computed as provided in sec-
tion 8438(a) of this title.
"(d) Notwithstanding any other provision
of this section, an election under this sec-
tion may not be made for the purpose of
providing a survivor annuity payable from
the Fund to a spouse of an annuitant by re-
marriage if-
"(A) such spouse was married to the annu-
itant on the date that payment of an annu-
ity to the annuitant under subchapter II of
this chapter commenced; and
"(B) rights to survivor benefits for such
spouse based on marriage to such annuitant
were then waived under section 8416(b)(2)
of this title.
"it tt136. Survive, benenu roe eligible fanner gnaaea: en-
bilemeat- amount
"(a) Subject to subsections (b) through (g)
of this section, an eligible former spouse of
a deceased participant or deceased former
participant who dies entitled to an immedi-
ate or deferred annuity under section 8411
or 8412 of this title is entitled to a survivor
annuity under this section if and to the
extent that-
"(1) an election under section 8436 of this
title,
"(2) any court decree dissolving or annul-
ling the marriage of the participant or
former participant and the eligible former
spouse, or -
"(3) any court order or court-approved
property settlement agreement incident to
such decree,
expressly provides for such survivor annu-
ity.
"(b)(1) The amount of the survivor annu-
ity payable from the Fund to an eligible
former spouse of a deceased participant or
deceased former participant under this sec-
tion may not exceed the excess, if any,, of-
"(A) the amount applicable in the case of
such eligible former spouse, as determined
under paragraph (2) of this subsection, over
"(B1 the amount of all other survivor an-
nuities payable from the Fund under this
section to other eligible former spouses of
the participant or former participant based
on the order of precedence provided in sub-
section (d) of this section.
"(2) For the purposes of paragraph (1XA)
of this subsection, the amount applicable in
the case of an eligible former spouse of a de-
ceased participant or deceased former par-
ticipant is the amount-
"(A) which is equal to 50 percent of the
amount of the deceased former participant's
annuity payable to the former participant
on the day before the date of the former
participant's death, If the deceased former
participant was an annuitant on such day;
"(B) which would be applicable under
paragraph (3) of section 8431(a) of this title
in the case of a surviving spouse of the de-
ceased, if the deceased was a participant de-
scribed in paragraph (1) or (2) of such sec-
tion 8431(a); or
"(C) which would be applicable under
paragraph (2) of section 8431(b) of this title
in the case of a surviving spouse of the de-
ceased, it the deceased was a former partici-
pant described in paragraph (1) of such sec-
tion 8431(b).
"(c) The total amount of all survivor an-
nuities payable from the Thrift Savings
Fund to eligible former spouses of a de-
ceased participant or deceased former par-
ticipant pursuant to this section may not
exceed the amount of the survivor annuities
that would be payable to the former spouses
S 10437
out of 100 percent of the balance in the ac-
count of the deceased participant or de-
ceased former participant, plus anticipated
net earnings from investments allocable to
such account, determined on an actuarial
basis In accordance with regulations pre-
scribed by the Board.
"(d) If more than one eligible former
spouse is entitled to a survivor annuity pur-
suant to this section, the amount of each
such survivor annuity shall be limited ap-
propriately to carry out subsection (b) or (c)
of this section on a first-come, first-served
basis determined by reference to the date an
election Is properly made pursuant to sec-
tion 8436, of this title or th'date the Direc-
tor or Executive Director, as the case may
be, properly receives a copy pf the court
decree, order, or court-approved agreement
applicable to the entitlement. -
"(e) The commencement and termination
dates of a survivor annuity payable under
this section to an eligible former spouse of a
deceased participant or deceased former
participant shall be the commencement and
termination dates determined under the
provisions of the applicable court order,
decree, or agreement or an election, as the
case may be (if provided in such order.
decree, agreement, or election), except that
any such survivor annuity-
"(1) shall not commence before-
"(A) the day after the participant or
former participant dies, or
"(B) the first day of the second month be-
ginning after the date on which the Office
receives Written notice of the court order,
decree, or agreement or the election, as the
case may be, together with such additional
information or documentation as the Office
may prescribe.
whichever is later, and
"(2) shall terminate not later than the
date provided in section 8464(bX2) of this
title.
"(f) For the purposes of this section, a
court decree, order, or agreement or an elec-
tion referred to in subsection (a) of.this sec-
tion shall not be effective, In the case of a
survivor annuity payable out of the Fund to
a former Spouse, to the extent that the elec-
tion is inconsistent with any Joint waiver
previously executed with respect to such
former spouse under section 8416(b)(2) of
this title.
"(g) Any payment under this section to a
person bars recovery by any other person.
"I AM. Survivor benenu for fame, apwaea: election,.
deposits and collection,. and adminktrative
pe??iebs
"(aX1) If an annuitant has an eligible
former spouse on the date that the annui-
tant applies for payment of an annuity to
the annuitant under subchapter II of this
chapter to commence, the annuitant may
elect, under procedures prescribed by the
Office, to provide a survivor annuity for
such former spouse under section 8435 of
this title. An election under this paragraph
shall be trade on such date or, 1f later,
within 2 years after the date on which the
marriage of the forme]; spouse to the annui-
tant was dissolved or annulled. The election
shall specify the amount of the survivor an-
nuity to be provided under this paragraph.
"(2) If an annuitant makes an election
under paragraph (1) of this subsection to
provide a survivor annuity payable out of
the Fund and the annuitant makes the elec-
tion during the 2-year period referred to in
such paragraph, the annuitant shall deposit
in the Fund, within such period, an amount
determined by the Office, as nearly as may
be administratively feasible, to reflect the
amount by which the annuity of such an an-
nuitant would have been reduced if the elec-
tion had been continuously in effect since
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810438 CONGRESSIONAL RECORD - SENATE
the date the annuity commenced, plus inter-
est computed as provided in section 8438(a)
of this title.
"(3) An election under paragraph (1) of
this subsection-
"(A) shall not be effective to the extent
that it conflicts with-
"(I) any court decree or order referred to
in subsection (a) of section 8435 of this title.
or
"(ti) any agreement referred to in such
subsection.
which Is received by the Office before the
date on which such election is made;
"(B) shah not be effective to the extent
that the amount of the annuity specified in
the election exceeds-
(i) in the case of a survivor annuity pay-
able from the Fund, the amount determined
pursuant to subsections (bX2) and (d) of sec-
tion 8435 of this title; or
"(ii) in the can of a survivor annuity pay-
able from the Thrift Savings Fund, the
amount determined pursuant to subsections
(c) and (d) of section 8435 of this title; and
'(C) shall not be effective, in the case of
an annuitant who In married on the date of
the election, unless the election is made
with the written consent of the annuitant's
spouse.
`(b) An annuitant who has elected to pro-
vide a survivor annuity for an eligible
former spouse pursuant to subsection (a) of
this section may make an election to provide
or increase a survivor annuity for any other
eligible former spouse of the annuitant
within the same period that, and subject to
the same conditions under which, an elec-
tion could be made under subsection (c) of
this section for a spouse of the annuitant
(subject to the provisions of subsection
(aX3XC) of this section relating to the con-
sent of a spouse, if the annuitant is then
married). The opportunity to make an elec-
tion under the preceding sentence Is In addi-
tion to any opportunity otherwise provided
under this subsection.
?Yc) If the entitlement of an eligible
former spouse of an annuitant to a survivor
annuity under this subchapter is terminated
or reduced by reason of the remarriage or
death of the former spouse. the annuitant
may elect,-in a signed writing received by
the Office (in the am of a survivor annuity
to be paid out of the Fund) or the Executive
Director (in the case of a survivor annuity
to be paid out of the Thrift Savings Fund)
within 2 years after the former spouses
date of death or remarriage, as the case may
be. to provide a survivor annuity under the
method described in section 8414(aX2XB) of
this title (in the case of a terminated or re-
duced entitlement payable out of the Fund)
or in subparagraph (B) or (D) of section
8434(aX2) of this title (in the ease of a ter-
minated or reduced entitlement payable
from the Thrift Savings Fund).
'Yd) The requirement that the spouse of
an annuitant waive a right to a survivor an-
nuity under this subchapter as & ,condition
for an election authorized by subsection
(aX3XC) of this section shall not apply If
the participant or annuitant establishes to
the satisfaction of the Office that--
"(1) the spouses whereabouts cannot rea-
sonably be determined; or
"(2) due to exceptional circumstances, it
Would be inappropriate to require the par-
ticipant or annuitant to obtain the spouse's
consent.
"I snit. Teewdss. doukk seas
'Ya) An election of an annuitant to pro-
vide a survivor annuity to the annuitant's
spouse under this subchapter terminates an
the first day of the first month beginning
after-
'Y1) the date of the death of the sppouse:
or
"(2) the date of the dissolution of the
spouse's marriage to the annuitant.
"(b) The entitlement of an eligible former
spouse of a former participant to a survivor
annuity under section 8435(a) of this title
terminates on the first day of the first
month beginning after-
"(1) the date of the death of the former
amuse; or
"(2) the date the former spouse remarries
before becoming 55 years of age.
-14436. Depe*s M Sto Fir/
"(a) For the purposes of section 8434(c) or
8436(aX2) of this title, the annual rate of in-
terest for each year during which an annu-
ity would have been reduced if the election
referred to in such section had been In
effect on and after the applicable date re-
ferred to In such section shall be the per-
cent determined for such year under section
8334(e) of this title.
"(b) If an annuitant does not make a de-
posit required by section 1434(c) or
8436(aX2) of this title, the Office shall col-
lect such amount by offset against the an-
nuitant's annuity payable from the Fund.
up to a maximum of 25 percent of the net
annuity otherwise payable to the annuitant.
The annuitant Is deemed to consent to such
offset.
'Xc) The Office may extend the time limit
for making a deposit required by section
8434(c) or $434(aX2) of this title In any case
for good cause shown.
"SUBCHAPTER V-DI$ABIUTY
6N1. bentaw.
"Fbr the purposes of this subchapter-
"(1) the term 'administrator of benefits'
means an insurance company or other
entity which-
(A) offers daims payment services and
related administrative services under bene-
fit plans provided by employers in the pri-
vate sector; and
"(B) has entered Into a contract with the
Office pursuant to section 8450 of this title;
'Y2) the term 'disability benefits under the
Social Security Act ' means disability hnsur-
ance benefits payable under section 223 of
the Social Security Act or benefits payable
under section 202 of such Act by reason of
being under a disability;
" (8) the term 'disability date', when used
with respect to an eligible participant.
means the date the eligible participant
became disabled;
'(4) the term 'disabled', when used with
respect to an eligible participant, means
that the eligible partielpant-
'%A) is under a disability within the mean-
ing of section 223 of the Social Security Act;
or
"(B) Is unable, because of disease or
injury, to render useful and efficient service
In the participant's position and is not quali-
fied for reassignment, under procedures pre-
scribed by the Office, to a vacant position-
"U) which is In the participant's employ-
ing agency and Is In the participant's com-
muting area;
"(ii) which Is at the same grade or pay
level as the participant's position; and
"(iii) in which the participant would be
able to render useful and efficient service;
"(5) the term edigible participant' means
an employee or Member whose service ex-
oeede 18 months and-
?'(A) who-
"d) has applied for disability benefits
under the Sold Security Act and has been
determined to be under a diwWltty for the
purposes of title II of the Social security
Act; or
"(Ii) in the ease of an employee or
Member who Is not entitled to disability
benefits under the Social Security Act by
July 80, 1985
mason of insufficient quarters of coverage.
has been determined by an administrator of
benefits to be disabled within the meaning
of paragraph (4XA) of this section on the
basis of,a report of examination required by
section 0445 of this title; or
"(B) who has been determined by an ad-
mtnktrator of benefits to be disabled within
the meaning of paragraph (4X9) of this sec-
tion on the basis of a report of examination
required by section 8445 of this title;
"(6) the term 'onset average pay'. when
used with respect to a disabled eligible par-
Ucipant; means the participant's average
pay on the participant's cis bllity date In-
creased on January 1 bit h year after
such date by the same t by which an-
nuities referred to In AE: (1) of sec-
tion 8463b) of this title are ipcreased under
such section 8462(b) In Deoet$er of the pre-
ceding year. and compounded;. and
(1) the term 'projected service'. when
used with respect to a disabled eligible par-
Ucipsnt, means the sum of the number of
years of service performed by the pardd-
pant before the participant's disability date
and the number of years, if any. after such
date and before the date the participant be-
0010101--
-(A) in the case of an eligible participant
referred to In subparagraph (6XA) of this
section, 192 years of on. or
"(B) f the case of an eligible participant
referred to in subparagraph (8X8) of this
section. 05 years of age.
91ra t lgeswo
"(aX 1l A person who Is an eligible partici-
pant. Is disabled, and has used all sick leave
accrued and accumulated under subchapter
I of chapter 63 of this title or any other
similar applicable provision of law relating
to Government employment Is entitled to
receive disability benefits under this sub-
chapter While-
"(A) In the case of a person who is dis-
abled within the meaning of section
8441(4XA) of this title, such person Is under
62 Nears of age; and
"(B) is the case of a person who is dis-
abled within the meaning of section
8441(4X8) of this title, such person Is under
55 years Of age.
"(2) When a person referred to its para-
graph (l) of this subsection exceeds the
fled for benefits under such paragraph, the
person shall be treated as as eligible paiticl-
pant for the purposes of ant to ben-
efits wider subsection (b) of this section.
"(bX1))An eligible participant who--
NA) Is disabled within the meaning of sec-
tion 6441(4XA) of this title and is not lees
than 62 yeah of on, or
?(B) Is disabled within the meaning of sec-
tion $441(4XB) of this title and is not less
than 55 years of We,
and who has 5 or more years of service and
projected service shall be entitled to an an-
nuity at provided in subchapter, II of this
"(2) For the purposes of applying the pro-
visions of subchapter H of this title in the
case of an eligible participant pursuant to
paragraph (1) of this subsection-
"(A) the eligible participant shall be
deemed to have separated from Govern-
meat employment an the day before the
date the Participant becomes entitled be an
annuity pursuant to paragraph (d) of this
subsectilon;
"(B) the service of the participant shall
include the participants projected service:
and
"(C) the participants average my shall be
equal to the participant's asset average pay.
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9 N143. (-..r.tst.a of brnef)ta
'(a) The annual rate of the disability ben-
efits payable under section 8442(a) of this
title to an eligible participant referred to in
section 8441(5XA) of this title shall be equal
to the excess of 60 percent of the .partici-
pant's onset average pay over the amount, if
any. payable to the participant as disability
benefits under the Social Security Act.
"(b) The annual rate of the disability ben-
efits payable under section 8442(a) of this
title to an eligible participant referred to in
section 8441(5)(B) of this Utle-
"(1) during the period ending I year after
the eligible participant's disability date.
shall be equal to the excess of 60 percent of
the participant's onset average pay over the
amount, if any, payable to the participant
as disability benefits under the Social Secu-
rity Act: and
"(2) after such period. while the partici-
pant is under 55 years of age, shall be equal
to the excess of 40 percent of the partici-
pant's onset average pay over the amount. If
any. payable to the participant as disability
benefits under the Social Security Act.
9 $444. A/eaesli..
Na) Except as provided In subsection (b)
of this section, a claim of a participant for
disability benefits under this subchapter
may be allowed only If the participant files
with the appropriate administrator of bene-
fits an application for the disability benefits
before the date the participant separates
from Government employment or within I
year after such date.
"(b) An appropriate administrator of ben-
efits may valve the time limitation set out
In subsection (a) of this section in the can
of a participant I1-
"(1) the administrator of benefits deter-
mines that the participant was mentally in-
competent on the date the participant sepa-
rated from Government employment or
within 1 year after such date; and
"(2) the application for disability benefits
is filed within 1 year after the data the par-
ticipant Is restored to mental competency or
the date a fiduciary is appointed to manage
the financial affairs of the participant,
whichever date is earlier.
w $445. Nedlew w...
Na) A participant applying for or lreoely-
Ing di ability benefits under section 8442(a)
of this title shall be examined by a physi-
cian under the direction of the appropriate
administrator of benefits at such times as
such administrator may require.
"(b) A physk4an examining a participant
under subsection (a) of this section shall
report to the appropriate administrator of
benefits the diagnosis and prognosis with re-
spect to such participant,
(c) Notwithstanding any other provision
of this subchapter, any participant who falls
to submit to the examination required
under subsection (a) of this section shall not
be entitled to disability benefits.
9 $44a Often of.R.r.Niw e."l.,.r r
Any participant who is applying
for disability benefits under this subchap-
ter. Is examined pursuant to section $445 of
this title. and is determined on the basis of
the examination to be able to perform the
work required in any position described in
paragraph (2) of this subsection shall be
considered for appointment to such posi-
tion.
"(2) A position referred to in paragraph
(1) of this subsection is a position which Is
In the agency of the Government employing
the participant referred to in such para-
graph, Is a position for which the partici-
pant is qualified, is not lower than the grade
or pay level of the participant's position.
and is within the participant's commuting
area.
"(b) Any participant who is appointed to
or offered a position under subsection (a) of
this. section Is entitled to appeal to the
Merit Systems Protection Board under sec-
tion 7701 of this title any determination
that the participant is able to perform the
work required of such position.
-18447. Reeorery or redor.tion of e.rninR eq.city
"(aXi) if an administrator of benefits de-
termines that an individual who is receiving
disability benefits under this subchapter
has recovered from the disability before be-
coming 62 years of age (in the case of an in-
dividual who Is disabled within the meaning
of section 8441(4XA) of this title) or 65
years of age (in the case of an individual
who is disabled within the meaning of sec-
Lion 8441(4XB) of this title), payment of the
benefits shall terminate on the date the in-
dividual Is reemployed by the Government
or 1 year after the date of the medical ex-
amination on which such administrator's
determination is based, whichever date Is
earlier.
"(2XA) Payment of *disability benefits to
any individual under this chapter that has
been terminated pursuant to paragraph (1)
of this subsection shall be resumed if.there
Is a recurrence of the individual's disability.
as determined by an administrator of bene-
fits after a medical examination of the indi-
vidual, and the Individual is under 62 years
of age (in the case of an Individual who is
disabled within the meaning of section
8441(4XA) of this title) or under 55 years of
age (in the case of an individual who Is dis-
abled within the meaning of section
8441(4XB) of this title).
"(B) A resumption of payment of disabil-
ity benefits under subparagraph (A) of this
paragraph shall be effective on the date the
medical examination referred to in such
paragraph was completed.
"(C) The annual rate of the disability ben-
efits payable to an individual upon resump-
tion of payment under subparagraph (A) of
this paragraph shall be the annual rate that
would have been payable to the Individual U
payment of disability benefits had not been
terminated pursuant to paragraph (1) of
this subsection.
"(b)(1)1f the administrator of benefits de-
termines that an individual who Is receiving
disability benefits under this subchapter
has received, during the latest calendar
year, income from wages or self-employ-
ment or both totalling the amount equal to
60 percent of the rate of pay payable for the
individual's position of Government employ-
ment on the individual's disability date de-
termined for the purposes of this subchap-
ter (increased as if such rate of pay had
been Increased, by the same percent as the
overall percent increase in the rates of pay
under the General Schedule, each time such
rates had been increased pursuant to section
5305 of this title since such date), payment
of the benefits shall terminate on the date
60 days after the end of such calendar year.
"(2)KA) If payment of disability benefits
under this subchapter has been terminated
pursuant to paragraph (1) of this subsection
in the case of an individual who is not reem-
ployed in a position subject to this chapter,
who continues to be disabled, who is under
62 years of age (in the case of an individual
who is disabled within the meaning of sec-
tion 8441(4)(A) of this title) or under 55
years of age (in the case of an individual
who is disabled within the meaning of sec-
tion 8441(4XB) of this title), and who re-
ceives in the calendar year in which the dis-
ability benefits were terminated, or any cal-
endar year after such year. income from
wages or self-employment or both totalling
less than the amount computed In such case
is provided in such paragraph, payment of
S 10439
disability benefits to the individual under
this subchapter shall be resumed.
"(B) A resumption of payment of disabil-
ity benefits to an individual under subpara-
graph (A) of this paragraph shall be effec-
tive the first day of the first year beginning
after the year in which the individual re-
ceived the income referred to in such sub-
paragraph.
"(C)'The annual rate of the disability ben-
efits payable to an individual upon resump-
tion of payment of disability benefits under
subparagraph (A) of this paragraph shall be
the annual rate that would have been pay-
able to the individual' if,payrnent had not
been terminated pursu ,ht to paragraph (1)
of this subsection.
"(c) Any determination ypder this section
may b~ appealed to the Office. A determina-
tion of the Office in such an appeal may be
appealed to .the Merit Systems Protection
Board under section 7701 of this title. The
Merit Systems Protection Board may hear
and adjudicate any such appeal.
9 5448. IfeWhend y bewomen' een/e.e.tiw
"(sKi) An Individual is not entitled to re-
ceive disability benefits under this subchap-
ter and compensation for Injury to or dis-
ability of the individual under subchapter I
of chapter 81 of this title covering the same
period of time.
"(2) Paragraph (1) of this subsection does
not bar the right of a claimant to the great-
er benefit conferred by either subchapter
referred to in such paragraph for any part
of the 11 period referred to in such paragraph.
"(3) !,Paragraph (1) of this subsection and
the provisions of subchapter I of chapter 81
of this] title do not deny an Individual an an-
nuity which the Individual Is entitled to re-
ceive under this chapter on account of serv-
ice petformed by the Individual and do not
deny any concurrent benefit to the individ-
ual under subchapter I of chapter 81 of this
title on account of the death of another In-
dlvid
"(b 1) Subject to paragraph (2) of this
subse on. an individual's receipt of a lump-
sum payment for compensation under sec-
tion 8135 of this title shall not affect the in-
dividual's entitlement to disability benefits
under this subchapter.
"(2)' If disability benefits are payable
under, this subchapter by reason of the
same 01sability for which a lump-sum pay-
ment pf compensation referred to in para-
graph (1) of this subsection has been made,
so much of the compensation as has been
paid for a period extended beyond the date
payment of the disability benefits com-
menceln, as determined by the Department
of Labor. shall be refunded to that Depart-
ment for credit to the Employees' Compen-
sation Fund. Before the individual may re-
ceive the disability benefits, the individual
shall-
"(A) refund to the Department of Labor
the amount representing the commuted
compensation payments for the extended
periods or
"(B) authorize the deduction of the
amount from the disability benefits.
Deductions from the disability benefits may
be made from accrued or accruing pay-
ments. The amounts deducted and withheld
from disability benefits shall be transmitted
to the Department of Labor for reimburse-
ment to the Employees' Compensation
Fund. When the Department of Labor finds
that the financial circumstances of an Indi-
vidual', entitled to disability benefits under
this subchapter warrant deferred refunding
under'ithis paragraph. deductions from the
disability benefits may be prorated against
and paid from accruing payments in such
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S 10440 CONGRESSIONAL RECORD - SENATE July 80, 1985
manner as the Department determines cep- such terms and conditions as he considers
propriate. appropriate to protect the interests of per.
~s NN MIM*Ny remove use i i . tlcipants and the United States.
"(aX1) Except as provided in paragraph "(f) All records established or maintained
(2) of this subsection, a participant shall be by an administrator of benefits in the ad-
entitled to disability benefits under this sub- ministration of this subchapter shall be the
chapter In the same manner as an eligible property of the United States. The adminis-
participant described in section 8441(5)(B) trator of benefits shall deliver such records
of this title if the participant- to the Office whenever requested by the
military reserve technician by reason of a
disability that disqualifies the individual
from membership In a reserve component of
the Armed Forces specified In section 261(a)
of title 10 or from holding the military
grade required for such employment:
"(B) is not considered disabled;
"(C) Is not appointed to another position
in the Government (under subsection (b) of
this section or otherwise); and
"(D) has not declined an offer of appoint-
ment to a position in the Government under
subsection (b) of this section.
(2) Payment of disability benefits to an
individual under this section terminates-
"(A) on the date the individual is appoint-
ed to a position in the Government (under
subsection (b) of this section or otherwise);
"(B) on the date the individual declines an
otter of appointment to a position in the
Government pursuant to subsection (b) of
this section; or
"(C) as provided in section 8447(a) or
6447(b) of this title.
"(b) Any individual applying for or receiv-
ing disability benefits pursuant to this sec-
tion shall, in accordance with regulations
prescribed by the Office, be considered by
any agency of the Government before any
vacant position In the.agency is filled If-
"(1) the position Is located within the
commuting area of the individual's former
position;
"(2) the Individual is qualified to serve in
the vacant position; and
"(3) the position is at the same grade or
equivalent level as the position from which
the Individual was separated.
"6 SM. A6.I.t.trstive Mwi.l.ee
Na) For the purpose of this section, the
term 'State' means a State of the United
States, the District of Columbia, the Com-
monwealth of Puerto Rico. and a territory
or possession of the United States.
"(b) The Office shall enter into a contract
with one or more insurance companies or
other entities described in section
$441(1XA) of this title to provide long-term
group disability Insurance benefits under
this subchapter and to administer the provi-
sions of this subchapter which the Office is
not specifically required by this chapter to
administer. Each such company or other
entity shall meet the following require-
ments:
"(1) It must be licensed to transact insur-
ance under the laws of a State.
"(2) It must have In effect, on the most
recent December 31 for which Information
is available to the Office, an amount of em-
ployee group disability Insurance equal to at
least 1 percent of the total amount of em-
ployee group disability insurance In the
United States in all insurance companies.
"(c) A contractor under a contract award-
,ed under subsection (b) of this section shall
establish an administrative office under a
name approved by the Office.
"(d) Each contract awarded by the Office
under subsection (b) of this section may
remain In effect for a period not exceeding 5
years and may include a provision authoriz-
ing extension of the contract, with the. con-
sent of the contractor, for successive periods
of 1 year each.
"(e) The Director may Include in contracts
awarded under subsection (b) of this section
tP -1ne provisions of any contract under
this subchapter which relate to the nature
or extent of coverage or benefits (including
payments with respect to benefits) shall su-
persede and preempt any law of any State
or political subdivision thereof, or any regu-
lation issued thereunder, which relates to
group disability insurance to the extent
that the law or regulation is inconsistent
with the contractual provisions.
"(h) The Secretary of Health and Human
Services shall furnish to the Office and an
administrator of benefits such information,
including Information on Individuals claim-
Ing entitlement to benefits under this sub-
chapter, as the Office determines to be nec-
essary to carry out this subchapter.
'16461. Amm.l aress.ti.s. epse I ...tl.{e.ey remne
"A contract awarded under section 6450 of
this title shall include a provision requiring
the administrator of benefits under the con-
tract to transmit an accounting to the
Office not later than 00 days after the end
of each policy year. The accounting shall set
forth, in a form approved by the Office-
"(1) the total of all claim charges incurred
for the contract year, and
"(2) the amounts of the expenses of the
administrator of benefits charged for the
contract year.
"m s46r. Res l # $.ys.e' Dlmb ty I...e..ce Frd
"(a) There Is established in the Treasury
of the United States a fund to be known as
the 'Federal Employees' Disability Insur
ance Fund'.
"(bXl) Each agency of the Government
employing participants shall make periodic
payments to the Federal Employees' Dis-
ability Insurance Fund in the amount of the
portion of the premium payable for the ap-
plicable period (as determined by the
Office) which Is attributable to such partici-
pants. as determined by the Office and the
appropriate administrator of benefits.
"(2) An employing agency shall pay the
amounts required by paragraph (1) of this
subsection from the appropriation or fund
available for payment of the basic pay or
salaries of employees of the agency. In the
can of a participant in the legislative
branch who L Paid by the Clerk of the
House of Representatives, the amount shall
be paid from the contingent fund of the
House of Representatives.
"(c) Sums in the Federal Employees' Dis-
ability Insurance Fund shall be available
without fiscal year limitation for the pay-
ment of premiums for long-term group dis-
ability insurance under this subchapter.
"(d) The Secretary of the Treasury may
invest and reinvest any of the money in the
Federal Employees' Disability Insurance
Fund in Interest-bearing obligations of the
United States and may sell such obligations
for the purposes of such fund. The interest
on and the proceeds from the sale of these
obligations, and the Income derived from
premium rate adjustmentsc become a part of
such fund.
"(eXi) No tax, fee, or other monetary pay
ment may be imposed or collected by any
State or by any political subdivision or
other governmental authority thereof on or
with respect to any premium paid for long-
term group disability Insurance under this
subchapter.
"(1) Paragraph (1) of this subsection shall
not be construed to exempt any administra-
tor of benefits from the Imposition, pay-
ment, or collection of a tax, fee, or other
monetary payment on the net income or
profit accruing to or realised by the admin-
istratgr from business conducted under this
subch $pter, if that tax, fee, or payment Is
applicable to a broad range of business ac-
tivity.,
? SUBCHAPTER VI-GENERAL AND
ADMINISTRATIVE PROVISIONS
w Nit. A.IM.rlty of tae Ofnm-.f nw...sd M..seeme.t
"(a) The Office shall pay all benefits that
are payable under subchapter II of this
chapter from the Fund.
"(b) The Office shall sdqAnister all provi-
sions of this chapter specifically re-
quired to be administe by the Board, the
Executive Director, or any other agency.
"(c) The Office may make regulations to
carry Out the provisions of this chapter ad-
ministrered by the Office.
"(d) The Office may contract for the per-
formanoe of any administrative services nec-
essary to carry out Its responsibilities under
this chapter.
-1 Nis- IC.et.d-avhtr .ti).ett.s.t le Mek pm ammold.s
and s.rvl,., apukim
'(a) 1'or the purpose of this section-
"(1) the term 'base Quarter', when used
with respect to a year. means the calendar
quartet ending on September $0, of such
year; and
"(2) the price Index for a base quarter Is
the arithmetic mean of such Index for the 3
months comprising such quarter.
"(bXI) Except as provided In subsection
(c) of this section. effective December 1 of
each year in which the price index for the
bane Outer of such year exceeds the price
Index or the base quarter of the preceding
year. each annuity which is payable from
the Fufnd under subchapter 13 or IV of this
chapter and commences not later than such
December 1 shall be increased by the per-
centage computed under paragraph (2) of
this su oi.
(2) The percentage by which an annuity
is Increased under paragraph (1) of this sub-
section In any year shall be the excess. If
any, of-
"(A) the percentage of the Increase in the
price 10dez for the bane quarter of such
year otrer the price Index of the preceding
year. over
"(B) I percent.
"(cXl) The first Increase (if any) made
under subsection (b) of this section to an an-
nuity payable to a participant who retires,
to the surviving spouse or surviving former
spouse of a deceased participant, or to the
surviving spouse or surviving former spouse
of a deceased annuitant whose annuity has
never been increased under this subsection
or subsection (b) of this section shall be
equal to the product (adjusted to the near-
est one-tenth of 1 percent) of-
"(A) one-twelfth of the applicable per-
centage of the adjustment computed under
subsection (b) of this section, multiplied by
"(BXi) the number of months (counting
any portion of a month as a month) for
which the annuity was payable before the
effective date of the increase, or
"(ii) in the came of a survivor annuity pay-
able to a surviving spouse or surviving
former spouse of a deceased annuitant
whose annuity -has never been so Increased,
the number of months (counting any por-
tion of a month as a month) since the annu-
ity was first payable to the deceased annui-
tant.
"(2) Effective on Its commencing date, an
annuity referred to In subsection (b) of this
section and payable to . an annuitant's sur-
viving spouse or surviving former spouse
shall be Increased by the total percentage
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July 80, 1985 CONGRESSIONAL RECORD -SENATE S 10441
by which the deceased annuitant's annuity the participant's or former participant's subsection shall retain accrued credit for en-
had been increased under this section service shall not be paid under subchapter titlement to benefits under subchapter III
during the period beginning on the date the IV of this chapter unless an application of chapter 83 of title 5, United States Code.
deceased annuitant's annuity commenced therefor Is received by the Office within 30 for service performed while subject to such
and ending on the date of the deceased an- years after the death or other event which subchapter.
nuitant's death. establishes the entitlement to the benefit. "(3) An individual referred to in para-
"(d) The monthly installment of an annu- "I Rut. C..n., n graph (1) of this subsection who becomes an
Ity payable after adjustment under this sec- '(a) Payments under this chapter which employee or Member after a break in service
lion shall be rounded to the next lowest would otherwise be made to a participant or for a period that Includes January 1. 1987,
dollar, but the increase in the monthly in- former participant based upon the service of may make deposits under section 8334 of
stallment under this section shall be at least the participant or former participant shall this title for service performed before such
$1. be paid (in whole or in part) by the Office date while subject to subchapter III of
"s Rtu. at of he.efks or the Executive Director, as the case may chapter 83 of this title.
"Each annuity and disability benefit is be, to another person if and to the extent "(b) Except as provided in'secyfon 8472(d)
stated as an annual amount, one-twelfth of that the terms of any court decree of di- of this title, any individual wh9L
which, fixed at the next lowest dollar. con- vorce, annulment, or legal separation, or the "(1) has an unrefunded lufitpaum credit
stitutes the monthly rate payable on the terms of any court order or court-approved in the Fund under subchapter III of chapter
first business day of the first month begin- property settlement agreement incident to 83 of this title. y
fling after the last day of the month for any court decree of divorce, annulment, or "(2) Is required by section 8402 of this title
which the annuity or disability benefit has legal separation expressly provide. Any pay- to be a participant, and
accrued. ment under this paragraph to a person bars ??(3) is not a participant referred to In we-
"Ism. C.....ee.en..r gem' .f.... .. recovery by any other person. tion 8473(a) Of this title.
"(axl) Except as otherwise provided in "(b) Subsection (a) of this section shall
this chapter, the annuity of a participant apply only to payments made by the Office shall retain accrued credit for entitlement
under subchapter II of this chapter Shan or the Executive Director under this chap- to benefits under such subchapter for serv-
commence on the first day of the first ter after the date on which the Office or ice performed while subject to such sub-
month beginning after- the Executive Director, as the case may be, chapter.
?(A) the date the participant separates receives written notice of such decree, order, "(c) Except as provided in section 8472(d)
from Government employment entitled to or agreement, and such additional informa- of this title. any individual who-
an immediate annuity under section $411 of tion and documentation as the Office or the "(1) has received a refund of a lump-sum
this title, or Executive Director may require. credit in the Fund under subchapter III of
"(S) in the case of a participant who is en- "a SM. A""'m" and pay, on reeoplerneat chapter 83 of this title,
titled to a deferred annuity under section Na) If an annuitant becomes employed In "(2T Is required by section 8402 of this title
$412 of this title and is not entitled to an an appointive or elective position in the. to be a participant:, and
immediate annuity under section $411 of Government, payment of any annuity under ?(3) is not a participant referred to in sec-
this title, the date elected by the participant subchapter II of this chapter to the annul- tion 8473(a) Of this title,
Under section $412(a) of this title or the tant terminates effective on the date of the may make deposits under section 8334 of
date the participant becomes g2 years of employment, and the annuitant's service on this title for,servi a performed before Janu-
age, whichever Is earlier, and after the date the annuitant becomes so ary 1, 1987, While subject to subchapter III
as the can may be, employed is covered by this chapter. Upon of chapter at of this title and shall, upon
"(2) The annuity of an annuitant under termination the mnt, the rights making such deposits, be entitled to credit
this chapter terminates on the date of death of the annuitant underr sub subchapter II of this under such subchapter for service covered
or other terminating event provided by law. chapter shall be redetermined. If the annul- by the deposits.
"(bXl) Except as otherwise provided in Sant dies while Still so employed, a survivor ?'(d) Survivor benefits entail be payable as
this chapter, a survivor annuity payable to cased payable with respect the de- provided in subchapter III of chapter 83 of
under this chapter shall ~
an individual - the ceased ce employment hshall be ad had annuitant otherwise r redetermined terd as this title and this chapter to the extent of
mence on the first day of the first month the ter minated on the service creditable under such subchsp-
begirning after the date of the death of the ) the The date of amount death. an ter (pursuant to this section) and this chap-
deceased participant or former participant from m a redetermination annuity resulting
this ter In the case of a participant referred to in
on whose death such annuity is based. chapter pursuant n of srights ubsection under er this subsection (a). (b). or (c) of this section.
"(2) A Survivor annuity payable to a sur- Section saa ll not be lea ss than t(a) of amount of this 7 acts tl
viving Spouse or an eligible former spouse of the e terminated e,ee(d min I h. petiego.ic teeetkenw .aune-
a deceased participant or deceased former the annuity plus the h any increases moo a( M the ice RecYe.,e?t ..r
participant under this chapter terminates after section r nat of this title occurring ce that r.um Qwil t). Ue
on the last day of the last mending after the termination of the annuity and "