PROPOSED CONFERENCE AGREEMENT-SUPPLEMENTAL RETIREMENT LEGISLATION 1. BASIC ANNUITY PLAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89-00066R000700120001-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 212
• Document Creation Date: December 23, 2016
• Document Release Date: August 28, 2013
• Sequence Number: 1
• Publication Date: May 14, 1986
• Content Type: MISC

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PROPOSED CONFERENCE AGREEMENT - SUPPLEMENTAL RETIREMENT LEGISLATION
1. BASIC ANNUITY PLAN
Proposed conference agreement - May 14, 1986
A. Eligibility
Federal civilian employees covered by Social
Security (generally, those employees hired
after December 31, 1983).
B. Employee
contributions
required
1.3% of pay in 1987,
0.94% in 1988-89, and
0.8% after 1989.
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C. Vesting of retire-
ment benefits
5 years civilian service, provided
employee's contributions are not refunded.
D. Salary base
Average of high-3 years salary.
E. Retirement benefit
l% of high-3 pay times years of service, or
1.1% if retiring after age 62 & 20 years svc.
F. Eligibility for
retirement
1. Unreduced
2. Reduced
3. Involuntary
4. Deferred
vested
Age 62 & 5 years service,
age 60 & 20 years service, or
"Minimum Retirement Age" & 30 years service--
Year of birth Minimum Retirement Age
Before 1948 55
1948 55 & 2 months
1949 55 & 4 months
1950. 55 & 6 months
1951 55 & 8 months
1952, 55 &10 months
1953 - 1964 56
1965 56 & 2 months
1966 SI-54 & 4 months
1967 5-&-E4,& 6 months
1968 5-&-5-6-& 8 months
1969 56 &10 months
1970 & after 57
Minimum Retirement Age & 10 years service.
Age 50 & 20 years service, or any age & 25
years service.
Unreduced benefit at age 62, if employee had
5 years civilian service at termination and
did not get refund of contributions. Reduced
benefit available at Minimum Retirement Age
to vested employee with. 1O years service.
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1. BASIC ANNUITY PLAN (continued)
Proposed conference agreement - May 14, 1986
G. Amount of annuity
1. Unreduced
2. Reduced
3. Involuntary
4. Deferred vested
Based on accrual rate, without reduction.
Reduced 5% for each year under age 62.
Based on accrual rate without reduction. Sup-
plement paid from Minimum Ret. Age to age 62.
Full accrued benefit payable at age 62.
Reduced benefit can be elected at Minimum
Retirement Age by former employee with 10
years of service.
H. Supplement payable
to age 62
Employee retiring after Minimum Retirement
Age with 30 years service, or age 60 with 20
years service, gets Supplement to age 62,
equal to estimated Social Security benefit
earned in federal service.
Supplement is subject to earnings test,
similar to the test used by Social Security
at age 62, reducing Supplement if retiree
has earned income in excess of an annual
exempt amount ($5,760 in 1986, wage-indexed).
I. Refunds
Option to withdraw contributions at separa-
tion with benefits forfeited. /
J. Cost-of-living
adjustments (COLAs)
1. Annual COLA
percentage,
based on
increase in
Consumer Price
Index (CPI)
2. Eligibility
for COLA
Increase in CPI Annual COLA percentage
Up to 2% Same as CPI increase
2% to 3% 2%
3% or more CPI increase minus I
percentage point
Regular retirees over age 62, or
disabled and survivors at any age.
K. Optional forms
of benefits
1. Joint-&-survivor annuity, automatic if
married unl.ess jointly rejected.
Employee's annuity is reduced 10% to
provide spouse with 50% survivor benefit.
2. Alternative options that are actuarially
equivalent and offered by Office of
Personnel Management.
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2. THRIFT-SAVINGS PLAN
Proposed conference agreement - May 14, 1986
A. Eligibility Every 6 months employees have an open season
to join the plan or reallocate investments.
Newly hired employees may join at the second
open season (6 to 12 months after hire).
B. Contributions
by employer
and employees
Employer automatically contributes 1 percent
of pay into each employee's account.
Employees may contribute up to 10% of pay,
with employer matching as follows--
First 3% of pay $1.00 per $1.00
Next 2% of pay ======= ...$.50 per $1.00.
So employer contributes at most 5% of pay
for any employee.
Employees covered by CSRS also may contribute
up to 5% of pay, with no employer matching,
to invest in Fund A (government securities).
C. Vesting
Full and immediate vesting of all except the
1%-of-pay automatic government contribution.
This automatic contribution becomes vested at
3
years of
service
for
career civil servants,
2
years of
service
for
non-career SES and
political
(Schedule
C)
appointees, Members
and Congressional staff.
D. Investments
1. Employee may
elect to invest
own account in:
2. Management of
investment funds
Fund A--Special government securities.
Fund B--Fixed-income securities, using
insurance company Guaranteed
Investment Contracts (GICs),
bank certificates of deposit or
other private-sector securities.
Fund C--Equities, using a stock index fund
(invested in proportion to a diversi-
fied common stock portfolio such as
the Wilshire 5000 Equity index).
The investment funds .are managed by a Board
of 5 members appointed by the President,
taking into account one recommendation from
the Senate and one from the House. Executive
Director is responisible for investment
operations, employee recordkeeping, etc. ?
Voting rights in connection with common stock
owned by the Plan are not exercised.
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2. THRIFT-SAVINGS PLAN (continued)
Proposed conference agreement - May 14, 1986
D. Investments (continued)
3. Phase-in of Percentage required to be
private-sector Contributions in government securities
investment option in calendar
in early years of year Employee Employer
the thrift plan:
1987 100% 100%
1988 80 100
1989 60 100
1990 40 100
1991 20 100
(After 1991, no funds derived from
employee contributions are required to
be held in government securities.)
1992 0 100
1993 0 80
1994 0 60
1995 0 40
1996 0 20
(After 1996, no funds are required to
be held in government securities.)
E. Payout of employee Employee may elect payout of
retirement accounts account balance:
1. As annuity for life or for a fixed term.
2. In cash (at retirement age, death or
disability).
3. As rollover to IRA (at termination of
employment).
Active employees may not withdraw funds.
Program of loans to employees is
to be established by January 1, 1988.
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3. SURVIVOR BENEFITS
A. Pre-retirement
death benefit
to spouse or
former spouse
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Proposed conference agreement - May 14, 1986
At death of married employee with 18 months
of civilian service, surviving spouse gets-
1. Lump sum of $15,000 (indexed to CPI) and
one-half employee's annual rate of pay
or high-3 average if higher. Spouse may
elect payment as an annuity.
2. Annuity equal to 50% of accrued annuity,
if employee had 10 years of service.
These benefits are paid in addition to any
Social Security, group life insurance or
thrift plan death benefits.
B. Children's benefits,
payable at death
before or after
retirement
Annually adjusted amounts, offset by Social
Security children's benefits, varying by
number of children & whether or not orphaned.
In 1986 amount is about $2,800 per child, up
to 3 children, or $3,400 if orphaned.
Payable to unmarried child up to age 18,
age 22 if in school, or any age if disability
started before age 18.
C. Optional post-
retirement
death benefit
to spouse or
former spouse
Employee's annuity is reduced 10% to provide
annuity to surviving spouse.
Automatic if married unless jointly
rejected by both spouses.
Surviving spouse gets (1) 50% of employee's
unreduced annuity, and (2) supplement payable
to age 60 if ineligible for Social Security.
At spouse's death, employee's annuity is
restored to unreduced amount.
D. Special provisions
for surviving
former spouses,
or new spouses
due to marriage
after retirement
Benefits are the same as for surviving
spouses, subject to elections, court
orders and deposits in certain cases.
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4. DISABILITY BENEFITS
Proposed conference agreement - May 14, 1986
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A. Administration Disability benefit paid if employee has 18
and eligibility months of .civilian service.
B. Definition of
disability
Employee must be unable, because of disease
or injury, to render useful and efficient
service in the employee's position.
Employee will also qualify for Social
Security benefits if unable to work in any
substantial gainful activity.
Employee may not decline reasonable job offer
in the same agency and commuting area, at the
same pay grade.
During disability, total income from work may
not exceed 80% of former job's current pay
level. Employee may be given physical exams.
C. Disability benefit
amounts
1. In first year 60% of high-3 minus 100% of any Social
of payments Security benefit payable to the employee.
2. After 1st year,
up to age 62
40% of high-3 minus 60% of initial Social
Security benefit payable to the employee,
increased by annual COLA percentage (same as
allowed for basic annuity at age 62 & over),
but not below annuity earned to date.
D. Retirement benefits
after disabled
employee reaches
age 62
Recomputed from basic annuity formula, but
limited to benefit payable to individual who
gets Social Security (40%-less-60% formula).
Employee gets credit for years of disability
toward basic annuity formula, and salary for
purposes of the high-3 goes up at annual
COLA percentage.
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5. MISCELLANEOUS PROVISIONS
Proposed conference agreement - May 14, 1986
A. Credited service
1. Part-time service
2. Unused sick leave
3. Military service
Pay rate is increased to full-time rate, and
benefit formula uses pro-rated service.
Not credited.
To get credit for post-1956 military
employee must deposit 3% of military
for period of service, plus interest
deposit made more than 2 years after
service,
base pay
if
hire.
B. Treatment of special
groups of employees
1. Firefighters,
law enforcement
officers and
air traffic
controllers
2. Military reserve
technicians
3. Members of
Congress and
Congressional
employees
4. Employees of non-
appropriated fund
instrumentalities
Unreduced benefit at age 50 & 20 years of
service, or any age & 25 years service.
Annuity is 1.7% of high-3 pay times years of
service up to 20, 1.0% times years over 20.
Supplement paid/to age 62, equals estimated
Soc.Sec. benefit earned in federal service,
earnings-tested above Minimum Retirement Age.
Annual COLA percentage applies at all ages.
Employees contribute additional 0.5% of pay.
Employee separated due to termination of mil-
itary service after age 50 & 25 years service
gets unreduced annuity with Supplement to 62,
earnings-tested above Minimum Retirement Age.
Unreduced annuity for Members only at age 50
& 20 years of service, or any age & 25 years
of service.
Annuity is 1.7% of high-3 pay times years of
service up to 20, 1.0% times years over 20.
Earnings-tested Supplement paid from Minimum
Retirement Age to age 62.
No COLA to age retirees before age 62. These
classes contribute additional 0.5% of pay.
Not covered. Department of Defense is to
provide a study of how to give such employees
appropriate benefits and portability.
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5. MISCELLANEOUS PROVISIONS (continued)
Proposed conference agreement - May 14, 1986
C. Transfers of current
employees covered by
CSRS to new program
Current employees may elect between July 1
and December 31, 1987 to transfer into the
new plan including Social Security--
Credit in current program stops, but the
high-3 pay continues to run.
All service counts toward years needed
to be eligible for retirement, disability
and vesting in both CSRS and new plan.
Employee gets survivor and disability
coverage from the new plan only.
Unused sick leave is credited under CSRS
based on the amount accumulated at date of
transfer, or date of retirement if lower.
Current law Social Security windfall
benefit reduction provision is retained.
D. Treatment of employees
re-hired, who were
not covered earlier
by Social Security
1. Employees with
break-in-service
up to 1 year
2. Employees with
break-in-service
over 1 year
Remain out of Social Security and are covered
by CSRS. May transfer to the new plan
including Social Security coverage.
Covered by Social Security, and--
a) Those with less than 5 years under CSRS
are covered by the new plan. ,
b) Those with 5 or more years under CSRS are
covered by CSRS with 100% offset of Social
Security. May transfer to the new plan.
E. Transition from
interim plan in
effect 1984-86
1 Employees newly
hired on or after
January 1, 1984
2. Employees before
January 1, 1984,
covered then by
Social Security
mandatorily
3. Employees re-hired
during 1984-86
New plan's effective date is January 1, 1987.
Get credit for all service toward new plan.
Those covered on January 1, 1987 get credit
toward thrift plan of 1% of 1984-86 pay.
These employees get CSRS benefits, offset by
Social Security benefits attributable to
federal service, and pay contributions at the
CSRS rate less Social Security (OASDI) rate.
They may transfer to the new plan.
These employees are treated the same as_
later re-hires (see D. above).
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HPSCI May 16, 1986
FERS Stmt. of Mgrs.
CENTRAL INTELLIGENCE AGENCY RETIREMENT
Title V of the conference agreement addresses federal employee retirement
benefits for officers and employees of the Central Intelligence Agency .(CIA.).
One section of Title V also addresses a related matter involving very limited
numbers of National Security Agency .(NSA) employees and Defense Intelligence
Agency (DIA) employees.
After enactment of the Federal Employees' Retirement System Act of 1986,
employees of the Central Intelligence Agency will generally fall into four
basic categories, each with differing retirement benefits and obligations:
(1) CRS Participants. Most Central Intelligence Agency employees
whose federal service began before December 31, 1983 participate in the
Civil Service Retirement System maintained under subchapter III of chapter
83 of title 5, United States Code. These CIA employees enjoy the same
benefits as federal employees in other agencies who participate in the
Civil Service Retirement System.
(2) CIARDS Participants. In 1964, Congress enacted the Central
Intelligence Agency Retirement Act of 1964 for Certain Employees (50
U.S.C. 403 note) to establish a CIA Retirement and Disability System
(CIARDS) for CIA employees whose duties are "(i) in support of Agency
activities abroad hazardous to life or health or (ii) so specialized
because of security requirements as to be clearly distinguishable from
normal government employment" (Sec. 203 CIA, Retirement Act). The. CIA
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employees participating in the C1ARDS receive retirement benefits superior
to those provided generally by the CSRS, benefitting in particular from a
higher annual pension accrual rate and an option for early retirement.
The group of CIAPEG participants will consist of CIA employees whose
federal service began prior to December 31, 1983 who are, or who will
become eligible (whether before, on or after December 31, 1983), to
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participate n CIARDS in accordance with the CIA Retirement Act and
implementing regulations.
(3) FERS Regular Participants. Central Intelligence Agency
employees whose federal service began after December 31, 1983 will
participate in the Federal Employees' Retirement System (FERS) established
under the new chapter 84 of title 5, United States Code. Unless they fall
within the special category of CIA employees who qualify for FERS
treatment equivalent to that accorded law enforcement officers, the CIA
employees covered by the FEES will incur the same obligations and receive
the same benefits as do most federal employees covered by the FEES.
(4) FERS Section 203 Criteria Participants. The CIA employees whose
federal service began after December 31, 1983 (and who therefore
participate in the FERS) and who meet the criteria prescribed under
section 203 of the CIA Retirement Act, namely that their CIA duties are
"(i) in support of Agency activities abroad hazardous to life or health or
(ii) so specialized because of security requirements as to be clearly
distinguishable from normal government employment," will incur the same
obligations and receive the same benefits as do federal employees covered
by the FERS who are law enforcement officers. The FERS accords
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preferential benefits to law enforcement officers in comparison to most
other types of federal employees, and thus CIA's FERS section 203 criteria
participants will receive preferential benefits in comparison to CIA FERS
regular participants.
The conferees agreed that, to improve the security of intelligence
sources, rethods and activities, the CIA should administer all federal
retirement systems as they apply to CIA officers and employees. The
conference agreement provides for such CIA administration. Providing for CIA
administration of retirement systems as they apply to CIA employees reduces
unnecessary dissemination within the government of intelligence personnel
information, improving security. The administration of the retirement systems
by CIA as to CIA employees will not differ substantively from OPM
administration of such systems with respect to other federal employees. The
benefits and obligations of CIA employees and non-CIA employees within a
retirement system will not differ; only the agencies administering the system
as to those employees will differ. As a result of provisions of the
conference agreement providing for CIA administration of the CSRS and the FERS
with respect to CIA employees, all aspects of retirement system administration
with regard to CIA employees will remain completely within the CIA, except for
Merit Systems Protection Board and federal court review of certain adverse
retirement decisions rade by the DCI with respect to CIA CSRS and regular FERS
employees. The conferees expect the MSPB and the federal courts to conduct
such proceedings in a manner consistent with the protection of intelligence
sources, methods and activities. The conferees also expect close cooperation
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among OPM, the Executive Director of the Thrift Investment Board, and the DCI
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to ensure both uniform administration of federal retirement systems and the
protection of intelligence sources, method and activities, particularly as the
(7-.nference agrecfnEnt for OPM and Executive Director, Thrift
Investment Board inspection and audit of CIA-related disbursements from the
Civil Service Retirement and Disability Fund and 'the Thrift Savings Plan.
The DCI must submit all retirement regulations he issues to the
intelligence committees of the Congress before the regulations take effect.
Section-by-Section Explanation
Title V of the conference agreement addresses Central Intelligence Agency
retirement and related matters. Title V consists of sections 501 through 506
amending the Central Intelligence Agency Retirement Act of 1964 for Certain
Employees and title 5 of the United States Code and section 507 making related
changes.
Section 501: References
Section 501 of the conference agreement amends the CIA Retirement Act of
1964.
Section 501(1) amends section 201(c) of the CIA Retirement Act to make
clear that the Provisions of section 201(c), which provide for the finality
and unreviewability of DCI administration of the CIA Retirement Act, do not
override the provision of section 305(d) of the CIA Retirement Act (added by
section 506 of the conference agreement) which permits CIA regular FERS
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employees to appeal certain adverse retirement determinations made by the DCI
to the Merit Systems Protection Board and the federal courts in accordance
with section 8461(e) of title 5 (as added by section 101 of the conference
ac.2reement).
Section 501(2) replaces the phrase "this Act" each place it appears in
Title II of the CIA Retirement Act with the phrase "this title" (except in two
specified sections), which is necessitated by the aodition of a new Title III
to the CIA Retirement Act by section 506 of the conference agreement.
Section 501(3) inserts the phrase "under this title" in Title II of the
CIL Retirement Act after the phrase "payable from the fund" (meaning the CIA
Retirement and Disability Fund) each place it appears in the title, which is
necessitated by the addition of a new Title III to the CIA Retirement Act by
section 506 of the conference agreement.
Section 502: Contributions to the CIA Retirement and Disability System
Section 502 of the conference agreement amends section 211 of the CIA
Retirement Act of 1964.
Section 502(1) amends section 211 of the CIA Retirement Act to provide for
an exception from the CIARDS contribution requirement of seven percent of
basic salary contained in section 211(a) for participants described in new
section 211(d) of the CIA Retirement Act as added by section 502(2) of the
conference agreement.
Section 502(2) adds to section 211 of the CIA Retirement Act a new
subsection (d) providing for contributions to the CIA Retirement and
Disability Fund by CLADS participants subject to title II of the CIA.
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Retirement Act before January 1, 1984, whose service is employment for
purposes of Title II of the Social Security Act and the social security tax
provisions of the Internal Revenue Code but whose service is not Creditable
service under the new Federal Employee Retirement System. SuTh imiiviauFas
would be CIARDS annuitants (who were participants before January 1, 1984) who
are recalled to service after a one year break in service, political
appointees, or individuals described in section 301(c)(1) of the CIA
Retirement Act. The conferees intend that this provision not apply to any
individuals other than individuals who fall within one of these categories.
The contribution due to the CIA Retirement and Disability Fund from such an
individual is equal to seven percent of basic pay, less the amount of social
security taxes deducted and withheld from basic pay.
0 Section 503: Offset of Annuity by Amount of Social Security Benefits
Section 503 of the conference agreement amends section 221 of the CIA
Retirement Act of 1964 by adding a new section 221(p). Section 221(p)
provides that the annuity payable under CIARDS to an individual described in
section 301(c)(1) of the CIA Retirement Act (as added by section 506 of the
conference agreement) shall be offset by the amount of the individual's Social
Security benefits, in the manner provided by section 8349 of'title 5, United
States Code (as added by section 201(b) of the conference agreement). An
individual described in section 301(c)(1) of the CIA Retirement Act is one who
separates, or has separated, from federal service after having been a CIA
employee subject to CIARDS and having completed at least 5 years of civilian
service creditahle under CIARDS. The social security offset under subsection
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221(p) does not apply to the annuity of an individual described in section
301(c) (1) who has elected to participate in the new FERS.
Section 504: Thaift Savings Fund Participation by Participants in the CIARDS
Section 504 of the conference agreement adds a new section 293 to the CIA
Retirement Act of 1964. Section 293 permits CIARDS participants to remain in
CIARDS and to elect to participate in the Thrift Savings Plan on the same
basis as CSRS participants may remain in the CSRS and elect to participate in
the Thrift Savings Plan under section 8351 of title 5, United States Code (as
added by the conference agreement). Sections 8461(k) and (m, of title 5,
*United States Code (as added by the conference agreement) apply with respect
to contributions to the Thrift Savings Plan, and resultant earnings, by CIA
employees Who have elected, While remaining in the CIARDS or the CSRS, to
participate in the Thrift Savings Plan. This ensures that the DCI will handle
all administration with respect to CIARDS and CSRS participants who have
elected to participate in the Thrift Savings Plan.
Section 505: Alternative Forms of Annuities
Section 505 of the conference agreement add a new section 294 to the CIA
Retirement Act of 1964 to authorize the DCI to provide by regulation for
alternative forms of annuities for CIARDS participants to elect upon
retirement. To the maximum extent practicable, the regulations and the
alternative forms of annuities must meet the requirements prescribed in
section 8343a of title 5, United States Code .(as added by the conference
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agreement) . The DCI must submit the regulations to the intelligence
carrnittees of the Congress before they take effect.
Section -,: Participation in the Federal Employees' Retirement System
Section 506 of the conference agreement enacts a new Title III of the CIA
Retirement Act of 1964 for Certain Employees, consisting of sections 301 - 307.
Section 301 of the CIA Retirement Act provides for application to certain
CIA employees of the Federal Enployee Retirement System established under
chapter 84 of title 54 United States Code (as added by section 101 of the
conference agreement).
Section 301(a) provides that the FERS applies to all Agency personnel any
of whose Service after December 31, 1983 is employment for purposes of Title
II of the Social Security Act and the social security tax provisions of the
Internal Revenue Code, except as provided in subsections 301 (b) and (c).
Section 301(b) provides that CIARDS participants who were CIARDS
participants on or before December 31, 1983, and who have not had a one year
break in service since then, are not subject to the FERS, without regard to
whether they are subject to Title II of the Social Security Act.
Section 301(c) provides that the FERS does not apply to an individual who
separates, or has separated, from federal service after having been a CIA
employee subject to CIARDS and having completed at least 5 years of civilian
service creditable under CIARDS, unless the individual elects to become
subject to the FERS.
Section 301(d) provides that .the provisions of chapter 84 of title 5 (as
added by section 101 of the conference agreement), which establishes the FERS,
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apply to CIA employees covered by the FERS, subject to any exceptions and
special rules provided in Title III of the CIA Retirement Act with respect to
such CIA employees.
Section 302 of the CIA Retirement Act provides special rules for CIA FERS
section 203 criteria employees.
Section 302(a) provides that CIA employees subject to the FERS who are
designated by the DCI under the criteria prescribed in section 203 of the CIA
Retirement Act Shall be treated for purposes of their retirement benefits and
obligations under the FERS as if they were law enforcement officers as defined
in section 8401(17) of title 5, United States Code (as added by section 101 of
the conference agreement). The conferees emphasize that CIA personnel are: not
law enforcement officers, and indeed, are prohibited by section 102(d)(3) of
the National Security Act from exercising law enforcement powers (except for
CIA Security Protective Service personnel who have law enforcement powers
under section 15 of the CIA Act of 1949 within CIA installations). The CIA
FERS section 203 criteria employees are merely to be treated as if they were
law enforcement officers for purposes of determining their FERS retirement
benefits and obligations. The criteria of section 203 of the CIA Retirement
Act to which the section refers permit designation of CIA FERS employees for
retirement treatment equivalent to law enforcement officers if the CIA
employees' duties are "(i) in support of Agency activities abrOad hazardous to
life or health or (ii) so specialized because of security requirements as to
be clearly distinguishable from normal government employment."
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Section 302(b) provides that the voluntary retirement provisions
applicable to CIARDS participants under section 233 of the CIA Retirement Act
also apply to CIA FERS section 203 criteria employees and that the mandatory
retireent provisions applicable to CIARDS participants under section 2 ot
the CIA Retirement Act also. apply to CIA FEBS section 203 criteria employees,
except that the applicable retirement benefits are those specified for such
special category employees under the FERS in chapter 84 of title 5, United
States Code. Section 233 of the CIA Retirement Act permits voluntary
retirement by an employee who is at least 50 years of age and has rendered 20
years of service provided the employee has not less than ten years of Agency
service, of which at least five years shall have been service after
designation, or Shall have been service prior to designation consisting of
duties meeting the criteria prescribed in section 203 of the CIA Retirement
Act. Section 235 of the CIA Retirement Act permits mandatory retirement of a
designated employee who has completed at least 25 years of service, or who has
completed 20 years of service and is at least 50 years of age, provided such
employee has not less than ten years of Agency service, of which at least five
years shall have been service after designation, or Shall have been service
prior to designation consisting of. duties meeting the criteria prescribed in
section 203 of the CIA Retirement Act. Section 235 also provides for
automatic separation from the Agency at age 60 of a section 203-designated
Agency employee receiving compensation at less than the GS-18 level and for
automatic separation of such an employee at age 65 if such employee is
receiving compensation at the GS-18 level or above, subject to extensions by
up to a total of five years by the DCI when it is in the public interest. A
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section 203-designated Agency employee who is automatically separated at age
60 or 65 receives retirement benefits under the applicable retirement system
if the employee has completed five years of Agency service.
Section 302(c) provides that the recall provisionE applicable to CIARDS
participants under section 271 of the CIA Retirement Act also apply to CIA
FERS section 203 criteria employees, except that a CIA FERS section 203
criteria employee makes contributions during recall service as provided in
section 8422 of title 5, United States Code (as added by section 101 of the
conference agreement). When a CIA FERS section 203 criteria employee recalled
to service subsequently reverts to a retired status, his FERS annuity is
redetermined.
Section 303 provides a special rule for use in determining the FERS
annuity of a retiring CIA employee who is not a FERS section 203 criteria
employee and who has served outside the United States during his Agency
service. The portion of such annuity relating to service abroad performed by
such employee after the effective date of the Federal Employees' Retirement
System Act of 1986 is based on the higher accrual rate set forth in section
8415(d) of title 5, United States Code (as added by section 101 of the
conference agreement), while the portion of the annuity of such employee
relating to other service is based on the normal FERS accrual rate applicable
to that employee's other service. The conferees provided the accrual rate
increase for periods of service abroad for regular CIA FERS employees because
such employees, during their service abroad, perform work substantially
similar to that of FEES Section 203 criteria employees, and Should thus enjoy
equivalent pension accrual rights during that period as a matter of equity.
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Section 304 provides special rules relating to certain former spouses of
certain CIA personnel. The conferees' intention is to preserve the existing
regime of benefits f r fcrmer spouses of CIA personnel, subject to necesE;ary
technical changes. The term "former spouse" as defined in the CIA Retirement
Act (section 204(b)(4)) incorporates the requirement, applicable throughout
the new Title III of the CIA Retirement Act that, to be considered a "former
spouse," the former wife or husband of a CIA employee must have been married
to the CIA employee for not less than 10 years of Agency service, at least 5
years of which were spent cutside the United States by both the employee and
the spouse (the "10/5 requirement"). As a result of section 304, CIA FEES
employees' former spouses, who meet the 10/5 requirement, receive former
spouses benefits analogous to those received by CIA CIARDS and CSRS employees'
former spouses who meet the 10/5 requirement. Throughout the discussion below
of this section, unless the context indicates otherwise, the term "former
spouse" when used in reference to a CIA employee's former spouse, means only a
former wife or husband who satisfies the 10/5 requirement.
Section 304(a) provides that the former spouse provisions ir chapter 84 of
title 5, United States Code (as added by section 101 of the conference
agreement) do not apply to a CIA FERS employee who has a former spouse meeting
the 10/5 requirement. Instead, the special rules provided in section 304
apply to such an employee and former spouse. For a CIA FERS employee whose
former spouse did not meet the 10/5 requirement, the normal former spouses
provisions of chapter 84 of title 5 (as added by section 101 of the conference
agreement) would apply.
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Section 304(b) provides that the provision in section 221(b)(1)(C) of the
CIA Retirement Act for a joint employee/former spouse waiver of a survivor
annuity by spousal agreement applies with respect to the survivor annuity for
a CD, FERS employee's formEr F7ouse under section 304(c)(2;
Section 304(c) provides that certain specified provisions of the CIA
Retirement Act of 1964 relating to CIA CIARDS employees apply equally to CIA
FERS employees with respect to former spouses. The specified provisions Rade
applicable deal with computation of annuities for former spouses, election of
survivor benefits for former spouses, Sharing of discontinued service (i.e.,
lump sum) benefits with former spouses, and the effect of payments under
spousal agreements or court orders.
Section 304(d) provides technical special rules with respect to
computation of annuities for CIA FEES employees' spouses in accordance with
section 222(a) of the CIA Retirement Act as made applicable by subsection
304(c). The special rules are necessary to take account of the recall and
reemployment situations of CIA FERS employees and to take account that CIA
FERS employees' contributions belong in the Civil Service Retirement and
Disability Fund rather than the CIA Retirement and Disability Fund to which
CIA CIARDS Participants contribute.
Section 304(e) provides special rules relating to the survivor annuities
of CIA FERS employees' former spouses under subsections (b) and (c) of section
222 of the CIA Retirement Act as made applicable by section 304(c). The
special rules adjust the application of the CIA Retirement Act provisions rade
applicable to CIA FERS former spouses provisions in light of the the former
spouses provisions of chapter 84 of title 5, United States Code (as added by
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section 101 of the conference agreement) with respect to percentage of
employee annuity used in calculating former spouse survivor benefits, the-
em.loyee annuity base used in such ca1culatic, svivor annuity election,
aggregation of multiple survivor annuities, and employee contributions to fund
elected survivor annuities.
Section 3104(f) provides for computation of the reduction of a CIA FERS
employee's annuity to provide survivor annuities in the manner provided by
section 8419(a) of title 5, United States Code (as added by section 101 of the
conference agreement).
Section 304(g) provides that the entitlement of a retired CIA FERS
employee's former spouse to a portion of the,employee's annuity extends to any
annuity supplement the employee receives under section 8421 of title 5, United
0 States Code (as added by section 101 of the conference agreement).
Section 305 provides that section 201(c) of the CIA Retirement Act, Which
provides for the finality and unreviewability of DCI administration of the CIA
Retirement Act, applies to aaministration of FERS by the CIA with respect to
CIA employees, except that regular CIA FERS employees may appeal certain
adverse retirement decisions made by the DCI to the Merit Systems Protection
Board and the federal courts as provided in section 8461(e) of title 5, United
States Code (as added by section 101 of the conference agreement). Subsection
8347(n) of title 5, United States Code (as amended by the conference
agreement) contains a provision similar with respect to finality and
unreviewability of DCI administration of the CSRS with respect to CIA
emloyees and similar with respect to appeals of certain DCI decisions by CIA
CSRS employees.
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Section 306 authorizes the DCI to prescribe in regulations (in
consultation with the Director, OPM and the Executive Director of the Thrift
Investment Board) appropriate procedures to carry out Title III of the CIA
Retirement Act. The DCI must submit the regulations to the intelligence
committees of the Congress before the regulations take effect.
Section 307 authorizes the DCI to provide by regulation for the transition
from CIARDS to FERS for CIARDS participants electing to participate in the
FERS. Section 307 gives CIA CIARDS employees the same opportunity to elect to
participate in the FERS as CIA CSRS employees enjoy under title III of the
Federal Employees' Retirement System Act of 1986. The DCI must submit the
regulations implementing section 307 to the intelligence committees of the
Congress before the regulations take effect.
Section 507: Special Retirement Accrual for Other Intelligence Personnel
Section 507 extends, to a limited number of civilian employees of the
National Security Agency and the Defense Intelligence Agency covered by the
CSRS and the FERS, the special retirement accrual benefit provided to CIA
regular FERS employee for periods of overseas service by section 303 of the
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CIA Retirement Act (as added by section 506 of the conference agreement). The
conferees concluded that NSA and DIA civilian employees within the groups
covered by section 9(b) (1) (B) of the NSA Act of 1959 and section 1605(a) of
TitiE 10, United States Co-.' 7erit treatment e iv,,nt to that afforded CLL.
regular FERS employees for periods of service abroad because of the nature of
their intelligence duties.
Administration of CSRS and FERS for Employees of the CIA
Section 206(i) of the conference agreement amends section 8347 of title 5,
United States Code, to add a new subsection 8347(n) to provide for CIA
administration of the Civil Service Retirement. System as it applies to CIA
employees. Section 8347(n) provides for CIA administration of the CSRS as it
applies to CIA employees in the same way as section 8461 of title 5, United
States Code (as amended by the conference agreement) provides for CIA
administration of the FERS as it applies to CIA employees. The conferees
concluded that CIA administration with respect to CIA employees of all.
retirement systems applicable to CIA employees forms an essential part of
efforts to improve the protection afforded to intelligence sources, methods
and activities.
These provisions (sections 8347 and 8461) provide that the Director of
Central Intelligence may, consistent with the administration of CSRS and FERS
by the Office of Personnel Management and the Executive Director of the
Federal Retirement Thrift Investment Board and to the extent the DCI considers
appropriate, administer CSRS and FERS retirement provisions as they apply to
CIA personnel. In addition, the DCI may, to the extent he considers
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appropriate, perform with respect to CIA personnel the functions and duties
(including with respect to disbursements from the Civil Service Retirement
Fund or the Thrift Savings Plan, but not including Thrift Savings Plan
investnent de.Tisions.:) of the Director, or the ii rector, Thrift
Investment Board under subchapter III of chapter 83 or under chapter 84, which
those officers would otherwise perform. To the extent that the DCI does not
exercise his authority to assume the functions and duties of OPM or the
Executive Director with respect to CIA CSRS and FERS employees, OPM and the
Executive Director would continue to perform such functions and duties with
respect to CIA CSES and FEPS employees. Allowing the DCI to assume such
functions and duties to the extent he considers appropriate will permit a
phased, orderly assumption of retirement administration functions and duties
by the CIA.
These provisions also provide that sections 8439(b), 8461(h)(1), and
8474(c)(4) of title 5, United States Code (as added by section 101 of the
conference agreement) shall be applied with respect to information relating to
CIA personnel in a manner that protects intelligence sources, methods and
activities. Section 8439(b) relates to auditing of the Thrift Eavings Plan by
a qualified public accountant and a report to the General Accounting Office.
Section 8461(h)(1) relates to OPM access to information held by other
agencies. Section 8474(c)(4) relates to Executive Director, Thrift Investment
Board access to information held by other agencies. Although nothing in the
Federal Employees' Retirement System Act of 1986, or the amendments made by
the Act, impairs or affects statutes (such as section 102(d)(3) of the
National Security Act of 1947 and sections 6 and 8 of the CIA Act of 1949) and
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Executive Orders (such as Executive Orders 12333 governing intelligence
activities and 12356 governing national security inforamtion) regarding
protection of intelligence sources, methods and activities, the conferees
believed it appropriate to e777,7-haE-i : t.hk. (-)1 such protection
because certain provisions of chapter 84 refer specifically address the issue
of access by one agency to information held by another agency. Security
practices, including clearance requirements, normally applicable to
intelligence information will apply in the administration of sections 8439(b),
8461(h)(1), and 8474(c)(4) of title 5 as they are applied with respect to CIA.
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Introduction/In-House Administration
I. Agency Authority to Administer Retirement In-House
A. With respect to Agency employees, the DCI now has the
authority, in place of OPM, to
1. Determine entitlement to benefits.
2. Maintain records relating to service.
3. Compute benefits.
4. Collect deposits.
5. Authorize and direct disbursements from the Fund.
(example - CSRS to CIARDS).
6. Perform other functions determined by the DCI to
be appropriate (example - FEGLI).
B. OPM will furnish Agency with information and services
as necessary.
C. With regard to the thrift plan, the DCI may
1. Maintain exclusive records relating to employee
elections, contributions, and accounts.
2. Provide that contributions be accounted for by
the Executive Director in aggregate amounts.
3. Make disbursements from the accounts of employees
4. Perform other functions determined by the DCI to
be appropriate.
D. Executive Director of the Thrift Board will furnish
Agency with information and services as necessary.
E. Regulations will be written to prescribe procedures
developed to carry out the DCI authorities.
1. Regulations must include procedures for OPM and
the Thrift Board to audit our disbursements from
their Funds.
2. Regulations have to be approved by the
Congressional Intelligence Committees.
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Anticipated Impact on RD
A. Inquiries - all RD employees will need to know
details about the new retirement programs.
B. Increased workload.
1. ROB - will handle anything OPM now handles.
2. RSB - annuitant section will gradually have a
bigger clientele, as CSRS cases will no longer go
to OPM effective with about 1 January 1987.
3. Thrift plan administration - RD will probably
need a full time person to handle thrift plan
matters.
4. Automation will be undertaken to help administer
the retirement programs more efficiently.
C. Goal is to implement new procedures and regulations
by 1 January 1987.
III. The Federal Emp1oyees11 Retirement System (FERS)
A. FERS automatically applies to all employees hired
since 1 January 1984 who are covered by Social
Security.
B. FERS will also apply to pre-1984 employees who elect
to transfer into the system.
IV. Retirement Programs Covering Agency Employees
A. CSRS - pre-1 January 1984 employees.
B. CIARDS - pre-1 January 1984 employees with five years
of qualifying service.
C. FERS - post-31 December 1983 employees.
D. FERS CIA - a special category for post-31 December
1983 employees with five years of qualifying service.
V. FERS - A Three Tier Retirement Program
A. Social Security:
B. A defined benefit plan.
C. A thrift savings plan.
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Defined Benefit Plan
I. Eligibility for Annuity
A. Unreduced
1. Age 62 & 5 years service.
2. Age 60 & 20 years service (plus supplement to age
62).
3. Minimum retirement age & 30 years service (plus
supplement to age 62).
Year of birth Minimum Retirement Age
Before 1948
55
1948
55
&
2 months
1949
55
&
4 months
1950
55
&
6 months
1951
55
&
8 months
1952
55
&
10 months
1953 - 1964
56
1965
56
&
2 months
1966
56
&
4 months
1967
56
&
6 months
1968
56
&
8 months
1969
56
&
10 months
1970 & after 57
Point out discrepancy in chart prepared by the
Conference and mention that this increase in
retirement age from 55 to 57 follows Social
Security's increase in retirement age from 65 - 67.
B. Reduced
1. Minimum retirement age & 10 years service.
2. Reduced 5% for each year under age 62.
3. No annuity supplement.
C. Involuntary
Age 50 & 20 year,s service, or any age & 25 years
service. Based on accrual rate without reduction.
Supplement paid from Minimum Retirement Age to age 62.
D. Deferred Vested
1. Unreduced benefit at age 62 & 5 years service
(provided that contributions were not refunded).
2. Reduced benefit (reduction of 5% for each year
under age 62) available at Minimum Retirement Age
& 10 years service. No annuity supplement.
(Example.)
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Employee Contributions
1.3% of pay in 1987,
0.94% in 1988-89, and
- 0.8% after 1989.
The employee's contributions to the defined benefit plan
will decrease as contributions to Social Security
increase. The total amount of contributions to the
defined benefit plan and Social Security will not change.
III. Accrual Rate for Benefits
1.0% per year or 1.1% if retiring after age 62 & 20 years
service. 1.7% for time spent overseas prospectively.
IV. Annuity Supplement
Payable to age 62 to employees retiring after Minimum
Retirement Age with 30 years service or age 60 with 20
years service.
A. Equal to estimated Social Security benefit earned in
federal service.
B. 50% of an individual's excess earnings ($5,760 in
1986, wage - indexed) for the immediately preceding
year will be deducted from the annuity supplement.
(Give example here.)
C. An annuity supplement will not be recomputed to take
into account the subsequent earnings under Social
Security of an annuitant who takes another-job after
retirement.
D. Except in the case of special classes (including FERS
CIA special category annuitants), COLAs will not be
applied to the annuity supplement.
V. Cost of Living Adjustments (COLAs)
A. Based on the inctease in the Consumer Price Index
(CPI).
Increase in CPI
Up to 2%
2% to 3%
3% or more
Annual COLA percentage
Same as CPI increase
2%
CPI increase - 1%
B. Payable to retirees over age 62, or at any age if
disabled or a survivor.
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VI. Survivor Benefits
A. Pre-Retirement
1. Spouse's Benefits
a. Eligibility requirements.
1) 18 months service by employee
2) 'married for 9 months or parent of issue
by that marriage.
(NOTE: The marriage requirement will be
deemed satisfied if the employee's death is
accidental.)
3) eligibility-terminates upon death of
widow(er) or their remarriage before age
55.
b. Benefits
1) lump sum equal to $15,000 plus 50% of
final annual rate of basic pay (or of the
average pay, if higher).
50% of accrued annuity if employee had 10
or more years of service, projected to
the employee's minimum retirement age.
3) Social Security and Thrift Savings Plan.
. Children's benefits
a. Eligibility requirements.
1) 18 months service by employee.
2) unmarried dependent child under 18 years
of age.
3) unmarried dependent child regardless of
age who is incapable of self-support
because ofmental or physical disability
incurred before age 18.
4) unmarried dependent child between 18 and
22years of age who is a full-time student.
b. Benefits - usually about $2,800 per child per
year, up to 3 children, offset by Social
Security.
B. Post-Retirement
1. Spouse's benefits.
a. Eligibility requirements.
1) married for 9 months.
2) upon, remarriage, an employee who was
married at the time of retirement
(including an employee whose annuity was
not reduced to provide a survivor annuity
for the employee's spouse or former
spouse as of the time of retirement) may
irrevocably elect within 2 years after
such remarriage or, if later, within 2
years after the death or remarriage of
any former spouse of such employee who
was entitled to a survivor annuity, a
reduction to provide a survivor annuity.
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3) if an employee is married at the time of
retiring and the annuity rights of the
spouse were waived, the employee may only
make a subsequent election to provide a
survivor annuity to such spouse during
the 18-month period following retirement
provided that the appropriate deposit
plus 6% interest is deposited to the fund.
4) an employee who is unmarried at the time
of retiring and later marries may
inevocably elect a reduction to provide a
survivor annuity to his or her spouse
within 2 years after the marriage or, if
later, within 2 years after the death or
remarriage of any former spouse.
5) eligibility terminates upon death or
remarriage before age 55.
b. Cost to annuitant to provide a survivor
annuity - 10%.
c. Benefits - 50% of annuitant's basic annuity
plus supplement to age 60 if ineligible for
Social Security.
2. Children's benefits - same as pre-retirement
children's benefits.
3. Insurable interest's benefits.
a. Eligibility requirements.
1) the employee must be in good health at
the time of retiring.
2) a married employee may make this election
on behalf of his or her spouse only if
the right of such spouse to a survivor
annuity is waived, except if the employee
has a former spouse who would become
entitled to a survivor annuity.
b. Cost to annuitant to provide a survivor
annuity to an insurable interest - 10%
reduction plus a 5% reduction for each full 5
years the individual named is younger than
the retiring employee, except that the total
reduction may not exceed 40%.
c. Benefits - 55% of reduced annuity (as stated
above).
VII. Disability Benefits'
A. Eligibility Requirements.
1. 18 months service.
2. unable, because of disease or injury, to render
useful and efficient service in the employee's
position.
3. employee must not have declined a reasonable
offer of reassignment to a vacant position in the
same agency if the position is at the same grade
(or higher) as the employee's most recent grade,
is within the employee's commuting area, and is
one in which the employee would be able to render
useful and efficient service.
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B. Distinction between "disabled" for purposes of FERS
and Social Security.
1. for benefits under FERS, a person must be
determined to be "occupationally disabled" - one
who is unable to render useful and efficient
service in his or her position.
2. for benefits under Social Security, a person must
be determined to be "totally disabled" - one who
is unable to perform substantial, gainful
activity; this is a more conservative definition
than under FERS.
C. Medical Examination.
1. at the end of 1 year from the date of the
disability retirement.
2. annually thereafter until becoming 60 years of
age.
unless the disability is permanent in character.
D. Benefits.
1. 60% of high-three average pay minus 100% of any
Social Security disability benefit for the first
year.
2. 40% of high-three average pay minus 60% of any
Social Security disability benefit for the second
and succeeding years.
3. the annuity will be redetermined at age 62 and
the redetermined annuity will be the lesser of:
a. the computed basic annuity with creditable
service applied for the period during which
the disability annuity was received and COLAs
applied to the high-three average pay, or
b. the amount which would be used for the
annuitant during the second or succeeding
years of disability, if applicable,
but in no case will the redetermined annuity be
less than the actual earned annuity.
E. Recovery and restoration of earning capacity.
If an annuitant receiving a disability annuity before
becoming 60 years of age recovers or has earnings
from wages or self-employment of at least 80% of the
current rate of pay of the position occupied
immediately before retirement, then the annuity
terminates.
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VIII. Military Deposits
Deposits of 3% of the amount of basic pay for post-1956
military service must be paid if the service is to be
creditable toward an annuity. Any deposit made after the
later of January 1, 1989 or two years after the date on
which the employee making the deposit first becomes an
employee shall include interest.
IX. Special Classes
This category includes our -post-1983 employees who meet
the criteria under CIARDS.
A. Eligibility for annuity - age 50 & 20 years of
service.
B. Employee contributions - additional .5% of pay.
C. Accrual rate for benefits - 1.7% per year up to 20
years, and 1% for years over 20. Annuity supplement
paid from retirement to age 62, with earnings test
applied above minimum retirement age.
D. COLAs - applied to both annuity and annuity
supplement beginning at retirement; equal to change
in CPI less 1%.
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Thrift Savings Plan
I. Eligibility
All employees are eligible for participation.
II. Open Season
A. Every six months to elect, modify, or terminate
contributions.
B. New employees must wait until the second open season
after hire before electing contributions.
C. Employees must wait until the second open season
after terminating contributions before becoming
eligible to again elect contributions.
D. Open season for transferees to elect contributions
begins on the date of their election to transfer.
E. First open season begins during the first pay period
in January 1987.
III. Contributions
A. Employer
1. On behalf of FERS and FERS CIA special category
participants, including transferees:
a. automatic 1% of pay (retroactive to January
1, 1984, with interest).
b. full matching of first 3% of employee's
contributions and 1/2 of next 2%.
2. On behalf of CSRS and CIARDS participants - no
employer contributions.
B. Employee
1. PERS and FERS CIA special category - up to 10% of
pay, tax deferred.
2. CSRS and CIARDS - up to 5% of pay, tax deferred.
IV. Vesting
A. Employee's contributions and employee's matching
contributions - immediately vested.
B. Employer's automatic 1% contributions - vested after
3 years.
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V. Benefits
A. An employee who separates from Government employment
entitled to an annuity may elect:
1.
an
immediate annuity from the Thrift Savings Fund;
2.
to
defer the commencement of an annuity;
3.
to
withdraw the balance in the account, or;
4.
to
transfer the balance to an eligible retirement
plan.
B. If an employee separates before becoming entitled to
a deferred annuity, then the balance must be
transferred to an eligible retirement plan.
VI. Loans
Beginning on January 1, 1988, an employee may apply to
borrow from his or her account that portion of the
balance which is attributable to his or her
contributions, up to limits mandated by IRS. The loan
may be approved only for:
A. the purchase of a primary residence,
B. educational expenses,
C. medical expenses, or
D. financial hardship.
VII. Investments
Phase-In of Private Sector Investment Option:
Year
% required to be invested in
government securities
Employee
Employer
1987
100%
100%
1988
80
100
1989
60
100
1990
40
100
1991
20
100
1992
0
100
1993
0
80
1994
0
60
1995
0
40
1996
0
20
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Transfer Provisions
I. Election to Transfer
Employees in CSRS or CIARDS can elect to transfer into
FERS or FERS CIA Special Category, during the period from
1 July 1987 - 31 December 1987. The election is
effective with the first pay period after the date of
election and is irrevocable-.
Effects of Transfer
A. Accrual rates
1. Lower rate under the new system is effective with
date of transfer.
2. Rates under the old system apply through date of
transfer.
B. COLAs
1. Part of annuity earned under FERS receives COLAs
as provided by FERS.
2. Part of annuity earned under CSRS or CIARDS
receives COLAs as provided under CSRS or CIARDS.
C. Sick leave
1. Sick leave accrued after transfer is not credited.
2. Sick leave balance at time of transfer (or at
date of retirement if less) is credited.
D. Social Security Coverage
1. Begins at transfer.
2. Windfall and government pension offset provisions
will still apply to CSRS and CIARDS participants
who transfer into FERS or FERS CIA Special
Category. .
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III. Other Provisions
A. An individual electing to transfer, who has a former
spouse entitled to benefits based on a court order or
property settlement, must have the written consent of
the former spouse before the election can be
effective.
B. Service in the old system counts toward the 18 month
eligibility requirement for survivor or disability
benefits, and toward the vesting requirement for the
governments 1% contribution.
C. An individual who had five years under civil service,
and returned to federal service after a break of over
365 days, is under Social Security and pays 1.3% into
retirement. His benefit will be computed under CSRS
rules, offset by the amount of his Social Security
earned in federal service. Such a person has the
option of transferring into FERS.
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CHAPTER 84 - FEDERAL EMPLOYEES' RETIREMENT SYSTEM
Page 4 - SUBCHAPTER I - General Provisions
Page 9 - SUBCHAPIER II - Basic Annuity
Page 29 - SUBCHAPTER III - Thrift Savings Plan
Page 46 - SUBCHAPTER IV - Survivor Annuities
Page 54 - SUBCHAPTER V - Disability Benefits
.Page 60 - SUBCHAPLER VI - General and Administrative Provisions
Page 67 - SUBCHAPTER VII - Federal Retirement Thrift Investment
Management System
Page 79 - TITLE II - Other Amendments to Title 5 Of the United States Code
Page 90 - TITLE III - Other Provisions Relating to the Federal Employees'
Retirement System and the Civil Service Retirement
System
Page 100 - TITLE Iv - Foreign Service Retirement
Page 114 - TITLE V - Central Intelligence Agency Retirement and Related
Matters
Page 120 - TITLE VI - Miscellaneous Provisions
Page 123 - TITLE VII - Authorization of Appropriations; Effective Dates
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14'1'
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1
99TH CONGRESS REPORT
2d Session I HOUSE OF REPRESENTATIVES 99-606
FEDERAL EMPLOYEES' RETIREMENT SYSTEM ACT OF 1986
MAY 16, 1986.?Ordered to be printed
Mr. FORD of Michigan, from the committee of conference,
submitted the following
CONFERENCE REPORT
[To accompany H.R. 2672]
The committee of conference on the disagreeing votes of the two
Houses on the amendments of the Senate to the bill (H.R. 2672), to
redesignate the New York International and Bulk Mail Center in
Jersey City, New Jersey, as the "New Jersey International and
Bulk Mail Center", and to honor the memory of a former postal
employee by dedicating a portion of a street at the New York Inter-
national and Bulk Mail Center in Jersey City, New Jersey, as "Mi-
chael McDermott Place", having met, after full and free confer-
ence, have agreed to recommend and do recommend to their re-
spective Houses as follows:
That the House recede from its disagreement to the amendments
of the Senate numbered 1 and 2, and agree to the same.
That the House recede from its disagreement to the amendment
of the Senate numbered 3 and agree to the same with an amend-
ment as follows:
In lieu of the matter proposed to be inserted by the Senate
amendment, insert the following:
TITLE I?FEDERAL EMPLOYEES' RETIREMENT SYSTEM
SEC. 100. SHORT TITLE; TABLE OF CONTENTS. ?
(a) SHORT TITLE.?This Act may be cited as the "Federal Employ-
ees' Retirement System Act of 1986".
(b) TABLE OF CONTENTS.?The table of contents is as follows:
TABLE OF CONTENTS
TITLE I?FEDERAL EMPLOYEES' RETIREMENT SYSTEM
Sec. 100. Short title; table of contents.
Sec. 100A. Purposes.
Sec. 101. Establishment.
? 60-345 0
?
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,
-4
-
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TITLE II-OTHER AMENDMENTS TO TITLE 5 OF THE UNITED STATES ?
- .
. CODE
Sec. 201. Treatment under Civil Service Retirement System of certain individuals ex-
cluded from Federal Employees' Retirement System.
Sec. 202. Non-applicaliility of Civil Service Retirement System to individuals under
Federal Employees' Retirement System.
Sec. 203. Pay for the Executive Director of the Federal Retirement Thrift Investment
Sec. 204. Alternative forms of annuities.
Sec. 205. Retirement counseling. . . . _
Sec. 206. Participation by certain employees and Members only in the Thrift Savings
Plan. .
Sec. 207. Miscellaneous amendments.
TITLE III-OTHER PROVISIONS RELATING TO THE FEDERAL EMPLOYEES'
RETIREMENT SYSTEM AND THE CIVIL SERVICE RETIREMENT SYSTEM
. ?
Sec. 301. Elections. ? ?
Sec. 302. Effect of an election under section 301 to become subject to the Federal Em-
ployees' Retirement System.
Sec. 303. Provisions relating to an election to become subject to chapter 83 subject to
certain offsets relating to Social Security. ? --
Sec. 304. Amendments relating to Social Security.
Sec. 305. Extension of Federal Employees' Retirement Contribution Temporary Ad-
justment Act of 1983; refund of excess contributions.
Sec. 306. Applicability to the United States Postal Service.
Sec. 307. Use of "normal-cost percentage".
Sec. 308. Retirement study.
Sec. 309. Repeal of automatic transfer provision.
Sec. 310. Disclosure of return information.
Sec. 311. Initial appointments to the Federal Retirement Thrift Investment Board.
Sec. 312.
- ' ? -2 TITLE IV-FOREIGN SERVICE RETIREMENT
Sec. 401. Short title; references to Foreign Service Act of 1980.
Sec. 402. Redesignation of certain provisions of the Foreign Service' Act of 1980.
Sec. 403. Definition of court.
Sec. 404. Creditable service for purposes of subchapters land II.
Sec. 405. Contributions to the Foreign Service Retirement and Disability System.
Sec. 406. Offset of annuity by the amount of Social Security benefits.
Sec. 407. 18-month period to elect survivor annuity.
Sec. 408. Alternate forms of annuities. - ? - - ? ' -
Sec. 409. Treatment of certain recall service. ?
Sec. 410. Reemployment. .
Sec. 411. Comparability between the Federal Employees' Retirement System and the
Foreign Service Pension System. ?
Sec. 412. Moderation of remarriqge penalty.......
Sec. 413. Lump-sum payments.
Sec. 414. Exclusion of participants in Foreign Service Pension System from Foreign
Service Retirement and Disability System.
Sec. 415. Foreign Service Pension System.'
Sec. 416. Table of contents. ? , ? . ?
Sec. 417. Effective date. , .
Plan for delayed contributions to the Thrift Savings Fund. .
?
TITLE V-CENTRAL INTELLIGENCE AGENCY RETIREMENT AND RELATED
MATTERS
?
Sec. 501. References.
Sec. 502. Contributions to the Central Intelligence Agency Retirement and Disability
Sys tern.
Sec. 503. Offset of annuity by the amount of Social Security benefits. ' -.
. .
Sec. 504. Thrift savings fund participation by participants in the Central Intelligence
Agency Retirement and Disability System.
Sec. 505. Alternative forms of annuities. ? ., : -- .-.;
Sec. 506. Participation in the Federal Employees' Retirement System.
Sec. 507. Special retirement accrual for other intelligence personnel. \?,,\,
?
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_
:
A
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3
TITLE VI?MISCELLANEOUS PROVISIONS
Sec. 601. Annuities for survivors of District of Columbia judges.
TITLE VH?AUTHORIZATION OF APPROPRIATIONS; EFFECTIVE DATES
Sec. 701. Authorization of appropriations for certain expenses of the Federal Retire-
ment Thrift Investment Management System.
Sec. 702. Effective dates.
SEC. 100A. PURPOSES.
The purposes of this Act are?
(1) to establish a Federal employees' retirement plan which is
coordinated with title II of the Social Security Act;
(2) to ensure a fully funded and financially sound retirement
benefits plan for Federal employees;
(3) to enhance portability of retirement assets earned as an
employee of the Federal Government;
(4) to provide options for Federal employees with respect to re-
tirement planning;
(5) to assist in building a quality career work force in the
Federal Government;
(6) to encourage Federal employees to increase personal sav-
ings for retirement; and
(7) to extend financial protection from disability to additional
Federal employees and to increase such protection for eligible
Federal employees.
SEC. 101. ESTABLISHMENT.
(a) IN GENERAL.?Title 5, United States Code, is amended by in-
serting after chapter 83 the following new chapter:
"CHAPTER 84?FEDERAL EMPLOYEES' RETIREMENT
SYSTEM
"Sec.
"8401. Definitions.
"8402. Federal Employees' Retirement System; exclusions.
"8403. Relationship to the Social Security Act. -
"SUBCHAPTER H?BASIC ANNUITY
"8410. Eligibility for annuity.
"8411. Creditable service.
"8412. Immediate retirement.
"8413. Deferred retirement.
"8414. Early retirement.
"8415. Computation of basic annuity.
"8416. Survivor reduction for a current spouse.
"8417. Survivor reduction for a former spouse.
"8418. Survivor elections; deposit; offsets.
"8419. Survivor reductions; computation.
"8420. Insurable interest reductions.
"8420a. Alternative forms of annuities.
"8421. Annuity supplement.
"8421a. Reductions on account of earnings from work performed while entitled to an
annuity supplement. '. : -
"8422. Deductions from pay; contributions for military service.
"8423. Government contributions. -
"8424. Lump-sum benefits; designation of beneficiary; order of precedence.
"8425. Mandatory separation.
"SUBCHAPTER I?GENERAL PROVISIONS
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Declassified and Approved For Release 2013/08/28 : CIA-RDP89-00066R000700120001-4
3
, TITLE V1?MISCELL4NEOUS PROVISIONS
Sec. 601. Annuities for survivors of District of Columbia judges.
TITLE VH?AUTHORIZATION OF APPROPRIATIONS; EFFECTIVE DATES
Sec. 701. Authorization of appropriations for certain expenses of the Federal Retire-
ment Thrift Investment Management System.
Sec. 702. Effective dates.
SEC. 100A. PURPOSE&
The purposes of this Act are?
(1) to establish a Federal employees' retirement plan which is
coordinated with title II of the Social Security Act;
(2) to ensure a fully funded and financially sound retirement
benefits plan for Federal employees;
(3) to enhance portability of retirement assets earned as an
employee of the Federal Government;
(4) to provide options for Federal employees with respect to re-
tirement planning;
(5) to assist in building a quality career work force in the
Federal Government;
(6) to encourage Federal employees to increase personal sav-
ings for retirement; and
? (7) to extend financial protection from disability to additional
Federal employees and to increase such protection for eligible
Federal employees.
SEC. 101. ESTABLISHMENT.
(a) IN GENERAL.?Title 5, United States Code, is amended by in-
serting after chapter 83 the following new chapter:
"CHAPTER 84?FEDERAL EMPLOYEES' RETIREMENT
SYSTEM
"SUBCHAPTER I?GENERAL PROVISIONS
"Sec.
"8401. Definitions.
"8402. Federal Employees' Retirement System; exclusions.
"8403. Relationship to the Social Security Act.
"SUBCHAPTER II?BASIC ANNUITY
"8410. Eligibility for annuity.
"8411. Creditable service.
"8412. Immediate retirement.
"8413. Deferred retirement.
"8414. Early retirement.
"8415. Computation of basic annuity.
"8416. Survivor reduction for a current spouse.
"8417. Survivor reduction for a former spouse.
"8418. Survivor elections; deposit; offsets.
"8419. Survivor reductions; computation.
"8420. Insurable interest reductions.
"8420a. Alternative forms of annuities.
"8421. Annuity supplement.
"8421a. Reductions on account of earnings from work performed while entitled to an
annuity supplement.
"8422. Deductions from pay; contributions for military service.
"8423. Government contributions.
"8424. Lump-sum benefits; designation of beneficiary; order of precedence.
"8425. Mandatory separation.
S.14,
;II. ?
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- ?
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4.
"SUBCHAP7'ER-III-THRIFT SAVINGS PLAN
_ _ . ?
"8431. Definition.
"8432. Contributions. ? ? - ? .
"8433. Benefits and election of benefits. .,.. .? f,..
"8434. Annuities: methods of payment; election; purchase.
"8435. Protections for spouses and former spouses. % .? ?? ,
"8436. Administrative provisions. S.?? ..
"8437. Thrift Savings Fund.
"8438. Investment of Thrift Savings Fund.
"8439. Accounting and information.
Tax treatment of the Thrift Savings Fund. : . '? ...-\\ '''?,_...7..s.:''''. 'I-
:
o. ?
;
"84.40.
" ? "SUBCHAPTER IV-SURVIVOR ANNUITIES
: ? - ?
"8442. Rights of a Widow or widower.
"8443. Rights of a child.
"8444. Rights of a named individual' with an insurable interest.
"8445. Rights of a former spouse. , : ? ?-? ? ? . _
"SUBCHAPTER V-DISABILITY BENEFITS _
"8451.Disability retirement.
"8452. ?Computation of disability annuity.
"8453. Application.
"8454. Medical examination. . ? ??
"8455. Recovery; restoration of earning capacity.
? "8456. Relationship to workers' compensation.
"8457. Military reserve technicians.
r? ?
?
"SUBCHAPTER VI-GENERAL AND ADMINISTRATIVE PROVISIONS
"8461. Authority of the Office of Personnel Management.
"8462.Cost-of-living adjustments.
"8464. Commencement and termination of annuities of employees and Membe.
"8463. Rate of benefits. rs
"8465. Waiver, allotment, and assignment of benefits.
"8466. Application for benefits._ - ?
"8467. Court orders.
"8468. Annuities and pay on reemployment.
"8469. Withholding of State income taxes.
"8470. Exemption from legal process; recovery of payments.
"SUBCHAPTER VH-FEDERAL RETIREMENT THRIFT INVESTMENT
MANAGEMENT SYSTEM
"8471. Definitions.
"8472. Federal Retirement Thrift Investment Board.
"8473. Employee Thrift Advisory Council.
"8474. Executive Director.
"8475. Investment policies.
"8476. Administrative provisions.
"8477. Fiduciary responsibilities; liability and penalties.
"8478. Bonding.
"8479. Exculpatory provisions; insurance.
"SUBCHAPTER I-GENERAL PROVISIONS
"? 8401. Definitions
"For the purpose of this charter-
"(1) the term 'account means an account established and
maintained under section 8439(a) of this title; .
"(2) the term 'annuitant' means a former employee or Member
who, on the basis of that individual's service, meets all require-
ments for title to an annuity under subchapter' II cor V of this
chapter and files claim therefor;
?
.? ?
?
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..flommr;
'rt
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?
5
"(3) the term 'average pay' means the largest annual rate re-
sulting from averaging an employee's or Member's rates of basic
pay in effect over any 3 consecutive years of service or, in the
'case of an annuity under this chapter based on service of less
than 3 years, over the total service, with each rate weighted by
the period it was in effect; ? -
"(4) except as provided in subchapter III of this chapter, the
term 'basic pay has the meaning given such term by section
8331(3); 2
"(5) the term 'Board' means the Federal Retirement Thrift In-
vestment Board established by section 8472(a) of this title;
"(6) the term 'Civil Service Retirement and Disability. Fund'
or 'Fund' means the Civil Service Retirement and Disability
Fund under section 8348; -
"(7) the term 'court' means any court of any State, the District
of Columbia, the Commonwealth of Puerto Rico, Guam, the
Northern Mariana Islands, or the Virgin Islands, and any
Indian court; ? -
"(8) the term 'Director' means the Director of the Office of
? Personnel Management; ? -
"(9) the term 'dynamic assumptions' means economic assump-
tions that are used in determining actuarial costs and liabil-
ities 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
received from the investment of sums in such Fund;
"(11) the term 'employee' means? 7
"(A) an individual referred to in subparagraph (A), (E),
(F), (H), (I), or (J) of section 8331(1) of this title; and
"(B) a Congressional employee as defined in section 2107
of this title, including a temporary Congressional employee
and an employee of the Congressional Budget Office;
any of whose civilian service after December 31, 1983, is employ-
ment for the purposes of title II of the Social Security Act and
chapter 21 of the Internal Revenue Code of 1954, except that
,such term does not include?
"a) any individual referred to in?
NI) clause (i), (v), (vi), or (ix) of paragraph (1) of sec-
tion 8331;
"(II) clause (ii) of such paragraph (other than an em-
ployee of the United States Park Police, or the United
States Secret Service, any of whose civilian service after
December 31, 1983, is such employment); or
? "(III) the undesignated material after the last clause
of such paragraph; or ?
- "(ii) any individual excluded under section 8402(c) of this
?title,
"(12) the term 'former spouse' means a former spouse of an in-
vidual? ' ?
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171- 000Z1-00LOOM99000-68dCl-V10 8Z/80/?1-0Z eseeiej -101 panaiddv pue Pe!PsseloeCI
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Declassified and Approved For Release 2013/08/28: CIA-RDP89-00066R000700120001-4
,
irect contact with these individuals in their detention and
are sufficiently rigorous that employment opportunities are
required to be limited to young and physically -vigorous in-
dividuals, as determined by the head of the employing
agency;
"(18) the term 'loss', when used with respect to the Thrift Sav-
ings Fund, means the amount of the loss resulting from the in-
vestment of sums in such Fund;
"(19) the term 'lump-sum credit' means the unrefunded
amount consisting of?
"(A) retirement deductions made from the basic pay of an
employee or Member under section 8422(a) of this title (or
under section 204 of the Federal Employees' Retirement
Contribution Temporary Adjustment Act of 1983);
"(B) amounts deposited by an employee or Member under
section 8422(0 and
"(C) interest on the deductions and deposits which, for
any calendar year, shall be equal to the overall average
yield to the Fund during the preceding fiscal year from all
obligations purchased by the Secretary of the Treasury
during such fiscal year under section 8348(c), (d), and (e), as
determined by the Secretary (compounded annually);
but does not include interest?
? "(i) if the service covered thereby aggregates 1 year or less;
or
"(ii) for a fractional part of a month in the total service;
"(20) the term Member' has the same meaning as provided in
section 2106, except that such term does not include an individ-
ual who irrevocably elects, by written notice to the official by
whom such individual is paid, not to participate in the Federal
Employees' Retirement System;
"(21) the term 'net earnings' means the excess of earnings over
losses;
"(22) the term 'net losses' means the excess of losses over earn-
ings;
"(23) the term 'normal-cost percentage' means the entry-age
normal cost of the provisions of the System which relate to the
Fund, computed by the Office in accordance with generally ac-
cepted actuarial practice and standards (using dynamic as-
sumptions) and expressed as a level percentage of aggregate
basic pay; ?
"(24) the term 'Office' means the Office of Personnel Manage-
ment;
"(25) the term 'price index' has the same meaning as provided
in section 8331(15);
"(26) the 'term 'service' means service which is creditable
under section 8411;
"(27) the term 'supplemental liability means the estimated
_excess of? ?-
"(A) the actuarial present value of all future benefits pay-
-able from the Fund under this chapter based on the service
of current or former employees or Members,,-over
"(B) the sum of? -
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- ."(i) the actuarial present value ..of .deductions to be
Withheld' from the future 'basic pay of employees and
:-'MeMbers Currently subject ..to this .chapter pursuant to
section 8422,
:'"(ii) the actuarial present value of the future contri-
butions to be made pursuant to section $423(d) with re-
spect - to. employees and Members. currently subject- to
this chapter; ? ?
,??*"(iii) the Fund balance. as' of the date the supplemen-
tal liability is * determined, to the extent that such..bal-
nce is attributable? ?
?,
? - ) to'the !System-, Or
.,-EM.to contributions'Made tinder ,the 'Federal
PloYeee,Retirement ? Contribution . Temporary ?
Adjustrnerit Act- of 1983 by .or On behalf of an
vidual who became subject to the System; and ?
--frird any other appropriate amount, as determined by
? the Office in accordance with generally accepted actu-
... arial practices' and principles; -
.."(28) the term .`Suiliivor' means. an 'individual entitled to an
annuity under subchapter IV of this chapter;
"(29) the term. 'System' means the Federal Employees',HRetire-
ment.System described in section 8402(a); ?
"(30) the term 'military reserve technician' means a member
of one of the reserve components of the armed forces specified in
section 261(a) of title 10 who?? .?
"(A) is assigned ? to: a civilian position as a technician in
the administration and training of such reserve components
or in the maintenance and repair of .supplies issued to such
::reserve components; and ? ? ,????.*
as a condition of employment in s. uch position, is re-
quired to be a member of one of such reserve components
serving in a specified military grade; and ?
? ? ? ?
."(31) the term 'military service' means honorable active serv-
ice?"(A) in the armed forces;
.
TB) in the commissioned corps of the Public Health Serv-
ice -after .June 30; 196'0; or . ,? ***. ?
"(C) in the cOmMissionecleorps.: of .tlze ,Wational--?Oceanic
and Atmospheric Administratio5'_."or,apredec6sor.entity in .
function,' after 'June 'SO, 1961, ;.
:.. but does not include service..iti-?,;thi:National.Gliard except when ?
ordered to'CietiVe duty in the seiCe76. :MeV
njted States;,
"? 8402. Federal Employe&-lietireiriehtS
?
. "(a) The ,pro. visionS ofthis-.c apter":comprzSe he -
rat i=
ees'Retirement Systein.n.ri:
TN. The provisions ?f.
4:4740,1a
..`(/) 'anji .individual who
.'scrzbed in subparagnriph'40
the SoCiallSeCurity:AC:t?Olitih'u'oja
terni,sit-
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?
210(aX5XB) of the Social Security Act, relating to continuity of
? employment); or -
"(2)(A) any employee or Member who has separated from the
service after?
"(i) having been subject to subchapter III Of chapter 83 of
this title, or subchapter I of chapter 8.01 the Foreign Serv-
ice Act of 1980; and '
"(ii) having completed at least 5 years of civilian service
creditable under subchapter III of chapter 83 of this title,
or at least ,5 years of civilian service creditable under sub-
chapter I of the Foreign Service Act of 1980 (determined
without regard to any deposit or redeposit _ requirement
under either such subchapter, or any requirement that the
individual become subject to either such subchapter after
performing the service involved); or
"(B) any employee having at least 5 years of civilian service
performed before January 1, 1987, creditable under subchapter
- III of chapter 83 of this title (determined without regard to any
deposit or redeposit requirement under such subchapter, any re-
quirement that the individual become subject to such subchap-
ter after performing the service involved, or any requirement
that the individual give notice in writing to the official by
whom such individual is paid of such individual's desire to
become subject to such subchapter);
except to the extent provided for under title III of the Federal Em-
ployees' Retirement System Act of 1986 pursuant to an election
under such title to become subject to this chapter.
"(c)(1) The Office may exclude from the operation of this chapter
an employee or group of employees in or under an Executive agency,
the United States Postal Service, or the Postal Rate Commission,
whose employment is temporary or intermittent, except an employee
whose employment is part-time career employment (as defined in sec-
tion 3401(2).
- "(2) The Architect of the Capitol may exclude from the operation
of this chapter an employee under the Office of the Architect of the
capitol whose employment is temporary or of uncertain duration.
(3) The Librarian of Congress may exclude from the operation of
:this chapter an employee under, the Library of Congress whose em-
ployment is temporary or of uncertain duration.
) The Director or Acting Director of the Botanic Garden may
exclude from the operation of this chapter an employee under the
Botanic Garden whose employment is temporary or of uncertain du-
'ration. "
8403. Relationship to the Social Security Act
. "Except as otherwise provided in this chapter, the benefits pay-
able under the System are in addition to the benefits payable under
the Social Security Act.
"SUBCHAPTER II?BASIC ANNUITY
8410. Eligibility for annuity
or any other provision of this chapter, an employ-
ee or Member must complete at least 5 years of civilian service cred-
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c...51tAWfry_
9
210(a)(5)(B) of the Social Security Act, relating to continuity of
employment); or
"(2)(A) any employee or Member who has separated from the
service after?
"(i) having been subject to subchapter III of chapter 83 of
this title, or subchapter I of chapter 8 of the Foreign Serv-
ice Act of 1980; and
"(ii) having completed at least 5 years of civilian service
_ creditable under subchapter III of chapter 83 of this title,
or at least 5 years of civilian service creditable under sub-
chapter I of the Foreign Service Act of 1980 (determined
without regard to any deposit or redeposit requirement
under either such subchapter, or any requirement that the
individual become subject to either such subchapter after
performing the service involved); or
"(B) any employee having at least 5 years of civilian service
performed before January 1, 1987, creditable under subchapter
- III of chapter 83 of this title (determined without regard to any
deposit or redeposit requirement under such subchapter, any re-
quirement that the individual become subject to such subchap-
ter after performing the service involved, or any requirement
that the individual give notice in writing to the official by
whom such individual is paid of such individual's desire to
become subject to such subchapter);
except to the extent provided for under title III of the Federal Em-
ployees' Retirement System Act of 1986 pursuant to an election
under such title to become subject to this chapter.
"(c)(1) The Office may exclude from the operation of this chapter
an employee or group of employees in or under an Executive agency,
the United States Postal Service, or the Postal Rate Commission,
whose employment is temporary or intermittent, except an employee
whose employment is part-time career employment (as defined in sec-
tion 3401(2).
"(2) The Architect of the Capitol may exclude from the operation
of this chapter an employee under the Office of the Architect of the
Capitol whose employment is temporary or of uncertain duration.
' "(3) The Librarian of Congress may exclude from the operation of
this chapter an employee under the Library of Congress whose em-
ployment is temporary or of uncertain duration.
"(4) The Director or Acting Director of the Botanic Garden may
exclude from the operation of this chapter an employee under the
Botanic Garden whose employment is temporary or of uncertain du-
ration.
!`? 8403. Relationship to the Social Security Act
"Except as otherwise provided in this chapter, the benefits pay-
able under the System are in addition to the benefits payable under
the Social Security Act.
"SUBCHAPTER II?BASIC ANNUITY
"? 8410. Eligibility for annuity
"Notwithstanding any other provision of this chapter, an employ-
ee or Member must complete at least 5 years of civilian service cred-
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?
_ .
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I
47.:ett447
?-'34,-':-1
',4?"S,x 'ee-We:, .%.,,e?
--;.?,7-.??,tv.,,,,,?
,,,
',V.V.,4S4.7
' *Vr'?.''''''''.' .
?-;?-?
L.;
,
10
,
4table. under section 8411 ?in order
under this subchapter. --7.---
f`? 8411. Creditable service
-an annuity
, ?
f'(a)(1) The total service of an employee or Member,is the. fuil years
and twelfth parts thereof excluding from the aggregate the fraction-
al part of a month; if any. -
? "(2) Credit may not be allowed for a period of Separaiion from the
service in excess of 3 calendar days.2
,."(b) For the purpose of this chapter, creditable 'Service of an em-
ployee or Member includes?
"(1) employment as an employee, and any service as a Member
(including the period from the date of the beginning Of the term
for .which elected or appointed to the date of taking Office as a
Member), after December 31, 1986; ?" '.1..
"(2) service with respect to Which deductions and withhold-
ings under section 204(aX1) of the Federal Employees' Retire-
ment Contribution Temporary Adjustment Act of 1983 have
been made;
"(3) except as provided in subsection (f), any civilian service
(performed before January 1, 1989, other than any service under
paragraph (1) or (2)) which, but for the amendments made by
subsections (a)(4) and (b) of section 202 of the Federal Employ-
ees' Retirement System Act -of 1986, would be creditable under
subchapter III of chapter 83 of this title (determined without
,regard to any deposit or redeposit requirement under such sub-
chapter, any requirement that the individual become subject to
?
such subchapter after performing the service involved, or any re-
, quirement that the individual give notice in writing to the offi
cial .by whom such individual is paid of Such individual's
desire to become subject to such subchapter); and .
?::.. "(4) a Period_ of Service (other than any service under any of
' the preceding provisions of this subsection 'and other than any
service) that was ,creditable under the Foreign Service
Pension System described in :=subchapter II ;Of ,chapter 8 _of the
Foreign'Service Act'" '1980, if the employee or Member ,waives
c' red': 97tie:Seriiir00.:),61:14942 System
.1"1- 10 lihe.'11m6un t that
re,, , have _beeWdduc
.
"44PRiueCjitgid:tius4i4t ,2-.N2(rai)o dhad
employee'kensubject hzec
service 071 f
paragraphs (2 #nd OR.iecAolatSdreA,
(cX1) Except as
Member shall provide ?zn
--Ifor.?;.%ggra '11'1(2
.!`(A) each period ofc
1, 1957- and
(B) eachPiiiod-WM;Atliita4
731, 1956, and ppqjg
based, if a deposit (inc
- spect to such feriOci?f_nrecc9?,
"(2) If an emp oyie. .:96:4fem*
any period of military'Wervire,,,*
may not include creditIfOniiiC -
_retired pay is izu:kirded'l
moutriti:-Catij rited,:under
3 LI
- :
4nzpi-Ojiee or
oneilanuarv
?-?
bteryi er
nnuity is
pith re-
ed on
ember
JSS the
? - ??, 444
4
tt
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"(A) based on a service-connected disability?
"(i) incurred in combat - with an enemy of the United
States; or
? "(ii) caused by an instrumentality of war and incurred in
line of duty during a period of war as defined by -section
301 of title 38; or
"(B) under chapter 67 of title 10.
"(3) An employee or Member who has made a deposit under sec--
tion 8334(j) (or a similar prior provision of law) with respect to a
period of military service, and who has not taken a refund of such
deposit? _
"(A) shall be allowed credit for such service without regard to
the deposit requirement under paragraph (1)(B); and
"(B) shall be entitled, upon filing appropriate application
therefor with the Office, to a refund equal to the difference be-
tween?
"(i) the amount deposited with respect to such period
under such section 8334(j) (or prior provision), excluding in-
terest; and
"(ii) the amount which would otherwise have been re-
quired with respect to such period under paragraph (1)(B).
"(d) Credit under this chapter shall be allowed for leaves of ab-
sence without pay granted an employee while performing military
service, or while receiving benefits under subchapter I of chapter 81.
An employee or former employee who returns to duty after a period
of separation is deemed, for the purpose of this subsection, to have
been on leave of absence without pay for that part of the period in
which that individual was receiving benefits under subchapter I of
chapter 81. Credit may not be allowed for so much of other leaves of
absence without pay as exceeds 6 months in the aggregate in a cal-
endar year.
"(e) Credit shall be allowed for periods of approved leave without
pay granted, an employee to serve as a full-time officer or employee
of an organization composed primarily of employees (as defined by
section 8331(1) or 8401(11)), subject to the employee arranging to pay,
through the employee's employing agency, within 60 days after com-
mencement of such leave without pay, amounts equal to the retire-
ment deductions and agency contributions which would be applica-
ble under sections 8422(a) and 8423(a), respectively, if the employee
were in pay status. If the election and all payments provided by this
subsection are not made, the employee may not receive credit for the
periods of leave without pay, notwithstanding the third sentence of
subsection (d).
"(f)(1) An employee or Member who has received a refund of re-
tirement deductions under subchapter III of chapter 83 with respect
to any service described in subsection (b)(3) may not be allowed
credit for such service under this chapter unless such employee or
Member deposits an amount equal to 1.3 percent of basic pay for
such service, with interest. ?- -
"(2) An employee or Member may not be allowed credit under this
chapter for any service described in subsection (b)(3) for which re-
tirement deductions under subchapter III of chapter 83 have not
been made, unless such employee or Member deposits an amount
equal to, 1.3 percent of basic pay for such service, with interest.
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? ?-
-
r *It
1.A*
,
- Ar.0240e0-4-t :Sr",
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? ,
. . _ , (3) Interest under paragraph ? (1).,.or (2) shall.-be:computed in ac-
cordance With paragraphs (2). arid (3) -of section 8334(e) 'and regula-
tions prescribed by the Office. - . - . .. . .. ?,..). ?-,:?:-L,f.,izs:,:-,
?:,',."(4) For the purpose of survivor annuities, deposits' authorized by .
. the preceding provisions of this subsection may also be inade by a
survivor of an employee or Member ? ? ? ??-.--?:?,?.:?..):. '??';...:.?; .;:.:-? *.'-'..A,' - : , - ' ':??
'..' .--, '--,.?1??-t-c,.--i:--,..?;-.---,
.".?.._.,41;.! .Immediate retirement -".-; ,- .- ? ? -- ,?? - - - - - .- .?-? - - ,----?.= ?
.......: 1.....,? -.f:?,::-,--.i-,
- "(a) An employee or Member who is separated. from 'the service
. .
after attaining the applicable minimum retirement' ake under .Sub-
?.' section (h) and completing 30 years .of service is entitled to an annu-
ity. .7 ...'-- ..-;.:-f;z.- '" -,'Y, ? ) '..? ' .:` .. ?::, '':. ''',.:-;...:._.;) '"; .',,cr...
_ "(b) An employee - or ??Member who is 'Separcited from-the service
after becoming .60 years of age cinct completing 20 years of Service is
entitled to-an? annuity. :-,v, --- '.- ?-'. 2.,.-:-? ? ._. -,--,.t., ,.;.?,,.. ?-?.,...,-.,--,r,',.-:.
"(c) An employee or Member who is separated froin7the Service.
after becoming 62 years of age and Completing '5 Years of .service is
?
entitled toan annuity. .- ..'''' - ? . - '.? '-i?-???-?-? . ''!--------'''":;"--'-'?'' - .
"(d) An employee who is separated- from the service,' -except by re-
. .. ....... ,
moval for cause on charges of Misconduct. or delinquency?
"(1) after completing 25 years of service as .a law enforcement
- - officer or firefighter, or any combination or such service totaling
? -- at least 25 .years, or ?
- - a
"(2) after becoming 50 years of age arid completing 20 years of
_ . . . . . . .. . .... .. . .
.,..,,.. , .. ... .. .
service as a' law enforcement officer or firefighter,. or any combi-
nation of such service totaling at least 20 years,.
is entitled to an annuity. .- _ ., - - . ? _ ...? ? ? - :-.. - ?
....
- Te) An employee who is Separated from .the- sert4ce,:?eie ept by re-
moval for cause on charges of miscOnduct or delinquency---.?..'
? - .- - "(1) after completing 25 years of serbice. as an -'air traffic . Can-
. ? . .?.,. ..,... __.?.?.. ?? ?. ?
troller, or .
"(2) after becoming 50 years of age and completing $ years of
service as an air traffic controller,
.._ :,y?!..,.%;,-,:,p,t,....,:-a=.7.,:trtt.4r.s?-,v, - f.r.., ?or .:..
is entitled to an annuity. . , . .. ? .. . . - ,?-...; .,
4,,t,;i0,-;:kVAkiWT;;;c45-s::..e? ? ?,,,, ,?? - .? ,...:
- "(PA Member, .who is separated :Tram- ,?th-.0 se.rpcer;:except..4, resig-
nation or expulsion?. ...,... . ? ..-.: ." _ ._1:,?,':':?'::.; ,..::::7-W.Zi.,,,J.414,,,..
. ?, :-.,4-3,?c-...,-,,...,?=,..i.TN,,,,,,,,-,,..,45-2-,..,,,,.,,,,.::
."(1) after completing 25 years of service, ? ar,?:-V,=A-i41,....7,?
"(2) after becoming 50 years of age.iand,c9Tpletinkp years of
' 'service, : ? ? '? 7 ' ' ' -- ---... \''':;Vq;;rtigs'j,.-A,t):14V,V4;.? 7 ,;::'";' ,- - -
" ' ? ". .: ...D; ,..!:rf,,S),%agrAfif0-',1';,VN,,Cr''''
is entitled .to an annuity. : . , ,., ..?,?? ,.?.,,,,.!;--,tii..ii,..K74.NsioAs4A
.:. "(g) An employee or Member Who ,ts..separate4,1r.o.:..the .Service
after attaining the applicable minimum" retireM?ent'agejUder sub-
section (h) and completing 10 years of service is entitled loan annu-
ity. This subsection shall not apply to an:04M'). Yee;OtiMernber who
. is entitled to an annuity under any other; prOVisian.W4zhisis.sseuc btisoenc:-
. ,,
.? tion is? ? e applicable minimum retirerneltf ill -
. , - -....,..,-,10.1 .?
-.. o.- r:: ?:;?Jli u my'
,..-...,,,, .,.,... .
? . - . -,. ? : ?-? ????-? ? ,-,:-. ,::.?-,-,..-..,..,?-,,,-,?rt.,,-._ _....t
,vis 04 cernber
' TA) for an individual whose date '. .?6.i4 ? i
. 1, 1948, 55 years of age; ??:.-:,-- .0 ' -.7 ...:7:r ' 711,.4, *-- WA -. '''? 1 kti'- c:" ?
. ... 31; 1947, and before January ,l, t.195,7,,,,,''55eiii.s ? r
.. ., . ? .. --"..(B) for .an individual whose datird ,..biti. 0,11-?,- i':-:-. '
.'?' .,vic-p-_,c,d,Pge,-filus 'the
. , . . number of months' in .the age inc.. re- as- e.-;
? - paragraph (2)(A); .,,,?,-.,..,,:, -,,..--;f-:,,-7- .4.4ae'ide-71:4-1-' i4idA. ...clesi?-? .;I: -
? . .. .
?
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:"(C) for an individual whose date of birth is after December'
31, 1952, and before January 1, 1965, 56 years of age; '-
"(D) for an individual whose date of birth is after December
31, 1964, and before January 1, 1970, 56 years of age plus the
number of months in the age increase factor determined under
paragraph (2)(B); and
-"(E) for an individual whose date of birth is after December
31, 1969, 57 years of age. .
"(2)(A) For an individual whose date of birth occurs during the 5-
year period consisting of calendar years 1948 through 1952, the age
increase factor shall be equal to two-twelfths times the number of
months in the period beginning with January 1948 and ending with
December of the year in which the date of birth occurs.
"(B) For an individual whose date of birth occurs during the 5-
year period consisting of calendar years 1965 through 1969, the age
increase factor shall be equal to two-twelfths times the number of
months in the period beginning with January 1965 and ending with
December of the year in which the date of birth occurs.
".q 8413. Deferred retirement
"(a) An employee or Member who is separated from the service, or
transferred to a position in which the employee or Member does not
continue subject to this chapter, after completing 5 years of service
is entitled to an annuity beginning at the age of 62 years.
"(b)(1) An employee or Member who is separated from the service,
or transferred to a position in which the employee or Member does
not continue subject to this chapter, after. completing 10 years of
service is entitled to an annuity beginning on the date designated by
the employee or Member in a written election under this subsection.
The date designated under this subsection may not precede the date
on which the employee or Member attains the applicable minimum
retirement age under section 8412(h) and must precede the date on
which the employee or Member becomes 62 years of age.
"(2) The election of an annuity under this subsection shall not be
effective unless? -
"(A) it is made at such time and in such manner as the
Office shall by regulation prescribe; and
"(B) the employee or Member will not otherwise be eligible to
receive an annuity within 31 days after filing the election.
"(3) The election of an annuity under this subsection extinguishes
the right of the employee or Member to receive any other annuity
based on the service on which the annuity under this subsection is
based.
"? 8414. Early retirement
"(a)(1) A member of the Senior Executive Service who is removed
from the Senior Executive Service for less than fulTy successful exec-
utive performance (as determined under subchapter II of chapter 43
of this title) after completing 25 years of service, or after becoming
50 years of age and completing 20 years of service, is entitled to an
annuity. ,
!`(2) A member of the Defense Intelligence Senior Executive Service
or the Senior Cryptologic Executive Service who is removed from
such service for less than fully successful executive performance -
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?
_ .
? ._ ? ?
?
04-ti,t'kEr
7.41_
?AN
14
after. completing 25 years ,of service, or after. becoming 50 years of
age and completing 20 years of service, is entitled to an annuity. .
"(b)(1) Except as provided in paragraphs (2) and (3), an employee
who?_ ? ?
e?(A) is separated from the service involuntarily; except by re-
moval for cause on charges of misconduct or delinquency; or
--,--"(B) while serving in a geographic area designated by the Di-
rector, is separated from the service voluntarily during a period
- in which (as determined by the Director)? 'n
the agency :in which the employee is serving is under-
: _.. :going a major reorganization, a major reduction in force, Or
- -a major transfer of function; and ? )'? - ? ?
"(ii) a significant percentage of the total number of em--
ployees 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 compa-
rable provisions); ' , : ?:
after completing 25 years of service, or after becoming 50 years of
age and completing 20 years of service, is entitled to an annuity.
"(2) An employee under paragraph (1) who is separated as de-
scribed in subparagraph (A) of Such paragraph is not entitled to an
annuity under this subsection if the employee has declined a reason-
able offer of another position in the employee's agency for which the
employee is qualified, and the offered position is not lower- than 2
grades (or pay levels) below the employee's grade (or pay level) and is
within the employee's Commuting area.'
"(3) Paragraph (1) shall not apply to an employee entitled to an
annuity under subsection (d) or (e) of section 8412.
"(c) A military reserve technician who is separated from techni-
cian service, after. becoming 50 years of age and completing. 25 years
of service, by reason of ceasing to satisfy the condition described in
section 8401(30)(B) is entitled to an annuity. _
_ .
"? 8415. Computation of basic annuity
"(a) Except as otherwise provided in this section, thesinnuity of
an employee retiring under this subchapter is 1 percerit of that indi-
vidual's average pay multiplied by such individual's total service.
"(b) The annuity of a Member, or former Member with title to a
Member annuity, retiring under this subchapter is computed Under
- subsection (a), except that if the individual has had at least 5 years
of Service as a Member or Congressional employee, .or any,combina-
tion thereof, So much of the annuity as is computed with respect to
either such type of service (or a combination thereof), not exceeding
a total of 20 years, shall be computed by multiplying 1 7/ percent of
the individual's average pay by the yearsof such service.
"(c) The annuity of a Congressional employee, .or former; Congres-',
sional employee, retiring under this subchapter is computed under
subsection (a), except that if the individual has h aljeast 5 years
of service as a .Congressional employee or Member, or any combina- -
tion thereof; so much of the annuity as is computed with respect to .
either such type of service (or a combination-,thereof), "riot exceeding
a total of 20 years, shall be computed by multiplying-1,4percent of
the individual's average pay by the years of such service. 2?.
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.,"(d) The annuity of an employee retiring under subsection (d) or
(e) of section 8412 or under subsection (a) or (b) of section 8425 is-
-. "(1) 1 740 percent of that individual's average pay multiplied
by so much of such individual's total service as does not exceed
20 years; plus
."(2) 1 percent of that individual's average pay multiplied by
so much of such individual's total service as exceeds 20 years.
"(e)(1) In computing an annuity under this subchapter for an em-
ployee whose service includes service performed on a part-time
basis?
"(A) the average pay of the employee, to the extent that it in-
cludes pay for service performed in any position on a part-time
basis, shall be determined by using the annual rate of basic pay
that would be payable for full-time service in the position; and
"(B) the benefit so computed shall then be multiplied by a
fraction equal to the ratio which the employee's actual service,
as determined by prorating the employee's total service to reflect
the service that was performed on a part-time basis, bears to the
total service that would be creditable for the employee if all of
the service had been performed on a full-time basis.
"(2) For the purpose of this subsection, employment on a part-time
basis shall not be considered to include employment on a temporary
or intermittent basis. -
"(f)(1) The annuity of an employee or Member retiring under sec-
tion '8412(g) or 8413(b) is computed in accordance with applicable
provisions of this section, except that the annuity shall be reduced
by five-twelfths of 1 percent for each full month by which the com-
mencement date of the annuity precedes the sixty-second anniversary
of the birth of the employee or Member.
"(2)(A) Paragraph (1) does not apply in the case of an employee or
Member retiring under section 8413(b) if the employee or Member
would satisfy the age and service requirements for title to an annu-
ity under section 8412(a), (b), (d)(2), (e)(2), or (f)(2), determined as if
the employee or Member had, as of the date of separation, attained
the age specified in subparagraph (B).
"(B) A determination under subparagraph (A) shall be based on
how old the employee or Member will be as of the date on which the
annuity under section 8413(b) is to commence.
"(g)(1) In applying subsection (a) with respect to an employee
under paragraph (2), the percentage applied under such subsection
shall be 1.1 percent, rather than 1 percent. -
"(2) This subsection applies in the case of an employee who?
"(A) retires entitled to an annuity under section 8412; and
"(B) at the time of the separation on which entitlement to the
annuity is based, is at least 62 years of age and has completed
at least 20 years of service;
but does not apply in the case of a Congressional employee, military
- reserve technician, 'law enforcement officer, firefighter, or air traffic
controller.
"? 8416. Survivor reduction for a current spouse .
(a)(1) If an employee or Member is married at the time of retiring
under this chapter, the reduction described in section 8419(a) shall
be made unless the employee or Member and the spouse jointly
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16
waive, by written election, any right which the spouse may have to a
_survivor annuity under section 8442 based on the service of suchem-
ployee or Member., A waiver under ,this paragraph shall be filed
with the Office under procedures prescribed by the Office. 2
"(2) Notwithstanding paragraph (1), an employee or Member who
is married at the time of retiring under, this chapter may waive the
annuity for a surviving spouse without the spouse's consent if the
employee or Member establishes to the satisfaction of the Office (in
accordance with regulations prescribed by the Office)? -.- ? - ?
? ."(A) that the spouse's whereabouts cannot be determined; or
"(B) that, due to exceptional circumstances, requiring the em-
ployee or Member to seek the spouse's consent would otherwise
? - be inappropriate. ? ?
"(3) Except as provided in subsection (d), a waiver made under
this subsection shall be irrevocable.
"(b)(1) Upon remarriage, a retired employee or Member who was
married at the time of retirement (including an employee or Member
whose annuity was not reduced to provide a survivor annuity for the
employee's or Member's spouse or former spouse as of the time of re-
tirement) may irrevocably elect during such marriage, in a signed
writing received by the Office within 2 years after such remarriage
or, if later, within 2 years after the death or remarriage of any
former spouse of such employee or Member who was entitled to a
survivor annuity under section 8445 (or of the last such surviving
former spouse, if there was more than one), a reduction -in the em-
ployee's or Member's annuity under section 8419(a) for the purpose
of providing an annuity for such employee's or Member's spouse in
the event such spouse survives the employee or Member. -
"(2) The election and reduction shall be effective the first .day of
the second month after the election is received by the Office, but not
less than 9 months after the date of the remarriage.
"(3) An election to provide a survivor, annuity, to an individual
under this subsection? ; , - ?
"(A) shall prospectively void any election made by the employ-
ee or Member under section 8420 with respect to such individ-
ual, or ' ?-?-? '
"(B) shall, if an election was. made by .the employee or
Member under section 8420 with respect to a different individ-
ual, prospectively _void such election if appropriate written
.plication is made by such employee or Member' .'at ,the time of
- making the election under this subsection.
"(4) Any election under this subsection made ,by' an, emploYee or
Member on behalf of an individual after the retirement of such em-
ployee or Member shall not be effective if=
_TA) the employee or Member, was married to such individual
at the time of retirement; and
"(B) the annuity rights of such individual based on the serv-
ice of such employee or Member were then waived _Under subsec-
tion (a). -
"(c)(1) An employee or Member who is 'Unmarried. at :.,t4e, time of
retiring under this chapter and who. later marries 'may -irrevocably
elect, in a signed writing received by the Office within 2 .years after
such employee or Member marries or, if later,vitoithinyears after
the death or remarriage of any former,epouse tiuch:emp1oyee or
?
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Member who was entitled to a survivor annuity under section 8445 ---
(or of the last such surviving former spouse, if there was more than
one), a reduction in the current annuity of the retired employee or
Member, in accordance with section 841.9(a).
"(2) The election and reduction shall take effect the first day of
the first month beginning 9 months after the date of marriage. Any
such election to provide a survivor annuity for an individual-
- "(A) shall prospectively void any election made by the employ-
ee or Member under section 8420 with respect to such individ-
ual,. or --
"(B) shall, if an election was made by the employee or
Member under section 8420 with respect to a different individ-
ual, prospectively void such election if appropriate written ap-
plication is made by such employee or Member at the time of
making the election under this subsection.
"(d)(1) An employee or Member?
"(A) who is married on the date of retiring under this chap-
ter, and
"(B) with respect to whose spouse a waiver under subsection
(a) has been made,
may, during the 18-month period beginning on such date, elect to
have a reduction made under section 8419 in order to provide a sur-
vivor annuity under section 8442 for such spouse.
"(2)(A) An election under this subsection shall not be effective
unless the amount described in subparagraph (B) is deposited into
the Fund before the expiration of the 18-month period referred to in
paragraph (1).
"(B) The amount to be deposited under this subparagraph is equal
to the sum of?
"(i) the difference (for the period between the date on which
the annuity of the former employee or Member commences and
the date on which reductions pursuant to the election under
this subsection commence) between the amount paid to the
former employee or Member from the Fund under this chapter
and the amount which would have been paid if such election
had been made at the time of retirement; and
"(ii) the costs associated with providing for the election under
this subsection.
The amount to be deposited under clause (i) shall include interest,
computed at the rate of 6 percent a year.
"(3) An annuity which is reduced pursuant to an election by a
former employee or Member under this subsection shall be reduced
by the same percentage as was in effect under section 8419 as of the
date of the employee's or Member's retirement.
"(4) Rights and obligations under this chapter resulting from an
election under this subsection shall be the same as the rights and
obligations which would have resulted had the election been made
at the time of retirement. - ? _ .
"(6) The Office shall inform each employee and Member who is
eligible to make an election under this subsection of the right to
make such election and the procedures and deadlines applicable in
'flaking any such election.
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"? 8417. Survivor reduction for a former spouse
:"(a) If an employee or Member has aformr spouie Who is entitled
to a survivor annuity as provided in section 8445, the reduction de-
scribed in section 8419(a) shall be made. =
"(b)(1) An' employee or Member who has former spouse may
elect, under procedures prescribed by the Office, a reduction in the
annuity of the employee or Member under section 8419(a) in order to
provide a survivor annuity for such 'former;spouse under section
"(2) An election under this subsection shall be made at the time
of retirement or, If the marriage is dissolved after the date of retire-
ment, within 2 years after the date on which the marriage of the
former spouse to the employee or Member is so dissolved. '-
"(3) An election under this subsection?
"(A) shall not be effective to the extent that it?
"(i) conflicts with?
"(I) any court order or decree referred to in section
8445(a) which was issued before the date of such elec-
tion; or
"(II) any agreement, referred to in such section
8445(a) which was entered into before such date; or
"(ii) would cause the total of survivor .annuities payable
under sections 8442 and 8445, .respectively, based on the
service of the employee or Member to exceed the amount
Which would be payable to a widow or widower of such em-
ployee or Member.?under such section 8442 (determined
without regard to any reduction to provide for an ,annuity
under such section 8445); and ,., '1,, - '
"(B) shall not be effective, in 'the ca.Se Of an employee or
Member who is then married, unless it is made with the
spouse's Written consent.
, .
The Office shall by regulation provide that subparagraph (B) may
be Waived for either of the reasons set forth in Section 8416(a)(2).
"? 8418. Survivor elections; deposi4 offsets
"(a)(1) An 'individual 'Who makes an'eleCtion' bsection (b)
or (c) of section 8416 or 'section 8417(b) which is required to Made
. .
within 2 years after-the date Of a prescribed event shall* deposit into
.the Fund, before the expiration of the 2-year :period involved, an
amount determined* by. the Office (as nearly as MaY'bi.'administra-
lively feasible) to reflect the amount by 'which' the -iirznizity of such
individual, would have. been' 'reduced if the election had been in
effect since the date of retirement (or, if later'and in the ease of an -
election under such section 84I6(b), since the .date- the previous re-
duction in the annuity' of such individual was .terminated under
paragraph (I) or (2) of section 8419(b)), plus interest '
,"(2) Interest under paragraph (1) shall, be computed .at the rate of
6 percent a year I. ?
"(b) If the electing individual does not make the deposit required
under subsection' (a), .the Office shall collect. such .'amount by offset
against such :individual's annuity, .up to a maximum of .25 percent
,of, the net, annuity otherwise payable, .ancllhOndividual.ii deemed.
to consent to such offset ? -.!
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"(c) Subsections (a) and (b) shall not apply if?
? "(1) the employee or ?Member makes an election under section
8416(b) or (c) after having made an election under section 8420;
"(2) the election under such section 8420 becomes void under,
subsection (b)(3) or (c)(2) of such section 8416'.
"(d) The Office shall prescribe regulations under which the survi-
vor of an employee or Member may make a deposit under this sec-
tion.
"? 8419. Survivor reductions; computation
"(a)(1) Except as provided in paragraph (2), the annuity of an an-
nuitant computed under section 8415, or under section 8452 (includ-
ing subsection I (a)(2) of such section, if applicable), shall be reduced
by 10 percent if a survivor annuity, or a combination of survivor an-
nuities, under section 8442 or 8445 (or both) are to be provided for.
"(2)(A) If no survivor annuity under section 8442 is to be provided
for, but one or more survivor annuities under section 8445 involving
a total of less than the entirety of the amount referred to in subsec-
tion (bX2) of such section are to be provided for, the annuity of the
annuitant involved (as computed under section 8415, or under sec-
tion 8452 (including subsection (a)(2) of such section, if applicable)),
shall be reduced by an appropriate percentage determined under
subparagraph (B).
"(B) The Office shall prescribe regulations under which an appro-
priate reduction under this paragraph, not to exceed a total of 10
percent, shall be made. - -
"(b)(1) Any reduction in an annuity for the purpose of providing a
survivor annuity for the current spouse of a retired employee or
Member shall be terminated for each full month?
"(A) after the death of the spouse; or
"(B) after the dissolution of the spouse's marriage to the em-
ployee or Member, except that an appropriate reduction shall be
made thereafter if the spouse is entitled, as a former spouse, to
a survivor annuity under section 8445.
"(2) Any reduction in an annuity for the purpose of providing a
?survivor annuity for a former spouse of a retired employee or
Member shall be terminated for each full month after the former
_spouse remarries before reaching age 55 or dies. This reduction shall
be replaced by appropriate reductions under subsection (a) if the re-
tired employee or Member has one or more of the following:
"(A) another former spouse who is entitled to a survivor an-
nuity under section 8445;
"(B) a current spouse to whom the employee or Member was
married at the time of retirement and with respect to whom a
,survivor annuity was not waived under section 8416(a) (or, if
waived, with respect to whom an election under section 8416(d)
has been made); or
-"(C) a current spouse whom the employee or Member married
after retirement and with respect to whom an election has been
made under subsection (b) or (c) of section 8416. -
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? f`? 8420. Insurable interest reductions
"(a)(1) At the time of retiring under section 8412; 8413, or 8414, an
,
employee or Member who is found to be in good health by the Office
may elect to have such employee's or Member's annuity (as computed
under section 8415) reduced under paragraph (2) in order to provide
an annuity .under section 8444 for an individual having an insur-
able interest in the employee or Member. Such individual shall be
designated by the employee or Member in writing. ? ? ' ) ?
"(2) The annuity of the employee or Member making the election
is reduced by 10 percent, and by 5 percent for each full 5 years the
individual named is younger than the retiring employee or Member,
except that the total reduction may not exceed 40 percent.-
"(3) An annuity which' is reduced under this subsection shall, ef-
fective the first day of the month following the death of the individ-
ual named under this subsection, be recomputed and paid as if the
annuity had not been so reduced. ?
"(b)(1) In the case of a married employee or Member-, an election
under this section on behalf of the spouse may be made only if any
right of such spouse to a survivor annuity based on the service of
such employee or Member is ?waived in accordance - with section
8416'(a). . -
"(2) Paragraph (1) does not apply in the ca.4e of an employee or
Member if such employee or Member has a former spouse who
would become entitled to an annuity under section 8445 as a survi-
vor of such employee or Member.
-
"? 8420a. Alternative forms of annuities
"(a) The Office shall prescribe regulations Under which anm-
ployee or Member may, at the time of retiring under this subchapter,
elect annuity benefits under this section instead of any other bene-
fits under this subchapter, and any benefits under subchapter IV of
this chapter, based on the service of the employee or Member.
"(b) Subject to subsection (c), the Office shall by regulation pro-
vide for such alternative forms of annuities as the Office considers
appropriate, except that among the alternatives offered shall be?
.
"(1) an alternative which provides for? - , -
"(A) payment of the lump-sum credit (excluding interest)
to the employee or Member; and ?
"(B) payment of an annuity to the -employee or Member
.? ? for life; and ?
"(2) in the case of an employee or Member who is married at
the time of retirement, an alternative which provides for?
"(A) payment of the lump-sum credit (excluding interest)
- to the employee or Member; and " ? -
"(B) payment of an annuity to the employee Or Member
for life, with a_ survivor annuity payable for the life of a
-, ? . surviving spouse.:?? -1
"(c) Each alternativ`e provided for under subsection?(b) shall, to
the extent practicable, be designed such that the present value of the
benefits provided under such alternative (including any lump-sum
credit) is actuarially equivalent to the sum '
? \
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? "(I) the present value of the annuity which would otherwise
. be provided under this subchapter, as computed under section
8415; and -. - - ? . ,
-"(2) the present value of the annuity supplement which would
otherwise be provided (if any) under section 8421.
"(d) An employee or Member who, at the time of retiring under
this subchapter-
- is married, shall be ineligible to make an election under
this section unless a waiver is made under section 8416(a); or
"(2) has a former spouse, shall be ineligible to make an elec-
tion under this section if the former spouse is entitled to bene-
fits under section 8445 or 8467 (based on the service of the em-
ployee or Member) under the terms of a decree of divorce or an-
nulment, or a court order or court-approved property settlement
incident to any such decree, with respect to which the Office
has been duly notified.
"(e) An employee or Member who is married at the time of retiring
under this subchapter and who makes an election under this section
may, during the 18-month period beginning on the date of retire-
ment, make the election provided for under section 8416(d), subject
to the deposit requirement thereunder.
a? 8421. Annuity supplement
"(a)(I) Subject to paragraph (3), an individual shall, if and while
entitled to an annuity, under subsection (a), (b), (d), or (e) of section
8412, or under section 8414(c), also be entitled to an annuity supple-
ment under this section.
"(2) Subject to paragraph (3), an individual shall, if and while
entitled to an annuity under section 8412(f), or under subsection (a)
or (b) of section 8414, also be entitled to an annuity supplement
under this section if such individual is at least the applicable mini-
mum retirement age under section 8412(h).
"(3)(A) Ara individual whose entitlement to an annuity under sec-
tion 8412 or 8414 does not commence before age 62 is not entitled to
an annuity supplement under this section.
"(B) An individual entitled to an annuity supplement under this
section ceases to be so entitled after the last day of the month pre-
ceding the first month for which such individual would, on proper
application, be entitled to old-age insurance benefits under title II of
the Social Security Act, but not later than the last day of the month
zn which such individual attains age 62.
"(b)(1) The amount of the annuity supplement of an annuitant
under this section for any month shall be equal to the product of?
"(A) an amount determined under paragraph (2), multiplied
by
"(B) a fraction, as described in paragraph (3).
(2) The amount under this paragraph for an annuitant is an
amount equal to the old-age insurance benefit which would be pay-
able to such annuitant under title II of the Social Security Act
(without regard to sections 203, 215(a)(7), and 215(dX5) of such Act)
Upon attaining age 62 and filing application therefor, determined as
if the annuitant had attained such age and filed application there-
or, and 'were. a fully insured individual (as defined in section 2I4(a)
such Act), on January 1 of the year in which such annuitant's
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entitlement to any payment under this section commences, except
that the reduction of such old-age insurance benefit under section
202(q) of such Act shall be the maximum applicable for an individ-
ual born in the same year as the annuitant. In computing the pri-
mary insurance amount under section 215 of such Act for purposes
of this paragraph, the number of elapsed years (referred to in section
215(b)(2)(B)(iii) of such Act and used to compute the number of bene-
? fit computation years) shall not include years beginning with the
? year in which such annuitant's entitlement to any payment under
this section commences, and?
"(A) only basic pay for service performed (if any) shall be
taken into account in computing the total wages and self-em-
ployment income of the? annuitant for a benefit computation
year;
"(B) for a benefit computation year which commences after
the date of the separation with respect to which entitlement to
the annuitant's annuity under this subchapter is based and
before the date as of which such annuitant is treated, under the
preceding sentence, to have attained age 62, the total wages and
self-employment income of such annuitant for such year shall
be deemed to be zero; and
"(C) for a benefit computation year after age 21 which pre-
cedes the separation referred to in subparagraph (B), and
during which the individual did not perform a full year of
service, the total wages and self-employment income of such an-
nuitant for such year shall be deemed to have been an amount
equal to the product of?
"(i) the average total wages of all workers for that year,
multiplied by
"(ii) a fraction? ?
"(I) the numerator of which is the total basic pay of
the individual for service performed in the first year
? thereafter in which such individual performed a full
year of service; and
"(II) the denominator of which is the average total
wages of all workers for the year referred to in sub-
clause (I).
. - . ?
"(3) The fraction under- this paragraph for cz' ny annuitant is a
fraction? . _ ?
"(A) the numerator of which is the annuitant's total years of
service (rounding a fraction to the nearest whole number, with
1/2 being rounded to the next higher number), not to exceed the
number under subparagraph (B); and
"(B) the denominator of which is 40. ;.
"(4) For the purpose of this subsection? - . .7.
. "(A) the term 'benefit computation year' has the meaning pro-
vided in section 215(b)(2)(B)(i) of the Social Security Act;
"(B) the term 'average total wages of all workers; for a year,
means the average of the total wages, as defined and computed
...,under section 2 15(b)(3)(A)(ii)(I) of the Social .Security Act for
such year; and ? ,?.. ?
"(C) the term 'service' does not include. military service. ?
s . P
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."(c) An amount under this section shall, for purposes of section
8467, be treated in the same way as an amount computed under sec-
tion 8415. _ _
" 8421a. Reductions On account of earnings from work performed
while entitled to an annuity supplement
"(a) The amount of the annuity supplement to which an individ-
ual is entitled under section 8421 for any month (determined with-
out regard to subsection (c) of such section) shall be reduced by the
amount of any excess earnings of such individual which are re-
quired to be charged to such supplement for such month, as deter-
mined under subsection (b).
, "(b) The amount of an individual's excess earnings shall be
charged to months as follows:
"(1)(A) There shall be charged to each month of a year under
subsection (a) an amount equal to the individual's excess earn-
ings (as determined under paragraph (2) with respect to such
year),. divided by the number of the individual's supplement en-
titlement months for such year (as determined under paragraph
,"(B) Notwithstanding subparagraph (A), the amount charged
to a month under subsection (a) may not exceed the amount of
the annuity supplement to which the individual is entitled
under section 8421 for such month (determined without regard
to subsection (c) of such section).
"(2) The excess earnings based on which reductions under
subsection (a) shall be made with respect to an individual in a
year? ?
"(A) shall be equal to 50 percent of so much of such indi-
vidual's earnings for the immediately preceding year as ex-
ceeds the applicable exempt amount for such preceding
year; but , -
"(B) may not exceed the total amount of the annuity sup-
plement payments to which such individual was entitled
for such preceding year under section 8421 (determined
without regard to subsection (c) of such section, and with-
out regard to this section). -
"(3)(A) Subject to subparagraph (B), the number of an indi-
vidual's supplement entitlement months for a year shall be 12.
"(B) The number determined under subparagraph (A) shall be
reduced so as not to include any month after which such indi-
vidual ceases to be entitled to an annuity supplement by reason
of section 8421(a)(3)(B), relating to cessation of entitlement upon
' attaining age 62.
"(4)(A) For purposes of this section, and except as provided in
subparagraph (B), the 'earnings' and the 'applicable exempt
amount' of an individual shall be determined in a manner con-
sistent with applicable provisions of section 203 of the Social
Security Act.
"(B) For purposes of this n section?
.
"(i) in determining the excess earnings of any individual,
? only earnings attributable to periods during which such in-
dividual was entitled to an annuity supplement under sec-
tion 8421 shall be considered; and
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"(ii) any earnings attributable to a period before attain-
ing the applicable retirement age under section ,-,412(h)
shall not be considered in determining the excess earnings
,of an individual who retires under section.,841.2(dLor(e), or
, section 8414("- ? ?
."(c) If, after an individual ceases to be entitled to an *annuity sup-
plement under section 8421 by reason of subsection (a)(3)(B) Of such
section, any portion of the individual's excess earnings remains out-
standing, an amount not to exceed 25 percent of the amount other-
wise payable to such individual under this chapter for each month
shall be deducted from such monthly payment until the full amount
of that outstanding portion has been accounted for. To -the 'extent
practicable, :reduction S 'under this subsection shall toe made by a
level percentage.-
- ."(d) The Office shall prescribe regulations under which this sec-
tion shall be applied in the case of a reemployed annuitant.
"? 8422. Deductions from pay; contributions for military service
"(aX1) The employing agency shall deduct and withhold 'from':;
basic pay of each employee and Member a percentage of basic pay
determined in accordance with paragraph (2). -
"(2) The applicable percentage under 'this subsection for any pay
period shall be? -
"(A) in the case of an employee (other than a law enforcement
officer, firefighter, air traffic controller, or Congressional em-
ployee) a percentage equal to-- - ?
"(i) 7 percent, minus -
"(ii) the percentage then in effect under section 3101(a) of
the Internal Revenue Code of 1954 (relating to rate of tax
for old-age, survivors, and disability insurance); and
"(B) in the case of a Member, law enforcement 'officer, fire-
fighter, air traffic controller, or Congressional employee, a per-
centage equal to?
"(i) 71/2 percent, minus
"(ii) the same percentage as would apply in the case of an
employee under subparagraph (A)(ii). ' -
"(b) Each employee or Member is deemed to consent and agree to
the deductions 'under subsection (a). Notwithstanding any law oi-`:
regulation affecting the pay Of an employee or Member, payment less
such deductions is a full and complete discharge and acquittance of
all claims and demands for regular services during the period cov-
ered by the payment, except the right to any benefits under this sub-
chapter, or under subchapter IV or V of this chapter, based on the
service of the employee or Member.
"(c) The amounts deducted and withheld under this section shall
be deposited in the Treasury of the United States to the credit of the
Fund under such procedures as the Comptroller General of the
United States may -prescribe. - -
"(d) Under such regulations as the Office may prescribe, amounts
deducted under subsection (a) shall be entered on individual retire-
ment records. - - s. . - - ? ?
."(e)(1) Each employee or Member who has performed military serv-
ice before the date of the separation on which the entitlement to any
annuity under this subchapter, or subchapter V of this chapter, is
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based may pay, in accordance with such regulations as the Office
shall issue, to the agency by which the employee is emplayed, or, in
the case of a Member or a Congressional employee, to the Secretary
of the Senate or the Clerk of the House of Representatives, as appro-
priate, an amount equal to 3 percent of the amount of the basic pay
paid under section 204 of title 37 to the employee or Member for
each period of military service after December 1956. The amount of
such payments shall be based on such evidence of basic pay for mili-
tary service as the employee or Member may provide, or if the Office
determines sufficient evidence has not been so provided to adequate-
- ly determine basic pay for military service, such payment shall be
based on estimates of such basic pay provided to the Office under
paragraph (4).
"(2) Any deposit made under paragraph (1) more than two years
after the later of?
"(A) January 1, 1987; or
"(B) the date on which the employee or Member making the
deposit first becomes an employee or Member,
- shall include interest on such amount computed and compounded
annually beginning on the date of the expiration of the two-year
period. The interest rate that is applicable in computing interest in
any year under this paragraph shall be equal to the interest rate
that is applicable for such year under section 8334(e).
"(3) Any payment received by an agency, the Secretary of the
Senate, or the Clerk of the House of Representatives under this sub-
section shall be immediately remitted to the Office for deposit in the
Treasury of the United States to the credit of the Fund.
."(4) The Secretary of Defense, the Secretary of Transportation, the
- Secretary of Commerce, or the Secretary of Health and Human Serv-
ices, as appropriate, shall furnish such information to the Office as
,the Office may determine to be necessary for the administration of
this subsection.
"? 8423. Government contributions
"(a)(1) Each employing agency having any employees or Members
ubject to section 8422(a) shall contribute to the Fund an amount
equal to the sum of?
"(A) the product of?
"(i) the normal-cost percentage, as determined for employ-
ees (other than employees covered by subparagraph (B)),
- multiplied by
"(ii) the aggregate amountS of basic pay payable by the
agency, for the period involved, to employees and Members
(under clause (i)) who are within such agency. ---
(2) In determining any normal-cost percentage to be applied
under this subsection, amounts provided for under section 8422
hall be taken into account. - -
"(3) Contributions under this subsection shall be paid? -
"(A) in the' case of law enforcement officers, firefighters, air
traffic controllers, military reserve technicians, and other ern-
ployees, from the appropriation or fund used to pay such law
enforcement officers, firefighters, air traffic controllers, military
reserve technicians, or other employees, respectively;
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- "(B) in the case of elected officials, from an appropriation or
- fund available for payment of other salaries of the same office j
Or establishment; and ? ? .
"(C) in the case of employees of the legislative branch paid by
the Clerk of the House of Representatives, from the contingent
fund of the House.
"(4) A contribution to the Fund under this subsection shall be de-
posited under such procedures as the Comptroller General of the
United States may prescribe.
"(b)(1) The Office shall compute? .. - - ?
"(A) the amount- of the supplemental liability of the Fund
with respect to individuals other than those to whom subpara-
graph (B) relates, and
"(B) the amount of the supplemental liability of the Fund
with respect to current or former employees of the United States
Postal Service (and the Postal Rate Commission) and their sur-
vivors;
as of the close of each fiscal year beginning after September 30,
1987. ? - -
"(2) The amount - of any -supplemental liability computed under
paragraph (1)(A) or (1)(B) shall be amortized in 30 equal annual in-
stallments, with interest computed at the rate used in the most
recent valuation of the System.
-"(3) At the end of each fiscal year, the Office shall notify?
"(A) the Secretary of the Treasury of the amount of the in-
stallment computed under this subsection for such year with re-
spect to individuals under paragraph (1)(A); and
"(B) the Postmaster General of the United States of the
amount of the installment computed under this subsection for
such year with respect to individuals under paragraph (1)(B).
"(4)(A) Before closing the accounts for a fiscal year, the Secretary
of the Treasury shall credit to the Fund, as a Government contribu-
tion, out of any money in the Treasury of the United States not oth-
erwise appropriated, the amount under paragraph (3)(A) for such?
year. -
"(B) Upon receiving notification under paragraph (3)(B), the
United States Postal Service shall pay the amount specified in such
notification to the Fund.
"(5) For the purpose of carrying out paragraph (1) with respect to
any fiscal year, the Office may?
"(A) require the Board of Actuaries of the Civil Service Re-
? tirement System to make actuarial determinations and valu-
ations, make recommendations, and' maintain records in the
same manner as provided in section 8347(1); and
? "(B) use the latest actuarial determinations and valuations
? made by such Board of Actuaries.
"(c) Under regulations prescribed by the Office, the head of an
agency may request reconsideration of any amount determined to be
payable with respect to such agency under subsection (a) or (b). Any
such request shall be referred to the Board of Actuaries of the Civil
Service Retirement System. ?The Board of Actuaries shall review the
computations of the Office and may make any adjustment with re-
spect to any such amount which the Board determines appropriate.
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A determination by the Board of Actuaries under this subsection
shall be final.
"? 8424. Lump-sum benefits; designation of beneficiary; order of
precedence
"(a) Subject to subsection (b), an employee or Member who?
"(1)(A) is separated from the service for at least 31 consecutive
days; or
"(B) is transferred to a position in which the individual is
not subject to this chapter and remains in such a position for at
least 31 consecutive days;
"(2) files an application with the Office for payment of the
lump-sum credit;
"(3) is not reemployed in a position in which the individual is
subject to this chapter at the time of filing the application; and
"(4) will not become eligible to receive an annuity within 31
days after filing the application;
is entitled to be paid the lump-sum credit. Except as provided in sec-
tion 8420a, payment of the lump-sum credit to an employee or
Member voids all annuity rights under this subchapter, and sub-
chapters IV and V of this chapter, based on the service on which
the lump-sum credit is based.
"(b)(1) Payment of the lump-sum credit under subsection (a)?
"(A) may be made only if any current spouse and any former
spouse of the employee or Member are notified of the applica-
tion by the employee or Member; and
"(B) in any case in which there is a former spouse, shall be
subject to the terms of a court decree of divorce, annulment, or
legal separation issued with respect to such former spouse if?
"(i) the decree expressly relates to any portion of the
lump-sum credit involved; and
"(ii) payment of the lump-sum credit would affect any
right or interest of the former spouse with respect to a sur-
vivor annuity under section 8445, or to any portion of an
. annuity under section 8467.
1,"(2)(A) Notification of a spouse or former spouse under this sub-
section shall be made in accordance with such requirements as the
Office shall by regulation prescribe.
"(B) Under the regulations, the Office may provide that para-
graph (1)(A) may be waived with respect to a spouse or former
Siouse if the employee or Member establishes to the satisfaction of
Office that the whereabouts of such spouse or former spouse
cannot be determined.
--?(3) The Office shall prescribe regulations under which this sub-
section shall be applied in any case in which the Office receives two
C! more orders or decrees referred to in paragraph (1)(13)(0. ? -
(c) Under regulations prescribed by the Office, an employee or
Member, or a former employee or Member, may designate one or
more beneficiaries under this section.
(d) Lump-sum benefits authorized by subsections (e) through (g)
,hall be paid to the individual or individuals surviving the employ?
-
e,Vr Member and alive at the date title to the payment arises in the
itowing order of precedence, and the payment bars recovery by any
othfr individual:
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- - ."First, 'to the beneficiary or beneficiaries d esignated by the
employee or Member in a signed and witnessed writing received
in the Office before the death of such employee or Member. For
this purpose, a designation., change, or cancellation of benefici-
ary in a will or other document not so executed and filed has
no force or effect. ?? ?
"Second, if there is no designated beneficiary, to the widow or
widower of the employee or Member.
? "Third, if none of the above, to the child or children of the
employee or Member and descendants Of deceased children by
representation.
".Fourth, if none of the above, to the parents of the employee
or Member or the survivor of them. ' -
"Fifth, if none of the above, to the duly appointed executor or
administrator of the estate of the employee or Member. .- --
"Sixth, if -none of the above, to such other next of kin of the
employee or Member as the Office determines to be entitled
under the laws of the domicile of the employee or Member at
the date of death of the employee or Member. .
For the purpose of this subsection, 'child' includes a natural child
and an adopted child, but does not include a stepchild.
"(e) If an employee or Member, or former employee or Member,
dies?? ? -
"(1) without a survivor, or
"(2) with a survivor or survivors and the right of all survivors
under subchapter IV terminates before a claim for survivor an-
nuity under such subchapter is filed, .
the lump-sum credit shall be paid. - -
--."(f) If all annuity. rights under this chapter (other than under
subchapter III of this chapter) based on the service of a deceased
employee or Member terminate before the total annuity paid equals
the lump-sum credit, the difference shall be paid. ? -
"(g) If an annuitant dies, annuity accrued and unpaid shall be
"(h) Annuity accrued and unpaid on the terininatiOn, except by
death, of the annuity of an annuitant or survivor shall' be paid to
that individual. Annuity accrued and unpaid on the death of a sur-.
vivor shall be paid in the following order of precedence, and the '
payment bars recovery by any other person: I;
. 'First, to the duly appointed executor or administrator of the ,
estate of the survivor.
"Second, if there is no executor or administrator, payment ?
may be made, after 30 days from the date of death of the survi--;-:-
vor, to such next of kin of the survivor as the Office determines'
''to. be entitled under the laws of the domicile of the survivor at '
the date of death. - - ? ? -
"?',1344. Mandatory separation ,.,. ,.-- ,-,,,:,..1.,:.
. . .
"(a) An air traffic controller who is' otherwise eligible for: imihedi-
ate retirement , under section 8412(e) shall be separated from the
service on the last day of the month in Which that air traffic con-'-'
troller, ;becomes 56 years of age or' completes 20 years :of service if
then over that age.- The Secretary, under such regulations as the Sec- I,
retary may prescribe, may exempt a controller having 'exceptional .-
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r,
;2?.---W14.145"
Fe4W1
i-t;1"-ieeeNA
AZ'
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skills-and :experience .as a controller from the automatic separation
provisions of this subsectian until that controller becomes 61 years
of age. ,The Secretary shall notify the controller in writing .of the
date of separation at least 60 days before that date. Action to sepa-
rate' the controller is not effective, without- the consent of the con-
troller, until the last day of the month in which the 60-day notice
, .
,"(b) A lath enforcement officer or firefighter who is otherwise eli-
gible. for immediate retirement under section 8412(d) shall be sepa-
rated from the service on the last day of the month in which that
law enforcement officer or firefighter becomes '55 years of age or
completes 20 years of service if then over that age. If the head of the
agency :Ridges that the public interest so requires, that agency head
may exempt such an employee from automatic separation under this
??,
subsection until that employee becomes 60 years of age. The employ-
ing office shall notify the employee in writing of the date of separa-
tion at least 60 days before that date. Action to separate the employ-
ee Is not effective, without the consent of the employee, until the last
day of the month in Which the 60-day notice expires.
"(c) The President, by Executive order, may exempt an employee
from automatic separation under this section if the President deter-
mines the public interest so requires..
"SUBCHAPTER III?THRIFT SAVINGS PLAN
. .
."? 8431. Definition
".'."Notwithstanding section 8401 of this title, for the purpose of this
subchapter, the term 'basic pay , when used with respect to an em:-
?ployee or Member, means the basic pay of the employee or Member
q. established 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 (including any provision of
law restricting the Use of appropriated funds). '
? 8432 Contributions
i(a) An employee or Member may contribute to the Thrift Savings
Fund in any, pay period, pursuant to an election under subsection
1.0 ), an amount not to exceed 10 percent of such individual's basic
Y for such period. Contributions made under this subsection
uring any 6-month period for which an election period is provided
?..iynder subsection (b)(1) shall be made each pay period during such 6-
.4.....!nonth period pursuant to a program of regular contributions pro-
' ided in regulations prescribed by the Executive Director.
!`(b)(1)(A) The Executive Director shall prescribe regulations under
Aich employees and Members shall be afforded a reasonable period
very 6 months to elect to make contributions under subsection (a),
inodify the amount to be contributed under such subsection, or to
!rininate such contributions. An election to make such contribu-
ps shall remain in effect until modified or terminated. .,
013) The amount to be contributed pursuant to an election under ?
uPPa. ragraph (A) shall be the percentage of bask pay or amount
.ignated by, the employee or Member.
"(2) Under the regulations?,
?
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skills and experience as a controller from the automatic separation
provisions of this subsection until that controller becomes 61 years
of age. The Secretary shall notify the controller in writing of the
date of separation at least 60 days before that date. Action to sepa-
rate the controller is not effective, without the consent of the con-
? troller, until the last day of the month in which the 60-day notice
expires.
"(b) A law enforcement officer or firefighter who is otherwise eli-
gible for immediate retirement under section 8412(d) shall be sepa-
rated from the service on the last day of the month in which that
law enforcement officer or firefighter becomes 55 years of age or
completes 20 years of service if then over that age. If the head of the
agency judges that the public interest so requires, that agency head
may exempt such an employee from automatic separation under this
subsection until that employee becomes 60 years of age. The employ-
ing office shall notify the employee in writing of the date of separa-
tion at least 60 days before that date. Action to separate the employ-
ee is not effective, without the consent of the employee, until the last
day of the month in which the 60-day notice expires.
"(c) The President, by Executive order, may exempt an employee
from automatic separation under this section if the President deter-
mines the public interest so requires.
"SUBCHAPTER III?THRIFT SAVINGS PLAN
"? 8431. Definition
"Notwithstanding section 8401 of this title, for the purpose of this
subchapter, the term 'basic pay; when used with respect to an em-
ployee or Member, means the basic pay of the employee or Member
established 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 (including any provision of
law restricting the use of appropriated funds).
W8432. Contributions
"(a) An employee or Member may contribute to the Thrift Savings
Fund in any pay period, pursuant to an election under subsection
(b)(1), an amount not to exceed 10 percent of such individual's basic
Pay for such period. Contributions made under this subsection
during any 6-month period for which an election period is provided
under subsection (b)(1) shall be made each pay period during such 6-
month period pursuant to a program of regular contributions pro-
vided in regulations prescribed by the Executive Director.
!Th)(1)(A) The Executive Director shall prescribe regulations under
which employees and Members shall be afforded a reasonable period
every 6 months to elect to make contributions under subsection (a),
to modify the amount to be contributed under such subsection, or to
terminate such contributions. An election to make such contribu-
tions shall remain in effect until modified or terminated.
? 03) The amount to be contributed pursuant to an election under
1_,11 bparagraph (A) shall be the percentage of basic pay or amount
ignated by the employee or Member.
(2) Under the regulations?
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. "(A) an employee or Member who has not pi-eviodsly been e.
?? gible to make an election under this subsection shall not become
so eligible until the second period (described in paragraph (1))
. - beginning after the date of commencing service as an employee
? or Member; .
"(B) an employee or Member whose appointment or election to
a position or office in the Federal Government follows a previ-
ous period of service during which that individual met the re-
? quirements of subparagraph (A) shall be eligible to make an
election under this subsection notwithstanding any period of
? separation; ?
? "(C) an employee or Member who elects under subparagraph
(D) to terminate contributions shall not again become eligible to
? make an election under this subsection until the second period
(described in paragraph (1)) commencing after the election to
" terminate; and ,
"(D) an election to terminate may be made under this sub-
? paragraph at any time other than during a period afforded
under paragraph (1). ? ? ?
"(3) Notwithstanding paragraph (2)(A), an employee or Member
who elects to become subject to this chapter under section 301 of the
Federal Employees' Retirement System Act of 1986 may make the
first election for the purpose of subsection (a) during the period pre-
scribed for such purpose by the Executive Director. The period pre-
scribed by the Executive Director shall commence on the date on
which the employee or Member makes the .election to become subject
to this chapter.
"(c)(1) At the end of the pay period that includes the first date on
which an employee or Member may make contributions under sub-
section (a) (without regard to whether the employee or Member has
elected to make such contributions during such pay period), and at
the end of each succeeding pay period, the employing agency shall
contribute to the Thrift Savings Fund for the benefit of such ern-
ployee or Member the amount equal to 1 percent of the basic pay of
such employee or Member for such pay period. -
"(2)(A) In addition to contributions made under paragraph (1), the
employing agency of an employee or Member who contributes to the
Thrift Savings Fund under subsection (a) for any pay period shall
make a contribution to the Thrift Savings Fund for the benefit of
such employee or Member. The employing agency's contribution
shall be made at the end of such pay period. ? '? - ? .; -
"(B) The amount contributed under subparagraph (A) by an em-
ploying agency _with respect to a contribution of an employee or
Member during any pay period shall be the amount equal to the
`.`(i) such portion ? of the total amount of thefemployee's or
- Member's contribution as does not exceed 3 percent of such ern-
ployee's or Member's basic pay for such period; and ?-, -",
"(ii) one-half of such portion of the amount of the employee's
?? or Member's contribution as exceeds 3 percent; but does not
? exceed 5 percent, of such employee's or Member's basic pay for
? such pay period. ? - -;?????,%=:!, e;., ?
??
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"(3)(A) There shall be contributed to the Thrift Savings Fund on
behalf of each employee or Member described in subparagraph (B)
the amount determined under subparagraph (C).
"(B) An employee or Member referred to in subparagraph (A) is an
employee or Member who= ,
"(i) is an employee or Member on January I, 1987;
"(ii) has creditable service described in section 8411(b)(2) of
this title; and
."(iii) has not received a refund of the amount of the retire-
ment deductions Made with respectto such service under section
? - 204 Of the Federal Employees' Retirement Contribution Tempo-
? rary Adjustment Act of 1983. . . .
"(C) The amount referred to in subparagraph (A) in the 'ease of an
employee or Member is equal to the sum of? . . .
. "(i) 1 percent of the total basic pay paid to such employee or
Member for service described in section 8411(6)(2) of this title;
. "(ii) interest on Such amount Computed with respect to such
service in the manner provided in paragraphs (2) and (3) of sec-
tion 8334(e) of this title. .
"(D) The Secretary of the Treasury shall credit to the Thrift Sav-
ings Fund, out of any sums in the Treasury not otherwise appropri-
? ated, the amounts determined by the Director to be necessary to
? carry out this paragraph.
"(d) Notwithstanding any other provision of this section, no con-
? tribution may be made under this section for any year to the extent
that such contribution, when added to prior contributions for such
year, exceeds any limitation under section 415 of the Internal Reve-
. .nue Code of 1954.... - ? , --
,fYe) The sums required to. be contributed to the Thrift Savings
Fund by an employing agency under subsection (c) for the benefit of
:..an employee or Member shall be paid from the appropriation or
'? fund available to such agency for payment of salaries of the employ-
ee's or Member's office or establishment. When . an employee or
Member in the legislative branch is paid by the Clerk of the House
pf Representatives, the Clerk, may pay from the contingent fund of
the House of Representatives the contribution that otherwise would
? contributed_ from the appropriation or fund used to Pay the em-
ployee Or Member. . ,
"(t) Amounts contributed by an employee or. Member under subsec-
lion (a) and amounts contributed with respect to such employee or
Member under subsection (c) shall be deposited in the Thrift Say-
pigs Fund to the credit of that employee's or Member's account in
;accordance with such procedures as the Comptroller General of the
'United States may, in consultation with the Executive Director, pre-
: ?
-.scribe in regulations. ?.?
`(g)(1) Except as provided in paragraphs (2) and (3), all contribu-
k?tions made Under this section shall be fully nOnforfeitable .when
rrZade
,