COMMITTEE PRINT OF S. 1527 AS REVISED FOR COMMITTEE CONSIDERATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89-00066R000200020023-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 149
• Document Creation Date: December 22, 2016
• Document Release Date: May 18, 2010
• Sequence Number: 23
• Content Type: REGULATION

i ~ ~
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1 COKKITTEE PRIAT OF S. 1527 11S REYISED FOR COIiKITTEE
2 CONSIDERkTION
3 That this 7~ct rtay be cited as the "Federal Retirement Refcrm
4 act of 19 85 ".
5 PURPOSES
6 Sec. 2. The purpcses of this act are--
7 (~) to pcovide Federal employees With a retirement
8 benefits plan tahich is comparable to good private sector
9 retirement benefits plans;
10 (2) to assist in building a quality career Work force
11 in the Federal Gcvernment;
12 (3) to promote financial stability and flexibility
13 for the future of each Federal employee;
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~1
(4) to ensure
a fully
funded and financially sound
2
Federal Government retirement benefits plan;
3
(5) to enhance portability of cetirem2nt assets
4
between Federal fobs and jobs outside the Federal
5
Government;
6
(6) to increase the options of each Federal employee
7
with respect to retirement benefits plans;
8
(7) to encourage Federal employees to increase
9
personal savings for retirement;
10
(8) to include Federal employees in the investment
11
decisionmaking process with respect to the assets of the
12
retirement system; and
13
(9) to extend financial protection from disability to
14
additional Federal employees and to increase such
15
protection for eligible Federal employees.
16
TITLE I--FEDERAL RETIREMENT SYSTEM
17
ESTABLISHMENT
18
Sec. 101. (a) Title 5, United States Code, is amended by
19
inserting after chapter 83 the following new chapter:
20
" CHAPTER 84--FEDERAL RETIREMENT SYSTEM
"Sec.
"8401. Definitions.
" 8402. Federal Retirement System; participation.
" 8403. Relationship to the Social Security Act.
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"8412.
" 8413.
"8414.
"8415.
"8416.
8417.
"8418.
"8419.
"8429.
"8421.
?`8422.
" 8423.
"8424.
"8426.
?`8427.
" 8428.
Entitlement to defected retirement.
Computation of annuity.
Reduction for early retirement.
Reduction for survivor annuities.
Methods of payments.
Level benefits option.
Contributions.
Funding of annuity attributable to military service.
Lump-sum benefits; designation of beneficiaries;
order of precedence.
" SUBCHAPTER III--THRIFT SAYINGS PLAN
Contributions.
Vesting.
Entitlement and elections relatinq.to entitlement.
Annuities: methods of payment; election; and
computation.
Administrative provisions relating to payments and
elections.
Thrift Savings Fund.
Investment of Thrift Savings Fund.
Accounting.
" SUBCHAPTER IY=-SURVIVOR BENEFITS
" 8433.
"8434.
"8437.
"8438.
Basic plan spousal benefits relating to the death of
a participant or former participant other than an
annuitant.
Basic plan spousal and insurable interest benefits
relating to the death of an annuitant.
Survivor benefits under the thrift savings plan.
Basic and thrift savings plan survivor benefits
relating to marriage after commencement of an
annuity.
Survivor benefits for former spouses: entitlements;
amount.
Survivor benefits for former spouses: elections,
deposits and collections, and administrative
provisions.
Termination of entitlement.
Deposits to the Fund.
" SUBCHAPTER V--DISABILITY BENEFITS
8 44 1 .
Definitions.
" 8442.
Entitlement.
" 84u3.
Computation
of benefits.
" 8444.
Application.
" 8445.
Medical examinations.
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" 8u46. Offers of alternative employment.
" 8u47. Recovery oc restoration of earning capacity.
?'8448. Relationship to corkers' compensation.
" 8449. Kilitary cesecve technicians.
" 845 E+. Administrative provisions.
" 8451. Annual accounting; special contingency cesecve.
" 8452. Federal Employees' Disability Insurance Fund.
" SUBCHAPTER YI--GENERAL AND ADliINISTRATIYE PROYISIONS
''8461. Authority of the Office of Personnel flanagement.
" 8462. Cost-of-living adjustment in basic plan annuities and
survivor annuities.
" 8463. Rate of benefits.
" 8464. Commencement and termination of annuities.
" 8465. Waiver, allotment, and assignment of benefits.
" 8466. Application for benefits.
" 8u67. Court orders.
" 8468. Annuities and pay on reemployment.
" 8469. Information.
" SUBCHAPTER VII--TRANSITION PROVISIONS
" 8471. Treatment of certain individuals subject to the ~ivil
Secvice~Reticement and Disability System.
" 8472. Special rules for participants retaining entitlement
in the Civil Service 8eticement and Disability
System.
" 8473. Participants subject to the Federal Employee;'
Retirement Contribution Temporary Adjustment Act of
1983.
" 8474. Reemployed annuitants under a Government retirement
system.
" 8u75. Exemption from certain offset provisions of the
Social Security Act.
" 8476. Regulations.
" SUBCHAPTER YIII--FEDERAL RETIREMENT THRIFT INYESTIiENT
MANAGEMENT SYSTEM
" 8491. Federal Retirement Thrift Investment Board.
" 8492. Federal Retirement Thrift Advisory Committee.
" 8493. Employee Advisory Committee.
" 8u94. Executive Director.
" 8495. Investment policy.
" 8496. Administrative provisions.
" 8497. Fiduciary responsibilities; liability and penalty.
" 8498. Bonding.
" 6499. Exculpatory provisions; insurance.
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1
" SUBCHAPTER I--DEFINITIONS; FEDERAL RETIREMENT SYSTEM
2 " S
8401. Definitions
3
" Except as otherwise provided in this chapter, for the
u purposes of this chapter--
5 " (1) the term 'account', when used with respect to a
6 participant oc annuitant, means an account established
7 and maintained under section 8428(a) of this title;
8 " (2) the term 'annuitant' means a former participant
9 who is entitled to an annuity under this chapter and Who
10 has applied under this chapter for the payment of the
11 annuity to commence;
12 " (3) the term `average pay', when used with respect
13 to a participant, means the largest annual rate resulting
14 from averaging the participant's rates of basic pay in
15 effect over any 5 consecutive years of creditable service
16 or, in the case of an annuity under this chapter based on
17 service of less than 5 years, over the total service,
18 with each rate weighted by the period it Was in effect;
19 " (4) the term 'basic pay', when used with respect to
20 a participant--
21 " (A) means the lesser of--
22 " (i) the basic pay of the participant
23 established pursuant to law, without regard to
24 any provision of law (except sections 5308 and
25 5382(b) of this title) limiting the Cate of pay
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1 actually payable in any pay period (including any
2 provision of law restricting the use of
3 appropriated funds); oc
4 " (li) the rate of .basic pay payable for
5 level I of the Executive Schedule; and
6 " (B) includes the items described in
7 subparagraphs (A) through (D) of paragraph (3) of
8 section 8331 of this title and does not include the
9 items excluded by such paragraph;
10 " (5) the term 'Board' means the Federal Retirement
11 Thrift Investment Board established by section 8491(a) of
12 this title;
13 " (6) the term 'Civil Service Retirement and
14 Disability Fund' means the Civil Service Retirement and
15 Disability Fund referred to in section 8348 of this
16 title;
17 " (7) the teem 'court', when used with respect to a
18 judgment, decree, order, or other judicial action, means
19 any court of the United States, a State, the District of
20 Columbia, the Commonwealth of Puerto Rico, oc a territory
21 or possession of the United States, or any Indian court,
22 having jurisdiction to issue such judgment, decc2e, oc
23 order or to take such other judicial action;
24 " (8) the term 'Director' means the Director of the
25 Office of Personnel Management;
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1 ?`(9) the term `dynamic assumptions' means economic
2 assumptions that are used in determining actuarial costs
3 and liabilities of a retirement system and in
v anticipating the effects of long-term future--
5 " (A) investment yields,
6 " (B) increases in rates of basic pay, and
~ ?`(C) rates of price inflation;
g " (10) the term 'earnings', when used with respect to
9 the Thrift Savings Fund, means the amount of the gain
10 experienced oc yield received from the investment of sums
11 in such fund;
12 " (11) the term 'eligible former spouse', when used
13 with respect to a participant or former participant,
14 means a former spouse of the participant oc former
15 participant who was married to the participant oc former
16 participant for at least 9 months;
17 " (12) the term `employee' means--
18 " (A) each individual referred to in
19 subparagraphs (A), (E), (F), (H), (I), and (J) of
20 section 8331(1) of this title, including an employee
21 of the United States Pack Police and an employee of
22 the United States Secret Service; and
23 ?`(B) a Congressional employee as defined in
24 section 2107 of this title, including a temporary
25 Congressional employee;
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1 any of whose employment by the Government after Dec~mbec
2 31, 1983, is employment for the purposes of title II of
3 the Social Security Act and chanter 21 of the Intec~al
4 Revenue Code of 1954, except that such term does not
5 include any individual referred to in clause (i), (11),
6 (v), (vi), or (ix) of paragraph (1) of section 8331 of
7 this title or in the undesignated material after clause
8 (ix) of such paragraph, any individual excluded under
9 section 8402(b)(2) of this title, or any individual who
10 was subject to subchapter III of chapter 33 of this title
11 on December 31, 1983, and has not commenced participation
12 in the System pursuant to section 8471 of this title;
13 " (13) the term 'Employee Advisory Committee' means
14 the Employee Advisory Committee established in accordance
15 with section 8493 of this title;
16 " (14) the term 'Executive Director' means the
17 Executive Director appointed under section 8494(x)(1) of
18 this title;
19 " (15) the term ' firefighter' means--
20 (A.) an employee the duties of whose position--
21 " (i) are primarily to perform work directly
22 connected with the control and extinguishment of
23 fires; and
24 " (ii) are sufficiently rigorous that
25 employment opportunities are required to be
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1 limited to young and physically vigorous
2 individuals, as determined by the Director
3 considering the recommendation of the employing
v agency; and
5 " (B) an employee who is transferred directly to
6 a supervisory or administrative position after
7 performing duties described in subparagraph (A) of
8 this paragraph for at least 10 years;
g " (16) the term `Fund' means the Civil Service
10 Retirement and Disabilit? Fund;
11 " (17) the term 'Government' means the Federal
12 Government and Gallaudet College;
13 " (18) the term `law enforcement officer' means--
" (A) an employee, the duties of whose position--
" (i) are primarily (I) the investigation,
apprehension, or detention of individuals
suspected oc convicted of offenses against the
criminal laws of the United States, oc (II) the
protection of officials of the United States
against threats to personal safety; and
" (11) ace sufficiently rigorous that
employment opportunities ace requited to be
limited to young and physically vigorous
24 individuals, as determined by the Director
25 considering the recommendation of the employing
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1 agency; and
2 " (B) an employee who is transferred directly to
3 a supervisory oc administrative position after
4 performing duties described in subparagraph (A) of
5 this paragraph for at least 10 years;
6 " (19) the term 'loss', when used with respect to the
7 Thrift Savings Fund, means the amount of the loss
e experienced from the investment of sums in such fund;
9 " (20) the term 'lump-sum credit' has th= same
10 meaning as provided by section 8331(8) of this title;
11 " (21) the teem 'tiember' has the same meaning as
12 provided in section 2106 of this title, except that such
13 term does not include a person who (A) was a !(ember of
14 Congress on December 31, 1983, and (B) has not commenced
15 participation in the System pursuant to section 8471 of
16 this title;
17 " (22) the term 'military reserve technician' means a
18 member of one of the reserve components of the Armed
19 Forces specified in section 261(a) of title 10 who--
20 " (A) is assigned to a civilian position as a
21 technician in the administration and training of such
22 reserve components or in the maintenance and repair
23 of supplies issued to such reserve components; 3n3
24 " (B) as a condition of employment in such
25 position, is required to be a member of one of such
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1 reserve components serving in a specified military
2 grade;
3 " (23) the term 'net eacnings' means the excess of
u earnings over losses;
5 " (2u) the term `net losses' means the excess of
6 losses over eacnings;
7 " (25) the teen 'normal cost' means the entry-age
8 normal cost of the provisions of the System which relate
9 to the Fund, computed by the Office in accordance with
10 generally accepted actuarial practice and standards
11 (using dynamic assumptions) and expressed as a level
12 percentage of aggregate basic pay;
13 " (26) the term 'Office' means the Office of
1u Personnel Management;
15 " (27) the term 'participant' means an employee or
16 Member or a person who is receiving disability benefits
17 under subchapter Y of this chapter;
18 " (28) the term 'price index' has the same meaning as
19 provided in section 8331(15) of this title;
20 " (29) the term 'service', when used with respect to
21 a participant oc former participant, means--
22 " (~) employment as a participant after December
23 31, 1986;
2u " (B) se;vic2 which is creditable under section
25 8u73 of this title;
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1 " (C) subject to section 8u19(a) of this title,
2 military service as provided in section 8332(c) of
3 this title;
4 " (D) service that is creditable under subchapter
5 III of chapter 83 of this title, but only for the
6 purposes provided in section 8u72(a) of this title;
7 and
8 " (E) leaves of absence commencing after December
9 31, 1986, under the same conditions and subject to
10 the same limitations as ace prescribed in section
11 8332(f) of this title; and
12 is computed as the full years and twelfth pacts thereof,
13 excluding from the aggregate the fractional part of a
14 month, if any;
15 " (30 ) the term 'supplemental liability' means the
16 estimated excess of--
17 " (A) the actuarial present value of all future
18 benefits payable from the Fund under this chapter,
19 over
(B ) the su:n of--
" (i) the actuarial present value of the
future contributions to be made on behalf of
participants pursuant to section 8u18(a) of this
title; and
" (ii) the balance in the Fund attcibut3ble
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to the System on the date the supplemental
liability is detecmined;.and '
3 " (31) the teen 'System' means the Federal Retirement
4 System described in section 8402(a) of this title.
5 " S 8402. Federal Retirement System; participation
6 " (a) The provisions of this chapter comprise the Federal
7 Retirement System.
8 " (b)(1) Except as provided in paragraph (2) of this
9 subsection, each employee and riember shall be a participant
10 in the System.
11 " (2)(A) The Office :nay exclude from the operation of
12 this chapter an employee or group of employees in or under an
13 Executive agency whose employment is temporary oc
14 intermittent, except an employee whose employment is part-
15 time career employment (as defined in section 3401(2) of this
16 title) .
17 " (B) The Architect of the Capitol may exclude from the
i8 operation of this chapter an employee under the Office of the
19 Architect of the-Capitol whose employment is temporary oc of
20 uncertain duration.
21 " (C) The Librarian of Congress may exclude from the
22 operation of this chapter an employee under the Library of
23 Congress whose employment is temporary oc of uncertain
2u duration.
25 " S 8403. Relationship to the Social Security Act
--
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1 " Except as otherwise provided in this chapter, the
2 benefits payable under the System are in addition to the
3 benefits payable under the Social Security Act.
4 "SUBCHAPTER II--BASIC PLAN
5 " S 8411. Entitlement to immediate retirement
6 " (a) An employee or a bembec who is sepacat~d from
7 Government employment after becoming 55 years of age and
8 completing 10 years of service is entitled to an immediate
9 annuity.
10 " (b) An employee cc a !!ember who is separated from
11 Government employment after becoming 62 years of age and
12 completing 5 years of service is entitled to an immediate
13 annuity.
14 " (c) An employee who is separated from ~ovecnment
15 employment--
16 " (1) after becoming 50 years of age and completing
17 20 years of service as a law enforcement officer oc
18 firefighter, or any combination of such service totaling
19 at least 20 years, or
20 " (2) after completing 25 years of service as a law
21 enforcement officer or firefighter, oc any combination of
22 such service totaling at least 25 years,
23 is entitled to an immediate annuity. The pcovisicns ~f
24 section 8335(b) of this title, relating to mandatory
25 separation, shall apply to a participant who is 3 law
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1 enforcement officer or a firefighter.
2 " (d) An employee who is separated from Government
3 employment--
4 " (1) after becoming 50 years of age and completing
5 20 years of service as an air traffic controller, oc
6 " (2) after completing 25 years as an air traffic
7 controller,
8 is entitled to an immediate annuity. The provisions of
9 section 8335(a) of this title, relating to mandatory
10 separation, shall apply to a participant who is an air
11 traffic controller.
12 " (e)(t) Except as provided in paragraphs (2) and (3) of
13 this subsection, any employee who has completed 25 years of
14 service, or is not less than 50 years of age and has
15 completed 20 years of service, and who--
16 " (A) is separated from Government employment
17 involuntarily, except by removal for cause on charges of
18 misconduct or delinquency, or
19 " (B) while serving in a geographic area designated
20 by the Director, is voluntarily separated from Govecn;nent
21 employment during a period that (as determin=d by the
22 Di~ecto~)--
23 " (i) the agency in which the employee is serving
2u is undergoing a major reorganization, a major
25 reduction in force, or a major transfer of function,
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1 and
2 " (ii) a significant percentage of the total
3 number of employees serving in such agency will be
4 separated or subject to an immediate reduction in the
5 rate of basic pay (without regard to subchapter vI of
6 chapter 53 of this title or comparable provisions),
7 is entitled to an immediate annuity.
8 " (2) An employee described in paragraph (1)(A) of this
9 subsection is not entitled to an annuity under this
10 subsection if the employee has declined a seasonable offer of
11 another position in the employee's agency for which the
12 employee is qualified and the offered position is not lower
13 than 2 grades or pay levels below the employee's grade or pay
14 level and is within the employee's commuting area.
15 " (3) Paragraph (2) of this subsection shall not apply to
16 a firefighter, law enforcement officer, oc air traffic
17 controller.
18 " (f) An annuity authorized by this section is computed
19 under sections 8413 through 8415 of this title.
20 " S 8412. Entitlement to deferred retirement
21 " (a> A participant who is under 55 years of age and
22 separates from Government employment after completing 10
23 years of service is entitled to an annuity to commence on or
24 after the date the participant becomes 55 years of age but
25 not later than the date the participant becomes 62 years of
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1 age, as elected by the participant under rules presccib~d by
2 the Office.
3 " (b) A participant who is under 62 years of age and
4 separates from Government employment after completing 5 years
5 of service and before completing t0 years of service is
6 entitled to an annuity to commence on the date the
7 participant becomes 62 years of age.
8 " (c) An annuity authorized by this section is computed
9 under sections 8413 through 8415 of this title.
10 " S 8413. Computation of annuity
11 " (a)(1) Except as provided in section 8414 oc 8415 of
12 this title--
13 " (A) if an annuitant has not elected to make a
14 contribution under section 8418(c) of this title, the
15 amount of the annuity the annuitant is entitled to
16 receive under this subchapter shall be equal to--
17 " (i) 0.9 percent of the annuitant's average pay
18 multiplied by so much of the annuitant's total
19 service as does not exceed 15 years; and
20 " (ii) 1.1 percent of the annuitant's average pay
21 multiplied by so much of the annuitant's total
22 service as exceeds 15 years; oc
23 " (B> if an annuitant has elected to make a
24 contribution under section 8418(c) of this title, the
25 amount of the annuity the annuitant is entitled to
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1 receive under this subchapter shall be equal to--
2 " (i) 1.1 percent of the annuitant's average pay
3 multiplied by ;o much of the annuitant's total
4 service as does not exceed 10 years; and
5 " (ii) 1.35 percent of the annuitant's average
6 pay multiplied by so much of the annuitant's total
7 service as exceeds 10 years.
8 " (2) Foc the purposes of computing the amount of an
9 annuity under paragraph (1) of this subsection, the total
10 service of a participant who separates from Government
11 employment entitled to an immediate annuity oc Who dies
12 leaving a survivor or survivors entitled to a survivor
13 annuity under this chapter includes days of unused sick leave
14 credited to the participant under a formal leave system to
15 the same extent that unused sick leave is credited in
16 computing an annuity of a person who is subject to subchapter
17 ZII of chapter 83 of this title, as provided in section
18 8339(m) of this title.
19 " (b)(1) A former participant who is entitled to receive
20 an annuity under subsection (c) oc (d) of section 8411 of
21 this title shall also be entitled to receive an annuity
22 supplement, in addition to the amount of the annuity computed
23 under subsection (a) of this section, while the former
24 participant is under 62 years of age.
25 " (2) The amount of the annuity supplement payable to a
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1 former participant under paragraph (1) of this subsection
2 shall be equal to the estimated amount of the benefits that--
3 " (A) the former participant would be entitled t~
4 receive under title II of the Social Security Act if the
5 participant were 62 years of age on the date the. annuity
6 referred to in such paragraph commences; and
7 " (B) is attributable to service referred to in
8 section 8411(c) or 8411(d> of this title, as the case :nay
9 be,
10 computed on the date such annuity commences and increased as
11 provided in paragraph (3) of this subsection.
12 " (3) Effective on January 1 of each year, the amount of
13 the annuity supplement payable to a former participant under
14 this subsection shall be increased by the percentage
15 increase, if any, in the SSA average wage index (as defined
15 in section 215(i)(1)(G) of the Social Security A~t) published
17 for November of the immediately preceding year over such
18 index published for November of the year ending immediately
19 before such preceding year.
20 " (c) In computing under this section the annuity of an
21 individual who has performed service on less than a full-time
22 basis, such service shall be credited on a proportional basis
23 equal to the fraction that such service is of full-time
24 service, and the annual Cate of basic pay that would be
25 payable for full-time service in the position shall be deemed
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1 to be the~rate of basic pay.
2 " S 841u. Reduction for early retirement
3 " (a) Except as provided in subsection (b), the annuity
4 computed under section 8413(a) of this title (without regard
5 to this section or section 8u15 of this title)--
6 " (1) for an annuitant, other than an annuitant
7 referred to in paragraph (2> or (3) of this section, who
8 is under 62 years of age on the date on which the
9 annuitant's annuity ~ommences shall be reduced by one-
10 sixth of 1 percent for each full month that the annuitant
11 is under such age on such date;
12 " (2> for an annuitant, other than an annuitant
13 entitled to an immediate annuity under section 8411(e) of
14 this title and an annuitant referred to in parag=aph (3)
15 of this subsection, who is at least 55 years of age and
16 is under 62 years of age on the date on which the
17 annuitant's annuity commences and has not completed 30
18 years of sec vice shall be reduced by five-twelfths of 1
19 percent for each full month that the annuitant is under
20 62 years of age on such date; and
21 " (3) for an annuitant who separated from Government
22 employment as a military reserve technician and is under
23 55 years of age on the date on which the annuitant's
2u annuity commences shall be reduced by one-sixth of 1
25 percent for each full month that the annuitant is under
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1 such age on such date.
2 " (b) Subsection (a> of this section shall not apply in
3 the case of an annuitant who has elected to make
4 contributions under section 8418(c) of this title, is at
5 least 55 years of age on the date on which the annuitant's
6 annuity commences, and has completed 30 years of service.
7 " S 8415. Reduction for survivor annuities
8 " (a) The annuity of an annuitant computed under section
9 8413 of this title and, if -appropriate, under section 8414 of
18 this title shall be reduced by 12 percent for each survivor
11 annuity which is expected to be payable out of the Fund with
12 respect to the annuitant under this chapter.
13 " (b) A seduction in the annuity of an annuitant pursuant
14 to subsection (a) of this section shall be adjusted, as
15 appropriate to carry out such subsection, to reflect any
16 change in circumstances relating to entitlement to a survivor
17 annuity, including any election made pursuant to section
18 8434(a), 8436(b), or 8436(c) of this title.
19 " S 8416. Methods of Payment
20 " (a)(1) The Office shall prescribe methods of payment of
21 annuities under this subchapter.
22 " (2) The methods of payment prescribed under paragraph
23 (1> of this subsection shall include, but not be limited to--
24 " (A) a method which provides for the payment of a
25 monthly annuity only to an annuitant during the life of
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1 the annuitant;
2 " (B) a method which provides for the payment of a
3 monthly annuity to an annuitant and a monthly survivor
4 annuity equal to 50 percent of the annuitant's annuity on
5 the date of the annuitant's death (computed without
6 regard to an election under section 8417(a) of this
7 title) to the annuitant's surviving spouse, if any; and
8 " (C> a method which provides for the payment of a
9 monthly annuity to an annuitant and a monthly survivor
10 annuity equal to 50 percent of the annuitant's annuity on
11 the date of the annuitant's death (computed without
12 regard to an election under section 8417(a) of this
13 title) to an individual who is designated by the
14 annuitant and who has an insurable interest in the
15 annuitant.
16 " (b)(1) Subject to paragraphs (2) and (3) of this
17 subsection--
18 " (A) under such regulations as the Office shall
19 prescribe, a participant or former participant who is
20 applying for an annuity under this subchapter to commence
21 shall elect one of the methods of payment prescribed by
22 the Office under subsection (a) of this section; and
23 " (B) the annuity of an annuitant under this
24 subchapter shall be paid in accordance with the method of
25 payment elected by the annuitant pursuant to subparagraph
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1 (A) of this paragraph..
2 " (2>(A) A participant or former participant Who is
3 married on the date on which the participant or former
u participant applies for an annuity under this subchapter to
5 cormence may elect a method of payment other than the method
6 described in subsection (a)(2)(B) of this section only if the
7 participant or former participant and the spouse of the
8 participant or former participant jointly waive a survivor
9 annuity under the method described in such subsection
10 (a)(2)(B).
11 " (B) A waiver shall not be effective for the purpose of
12 subparagraph (A> of this paragraph unless the waiver is made
13 in writing, is notarized, and is filed with the 3ffice on or
1u before the date the annuity to which the waiver relates
15 commences.
16 " (C) A waiver made in accordance with this paragraph
17 shall be irrevocable.
18 " (3) In the case of an annuitant who is subject to
19 paragraph (2>(A) of this subsection and fails to make an
20 election under paragraph (1) of this subsection, an annuity
21 and survivor annuity shall be paid under the method of
22 payment described in subsection (a)(2)(B) of this section.
23 " (4) A participant or former participant may elect the
24 method prescribed under subsection (a)(2)(C) of this section
25 only if the participant oc former participant is in good
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1 health on the date'the election is made, as~determin~d by the
2 Office.
3 " S 8417. Level benefits option
4 " (a) Under regulations prescribed by the Office, an
5 annuity payable under this subchapter to a participant Who is
6 separating from Government employment entitled to an
7 immediate annuity under subsection (a) of section 8411 of
8 this title and is less than 62 years of age may be adjusted
9 as provided in subsection (b) of this section, if elected by
1B the participant on oc before the date of separation.
11 " (b)(1) Subject to paragraph (2) of this subsection, an
12 annuity payable under this subchapter to an annuitant Who has
13 made an election authorized by subsection (a> of this section
14 may be increased during the period the annuitant is not less
15 than 55 years of age and is less than 62 years of age and may
16 be reduced on and after the date the annuitant is not less
17 than 62 years of age as appropriate to provide the annuitant
18 an annuity under this subchapter, during each month of such
19 period, in an amount Which (as nearly as is practicable to
20 determine) equals the total amount of the monthly benefits
21 payable to the annuitant under this subchapter and section
22 202(a) of the Social Security Act of ter such date.
23 " (2) The actuarial present value of the benefits
24 expected to be paid under this subchapter to the annuitant as
25 provided in paragraph (1) of this subsection may not exceed
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1 the actuarial present value of the benefits that would be
2 expected to be paid under this subchapter to such participant
3 if the adjustments authorized by such paragraph were not
4 made, as determined under regulations prescribed by the
5 Office.
6 " 4 8418. Contributions
7 " (a)(1) Each agency of the Government employing a
8 participant shall contribute to the Fund an amount equal to
9 the sum of--
10 " (A) the normal cost, as determined by the Office,
11 of (i) each participant who is employed by the agency,
12 and (li) each disabled participant who is entitled to
13 benefits under section 8442(a) of this title and was
14 employed by the agency on the date the participant became
15 disabled (computed using average pay as increased in
16 accordance with section 8441(6) of this title); and
17 " (B> the normal cost, as determined by the Office,
18 of the annuity supplement under section 8413(b) of this
19 title for each law enforcement officer, firefighter, and
20 air traffic controller who is employed by the agency.
21 In computing normal cost, the Office shall not take into
22 account normal cost attributable to credit for military
23 service provided in section 8419 of this title.
24 " (2) The contribution required by paragraph (1) of this
25 subsection to be made by an agency shall be made from the
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1 appropriation or fund used to pay the agency's pacti~ipants,
2 or, in the case of an elected participant, from an
3 appropriation oc fund available for payment of other salaries
4 of the office or establishment of the participant. In the
5 case of a participant in the legislative branch who is paid
6 by the Clerk of the House of $epresentatives, contributions
7 for the benefit of such participant shall be paid from the
8 contingent fund of the House of Representatives.
9 " (b)(1) The Office shall compute--
10 " (A) the amount of the supplemental liability of the
11 F and relating to participants and annuitants other than
12 participants and annuitants referred to in subparagraph
13 (B) of this pacagraph, and
14 ??(B) the amount of the supplemental liability of the
15 Fund relating to participants and annuitants who are
16 active oc retired officers or employees of the United
17 States Postal Service,
18 as of the close of each fiscal year beginning after September
19 30, 1987.
20 " (2) The amounts of any supplemental liability--
21 ?`(A> computed pursuant to pacagraph (1)(A) of this
22 subsection with respect to participants and annuitants
23 referred to in such paragraph (1)(A) of this subsection,
24 and
25 `.`(B) computed pursuant to pacagraph (1)(B) of this
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1 subsection with respect to participants and annuitants
2 referred to in such paragraph (1)(B),
3 shall each be amortized in thirty annual installments.
v " (3) At the end of each fiscal year, the Office shall
5 notify--
6 " (A) the Secretary of the Treasury of the amount of
7 the annual installment computed under paragraph (2)(A) of
e this subsection for such fiscal year, and
9 " (B) the Postmaster General of the United States of
18 the amount of the annual installment computed pursuant to
11 paragraph (2)(B) of this subsection for such fiscal year.
12 " (4)(A) Before closing the accounts for a fiscal year,
13 the Secretary of the Treasury shall credit the amount of the
14 annual installment computed for such fiscal year pursuant to
15 paragraph (2)(A) to the Fund, as a Government contribution,
16 out of any money in the Treasury of the United States not
17 otherwise appropriated.
18 " (B) Upon receiving a notice required by pacagcaph
19 (3)(B) of this subsection, the United States Postal Service
20 shall pay to the Fund the amount of the annual installment
21 specified in the notice.
22 " (5) For the purpose of carrying out pacagcaph (1) of
23 this subsection with respect to any fiscal year, the Office
2u may--
25 " (A) require the Board of Actuaries of the ~ivil
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1 Service Retirement System to make actuarial
2 determinations and valuations, make recommendations, and
3 maintain records in the same manner as provided in
4 section 8347 (f) of this title; and
5 " (B) may use the latest actuarial detec!ninations and
6 valuations made by such Board of Actuaries.
7 " (c)(1) Under regulations prescribed by the Office, a
8 participant may elect to contribute to the Fund under this
9 subsection. An election under this paragraph may be :Wade Daly
10 within 60 days after the date the participant first becomes a
11 participant and shall be irrevocable.
12 " (2)(A) Each agency of the Government employing a
13 participant who elects under paragraph (1) of this subsection
14 to contribute to the Fund shall deduct and withhold 1.3
15 percent of the basic pay of the participant.
16 " (B) Under regulations prescribed by the Office, 1.3
17 percent of the amount of the disability benefits payable
18 under section 8442(a)(1) of this title to a participant who
19 elects under paragraph (1) to contribute to the Fund shall be
20 deducted and withheld from such amount.
21 " (3) Amounts deducted and withheld under paragraph (2)
22 of this subsection shall be deposited in the Treasury of the
23 United States to the credit of the Fund under such proc~duces
24 as the Comptroller General of the United States ;nay
25 prescribe.
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1 " (u) Each participant who elects to contribute to the
2 Fund under this subsection shall consent and agree to the
3 deductions required by paragraph (2) of this subsection.
4 Notwithstanding any other provision of law, payment less such
5 deductions is a full and complete discharge and acquittance
6 of all claims and demands for regular services performed
7 du=ing the period coveted by the payment oc for disability
8 benefits payable under section 8442(a)(1) of this title for
9 the period, as the case may be.
10 " (5) Section 8334(d) of this title shall apply to
11 refunds of amounts deducted as required by paragraph (2) of
12 this subsection.
13 " (d) Under regulations prescribed by the Office, the
14 head of an agency may request reconsideration of the amount
15 of the normal cost oc the supplemental liability computed by
16 the Office for such agency under subsection (a) oc (b) of
17 this section. Any such request shall be referred to the Board
18 of Actuaries of the Civil Service Retirement System. The
19 Board of Actuaries shall review the computations of the
20 Office and, if considered appropriate by the Board of
21 Actuaries, recompute such normal cost or such supplemental
22 liability of such agency under this subsection. The
23 determination of the Board of Actuaries shall be final.
24 " S 8419. Funding of annuity attributable to military s~cvice
25 " (a) Except in the :,ase of an individual making an
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1 election under section 8u71(a)(1)(A) of this title, a
2 participant's oc former participant's service shall include
3 credit for military service as provided in section 83320) of
u this title without regard to whether the participant oc
5 former participant has made a deposit covering such military
6 service as provided in section 833?(j) of this title.
7 " (b) Before closing the accounts for a fiscal year, the
8 Secretary of the Treasury shall reimburse the Fund from sums
9 in the Department of Defense Military Retirement Fund
10 (established by section 1?61(a) of title 10), which ace
11 hereby made available to pay the reimbursement, for the
12 normal cost relating to the creditable military service of
13 employees and Members who became participants during such
14 fiscal yeas, actuarially adjusted to the date of payment, as
15 determined by the Office.
16 " (c> At the end of each fiscal year the Office shall
17 compute the amount of the reimbursement required by
18 subsection (b) of this section for the fiscal year and shall
19 notify the Secretary of the Treasury of that amount.
20 " S 842x. Lump-sum benefits; designation of beneficiary;
21 order of precedence
22 " (a) Lump-sum benefits authorized by subsections (b)
23 th=ough (d) of this section shall be paid to the person oc
24 persons who survive a participant to whom such subsections
25 apply and ace alive on the date title to the payment arises.
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1 Entitlement to such payment shall be in the same order of
2 precedence as is provided in section 9342(c) of this title.
3 Payment under this subsection bars recovery by any other
4 person.
5 " (b) If--
6 " (1) a participant Who has made contributions to the
7 Fund under section 8418(c) of this title dies--
8 " (A) without a survivor, or
9 " (B) with a survivor or survivors and the tight
10 of all survivors terminates before a claim for
11 survivor annuity is filed, or
12 " (2) a former participant not retired dies,
13 the portion of the lump-sum credit attributable to the
14 contributions referred to in paragraph (1) of this subsection
15 shall be paid as provided in subsection (a) of this section.
16 " (c) If all rights to an annuity payable from the Fund
17 under this chapter based on the service of a deceased
18 participant terminate before the total annuity paid equals
19 the portion of the lump-sum credit referred to in subsection
20 (a) of this section, the difference shall be paid as provided
21 in subsection (a) of this section.
22 " (d) If an annuitant dies, annuity payable from the Fund
23 which is accrued and unpaid shall be paid as provided in
24 subsection (a) of this section.
25 " (e) Annuity payable from the Fund which is accrued and
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1 unpaid on~the termination, except by death, of the annuity of
2 an annuitant or survivor annuitant shall be paid to that
3 individual. Annuity payable from the Fund Which is accrued
4 and unpaid on the death of a survivor annuitant shall be paid
5 in the same order of precedence as is provided in section
6 8342(g) of this title, and the payment bars recovery by any
7 other person.
8 " SUBCHAPTER III--THRIFT SAYINGS PLAN
9 " S 8421. Contributions
10 " (a)(1) Each participant may contribute to the Thrift
11 Savings Fund in any year an amount not exceeding 10 percent
12 of the participant's annual rate of basic pay.
13 " (2) Each participant receiving disability benefits
14 under subchapter Y of this chapter may, until becoming 62
15 years of age (in the case of a person who is disabled within
16 the meaning of section 84u1(u)(A) of this title) or until
17 becoming 55 years of age tin the case of a person who is
18 disabled within the meaning of section 8441(v)(B) of this
19 title), contribute to the Thrift Savings Fund in any year an
20 amount not exceeding 10 percent of the amount of the former
21 participant's disability benefits payable under such
22 subchapter during such year.
23 " (3)(A) Except as provided in subparagraph (B) of this
24 paragraph, notwithstanding the limitations specified in
25 paragraphs (1) and (2) of this subsection, if, in any period
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1 for which a participant is entitled to contribute to the
2 Thrift Savings Fund, the participant contributes less than
3 the maximum amount authorized by paragraph (1') or (2) of this
u subsection (as applicable), the participant may contribute in
5 a later period for which the participant is entitled to
6 contribute to such fund the amount equal to the excess of
7 such maximum amount authorized for the earlier period over
8 the amount contributed during the earlier period.
9 " (B) The total amount contributed under subparagraph (A)
10 of this paragraph and paragraph (1) oc (2) of this subsection
11 in any period may not exceed the amount equal to 15 percent
12 of the periodic equivalent of the participant's annual rate
13 of basic pay for such period.
14 " (4> Any contribution under this subsection shall be
15 made only pursuant to a program of regular contributions
16 under regulations pcesccibed by the Executive Director.
17 " (5) At least once each year, a participant may modify
18 the amount contributed pursuant to paragraph (1) oc (2) of
19 this subsection, as the case may be, under regulations
20 pcesccibed by the Executive Director.
21 " (b)(1) The employing agency of 3 participant who
22 contributes to the Thrift Savings Fund under subsection (3)
23 of this section for any pay period, oc, in the case of a
24 disabled participant who contributes to such fund under such
25 subsection for any disability benefits payment period, the
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1 employing agency of the participant on the date the
2 participant became disabled (as defined in section 84u1(u) of
3 this title), shall make a contribution to the Thrift Savings
4 Fund for the benefit of such participant or disabled
5 participant. The employing agency's contribution shall be
6 made at the end of such period.
7 " (2)(J~) Except as provided in subparagraph (B) of this
8 paragraph, the amount contributed under paragraph (1) of this
9 subsection by an employing agency With respect to a
10 contribution of a participant during any period shall be the
11 amount equal to such portion of the amount of the
12 participant's contribution as (i) does not exceed 5 percent
13 of the amount of the gross pay or gross disability benefits,
14 as the case may be, Which is payable for such period, and
15 (11) is not contributed under subsection (a>(3) of this
15 section.
17 " (B) In the case of a participant Who has made an
18 election to make contributions under section 8418(c> of this
19 title, the amount contributed under paragraph (1) of this
20 subsection by an employing agency With respect to a
21 contribution of a participant under subsection (a) of this
22 section during any period shall be the amount equal to 50
23 percent of such portion of the amount of the participant's
24 contribution as (i) does not exceed 6 percent of the amount
25 of the gross pay or gross disability benefits, as the case
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1 may be, which is payable for such period, and (ii) is not
2 contributed under subsection (a)(3) of this section.
3 " (c) The sums required to be contributed to the Thrift
4 Savings Fund by an employing agency under subsection (b) of
5 this section for the benefit of a participant shall be paid
6 from the appropriations or funds available to such agency to
7 pay the basic pay of participants or, in the case of an
8 elected participant, from an appropriation or fund available
9 for payment of other salaries of the participant's office oc
10 establishment. In the case of a participant in the
11 legislative branch who is paid by the Clerk of the House of
12 Representatives, contributions for the benefit of such
13 participant shall be paid from the contingent fund of the
14 House of Representatives.
15 " (d)(1) Foc purposes of the Internal Revenue Code of
16 1954--
17 "(A) the amount of any--
18 " (i) participant contribution, or
19 " (11) employing agency's matching contribution,
2B to the Thrift Savings Fund shall not be included in the
21 gross income of~the participant in the taxable year in
22 which such contributions are made, and
23 " (B) the determination of when, and in what manner,
24 such contributions and any income allocable to such
25 contributions are included in the gross income of such
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1 participant shall be made in the same manner as if the
2 Thrift Savings Fund were a trust which met the
3 requirements of section 401(a) of such Code.
4 " (2) Paragraph (1) ;hall not apply to any participant
5 contribution described in paragraph (1)(A)(i) in any taxable
6 year with respect to which section 402(a)(8) of such Code
7 does not apply to contributions made to any qualified cash or
e deferred arrangement (within the meaning of section 401(k) of
9 such Code).
10 " (e) Subsection (d)(1) of this section shall not be
11 construed to provide that any amount of the pacticip3nt's pay
12 which is contributed to the Thrift Savings Fund shall not be
13 included in the term 'wages' for purposes of section 209 cf
14 the Social Security Act oc section 3121(a) of the Internal
15 Revenue Code of 1954.
16 " S 8422. Vesting
17 " (a)(1) A participant who separates from Government
18 employment shall be entitled to an amount equal to--
19 " (A) the total amount of the contributions made
20 under section 8421(a) of this title plus the total amount
21 of the net earnings in the Thrift Savings Fund, or minus
22 the total amount of the net losses, attributable to such
23 contributions; and
24 " (B) the applicable percentage of the amount equal
25 to the total amount contributed to the Thrift Savings
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1 Fund for the benefit of the participant under section
2 8421(b) of this title plus the total amount of the net
3 earnings in the Thrift Savings Fund, or minus the total
u amount of the net losses, attributable to such
5 contributions, as provided in subsection (b) of this
6 section.
7 " (2) The amount to which a participant is entitled under
8 paragraph (1) of this subsection shall be payable in
9 accordance with the election made by the participant pursuant
10 to section 8423 of this title.
11 " (b)(1) For the purpose of subsection (a)(1)(B) of this
12 section, except as provided in paragraph (2) of this
13 subsection, the applicable peccentage for a participant
14 separating from Government employment after having been a
15 participant in the System for a period set forth under column
16 I of the table below is the peccentage set forth under column
17 II of the table below opposite the description of such
18 period:
" Column I
Co~ymn ~,~
Period for, which the participant has
been a participant in the System:
Applicable
percentage:
Less than 1 year .
0
Not less than 1 year, but less than
2
years
20
Not less than 2 years, but less than
3
years.
40
Not less than 3 years, but less than
4
years.
60
Not less than u years, but less than
5
years.
80
Not less than 5 years
100.
19 " (2) For the purposes of subsection (a)(1)(B) of this
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1 section--
2 " (A) the percentage applicable in the case of any
3 participant who dies while employed by the Government
4 shall be 100 percent; and
5 " (B) in the case of a participant making
6 contributions under section 8421(x)(2) of this title, the
7 period for which the person has been a participant in the
8 System shall include periods for which such contributions
9 were made.
10 " (c) when an election is made by a participant under
11 section 8423(c) of this title, the amount equal to the excess
12 of--
13 " (1 ) the sum of--
14 " (A) the amounts contributed to the Thrift
15 Savings Fund with respect to the participant under
16 section 8421 of this title; and
17 " (B) the net earnings in the Thrift Savings Fund
18 attributable to such contributions, over
19 " (2) the sum of--
20 " (A) the amount in the Thrift Savings Fund paid
21 oc reserved for payment to oc with r?spect to the
22 participant pursuant to section 8423(c) of this
23 title, and
24 " (B) the amount of the administrative expenses
25 allocated to the account of such participant under
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~ section 8428(a)(3) of this title,
2 shall be transferred to the Treasury of the United States for
3 credit to !liscellaneous Receipts.
4 " S 8423. Entitlement and elections relating to entitlement
5 " (a)(1) Any participant who separates from Government
6 employment entitled to an immediate annuity under section
7 8411 of this title and, subject to paragraph (2) of this
8 subsection, any participant who is entitled to receive
9 disability benefits under subchapter Y of this title is
10 entitled and may elect--
11 " (A) to receive an immediate annuity from the Thrift
12 Savings Fund;
13 " (B) to defer the commencement of the payment of an
14 annuity from the Thrift Savings Fund until such Sate as
15 the participant specifies;
16 " (C) to withdraw, in one oc more payments, the
17 amount of the balance credited to the participant's
18 account in the Thrift Savings Fund; oc
19 " (D) to transfer the amount of the balance in the
20 account to an individual retirement account or other
21 qualified plan (within the meaning of the Internal
22 Revenue Code of 1954) of the participant.
23 " (2) An election may be made by a disabled participant
2u under paragraph (1) of this subsection only within one year
25 after the date the participant is determined to be disabled
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1 for the purposes of subchapter V of this chapter. Thz
2 election is irrevocable.
3 " (b) Any participant who separates from Government
4 employment entitled to a deferred annuity under section 8412
5 of this title is entitled and may elect--
6 " (1) to receive an annuity from the Thrift Savings
7 Fund to commence on the first date the participant is
8 entitled to receive the deferred annuity;
9 " (2) to defer the commencement of the payment of an
10 annuity from the Thrift Savings Fund until a date after
11 the first date the participant is entitled to receive the
12 deferred annuity, 3s specified by the participant;
13 " (3) to withdraw in one or more payments, on or
14 after the first date the participant is entitled to
15 receive the defected annuity, the amount of the balance
16 credited to the participant's account in the Thrift
17 Savings Fund; or
18 " (4) to transfer the amount of the balance in the
19 account to an individual retirement account oc other
20 qualified plan (within the meaning of the Intecnai
21 Revenue Code of 1954) of the participant.
22 " (c) Any participant who separates from Government
23 employment before beconing entitled to an annuity under
24 section 8411 oc 8412 of this title is entitled and may
25 elect--
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" (1) to withdraw, in one oc more payments, the
2 amount computed under section 8422(a)(1) of this title,
3 payable when the participant becomes 62 years of age; ~r
4 " (2> to transfer such amount to an individual
5 retirement account or other qualified plan (within the
6 meaning of the Internal Revenue Code of 1954) of the
7 participant.
8 " (d)(1) Sub)ect to paragraph (2) of this subsection, any
9 participant making an election pursuant to subsection
10 (a>(1)(B) or (b)(2> of this section may modify the date
11 specified in the election or in a previous modification under
12 this subsection.
13 " (2) Any modification of an election under paragraph (1)
14 of this subsection may not be made on or after the date
15 specified in the election or the latest modification made
16 under such paragraph and may not specify a date for the
17 commencement of annuity payments earlier than one month after
18 the date the modification is filed with the Executive
19 Director.
20 " S 8424. Annuities: methods of payment; election; and
21 computation
22 " (a)(1) The Board shall prescribe methods of payment of
23 annuities under this subchapter.
24 " (2) The methods of payment prescribed under paragraph
25 (1) of this subsection shall include, but not be limited to--
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1 " (A) a method which provides for the payment of a
2 monthly annuity only to an annuitant during the life of
3 the annuitant;
4 " (B) a method which provides for the payment of a
5 monthly annuity to an annuitant for the joint lives of
6 the annuitant and the spouse of the annuitant and an
7 appropriate monthly annuity to the one of them who
8 survives the other of them for the life of the survivor;
9 " (C> a method described in subparagraph (A) of this
10 paragraph which provides annual increases in the amount
11 of the annuity payable;
12 " (D) a method described in subparagraph (B) of this
13 paragraph which provides annual increases in the amount
14 of the annuity payable; and
15 " (E) a method providing for the payment of a monthly
16 annuity--
17 " (i) to the annuitant for the joint lives of the
18 annuitant and an individual, designated by the
19 annuitant under regulations prescribed by the
20 Executive Director, who has an insurable interest in
21 the annuitant; and
22 " (ii) to the one of them who survives the other
23 of them for the life of the survivor.
24 " (b) Subject to subsection (c) of this section, under
25 such regulations as the Executive Director shall prescribe,
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1 an annuitant electing under section 8423 of this title to
2 receive an annuity fron the Thrift Savings Fund shall elect,
3 on oc before the date on which the annuitant's annuity under
4 this subchapter commences, one of the methods of payment
5 prescribed by the Board under subsection (a) of this section.
6 " (c) The amount of an annuity payable under this
7 subchapter pursuant to the method elected under subsection
e (b) of this section shall be determined on an actuarial basis
9 under regulations prescribed by the Executive Director.
10 " S 8425. Administrative provisions relating to payments and
11 elections
12 " (a) The Executive Director shall make or provide for
13 payments and transfers in accordance with an election of a
14 participant under section 8423 oc 8424(b) of this title.
15 " (b) Any election under section 8423 or 8424(b) of this
16 title shall be in writing and shall be filed with the
17 Executive Director in accordance with regulations prescribed
18 by the Executive Dicecto_.
19 " (c) Notwithstanding any other provision of this
20 section, an election or modification of an election und~~ any
21 provision of this subchapter shall not be effective if the
22 election or modification would result in a violation of the
23 terms of an applicable court decree of divorce, annulment, or
24 legal separation, or the terms of any court order or court-
25 approved property settlement agreement incident to a court
--
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1 decree of divorce, annulment, or legal separation, as
2 determined by the Executive Director.
3 " S 8426. Thrift Savings Fund
4 " (a) There is established in the Treasury of the ignited
5 States a Thrift Savings Fund.
6 " (b) The Thrift Savings Fund consists of the sum of all
7 amounts contributed under section 8421 of tfiis title and all
8 amounts deposited under section 8499(b) of this title,
9 increased by the total net earnings from investments of sums
10 in the Thrift Savings Fund or reduced by the total net losses
11 from investments of the Thrift Savings Fund, and reduced by
12 the total amount of payments made from the Thrift Savings
13 Fund and the total amount of the outstanding loans made from
14 the Thrift Savings Fund.
15 " (c) The sums in the Thrift Savings Fund ace
16 appropriated and shall remain available Without fiscal year
17 limitation--
18 " (1) to invest under section 8427 of this title;
19 " (2> to pay benefits under this subchapter;
20 " (3) to pay the administrative expenses of th=
21 Federal Retirement Thrift Investment Management System
22 prescribed in subchapter gIIZ of this chapter;
23 " (4) to make loans to participants as authorized
24 under subsection (e) of this section; and
25 " (5) to purchase insurance as provided in section
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~1 8499(b)(2) of this title.
2 " (d)(1) Except as provided in pacagra~h (2) of this
3 subsection or section 8465(b) or 8467 of Lhis title, and
4 except as otherwise provided in a Federal law, sums in the
5 Thrift Savings Fund ace not subject to execution, levy,
6 attachment, garnishment, or other legal process.
7 " (2) Koneys due oc payable from the Thrift Savings Fund
8 to any individual and, in the case of an individual who is a
9 participant, moneys which the individual would be entitled to
10 receive under section 8422 of this title upon separation from
11 Government employment shall be subject to legal process for
12 the enforcement of the individual's legal obligations to
13 provide child support or make alimony payments as provided in
14 section 459 of the Social Security Act (42 U.S.C. 659) oc to
15 pay any indebtedness of the individual to the United States.
16 " (e) The Board shall establish a pcogcam to make loans
17 from the Thrift Savings Fund to a participant in case of
18 financial hardship. The Executive Director shall presccib~
19 regulations to carry out such pcogcam. Any such loan shall be
20 made only out of sums contributed to the Thrift Savings Fund
21 by the participant and net earnings attributable to such
22 suns.
23 " (f) The sums in the Thrift Savings Fund shall not b2
24 appropriated and may not be used for any purpose other than
25 the purposes specified in this section.
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1 " S 8427. Investment of Thrift Savings Fund
2 " (a) Foc the purposes of this section--
3 " (1) the term `Common Stock Index Investment Fund'
4 means the Common Stock Investment Fund established under
5 subsection (b)(1)(C) of this section;
6 " (2) the term `equity capital' means common and
7 preferred stock, surplus, undivided profits, contingency
8 reserves, and other capital reserves;
9 " (3) the teem `Fixed Income Investment Fund' mean
10 the Fixed Inr'ome Investment Fund established under
11 subsection (b)(1)(B) of this section;
12 " (4) the term 'Government Securities Investment
13 Fund' means the Government Securities Investment Fund
14 established under subsection (b)(1)(A) of this section;
15 " (5) the term 'net worth' means capital, paid-in and
16 contributed surplus, unassigned surplus, contingency
17 reserves, group contingency reserves, and special
18 reserves;
19 " (6) the term 'plan' means an employee benefit plan,
20 as defined in section 3(3) of the Employee Retirement
21 Income Security Act of 1974 (29 O.S.C. 1002(3));
22 " (7) the teem 'qualified professional asset manager'
23 means--
24 " (A) a bank, as defined in section 202(3)(2) of
25 the Investment Advisers Act of 194Q (15 O.S.C. 80b-
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2(a)(2)) which--
" (i) has the power to manage, a~quice, oc
dispose of~assets of a plan; and
" (ii) has, as of the last day of its latest
fiscal year ending before the date of a
determination for the purpose of this clause,
equity capital in excess of S1,000,000;
" (B) a savings and loan association, the
accounts of which ace insured by the Federal S3vin~s
and Loan Insurance Corporation, which--
" (i) has applied for and been granted trust
powers to manage, acquire, oc dispose of assets
of a plan by a State or Government authority
having supervision over savings and loan
associations; and
" (ii) has, as of the last day of its latest
17 fiscal year ending before the date of a
18 determination for the purpose of this clause,
19 equity capital or net worth in excess of
20 S1,000,000;
21 " (C) an insurance company which--
22 " (i) is qualified under the laws of more
23 than one State to manage, acquire, oc dispose of
24 any assets of a plan;
25 " (ii) has, as of the last day of its latest
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1 fiscal year ending before the date of a
2 determination for the purpose of this clause, net
3 worth in excess of S1,000,000; and
4 " (iii) is subject to supervision and
5 examination by a State authority having
6 supervision over insurance companies; or
7 " (D) an investment adviser registered under
8 section 203 of the Investment Advisers Act of 1940
9 (15 U.S.C. 80b-3) if the investment adviser has, on
10 the the last day of its latest fiscal year ending
11 before the date of a determination for the purpose of
12 this subparagraph, total client assets under its
13 management and control in excess of S50,000,000,
14 and--
" (i) the investment adviser has, on such
day, shareholder's or partner's equity in excess
of 5758,000; or
" (li) payment of all of the investment
adviser's liabilities, including any liabilities
Which may arise by reason of a breach oc
violation of- a duty described in section 8497 of
this title, is unconditionally guaranteed by--
" (I) a person who directly or
indirectly, through one or more
intermediaries, controls, is controlled by,
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1 or is under common control with the
2 investment adviser and who has, on the 13st
3 day of the person's latest fiscal year ending
4 before the date of a determination for the
5 purpose of this clause, shareholder's or
6 partner's equity in an amount Which, when
7 added to the amount of the shareholder's or
8 partner's equity of the investment adviser on
9 such day, exceeds S750,000;
10 " (II) a qualified professional asset
11 manager described in subparagraph (A), (B),
12 or (C) of this paragraph; or
13 " (III) a broker oc dealer registered
14 under section 15 of the Securities Exchange
15 Act of 1934 (15 U.S.C. 780) that has, on the
16 last day of the broker's oc dealer's latest
17 fiscal year ending before the date of a
18 determination for the purpose of this clause,
19 net worth in excess of S750,000; and
20 " (8) the teem 'shareholder's oc partner's equity',
21 when used in paragraph (7)(D) of this subsection with
22 respect to an investment advisee oc a person who is
23 affiliated with the investment adviser in a manner
24 described in clause (ii)(I) of such paragraph (7)(D),
25 means the equity shown in the most recent balance sheet
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1 prepared for such investment adviser oc affiliated
2 person, in accocdanca with generally accepted accounting
3 principles, within 2 years before the date on which the
u investment adviser's status as a qualified professional
5 asset manager is determined for the purposes of this
6 section.
7 " (b>(1> The Board shall establish--
8 " (A) a Government Securities Investment Fund under
9 which sums in the Thrift Savings Fund ace invested in
18 securities of the United States Government issued as
11 provided in subsection (q) of this section;
12 " (B> a Fixed Income Investment Fund under which sums
13 in the Thrift Savings Fund ace invested in insurance
14 contracts, certificates of deposits, or other instruments
15 or obligations which (i) are issued or selected by
16 qualified professional asset managers, and (ii) return
17 the amount invested and pay interest, at a specified rate
18 or rates, on that amount during a specified period of
19 time;
20 " (C) a Common Stock Index Investment Fund as
21 provided in paragraph (2) of this subsection; and
22 " (D) such other investment funds as the Board
23 determines to be appropriate for the purposes of this
2u subchapter.
25 " (2)(A) The Board shall define an index which--
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" (i) consists of (I) all of the common stocks that
2 are publicly listed and traded on one oc more national
3 securities exchanges, and (II) over-the-counter
u securities quoted publicly on the National Association of
5 Securities Dealers Automated Quotations system or on
6 another automated basis, or
7 " (11) is a commonly recognized index comprised of
8 common stock the aggregate market value of which is as
9 complete a representation of the United States equity
10 markets as is reasonably pca~ticable.
11 " (B) Except as provided in subparagraph (C) of this
12 pa^agraph, the Common Stock Index Investment Fund shall be
13 invested in a portfolio designed to replicate the performance
14 of the index defined under subparagraph (A) of this
15 paragraph. The portfolio shall be designed such that--
16 " (i) to the extent practicable, the percentage of
17 the Common Stock Index Investment Fund that is invested
18 in each stock is the same as the percentage determined by
19 dividing the aggregate market value of all shares of that
20 stock by the aggregate market value of all shares of all
21 stock included in such index, oc
22 " (11) a sampling of stocks included in the index is
23 used in the construction of an index fund that minimizes
24 differences between the net portfolio return and the
25 total index return.
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1 " (C) The Employee Advisory Committee may, by resolution,
2 exclude certain stocks from the Common Stock Index I~vestmant
3 Fund and from the index defined in accordance with
u subparagraph (A) of this paragraph, notwithstanding the
5 standards for investment decisionmakinq set out in section
6 8495 of this title.
7 " (c>(1) The Executive Director shall invest in the
8 Government Securities Investment Fund the sums which ace in
9 the Thrift Savings Fund, are available for investment, and
10 are not to be invested in an investment fund referred to in
11 subsection (b)(1)(B), (b)(1)(C), or (b)(1)(D) of this section
12 pursuant to an election made under subsecxion (d) of this
13 section.
14 " (2) Except as provided in subsection (e) of this
15 section, the Executive Director shall invest sums availabl=
16 in the Thrift Savings Fund for investment as provided in
17 elections made under subsection (d) of this section.
18 " (d)(1) Except as provided in subsection (e) of this
19 section, at least once each year, a participant ~r former
29 participant may elect the investment funds referred to in
21 subsection (b) of this section into which the sums in the
22 Thrift Savings Fund credited to the account of such
23 participant or former participant are to be invested oc
24 reinvested.
25 " (2) The election may be made by a participant or former
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1 participant under paragraph (1) of this subsection only in
2 accordance with regulations prescribed by the Executive
3 Director and within such period after the date the
4 participant's oc former participant's annual statement i~
5 transmitted to the participant oc former participant pursuant
6 to section 8428(b) of this title as the Executive Director
7 shall prescribe in such regulations.
8 " (e)(1)(A) The Executive Director shall invest a
9 percentage of the total amount that--
10 " (i) is contributed to the Thrift Savings Fund by 3
11 participant under section 8421(a) of this title during a
12 year described under column I of the first table of
13 minimum Government securities investments set out in
1u subparagraph (B) of this paragraph, and
" (11) is available for investment,
16 in the Government Securities Investment Fund as provided
17 under column II of the table opposite the description of such
18 year.
19 " (B ) Foc the purposes of subparagraph (A ) of this
20 paragraph, the first table of minimum Government securities
21 investments is as follows:
Year
Column II
Minimum percentage of the
amounts contributed by
a participant for
each month of such year
to be invested in the
Government Securities
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Inve
stme
1987
1B0
1988
80
1989
60
1990
40
1991
20.
1 " (2)(A) The Executive Director shall invest a percentage
2 of the total amount that--
3 " (i) is contributed to the Thrift Savings Fund by
4 the Government for the benefit of a participant pursuant
5 to section 8421(b) of this title during a year described
6 under column I of the second table of minimum Government
7 securities investments set out in subparagraph (B) of
8 this paragraph, and
9 " (11) is available for investment,
10 in the Government Securities Investment Fund as provided
11 under column II of the table opposite the description of such
12 year.
13 " (B) For the purposes of subparagraph (A) of this
14 paragraph, the second table of minimum Government securities
15 investments is as folloWS:
.. ~~~ ~
Year:
1987-1992
1993
Column II
Minimum percentage of the
amounts contributed for the
benefit of a participant
for each month of such year
to be invested in the
Government Securities
Investment Fund:
100
80
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1994 ~
60
1995
40
1996
20
1 " (3) All sums crEdited to the Thrift Savings Fund
2 pursuant to section 8u73(b) of this title shall be invested
3 in the Government Securities Investment Fund.
u ??(u) The sums which are invested in the Government
5 Securities Investment Fund as requited by this subsection and
6 ace returned to the Thrift Savings Fund after maturity of the
7 securities purchased with such sums, and the amounts earned
8 on the investment of such sums, shall be reinvested in the
9 Government Securities Investment Fund.
10 " (f) The Secretary of the Treasury shall issue notes
11 under section 3103 of title 31 as appropriate to meet the
12 investment needs of the Thrift Savings Fund under this
13 section. The notes shall have a u-year maturity, shall be
14 redeemable at par, and shall bear interest at a rate equal to
15 the average market yield of all 4-year notes which w~ce
16 issued in the latest issue of u-year notes then forming 3
17 pact of the public debt of the United States. If the average
18 market yield is not a multiple of 1/8 of 1 percent, the rate
19 of interest on the obligations shall be the multiple of 1/6
20 of 1 percent nearest the average market yield.
21 " S 8428. Accounting
22 " (a)(1) The Executive Director shall establish and
23 maintain an account for each participant making contributions
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1 under section 8421(a) of this title.
2 " (2) The balance in the account of a participant oc
3 focmec participant at any time is the excess of--
4 " (A) the sum of--
5 " (i) all contributions made to the Thrift
6 Savings Fund by the participant or focmec participant
7 under section 8421(a) of this title;
e " (11) all contributions made to such fund for
9 the benefit of the participant oc former participant
10 under section Su21(b> of this title;
11 " (iii) the amounts transferred to such fund with
12 respect to the participant oc focmec participant
13 under section 8473(b) of this title; and
14 " (iv) the total amount of the allocations made
15 to and reductions made in the account pursuant to
16 paragraph (3) of this section, over
17 " (B) the amounts paid out of the Thrift Savings Fund
18 with respect to such participant or former pacti~ipant
19 under this subchapter and subchapter IV of this title.
20 " (3) Pursuant to regulations prescribed by the Executive
21 Director, the Executive Director shall allocate to the
22 account of each participant oc focmec participant an amount
23 equal to a pro rata share of the net earnings and net losses
24 from each investment of sums in the Thrift Savings Fund
25 attributable to sums credited to the account of such
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1 participant, reduced by an appropriate share of the
2 ad;ninistcative expenses of the Federal Retirement Thrift
3 Investment Kanagement System prescribed in subchapter VIII of
4 this chapter, as detec~ined by the Executive Director.
5 " (b) The Executive Director shall provide each
6 participant and former participant an annual statement of the
7 balance in the participant's or former participant's account.
8 " (c)(1) Foc the purposes of this subsection, the term
9 'qualified public accountant' shall have the same meaning as
10 provided in section 103(z)(3)(D) of the employee Retirement
11 Income Security Act of 1974 (29 U.S.C. 102u(3)(3)(D)).
12 " (2) The Executive Director shall annually engage, on
13 behalf of all participants, an independent qualified public
14 accountant, who shall conduct an examination of any accounts
15 established under subsection (a) of this section and of other
16 books and records maintained in the administration of this
17 subchapter as the accountant considers necessary to enable
18 the accountant to make the determination requited by
19 paragraph (3) of this subsection. The examination shall be
20 conducted in accordance with generally accepted auditing
21 standards and shall involve such tests of the accounts,
22 books, and records as the independent qualified public
23 accountant considers necessary.
2u " (3) The independent qualified public accountant
25 conducting an examination under paragraph (2) of this
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1 subsection shall determine whether the accounts, books, and
2 records referred to in such paragraph have been ;maintained in
3 conformity with generally accepted accounting principles
4 applied on a basis consistent with the application of such
5 principles during the examination conducted under such
6 paragraph during the preceding year. The accountant shall
7 transmit to the Board and the Comptroller General of the
8 United States a report on his examination, including his
9 determination under this paragraph.
10 " (4) In making a determination under paragraph (3) of
11 this subsection, the accountant may rely on the correctness
12 of any actuarial matter certified by an enrolled actuary, if
13 the accountant states his reliance in the report transmitted
14 to the Board under such paragraph.
15 " SUBCHAPTER IV--SURVIVOR BENEFITS
16 " S .8431. Basic plan spousal benefits relating to the death
17 of a participant or former participant other
18 than an annuitant
19 " (a)(1) Zf a participant dies after performing 5 or mote
20 years of service and before separating from Gove_nment
21 employment and the participant has satisfied the age and
22 service requirements for retirement entitled to an immediate
23 annuity under section 8411 of this title before the date of
24 death, the surviving spouse of a deceased participant shall
25 be entitled to a survivor annuity payable out of the Fund.
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1 " (2) If a participant dies after performing 5 or more
2 years of service and before separating from Government
3 employment and the participant has not satisfied the age and
u service requirements for retirement entitled to 3n immediate
5 annuity under section 8411 of this title before the date of
6 death, the surviving spouse of a deceased participant shall
7 be entitled to a survivor annuity payable out of the Fund.
8 The survivor annuity shall commence on the first date the
9 participant could have retired entitled to an immediate
10 annuity under section 8411 of this title if the participant
11 had continued to live and had continued to be a participant
12 until such date.
13 " (3) The amount of the survivor annuity payable under
14 paragraph (1) or (2) of this subsection to the surviving
15 spouse of a deceased participant shall be equal to 50 percent
16 of the annuity computed With respect to the deceased
17 participant pursuant to sections 8413, 8414, and 8415 of this
18 title as if the participant had retired from Gov~rnmsnt
19 employment on the day before the date of death and had
20 elected the method of payment described in section
21 8416(a)(2)(E) of this title.
22 " (b)(1) If a former participant dies entitled tc a
23 defected annuity under section 8412 of this title before
24 payment of an annuity under subchapter II of this chapter to
25 the former participant commences, the surviving spouse of the
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1 deceased former participant is entitled to a survivor annuity
2 payable out of the Fund.
3 " (2> The amount of the survivor annuity payable under
4 paragraph (1) of this subsection to the surviving spouse of a
5 deceased former participant shall be equal to 50 percent cf
6 the annuity which the deceased former participant would have
7 been entitled to receive under such section if the deceased
8 former participant--
9 " (A) had been 55 years of age on the day before the
10 date of death, or
11 " (B) in the case of a former participant who was 55
12 years of age or older on such day and was not receiving
13 such annuity, had commenced to receive such defected
14 annuity on such day,
15 computed under sections 8413, 8414, and 8415 of this title.
16 " S 8432. Basic plan spousal and insurable interest benefits
17 relating to the death of an annuitant
18 " A survivor annuity shall be paid out of the Fund with
19 respect to a deceased annuitant--
20 " (1) in accordance with the method of payment
21 elected by the annuitant under section 8416 of this
22 title;
23 " (2) as provided in subsection~(b)(3) of such
24 section; or
25 " (3) in accordance with an election made by the
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1 annuitant under section 8434(a) oc 8436(c> of this title.
2 " S 8433. Survivor benefits under the thrift savings plan
3 " (a) A survivor annuity shall be paid out of the Thrift
4 Savings Fund with respect to a deceased annuitant as provided
5 under a method of payment of annuities elected by the
6 annuitant under section 8424(b) of this title or in
7 accordance with an election made by the annuitant under
8 section 8434(a> or 8436(0) of this title. The amount of the
9 survivor annuity shall be determined on an actuarial basis
10 under regulations pres~cibed by the Executive Director.
11 " (b)(1) Except as provided in subsection (d) of this
12 section, the amount in the account established and maintained
13 for a deceased participant or deceased former participant
14 (other than a deceased annuitant) pursuant to section 8428(a)
15 of this title, determined on the date of an election under
16 subsection (c) of this section, shall, subject to the limits
17 of the entitlement set out in section 8422(a)(1) of this
18 title (without regard to section 8422(a)(2) of this title),
19 be paid as provided in paragraph (2) of this subsection.
20 " (2)(A) Except as provided in subparagraph (B) ~f this
21 paragraph, payment under paragraph (1) of this subsection
22 shall be made to the surviving spouse of the deceased
23 participant oc former participant pursuant to thz method
24 elected under subsection (c) of this section.
25 " (B) If a deceased participant oc former participant
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1 referred to in paragraph (1) of this subsection is not
2 survived by a spouse, payment under such paragraph shall be
3 made to--
u " (i) any individual who has an insurable interest in
5 the participant oc former participant and has been
6 designated by the participant for the purpose of such
7 paragraph under regulations prescribed by the Executive
8 Director; or
9 " (ii) if the deceased participant oc foc~ner
10 participant did not make a designation as provided in
11 clause (i) of this subparagraph, to the estate of the
12 deceased participant or former participant.
13 " (c) A surviving spouse or another individual who is
14 entitled to payment of benefits under subsection (b) of this
15 section may elect--
16 " (1) to receive an annuity from the Fund payable
17 monthly for life;
18 " (2) to transfer the amount referred to in such
19 subsection to an individual retirement account (within
20 the meaning of the Internal Revenue Code of 1954) of the
21 surviving spouse; oc
22 " (3) to withdraw such amount in one or more
23 payments.
24 " (d) Any amount required for the payment of a survivor
25 annuity with respect to a deceased participant oc deceased
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1 focmec participant out of the Thrift Savings Fund pursuant to
2 section 8435 of this title shall be deducted and Withheld
3 from a distribution made with respect to the deceased
4 participant or deceased focmec participant pursuant to
5 subsection (b) of this section. The amount deducted and
6 withheld shall be maintained in the Thrift Savings Fund until
7 expended in payment of the survivor annuity or until the
e survivor annuity terminates. any sums remaining from the
9 amount deducted and withheld after the termination of the
10 survivor annuity, plus net earnings realized from investment
11 of such amount, shall be distributed as provided in
12 subsection (b) of this section, as the case may be.
13 " S 8434. Basic and thrift savings plan survivor benefits
14 relating to marriage after commencement of an
15 annuity
16 " (a) If an annuitant--
17 " (1) is married on the date that the annuitant
18 applies for payment of an annuity under subchapter II of
'19 this chapter to commence, the marriage terminates, and
20 the annuitant remarries, or
21 " (2) is not married on such date and marries after
22 such date,
23 th? annuitant. may irrevocably elect during the later marriage
24 to provide an annuity for such annuitant's spous= under the
25 method of payment described in section 8416(a)(2)(B) oc
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1 subparagraph (B) oc (D) of section 8424(a)(2> of this title.
2 l~n election under this subparagraph shall be made in a signed
3 writing received by the Office within 2 years after the date
4 of the cemarriage oc marriage, as the case may b~.
5 " (b) An election under subsection (a) of this section
6 shall be effective the first day of the second month
7 beginning after the election is received by the Office (in
S the case of a survivor annuity payable out of the Fund) oc
9 the Executive Director (in the case of a survivor annuity
10 payable out of the Thrift Savings Fund), but not earlier than
11 9 months after the date of the remarriage referred to in
12 paragraph (1) of such subsection or the date of the marriage
13 referred to in paragraph (2) of such subsection, as the case
14 may be.
15 " (c) An annuitant making an election under subsection
16 (a) of this section to provide a survivor annuity payable out
17 of the Fund shall, within 2 years after Lhe date of the
18 cemarriage referred to in paragraph (1) of such subsection or
19 the date of the marriage referred to in paragraph (2) of such
20 subsection, as the case may be, deposit in the Fund an amount
21 determined by the Office, as nearly as may be
22 administratively feasibl?, to reflect the amount by which th e
23 annuity of such annuitant would have been reduced if the
24 election had been in effect since--
25 " (1) the date that payment of an annuity to the
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1 annuitant under subchapter II of this chapter commenced,
2 or
3 " (2) if the annuity had previously been reduced to
v provide for a survivor annuity under section 8v32 of this
5 title, the date the previous reduction in such
6 annuitant's annuity was terminated under section 8v15(b>
7 of this title,
8 plus interest computed as provided in section 8v38(a) of this
9 title.
10 " (d) Notwithstanding any other provision of this
11 section, an election under this section may not be made for
12 the purpose of providing a survivor annuity payable from the
13 Fund to a spouse of an annuitant by remarriage if--
1v " (A) such spouse was married to the annuitant on the
15 date that payment of an annuity to the annuitant under
16 subchapter II of this chapter commenced; and
17 " (B) tights to survivor benefits for such spouse
18 based on marriage to such annuitant were then waived
19 under section 8416(b)(2) of this title.
20 " S 8v35. Survivor benefits for eligible former spouses:
21 entitlement; amount
22 " (a) Subject to subsections (b) through (g) of this
23 section, an eligible former spouse of a deceased participant
2v or deceased former participant who dies entitled to an
25 immediate or deferred annuity under section 8v11 or 8v 12 ~f
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1 this title is entitled to a survivor annuity and=r this
2 section if and to the extent that--
3 " (1) an election under section 8436 of this title,
4 " (2) any court decree dissolving oc annulling the
5 marriage of the participant oc former participant aid the
6 eligible former spouse, or
7 " (3) any court order or court-approved property
8 settlement agreement incident to such decree,
9 expressly provides for such survivor annuity.
10 " (b)(1) The amount of the survivor annuity payable from
11 the Fund to an eligible former spouse of a deceased
12 participant oc deceased former participant under this section
13 may not exceed the excess, if any, of--
14 " (A) the amount applicable in the case of such
15 eligible former spouse, as determined under paragraph (2)
16 of this subsection, over
17 " (B) the amount of all other survivor annuities
18 payable from the Fund under this section to other
~9 eligible former spouses of the participant or former
20 participant based on the order of precedence provided in
21 subsection (d) of this section.
22 " (2) For the purposes of paragraph (1)(A) of this
23 subsection, the amount applicable in the case of an eligible
24 former spouse of a deceased participant or deceased focner
25 participant is the amount--
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1 " (A) which is equal to 50 percent of the amount of
2 the deceased former participant's annuity payable to the
3 former participant on the day before the date of the
4 former participant's death, if the deceased former
5 participant Was an annuitant on such day;
6 " (B) which would be applicable under paragraph (3)
7 of section 8u31(a) of this title in the case of a
8 surviving spouse of the deceased, if the deceased was a
9 participant described in paragraph (1) oc (2) of such
10 section 8431(a); or
11 " (C) which would be applicable under paragraph (2)
12 of section Su31(b) of this title in the case of 3
13 surviving spouse of the deceased, if the deceased was a
14 former participant described in paragraph (1) of such
15 section 8431(by.
16 " (c) The total amount of all survivor annuities payable
17 from the Thrift Savings Fund to eligible former spouses of a
18 deceased participant oc deceased former participant pursuant
19 to this section may not exceed the amount of the survivor
20 annuities that would be payable to the former spouses out of
21 100 percent of the balance in the account of the deceased
22 participant or deceased former participant, plus anticipated
23 net earnings from investments allocable to such account,
2u determined on an actuarial basis in accordance with
25 regulations prescribed by the Executive Director.
--
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1 " (d) If mote than one eligible former spouse is entitled
2 to a survivor annuity pursuant to this section, *_he amount of
3 each such survivor annuity shall be limited appccpriately to
4 carry out subsection (b) or (c) of this section on a first-
s come, first-served basis determined by reference to the date
6 an election is properly made pursuant to section 8436 of this
7 title or the date on which the court decree, order, oc court-
8 approved agreement applicable to the entitlement was issued,
9 as the case may be.
10 " (e) The commencement and termination dates of a
11 survivor annuity payable under this section to an eligible
12 former spouse of a deceased participant or deceased former
13 participant shall be the commencement and termination dates
14 determined under the provisions of the applicable court
15 order, decree, oc agreement or an election, as the case may
16 be (if provided in such order, decree, agreement, or
17 election), except that any such survivor annuity--
18 " (1) shall not commence before--
" (A) the day after the participant oc former
participant dies, oc
" (B) the first day of the second month beginning
22 after the date on which the Office receives written
notice of the court order, decree, oc agreement or
the election, as the case may be, together with such
additional infcrnation or documentation as the 3ffice
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1 requires,
2 whichever is later, and
3 " (2> shall terminate not later than the date
4 provided in section 8464(b)(2) of this title.
5 " (f) For the purposes of this section, a court decree,
6 order, oc agreement or an election referred to in subsection
7 (a) of this section shall not be effective, in the case of a
8 survivor annuity payable out of the Fund to a former spouse,
9 to the extent that the election is inconsistent with any
10 joint waiver previously executed with respect to such former
11 spouse under section 8416(b)(2) of this title.
12 " (g) Any payment under this section to a person bars
13 recovery by any other person.
14 " S 8436. Survivor benefits for former spouses: elections,
15 deposits and collections, and administrative
16 provisions
17 " (a)(1) If an annuitant has an eligible former spouse on
18 the date that the annuitant applies for payment of an annuity
19 to the annuitant under subchapter II of this chapter to
20 commence, the annuitant may elect, under procedures
21 prescribed by the Office, to provide a survivor annuity for
22 such former spouse under section 8435 of this title. An
23 election under this paragraph shall be made on such date or,
24 if later, within 2 years after the date on which the marriage
25 of the former spouse to the annuitant was dissolved or
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1 annulled. The election shall specify the amount cf the
2 survivor annuity to be provided under this paragraph.
3 " (2) If an annuitant makes an election under paragraph
u (1) of this subsection to provide a survivor annuity payable
5 out of the Fund and the annuitant makes the election during
6 the 2-year period referred to in such paragraph, the
7 annuitant shall deposit in the Fund, within such period, an
8 amount determined by the Office, as nearly as may be
9 administratively feasible, to reflect the amount by which the
10 annuity of such an a:~nuitant would have been reduced if the
11 election had been continuously in effect since the date the
12 annuity commenced, plus interest computed as provided in
13 section 8438(a> of this title.
14 " (3) An election under paragraph (1) of this
15 subsection--
16 " (A) shall not be effective to the extent that it
17 conflicts with--
18 " (i) any court decree oc order referred to in
19 subsection (a) of section 8u35 of this title, oc
20 " (ii) any agreement referred to in such
21 subsection,
22 which is received by the Office before the date on which
23 such election is made;
24 " (B) shall not be effective to the extent that the
25 amount of the annuity specified in the election exceeds--
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" (i) in the case of a survivor annuity payable
from the Fund, the amount determined pursuant to
subsections (b)(2) and (d) of section 8u35 of this
title; or
" (11) in the case of a survivor annuity payable
from the Thrift Savings Fund, the amount determined
7 pursuant to subsections (c) and (d) of secticn 8u35
8 of this title; and
9 " (C) shall not be effective, in the case of an
10 annuitant who is married on the date of the election,
11 unless the election is made with the written consent of
12 the annuitant's spouse.
13 " (b) an annuitant who has elected to provide a survivor
14 annuity for an eligible former spouse pursuant to subsection
15 (a) of this section or who has an eligible former spouse
16 entitled to receive a survivor annuity with respect to the
17 annuitant under paragraph (2) oc (3) of section 8u35(a) of
18 this title may make an election to provide or increase a
19 survivor annuity for any other eligible formic spouse of the
20 annuitant within the same period that, and subject to the
21 same conditions under which, an election could be made under
22 subsection (c) of this section for a spouse of the annuitant
23 (subject to the provisions of subsection (a)(3)(C) of this
24 section relating to the consent of a spouse, if the annuitant
25 is then married). The opportunity to make an election under
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1 the preceding sentence is in addition to any opportunity
2 otherwise provided under this section.
3 " (c>(1> If the entitlement of an eligible former spouse
4 of an annuitant to a survivor annuity under this subchapter
5 is terminated or reduced by reason of the remarriage oc death
6 of the former spouse, the annuitant may elect, in a signed
7 Wcitinq received by the Office (in the case of a survivor
8 annuity to be paid out of the Fund) oc the Executive Dice~tor
9 (in the case of a survivor annuity to be paid out of the
10 Thrift Savings Fund) within 2 years after the former spouse's
11 date of death oc remarriage, as the case may be, to provide a
12 survivor annuity to the annuitant's spouse.
13 " (2) A survivor annuity elected under paragraph (1) of
14 this subsection shall be paid under the method described in
15 section 8416(a)(2)(B) of this title tin the case of a
16 terminated or reduced entitlement payable out of the Fund) oc
17 in subparagraph (B) oc (D) of section 8424(a)(2) of this
18 title (in the case of a terminated or reduced entitlement
19 payable from the Thrift Savings Fund).
20 " (d) If the entitlement of an annuitant's spouse to a
21 survivor annuity under this subchapter is terminated by
22 reason of the death of the spouse, the annuitant may elect,
23 in a signed writing received by the Office (in the case of a
24 survivor annuity to be paid out of the Fund) oc the Executive
25 Director (in the case of a survivor annuity to be paid out of
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1 the Thrift Savings Fund) Within 2 years after the spouse's
2 date of death to provide or increase a survivor annuity for a
3 former spouse of the annuitant.
4 " (e) The requirement that the spouse of an annuitant
5 Waive a right to a survivor annuity under this subchapter as
6 a condition for an election authorized by subsection
7 (a)(3)(C) of this section shall not apply if the participant
8 oc annuitant establishes to the satisfaction of the Dffice
9 that--
10 " (1) the spcuse's Whereabouts cannot reasonably be
11 determined; oc
12 " (2) due to exceptional circumstances, it Would be
13 inappropriate to require the participant oc annuitant to
14 obtain the spouse's consent.
15 " S 8437. Termination of entitlement
16 " An election of an annuitant to provide a survivor
17 annuity to the annuitant's spouse under this subchapter
18 terminates on the first day of the first month beginning
19 after--
20 " (1) the date of the death of the spouse; or
21 " (2) the date of the dissolution of the spouse's
22 marriage to the annuitant.
23 " S 8438. Deposits to the Fund
24 " (a) Foc the purposes of section 8434(c) or 8436(a)(2)
25 of this title, the annual rate of interest fir each year
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1 during which an annuity would have been redu~ed if the
2 election referred to in such section had been in effect on
3 and after the applicable date referred to in such section
4 shall be the percent determined for such year under section
5 8334(e> of this title.
6 " (b) If an annuitant does not make a deposit required by
7 se:,tion 8434(c) oc 8436(a)(2) of this title, the Office shall
e collect such amount by offset against the annuitant's annuity
9 payable from the Fund, up to a maximum of 25 percent of the
10 net annuity otherwise payable to the annuitant. The ann~litant
11 is deemed to consent to such offset.
t2 " (c) The Office may extend the time limit for making a
13 deposit required by section 8434(c) oc 8436(a)(2> of this
14 title in any case for good cause shown.
15 " SUBCHAPTER Y--DISABILITY BENEFITS
16 " S 8441. Definitions
17 " Foc the purposes of this subchapter--
18 " (1) the term `administrator of benefits' mans--
19 " (A) the Office; or
20 " (B) an insurance company or other entity
21 which--
" (i) offers claims payment services and
related administrative services under benefit
plans provided on a self-insured basis by
employees in the private sector; and
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" (11) has entered into a contrast with the
Office pursuant to section 8u50 of this title;
3 " (2) the term 'disability benefits under the Social
4 Security Act' means disability insurance benefits payable
5 under section 223 of the Social Security Act or benefits
6 payable under section 202 of such Act by reason of being
7 under a disability;
8 " (3) the term 'disability date', when used with
9 respect to an eligible participant, means the date the
10 eligible participant became disabled:
11 " (4) the teem 'disabled', when used with respect to
12 an eligible participant, means that the eligible
13 participant--
14 " (A) is under a disability within the meaning of
15 section 223 of the Social Security Act; oc
16 " (B) is unable, because of disease or injury, to
17 render useful and efficient service in the
18 participant's position and is not qualified for
19 reassignment, under procedures prescribed by the
Office, to a vacant position--
" (i) which is in the participant's employing
agency and is in the participant's commuting
area;
" (ii) which is at the same grade or pay
level as the participant's position; and
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1 " (iii) in which the participant would be
2 able to render useful and efficient service;
3 " (5) the term 'eligible participant' means an
4 employee or Hembec whose service exceeds 18 months and--
5 ' ' (A) who--
6 " (i) has applied for disability benefits
7 under the Social Secu?city Act and has been
8 determined to be under a disability for the
9 purposes of title II of the Social Security A~t;
10 oc
11 " (11) in the case of an employee or ?~enbec
12 who is not entitled to disability benefits under
13 the Social Security Act by reason of insufficient
14 quarters of coverage, has been determined by 3n
15 administrator of benefits to be disabled within
16 the meaning of paragraph (4)(A) of tnis section
17 on the basis of a report of examination required
18 by section 8445 of this title; oc
19 " (B) who has been determined by an administrator
20 of benefits to be disabled within the meaning of
21 paragraph (4)(B) of this section on the basis of a
22 report of examination required by section 8445 of
23 this title and the findings of the Office with
24 respect to the reassignment of the employee;
25 " (6) the term 'onset average pay', when used with
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1 respect to a disabled eligible parti~clpant, Weans the
2 participant's average pay on the participant's disability
3 date increased on January 1 of each year after such date
v by the same percent by which annuities referred to in
5 paragraph (1> of section 8v62(b) of this title are
6 increased under such section Sv62(b) in December of the
7 preceding year, and compounded; and
8~ " (7) the term 'projected service', when used with
9 respect to a disabled eligible participant, means the sum
10 of the number of years of service performed by the
11 participant before the participant's disability date and
12 the number of years, if any, after such date and befcce
13 the date the participant becomes--
1v " (A) in the case of an eligible participant
15 referred to in subparagraph (5)(A) of this section,
16 62 years of age; oc
17 " (B) in the case of an eligible participant
18 referred to in subparagraph (5)(B) of this section,
19 55 years of 3g~.
20 " S 8vv2. Entitlement
21 " (a)(1) A person who is an eligible participant, is
22 disabled, and has used all sick leave accrued and accumulated
23 under subchapter I of chapter 63 of this title or any other
2v similar applicable provision of law relating to :,overnment
25 employment is entitled to receive disability benefits und2c
--
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1 this subchapter while-=
2 " (A) in the case of a person who is disabled within
3 the meaning of section 8441(4)(A) of this title, such
4 person is under 62 years of age and during the month in
5 which such person becomes such age; and
6 " (B) in the case of a person who is disabled within
7 the meaning of section 8441(4)(B) of this title, such
8 person is under 55 years of age and during the month in
9 which such person becomes such age.
10 ' ' (2 ) On and after the first day of the first month
11 beginning after the month in which a person referred to in
12 paragraph (1) of this subsection becomes the maximum age
13 prescribed for such person in subparagraph (A> or (B) of such
14 paragraph, the person shall be treated as an eligible
15 participant for the purposes of entitlement to benefits under
16 subsection (b) of this section.
17 " (b>(1) An eligible participant who--
18 " (A) is disabled within the meaning of section
19 e4u1(4)(A) of this title and is not less than 62 years of
20 age, or
21 " (B) is disabled within the meaning of section
22 8441(4)(B) of this title and is not less than 55 years of
23 age,
24 and who has 5 or more years of service and projected service
25 shall be entitled to an annuity as provided in subchapter II
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1 of this title.
2 " (2) For the purposes of applying the provisions of
3 subchapter II of this title in the case of an eligible
4 participant pursuant to paragraph (1) of this subsection--
5 " (A) the eligible participant shall be deemed to
6 have separated from Government employment on the day
7 before the date the participant becomes entitled to an
8 annuity pursuant to paragraph (1) of this subsection;
9 " (B) the service of the participant shall include
10 the participant's projected service; anti
11 " (C) the participant's average pay shall be equal to
12 the participant's onset average pay.
13 " (c) if the condition of an eligible participant who is
14 disabled within the meaning of subparagraph (A) oc (B) of
15 section 8441(4) of this title changes such that the
16 participant is disabled within the meaning of the other such
17 subparagraph, the entitlement of such participant to receive
18 disability benefits under this subchapter shall be adjusted
19 as appropriate to reflect the changed condition.
20 " S 8443. Computation of benefits
21 " (a) The annual rate of the disability benefits payable
22 under section 8442(a) of this title to an eligible
23 participant referred to in section 8441(5)(A) of this title
24 shall be equal to the excess of 60 percent of the
25 pa_ticipant's onset average pay over the amount, if any,
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1 payable to the participant as disability benefits under the
2 Social Security Act.
3 " (b) The annual rate of the disability benefits payable
4 under section 8442(a) of this title to an eligible
5 participant referred to in section 8441(5)(B) of this title--
6 " (1) during the period ending 1 year after the
7 eligible participant's disability date, shall be equal to
8 the excess of 60 percent of the participant's onset
9 average pay over the amount, if any, payable to the
10 participant as disability benefits under the Social
11 Security Act; and
12 " (2) after such period, while the participant is
13 under 55 years of age, shall be equal to the excess of 40
14 percent of the participant's onset average pay over the
15 amount, if any, payable to the participant as disability
16 benefits under the Social Security Act.
17 " S 8444. Application
18 " (a) Except as provided in subsection (b) of this
19 section, a claim of a participant for disability benefits
20 under this subchapter may be allowed only if the participant
21 files with the appropriate administrator of benefits an
22 application for the disability benefits before the date the
23 participant separates from Government employment oc within ~
24 year after such date.
25 " (b) An appropriate administrator of benefits may waive
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1 the time limitation set out in subsection (a) of this section
2 in the case of a participant if--
3 " (1) the administrator of benefits determines that
4 the participant was mentally incompetent on the date the
5 participant separated from Government employment oc
6 within 1 year after such date; and
7 " (2) the application for disability benefits is
8 filed within 1 year after the date the participant is
9 restored to mental competency or the date a fiduciary is
10 appo!nted to manage the financial affairs of the
11 participant, whichever date is earlier.
12 " S 8445. >Kedical examinations
13 " (a) A participant applying for or receiving disability
14 benefits under section 8442(a) of this title shall be
15 examined by a physician under the direction of the
16 appropriate administcatoc of benefits at such tines as sucn
17 administcatoc may require.
18 " (b) A physician examining a participant under
19 subsection (a) of this section shall report to the
20 appropriate administcatoc of benefits the diagnosis and
21 prognosis with respect to such participant.
22 " (c) Notwithstanding any other provision of this
23 subchapter, any participant who fails to submit to the
24 examination required under subsection, (a) of this section
25 shall not be entitle3 to disability benefits.
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1 " S 8446. Offers of alternative employment
2 " (a)(1) Any participant who is applying for disability
3 benefits under this subchapter, is examined pursuant to
4 section 8445 of this title, and is determined on the basis of
5 the examination to be able to perform the work required in
6 any position described in paragraph (2) of this subsection
7 shall be considered for appointment to such position.
8 " (2) A position referred to in paragraph (1) of this
9 subsection is a position which is in the agency of the
10 Government employing the participant referred to in such
11 paragraph, is a position for which the participant is
12 qualified, is not lower than the grade or pay level of the
13 participant's position, and is within the participant's
14 commuting area.
15 " (b) Any participant who is appointed to oc offered a
16 position under subsection (a) of this section is entitled to
17 appeal to the liecit Systems Protection Board under section
18 7701 of this title any determination that the participant is
19 able to perform the work required of such position.
20 " S 8447. Recovery or restoration of earning capacity
21 " (a)(1) If an administrator of benefits determines that
22 an individual who is receiving disability benefits under this
23 subchapter has recovered from the disability before beccming
24 62 years of age (in the case of an individual who is disabled
25 within the meaning of section 8441(4)(A> of this title) oc 55
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1 years of age (in the case of an individual who is disabled
2 within the meaning of section 8441(4)(B) of this title),
3 payment of the benefits shall terminate on the date the
4 individual is reemployed by the Government or ~ year after
5 the date of the medical examination on which such
6 adninistcator's determination is based, whichever date is
7 earlier.
8 " (2>(A) Payment of disability benefits to any individual
9 'under this chapter that has been terminated pursuant to
10 paragraph (1) of this subsection shall be resumed if there is
11 a recurrence of the individual's disability, as determined by
12 an administrator of benefits after a medical examination of
13 the individual, and the individual is under 62 years of age
14 (in the case of an individual who is disabled within the
15 meaning of section 8441(4)(A) of this title) oc under 55
16 years of age (in the case of an individual who is disabled
17 within the meaning of section 8441(a)(B) of this title).
18 " (B) A resumption of payment of disability benefits
19 under subparagraph (A) of this paragraph shall be effective
20 on the date the medical examination referred to in such
21 pacagcaph was completed.
22 " (C) The annual rate of the disability benefits payable
23 to an individual upon resumption of payment under
24 subparagraph (A> of this paragraph shall be the annual rate
25 that would have been payable to the individual if paymen~ of
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1 disability benefits had not been terminated pursuant to
'2 paragraph (1) of this subsection.
3 " (b)(1> If the administrator of benefits determines that
4 an individual who is receiving disability benefits under this
5 subchapter has received, during the latest calendar year,
6 income from wages oc self-employment oc both totalling the
7 amount equal to 60 percent of the rate of pay payable for the
8 individual's position of Government employment on the
9 individual's disability date determined for the purposes of
10 this subchapter (increased as if such rate of pay had been
11 increased, by the same percent as the overall percent
12 increase in the rates of pay under the General Schedule, each
13 tine such rates had been increased pursuant to section 5305
14 of this title since such date), payment of the benefits shall
15 terminate on the date 60 days after the end of such calendar
16 year.
17 " (2)(A) If payment of disability benefits under this
18 subchapter has been terminated pursuant to paragraph (1) of
19 this subsection in the case of an individual who is not
20 reemployed in a position subject to this chapter, who
21 continues to be disabled, who is under 62 years of age (in
22 the case of an individual who is disabled within the meaning
23 of section 8441(4)(A) of this title) or under 55 years of age
24 (in the case of an individual who is disabled within the
25 meaning of section 8441(4)(8) of this title), and who
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1 receives in the calendar year in which the disability
2 benefits were terminated, oc any calendar year after such
3 year, income from wages oc self-employment oc both totalling
4 less than the amount computed in such case as provided in
5 such paragraph, payment of disability benefits to the
6 individual under this subchapter shall be resumed.
7 " (B ) A resumption of payment of disability benefits to
8 an individual under subpacagcaph (A) of this paragraph shall
9 be effective the first day of the first year beginning after
10 the year in which the individual received the income referred
11 to in such subpacagcaph.
12 " (C) The annual rate of the disability benefits payable
13 to an individual upon resumption of payment of disability
14 benefits under subparagraph (A) of this paragraph shall be
15 the annual rate that would have been payable to the
16 individual if payment had not been terminated pursuant to
17 paragraph (1) of this subsection.
18 " (c) Any determination under this section may be
19 appealed to the Office. A determination of the Office in such
20 an appeal may be appealed to the nerit Systems Protection
21 Board under section 7701 of this title. The Kerit Systems
22 Protection Board may heat and adjudicate any such appeal.
23 " S 8448. Relationship to workers' compensation
24 " (a)(1) An individual is not entitled to receive
25 disability benefits under this subchapter and compensation
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1 for injury to oc disability of the individual under
2 subchapter I of chapter 81 of this title covering the same
3 period of time.
4 " (2) Paragraph (1) of this subsection does not bar the
5 right of a claimant to the greater benefit conferred by
6 either subchapter ceferc~d to in such paragraph for any part
7 of the period referred to in such paragraph.
8 " (3) Paragraph (1) of this subsection and the provisions
9 of subchapter I of chapter 81 of this title do not deny an
10 individual an annuity which the individual is entitled to
11 receive under this chapter on account of service performed by
12 the individual and do not deny any concurrent benefit to the
13 individual under subchapter I of chapter 81 of this title on
14 account of the death of another individual.
15 " (b)(1) Subject to paragraph (2) of this subsection, an
16 individual's receipt of a lump-sum payment for compensation
17 under section 8135 of this title shall not affect the
18 individual's entitlement to disability benefits under this
19 subchapter.
20 " (2) If disability benefits are payable under this
21 subchapter by reason of the same disability for which a lump-
22 sum payment of compensation referred to in paragraph (1) of
23 this subsection has been made, so much of the co;noensation as
24 has been paid for a period extended beyond the date payment
25 of the disability benefits commences, as det~cmined by the
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1 Department of Labor, shall be refunded to that Department for
2 credit to the Employees' Compensation Fund. Before the
3 individual may receive the disability benefits, the
4 individual shall--
5 " (A) refund to the Department of Labor the amount
6 representing the commuted compensation payments for the
7 extended period; oc
8 " (B) authorize the deduction of the amount from the
9 disability benefits.
10 Deductions from the disability benefits may be made from
11 accrued oc accruing payments. The amounts deducted and
12 Withheld from disability benefits shall be transmitted to the
13 Department of Labor for reimbursement to the Employees'
14 Compensation Fund. When the Department of Labor finds that
15 the financial circumstances of an individual entitle3 to
16 disability benefits under this subchapter Tarrant deferred
17 refunding under this paragraph, deductions from the
18 disability benefits may be prorated against and paid from
19 ac~cuinq payments in such manner as the Department determines
20 appropriate.
21 " S 8449. liilitacy reserve technicians
22 " (a)(1) Except as provided in paragraph (2) of this
23 subsection, a participant shall be entitled to disability
24 benefits under this subchapter in the same manner as an
25 eligible participant described in section 8441(5)(B) of this
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1 title if the participant--
2 " (A) is separated from employment as a a~ilitacy
3 reserve technician by reason of a disability that
4 disqualifies the individual from ;nembership in a cesecv~
5 component of the Armed Forces specified in section 261(a)
6 of title 10 or from holding the military grade required
7 for such employment:
8 " (B) is not considered disabled;
9 " (C) is not appointed to another position in the
10 Government (under subsection (b) of this section or
11 otherwise); and
12 " (D) has not declined an offer of appointment to a
13 position in the Government under subsection (b) of this
14 section.
15 " (2) Payment of disability benefits to an individual
16 under this section terminates--
17 " (A) on the date the individual is appointed to 3
18 position in the Government (under subsection (b) of this
19 section oc otherwise);
20 " (B) on the date the individual declines an offer of
21 appointment to a position in the Government pursuant to
22 subsection (b> of this section; oc
23 " (C) as provided in section 8u47(a) oc 8447(b> of
24 this title.
25 " (b) Any individual applying for or receiving disability
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1 benefits pursuant to this section shall,~in accordance With
2 regulations prescribed by the Office, be considered by any
3 agency of the Government before any vacant position in the
4 agency is filled if--
5 " (1) the position is located within the com:nutinq
6 area of the individual's former position;
7 " (2) the individual is qualified to serve in the
8 vacant position; and
9 " (3) the position is at the same grade oc equivalent
10 level as the position from which the individual was
11 separated.
12 " S 8450. Administrative provisions
13 " (a) Foc the purpose of this section, the term `State'
1u means a State of the United States, the District of Columbia,
15 the Commonwealth of Puerto xico, and a territory or
16 possession of the United States.
17 " (b)(1) In order to provide for the administration of
18 benefits under this subchapter with maximum efficiency and
19 convenience for individuals entitled to such benefits, the
20 Office is authorized to contract with one oc more insurance
21 companies oc other entities described in section 84u1(1)(A)
22 of this title which the Office determines is appcopriat'ly
23 qualified to perform some or all of the functions described
2u in paragraph (2) of this subsection (to the extent that the
25 Office is not expressly required by this subchapter to
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t perform any function). The authority under this paragraph
2 shall be exercised in 3ccocdance with provisions of this
3 subchapter and applicable regulations issued pursuant to
4 section 8461(c) of this title.
5 " (2) The functions referred to in paragraph (1) of this
6 subsection ace as follows:
7 " (A) Receive disability applications and determine
8 benefits entitlements based upon medical evidence and
9 availability of alternative employment.
10 " (B) Compute the amount of a benefits entitlement.
11 " (C) Receive, disburse, and account for monies from
12 the Federal Employees' Disability Insurance Fund.
13 " (D) Monitor individual cases for rehabilitation
14 opportunities and determine recovery from disability oc
15 restoration to earning capacity.
16 " (E) Serve as a channel of communication of
17 information relating to administration of this
18 subchapter.
19 " (F) Otherwise assist, in such manner as a contract
20 entered into under paragraph (~) of this subsection may
21 provide, in discharging administrative duties necessary
22 to carry out the provisions of this subchapt?r.
23 " (c) A contractor under a contract awarded under
24 subsection (b) of this section shall establish an
25 administrative office under a name approved by the Office.
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1 " (d) Subject to subsection (e) of this section, each
2 contract under this section shall be for a term not to exc?ed
3 5 years and may be automatically renewable, in the absence of
4 notice by either party of intention to terminate at the end
5 of the then current term, for successive terms of 1 yeas
6 each.
7 " (e) The Office may terminate any such contract under
8 this section at any time (after such reasonable notice and
9 opportunity for hearing as the Office may prescribe in
10 regulations) if the Office finds that the contractor has
11 failed substantially to carry out the contract or is carrying
12 out the contract in a manner which is inconsistent with the
13 efficient administration of this subchapter.
14 " (f) Each contract entered into under this section shall
15 provide for advances of monies from the Federal Employees'
16 Disability Insurance Fund to the contractor for purposes of
17 paying disability benefits under this subchapter and the
18 costs of administration, as determined by the Office to be
19 necessary and proper for carrying out the functions coveted
20 by the contract.
21 " (9) The Director may include in contracts awarded under
22 subsection (b) of this section such terms an3 conditions as
23 he considers appropriate to protect the interests of
24 participants and the -Jnited States.
25 " (h) All records established oc maintainad by an
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1 administrator of benefits in the administration of this
2 subchapter shall be the property of the United States. The
3 administrator of benefits shall deliver such records to the
4 Office whenever requested by the Office.
5 '?(i) The provisions of any contract under this
6 subchapter which relate to the nature or extent of coverage
7 oc benefits (including payments with respect to benefits)
8 shall supersede and preempt any law of any State or political
9 subdivision thereof, o~ any regulation issued thereunder,
10 which relates to group disability insurance to the extent
11 that the law or regulation is inconsistent with the
12 contractual provisions.
13 '?(~) The Secretary of Health and Human Services shall
14 furnish to the Office and an administrator of benefits such
15 information, including information on individuals claiming
16 entitlement to benefits under this subchapter, as the Office
17 determines to be necessary to carry out this subchapter.
18 ??S 8451. Annual accounting; special contingency ces~cv~
19 ??(a) A contract awarded under section 8458 of this title
20 sh311 include a provision requiring the administrator of
21 benefits under the contract to transmit an accounting to the
22 Office not later than 90 days after the end of each contract
23 year. The accounting shall set forth, in a form approved by
24 th~ Office--
25 '?(1> the total amount of all monies advanced to the
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1 contracting entity from the Federal Employees' Disability
2 Insurance Fund during the contract year;
3 " (2) the total of all benefit payments made during
4 the contract year; and
5 " (3) the amounts of the authorized administrative
6 expenses charged for the contract year.
7 " (b) Any excess of the amount described in subsection
8 (a)(1) of this section over the sum of the amounts described
9 in subsections (a)(2) and (a)(3) of this section for a
10 contract year shall be credited to contract charges in the
11 su~ceedinq contract year or returned to the Federal
12 Employees' Disability Insurance Fund upon termination of the
13 contract, as the Office directs.
14 " S 8452. Federal Employees' Disability Insurance Fund
15 " (a) There is established in the Treasury of the United
16 States a fund to be known as the `Federal Employees'
17 Disability Insurance Fund'.
18 " (b)(1) Each agency of the Government employing
19 participants shall make periodic payments to the Federal
20 Employees' Disability Insurance Fund equal to a percentage of
21 the basic pay of each participant which the Office determines
22 is necessary to fund benefits and administrative expenses
23 under this subchapter.
24 " (2) An employing agency shall pay the amounts required
25 by paragraph (1) of this subsection from the appropriation or
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1 fund available for payment of the basic pay oc salaries of
2 employees of the agency. In the case of a participant in the
3 legislative branch who is paid by the Clerk of the House of
4 Representatives, the amount shall be paid from the contingent
5 fund of the House of Representatives.
6 " (c) Sums in the Federal Employees' Disability Insurance
7 Fund shall be available without fiscal year limitation 3s the
8 Office determines necessary to pay disability benefits and
9 administrative expenses authorized by this subchapter.
10 " (d) The Secretary of the Treasury may invest and
11 reinvest any of the money in the Federal Employees'
12 Disability Insurance Fund in interest-bearing obligations of
13 the United States and may sell such obligations for the
14 purposes of such fund. The interest on and the proceeds from
15 the sale of these obligations, and the income derived from
16 premium rate adjustments, become a part of such fund.
17 " (e)(1) No tax, fee, or other monetary payment may be
18 imposed oc collected by any State or by any political
19 subdivision or other governmental authority thereof on, or
20 with respect to, any funds transferred to contractors under
21 this subchapter for payment and administration of disability
22 benefits under this subchapter.
23 " (2) Paragraph (1) of this subsection shall not be
24 construed to exempt any administrator of benefits from the
25 imposition, payment, or collection of a tax, fee, or oth~c
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1 monetary payment on the net income or profit accruing E~ o:
2 realized by the administrator from business conducted under
3 this subchapter, if that tax, fee, or payment is applicable
4 to a broad range of business activity.
5 " SUBCHAPTER VI--GENERAL AND ADKINISTRATIYE PROVISIONS
6 " S 8461. Authority of the Office of Personnel Kanagement
7 " (a> The Office shall pay all benefits that are payable
8 under this chapter from the Fund.
9 " (b) The Office shall administer all provisions of this
1B chapter not specifically required to be administ~ced by the
11 Board, the Executive Director, or any other agency.
12 " (c) The Office may make regulations to carry out the
13 provisions of this chapter administered by the Office.
14 " (d) The Office may contract for the performance of any
15 administrative services necessary to carry out its
16 responsibilities under this chapter.
17 " S 8462. Cost-of-living adjustment in basic plan annuities
18 and survivor annuities
19 " (a) For the purpose of this section--
2a " (1) the term 'base quarter', when used with respect
21 to a year, means the calendar quarter ending on September
22 30, of such year; and
23 " (2) the price index for a base quarter is the
24 arithmetic mean of such index for the 3 monttis ccmprising
25 such quarter.
~__
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1 " (b)(1) Except as provided in subsection {c) of this
2 section, effective December 1 of each year in which the price
3 index for the base quarter of such year exceeds the price
u index for the base quartet of the preceding year, each
5 annuity which is payable from the Fund under subchapter II oc
6 IV of this chapter and commences not later than such December
7 1 ;hall be increased by the percentage computed under
8 paragraph (2) of this subsection.
9 " (2) The percentage by which an annuity is increased
10 under paragraph (1) of this subsection in any year shall be
11 the excess, if any, of--
12 " (A) the percentage of the increase in the price
13 index for the base quarter of such year over the price
14 index of the preceding year, over
15 " (B) 2 percent.
16 " (c)(1) The first increase (if any) made under
17 subsection (b) of this section to an annuity payable to a
18 participant who retires, to the surviving spouse or surviving
19 focmec spouse of a deceased participant, oc to the surviving
20 spouse or surviving focmec spouse of a deceased annuitant
21 whose annuity has never been increased under this subsection
22 oc subsection (b) of this section shall be equal to the
23 product (ad)usted to the nearest one-tenth of 1 percent) of--
24 " (A) one-twelfth of the applicable percentage of the
25 adjustment computed under subsection (b) of this section,
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1 multiplied by
2 " (B)(i) the number of months (counting any portion
3 of a month as a month) for which the annuity was payable
4 before the effective date of the increase, or
5 " (11) in the case of a survivor annuity payable to a
6 surviving spouse or surviving former spouse of a deceased
7 annuitant whose annuity has never been so increased, the
8 number of months (counting any portion of a month as a
9 month) since the annuity was first payable tc the
10 deceased annuitant.
11 " (2) Effective on its commencing date, an annuity
12 refereed to in subsection (b) of this section and payable to
13 an annuitant's surviving spouse or surviving former spo~~se
1u shall be increased by the total percentage by which the
15 deceased annuitant's annuity had been increased under this
16 section during the period beginning on the date the deceased
17 annuitant's annuity commenced and ending on the date of the
18 deceased annuitant's death.
19 " (d) The monthly installment of an annuity payable after
20 adjustment under this section shall be rounded to the next
21 lowest dollar, but the increase in the monthly installment
22 under this section shall be at least S1.
23 "S 8u63. Rate of benefits
24 " Each annuity and disability benefit is stated as an
25 annual amount, one-twelfth of which, fixed at the next lowest
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1 dollar, constitutes the monthly rate payable on the first
2 business day of the first month beginning after the last day
3 of the month for which the annuity or disability benefit has
4 accrued.
5 " S 8464. Commencement and termination of annuities
6 " (a)(1) Except as otherwise provided in this chapter,
7 the annuity of a participant under subchapter II of this
8 chapter shall commence on the first day of the first month
9 beginning after--
10 " (A) the date the participant s2pacates from
11 Government employment entitled to 3n immediate annuity
12 under section 8411 of this title, or
13 " (B) in the case of a participant who is entitled to
14 a deferred annuity under section 8412 of this title and
15 is not entitled to an immediate annuity under section
16 8411 of this title, the date elected by the participant
17 under section 8412(a) of this title oc the date the
18 participant becomes 62 years of age, whichever is
19 earlier,
20 as the case may be.
21 " (2) The annuity of an annuitant under this chapter
22 terminates on the date of death or other terminating event
23 provided by law.
24 " (b)(1) Except as otherwise pcovlded in this chapter, a
25 survivor annuity payable to an individual unaec this chapter
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1 shall commence on the first day of the first month beginning
2 after the date of the death of the deceased participant or
3 former participant on whose death such annuity is based.
u " (2) A survivor annuity payable to a sucvivinq spouse or
5 an eligible former spouse of a deceased participant or
6 deceased former participant under this chapter terminates on
7 the last day of the last month ending before the sucvivinq
8 spouse or former spouse dies oc, if the sucvivinq spouse oc
9 former spouse is less than 55 years of age, remarries.
1e " S 8465. Waiver, allotment, and assignment of benefits
11 " (a) An individual entitled to receive payment of
12 benefits under subchapter II of this chapter .nay decline tc
13 accept all or any part of the amount of the benefits by a
14 waiver signed and filed with the Office. The waiver may be
15 revoked in writing at any time. Payment of the benefits
16 waived may not be made for the period during which the waiver
17 is in effect.
18 " (b) An individual entitled to receive payment of
19 benefits under subchapter II of this chapter may make
20 allotments oc assignments of amounts from the benefits for
21 such purposes as the Office considers appropriate.
22 " S 8466. Application for benefits
23 " (a) No payment of benefits based on the service of a
24 former participant shall be made under this chapter unless an
25 application for payment of the benefits is received by t`~e
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1 Office before the one hundred and fifteenth anniversary of
2 the former participant's birth.
3 " (b) Notwithstanding subsection (a) of this section,
4 after the death of a participant oc former participant, a
5 benefit based on the participant's oc former participant's
6 service shall not be paid under subchapter IY of this chapter
7 unless an application therefor is received by the Office
8 Within 30 years after the death or other event which
9 establishes the entitlement to the benefit.
10 " S 8467. Court orders
11 " (a) Payments under this chapter which would otherwise
12 be made to a participant oc former participant based upon the
13 service of the participant oc former participant shall be
1u paid (in whole oc in part) by the Office or the Executive
15 Director, as the case may be, to another person if and to the
16 extent that the terms of any court decree of divorce,
17 annulment, or legal separation, oc the teems of any court
18 order or court-approved property settlement agreement
19 incident to any court decree of divorce, annulment, or legal
20 separation expressly provide. Any payment under this
21 pa:agcaph to a person bats recovery by any other person.
22 " (b) Subsection (a) of this section shall apply only to
23 payments made by the Office or the Executive Dicecto^ under
24 this chapter after the date on which the Office or the
25 Executive Director, as the case may be, receives written
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1 notice of such decree, order, oc agreement, and such
2 additional information and documentation as the Office or the
3 Executive Director may require.
4 " S 8468. Annuities and pay on reemployment
5 " (a)(1) Except in the case of an annuitant who has made
6 an election under subsection (b) of this section, if an
7 annuitant becomes employed in an appointive oc elective
8 position in the Government, payment of any annuity under
9 subchapter II of this chapter to the annuitant terminates
10 effective on the date of the employment, and the annuitant's
11 service on and after the date the annuitant becomes so
12 employed is coveted by this chapter. Upon termination of the
13 employment, the rights of the annuitant under subchapter II
14 of this chapter shall be redetermined. If the annuitant 31es
15 while still so employed, a survivor annuity payable with
16 respect to the deceased annuitant shall be redetermined as if
17 the employment had otherwise terminated on the date of death.
18 " (2) The amount of an annuity resulting from a
19 redetermination of rights under this chapter pursuant to
20 paragraph (1) of this subsection shall not be less than the
21 amount of the terminated annuity plus any increases under
22 section 8462 of this title occurring after the termination of
23 the annuity and before the commencement of the cedetecminzd
24 annuity.
25 " (b)(1) Under regulations prescribed by the Office, an
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1 annuitant who becomes employed in an appointive oc elective
2 position in the Government on a part-time basis may elect to
3 continue to receive an annuity under subchapter II of this
4 chapter as provided in this subsection.
5 " (2) The annuity payable under subchapter II of this
6 chapter to an annuitant making an election under par3graph
7 (1) of this subsection shall be reduced during the pact-time
8 employment referred to in such paragraph as necessary to
9 carry out paragraph (3) of this subsection.
10 " (3) The sum of--
11 " (A) the amount of an annuity payable under
12 subchapter II of this chapter to an annuitant making 3n
13 election under pacagcaph (1) of this subsection, and
14 " (B) the annual rate of pay payable to the
15 annuitant,
16 during the part-time employment referred to in such paragraph
17 may not exceed the annual rate of pay which is payable for
18 full-time employment in the position in which the annuitant
19 is employed.
20 " (4) Upon termination of the part-time employment
21 referred to in paragraph (1) of this subsection, payment of
22 the full annuity of an annuitant who has made an election
23 under paragraph (1) of this subsection shall resume. The
24 amount of the full annuity, upon resumption of payment, shall
25 be the amount of the annuity which would have been payable to
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1 the annuitant if the annuitant had not accepted such
2 employment.
3 " S 8469. Information
4 " The Office shall make available to each individual who
5 is required or eligible to be a participant such information
6 as may be necessary to enable the individual to understand
7 the rights and benefits, including options, which the
8 individual has under the provisions of this chapter.
9 " SUBCHAPTER VII--TRANSITION PROVISIONS
10 " S 8471. Treatment of certain individuals subject to the
11 Civil Service Retirement and Disability System
12 " (a)(1)(A) Any individual--
13 " (i) who is subject to subchapter III of chapter 83
14 of this title as an employee (as defined in section
15 8331(1) of this title, other than an individual employed
16 by the government of the District of Columbia), whose
17 service is not employment for the purposes of title II of
18 the Social Security Act and chaplet 21 of the Internal
19 Revenue Code of 1954, and who is not requited by section
20 8402 of this title to be a participant, oc
21 " (11) who is a flembec of Congress (as defined in
22 section 2106 of this title) and who is not requited by
23 section 8402 of this title to be a pacticipa~t,
24 may elect to commence participation in the System.
25 " (B) An election ;Wade under subparagraph (A) of this
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1 paragraph shall be made in writing, in accordance with suc'~
2' regulations as the Office may prescribe, and not later than
3 December 31, 1987, oc, in the case of an individual who
v becomes an employee or Member after a break in service for a
5 period that includes January 1, 1987, not later than 1 year
6 after the date on which the individual resumes service.
7 " (2> Except as provided in section eu72(d) of this
8 title, any individual who makes the election authorized by
9 paragraph (1) of this subsection shall retain accrued credit
10 for entitlement to benefits under subchapter III of chapter
11 83 of title 5, United States Code, for service performed
12 while subject to such subchapter.
13 " (3) an individual referred to in paragraph (1) of this
1v subsection who becomes an employee or Member after a break in
15 service for a period that includes January 1, 1987, !nay make
16 deposits under section 833v of this title for service
17 performed before such date while subject to subchapter IIZ of
18 chaplet 83 of this title.
19 " (b) Except as provided in section 8u72(d) cf this
20 title, any individual who--
21 " (1) has an uncefunded lump-sum credit in the Fund
22 under subchapter III of chapter 83 of this title,
23 " (2) is required by section Sv02 of this title to be
24 a participant, and
25 " (3) is not a participant referred to in section
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1 8473(a)~of this title,
2 shall retain accrued credit for entitlement to benefits under
3 su~h subchapter for service performed while subject to such
4 subchapter.
5 " (c) Except as provided in section 8472(d) of this
6 title, any individual who--
7 " (1) has received a refund of a lump-sum credit in
~8 the Fund under subchapter III of chapter 83 of this
9 title,
10 " (2) is required by section 8402 of this title to be
11 a participant, and
12 " (3) is not a participant referred to in section
13 8473(a) of this title,
14 may make deposits under section 8334 of this title for
15 service performed before January 1, 1987, while subject to
16 subchapter III of chapter 83 of this title and shall, upon
17 making such deposits, be entitled to credit under such
18 subchapter for service covered by the deposits.
19 " (d) Survivor benefits shall be payable as provided in
20 subchapter III of chapter 83 of this title and this chapter
21 to the extent of the service creditable under such subchapter
22 (pursuant to this section) and thls chapter in the case of a
23 participant referred to in subsection (a), (b), oc (c) of
24 this section.
25 " S 8472. Special rules for participants retaining
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1 entitlement in the Civil Service Retirement and
2 Disability System
3 " (a) Service that is creditable under subchapter III of
4 chapter 83 of this title in the case of an individual who
5 elects to be a participant or Who retains entitlement in the
6 Civil Service Retirement and Disability System under section
7 8471 of this title shall be credited as service under this
8 chaplet only--
9 " (1) for the purposes of determining eligibility to
10 retire entitled to an annuity under section 8411 oc 8412
11 of this title and entitlement for disability benefits
12 under subchapter Y of this chapter; and
13 " (2) for the purpose of considering such service as
14 years of participation in the System for the purposes of
15 section 8422 of this title (relating to vesting under the
16 thrift savings plan).
17 " (b) Service performed as a participant in the System by
18 an individual referred to in subsection (a) of this secticn
19 shall be credited under subchapter III of chapter 83 of this
20 title only for the purpose of determining eligibility to
21 retire entitled to an annuity under section 8335, 8336, oc
22 8338 of this title.
23 " (c)(1) The rates of basic pay in effect for an
24 individual referred to in subsection (a) of this section on
25 and after the date the individual begins to participate in
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1 the System shall be taken into account in computing the
2 individual's average pay (as defined in section 8331(u) of
3 this title) for the purposes of subchapter III of chapter 83
~ of this title.
5 " (2) The rates of basic pay in effect for an individual
6 referred to in subsection (a) of this section before the date
7 the individual begins to participate in the System s1a11 be
8 taken into account in computing the individual's average pay
9 for the purposes of this chapter.
10 " (d) Sec?lon 8337 of this title (relating to disability
11 retirement) shall not apply in the case of a participant
12 referred to in subsection (a).
13 " S 8473. Participants subject to the Federal Employees'
14 Retirement Contribution Tempocacy Ad)ust:nent
15 Act of 1983
16 " (a)(1) The service of a participant with respeot to
17 which a reduced contribution is made under section 20u(a) of
18 the Federal Employees' Retirement Contribution Tempocacy
19 Adjustment Act of 1983 (97 Stat. 1107; 5 U.S.C. 8331 note)
20 shall be credited as service for the purposes of this chapter
21 and shall be considered years of participation in the System
22 for the purposes of section 8422(b)(1) of this title.
23 " (2) Paragraph (1) of this subsection shall not apply to
2u a Member of Congress (as defined in section 2106 of this
25 title).
~-
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1 " (b)(1) On January 1, 1987, the amount computed under
2 paragraph (2) of this subsection shall be transferred fco;n
3 the Fund to the Thrift Savings Fund in the case of a
4 participant to whom subsection (a)(1) of this section
5 applies. The amount transferred shall be credited to an
6 account established for the individual pursuant to section
7 8428(a) of this title.
8 " (2)(A) The amount transferred from the Fund in the case
9 of a participant pursuant to paragraph (1) of this subsection
10 shall be equal to the sum of--
11 " (i) two times the total amount deducted and
12 withheld from the basic pay of the participant pursuant
13 to section 204(a> of the Federal Employees' Retirement
14 Contribution Temporary Adjustment Act of 1983 (97 Stat.
15 1107; 5 U.S.C. 8331 note); and
16 " (ii) interest on the amount referred to in clause
17 (i) of this subpacagcaph computed at the annual rate
18 determined under the second sentence of this subpacagcaph
19 and compounded annually, as if a fraction of such amount
20 (determined as provided in subparagraph (B) of this
21 paragraph) had been deposited to the credit of the Fund
22 at the end of each month for which amounts were deducted
23 and withheld from the basic pay of the participant as
24 described in clause (i) of this subparagraph.
25 The annual rate referred to in clause (ii) for an amount
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1 transferred from the Fund in any calendar year shall be equal
2 to the interest rate determined for such calendar year under
3 section 8334(e) of this title.
4 " (B) In the case of any participant to Whom pacagraph
5 (1) of this subsection applies--
6 " (i) the numerator of the fraction referred t~ in
7 subparagraph (A)(11> of this paragraph is one; and
8 " (ii) the denominator of the fraction is the number
9 of months for Which amounts Were deducted and Withheld
10 from the basic pay of the participant as described in
11 subparagraph (A)(i) of this paragraph.
12 " (3) For the purposes of section 8422 of this title--
13 " (A) one-half of the amount computed in the case of
14 a participant referred to in subsection (a) ~f this
15 section pursuant to pacagraph (2) of this subsection
16 shall be treated as a contribution made under section
17 8421(a) of this title; and
18 " (B) one-half of such amount shall be treated as a
19 contribution made by the employing agency of the
20 participant pursuant to section 8u21(b> of this title.
21 " (4) All amounts transferred from the Fund pursuant to
22 paragraph (1) of this subsection shall be transferred in the
23 form of interest-bearing securities of the United States.
2u " (c) The total amount of any deposit made to the Fund
25 under section 833u(j) of this title (relating to deposits
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1 covering periods of ~nilitacy service) in the case of a
2 participant referred to in subsection (a)(1) of this section.
3 shall be refunded to the participant. The refund shall be
v paid out of sums in the Fund.
5 " S 8v74. Reemployed annuitants under a Government retirement
6 system.
7 " (a) Foc the purposes of this section--
8 " (1) the term 'annuitant'--
9 " (A) in the case of the Civil Service Retirement
10 and Disability System, shall have the same meaning
11 provided in section 8331(9) of this title;
12 " (B) in the case of the Foreign Service
13 Retirement and Disability System, shall have the same
1v meaning provided in section 80v(1) of the Foreign
15 Service Act of 1980 (22 U.S.C. v0vv(1)), except that
16 such term does not include a survivor; and
17 " (C) in the case of the Central Intelligence
18 Agency Retirement and Disability System, means--
19 " (1) any participant who is referred to in
20 section 203 of the Central Intelligence Agency
21 Retirement A~t of 196v for Certain Employees, and
22 " (li) any individual who formerly was such a
23 participant,
2v entitled to 3n annuity from the Central Intelligence
25 Agency Retirement and Disability Fund;
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1 " (2) the teem 'Government retirement system' mans--
2 " (A) the Civil Service Retirement and Disability
3 System under subchapter III of chapter 83 of this
4 title;
5 " (B) the Foreign Service Retirement and
6 Disability System under chapter 8 of the Foreign
7 Service Act of 1980 (22 U.S.C. 4041 et seq.); and
8 " (C) the Central Intelligence Agency Retirement
9 and Disability System under the Central Intelligence
10 Agency Retie?m~nt Act of 1964 for Cecta:n Employees
11 (50 U.S.C. 403 note); and
12 " (3) the term `reemployed annuitant' means an
13 annuitant Who becomes employed by the Government after
14 the effective date of the Federal Retirement Reform Act
15 of 1985 and is required by section 8402 of this title to
16 be a participant.
17 " (b) A reemployed annuitant shall retain entitlement in
18 the Government retirement system under Which the annuitant is
19 receiving an annuity.
20 " (c)(1) Service that is creditable under the Government
21 retirement system of a reemployed annuitant shall be credited
22 under this chapter only for the purpose of determining
23 eligibility to retire entitled to an annuity under section
24 8411 of this title.
25 " (2) Service performed as a reemployed annuitant shall
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1 not be creditable service for the purposes of the Government
2 retirement system of the reemployed annuitant.
3 " (d)(1) The Cates of basic pay in effect for a
4 reemployed annuitant on and after the date the annuitant
5 begins to participate in the System shall be taken into
6 account in computing the annuitant's average pay for the
7 purposes of the Government retirement system under which the
8 annuitant was receiving an annuity when the reemployment
9 commenced.
10 " (2) The rates of basic pay in effect for a reemployed
11 annuitant before the date the annuitant begins to participate
12 in the System shall be taken into account in computing the
13 annuitant's average pay for the purposes of this chapter.
14 " (e) Deductions may not be withheld from the pay of a
15 reemployed annuitant for the purposes of the reemployed
16 annuitant's Government retirement system while the reemployed
17 annuitant is a participant in the System.
18 " S 8475. Exemption from certain offset provisions of the
19 Social Security Act
20 " Sections 202(b)(4), 2Z2(c)(2), 202(e)(7>, 202(f)(2),
21 202(q)(4), and 215(a)(7) of the Social Security Act shall not
22 apply in the case of a person who is a participant referred
23 to in section 8471 of this title and who has completed 5
2u years of service.
25 " S 8476. Regulations
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1 " The Office may prescribe regulations to catty out this
2 subchapter.
3 ~" SUBCHAPTER VIII--FEDERAL RETIREMENT THRIFT INVESTMENT
4 MANAGEMENT SYSTEM
5 " S 8u91. Federal Retirement Thrift Investment Board
6 " (a) There is established in the executive branch of the
7 Government a Federal Retirement Thrift Investment Board.
8 " (b)(1) The Board shall be composed of--
9 " (A) the Chairman of the Federal Seserve Board;
10 " (B) the Secretary of the Treasury;
11 " (C) the Director; and
12 " (D) two representatives of Federal employes
13 organizations appointed by the President, one of whom
14 shall be a representative from a labor organization (as
15 defined in section 7103(a)(4) of this title) and one of
16 whom shall be a representative from an organization for
17 employees who are managers.
18 " (2) If an office referred to in paragraph (1)(A),
19 (1)(B), or (1)(C) of this subsection is vacant, the person
20 acting as the officer in such office shall be a member of the
21 Board while acting as such officer.
22 " (3) The Chairman of the Federal Reserve Board shall be
23 the Chairman of the Board.
24 " (4) The members of the Board appointed under paragraph
25 (1)(D) of this subsection shall serve until replaced by the
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1 President.
2 " (c> The Board shall--
3 " (1) establish policies for--
4 " (A) the investment and management of the Thrift
5 Savings Fund; and
6 " (B) the administration of subchapter III of
7 this chapter and the provisions of subchapter Iv of
8 this chapter which relate to survivor annuities
9 payable out of the Thrift Savings Fund;
10 " (2) review the performance of investments made for
11 the Thrift Savings Fund;
12 " (3) without regard to civil service and
13 classification law;, fix the rate of pay of the Executive
14 Director;
15 " (4) supervise the Executive Director; and
16 " (5) review and approve the budget of the Board.
17 " (d)(1) The Board may--
18 " (A) adopt, alter, and use a seal;
19 " (B) except as provided in paragraph (2) of this
20 subsection, direct the Executive Director to take such
21 action as the Board considers appropriate to catty out
22 the provisions of this subchapter and subchapter III of
23 this chapter, the provisions of subchapter IY of this
24 chapter which relate to survivor annuities payable out of
25 the Thrift Savings Fund, and the policies of the Board;
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1 " (C) upon the concurring votes of four members,
2 remove the Executive Director from office for good cause
3 shown after investigation by the Comptroller General of
4 the United States and after considering any
5 recommendations made by the Comptroller General with
6 respect to the removal; and
7 " (D) take such other action as may be necessary to
8 carry out the functions of the Board.
9 " (2) Except in the case of investments required by
10 section 8u27 of this title to be invested in securities of
11 the Government, the Board may not direct the Executive
12 Director oc any contractor under a contract awarded under
13 section 8u9u(c)(2) this title to invest or to cause to be
14 invested any sums in the Thrift Savings Fund in a specific
15 asset or to dispose of o; cause to be disposed any specific
16 asset of such Fund.
17 " (e) The members of the Board shall discharge their
18 responsibilities solely in the interest of participants and
19 beneficiaries under this chapter.
20 " S 8492. Federal Retirement Thrift Advisory Committee
21 " (a)(1) The Board shall establish a Federal Retice~nent
22 Thrift Advisory Committee (hereafter in this section referred
23 to as the 'Advisory Committee').
2u " (2)(A) The Advisory Committee shall be composed of 5
25 members appointed as provided in subparagraph (B) of this
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1 pacagraFh.
2 " (B> The members of the Advisory Committee shall be
3 appointed by action agreed to by a majority of the members
4 the Board. Three of the members of the Advisory Committee
5 shall be appointed from among investment asset managecs not
6 employed by the Government and three of the members of the
7 Advisory Committee shall be appointed from among
8 administrators of thrift savings plans established for
9 employees of private sector enterprises.
10 " (3) The Board shall prescribe the terms and conditions
11 of service of the members of the Advisory Committee.
12 " (b) The Advisory Committee shall--
13 ?`(1) advise the Board and the Executive Director on
14 matters relating to--
15 " (A)(i) investment policy for the Thrift Savings
16 Fund;
17 " (ii) selection of the types of investment funds
18 Which are appropriate for investment of sums in the
19 Thrift Savings Fund; and
20 " (iii) selection of investment managecs fo: the
21 purpose of contracting for the administration of
22 investment funds under section 8494(c)(2) of this
23 title; and
24 " (B)(i) the performance of the duties of the
25 Board and the Executive Director under the provisions
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1 of~this subchapter and subchapter III of this chapter
2 and the provisions of subchapter IY of this ~haptec
3 which relate to survivor annuities payable out of the
4 Thrift Savings Fund; and
5 " (ii) the administration of such provisions; and
6 " (2) review the performance of investments made for
7 the Thrift Savings Fund.
8 " S 8u93. Employee Advisory Committee
9 " {a) The Board shall establish an Employee Advisory
10 Committee. The Employee Advisory Committee shall be compos?3
11 of 5 members, elected in accordance with subsection (b) of
12 this section, each of whom is a participant and has 3n
13 account balance in the Thrift Savings Fund.
14 " (b){1> For the purposes of this subsection, the term
15 'voting participant' means a participant who has an account
16 balance in the Thrift Savings Fund.
17 " (2) The members of the Employee Advisory Committee
18 shall be elected by ma)ocity vote of the voting participants
19 that vote in accocdanc~ with this subsection and the
20 regulations prescribed by the Executive Director.
21 " (3) Each voting participant shall have one vote for
22 each vacancy on the Employee Advisory Committee. Foc each
23 elaction, a voting participant shall be entitled to cast only
24 one vote for an individual nominee.
25 " (u) Nominations for the election of members to th~
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1 Employee Advisory Committee shall be solicited from voting
2 participants. Each nominee shall have the opportunity, in
3 accordance with the regulations prescribed by the Executive
u Director, to submit a brief statement to voting participants
5 in connection With the election.
6 " (5) Run-off elections shall be held in accordance with
7 the regulations prescribed by the Executive Director
8 " (6) Each member of the Employee Advisory Committee
9 shall serve for a term of 2 years, except that, in accordance
10 with regulations prescribed bS? the Executive Director, 3 of
11 the first 5 members shall serve for a term of 3 years. Zn the
12 event that a member, for any reason, fails to complete his oc
13 her term, an election will be held, in accordance with
14 regulations prescribed by the Executive Director, to fill
15 that vacancy for the remainder of the member's term.
16 " (c) The Employee Advisory Committee shall act by
17 resolution of a majority of the members.
18 " (d) The Employee Advisory Committee shall--
19 " (1) advise the Board and the Executive Director on
20 matters relating to--
21 " (A) investment policies for the Thrift Savings
22 Fund, and
23 " (B) selection of the types of investment funds
2u that ace appropriate for investment of sums in the
25 Thrift Savings Fund;
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1 " (2) advise the Executive Director cegacdin~ stocks
2 to be excluded from the Common Stock Index Investment
3 Fund in accordance with section 8427(b)(2)(C) of this
4 title;
5 " (3) exercise all rights as shareholders with
6 respect to stocks purchased for investments of the Common
7 Stock Index Investment Fund; and
8 " (4) perform such other duties, as the Board may
9 direct, with respect to investment funds established in
10 accordance with section 8427(b)(1)(D) of this title.
11 " S 8494. Executive Director
12 " (a)(1) The Board shall appoint an Executive Director by
13 action agreed to by a majority of the members of the Board.
14 The Executive Director shall have substantial experience,
15 training, oc expertise in the management of financial
16 investments.
17 " (2) The Board shall prescribe the terms and conditions
18 of service of the Executive Director.
19 " (b) The Executive Director shall--
20 " (1) carry out the policies established by the
21 Board;
22 " (2) invest and manage the Thrift Savings Fund in
23 accordance with the investment and other policies
24 established by the Board;
25 " (3) provide for payment of annuities and other
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1 authorized distributions from the Thrift Savings Fund
2 under this chapter, by the Office or otherwise; and
3 " (u) administer the provisions of this subchapter
4 and subchapter III of this chapter and the provisions of
5 subchapter IY of this chapter which relate to survivor
6 annuities payable out of the Thrift Savings Fund.
7 " (c> The Executive Director, may--
8 " (1) prescribe regulations to carry out the
9 responsibilities of the Executive Director under this
10 section;
11 " (2) without regard to civil service and
12 classification laws, appoint, employ, and fix the
13 compensation of such personnel as may be necessary to
14 carry out the provisions of this subchapter and
15 subchapter III of this chapter and the provisions of
16 subchapter IY of this chapter which relate to survivor
17 annuities payable out of the Thrift Savings Fund;
18 " (3) enter into such contracts oc other arrang?me~ts
19 (including contracts for the performance of
20 administrative services), and make such modifications
21 thereof, as may be appropriate to catty out the
22 provisions of this subchapter and section eu27 of this
23 title and the policies of the Board;
2u " (u) except as provided in section 552a of this
25 title, obtain from any Federal agency, including any
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1 independent establishment or instrumentality of the
2 United States, advice, information, estimates,
3 statistics, and such other assistance as the Executive
4 Director considers necessary to carry out the provisions
5 of this subchapter and subchapter III of this chapter,
6 the provisions of subchapter IY of this chapter Which
7 relate to survivor annuities payable out of the Thrift
8 Savings Fund, and the policies of the Board;
9 " (5) make such payments out of sums in the Thrift
10 Savings Fund as the Executive Director determines are
11 necessary to carry out the provisions of this subchapter,
12 subchapter III of this chapter, the provisions of
13 subchapter IY of this chapter which relate to survivor
14 annuities payable out of the Thrift Savings Fund, and the
15 policies of the Board;
16 " (6) pay the compensation, per diem, and travel
17 expenses of personnel from the Thrift Savings Fund;
18 " (7) accept and utilize the services of individuals
19 employed intermittently in the Government service and
20 reimburse such individuals for travel expenses, as
21 authorized by section 5703 of this title, including per
22 diem as authorized by section 5702 of this title;
23 " (8) except as otherwise expressly prohibited by law
24 oc the policies of the Board, delegate any of the
25 Executive Director's functions to such officers and
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1 employees under the $oacd as the Executive Director .nay
2 designate and authorize such successive cedelegations of
3 such functions to such officers and employees under the
4 Board as the Executive Director may consider to be
5 necessary or appropriate; and
6 " (9) take such other actions as are appropriate to
7 carry out the functions of the Executive Director.
8 " S 8495. Investment policy
9 " The Board shall develop investment policies under
1B section 8491(c)(1) of this title which provide for--
11 " (1> prudent investments suitable for accumulating
12 funds for payment of retirement income;
13 " (2) low administrative costs; and
14 " (3) investments likely to receive broad acceptance
15 by participants and the public, as determined by the
16 Employee Advisory Committee.
17 " S 8496. Administrative provisions
18 " (a) The Board shall meet--
19 " (1) not less than once during each fiscal year; and
2B " (2) at additional times at the call of the
21 Chairman.
22 " (b)(1) Except as provided in section 8491(d)(1)(C) of
23 this title, the Board shall perform the functions and
24 exercise the powers of the Board on a majority vote of a
25 quorum of the Board.
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1 " (2)'A vacancy on the Board shall not impair the
2 authority of a quorum of the Board to perform the functions
3 and exercise the powers of the Board.
4 " (c) Three members of the Board shall constitute a
5 quorum for the transaction of business.
6 " (d)(1) Each member of the Board who is not an officer
7 or employee of the Federal Government and each member of the
8 Federal Retirement Thrift Advisory Committee or the Employee
9 Advisory Committee shall be compensated at the daily sate of
10 basic pay payable for grade GS-18 under the Ge,~eral Schedule
11 for each day oc part thereof during which such member is
12 engaged in performing a function of the Board, the Federal
13 Retirement Thrift Advisory Committee, or the Employee
14 Advisory Committee, as the case may be.
15 " (2) A member of the Board, the Federal Retirement
16 Thrift Advisory Committee, or the Employee Advisory Committee
17 shall be paid travel, per diem, and other necessary expenses
18 under subchapter I of chapter 57 of this title while
19 traveling away from his home oc regular place of business in
20 the performance of the duties of the Board, the Federal
21 Retirement Thrift Advisory Committee, or the Employe
22 Advisory Committee, as the case may be.
23 " (e) The accrued annual leave of any employee who is a
24 member of the Board shall not be charged for any time us?d in
25 performinq service for the Board during any work period.
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1 ''(f) Section 14(a)(2) of the Federal Advisory Committee
2 Act (86 Stat. 776; 5 U.S.C. App.) shall not aaply to the
3 Federal Retirement Thrift Advisory Committee or the Employee
4 Advisory Committee.
5 " S 8497. Fiduciary responsibilities; liability and penalty
6 " (a) For the purposes of this section--
? " (1) the teCm 'fiduciary' means--
8 " (A) each member of the Federal Retirement
9 Thrift Advisory Committee and the Executive Director;
10 " (B) any person who has or exercises
11 discretionary authority or discretionary control over
12 the management oc disposition of the assets of t'~e
13 Thrift Savings Fund;
14 " (C) each member of the Employee Advisory
15 Committee with respect to the member's duties in
16 connection with the Common Stock Index Investment
17 Fund, except with respect to the performance of the
18 function referred to in section 8427(b)(2)(C) of this
19 title; and
28 " (D) any person who, with respect to the Thrift
21 Savings Fund, is described in section 3(21)(A) of the
22 Employee Retirement Income Security Act of 1974 (29
23 U.S.C. 1002(21)(A));
24 except that, such term does not include the members of
25 the Board;
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1 " (2> the term `patty in interest' includes--
2 " (A) any fiduciary;
3 " (B) any counsel to a fiduciary;
4 " (C) any participant;
5 " (D) any person providing services to the Board
6 oc the Executive Director;
7 '?(E) a labor organization the members of which
8 are participants;
9 " (F) a spouse, ancestor, lineal descendant, oc
10 spouse of a lineal descendant of a person described
11 in subclause (A), (B), or (D> of this clause;
12 " (G) a cocpocation, partnership, or trust oc
13 estate of which, or in which, 58 percent or moca of--
14 " (i) the combined voting power of all
15 classes of stock entitled to vote oc the total
16 value of shares of all classes of stock of such
17 cocpocation;
18 " (ii ) the capital interest oc pc of its
19 interest of such partnership; or
20 " (iii) the beneficial interest of such trust
21 oc estate,
22 is owned directly oc indirectly, or held by a person
23 described in subclause (A), (B), (D), oc (F) of this
24 clause;
25 " (H) an employee, officer, director, or an
~~-
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1 individual having powers or responsibilities sirilac
2 to those of an officer and director, oc a holder
3 (directly or indirectly) of 10 percent oc mote of the
u shares of a corporation referred to in subclause (F)
5 of this clause; and
6 " (I) an employee, officer, director, or an
7 individual having poWecs oc responsibilities similar
8 to those of an officer and director, or a person Who,
9 directly or indirectly, is at least a 10 percent
10 partner oc ]oint venturer (measured in capital oc
11 profits) of a person described in subclause (A), (B),
12 (D), (F), or (~) of this clause;
13 " (3) the term 'person' means an individual,
14 partnership, joint venture, corporation, mutual company,
15 point-stock company, trust, estate, unincorporated
16 organization, association, or labor organization; and
17 " (4) the term 'adequate consideration' means--
18 " (A) in the case of a security for Which there
19 is a generally recognized market--
20 " (i) the price of the security prevailing on
21 a national securities exchange Which is
22 registered under section 6 of the Securities
23 Exchange Act of 1934; oc
24 " (ii) if the security is not traded on such
25 a national securities exchange, a price not less
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1 favorable to the Thrift Savings Fund than the
2 offering price for the security as established by
3 the current bid and asked prices quoted by
4 persons independent of the issuer and of any
5 party in interest;
6 " (B) in the case of an asset other than a
7 security or in the case of a service for which there
8 is a generally recognized market, the fair market
9 value of the asset or service as determined in good
10 faith by the fiduciary oc fiduciaries with
11 discretionary authority oc control over the
12 acquisition, management, or disposition of the asset
13 or over the retention of the service; and
14 " (C) in the case of any other asset or secvic~--
15 " (i) the most favorable price to the Thrift
16 Savings Fund as determined by a competitive
17 bidding process conducted in accordance with
18 regulations prescribed by the Executive Director;
19 " (11) the most favorable price to the Thrift
20 Savings Fund as determined by at least 2
21 appraisals conducted by qualified appraisers
22 independent of the seller, purchaser, or
23 provider, as the case may be, and independent of
24 any party in interest; or
25 " (iii) the fair market value as detecmin~d
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1 by the fiduciary or fiduciaries who have
2 discretionary authority or control over the
3 acquisition, management, oc disposition of the
4 asset or over the retention of the service and
5 ace independent of the person or persons entering
6 into the subject transaction with the Thrift
7 Savings Fund, in accordance with regulations
8 prescribed by the Executive Director.
9 " (b)(1) A fiduciary shall discharge his responsibilities
10 with respect to the Thrift Savings Fund or applicable portion
11 thereof solely in the interest of the participants and
12 beneficiaries and--
13 " (A) for the exclusive purpose of--
14 " (i) providing benefits to participants and
15 their beneficiaries; and
16 " (ii) defraying reasonable expenses of
17 administering the Thrift Savings Fund or applicable
18 portions thereof;
19 " (B) with the care, skill, prudence, and diligence
20 under the circumstances then prevailing that a prudent
21 individual acting in a like capacity and familiar with
22 such matters would use in the conduct of an enterprise of
23 a like character and with like objectives;
2u " (C) to the extent permitted by section 8427 of this
25 title, by diversifying the investments of the Thrift
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1 Savings Fund~or applicable portions thereof so as to
2 minimize the cask of large losses, unless under the
3 circumstances it is clearly prudent not to do so; and
4 " (D) in accordance with the provisions of this
5 chapter and the policies prescribed by the Board.
6 " (2) No fiduciary may maintain the indicia of ownership
7 of any assets of the Thrift savings Fund outside the
8 jurisdiction of the district courts of the United States.
9 " (c) A fiduciary shall not--
10 " (1) deal with any assets of the Thrift Savings Fund
11 in his own interest or for his own account;
12 " (2) act, in his individual or any other capacity,
13 in any transaction involving the Thrift Savings Fund on
14 behalf of a party, or representing a party, whose
15 interests are adverse to the interests of the Thrift
16 Savings Fund oc the interests of its participants or
17 beneficiaries;
18 " (3) receive any consideration for his own personal
19 account from any party. dealing with sums credited to the
20 Thrift Savings Fund in connection with a transaction
21 involving assets of the Thrift Savings Fund, except fees
22 which the fiduciary is entitled to receive as provided in
23 a contract awarded under section 8494(c)(2> of this
24 title;
25 " (4) permit the transfer of any assets of the Thrift
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1 ~ Savings Fund to oc the use of such assets by any person
2 known to be a party in interest, except in r~tucn fog
3 adequate consideration; or
4 ?`(5) permit the acquisition of any property from oc
5 services by any person known to be a party in interest,
6 except in exchange for adequate consideration.
7 " (d) This section does not prohibit any fiduciary from--
e " (1) receiving any benefit which the fiduciary is
9 entitled to receive under this chapter as a participant,
10 a former participant, or a beneficiary of a participant
11 or former participant;
12 " (2) receiving any reasonable compensation
13 authorized by this title for services rendered, oc for
14 reimbursement of expenses properly and actually incurred,
15 in the performance of the fiduciary's duties under this
16 chapter; or
17 " (3) serving as a fiduciary in addition to being an
18 officer, employee, agent, or other representative of a
19 party in interest.
20 " (e)(1)(A) Any fiduciary that breaches the
21 responsibilities, duties, and obligations set out in
22 subsection (b) of this section or violates subsection (c) of
23 this section shall be liable to the Thrift Savings Fund for
2u any losses to such fund resulting from each such breach oc
25 violation and to restore to such fund any profits made by the
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1 fiduciary through use of assets of such fund by the
2 fiduciary, and shall be subject to such other equitable oc
3 remedial relief as a court considers appropriate. A fiduciary
4 may be removed for a breach referred to in the preceding
5 sentence.
6 " (B) The Secretary of Labor may assess a civil penalty
7 against a party in interest engaging in a transaction
8 prohibited by subsection (c) of this section. The amount of
9 such penalty may not exceed 5 percent of the amount involved
10 (as defined in section 4975(f)(4) of the Internal Revenue
11 Code of 1954); except that, if the transaction is not .
12 corrected (in such manner as the Secretary of Labor shall
13 prescribe by regulation consistent with section 4975(f)(5).of
14 the Internal Revenue Code of 1954) within 90 days after the
15 date the Seccetacy of Labor transmits notice to the party in
16 interest (or such longer period as the Seccetacy of Labor may
17 permit), such penalty may be in an amount not more than 100
18 percent of the amount involved.
19 " (C) A fiduciary shall not be liable under subparagraph
20 (A) of this paragraph with respect to a bce3ch of fiduciary
21 duty under subsection (b) of this section committed oefor?
22 becoming a fiduciary or after ceasing to be a fiduciary.
23 " (D) A fiduciary shall be jointly and severally liable
24 under subparagraph (A) of this paragraph for a breach of
25 fiduciary duty under subsection (b) of this section by
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1 another fiduciary if--
2 " (i) the fiduciary participates knowingly in, oc
3 knowingly undertakes to conceal, an act oc omission of
u such other fiduciary, knowing such act oc omission is
5 such a breach;
6 " (ii) by the fiduciary's failure to comply with
7 subsection (b) of this section in the administration of
8 the fiduciary's specific responsibilities which give rise
9 to the fiduciary status, the fiduciary has enabled such
10 other fiduciary to commit such a breach; or
11 " (iii) the fiduciary has knowledge of a breach by
12 such other fiduciary, unless the fiduciary makes
13 reasonable efforts under the circumstances to reredy the
14 breach.
15 " (E) The Board shall prescribe, in regulations,
16 procedures for allocating fiduciary responsibilities among
17 fiduciaries, including investment managers. any fiduciary
18 who, pursuant to such procedures, allocates to a person oc
19 persons any fiduciary responsibility shall not be liabl= for
20 an act or omission of such person or persons unless--
21 " (i) such fiduciary violated subsection (b> of this
22 section with respect to the allocation, with respect to
23 the implementation of the procedures prescribed by the
24 Board, or in continuing such allocation; oc
25 " (ii) such fiduciary would otherwise be liable in
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1 accordance with subparagraph (D) of this paragraph.
2 " (2) A civil action may be brought in the district
3 courts of the United States--
4 " (A) by the Secretary of Labor--
5 " (i) to determine and enforce a liability under
6 paragraph (1)(A) of this subsectlon;
7 " (ii) to collect any civil penalty under
8 paragraph (1)(B) of this subsection; or
9 " (iii) to enjoin any act or practice which
10 violates section 8491(e) of this title;
11 " (B> by the Secretary of Labor, any participant,
12 annuitant, former participant who is entitled to a
13 defected annuity under section 8412 of this title, other
14 beneficiary, or fiduciary--
15 " (i> to enjoin any act oc practice which
16 violates any provision of subsection (b) oc (c) of
17 this section; or
18 " (ii) to obtain any other appropriate equitable
19 relief to redress a violation of any such provision;
20 or
21 " (C) by any participant, annuitant, foc~ec
22 participant entitled to a deferred annuity under section
23 8412 of this title, or other beneficiary to recover
24 benefits due to hi:n or her under the provisions of this
25 chapter, to enforce his or her rights under such
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1 provisions, or to clarify his or her rights to future
2 benefits under such provisions.
3 " (3) An action may not be commenced under paragraph (2)
4 of this subsection with respect to a fiduciary's breach of
5 any responsibility, duty, or obligation under subsection (b)
6 of this section or a violation of subsection (c) of this
7 section after the earlier of--
8 " (A) 6 years after (i) the date of the last action
9 which constituted a part of the breach oc violation, oc
10 (ii) in the case of an omission, the latest date on which
11 the fiduciary could have cured the breach or violation;
12 oc
13 " (B) 3 years after the earliest date on which the
14 plaintiff had actual knowledge of the breach or
15 violation; except that, in the case of fraud or
16 concealment, such action may be commenced not later than
17 6 years after the date of discovery of such breach oc
18 violation.
19 " (4)(A> Except for actions under paragraph (2)(C) ~f
20 this subsection, the district courts of the United States
21 shall have exclusive jurisdiction of civil actions under this
22 subsection. State courts of competent jurisdiction and
23 district courts of the United States shall have concurrent
24 jurisdiction of actions under paragraph (2)(C) of this
25 subsection.
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1 " (B) An action under this subsection may be brought in
2 tha District Court of the United States foc~the District of
3 Columbia oc a district court of the United States in the
4 district where the breach alleged in the complaint or
5 petition filed in the action tools place or in the distri~t
6 where a defendant resides or may be found. Process may be
7 served in any other district where a defendant resides oc may
8 be found.
9 " (5)(A) A copy of the complaint or petition filed in any
10 action brought under this subsection (other than by the
11 Secretary of Labor)-shall be served on the Director, the
12 Executive Director, the Secretary of Labor, and the Secretary
13 of the Treasury by certified mail.
14 " (B ) Any officer ref erred to in subparagraph ( A ) of thi s
15 paragraph shall have the tight in his discretion to intervene
16 in any action. If the Secretary of Labor brings an action
17 under paragraph (2) of this subsection on behalf of a
18 pa.ticipant or beneficiary, he shall notify the Director, the
19 Executive Director, and the Secretary of the Treasury.
20 " S 8498. Bonding
21 " (a)(1) Except as provided in paragraphs (2) and (3) of
22 this subsection, each fiduciary and each person who handles
23 funds or property of the Thrift Savings Fund shall be bonded
2u as provided in this section.
25 ' ' (2 ) liembers of the Federal Retirement Thcif t Advisory
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1~ Committee oc Employee Advisory Committee and the Executive
2 Director shall be exempt from the bonding requirarnents of
3 this section.
4 " (3)(A) Bond shall not be required of a fiduciary (oc of
5 any director, officer, or employee of such fiduciary) if such
6 fiduciary--
? ~ " (i) is a corporation organized and doing business
8 under the laws of the United States or of any State;
9 " (ii) is authorized under such laws to exercise
10 trust powers oc to conduct an insurance business;
11 " (iii> is sub)ect to supervision or examination by
12 Federal oc State authority; and
13 " (iv) has at all times a combined capital and
14 surplus in excess of such minimum amount (not less than
15 51,008,000) as the secretary of Labor prescribes in
16 regulations.
17 " (B) If--
18 " (i) a bank or other financial institution would,
19 but for this subparagraph, not be required to be bonded
20 under this section by reason of the application of the
21 exception provided in subparagraph (A) of this paragraph,
22 " (ii) the bank or financial institution is
23 authorized to exercise trust powers, and
24 " (iii) the deposits of the bank or financial
25 institution are not insured by the Federal Deposit
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1 Insurance Corporation or the Federal Savings and Loan
2 Insurance Corporation,
3 such exception shall apply to such bank oc financial
u institution only if the bank or institution meets bonding
5 requirements under State law which the Seccetacy of Labor
6 determines ace at least equivalent to those imposed on banks
7 by Federal law.
8 " (b>(1) The Secretary of Labor shall prescribe the
9 amount of a bond under this section at the beginning of each
10 fiscal year. Exce~:t as otherwise provided in this paragraph,
11 such amount shall not be less than 10 per centum of the
12 amount of funds handled. In no case shall such bond be less
13 than S1,000 nor more than 5500,000, except that the Secretary
1u of Labor, after due notice and opportunity for hearing to all
15 interested parties, and other consideration of the record,
16 may prescribe an amount in excess of 5500,000.
17 " (2) For the purpose of prescribing the amount of 3 bend
18 under paragraph (1) of this subsection, the amount of funds
19 handled shall be determined by reference to the amount of the
20 funds handled by the person, group, or class to be covered by
21 such bond oc by their predecessor oc predecessors, if any,
22 during the preceding fiscal year, or to the amount of funds
23 to be handled during the current fiscal year by such person,
2v group, or class, estimated as provided in regulations
25 prescribed by the Seccetacy of Labor.
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1 " (c) A bond requited by subsection (a) of this section--
2 " (1) shall include such terms and conditions as the
3 Secretary of Labor considers necessary to protect the
4 Thrift Savings Fund against loss by reason of acts of
5 fraud or dishonesty on the pact of the bonded person
6 directly oc through connivance with others;
7 " (2) shall have as surety thereon a corporate surety
8 company which is an acceptable surety on Federal bonds
9 under authority granted by the Secretary of the Treasury
10 pursuant to sections 6 through 13 of title 6, United
11 States Code; and
12 " (3) shall be i~ a form oc of a type approved by the
13 Secretary of Labor, including individual bonds oc
14 schedule or blanket forms of bonds which cover a group or
15 class.
16 " (d)(1) It shall be unlawful for any person to Whom
17 subsection (a) of this section applies, to receive, Handle,
18 disburse, or otherwise exercise custody or control of any of
19 the funds or otnec property of the Thrift Savings Fund
20 without being bonded as required by this section.
21 " (2) It shall be unlawful for any fiduciary, or any
22 other person having authority to direct the performance of
23 functions described in paragraph (1) of this subsection, to
24 permit any such function to be performed by any person to
25 Whom subsection (a) of this section applies unless such
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1 person has met the requirements of such subsectioh.
2 " (e)~NOtwithstanding any other provision of law, any
3 person who is required to be bonded as provided in subsection
4 (a) of this section shall be exempt from any other provision
5 of law which would, but for this subsection, require such
6 person to be bonded for the handling ~f the funds oc ot~ec
7 property of the Thrift Savings Fund.
8 " (f) The Secretary of Labor shall prescribe such
9 regulations as may be necessary to carry out the provisions
10 of this section, including exempting a person oc class of
11 persons from the requirements of this section.
12 " 5.8499. Exculpatory provisions; insurance
13 " (a) Any provision in an agreement oc instrument which
14 purports to relieve a fiduciary from responsibility or
15 liability for any responsibility, obligation, or duty under
16 this subchapter shall be void.
17 " (b)(1) The Executive Director may require employing
18 agencies to contribute an amount not to exceed one percent of
19 the amount such agencies are required to contribute in
20 accordance with section 8421(b) of this title to the Thrift
21 Savings Fund.
22 " (2) The sums credited to the Thrift Savings Fund under
23 paragraph (1) of this subsection shall be available and may
24 be used at the discretion of the Executive Director to
25 purchase insurance to cover potential liability of persons
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1 who serve in a fiduciary capacity With respect to the Thrift
2 Savings Fund, without regard to Whether a policy of insurance
3 permits recourse by the insurer against the fiduciary in the
4 case of a breach of a fiduciary obligation. ".
5 (b) The table of chaplets at the beginning of pact III of
6 such title is amended by insetting after the item relating to
7 chapter 83 the following new item:
" 84. Federal Retirement System ................ 8401. " .
8 TITLE II--AliENDMENTS RELATING TO SOCIAL SECURITY
9 AHEND!lENTS TO THE SOCIAL SECURITY ACT
10 Sec. 201. Section 210(a)(5) of the Social Security Act is
11 amended--
12 (1) by striking out " oc " at the end of subparagraph
13 (F);
14 (2) by striking out the semicolon at the end of
15 subparagraph (G) and inserting in lieu thereof " , or " ;
16 and
17 (3) by adding at the end thereof the following new
18 subparagraph:
19 " (H) service performed by an individual after
20 such individual has commenced participation in the
21 Federal Retirement System pursuant to section 8471 of
22 title 5, United States Code; ".
23 AflENDMENTS TO THE INTERNAL REVENUE CODE OF 1954
24 Sec. 202. Section 3121(b)(5) of the Internal Revenue Code
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1 of 195u is amended--
2 (1) by striking out " or " at the end of subpacagcaph
3 (F);
u (2) by striking out the semicolon at the end of
5 subpacagcaph (G) and inserting in lieu thereof " , oc ";
6 and
7 (3) by adding at the end thereof the following new
8 subpacagcaph:
9 " (H) service performed by an individual after
10 such individual has commenced participation in the
11 Federal Retirement System pursuant to section eu71 of
12 title 5, United States Code; ".
13 TITLE III--MISCELLANEOUS AND CONFORMING AMENDMENTS
14 EXTENSION OF FEDERAL E";PLOYEES' RETIREMENT CONTRIBUTION
15 TEMPORARY ADJUSTMENT ACT OF 1983
16 Sec. 301. (a) Sections 202(1), 202(6), 203(a)(4)(A),
17 203(a)(4)(B), 204(a), 206(b)(2)(A)(i), and 206(c)(3) of the
18 Federal Employees' Retirement Contribution Temporary
19 Adjustment Act of 1983 (97 Stat. 1106; 5 U.S.C. 8331 note)
20 are amended by striking out "January ~, 1986 " each place it
21 appears and inserting in lieu thereof "January 1, 1987 " .
22 (b) Section 205 of such Act is amended by striking out
23 " and 1986 " in subsections (b) and (c) and insetting i~ lieu
24 thereof " 1986, and 1987 ".
25 MISCELLANEOUS AMENDMENTS TO CHAPTEr~ 83 OF TITLE 5, UNITED
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1' STATES CODE ,
2 Sec. 302. (a) Section 8331(1)(G) of title 5, United
3 States Code, is amended to read as follows:
4 " (G) an individual first employed by the
5 government of the District of Columbia before January
6 1, 1987; ".
7 (b>(1) Section 8332(j)(1) of such title is a~ended--
8 (A) in the first sentence--
9 (i) by inserting "civilian service," after
10 " Notwithstanding any other provision of this
11 section, ";
12 (ii) by insetting "for such service" before the
13 period at the end thereof; and
14 (B) in the second sentence, by striking out " If the
15 military service " and inserting in lieu thereof " If the
16 civilian service, military service, ".
17 (2) Section 8332 of such title is fucthher amended by
18 adding at the end thereof the following new subsection:
19 " (n) Except as provided in section 8472(b) of this
20 title, service performed while a participant in the Fed~cal
21 Retirement System under chapter 84 of this title is not
22 creditable under this section. ".
23 (c)(1) The first sentence of section 8333(b) of such
24 title is amended by inserting " or chapter 84 of this title "
25 after " subject to this subchapter " .
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1 (2) Section 8333(c) of such title is amended by adding at
2 the end thereof the following new sentence: "The
3 requirements of the first sentence shall apply only with
4 respect to the civilian service performed by a Member while
5 not a participant in the Federal Retirement System under
6 chapter 84 of this title. ".
7 (d) Subsection (a) of section 8334 of such title is
8 amended--
9 (1) in the first sentence of paragraph (1), by
10 striking out "The employing " and inserting in lieu
11 thereof "Except as provided in paragraph (3) of this
12 subsection, the employing "; and
13 (2) by adding at the end thereof the following aew
14 paragraph:
15 " (3)(A) In the case of an employee or Member who was
16 subject to this subchapter before January 1, 1984, and whose
17 service--
18 " (i) is employment for the purposes of tit1= II of
19 the Social Security Act and chapter 21 of the Intec131
20 Revenue Code of 1954; and
21 " (il) is not creditable service for any purpose
22 under chapter 84 of this title,
23 an employing agency shall deduct and Withhold from the basic
24 pay of the employee oc Member under paragraph (1) of this
25 subsection during any pay period only the amount computed
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1 pursuant to subpacagcaph (B) of this paragraph.
2 " (B) The amount deducted and Withheld from basic pay
3 during any pay period pursuant to subparagraph (A) of this
4 paragcaph in the case of an employee or tiembec referred to in
5 such subpacagcaph shall be the excess of--
6 " (i) the amount determined by multiplying the
7 percent applicable to the employee oc Member under
8 paragraph (1) of this subsection by the basis pay payable
9 for such pay period, over
10 " (11) the amount of the taxes deducted and withheld
11 from such basic pay under section 3101(a) of the Internal
12 Revenue Code of 1954 for such pay period. " .
13 (e) Section 8347(a) of such title is amended by adding at
14 the end thereof the following: "The Office may contract for
15 the performance of a3ministrative services necessary to carry
16 out its responsibilities under this subchapter. ".
17 (f) Section 8348(a) of such title is amended--
18 (1) in paragraph (1)(A), by inserting " Oc the
19 provisions of chapter 84 of this title Which relate to
20 benefits payable out of the Fund " after "subchapter ";
21 and
22 (2) in paragraph (2), by inserting " , chapter 84 of
23 this title, " after "chapter ".
24 CONFORMING PROVISIONS FOR THE POSTAL SERVICE RETIREMENT
25 SYSTEM
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1 Sec. 30.3. Section 1005(d) of title 39, United State
2 Code, is amended to read as follows:
3 " (d) Officers and e~ploy2es of the Postal Service (other
4 than the Governors) shall be covered by chapters 83 and 8u of
5 title 5 according to the provisions of such chapters. The
6 Postal Service shall withhold from pay and shall pay into the
7 Civil Service Retirement and Disability Fund the amounts
8 specified in oc determined under such chapter 83. The Postal
9 Service shall pay into the Civil Service Retirement and
10 Disability Fund the amounts specified or determined under
11 subchapters II and Y of such chapter 84. The Postal Service
12 shall pay into the Federal Retirement Thrift Savings Fund the
13 amounts specified in or determined under subchapter III of
1u such chapter 8u. ".
15 HEALTH BENEFIT PLAN AKENDtiENTS
16 Sec. 304. (a) Section 8901(1)(E) of title 5, United
17 States Code, is amended to read as folloWS:
18 " (E) an individual first employed by the
19 government of the District of Columbia before January
20 1 , 1987; ".
21 (b) Section 8901(10) of such title is amended--
22 (1) in subparagraph (C)(i)--
23 (A> by inserting "or 8467" after "83u5(j) ";
24 and
25 (B) by inserting "or 8434" after "8341(h)";
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1 and
2 (2) in subparagraph (C)(ii)-- '
3 (A) by inserting "oc 8434" after "~8341(h) ";
4 and
5 (B) by inserting "oc 8467" after " 8345(j) ".
6 (c)(1) Subsection (b) of section 8905 of such title is
7 amended--
8 (A) by cedesignating subpacagcaphs (A), (B), and (C)
9 of paragraph (1) as clauses (i), (li), and (iii),
10 respectively;
11 (B) by cedesignating paragraphs (1) and (2) 3s
12 subpacagcaphs (A) and (B), respectively;
13 (C) by inserting "(1)" after "(b)"; and
14 (D) by adding at the end thereof the following new
15 paragraph (2):
16 " (2) A member of family of a deceased employee cr
17 annuitant who was enrolled in a health benefit plan under
18 this chapter on the date of death of the employee oc
19 annuitant may continue the enrollment under the conditions of
20 eligibility prescribed in regulations issued by the
21 Office. ".
22 (2) Subsection (c)(1) of such section is amended--
23 (A) in subparagraph (B), by insetting " or
24 8435(a)(1)"; and
25 (B) in the second sentence--
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1
2 and
(i) by inserting "or 8434" after "8341(h) ";
3 (11) by inserting "or 8467" after "8345(j) ".
4 E?lPLOYEES OF CERTAIN NONaPPROPRII-TED FUND INSTRUNENTaLITIES
5 Sec. 385. Section 2185(c) of title 5, United States Ccde,
6 is amended by inserting ", chapter 84, " after "chapter
7 81 " in clause (2) of the first sentence.
8 DISCJ.OSURE OF EARNINGS INFORKl~TION OF DIS~IBLED FEDERAL
9 EIiPL07EES
10 Sec. 306. (a) Paragraph (7)(D) of section 6183(1) of the
11 Internal Revenue Ccde of 1954 (relating to disclosure cf
12 returns and return information for purposes other than tax
13 administration) is amended--
14 (1) by striking out "and " at the end of clause
15 (vi);
16 (2) by striking out the period at the end of clause
17 (vii) and inserting in lieu thereof a semicolon ar.d
18 "and "; and
19 (3) by adding at the end thereof the following r.eW
28 clause:
21 " (vii) disability benefits provided under
22 subchapter III of chapter 83 of title 5, United
23 States Ccde, or subchapter V of chapter 84 cf
24 such title. ".
25 (b) The heading cf paragraph (7) of section 6183(1) cf
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such Code is amended to read as folloWS:
" (7) Disclosure of return information to Federal,
3 State, and local agencies administering certain pcograRs
4 under the Social Security Act or the Fcod Stamp Act of
5 1977 or certain civil service disability benefits
6 programs.--".
7 TITLE IY--AUTHORIZATION AAD EFFECTIVE DATES
8 FIRST YEAR ERPENSES OF THE FEDERAL RETIREtSEPT THRIFT
9 INYEST?lEtiT KANAGEKENT SYSTEH
10 Sec. 401. (a) potWithstanding section 8426(c)(3) of title
11 5, United States Code, as added by section 101 of this Act,
12 the expenses incurred in the administration of the Federal
13 Retirement Thrift Investment Kanagement System prescribed in
14 subchapter VIII of chapter 84 of such title, as added by
15 section 101 of this Act, ducinq fiscal years 1986 and 1987
16 shall be paid from sums appropriated pursuant to subsecticr
17 (b).
18 (b) There are authorized to be appropriated to the
19 Federal Retirement Thrift Investment Board, for fiscal years
20 1986 and 1987, such sums as may be necessary to pay the
21 expenses incurred in the administration of the Federal
22 Retirement Thrift Investment Kanagement System prescribed in
23 subchapter YIZI of chapter 84 of title 5, United States Ccde,
24 as added by section 101 of this Act, during such fiscal
25 years.
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1 1~UTHORIZaTION TO Cl~RR7 OUT IRF0RlIaTION PR0GRI~K
2 Sec. 402. (a) The office of Personnel Kanagemert shall
3 take appropriate action during fiscal years 1986 and 1987, to
4 make available on cr before January 1, 1987, the information
5 described in section 8469 of title 5, United States Ccde, as
6 added by section 101(a) of this act.
7 (b) There are authorized to be appropriated S1,B00,OOe to
8 the office of Perscnnel Kanagement for fiscal year 1986 tc
9 carry out subsection (a). Sums appropriated pursuant to this
10 authorization shall remain available until expended or until
11 October 1, 1987, Whichever is earlier.
12 EFFECTIVE D~ITES
13 Sec. 403. (a) Except as provided in subsection (b), this
14 act and the amendments made by this act shall take effect
15 January 1, 1987.
16 (b) Subchapter VIII of chapter 84 of title 5, United
17 States Code (relating to the Federal Retirement Thrift
18 Investment ?lanagement System), as added by section 101, shall
19 take effect on the date of enactment.
20 (c) The prcgram required by section 8426 (e) of title 5,
21 United States Code, as added by section 101(a) of this pct,
22 shall be established not later than January 1, 1988.
~_
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