Calendar No. 309

106TH CONGRESS

1ST SESSION S. 1232

[Report No. 106–178]

A BILL

To provide for the correction of retirement coverage

errors under chapters 83 and 84 of title 5,United States Code.

OCTOBER 8, 1999

Reported without amendment
II

Calendar No. 309

106TH CONGRESS

1ST SESSION S. 1232

[Report No. 106–178]

To provide for the correction of retirement coverage errors under chapters

83 and 84 of title 5, United States Code.

IN THE SENATE OF THE UNITED STATES

JUNE 17, 1999

Mr. COCHRAN (for himself, Mr. AKAKA, Mr. THOMPSON, Mr. LIEBERMAN, Mr.

WARNER, Mr. SARBANES, Mr. LEAHY, Mr. ROBB, Mr. JEFFORDS, and

Ms. SNOWE) introduced the following bill; which was read twice and referred to the Committee on Governmental Affairs

OCTOBER 8, 1999

Reported by Mr. THOMPSON, without amendment

A BILL

To provide for the correction of retirement coverage errors

under chapters 83 and 84 of title 5, United States Code.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

•S 1232 RS

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Federal Erroneous Retirement Coverage Corrections

4 Act’’.

5 (b) TABLE OF CONTENTS.—The table of contents for

6 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definitions.

Sec. 3. Applicability.

Sec. 4. Irrevocability of elections.

TITLE I—DESCRIPTION OF RETIREMENT COVERAGE ERRORS TO

WHICH THIS ACT APPLIES AND MEASURES FOR THEIR RECTIFICATION

Subtitle A—Employees and Annuitants Who Should Have Been FERS Covered, but Who Were Erroneously CSRS Covered or CSRS-Offset Covered

Instead, and Survivors of Such Employees and Annuitants

Sec. 101. Employees.

Sec. 102. Annuitants and survivors.

Subtitle B—Employee Who Should Have Been FERS Covered, CSRS-Offset

Covered, or CSRS Covered, but Who Was Erroneously Social Security-Only

Covered Instead

Sec. 111. Applicability.

Sec. 112. Correction mandatory.

Subtitle C—Employee Who Should or Could Have Been Social Security-Only

Covered but Who Was Erroneously CSRS-Offset Covered or CSRS Covered

Instead

Sec. 121. Employee who should be Social Security-Only covered, but who is erroneously CSRS or CSRS-Offset covered instead.

Subtitle D—Employee Who Was Erroneously FERS Covered.

Sec. 131. Employee who should be Social Security-Only covered, CSRS covered,

or CSRS-Offset covered and is not FERS-eligible, but who is

erroneously FERS covered instead.

Sec. 132. FERS-Eligible Employee Who Should Have Been CSRS Covered,

CSRS-Offset Covered, or Social Security-Only Covered, but

Who Was Erroneously FERS Covered Instead Without an

Election.

Sec. 133. Retroactive effect.

Subtitle E—Employee Who Should Have Been CSRS-Offset Covered, but

Who Was Erroneously CSRS Covered Instead

Sec. 141. Applicability.
3

•S 1232 RS

Sec. 142. Correction mandatory.

Subtitle F—Employee Who Should Have Been CSRS Covered, but Who Was

Erroneously CSRS-Offset Covered Instead

Sec. 151. Applicability.

Sec. 152. Correction mandatory.

TITLE II—GENERAL PROVISIONS

Sec. 201. Identification and notification requirements.

Sec. 202. Information to be furnished to and by authorities administering this

Act.

Sec. 203. Service credit deposits.

Sec. 204. Provisions related to Social Security coverage of misclassified employees.

Sec. 205. Thrift Savings Plan treatment for certain individuals.

Sec. 206. Certain agency amounts to be paid into or remain in the CSRDF.

Sec. 207. CSRS coverage determinations to be approved by OPM.

Sec. 208. Discretionary actions by Director.

Sec. 209. Regulations.

TITLE III—OTHER PROVISIONS

Sec. 301. Provisions to permit continued conformity of other Federal retirement systems.

Sec. 302. Authorization and appropriation.

Sec. 303. Individual right of action preserved for amounts not otherwise provided for under this Act.

Sec. 304. Effective date.

TITLE IV—TAX PROVISIONS

Sec. 401. Tax provisions.

TITLE V—MISCELLANEOUS RETIREMENT PROVISIONS

Sec. 501. Federal Reserve Board portability of service credit.

Sec. 502. Certain transfers to be treated as a separation from service for purposes of the Thrift Savings Plan.

1 SEC. 2. DEFINITIONS.

2 For purposes of this Act:

3 (1) ANNUITANT.—The term ‘‘annuitant’’ has

4 the meaning given such term under section 8331(9)

5 or 8401(2) of title 5, United States Code.

6 (2) CSRS.—The term ‘‘CSRS’’ means the Civil

7 Service Retirement System.
4

•S 1232 RS

1 (3) CSRDF.—The term ‘‘CSRDF’’ means the

2 Civil Service Retirement and Disability Fund.

3 (4) CSRS COVERED.—The term ‘‘CSRS cov4 ered’’, with respect to any service, means service

5 that is subject to the provisions of subchapter III of

6 chapter 83 of title 5, United States Code, other than

7 service subject to section 8334(k) of such title.

8 (5) CSRS-OFFSET COVERED.—The term

9 ‘‘CSRS-Offset covered’’, with respect to any service,

10 means service that is subject to the provisions of

11 subchapter III of chapter 83 of title 5, United

12 States Code, and to section 8334(k) of such title.

13 (6) EXECUTIVE DIRECTOR.—The term ‘‘Execu14 tive Director of the Federal Retirement Thrift In15 vestment Board’’ or ‘‘Executive Director’’ means the

16 Executive Director appointed under section 8474 of

17 title 5, United States Code.

18 (7) FERS.—The term ‘‘FERS’’ means the

19 Federal Employees’ Retirement System.

20 (8) FERS COVERED.—The term ‘‘FERS cov21 ered’’, with respect to any service, means service

22 that is subject to chapter 84 of title 5, United States

23 Code.
5

•S 1232 RS

1 (9) FORMER EMPLOYEE.—The term ‘‘former

2 employee’’ means an individual who formerly was a

3 Government employee, but who is not an annuitant.

4 (10) OASDI TAXES.—The term ‘‘OASDI

5 taxes’’ means the OASDI employee tax and the

6 OASDI employer tax.

7 (11) OASDI EMPLOYEE TAX.—The term

8 ‘‘OASDI employee tax’’ means the tax imposed

9 under section 3101(a) of the Internal Revenue Code

10 of 1986 (relating to Old-Age, Survivors and Dis11 ability Insurance).

12 (12) OASDI EMPLOYER TAX.—The term

13 ‘‘OASDI employer tax’’ means the tax imposed

14 under section 3111(a) of the Internal Revenue Code

15 of 1986 (relating to Old-Age, Survivors and Dis16 ability Insurance).

17 (13) OASDI TRUST FUNDS.—The term

18 ‘‘OASDI trust funds’’ means the Federal Old-Age

19 and Survivors Insurance Trust Fund and the Fed20 eral Disability Insurance Trust Fund.

21 (14) OFFICE.—The term ‘‘Office’’ means the

22 Office of Personnel Management.

23 (15) RETIREMENT COVERAGE DETERMINA24 TION.—The term ‘‘retirement coverage determina25 tion’’ means a determination by an employee or
6

•S 1232 RS

1 agent of the Government as to whether a particular

2 type of Government service is CSRS covered, CSRS3 Offset covered, FERS covered, or Social Security4 Only covered.

5 (16) RETIREMENT COVERAGE ERROR.—The

6 term ‘‘retirement coverage error’’ means an erro7 neous retirement coverage determination that was in

8 effect for a minimum period of 3 years of service

9 after December 31, 1986.

10 (17) SOCIAL SECURITY-ONLY COVERED.—The

11 term ‘‘Social Security-Only covered’’, with respect to

12 any service, means Government service that—

13 (A) constitutes employment under section

14 210 of the Social Security Act (42 U.S.C. 410);

15 and

16 (B)(i) is subject to OASDI taxes; but

17 (ii) is not subject to CSRS or FERS.

18 (18) SURVIVOR.—The term ‘‘survivor’’ has the

19 meaning given such term under section 8331(10) or

20 8401(28) of title 5, United States Code.

21 (19) THRIFT SAVINGS FUND.—The term

22 ‘‘Thrift Savings Fund’’ means the Thrift Savings

23 Fund established under section 8437 of title 5,

24 United States Code.
7

•S 1232 RS

1 SEC. 3. APPLICABILITY.

2 (a) IN GENERAL.—This Act shall apply with respect

3 to retirement coverage errors that occur before, on, or

4 after the date of enactment of this Act.

5 (b) LIMITATION.—Except as otherwise provided in

6 this Act, this Act shall not apply to any erroneous retire7 ment coverage determination that was in effect for a pe8 riod of less than 3 years of service after December 31,

9 1986.

10 SEC. 4. IRREVOCABILITY OF ELECTIONS.

11 Any election made (or deemed to have been made)

12 by an employee or any other individual under this Act

13 shall be irrevocable.
8

•S 1232 RS

1 TITLE I—DESCRIPTION OF RE2 TIREMENT COVERAGE ER3 RORS TO WHICH THIS ACT AP4 PLIES AND MEASURES FOR

5 THEIR RECTIFICATION

6 Subtitle A—Employees and Annu7 itants Who Should Have Been

8 FERS Covered, but Who Were

9 Erroneously CSRS Covered or

10 CSRS-Offset Covered Instead,

11 and Survivors of Such Employ12 ees and Annuitants

13 SEC. 101. EMPLOYEES.

14 (a) APPLICABILITY.—This section shall apply in the

15 case of any employee or former employee who should be

16 (or should have been) FERS covered but, as a result of

17 a retirement coverage error, is (or was) CSRS covered or

18 CSRS-Offset covered instead.

19 (b) UNCORRECTED ERROR.—

20 (1) APPLICABILITY.—This subsection applies if

21 the retirement coverage error has not been corrected

22 before the effective date of the regulations described

23 under paragraph (3). As soon as practicable after

24 discovery of the error, and subject to the right of an

25 election under paragraph (2), if CSRS covered or
9

•S 1232 RS

1 CSRS-Offset covered, such individual shall be treat2 ed as CSRS-Offset covered, retroactive to the date

3 of the retirement coverage error.

4 (2) COVERAGE.—

5 (A) ELECTION.—Upon written notice of a

6 retirement coverage error, an individual may

7 elect to be CSRS-Offset covered or FERS cov8 ered, effective as of the date of the retirement

9 coverage error. Such election shall be made not

10 later than 180 days after the date of receipt of

11 such notice.

12 (B) NONELECTION.—If the individual does

13 not make an election by the date provided

14 under subparagraph (A), a CSRS-Offset cov15 ered individual shall remain CSRS-Offset cov16 ered and a CSRS covered individual shall be

17 treated as CSRS-Offset covered.

18 (3) REGULATIONS.—The Office shall promul19 gate regulations to carry out this subsection.

20 (c) CORRECTED ERROR.—

21 (1) APPLICABILITY.—This subsection applies if

22 the retirement coverage error was corrected before

23 the effective date of the regulations described under

24 subsection (b).

25 (2) COVERAGE.—
10

•S 1232 RS

1 (A) ELECTION.—

2 (i) CSRS-OFFSET COVERED.—Not

3 later than 180 days after the date of en4 actment of this Act, the Office shall pro5 mulgate regulations authorizing individuals

6 to elect, during the 18-month period imme7 diately following the effective date of such

8 regulations, to be CSRS-Offset covered, ef9 fective as of the date of the retirement cov10 erage error.

11 (ii) THRIFT SAVINGS FUND CON12 TRIBUTIONS.—If an individual elects to be

13 CSRS-Offset covered, all employee con14 tributions to the Thrift Savings Fund

15 made during the period of FERS coverage,

16 and earnings thereon, may remain in that

17 Fund, notwithstanding any limit that

18 would otherwise be applicable.

19 (B) PREVIOUS SETTLEMENT PAYMENT.—

20 An individual who previously received a pay21 ment ordered by a court or provided as a settle22 ment of claim for losses resulting from a retire23 ment coverage error shall not be entitled to

24 make an election under this subsection unless

25 that amount is waived in whole or in part under
11

•S 1232 RS

1 section 208, and any amount not waived is re2 paid.

3 (C) INELIGIBILITY FOR ELECTION.—An

4 individual who, subsequent to correction of the

5 retirement coverage error, received a refund of

6 retirement deductions under section 8424 of

7 title 5, United States Code, or a distribution

8 under section 8433 of title 5, United States

9 Code, may not make an election under this sub10 section.

11 (3) CORRECTIVE ACTION TO REMAIN IN EF12 FECT.—If an individual is ineligible to make an elec13 tion or does not make an election under paragraph

14 (2) before the end of any time limitation under this

15 subsection, the corrective action taken before such

16 time limitation shall remain in effect.

17 SEC. 102. ANNUITANTS AND SURVIVORS.

18 (a) IN GENERAL.—This section shall apply in the

19 case of an individual who is—

20 (1) an annuitant who should have been FERS

21 covered but, as a result of a retirement coverage

22 error, was CSRS covered or CSRS-Offset covered in23 stead; or

24 (2) a survivor of an employee who should have

25 been FERS covered but, as a result of a retirement
12

•S 1232 RS

1 coverage error, was CSRS covered or CSRS-Offset

2 covered instead.

3 (b) COVERAGE.—

4 (1) ELECTION.—Not later than 180 days after

5 the date of enactment of this Act, the Office shall

6 promulgate regulations authorizing an individual de7 scribed under subsection (a) to elect CSRS-Offset

8 coverage or FERS coverage, effective as of the date

9 of the retirement coverage error.

10 (2) TIME LIMITATION.—An election under this

11 subsection shall be made not later than 18 months

12 after the effective date of the regulations promul13 gated under paragraph (1).

14 (3) REDUCED ANNUITY.—

15 (A) AMOUNT IN ACCOUNT.—If the indi16 vidual elects CSRS-Offset coverage, the amount

17 in the employee’s Thrift Savings Fund account

18 under subchapter III of chapter 84 of title 5,

19 United States Code, on the date of retirement

20 that represents the Government’s contributions

21 and earnings on those contributions (whether or

22 not such amount was subsequently distributed

23 from the Thrift Savings Fund) will form the

24 basis for a reduction in the individual’s annuity,

25 under regulations promulgated by the Office.
13

•S 1232 RS

1 (B) REDUCTION.—The reduced annuity to

2 which the individual is entitled shall be equal to

3 an amount which, when taken together with the

4 amount referred to in subparagraph (A), would

5 result in the present value of the total being ac6 tuarially equivalent to the present value of an

7 unreduced CSRS-Offset annuity that would

8 have been provided the individual.

9 (4) REDUCED BENEFIT.—If—

10 (A) a surviving spouse elects CSRS-Offset

11 benefits; and

12 (B) a FERS basic employee death benefit

13 under section 8442(b) of title 5, United States

14 Code, was previously paid;

15 then the survivor’s CSRS-Offset benefit shall be sub16 ject to a reduction, under regulations promulgated

17 by the Office. The reduced annuity to which the in18 dividual is entitled shall be equal to an amount

19 which, when taken together with the amount of the

20 payment referred to under subparagraph (B) would

21 result in the present value of the total being actuari22 ally equivalent to the present value of an unreduced

23 CSRS-Offset annuity that would have been provided

24 the individual.
14

•S 1232 RS

1 (5) PREVIOUS SETTLEMENT PAYMENT.—An in2 dividual who previously received a payment ordered

3 by a court or provided as a settlement of claim for

4 losses resulting from a retirement coverage error

5 may not make an election under this subsection un6 less repayment of that amount is waived in whole or

7 in part under section 208, and any amount not

8 waived is repaid.

9 (c) NONELECTION.—If the individual does not make

10 an election under subsection (b) before any time limitation

11 under this section, the retirement coverage shall be subject

12 to the following rules:

13 (1) CORRECTIVE ACTION PREVIOUSLY

14 TAKEN.—If corrective action was taken before the

15 end of any time limitation under this section, that

16 corrective action shall remain in effect.

17 (2) CORRECTIVE ACTION NOT PREVIOUSLY

18 TAKEN.—If corrective action was not taken before

19 such time limitation, the employee shall be CSRS20 Offset covered, retroactive to the date of the retire21 ment coverage error.
15

•S 1232 RS

1 Subtitle B—Employee Who Should

2 Have Been FERS Covered,

3 CSRS-Offset Covered, or CSRS

4 Covered, but Who Was Erro5 neously Social Security-Only

6 Covered Instead

7 SEC. 111. APPLICABILITY.

8 This subtitle shall apply in the case of any employee

9 who—

10 (1) should be (or should have been) FERS cov11 ered but, as a result of a retirement coverage error,

12 is (or was) Social Security-Only covered instead;

13 (2) should be (or should have been) CSRS-Off14 set covered but, as a result of a retirement coverage

15 error, is (or was) Social Security-Only covered in16 stead; or

17 (3) should be (or should have been) CSRS cov18 ered but, as a result of a retirement coverage error,

19 is (or was) Social Security-Only covered instead.

20 SEC. 112. CORRECTION MANDATORY.

21 (a) UNCORRECTED ERROR.—If the retirement cov22 erage error has not been corrected, as soon as practicable

23 after discovery of the error, such individual shall be cov24 ered under the correct retirement coverage, effective as of

25 the date of the retirement coverage error.
16

•S 1232 RS

1 (b) CORRECTED ERROR.—If the retirement coverage

2 error has been corrected, the corrective action previously

3 taken shall remain in effect.

4 Subtitle C—Employee Who Should

5 or Could Have Been Social Se6 curity-Only Covered but Who

7 Was Erroneously CSRS-Offset

8 Covered or CSRS Covered In9 stead

10 SEC. 121. EMPLOYEE WHO SHOULD BE SOCIAL SECURITY11 ONLY COVERED, BUT WHO IS ERRONEOUSLY

12 CSRS OR CSRS-OFFSET COVERED INSTEAD.

13 (a) APPLICABILITY.—This section applies in the case

14 of a retirement coverage error in which a Social Security15 Only covered employee was erroneously CSRS covered or

16 CSRS-Offset covered.

17 (b) UNCORRECTED ERROR.—

18 (1) APPLICABILITY.—This subsection applies if

19 the retirement coverage error has not been corrected

20 before the effective date of the regulations described

21 in paragraph (3).

22 (2) COVERAGE.—In the case of an individual

23 who is erroneously CSRS covered, as soon as prac24 ticable after discovery of the error, and subject to

25 the right of an election under paragraph (3), such
17

•S 1232 RS

1 individual shall be CSRS-Offset covered, effective as

2 of the date of the retirement coverage error.

3 (3) ELECTION.—

4 (A) IN GENERAL.—Upon written notice of

5 a retirement coverage error, an individual may

6 elect to be CSRS-Offset covered or Social Secu7 rity-Only covered, effective as of the date of the

8 retirement coverage error. Such election shall

9 be made not later than 180 days after the date

10 of receipt of such notice.

11 (B) NONELECTION.—If the individual does

12 not make an election before the date provided

13 under subparagraph (A), the individual shall re14 main CSRS-Offset covered.

15 (C) REGULATIONS.—The Office shall pro16 mulgate regulations to carry out this para17 graph.

18 (c) CORRECTED ERROR.—

19 (1) APPLICABILITY.—This subsection applies if

20 the retirement coverage error was corrected before

21 the effective date of the regulations described under

22 subsection (b)(3).

23 (2) ELECTION.—Not later than 180 days after

24 the date of enactment of this Act, the Office shall

25 promulgate regulations authorizing individuals to
18

•S 1232 RS

1 elect, during the 18-month period immediately fol2 lowing the effective date of such regulations, to be

3 CSRS-Offset covered or Social Security-Only cov4 ered, effective as of the date of the retirement cov5 erage error.

6 (3) NONELECTION.—If an eligible individual

7 does not make an election under paragraph (2) be8 fore the end of any time limitation under this sub9 section, the corrective action taken before such time

10 limitation shall remain in effect.

11 Subtitle D—Employee Who Was

12 Erroneously FERS Covered

13 SEC. 131. EMPLOYEE WHO SHOULD BE SOCIAL SECURITY14 ONLY COVERED, CSRS COVERED, OR CSRS15 OFFSET COVERED AND IS NOT FERS-ELIGI16 BLE, BUT WHO IS ERRONEOUSLY FERS COV17 ERED INSTEAD.

18 (a) APPLICABILITY.—This section applies in the case

19 of a retirement coverage error in which a Social Security20 Only covered, CSRS covered, or CSRS-Offset covered em21 ployee not eligible to elect FERS coverage under authority

22 of section 8402(c) of title 5, United States Code, was erro23 neously FERS covered.

24 (b) UNCORRECTED ERROR.—
19

•S 1232 RS

1 (1) APPLICABILITY.—This subsection applies if

2 the retirement coverage error has not been corrected

3 before the effective date of the regulations described

4 in paragraph (2).

5 (2) COVERAGE.—

6 (A) ELECTION.—Upon written notice of a

7 retirement coverage error, an individual may

8 elect to remain FERS covered or to be Social

9 Security-Only covered, CSRS covered, or

10 CSRS-Offset covered, as would have applied in

11 the absence of the erroneous retirement cov12 erage determination, effective as of the date of

13 the retirement coverage error. Such election

14 shall be made not later than 180 days after the

15 date of receipt of such notice.

16 (B) NONELECTION.—If the individual does

17 not make an election before the date provided

18 under subparagraph (A), the individual shall re19 main FERS covered, effective as of the date of

20 the retirement coverage error.

21 (3) EMPLOYEE CONTRIBUTIONS IN THRIFT SAV22 INGS FUND.—If under this section, an individual

23 elects to be Social Security-Only covered, CSRS cov24 ered, or CSRS-Offset covered, all employee contribu25 tions to the Thrift Savings Fund made during the
20

•S 1232 RS

1 period of erroneous FERS coverage (and all earn2 ings on such contributions) may remain in the

3 Thrift Savings Fund in accordance with regulations

4 promulgated by the Executive Director, notwith5 standing any limit under section 8351 or 8432 of

6 title 5, United States Code.

7 (4) REGULATIONS.—Except as provided under

8 paragraph (3), the Office shall promulgate regula9 tions to carry out this subsection.

10 (c) CORRECTED ERROR.—

11 (1) APPLICABILITY.—This subsection applies if

12 the retirement coverage error was corrected before

13 the effective date of the regulations described under

14 paragraph (2).

15 (2) ELECTION.—Not later than 180 days after

16 the date of enactment of this Act, the Office shall

17 promulgate regulations authorizing individuals to

18 elect, during the 18-month period immediately fol19 lowing the effective date of such regulations to re20 main Social Security-Only covered, CSRS covered,

21 or CSRS-Offset covered, or to be FERS covered, ef22 fective as of the date of the retirement coverage

23 error.

24 (3) NONELECTION.—If an eligible individual

25 does not make an election under paragraph (2), the
21

•S 1232 RS

1 corrective action before the end of any time limita2 tion under this subsection shall remain in effect.

3 SEC. 132. FERS-ELIGIBLE EMPLOYEE WHO SHOULD HAVE

4 BEEN CSRS COVERED, CSRS-OFFSET COV5 ERED, OR SOCIAL SECURITY-ONLY COVERED,

6 BUT WHO WAS ERRONEOUSLY FERS COV7 ERED INSTEAD WITHOUT AN ELECTION.

8 (a) IN GENERAL.—

9 (1) FERS ELECTION PREVENTED.—If an indi10 vidual was prevented from electing FERS coverage

11 because the individual was erroneously FERS cov12 ered during the period when the individual was eligi13 ble to elect FERS under title III of the Federal Em14 ployees Retirement System Act or the Federal Em15 ployees’ Retirement System Open Enrollment Act of

16 1997 (Public Law 105–61; 111 Stat. 1318 et seq.),

17 the individual—

18 (A) is deemed to have elected FERS cov19 erage; and

20 (B) shall remain covered by FERS, unless

21 the individual declines, under regulations pro22 mulgated by the Office, to be FERS covered.

23 (2) DECLINING FERS COVERAGE.—If an indi24 vidual described under paragraph (1)(B) declines to

25 be FERS covered, such individual shall be CSRS
22

•S 1232 RS

1 covered, CSRS-Offset covered, or Social Security2 Only covered, as would apply in the absence of a

3 FERS election, effective as of the date of the erro4 neous retirement coverage determination.

5 (b) EMPLOYEE CONTRIBUTIONS IN THRIFT SAVINGS

6 FUND.—If under this section, an individual declines to be

7 FERS covered and instead is Social Security-Only cov8 ered, CSRS covered, or CSRS-Offset covered, as would

9 apply in the absence of a FERS election, all employee con10 tributions to the Thrift Savings Fund made during the

11 period of erroneous FERS coverage (and all earnings on

12 such contributions) may remain in the Thrift Savings

13 Fund in accordance with regulations promulgated by the

14 Executive Director, notwithstanding any limit that would

15 otherwise be applicable.

16 (c) INAPPLICABILITY OF DURATION OF ERRONEOUS

17 COVERAGE.—This section shall apply regardless of the

18 length of time the erroneous coverage determination re19 mained in effect.

20 SEC. 133. RETROACTIVE EFFECT.

21 This subtitle shall be effective as of January 1, 1987,

22 except that section 132 shall not apply to individuals who

23 made or were deemed to have made elections similar to

24 those provided in this section under regulations promul25 gated by the Office before the effective date of this Act.
23

•S 1232 RS

1 Subtitle E—Employee Who Should

2 Have Been CSRS-Offset Cov3 ered, but Who Was Erroneously

4 CSRS Covered Instead

5 SEC. 141. APPLICABILITY.

6 This subtitle shall apply in the case of any employee

7 who should be (or should have been) CSRS-Offset covered

8 but, as a result of a retirement coverage error, is (or was)

9 CSRS covered instead.

10 SEC. 142. CORRECTION MANDATORY.

11 (a) UNCORRECTED ERROR.—If the retirement cov12 erage error has not been corrected, as soon as practicable

13 after discovery of the error, such individual shall be cov14 ered under the correct retirement coverage, effective as of

15 the date of the retirement coverage error.

16 (b) CORRECTED ERROR.—If the retirement coverage

17 error has been corrected before the effective date of this

18 Act, the corrective action taken before such date shall re19 main in effect.
24

•S 1232 RS

1 Subtitle F—Employee Who Should

2 Have Been CSRS Covered, but

3 Who Was Erroneously CSRS-Off4 set Covered Instead

5 SEC. 151. APPLICABILITY.

6 This subtitle shall apply in the case of any employee

7 who should be (or should have been) CSRS covered but,

8 as a result of a retirement coverage error, is (or was)

9 CSRS-Offset covered instead.

10 SEC. 152. CORRECTION MANDATORY.

11 (a) UNCORRECTED ERROR.—If the retirement cov12 erage error has not been corrected, as soon as practicable

13 after discovery of the error, such individual shall be cov14 ered under the correct retirement coverage, effective as of

15 the date of the retirement coverage error.

16 (b) CORRECTED ERROR.—If the retirement coverage

17 error has been corrected before the effective date of this

18 Act, the corrective action taken before such date shall re19 main in effect.

20 TITLE II—GENERAL PROVISIONS

21 SEC. 201. IDENTIFICATION AND NOTIFICATION REQUIRE22 MENTS.

23 Government agencies shall take all such measures as

24 may be reasonable and appropriate to promptly identify
25

•S 1232 RS

1 and notify individuals who are (or have been) affected by

2 a retirement coverage error of their rights under this Act.

3 SEC. 202. INFORMATION TO BE FURNISHED TO AND BY AU4 THORITIES ADMINISTERING THIS ACT.

5 (a) APPLICABILITY.—The authorities identified in

6 this subsection are—

7 (1) the Director of the Office of Personnel

8 Management;

9 (2) the Commissioner of Social Security; and

10 (3) the Executive Director of the Federal Re11 tirement Thrift Investment Board.

12 (b) AUTHORITY TO OBTAIN INFORMATION.—Each

13 authority identified in subsection (a) may secure directly

14 from any department or agency of the United States infor15 mation necessary to enable such authority to carry out its

16 responsibilities under this Act. Upon request of the au17 thority involved, the head of the department or agency in18 volved shall furnish that information to the requesting au19 thority.

20 (c) AUTHORITY TO PROVIDE INFORMATION.—Each

21 authority identified in subsection (a) may provide directly

22 to any department or agency of the United States all in23 formation such authority believes necessary to enable the

24 department or agency to carry out its responsibilities

25 under this Act.
26

•S 1232 RS

1 (d) LIMITATION; SAFEGUARDS.—Each of the respec2 tive authorities under subsection (a) shall—

3 (1) request or provide only such information as

4 that authority considers necessary; and

5 (2) establish, by regulation or otherwise, appro6 priate safeguards to ensure that any information ob7 tained under this section shall be used only for the

8 purpose authorized.

9 SEC. 203. SERVICE CREDIT DEPOSITS.

10 (a) CSRS DEPOSIT.—In the case of a retirement cov11 erage error in which—

12 (1) a FERS covered employee was erroneously

13 CSRS covered or CSRS-Offset covered;

14 (2) the employee made a service credit deposit

15 under the CSRS rules; and

16 (3) there is a subsequent retroactive change to

17 FERS coverage;

18 the excess of the amount of the CSRS civilian or military

19 service credit deposit over the FERS civilian or military

20 service credit deposit, together with interest computed in

21 accordance with paragraphs (2) and (3) of section 8334(e)

22 of title 5, United States Code, and regulations prescribed

23 by the Office, shall be paid to the employee, the annuitant

24 or, in the case of a deceased employee, to the individual
27

•S 1232 RS

1 entitled to lump-sum benefits under section 8342(c) or

2 8424(d) of title 5, United States Code, as applicable.

3 (b) FERS DEPOSIT.—

4 (1) APPLICABILITY.—This subsection applies in

5 the case of an erroneous retirement coverage deter6 mination in which—

7 (A) the employee owed a service credit de8 posit under section 8411(f) of title 5, United

9 States Code; and

10 (B)(i) there is a subsequent retroactive

11 change to CSRS or CSRS-Offset coverage; or

12 (ii) the service becomes creditable under

13 chapter 83 of title 5, United States Code.

14 (2) REDUCED ANNUITY.—

15 (A) IN GENERAL.—If at the time of com16 mencement of an annuity there is remaining

17 unpaid CSRS civilian or military service credit

18 deposit for service described under paragraph

19 (1), the annuity shall be reduced based upon

20 the amount unpaid together with interest com21 puted in accordance with section 8334(e) (2)

22 and (3) of title 5, United States Code, and reg23 ulations prescribed by the Office.

24 (B) AMOUNT.—The reduced annuity to

25 which the individual is entitled shall be equal to
28

•S 1232 RS

1 an amount that, when taken together with the

2 amount referred to under subparagraph (A),

3 would result in the present value of the total

4 being actuarially equivalent to the present value

5 of the unreduced annuity benefit that would

6 have been provided the individual.

7 (3) SURVIVOR ANNUITY.—

8 (A) IN GENERAL.—If at the time of com9 mencement of a survivor annuity, there is re10 maining unpaid any CSRS service credit de11 posit described under paragraph (1), and there

12 has been no actuarial reduction in an annuity

13 under paragraph (2), the survivor annuity shall

14 be reduced based upon the amount unpaid to15 gether with interest computed in accordance

16 with section 8334(e) (2) and (3) of title 5,

17 United States Code, and regulations prescribed

18 by the Office.

19 (B) AMOUNT.—The reduced survivor an20 nuity to which the individual is entitled shall be

21 equal to an amount that, when taken together

22 with the amount referred to under subpara23 graph (A), would result in the present value of

24 the total being actuarially equivalent to the

25 present value of an unreduced survivor annuity
29

•S 1232 RS

1 benefit that would have been provided the indi2 vidual.

3 SEC. 204. PROVISIONS RELATED TO SOCIAL SECURITY COV4 ERAGE OF MISCLASSIFIED EMPLOYEES.

5 (a) DEFINITIONS.—In this section, the term—

6 (1) ‘‘covered individual’’ means any employee,

7 former employee, or annuitant who—

8 (A) is or was employed erroneously subject

9 to CSRS coverage as a result of a retirement

10 coverage error; and

11 (B) is or was retroactively converted to

12 CSRS-offset coverage, FERS coverage, or So13 cial Security-only coverage; and

14 (2) ‘‘excess CSRS deduction amount’’ means an

15 amount equal to the difference between the CSRS

16 deductions withheld and the CSRS-Offset or FERS

17 deductions, if any, due with respect to a covered in18 dividual during the entire period the individual was

19 erroneously subject to CSRS coverage as a result of

20 a retirement coverage error.

21 (b) REPORTS TO COMMISSIONER OF SOCIAL SECU22 RITY.—

23 (1) IN GENERAL.—In order to carry out the

24 Commissioner of Social Security’s responsibilities

25 under title II of the Social Security Act, the Com-
30

•S 1232 RS

1 missioner may request the head of each agency that

2 employs or employed a covered individual to report

3 (in coordination with the Office of Personnel Man4 agement) in such form and within such timeframe as

5 the Commissioner may specify, any or all of—

6 (A) the total wages (as defined in section

7 3121(a) of the Internal Revenue Code of 1986)

8 paid to such individual during each year of the

9 entire period of the erroneous CSRS coverage;

10 and

11 (B) such additional information as the

12 Commissioner may require for the purpose of

13 carrying out the Commissioner’s responsibilities

14 under title II of the Social Security Act (42

15 U.S.C. 401 et seq.).

16 (2) COMPLIANCE.—The head of an agency or

17 the Office shall comply with a request from the

18 Commissioner under paragraph (1).

19 (3) WAGES.—For purposes of section 201 of

20 the Social Security Act (42 U.S.C. 401), wages re21 ported under this subsection shall be deemed to be

22 wages reported to the Secretary of the Treasury or

23 the Secretary’s delegates pursuant to subtitle F of

24 the Internal Revenue Code of 1986.
31

•S 1232 RS

1 (c) PAYMENT RELATING TO OASDI EMPLOYEE

2 TAXES.—

3 (1) IN GENERAL.— The Director of the Office

4 of Personnel Management shall transfer from the

5 Civil Service Retirement and Disability Fund to the

6 OASDI trust funds an amount equal to the excess

7 CSRS deduction amount for covered individuals (as

8 adjusted by amounts transferred relating to applica9 ble OASDI employee taxes as a result of corrections

10 made, including corrections made before the date of

11 enactment of this Act).

12 (2) TRANSFER.—Amounts transferred under

13 this subsection—

14 (A) shall be deposited in the OASDI trust

15 funds in the proportions indicated under section

16 201 (a) and (b) of the Social Security Act (42

17 U.S.C. 401 (a) and (b)); and

18 (B) shall be determined notwithstanding

19 any limitation under section 6501 of the Inter20 nal Revenue Code of 1986.

21 (d) PAYMENT OF OASDI EMPLOYER TAXES.—

22 (1) IN GENERAL.—Each employing agency shall

23 pay into the OASDI trust funds an amount equal to

24 OASDI employer taxes owed with respect to covered

25 individuals during the applicable period of erroneous
32

•S 1232 RS

1 coverage (as adjusted by amounts transferred for

2 the payment of such taxes as a result of corrections

3 made, including corrections made before the date of

4 enactment of this Act).

5 (2) TRANSFER.—Amounts transferred under

6 this subsection—

7 (A) shall be deposited in the OASDI trust

8 funds in the proportions indicated under section

9 201 (a) and (b) of the Social Security Act (42

10 U.S.C. 401 (a) and (b)); and

11 (B) shall be determined subject to any lim12 itation under section 6501 of the Internal Rev13 enue Code of 1986.

14 (e) APPLICATION OF OASDI TAX PROVISIONS OF

15 THE INTERNAL REVENUE CODE OF 1986 TO AFFECTED

16 INDIVIDUALS AND EMPLOYING AGENCIES.—A covered in17 dividual and the individual’s employing agency shall be

18 deemed to have fully satisfied in a timely manner their

19 responsibilities with respect to the taxes imposed by sec20 tions 3101(a), 3102(a), and 3111(a) of the Internal Rev21 enue Code of 1986 on the wages paid by the employing

22 agency to such individual during the entire period such

23 individual was erroneously subject to CSRS coverage as

24 a result of a retirement coverage error. No credit or refund
33

•S 1232 RS

1 of taxes on such wages shall be allowed as a result of this

2 subsection.

3 SEC. 205. THRIFT SAVINGS PLAN TREATMENT FOR CER4 TAIN INDIVIDUALS.

5 (a) APPLICABILITY.—This section applies to an indi6 vidual who—

7 (1) is eligible to make an election of coverage

8 under section 101 or 102, and only if FERS cov9 erage is elected (or remains in effect) for the em10 ployee involved;

11 (2) is described in section 111; or

12 (3) is a former employee, annuitant, or survivor

13 (subject to conditions similar to those in sections

14 101 and 102) in the case of a retirement coverage

15 error in which a FERS covered employee was erro16 neously Social Security-Only covered and is cor17 rected to FERS coverage.

18 (b) PAYMENT INTO THRIFT SAVINGS FUND.—

19 (1) IN GENERAL.—

20 (A) PAYMENT.—With respect to an indi21 vidual to whom this section applies, the employ22 ing agency shall pay to the Thrift Savings

23 Fund under subchapter III of chapter 84 of

24 title 5, United States Code, for credit to the ac25 count of the employee involved, an amount
34

•S 1232 RS

1 equal to the earnings which are disallowed

2 under section 8432a of such title on the em3 ployee’s retroactive contributions to such Fund.

4 (B) AMOUNT.—The amount paid under

5 subparagraph (A) shall represent earnings, on

6 such retroactive contributions, during the pe7 riod of the retirement coverage error and con8 tinuing through the date on which the amount

9 is paid by the employing agency (and based on

10 distributions from the employee’s Thrift Sav11 ings Plan account).

12 (C) EARNINGS.—Earnings under subpara13 graph (B) shall be computed in accordance with

14 the procedures for computing lost earnings

15 under section 8432a of title 5, United States

16 Code. The amount paid by the employing agen17 cy shall be treated for all purposes as if that

18 amount had actually been earned on the basis

19 of the employee’s contributions.

20 (2) ADDITIONAL EMPLOYEE CONTRIBUTION.—

21 In cases in which the retirement coverage error was

22 corrected before the effective date of the regulations

23 under section 101(c), the employee involved (includ24 ing an employee described in subsection (a)(2)) shall

25 have an additional opportunity to make retroactive
35

•S 1232 RS

1 contributions for the period of the retirement cov2 erage error (subject to applicable limits), and such

3 contributions (including any contributions made

4 after the date of the correction) shall be treated in

5 accordance with paragraph (1).

6 (c) REGULATIONS.—The Office, in consultation with

7 the Federal Retirement Thrift Investment Board, shall

8 prescribe regulations appropriate to carry out this section.

9 SEC. 206. CERTAIN AGENCY AMOUNTS TO BE PAID INTO OR

10 REMAIN IN THE CSRDF.

11 (a) CERTAIN EXCESS AGENCY CONTRIBUTIONS TO

12 REMAIN IN THE CSRDF.—

13 (1) IN GENERAL.—Any amount described under

14 paragraph (2) shall—

15 (A) remain in the CSRDF; and

16 (B) may not be paid or credited to an

17 agency.

18 (2) AMOUNTS.—Paragraph (1) refers to any

19 amount of contributions made by an agency under

20 section 8423 of title 5, United States Code, on be21 half of any employee, former employee, or annuitant

22 (or survivor of such employee, former employee, or

23 annuitant) who makes an election to correct a retire24 ment coverage error under this Act, that the Office

25 determines to be excess as a result of such election.
36

•S 1232 RS

1 (b) ADDITIONAL EMPLOYEE RETIREMENT DEDUC2 TIONS TO BE PAID BY AGENCY.—If a correction in a re3 tirement coverage error results in an increase in employee

4 deductions under section 8334 or 8422 of title 5, United

5 States Code, that cannot be fully paid by a reallocation

6 of otherwise available amounts previously deducted from

7 the employee’s pay as employment taxes or retirement de8 ductions, the employing agency—

9 (1) shall pay the required additional amount

10 into the CSRDF; and

11 (2) shall not seek repayment of that amount

12 from the employee, former employee, annuitant, or

13 survivor.

14 SEC. 207. CSRS COVERAGE DETERMINATIONS TO BE AP15 PROVED BY OPM.

16 No agency shall place an individual under CSRS cov17 erage unless—

18 (1) the individual has been employed with

19 CSRS coverage within the preceding 365 days; or

20 (2) the Office has agreed in writing that the

21 agency’s coverage determination is correct.

22 SEC. 208. DISCRETIONARY ACTIONS BY DIRECTOR.

23 (a) IN GENERAL.—The Director of the Office of Per24 sonnel Management may—
37

•S 1232 RS

1 (1) extend the deadlines for making elections

2 under this Act in circumstances involving an individ3 ual’s inability to make a timely election due to a

4 cause beyond the individual’s control;

5 (2) provide for the reimbursement of necessary

6 and reasonable expenses incurred by an individual

7 with respect to settlement of a claim for losses re8 sulting from a retirement coverage error, including

9 attorney’s fees, court costs, and other actual ex10 penses;

11 (3) compensate an individual for monetary

12 losses that are a direct and proximate result of a re13 tirement coverage error, excluding claimed losses re14 lating to forgone contributions and earnings under

15 the Thrift Savings Plan under subchapter III of

16 chapter 84 of title 5, United States Code, and all

17 other investment opportunities; and

18 (4) waive repayments otherwise required under

19 this Act.

20 (b) SIMILAR ACTIONS.—In exercising the authority

21 under this section, the Director shall, to the extent prac22 ticable, provide for similar actions in situations involving

23 similar circumstances.
38

•S 1232 RS

1 (c) JUDICIAL REVIEW.—Actions taken under this

2 section are final and conclusive, and are not subject to

3 administrative or judicial review.

4 (d) REGULATIONS.—The Office of Personnel Man5 agement shall prescribe regulations regarding the process

6 and criteria used in exercising the authority under this

7 section.

8 (e) REPORT.—The Office of Personnel Management

9 shall, not later than 180 days after the date of enactment

10 of this Act, and annually thereafter for each year in which

11 the authority provided in this section is used, submit a

12 report to each House of Congress on the operation of this

13 section.

14 SEC. 209. REGULATIONS.

15 (a) IN GENERAL.—In addition to the regulations spe16 cifically authorized in this Act, the Office may prescribe

17 such other regulations as are necessary for the administra18 tion of this Act.

19 (b) FORMER SPOUSE.—The regulations prescribed

20 under this Act shall provide for protection of the rights

21 of a former spouse with entitlement to an apportionment

22 of benefits or to survivor benefits based on the service of

23 the employee.
39

•S 1232 RS

1 TITLE III—OTHER PROVISIONS

2 SEC. 301. PROVISIONS TO PERMIT CONTINUED CON3 FORMITY OF OTHER FEDERAL RETIREMENT

4 SYSTEMS.

5 (a) FOREIGN SERVICE.—Sections 827 and 851 of the

6 Foreign Service Act of 1980 (22 U.S.C. 4067 and 4071)

7 shall apply with respect to this Act in the same manner

8 as if this Act were part of—

9 (1) the Civil Service Retirement System, to the

10 extent this Act relates to the Civil Service Retire11 ment System; and

12 (2) the Federal Employees’ Retirement System,

13 to the extent this Act relates to the Federal Employ14 ees’ Retirement System.

15 (b) CENTRAL INTELLIGENCE AGENCY.—Sections

16 292 and 301 of the Central Intelligence Agency Retire17 ment Act (50 U.S.C. 2141 and 2151) shall apply with re18 spect to this Act in the same manner as if this Act were

19 part of—

20 (1) the Civil Service Retirement System, to the

21 extent this Act relates to the Civil Service Retire22 ment System; and

23 (2) the Federal Employees’ Retirement System,

24 to the extent this Act relates to the Federal Employ25 ees’ Retirement System.
40

•S 1232 RS

1 SEC. 302. AUTHORIZATION AND APPROPRIATION.

2 All payments permitted or required by this Act to be

3 paid from the Civil Service Retirement and Disability

4 Fund, together with administrative expenses incurred by

5 the Office in administering this Act, shall be deemed to

6 have been authorized to be paid from that Fund, which

7 is appropriated for the payment thereof.

8 SEC. 303. INDIVIDUAL RIGHT OF ACTION PRESERVED FOR

9 AMOUNTS NOT OTHERWISE PROVIDED FOR

10 UNDER THIS ACT.

11 Nothing in this Act shall preclude an individual from

12 bringing a claim against the Government of the United

13 States which such individual may have under section

14 1346(b) or chapter 171 of title 28, United States Code,

15 or any other provision of law (except to the extent the

16 claim is for any amounts otherwise provided for under this

17 Act).

18 SEC. 304. EFFECTIVE DATE.

19 Except as otherwise provided in this Act, this Act

20 shall take effect on the date of enactment of this Act.

21 TITLE IV—TAX PROVISIONS

22 SEC. 401. TAX PROVISIONS.

23 (a) PLAN QUALIFICATION.—No retirement plan of

24 the United States (or any agency thereof) shall fail to be

25 treated as a qualified plan under the Internal Revenue
41

•S 1232 RS

1 Code of 1986 by reason of any action taken under this

2 Act.

3 (b) TRANSFERS.—For purposes of the Internal Rev4 enue Code of 1986, no amount shall be includible in the

5 gross income of any individual in any tax year by reason

6 of any direct transfer under this Act between funds or any

7 Government contribution under this Act to any fund or

8 account in any such tax year.

9 TITLE V—MISCELLANEOUS

10 RETIREMENT PROVISIONS

11 SEC. 501. FEDERAL RESERVE BOARD PORTABILITY OF

12 SERVICE CREDIT.

13 (a) CREDITABLE SERVICE.—

14 (1) IN GENERAL.—Section 8411(b) of title 5,

15 United States Code, is amended—

16 (A) by striking ‘‘and’’ at the end of para17 graph (3);

18 (B) in paragraph (4)—

19 (i) by striking ‘‘of the preceding provi20 sions’’ and inserting ‘‘other paragraph’’;

21 and

22 (ii) by striking the period at the end

23 and inserting ‘‘; and’’; and

24 (C) by adding at the end the following:
42

•S 1232 RS

1 ‘‘(5) a period of service (other than any service

2 under any other paragraph of this subsection, any

3 military service, and any service performed in the

4 employ of a Federal Reserve Bank) that was cred5 itable under the Bank Plan (as defined in subsection

6 (i)), if the employee waives credit for such service

7 under the Bank Plan and makes a payment to the

8 Fund equal to the amount that would have been de9 ducted from pay under section 8422(a) had the em10 ployee been subject to this chapter during such pe11 riod of service (together with interest on such

12 amount computed under paragraphs (2) and (3) of

13 section 8334(e)).

14 Paragraph (5) shall not apply in the case of any employee

15 as to whom subsection (g) (or, to the extent subchapter

16 III of chapter 83 is involved, section 8332(n)) otherwise

17 applies.’’.

18 (2) BANK PLAN DEFINED.—Section 8411 of

19 title 5, United States Code, is amended by adding

20 at the end the following:

21 ‘‘(i) For purposes of subsection (b)(5), the term

22 ‘Bank Plan’ means the benefit structure in which employ23 ees of the Board of Governors of the Federal Reserve Sys24 tem appointed on or after January 1, 1984, participate,

25 which benefit structure is a component of the Retirement
43

•S 1232 RS

1 Plan for Employees of the Federal Reserve System, estab2 lished under section 10 of the Federal Reserve Act (and

3 any redesignated or successor version of such benefit

4 structure, if so identified in writing by the Board of Gov5 ernors of the Federal Reserve System for purposes of this

6 chapter).’’.

7 (b) EXCLUSION FROM CHAPTER 84.—

8 (1) IN GENERAL.—Paragraph (2) of section

9 8402(b) of title 5, United States Code, is amended

10 by striking the matter before subparagraph (B) and

11 inserting the following:

12 ‘‘(2)(A) any employee or Member who has sepa13 rated from the service after—

14 ‘‘(i) having been subject to—

15 ‘‘(I) subchapter III of chapter 83 of

16 this title;

17 ‘‘(II) subchapter I of chapter 8 of title

18 I of the Foreign Service Act of 1980; or

19 ‘‘(III) the benefit structure for em20 ployees of the Board of Governors of the

21 Federal Reserve System appointed before

22 January 1, 1984, that is a component of

23 the Retirement Plan for Employees of the

24 Federal Reserve System, established under

25 section 10 of the Federal Reserve Act; and
44

•S 1232 RS

1 ‘‘(ii) having completed—

2 ‘‘(I) at least 5 years of civilian service

3 creditable under subchapter III of chapter

4 83 of this title;

5 ‘‘(II) at least 5 years of civilian serv6 ice creditable under subchapter I of chap7 ter 8 of title I of the Foreign Service Act

8 of 1980; or

9 ‘‘(III) at least 5 years of civilian serv10 ice (other than any service performed in

11 the employ of a Federal Reserve Bank)

12 creditable under the benefit structure for

13 employees of the Board of Governors of

14 the Federal Reserve System appointed be15 fore January 1, 1984, that is a component

16 of the Retirement Plan for Employees of

17 the Federal Reserve System, established

18 under section 10 of the Federal Reserve

19 Act,

20 determined without regard to any deposit or re21 deposit requirement under either such sub22 chapter or under such benefit structure, or any

23 requirement that the individual become subject

24 to either such subchapter or to such benefit
45

•S 1232 RS

1 structure after performing the service involved;

2 or’’.

3 (2) EXCEPTION.—Subsection (d) of section

4 8402 of title 5, United States Code, is amended to

5 read as follows:

6 ‘‘(d) Paragraph (2) of subsection (b) shall not apply

7 to an individual who—

8 ‘‘(1) becomes subject to—

9 ‘‘(A) subchapter II of chapter 8 of title I

10 of the Foreign Service Act of 1980 (relating to

11 the Foreign Service Pension System) pursuant

12 to an election; or

13 ‘‘(B) the benefit structure in which em14 ployees of the Board of Governors of the Fed15 eral Reserve System appointed on or after Jan16 uary 1, 1984, participate, which benefit struc17 ture is a component of the Retirement Plan for

18 Employees of the Federal Reserve System, es19 tablished under section 10 of the Federal Re20 serve Act (and any redesignated or successor

21 version of such benefit structure, if so identified

22 in writing by the Board of Governors of the

23 Federal Reserve System for purposes of this

24 chapter); and
46

•S 1232 RS

1 ‘‘(2) subsequently enters a position in which,

2 but for paragraph (2) of subsection (b), such indi3 vidual would be subject to this chapter.’’.

4 (c) PROVISIONS RELATING TO CERTAIN FORMER

5 EMPLOYEES.—A former employee of the Board of Gov6 ernors of the Federal Reserve System who—

7 (1) has at least 5 years of civilian service (other

8 than any service performed in the employ of a Fed9 eral Reserve Bank) creditable under the benefit

10 structure for employees of the Board of Governors

11 of the Federal Reserve System appointed before

12 January 1, 1984, that is a component of the Retire13 ment Plan for Employees of the Federal Reserve

14 System, established under section 10 of the Federal

15 Reserve Act;

16 (2) was subsequently employed subject to the

17 benefit structure in which employees of the Board of

18 Governors of the Federal Reserve System appointed

19 on or after January 1, 1984, participate, which ben20 efit structure is a component of the Retirement Plan

21 for Employees of the Federal Reserve System, estab22 lished under section 10 of the Federal Reserve Act

23 (and any redesignated or successor version of such

24 benefit structure, if so identified in writing by the

25 Board of Governors of the Federal Reserve System
47

•S 1232 RS

1 for purposes of chapter 84 of title 5, United States

2 Code); and

3 (3) after service described in paragraph (2), be4 comes subject to and thereafter entitled to benefits

5 under chapter 84 of title 5, United States Code,

6 shall, for purposes of section 302 of the Federal Employ7 ees’ Retirement System Act of 1986 (100 Stat. 601; 5

8 U.S.C. 8331 note) be considered to have become subject

9 to chapter 84 of title 5, United States Code, pursuant to

10 an election under section 301 of such Act.

11 (d) EFFECTIVE DATE.—

12 (1) IN GENERAL.—Subject to succeeding provi13 sions of this subsection, this section and the amend14 ments made by this section shall take effect on the

15 date of enactment of this Act.

16 (2) PROVISIONS RELATING TO CREDITABILITY

17 AND CERTAIN FORMER EMPLOYEES.—The amend18 ments made by subsection (a) and the provisions of

19 subsection (c) shall apply only to individuals who

20 separate from service subject to chapter 84 of title

21 5, United States Code, on or after the date of enact22 ment of this Act.

23 (3) PROVISIONS RELATING TO EXCLUSION

24 FROM CHAPTER.—The amendments made by sub25 section (b) shall not apply to any former employee
48

•S 1232 RS

1 of the Board of Governors of the Federal Reserve

2 System who, subsequent to his or her last period of

3 service as an employee of the Board of Governors of

4 the Federal Reserve System and prior to the date of

5 enactment of this Act, became subject to subchapter

6 III of chapter 83 or chapter 84 of title 5, United

7 States Code, under the law in effect at the time of

8 the individual’s appointment.

9 SEC. 502. CERTAIN TRANSFERS TO BE TREATED AS A SEPA10 RATION FROM SERVICE FOR PURPOSES OF

11 THE THRIFT SAVINGS PLAN.

12 (a) AMENDMENTS TO CHAPTER 84 OF TITLE 5,

13 UNITED STATES CODE.—

14 (1) IN GENERAL.—Subchapter III of chapter

15 84 of title 5, United States Code, is amended by in16 serting before section 8432 the following:

17 ‘‘§ 8431. Certain transfers to be treated as a separa18 tion

19 ‘‘(a) For purposes of this subchapter, separation

20 from Government employment includes a transfer from a

21 position that is subject to one of the retirement systems

22 described in subsection (b) to a position that is not subject

23 to any of them.

24 ‘‘(b) The retirement systems described in this sub25 section are—
49

•S 1232 RS

1 ‘‘(1) the retirement system under this chapter;

2 ‘‘(2) the retirement system under subchapter

3 III of chapter 83; and

4 ‘‘(3) any other retirement system under which

5 individuals may contribute to the Thrift Savings

6 Fund through withholdings from pay.’’.

7 (2) CLERICAL AMENDMENT.—The table of sec8 tions for chapter 84 of title 5, United States Code,

9 is amended by inserting before the item relating to

10 section 8432 the following:

‘‘8431. Certain transfers to be treated as a separation.’’.

11 (b) CONFORMING AMENDMENTS.—Subsection (b) of

12 section 8351 of title 5, United States Code, is amended

13 by redesignating paragraph (11) as paragraph (8), and

14 by adding at the end the following:

15 ‘‘(9) For the purpose of this section, separation

16 from Government employment includes a transfer

17 described in section 8431.’’.

18 (c) EFFECTIVE DATE.—The amendments made by

19 this section shall apply with respect to transfers occurring

20 before, on, or after the date of enactment of this Act, ex21 cept that, for purposes of applying such amendments with

22 respect to any transfer occurring before such date of en23 actment, the date of such transfer shall be considered to

24 be the date of enactment of this Act. The Executive Direc25 tor (within the meaning of section 8401(13) of title 5,
50

•S 1232 RS

1 United States Code) may prescribe any regulations nec2 essary to carry out this subsection.