I

104TH CONGRESS

1ST SESSION H. R. 1185

To amend chapters 83 and 84 of title 5, United States Code, to increase

the percentage of basic pay required to be contributed by individuals;

to change the method for computing ‘‘average pay’’; and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 9, 1995

Mr. MICA introduced the following bill; which was referred to the Committee

on Government Reform and Oversight

A BILL

To amend chapters 83 and 84 of title 5, United States

Code, to increase the percentage of basic pay required

to be contributed by individuals; to change the method

for computing ‘‘average pay’’; and for other purposes.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Federal Retirement Reform Act of 1995’’.

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

7 this Act is as follows:

Sec. 1. Short title; table of contents.
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Sec. 2. Amendment of title 5, United States Code.

Sec. 3. Individual contributions.

Sec. 4. Average pay.

1 SEC. 2. AMENDMENT OF TITLE 5, UNITED STATES CODE.

2 Except as otherwise expressly provided, whenever in

3 this Act an amendment or repeal is expressed in terms

4 of an amendment to, or repeal of, a section or other provi5 sion, the reference shall be considered to be made to a

6 section or other provision of title 5, United States Code.

7 SEC. 3. INDIVIDUAL CONTRIBUTIONS.

8 (a) CSRS.—

9 (1) IN GENERAL.—The table under section

10 8334(c) is amended—

11 (A) in the matter relating to an employee

12 by striking

‘‘7 ........ After December 31,

1969.’’

13 and inserting the following:

‘‘7 ........ January 1, 1970, to December 31, 1995.

‘‘8 ........ January 1, 1996, to December 31, 1996.

‘‘81⁄2 ..... January 1, 1997, to December 31, 1997.

‘‘91⁄2 ..... After December 31,

1997.’’;

14 (B) in the matter relating to a Member or

15 employee for Congressional employee service by

16 striking

‘‘71⁄2 ..... After December 31,

1969.’’
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1 and inserting the following:

‘‘71⁄2 ..... January 1, 1970, to December 31, 1995.

‘‘81⁄2 ..... January 1, 1996, to December 31, 1996.

‘‘9 ........ January 1, 1997, to December 31, 1997.

‘‘91⁄2 ..... After December 31,

1997.’’;

2 (C) in the matter relating to a Member for

3 Member service by striking

‘‘8 ........ After December 31,

1969.’’

4 and inserting the following:

‘‘8 ........ January 1, 1970, to December 31, 1995.

‘‘9 ........ January 1, 1996, to December 31, 1996.

‘‘91⁄2 ..... After December 31,

1996.’’;

5 (D) in the matter relating to a law enforce6 ment officer for law enforcement service and

7 firefighter for firefighter service by striking

‘‘71⁄2 ..... After December 31,

1974.’’

8 and inserting the following:

‘‘71⁄2 ..... January 1, 1975, to December 31, 1995.

‘‘81⁄2 ..... January 1, 1996, to December 31, 1996.

‘‘9 ........ January 1, 1997, to December 31, 1997.

‘‘91⁄2 ..... After December 31,

1997.’’;
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1 (E) in the matter relating to a bankruptcy

2 judge by striking

‘‘8 ........ After December 31,

1983.’’

3 and inserting the following:

‘‘8 ........ January 1, 1984, to December 31, 1995.

‘‘9 ........ January 1, 1996, to December 31, 1996.

‘‘91⁄2 ..... After December 31,

1996.’’;

4 (F) in the matter relating to a judge of the

5 United States Court of Appeals for the Armed

6 Forces for service as a judge of that court by

7 striking

‘‘8 ........ On and after the date of

the enactment of the

Department of Defense Authorization

Act, 1984.’’

8 and inserting the following:

‘‘8 ........ The date of the enactment of the Department of Defense Authorization Act, 1984,

to December 31,

1995.

‘‘9 ........ January 1, 1996, to December 31, 1996.

‘‘91⁄2 ..... After December 31,

1996.’’;

9 (G) in the matter relating to a United

10 States magistrate by striking
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‘‘8 ........ After September 30,

1987.’’

1 and inserting the following:

‘‘8 ........ October 1, 1987, to December 31, 1995.

‘‘9 ........ January 1, 1996, to December 31, 1996.

‘‘91⁄2 ..... After December 31,

1996.’’; and

2 (H) in the matter relating to a Claims

3 Court judge by striking

‘‘8 ........ After September 30,

1988.’’

4 and inserting the following:

‘‘8 ........ October 1, 1988, to December 31, 1995.

‘‘9 ........ January 1, 1996, to December 31, 1996.

‘‘91⁄2 ..... After December 31,

1996.’’.

5 (2) DEDUCTIONS.—The first sentence of section

6 8334(a)(1) is amended to read as follows: ‘‘The em7 ploying agency shall deduct and withhold from the

8 basic pay of an employee, Member, Congressional

9 employee, law enforcement officer, firefighter, bank10 ruptcy judge, judge of the United States Court of

11 Appeals for the Armed Forces, United States mag12 istrate, or Claims Court judge, as the case may be,

13 the percentage of basic pay applicable under sub14 section (c).’’.
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1 (3) GOVERNMENT CONTRIBUTIONS.—Section

2 8334(a)(1) is amended by inserting after the second

3 sentence the following: ‘‘The amount to be contrib4 uted under the preceding sentence with respect to

5 any service period occurring after December 31,

6 1995, shall be determined as if the applicable per7 centage under subsection (c) for each such period

8 were not greater than the applicable percentage

9 thereunder, for the type of service involved, for cal10 endar year 1995.’’.

11 (4) OTHER SERVICE.—

12 (A) MILITARY SERVICE.—Section 8334(j)

13 is amended—

14 (i) in paragraph (1)(A) by inserting

15 ‘‘and subject to paragraph (5),’’ after ‘‘Ex16 cept as provided in subparagraph (B),’’;

17 and

18 (ii) by adding at the end the follow19 ing:

20 ‘‘(5) Effective with respect to any period of military

21 service after December 31, 1995, the percentage of basic

22 pay under section 204 of title 37 payable under paragraph

23 (1) shall be equal to the same percentage as would be ap24 plicable under section 8334(c) for that same period for

25 service as an ‘employee’, subject to paragraph (1)(B).’’.
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1 (B) VOLUNTEER SERVICE.—Section

2 8334(l) is amended—

3 (i) in paragraph (1) by striking the

4 period at the end and inserting ‘‘, subject

5 to paragraph (4).’’; and

6 (ii) by adding at the end the follow7 ing:

8 ‘‘(4) Effective with respect to any period of service

9 after December 31, 1995, the percentage of the readjust10 ment allowance or stipend (as the case may be) payable

11 under paragraph (1) shall be equal to the same percentage

12 as would be applicable under section 8334(c) for that same

13 period for service as an ‘employee’.’’.

14 (b) FERS.—

15 (1) IN GENERAL.—Section 8422(a) is amended

16 by striking paragraph (2) and inserting the follow17 ing:

18 ‘‘(2) The percentage to be deducted and withheld

19 from basic pay for any pay period shall be equal to—

20 ‘‘(A) the applicable percentage under paragraph

21 (3), minus

22 ‘‘(B) the percentage then in effect under section

23 3101(a) of the Internal Revenue Code of 1986 (re24 lating to rate of tax for old-age, survivors, and dis25 ability insurance).
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1 ‘‘(3) The applicable percentage under this paragraph,

2 for civilian service after December 31, 1995, shall be as

3 follows:

Percentage of

basic

pay

Service period

‘‘Employee ................................................. 8 .......... January 1, 1996, to December 31, 1996.

‘‘81⁄2 ..... January 1, 1997, to December 31, 1997.

‘‘91⁄2 ..... After December 31,

1997.

‘‘Congressional employee .......................... 81⁄2 ....... January 1, 1996, to December 31, 1996.

‘‘9 ........ January 1, 1997, to December 31, 1997.

‘‘91⁄2 ..... After December 31,

1997.

‘‘Member ................................................... 81⁄2 ....... January 1, 1996, to December 31, 1996.

‘‘9 ........ January 1, 1997, to December 31, 1997.

‘‘91⁄2 ..... After December 31,

1997.

‘‘Law enforcement officer ......................... 81⁄2 ....... January 1, 1996, to December 31, 1996.

‘‘9 ........ January 1, 1997, to December 31, 1997.

‘‘91⁄2 ..... After December 31,

1997.

‘‘Firefighter ............................................... 81⁄2 ....... January 1, 1996, to December 31, 1996.

‘‘9 ........ January 1, 1997, to December 31, 1997.

‘‘91⁄2 ..... After December 31,

1997.

‘‘Air traffic controller ............................... 81⁄2 ....... January 1, 1996, to December 31, 1996.

‘‘9 ........ January 1, 1997, to December 31, 1997.

‘‘91⁄2 ..... After December 31,

1997.’’.

4 (2) OTHER SERVICE.—

5 (A) MILITARY SERVICE.—Section 8422(e)

6 is amended—
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1 (i) in paragraph (1)(A) by inserting

2 ‘‘and subject to paragraph (5),’’ after ‘‘Ex3 cept as provided in subparagraph (B),’’;

4 and

5 (ii) by adding at the end the follow6 ing:

7 ‘‘(5) Effective with respect to any period of military

8 service after December 31, 1995, the percentage of basic

9 pay under section 204 of title 37 payable under paragraph

10 (1) shall be equal to the same percentage as would be ap11 plicable under section 8422(a)(3) for that same period for

12 service as an ‘employee’, subject to paragraph (1)(B).’’.

13 (B) VOLUNTEER SERVICE.—Section

14 8422(f) is amended—

15 (i) in paragraph (1) by striking the

16 period at the end and inserting ‘‘, subject

17 to paragraph (4).’’; and

18 (ii) by adding at the end the follow19 ing:

20 ‘‘(4) Effective with respect to any period of service

21 after December 31, 1995, the percentage of the readjust22 ment allowance or stipend (as the case may be) payable

23 under paragraph (1) shall be equal to the same percentage

24 as would be applicable under section 8422(a)(3) for that

25 same period for service as an employee.’’.
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1 (c) EXEMPTION.—

2 (1) IN GENERAL.—Section 1005(d) of title 39,

3 United States Code, is amended by adding at the

4 end the following:

5 ‘‘(3) For purposes of applying chapters 83 and 84

6 of title 5 with respect to any officer or employee of the

7 Postal Service, section 3 of the Federal Retirement Re8 form Act of 1995 shall be treated as if it had not been

9 enacted.’’.

10 (2) TECHNICAL AMENDMENT.—The second sen11 tence of section 1005(d)(1) of title 39, United States

12 Code, is amended by striking the period and insert13 ing ‘‘, subject to paragraph (3).’’.

14 (d) EFFECTIVE DATE.—This section shall take effect

15 on January 1, 1996.

16 SEC. 4. AVERAGE PAY.

17 (a) CSRS.—

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

19 83 is amended by inserting after section 8339 the

20 following:

21 ‘‘§ 8339a. Special rules relating to average pay

22 ‘‘(a) Notwithstanding section 8331(4), for purposes

23 of any annuity or survivor annuity eligibility for which is

24 based on a separation occurring after December 31, 1995,
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1 ‘average pay’ shall be determined in accordance with this

2 section.

3 ‘‘(b) For purposes of any computation under this sub4 chapter which involves the multiplication of ‘average pay’

5 times a fixed percentage times a period of service (includ6 ing any computation under the second sentence of section

7 8339(a)), with respect to any annuity or survivor annuity

8 described in subsection (a), the term ‘average pay’ shall—

9 ‘‘(1) with respect to service performed before

10 calendar year 1996, have the meaning given such

11 term by subsection (d)(1);

12 ‘‘(2) with respect to service performed during

13 calendar year 1996, have the meaning given such

14 term by subsection (d)(2); and

15 ‘‘(3) with respect to service performed after cal16 endar year 1996, have the meaning given such term

17 by subsection (d)(3).

18 ‘‘(c)(1) For purposes of any computation described

19 in paragraph (2), the term ‘average pay’ shall, if the sepa20 ration (on which eligibility for the annuity or survivor an21 nuity involved is based) occurs—

22 ‘‘(A) during calendar year 1996, have the

23 meaning given such term by subsection (d)(2); or

24 ‘‘(B) after calendar year 1996, have the mean25 ing given such term by subsection (d)(3).
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1 ‘‘(2) This subsection shall apply for purposes of any

2 computation under this subchapter involving the mul3 tiplication of ‘average pay’ times a specified percentage

4 (where the total percentage to be applied in such computa5 tion is specifically stated, rather than to be determined

6 as a function of length of service), such as the computa7 tion of any minimum amount under section 8339(e),

8 8339(g)(1), or 8341(d)(1), any maximum amount allow9 able under section 8339(f) or 8340(g)(1)(B), and any

10 amount under subparagraph (A) or clause (i) of section

11 8341(e)(2).

12 ‘‘(d) For purposes of this section—

13 ‘‘(1) the meaning given the term ‘average pay’

14 by this paragraph shall be the meaning given such

15 term by section 8331(4);

16 ‘‘(2) the meaning given the term ‘average pay’

17 by this paragraph shall be the meaning such term

18 would have under section 8331(4) if ‘4 consecutive

19 years’ were substituted for ‘3 consecutive years’ and

20 ‘4 years’ were substituted for ‘3 years’; and

21 ‘‘(3) the meaning given the term ‘average pay’

22 by this paragraph shall be the meaning such term

23 would have under section 8331(4) if ‘5 consecutive

24 years’ were substituted for ‘3 consecutive years’ and

25 ‘5 years’ were substituted for ‘3 years’.
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1 ‘‘(e) Nothing in this section shall be considered to

2 apply with respect to any annuity or survivor annuity eligi3 bility for which is based on a separation occurring before

4 January 1, 1996.

5 ‘‘(f) The Office of Personnel Management shall pre6 scribe such regulations as may be necessary to carry out

7 this section, including regulations for the application of

8 section 8339(m) and (p) (and any other provision of this

9 subchapter not otherwise specifically addressed in this sec10 tion) in a manner consistent with the purposes of this sec11 tion.’’.

12 (2) TECHNICAL AMENDMENTS.—

13 (A) Section 8331(4) is amended by strik14 ing ‘‘effect;’’ and inserting ‘‘effect, subject to

15 section 8339a;’’.

16 (B) The table of sections for chapter 83 is

17 amended by inserting after the item relating to

18 section 8339 the following:

‘‘8339a. Special rules relating to average pay.’’.

19 (b) FERS.—

20 (1) IN GENERAL.—Chapter 84 is amended by

21 inserting after section 8461 the following:

22 ‘‘§ 8461a. Special rules relating to average pay

23 ‘‘(a) Notwithstanding section 8401(3), for purposes

24 of any annuity or survivor annuity eligibility for which is

25 based on a separation occurring after December 31, 1995,
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1 ‘average pay’ shall be determined in accordance with this

2 section.

3 ‘‘(b)(1) Except as provided in paragraph (2), for pur4 poses of any computation under this chapter which in5 volves the multiplication of ‘average pay’ times a fixed per6 centage times a period of service, with respect to any an7 nuity or survivor annuity described in subsection (a), the

8 term ‘average pay’ shall—

9 ‘‘(A) with respect to service performed before

10 calendar year 1996, have the meaning given such

11 term by subsection (d)(1);

12 ‘‘(B) with respect to service performed during

13 calendar year 1996, have the meaning given such

14 term by subsection (d)(2); and

15 ‘‘(C) with respect to service performed after cal16 endar year 1996, have the meaning given such term

17 by subsection (d)(3).

18 ‘‘(2) In the case of an annuity or survivor annuity

19 eligibility for which is based on the service of an employee

20 or Member who, as of December 31, 1995, has less than

21 5 years of civilian service creditable under section 8411,

22 for purposes of any computation described in paragraph

23 (1), the term ‘average pay’ shall, if the separation (on

24 which eligibility for such annuity or survivor annuity is

25 based) occurs—
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1 ‘‘(A) during calendar year 1996, have the

2 meaning given such term by subsection (d)(2); or

3 ‘‘(B) after calendar year 1996, have the mean4 ing given such term by subsection (d)(3).

5 ‘‘(c)(1) For purposes of any computation described

6 in paragraph (2), the term ‘average pay’ shall, if the sepa7 ration (on which eligibility for the annuity or survivor an8 nuity involved is based) occurs—

9 ‘‘(A) during calendar year 1996, have the

10 meaning given such term by subsection (d)(2); or

11 ‘‘(B) after calendar year 1996, have the mean12 ing given such term by subsection (d)(3).

13 ‘‘(2) This subsection shall apply for purposes of any

14 computation under this chapter involving the multiplica15 tion of ‘average pay’ times a specified percentage (where

16 the total percentage to be applied in such computation is

17 specifically stated, rather than to be determined as a func18 tion of length of service), such as the computation of an

19 amount under section 8442(b)(1)(A)(i) or 8452(a)(1)(A).

20 ‘‘(d) For purposes of this section—

21 ‘‘(1) the meaning given the term ‘average pay’

22 by this paragraph shall be the meaning given such

23 term by section 8401(3);

24 ‘‘(2) the meaning given the term ‘average pay’

25 by this paragraph shall be the meaning such term
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1 would have under section 8401(3) if ‘4 consecutive

2 years’ were substituted for ‘3 consecutive years’ and

3 ‘4 years’ were substituted for ‘3 years’; and

4 ‘‘(3) the meaning given the term ‘average pay’

5 by this paragraph shall be the meaning such term

6 would have under section 8401(3) if ‘5 consecutive

7 years’ were substituted for ‘3 consecutive years’ and

8 ‘5 years’ were substituted for ‘3 years’.

9 ‘‘(e) Nothing in this section shall be considered to

10 apply with respect to any annuity or survivor annuity eligi11 bility for which is based on a separation occurring before

12 January 1, 1996.

13 ‘‘(f) The Office of Personnel Management shall pre14 scribe such regulations as may be necessary to carry out

15 this section, including regulations for the application of

16 section 8415(e) (and any other provision of this chapter

17 not otherwise specifically addressed in this section) in a

18 manner consistent with the purposes of this section.’’.

19 (2) TECHNICAL AMENDMENTS.—

20 (A) Section 8401(3) is amended by strik21 ing ‘‘effect;’’ and inserting ‘‘effect, subject to

22 section 8461a;’’.

23 (B) The table of sections for chapter 84 is

24 amended by inserting after the item relating to

25 section 8461 the following:

‘‘8461a. Special rules relating to average pay.’’.
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1 (c) REGULATIONS.—The Office of Personnel Man2 agement shall prescribe such regulations as may be nec3 essary to carry out the purposes of this section, including

4 regulations to provide that section 302(a)(6) of the Fed5 eral Employees’ Retirement System Act of 1986 (5 U.S.C.

6 8331 note) shall be carried out in a manner consistent

7 with the amendments made by this section.

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