II

104TH CONGRESS

2D SESSION S. 1686

To provide for early deferred annuities under chapter 83 of title 5, United

States Code, for certain former Department of Defense employees who

are separated from service by reason of certain defense base closures,

and for other purposes.

IN THE SENATE OF THE UNITED STATES

APRIL 18, 1996

Mr. FORD (for himself, Mr. COATS, Mr. LUGAR, Mrs. HUTCHISON, and Mr.

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

A BILL

To provide for early deferred annuities under chapter 83

of title 5, United States Code, for certain former Department of Defense employees who are separated from service by reason of certain defense base closures, 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. EARLY DEFERRED ANNUITIES OF CERTAIN

4 FORMER EMPLOYEES OF THE DEPARTMENT

5 OF DEFENSE.

6 (a) DEFINITIONS.—For purposes of this section—
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1 (1) the term ‘‘Civil Service Retirement System’’

2 means the retirement system under subchapter III

3 of chapter 83 of title 5, United States Code;

4 (2) the term ‘‘defense contractor’’ means any

5 entity that—

6 (A) contracts with the Department of De7 fense to perform a function previously per8 formed by Department of Defense employees;

9 (B) performs that function at the same in10 stallation at which such function was previously

11 performed by Department of Defense employees

12 or in the vicinity of that installation; and

13 (C) is the employer of one or more trans14 ferred employees;

15 (3) the term ‘‘early deferred retirement age’’

16 means the first age at which a transferred employee

17 would have been eligible for immediate retirement

18 under subsection (a) or (b) of section 8336 of title

19 5, United States Code, if such transferred employee

20 had remained an employee within the meaning of

21 section 8331(1) of such title continuously until at22 taining such age;

23 (4) the term ‘‘severance pay’’ means severance

24 pay payable under section 5595 of title 5, United

25 States Code;
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1 (5) the term ‘‘separation pay’’ means separa2 tion pay payable under section 5597 of title 5, Unit3 ed States Code; and

4 (6) the term ‘‘transferred employee’’ means a

5 former employee of the Department of Defense

6 (other than a temporary employee) who—

7 (A) while employed by the Department of

8 Defense at a military installation to be closed or

9 realigned pursuant to recommendations of the

10 Defense Base Closure and Realignment Com11 mission that were approved by the President in

12 1995 under section 2903(e) of the Defense

13 Base Closure and Realignment Act of 1990

14 (title XXIX of Public Law 101–510; 10 U.S.C.

15 2687 note) and while covered under the Civil

16 Service Retirement System, was separated from

17 Federal service in a reduction-in-force resulting

18 from conversion from performance of a function

19 by Department of Defense employees at that

20 military installation to performance of that

21 function by a defense contractor at that instal22 lation or in the vicinity of that installation;

23 (B) is employed by the defense contractor

24 within 60 days following such separation to per-
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1 form substantially the same function performed

2 before the separation;

3 (C) remains employed by the defense con4 tractor or a successor defense contractor, or

5 subcontractor of a defense contractor until at6 taining early deferred retirement age or is in7 voluntarily separated from employment by the

8 defense contractor before attaining such age for

9 reasons other than misconduct;

10 (D) at the time separated from Federal

11 service, was not eligible for an immediate annu12 ity under the Civil Service Retirement System;

13 (E) does not withdraw retirement contribu14 tions under section 8342 of title 5, United

15 States Code; and

16 (F)(i) has not received separation pay or

17 severance pay due to a separation described in

18 subparagraph (A); or

19 (ii) has repaid the full amount of such pay

20 with interest (as determined by the Office of

21 Personnel Management) to the Department of

22 Defense before attaining early deferred retire23 ment age.

24 (b) RETIREMENT BENEFITS OF TRANSFERRED EM25 PLOYEES.—Notwithstanding the age requirement under
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1 section 8338(a) of title 5, United States Code, payment

2 of a deferred annuity for which a transferred employee

3 is eligible under that section shall commence on the first

4 day of the first month that begins after the date on which

5 the transferred employee attains early deferred retirement

6 age.

7 (c) COMPUTATION OF AVERAGE PAY.—(1)(A) This

8 paragraph applies to the computation of the annuity of

9 a transferred employee who retires under this section who

10 immediately before separation from Federal service as de11 scribed under subsection (a)(6)(A) was employed in a posi12 tion classified under the General Schedule.

13 (B) Subject to subparagraph (C), in the computation

14 of an annuity referred to under subparagraph (A) for a

15 transferred employee, the average pay of the transferred

16 employee under section 8331(4) of title 5, United States

17 Code, shall be adjusted at the same time and by the same

18 percentage that rates of basic pay are increased under sec19 tion 5303 of title 5, United States Code, during the period

20 beginning on the date on which the transferred employee

21 separates from Federal service as described under sub22 section (a)(6)(A) and ending on the date on which the

23 transferred employee attains early deferred retirement

24 age.
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1 (C) Average pay as adjusted by this paragraph may

2 not exceed the limitation on maximum pay, final pay, or

3 average pay (as applicable) under section 8340(g)(1) (A)

4 or (B) of title 5, United States Code.

5 (2)(A) This paragraph applies to the compensation

6 of an annuity of a transferred employee who retires in ac7 cordance with this section who immediately before separa8 tion from Federal service as described under subsection

9 (a)(6)(A) was a prevailing rate employee as defined under

10 section 5342(2) of title 5, United States Code.

11 (B) In the computation of an annuity referred to

12 under subparagraph (A) for a transferred employee, aver13 age pay under section 8331(4) of title 5, United States

14 Code, shall be adjusted at the same time and by the same

15 percentage that pay rates for positions that are in the

16 same area as, and are comparable to, the last position the

17 transferred employee held as a prevailing rate employee,

18 are increased under section 5343(a) of such title during

19 the period beginning on the date on which the transferred

20 employee separates from Federal service as described

21 under subsection (a)(6)(A) and ending on the date on

22 which the transferred employee attains early deferred re23 tirement age.

24 (d) SERVICE FOR A DEFENSE CONTRACTOR RELAT25 ING TO CREDITABLE SERVICE AND HEALTH INSUR-
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1 ANCE.—(1) Service performed by a transferred employee

2 for a defense contractor after separation from Federal

3 service as described under subsection (a)(6)(A) shall not

4 be treated as creditable service for purposes of computing

5 the amount of an early deferred annuity in accordance

6 with this section.

7 (2) Nothing in this section shall be construed to re8 quire employee or agency contributions under chapter 89

9 of title 5, United States Code, for any period of service

10 performed by a transferred employee for a defense con11 tractor after separation from Federal service as described

12 under subsection (a)(6)(A).

13 (e) RECEIPT OF BENEFITS WHILE EMPLOYED BY A

14 DEFENSE CONTRACTOR.—A transferred employee may

15 commence receipt of an early deferred annuity in accord16 ance with this section while continuing to work for a de17 fense contractor.

18 (f) LUMP-SUM CREDIT PAYMENT.—If a transferred

19 employee dies before attaining early deferred retirement

20 age, such employee shall be treated as a former employee

21 who dies not retired for purposes of payment of the lump22 sum credit under section 8342(d) of title 5, United States

23 Code.
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1 (g) IMPLEMENTING REGULATIONS.—The Office of

2 Personnel Management shall promulgate regulations to

3 carry out the provisions of this section.

4 (h) EFFECTIVE DATE.—This section shall take effect

5 on August 1, 1996, and shall apply to transferred employ6 ees separated from Federal service on or after that date.

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