I 

111TH CONGRESS 

1ST SESSION H. R. 1263 

To amend title 5, United States Code, to provide for the automatic enrollment 

of new participants in the Thrift Savings Plan, and to clarify the method 

for computing certain annuities based on part-time service; to allow 

certain employees of the District of Columbia to have certain periods 

of service credited for purposes relating to retirement eligibility; and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 3, 2009 

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

on Oversight and Government Reform, and in addition to the Committee 

on Ways and Means, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL 

To amend title 5, United States Code, to provide for the 

automatic enrollment of new participants in the Thrift 

Savings Plan, and to clarify the method for computing 

certain annuities based on part-time service; to allow 

certain employees of the District of Columbia to have 

certain periods of service credited for purposes relating 

to retirement eligibility; 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, 


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

3 ‘‘Federal Retirement Reform Act of 2009’’. 

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

5 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—THRIFT SAVINGS PLAN ENHANCEMENT 

Sec. 101. Short title. 

Sec. 102. Automatic enrollments. 

Sec. 103. Qualified Roth contribution program. 

Sec. 104. Authority to establish self-directed investment window. 

Sec. 105. Reporting requirements. 

Sec. 106. Acknowledgement of risk. 

Sec. 107. Credit for unused sick leave. 

TITLE II—COMPUTATION OF CERTAIN ANNUITIES BASED ON 

PART-TIME SERVICE 

Sec. 201. Computation of certain annuities based on part-time service. 

Sec. 202. Applicability. 

TITLE III—RETIREMENT CREDIT FOR SERVICE OF CERTAIN EMPLOYEES TRANSFERRED FROM DISTRICT OF COLUMBIA SERVICE TO FEDERAL SERVICE 

Sec. 301. Short title. 

Sec. 302. Retirement Credit For Service of Certain Employees Transferred 

From District of Columbia Service to Federal Service. 

Sec. 303. Qualifying District of Columbia Service Defined. 

Sec. 304. Certification of Service. 

TITLE IV—DISTRIBUTIONS FROM GOVERNMENTAL RETIREMENT 

PLANS FOR HEALTH AND LONG-TERM CARE INSURANCE 

Sec. 401. Distributions from governmental retirement plans for health and 

long-term care insurance for Federal annuitants and members 

and former members of the Armed Forces of the United 

States. 

6 TITLE I—THRIFT SAVINGS PLAN 

7 ENHANCEMENT 

8 SEC. 101. SHORT TITLE. 

9 This title may be cited as the ‘‘Thrift Savings Plan 

10 Enhancement Act of 2009’’. 


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1 SEC. 102. AUTOMATIC ENROLLMENTS. 

2 (a) IN GENERAL.—Section 8432(b) of title 5, United 

3 States Code, is amended by striking paragraphs (2) 

4 through (4) and inserting the following: 

5 ‘‘(2)(A) The Board shall by regulation provide for an 

6 eligible individual to be automatically enrolled to make 

7 contributions under subsection (a) at the default percent8 age of basic pay. 

9 ‘‘(B) For purposes of this paragraph, the default per10 centage shall be equal to 3 percent or such other percent11 age, not less than 2 percent nor more than 5 percent, as 

12 the Board may by regulation prescribe. 

13 ‘‘(C) The regulations shall include provisions under 

14 which any individual who would otherwise be automatically 

15 enrolled in accordance with subparagraph (A) may— 

16 ‘‘(i) modify the percentage or amount to be con17 tributed pursuant to automatic enrollment, effective 

18 from the start of such enrollment; or 

19 ‘‘(ii) decline automatic enrollment altogether. 

20 ‘‘(D) For purposes of this paragraph, the term ‘eligi21 ble individual’ means any individual who, after any regula22 tions under subparagraph (A) first take effect, is ap23 pointed, transferred, or reappointed to a position in which 

24 that individual is eligible to contribute to the Thrift Sav25 ings Fund. 


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1 ‘‘(E) Sections 8351(a)(1), 8440a(a)(1), 8440b(a)(1), 

2 8440c(a)(1), 8440d(a)(1), and 8440e(a)(1) shall be ap3 plied in a manner consistent with the purposes of this 

4 paragraph.’’. 

5 (b) TECHNICAL AMENDMENT.—Section 8432(b)(1) 

6 of title 5, United States Code, is amended by striking the 

7 parenthetical matter in subparagraph (B). 

8 SEC. 103. QUALIFIED ROTH CONTRIBUTION PROGRAM. 

9 (a) IN GENERAL.—Subchapter III of chapter 84 of 

10 title 5, United States Code, is amended by inserting after 

11 section 8432c the following: 

12 ‘‘§ 8432d. Qualified Roth contribution program 

13 ‘‘(a) DEFINITIONS.—For purposes of this section— 

14 ‘‘(1) the term ‘qualified Roth contribution pro15 gram’ means a program described in paragraph (1) 

16 of section 402A(b) of the Internal Revenue Code of 

17 1986 which meets the requirements of paragraph (2) 

18 of such section; and 

19 ‘‘(2) the terms ‘designated Roth contribution’ 

20 and ‘elective deferral’ have the meanings given such 

21 terms in section 402A of the Internal Revenue Code 

22 of 1986. 

23 ‘‘(b) AUTHORITY TO ESTABLISH.—The Board shall 

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1 ings Plan of a qualified Roth contribution program, under 

2 such terms and conditions as the Board may prescribe. 

3 ‘‘(c) REQUIRED PROVISIONS.—The regulations under 

4 subsection (b) shall include— 

5 ‘‘(1) provisions under which an election to make 

6 designated Roth contributions may be made— 

7 ‘‘(A) by any individual who is eligible to 

8 make contributions under section 8351, 

9 8432(a), 8440a, 8440b, 8440c, 8440d, or 

10 8440e; and 

11 ‘‘(B) by any individual, not described in 

12 subparagraph (A), who is otherwise eligible to 

13 make elective deferrals under the Thrift Sav14 ings Plan; 

15 ‘‘(2) any provisions which may, as a result of 

16 enactment of this section, be necessary in order to 

17 clarify the meaning of any reference to an ‘account’ 

18 made in section 8432(f), 8433, 8434(d), 8435, 

19 8437, or any other provision of law; and 

20 ‘‘(3) any other provisions which may be nec21 essary to carry out this section.’’. 

22 (b) CLERICAL AMENDMENT.—The analysis for chap23 ter 84 of title 5, United States Code, is amended by insert24 ing after the item relating to section 8432c the following: 

‘‘8432d. Qualified Roth contribution program.’’. 


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1 SEC. 104. AUTHORITY TO ESTABLISH SELF-DIRECTED IN2 VESTMENT WINDOW. 

3 (a) IN GENERAL.—Section 8438(b)(1) of title 5, 

4 United States Code, is amended— 

5 (1) in subparagraph (D), by striking ‘‘and’’ at 

6 the end; 

7 (2) in subparagraph (E), by striking the period 

8 and inserting ‘‘; and’’; and 

9 (3) by adding after subparagraph (E) the fol10 lowing: 

11 ‘‘(F) a self-directed investment window, if 

12 the Board authorizes such window under para13 graph (5).’’. 

14 (b) REQUIREMENTS.—Section 8438(b) of title 5, 

15 United States Code, is amended by adding at the end the 

16 following: 

17 ‘‘(5)(A) The Board may authorize the addition of a 

18 self-directed investment window under the Thrift Savings 

19 Plan if the Board determines that such addition would be 

20 in the best interests of participants. 

21 ‘‘(B) The self-directed investment window shall be 

22 limited to— 

23 ‘‘(i) low-cost, passively-managed index funds 

24 that offer diversification benefits; and 


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1 ‘‘(ii) other investment options, if the Board de2 termines the options to be appropriate retirement in3 vestment vehicles for participants. 

4 ‘‘(C) The Board shall ensure that any administrative 

5 expenses related to use of the self-directed investment win6 dow are borne solely by the participants who use such win7 dow. 

8 ‘‘(D) The Board may establish such other terms and 

9 conditions for the self-directed investment window as the 

10 Board considers appropriate to protect the interests of 

11 participants, including requirements relating to risk dis12 closure. 

13 ‘‘(E) The Board shall consult with the Employee 

14 Thrift Advisory Council (established under section 8473) 

15 before establishing any self-directed investment window.’’. 

16 SEC. 105. REPORTING REQUIREMENTS. 

17 (a) ANNUAL REPORT.—The Board shall, not later 

18 than June 30 of each year, submit to Congress an annual 

19 report on the operations of the Thrift Savings Plan. Such 

20 report shall include, for the prior calendar year, informa21 tion on the number of participants as of the last day of 

22 such prior calendar year, the median balance in partici23 pants’ accounts as of such last day, demographic informa24 tion on participants, the percentage allocation of amounts 

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1 velopment and implementation of the self-directed invest2 ment window, the diversity demographics of any company, 

3 investment adviser, or other entity retained to invest and 

4 manage the assets of the Thrift Savings Fund, and such 

5 other information as the Board considers appropriate. A 

6 copy of each annual report under this subsection shall be 

7 made available to the public through an Internet website. 

8 (b) REPORTING OF FEES AND OTHER INFORMA9 TION.— 

10 (1) IN GENERAL.—The Board shall include in 

11 the periodic statements provided to participants 

12 under section 8439(c) the amount of the investment 

13 management fees, administrative expenses, and any 

14 other fees or expenses paid with respect to each in15 vestment fund and option under the Thrift Savings 

16 Plan. Any such statement shall also provide a state17 ment notifying participants as to how they may ac18 cess the annual report described in subsection (a), as 

19 well as any other information concerning the Thrift 

20 Savings Plan that might be useful. 

21 (2) USE OF ESTIMATES.—For purposes of pro22 viding the information required under this sub23 section, the Executive Director may provide a rea24 sonable and representative estimate of any fees or 

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1 cate any such estimate as being such an estimate. 

2 Any such estimate shall be based on the previous 

3 year’s experience. 

4 (c) DEFINITIONS.—For purposes of this section— 

5 (1) the term ‘‘Board’’ has the meaning given 

6 such term by 8401(5) of title 5, United States Code; 

7 (2) the term ‘‘participant’’ has the meaning 

8 given such term by section 8471(3) of title 5, United 

9 States Code; and 

10 (3) the term ‘‘account’’ means an account es11 tablished under section 8439 of title 5, United 

12 States Code. 

13 SEC. 106. ACKNOWLEDGEMENT OF RISK. 

14 (a) IN GENERAL.—Section 8439(d) of title 5, United 

15 States Code, is amended— 

16 (1) by striking the matter after ‘‘who elects to 

17 invest in’’ and before ‘‘shall sign an acknowledge18 ment’’ and inserting ‘‘any investment fund or option 

19 under this chapter, other than the Government Se20 curities Investment Fund,’’; and 

21 (2) by striking ‘‘either such Fund’’ and insert22 ing ‘‘any such fund or option’’. 

23 (b) COORDINATION WITH PROVISIONS RELATING TO

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1 section (d) of section 8439 of title 5, United States Code 

2 (as amended by subsection (a)) is further amended— 

3 (1) by redesignating subsection (d) as sub4 section (d)(1); and 

5 (2) by adding at the end the following: 

6 ‘‘(2)(A) In the case of an investment made under sec7 tion 8438(c)(2) in any fund or option to which paragraph 

8 (1) would otherwise apply, the participant involved shall, 

9 for purposes of this subsection, be deemed— 

10 ‘‘(i) to have elected to invest in such fund or 

11 option; and 

12 ‘‘(ii) to have executed the acknowledgement re13 quired under paragraph (1). 

14 ‘‘(B)(i) The Executive Director shall prescribe regu15 lations under which written notice shall be provided to a 

16 participant whenever an investment is made under section 

17 8438(c)(2)(B) on behalf of such participant in the absence 

18 of an affirmative election described in section 8438(c)(1). 

19 ‘‘(ii) The regulations shall ensure that any such no20 tice shall be provided to the participant within 7 calendar 

21 days after the effective date of the default election. 

22 ‘‘(C) For purposes of this paragraph, the term ‘par23 ticipant’ has the meaning given such term by section 

24 8471(3).’’. 


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1 (c) COORDINATION WITH PROVISIONS RELATING TO

2 FIDUCIARY RESPONSIBILITIES, LIABILITIES, AND PEN3 ALTIES.—Section 8477(e)(1)(C) of title 5, United States 

4 Code, is amended— 

5 (1) by redesignating subparagraph (C) as sub6 paragraph (C)(i); and 

7 (2) by adding at the end the following: 

8 ‘‘(ii) A fiduciary shall not be liable under subpara9 graph (A), and no civil action may be brought against a 

10 fiduciary— 

11 ‘‘(I) for providing for the automatic enrollment 

12 of a participant in accordance with section 

13 8432(b)(2)(A); 

14 ‘‘(II) for enrolling a participant in a default in15 vestment fund in accordance with section 

16 8438(c)(2)(B); or 

17 ‘‘(III) for allowing a participant to invest 

18 through the self-directed investment window or for 

19 establishing restrictions applicable to participants’ 

20 ability to invest through the self-directed investment 

21 window.’’. 

22 SEC. 107. CREDIT FOR UNUSED SICK LEAVE. 

23 (a) IN GENERAL.—Section 8415 of title 5, United 

24 States Code, is amended— 


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1 (1) by redesignating the second subsection (k) 

2 and subsection (l) as subsections (l) and (m), respec3 tively; and 

4 (2) in subsection (l) (as so redesignated by 

5 paragraph (1))— 

6 (A) by striking ‘‘(l) In computing’’ and in7 serting ‘‘(l)(1) In computing’’; and 

8 (B) by adding at the end the following: 

9 ‘‘(2) Except as provided in paragraph (1), in com10 puting an annuity under this subchapter, the total service 

11 of an employee who retires on an immediate annuity or 

12 who dies leaving a survivor or survivors entitled to annuity 

13 includes the days of unused sick leave to his credit under 

14 a formal leave system, except that these days will not be 

15 counted in determining average pay or annuity eligibility 

16 under this subchapter. For purposes of this subsection, in 

17 the case of any such employee who is excepted from sub18 chapter I of chapter 63 under section 6301(2)(x)–(xiii), 

19 the days of unused sick leave to his credit include any un20 used sick leave standing to his credit when he was ex21 cepted from such subchapter.’’. 

22 (b) EXCEPTION FROM DEPOSIT REQUIREMENT.— 

23 Section 8422(d)(2) of title 5, United States Code, is 

24 amended by striking ‘‘section 8415(k)’’ and inserting 

25 ‘‘paragraph (1) or (2) of section 8415(l)’’. 


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

2 this section shall apply with respect to annuities computed 

3 based on separations occurring on or after the date of en4 actment of this Act. 

5 TITLE II—COMPUTATION OF 

6 CERTAIN ANNUITIES BASED 

7 ON PART-TIME SERVICE 

8 SEC. 201. COMPUTATION OF CERTAIN ANNUITIES BASED 

9 ON PART-TIME SERVICE. 

10 Section 8339(p) of title 5, United States Code, is 

11 amended by adding at the end the following: 

12 ‘‘(3) In the administration of paragraph (1)— 

13 ‘‘(A) subparagraph (A) of such paragraph shall 

14 apply with respect to service performed before, on, 

15 or after April 7, 1986; and 

16 ‘‘(B) subparagraph (B) of such paragraph— 

17 ‘‘(i) shall apply with respect to that portion 

18 of any annuity which is attributable to service 

19 performed on or after April 7, 1986; and 

20 ‘‘(ii) shall not apply with respect to that 

21 portion of any annuity which is attributable to 

22 service performed before April 7, 1986.’’. 

23 SEC. 202. APPLICABILITY. 

24 The amendment made by section 201 shall be effec25 tive with respect to any annuity, entitlement to which is 


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1 based on a separation from service occurring on or after 

2 the date of enactment of this Act. 

3 TITLE III—RETIREMENT CREDIT 

4 FOR SERVICE OF CERTAIN 

5 EMPLOYEES TRANSFERRED 

6 FROM DISTRICT OF COLUM7 BIA SERVICE TO FEDERAL 

8 SERVICE 

9 SEC. 301. SHORT TITLE. 

10 This Act may be cited as the ‘‘District of Columbia 

11 Court, Offender Supervision, Parole, and Public Defender 

12 Employees Equity Act of 2009’’. 

13 SEC. 302. RETIREMENT CREDIT FOR SERVICE OF CERTAIN 

14 EMPLOYEES TRANSFERRED FROM DISTRICT 

15 OF COLUMBIA SERVICE TO FEDERAL SERV16 ICE. 

17 (a) IN GENERAL.—Any individual who is treated as 

18 an employee of the Federal government for purposes of 

19 chapter 83 or chapter 84 of title 5, United States Code, 

20 on or after the date of enactment of this Act who per21 formed qualifying District of Columbia service shall be en22 titled to have such service included in calculating the indi23 vidual’s creditable service under sections 8332 or 8411 of 

24 title 5, United States Code, but only for purposes of the 

25 following provisions of such title: 


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1 (1) Sections 8333 and 8410 (relating to eligi2 bility for annuity). 

3 (2) Sections 8336 (other than subsections (d), 

4 (h), and (p) thereof) and 8412 (relating to imme5 diate retirement). 

6 (3) Sections 8338 and 8413 (relating to de7 ferred retirement). 

8 (4) Sections 8336(d), 8336(h), 8336(p), and 

9 8414 (relating to early retirement). 

10 (5) Section 8341 and subchapter IV of chapter 

11 84 (relating to survivor annuities). 

12 (6) Section 8337 and subchapter V of chapter 

13 84 (relating to disability benefits). 

14 (b) TREATMENT OF DETENTION OFFICER SERVICE

15 AS LAW ENFORCEMENT OFFICER SERVICE.—Any portion 

16 of an individual’s qualifying District of Columbia service 

17 which consisted of service as a detention officer under sec18 tion 2604(2) of the District of Columbia Government 

19 Comprehensive Merit Personnel Act of 1978 (sec. 1– 

20 626.04(2), D.C. Official Code) shall be treated as service 

21 as a law enforcement officer under sections 8331(20) or 

22 8401(17) of title 5, United States Code, for purposes of 

23 applying subsection (a) with respect to the individual. 

24 (c) SERVICE NOT INCLUDED IN COMPUTING

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1 lumbia service shall not be taken into account for purposes 

2 of computing the amount of any benefit payable out of 

3 the Civil Service Retirement and Disability Fund. 

4 SEC. 303. QUALIFYING DISTRICT OF COLUMBIA SERVICE 

5 DEFINED. 

6 In this title, ‘‘qualifying District of Columbia service’’ 

7 means any of the following: 

8 (1) Service performed by an individual as a 

9 nonjudicial employee of the District of Columbia 

10 courts— 

11 (A) which was performed prior to the ef12 fective date of the amendments made by section 

13 11246(b) of the Balanced Budget Act of 1997; 

14 and 

15 (B) for which the individual did not ever 

16 receive credit under the provisions of sub17 chapter III of chapter 83 or chapter 84 of title 

18 5, United States Code (other than by virtue of 

19 section 8331(1)(iv) of such title). 

20 (2) Service performed by an individual as an 

21 employee of an entity of the District of Columbia 

22 government whose functions were transferred to the 

23 Pretrial Services, Parole, Adult Supervision, and Of24 fender Supervision Trustee under section 11232 of 

25 the Balanced Budget Act of 1997— 


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1 (A) which was performed prior to the ef2 fective date of the individual’s coverage as an 

3 employee of the Federal Government under sec4 tion 11232(f) of such Act; and 

5 (B) for which the individual did not ever 

6 receive credit under the provisions of sub7 chapter III of chapter 83 or chapter 84 of title 

8 5, United States Code (other than by virtue of 

9 section 8331(1)(iv) of such title). 

10 (3) Service performed by an individual as an 

11 employee of the District of Columbia Public De12 fender Service— 

13 (A) which was performed prior to the ef14 fective date of the amendments made by section 

15 7(e) of the District of Columbia Courts and 

16 Justice Technical Corrections Act of 1998; and 

17 (B) for which the individual did not ever 

18 receive credit under the provisions of sub19 chapter III of chapter 83 or chapter 84 of title 

20 5, United States Code (other than by virtue of 

21 section 8331(1)(iv) of such title). 

22 (4) In the case of an individual who was an em23 ployee of the District of Columbia Department of 

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1 plex and who was appointed to a position with the 

2 Bureau of Prisons, the District of Columbia courts, 

3 the Pretrial Services, Parole, Adult Supervision, and 

4 Offender Supervision Trustee, the United States Pa5 role Commission, or the District of Columbia Public 

6 Defender Service, service performed by the indi7 vidual as an employee of the District of Columbia 

8 Department of Corrections— 

9 (A) which was performed prior to the ef10 fective date of the individual’s coverage as an 

11 employee of the Federal Government; and 

12 (B) for which the individual did not ever 

13 receive credit under the provisions of sub14 chapter III of chapter 83 or chapter 84 of title 

15 5, United States Code (other than by virtue of 

16 section 8331(1)(iv) of such title). 

17 SEC. 304. CERTIFICATION OF SERVICE. 

18 The Office of Personnel Management shall accept the 

19 certification of the appropriate personnel official of the 

20 government of the District of Columbia or other inde21 pendent employing entity concerning whether an indi22 vidual performed qualifying District of Columbia service 

23 and the length of the period of such service the individual 

24 performed. 


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1 TITLE IV—DISTRIBUTIONS FROM 

2 GOVERNMENTAL RETIRE3 MENT PLANS FOR HEALTH 

4 AND LONG-TERM CARE IN5 SURANCE 

6 SEC. 401. DISTRIBUTIONS FROM GOVERNMENTAL RETIRE7 MENT PLANS FOR HEALTH AND LONG-TERM 

8 CARE INSURANCE FOR FEDERAL ANNU9 ITANTS AND MEMBERS AND FORMER MEM10 BERS OF THE ARMED FORCES OF THE 

11 UNITED STATES. 

12 (a) IN GENERAL.—Subsection (l) of section 402 of 

13 the Internal Revenue Code (relating to distributions from 

14 governmental plans for health and long-term care insur15 ance) is amended by inserting ‘‘, a Federal annuitant, or 

16 a member or former member of the uniformed services of 

17 the United States’’ after ‘‘eligible retired public safety offi18 cer’’. 

19 (b) DEFINITIONS.—Paragraph (4) of section 402(l) 

20 of such Code (relating to definitions) is amended by add21 ing at the end the following new subparagraphs: 

22 ‘‘(E) FEDERAL ANNUITANT.—The term 

23 ‘Federal annuitant’ means an annuitant, as de24 fined by paragraph (3) of section 8901 of title 

25 5, United States Code. 


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1 ‘‘(F) MEMBER OR FORMER MEMBER OF

2 THE UNIFORMED SERVICES OF THE UNITED

3 STATES.—The term ‘member or former member 

4 of the uniformed services of the United States’ 

5 shall have the same meaning given such term in 

6 chapter 55 of title 10, United States Code.’’. 

7 (c) CONFORMING AMENDMENTS.—Paragraphs 

8 (3)(B) and (4)(D) of section 402(l) of such Code are each 

9 amended by inserting ‘‘, Federal annuitant, or member or 

10 former member of the uniformed services of the United 

11 States, as the case may be,’’ after ‘‘eligible retired public 

12 safety officer’’ both places it appears. 

13 (d) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to distributions in taxable years 

15 beginning after December 31, 2008. 

Æ 


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