II 

110TH CONGRESS 

1ST SESSION S. 1725 

To amend the Employee Retirement Income Security Act of 1974, the Internal Revenue Code of 1986, and title 5, United States Code, to improve 

the protection of pension benefits, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 28, 2007 

Mr. HARKIN introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To amend the Employee Retirement Income Security Act 

of 1974, the Internal Revenue Code of 1986, and title 

5, United States Code, to improve the protection of pension benefits, 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. 

4 This Act may be cited as the ‘‘Restoring Pension 

5 Promises to Workers Act’’. 


rwilkins on PROD1PC63 with BILLS
2 

•S 1725 IS

1 TITLE I—AMENDMENTS TO THE 

2 EMPLOYEE RETIREMENT IN3 COME SECURITY ACT OF 1974 

4 AND THE INTERNAL REV5 ENUE CODE OF 1986 

6 SEC. 101. NO EXCLUSION FOR COMPENSATION UNDER NON7 QUALIFIED DEFERRED COMPENSATION 

8 PLANS UNLESS EMPLOYER MAINTAINS 

9 QUALIFIED EMPLOYER PLAN. 

10 (a) IN GENERAL.—Paragraph (1) of section 409A(a) 

11 of the Internal Revenue Code of 1986 (relating to inclu12 sion in gross income of deferred compensation under non13 qualified deferred compensation plans) is amended by re14 designating subparagraph (B) as subparagraph (C) and 

15 by inserting after subparagraph (A) the following new sub16 paragraph: 

17 ‘‘(B) GROSS INCOME INCLUSION FOR EM18 PLOYER FAILURES.—If at any time during a 

19 taxable year an employer maintaining a non20 qualified deferred compensation plan fails to 

21 meet the requirements of subsection (e), all 

22 compensation deferred under the plan for the 

23 taxable year and all preceding taxable years 

24 shall be includible in gross income for the tax25 able year to the extent not subject to a substanVerDate Aug 31 2005 23:36 Jun 29, 2007 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1725.IS S1725

rwilkins on PROD1PC63 with BILLS
3 

•S 1725 IS

1 tial risk of forfeiture and not previously in2 cluded in gross income.’’. 

3 (b) REQUIREMENT TO MAINTAIN QUALIFIED EM4 PLOYER PLAN.—Section 409A of the Internal Revenue 

5 Code of 1986 (relating to inclusion in gross income of de6 ferred compensation under nonqualified deferred com7 pensation plans) is amended by redesignating subsection 

8 (e) as subsection (f) and by adding after subsection (d) 

9 the following new subsection: 

10 ‘‘(e) REQUIREMENT THAT EMPLOYER MAINTAIN

11 QUALIFIED EMPLOYER PLANS.— 

12 ‘‘(1) IN GENERAL.—An employer meets the re13 quirements of this subsection only if, at all times 

14 during the taxable year, the employer maintains 1 or 

15 more qualified employer plans which are defined 

16 benefit plans and which meet— 

17 ‘‘(A) the participation requirements of 

18 paragraph (2), 

19 ‘‘(B) the vesting requirements of para20 graph (3), and 

21 ‘‘(C) the minimum benefit requirements of 

22 paragraph (4). 

23 ‘‘(2) PARTICIPATION REQUIREMENTS.—A quali24 fied employer plan shall meet the requirements of 


rwilkins on PROD1PC63 with BILLS
4 

•S 1725 IS

1 this paragraph if the plan meets the requirements of 

2 section 410(b). 

3 ‘‘(3) VESTING REQUIREMENTS.—A qualified 

4 employer plan shall meet the requirements of this 

5 paragraph if the plan meets the requirements of sec6 tion 416(b)(1). 

7 ‘‘(4) MINIMUM BENEFIT REQUIREMENTS.—A 

8 qualified employer plan shall meet the requirements 

9 of this paragraph if the plan meets the requirements 

10 of section 416(c)(1), except that such section shall 

11 be applied for purposes of this paragraph by deter12 mining the applicable percentage under section 

13 416(c)(1)(B)(i) (and without regard to section 

14 416(c)(1)(B)(ii)). 

15 ‘‘(5) APPLICABLE RULES.—The Secretary shall 

16 prescribe rules for the application of sections 410(b), 

17 416(b), and 416(c)(1) for purposes of this sub18 section. Such rules shall provide— 

19 ‘‘(A) for such modifications to such sec20 tions are necessary to apply such sections to a 

21 qualified employer plan which is not a plan de22 scribed in section 401(a) which includes a trust 

23 exempt from tax under section 501(a), includ24 ing for the exclusion of employees from the ap25 plication of section 410(b) in the same manner 


rwilkins on PROD1PC63 with BILLS
5 

•S 1725 IS

1 as employees may be excluded under para2 graphs (3) and (4) of section 410(b), and 

3 ‘‘(B) for the application of section 416 to 

4 a qualified employer plan which is not a top5 heavy plan.’’. 

6 (c) EFFECTIVE DATE.— 

7 (1) IN GENERAL.—The amendments made by 

8 this section shall apply to taxable years beginning 

9 after December 31, 2007, except that the amend10 ments shall only apply to amounts deferred after 

11 December 31, 2007 (and to earnings on such 

12 amounts). 

13 (2) GUIDANCE RELATING TO CERTAIN EXISTING

14 ARRANGEMENTS.—Not later than 60 days after the 

15 date of the enactment of this Act, the Secretary of 

16 the Treasury shall issue guidance providing a limited 

17 period during which a nonqualified deferred com18 pensation plan adopted before such date of enact19 ment, may, without violating the requirements of 

20 section 409A(a) of such Code, be amended— 

21 (A) to provide that a participant may, no 

22 later than December 31, 2008— 

23 (i) terminate participation in the plan, 

24 or 


rwilkins on PROD1PC63 with BILLS
6 

•S 1725 IS

1 (ii) cancel or modify an outstanding 

2 deferral election with regard to all or a 

3 portion of amounts deferred after Decem4 ber 31, 2007, to the extent necessary for 

5 the plan to meet the requirements of sec6 tion 409A(a)(1)(B) of such Code (as added 

7 by the amendments made by this section), 

8 but only if amounts subject to the termination, 

9 cancellation, or modification are, to the extent 

10 not previously included in gross income, includ11 ible in income of the participant when no longer 

12 subject to substantial risk of forfeiture, and 

13 (B) to conform to the requirements of sec14 tion 409A(a)(1)(B) of such Code (as added by 

15 the amendments made by this section) with re16 gard to amounts deferred after December 31, 

17 2007. 

18 SEC. 102. LIMITATIONS ON RECOVERY OF OVERPAYMENTS 

19 TO PARTICIPANTS AND BENEFICIARIES. 

20 (a) IN GENERAL.—Section 206 of the Employee Re21 tirement Income Security Act of 1974 (29 U.S.C. 1056) 

22 is amended by adding at the end the following new sub23 section: 

24 ‘‘(h) SPECIAL RULES RELATING TO PLAN RECOV25 ERY OF OVERPAYMENT OF BENEFITS.— 


rwilkins on PROD1PC63 with BILLS
7 

•S 1725 IS

1 ‘‘(1) NO RECOVERY IN CASES OF HARDSHIP OR

2 INSIGNIFICANT AMOUNTS.—Each pension plan shall 

3 provide that the plan shall not take any action to re4 cover any applicable overpayment if the recovery— 

5 ‘‘(A) would be against equity and good 

6 conscience by reason of the hardship the recov7 ery would impose on the participant or bene8 ficiary, or 

9 ‘‘(B) is of an amount that the plan’s actu10 ary determines is actuarially insignificant. 

11 For purposes of subparagraph (B), if the error re12 sulting in the overpayment also resulted in overpay13 ments to 1 or more other participants or bene14 ficiaries, the determination as to whether any such 

15 overpayment is actuarially insignificant shall be 

16 made by reference to the aggregate of all such over17 payments rather than each such overpayment. 

18 ‘‘(2) TIME LIMITATION ON RECOVERY.—Each 

19 pension plan shall provide that the plan shall not 

20 initiate any action to recover any applicable overpay21 ment if the plan did not initiate any such action 

22 with respect to the overpayment during the 3-year 

23 period beginning on the date the overpayment was 

24 made. 


rwilkins on PROD1PC63 with BILLS
8 

•S 1725 IS

1 ‘‘(3) NOTICE REQUIREMENT.—Any notice to a 

2 plan participant or beneficiary with respect to an ap3 plicable overpayment shall include notice of the par4 ticipant’s or beneficiary’s rights to appeal any ad5 ministrative decision of the plan with respect to the 

6 overpayment. 

7 ‘‘(4) SATISFACTION OF FIDUCIARY RESPONSI8 BILITY.—A fiduciary of a plan shall not be treated 

9 as violating any fiduciary responsibility under part 4 

10 of this subtitle solely by reason of a failure to re11 cover any applicable overpayment in accordance with 

12 the requirements of this subsection. 

13 ‘‘(5) APPLICABLE OVERPAYMENT.—The term 

14 ‘applicable overpayment’ means any payment of ben15 efits to a participant or beneficiary in excess of the 

16 amount to which the participant or beneficiary is en17 titled to under the plan which is not due to the fault 

18 of the participant or beneficiary.’’. 

19 (b) EFFECTIVE DATE.— 

20 (1) IN GENERAL.—The amendment made by 

21 this section shall apply to any overpayment of bene22 fits made on or after the date of the enactment of 

23 this Act. 

24 (2) PREVIOUS OVERPAYMENTS.—The amend25 ment made by this section shall apply to any overVerDate Aug 31 2005 23:36 Jun 29, 2007 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1725.IS S1725

rwilkins on PROD1PC63 with BILLS
9 

•S 1725 IS

1 payment of benefits made before the date of the en2 actment of this Act if, on or before such date, the 

3 plan has not initiated any action to recover such 

4 overpayment. 

5 (3) GUIDANCE.—Not later than 90 days after 

6 the date of the enactment of this Act, the Secretary 

7 of Labor shall issue guidance on the method or 

8 methods for determining whether an overpayment is 

9 actuarially insignificant for purposes of section 

10 206(h)(1)(B) of the Employee Retirement Income 

11 Security Act of 1974 (as added by this section). 

12 SEC. 103. PROTECTION OF SUBSIDIZED EARLY RETIRE13 MENT BENEFITS IN CORPORATE MERGERS 

14 AND ACQUISITIONS. 

15 (a) AMENDMENT TO ERISA.—Section 208 of the 

16 Employee Retirement Income Security Act of 1974 (29 

17 U.S.C. 1058) is amended by— 

18 (1) striking ‘‘A pension plan’’ and inserting 

19 ‘‘(a) IN GENERAL.—A pension plan’’; and 

20 (2) adding at the end the following: 

21 ‘‘(b) PROTECTION OF PRO-RATA SHARE OF EARLY

22 RETIREMENT SUBSIDY.—If— 

23 ‘‘(1) an employee, following the sale of a cor24 poration or a corporate division, liquidation, merger, 

25 consolidation, sale of an interest in another corporaVerDate Aug 31 2005 23:36 Jun 29, 2007 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1725.IS S1725

rwilkins on PROD1PC63 with BILLS
10 

•S 1725 IS

1 tion, partnership, or joint venture, or other similar 

2 transaction, continues employment with the em3 ployer that acquires all or part of the trade or busi4 ness in such transaction (referred to in this sub5 section as the ‘successor employer’), and 

6 ‘‘(2) the employee was a participant in a pen7 sion plan maintained by the previous employer be8 fore such transaction, 

9 then, solely for the purpose of determining eligibility 

10 for any subsidized early retirement benefit provided 

11 by such plan, there shall be taken into account any 

12 periods of service with the successor employer that 

13 would have been taken into account had such trans14 action not occurred.’’. 

15 (b) AMENDMENT TO THE INTERNAL REVENUE

16 CODE.—Section 414(l) of the Internal Revenue Code of 

17 1986 (relating to mergers and consolidations of plans) is 

18 amended by adding at the end the following: 

19 ‘‘(3) PROTECTION OF PRO-RATA SHARE OF

20 EARLY RETIREMENT SUBSIDY.—If— 

21 ‘‘(A) an employee, following the sale of a 

22 corporation or a corporate division, liquidation, 

23 merger, consolidation, sale of an interest in an24 other corporation, partnership, or joint venture, 

25 or other similar transaction, continues employVerDate Aug 31 2005 23:36 Jun 29, 2007 Jkt 059200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1725.IS S1725

rwilkins on PROD1PC63 with BILLS
11 

•S 1725 IS

1 ment with the employer that acquires all or 

2 part of the trade or business in such trans3 action (referred to in this paragraph as the 

4 ‘successor employer’), and 

5 ‘‘(B) the employee was a participant in a 

6 pension plan maintained by the previous em7 ployer before such transaction, 

8 then, solely for the purpose of determining eligibility 

9 for any subsidized early retirement benefit provided 

10 by such plan, there shall be taken into account any 

11 periods of service with the successor employer that 

12 would have been taken into account had such trans13 action not occurred.’’. 

14 SEC. 104. OFFICE OF PENSION PARTICIPANT ADVOCACY. 

15 (a) IN GENERAL.—Title III of the Employee Retire16 ment Income Security Act of 1974 (29 U.S.C. 1201 et 

17 seq.) is amended by adding at the end the following: 

18 ‘‘Subtitle D—Office of Pension 

19 Participant Advocacy 

20 ‘‘SEC. 3051. OFFICE OF PENSION PARTICIPANT ADVOCACY. 

21 ‘‘(a) ESTABLISHMENT.— 

22 ‘‘(1) IN GENERAL.—There is established in the 

23 Department of Labor an office to be known as the 

24 ‘Office of Pension Participant Advocacy’. 


rwilkins on PROD1PC63 with BILLS
12 

•S 1725 IS

1 ‘‘(2) PENSION PARTICIPANT ADVOCATE.—The 

2 Office of Pension Participant Advocacy shall be 

3 under the supervision and direction of an official to 

4 be known as the ‘Pension Participant Advocate’ who 

5 shall— 

6 ‘‘(A) have demonstrated experience in the 

7 area of pension participant assistance, and 

8 ‘‘(B) be selected by the Secretary after 

9 consultation with pension participant advocacy 

10 organizations. 

11 The Pension Participant Advocate shall report di12 rectly to the Secretary and shall be entitled to com13 pensation at the same rate as the highest rate of 

14 basic pay established for the Senior Executive Serv15 ice under section 5382 of title 5, United States 

16 Code. 

17 ‘‘(b) FUNCTIONS OF OFFICE.—It shall be the func18 tion of the Office of Pension Participant Advocacy to— 

19 ‘‘(1) evaluate the efforts of the Federal Govern20 ment, business, and financial, professional, retiree, 

21 labor, women’s, and other appropriate organizations 

22 in assisting and protecting pension plan participants, 

23 including— 

24 ‘‘(A) serving as a focal point for, and ac25 tively seeking out, the receipt of information 


rwilkins on PROD1PC63 with BILLS
13 

•S 1725 IS

1 with respect to the policies and activities of the 

2 Federal Government, business, and such organi3 zations which affect such participants, 

4 ‘‘(B) identifying significant problems for 

5 pension plan participants and the capabilities of 

6 the Federal Government, business, and such or7 ganizations to address such problems, and 

8 ‘‘(C) developing proposals for changes in 

9 such policies and activities to correct such prob10 lems, and communicating such changes to the 

11 appropriate officials, 

12 ‘‘(2) promote the expansion of pension plan cov13 erage and the receipt of promised benefits by in14 creasing the awareness of the general public of the 

15 value of pension plans and by protecting the rights 

16 of pension plan participants, including— 

17 ‘‘(A) enlisting the cooperation of the public 

18 and private sectors in disseminating informa19 tion, and 

20 ‘‘(B) forming private-public partnerships 

21 and other efforts to assist pension plan partici22 pants in receiving their benefits, 

23 ‘‘(3) advocate for the full attainment of the 

24 rights of pension plan participants, including by 


rwilkins on PROD1PC63 with BILLS
14 

•S 1725 IS

1 making pension plan sponsors and fiduciaries aware 

2 of their responsibilities, 

3 ‘‘(4) give priority to the special needs of low 

4 and moderate income participants, and 

5 ‘‘(5) develop needed information with respect to 

6 pension plans, including information on the types of 

7 existing pension plans, levels of employer and em8 ployee contributions, vesting status, accumulated 

9 benefits, benefits received, and forms of benefits. 

10 ‘‘(c) REPORTS.— 

11 ‘‘(1) ANNUAL REPORT.—Not later than Decem12 ber 31 of each calendar year, the Pension Partici13 pant Advocate shall report to the Committees on 

14 Education and Labor and Ways and Means of the 

15 House of Representatives and the Committees on 

16 Health, Education, Labor, and Pensions and Fi17 nance of the Senate on its activities during the fiscal 

18 year ending in the calendar year. Such report 

19 shall— 

20 ‘‘(A) identify significant problems the Ad21 vocate has identified, 

22 ‘‘(B) include specific legislative and regu23 latory changes to address the problems, and 

24 ‘‘(C) identify any actions taken to correct 

25 problems identified in any previous report. 


rwilkins on PROD1PC63 with BILLS
15 

•S 1725 IS

1 The Pension Participant Advocate shall submit a 

2 copy of such report to the Secretary and any other 

3 appropriate official at the same time it is submitted 

4 to the committees of Congress. 

5 ‘‘(2) SPECIFIC REPORTS.—The Pension Partici6 pant Advocate shall report to the Secretary or any 

7 other appropriate official any time the Advocate 

8 identifies a problem which may be corrected by the 

9 Secretary or such official. 

10 ‘‘(3) REPORTS TO BE SUBMITTED DIRECTLY.— 

11 The report required under paragraph (1) shall be 

12 provided directly to the committees of Congress 

13 without any prior review or comment by any person 

14 other than the Secretary or any other Federal officer 

15 or employee. 

16 ‘‘(d) SPECIFIC POWERS.— 

17 ‘‘(1) RECEIPT OF INFORMATION.—Subject to 

18 such confidentiality requirements as may be appro19 priate, the Secretary and other Federal officials 

20 shall, upon request, provide such information (in21 cluding plan documents) as may be necessary to en22 able the Pension Participant Advocate to carry out 

23 the Advocate’s responsibilities under this section. 

24 ‘‘(2) APPEARANCES.—The Pension Participant 

25 Advocate may represent the views and interests of 


rwilkins on PROD1PC63 with BILLS
16 

•S 1725 IS

1 pension plan participants before any Federal agency, 

2 including, upon request of a participant, in any pro3 ceeding involving the participant. 

4 ‘‘(3) CONTRACTING AUTHORITY.—In carrying 

5 out responsibilities under subsection (b)(5), the Pen6 sion Participant Advocate may, in addition to any 

7 other authority provided by law— 

8 ‘‘(A) contract with any person to acquire 

9 statistical information with respect to pension 

10 plan participants, and 

11 ‘‘(B) conduct direct surveys of pension 

12 plan participants.’’. 

13 (b) CONFORMING AMENDMENT.—The table of con14 tents for title III of such Act is amended by adding at 

15 the end the following: 

‘‘Subtitle D—Office of Pension Participant Advocacy 

‘‘3051. Office of Pension Participant Advocacy.’’. 

16 (c) EFFECTIVE DATE.—The amendment made by 

17 this section shall take effect on January 1, 2009. 

18 SEC. 105. PROSPECTIVE APPLICATION OF REQUIRED BEN19 EFIT REDUCTIONS UNDER PLANS IN CRIT20 ICAL STATUS. 

21 (a) IN GENERAL.— 

22 (1) AMENDMENT TO ERISA.—Clause (ii) of sec23 tion 305(e)(8)(A) of the Employee Retirement In24 come Security Act of 1974 (29 U.S.C. 


rwilkins on PROD1PC63 with BILLS
17 

•S 1725 IS

1 1085(e)(8)(A)(ii)) is amended by striking ‘‘the date 

2 on which the plan provides notice to the participant 

3 or beneficiary under subsection (b)(3)(D) for the ini4 tial critical year’’ and inserting ‘‘the effective date of 

5 the reduction specified in the notice which the plan 

6 provides to the participant or beneficiary under sub7 paragraph (C)’’. 

8 (2) AMENDMENT TO 1986 CODE.—Clause (ii) of 

9 section 432(e)(8)(A) of the Internal Revenue Code 

10 of 1986 is amended by striking ‘‘the date on which 

11 the plan provides notice to the participant or bene12 ficiary under subsection (b)(3)(D) for the initial crit13 ical year’’ and inserting ‘‘the effective date of the re14 duction specified in the notice which the plan pro15 vides to the participant or beneficiary under sub16 paragraph (C)’’. 

17 (b) NOTICE REQUIREMENTS.— 

18 (1) AMENDMENT TO ERISA.—Subclause (II) of 

19 section 305(b)(3)(D)(ii) of the Employee Retirement 

20 Income Security Act of 1974 (29 U.S.C. 

21 1085(b)(3)(D)(ii)(II)) is amended by striking ‘‘the 

22 date such notice is provided for the first plan year 

23 in which the plan is in critical status’’ and inserting 

24 ‘‘the effective date of the reduction specified in the 


rwilkins on PROD1PC63 with BILLS
18 

•S 1725 IS

1 notice which the plan provides to the participant or 

2 beneficiary under subsection (e)(8)(C)’’. 

3 (2) AMENDMENT TO 1986 CODE.—Subclause 

4 (II) of section 432(b)(3)(D)(ii) of the Internal Rev5 enue Code of 1986 is amended by striking ‘‘the date 

6 such notice is provided for the first plan year in 

7 which the plan is in critical status’’ and inserting 

8 ‘‘the effective date of the reduction specified in the 

9 notice which the plan provides to the participant or 

10 beneficiary under subsection (e)(8)(C)’’. 

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

12 this section shall take effect as if included in the amend13 ments made by sections 202 and 212 of the Pension Pro14 tection Act of 2006 to which they relate. 

15 TITLE II—PROTECTION FOR THE 

16 SPOUSES OF FEDERAL EM17 PLOYEES 

18 SEC. 201. SURVIVOR ANNUITIES FOR WIDOWS, WIDOWERS, 

19 AND FORMER SPOUSES OF FEDERAL EM20 PLOYEES WHO DIE BEFORE ATTAINING AGE 

21 FOR DEFERRED ANNUITY UNDER CIVIL 

22 SERVICE RETIREMENT SYSTEM. 

23 (a) DEFINITION.—Section 8341(a) of title 5, United 

24 States Code, is amended— 


rwilkins on PROD1PC63 with BILLS
19 

•S 1725 IS

1 (1) in paragraph (1), by striking ‘‘employee or 

2 Member’’ and inserting ‘‘employee, Member, or an3 nuitant, or of a former employee or Member,’’; and 

4 (2) in paragraph (2), by striking ‘‘employee or 

5 Member’’ and inserting ‘‘employee, Member, or an6 nuitant, or of a former employee or Member,’’. 

7 (b) BENEFITS FOR WIDOW, WIDOWER, OR FORMER

8 SPOUSE.— 

9 (1) IN GENERAL.—Section 8341 of title 5, 

10 United States Code, is amended by adding at the 

11 end the following: 

12 ‘‘(l) If a former employee heretofore or hereafter sep13 arated from the service with title to deferred annuity from 

14 the Fund hereafter dies before having established a valid 

15 claim for annuity and is survived by a widow or widower 

16 to whom married at the date of separation, the widow or 

17 widower— 

18 ‘‘(1) is entitled to an annuity equal to 55 per19 cent of the deferred annuity of the former employee 

20 commencing on the day after the former employee 

21 dies and terminating on the last day of the month 

22 before the widow or widower dies or remarries before 

23 becoming 55 years of age; or 

24 ‘‘(2) may elect to receive the lump-sum credit 

25 instead of annuity if the widow or widower is the inVerDate Aug 31 2005 23:36 Jun 29, 2007 Jkt 059200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S1725.IS S1725

rwilkins on PROD1PC63 with BILLS
20 

•S 1725 IS

1 dividual who would be entitled to the lump-sum 

2 credit and files application therefor with the Office 

3 before the award of the annuity. 

4 Notwithstanding the preceding sentence, an annuity pay5 able under this subsection to the widow or widower of a 

6 former employee may not exceed the difference between— 

7 ‘‘(A) the annuity which would otherwise be pay8 able to such widow or widower under this subsection, 

9 and 

10 ‘‘(B) the amount of the survivor annuity pay11 able to any former spouse of such former employee 

12 under subsection (h) of this section.’’. 

13 (2) TECHNICAL AND CONFORMING AMEND14 MENTS.—Section 8339(j) of title 5, United States 

15 Code, is amended— 

16 (A) in paragraph (3)(A)(ii), by striking 

17 ‘‘and (h)’’ and inserting ‘‘(h), and (l)’’; and 

18 (B) in paragraph (4), by striking ‘‘and 

19 (h)’’ and inserting ‘‘(h), and (l)’’. 

20 (c) BENEFITS FOR FORMER SPOUSE.—Section 

21 8341(h) of title 5, United States Code, is amended— 

22 (1) in paragraph (1), by adding after the first 

23 sentence ‘‘Subject to paragraphs (2) through (5) of 

24 this subsection, a former spouse of a former em25 ployee who dies after having separated from the 


rwilkins on PROD1PC63 with BILLS
21 

•S 1725 IS

1 service with title to a deferred annuity under section 

2 8338(a) but before having established a valid claim 

3 for annuity is entitled to a survivor annuity under 

4 this subsection, if and to the extent expressly pro5 vided for in an election under section 8339(j)(3) of 

6 this title, or in the terms of any decree of divorce 

7 or annulment or any court order or court-approved 

8 property settlement agreement incident to such de9 cree.’’; and 

10 (2) in paragraph (2)— 

11 (A) in subparagraph (A)(ii), by striking 

12 ‘‘or annuitant,’’ and inserting ‘‘annuitant, or 

13 former employee’’; and 

14 (B) in subparagraph (B)— 

15 (i) in clause (ii), by striking ‘‘or’’ at 

16 the end; 

17 (ii) in clause (iii), by striking the pe18 riod and inserting ‘‘; or’’; and 

19 (iii) by adding at the end the fol20 lowing: 

21 ‘‘(iv) under subparagraph (A) of sub22 section (l) of this section in the case of a 

23 widow or widower, if the deceased was a 

24 former employee described in the first sen25 tence of such subsection.’’. 


rwilkins on PROD1PC63 with BILLS
22 

•S 1725 IS

1 (d) PROTECTION OF SURVIVOR BENEFIT RIGHTS.— 

2 Section 8339(j)(3) of title 5, United States Code, is 

3 amended by inserting at the end the following: 

4 ‘‘The Office shall provide by regulation for the appli5 cation of this subsection to the widow, widower, or sur6 viving former spouse of a former employee who dies after 

7 having separated from the service with title to a deferred 

8 annuity under section 8338(a) but before having estab9 lished a valid claim for annuity.’’. 

10 (e) EFFECTIVE DATE.—The amendments made by 

11 this section shall take effect on the date of the enactment 

12 of this Act and shall apply only in the case of a former 

13 employee who dies on or after such date. 

14 SEC. 202. COURT ORDERS RELATING TO FEDERAL RETIRE15 MENT BENEFITS FOR FORMER SPOUSES OF 

16 FEDERAL EMPLOYEES. 

17 (a) CIVIL SERVICE RETIREMENT SYSTEM.—Section 

18 8345(j) of title 5, United States Code, is amended— 

19 (1) by redesignating paragraph (3) as para20 graph (4); and 

21 (2) by inserting after paragraph (2) the fol22 lowing: 

23 ‘‘(3)(A) A court decree, court order, property settle24 ment, or similar process referred to under paragraph 

25 (1)(A) shall be treated as meeting the requirements of 


rwilkins on PROD1PC63 with BILLS
23 

•S 1725 IS

1 that paragraph if it requires that payment of benefits be 

2 made to the former spouse of the employee, Member, or 

3 annuitant— 

4 ‘‘(i) in the case of any payment before the em5 ployee, Member, or annuitant has separated from 

6 service, on or after the date on which the employee, 

7 Member, or annuitant attains (or would have at8 tained) the earliest retirement age, 

9 ‘‘(ii) as if the employee, Member, or annuitant 

10 had retired on the date on which such payment is 

11 to begin under such order (but taking into account 

12 only the present value of the benefits actually ac13 crued and not taking into account the present value 

14 of any employer subsidy for early retirement), and 

15 ‘‘(iii) in any form in which such benefits may 

16 be paid under this chapter to the employee, Member, 

17 or annuitant (other than in the form of a joint and 

18 survivor annuity with respect to the former spouse 

19 and his or her subsequent spouse). 

20 For purposes of clause (ii), the interest rate assumption 

21 used in determining the present value shall be the interest 

22 rate specified under this chapter or, if no rate is specified, 

23 5 percent. 

24 ‘‘(B) In this paragraph, the term ‘earliest retirement 

25 age’ means the earlier of— 


rwilkins on PROD1PC63 with BILLS
24 

•S 1725 IS

1 ‘‘(i) the date on which the employee, Member, 

2 or annuitant is entitled to a distribution under this 

3 chapter, or 

4 ‘‘(ii) the later of— 

5 ‘‘(I) the date the employee, Member, or an6 nuitant attains age 50, or 

7 ‘‘(II) the earliest date on which the em8 ployee, Member, or annuitant could begin re9 ceiving benefits under this chapter if the em10 ployee, Member, or annuitant separated from 

11 service.’’. 

12 (b) FEDERAL EMPLOYEES RETIREMENT SYSTEM.— 

13 Section 8467 of title 5, United States Code, is amended— 

14 (1) by redesignating subsection (c) as sub15 section (d); and 

16 (2) by inserting after subsection (b) the fol17 lowing: 

18 ‘‘(c)(1) A court decree, court order, property settle19 ment, or similar process referred to under subsection 

20 (a)(1) shall be treated as meeting the requirements of that 

21 subsection if it requires that payment of benefits be made 

22 to the former spouse of the employee, Member, or annu23 itant— 

24 ‘‘(A) in the case of any payment before the em25 ployee, Member, or annuitant has separated from 


rwilkins on PROD1PC63 with BILLS
25 

•S 1725 IS

1 service, on or after the date on which the employee, 

2 Member, or annuitant attains (or would have at3 tained) the earliest retirement age, 

4 ‘‘(B) as if the employee, Member, or annuitant 

5 had retired on the date on which such payment is 

6 to begin under such order (but taking into account 

7 only the present value of the benefits actually ac8 crued and not taking into account the present value 

9 of any employer subsidy for early retirement), and 

10 ‘‘(C) in any form in which such benefits may be 

11 paid under this chapter to the employee, Member, or 

12 annuitant (other than in the form of a joint and sur13 vivor annuity with respect to the alternate payee and 

14 his or her subsequent spouse). 

15 For purposes of subparagraph (B), the interest rate as16 sumption used in determining the present value shall be 

17 the interest rate specified under this chapter or, if no rate 

18 is specified, 5 percent. 

19 ‘‘(2) In this subsection, the term ‘earliest retirement 

20 age’ means the earlier of— 

21 ‘‘(A) the date on which the employee, Member, 

22 or annuitant is entitled to a distribution under this 

23 chapter, or 

24 ‘‘(B) the later of— 


rwilkins on PROD1PC63 with BILLS
26 

•S 1725 IS

1 ‘‘(i) the date the employee, Member, or an2 nuitant attains age 50, or 

3 ‘‘(ii) the earliest date on which the em4 ployee, Member, or annuitant could begin re5 ceiving benefits under this chapter if the em6 ployee, Member, or annuitant separated from 

7 service.’’ 

8 (c) EFFECTIVE DATE AND APPLICATION.—The 

9 amendments made by this section shall take effect on the 

10 date of the enactment of this Act and apply to any court 

11 decree, court order, property settlement, or similar process 

12 issued or approved before, on, or after that date. 

13 SEC. 203. ELIMINATION OF CERTAIN BARS TO ELIGIBILITY 

14 FOR SURVIVOR ANNUITY. 

15 Section 4(b) of the Civil Service Spouse Equity Act 

16 of 1984 (5 U.S.C. 8341 note) is amended— 

17 (1) in paragraph (1)(B)(i), by striking ‘‘after 

18 September 14, 1978, and’’; and 

19 (2) by striking paragraph (4). 


rwilkins on PROD1PC63 with BILLS
27 

•S 1725 IS

1 SEC. 204. ORDER OF PRECEDENCE FOR DISPOSITION OF 

2 AMOUNTS REMAINING IN THE THRIFT SAV3 INGS ACCOUNT OF A FEDERAL EMPLOYEE 

4 (OR FORMER EMPLOYEE) WHO DIES BEFORE 

5 MAKING AN EFFECTIVE ELECTION CONTROL6 LING SUCH DISPOSITION. 

7 (a) IN GENERAL.—Section 8433(e) of title 5, United 

8 States Code, is amended— 

9 (1) by striking ‘‘(e)’’ and inserting ‘‘(e)(1)’’; 

10 (2) by striking all that follows ‘‘paid’’ and in11 serting ‘‘in accordance with paragraph (2).’’; and 

12 (3) by adding at the end the following: 

13 ‘‘(2)(A) An amount under paragraph (1) shall be paid 

14 in a manner consistent with the provisions of section 

15 8424(d), except that, in applying the order of precedence 

16 under such provisions— 

17 ‘‘(i) the widow or widower of the decedent shall 

18 be the first party entitled to receive (instead of any 

19 designated beneficiary); and 

20 ‘‘(ii) if there is no widow or widower, the party 

21 next entitled to receive shall be the beneficiary or 

22 beneficiaries designated by the employee or Member 

23 (or former employee or Member) in accordance with 

24 the procedures that would otherwise normally apply, 

25 subject to such additional conditions as the Execu26 tive Director shall by regulation prescribe based on 


rwilkins on PROD1PC63 with BILLS
28 

•S 1725 IS

1 section 205(c)(2) of the Employee Retirement In2 come Security Act of 1974 (29 U.S.C. 1055(c)(2)). 

3 ‘‘(B) The order of precedence under subparagraph 

4 (A) shall not apply if the widow or widower consents in 

5 writing to the application of the order of precedence under 

6 section 8424(d).’’ 

7 (b) EFFECTIVE DATE.—The amendments made by 

8 this section shall take effect on the 90th day after the 

9 date of the enactment of this Act, and shall apply in the 

10 case of any individual who dies on or after such 90th day. 

Æ 


rwilkins on PROD1PC63 with BILLS