108TH CONGRESS

2D SESSION H. R. 4657

AN ACT

To amend the Balanced Budget Act of 1997 to impurposes. police officers, and fire fighters, and for other efit payments for District of Columbia teachers, prove the administration of Federal pension ben-

108TH CONGRESS

2D SESSION H. R. 4657

AN ACT

To amend the Balanced Budget Act of 1997 to improve

the administration of Federal pension benefit payments

for District of Columbia teachers, police officers, and

fire fighters, 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.

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

3 Retirement Protection Improvement Act of 2004’’.

4 SEC. 2. ESTABLISHMENT OF DISTRICT OF COLUMBIA FED5 ERAL PENSION FUND FOR PAYMENT OF FED6 ERAL BENEFIT PAYMENTS TO DISTRICT OF

7 COLUMBIA TEACHERS, POLICE OFFICERS,

8 AND FIRE FIGHTERS.

9 (a) IN GENERAL.—Subtitle A of title XI of the

10 Balanced Budget Act of 1997 (sec. 1—801.01 et seq.,

11 D.C. Official Code) is amended—

12 (1) by redesignating chapter 9 as chapter 10;

13 (2) by redesignating sections 11081 through

14 11087 as sections 11091 through 11097; and

15 (3) by inserting after chapter 8 the following

16 new chapter:

17 ‘‘CHAPTER 9—DISTRICT OF COLUMBIA

18 FEDERAL PENSION FUND

19 ‘‘SEC. 11081. CREATION OF FUND.

20 ‘‘(a) ESTABLISHMENT.—There is established on the

21 books of the Treasury the District of Columbia Teachers,

22 Police Officers, and Firefighters Federal Pension Fund

23 (hereafter referred to as the ‘D.C. Federal Pension

24 Fund’), consisting of the following:

25 ‘‘(1) The assets transferred pursuant to section

26 11083.
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1 ‘‘(2) The annual Federal payments deposited

2 pursuant to section 11084.

3 ‘‘(3) Any amounts otherwise appropriated to

4 such Fund.

5 ‘‘(4) Any income earned on the investment of

6 the assets of such Fund pursuant to subsection (b).

7 ‘‘(b) INVESTMENT OF ASSETS.—The Secretary shall

8 invest such portion of the assets of the D.C. Federal Pen9 sion Fund as is not in the judgment of the Secretary re10 quired to meet current withdrawals. Such investments

11 shall be in public debt securities with maturities suitable

12 to the needs of the D.C. Federal Pension Fund, as deter13 mined by the Secretary, and bearing interest at rates de14 termined by the Secretary, taking into consideration cur15 rent market yields on outstanding marketable obligations

16 of the United States of comparable maturities.

17 ‘‘(c) RECORDKEEPING FOR ACTUARIAL STATUS.—

18 The Secretary shall provide for the keeping of such

19 records as are necessary for determining the actuarial sta20 tus of the D.C. Federal Pension Fund.

21 ‘‘SEC. 11082. USES OF AMOUNTS IN FUND.

22 ‘‘(a) IN GENERAL.—Amounts in the D.C. Federal

23 Pension Fund shall be used—

24 ‘‘(1) to make Federal benefit payments under

25 this subtitle;
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1 ‘‘(2) subject to subsection (b), to cover the rea2 sonable and necessary administrative expenses in3 curred by any person in administering the D.C. Fed4 eral Pension Fund and carrying out this chapter;

5 ‘‘(3) for the accumulation of funds in order to

6 finance obligations of the Federal Government for

7 future benefits; and

8 ‘‘(4) for such other purposes as are specified in

9 this subtitle.

10 ‘‘(b) BUDGETING, CERTIFICATION, AND APPROVAL

11 OF ADMINISTRATIVE EXPENSES.—The administrative ex12 penses of the D.C. Federal Pension Fund shall be paid

13 in accordance with an annual budget set forth by the Pen14 sion Fund Trustee which shall be subject to certification

15 and approval by the Secretary.

16 ‘‘SEC. 11083. TRANSFER OF ASSETS AND OBLIGATIONS OF

17 TRUST FUND AND FEDERAL SUPPLEMENTAL

18 FUND.

19 ‘‘(a) TRANSFER OF OBLIGATIONS.—Effective Octo20 ber 1, 2004, all obligations to make Federal benefit pay21 ments shall be transferred from the Trust Fund to the

22 D.C. Federal Pension Fund.

23 ‘‘(b) TRANSFER OF ASSETS.—Effective October 1,

24 2004, all assets of the Trust Fund and all assets of the
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1 Federal Supplemental Fund as of such date shall be trans2 ferred to the D.C. Federal Pension Fund.

3 ‘‘SEC. 11084. DETERMINATION OF ANNUAL FEDERAL PAY4 MENTS INTO D.C. FEDERAL PENSION FUND.

5 ‘‘(a) ANNUAL AMORTIZATION AMOUNT.—

6 ‘‘(1) IN GENERAL.—At the end of each fiscal

7 year (beginning with fiscal year 2005), the Secretary

8 shall promptly pay into the D.C. Federal Pension

9 Fund from the general fund of the Treasury an

10 amount equal to the annual amortization amount for

11 the year (which may not be less than zero).

12 ‘‘(2) DETERMINATION OF AMOUNT.—For pur13 poses of paragraph (1)—

14 ‘‘(A) the ‘original unfunded liability’ is the

15 present value as of the effective date of this Act

16 of expected future benefits payable from the

17 Federal Supplemental Fund; and

18 ‘‘(B) the ‘annual amortization amount’

19 means the amount determined by the enrolled

20 actuary to be necessary to amortize in equal an21 nual installments (until fully amortized)—

22 ‘‘(i) the original unfunded liability

23 over a 30-year period,

24 ‘‘(ii) a net experience gain or loss over

25 a 10-year period, and
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1 ‘‘(iii) any other changes in actuarial

2 liability over a 20-year period.

3 ‘‘(3) SCHEDULE FOR AMORTIZATION.—In deter4 mining the annual amortization amount under para5 graph (2)(B), the enrolled actuary shall include

6 amounts necessary to complete the amortization

7 schedules used for determining the annual amortiza8 tion amount for payments into the Federal Supple9 mental Fund under section 11053 (as in effect prior

10 to the enactment of this chapter).

11 ‘‘(b) ADMINISTRATIVE EXPENSES.—During each fis12 cal year (beginning with fiscal year 2009), the Secretary

13 shall pay into the D.C. Federal Pension Fund from the

14 general fund of the Treasury the amounts necessary to

15 pay the reasonable and necessary administrative expenses

16 described in section 11082(a)(2) for the year.

17 ‘‘SEC. 11085. ADMINISTRATION THROUGH PENSION FUND

18 TRUSTEE.

19 ‘‘(a) IN GENERAL.—The Secretary shall select a Pen20 sion Fund Trustee to carry out the responsibilities and

21 duties specified in this subtitle in accordance with the con22 tract described in subsection (b).

23 ‘‘(b) CONTRACT.—The Secretary shall enter into a

24 contract with the Pension Fund Trustee to provide for the

25 auditing of D.C. Federal Pension Fund assets, the making
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1 of Federal benefit payments under this subtitle from the

2 D.C. Federal Pension Fund, and such other matters as

3 the Secretary deems appropriate. The Secretary shall en4 force the provisions of the contract and otherwise monitor

5 the administration of the D.C. Federal Pension Fund.

6 ‘‘(c) SUBCONTRACTS.—Notwithstanding any provi7 sion of a District Retirement Program or any other law,

8 rule, or regulation, the Pension Fund Trustee may, with

9 the approval of the Secretary, enter into one or more sub10 contracts with the District Government or any person to

11 provide services to the Pension Fund Trustee in connec12 tion with its performance of the contract. The Pension

13 Fund Trustee shall monitor the performance of any such

14 subcontract and enforce its provisions.

15 ‘‘(d) DETERMINATION BY THE SECRETARY.—Not16 withstanding subsection (b) or any other provision of this

17 subtitle, the Secretary may determine, with respect to any

18 function otherwise to be performed by the Pension Fund

19 Trustee, that in the interest of economy and efficiency

20 such function shall be performed by the Secretary rather

21 than the Pension Fund Trustee.

22 ‘‘(e) REPORTS.—The Pension Fund Trustee shall re23 port to the Secretary, in a form and manner and at such

24 intervals as the Secretary may prescribe, on any matters
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1 under the responsibility of the Pension Fund Trustee as

2 the Secretary may prescribe.

3 ‘‘SEC. 11086. APPLICABILITY OF OTHER PROVISIONS TO D.C.

4 FEDERAL PENSION FUND.

5 ‘‘The following provisions of this subtitle shall apply

6 with respect to the D.C. Federal Pension Fund in the

7 same manner as such provisions applied with respect to

8 the Trust Fund prior to October 1, 2004:

9 ‘‘(1) Section 11023(b) (relating to the repay10 ment by the District Government of costs attrib11 utable to errors or omissions in transferred records).

12 ‘‘(2) Section 11034 (relating to the treatment

13 of the Trust Fund under certain laws).

14 ‘‘(3) Section 11061 (relating to annual valu15 ations and reports by the enrolled actuary), except

16 that in applying section 11061(b) to the D.C. Fed17 eral Pension Fund, the annual report required under

18 such section shall include a determination of the an19 nual payment to the D.C. Federal Pension Fund

20 under section 11084.

21 ‘‘(4) Section 11062 (relating to reports by the

22 Comptroller General).

23 ‘‘(5) Section 11071 (relating to judicial review).
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1 ‘‘(6) Section 11074 (relating to the treatment

2 of misappropriation of Trust Fund amounts as a

3 Federal crime).’’.

4 (b) TERMINATION OF CURRENT FUNDS.—

5 (1) DISTRICT OF COLUMBIAFEDERAL PENSION

6 LIABILITY TRUST FUND.—Chapter 4 of subtitle A of

7 title XI of such Act (sec. 1—807.01 et seq., D.C.

8 Official Code) is amended by adding at the end the

9 following new section:

10 ‘‘SEC. 11036. TERMINATION OF TRUST FUND.

11 ‘‘Effective upon the transfer of the obligations and

12 assets of the Trust Fund to the D.C. Federal Pension

13 Fund under section 11083—

14 ‘‘(1) the Trust Fund shall terminate; and

15 ‘‘(2) the obligation to make Federal benefit

16 payments from the Trust Fund, and any duty im17 posed on any person with respect to the Trust Fund,

18 shall terminate.’’.

19 (2) FEDERAL SUPPLEMENTAL DISTRICT OF CO20 LUMBIAPENSION FUND.—Chapter 6 of subtitle A of

21 title XI of such Act (sec. 1—811.01 et seq., D.C.

22 Official Code) is amended by adding at the end the

23 following new section:
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1 ‘‘SEC. 11056. TERMINATION OF FEDERAL SUPPLEMENTAL

2 FUND.

3 ‘‘Effective upon the transfer of the assets of the Fed4 eral Supplemental Fund to the D.C. Federal Pension

5 Fund under section 11083—

6 ‘‘(1) the Federal Supplemental Fund shall ter7 minate; and

8 ‘‘(2) any duty imposed on any person with re9 spect to the Federal Supplemental fund shall termi10 nate.’’.

11 (c) CONFORMING DEFINITIONS.—

12 (1) TRUSTEE.—Section 11003(16) of such Act

13 (sec. 1—801.02(16), D.C. Official Code) is amended

14 by striking the period at the end and inserting the

15 following: ‘‘, or, beginning October 1, 2004, the Pen16 sion Fund Trustee selected by the Secretary under

17 section 11085.’’.

18 (2) D.C. FEDERAL PENSION FUND.—Section

19 11003 of such Act (sec. 1—801.02, D.C. Official

20 Code) is amended—

21 (A) by redesignating paragraphs (3)

22 through (16) as paragraphs (4) through (17);

23 and

24 (B) by inserting after paragraph (2) the

25 following new paragraph:
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1 ‘‘(3) The term ‘D.C. Federal Pension Fund’

2 means the District of Columbia Teachers, Police Of3 ficers, and Firefighters Federal Pension Fund estab4 lished under section 11081.’’.

5 (d) OTHER CONFORMING AMENDMENT.—Section

6 11041(b) of such Act (sec. 1—809.01(b), D.C. Official

7 Code) is amended in the heading by striking ‘‘FROM

8 TRUST FUND’’.

9 (e) CLERICAL AMENDMENTS.—The table of contents

10 of subtitle A of title XI of such Act is amended—

11 (1) by adding at the end of the items relating

12 to chapter 4 the following:

‘‘Sec. 11036. Termination of Trust Fund.’’;

13 (2) by adding at the end of the items relating

14 to chapter 6 the following:

‘‘Sec. 11056. Termination of Federal Supplemental Fund.’’;

15 (3) by redesignating the item relating to chap16 ter 9 as relating to chapter 10;

17 (4) by redesignating the items relating to sec18 tions 11081 through 11087 as relating to sections

19 11091 through 11097; and

20 (5) by inserting after the items relating to

21 chapter 8 the following:

‘‘CHAPTER 9—DISTRICT OF COLUMBIA FEDERAL PENSION FUND

‘‘Sec. 11081. Creation of Fund.

‘‘Sec. 11082. Uses of Amounts in Fund.
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‘‘Sec. 11083. Transfer of Assets and Obligations of Trust Fund and Federal

Supplemental Fund.

‘‘Sec. 11084. Determination of Annual Federal Payment Into D.C. Federal

Pension Fund.

‘‘Sec. 11085. Administration Through Pension Fund Trustee.

‘‘Sec. 11086. Applicability of Other Provisions to D.C. Federal Pension Fund.’’.

1 SEC. 3. ADMINISTRATION OF DISTRICT OF COLUMBIA JUDI2 CIAL RETIREMENT AND SURVIVORS ANNUITY

3 FUND.

4 (a) PROCEDURES FOR RESOLVING DENIED BENEFIT

5 CLAIMS.—

6 (1) IN GENERAL.—Section 11—1570(c), D.C.

7 Official Code, is amended by adding at the end the

8 following new paragraph:

9 ‘‘(3)(A) In accordance with procedures ap10 proved by the Secretary, the Secretary shall provide

11 to any individual whose claim for a benefit under

12 this subchapter has been denied in whole or in

13 part—

14 ‘‘(i) adequate written notice of such denial,

15 setting forth the specific reasons for the denial

16 in a manner calculated to be understood by the

17 average participant in the program of benefits

18 under this subchapter; and

19 ‘‘(ii) a reasonable opportunity for a full

20 and fair review of the decision denying such

21 claim.
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1 ‘‘(B) Any factual determination made by the

2 Secretary pursuant to this paragraph shall be pre3 sumed correct unless rebutted by clear and con4 vincing evidence. The Secretary’s interpretation and

5 construction of the benefit provisions of this sub6 chapter shall be entitled to great deference. ’’.

7 (2) EFFECTIVE DATE.—The amendment made

8 by paragraph (1) shall apply with respect to claims

9 for benefits which are made after the date of the en10 actment of this Act.

11 (b) TREATMENT OF MISAPPROPRIATION OF FUND

12 AMOUNTS AS FEDERAL CRIME.—

13 (1) IN GENERAL.—Section 11—1570, D.C. Of14 ficial Code, is amended by adding at the end the fol15 lowing new subsection:

16 ‘‘(l) The provisions of section 664 of title 18, United

17 States Code (relating to theft or embezzlement from em18 ployee benefit plans), shall apply to the Fund.’’.

19 (2) EFFECTIVE DATE.—The amendment made

20 by paragraph (1) shall take effect on the date of the

21 enactment of this Act.
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1 SEC. 4. ADMINISTRATION OF RETIREMENT PROGRAM FOR

2 POLICE OFFICERS, FIRE FIGHTERS, AND

3 TEACHERS BY OTHER THAN CHIEF FINAN4 CIAL OFFICER.

5 (a) IN GENERAL.—Section 424(c)(21) of the District

6 of Columbia Home Rule Act (sec. 1—204.24c(21), D.C.

7 Official Code) is amended by striking ‘‘systems’’ and in8 serting the following: ‘‘systems (other than the retirement

9 system for police officers, fire fighters, and teachers)’’.

10 (b) EFFECTIVE DATE.—The amendment made by

11 subsection (a) shall apply with respect to fiscal year 2005

12 and each succeeding fiscal year.

Passed the House of Representatives September 28,

2004.

Attest:

Clerk.