IB
Union Calendar No. 455
104TH CONGRESS
2D SESSION
H. R. 3841
[Report No. 104–831]
To amend the civil service laws of the United States, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 17, 1996
Mr. MICA (for himself, Mr. MORAN, and Mrs. MORELLA) introduced the fol-
lowing bill; which was referred to the Committee on Government Reform
and Oversight
SEPTEMBER 24, 1996
Additional sponsor: Mr. DAVIS
SEPTEMBER 24, 1996
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on July 17, 1996]
A BILL
To amend the civil service laws of the United States, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Om-
nibus Civil Service Reform Act of 1996’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—DEMONSTRATION PROJECTS
Sec. 101. Demonstration projects.
TITLE II—PERFORMANCE MANAGEMENT ENHANCEMENT
Sec. 201. Increased weight given to performance for order-of-retention purposes in
a reduction in force.
Sec. 202. No appeal of denial of periodic step-increases.
Sec. 203. Performance appraisals.
Sec. 204. Amendments to incentive awards authority.
Sec. 205. Due process rights of managers under negotiated grievance procedures.
Sec. 206. Collection and reporting of training information.
TITLE III—ENHANCEMENT OF THRIFT SAVINGS PLAN AND
CERTAIN OTHER BENEFITS
Subtitle A—Additional Investment Funds for the Thrift Savings Plan
Sec. 301. Short title.
Sec. 302. Additional investment funds for the Thrift Savings Plan.
Sec. 303. Acknowledgement of investment risk.
Sec. 304. Effective date.
Subtitle B—Thrift Savings Account Liquidity
Sec. 311. Short title.
Sec. 312. Notice to spouses for in-service withdrawals; de minimus accounts; Civil
Service Retirement System participants.
Sec. 313. In-service withdrawals; withdrawal elections, Federal Employees’ Re-
tirement System participants.
Sec. 314. Survivor annuities for former spouses; notice to Federal Employees’ Re-
tirement System spouses for in-service withdrawals.
Sec. 315. De minimus accounts relating to the judiciary.
Sec. 316. Definition of basic pay.
Sec. 317. Eligible rollover distributions.
Sec. 318. Effective date.
Subtitle C—Other Provisions Relating to the Thrift Savings Plan
Sec. 321. Percentage limitations on contributions.
Sec. 322. Loans under the Thrift Savings Plan for furloughed employees.
Sec. 323. Immediate participation in the Thrift Savings Plan.
Subtitle D—Resumption of Certain Survivor Annuities That Terminated by
Reason of Marriage
Sec. 331. Resumption of certain survivor annuities that terminated by reason of
marriage.
Subtitle E—Life Insurance Benefits
Sec. 341. Domestic relations orders.
Sec. 342. Exception from provisions requiring reduction in additional optional
life insurance.
TITLE IV—REORGANIZATION FLEXIBILITY
Sec. 401. Voluntary reductions in force.
Sec. 402. Nonreimbursable details to Federal agencies before a reduction in force.
TITLE V—SOFT-LANDING PROVISIONS
Sec. 501. Temporary continuation of Federal employees’ life insurance.
Sec. 502. Continued eligibility for health insurance.
Sec. 503. Priority placement programs for Federal employees affected by a reduc-
tion in force.
Sec. 504. Job placement and counseling services.
Sec. 505. Education and retraining incentives.
TITLE VI—MISCELLANEOUS
Sec. 601. Reimbursements relating to professional liability insurance.
Sec. 602. Employment rights following conversion to contract.
Sec. 603. Debarment of health care providers found to have engaged in fraudulent
practices.
Sec. 604. Conversion of certain excepted service positions in the United States
Fire Administration to competitive service positions.
Sec. 605. Eligibility for certain survivor annuity benefits.
Sec. 606. Amendment to Public Law 104–134.
Sec. 607. Miscellaneous amendments relating to the health benefits program for
Federal employees.
Sec. 608. Pay for certain positions formerly classified at GS–18.
Sec. 609. Repeal of section 1307 of title 5 of the United States Code.
Sec. 610. Mandatory internal alternative dispute resolution procedures.
TITLE I—DEMONSTRATION
PROJECTS
SEC. 101. DEMONSTRATION PROJECTS.
(a) DEFINITIONS.—Paragraph (1) of section 4701(a)
of title 5, United States Code, is amended by striking sub-
paragraph (A) and by redesignating subparagraphs (B)
and (C) as subparagraphs (A) and (B), respectively.
(b) PRE-IMPLEMENTATION PROCEDURES.—Subsection
(b) of section 4703 of title 5, United States Code, is amend-
ed to read as follows:
‘‘(b) Before an agency or the Office may conduct or
enter into any agreement or contract to conduct a dem-
onstration project, the Office—
‘‘(1) shall develop or approve a plan for such
project which identifies—
‘‘(A) the purposes of the project;
‘‘(B) the methodology;
‘‘(C) the duration; and
‘‘(D) the methodology and criteria for eval-
uation;
‘‘(2) shall publish the plan in the Federal Reg-
ister;
‘‘(3) may solicit comments from the public and
interested parties in such manner as the Office con-
siders appropriate;
‘‘(4) shall obtain approval from each agency in-
volved of the final version of the plan; and
‘‘(5) shall provide notification of the proposed
project, at least 30 days in advance of the date any
project proposed under this section is to take effect—
‘‘(A) to employees who are likely to be af-
fected by the project; and
‘‘(B) to each House of the Congress.’’.
(c) NONWAIVABLE PROVISIONS.—Section 4703(c) of
title 5, United States Code, is amended—
(1) by striking paragraph (1) and inserting the
following:
‘‘(1) any provision of subchapter V of chapter 63
or subpart G of part III of this title;’’; and
(2) by striking paragraph (3) and inserting the
following:
‘‘(3) any provision of chapter 15 or subchapter
II or III of chapter 73 of this title;’’.
(d) LIMITATIONS.—Subsection (d) of section 4703 of
title 5, United States Code, is amended to read as follows:
‘‘(d)(1) Each demonstration project shall terminate be-
fore the end of the 5-year period beginning on the date on
which the project takes effect, except that the project may
continue for a maximum of 2 years beyond the date to the
extent necessary to validate the results of the project.
‘‘(2)(A) Not more than 15 active demonstration
projects may be in effect at any time, and of the projects
in effect at any time, not more than 5 may involve 5,000
or more individuals each.
‘‘(B) Individuals in a control group necessary to vali-
date the results of a project shall not, for purposes of any
determination under subparagraph (A), be considered to be
involved in such project.’’.
(e) EVALUATIONS.—Subsection (h) of section 4703 of
title 5, United States Code, is amended by adding at the
end the following: ‘‘The Office may, with respect to a dem-
onstration project conducted by another agency, require
that the preceding sentence be carried out by such other
agency.’’.
(f) PROVISIONS FOR TERMINATION OF PROJECT OR
MAKING IT PERMANENT.—Section 4703 of title 5, United
States Code, is amended—
(1) in subsection (i) by inserting ‘‘by the Office’’
after ‘‘undertaken’’; and
(2) by adding at the end the following:
‘‘(j)(1) If the Office determines that termination of a
demonstration project (whether under subsection (e) or oth-
erwise) would result in the inequitable treatment of employ-
ees who participated in the project, the Office shall take
such corrective action as is within its authority. If the Of-
fice determines that legislation is necessary to correct an
inequity, it shall submit an appropriate legislative proposal
to both Houses of Congress.
‘‘(2) If the Office determines that a demonstration
project should be made permanent, it shall submit an ap-
propriate legislative proposal to both Houses of Congress.’’.
nual performance ratings received during the 4-year period
prior to the date of issuance of reduction-in-force notices
or the 4-year period prior to the agency-established cutoff
date (as appropriate), computed in accordance with para-
graph (2) or (3) (as appropriate).
‘‘ ‘(2) Except as provided in paragraph (3), an em-
ployee shall receive—
‘‘ ‘(A) 5 additional years of service for each per-
formance rating of fully successful (Level 3) or equiv-
alent;
‘‘ ‘(B) 7 additional years of service for each per-
formance rating of exceeds fully successful (Level 4) or
equivalent; and
‘‘ ‘(C) 10 additional years of service for each per-
formance rating of outstanding (Level 5) or equiva-
lent.
‘‘ ‘(3)(A) If the employing agency uses a rating system
having only 1 rating to denote performance which is fully
successful or better, then an employee under such system
shall receive 5 additional years of service for each such rat-
ing.
‘‘ ‘(B) If the employing agency uses a rating system
having only 2 ratings to denote performance which is fully
successful or better, then an employee under such system
shall receive—
‘‘ ‘(i) 5 additional years of service for each per-
formance rating at the lower of those 2 ratings; and
‘‘ ‘(ii) 7 additional years of service for each per-
formance rating at the higher of those 2 ratings.
‘‘ ‘(C) If the employing agency uses a rating system
having more than 3 ratings to denote performance which
is fully successful or better, then an employee under such
system shall receive—
‘‘ ‘(i) 5 additional years of service for each per-
formance rating at the lowest of those ratings;
‘‘ ‘(ii) 7 additional years of service for each per-
formance rating at the next rating above the rating
referred to in clause (i); and
‘‘ ‘(iii) 10 additional years of service for each
performance rating above the rating referred to in
clause (ii).
‘‘ ‘(D) For purposes of this paragraph, a rating shall
not be considered to denote performance which is fully suc-
cessful or better unless, in order to receive such rating, such
performance must satisfy all requirements for a fully suc-
cessful rating (Level 3) or equivalent, as established under
part 430 of this chapter (as in effect as of January 1,
1996).’; and
‘‘(C) subsection (c) of such section shall be con-
sidered to read as follows:
‘‘ ‘(c)(1) Service credit for employees who do not have
3 actual annual performance ratings of record received dur-
ing the 4-year period prior to the date of issuance of reduc-
tion-in-force notices, or the 4-year period prior to the agen-
cy-established cutoff date for ratings permitted in subsection
(b)(2) of this section, shall be determined in accordance
with paragraph (2).
‘‘ ‘(2) An employee who has not received 1 or more of
the 3 annual performance ratings of record required under
this section shall—
‘‘ ‘(A) receive credit for performance on the basis
of the rating or ratings actually received (if any);
and
‘‘ ‘(B) for each performance rating not actually
received, be given credit for 5 additional years of serv-
ice.’.’’.
(b) EQUITABLE TREATMENT
OF EMPLOYEES.—For
purposes of determining the order of retention of employees
in a reduction in force taking effect on or after October 1,
1999, the Office of Personnel Management shall prescribe
such regulations as may be necessary to ensure that—
(1) in the case of any agency having more than
1 performance evaluation system, employees subject to
different systems are treated equitably; and
(2) with respect to employees in the same com-
petitive area who have been subject to different per-
formance evaluation systems with dissimilar sum-
mary levels, no such employee shall suffer as a result
of having been covered by more than 1 such system.
(c) REPORT.—Not later than 270 days after the date
of the enactment of this Act, the General Accounting Office
shall submit to the Committee on Government Reform and
Oversight of the House of Representatives and the Commit-
tee on Governmental Affairs of the Senate a report analyz-
ing and assessing the following:
(1) Based on performance-ratings statistics in
the executive branch of the Government over the past
15 years, the correlation (if any) between employees’
ratings of record and the following:
(A) Promotions.
(B) Awards.
(C) Bonuses.
(D) Quit rates.
(E) Removals.
(F) Disciplinary actions (other than remov-
als).
(G) The filing of grievances, complaints,
and charges of unfair labor practices.
(H) Appeals of adverse actions.
(2) The impact of performance ratings on reten-
tion during reductions in force over the past 5 years.
(3) Whether ‘‘pass/fail’’ performance systems are
compatible with the statutory requirement that effi-
ciency or performance ratings be given due effect dur-
ing reductions in force.
(4) The respective numbers of Federal agencies,
organizational units, and Federal employees that are
covered by the different performance evaluation sys-
tems.
(5) The potential impact of this section on em-
ployees in different performance evaluation systems.
(6) Whether there are significant differences in
the distribution of ratings among or within agencies
and, if so, the reasons therefor.
Based on the findings of the General Accounting Office, the
report shall include recommendations to improve the effec-
tiveness of Federal performance evaluation systems.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply with respect to reductions in force taking
effect on or after October 1, 1999.
SEC. 202. NO APPEAL OF DENIAL OF PERIODIC STEP-IN-
CREASES.
(a) IN GENERAL.—Section 5335(c) of title 5, United
States Code, is amended—
(1) by striking the second sentence;
(2) in the third sentence by striking ‘‘or appeal’’;
and
(3) in the last sentence by striking ‘‘and the enti-
tlement of the employee to appeal to the Board do not
apply’’ and inserting ‘‘does not apply’’.
(b) PERFORMANCE RATINGS.—Section 5335 of title 5,
United States Code, as amended by subsection (a), is further
amended—
(1) in subsection (a)(B) by striking ‘‘work of the
employee is of an acceptable level of competence’’ and
inserting ‘‘performance of the employee is at least
fully successful’’;
(2) in subsection (c)—
(A) in the first sentence by striking ‘‘work
of an employee is not of an acceptable level of
competence,’’ and inserting ‘‘performance of an
employee is not at least fully successful,’’; and
(B) in the last sentence by striking ‘‘accept-
able level of competence’’ and inserting ‘‘fully
successful work performance’’; and
(3) by adding at the end the following:
‘‘(g) For purposes of this section, the term ‘fully suc-
cessful’ denotes work performance that satisfies the require-
ments of section 351.504(d)(3)(D) of title 5 of the Code of
Federal Regulations (as deemed to be amended by section
3502(g)(2)(B)).’’.
SEC. 203. PERFORMANCE APPRAISALS.
(a) IN GENERAL.—Section 4302 of title 5, United
States Code, is amended—
(1) in subsection (b) by striking paragraphs (5)
and (6) and inserting the following:
‘‘(5) assisting employees in improving unaccept-
able performance, except in circumstances described
in subsection (c); and
‘‘(6) reassigning, reducing in grade, removing, or
taking other appropriate action against employees
whose performance is unacceptable.’’; and
(2) by adding at the end the following:
‘‘(c) Upon notification of unacceptable performance,
an employee shall be afforded an opportunity to dem-
onstrate acceptable performance before a reduction in grade
or removal may be proposed under section 4303 based on
such performance, except that an employee so afforded such
an opportunity shall not be afforded any further oppor-
tunity to demonstrate acceptable performance if the employ-
ee’s performance again is determined to be at an unaccept-
able level.’’.
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Subject to paragraph (2), this
section and the amendments made by this section
shall take effect 180 days after the date of the enact-
ment of this Act.
(2) EXCEPTION.—The amendments made by this
section shall not apply in the case of any proposed
action as to which the employee receives advance
written 
notice, 
in 
accordance 
with 
section
4303(b)(1)(A) of title 5, United States Code, before the
effective date of this section.
SEC. 204. AMENDMENTS TO INCENTIVE AWARDS AUTHOR-
ITY.
Chapter 45 of title 5, United States Code, is amend-
ed—
(1) by amending section 4501 to read as follows:
‘‘§ 4501. Definitions
‘‘For the purpose of this subchapter—
‘‘(1) the term ‘agency’ means—
‘‘(A) an Executive agency;
‘‘(B) the Library of Congress;
‘‘(C) the Office of the Architect of the Cap-
itol;
‘‘(D) the Botanic Garden;
‘‘(E) the Government Printing Office; and
‘‘(F) the United States Sentencing Commis-
sion;
but does not include—
‘‘(i) the Tennessee Valley Authority; or
‘‘(ii) the Central Bank for Cooperatives;
‘‘(2) the term ‘employee’ means an employee as
defined by section 2105; and
‘‘(3) the term ‘Government’ means the Govern-
ment of the United States.’’;
(2) by amending section 4503 to read as follows:
‘‘§ 4503. Agency awards
‘‘(a) The head of an agency may pay a cash award
to, and incur necessary expense for the honorary recognition
of, an employee who—
‘‘(1) by his suggestion, invention, superior ac-
complishment, or other personal effort, contributes to
the efficiency, economy, or other improvement of Gov-
ernment operations or achieves a significant reduc-
tion in paperwork; or
‘‘(2) performs a special act or service in the pub-
lic interest in connection with or related to his offi-
cial employment.
‘‘(b)(1) If the criteria under paragraph (1) or (2) of
subsection (a) are met on the basis of the suggestion, inven-
tion, superior accomplishment, act, service, or other meri-
torious effort of a group of employees collectively, and if
the circumstances so warrant (such as by reason of the in-
feasibility of determining the relative role or contribution
assignable to each employee separately), authority under
subsection (a) may be exercised—
‘‘(A) based on the collective efforts of the group;
and
‘‘(B) with respect to each member of such group.
‘‘(2) The amount awarded to each member of a group
under this subsection—
‘‘(A) shall be the same for all members of such
group, except that such amount may be prorated to
reflect differences in the period of time during which
an individual was a member of the group; and
‘‘(B) may not exceed the maximum cash award
allowable under subsection (a) or (b) of section 4502,
as applicable.’’; and
(3) in subsection (a)(1) of section 4505a by strik-
ing ‘‘at the fully successful level or higher’’ and insert-
ing ‘‘higher than the fully successful level’’.
SEC. 205. DUE PROCESS RIGHTS OF MANAGERS UNDER NE-
GOTIATED GRIEVANCE PROCEDURES.
(a) IN GENERAL.—Paragraph (2) of section 7121(b)
of title 5, United States Code, is amended to read as follows:
‘‘(2) The provisions of a negotiated grievance proce-
dure providing for binding arbitration in accordance with
paragraph (1)(C)(iii) shall, if or to the extent that an al-
leged prohibited personnel practice is involved, allow the ar-
bitrator to order a stay of any personnel action in a man-
ner similar to the manner described in section 1221(c) with
respect to the Merit Systems Protection Board.’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a)—
(1) shall take effect on the date of the enactment
of this Act; and
(2) shall apply with respect to orders issued on
or after the date of the enactment of this Act, notwith-
standing the provisions of any collective bargaining
agreement.
SEC. 206. COLLECTION AND REPORTING OF TRAINING IN-
FORMATION.
(a) TRAINING WITHIN GOVERNMENT.—The Office of
Personnel Management shall collect information concerning
training programs, plans, and methods utilized by agencies
of the Government and submit a report to the Congress on
this activity on an annual basis.
(b) TRAINING OUTSIDE OF GOVERNMENT.—The Office
of Personnel Management, to the extent it considers appro-
priate in the public interest, may collect information con-
(C) in paragraph (8) (as redesignated by
subparagraph (A) of this paragraph) by striking
‘‘and’’ at the end;
(D) in paragraph (9) (as redesignated by
subparagraph (A) of this paragraph)—
(i) by striking ‘‘paragraph (7)(D)’’
each place it appears and inserting ‘‘para-
graph (8)(D)’’; and
(ii) by striking the period and insert-
ing a semicolon and ‘‘and’’; and
(E) by adding at the end the following:
‘‘(10) the term ‘Small Capitalization Stock
Index Investment Fund’ means the Small Capitaliza-
tion Stock Index Investment Fund established under
subsection (b)(1)(D).’’; and
(2) in subsection (b)—
(A) in paragraph (1)—
(i) in subparagraph (B) by striking
‘‘and’’ at the end;
(ii) in subparagraph (C) by striking
the period and inserting a semicolon; and
(iii) by adding at the end the follow-
ing:
‘‘(D) a Small Capitalization Stock Index Invest-
ment Fund as provided in paragraph (3); and
‘‘(E) an International Stock Index Investment
Fund as provided in paragraph (4).’’; and
(B) by adding at the end the following:
‘‘(3)(A) The Board shall select an index which is a
commonly recognized index comprised of common stock the
aggregate market value of which represents the United
States equity markets excluding the common stocks included
in the Common Stock Index Investment Fund.
‘‘(B) The Small Capitalization Stock Index Investment
Fund shall be invested in a portfolio designed to replicate
the performance of the index in subparagraph (A). The
portfolio shall be designed such that, to the extent prac-
ticable, the percentage of the Small Capitalization Stock
Index Investment Fund that is invested in each stock is the
same as the percentage determined by dividing the aggre-
gate market value of all shares of that stock by the aggregate
market value of all shares of all stocks included in such
index.
‘‘(4)(A) The Board shall select an index which is a
commonly recognized index comprised of stock the aggregate
market value of which is a reasonably complete representa-
tion of the international equity markets excluding the Unit-
ed States equity markets.
‘‘(B) The International Stock Index Investment Fund
shall be invested in a portfolio designed to replicate the per-
formance of the index in subparagraph (A). The portfolio
shall be designed such that, to the extent practicable, the
percentage of the International Stock Index Investment
Fund that is invested in each stock is the same as the per-
centage determined by dividing the aggregate market value
of all shares of that stock by the aggregate market value
of all shares of all stocks included in such index.’’.
SEC. 303. ACKNOWLEDGEMENT OF INVESTMENT RISK.
Section 8439(d) of title 5, United States Code, is
amended by striking ‘‘Each employee, Member, former em-
ployee, or former Member who elects to invest in the Com-
mon Stock Index Investment Fund or the Fixed Income In-
vestment Fund described in paragraphs (1) and (3),’’ and
inserting ‘‘Each employee, Member, former employee, or
former Member who elects to invest in the Common Stock
Index Investment Fund, the Fixed Income Investment
Fund, the International Stock Index Investment Fund, or
the Small Capitalization Stock Index Investment Fund, de-
fined in paragraphs (1), (3), (5), and (10),’’.
SEC. 304. EFFECTIVE DATE.
This subtitle shall take effect on the date of enactment
of this Act, and the Funds established under this subtitle
shall be offered for investment at the earliest practicable
election period (described in section 8432(b) of title 5, Unit-
ed States Code) as determined by the Executive Director
in regulations.
Subtitle B—Thrift Savings Account
Liquidity
SEC. 311. SHORT TITLE.
This subtitle may be cited as the ‘‘Thrift Savings Plan
Act of 1996’’.
SEC. 312. NOTICE TO SPOUSES FOR IN-SERVICE WITHDRAW-
ALS; DE MINIMUS ACCOUNTS; CIVIL SERVICE
RETIREMENT SYSTEM PARTICIPANTS.
Section 8351(b) of title 5, United States Code, is
amended—
(1) in paragraph (5)—
(A) in subparagraph (B)—
(i) by striking ‘‘An election, change of
election, or modification (relating to the
commencement date of a deferred annuity)’’
and inserting ‘‘An election or change of elec-
tion’’;
(ii) by inserting ‘‘or withdrawal’’ after
‘‘and a loan’’;
(iii) by inserting ‘‘and (h)’’ after
‘‘8433(g)’’;
(iv) by striking ‘‘the election, change of
election, or modification’’ and inserting
‘‘the election or change of election’’; and
(v) by inserting ‘‘or withdrawal’’ after
‘‘for such loan’’; and
(B) in subparagraph (D)—
(i) by inserting ‘‘or withdrawals’’ after
‘‘of loans’’; and
(ii) 
by 
inserting 
‘‘or 
(h)’’ 
after
‘‘8433(g)’’; and
(2) in paragraph (6)—
(A) by striking ‘‘$3,500 or less’’ and insert-
ing ‘‘less than an amount that the Executive Di-
rector prescribes by regulation’’; and
(B) by striking ‘‘unless the employee or
Member elects, at such time and otherwise in
such manner as the Executive Director pre-
scribes, one of the options available under sub-
section (b)’’.
SEC. 313. IN-SERVICE WITHDRAWALS; WITHDRAWAL ELEC-
TIONS, FEDERAL EMPLOYEES’ RETIREMENT
SYSTEM PARTICIPANTS.
(a) IN GENERAL.—Section 8433 of title 5, United
States Code, is amended—
‘‘(3) The Executive Director shall make each transfer
elected under paragraph (2) directly to an eligible retire-
ment plan or plans (as defined in section 402(c)(8) of the
Internal Revenue Code of 1986) identified by the employee,
Member, former employee, or former Member for whom the
transfer is made.
‘‘(4) A transfer may not be made for an employee,
Member, former employee, or former Member under para-
graph (2) until the Executive Director receives from that
individual the information required by the Executive Direc-
tor specifically to identify the eligible retirement plan or
plans to which the transfer is to be made.’’;
(2) in subsection (d)—
(A) in paragraph (1) by striking ‘‘Subject
to paragraph (3)(A)’’ and inserting ‘‘Subject to
paragraph (3)’’;
(B) by striking paragraph (2) and redesig-
nating paragraph (3) as paragraph (2); and
(C) in paragraph (2) (as redesignated by
subparagraph (B) of this paragraph)—
(i) in subparagraph (A) by striking
‘‘(A)’’; and
(ii) by striking subparagraph (B);
(3) in subsection (f)(1)—
(A) by striking ‘‘$3,500 or less’’ and insert-
ing ‘‘less than an amount that the Executive Di-
rector prescribes by regulation’’; and
(B) by striking ‘‘unless the employee or
Member elects, at such time and otherwise in
such manner as the Executive Director pre-
scribes, one of the options available under sub-
section (b), or’’ and inserting a comma;
(4) in subsection (f)(2)—
(A) by striking ‘‘February 1’’ and inserting
‘‘April 1’’;
(B) in subparagraph (A)—
(i) by striking ‘‘65’’ and inserting
‘‘701⁄2’’; and
(ii) by inserting ‘‘or’’ after the semi-
colon;
(C) by striking subparagraph (B); and
(D) by redesignating subparagraph (C) as
subparagraph (B);
(5) in subsection (g)—
(A) in paragraph (1) by striking ‘‘after De-
cember 31, 1987, and’’; and
(B) by striking paragraph (2) and redesig-
nating paragraphs (3) through (5) as para-
graphs (2) through (4), respectively; and
(6) by adding after subsection (g) the following:
‘‘(h)(1) An employee or Member may apply, before sep-
aration, to the Board for permission to withdraw an
amount from the employee’s or Member’s account based
upon—
‘‘(A) the employee or Member having attained
age 591⁄2; or
‘‘(B) financial hardship.
‘‘(2) A withdrawal under paragraph (1)(A) shall be
available to each eligible participant one time only.
‘‘(3) A withdrawal under paragraph (1)(B) shall be
available only for an amount not exceeding the value of that
portion of such account which is attributable to contribu-
tions made by the employee or Member under section
8432(a) of this title.
‘‘(4) Withdrawals under paragraph (1) shall be subject
to such other conditions as the Executive Director may pre-
scribe by regulation.
‘‘(5) A withdrawal may not be made under this sub-
section unless the requirements of section 8435(e) of this
title are satisfied.’’.
(b) INVALIDITY OF CERTAIN PRIOR ELECTIONS.—Any
election made under section 8433(b)(2) of title 5, United
States Code (as in effect before the effective date of this title),
with respect to an annuity which has not commenced before
the implementation date of this title as provided by regula-
tion by the Executive Director in accordance with section
318, shall be invalid.
SEC. 314. SURVIVOR ANNUITIES FOR FORMER SPOUSES;
NOTICE TO FEDERAL EMPLOYEES’ RETIRE-
MENT SYSTEM SPOUSES FOR IN-SERVICE
WITHDRAWALS.
Section 8435 of title 5, United States Code, is amend-
ed—
(1) in subsection (a)(1)(A)—
(A) by striking ‘‘may make an election
under subsection (b)(3) or (b)(4) of section 8433
of this title or change an election previously
made under subsection (b)(1) or (b)(2) of such
section’’ and inserting ‘‘may withdraw all or
part of a Thrift Savings Fund account under
subsection (b) (2), (3), or (4) of section 8433 of
this title or change a withdrawal election’’; and
(B) by adding at the end ‘‘A married em-
ployee or Member (or former employee or Mem-
ber) may make a withdrawal from a Thrift Sav-
ings Fund account under subsection (c)(1) of sec-
tion 8433 of this title only if the employee or
Member (or former employee or Member) satisfies
the requirements of subparagraph (B).’’;
(2) in subsection (c)—
(A) in paragraph (1)—
(i) by striking ‘‘An election, change of
election, or modification of the commence-
ment date of a deferred annuity’’ and in-
serting ‘‘An election or change of election’’;
and
(ii) by striking ‘‘modification, or
transfer’’ and inserting ‘‘or transfer’’; and
(B) in paragraph (2) in the matter follow-
ing subparagraph (B)(ii) by striking ‘‘modifica-
tion,’’;
(3) in subsection (e)—
(A) in paragraph (1)—
(i) in subparagraph (A)—
(I) by inserting ‘‘or withdrawal’’
after ‘‘A loan’’;
(II) by inserting ‘‘and (h)’’ after
‘‘8433(g)’’; and
(III) 
by 
inserting 
‘‘or 
with-
drawal’’ after ‘‘such loan’’;
(ii) in subparagraph (B) by inserting
‘‘or withdrawal’’ after ‘‘loan’’; and
(iii) in subparagraph (C)—
(I) by inserting ‘‘or withdrawal’’
after ‘‘to a loan’’; and
(II) by inserting ‘‘or withdrawal’’
after ‘‘for such loan’’; and
(B) in paragraph (2)—
(i) by inserting ‘‘or withdrawal’’ after
‘‘loan’’; and
(ii) by inserting ‘‘and (h)’’ after
‘‘8344(g)’’; and
(4) in subsection (g)—
(A) by inserting ‘‘or withdrawals’’ after
‘‘loans’’; and
(B) by inserting ‘‘and (h)’’ after ‘‘8433(g)’’.
SEC. 315. DE MINIMUS ACCOUNTS RELATING TO THE JUDI-
CIARY.
(a) JUSTICES AND JUDGES.—Section 8440a(b)(7) of
title 5, United States Code, is amended—
(1) by striking ‘‘$3,500 or less’’ and inserting
‘‘less than an amount that the Executive Director pre-
scribes by regulation’’; and
(2) by striking ‘‘unless the justice or judge elects,
at such time and otherwise in such manner as the
Executive Director prescribes, one of the options
available under section 8433(b)’’.
(b) BANKRUPTCY JUDGES AND MAGISTRATES.—Sec-
tion 8440b(b) of title 5, United States Code, is amended—
(1) in paragraph (7) in the first sentence by in-
serting ‘‘of the distribution’’ after ‘‘equal to the
amount’’; and
(2) in paragraph (8)—
(A) by striking ‘‘$3,500 or less’’ and insert-
ing ‘‘less than an amount that the Executive Di-
rector prescribes by regulation’’; and
(B) by striking ‘‘unless the bankruptcy
judge or magistrate elects, at such time and oth-
erwise in such manner as the Executive Director
prescribes, one of the options available under
subsection (b)’’.
(c) FEDERAL CLAIMS JUDGES.—Section 8440c(b) of
title 5, United States Code, is amended—
(1) in paragraph (7) in the first sentence by in-
serting ‘‘of the distribution’’ after ‘‘equal to the
amount’’; and
(2) in paragraph (8)—
(A) by striking ‘‘$3,500 or less’’ and insert-
ing ‘‘less than an amount that the Executive Di-
rector prescribes by regulation’’; and
(B) by striking ‘‘unless the judge elects, at
such time and otherwise in such manner as the
Executive Director prescribes, one of the options
available under section 8433(b)’’.
SEC. 316. DEFINITION OF BASIC PAY.
(a) IN GENERAL.—(1) Section 8401(4) of title 5, Unit-
ed States Code, is amended by striking ‘‘except as provided
in subchapter III of this chapter,’’.
(2) Section 8431 of title 5, United States Code, is re-
pealed.
(b) TECHNICAL AND CONFORMING AMENDMENTS.—(1)
The table of sections for chapter 84 of title 5, United States
Code, is amended by repealing the item relating to section
8431.
(2) Section 5545a(h)(2)(A) of title 5, United States
Code, is amended by striking ‘‘8431,’’.
(3) Section 616(f) of the Treasury, Postal Service, and
General Government Appropriations Act, 1996 (Public Law
104–52; 109 Stat. 500; 5 U.S.C. 5343 note) is amended by
striking ‘‘section 8431 of title 5, United States Code, and’’.
SEC. 317. ELIGIBLE ROLLOVER DISTRIBUTIONS.
Section 8432 of title 5, United States Code, is amended
by adding at the end the following:
‘‘(j)(1) For the purpose of this subsection—
‘‘(A) the term ‘eligible rollover distribution’ has
the meaning given such term by section 402(c)(4) of
the Internal Revenue Code of 1986; and
‘‘(B) the term ‘qualified trust’ has the meaning
given such term by section 402(c)(8) of the Internal
Revenue Code of 1986.
‘‘(2) An employee or Member may contribute to the
Thrift Savings Fund an eligible rollover distribution from
a qualified trust. A contribution made under this subsection
shall be made in the form described in section 401(a)(31)
of the Internal Revenue Code of 1986. In the case of an
eligible rollover distribution, the maximum amount trans-
ferred to the Thrift Savings Fund shall not exceed the
amount which would otherwise have been included in the
employee’s or Member’s gross income for Federal income tax
purposes.
‘‘(3) The Executive Director shall prescribe regulations
to carry out this subsection.’’.
SEC. 318. EFFECTIVE DATE.
This subtitle shall take effect on the date of the enact-
ment of this Act, and withdrawals, loans, rollovers, and
elections as provided under the amendments made by this
subtitle shall be made at the earliest practicable date as de-
termined by the Executive Director in regulations.
Subtitle C—Other Provisions
Relating to the Thrift Savings Plan
SEC. 321. PERCENTAGE LIMITATIONS ON CONTRIBUTIONS.
(a) AMENDMENTS RELATING TO FERS.—
(1) IN GENERAL.—Subsection (a) of section 8432
of title 5, United States Code, is amended by striking
‘‘10 percent of’’.
(2) JUSTICES AND JUDGES.—Subsection (b) of
section 8440a of title 5, United States Code, as
amended by section 315(a), is further amended—
(A) by striking paragraph (2) and by redes-
ignating paragraphs (3) through (7) as para-
graphs (2) through (6), respectively; and
(B) in paragraph (6) (as so redesignated by
subparagraph (A)) by striking ‘‘paragraphs (4)
and (5)’’ and inserting ‘‘paragraphs (3) and
(4)’’.
(3) BANKRUPTCY JUDGES AND MAGISTRATES.—
Subsection (b) of section 8440b of title 5, United
States Code, as amended by section 315(b), is further
amended—
(A) by striking paragraph (2) and by redes-
ignating paragraphs (3) through (8) as para-
graphs (2) through (7), respectively;
(B) in paragraph (4) (as so redesignated by
subparagraph (A)) by striking ‘‘paragraph
(4)(A), (B), or (C)’’ and inserting ‘‘paragraph
(3)(A), (B), or (C)’’; and
(C) in paragraph (7) (as so redesignated by
subparagraph (A)) by striking ‘‘Notwithstanding
paragraph (4),’’ and inserting ‘‘Notwithstanding
paragraph (3),’’.
(4) COURT OF FEDERAL CLAIMS JUDGES.—Sub-
section (b) of section 8440c of title 5, United States
Code, as amended by section 315(c), is further amend-
ed—
(A) by striking paragraph (2) and by redes-
ignating paragraphs (3) through (8) as para-
graphs (2) through (7), respectively;
(B) in paragraph (4) (as so redesignated by
subparagraph (A)) by striking ‘‘paragraph
(4)(A) or (B)’’ and inserting ‘‘paragraph (3)(A)
or (B)’’; and
(C) in paragraph (7) (as so redesignated by
subparagraph (A)) by striking ‘‘Notwithstanding
paragraph (4),’’ and inserting ‘‘Notwithstanding
paragraph (3),’’.
(5) JUDGES OF THE UNITED STATES COURT OF
VETERANS
APPEALS.—Paragraph 
(2) 
of 
section
8440d(b) of title 5, United States Code, is amended
to read as follows:
‘‘(2) For purposes of contributions made to the Thrift
Savings Fund, basic pay does not include any retired pay
paid pursuant to section 7296 of title 38.’’.
(b) AMENDMENTS RELATING TO CSRS.—Paragraph
(2) of section 8351(b) of title 5, United States Code, is
amended by striking ‘‘5 percent of’’.
(c) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section shall take effect 6 months after the date
of the enactment of this Act or such earlier date as
the Executive Director may by regulation prescribe.
(2) COORDINATION WITH ELECTION PERIODS.—
The Executive Director shall by regulation determine
the first election period in which elections may be
made consistent with the amendments made by this
section.
(3) DEFINITIONS.—For purposes of this sub-
section—
(A) the term ‘‘election period’’ means a pe-
riod afforded under section 8432(b) of title 5,
United States Code; and
(B) the term ‘‘Executive Director’’ has the
meaning given such term by section 8401(13) of
title 5, United States Code.
SEC. 322. LOANS UNDER THE THRIFT SAVINGS PLAN FOR
FURLOUGHED EMPLOYEES.
Section 8433(g) of title 5, United States Code, as
amended by section 313(a)(5)(B), is further amended by
adding at the end the following:
‘‘(5) An employee who has been furloughed due to a
lapse in appropriations may not be denied a loan under
this subsection solely because such employee is not in a pay
status.’’.
SEC. 323. IMMEDIATE PARTICIPATION IN THE THRIFT SAV-
INGS PLAN.
(a) ELIMINATION OF CERTAIN WAITING PERIODS FOR
PURPOSES
OF EMPLOYEE CONTRIBUTIONS.—Paragraph
(4) of section 8432(b) of title 5, United States Code, is
amended to read as follows:
‘‘(4) The Executive Director shall prescribe such regu-
lations as may be necessary to carry out the following:
‘‘(A) Notwithstanding subparagraph (A) of para-
graph (2), an employee or Member described in such
subparagraph shall be afforded a reasonable oppor-
tunity to first make an election under this subsection
beginning on the date of commencing service or, if
that is not administratively feasible, beginning on the
earliest date thereafter that such an election becomes
administratively feasible, as determined by the Execu-
tive Director.
‘‘(B) An employee or Member described in sub-
paragraph (B) of paragraph (2) shall be afforded a
reasonable opportunity to first make an election
under this subsection (based on the appointment or
election described in such subparagraph) beginning
on the date of commencing service pursuant to such
appointment or election or, if that is not administra-
tively feasible, beginning on the earliest date there-
after that such an election becomes administratively
feasible, as determined by the Executive Director.
‘‘(C) Notwithstanding the preceding provisions of
this paragraph, contributions under paragraphs (1)
and (2) of subsection (c) shall not be payable with re-
spect to any pay period before the earliest pay period
for which such contributions would otherwise be al-
lowable under this subsection if this paragraph had
not been enacted.
‘‘(D) 
Sections 
8351(a)(2), 
8440a(a)(2),
8440b(a)(2), 8440c(a)(2), and 8440d(a)(2) shall be
applied in a manner consistent with the purposes of
subparagraphs (A) and (B), to the extent those sub-
paragraphs can be applied with respect thereto.
‘‘(E) Nothing in this paragraph shall affect
paragraph (3).’’.
(b) TECHNICAL AND CONFORMING AMENDMENTS.—(1)
Section 8432(a) of title 5, United States Code, is amend-
ed—
(A) in the first sentence by striking ‘‘(b)(1)’’ and
inserting ‘‘(b)’’; and
(B) by amending the second sentence to read as
follows: ‘‘Contributions under this subsection pursu-
ant to such an election shall, with respect to each pay
period for which such election remains in effect, be
made in accordance with a program of regular con-
tributions provided in regulations prescribed by the
Executive Director.’’.
(2) Section 8432(b)(1)(B) of such title is amended by
inserting ‘‘(or any election allowable by virtue of paragraph
(4))’’ after ‘‘subparagraph (A)’’.
(3) Section 8432(b)(3) of such title is amended by
striking ‘‘Notwithstanding paragraph (2)(A), an’’ and in-
serting ‘‘An’’.
(4) Section 8432(i)(1)(B)(ii) of such title is amended
by striking ‘‘either elected to terminate individual contribu-
tions to the Thrift Savings Fund within 2 months before
commencing military service or’’.
(5) Section 8439(a)(1) of such title is amended by in-
serting ‘‘who makes contributions or’’ after ‘‘for each indi-
vidual’’ and by striking ‘‘section 8432(c)(1)’’ and inserting
‘‘section 8432’’.
(6) Section 8439(c)(2) of such title is amended by add-
ing at the end the following: ‘‘Nothing in this paragraph
shall be considered to limit the dissemination of informa-
tion only to the times required under the preceding sen-
tence.’’.
(7) Sections 8440a(a)(2) and 8440d(a)(2) of such title
are amended by striking ‘‘subject to’’ and all that follows
and inserting ‘‘subject to this chapter.’’.
(c) EFFECTIVE DATE.—This section shall take effect
6 months after the date of the enactment of this Act or such
earlier date as the Executive Director (within the meaning
of section 8401(13) of title 5, United States Code) may by
regulation prescribe.
Subtitle D—Resumption of Certain
Survivor Annuities That Termi-
nated by Reason of Marriage
SEC. 331. RESUMPTION OF CERTAIN SURVIVOR ANNUITIES
THAT TERMINATED BY REASON OF MAR-
RIAGE.
(a) CIVIL SERVICE RETIREMENT SYSTEM.—Section
8341(e) of title 5, United States Code, is amended by add-
ing at the end the following:
‘‘(4) If the annuity of a child under this subchapter
terminates under paragraph (3)(E) because of marriage,
then, if such marriage ends (whether by death of the spouse,
divorce, or annulment), such annuity shall resume on the
first day of the month in which the marriage ends, but only
if—
‘‘(A) any lump sum paid is returned to the
Fund; and
‘‘(B) that individual is not otherwise ineligible
for such annuity.’’.
(b) FEDERAL EMPLOYEES’ RETIREMENT SYSTEM.—
Section 8443(b) of such title is amended by adding at the
end the following: ‘‘If the annuity of a child under this sub-
chapter terminates under subparagraph (E) because of mar-
riage, then, if such marriage ends (whether by death of the
spouse, divorce, or annulment), such annuity shall resume
on the first day of the month in which the marriage ends,
but only if any lump sum paid is returned to the Fund,
and that individual is not otherwise ineligible for such an-
nuity.’’.
(c) HEALTH BENEFITS PROGRAM.—Section 8908 of
title 5, United States Code, is amended by adding at the
end the following:
‘‘(d) An individual—
‘‘(1) whose survivor annuity under section
8341(e) is terminated, and then later restored under
paragraph (4) thereof, or
‘‘(2) whose survivor annuity under section
8443(b) is terminated, and then later restored under
the last sentence thereof,
may, under regulations prescribed by the Office, enroll in
a health benefits plan described by section 8903 or 8903a
if such individual was covered by any such plan imme-
diately before such annuity so terminated.’’.
(d) APPLICABILITY.—The amendments made by this
section shall apply with respect to any termination of mar-
riage taking effect before, on, or after the date of the enact-
ment of this Act, except that no amount shall be payable
by reason of the amendments made by subsections (a) and
(b), respectively, except to the extent of any amounts accru-
ing for periods beginning on or after the first day of the
first month beginning on or after the later of—
(1) the date of the enactment of this Act; or
(2) the date as of which termination of marriage
takes effect.
Subtitle E—Life Insurance Benefits
SEC. 341. DOMESTIC RELATIONS ORDERS.
(a) IN GENERAL.—Section 8705 of title 5, United
States Code, is amended—
(1) in subsection (a) by striking ‘‘(a) The’’ and
inserting ‘‘(a) Except as provided in subsection (e),
the’’; and
(2) by adding at the end the following:
‘‘(e)(1) Any amount which would otherwise be paid to
a person determined under the order of precedence named
by subsection (a) shall be paid (in whole or in part) by
the Office to another person if and to the extent expressly
provided for in the terms of any court decree of divorce,
annulment, or legal separation, or the terms of any court
order or court-approved property settlement agreement inci-
dent to any court decree of divorce, annulment, or legal sep-
aration.
‘‘(2) For purposes of this subsection, a decree, order,
or agreement referred to in paragraph (1) shall not be effec-
tive unless it is received, before the date of the covered em-
ployee’s death, by the employing agency or, if the employee
has separated from service, by the Office.
‘‘(3) A designation under this subsection with respect
to any person may not be changed except—
‘‘(A) with the written consent of such person, if
received as described in paragraph (2); or
‘‘(B) by modification of the decree, order, or
agreement, as the case may be, if received as described
in paragraph (2).
‘‘(4) The Office shall prescribe any regulations nec-
essary to carry out this subsection, including regulations
for the application of this subsection in the event that 2
or more decrees, orders, or agreements, are received with
respect to the same amount.’’.
(b) DIRECTED ASSIGNMENT.—Section 8706(e) of title
5, United States Code, is amended—
(1) by striking ‘‘(e)’’ and inserting ‘‘(e)(1)’’; and
(2) by adding at the end the following:
‘‘(2) A court decree of divorce, annulment, or legal sep-
aration, or the terms of a court-approved property settle-
ment agreement incidental to any court decree of divorce,
annulment, or legal separation, may direct that an insured
employee or former employee make an irrevocable assign-
ment of the employee’s or former employee’s incidents of
ownership in insurance under this chapter (if there is no
previous assignment) to the person specified in the court
order or court-approved property settlement agreement.’’.
SEC. 342. EXCEPTION FROM PROVISIONS REQUIRING RE-
DUCTION IN ADDITIONAL OPTIONAL LIFE IN-
SURANCE.
(a) IN GENERAL.—Subsection (c) of section 8714b of
title 5, United States Code, is amended by adding at the
end the following:
‘‘(3)(A) The amount of additional optional insurance
continued under paragraph (2) shall be continued, without
any reduction under the last two sentences thereof, if—
‘‘(i) at the time of retirement, there is in effect
a designation under section 8705 under which the en-
tire amount of such insurance would be paid to an
individual who is permanently disabled; and
‘‘(ii) an election under subsection (d)(3) on be-
half of such individual is made in timely fashion.
‘‘(B) Notwithstanding subparagraph (A), any reduc-
tion required under paragraph (2) shall be made if—
‘‘(i) the additional optional insurance is not in
fact paid in accordance with the designation under
section 8705, as in effect at the time of retirement;
‘‘(ii) the Office finds that adequate arrangements
have not been made to ensure that the insurance pro-
vided under this section will be used only for the care
and support of the individual so designated; or
‘‘(iii) the election referred to in subparagraph
(A)(ii) terminates at any time before the death of the
individual who made such election.
‘‘(C) For purposes of this paragraph, the term ‘perma-
nently disabled’ shall have the meaning given such term
under regulations which the Office shall prescribe based on
subparagraphs (A) and (C) of section 1614(a)(3) of the So-
cial Security Act, except that, in applying subparagraph
(A) of such section for purposes of this subparagraph,
‘which can be expected to last permanently’ shall be sub-
stituted for ‘which has lasted or can be expected to last for
a continuous period of not less than twelve months’.’’.
(b) CONTINUED WITHHOLDINGS.—Subsection (d) of
such section 8714b is amended by adding at the end the
following:
‘‘(3)(A) To be eligible for unreduced additional op-
tional insurance under subsection (c)(3), the insured indi-
vidual shall be required to elect, at such time and in such
manner as the Office by regulation requires (including pro-
cedures for demonstrating compliance with the require-
ments of subsection (c)(3)), to have the full cost thereof con-
tinue to be withheld from the former employee’s annuity
or compensation, as the case may be, beginning as of when
such withholdings would otherwise cease under the second
sentence of paragraph (1).
‘‘(B) An election made by an insured individual under
subparagraph (A) (and withholdings pursuant thereto)
shall terminate in the event that—
‘‘(i) the insured individual—
‘‘(I) revokes such election; or
‘‘(II) makes any redesignation or other
change in the designation under section 8705 (as
in effect at the time of retirement); or
‘‘(ii) the Office finds, upon the application of the
insured individual or on its own initiative, that any
of the requirements or conditions for unreduced addi-
tional optional insurance under subsection (c)(3) are,
at any time, no longer met.’’.
(c) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section shall take effect on the date of the enact-
ment of this Act.
(2) ELECTION FOR CERTAIN INDIVIDUALS NOT
OTHERWISE ELIGIBLE.—The Office of Personnel Man-
agement shall prescribe regulations under which an
election under section 8714b(d)(3)(A) of title 5, Unit-
ed States Code (as amended by this section) may be
made, within 1 year after the date of the enactment
of this Act, by any individual not otherwise eligible
to make such an election, but only if such individ-
ual—
(A) separated from service on or after the
first day of the 50-month period ending on the
date of enactment of this Act; and
(B) would have been so eligible had the
amendments made by this section (and imple-
menting regulations) been in effect as of the indi-
vidual’s separation date (or, if earlier, the last
day for making such an election based on that
separation).
(3) WITHHOLDINGS.—
(A) PROSPECTIVE EFFECT.—If an individ-
ual makes an election under paragraph (2),
withholdings under section 8714b(d)(3)(A) of
such title 5 shall thereafter be made from such
individual’s annuity or compensation, as the
case may be.
(B) EARLIER
AMOUNTS.—If, pursuant to
such election, benefits are in fact paid in accord-
ance with section 8714b(c)(3) of such title 5
upon the death of the insured individual, an ap-
propriate reduction (computed under regulations
prescribed by the Office) shall be made in such
benefits to reflect the withholdings that—
(i) were not made (before the com-
mencement of withholdings under subpara-
graph (A)) by reason of the cessation of
withholdings under the second sentence of
section 8714b(d)(1) of such title; but
(ii) would have been made had the
amendments made by this section (and im-
plementing regulations) been in effect as of
the time described in paragraph (2)(B).
(4) NOTICE.—The Office shall, by publication in
the Federal Register and such other methods as it con-
siders appropriate, notify current and former Federal
employees as to the enactment of this section and any
benefits for which they might be eligible pursuant
thereto. Included as part of such notification shall be
a brief description of the procedures for making an
election under paragraph (2) and any other informa-
tion that the Office considers appropriate.
TITLE IV—REORGANIZATION
FLEXIBILITY
SEC. 401. VOLUNTARY REDUCTIONS IN FORCE.
Section 3502(f) of title 5, United States Code, is
amended to read as follows:
‘‘(f)(1) The head of an Executive agency or military
department may, in accordance with regulations prescribed
by the Office of Personnel Management—
‘‘(A) separate from service any employee who
volunteers to be separated under this subparagraph
even though the employee is not otherwise subject to
separation due to a reduction in force; and
‘‘(B) for each employee voluntarily separated
under subparagraph (A), retain an employee in a
similar position who would otherwise be separated
due to a reduction in force.
‘‘(2) The separation of an employee under paragraph
(1)(A) shall be treated as an involuntary separation due
to a reduction in force, except for purposes of priority place-
ment programs and advance notice.
‘‘(3) An employee with critical knowledge and skills
(as defined by the head of the Executive agency or military
department concerned) may not participate in a voluntary
separation under paragraph (1)(A) if the agency or depart-
ment head concerned determines that such participation
would impair the performance of the mission of the agency
or department (as applicable).
‘‘(4) The regulations prescribed under this section shall
incorporate the authority provided in this subsection.
‘‘(5) No authority under paragraph (1) may be exer-
cised after September 30, 2001.’’.
SEC. 402. NONREIMBURSABLE DETAILS TO FEDERAL AGEN-
CIES BEFORE A REDUCTION IN FORCE.
(a) IN GENERAL.—Section 3341 of title 5, United
States Code, is amended to read as follows:
‘‘§ 3341. Details; within Executive agencies and mili-
tary departments; employees affected by
reduction in force
‘‘(a) The head of an Executive agency or military de-
partment may detail employees, except those required by
law to be engaged exclusively in some specific work, among
the bureaus and offices of the agency or department.
‘‘(b) The head of an Executive agency or military de-
partment may detail to duties in the same or another agen-
cy or department, on a nonreimbursable basis, an employee
who has been identified by the employing agency as likely
to be separated from the Federal service by reduction in
force or who has received a specific notice of separation by
reduction in force.
‘‘(c)(1) Details under subsection (a)—
‘‘(A) may not be for periods exceeding 120 days;
and
‘‘(B) may be renewed (1 or more times) by writ-
ten order of the head of the agency or department, in
each particular case, for periods not exceeding 120
days each.
‘‘(2) Details under subsection (b)—
‘‘(A) may not be for periods exceeding 90 days;
and
‘‘(B) may not be renewed.
‘‘(d) The 120-day limitation under subsection (c)(1)
for details and renewals of details does not apply to the
Department of Defense in the case of a detail—
‘‘(1) made in connection with the closure or re-
alignment of a military installation pursuant to a
base closure law or an organizational restructuring of
the Department as part of a reduction in the size of
the armed forces or the civilian workforce of the De-
partment; and
‘‘(2) in which the position to which the employee
is detailed is eliminated on or before the date of the
closure, realignment, or restructuring.
‘‘(e) For purposes of this section—
‘‘(1) the term ‘base closure law’ means—
‘‘(A) section 2687 of title 10;
‘‘(B) title II of the Defense Authorization
Amendments and Base Closure and Realignment
Act; and
‘‘(C) the Defense Base Closure and Realign-
ment Act of 1990; and
‘‘(2) the term ‘military installation’—
‘‘(A) in the case of an installation covered
by section 2687 of title 10, has the meaning
given such term in subsection (e)(1) of such sec-
tion;
‘‘(B) in the case of an installation covered
by the Act referred to in subparagraph (B) of
paragraph (1), has the meaning given such term
in section 209(6) of such Act; and
‘‘(C) in the case of an installation covered
by the Act referred to in subparagraph (C) of
paragraph (1), has the meaning given such term
in section 2910(4) of such Act.’’.
(b) CLERICAL AMENDMENT.—The table of sections for
chapter 33 of title 5, United States Code, is amended by
striking the item relating to section 3341 and inserting the
following:
‘‘3341. Details; within Executive agencies and military departments; employees
affected by reduction in force.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect 30 days after the date of the enact-
ment of this Act.
TITLE V—SOFT-LANDING
PROVISIONS
SEC. 501. TEMPORARY CONTINUATION OF FEDERAL EM-
PLOYEES’ LIFE INSURANCE.
Section 8706 of title 5, United States Code, is amended
by adding at the end the following:
‘‘(g)(1) Notwithstanding subsections (a) and (b) of this
section, an employee whose coverage under this chapter
would otherwise terminate due to a separation described in
paragraph (3) shall be eligible to continue basic insurance
coverage described in section 8704 in accordance with this
subsection and regulations the Office may prescribe, if the
employee arranges to pay currently into the Employees Life
Insurance Fund, through the former employing agency or,
if an annuitant, through the responsible retirement system,
an amount equal to the sum of—
‘‘(A) both employee and agency contributions
which would be payable if separation had not oc-
curred; plus
‘‘(B) an amount, determined under regulations
prescribed by the Office, to cover necessary adminis-
trative expenses, but not to exceed 2 percent of the
total amount under subparagraph (A).
‘‘(2) Continued coverage under this subsection may not
extend beyond the date which is 18 months after the effective
date of the separation which entitles a former employee to
coverage under this subsection. Termination of continued
coverage under this subsection shall be subject to provision
for temporary extension of life insurance coverage and for
conversion to an individual policy of life insurance as pro-
vided by subsection (a). If an eligible employee does not
make an election for purposes of this subsection, the employ-
ee’s insurance will terminate as provided by subsection (a).
‘‘(3)(A) This subsection shall apply to an employee
who, on or after the date of enactment of this subsection
and before the applicable date under subparagraph (B)—
‘‘(i) is involuntarily separated from a position
due to a reduction in force, or separates voluntarily
from a position the employing agency determines is
a 
‘surplus 
position’ 
as 
defined 
by 
section
8905(d)(4)(C); and
‘‘(ii) is insured for basic insurance under this
chapter on the date of separation.
‘‘(B) The applicable date under this subparagraph is
October 1, 2001, except that, for purposes of any involun-
tary separation referred to in subparagraph (A) with re-
spect to which appropriate specific notice is afforded to the
affected employee before October 1, 2001, the applicable date
under this subparagraph is February 1, 2002.’’.
SEC. 502. CONTINUED ELIGIBILITY FOR HEALTH INSUR-
ANCE.
(a) CONTINUED ELIGIBILITY AFTER RETIREMENT.—
Section 8905 of title 5, United States Code, is amended—
(1) in the first sentence of subsection (b) by strik-
ing ‘‘An’’ and inserting ‘‘Subject to subsection (g),
an’’; and
(2) by adding at the end the following:
‘‘(g)(1) The Office shall waive the requirements for con-
tinued enrollment under subsection (b) in the case of any
individual who, on or after the date of the enactment of
this subsection and before the applicable date under para-
graph (2)—
‘‘(A) is involuntarily separated from a position,
or voluntarily separated from a surplus position, in
or under an Executive agency due to a reduction in
force,
‘‘(B) based on the separation referred to in sub-
paragraph (A), retires on an immediate annuity
under subchapter III of chapter 83 or subchapter II
of chapter 84, and
‘‘(C) is enrolled in a health benefits plan under
this chapter as an employee immediately before retire-
ment.
‘‘(2) The applicable date under this paragraph is Octo-
ber 1, 2001, except that, for purposes of any involuntary
separation referred to in paragraph (1)(A) with respect to
which appropriate specific notice is afforded to the affected
employee before October 1, 2001, the applicable date under
this paragraph is February 1, 2002.
‘‘(3) For purposes of this subsection, the term ‘surplus
position’, with respect to an agency, means any position
determined in accordance with regulations under section
8905a(d)(4)(C) for such agency.’’.
(b) TEMPORARY
CONTINUED
ELIGIBILITY
AFTER
BEING INVOLUNTARILY SEPARATED.—Section 8905a(d)(4)
of title 5, United States Code, is amended—
(1) in subparagraph (A) by striking ‘‘the De-
partment of Defense’’ and inserting ‘‘an Executive
agency’’; and
(2) by amending subparagraph (C) to read as
follows:
‘‘(C) For purposes of this paragraph, the term ‘surplus
position’ means a position that, as determined under regu-
lations prescribed by the head of the agency involved, is
identified during planning for a reduction in force as being
no longer required and is designated for elimination during
the reduction in force.’’.
SEC. 503. PRIORITY PLACEMENT PROGRAMS FOR FEDERAL
EMPLOYEES AFFECTED BY A REDUCTION IN
FORCE.
(a) IN GENERAL.—Subchapter I of chapter 33 of title
5, United States Code, is amended by adding at the end
the following:
‘‘(e) An individual is eligible for reemployment prior-
ity under this section for 2 years from the effective date
of the reduction in force from which the individual will be,
or has been, separated under section 3502.
‘‘(f) An individual loses eligibility for reemployment
priority under this section when the individual—
‘‘(1) requests removal in writing;
‘‘(2) accepts or declines a bona fide offer under
this section or fails to accept such an offer within the
period of time allowed for such acceptance; or
‘‘(3) separates from the agency before being sepa-
rated under section 3502.
A present or former employee who declines a position with
a representative rate (or equivalent) that is less than the
rate of the position from which the individual was sepa-
rated under section 3502 retains eligibility for positions
with a higher representative rate up to the rate of the indi-
vidual’s last position.
‘‘(g) Whenever more than one individual is qualified
for a position under this section, the agency shall select the
most highly qualified individual, subject to subsection (d).
‘‘(h) The Office of Personnel Management shall issue
regulations to implement this section.’’.
(b) CLERICAL AMENDMENT.—The table of sections for
chapter 33 of title 5, United States Code, is amended by