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SECTION 1. SHORT TITLE.

This Act may be cited as the ''Deferred Benefits Adjustment Act of
2013''.

SEC. 2. INDEXATION OF DEFERRED ANNUITIES.

(a) Amendments to Subchapter III of Chapter 83.--Section 8338 of
title 5, United States Code, is amended--
(1) in subsection (d) by striking ''(d) An'' and inserting
''(d) Subject to subsection (e), an''; and
(2) by adding at the end the following:
''(e)(1) The average pay used in the computation of an annuity
authorized by this section shall be equal to the average pay described
in section 8331(4), increased by the percentage adjustments
(compounded) in rates of pay of the General Schedule taking effect
during the period--
''(A) beginning on the day after the date of the separation
on which title to annuity is based, and
''(B) ending on the day before the commencement date of
such annuity.
''(2) In the case of a former employee or Member who dies after
having separated from the service with title to an annuity authorized
by this section but before having established a valid claim for such
annuity, the average pay used in the computation of any survivor
annuity payable based on the service of such former employee or Member
shall be increased in the manner described in paragraph (1), except
that, in applying subparagraph (B) of paragraph (1) for purposes of
this paragraph, the commencement date of such survivor annuity shall be
used instead of the commencement date of the annuity referred to in
such subparagraph.
''(3) Average pay shall not be increased by reason of any
adjustment under this subsection to an amount which exceeds the rate of
basic pay that, as of the day before the commencement date of the
annuity or survivor annuity involved, is payable for the position that
was held by the employee or Member at the time of earning the highest
rate of pay taken into account in computing such employee's or Member's
average pay, as determined under regulations of the Office.''.
(b) Amendment to Chapter 84.--Section 8415 of title 5, United
States Code, is amended by adding at the end the following:
''(n)(1) The average pay used in the computation of a deferred
annuity under section 8413 shall be equal to the average pay described
in section 8401(3), increased by the percentage adjustments
(compounded) in rates of pay of the General Schedule taking effect
during the period--
''(A) beginning on the day after the date of the separation
on which title to annuity is based, and
''(B) ending on the day before the commencement date of
such annuity.
''(2) In the case of a former employee or Member who dies after
having separated from the service with title to a deferred annuity
referred to in paragraph (1) but before having established a valid
claim for such annuity, the average pay used in the computation of any
survivor annuity payable based on the service of such former employee
or Member shall be increased in the manner described in paragraph (1),
except that, in applying subparagraph (B) of paragraph (1) for purposes
of this paragraph, the commencement date of such survivor annuity shall
be used instead of the commencement date of the annuity referred to in
such subparagraph.
''(3) Average pay shall not be increased by reason of any
adjustment under this subsection to an amount which exceeds the rate of
basic pay that, as of the day before the commencement date of the
annuity or survivor annuity involved, is payable for the position that
was held by the employee or Member at the time of earning the highest
rate of pay taken into account in computing such employee's or Member's
average pay, as determined under regulations of the Office.''.
(c) Amendments Relating to Individuals Becoming Subject to FERS by
Election.--
(1) Computation of a deferred annuity.--Paragraph (6) of
section 302(a) of the Federal Employees' Retirement System Act
of 1986 (5 U.S.C. 8331 note) is amended by adding at the end
the following:
''(C) In determining average pay under this paragraph for
purposes of computing a deferred annuity under section 8413 of
such title--
''(i) the provisions of section 8338(e)(1) and (3)
of such title shall apply, to the extent that such
annuity is computed under paragraph (4); and
''(ii) the provisions of section 8415(n)(1) and (3)
of such title shall apply, to the extent that such
annuity is computed under paragraph (5).''.
(2) Computation of a survivor annuity.--Paragraph (9) of
such section 302(a) is amended by striking ''(9)'' and
inserting ''(9)(A)'', and by adding at the end the following:
''(B) In computing an annuity under paragraph (3) for
purposes of determining the amount of a survivor annuity under
subchapter IV of chapter 84 of title 5, United States Code, to
which the survivor is entitled based on the service of a former
employee or Member who dies in the circumstances described in
section 8415(n)(2) of such title--
''(i) paragraph (6)(C)(i) shall apply, to the
extent that such annuity is computed under paragraph
(4); and
''(ii) paragraph (6)(C)(ii) shall apply, to the
extent that such annuity is computed under paragraph
(5).''.
(d) Conforming Amendments.--(1) Section 8331(10) of title 5, United
States Code, is amended by inserting ''former employee or Member,''
before ''or annuitant''.
(2) Section 8341(h)(1) of title 5, United States Code, is amended
by striking ''or former Member who was separated from the service with
title to a deferred annuity under section 8338(b) of this title'' and
inserting ''or former employee or Member who died after having
separated from the service with title to a deferred annuity under
section 8338 but before having established a valid claim for
annuity,''.
(3) Clause (iii) of section 8341(h)(2)(B) of title 5, United States
Code, is amended by striking ''a Member'' and inserting ''an employee
or Member''.

SEC. 3. AMENDMENT TO PROVIDE THAT THE WIDOW OR WIDOWER OF A DEFERRED
ANNUITANT WHO DIES BEFORE ESTABLISHING A VALID CLAIM FOR
ANNUITY UNDER CSRS SHALL BE ELIGIBLE FOR A SURVIVOR
ANNUITY IN THE SAME WAY AS APPLIES CURRENTLY UNDER FERS.

Subsection (f) of section 8341 of title 5, United States Code, is
amended to read as follows:
''(f) If an employee or Member dies after having separated from the
service with title to a deferred annuity under section 8338 but before
having established a valid claim for annuity, and is survived by a
widow or widower to whom married on the date of separation, the widow
or widower--
''(1) is entitled to an annuity equal to 55 percent of the
deferred annuity of the employee or Member commencing on the
day after the employee or Member dies and terminating on the
last day of the month before the widow or widower dies or
remarries before age 55; or
''(2) may elect to receive the lump-sum credit instead of
annuity if the widow or widower is the individual who would be
entitled to the lump-sum credit and files application therefor
with the Office before the award of the annuity.
Notwithstanding the preceding sentence, an annuity payable
under this subsection to the widow or widower of a former
employee or Member may not exceed the difference between--
''(A) the annuity which would otherwise be payable to such
widow or widower under this subsection; and
''(B) the amount of the survivor annuity payable to any
former spouse of such former employee or Member under
subsection (h).''.

SEC. 4. EFFECTIVE DATES.

(a) Amendments Made by Section 2.--
(1) In general.--The amendments made by section 2 shall
apply to any annuity or survivor annuity commencing before, on,
or after the date of the enactment of this Act, subject to
paragraph (2).
(2) Recomputations.--In the case of any individual who is
entitled to an annuity or survivor annuity based on a
separation from service which occurred before the date of the
enactment of this Act--
(A) such annuity or survivor annuity shall be
recomputed to take into account the amendments made by
section 2 only if application therefor is made within
12 months after the effective date of regulations
prescribed by the Office of Personnel Management to
carry out such amendments; and
(B) any change in an annuity or survivor annuity
resulting from a recomputation under subparagraph (A)
shall be effective only with respect to amounts
accruing for months beginning on or after the date of
the enactment of this Act.
(b) Amendment Made by Section 3.--The amendment made by section 3
shall take effect as of the date of the enactment of this Act. Upon
timely application to the Office of Personnel Management, such
amendment shall also apply to the widow or widower of a former employee
or Member who died before such date of enactment, except that no amount
shall be payable--
(1) for any period beginning before such date of enactment;
or
(2) in any case in which all annuity rights under
subchapter III of chapter 83 of title 5, United States Code,
have been voided due to the lump-sum credit having been taken.
(c) Savings Provision.--Nothing in section 3 shall affect the right
of an individual to a survivor annuity, based on a death occurring on
or after the date of the enactment of this Act, if such individual
would (upon filing claim therefor) have been entitled to such annuity
had section 3 not been enacted.
(d) Definitions.--For purposes of this section--
(1) the terms ''widow'' and ''widower'' have the respective
meanings given them by section 8341 of title 5, United States
Code; and
(2) the term ''lump-sum credit'' has the meaning given such
term by section 8331(8) of such title.
Deferred Benefits Adjustment Act of 2013 - Amends federal civil service law to provide for the indexation of deferred annuities, including survivor annuities, under the Civil Service Retirement System (CSRS) and the Federal Employees' Retirement System (FERS) and for individuals becoming subject to FERS by election.Terminates the entitlement of a survivor who remarries before age 55 (currently, who remarries at any age) to an annuity based on the service of a deferred annuitant who dies before establishing a valid claim for a CSRS annuity.