I
111th CONGRESS
1st Session
H. R. 1263
IN THE HOUSE OF REPRESENTATIVES
March 3, 2009
Mr. Lynch introduced the following bill; which was referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend title 5, United States Code, to provide for the automatic enrollment of new participants in the Thrift Savings Plan, and to clarify the method for computing certain annuities based on part-time service; to allow certain employees of the District of Columbia to have certain periods of service credited for purposes relating to retirement eligibility; and for other purposes.
Short title; table of contents
Short title
This Act may be cited
as the Federal Retirement Reform Act
of 2009
.
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Title I—THRIFT SAVINGS PLAN ENHANCEMENT
Sec. 101. Short title.
Sec. 102. Automatic enrollments.
Sec. 103. Qualified Roth contribution program.
Sec. 104. Authority to establish self-directed investment window.
Sec. 105. Reporting requirements.
Sec. 106. Acknowledgement of risk.
Sec. 107. Credit for unused sick leave.
Title II—Computation of certain annuities based on part-time service
Sec. 201. Computation of certain annuities based on part-time service.
Sec. 202. Applicability.
Title III—Retirement Credit For Service of Certain Employees Transferred From District of Columbia Service to Federal Service
Sec. 301. Short title.
Sec. 302. Retirement Credit For Service of Certain Employees Transferred From District of Columbia Service to Federal Service.
Sec. 303. Qualifying District of Columbia Service Defined.
Sec. 304. Certification of Service.
Title IV—Distributions From Governmental Retirement Plans For Health and Long-Term Care Insurance
Sec. 401. Distributions from governmental retirement plans for health and long-term care insurance for Federal annuitants and members and former members of the Armed Forces of the United States.
THRIFT SAVINGS PLAN ENHANCEMENT
Short title
This title may be cited
as the Thrift Savings Plan Enhancement
Act of 2009
.
Automatic enrollments
In general
Section 8432(b) of title 5, United States Code, is amended by striking paragraphs (2) through (4) and inserting the following:
The Board shall by regulation provide for an eligible individual to be automatically enrolled to make contributions under subsection (a) at the default percentage of basic pay.
For purposes of this paragraph, the default percentage shall be equal to 3 percent or such other percentage, not less than 2 percent nor more than 5 percent, as the Board may by regulation prescribe.
The regulations shall include provisions under which any individual who would otherwise be automatically enrolled in accordance with subparagraph (A) may—
modify the percentage or amount to be contributed pursuant to automatic enrollment, effective from the start of such enrollment; or
decline automatic enrollment altogether.
For purposes of this paragraph, the term eligible individual means any individual who, after any regulations under subparagraph (A) first take effect, is appointed, transferred, or reappointed to a position in which that individual is eligible to contribute to the Thrift Savings Fund.
Sections 8351(a)(1), 8440a(a)(1), 8440b(a)(1), 8440c(a)(1), 8440d(a)(1), and 8440e(a)(1) shall be applied in a manner consistent with the purposes of this paragraph.
.
Technical amendment
Section 8432(b)(1) of title 5, United States Code, is amended by striking the parenthetical matter in subparagraph (B).
Qualified Roth contribution program
In general
Subchapter III of chapter 84 of title 5, United States Code, is amended by inserting after section 8432c the following:
Qualified Roth contribution program
Definitions
For purposes of this section—
the term qualified Roth contribution program means a program described in paragraph (1) of section 402A(b) of the Internal Revenue Code of 1986 which meets the requirements of paragraph (2) of such section; and
the terms designated Roth contribution and elective deferral have the meanings given such terms in section 402A of the Internal Revenue Code of 1986.
Authority To establish
The Board shall by regulation provide for the inclusion in the Thrift Savings Plan of a qualified Roth contribution program, under such terms and conditions as the Board may prescribe.
Required provisions
The regulations under subsection (b) shall include—
provisions under which an election to make designated Roth contributions may be made—
by any individual who is eligible to make contributions under section 8351, 8432(a), 8440a, 8440b, 8440c, 8440d, or 8440e; and
by any individual, not described in subparagraph (A), who is otherwise eligible to make elective deferrals under the Thrift Savings Plan;
any provisions which may, as a result of
enactment of this section, be necessary in order to clarify the meaning of any
reference to an account
made in section 8432(f), 8433, 8434(d),
8435, 8437, or any other provision of law; and
any other provisions which may be necessary to carry out this section.
.
Clerical amendment
The analysis for chapter 84 of title 5, United States Code, is amended by inserting after the item relating to section 8432c the following:
8432d. Qualified Roth contribution program.
.
Authority to establish self-directed investment window
In general
Section 8438(b)(1) of title 5, United States Code, is amended—
in subparagraph
(D), by striking and
at the end;
in subparagraph
(E), by striking the period and inserting ; and
; and
by adding after subparagraph (E) the following:
a self-directed investment window, if the Board authorizes such window under paragraph (5).
.
Requirements
Section 8438(b) of title 5, United States Code, is amended by adding at the end the following:
The Board may authorize the addition of a self-directed investment window under the Thrift Savings Plan if the Board determines that such addition would be in the best interests of participants.
The self-directed investment window shall be limited to—
low-cost, passively-managed index funds that offer diversification benefits; and
other investment options, if the Board determines the options to be appropriate retirement investment vehicles for participants.
The Board shall ensure that any administrative expenses related to use of the self-directed investment window are borne solely by the participants who use such window.
The Board may establish such other terms and conditions for the self-directed investment window as the Board considers appropriate to protect the interests of participants, including requirements relating to risk disclosure.
The Board shall consult with the Employee Thrift Advisory Council (established under section 8473) before establishing any self-directed investment window.
.
Reporting requirements
Annual report
The Board shall, not later than June 30 of each year, submit to Congress an annual report on the operations of the Thrift Savings Plan. Such report shall include, for the prior calendar year, information on the number of participants as of the last day of such prior calendar year, the median balance in participants’ accounts as of such last day, demographic information on participants, the percentage allocation of amounts among investment funds or options, the status of the development and implementation of the self-directed investment window, the diversity demographics of any company, investment adviser, or other entity retained to invest and manage the assets of the Thrift Savings Fund, and such other information as the Board considers appropriate. A copy of each annual report under this subsection shall be made available to the public through an Internet website.
Reporting of fees and other information
In general
The Board shall include in the periodic statements provided to participants under section 8439(c) the amount of the investment management fees, administrative expenses, and any other fees or expenses paid with respect to each investment fund and option under the Thrift Savings Plan. Any such statement shall also provide a statement notifying participants as to how they may access the annual report described in subsection (a), as well as any other information concerning the Thrift Savings Plan that might be useful.
Use of estimates
For purposes of providing the information required under this subsection, the Executive Director may provide a reasonable and representative estimate of any fees or expenses described in paragraph (1) and shall indicate any such estimate as being such an estimate. Any such estimate shall be based on the previous year’s experience.
Definitions
For purposes of this section—
the term Board has the meaning given such term by 8401(5) of title 5, United States Code;
the term participant has the meaning given such term by section 8471(3) of title 5, United States Code; and
the term account means an account established under section 8439 of title 5, United States Code.
Acknowledgement of risk
In general
Section 8439(d) of title 5, United States Code, is amended—
by striking the
matter after who elects to invest in
and before shall
sign an acknowledgement
and inserting any investment fund or
option under this chapter, other than the Government Securities Investment
Fund,
; and
by striking
either such Fund
and inserting any such fund or
option
.
Coordination with provisions relating to investments in the absence of an election
Subsection (d) of section 8439 of title 5, United States Code (as amended by subsection (a)) is further amended—
by redesignating subsection (d) as subsection (d)(1); and
by adding at the end the following:
In the case of an investment made under section 8438(c)(2) in any fund or option to which paragraph (1) would otherwise apply, the participant involved shall, for purposes of this subsection, be deemed—
to have elected to invest in such fund or option; and
to have executed the acknowledgement required under paragraph (1).
The Executive Director shall prescribe regulations under which written notice shall be provided to a participant whenever an investment is made under section 8438(c)(2)(B) on behalf of such participant in the absence of an affirmative election described in section 8438(c)(1).
The regulations shall ensure that any such notice shall be provided to the participant within 7 calendar days after the effective date of the default election.
For purposes of this paragraph, the term participant has the meaning given such term by section 8471(3).
.
Coordination with provisions relating to fiduciary responsibilities, liabilities, and penalties
Section 8477(e)(1)(C) of title 5, United States Code, is amended—
by redesignating subparagraph (C) as subparagraph (C)(i); and
by adding at the end the following:
A fiduciary shall not be liable under subparagraph (A), and no civil action may be brought against a fiduciary—
for providing for the automatic enrollment of a participant in accordance with section 8432(b)(2)(A);
for enrolling a participant in a default investment fund in accordance with section 8438(c)(2)(B); or
for allowing a participant to invest through the self-directed investment window or for establishing restrictions applicable to participants’ ability to invest through the self-directed investment window.
.
Credit for unused sick leave
In general
Section 8415 of title 5, United States Code, is amended—
by redesignating the second subsection (k) and subsection (l) as subsections (l) and (m), respectively; and
in subsection (l) (as so redesignated by paragraph (1))—
by striking
(l) In computing
and inserting (l)(1) In
computing
; and
by adding at the end the following:
Except as provided in paragraph (1), in computing an annuity under this subchapter, the total service of an employee who retires on an immediate annuity or who dies leaving a survivor or survivors entitled to annuity includes the days of unused sick leave to his credit under a formal leave system, except that these days will not be counted in determining average pay or annuity eligibility under this subchapter. For purposes of this subsection, in the case of any such employee who is excepted from subchapter I of chapter 63 under section 6301(2)(x)–(xiii), the days of unused sick leave to his credit include any unused sick leave standing to his credit when he was excepted from such subchapter.
.
Exception from deposit requirement
Section 8422(d)(2) of title 5, United States
Code, is amended by striking section 8415(k)
and inserting
paragraph (1) or (2) of section 8415(l)
.
Effective date
The amendments made by this section shall apply with respect to annuities computed based on separations occurring on or after the date of enactment of this Act.
Computation of certain annuities based on part-time service
Computation of certain annuities based on part-time service
Section 8339(p) of title 5, United States Code, is amended by adding at the end the following:
In the administration of paragraph (1)—
subparagraph (A) of such paragraph shall apply with respect to service performed before, on, or after April 7, 1986; and
subparagraph (B) of such paragraph—
shall apply with respect to that portion of any annuity which is attributable to service performed on or after April 7, 1986; and
shall not apply with respect to that portion of any annuity which is attributable to service performed before April 7, 1986.
.
Applicability
The amendment made by section 201 shall be effective with respect to any annuity, entitlement to which is based on a separation from service occurring on or after the date of enactment of this Act.
Retirement Credit For Service of Certain Employees Transferred From District of Columbia Service to Federal Service
Short title
This Act may be cited as
the District of Columbia Court,
Offender Supervision, Parole, and Public Defender Employees Equity Act of
2009
.
Retirement Credit For Service of Certain Employees Transferred From District of Columbia Service to Federal Service
In General
Any individual who is treated as an employee of the Federal government for purposes of chapter 83 or chapter 84 of title 5, United States Code, on or after the date of enactment of this Act who performed qualifying District of Columbia service shall be entitled to have such service included in calculating the individual’s creditable service under sections 8332 or 8411 of title 5, United States Code, but only for purposes of the following provisions of such title:
Sections 8333 and 8410 (relating to eligibility for annuity).
Sections 8336 (other than subsections (d), (h), and (p) thereof) and 8412 (relating to immediate retirement).
Sections 8338 and 8413 (relating to deferred retirement).
Sections 8336(d), 8336(h), 8336(p), and 8414 (relating to early retirement).
Section 8341 and subchapter IV of chapter 84 (relating to survivor annuities).
Section 8337 and subchapter V of chapter 84 (relating to disability benefits).
Treatment of Detention Officer Service as Law Enforcement Officer Service
Any portion of an individual’s qualifying District of Columbia service which consisted of service as a detention officer under section 2604(2) of the District of Columbia Government Comprehensive Merit Personnel Act of 1978 (sec. 1–626.04(2), D.C. Official Code) shall be treated as service as a law enforcement officer under sections 8331(20) or 8401(17) of title 5, United States Code, for purposes of applying subsection (a) with respect to the individual.
Service Not Included in Computing Amount of Any Annuity
Qualifying District of Columbia service shall not be taken into account for purposes of computing the amount of any benefit payable out of the Civil Service Retirement and Disability Fund.
Qualifying District of Columbia Service Defined
In this title, qualifying District of
Columbia service
means any of the following:
Service performed by an individual as a nonjudicial employee of the District of Columbia courts—
which was performed prior to the effective date of the amendments made by section 11246(b) of the Balanced Budget Act of 1997; and
for which the individual did not ever receive credit under the provisions of subchapter III of chapter 83 or chapter 84 of title 5, United States Code (other than by virtue of section 8331(1)(iv) of such title).
Service performed by an individual as an employee of an entity of the District of Columbia government whose functions were transferred to the Pretrial Services, Parole, Adult Supervision, and Offender Supervision Trustee under section 11232 of the Balanced Budget Act of 1997—
which was performed prior to the effective date of the individual’s coverage as an employee of the Federal Government under section 11232(f) of such Act; and
for which the individual did not ever receive credit under the provisions of subchapter III of chapter 83 or chapter 84 of title 5, United States Code (other than by virtue of section 8331(1)(iv) of such title).
Service performed by an individual as an employee of the District of Columbia Public Defender Service—
which was performed prior to the effective date of the amendments made by section 7(e) of the District of Columbia Courts and Justice Technical Corrections Act of 1998; and
for which the individual did not ever receive credit under the provisions of subchapter III of chapter 83 or chapter 84 of title 5, United States Code (other than by virtue of section 8331(1)(iv) of such title).
In the case of an individual who was an employee of the District of Columbia Department of Corrections who was separated from service as a result of the closing of the Lorton Correctional Complex and who was appointed to a position with the Bureau of Prisons, the District of Columbia courts, the Pretrial Services, Parole, Adult Supervision, and Offender Supervision Trustee, the United States Parole Commission, or the District of Columbia Public Defender Service, service performed by the individual as an employee of the District of Columbia Department of Corrections—
which was performed prior to the effective date of the individual’s coverage as an employee of the Federal Government; and
for which the individual did not ever receive credit under the provisions of subchapter III of chapter 83 or chapter 84 of title 5, United States Code (other than by virtue of section 8331(1)(iv) of such title).
Certification of Service
The Office of Personnel Management shall accept the certification of the appropriate personnel official of the government of the District of Columbia or other independent employing entity concerning whether an individual performed qualifying District of Columbia service and the length of the period of such service the individual performed.
Distributions From Governmental Retirement Plans For Health and Long-Term Care Insurance
Distributions from governmental retirement plans for health and long-term care insurance for Federal annuitants and members and former members of the Armed Forces of the United States
In general
Subsection (l) of
section 402 of the Internal Revenue Code (relating to distributions from
governmental plans for health and long-term care insurance) is amended by
inserting , a Federal annuitant, or a member or former member of the
uniformed services of the United States
after eligible retired
public safety officer
.
Definitions
Paragraph (4) of section 402(l) of such Code (relating to definitions) is amended by adding at the end the following new subparagraphs:
Federal annuitant
The term Federal annuitant means an annuitant, as defined by paragraph (3) of section 8901 of title 5, United States Code.
Member or former member of the uniformed services of the United States
The term member or former member of the uniformed services of the United States shall have the same meaning given such term in chapter 55 of title 10, United States Code.
.
Conforming amendments
Paragraphs (3)(B)
and (4)(D) of section 402(l) of such Code are each amended by inserting
, Federal annuitant, or member or former member of the uniformed
services of the United States, as the case may be,
after
eligible retired public safety officer
both places it
appears.
Effective date
The amendments made by this section shall apply to distributions in taxable years beginning after December 31, 2008.