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115th Congress } { Rept. 115-946
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
======================================================================
CORRECTING MISCALCULATIONS IN VETERANS' PENSIONS ACT
_______
September 12, 2018.--Committee to the Committee of the whole house on
the State of the Union and ordered to be printed
_______
Mr. Gowdy, from the Committee on Oversight and Government Reform,
submitted the following
R E P O R T
[To accompany H.R. 4431]
[Including cost estimate of the Congressional Budget Office]
The Committee on Oversight and Government Reform, to whom
was referred the bill (H.R. 4431) to amend title 5, United
States Code, to provide for interest payments by agencies in
the case of administrative error in processing certain annuity
deposits for prior military service, having considered the
same, report favorably thereon without amendment and recommend
that the bill do pass.
CONTENTS
Page
Summary and Purpose of the Legislation........................... 2
Background and Need for Legislation.............................. 2
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 3
Statement of General Performance Goals and Objectives............ 3
Legislative History.............................................. 3
Committee Consideration.......................................... 3
Roll Call Votes.................................................. 4
Explanation of Amendments........................................ 4
Application of Law to the Legislative Branch..................... 4
Duplication of Federal Programs.................................. 4
Disclosure of Directed Rule Makings.............................. 4
Federal Advisory Committee Act................................... 4
Unfunded Mandates Statement...................................... 4
Earmark Identification........................................... 5
Committee Estimate............................................... 5
New Budget Authority and Congressional Budget Office Cost
Estimate....................................................... 5
Section-by-Section Analysis...................................... 6
Correspondence................................................... 7
Changes in Existing Law Made by the Bill, as Reported............ 9
Summary and Purpose of the Legislation
H.R. 4431, the Correcting Miscalculations in Veterans'
Pensions Act provides permissive authority to agencies to pay
interest accrued on Federal civilian deposits made by former
military members if the interest accrued because of an
administrative error.
Background and Need for Legislation
Current Federal retirement law allows former members of the
military who become Federal civilian employees to voluntarily
elect to pay a deposit into the Federal employee pension fund,
also known as the Civil Service Retirement and Disability
Fund.\1\ A deposit allows time served in the military after
1956 to be counted as creditable service toward annuity
eligibility.\2\ It also allows an individual to increase the
amount of his or her pension upon retirement by counting basic
pay during creditable military service in the ``high-three''
annuity computation.\3\
---------------------------------------------------------------------------
\1\5 U.S.C. Sec. 8334(j)(1)(A).
\2\Office Of Personnel Management, CSRS/FERS Handbook 3, 39 (1998)
[hereinafter ``OPM Retirement Handbook''].
\3\Id.
---------------------------------------------------------------------------
Under the pre-1986 Civil Service Retirement System (CSRS),
military service deposits are equivalent to seven percent of
military basic pay.\4\ Under the Federal Employees Retirement
System (FERS), military service deposits are equivalent to
three percent of military basic pay.\5\ Military service
deposits must be paid before an individual leaves Federal
service.\6\ Generally, individuals wishing to pay a military
service deposit must do so within two years of beginning
civilian service. After this grace period, the individual must
pay interest on the deposit.\7\
---------------------------------------------------------------------------
\4\5 U.S.C. Sec. 8334(j)(1)(A).
\5\U.S.C. Sec. 8422(e)(1)(A).
\6\OPM Retirement Handbook supra note 2, at 5, 42.
\7\Id., at 20, 46.
---------------------------------------------------------------------------
Occasionally, administrative errors arise while processing
an individual's military service deposit. A 1996 Government
Accountability Office (GAO) decision provides such an
example.\8\ In 1991, a Department of Energy (DOE) civilian
employee applied to make a deposit to his annuity for prior
periods of military service.\9\ DOE originally calculated his
deposit at the three percent required for employees covered by
FERS, and upon payment, the employee received a letter stating
his deposit had been paid in full.\10\ In 1995, however, the
agency discovered the employee was actually covered under CSRS,
and the deposit should have been calculated at the higher seven
percent level.\11\ The higher deposit, plus the additional
interest that had accrued, was nearly $14,000.\12\
---------------------------------------------------------------------------
\8\Gov't Accountability Office, File B-270151.3, Matter of George
W. Schlossnagle--Post-1956 Military Service Deposit Decision 1-2
(1996).
\9\Id.
\10\Id.
\11\Id.
\12\Id.
---------------------------------------------------------------------------
The employee argued he should not have to pay additional
interest caused by DOE's error.\13\ As the OPM retirement
handbook makes clear, there is no provision in law or
regulation for a complete waiver of interest on military
deposit accounts.\14\ DOE thus requested GAO's decision on
whether the agency could use appropriated funds to pay for the
interest caused by DOE's error.\15\ In making its decision, GAO
referred again to OPM's retirement handbook, which states, ``If
the agency determines that its errors caused the employee to be
liable for additional interest, and the agency has
authorization to spend monies for this purpose, it may pay, on
behalf of the employee, the interest charges caused by its
errors.''\16\ GAO found no specific authorization for DOE to
pay the interest and noted there is no agency obligation under
section 8334(j) of title 5, United States Code--relating to
military service deposits under CSRS--to pay such interest.\17\
---------------------------------------------------------------------------
\13\Id.
\14\OPM Retirement Handbook, supra note 2, at 28, 47.
\15\Gov't Accountability Office, supra note 8.
\16\Id., at 29, 47 (emphasis added).
\17\GAO Decision, supra note 8, at 4-5.
---------------------------------------------------------------------------
The Correcting Miscalculations in Veterans' Pensions Act
remedies this loophole by authorizing all agencies to pay
interest due to administrative errors in calculating and
processing a military service deposit. This coverage will
extend to both military service deposits under CSRS and FERS
and prevent confusion as to whether an agency may pay to fix
its own mistakes.
Statement of Oversight Findings and Recommendations of the Committee
In accordance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the previous section.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goal or objective of this bill is to provide for interest
payments by agencies in the case of administrative error in
processing certain annuity deposits for prior military service.
Legislative History
On November 16, 2017, Representative Earl ``Buddy'' Carter
(R-GA) introduced H.R. 4431, the Correcting Miscalculations in
Veterans' Pensions Act, with Representatives Jody Hice (R-GA),
Jim Banks (R-IN), Mark Meadows (R-NC), Karen Handel (R-GA),
Clay Higgins (R-LA), Jimmy Gomez (D-CA), and Peter Welch (D-
VT), in addition to Delegate Aumua Amata Coleman Radewagen (R-
AS). The bill was referred to the Committee on Oversight and
Government Reform, with an additional referral to the Committee
on House Administration. The Committee on Oversight and
Government Reform considered H.R. 4431 at a business meeting on
November 30, 2017, and ordered the bill favorably reported by
voice vote.
Committee Consideration
On November 30, 2017, the Committee met in open session
and, with a quorum being present, ordered the bill favorably
reported by voice vote.
Roll Call Votes
There were no roll call votes requested or conducted during
Committee consideration of H.R. 4431.
Explanation of Amendments
During Committee consideration of the bill, Representative
Elijah Cummings (D-MD), the Ranking Minority Member of the
Committee, offered an amendment to provide permissive authority
to the Office of Personnel Management to pay interest assessed
on Federal Government civilian pension deposits made by former
Peace Corps and AmeriCorps members. Following debate, Mr.
Cummings withdrew his amendment.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to the terms and conditions of
employment or access to public services and accommodations.
This bill provides for interest payments by agencies in the
case of administrative error in processing certain annuity
deposits for prior military service, without regard to which
branch of government in which the employee is employed.
Therefore, provisions of the bill relate to terms and
conditions of employment of legislative branch employees. In
satisfaction of the requirement of Section 102(b)(3)(A),
provisions of this bill could affect retirement benefits of
certain employees in the legislative branch in the same manner
as they would affect benefits of employees in the executive
branch.
Duplication of Federal Programs
In accordance with clause 2(c)(5) of rule XIII no provision
of this bill establishes or reauthorizes a program of the
Federal Government known to be duplicative of another Federal
program, a program that was included in any report from the
Government Accountability Office to Congress pursuant to
section 21 of Public Law 111-139, or a program related to a
program identified in the most recent Catalog of Federal
Domestic Assistance.
Disclosure of Directed Rule Makings
This bill directs the Director of the Office of Personnel
Management to issue such regulations as are necessary to carry
out the bill.
Federal Advisory Committee Act
The Committee finds the legislation does not establish or
authorize the establishment of an advisory committee within the
definition of Section 5(b) of the appendix to title 5, United
States Code.
Unfunded Mandates Statement
Pursuant to section 423 of the Congressional Budget Act of
1974 the Committee has included a letter received from the
Congressional Budget Office below.
Earmark Identification
This bill does not include any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI of the House of Representatives.
Committee Estimate
Pursuant to clause 3(d)(2)(B) of rule XIII of the Rules of
the House of Representatives, the Committee includes below a
cost estimate of the bill prepared by the Director of the
Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974.
New Budget Authority and Congressional Budget Office Cost Estimate
Pursuant to clause 3(c)(3) of rule XIII of the House of
Representatives, the cost estimate prepared by the
Congressional Budget Office and submitted pursuant to section
402 of the Congressional Budget Act of 1974 is as follows:
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 10, 2018.
Hon. Trey Gowdy,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4431, the
Correcting Miscalculations in Veterans' Pensions Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Amber
Marcellino.
Sincerely,
Mark P. Hadley
(For Keith Hall, Director).
Enclosure.
H.R. 4431--Correcting Miscalculations in Veterans' Pensions Act
H.R. 4431 would allow federal agencies to pay the interest
owed by any former employees who chose to count their prior
military service for civilian retirement benefits, if the
interest results from an administrative error.
Under current law, federal employees may include years of
prior military service in the calculation of their civil
service retirement benefits if they pay a deposit to cover the
retirement contributions they would have paid if that period of
military service had been civilian service. Administrative
errors occur when employees receive inaccurate information
about the amount or the due date of the deposit. If employees
owe additional funds to convert their period of military
service because of an administrative error, they also owe
interest on the amount due.
Based on a small sample of cases and information from the
Merit Systems Protection Board, CBO estimates that H.R. 4431
would affect just a few federal retirees each year and that the
average amount of interest accrued in each case would be about
$15,000. Enacting H.R. 4431 would allow federal agencies the
option to make those interest payments on behalf of their
former employees using funds appropriated for salaries and
expenses. Considering the small number of retirees that would
be affected and that some agencies already have the authority
to make such payments, CBO estimates that implementing the
provision would cost less than $500,000 over the 2019-2023
period. Any such spending would be subject to the availability
of appropriated funds.
Allowing federal agencies to pay the interest costs
associated with administrative errors in converting military
service could make it more likely that some retirees would pay
their deposit (or corrected deposit) and thus receive a higher
retirement benefit. (In those cases, the higher benefit
payments would be partially offset by the deposit payments,
which are recorded as revenues.) However, given the limited
number of retirees that could be affected, CBO estimates that
the increases in direct spending and revenues would each be
less than $500,000 over the 2019-2028 period.
Because enacting H.R. 4431 would affect direct spending and
revenues, pay-as-you-go procedures apply.
CBO estimates that enacting H.R. 4431 would not
significantly increase net direct spending or on-budget
deficits in any of the four consecutive 10-year periods
beginning in 2029.
H.R. 4431 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Amber G.
Marcellino. The estimate was reviewed by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
Section-by-Section Analysis
Section 1. Short title
Section 1 designates the short title of the bill--the
``Correcting Miscalculations in Veterans' Pensions Act.''
Sec. 2. Interest payment as a result of error in processing of annuity
deposit amounts
Section 2 amends section 8334(j) of title 5, United States
Code, to authorize Federal agencies to pay interest assessed on
the military service deposits of their employees, Members, or
annuitants in the event of an administrative error by the
agency. The Director of the Office of Personnel Management is
directed to implement such regulations as are necessary to
carry out the amendments made by this bill. Similar provisions
are added for both the Civil Service Retirement System and the
Federal Employees Retirement System to ensure all individuals
covered by the Federal Government's main retirement systems are
covered by the amendments made by this bill.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
TITLE 5, UNITED STATES CODE
* * * * * * *
PART III--EMPLOYEES
* * * * * * *
SUBPART G--INSURANCE AND ANNUITIES
* * * * * * *
CHAPTER 83--RETIREMENT
* * * * * * *
SUBCHAPTER III--CIVIL SERVICE RETIREMENT
* * * * * * *
Sec. 8334. Deductions, contributions, and deposits
(a)(1)(A) The employing agency shall deduct and withhold from
the basic pay of an employee, Member, Congressional employee,
law enforcement officer, firefighter, bankruptcy judge, judge
of the United States Court of Appeals for the Armed Forces,
United States magistrate, Court of Federal Claims judge, member
of the Capitol Police, member of the Supreme Court Police,
nuclear materials courier, or customs and border protection
officer, as the case may be, the percentage of basic pay
applicable under subsection (c).
(B)(i) Except as provided in clause (ii), an equal amount
shall be contributed from the appropriation or fund used to pay
the employee or, in the case of an elected official, from an
appropriation or fund available for payment of other salaries
of the same office or establishment. When an employee in the
legislative branch is paid by the Chief Administrative Officer
of the House of Representatives, the Chief Administrative
Officer may pay from the applicable accounts of the House of
Representatives the contribution that otherwise would be
contributed from the appropriation or fund used to pay the
employee.
(ii) In the case of an employee of the United States Postal
Service, no amount shall be contributed under this
subparagraph.
(2) The amounts so deducted and withheld, together with the
amounts so contributed, shall be deposited in the Treasury of
the United States to the credit of the Fund under such
procedures as the Secretary of the Treasury may prescribe.
Deposits made by an employee or Member also shall be credited
to the Fund.
(b) Each employee or Member is deemed to consent and agree to
these deductions from basic pay. Notwithstanding any law or
regulation affecting the pay of an employee or Member, payment
less these deductions is a full and complete discharge and
acquittance of all claims and demands for regular services
during the period covered by the payment, except the right to
the benefits to which the employee or Member is entitled under
this subchapter.
(c) Each employee or Member credited with civilian service
after July 31, 1920, for which retirement deductions or
deposits have not been made, may deposit with interest an
amount equal to the following percentages of his basic pay
received for that service:
------------------------------------------------------------------------
Percentage of basic pay Service period
------------------------------------------------------------------------
Employee 2 1/2 August 1, 1920, to
June 30, 1926.
3 1/2 July 1, 1926, to
June 30, 1942.
5 July 1, 1942, to
June 30, 1948.
6 July 1, 1948, to
October 31, 1956.
6 1/2 November 1, 1956, to
December 31, 1969.
7 January 1, 1970, to
December 31, 1998.
7.25 January 1, 1999, to
December 31, 1999.
7.4 January 1, 2000, to
December 31, 2000.
7 After December 31,
2000.
Member or employee for 2 1/2 August 1, 1920, to
Congressional employee June 30, 1926.
service
3 1/2 July 1, 1926, to
June 30, 1942.
5 July 1, 1942, to
June 30, 1948.
6 July 1, 1948, to
October 31, 1956.
6 1/2 November 1, 1956, to
December 31, 1969
7.5 January 1, 1970, to
December 31 1998.
7.75 January 1, 1999, to
December 31, 1999.
7.9 January 1, 2000, to
December 31, 2000.
7.5 After December 31,
2000.
Member for Member service 2 1/2 August 1, 1920, to
June 30, 1926.
3 1/2 July 1, 1926, to
June 30, 1942.
5 July 1, 1942, to
August 1, 1946.
6 August 2, 1946, to
October 31, 1956.
7 1/2 November 1, 1956, to
December 31, 1969.
8 January 1, 1970, to
December 31, 1998.
8.25 January 1, 1999, to
December 31, 1999.
8.4 January 1, 2000, to
December 31, 2000.
8.5 January 1, 2001, to
December 31, 2002.
8 After December 31,
2002.
Law enforcement officer 2 1/2 August 1, 1920, to
for law enforcement June 30, 1926.
service, member of the
Supreme Court Police for
Supreme Court Police
service, and firefighter
for firefighter service
3 1/2 July 1, 1926, to
June 30, 1942.
5 July 1, 1942, to
June 30, 1948.
6 July 1, 1948, to
October 31, 1956.
6 1/2 November 1, 1956, to
December 31, 1969.
7 January 1, 1970, to
December 31, 1974.
7.5 January 1, 1975, to
December 31, 1998.
7.75 January 1, 1999, to
December 31, 1999.
7.9 January 1, 2000, to
December 31, 2000.
7.5 After December 31,
2000.
Bankruptcy judge 2 1/2 August 1, 1920, to
June 30, 1926.
3 1/2 July 3, 1926, to
June 30, 1942.
5 July 1, 1942, to
June 30, 1948.
6 July 1, 1948, to
October 31, 1956.
6 1/2 November 1, 1956, to
December 31, 1969.
7 January 1, 1970, to
December 31, 1983.
8 January 1, 1984, to
December 31, 1998.
8.25 January 1, 1999, to
December 31, 1999.
8.4 January 1, 2000, to
December 31, 2000.
8 After December 31,
2000.
Judge of the United 6 May 5, 1950, to
States Court of Appeals October 31, 1956.
for the Armed Forces for
service as a judge of
that court
6 1/2 November 1, 1956, to
December 31, 1969.
7 January 1, 1970, to
(but not including)
the date of the
enactment of the
Department of
Defense
Authorization Act,
1984
8 The date of
enactment of the
Department of
Defense
Authorization Act,
1984, to December
31, 1998.
8.25 January 1, 1999, to
December 31, 1999.
8.4 January 1, 2000, to
December 31, 2000.
8 After December 31,
2000.
United States Magistrate 2 1/2 August 1, 1920, to
judge June 30, 1926.
3 1/2 July 1, 1926, to
June 30, 1942.
5 July 1, 1942, to
June 30, 1948.
6 July 1, 1948, to
October 31, 1956.
6 1/2 November 1, 1956, to
December 31, 1969.
7 January 1, 1970, to
September 30, 1987.
8 October 1, 1987, to
December 31, 1998
8.25 January 1, 1999, to
December 31, 1999.
8.4 January 1, 2000, to
December 31, 2000.
8 After December 31,
2000.
Court of Federal Claims 2 1/2 August 1, 1920, to
Judge June 30, 1926.
3 1/2 July 1, 1926, to
June 30, 1942.
5 July 1, 1942, to
June 30, 1948.
6 July 1, 1948, to
October 31, 1956.
6 1/2 November 1, 1956, to
December 31, 1969.
7 January 1, 1970, to
September 30, 1988.
8 October 1, 1988, to
December 31, 1998.
8.25 January 1, 1999, to
December 31, 1999.
8.4 January 1, 2000, to
December 31, 2000.
8 After December 31,
2000.
Member of the Capitol 2.5 August 1, 1920, to
Police June 30, 1926.
3.5 July 1, 1926, to
June 30, 1942.
5 July 1, 1942, to
June 30, 1948.
6 July 1, 1948, to
October 31, 1956.
6.5 November 1, 1956, to
December 31, 1969.
7.5 January 1, 1970, to
December 31, 1998.
7.75 January 1, 1999, to
December 31, 1999.
7.9 January 1, 2000, to
December 31, 2000.
7.5 After December 31,
2000
Nuclear materials courier 7 October 1, 1977 to
October 16, 1998.
7.5 October 17, 1998 to
December 31, 1998.
7.75 January 1, 1999 to
December 31, 1999.
7.9 January 1, 2000 to
December 31, 2000.
7.5 After December 31,
2000.
Customs and border 7.5 After June 29, 2008.
protection officer
------------------------------------------------------------------------
Notwithstanding the preceding provisions of this subsection and
any provision of section 206(b)(3) of the Federal Employees'
Retirement Contribution Temporary Adjustment Act of 1983, the
percentage of basic pay required under this subsection in the
case of an individual described in section 8402(b)(2) shall,
with respect to any covered service (as defined by section
203(a)(3) of such Act) performed by such individual after
December 31, 1983, and before January 1, 1987, be equal to 1.3
percent, and, with respect to any such service performed after
December 31, 1986, be equal to the amount that would have been
deducted from the employee's basic pay under subsection (k) of
this section if the employee's pay had been subject to that
subsection during such period.
(d)(1) Each employee or Member who has received a refund of
retirement deductions under this or any other retirement system
established for employees of the Government covering service
for which he may be allowed credit under this subchapter may
deposit the amount received, with interest. Credit may not be
allowed for the service covered by the refund until the deposit
is made.
(2)(A) This paragraph applies with respect to any employee or
Member who--
(i) separates before March 1, 1991, and receives (or
elects, in accordance with applicable provisions of
this subchapter, to receive) a refund (described in
paragraph (1)) which relates to a period of service
ending before March 1, 1991;
(ii) is entitled to an annuity under this subchapter
(other than a disability annuity) which is based on
service of such employee or Member, and which commences
on or after December 2, 1990; and
(iii) does not make the deposit (described in
paragraph (1)) required in order to receive credit for
the period of service with respect to which the refund
relates.
(B) Notwithstanding the second sentence of paragraph (1), the
annuity to which an employee or Member under this paragraph is
entitled shall (subject to adjustment under section 8340) be
equal to an amount which, when taken together with the unpaid
amount referred to in subparagraph (A)(iii), would result in
the present value of the total being actuarially equivalent to
the present value of the annuity which would otherwise be
provided the employee or Member under this subchapter, as
computed under subsections (a)-(i) and (n) of section 8339
(treating, for purposes of so computing the annuity which would
otherwise be provided under this subchapter, the deposit
referred to in subparagraph (A)(iii) as if it had been timely
made).
(C) The Office of Personnel Management shall prescribe such
regulations as may be necessary to carry out this paragraph.
(e)(1) Interest under subsection (c), (d)(1), (j), (k), or
(l) of this section is computed in accordance with paragraphs
(2) and (3) of this subsection and regulations prescribed by
the Office of Personnel Management.
(2) Interest accrues annually on the outstanding portion of
any amount that may be deposited under subsection (c), (d)(1),
(j), (k), or (l) of this section, and is compounded annually,
until the portion is deposited. Such interest is computed from
the mid-point of each service period included in the
computation, or from the date refund was paid. The deposit may
be made in one or more installments. Interest may not be
charged for a period of separation from the service which began
before October 1, 1956.
(3) The rate of interest is 4 percent a year through December
31, 1947, and 3 percent a year beginning January 1, 1948,
through December 31, 1984. Thereafter, the rate of interest for
any calendar year shall be equal to the overall average yield
to the Fund during the preceding fiscal year from all
obligations purchased by the Secretary of the Treasury during
such fiscal year under section 8348(c), (d), and (e) of this
title, as determined by the Secretary.
(f) Under such regulations as the Office of Personnel
Management may prescribe, amounts deducted under subsection (a)
or (k) of this section and deposited under subsections (c) and
(d)(1) of this section shall be entered on individual
retirement records.
(g) Deposit may not be required for--
(1) service before August 1, 1920;
(2) military service, except to the extent provided
under section 8332(c) or section 8334(j) of this title;
(3) service for the Panama Railroad Company before
January 1, 1924;
(4) service performed before October 29, 1983,, by
natives of the Pribilof Islands in the taking and
curing of fur seal skins and other activities in
connection with the administration of the Pribilof
Islands except where deductions, contributions, and
deposits were made before October 29, 1983;
(5) days of unused sick leave credited under section
8339(m) of this title; or
(6) any period for which credit is allowed under
section 8332(l) of this title.
(h) For the purpose of survivor annuities, deposits
authorized by subsections (c), (d)(1), (j), and (k) of this
section may also be made by a survivor of an employee or
Member.
(i)(1) The Director of the Administrative Office of the
United States Courts shall pay to the Fund the amount which an
employee may deposit under subsection (c) of this section for
service creditable under section 8332(b)(12) of this title if
such creditable service immediately precedes service as an
employee subject to this subchapter with a break in service of
no more than ninety working days. The Director shall pay such
amount from any appropriation available to him as a necessary
expense of the appropriation concerned.
(2) The amount the Director pays in accordance with paragraph
(1) of this subsection shall be reduced by the amount of any
refund to the employee under section 376 of title 28. Except to
the extent of such reduction, the amount the Director pays to
the Fund shall satisfy the deposit requirement of subsection
(c) of this section.
(3) Notwithstanding any other provision of law, the amount
the Director pays under this subsection shall constitute an
employer contribution to the Fund, excludable under section 402
of the Internal Revenue Code of 1986 from the employee's gross
income until such time as the contribution is distributed or
made available to the employee, and shall not be subject to
refund or to lump-sum payment to the employee.
(4) Notwithstanding any other provision of law, a bankruptcy
judge or magistrate judge who is covered by section 377 of
title 28 or section 2(c) of the Retirement and Survivors'
Annuities for Bankruptcy Judges and Magistrates Act of 1988
shall not be subject to deductions and contributions to the
Fund, if the judge or magistrate judge notifies the Director of
the Administrative Office of the United States Courts of an
election of a retirement annuity under those provisions. Upon
such an election, the judge or magistrate judge shall be
entitled to a lump-sum credit under section 8342(a) of this
title.
(5) Notwithstanding any other provision of law, a judge who
is covered by section 7296 of title 38 shall not be subject to
deductions and contributions to the Fund, if the judge notifies
the Director of the Office of Personnel Management of an
election of a retirement annuity under that section. Upon such
an election, the judge shall be entitled to a lump-sum credit
under section 8342(a) of this title.
(6) Notwithstanding any other provision of law, a judge of
the United States Court of Federal Claims who is covered by
section 178 of title 28 shall not be subject to deductions and
contributions to the Fund if the judge notifies the Director of
the Administrative Office of the United States Courts of an
election of a retirement annuity under those provisions. Upon
such an election, the judge shall be entitled to a lump-sum
credit under section 8342(a) of this title.
(j)(1)(A) Except as provided in subparagraph (B), and subject
to paragraph (5), each employee or Member who has performed
military service before the date of the separation on which the
entitlement to any annuity under this subchapter is based may
pay, in accordance with such regulations as the Office shall
issue, to the agency by which the employee is employed, or, in
the case of a Member or a Congressional employee, to the
Secretary of the Senate or the Chief Administrative Officer of
the House of Representatives, as appropriate, an amount equal
to 7 percent of the amount of the basic pay paid under section
204 of title 37 to the employee or Member for each period of
military service after December 1956. The amount of such
payments shall be based on such evidence of basic pay for
military service as the employee or Member may provide, or if
the Office determines sufficient evidence has not been so
provided to adequately determine basic pay for military
service, such payment shall be based upon estimates of such
basic pay provided to the Office under paragraph (4).
(B) In any case where military service interrupts creditable
civilian service under this subchapter and reemployment
pursuant to chapter 43 of title 38 occurs on or after August 1,
1990, the deposit payable under this paragraph may not exceed
the amount that would have been deducted and withheld under
subsection (a)(1) from basic pay during civilian service if the
employee had not performed the period of military service.
(2) Any deposit made under paragraph (1) of this subsection
more than two years after the later of--
(A) October 1, 1983; or
(B) the date on which the employee or Member making
the deposit first becomes an employee or Member
following the period of military service for which such
deposit is due,
shall include interest on such amount computed and compounded
annually beginning on the date of the expiration of the two-
year period. The interest rate that is applicable in computing
interest in any year under this paragraph shall be equal to the
interest rate that is applicable for such year under subsection
(e) of this section.
(3) Any payment received by an agency, the Secretary of the
Senate, or the Chief Administrative Officer of the House of
Representatives under this subsection shall be immediately
remitted to the Office for deposit in the Treasury of the
United States to the credit of the Fund.
(4) The Secretary of Defense, the Secretary of
Transportation, the Secretary of Commerce, or the Secretary of
Health and Human Services, as appropriate, shall furnish such
information to the Office as the Office may determine to be
necessary for the administration of this subsection.
(5) Effective with respect to any period of military service
after December 31, 1998, the percentage of basic pay under
section 204 of title 37 payable under paragraph (1) shall be
equal to the same percentage as would be applicable under
subsection (c) of this section for that same period for service
as an employee, subject to paragraph (1)(B).
(6)(A) In calculating and processing the deposit under
paragraph (1) with respect to an employee, Member, or
annuitant, if the employing agency of such employee, Member, or
annuitant makes an administrative error, such employing agency
may pay, on behalf of the employee, Member, or annuitant, any
additional interest assessed due to the administrative error.
(B) For purposes of subparagraph (A), the Secretary of the
Senate or the Chief Administrative Officer of the House of
Representatives, as appropriate, shall be considered the
employing agency of a Member or Congressional employee.
(C) The Director of the Office of Personnel Management shall
issue such regulations as are necessary to carry out this
paragraph.
(k)(1) Effective with respect to pay periods beginning after
December 31, 1986, in administering this section in the case of
an individual described in section 8402(b)(2) of this title--
(A) the amount to be deducted and withheld by the
employing agency shall be determined in accordance with
paragraph (2) of this subsection instead of subsection
(a)(1)(A); and
(B) the amount of the contribution under subparagraph
(B) of subsection (a)(1) shall be the amount which
would have been contributed under such subparagraph if
this subsection had not been enacted.
(2)(A) With respect to Federal wages of an employee or Member
(or that portion thereof) not exceeding the contribution and
benefit base during the calendar year involved, the appropriate
amount to be deducted and withheld under this subsection is the
amount by which--
(i) the total deduction for those wages (or for that
portion) exceeds;
(ii) the OASDI contribution with respect to those
wages (or that portion).
(B) With respect to any portion of Federal wages of an
employee or Member which exceed the contribution and benefit
base during the calendar year involved, the appropriate amount
to be deducted and withheld under this subsection is an amount
equal to the total deduction for that portion.
(C) For purposes of this paragraph--
(i) the term ``Federal wages'' means basic pay for
service as an employee or Member, as the case may be;
(ii) the term ``contribution and benefit base'' means
the contribution and benefit base in effect with
respect to the period involved, as determined under
section 230 of the Social Security Act;
(iii) the term ``total deduction'', as used with
respect to any Federal wages (or portion thereof),
means an amount equal to the amount of those wages (or
of that portion), multiplied by the percentage which
(but for this subsection) would apply under subsection
(a)(1)(A) with respect to the individual involved; and
(iv) the term ``OASDI contribution'', with respect to
any income, means the amount of tax which may be
imposed under section 3101(a) of the Internal Revenue
Code of 1986 with respect to such income (determined
without regard to any income which is not a part of
Federal wages).
(3) The amount of a deposit under subsection (c) of this
section for any service with respect to which paragraph (1) of
this subsection applies shall be equal to an amount determined
based on the preceding provisions of this subsection, and shall
include interest.
(4) In administering paragraphs (1) through (3)--
(A) the term ``an individual described in section
8402(b)(2) of this title'' shall be considered to
include any individual--
(i) who is subject to this subchapter as a
result of a provision of law described in
section 8347(o), and
(ii) whose employment (as described in
section 8347(o)) is also employment for
purposes of title II of the Social Security Act
and chapter 21 of the Internal Revenue Code of
1986; and
(B) the term ``Federal wages'', as applied with
respect to any individual to whom this subsection
applies as a result of subparagraph (A), means basic
pay for any employment referred to in subparagraph
(A)(ii).
(l)(1) Each employee or Member who has performed service as a
volunteer or volunteer leader under part A of title VIII of the
Economic Opportunity Act of 1964, as a full-time volunteer
enrolled in a program of at least 1 year's duration under part
A, B, or C of title I of the Domestic Volunteer Service Act of
1973, or as a volunteer or volunteer leader under the Peace
Corps Act before the date of the separation on which the
entitlement to any annuity under this subchapter is based may
pay, in accordance with such regulations as the Office of
Personnel Management shall issue, an amount equal to 7 percent
of the readjustment allowance paid to the employee or Member
under title VIII of the Economic Opportunity Act of 1964 or
section 5(c) or 6(1) of the Peace Corps Act or the stipend paid
to the employee or Member under part A, B, or C of title I of
the Domestic Volunteer Service Act of 1973, for each period of
service as such a volunteer or volunteer leader. This paragraph
shall be subject to paragraph (4).
(2) Any deposit made under paragraph (1) more than 2 years
after the later of--
(A) October 1, 1993; or
(B) the date on which the employee or Member making
the deposit first becomes an employee or Member,
shall include interest on such amount computed and compounded
annually beginning on the date of the expiration of the 2-year
period. The interest rate that is applicable in computing
interest in any year under this paragraph shall be equal to the
interest rate that is applicable for such year under subsection
(e).
(3) The Director of the Peace Corps and the Chief Executive
Officer of the Corporation for National and Community Service
shall furnish such information to the Office of Personnel
Management as the Office may determine to be necessary for the
administration of this subsection.
(4) Effective with respect to any period of service after
December 31, 1998, the percentage of the readjustment allowance
or stipend (as the case may be) payable under paragraph (1)
shall be equal to the same percentage as would be applicable
under subsection (c) of this section for the same period for
service as an employee.
(m) A Member who has served in a position in the executive
branch for which the rate of basic pay was reduced for the
duration of the service of the Member to remove the impediment
to the appointment of the Member imposed by article I, section
6, clause 2 of the Constitution, or the survivor of such a
Member, may deposit to the credit of the Fund an amount equal
to the difference between the amount deducted from the basic
pay of the Member during that period of service and the amount
that would have been deducted if the rate of basic pay which
would otherwise have been in effect during that period had been
in effect, plus interest computed under subsection (e).
(n) Notwithstanding subsection (c), no deposit may be made
with respect to service credited under section 8332(b)(17).
* * * * * * *
CHAPTER 84--FEDERAL EMPLOYEES' RETIREMENT SYSTEM
* * * * * * *
SUBCHAPTER II--BASIC ANNUITY
* * * * * * *
Sec. 8422. Deductions from pay; contributions for other service;
deposits
(a)(1) The employing agency shall deduct and withhold from
basic pay of each employee and Member a percentage of basic pay
determined in accordance with paragraph (2).
(2) The percentage to be deducted and withheld from basic pay
for any pay period shall be equal to--
(A) the applicable percentage under paragraph (3),
minus (B) the percentage then in effect under section
3101(a) of the Internal Revenue Code of 1986 (relating
to rate of tax for old-age, survivors, and disability
insurance).
(3)(A) The applicable percentage under this paragraph for
civilian service by employees or Members other than revised
annuity employees or further revised annuity employees shall be
as follows:
------------------------------------------------------------------------
------------------------------------------------------------------------
Employee 7 January 1, 1987, to
December 31, 1998.
7.25 January 1, 1999, to
December 31, 1999.
7.4 January 1, 2000, to
December 31, 2000.
7 After December 31,
2000.
Congressional employee 7.5 January 1, 1987, to
December 31, 1998.
7.75 January 1, 1999, to
December 31, 1999.
7.9 January 1, 2000, to
December 31, 2000.
7.5 After December 31,
2000.
Member 7.5 January 1, 1987, to
December 31, 1998.
7.75 January 1, 1999, to
December 31, 1999.
7.9 January 1, 2000, to
December 31, 2000.
8 January 1, 2001, to
December 31, 2002.
7.5 After December 31,
2002.
Law enforcement 7.5 January 1, 1987, to
officer, firefighter, December 31, 1998.
member
of the Capitol Police, 7.75 January 1, 1999, to
member of December 31, 1999.
the Supreme Court 7.9 January 1, 2000, to
Police, or air December 31, 2000.
traffic controller 7.5 After December 31,
2000.
Nuclear materials 7 January 1, 1987, to
courier October 16, 1998.
7.5 October 17, 1998, to
December 31, 1998.
7.75 January 1, 1999, to
December 31, 1999.
7.9 January 1, 2000, to
December 31, 2000.
7.5 After December 31,
2000.
Customs and border 7.5 After June 29, 2008.
protection officer
------------------------------------------------------------------------
(B) The applicable percentage under this paragraph for
civilian service by revised annuity employees shall be as
follows:
------------------------------------------------------------------------
------------------------------------------------------------------------
Employee 9.3 After December 31,
2012.
Congressional employee 9.3 After December 31,
2012.
Member 9.3 After December 31,
2012.
Law enforcement 9.8 After December 31,
officer, firefighter, 2012.
member of the Capitol
Police, member of the
Supreme Court Police,
or air traffic
controller
Nuclear materials 9.8 After December 31,
courier 2012.
Customs and border 9.8 After December 31,
protection officer 2012.
------------------------------------------------------------------------
(C) The applicable percentage under this paragraph for
civilian service by further revised annuity employees shall be
as follows:
------------------------------------------------------------------------
------------------------------------------------------------------------
Employee 10.6. After December 31,
2013.
Congressional employee 10.6. After December 31,
2013.
Member 10.6. After December 31,
2013.
Law enforcement 11.1. After December 31,
officer, firefighter 2013.
member of the Capitol
Police, member of the
Supreme Court Police,
or air traffic
controller
Nuclear materials 11.1. After December 31,
courier 2013.
Customs and border 11.1. After December 31,
protection officer 2013.
------------------------------------------------------------------------
(b) Each employee or Member is deemed to consent and agree to
the deductions under subsection (a). Notwithstanding any law or
regulation affecting the pay of an employee or Member, payment
less such deductions is a full and complete discharge and
acquittance of all claims and demands for regular services
during the period covered by the payment, except the right to
any benefits under this subchapter, or under subchapter IV or V
of this chapter, based on the service of the employee or
Member.
(c) The amounts deducted and withheld under this section
shall be deposited in the Treasury of the United States to the
credit of the Fund under such procedures as the Secretary of
the Treasury may prescribe. Deposits made by an employee,
Member, or survivor also shall be credited to the Fund.
(d)(1) Under such regulations as the Office may prescribe,
amounts deducted under subsection (a) shall be entered on
individual retirement records.
(2) Deposit may not be required for days of unused sick leave
credited under section paragraph (1) or (2) of section 8415(m).
(e)(1)(A) Except as provided in subparagraph (B), and subject
to paragraph (6), each employee or Member who has performed
military service before the date of the separation on which the
entitlement to any annuity under this subchapter, or subchapter
V of this chapter, is based may pay, in accordance with such
regulations as the Office shall issue, to the agency by which
the employee is employed, or, in the case of a Member or a
Congressional employee, to the Secretary of the Senate or the
Chief Administrative Officer of the House of Representatives,
as appropriate, an amount equal to 3 percent of the amount of
the basic pay paid under section 204 of title 37 to the
employee or Member for each period of military service after
December 1956. The amount of such payments shall be based on
such evidence of basic pay for military service as the employee
or Member may provide, or if the Office determines sufficient
evidence has not been so provided to adequately determine basic
pay for military service, such payment shall be based on
estimates of such basic pay provided to the Office under
paragraph (4).
(B) In any case where military service interrupts creditable
civilian service under this subchapter and reemployment
pursuant to chapter 43 of title 38 occurs on or after August 1,
1990, the deposit payable under this paragraph may not exceed
the amount that would have been deducted and withheld under
subsection (a)(1) from basic pay during civilian service if the
employee had not performed the period of military service.
(2) Any deposit made under paragraph (1) more than two years
after the later of--
(A) January 1, 1987; or
(B) the date on which the employee or Member making
the deposit first becomes an employee or Member
following the period of military service for which such
deposit is due,
shall include interest on such amount computed and compounded
annually beginning on the date of the expiration of the two-
year period. The interest rate that is applicable in computing
interest in any year under this paragraph shall be equal to the
interest rate that is applicable for such year under section
8334(e).
(3) Any payment received by an agency, the Secretary of the
Senate, or the Chief Administrative Officer of the House of
Representatives under this subsection shall be immediately
remitted to the Office for deposit in the Treasury of the
United States to the credit of the Fund.
(4) The Secretary of Defense, the Secretary of
Transportation, the Secretary of Commerce, or the Secretary of
Health and Human Services, as appropriate, shall furnish such
information to the Office as the Office may determine to be
necessary for the administration of this subsection.
(5) For the purpose of survivor annuities, deposits
authorized by this subsection may also be made by a survivor of
an employee or Member.
(6) The percentage of basic pay under section 204 of title 37
payable under paragraph (1), with respect to any period of
military service performed during--
(A) January 1, 1999, through December 31, 1999, shall
be 3.25 percent; and
(B) January 1, 2000, through December 31, 2000, shall
be 3.4 percent.
(7)(A) In calculating and processing the deposit under
paragraph (1) with respect to an employee, Member, or
annuitant, if the employing agency of such employee, Member, or
annuitant makes an administrative error, such employing agency
may pay, on behalf of the employee, Member, or annuitant, any
additional interest assessed due to the administrative error.
(B) For purposes of subparagraph (A), the Secretary of the
Senate or the Chief Administrative Officer of the House of
Representatives, as appropriate, shall be considered the
employing agency of a Member or Congressional employee.
(C) The Director of the Office of Personnel Management shall
issue such regulations as are necessary to carry out this
paragraph.
(f)(1) Each employee or Member who has performed service as a
volunteer or volunteer leader under part A of title VIII of the
Economic Opportunity Act of 1964, as a full-time volunteer
enrolled in a program of at least 1 year's duration under part
A, B, or C of title I of the Domestic Volunteer Service Act of
1973, or as a volunteer or volunteer leader under the Peace
Corps Act before the date of the separation on which the
entitlement to any annuity under this subchapter, or subchapter
V of this chapter, is based may pay, in accordance with such
regulations as the Office of Personnel Management shall issue,
an amount equal to 3 percent of the readjustment allowance paid
to the employee or Member under title VIII of the Economic
Opportunity Service Act of 1964 or section 5(c) or 6(1) of the
Peace Corps Act or the stipend paid to the employee or Member
under part A, B, or C of title I of the Domestic Volunteer
Service Act of 1973, for each period of service as such a
volunteer or volunteer leader. This paragraph shall be subject
to paragraph (4).
(2) Any deposit made under paragraph (1) more than 2 years
after the later of--
(A) October 1, 1993, or
(B) the date on which the employee or Member making
the deposit first becomes an employee or Member,
shall include interest on such amount computed and compounded
annually beginning on the date of the expiration of the 2-year
period. The interest rate that is applicable in computing
interest in any year under this paragraph shall be equal to the
interest rate that is applicable for such year under section
8334(e).
(3) The Director of the Peace Corps and the Chief Executive
Officer of the Corporation for National and Community Service
shall furnish such information to the Office of Personnel
Management as the Office may determine to be necessary for the
administration of this subsection.
(4) The percentage of the readjustment allowance or stipend
(as the case may be) payable under paragraph (1), with respect
to any period of volunteer service performed during--
(A) January 1, 1999, through December 31, 1999, shall
be 3.25 percent; and
(B) January 1, 2000, through December 31, 2000, shall
be 3.4 percent.
(g) A Member who has served in a position in the executive
branch for which the rate of basic pay was reduced for the
duration of the service of the Member to remove the impediment
to the appointment of the Member imposed by article I, section
6, clause 2 of the Constitution, or the survivor of such a
Member, may deposit to the credit of the Fund an amount equal
to the difference between the amount deducted from the basic
pay of the Member during that period of service and the amount
that would have been deducted if the rate of basic pay which
would otherwise have been in effect during that period had been
in effect, plus interest computed under section 8334(e).
(h) No deposit may be made with respect to service credited
under section 8411(b)(6).
(i)(1) Each employee or Member who has received a refund of
retirement deductions under this or any other retirement system
established for employees of the Government covering service
for which such employee or Member may be allowed credit under
this chapter may deposit the amount received, with interest.
Credit may not be allowed for the service covered by the refund
until the deposit is made.
(2) Interest under this subsection shall be computed in
accordance with paragraphs (2) and (3) of section 8334(e) and
regulations prescribed by the Office. The option under the
third sentence of section 8334(e)(2) to make a deposit in one
or more installments shall apply to deposits under this
subsection.
(3) For the purpose of survivor annuities, deposits
authorized by this subsection may also be made by a survivor of
an employee or Member.
* * * * * * *
[all]
