[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1080 Reported in Senate (RS)]





                                                       Calendar No. 412

104th CONGRESS

  2d Session

                                S. 1080

                          [Report No. 104-274]

_______________________________________________________________________

                                 A BILL

    To amend chapter 84 of title 5, United States Code, to provide 
        additional investment funds for the Thrift Savings Plan.

_______________________________________________________________________

                              May 16, 1996

        Reported with an amendment and an amendment to the title





                                                       Calendar No. 412
104th CONGRESS
  2d Session
                                S. 1080

                          [Report No. 104-274]

    To amend chapter 84 of title 5, United States Code, to provide 
        additional investment funds for the Thrift Savings Plan.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                July 27 (legislative day, July 10), 1995

   Mr. Stevens (for himself, Mr. Pryor, and Mr. Roth) introduced the 
 following bill; which was read twice and referred to the Committee on 
                          Governmental Affairs

                              May 16, 1996

  Reported by Mr. Stevens, with an amendment and an amendment to the 
                                 title
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
    To amend chapter 84 of title 5, United States Code, to provide 
        additional investment funds for the Thrift Savings Plan.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Thrift Savings Investment 
Funds Act of 1995''.</DELETED>

<DELETED>SEC. 2. ADDITIONAL INVESTMENT FUNDS FOR THE THRIFT SAVINGS 
              PLAN.</DELETED>

<DELETED>    Section 8438 of title 5, United States Code, is amended--
</DELETED>
        <DELETED>    (1) in subsection (a)--</DELETED>
                <DELETED>    (A) by redesignating paragraphs (5) 
                through (8) as paragraphs (6) through (9), 
                respectively;</DELETED>
                <DELETED>    (B) by inserting after paragraph (4) the 
                following new paragraph:</DELETED>
        <DELETED>    ``(5) the term `International Stock Index 
        Investment Fund' means the International Stock Index Investment 
        Fund established under subsection (b)(1)(E);'';</DELETED>
                <DELETED>    (C) in paragraph (8) (as redesignated by 
                subparagraph (A) of this paragraph) by striking out 
                ``and'' at the end thereof;</DELETED>
                <DELETED>    (D) in paragraph (9) (as redesignated by 
                subparagraph (A) of this paragraph)--</DELETED>
                        <DELETED>    (i) by striking out ``paragraph 
                        (7)(D)'' in each place it appears and inserting 
                        in each such place ``paragraph (8)(D)''; 
                        and</DELETED>
                        <DELETED>    (ii) by striking out the period 
                        and inserting in lieu thereof a semicolon and 
                        ``and''; and</DELETED>
                <DELETED>    (E) by adding at the end thereof the 
                following new paragraph:</DELETED>
        <DELETED>    ``(10) the term `Small Capitalization Stock Index 
        Investment Fund' means the Small Capitalization Stock Index 
        Investment Fund established under subsection (b)(1)(D).''; 
        and</DELETED>
        <DELETED>    (2) in subsection (b)--</DELETED>
                <DELETED>    (A) in paragraph (1)--</DELETED>
                        <DELETED>    (i) in subparagraph (B) by 
                        striking out ``and'' at the end 
                        thereof;</DELETED>
                        <DELETED>    (ii) in subparagraph (C) by 
                        striking out the period and inserting in lieu 
                        thereof a semicolon; and</DELETED>
                        <DELETED>    (iii) by adding at the end thereof 
                        the following new subparagraphs:</DELETED>
                <DELETED>    ``(D) a Small Capitalization Stock Index 
                Investment Fund as provided in paragraph (3); 
                and</DELETED>
                <DELETED>    ``(E) an International Stock Index 
                Investment Fund as provided in paragraph (4).''; 
                and</DELETED>
                <DELETED>    (B) by adding at the end thereof the 
                following new paragraphs:</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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 
        practicable, 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 aggregate 
        market value of all shares of that stock by the aggregate 
        market value of all shares of all stocks included in such 
        index.</DELETED>
        <DELETED>    ``(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 representation 
        of the international equity markets excluding the United States 
        equity markets.</DELETED>
        <DELETED>    ``(B) The International 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 practicable, the 
        percentage of the International Stock Index Investment Fund 
        that is invested in each stock is the same as the percentage 
        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.''.</DELETED>

<DELETED>SEC. 3. ACKNOWLEDGEMENT OF INVESTMENT RISK.</DELETED>

<DELETED>    Section 8439(d) of title 5, United States Code, is amended 
by striking out ``Each employee, Member, former employee, or former 
Member who elects to invest in the Common Stock Index Investment Fund 
or the Fixed Income Investment Fund described in paragraphs (1) and 
(3),'' and inserting in lieu thereof ``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, defined in paragraphs (1), (3), (5), and 
(10),''.</DELETED>

<DELETED>SEC. 4. EFFECTIVE DATE.</DELETED>

<DELETED>    This Act shall take effect on the date of enactment of 
this Act, and the Funds established under this Act shall be offered for 
investment at the earliest practicable election period (described in 
section 8432(b) of title 5, United States Code) as determined by the 
Executive Director in regulations.</DELETED>

    TITLE I--ADDITIONAL INVESTMENT FUNDS FOR THE THRIFT SAVINGS PLAN

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Thrift Savings Investment Funds 
Act of 1996''.

SEC. 102. ADDITIONAL INVESTMENT FUNDS FOR THE THRIFT SAVINGS PLAN.

    Section 8438 of title 5, United States Code, is amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraphs (5) through (8) as 
                paragraphs (6) through (9), respectively;
                    (B) by inserting after paragraph (4) the following 
                new paragraph:
            ``(5) the term `International Stock Index Investment Fund' 
        means the International Stock Index Investment Fund established 
        under subsection (b)(1)(E);'';
                    (C) in paragraph (8) (as redesignated by 
                subparagraph (A) of this paragraph) by striking out 
                ``and'' at the end thereof;
                    (D) in paragraph (9) (as redesignated by 
                subparagraph (A) of this paragraph)--
                            (i) by striking out ``paragraph (7)(D)'' in 
                        each place it appears and inserting in each 
                        such place ``paragraph (8)(D)''; and
                            (ii) by striking out the period and 
                        inserting in lieu thereof a semicolon and 
                        ``and''; and
                    (E) by adding at the end thereof the following new 
                paragraph:
            ``(10) the term `Small Capitalization Stock Index 
        Investment Fund' means the Small Capitalization 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 out 
                        ``and'' at the end thereof;
                            (ii) in subparagraph (C) by striking out 
                        the period and inserting in lieu thereof a 
                        semicolon; and
                            (iii) by adding at the end thereof the 
                        following new subparagraphs:
                    ``(D) a Small Capitalization Stock Index Investment 
                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 thereof the following new 
                paragraphs:
            ``(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 practicable, 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 aggregate 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 representation 
        of the international equity markets excluding the United States 
        equity markets.
            ``(B) The International 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 practicable, the 
        percentage of the International Stock Index Investment Fund 
        that is invested in each stock is the same as the percentage 
        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. 103. ACKNOWLEDGEMENT OF INVESTMENT RISK.

    Section 8439(d) of title 5, United States Code, is amended by 
striking out ``Each employee, Member, former employee, or former Member 
who elects to invest in the Common Stock Index Investment Fund or the 
Fixed Income Investment Fund described in paragraphs (1) and (3),'' and 
inserting in lieu thereof ``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, defined in paragraphs (1), (3), (5), and (10),''.

SEC. 104. EFFECTIVE DATE.

    This title shall take effect on the date of enactment of this Act, 
and the Funds established under this title shall be offered for 
investment at the earliest practicable election period (described in 
section 8432(b) of title 5, United States Code) as determined by the 
Executive Director in regulations.

              TITLE II--THRIFT SAVINGS ACCOUNTS LIQUIDITY

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Thrift Savings Plan Act of 1996''.

SEC. 202. NOTICE TO SPOUSES FOR IN-SERVICE WITHDRAWALS; 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 out ``An election, change 
                        of election, or modification (relating to the 
                        commencement date of a deferred annuity)'' and 
                        inserting in lieu thereof ``An election or 
                        change of election'';
                            (ii) by inserting ``or withdrawal'' after 
                        ``and a loan'';
                            (iii) by inserting ``and (h)'' after 
                        ``8433(g)'';
                            (iv) by striking out ``the election, change 
                        of election, or modification'' and inserting in 
                        lieu thereof ``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 out ``$3,500 or less'' and 
                inserting in lieu thereof ``less than an amount that 
                the Executive Director prescribes by regulation''; and
                    (B) by striking out ``unless the employee or Member 
                elects, at such time and otherwise in such manner as 
                the Executive Director prescribes, one of the options 
                available under subsection (b)''.

SEC. 203. IN-SERVICE WITHDRAWALS; WITHDRAWAL ELECTIONS, FEDERAL 
              EMPLOYEES RETIREMENT SYSTEM PARTICIPANTS.

    (a) In General.--Section 8433 of title 5, United States Code, is 
amended--
            (1) by striking out subsections (b) and (c) and inserting 
        in lieu thereof the following:
    ``(b) Subject to section 8435 of this title, any employee or Member 
who separates from Government employment is entitled and may elect to 
withdraw from the Thrift Savings Fund the balance of the employee's or 
Member's account as--
            ``(1) an annuity;
            ``(2) a single payment;
            ``(3) 2 or more substantially equal payments to be made not 
        less frequently than annually; or
            ``(4) any combination of payments as provided under 
        paragraphs (1) through (3) as the Executive Director may 
        prescribe by regulation.
    ``(c)(1) In addition to the right provided under subsection (b) to 
withdraw the balance of the account, an employee or Member who 
separates from Government service and who has not made a withdrawal 
under subsection (h)(1)(A) may make one withdrawal of any amount as a 
single payment in accordance with subsection (b)(2) from the employee's 
or Member's account.
    ``(2) An employee or Member may request that the amount withdrawn 
from the Thrift Savings Fund in accordance with subsection (b)(2) be 
transferred to an eligible retirement plan.
    ``(3) The Executive Director shall make each transfer elected under 
paragraph (2) directly to an eligible retirement 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 paragraph (2) until the Executive 
Director receives from that individual the information required by the 
Executive Director 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 out ``Subject to 
                paragraph (3)(A)'' and inserting in lieu thereof 
                ``Subject to paragraph (3)'';
                    (B) by striking out paragraph (2) and redesignating 
                paragraph (3) as paragraph (2); and
                    (C) in paragraph (2) (as redesignated under 
                subparagraph (B) of this paragraph)--
                            (i) in subparagraph (A) by striking out 
                        ``(A)''; and
                            (ii) by striking out subparagraph (B);
            (3) in subsection (f)(1)--
                    (A) by striking out ``$3,500 or less'' and 
                inserting in lieu thereof ``less than an amount that 
                the Executive Director prescribes by regulation; and
                    (B) by striking out ``unless the employee or Member 
                elects, at such time and otherwise in such manner as 
                the Executive Director prescribes, one of the options 
                available under subsection (b), or'' and inserting a 
                comma;
            (4) in subsection (f)(2)--
                    (A) by striking out ``February 1'' and inserting in 
                lieu thereof ``April 1'';
                    (B) in subparagraph (A)--
                            (i) by striking out ``65'' and inserting in 
                        lieu thereof ``70\1/2\''; and
                            (ii) by inserting ``or'' after the 
                        semicolon;
                    (C) by striking out subparagraph (B); and
                    (D) by redesignating subparagraph (C) as 
                subparagraph (B);
            (5) in subsection (g)--
                    (A) in paragraph (1) by striking out ``after 
                December 31, 1987, and''; and
                    (B) by striking out paragraph (2) and redesignating 
                paragraphs (3) through (5) as paragraphs (2) through 
                (4), respectively; and
            (6) by adding after subsection (g) the following new 
        subsection:
    ``(h)(1) An employee or Member may apply, before separation, 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 59\1/2\; 
        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 contributions 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 prescribe by regulation.
    ``(5) A withdrawal may not be made under this subsection 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 regulation by the Executive Director in accordance with section 207 
of this title, shall be invalid.

SEC. 204. SURVIVOR ANNUITIES FOR FORMER SPOUSES; NOTICE TO FEDERAL 
              EMPLOYEES RETIREMENT SYSTEM SPOUSES FOR IN-SERVICE 
              WITHDRAWALS.

    Section 8435 of title 5, United States Code, is amended--
            (1) in subsection (a)(1)(A)--
                    (A) by striking out ``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 in lien thereof ``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 thereof ``A married 
                employee or Member (or former employee or Member) may 
                make a withdrawal from a Thrift Savings Fund account 
                under subsection (c)(1) of section 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 out ``An election, change 
                        of election, or modification of the 
                        commencement date of a deferred annuity'' and 
                        inserting in lieu thereof ``An election or 
                        change of election''; and
                            (ii) by striking out ``modification, or 
                        transfer'' and inserting in lien thereof ``or 
                        transfer''; and
                    (B) in paragraph (2) in the matter following 
                subparagraph (B)(ii) by striking out ``modification,'';
            (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 
                                withdrawal'' 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 ``8344(g)''.

SEC. 205. DE MINIMUS ACCOUNTS RELATING TO THE JUDICIARY.

    (a) Justices and Judges.--Section 8440a(b)(7) of title 5, United 
States Code, is amended--
            (1) by striking out ``$3,500 or less'' and inserting in 
        lieu thereof ``less than an amount that the Executive Director 
        prescribes by regulation''; and
            (2) by striking out ``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.--Section 8440b(b) of title 
5, United States Code, is amended--
            (1) in paragraph (7) in the first sentence by inserting 
        ``of the distribution'' after ``equal to the amount''; and
            (2) in paragraph (8)--
                    (A) by striking out ``$3,500 or less'' and 
                inserting in lieu thereof ``less than an amount that 
                the Executive Director prescribes by regulation''; and
                    (B) by striking out ``unless the bankruptcy judge 
                or magistrate elects, at such time and otherwise 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 inserting 
        ``of the distribution'' after ``equal to the amount''; and
            (2) in paragraph (8)--
                    (A) by striking out ``$3,500 or less'' and 
                inserting in lieu thereof ``less than an amount that 
                the Executive Director prescribes by regulation''; and
                    (B) by striking out ``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. 206. DEFINITION OF BASIC PAY.

    (a) In General.--(1) Section 8401(4) of title 5, United States 
Code, is amended by striking out ``except as provided in subchapter III 
of this chapter,''.
    (2) Section 8431 of title 5, United States Code, is repealed.
    (b) Technical and Conforming Amendments.--(1) The table of sections 
for chapter 84 of title 5, United States Code, is amended by striking 
out the item relating to section 8431.
    (2) Section 5545a(h)(2)(A) of title 5, United States Code, is 
amended by striking out ``8431,''.
    (3) Section 615(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 out ``section 8431 of title 
5, United States Code,''.

SEC. 207. EFFECTIVE DATE.

    This title shall take effect on the date of the enactment of this 
Act and withdrawals and elections as provided under the amendments made 
by this title shall be made at the earliest practicable date as 
determined by the Executive Director in regulations.
            Amend the title so as to read: ``A bill to amend chapters 
        83 and 84 of title 5, United States Code, to provide additional 
        investment funds for the Thrift Savings Plan, to permit 
        employees to gain additional liquidity in their Thrift Savings 
        Accounts, and for other purposes.''.