[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1263 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 1263

  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.


_______________________________________________________________________


                    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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Federal Retirement 
Reform Act of 2009''.
    (b) 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.

                TITLE I--THRIFT SAVINGS PLAN ENHANCEMENT

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Thrift Savings Plan Enhancement 
Act of 2009''.

SEC. 102. AUTOMATIC ENROLLMENTS.

    (a) In General.--Section 8432(b) of title 5, United States Code, is 
amended by striking paragraphs (2) through (4) and inserting the 
following:
    ``(2)(A) 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.
    ``(B) 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.
    ``(C) The regulations shall include provisions under which any 
individual who would otherwise be automatically enrolled in accordance 
with subparagraph (A) may--
            ``(i) modify the percentage or amount to be contributed 
        pursuant to automatic enrollment, effective from the start of 
        such enrollment; or
            ``(ii) decline automatic enrollment altogether.
    ``(D) 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.
    ``(E) 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.''.
    (b) Technical Amendment.--Section 8432(b)(1) of title 5, United 
States Code, is amended by striking the parenthetical matter in 
subparagraph (B).

SEC. 103. QUALIFIED ROTH CONTRIBUTION PROGRAM.

    (a) In General.--Subchapter III of chapter 84 of title 5, United 
States Code, is amended by inserting after section 8432c the following:
``Sec. 8432d. Qualified Roth contribution program
    ``(a) Definitions.--For purposes of this section--
            ``(1) 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
            ``(2) the terms `designated Roth contribution' and 
        `elective deferral' have the meanings given such terms in 
        section 402A of the Internal Revenue Code of 1986.
    ``(b) 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.
    ``(c) Required Provisions.--The regulations under subsection (b) 
shall include--
            ``(1) provisions under which an election to make designated 
        Roth contributions may be made--
                    ``(A) by any individual who is eligible to make 
                contributions under section 8351, 8432(a), 8440a, 
                8440b, 8440c, 8440d, or 8440e; and
                    ``(B) by any individual, not described in 
                subparagraph (A), who is otherwise eligible to make 
                elective deferrals under the Thrift Savings Plan;
            ``(2) 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
            ``(3) any other provisions which may be necessary to carry 
        out this section.''.
    (b) 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.''.

SEC. 104. AUTHORITY TO ESTABLISH SELF-DIRECTED INVESTMENT WINDOW.

    (a) In General.--Section 8438(b)(1) of title 5, United States Code, 
is amended--
            (1) in subparagraph (D), by striking ``and'' at the end;
            (2) in subparagraph (E), by striking the period and 
        inserting ``; and''; and
            (3) by adding after subparagraph (E) the following:
                    ``(F) a self-directed investment window, if the 
                Board authorizes such window under paragraph (5).''.
    (b) Requirements.--Section 8438(b) of title 5, United States Code, 
is amended by adding at the end the following:
    ``(5)(A) 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.
    ``(B) The self-directed investment window shall be limited to--
            ``(i) low-cost, passively-managed index funds that offer 
        diversification benefits; and
            ``(ii) other investment options, if the Board determines 
        the options to be appropriate retirement investment vehicles 
        for participants.
    ``(C) 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.
    ``(D) 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.
    ``(E) The Board shall consult with the Employee Thrift Advisory 
Council (established under section 8473) before establishing any self-
directed investment window.''.

SEC. 105. REPORTING REQUIREMENTS.

    (a) 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.
    (b) Reporting of Fees and Other Information.--
            (1) 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.
            (2) 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.
    (c) Definitions.--For purposes of this section--
            (1) the term ``Board'' has the meaning given such term by 
        8401(5) of title 5, United States Code;
            (2) the term ``participant'' has the meaning given such 
        term by section 8471(3) of title 5, United States Code; and
            (3) the term ``account'' means an account established under 
        section 8439 of title 5, United States Code.

SEC. 106. ACKNOWLEDGEMENT OF RISK.

    (a) In General.--Section 8439(d) of title 5, United States Code, is 
amended--
            (1) 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
            (2) by striking ``either such Fund'' and inserting ``any 
        such fund or option''.
    (b) 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--
            (1) by redesignating subsection (d) as subsection (d)(1); 
        and
            (2) by adding at the end the following:
    ``(2)(A) 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--
            ``(i) to have elected to invest in such fund or option; and
            ``(ii) to have executed the acknowledgement required under 
        paragraph (1).
    ``(B)(i) 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).
    ``(ii) 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.
    ``(C) For purposes of this paragraph, the term `participant' has 
the meaning given such term by section 8471(3).''.
    (c) Coordination With Provisions Relating to Fiduciary 
Responsibilities, Liabilities, and Penalties.--Section 8477(e)(1)(C) of 
title 5, United States Code, is amended--
            (1) by redesignating subparagraph (C) as subparagraph 
        (C)(i); and
            (2) by adding at the end the following:
    ``(ii) A fiduciary shall not be liable under subparagraph (A), and 
no civil action may be brought against a fiduciary--
            ``(I) for providing for the automatic enrollment of a 
        participant in accordance with section 8432(b)(2)(A);
            ``(II) for enrolling a participant in a default investment 
        fund in accordance with section 8438(c)(2)(B); or
            ``(III) 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.''.

SEC. 107. CREDIT FOR UNUSED SICK LEAVE.

    (a) In General.--Section 8415 of title 5, United States Code, is 
amended--
            (1) by redesignating the second subsection (k) and 
        subsection (l) as subsections (l) and (m), respectively; and
            (2) in subsection (l) (as so redesignated by paragraph 
        (1))--
                    (A) by striking ``(l) In computing'' and inserting 
                ``(l)(1) In computing''; and
                    (B) by adding at the end the following:
    ``(2) 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.''.
    (b) 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)''.
    (c) 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.

 TITLE II--COMPUTATION OF CERTAIN ANNUITIES BASED ON PART-TIME SERVICE

SEC. 201. 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:
    ``(3) In the administration of paragraph (1)--
            ``(A) subparagraph (A) of such paragraph shall apply with 
        respect to service performed before, on, or after April 7, 
        1986; and
            ``(B) subparagraph (B) of such paragraph--
                    ``(i) shall apply with respect to that portion of 
                any annuity which is attributable to service performed 
                on or after April 7, 1986; and
                    ``(ii) shall not apply with respect to that portion 
                of any annuity which is attributable to service 
                performed before April 7, 1986.''.

SEC. 202. 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.

     TITLE III--RETIREMENT CREDIT FOR SERVICE OF CERTAIN EMPLOYEES 
    TRANSFERRED FROM DISTRICT OF COLUMBIA SERVICE TO FEDERAL SERVICE

SEC. 301. SHORT TITLE.

    This Act may be cited as the ``District of Columbia Court, Offender 
Supervision, Parole, and Public Defender Employees Equity Act of 
2009''.

SEC. 302. RETIREMENT CREDIT FOR SERVICE OF CERTAIN EMPLOYEES 
              TRANSFERRED FROM DISTRICT OF COLUMBIA SERVICE TO FEDERAL 
              SERVICE.

    (a) 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:
            (1) Sections 8333 and 8410 (relating to eligibility for 
        annuity).
            (2) Sections 8336 (other than subsections (d), (h), and (p) 
        thereof) and 8412 (relating to immediate retirement).
            (3) Sections 8338 and 8413 (relating to deferred 
        retirement).
            (4) Sections 8336(d), 8336(h), 8336(p), and 8414 (relating 
        to early retirement).
            (5) Section 8341 and subchapter IV of chapter 84 (relating 
        to survivor annuities).
            (6) Section 8337 and subchapter V of chapter 84 (relating 
        to disability benefits).
    (b) 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.
    (c) 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.

SEC. 303. QUALIFYING DISTRICT OF COLUMBIA SERVICE DEFINED.

    In this title, ``qualifying District of Columbia service'' means 
any of the following:
            (1) Service performed by an individual as a nonjudicial 
        employee of the District of Columbia courts--
                    (A) which was performed prior to the effective date 
                of the amendments made by section 11246(b) of the 
                Balanced Budget Act of 1997; and
                    (B) 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).
            (2) 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--
                    (A) 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
                    (B) 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).
            (3) Service performed by an individual as an employee of 
        the District of Columbia Public Defender Service--
                    (A) 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
                    (B) 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).
            (4) 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--
                    (A) which was performed prior to the effective date 
                of the individual's coverage as an employee of the 
                Federal Government; and
                    (B) 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).

SEC. 304. 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.

 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.

    (a) 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''.
    (b) Definitions.--Paragraph (4) of section 402(l) of such Code 
(relating to definitions) is amended by adding at the end the following 
new subparagraphs:
                    ``(E) Federal annuitant.--The term `Federal 
                annuitant' means an annuitant, as defined by paragraph 
                (3) of section 8901 of title 5, United States Code.
                    ``(F) 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.''.
    (c) 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.
    (d) Effective Date.--The amendments made by this section shall 
apply to distributions in taxable years beginning after December 31, 
2008.
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