[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4363 Reported in House (RH)]

                                                 Union Calendar No. 383
112th CONGRESS
  2d Session
                                H. R. 4363

                          [Report No. 112-535]

  To amend title 5, United States Code, to allow Federal employees to 
         continue their public service while partially retired.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 17, 2012

 Mr. Issa (for himself, Mr. Ross of Florida, and Mr. Lynch) introduced 
 the following bill; which was referred to the Committee on Oversight 
                         and Government Reform

                             June 15, 2012

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
                  [Insert the part printed in italic]


_______________________________________________________________________

                                 A BILL


 
  To amend title 5, United States Code, to allow Federal employees to 
         continue their public service while partially retired.


 


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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Employee Phased Retirement 
Act''.

SEC. 2. PHASED RETIREMENT AUTHORITY.

    (a) CSRS.--Chapter 83 of title 5, United States Code, is amended--
            (1) in section 8331--
                    (A) in paragraph (30) by striking ``and'' at the 
                end;
                    (B) in paragraph (31) by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(32) `Director' means the Director of the Office of 
        Personnel Management.'';
            (2) by inserting after section 8336 the following:
``Sec. 8336a. Phased retirement
    ``(a) For the purposes of this section--
            ``(1) the term `composite retirement annuity' means the 
        annuity computed when a phased retiree attains full retirement 
        status;
            ``(2) the term `full retirement status' means that a phased 
        retiree has ceased employment and is entitled, upon 
        application, to a composite retirement annuity;
            ``(3) the term `phased employment' means the less-than-
        full-time employment of a phased retiree;
            ``(4) the term `phased retiree' means a retirement-eligible 
        employee who--
                    ``(A) makes an election under subsection (b); and
                    ``(B) has not entered full retirement status;
            ``(5) the term `phased retirement annuity' means the 
        annuity payable under this section before full retirement;
            ``(6) the term `phased retirement percentage' means the 
        percentage which, when added to the working percentage for a 
        phased retiree, produces a sum of 100 percent;
            ``(7) the term `phased retirement period' means the period 
        beginning on the date on which an individual becomes entitled 
        to receive a phased retirement annuity and ending on the date 
        on which the individual dies or separates from phased 
        employment;
            ``(8) the term `phased retirement status' means that a 
        phased retiree is concurrently employed in phased employment 
        and eligible to receive a phased retirement annuity;
            ``(9) the term `retirement-eligible employee'--
                    ``(A) means an individual who, if the individual 
                separated from the service, would meet the requirements 
                for retirement under subsection (a) or (b) of section 
                8336; but
                    ``(B) does not include an employee, described in 
                section 8335, after the date as of which such employee 
                is required to be separated from the service by reason 
                of such section; and
            ``(10) the term `working percentage' means the percentage 
        of full-time employment equal the quotient obtained by 
        dividing--
                    ``(A) the number of hours per pay period to be 
                worked by a phased retiree as scheduled in accordance 
                with subsection (b)(2); by
                    ``(B) the number of hours per pay period to be 
                worked by an employee serving in a comparable position 
                on a full-time basis.
    ``(b)(1) With the concurrence of the head of the employing agency, 
and under regulations promulgated by the Director, a retirement-
eligible employee who has been employed on a full-time basis for not 
less than the 3-year period ending on the date on which the retirement-
eligible employee makes an election under this subsection may elect to 
enter phased retirement status.
    ``(2)(A) Subject to subparagraph (B), at the time of entering 
phased retirement status, a phased retiree shall be appointed to a 
position for which the working percentage is 50 percent.
    ``(B) The Director may, by regulation, provide for working 
percentages different from the percentage specified under subparagraph 
(A), which shall be not less than 20 percent and not more than 80 
percent.
    ``(C) The working percentage for a phased retiree may not be 
changed during the phased retiree's phased retirement period.
    ``(D)(i) Not less than 20 percent of the hours to be worked by a 
phased retiree shall consist of mentoring.
    ``(ii) The Director may, by regulation, provide for exceptions to 
the requirement under clause (i).
    ``(iii) Clause (i) shall not apply to a phased retiree serving in 
the United States Postal Service. Nothing in this clause shall prevent 
the application of clause (i) or (ii) with respect to a phased retiree 
serving in the Postal Regulatory Commission.
    ``(3) A phased retiree--
            ``(A) may not be employed in more than one position at any 
        time; and
            ``(B) may transfer to another position in the same or a 
        different agency, if the transfer does not result in a change 
        in the working percentage.
    ``(4) A retirement-eligible employee may make only one election 
under this subsection during the retirement-eligible employee's 
lifetime.
    ``(5) A retirement-eligible employee who makes an election under 
this subsection may not make an election under section 8343a.
    ``(c)(1) Except as otherwise provided under this subsection, the 
phased retirement annuity for a phased retiree is the product obtained 
by multiplying--
            ``(A) the amount of an annuity computed under section 8339 
        that would have been payable to the phased retiree if, on the 
        date on which the phased retiree enters phased retirement 
        status, the phased retiree had separated from service and 
        retired under section 8336 (a) or (b); by
            ``(B) the phased retirement percentage for the phased 
        retiree.
    ``(2) A phased retirement annuity shall be paid in addition to the 
basic pay for the position to which a phased retiree is appointed 
during phased employment.
    ``(3) A phased retirement annuity shall be adjusted in accordance 
with section 8340.
    ``(4)(A) A phased retirement annuity shall not be subject to 
reduction for any form of survivor annuity, shall not serve as the 
basis of the computation of any survivor annuity, and shall not be 
subject to any court order requiring a survivor annuity to be provided 
to any individual.
    ``(B) A phased retirement annuity shall be subject to a court order 
providing for division, allotment, assignment, execution, levy, 
attachment, garnishment, or other legal process on the same basis as 
other annuities.
    ``(5) Any reduction of a phased retirement annuity based on an 
election under section 8334(d)(2) shall be applied to the phased 
retirement annuity after computation under paragraph (1).
    ``(6)(A) Any deposit, or election of an actuarial annuity reduction 
in lieu of a deposit, for military service or for creditable civilian 
service for which retirement deductions were not made or refunded shall 
be made by a retirement-eligible employee at or before the time the 
retirement-eligible employee enters phased retirement status. No such 
deposit may be made, or actuarial adjustment in lieu thereof elected, 
at the time a phased retiree enters full retirement status.
    ``(B) Notwithstanding subparagraph (A), if a phased retiree does 
not make such a deposit and dies in service as a phased retiree, a 
survivor of the phased retiree shall have the same right to make such 
deposit as would have been available had the employee not entered 
phased retirement status and died in service.
    ``(C) If a phased retiree makes an election for an actuarial 
annuity reduction under section 8334(d)(2) and dies in service as a 
phased retiree, the amount of any deposit upon which such actuarial 
reduction shall have been based shall be deemed to have been fully 
paid.
    ``(7) A phased retirement annuity shall commence on the date on 
which a phased retiree enters phased employment.
    ``(8) No unused sick leave credit may be used in the computation of 
the phased retirement annuity.
    ``(d) All basic pay not in excess of the full-time rate of pay for 
the position to which a phased retiree is appointed shall be deemed to 
be basic pay for purposes of section 8334.
    ``(e) Under such procedures as the Director may prescribe, a phased 
retiree may elect to enter full retirement status at any time. Upon 
making such an election, a phased retiree shall be entitled to a 
composite retirement annuity.
    ``(f)(1) Except as provided otherwise under this subsection, a 
composite retirement annuity is a single annuity computed under 
regulations prescribed by the Director, equal to the sum of--
            ``(A) the amount of the phased retirement annuity as of the 
        date of full retirement, before any reduction based on an 
        election under section 8334(d)(2), and including any 
        adjustments made under section 8340; and
            ``(B) the product obtained by multiplying--
                    ``(i) the amount of an annuity computed under 
                section 8339 that would have been payable at the time 
                of full retirement if the individual had not elected a 
                phased retirement and as if the individual was employed 
                on a full-time basis in the position occupied during 
                the phased retirement period and before any reduction 
                for survivor annuity or reduction based on an election 
                under section 8334(d)(2); by
                    ``(ii) the working percentage.
    ``(2) After computing a composite retirement annuity under 
paragraph (1), the Director shall adjust the amount of the annuity for 
any applicable reductions for a survivor annuity and any previously 
elected actuarial reduction under section 8334(d)(2).
    ``(3) A composite retirement annuity shall be adjusted in 
accordance with section 8340, except that subsection (c)(1) of that 
section shall not apply.
    ``(4) In computing a composite retirement annuity under paragraph 
(1)(B)(i), the unused sick leave to the credit of a phased retiree at 
the time of entry into full retirement status shall be adjusted by 
dividing the number of hours of unused sick leave by the working 
percentage.
    ``(g)(1) Under such procedures and conditions as the Director may 
provide, and with the concurrence of the head of the employing agency, 
a phased retiree may elect to terminate phased retirement status and 
return to a full-time work schedule.
    ``(2) Upon entering a full-time work schedule based upon an 
election under paragraph (1), the phased retirement annuity of a phased 
retiree shall terminate.
    ``(3) After the termination of a phased retirement annuity under 
this subsection, the individual's rights under this subchapter shall be 
determined based on the law in effect at the time of any subsequent 
separation from service. For purposes of this subchapter or chapter 84, 
at time of the subsequent separation from service, the phased 
retirement period shall be treated as if it had been a period of part-
time employment with the work schedule described in subsection (b)(2).
    ``(h) For purposes of section 8341--
            ``(1) the death of a phased retiree shall be deemed to be 
        the death in service of an employee; and
            ``(2) the phased retirement period shall be deemed to have 
        been a period of part-time employment with the work schedule 
        described in subsection (b)(2).
    ``(i) Employment of a phased retiree shall not be deemed to be 
part-time career employment, as defined in section 3401(2).
    ``(j) A phased retiree is not eligible to apply for an annuity 
under section 8337.
    ``(k) For purposes of section 8341(h)(4), retirement shall be 
deemed to occur on the date on which a phased retiree enters into full 
retirement status.
    ``(l) For purposes of sections 8343 and 8351, and subchapter III of 
chapter 84, a phased retiree shall be deemed to be an employee.
    ``(m) A phased retiree is not subject to section 8344.
    ``(n) For purposes of chapter 87, a phased retiree shall be deemed 
to be receiving basic pay at the rate of a full-time employee in the 
position to which the phased retiree is appointed.''; and
            (3) in the table of sections by inserting after the item 
        relating to section 8336 the following:

``8336a. Phased retirement.''.
    (b) FERS.--Chapter 84 of title 5, United States Code, is amended--
            (1) by inserting after section 8412 the following new 
        section:
``Sec. 8412a. Phased retirement
    ``(a) For the purposes of this section--
            ``(1) the term `composite retirement annuity' means the 
        annuity computed when a phased retiree attains full retirement 
        status;
            ``(2) the term `full retirement status' means that a phased 
        retiree has ceased employment and is entitled, upon 
        application, to a composite retirement annuity;
            ``(3) the term `phased employment' means the less-than-
        full-time employment of a phased retiree;
            ``(4) the term `phased retiree' means a retirement-eligible 
        employee who--
                    ``(A) makes an election under subsection (b); and
                    ``(B) has not entered full retirement status;
            ``(5) the term `phased retirement annuity' means the 
        annuity payable under this section before full retirement;
            ``(6) the term `phased retirement percentage' means the 
        percentage which, when added to the working percentage for a 
        phased retiree, produces a sum of 100 percent;
            ``(7) the term `phased retirement period' means the period 
        beginning on the date on which an individual becomes entitled 
        to receive a phased retirement annuity and ending on the date 
        on which the individual dies or separates from phased 
        employment;
            ``(8) the term `phased retirement status' means that a 
        phased retiree is concurrently employed in phased employment 
        and eligible to receive a phased retirement annuity;
            ``(9) the term `retirement-eligible employee'--
                    ``(A) means an individual who, if the individual 
                separated from the service, would meet the requirements 
                for retirement under subsection (a) or (b) of section 
                8412; and
                    ``(B) does not include--
                            ``(i) an individual who, if the individual 
                        separated from the service, would meet the 
                        requirements for retirement under subsection 
                        (d) or (e) of section 8412; but
                            ``(ii) does not include an employee, 
                        described in section 8425, after the date as of 
                        which such employee is required to be separated 
                        from the service by reason of such section; and
            ``(10) the term `working percentage' means the percentage 
        of full-time employment equal to the quotient obtained by 
        dividing--
                    ``(A) the number of hours per pay period to be 
                worked by a phased retiree as scheduled in accordance 
                with subsection (b)(2); by
                    ``(B) the number of hours per pay period to be 
                worked by an employee serving in a comparable position 
                on a full-time basis.
    ``(b)(1) With the concurrence of the head of the employing agency, 
and under regulations promulgated by the Director, a retirement-
eligible employee who has been employed on a full-time basis for not 
less than the 3-year period ending on the date on which the retirement-
eligible employee makes an election under this subsection may elect to 
enter phased retirement status.
    ``(2)(A) Subject to subparagraph (B), at the time of entering 
phased retirement status, a phased retiree shall be appointed to a 
position for which the working percentage is 50 percent.
    ``(B) The Director may, by regulation, provide for working 
percentages different from the percentage specified under subparagraph 
(A), which shall be not less than 20 percent and not more than 80 
percent.
    ``(C) The working percentage for a phased retiree may not be 
changed during the phased retiree's phased retirement period.
    ``(D)(i) Not less than 20 percent of the hours to be worked by a 
phased retiree shall consist of mentoring.
    ``(ii) The Director may, by regulation, provide for exceptions to 
the requirement under clause (i).
    ``(iii) Clause (i) shall not apply to a phased retiree serving in 
the United States Postal Service. Nothing in this clause shall prevent 
the application of clause (i) or (ii) with respect to a phased retiree 
serving in the Postal Regulatory Commission.
    ``(3) A phased retiree--
            ``(A) may not be employed in more than one position at any 
        time; and
            ``(B) may transfer to another position in the same or a 
        different agency, if the transfer does not result in a change 
        in the working percentage.
    ``(4) A retirement-eligible employee may make only one election 
under this subsection during the retirement-eligible employee's 
lifetime.
    ``(5) A retirement-eligible employee who makes an election under 
this subsection may not make an election under section 8420a.
    ``(c)(1) Except as otherwise provided under this subsection, the 
phased retirement annuity for a phased retiree is the product obtained 
by multiplying--
            ``(A) the amount of an annuity computed under section 8415 
        that would have been payable to the phased retiree if, on the 
        date on which the phased retiree enters phased retirement 
        status, the phased retiree had separated from service and 
        retired under section 8412 (a) or (b); by
            ``(B) the phased retirement percentage for the phased 
        retiree.
    ``(2) A phased retirement annuity shall be paid in addition to the 
basic pay for the position to which a phased retiree is appointed 
during the phased employment.
    ``(3) A phased retirement annuity shall be adjusted in accordance 
with section 8462.
    ``(4)(A) A phased retirement annuity shall not be subject to 
reduction for any form of survivor annuity, shall not serve as the 
basis of the computation of any survivor annuity, and shall not be 
subject to any court order requiring a survivor annuity to be provided 
to any individual.
    ``(B) A phased retirement annuity shall be subject to a court order 
providing for division, allotment, assignment, execution, levy, 
attachment, garnishment, or other legal process on the same basis as 
other annuities.
    ``(5)(A) Any deposit, or election of an actuarial annuity reduction 
in lieu of a deposit, for military service or for creditable civilian 
service for which retirement deductions were not made or refunded, 
shall be made by a retirement-eligible employee at or before the time 
the retirement-eligible employee enters phased retirement status. No 
such deposit may be made, or actuarial adjustment in lieu thereof 
elected, at the time a phased retiree enters full retirement status.
    ``(B) Notwithstanding subparagraph (A), if a phased retiree does 
not make such a deposit and dies in service as a phased retiree, a 
survivor of the phased retiree shall have the same right to make such 
deposit as would have been available had the employee not entered 
phased retirement status and died in service.
    ``(6) A phased retirement annuity shall commence on the date on 
which a phased retiree enters phased employment.
    ``(7) No unused sick leave credit may be used in the computation of 
the phased retirement annuity.
    ``(d) All basic pay not in excess of the full-time rate of pay for 
the position to which a phased retiree is appointed shall be deemed to 
be basic pay for purposes of sections 8422 and 8423.
    ``(e) Under such procedures as the Director may prescribe, a phased 
retiree may elect to enter full retirement status at any time. Upon 
making such an election, a phased retiree shall be entitled to a 
composite retirement annuity.
    ``(f)(1) Except as provided otherwise under this subsection, a 
composite retirement annuity is a single annuity computed under 
regulations prescribed by the Director, equal to the sum of--
            ``(A) the amount of the phased retirement annuity as of the 
        date of full retirement, including any adjustments made under 
        section 8462; and
            ``(B) the product obtained by multiplying--
                    ``(i) the amount of an annuity computed under 
                section 8412 that would have been payable at the time 
                of full retirement if the individual had not elected a 
                phased retirement and as if the individual was employed 
                on a full-time basis in the position occupied during 
                the phased retirement period and before any adjustment 
                to provide for a survivor annuity; by
                    ``(ii) the working percentage.
    ``(2) After computing a composite retirement annuity under 
paragraph (1), the Director shall adjust the amount of the annuity for 
any applicable reductions for a survivor annuity.
    ``(3) A composite retirement annuity shall be adjusted in 
accordance with section 8462, except that subsection (c)(1) of that 
section shall not apply.
    ``(4) In computing a composite retirement annuity under paragraph 
(1)(B)(i), the unused sick leave to the credit of a phased retiree at 
the time of entry into full retirement status shall be adjusted by 
dividing the number of hours of unused sick leave by the working 
percentage.
    ``(g)(1) Under such procedures and conditions as the Director may 
provide, and with the concurrence of the head of employing agency, a 
phased retiree may elect to terminate phased retirement status and 
return to a full-time work schedule.
    ``(2) Upon entering a full-time work schedule based on an election 
under paragraph (1), the phased retirement annuity of a phased retiree 
shall terminate.
    ``(3) After termination of the phased retirement annuity under this 
subsection, the individual's rights under this chapter shall be 
determined based on the law in effect at the time of any subsequent 
separation from service. For purposes of this chapter, at the time of 
the subsequent separation from service, the phased retirement period 
shall be treated as if it had been a period of part-time employment 
with the work schedule described in subsection (b)(2).
    ``(h) For purposes of subchapter IV--
            ``(1) the death of a phased retiree shall be deemed to be 
        the death in service of an employee;
            ``(2) except for purposes of section 8442(b)(1)(A)(i), the 
        phased retirement period shall be deemed to have been a period 
        of part-time employment with the work schedule described in 
        subsection (b)(2) of this section; and
            ``(3) for purposes of section 8442(b)(1)(A)(i), the phased 
        retiree shall be deemed to have been at the full-time rate of 
        pay for the position occupied.
    ``(i) Employment of a phased retiree shall not be deemed to be 
part-time career employment, as defined in section 3401(2).
    ``(j) A phased retiree is not eligible to receive an annuity 
supplement under section 8421.
    ``(k) For purposes of subchapter III, a phased retiree shall be 
deemed to be an employee.
    ``(l) For purposes of section 8445(d), retirement shall be deemed 
to occur on the date on which a phased retiree enters into full 
retirement status.
    ``(m) A phased retiree is not eligible to apply for an annuity 
under subchapter V.
    ``(n) A phased retiree is not subject to section 8468.
    ``(o) For purposes of chapter 87, a phased retiree shall be deemed 
to be receiving basic pay at the rate of a full-time employee in the 
position to which the phased retiree is appointed.''; and
            (2) in the table of sections by inserting after the item 
        relating to section 8412 the following:

``8412a. Phased retirement.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the effective date of the implementing regulations issued by 
the Director of the Office of Personnel Management.

SEC. 3. CONTRIBUTIONS TO THRIFT SAVINGS FUND OF PAYMENTS FOR ACCRUED OR 
              ACCUMULATED LEAVE.

    (a) Civil Service Retirement System.--Section 8351(b)(2) of title 
5, United States Code, is amended by adding at the end the following:
    ``(D)(i) A qualified phased retiree may, in addition to any 
contributions otherwise allowable, contribute to the Thrift Savings 
Fund by direct transfer any part of any amount otherwise payable to 
such retiree for accumulated and current accrued annual or vacation 
leave under section 5551 or 5552.
    ``(ii) For purposes of this subparagraph, the term `qualified 
phased retiree' means a phased retiree (as defined by section 8336a) 
who has completed at least 1 year of service as such a retiree.''.
    (b) Federal Employees' Retirement System.--Section 8432(a) of title 
5, United States Code, is amended by adding at the end the following:
    ``(4)(A) A qualified phased retiree may, in addition to any 
contributions otherwise allowable, contribute to the Thrift Savings 
Fund by direct transfer any part of any amount otherwise payable to 
such retiree for accumulated and current accrued annual or vacation 
leave under section 5551 or 5552.
    ``(B) For purposes of this paragraph, the term `qualified phased 
retiree' means a phased retiree (as defined by section 8412a) who has 
completed at least 1 year of service as such a retiree.''.
    (c) Regulations.--The Executive Director of the Federal Retirement 
Thrift Investment Board shall prescribe regulations to carry out the 
amendments made by this section.
    (d) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this section, or upon 
such earlier date as may be established by the Executive Director of 
the Federal Retirement Thrift Investment Board under the regulations 
prescribed under subsection (c).
                                                 Union Calendar No. 383

112th CONGRESS

  2d Session

                               H. R. 4363

                          [Report No. 112-535]

_______________________________________________________________________

                                 A BILL

  To amend title 5, United States Code, to allow Federal employees to 
         continue their public service while partially retired.

_______________________________________________________________________

                             June 15, 2012

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed