[Congressional Record Volume 145, Number 11 (Friday, January 22, 1999)]
[Senate]
[Pages S899-S900]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SHELBY:
  S. 297. A bill to amend title 37, United States Code, to authorize 
members of the uniformed services to participate in the Thrift Savings 
Plan, and for other purposes; to the Committee on Governmental Affairs.


                 THRIFT SAVINGS PLAN (TSP) LEGISLATION

 Mr. SHELBY. Mr. President, I rise today to introduce 
legislation to increase the retirement benefits for military personnel 
by allowing them to participate in the Thrift Savings Plan (TSP).
  Many of us are concerned about the current state of readiness in our 
military forces, and rightly so. In the last decade, the number of 
Americans wearing their nation's uniform has decreased precipitously 
along with the funding that pays for their weapons, aircraft, ships, 
wages, housing, and benefits. Tragically, as the defense budget 
withers, our military's operational tempo soars. Overseas deployments 
have steadily increased in number, scope, and duration. Our troops are 
working harder than ever and yet, we have failed to support them. In 
addition to inadequately funding much needed weapons modernization, we 
have kept their wages low and slowly eroded their benefits. As we make 
it less and less attractive to serve, we

[[Page S900]]

will not be able to recruit high quality people and those that now 
serve will continue to leave. Recruiting and retention are the backbone 
of our military services. Without either there is no readiness. Our 
service men and women are being stretched to the breaking point, and 
they are voting with their feet. We must act now.
  Senior Pentagon officials have determined that retirement benefits 
are a key consideration in the decision to pursue a military career and 
therefore are critical to the retention of our best people. Because of 
reduced retirement benefits--commonly referred to as ``Redux''--an 
increasing number of mid-career personnel are deciding to leave the 
military. In recent testimony to the Senate, General Henry Shelton, the 
Chairman of the Joint Chiefs of Staff, stated that ``that is why, among 
a number of pressing needs, reforming military retirement and military 
pay remains the Joint Chiefs' highest priority.''
  The bill I am introducing today is simple and straightforward. It 
shores up the military retirement system by allowing military personnel 
to supplement direct benefits through participation in the Thrift 
Saving Plan (TSP). This legislation will provide ALL military personnel 
a retirement benefit that is available to federal employees and all of 
us in the Senate and our staffs. Furthermore, the inherent flexibility 
of TSP will give military personnel and their families greater control 
over their retirement benefits. For these reasons, this legislation is 
a priority for the leadership in the Senate.
  Specifically, my bill will allow members of the armed services to 
contribute up to 5 percent of basic pay in a tax-deferred individual 
account where the funds are held in trust and invested and can later be 
withdrawn at retirement. As an additional incentive for a military 
career, personnel will be qualified to contribute up to 10 percent of 
their basic pay after 10 years of service. As is the case with the 
Federal Employee Retirement System (FERS), the government would provide 
up to 5 percent to match the individual's contribution.
  So often we marvel over our high-tech weapons systems and we forget 
that they are useless without highly skilled and professional Americans 
to operate them. If the services continue to hemorrhage qualified 
people at current rates, there will be a reckoning the magnitude of 
which we are not prepared to endure. We must take action now to slow 
the exodus of qualified personnel from the military. I believe that 
this bill will be a powerful tool to assist the services in retaining 
personnel, and I urge my colleagues to cosponsor this legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 297

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

     SECTION 1. PARTICIPATION OF MEMBERS OF THE UNIFORMED SERVICES 
                   IN THE THRIFT SAVINGS PLAN.

       (b) Authority.--(1) Chapter 3 of title 37, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 211. Participation in Thrift Savings Plan

       ``(a) Participation Authorized.--(1) A member of the 
     uniformed services may contribute to the Thrift Savings Fund 
     out of basic pay.
       ``(2) An election to contribute to the Thrift Savings Fund 
     under paragraph (1) may be made only during a period provided 
     under section 8432(b) of title 5 for individuals subject to 
     chapter 84 of such title.
       ``(b) Applicability of Thrift Savings Plan Provisions.--
     Except as otherwise provided in this section, the provisions 
     of subchapters III and VII of chapter 84 of title 5 shall 
     apply with respect to members of the uniformed services 
     making contributions to the Thrift Savings Fund as if such 
     members were employees within the meaning of section 8401(11) 
     of such title.
       ``(c) Maximum Contribution From Basic Pay.--(1) The amount 
     contributed by a member of the uniformed services for any pay 
     period out of basic pay may not exceed the amount equal to 
     the maximum allowable percent of such member's basic pay for 
     such pay period.
       ``(2) For the purposes of paragraph (1), the maximum 
     allowable percent of basic pay applicable to a member with 
     respect to a pay period is as follows:
       ``(A) If the member has less than 5 years of service 
     computed under section 205 of title 37 on or before the last 
     day of the pay period, 5 percent.
       ``(B) If the member has at least 5 years of service 
     computed under section 205 of title 37 on or before the last 
     day of the pay period, 10 percent.
       ``(d) Agency Contributions.--Contributions shall be made 
     under paragraph (2), but not any other paragraph, of section 
     8432(c) of title 5 for the benefit of a member of the 
     uniformed services making contributions to the Thrift Savings 
     Fund under subsection (a). For the purposes of this 
     subsection, the reference in paragraph (2) of such section to 
     contributions under paragraph (1) of such section does not 
     apply.
       ``(e) Rules of Construction.--The following rules of 
     construction apply for the purposes of this section:
       ``(1) In applying section 8433 of title 5 to a member of 
     the uniformed services who has an account balance in the 
     Thrift Savings Fund, any reference in such section to 
     separation from Government employment shall be construed to 
     refer to the following actions:
       ``(A) Release of the member from active-duty service (not 
     followed by a resumption of active-duty service within 30 
     days after the effective date of the release).
       ``(B) Transfer of the member to an inactive status.
       ``(C) Transfer of the member by the Secretary concerned to 
     a retired list maintained by the Secretary.
       ``(2) The reference in section 8433(g)(1) of title 5 to 
     contributions made under section 8432(a) of such title shall 
     be treated as being a reference to contributions made to the 
     Fund by the member, whether made under this section or 
     section 8351 or 8432(a) of title 5.''.
       (2) The table of sections at the beginning of such chapter 
     is amended by adding at the end the following:

``211. Participation in Thrift Savings Plan.''.

       (b) Relationship to Participation Under Other Authority.--
     Section 8432b(b)(2)(B) of title 5, United States Code, is 
     amended by inserting after ``section 8432(a)'' the following 
     ``of this title or section 211 of title 37''.
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