[Congressional Record Volume 145, Number 54 (Tuesday, April 20, 1999)]
[House]
[Pages H2161-H2164]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    ALLOWING FOR CONTRIBUTIONS OF CERTAIN ROLLOVER DISTRIBUTIONS TO 
   ACCOUNTS AND ELIMINATING CERTAIN WAITING-PERIOD REQUIREMENTS FOR 
                  PARTICIPATING IN THRIFT SAVINGS PLAN

  Mr. SCARBOROUGH. Mr. Speaker, I move to suspend the rules and pass 
the

[[Page H2162]]

bill (H.R. 208) to amend title 5, United States Code, to allow for the 
contribution of certain rollover distributions to accounts in the 
Thrift Savings Plan, to eliminate certain waiting-period requirements 
for participating in the Thrift Savings Plan, and for other purposes, 
as amended.
  The Clerk read as follows:

                                H.R. 208

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

     SECTION 1. ELIGIBLE ROLLOVER DISTRIBUTIONS.

       (a) In General.--Section 8432 of title 5, United States 
     Code, is amended by adding at the end the following:
       ``(j)(1) For the purpose of this subsection--
       ``(A) the term `eligible rollover distribution' has the 
     meaning given such term by section 402(c)(4) of the Internal 
     Revenue Code of 1986; and
       ``(B) the term `qualified trust' has the meaning given such 
     term by section 402(c)(8) of the Internal Revenue Code of 
     1986.
       ``(2) An employee or Member may contribute to the Thrift 
     Savings Fund an eligible rollover distribution from a 
     qualified trust. A contribution made under this subsection 
     shall be made in the form described in section 401(a)(31) of 
     the Internal Revenue Code of 1986. In the case of an eligible 
     rollover distribution, the maximum amount transferred to the 
     Thrift Savings Fund shall not exceed the amount which would 
     otherwise have been included in the employee's or Member's 
     gross income for Federal income tax purposes.
       ``(3) The Executive Director shall prescribe regulations to 
     carry out this subsection.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on October 1, 2000, or such earlier date as 
     the Executive Director (as defined by section 8401 of title 
     5, United States Code) may by regulation prescribe, but not 
     before September 1, 2000.

     SEC. 2. IMMEDIATE PARTICIPATION IN THE THRIFT SAVINGS PLAN.

       (a) Elimination of Certain Waiting Periods for Purposes of 
     Employee Contributions.--Paragraph (4) of section 8432(b) of 
     title 5, United States Code, is amended to read as follows:
       ``(4) The Executive Director shall prescribe such 
     regulations as may be necessary to carry out the following:
       ``(A) Notwithstanding subparagraph (A) of paragraph (2), an 
     employee or Member described in such subparagraph shall be 
     afforded a reasonable opportunity to first make an election 
     under this subsection beginning on the date of commencing 
     service or, if that is not administratively feasible, 
     beginning on the earliest date thereafter that such an 
     election becomes administratively feasible, as determined by 
     the Executive Director.
       ``(B) An employee or Member described in subparagraph (B) 
     of paragraph (2) shall be afforded a reasonable opportunity 
     to first make an election under this subsection (based on the 
     appointment or election described in such subparagraph) 
     beginning on the date of commencing service pursuant to such 
     appointment or election or, if that is not administratively 
     feasible, beginning on the earliest date thereafter that such 
     an election becomes administratively feasible, as determined 
     by the Executive Director.
       ``(C) Notwithstanding the preceding provisions of this 
     paragraph, contributions under paragraphs (1) and (2) of 
     subsection (c) shall not be payable with respect to any pay 
     period before the earliest pay period for which such 
     contributions would otherwise be allowable under this 
     subsection if this paragraph had not been enacted.
       ``(D) Sections 8351(a)(2), 8440a(a)(2), 8440b(a)(2), 
     8440c(a)(2), and 8440d(a)(2) shall be applied in a manner 
     consistent with the purposes of subparagraphs (A) and (B), to 
     the extent those subparagraphs can be applied with respect 
     thereto.
       ``(E) Nothing in this paragraph shall affect paragraph 
     (3).''.
       (b) Technical and Conforming Amendments.--(1) Section 
     8432(a) of title 5, United States Code, is amended--
       (A) in the first sentence by striking ``(b)(1)'' and 
     inserting ``(b)''; and
       (B) by amending the second sentence to read as follows: 
     ``Contributions under this subsection pursuant to such an 
     election shall, with respect to each pay period for which 
     such election remains in effect, be made in accordance with a 
     program of regular contributions provided in regulations 
     prescribed by the Executive Director.''.
       (2) Section 8432(b)(1)(B) of title 5, United States Code, 
     is amended by inserting ``(or any election allowable by 
     virtue of paragraph (4))'' after ``subparagraph (A)''.
       (3) Section 8432(b)(3) of title 5, United States Code, is 
     amended by striking ``Notwithstanding paragraph (2)(A), an'' 
     and inserting ``An''.
       (4) Section 8439(a)(1) of title 5, United States Code, is 
     amended by inserting ``who makes contributions or'' after 
     ``for each individual'' and by striking ``section 
     8432(c)(1)'' and inserting ``section 8432''.
       (5) Section 8439(c)(2) of title 5, United States Code, is 
     amended by adding at the end the following: ``Nothing in this 
     paragraph shall be considered to limit the dissemination of 
     information only to the times required under the preceding 
     sentence.''.
       (6) Sections 8440a(a)(2) and 8440d(a)(2) of title 5, United 
     States Code, are amended by striking all after ``subject to'' 
     and inserting ``this chapter.''.
       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     take effect on October 1, 2000, or such earlier date as the 
     Executive Director (as defined by section 8401 of title 5, 
     United States Code) may by regulation prescribe, but not 
     before September 1, 2000.
       (2) Savings provision.--Notwithstanding any other provision 
     of this section, until the amendments made by this section 
     take effect, title 5, United States Code, shall be applied as 
     if this section had not been enacted.

     SEC. 3. ADDITIONAL GOVERNMENT CONTRIBUTIONS FOR RETIREMENT.

       (a) Federal Employees' Retirement System.--Section 8423(a) 
     of title 5, United States Code, is amended by adding at the 
     end the following:
       ``(5) Notwithstanding any other provision of this chapter, 
     effective with respect to contributions for pay periods 
     beginning on or after October 1, 2000, the normal-cost 
     percentage used for purposes of any computation under this 
     subsection shall be equal to--
       ``(A) the percentage that would otherwise apply if this 
     paragraph had not been enacted, plus
       ``(B) .01 of 1 percentage point.''.
       (b) Supplemental Liability.--For purposes of applying 
     section 8423(b) of title 5, United States Code, and section 
     857(b) of the Foreign Service Act of 1980 (22 U.S.C. 
     4071f(b)), all amounts shall be determined as if this section 
     had never been enacted.
       (c) Limitation on Source of Additional Contributions.--
     Notwithstanding section 8423(a)(3) of title 5, United States 
     Code, or any other provision of law, the additional 
     Government contributions required to be made by reason of the 
     amendment made by subsection (a) shall be made out of any 
     amounts available to the employing agency involved, other 
     than any appropriation, fund, or other amounts available for 
     the payment of employee salaries or benefits.
       (d) Conforming Amendment.--Section 307 of the Federal 
     Employees' Retirement System Act of 1986 (Public Law 99-335; 
     5 U.S.C. 8401 note) is amended by inserting ``, including the 
     additional amount required under section 8423(a)(5)(B) of 
     such title 5,'' after ``Federal Employees' Retirement 
     System''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Florida (Mr. Scarborough) and the gentleman from Maryland (Mr. 
Cummings) each will control 20 minutes.
  The Chair recognizes the gentleman from Florida (Mr. Scarborough).


                             General Leave

  Mr. SCARBOROUGH. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks on the bill, H.R. 208.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.
  Mr. SCARBOROUGH. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in support of H.R. 208. H.R. 208 would achieve 
two worthwhile objectives. First, it would allow newly hired Federal 
employees to begin contributing their own money to the Thrift Savings 
Plan, the Federal Government's 401(k) plan, almost immediately. Second, 
Federal employees would be able to consolidate their retirement funds 
in the Thrift Savings Plan.
  I believe the policy underlying H.R. 208 is sound. I commend the 
gentlewoman from Maryland (Mrs. Morella) for introducing this 
legislation and for all of her hard work to advance this bill.
  I also would like to thank the distinguished gentleman from Maryland 
(Mr. Cummings), the ranking member of the Subcommittee on Civil 
Service, for his strong support for this legislation. I thank the 
gentleman from Indiana (Mr. Burton), the chairman of the Committee on 
Government Reform and Oversight, and the gentleman from California (Mr. 
Waxman) for expediting this very important legislation.
  Mr. Speaker, in light of all the uncertainty surrounding Social 
Security, Congress should encourage everyone, including Federal 
employees, to assume more responsibility for their own retirement. H.R. 
208 does exactly that.
  According to the Congressional Research Service, each $1,000 
employees contribute their first year will increase their Thrift 
Savings Plan balances after a 30-year career by almost $19,000. That is 
assuming a 10 percent rate of return, which is very good. It is a very 
good incentive to save.
  Finally, Mr. Speaker, the gentlewoman from Maryland (Mrs. Morella) 
and I have been working closely together to help offset and pay for 
this benefit, and I greatly appreciate her cooperation in this process. 
As a result of this work, H.R. 208 fully offsets the cost of this 
benefit without raising taxes on the American people.
  I encourage all Members to support this very important bill.

[[Page H2163]]

  Mr. Speaker, I reserve the balance of my time.

                              {time}  1530

  Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I commend my colleague, the gentlewoman from Maryland 
(Mrs. Morella), for sponsoring H.R. 208. I also want to thank our 
subcommittee chairman, the gentleman from Florida (Mr. Scarborough), 
the gentleman from Indiana (Mr. Burton), the full committee chairman, 
and certainly our ranking member, the gentleman from California (Mr. 
Waxman), for bringing this bill up so quickly.
  H.R. 208 makes significant reforms in the Thrift Savings Plan. This 
bill contains proposals that are contained in President Clinton's 
fiscal year 2000 budget. It would permit new Federal employees to begin 
contributing to their TSP immediately rather than waiting a year, as 
required under current law, and would let Federal employees transfer 
balances from other tax deferred savings plans, including private 
sector 401(k) accounts, to their TSP accounts.
  Early participation in the Federal Employees Retirement System, 
particularly in the Thrift Savings Plan, is critical if an employee is 
going to maximize the amount of savings earned for his retirement.
  The importance of saving for one's retirement is more evident to me 
as the Subcommittee on Civil Service of the Committee on Government 
Reform considers legislation to offer long-term care insurance as a 
benefit option to Federal and postal employees and military personnel 
and retirees. A study released at the beginning of this month shows 
that baby boomers are concerned about their retirement security, but 
are not saving adequately for their long-term care needs. H.R. 208 is 
one initiative that will help the Federal work force save money for 
their golden years.
  At the full committee markup of this bill, the Republicans offered an 
amendment to pay for the cost of the legislation by requiring agencies 
to divert money from their already hard-pressed salaries and expense 
accounts into the Civil Service Retirement and Disability Trust Fund. 
The Democrats strongly opposed this provision and worked in a swift and 
bipartisan manner to formulate an acceptable alternative that would 
require agencies to pay for the cost, but prohibit them from using 
salaries and benefit accounts for this purpose.
  I support this prohibition, Mr. Speaker, because Federal employees 
have been squeezed enough. Inadequate pay raises, increasing costs in 
health insurance premiums, and the constant threat of layoffs and 
contracting out have caused serious problems in Federal agencies. 
Enough is enough.
  I am pleased now to be able to support this legislation because it 
helps Federal employees save for their retirement and removes the 
possibility that any of them would have to lose their jobs to pay for 
it.
  Again, I congratulate the gentlewoman from Maryland (Mrs. Morella), 
my colleague, and I urge all Members to join me in supporting this 
legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SCARBOROUGH. Mr. Speaker, I yield 5 minutes to the gentlewoman 
from Maryland (Mrs. Morella), who is, of course, a great champion of 
Federal employees and who is the architect of this bill.
  Mrs. MORELLA. Mr. Speaker, I thank the chairman of the subcommittee 
for yielding me this time, and I am really delighted this important 
legislation is coming before the House today.
  I certainly want to thank the chairman of the Committee on Government 
Reform, the gentleman from Indiana (Mr. Burton), the chairman of the 
Subcommittee on Civil Service, the gentleman from Florida (Mr. 
Scarborough), as well as the committee's ranking minority member, the 
gentleman from California (Mr. Waxman), and of course we have just 
heard from the subcommittee's ranking minority member, the gentleman 
from Maryland (Mr. Cummings), my colleague, for all their strong 
support throughout.
  Mr. Speaker, when I thank my colleagues I know that I also speak for 
the thousands of Federal employees with whom I have met and who have 
written and called my office and the offices of others in support of 
this legislation.
  This legislation would bolster two critical components of Federal 
employees' retirement benefits, the Thrift Savings Plan. The Thrift 
Savings Plan is critical for all Federal employees but is particularly 
important for those employees hired in the last decade who, under the 
Federal Employees Retirement System, receive smaller civil service 
benefits and need to invest more to enhance their retirement income.
  Currently, employees can elect to begin contributing to the TSP only 
during two semiannual election periods that are established by law. 
Newly hired employees are first eligible to participate during the 
second election period after being hired. Now, what that means is that 
these employees must wait from 6 to 12 months, depending upon their 
dates of hire, before they may contribute their own funds.
  Allowing employees to begin contributing to the Thrift Savings Plan 
immediately makes it more likely that employees will get into or 
continue the habit of saving for retirement through payroll deduction. 
Early saving is especially important in order to maximize the effect of 
compound earnings and to take full advantage of the benefit of pretax 
savings accorded to tax deferred retirement plans.
  This bill would eliminate all waiting periods for employee 
contributions to the TSP for new hires and rehires. Employees who are 
hired or rehired would be eligible to contribute their own funds 
immediately.
  Further, ensuring the portability of retirement savings is important 
because portable retirement savings can follow employees as they change 
jobs. It also would preserve the special tax status accorded to these 
funds. So while the Internal Revenue Code currently allows transfers of 
retirement savings between 401(k) plans, such transfers are not 
authorized for the Thrift Savings Plan. There is no justification for 
this limitation.
  H.R. 208 would authorize employees to transfer funds from certain tax 
deferred savings plans from a previous job to their TSP accounts. The 
funds so transferred would be subject to the rules governing the plan 
which accepts the transfer.
  Mr. Speaker, during the committee markup of H.R. 208, I offered an 
amendment in the nature of a substitute to this bill to provide offsets 
to the anticipated decrease in Federal Government general tax revenues 
that would result from employees taking advantage of the benefits 
offered by H.R. 208. Because H.R. 208 would eliminate all waiting 
periods for employee contributions to the TSP for new hires and 
rehires, it is estimated that about 400,000 employees hired over the 
1999-2003 period would participate in the TSP. As a result, the Federal 
Government would forgo tax revenues over that period, 1999-2003.
  The amendment I offered will provide funding to compensate the 
Federal Government for these lost revenues. And I want to make it 
clear, this amendment does not require agencies to use any of their 
salary and expense account funding to accomplish these goals. In fact, 
it makes clear that they may not use funding intended for employees' 
salary and expense accounts for those expenses. The amendment assures 
Federal employees that the legislation is designed to improve benefits 
for Federal employees, and it will not unintentionally result in 
furloughs or reductions in force at Federal agencies.
  In closing, Mr. Speaker, I want to stress that H.R. 208 is a sensible 
way to encourage Federal employees to take personal responsibility and 
increase their savings for retirement, something we want all Americans 
to do. I urge my colleagues to join me in supporting this important 
measure, and again I thank the committee chair, the ranking member, the 
subcommittee chair, the gentleman from Florida (Mr. Scarborough), and 
the ranking member, the gentleman from Maryland (Mr. Cummings), for 
their support throughout the way.
  Mr. CUMMINGS. Mr. Speaker, I yield 3 minutes to the gentleman from 
Maryland (Mr. Hoyer), my distinguished colleague who has constantly 
been at the forefront of protecting the rights of Federal employees, 
and who has been constantly sensitive to their needs and their 
concerns.

[[Page H2164]]

  (Mr. HOYER asked and was given permission to revise and extend his 
remarks.)
  Mr. HOYER. Mr. Speaker, I thank the distinguished ranking member, my 
colleague, the gentleman from Maryland (Mr. Cummings), for his kind 
comments and for his leadership on this bill, and in particular for his 
leadership on ensuring the fact that we did not rob from Peter to pay 
Paul as it related to employee pay and benefits.
  I also want to thank the gentleman from Florida (Mr. Scarborough), 
the distinguished chairman of the subcommittee, for his leadership in 
facilitating this bill to the floor. He is motioning that Mr. 
Nesterczuk made him do it, but for whatever reasons, he did it. We are 
pleased; I want him to know that.
  I also want to take the opportunity to congratulate my colleague, the 
gentlewoman from Maryland (Mrs. Connie Morella), who, as the gentleman 
from Florida (Mr. Scarborough) said, is always in the forefront of 
advocating on behalf of our Federal employee work force.
  Mr. Speaker, I would simply add this. The bill has been explained by 
the gentlewoman from Maryland (Mrs. Morella) herself, the gentleman 
from Florida (Mr. Scarborough), the gentleman from Maryland (Mr. 
Cummings), and many Members on this floor talking about the necessity 
to recruit and retain good people. This will be a major recruitment 
tool, in my opinion, for the Federal Government because it will give 
the ability to Federal employers to say that first of all its employees 
can transfer whatever savings they now have in a 401(k) or similarly 
situated program from a tax standpoint and switch that into the Thrift 
Savings Plan.
  The Thrift Savings Plan, which, by the way, was the creation of 
Senator Ted Stevens from Alaska and Congressman Bill Ford from 
Michigan, has been an extraordinarily good program for Federal 
employees. It was created in 1984 and took effect in 1987 as the 
integrated retirement system that we now have dealing with retirement 
and Social Security and the Thrift Savings Plan. Those three components 
now make up a Federal employees retirement benefit package.
  So not only will we allow them to put their money in from previous 
programs, but in addition to that, we will let them do so from the very 
beginning of their employment. I think that is a critical aspect of 
this legislation. I think it will be an incentive for employees to come 
on board; and I congratulate the committee for bringing this 
legislation to the floor and will certainly support it 
enthusiastically.
  Mr. CUMMINGS. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
the District of Columbia (Ms. Eleanor Holmes Norton).
  We are very pleased, Mr. Speaker, at this point to recognize my 
distinguished colleague from the District of Columbia, and a member of 
our subcommittee who, too, has been at the forefront of protecting the 
rights of Federal employees, and one who has put forth her own 
legislation from time to time to make sure that those rights are 
protected. I am just so glad that she is on our subcommittee because 
she makes sure that we keep an institutional memory of the things that 
we should have been doing for Federal employees and the things that we 
must do.
  Ms. NORTON. Mr. Speaker, I thank the gentleman from Maryland for his 
very kind remarks and for yielding me this time, and I congratulate him 
for his consistent hard work and vigilance on behalf of Federal 
employees, especially for his particular contribution to this bill and 
seeing how it was paid for.
  I congratulate the gentlewoman from Maryland for writing this bill, 
and the gentleman from Florida (Mr. Scarborough) for his hard work in 
making sure that the bill was shaped in a bipartisan manner and reached 
the floor here today.
  Mr. Speaker, this bill is, first and foremost, a richly deserved 
benefit for Federal employees who have fallen way behind the private 
sector in state-of-the-art benefits, but it has a more important 
implication for the Federal Government itself.
  Mr. Speaker, the Federal Government seems not to have heard that 
there is a labor shortage out there, and it is a shortage that goes 
from the top to the bottom of the work force.
  There is a fierce competition for labor at all levels. The Federal 
Government has literally not joined this competition. It is as if this 
were 1960, when college graduates and skilled workers automatically 
gravitated to Federal employment. That has not been the case now for a 
long time, and it is going to show in our Federal work force. 
Therefore, the implications of this bill are larger than the modest 
benefit it provides to our employees in eliminating the waiting period 
for when an employee can make a contribution to the Thrift Savings Plan 
and in allowing transfers from a 401(k) savings account.
  A way to understand the importance of this bill, if we mean to 
attract good people to work for the Federal Government, is to imagine 
an employee looking around among her options and seeing that she could 
not transfer her 401(k), and seeing that she would have a 6-to-12-month 
break in engaging in tax-exempt savings herself. It seems to me she 
might well move on to almost any large employer today where we will 
find such benefits to be state-of-the-art. There are plenty of 
alternatives. No large, smart employer would fail to have comparable 
benefits to those which this bill modestly affords.

                              {time}  1545

  Social Security is the most important issue facing the 106th 
Congress. The President and the Republican majority together are 
encouraging private savings and investment. If we are serious about 
encouraging Americans to engage in private saving and our savings are 
at a low point, then it is time we took care of home first, and the 
Thrift Savings Account is the place to begin.
  Mr. CUMMINGS. Mr. Speaker, may I inquire as to how much time we have 
remaining?
  The SPEAKER pro tempore (Mr. Pease). The gentleman from Maryland (Mr. 
Cummings) has 10\1/2\ minutes remaining, and the gentleman from Florida 
(Mr. Scarborough) has 12\1/2\ minutes remaining.
  Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume. 
We have no additional speakers.
  In summary, Mr. Speaker, I am very, very pleased that this 
legislation is before us. I think it sends a very strong statement to 
our Federal employees and those who are considering possibly coming 
into the Federal Government, and that is that the Congress of the 
United States of America cares about them and cares about their 
security in retirement.
  Mr. Speaker, I just urge all of my colleagues to vote for this very, 
very important legislation.
  Mr. Speaker, I yield back the balance of my time.
  Mr. SCARBOROUGH. Mr. Speaker, I yield myself the balance of my time.
  H.R. 208 is a sound bill, and it is fully paid for. Once again, I 
want to commend the gentlewoman from Maryland (Mrs. Morella) for her 
hard work on this bill, as well as the gentleman from Maryland (Mr. 
Cummings), the ranking member, and I urge all Members to support it.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Florida (Mr. Scarborough) that the House suspend the 
rules and pass the bill, H.R. 208, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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