[Congressional Record Volume 150, Number 119 (Tuesday, September 28, 2004)]
[House]
[Pages H7705-H7708]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DISTRICT OF COLUMBIA RETIREMENT PROTECTION IMPROVEMENT ACT OF 2004
Mr. TOM DAVIS of Illinois. Mr. Speaker, I move to suspend the rules
and pass the bill (H.R. 4657) to amend the Balanced Budget Act of 1997
to improve the administration of Federal pension benefit payments for
District of Columbia teachers, police officers, and fire fighters, and
for other purposes, as amended.
The Clerk read as follows:
H.R. 4657
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 ``District of Columbia
Retirement Protection Improvement Act of 2004''.
SEC. 2. ESTABLISHMENT OF DISTRICT OF COLUMBIA FEDERAL PENSION
FUND FOR PAYMENT OF FEDERAL BENEFIT PAYMENTS TO
DISTRICT OF COLUMBIA TEACHERS, POLICE OFFICERS,
AND FIRE FIGHTERS.
(a) In General.--Subtitle A of title XI of the Balanced
Budget Act of 1997 (sec. 1--801.01 et seq., D.C. Official
Code) is amended--
(1) by redesignating chapter 9 as chapter 10;
(2) by redesignating sections 11081 through 11087 as
sections 11091 through 11097; and
(3) by inserting after chapter 8 the following new chapter:
``CHAPTER 9--DISTRICT OF COLUMBIA FEDERAL PENSION FUND
``SEC. 11081. CREATION OF FUND.
``(a) Establishment.--There is established on the books of
the Treasury the District of Columbia Teachers, Police
Officers, and Firefighters Federal Pension Fund (hereafter
referred to as the `D.C. Federal Pension Fund'), consisting
of the following:
``(1) The assets transferred pursuant to section 11083.
``(2) The annual Federal payments deposited pursuant to
section 11084.
``(3) Any amounts otherwise appropriated to such Fund.
``(4) Any income earned on the investment of the assets of
such Fund pursuant to subsection (b).
``(b) Investment of Assets.--The Secretary shall invest
such portion of the assets of the D.C. Federal Pension Fund
as is not in the judgment of the Secretary required to meet
current withdrawals. Such investments shall be in public debt
securities with maturities suitable to the needs of the D.C.
Federal Pension Fund, as determined by the Secretary, and
bearing interest at rates determined by the Secretary, taking
into consideration current market yields on outstanding
marketable obligations of the United States of comparable
maturities.
``(c) Recordkeeping for Actuarial Status.--The Secretary
shall provide for the keeping of such records as are
necessary for determining the actuarial status of the D.C.
Federal Pension Fund.
``SEC. 11082. USES OF AMOUNTS IN FUND.
``(a) In General.--Amounts in the D.C. Federal Pension Fund
shall be used--
``(1) to make Federal benefit payments under this subtitle;
``(2) subject to subsection (b), to cover the reasonable
and necessary administrative expenses incurred by any person
in administering the D.C. Federal Pension Fund and carrying
out this chapter;
``(3) for the accumulation of funds in order to finance
obligations of the Federal Government for future benefits;
and
``(4) for such other purposes as are specified in this
subtitle.
``(b) Budgeting, Certification, and Approval of
Administrative Expenses.--The administrative expenses of the
D.C. Federal Pension Fund shall be paid in accordance with an
annual budget set forth by the Pension Fund Trustee which
shall be subject to certification and approval by the
Secretary.
``SEC. 11083. TRANSFER OF ASSETS AND OBLIGATIONS OF TRUST
FUND AND FEDERAL SUPPLEMENTAL FUND.
``(a) Transfer of Obligations.--Effective October 1, 2004,
all obligations to make Federal benefit payments shall be
transferred from the Trust Fund to the D.C. Federal Pension
Fund.
``(b) Transfer of Assets.--Effective October 1, 2004, all
assets of the Trust Fund and
[[Page H7706]]
all assets of the Federal Supplemental Fund as of such date
shall be transferred to the D.C. Federal Pension Fund.
``SEC. 11084. DETERMINATION OF ANNUAL FEDERAL PAYMENTS INTO
D.C. FEDERAL PENSION FUND.
``(a) Annual Amortization Amount.--
``(1) In general.--At the end of each fiscal year
(beginning with fiscal year 2005), the Secretary shall
promptly pay into the D.C. Federal Pension Fund from the
general fund of the Treasury an amount equal to the annual
amortization amount for the year (which may not be less than
zero).
``(2) Determination of amount.--For purposes of paragraph
(1)--
``(A) the `original unfunded liability' is the present
value as of the effective date of this Act of expected future
benefits payable from the Federal Supplemental Fund; and
``(B) the `annual amortization amount' means the amount
determined by the enrolled actuary to be necessary to
amortize in equal annual installments (until fully
amortized)--
``(i) the original unfunded liability over a 30-year
period,
``(ii) a net experience gain or loss over a 10-year period,
and
``(iii) any other changes in actuarial liability over a 20-
year period.
``(3) Schedule for amortization.--In determining the annual
amortization amount under paragraph (2)(B), the enrolled
actuary shall include amounts necessary to complete the
amortization schedules used for determining the annual
amortization amount for payments into the Federal
Supplemental Fund under section 11053 (as in effect prior to
the enactment of this chapter).
``(b) Administrative Expenses.--During each fiscal year
(beginning with fiscal year 2009), the Secretary shall pay
into the D.C. Federal Pension Fund from the general fund of
the Treasury the amounts necessary to pay the reasonable and
necessary administrative expenses described in section
11082(a)(2) for the year.
``SEC. 11085. ADMINISTRATION THROUGH PENSION FUND TRUSTEE.
``(a) In General.--The Secretary shall select a Pension
Fund Trustee to carry out the responsibilities and duties
specified in this subtitle in accordance with the contract
described in subsection (b).
``(b) Contract.--The Secretary shall enter into a contract
with the Pension Fund Trustee to provide for the auditing of
D.C. Federal Pension Fund assets, the making of Federal
benefit payments under this subtitle from the D.C. Federal
Pension Fund, and such other matters as the Secretary deems
appropriate. The Secretary shall enforce the provisions of
the contract and otherwise monitor the administration of the
D.C. Federal Pension Fund.
``(c) Subcontracts.--Notwithstanding any provision of a
District Retirement Program or any other law, rule, or
regulation, the Pension Fund Trustee may, with the approval
of the Secretary, enter into one or more subcontracts with
the District Government or any person to provide services to
the Pension Fund Trustee in connection with its performance
of the contract. The Pension Fund Trustee shall monitor the
performance of any such subcontract and enforce its
provisions.
``(d) Determination by the Secretary.--Notwithstanding
subsection (b) or any other provision of this subtitle, the
Secretary may determine, with respect to any function
otherwise to be performed by the Pension Fund Trustee, that
in the interest of economy and efficiency such function shall
be performed by the Secretary rather than the Pension Fund
Trustee.
``(e) Reports.--The Pension Fund Trustee shall report to
the Secretary, in a form and manner and at such intervals as
the Secretary may prescribe, on any matters under the
responsibility of the Pension Fund Trustee as the Secretary
may prescribe.
``SEC. 11086. APPLICABILITY OF OTHER PROVISIONS TO D.C.
FEDERAL PENSION FUND.
``The following provisions of this subtitle shall apply
with respect to the D.C. Federal Pension Fund in the same
manner as such provisions applied with respect to the Trust
Fund prior to October 1, 2004:
``(1) Section 11023(b) (relating to the repayment by the
District Government of costs attributable to errors or
omissions in transferred records).
``(2) Section 11034 (relating to the treatment of the Trust
Fund under certain laws).
``(3) Section 11061 (relating to annual valuations and
reports by the enrolled actuary), except that in applying
section 11061(b) to the D.C. Federal Pension Fund, the annual
report required under such section shall include a
determination of the annual payment to the D.C. Federal
Pension Fund under section 11084.
``(4) Section 11062 (relating to reports by the Comptroller
General).
``(5) Section 11071 (relating to judicial review).
``(6) Section 11074 (relating to the treatment of
misappropriation of Trust Fund amounts as a Federal
crime).''.
(b) Termination of Current Funds.--
(1) District of columbia federal pension liability trust
fund.--Chapter 4 of subtitle A of title XI of such Act (sec.
1--807.01 et seq., D.C. Official Code) is amended by adding
at the end the following new section:
``SEC. 11036. TERMINATION OF TRUST FUND.
``Effective upon the transfer of the obligations and assets
of the Trust Fund to the D.C. Federal Pension Fund under
section 11083--
``(1) the Trust Fund shall terminate; and
``(2) the obligation to make Federal benefit payments from
the Trust Fund, and any duty imposed on any person with
respect to the Trust Fund, shall terminate.''.
(2) Federal supplemental district of columbia pension
fund.--Chapter 6 of subtitle A of title XI of such Act (sec.
1--811.01 et seq., D.C. Official Code) is amended by adding
at the end the following new section:
``SEC. 11056. TERMINATION OF FEDERAL SUPPLEMENTAL FUND.
``Effective upon the transfer of the assets of the Federal
Supplemental Fund to the D.C. Federal Pension Fund under
section 11083--
``(1) the Federal Supplemental Fund shall terminate; and
``(2) any duty imposed on any person with respect to the
Federal Supplemental fund shall terminate.''.
(c) Conforming Definitions.--
(1) Trustee.--Section 11003(16) of such Act (sec. 1--
801.02(16), D.C. Official Code) is amended by striking the
period at the end and inserting the following: ``, or,
beginning October 1, 2004, the Pension Fund Trustee selected
by the Secretary under section 11085.''.
(2) D.C. federal pension fund.--Section 11003 of such Act
(sec. 1--801.02, D.C. Official Code) is amended--
(A) by redesignating paragraphs (3) through (16) as
paragraphs (4) through (17); and
(B) by inserting after paragraph (2) the following new
paragraph:
``(3) The term `D.C. Federal Pension Fund' means the
District of Columbia Teachers, Police Officers, and
Firefighters Federal Pension Fund established under section
11081.''.
(d) Other Conforming Amendment.--Section 11041(b) of such
Act (sec. 1--809.01(b), D.C. Official Code) is amended in the
heading by striking ``From Trust Fund''.
(e) Clerical Amendments.--The table of contents of subtitle
A of title XI of such Act is amended--
(1) by adding at the end of the items relating to chapter 4
the following:
``Sec. 11036. Termination of Trust Fund.'';
(2) by adding at the end of the items relating to chapter 6
the following:
``Sec. 11056. Termination of Federal Supplemental Fund.'';
(3) by redesignating the item relating to chapter 9 as
relating to chapter 10;
(4) by redesignating the items relating to sections 11081
through 11087 as relating to sections 11091 through 11097;
and
(5) by inserting after the items relating to chapter 8 the
following:
``Chapter 9--District of Columbia Federal Pension Fund
``Sec. 11081. Creation of Fund.
``Sec. 11082. Uses of Amounts in Fund.
``Sec. 11083. Transfer of Assets and Obligations of Trust Fund and
Federal Supplemental Fund.
``Sec. 11084. Determination of Annual Federal Payment Into D.C. Federal
Pension Fund.
``Sec. 11085. Administration Through Pension Fund Trustee.
``Sec. 11086. Applicability of Other Provisions to D.C. Federal Pension
Fund.''.
SEC. 3. ADMINISTRATION OF DISTRICT OF COLUMBIA JUDICIAL
RETIREMENT AND SURVIVORS ANNUITY FUND.
(a) Procedures for Resolving Denied Benefit Claims.--
(1) In general.--Section 11--1570(c), D.C. Official Code,
is amended by adding at the end the following new paragraph:
``(3)(A) In accordance with procedures approved by the
Secretary, the Secretary shall provide to any individual
whose claim for a benefit under this subchapter has been
denied in whole or in part--
``(i) adequate written notice of such denial, setting forth
the specific reasons for the denial in a manner calculated to
be understood by the average participant in the program of
benefits under this subchapter; and
``(ii) a reasonable opportunity for a full and fair review
of the decision denying such claim.
``(B) Any factual determination made by the Secretary
pursuant to this paragraph shall be presumed correct unless
rebutted by clear and convincing evidence. The Secretary's
interpretation and construction of the benefit provisions of
this subchapter shall be entitled to great deference. ''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply with respect to claims for benefits which are
made after the date of the enactment of this Act.
(b) Treatment of Misappropriation of Fund Amounts as
Federal Crime.--
(1) In general.--Section 11--1570, D.C. Official Code, is
amended by adding at the end the following new subsection:
``(l) The provisions of section 664 of title 18, United
States Code (relating to theft or embezzlement from employee
benefit plans), shall apply to the Fund.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on the date of the enactment of this Act.
SEC. 4. ADMINISTRATION OF RETIREMENT PROGRAM FOR POLICE
OFFICERS, FIRE FIGHTERS, AND TEACHERS BY OTHER
THAN CHIEF FINANCIAL OFFICER.
(a) In General.--Section 424(c)(21) of the District of
Columbia Home Rule Act (sec. 1--204.24c(21), D.C. Official
Code) is amended by
[[Page H7707]]
striking ``systems'' and inserting the following: ``systems
(other than the retirement system for police officers, fire
fighters, and teachers)''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply with respect to fiscal year 2005 and each
succeeding fiscal year.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Virginia (Mr. Tom Davis) and the gentleman from Illinois (Mr. Davis)
each will control 20 minutes.
The Chair recognizes the gentleman from Virginia (Mr. Tom Davis).
General Leave
Mr. TOM DAVIS of Virginia. Mr. Speaker, I ask unanimous consent that
all Members may have 5 legislative days within which to revise and
extend their remarks and include extraneous material on the bill under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Virginia?
There was no objection.
Mr. TOM DAVIS of Virginia. Mr. Speaker, I yield myself such time as I
may consume.
Mr. Speaker, I am pleased to rise in support of H.R. 4657, a bill to
improve the administration of Federal pension benefit payments for
District of Columbia teachers, police officers, and firefighters. This
simple reform will streamline the pension process for these individuals
and the Federal Government. H.R. 4657 will transfer pension benefit
assets that are currently held in two Federal trust funds to a single,
newly created trust fund.
The bill also extends to retired judges the same rights of review of
benefit denials. These rights include the same review standards for
benefits that currently apply to retirees in the D.C. Police Officers'
and Firefighters' Retirement Plan.
Mr. Speaker, the bottom line is the Treasury Department presently
uses unnecessary resources to maintain two pension funds when only one
is needed. H.R. 4657 corrects this. This bill is budget neutral, and I
support the passage and am pleased to be joined tonight by the
distinguished gentlewoman from the District of Columbia (Ms. Norton)
and the gentleman from Maryland (Mr. Hoyer), who are also cosponsors of
this legislation.
Under the Balanced Budget Act of 1997, the Treasury Department and
the District of Columbia share responsibility for the D.C. Police
Officers' and Firefighters' Retirement Plan and under the defined
benefit retirement plan for all District judges.
Originally two separate retirement funds, the Supplemental Fund and
the Trust Fund, were created. Unlike the Trust Fund, the assets of the
Supplemental Fund had to be invested in public debt securities. This
provision was dropped 2 years later as part of an appropriations act,
thereby eliminating the primary reason for having two separate funds.
So instead of administering two similar funds, the passage of this
legislation promotes greater efficiency in the management of D.C.
pensions. It also extends to retired judges the same rights of review
of benefits denial that currently apply to those in the D.C. Police
Officers' and Firefighters' Retirement Plan. This is a matter of
fairness and transparency. The retired judges would receive the same
standards of review for factual determinations, interpretations, and
construction of benefit provisions.
Finally, H.R. 4657 would also transfer administration of the
retirement plans from the District of Columbia Office of Financial
Operations and Systems in the Chief Financial Officer's Office to the
District of Columbia Retirement Board.
The passage of this bill is beneficial to pensioners and the Treasury
Department as it promotes more efficient accounting and investing and
extends similar treatment to pensioners in all three retirement
programs.
I urge my colleagues to support it, and I thank my colleagues for
working with me on it.
Mr. Speaker, I reserve the balance of my time.
Mr. DAVIS of Illinois. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in support of H.R. 4657, the District of Columbia
Retirement Protection Improvement Act of 2004. I agree with the
gentleman from Virginia (Mr. Tom Davis) that the time has come to
simply provide protection, and the best of protection, to those
individuals in the District of Columbia who are in need of reform of
their pension.
Mr. Speaker, I yield such time as she may consume to the gentlewoman
from the District of Columbia (Ms. Norton).
Ms. NORTON. Mr. Speaker, I thank the gentleman for yielding me this
time and for his help and support and work on this bill. And I want to
thank the gentleman from Virginia (Mr. Tom Davis), chairman of the full
committee, for his help on this bill and his help on so many other
bills that enabled the District to function more efficiently.
H.R. 4657 is a significant management efficiency win for the District
of Columbia because the bill streamlines the administration of what has
been a very complicated pension benefit system for D.C. teachers,
police, and firefighters.
I want to thank the chairman and the gentleman from Maryland (Mr.
Hoyer), Democratic whip, both for their leadership in bringing this
important piece of legislation forward.
The legislation promotes more efficient investment, accounting, and
financial reporting of two pension funds, the D.C. Federal Pension
Liability Trust Fund and the Federal Supplemental D.C. Pension Fund,
simply by combining the two funds into a newly created D.C. Teachers,
Police, and Firefighters Pension Fund.
The bill also puts into law the appeal rights of those covered by the
judges' retirement plan. Employees covered by this plan already have by
regulation the same appeal rights as police officers, firefighters, and
teachers. This legislation simply codifies those regulations.
In 1997 the Department of Treasury assumed responsibility for the
D.C. Teachers' Retirement Plan and the Police Officers' and
Firefighters' Retirement Plan. These plans, combined, cover over 11,000
people who retired as of June 30, 1997. Since 1997 about 2,000
additional people have retired and approximately 9,000 teachers, police
officers, and firefighters are still working. These individuals are
covered by the D.C. Retirement Fund. Currently the District of Columbia
Retirement Board has oversight of the investment of the fund while the
D.C. Office of Pay and Retirement Services, which is under the Chief
Financial Officer, and the D.C. Office of Personnel share oversight of
the noninvestment benefit administration functions, including pension
benefit determinations and calculations and informing the employees
about the retirement fund and counseling them on their benefits and
sending out the checks.
{time} 2000
What I just said shows you how this issue has simply grown topsy
without anybody thinking through how to bring it together and make it
more efficient, because that was almost indecipherable. Imagine if you
had to administer this fund trying to figure that out.
Thanks to your leadership, Mr. Chairman, and your willingness to
amend this act, the bill now includes a critical provision that will
create significant management efficiency for the D.C.-administered
retirement plan by giving the D.C. Retirement Board oversight authority
over both the investment and the non-investment activities.
This change in law brings the District in line with most State and
local retirement plans. This change in local benefits administration
was enacted into law by the Mayor and D.C. City Council. Because it
amends the Home Rule Charter, congressional action was also required.
I thank you again, Mr. Chairman. I want to thank my colleagues for
their work and support on this bill, and urge them to support and vote
for H.R. 4657.
Mr. HOYER. Mr. Speaker, I am pleased to support The District of
Columbia Retirement Protection Improvement Act of 2004, which I
sponsored with Representative Tom Davis. This bill makes simple and
commonsense improvements to streamline the administration of pension
benefits for District of Columbia teachers, police officers, and
firefighters.
This legislation eliminates duplication and promotes efficiency in
the investment and accounting of D.C. pension funds. In 1997 Congress
created two separate funds that operated under different rules.
However, Congress has long since acted to eliminate the distinctions
between the two funds. This legislation
[[Page H7708]]
will take the logical next step of consolidating the two funds and
replacing them with the newly created D.C. Teachers, Police, and
Firefighters Pension Fund.
I am also pleased that we were able to include provisions supported
by Congresswoman Eleanor Holmes Norton and the City government to
transfer administration of retirement programs for D.C. Police
Officers, Firefighters, and Teachers from the office of the Chief
Financial Officer to the D.C. Retirement Board. This provision will
consolidate responsibility of retirement benefits and has already been
approved by the D.C. Government, but can only go into effect with
Congressional action.
Last year, I was pleased to join Congressman Davis in sponsoring
another bill affecting retirement funds for D.C. Police Officers and
Firefighters, the D.C. Military Retirement Equity Act, which was signed
into law on November 22, 2003. That law allowed retired D.C. Police
Officers, Firefighters, Park Police Officers, and Secret Service
employees to ``buy back'' military service time and credit it toward
their retirement in order to avoid cost reductions in their monthly
benefit payments.
These changes today will improve the management of pension funds for
D.C. Police Officers, Firefighters, and Teachers, many of whom work in
the District of Columbia but reside in my home State of Maryland.
Police Officers, Firefighters, and Teachers serve our communities every
day to ensure that our children are educated, our streets are safer,
and our neighborhoods are protected. I am pleased to take this small
step to improve the administration of pension benefits for these
workers.
Mr. DAVIS of Illinois. Mr. Speaker, I yield back the balance of my
time.
Mr. TOM DAVIS of Virginia. Mr. Speaker, I yield back the balance of
my time.
The SPEAKER pro tempore (Mr. Kline). The question is on the motion
offered by the gentleman from Virginia (Mr. Tom Davis) that the House
suspend the rules and pass the bill, H.R. 4657, 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.
____________________