[Congressional Record (Bound Edition), Volume 146 (2000), Part 15]
[House]
[Page 21894]
[From the U.S. Government Publishing Office, www.gpo.gov]



             FEDERAL THRIFT SAVINGS PLAN PARTICIPATION ACT

  Mrs. MORELLA. Mr. Speaker, I move to suspend the rules and concur in 
the Senate amendments to the 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.
  The Clerk read as follows:

       Senate amendments:
       Page 2, line 15, strike out all after ``distribution'' down 
     to and including ``trust.'' in line 16 and insert: that a 
     qualified trust could accept under the Internal Revenue Code 
     of 1986.
       Page 3, strike out lines 1 through 5 and insert:
       (b) Effective Date.--The amendment made by this section 
     shall take effect at the earliest practicable date after 
     September 30, 2000, as determined by the Executive Director 
     in regulations.
       Page 6, strike out lines 5 through 10 and insert:
       (1) In general.--The amendments made by this section shall 
     take effect at the earliest practicable date after September 
     30, 2000, as determined by the Executive Director in 
     regulations.
       Page 6, strike out all after line 15, over to and including 
     line 2 on page 8, and insert:

     SEC. 3. COURT ORDERS AFFECTING REFUNDS.

       (a) Civil Service Retirement System.--Section 8342(j)(1) of 
     title 5, United States Code, is amended to read as follows:
       ``(j)(1)(A) Payment of the lump-sum credit under subsection 
     (a) may be made only if the spouse, if any, and any former 
     spouse of the employee or Member are notified of the employee 
     or Member's application.
       ``(B) The Office shall prescribe regulations under which 
     the lump-sum credit shall not be paid without the consent of 
     a spouse or former spouse of the employee or Member where the 
     Office has received such additional information and 
     documentation as the Office may require that--
       ``(i) a court order bars payment of the lump-sum credit in 
     order to preserve the court's ability to award an annuity 
     under section 8341(h) or section 8345(j); or
       ``(ii) payment of the lump-sum credit would extinguish the 
     entitlement of the spouse or former spouse, under a court 
     order on file with the Office, to a survivor annuity under 
     section 8341(h) or to any portion of an annuity under section 
     8345(j).''.
       (b) Federal Employees Retirement System.--Section 
     8424(b)(1) of title 5, United States Code, is amended to read 
     as follows:
       ``(b)(1)(A) Payment of the lump-sum credit under subsection 
     (a) may be made only if the spouse, if any, and any former 
     spouse of the employee or Member are notified of the employee 
     or Member's application.
       ``(B) The Office shall prescribe regulations under which 
     the lump-sum credit shall not be paid without the consent of 
     a spouse or former spouse of the employee or Member where the 
     Office has received such additional information or 
     documentation as the Office may require that--
       ``(i) a court order bars payment of the lump-sum credit in 
     order to preserve the court's ability to award an annuity 
     under section 8445 or 8467; or
       ``(ii) payment of the lump-sum credit would extinguish the 
     entitlement of the spouse or former spouse, under a court 
     order on file with the Office, to a survivor annuity under 
     section 8445 or to any portion of an annuity under section 
     8467.''.

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


                             General Leave

  Mrs. MORELLA. Madam 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 
gentlewoman from Maryland?
  There was no objection.
  Mrs. MORELLA. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I want to thank all of the people who are involved in 
our consideration of H.R. 208, the Federal Thrift Savings Plan 
Participation Act. When I thank the Speaker, I know that I speak for 
the thousands of Federal employees with whom I have met and who have 
written and called my office in support of this legislation, including 
the gentleman from Maryland (Mr. Cummings), who is going to be handling 
it on the other side of the aisle.
  My legislation would bolster two critical components of Federal 
employees' retirement benefits, the Thrift Savings Plan. As we know, 
the TSP is a retirement savings and investment plan for Federal and 
postal employees.
  The TSP is critical for all Federal employees, but it 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 semi-annual election periods established by law. Newly-hired 
employees are first eligible to participate during the second election 
period after being hired. As a result, 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 TSP immediately makes 
it more likely that employees will get into and 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 pre-
tax 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, while preserving the special tax status accorded to these funds.
  While the Internal Revenue Code currently allows transfers of 
retirement savings between 401(k) plans, such transfers are not 
authorized for the TSP. There is no justification for this limitation. 
This bill, H.R. 208, would authorize employees to transfer funds from 
certain tax-deferred savings plans from previous jobs to their TSP 
accounts. As amended by the Senate, the TSP will be able to accept any 
transfer that a private sector 401(k) can accept under the Internal 
Revenue Code.
  In addition, the Senate has also included an amendment by Senator 
Akaka which would allow the Office of Personnel Management to recognize 
court orders prohibiting a Federal employee who is going through a 
divorce proceeding from withdrawing his or her retirement contributions 
to the Civil Service Retirement and Disability Trust Fund.
  This is a terrific bill. It will help in recruiting and retaining our 
wonderful Federal work force.
  Madam Speaker, I reserve the balance of my time.
  Mr. CUMMINGS. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I commend my colleague, the gentlewoman from Maryland 
(Mrs. Morella), for sponsoring H.R. 208. I am very pleased to say that 
I am a very proud cosponsor.
  Madam Speaker, this bill makes significant reforms in the Thrift 
Savings Plan. It contains proposals that were included in President 
Clinton's last two budget proposals.
  It would permit new Federal employees to begin contributing to their 
TSP immediately rather than waiting a year, as required under current 
law. It would also 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, 
especially in the TSP, is critical if an employee is going to maximize 
the amount of earnings saved for retirement.
  The Subcommittee on Civil Service has addressed the issue of 
protecting employees' retirement savings by moving legislation through 
Congress that would provide long-term care insurance as a benefit 
option for Federal employees and postal employees, as well as military 
personnel and retirees. The legislation, the Long Term Security Act, 
was signed into law by President Clinton last month.
  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 
retirement.
  Senator Akaka's amendment to the House bill further strengthens the 
legislation by allowing the TSP to accept all of the types of rollover 
contributions that private sector 401(k) plans may now accept.
  In addition, the Senator's amendment would provide an offset for the 
legislation that will not divert money from the agency's hard-pressed 
salaries and expenses accounts.
  I am pleased again to be a cosponsor. I want to thank the gentlewoman 
from Maryland (Mrs. Morella) for her sponsorship.
  Madam Speaker, I yield 7 minutes to the gentlewoman from the District 
of Columbia (Ms. Norton), a member of the subcommittee.
  The Subcommittee on Civil Service is one that works very closely, and 
we have done some great work this year. The gentlewoman is one of the 
leaders on our subcommittee, and one who constantly reminds us of how 
important our civil servants are.
  Ms. NORTON. Madam Speaker, I thank the gentleman from Maryland for 
yielding time to me, and for his very kind and gracious words. May I 
thank him and our other regional colleague, the gentlewoman from 
Maryland (Mrs. Morella), for their leadership on this bill. They have 
been steadfast until in fact we have come to this moment, when it has 
gone to the Senate and come back to us with a few changes.
  I want particularly to thank President Clinton, whose leadership has 
been at the forefront of this concept.
  Madam Speaker, I would like to say that this concept represents 
precisely what we ought to be doing with retirement. We are not taking 
any money from the social security trust fund to get this done. What we 
are doing is encouraging people, through incentives we are providing, 
to save their own money. That is the only way to make sure we secure 
the social service trust fund at the same time we do what we have not 
done nearly enough of, and that is to encourage the American people to 
stop spending so much of their money and save it. They are not doing 
that. We are at the lowest savings rate virtually in history.
  This bill encourages savings in two ways. First, it brings Federal 
employees into equality in rolling over their contributions into 
401(k)s now, like their private sector counterparts. There is no reason 
for there to have been any distinction in that regard.
  Secondly, it allows newly-hired employees to get into the savings 
habit from the moment they get their first paycheck by allowing TSP to 
apply to them immediately, instead of waiting for the next period, 
which could be as much as a year.
  Thus, essentially what this very good bill does is to put the 
government in the ballgame of employee savings plans. It brings us to 
where many private sector plans have long been.
  The House, of course, offset this bill through contributions from the 
Civil Service Retirement and Disability Fund. The administration 
opposed that, and I think correctly. After all, the Civil Service 
Retirement and Disability Fund is very controversial over here, at 
least with respect to funding it, and these contributions would not be 
related to benefits or to retirement. I believe the administration was 
probably correct in saying that it set a poor precedent for the future 
to use the trust fund for unrelated purposes.
  So I appreciate the suggestion of the other body, which is why this 
bill is back here, that we should offset, as is required, in a way that 
I must say gives us a double bang.
  First of all, it gives us the money. We recognize now court orders 
during a divorce proceedings that otherwise might result in what 
amounts to fraud. If one is going through a divorce and they say, oh, 
my God, I might have to give some of this to my wife or husband, and 
they pull their money out so they cannot be part of the proceeding, 
that is nothing the Federal government wants to encourage.

                              {time}  1445

  This body has been trying to go in the other way and secure spouses 
in what would otherwise be available to them, so I regard it as an 
antifraud measure. But then I am also pleased to see, when we consider 
what this means for women in particular, that it would safeguard women 
for what would otherwise be a fleet of what should be available to 
them.
  Madam Speaker, we get the savings, we prevent fraud, and we allow 
either spouse, in this case, I think it probably benefits women more 
than men, to perhaps get what would otherwise be available to them but 
has not been in the past, because the Federal Government did not 
recognize court orders until the divorce was all done and through, in 
which case the spouse could have withdrawn the retirement funds that 
were in the account.
  May I say, Madam Speaker, that there is another benefit to this bill, 
and that really has to do with the retention and recruitment of 
employees. The Federal Government has become almost noncompetitive with 
the private sector in pay and benefits.
  With the scarcity of workers, and I am amazed to hear myself say 
that, we have the kind of full employment that we never had in my 
lifetime, the private sector is trying everywhere it can to make sure 
that it recruits and retains employees. Moreover, the sizzle is all 
there. Youngsters getting out of school think of the Federal Government 
and State governments as kind of ho hum places. They want to go where 
the action is, to technology, to the private sector by having benefits 
that do not equal what the private sector has long done.
  We certainly do not help ourselves to retain and recruit the 
employees we need to keep this government running.
  Benefits used to be the way the government offset lower pay; now 
benefits have lost ground as well. We are not going to be able to 
maintain the extraordinary civil service we have had throughout my 
lifetime in this city as a native Washingtonian, unless we wake up and 
smell the coffee when it comes to pay and benefits.
  Obviously, this bill helps employees by equalizing their savings and 
benefit plan, but it helps the Government to make up for lost ground in 
recruiting and maintaining what has been historically the best and 
brightest labor force in the country.
  Mrs. MORELLA. Madam Speaker, I reserve the balance of my time.
  Mr. CUMMINGS. Madam Speaker, I yield myself 9 minutes.
  Madam Speaker, I want to, first of all, thank the gentlewoman from 
the District of Columbia (Ms. Norton) for what she just said. It 
reminds me that our subcommittee has worked very hard to stand up for 
our Federal employees, and we have had a tremendous sensitivity to 
their needs and their concerns.
  So often Federal employees are not given the credit for all the 
wonderful things that they do, and I have often said that they are the 
folks who keep government together. They are the oil that keeps the 
engine running. Without them, we would not be able to accomplish very 
much of anything in this country.
  With that, I want to thank the gentlewoman from Maryland (Ms. 
Morella) again for her sensitivity, but we have been very fortunate to 
work in a bipartisan way. As the gentlewoman from the District of 
Columbia (Ms. Norton) said, this is the way things should be done; just 
a common sense approach and encouraging people to save on their own.
  As we reach the waning days of this session, I want to take a moment, 
Madam Speaker, to thank the members of our committee, certainly the 
gentlewoman from the District of Columbia (Ms. Norton), the gentleman 
from Maine (Mr. Allen), the gentleman from Florida (Mr. Mica), the 
gentleman from Florida (Mr. Miller), the gentlewoman from Maryland 
(Mrs. Morella), the gentleman from Arkansas (Mr. Hutchinson), and 
certainly the gentleman from Florida (Mr. Scarborough), our chairman, 
for all of the efforts that we have been able to pull together to 
create some very, very meaningful legislation.
  I think that it is safe to say, Madam Speaker, that we set some goals 
at the beginning of this term, and I think we fulfilled just about all 
of them; and this is a crowning piece of legislation, because, again, 
it is recognition for our Federal employees for what they do every day, 
every day to lift our Nation up, to make it the strongest Nation in the 
world and the greatest Nation in the world. With that, I urge all of my 
colleagues to support this legislation.
  Madam Speaker, I yield back the balance of my time.
  Mrs. MORELLA. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I thank the gentleman from Maryland (Mr. Cummings) for 
his very appropriate and very kind words, but certainly the work that 
he has commented on dealing with this subcommittee working together for 
Federal employees, because they are so important to our Nation.
  America, Madam Speaker, has one of the lowest national savings rates 
among industrialized countries. It has fallen steadily over the last 20 
years, seriously jeopardizing America's security during what is 
supposed to be our golden years. Even though Americans recognize that 
they should be saving more, half of all family heads in their late 50s 
possess less than $10,000 in net financial assets.
  With the retirement of America's baby boomers approaching, Congress 
is beginning to consider how we can encourage Americans to save more. 
Federal employees, like all Americans, are increasingly concerned with 
planning for their retirement.
  This bill, H.R. 208, is a sensible way to encourage Federal employees 
to take personal responsibility and increase their savings for 
retirement without adding impediments before them. I think also as a 
Nation it helps us recruit and retain Federal employees. It says that 
we care about our civil servants. I am delighted that this important 
legislation has come to the floor for a vote. I want to thank the 
gentleman from Florida (Mr. Scarborough), chairman of the Subcommittee 
on Civil Service, the gentleman from Indiana (Mr. Burton), chairman of 
the Committee on Government Reform for their support in expediting 
consideration of the resolution.
  Madam Speaker, I want to thank the gentleman from Maryland (Mr. 
Cummings), who is the ranking member of the Subcommittee on Civil 
Service, and the gentleman from California (Mr. Waxman), who is the 
ranking member of the Committee on Government Reform, for their 
support.
  I would also like to thank Tom Trabucco, he is from the Thrift 
Savings Retirement Board, for all of his help in crafting this 
legislation. I also want to thank our staffs on both sides of the aisle 
and certainly on this side such as Garry Ewing, and especially my staff 
person Jordie Hannum. Madam Speaker, I ask my colleagues to vote for 
this bill.
  Mr. MORAN of Virginia. Madam Speaker, I rise today to join my 
colleague from Maryland in support of H.R. 208, the modernization of 
the Federal Employee Thrift Savings Plan (TSP).
  I share Mrs. Morella's view that federal employees should be allowed 
to participate in the TSP immediately upon being hired.
  As Members of Congress, it is the least we can do to reward the hard 
work of our federal employees who, in recent years, have assumed 
increasing responsibilities, sacrificed higher private sector wages, 
and generally tried to make the federal government operate more 
efficiently with, in many cases, tighter budgets.
  This bill will help to ensure that the Federal government is able to 
keep pace with the private sector in attracting the best and brightest 
personnel.
  I have seen this trend first-hand in my district, where many talented 
individuals leave federal service because their government compensation 
and benefits just don't compete with offers in the private sector. I 
firmly believe that this bill seeks to level the playing field by 
enabling the federal government to hire and retain a highly skilled 
workforce that will secure the American public's confidence in our 
government and the services our federal workforce provides.
  By lifting the waiting period restrictions on TSP participation, this 
is just one more step to make federal employment more attractive to 
individuals, and more competitive with the private sector.
  Mrs. MORELLA. Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mrs. Biggert). The question is on the motion 
offered by the gentlewoman from Maryland (Mrs. Morella) that the House 
suspend the rules and concur in the Senate amendments to the bill, H.R. 
208.
  The question was taken.
  Mrs. MORELLA. Madam Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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