[Congressional Record (Bound Edition), Volume 150 (2004), Part 14]
[House]
[Pages 19715-19718]
[From the U.S. Government Publishing Office, www.gpo.gov]




   DISTRICT OF COLUMBIA RETIREMENT PROTECTION IMPROVEMENT ACT OF 2004

  Mr. TOM DAVIS of Virginia. 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 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).

[[Page 19716]]

       ``(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 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.

[[Page 19717]]

  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 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

[[Page 19718]]

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.

                          ____________________