[Senate Report 118-101]
[From the U.S. Government Publishing Office]
Calendar No. 217
118th Congress} { Report
SENATE
1st Session } { 118-101
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U.S. CUSTOMS AND BORDER PROTECTION
OFFICER RETIREMENT TECHNICAL CORRECTIONS ACT
__________
R E P O R T
OF THE
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
TO ACCOMPANY
S. 311
TO CORRECT THE INEQUITABLE DENIAL OF ENHANCED
RETIREMENT AND ANNUITY BENEFITS TO CERTAIN
U.S. CUSTOMS AND BORDER PROTECTION OFFICERS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
October 3, 2023.--Ordered to be printed
__________
U.S. GOVERNMENT PUBLISHING OFFICE
WASHINGTON : 2023
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware RAND PAUL, Kentucky
MAGGIE HASSAN, New Hampshire RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona JAMES LANKFORD, Oklahoma
JACKY ROSEN, Nevada MITT ROMNEY, Utah
ALEX PADILLA, California RICK SCOTT, Florida
JON OSSOFF, Georgia JOSH HAWLEY, Missouri
RICHARD BLUMENTHAL, Connecticut ROGER MARSHALL, Kansas
David M. Weinberg, Staff Director
Lena C. Chang, Director of Governmental Affairs
Devin M. Parsons, Professional Staff Member
William E. Henderson III, Minority Staff Director
Christina N. Salazar, Minority Chief Counsel
Andrew J. Hopkins, Minority Counsel
Laura W. Kilbride, Chief Clerk
Calendar No. 217
118th Congress} { Report
SENATE
1st Session } { 118-101
======================================================================
U.S. CUSTOMS AND BORDER PROTECTION OFFICER RETIREMENT TECHNICAL
CORRECTIONS ACT
_______
October 3, 2023.--Ordered to be printed
_______
Mr. Peters, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. 311]
[Including cost estimate of the Congressional Budget Office]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 311) to correct the
inequitable denial of enhanced retirement and annuity benefits
to certain U.S. Customs and Border Protection Officers, having
considered the same, reports favorably thereon with an
amendment, in the nature of a substitute, and recommends that
the bill, as amended, do pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................2
III. Legislative History..............................................4
IV. Section-by-Section Analysis of the Bill, as Reported.............4
V. Evaluation of Regulatory Impact..................................5
VI. Congressional Budget Office Cost Estimate........................6
VII. Changes in Existing Law Made by the Bill, as Reported............9
I. PURPOSE AND SUMMARY
S. 311, the U.S. Customs and Border Protection Officer
Retirement Technical Corrections Act, would address a U.S.
Customs and Border Protection (CBP) error involving around
1,200 officers. In 2008, CBP told these officers they were
eligible for an enhanced retirement benefit without certain
mandatory retirement requirements, also known as a proportional
annuity. Officers affected by this error received a job offer
before the enhanced benefit took effect on July 6, 2008, but
entered on duty after July 6, 2008. Several years later, the
Office of Personnel Management (OPM) issued guidance with a
different interpretation of the law's requirements. Over a
decade later, CBP finally realized its retirement policy toward
this group of officers did not align with the law. CBP
rescinded these officers' eligibility for a proportional
annuity in 2021. The bill directs CBP to reinstate the
proportional annuity for the affected officers and includes a
retroactive annuity adjustment for eligible individuals who
retire before the date of enactment of this bill. The bill also
includes a GAO study of CBP's retirement benefit practices to
ensure a similar issue does not occur again.\1\
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\1\On March 30, 2022, the Committee approved S. 3868, the U.S.
Customs and Border Protection Officer Retirement Technical Corrections
Act, with an amendment in the nature of a substitute. That bill, as
reported, is substantially similar to S. 311. Accordingly, this
committee report is, in many respects, similar to the committee report
for S. 3868. See S. Rept. 117-175.
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II. BACKGROUND AND NEED FOR THE LEGISLATION
In December 2007, Congress passed legislation that included
provisions to establish an enhanced retirement benefit for CBP
officers, which the President signed into law.\2\ This
legislation structured a new retirement benefit for CBP
officers similar to retirement provisions for other special
retirement groups, such as law enforcement officers, nuclear
material couriers, and firefighters.\3\ For such positions with
heightened physical and mental demands, a 1.7% enhanced annuity
rate is coupled with a mandatory retirement age and maximum age
of entry, requiring individuals to complete 20 years of service
before age 57.\4\ Both the employee and the agency pay higher
contributions toward the officer's retirement, aligned with the
higher annuity level.\5\
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\2\Consolidated Appropriations Act, 2008, Pub. L. 110-161, Division
E, Sec. 535.
\3\Letter from Acting Director Kathleen McGettigan, Office of
Personnel Management, to Anthony M. Reardon, National President of the
National Treasury Employees Union (Apr. 1, 2021).
\4\Congressional Research Service, Retirement Benefits for Federal
Law Enforcement Personnel (R42631) (Sep. 5, 2017).
\5\Letter from Acting Director Kathleen McGettigan, supra note 3.
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The enhanced annuity benefit established for CBP officers
took effect prospectively, starting on the first day of the pay
period six months after the enactment of the 2007 legislation,
meaning July 6, 2008.\6\ The legislation included transition
rules allowing for a hybrid retirement benefit, referred to as
a ``proportional annuity,'' for individuals already serving as
CBP officers at the time the new benefit took effect.
Specifically, the legislative text states that individuals
``serving as a customs and border protection officer on the
effective date [. . .] pursuant to an appointment made before
that date'' are eligible for the enhanced annuity calculation
going forward without being subject to the mandatory separation
provisions or the 20-years-of-service requirement.\7\
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\6\Consolidated Appropriations Act, 2008, Pub. L. 110-161, Division
E, Sec. 535(e)(1).
\7\Consolidated Appropriations Act, 2008, Pub. L. 110-161, Division
E, Sec. 535(e)(2).
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In 2008, the CBP Office of Human Resources Management (HRM)
coordinated with the CBP Office of Chief Counsel, Department of
Homeland Security (DHS), and OPM to implement the enhanced
retirement for CBP officers over a six-month period. The HRM
Office of Compensation and Organizational Effectiveness
Division; Benefits, Medical and Worklife Division; and Hiring
Center worked together on guidance for implementing the
enhanced benefit.\8\ The guidance stated that employees who
received a tentative job offer before July 6, 2008, but entered
on duty after this date are eligible for the proportional
annuity, even if they leave the position before 20 years. This
classification resulted in the CBP Hiring Center using the
``O52'' remark code in the personnel records for this group of
officers, which states that the officer is ``[e]xempt from
mandatory retirement and eligible for prorated Annuity upon
retirement.''\9\
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\8\U.S. Customs and Border Protection, Office of Human Resources
Management, Production to Senate Homeland Security and Governmental
Affairs Committee (copy on file with Committee); Email from Allie
Cleaves, Office of Congressional Affairs, U.S. Customs and Border
Protection, to Senate Homeland Security and Governmental Affairs Staff
(Jan. 19, 2022).
\9\U.S. Customs and Border Protection, Office of Human Resources
Management, Talent Management Directorate, CBP Hiring Center: CBP
Officer Enhanced Retirement Coverage-Eligible for a Prorated Annuity
(Jul. 2020).
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In July 2011, OPM, in consultation with DHS, published
final regulations for the enhanced CBP officer retirement
benefit.\10\ The regulations further clarify that the
proportional annuity computation applies only to ``an employee
serving in a primary or secondary customs and border protection
officer position on July 6, 2008.''\11\ Both the regulations
and the underlying statute specify that individuals who enter
on duty as a CBP officer after July 6, 2008 are not eligible
for the proportional annuity.\12\
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\10\Office of Personnel Management, Customs and Border Protection
Officer Retirement, 76 Fed. Reg. 41993 (Jul. 18, 2011) (final rule).
\11\17 CFR Sec. 842.1009.
\12\Office of Personnel Management, supra note 10; Consolidated
Appropriations Act, 2008, supra note 7.
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In 2020, a CBP employee requested information from the
agency about the prorated annuity described in the individual's
O52 code. This employee had entered on duty after July 6, 2008,
even though CBP had offered the position to the individual
prior to that date. The CBP officer's inquiry brought the O52
code to the agency's attention for similarly situated officers,
after over a decade of having implemented the benefit. CBP
realized that the policy for this group of officers failed to
comply with federal statute or the related OPM regulations that
had since been finalized. OPM confirmed the error on the part
of CBP in January 2021. In response, CBP rescinded the O52
remark code in February 2021 from the personnel record of any
officer who had not technically entered on duty prior to or on
July 6, 2008, even if the officer had been offered a position
before that date.\13\
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\13\U.S. Customs and Border Protection, Office of Human Resources
Management, Production to Senate Homeland Security and Governmental
Affairs Committee (copy on file with Committee).
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CBP's error resulted in a number of officers becoming
ineligible for the proportional annuity they had been promised
and contributed toward since the beginning of their careers as
CBP officers.\14\ Nearly 1,200 officers have been impacted by
this CBP error. Of this total, CBP identified 764 employees who
entered on duty as officers before age 37, the maximum entry
age since the start of the enhanced benefit. Although these
employees will reach the 20-year mark at or below the mandatory
retirement age of 57, they had still been told at the time of
their hiring that they did not necessarily have to follow this
timeline in order to access their benefits. Additionally, there
are just over 400 officers who are at an even higher risk of
losing their enhanced benefits because they entered on duty as
a CBP officer after age 37 and may not be able to work a total
of 20 years.\15\
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\14\Id.
\15\Production from U.S. Customs and Border Protection to the
Senate Homeland Security and Governmental Affairs Committee (May 10,
2023) (copy on file with Committee); U.S. Customs and Border
Protection, Briefing with Senate Homeland Security and Governmental
Affairs Committee (May 11, 2023).
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Unless there is a legislative fix, officers who are not
able to reach 20 years of service will only receive a 1%
annuity rate for their retirement calculation rather than the
1.7% annuity rate, and they will not be reimbursed for the
higher contributions they have made toward their retirement
over the years.\16\
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\16\National Treasury Employees Union, CBP Proportional Retirement
Update (Aug. 24, 2021) (www.nteu.org//media//Files/nteu/docs/public/
cbp/leo/enhanced-retirement-eligibility-faqs).
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The U.S. Customs and Border Protection Officer Retirement
Technical Corrections Act would ensure impacted officers can
receive the retirement benefits they were promised when
starting their service. This bill directs CBP to identify
eligible individuals and notify them of the correction. Those
identified would then be eligible for a correction that would
align their retirement benefits with the proportional annuity.
The legislation also includes a retroactive annuity adjustment
for eligible individuals who retire before the date of
enactment of this bill and grants DHS the authority to waive
maximum entry age requirements for eligible officers as needed.
In order to help prevent a future problem similar to this error
that had a negative impact on officers and their families, the
bill also requires that the Comptroller General review CBP's
internal controls and training to ensure CBP is complying with
laws and regulations.
III. LEGISLATIVE HISTORY
Senator Gary Peters (D-MI) introduced S. 311, the U.S.
Customs and Border Protection Officer Retirement Technical
Corrections Act, on February 9, 2023, with original cosponsor
Senator Josh Hawley (R-MO). The bill was referred to the
Committee on Homeland Security and Governmental Affairs.
The Committee considered S. 311 at a business meeting on
May 17, 2023. At the business meeting, Chairman Peters offered
a substitute amendment to slightly adjust the officer
eligibility language to clarify that the job offers received
before July 6, 2008 were still ``tentative'' offers. The
substitute amendment was adopted by unanimous consent with
Senators Peters, Hassan, Sinema, Rosen, Padilla, Ossoff,
Blumenthal, Paul, Lankford, Romney, Scott, and Hawley present.
The bill, as amended, was ordered reported favorably by roll
call vote of 12 yeas to 0 nays, with Senators Peters, Hassan,
Sinema, Rosen, Padilla, Ossoff, Blumenthal, Paul, Lankford,
Romney, Scott, and Hawley voting in the affirmative, and with
Senators Carper, Johnson, and Marshall voting yea by proxy, for
the record only.
IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED
Section 1. Short title
This section establishes the short title of the bill as the
``U.S. Customs and Border Protection Officer Retirement
Technical Corrections Act.''
Section 2. Adjustment related to transition rules
Subsection (a) defines the term ``eligible individual'' in
the context of this section. Officers are eligible if they
received a tentative offer of employment before July 6, 2008
and entered into duty on or after July 6, 2008.
Subsection (b) describes the benefits these eligible
officers are entitled to receive, to align with the benefits
promised by the agency between 2008 and 2021. They may receive
the enhanced annuity starting in 2008 without being subject to
mandatory retirement requirements.
Subsection (c) directs DHS, within 120 days, to create a
list of impacted officers, notify the impacted officers of the
correction, and provide OPM with the information necessary for
the annuity correction. OPM is directed to make the annuity
correction after receiving the information, including
retroactively for impacted officers who retired before this
bill's enactment.
Subsection (d) provides DHS with the authority to waive
maximum entry age requirements for the group of impacted
officers. It also directs OPM, in consultation with DHS, to
issue appropriate guidance to assist in the implementation of
the annuity correction.
Subsection (e) directs the Government Accountability Office
to review the CBP hiring practices, policies, and procedures
related to eligibility for the enhanced retirement benefit, as
well as the relevant training provided to CBP senior leaders,
and submit a report to the Senate Homeland Security and
Governmental Affairs Committee and the House Homeland Security
Committee. This report will assist Congress in understanding
the process of how this error occurred and how to prevent CBP
from issuing guidance in the future that does not comply with
federal law.
V. EVALUATION OF REGULATORY IMPACT
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of this bill and determined
that the bill will have no regulatory impact within the meaning
of the rules. The Committee agrees with the Congressional
Budget Office's statement that the bill contains no
intergovernmental or private sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would impose no costs
on state, local, or tribal governments.
VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
The bill would:
Allow certain Customs and Border Protection
Officers to retire with an increased retirement benefit
Make those officers eligible for an annuity
that would treat their years of service similarly to
the treatment of time in service for federal law
enforcement officers and firefighters
Estimated budgetary effects would mainly stem from:
Larger retirement annuities for certain
Customs and Border Protection Officers
Retroactive revisions and adjustments to the
annuities of affected officers who retire before
enactment
Bill summary: S. 311 would allow certain Customs and Border
Protection Officers (CBPOs) to retire with a more generous
civil service retirement benefit.
Estimated Federal cost: The estimated budgetary effect of
S. 311 is shown in Table 1. The costs of the legislation mostly
fall within budget function 600 (income security).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF S. 311
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By fiscal year, millions of dollars--
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2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2023-2028 2023-2033
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Increases in Direct Spending
Estimated Budget Authority........................... 0 1 1 2 2 3 3 3 3 3 3 9 24
Estimated Outlays.................................... 0 1 1 2 2 3 3 3 3 3 3 9 24
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CBO estimates that administrative costs associated with the identification of people affected by S. 311 and the processing of retirement annuity
revisions would increase spending subject to appropriation by less than $500,000 over the 2023-2028 period.
Basis of estimate: For this estimate, CBO assumes that S.
311 will be enacted before the end of calendar year 2023.
Background: In 2007, the Consolidated Appropriations Act,
2008, authorized an enhanced retirement benefit for CBPOs
similar to the one available to federal law enforcement
officers and firefighters. That change took effect on July 6,
2008, but its implementation was different for officers who
already were working on that date and those whose service began
after that date.
CBPOs who enter duty after July 6, 2008, and who complete
20 years of service qualify for a retirement benefit that uses
a higher multiplier in the annuity calculation: 1.7 percent of
an employee's highest three consecutive years of qualifying pay
(or high-3) multiplied by the required 20 years of CBPO
service. (For any years of federal service beyond 20, 1 percent
of the employee's high-3 is included in the annuity
calculation.) In addition, officers cannot begin working after
age 36 and they generally must retire by age 57. The age limit
for starting employment as a CBPO ensures that they can work
the 20 years needed to receive an enhanced retirement before
they reach the mandatory retirement age. (In contrast, the
federal retirement benefit under standard retirement generally
is calculated at 1 percent of an employee's high-3 for all
years of service.)
CBPOs who already were serving on the effective date are
eligible for a proportional annuity, which provides a larger
benefit without the requirement to complete 20 years of covered
CBPO service (covered service is that which occurs on or after
July 6, 2008). Upon retirement, their annuities will be
prorated, with the enhanced multiplier of 1.7 percent applying
to years of CBPO service after July 6, 2008, and the standard
multiplier of 1 percent applying to years of service before
that date.
Some CBPOs received a tentative offer of employment before
July 6, 2008, but did not begin duty until after that date.
Customs and Border Protection (CBP) originally informed those
officers (a group of about 1,400, based on data provided by the
agency) that they would be eligible for the proportional
annuity. However, in 2021, the Office of Personnel Management
(OPM) determined that the proportional annuity provisions would
not apply because those officers had not entered duty by the
effective date. As a result, those CBPOs either will need to
continue working until they have completed a full 20 years of
covered service to be eligible for the enhanced benefit or they
will retire with a smaller than expected annuity (the standard
annuity calculation will apply to all their years of service).
S. 311 would, for the purposes of retirement, consider all
members of the affected group as having been in their positions
on the effective date, thus making them eligible for the
proportional annuity calculation.
Direct spending: S. 311 would increase direct spending
relative to current law because it would allow the affected
officers to receive enhanced retirement benefits for their
years of service as CBPOs. In total, CBO estimates, enacting
the bill would increase direct spending by $24 million over the
2023-2033 period.
The largest budgetary effect of S. 311 would stem from
benefits for CBPOs who were tentatively offered employment
before July 6, 2008, and began duty after that date at an age
older than 36 (the maximum age to begin work, under current
law). Before enhanced retirement coverage for CBPOs was
implemented, there was no maximum age, so some of the officers
tentatively offered employment before the effective date were
older, and some had previous years of federal service at other
agencies. CBO estimates that about 225 of those older CBPOs
either are already eligible for standard retirement on the
basis of their age and total years of service or will become so
before they achieve the 20 years of covered service following
July 6, 2008, that is necessary to receive enhanced coverage.
Moreover, because of the mandatory retirement age of 57, CBO
expects that most of those older officers would not or could
not work enough additional years to meet the 20-year
requirement for enhanced coverage.
Under current law, those officers will receive a standard
retirement benefit. If enacted, S. 311 would allow them to
retire with the proportional annuity calculation instead. CBO
estimates that the proportional calculation would increase
their initial retirement benefit by 55 percent, or by about
$11,000, on average. Federal retirement benefits are adjusted
annually for inflation and thus generally increase over time.
On that basis, CBO estimates that the larger benefits for those
retirees would increase direct spending by $21 million over the
2023-2033 period.
S. 311 also would direct OPM to retroactively revise the
annuities of any affected officer who retires before enactment
to use the proportional annuity calculation. CBP indicated
that, as of July 2023, about 30 retired CBPOs would qualify for
the revised benefit. Including the retroactive adjustment, CBO
estimates that revising pre-enactment retirements would
initially increase benefits for the group by about $7,000 each,
on average. Those benefits also would increase annually to
account for inflation and would thus increase direct spending
by $3 million over the 2023-2033 period, CBO estimates.
Most of the remaining CBPOs who would be affected by the
bill were younger than 37 when they were hired and generally
would not be eligible to retire before they complete the 20
years of covered service required to qualify for the enhanced
retirement. Thus, CBO expects that enacting S. 311 would not
lead to significant costs for that group of officers.
Spending subject to appropriation: S. 311 would direct the
Secretary of Homeland Security to identify and notify anyone
affected by the bill and to provide necessary information to
OPM to facilitate the processing of any required annuity
corrections for that group. CBO estimates that the cost would
be less than $500,000 over the 2023-2028 period; any spending
would be subject to the availability of appropriated funds.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in Table 1.
Increase in long-term net direct spending and deficits: CBO
estimates that enacting S. 311 would not increase net direct
spending by more than $2.5 billion in any of the four
consecutive 10-year periods beginning in 2034.
CBO estimates that enacting S. 311 would not increase on-
budget deficits by more than $5 billion in any of the four
consecutive 10-year periods beginning in 2034.
Mandates: None.
Estimate prepared by: Federal costs: Amber Marcellino;
Mandates: Andrew Laughlin.
Estimate reviewed by: Barry Blom, Chief, Projections Unit;
Kathleen FitzGerald, Chief, Public and Private Mandates Unit;
Christina Hawley Anthony, Deputy Director of Budget Analysis.
Estimate approved by: Phillip L. Swagel, Director,
Congressional Budget Office.
VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
Because S. 311 would not repeal or amend any provision of
current law, it would make no changes in existing law within
the meaning of clauses (a) and (b) of paragraph 12 of rule XXVI
of the Standing Rules of the Senate.
[all]