[Federal Register Volume 65, Number 239 (Tuesday, December 12, 2000)]
[Rules and Regulations]
[Pages 77500-77512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31249]



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DEPARTMENT OF THE TREASURY

31 CFR Part 29


Federal Benefit Payments Under Certain District of Columbia 
Retirement Plans

AGENCY: Departmental Offices, Treasury.

ACTION: Final rule.

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SUMMARY: The Department of the Treasury, Departmental Offices, is 
issuing final regulations to implement the provisions of Title XI of 
the Balanced Budget Act of 1997, as amended (Act). The Act assigns the 
Secretary of the Treasury responsibility for payment of benefits under 
the District of Columbia (District) retirement plan for judges 
regardless of when accrued and under the District retirement plans for 
police and firefighters, and teachers for benefits based on credit for 
service accrued as of June 30, 1997. The regulations establish the 
general rules for the Department of the Treasury's administration of 
its program responsibilities and the methodology for determining the 
amount of Federal Benefit Payments.

DATE: This final rule is effective January 11, 2001, except 
Sec. 29.102(a)(3) and subpart C of part 29 are effective March 31, 
2001.

FOR FURTHER INFORMATION CONTACT: Harold L. Siegelman, (202) 622-1540, 
Department of the Treasury, Metropolitan Square Building, Room 6033, 
1500 Pennsylvania Avenue, NW., Washington, DC 20220.

SUPPLEMENTARY INFORMATION: On December 13, 1999, the Department of the 
Treasury published (at 64 FR 69432) proposed regulations to implement 
Title XI of the Balanced Budget Act of 1997, Public Law 105-33, 111 
Stat. 251, 712-731, 756-759, enacted August 5, 1997, as amended by the 
Omnibus Consolidated and Emergency Supplemental Appropriations Act for 
Fiscal Year 1999, Public Law 105-277, 112 Stat. 2681, 2681-530 through 
538, 2681-552. The Act transferred certain unfunded pension liabilities 
from the District of Columbia (District) government to the Federal 
Government. The Act also required the Federal Government to assume 
responsibility for payment of benefits under the District retirement 
plan for judges regardless of when accrued and under the District 
retirement plans for police and firefighters, and teachers for benefits 
based on credit for service accrued as of June 30, 1997.
    The proposed regulations addressed both the general rules for the 
Department of the Treasury's administration of its program 
responsibilities and the methodology for determining the amount of 
Federal Benefit Payments for police, firefighters, and teachers. The 
Department has determined that it is impracticable to end the interim 
benefits administration period described in section 11041(a) of the Act 
until it has developed an automated data processing system that will 
make Federal Benefit Payments calculations in accordance with these 
regulations. Consequently, the effective date of the final regulations 
concerning the methodology for determining the amount of Federal 
Benefit Payments must be delayed until the automated system becomes 
operational, which is expected to occur on March 31, 2001. Accordingly, 
the regulations pertaining to the methodology for determining the 
amount of Federal Benefit Payments (subpart C of the proposed rules) 
are scheduled to become effective on March 31, 2001.
    The general rules for the Department of the Treasury's 
administration of its program responsibilities (subparts A and B of the 
proposed rules) will be effective 30 days after publication of this 
rule, with the exception of section 29.102(a)(3), which shall become 
effective on March 31, 2001. The general rules establish the regulatory 
framework for other regulations the Department is preparing pursuant to 
section 11083 of the Act.
    In the notice of proposed rulemaking (NPRM), subparts A through C 
were designated to become a new part 28 of Title 31, Code of Federal 
Regulations. However, before publication of the NPRM, proposed 
regulations on Nondiscrimination on the Basis of Sex in Education 
Programs and Activities Receiving Federal Financial Assistance were 
published (at 64 FR 58568) on October 29, 1999, as part 28. The final 
regulations on Federal Benefit Payments Under Certain District of 
Columbia Retirement Plans have been renumbered as part 29. The 
following discussion of the comments received under the proposed rule 
uses the old section numbers for convenience.
    The Department received two comments on the proposed regulations. 
The Department has accepted 9 of the 10 suggestions made in the 
comments.
    Proposed section 28.105(a) provided the rule for computing the end 
date for a period of time for filing documents under these regulations. 
One comment observed that District offices are closed on District 
holidays as well as Saturday, Sunday, and Federal holidays. Since the 
regulations generally require that documents be filed with the 
District, the last day of the filing must be extended by a day if the 
last day for filing falls on a District holiday. Section 29.105(a) has 
been changed to treat District holidays in the same manner as Federal 
holidays for filing time limits.
    Proposed section 28.105(c) provided the rule for computing the 
amount of unused sick leave creditable for annuity computation 
purposes. One comment noted that paragraph (c)(1) of that section 
incorrectly stated the rule under the Police and Firefighters Plan. 
Under section 4-622 of the D.C. Code, survivors of participants who die 
in service do not receive credit for unused sick leave. The calculation 
of a survivor annuity in such cases depends only on the average salary 
of the policeman or firefighter at the time of death. Similarly, 
certain disability annuity calculations, which are based on a 
disability percentage rather than the length of service, do not include 
credit for unused sick leave. The regulatory text has been corrected by 
deleting references to unused sick leave in such circumstances.
    Proposed section 28.106 provided for recognition of representative 
payees for recipients of Federal Benefit Payments under the same rules 
as apply to other benefits under each plan. The section includes a 
reference to section 4-629(b) of the DC Code as an example of a plan 
provision for payment to a representative payee. One comment suggested 
that the reference be clarified to indicate that section 4-629(b) 
applies to the Police and Firefighter Plan. The reference has been 
changed to so indicate.
    Proposed section 28.203 provided that legal process to affect 
Federal Benefit Payments should be served upon District officials in 
three specific situations. The supplementary information to the 
proposed regulations stated that in all other situations service of 
process was to be made upon the United States and the Department of the 
Treasury. One comment requested an explanation of the extent to which 
legal process should be served upon the United States and the 
Department of the Treasury in disputes over annuity amounts.
    The Department of the Treasury has reconsidered the entire issue of 
service of process affecting Federal Benefit Payments. The Department 
has concluded that legal process under section 659 of title 42, United 
States Code and part 581 of Title 5, Code of Federal Regulations, that 
is, process implementing an order for alimony or child support; or any 
request for or notice of appointment of a custodian, guardian, or other 
fiduciary to receive Federal Benefit Payments as

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representative payees under section 29.106 must be served upon the 
Department of the Treasury. The address for service of these types of 
process has been added as an appendix to subpart B of part 29. The 
Department will also request the U.S. Office of Personnel Management to 
make a similar change to appendix A of part 581 of Title 5, Code of 
Federal Regulations. Any qualifying court order under chapter 30 of 
title 1 of the DC Code (1997) must be served upon the District of 
Columbia in accordance with any rules issued under section 1-3005 of 
the DC Code. All other process regarding Federal Benefit Payments must 
be served upon the United States in accordance with applicable law. 
Process involving retirement benefits payable by the District of 
Columbia must be served upon the District in accordance with applicable 
law.
    Proposed section 28.302 defined the term disability retirement for 
use in subpart C of part 28. One comment noted that the definition 
should have referred to the statutory provision for teacher disability 
retirement for teachers who retired after June 30, 1946. The statutory 
reference in the final regulation has been changed to reflect the 
statute applicable to teachers who retire on disability retirement 
after June 30, 1946.
    Proposed section 28.302 also defined the term military service for 
use in subpart C of part 28. One comment noted that the definition 
erroneously included a deposit requirement for a teacher to be eligible 
for credit for honorable active military service. The definition has 
been corrected to eliminate the error.
    Proposed section 28.322 provided service credit rules concerning 
disability retirement after June 30, 1997. Paragraph (b) of that 
section also contained information about the commencing date of Federal 
Benefit Payments in such cases. One comment noted that paragraph (b) of 
that section contained an incorrect reference to proposed section 
28.342 that pertains to maximum annuity calculations. The reference 
should have been to proposed section 28.343, which relates to the 
calculation of the Federal Benefit Payment in disability retirement 
cases. The supplementary information to the proposed regulation 
contained several similar errors that appear to be the result of a 
change in section numbering late in the drafting process. The 
references have been corrected in the final regulations.
    One comment objected to proposed section 28.322(b) and suggested 
that Federal Benefit Payments should commence at separation in cases of 
disability retirement where the former employee has not met the 
criteria for optional retirement. The relevant language in the proposed 
regulation states:

    If an employee separates for disability retirement after June 
30, 1997, and, on the date of separation, the employee * * * [d]oes 
not satisfy the age and service requirements for optional 
retirement, the Federal Benefit Payment begins when the disability 
retiree reaches deferred retirement age.

    The suggested change would not be consistent with the statutory 
language that the regulation implements. Section 11012(c) of the 
Balanced Budget Act states, in pertinent part:

    Special Rule Regarding Disability Benefits.--To the extent that 
any portion of a benefit payment to which an individual is entitled 
under a District Retirement Program is based on a determination of 
disability made by the District of Columbia Retirement Board or the 
Trustee after [June 30, 1997], the Federal benefit payment with 
respect to the individual shall be in an amount equal to the 
deferred retirement benefit * * * the individual would receive if 
the individual left service on the day before the commencement of 
the disability retirement benefits.

    Since the disability retiree is not entitled to any amount of 
deferred retirement benefit until he or she reaches the appropriate age 
for deferred retirement, there is no ``amount equal to the deferred 
retirement benefit'' for the period between separation and the 
commencing date for the deferred retirement benefit. Accordingly, the 
proposed regulation correctly reflects the statutory provision.
    Moreover, if Federal Benefit Payments began at separation in cases 
of disability retirement where the employee had not yet reached the age 
for deferred retirement, the District government would control the 
commencement of such benefits by finding the employee eligible for 
disability retirement. This would be contrary to sections 11021 and 
11035(d) of the Act, which provide that only the Secretary or the 
Trustee shall determine whether an individual is eligible to receive a 
Federal Benefit Payment under the Act.
    Proposed section 28.344 provided the rule for calculating Federal 
Benefit Payments in cases involving death benefits. Examples 13A 
through 13C of appendix A to proposed part 28 illustrated the death-
benefit calculations. One comment noted that no example illustrates the 
survivor annuity calculation in cases in which the guaranteed minimum 
is based on a projection of service to age 60. Example 13D has been 
added in the final regulations to illustrate such a case. The 
projection to age 60 only affects the total survivor-annuity 
computation. As in 40-percent guaranteed minimum cases, Federal Benefit 
Payments are in the same proportion to the total survivor annuity as 
the amount of service as of June 30, 1997, is to the amount of total 
service.
    Example 10B in appendix A to proposed part 28 illustrated the 
computation of a reduced annuity to provide a survivor annuity. One 
comment noted an error in the amount labeled ``Total Reduced.'' The 
annual amount should have been $42,374.13, but was published as 
$43,374.13. The annual amount has been corrected in the final 
regulations. The monthly amount was correctly computed based on the 
lower amount.

Executive Order 12866, Regulatory Review

    Because this rule is not a significant regulatory action for 
purposes of Executive Order 12866, a regulatory assessment is not 
required.

Regulatory Flexibility Act

    It is hereby certified that this regulation will not have a 
significant economic impact on a substantial number of small entities. 
The regulation will only affect the determination of the Federal 
portion of retirement benefits to certain former employees of the 
District of Columbia. Accordingly, a regulatory flexibility analysis is 
not required by the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

List of Subjects in 31 CFR Part 29

    Administrative practice and procedure, Claims, Disability benefits, 
Firefighters, Government employees, Intergovernmental relations, Law 
enforcement officers, Pensions, Retirement, Teachers.
    Department of the Treasury.

Lisa G. Ross,
Acting Assistant Secretary of the Treasury.

    Accordingly, the Department of the Treasury, is amending subtitle A 
of title 31 of the Code of Federal Regulations to add part 29 to read 
as follows:

PART 29--FEDERAL BENEFIT PAYMENTS UNDER CERTAIN DISTRICT OF 
COLUMBIA RETIREMENT PROGRAMS

Subpart A--General Provisions
Sec.
29.101   Purpose and scope.
29.102   Related regulations.
29.103   Definitions.
29.104   Schedule for Federal Benefit Payments.

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29.105   Computation of time.
29.106   Representative payees.
Subpart B--Coordination With the District Government
29.201   Purpose and scope.
29.202   Definitions. [Reserved]
29.203   Service of Process.

Appendix A to Subpart B of Part 29--Addresses for Service of Process 
Under Sec. 29.203

Subpart C--Split Benefits
29.301   Purpose and scope.
29.302   Definitions.

General Principles for Determining Service Credit To Calculate Federal 
Benefit Payments

29.311   Credit only for service performed on or before June 30, 
1997.
29.312   All requirements for credit must be satisfied by June 30, 
1997.
29.313   Federal Benefit Payments are computed based on retirement 
eligibility as of the separation date and service creditable as of 
June 30, 1997.

Service Performed After June 30, 1997

29.321   General principle.
29.322   Disability benefits.

All Requirements for Credit Must be Satisfied by June 30, 1997

29.331   General principle.
29.332   Unused sick leave.
29.333   Military service.
29.334   Deposit service.
29.335   Refunded service.

Calculation of the Amount of Federal Benefit Payments

29.341   General principle.
29.342   Computed annuity exceeds the statutory maximum.
29.343   Disability benefits.
29.344   Survivor benefits.
29.345   Cost-of-living adjustments.
29.346   Reduction for survivor benefits.

Appendix A to Subpart C of Part 29--Examples

    Authority: Sections 11083 and 11251(a) of Pub. L. 105-33, 111 
Stat. 730 and 756, as amended by Pub. L. 105-277, 112 Stat. 2681-530 
through 2681-538.

Subpart A--General Provisions


Sec. 29.101  Purpose and scope.

    (a) This part contains the Department's regulations implementing 
Title XI of the Balanced Budget Act of 1997, Public Law 105-33, 111 
Stat. 251, enacted August 5, 1997, as amended.
    (b) This subpart contains general information to assist in the use 
of this part including--
    (1) Information about related regulations (Sec. 29.102),
    (2) Definitions of terms used in more than one subpart of this part 
(Sec. 29.103), and
    (3) The Department's general rules and procedures, applicable to 
the retirement plans for District of Columbia teachers, police and fire 
fighters, and judges that concern the administration of Federal Benefit 
Payments (Secs. 29.104-29.106).
    (c) This part applies to all Federal Benefit Payments made on or 
after October 1, 1997.
    (d) This part does not apply to the program of annuities, other 
retirement benefits, or medical benefits for members and officers, 
retired members and officers, and survivors thereof, of the United 
States Park Police force, the United States Secret Service, or the 
United States Secret Service Uniformed Division.


Sec. 29.102  Related regulations.

    (a) This part contains the following subparts:
    (1) General Provisions (Subpart A);
    (2) Coordination With the District Government (Subpart B); and (3) 
Split Benefits (Subpart C).
    (b) Part 581 of Title 5, Code of Federal Regulations, contains 
information about garnishment of certain Federal payments to enforce 
awards of alimony or child support.
    (c) Part 831 of Title 5, Code of Federal Regulations, contains 
information about benefits under the Civil Service Retirement System.
    (d) Part 870 of Title 5, Code of Federal Regulations, contains 
information about benefits under the Federal Employees Group Life 
Insurance Program.
    (e) Part 890 of Title 5, Code of Federal Regulations, contains 
information about benefits under the Federal Employees Health Benefits 
Program.


Sec. 29.103  Definitions.

    (a) In this part--
    District government means the government of the District of 
Columbia.
    Department means the United States Department of the Treasury.
    Federal Benefit Payment means a payment for which the Department is 
responsible under Title XI of the Balanced Budget Act of 1997 (Public 
Law 105-33, 111 Stat. 251), as amended, to which an individual is 
entitled under the Judges Plan, the Police and Firefighters Plan, or 
the Teachers Plan, in such amount and under such terms and conditions 
as may apply under such plans.
    Freeze date means June 30, 1997.
    Judges Plan means the retirement program (under subchapter III of 
chapter 15 of title 11 of the D.C. Code) for judges of the District of 
Columbia Court of Appeals or Superior Court or with judicial service 
with the former Juvenile Court of the District of Columbia, District of 
Columbia Tax Court, police court, municipal court, Municipal Court of 
Appeals, or District of Columbia Court of General Sessions.
    OPM means the United States Office of Personnel Management.
    Police and Firefighters Plan means any of the retirement programs 
(under chapter 6 of title 4 of the D.C. Code) for members of the 
Metropolitan Police Force and Fire Department in effect on June 29, 
1997.
    Secretary means the Secretary of the United States Department of 
the Treasury or his or her designee.
    Teachers Plan means any of the retirement programs for teachers 
(under chapter 12 of title 31 of the D.C. Code) in effect on June 29, 
1997.
    (b) In this subpart--
    Legal process means--
    (1) Any document that qualifies as legal process as defined in 
Sec. 581.103 of Title 5, Code of Federal Regulations; or
    (2) Any court order that Federal or District of Columbia law 
permits to cause all or any portion of a payment under the Judges Plan, 
the Police and Firefighters Plan, or the Teachers Plan to be made to a 
former spouse under chapter 30 of title 1 of the D.C. Code (1997).
    Representative payee means a fiduciary to whom a payment under the 
Judges Plan, the Police and Firefighters Plan, or the Teachers Plan is 
made for the benefit of a plan participant or a survivor.


Sec. 29.104  Schedule for Federal Benefit Payments.

    Federal Benefit Payments are payable on the first business day of 
the month following the month in which the benefit accrues. (See 
Sec. 29.105(b).)


Sec. 29.105  Computation of time.

    (a) For filing documents. In computing the number of days allowed 
for filing a document, the first day counted is the day after the 
action or event from which the period begins to run. If the date that 
ordinarily would be the last day for filing falls on a Saturday, a 
Sunday, a Federal holiday, or a District holiday, the period runs until 
the end of the next day that is not a Saturday, a Sunday, or a Federal 
or a District holiday.
    (b) For benefit accrual. (1) Annuity accrues on a daily basis; one-
thirtieth of the monthly rate constitutes the daily rate.
    (2) Annuity does not accrue on the 31st day of any month except 
that annuity accrues on the 31st day of the initial month if the 
employee's annuity commences on the 31st day of a 31-day month.
    (3) For accrual purposes the last day of a 28-day month counts as 3 
days and

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the last day of a 29-day month counts as 2 days.
    (c) For counting unused sick leave. (1) For annuity computation 
purposes--
    (i) The service of a participant under the Police and Firefighters 
Plan who retires on an immediate annuity is increased by the number of 
days of unused sick leave to the participant's credit under a formal 
leave system; and
    (ii) The service of a participant under the Teachers Plan who 
retires on an immediate annuity or dies leaving a survivor entitled to 
an annuity is increased by the number of days of unused sick leave to 
the participant's credit under a formal leave system.
    (2) In general, 8 hours of unused sick leave increases total 
service by 1 day. In cases where more or less than 8 hours of sick 
leave would be charged for a day's absence, total service is increased 
by the number of days in the period between the date of separation and 
the date that the unused sick leave would have expired had the employee 
used it (except that holidays falling within the period are treated as 
work days, and no additional leave credit is earned for that period).
    (3) If an employee's tour of duty changes from part time to full 
time or full time to part time within 180 days before retirement, the 
credit for unused sick leave is computed as though no change had 
occurred.
    (d) For counting leave without pay (LWOP) that is creditable 
service. (1) Under the Police and Firefighters Plan, credit is allowed 
for no more than 6 months of LWOP in each calendar year.
    (2)(i) Under the Teachers Plan, credit is allowed for no more than 
6 months of LWOP in each fiscal year.
    (ii)(A) For years prior to fiscal year 1976, each fiscal year 
started on July 1 and ended on the following June 30.
    (B) Fiscal year 1976 started on July 1, 1975, and ended on 
September 30, 1976.
    (C) For years starting in fiscal year 1977, each fiscal year starts 
on October 1 and ends on the following September 30.


Sec. 29.106  Representative payees.

    For Federal Benefit Payments, representative payees will be 
authorized to the same extent and under the same circumstances as each 
plan permits for non-Federal Benefit Payments under the plan. (See 
e.g., section 4-629(b) of the D.C. Code (1997) (applicable to the 
Police and Firefighters Plan).)

Subpart B--Coordination With the District Government


Sec. 29.201  Purpose and scope.

    This subpart contains information concerning the relationship 
between the Department and the District government in the 
administration of Title XI of the Balanced Budget Act of 1997, as 
amended, and the functions of each in the administration of that Act.


Sec. 29.202  Definitions. [Reserved]


Sec. 29.203  Service of Process.

    To affect Federal Benefit Payments--
    (a) Service must be made upon the Department at the address 
provided in appendix A to this subpart for--
    (1) Legal process under section 659 of title 42, United States 
Code, and part 581 of Title 5, Code of Federal Regulations, or
    (2) Any request for or notice of appointment of a custodian, 
guardian, or other fiduciary to receive Federal Benefit Payments as 
representative payees under Sec. 29.106;
    (b)(1) Service must be made upon the District government in 
accordance with any rules issued under section 1-3005 of the D.C. Code 
for any qualifying court order under chapter 30 of title 1 of the D.C. 
Code (1997), and
    (2) The District government must notify the Department and forward 
a copy of such an order to the address provided in appendix A to this 
subpart within 3 days of receipt of the order; and
    (c) All other process regarding Federal Benefit Payments must be 
served upon the United States in accordance with applicable law.

Appendix A to Subpart B of Part 29--Addresses for Service Under 
Sec. 29.203

    1. The mailing address for delivery of documents described in 
Sec. 29.203(a) by the United States Postal Service is: Office of DC 
Pensions, Department of the Treasury, Metropolitan Square Building, 
Room 6250, 1500 Pennsylvania Avenue, NW., Washington, DC 20220.
    2. The address for delivery of documents described in 
Sec. 29.203(a) by process servers, express carriers, or other forms 
of handcarried delivery is: Office of DC Pensions, Department of the 
Treasury, Metropolitan Square Building, Room 6250, 655 15th Street 
(F Street side), NW., Washington, DC.

Subpart C--Split Benefits


Sec. 29.301  Purpose and scope.

    (a) The purpose of this subpart is to addresses the legal and 
policy issues that affect the calculation of the Federal and District 
of Columbia portions of benefits under subtitle A of Title XI of the 
Balanced Budget Act of 1977, Public Law 105-33, 111 Stat. 251, 712-731, 
enacted August 5, 1997, as amended.
    (1) This subpart states general principles for the calculation of 
Federal Benefit Payments in cases in which the Department and the 
District government are both responsible for paying a portion of an 
employee's total retirement benefits under the Police and Firefighters 
Plan or the Teachers Plan.
    (2) This subpart provides illustrative examples of sample 
computations to show the application of the general principles to 
specific problems.
    (b)(1) This subpart applies only to benefits under the Police and 
Firefighters Plan or the Teachers Plan for individuals who have 
performed service creditable under these programs on or before June 30, 
1997.
    (2) This subpart addresses only those issues that affect the split 
of fiscal responsibility for retirement benefits (that is, the 
calculation of Federal Benefit Payments).
    (3) Issues relating to determination and review of eligibility and 
payments, and financial management, are beyond the scope of this 
subpart.
    (c) This subpart does not apply to benefit calculations under the 
Judges Plan.


Sec. 29.302  Definitions.

    In this subpart (including appendix A of this subpart)--
    Deferred retirement means retirement under section 4-623 of the 
D.C. Code (1997) (under the Police and Firefighters Plan) or section 
31-1231(a) of the D.C. Code (1997) (under the Teachers Plan).
    Deferred retirement age means the age at which a deferred annuity 
begins to accrue, that is, age 55 under the Police and Firefighters 
Plan and age 62 under the Teachers Plan.
    Department service or departmental service means any period of 
employment in a position covered by the Police and Firefighters Plan or 
Teachers Plan. Department service or departmental service may include 
certain periods of military service that interrupt a period of 
employment under the Police and Firefighters Plan or the Teachers Plan.
    Disability retirement means retirement under section 4-615 or 
section 4-616 of the D.C. Code (1997) (under the Police and 
Firefighters Plan) or section 31-1225 of the D.C. Code (1997) (under 
the Teachers Plan), regardless of whether the disability was incurred 
in the line of duty.
    Enter on duty means commencement of employment in a position 
covered by the Police and Firefighters Plan or the Teachers Plan.
    Excess leave without pay or excess LWOP means a period of time in a 
non-pay status that in any year is greater than the amount creditable 
as service under Sec. 29.105(d).
    Hire date means the date the employee entered on duty.

[[Page 77504]]

    Military service means--
    (1) For the Police and Firefighters Plan, military service as 
defined in section 4-607 of the D.C. Code (1997) that is creditable as 
other service under section 4-602 or section 4-610 of the D.C. Code 
(1997); and
    (2) For the Teachers Plan, military service as described in section 
31-1230(a)(4) of the D.C. Code (1997).
    Optional retirement means regular longevity retirement under 
section 4-618 of the D.C. Code (1997) (under the Police and 
Firefighters Plan) or section 31-1224(a) of the D.C. Code (1997) (under 
the Teachers Plan).
    Other service means any period of creditable service other than 
departmental service or unused sick leave. Other service includes 
service that becomes creditable upon payment of a deposit, such as 
service in another school system under the Teachers Plan (under section 
31-1208 of the D.C. Code (1997)); and service that is creditable 
without payment of a deposit, such as military service occurring prior 
to employment under the Police and Firefighters Plan.
    Pre-80 hire means an individual whose annuity is computed using the 
formula under the Police and Firefighters Plan applicable to 
individuals hired before February 15, 1980.
    Pre-96 hire means an individual whose annuity is computed using the 
formula under the Teachers Plan applicable to individuals hired before 
November 10, 1996.
    Sick leave means unused sick leave, which is creditable in a 
retirement computation, as calculated under Sec. 29.105(c).

General Principles for Determining Service Credit to Calculate 
Federal Benefit Payments


Sec. 29.311  Credit only for service performed on or before June 30, 
1997.

    Only service performed on or before June 30, 1997, is credited 
toward Federal Benefit Payments.


Sec. 29.312  All requirements for credit must be satisfied by June 30, 
1997.

    Service is counted toward Federal Benefit Payments only if all 
requirements for the service to be creditable are satisfied as of June 
30, 1997.


Sec. 29.313  Federal Benefit Payments are computed based on retirement 
eligibility as of the separation date and service creditable as of June 
30, 1997.

    Except as otherwise provided in this subpart, the amount of Federal 
Benefit Payments is computed based on retirement eligibility as of the 
separation date and service creditable as of June 30, 1997.

Service Performed After June 30, 1997


Sec. 29.321  General principle.

    Any service performed after June 30, 1997, may never be credited 
toward Federal Benefit Payments.


Sec. 29.322  Disability benefits.

    If an employee separates for disability retirement after June 30, 
1997, and, on the date of separation, the employee--
    (a) Satisfies the age and service requirements for optional 
retirement, the Federal Benefit Payment commences immediately, that is, 
the Federal Benefit Payment is calculated as though the employee 
retired under optional retirement rules using only service through June 
30, 1997 (See examples 7A and 7B of appendix A of this subpart); or
    (b) Does not satisfy the age and service requirements for optional 
retirement, the Federal Benefit Payment begins when the disability 
retiree reaches deferred retirement age. (See Sec. 29.343.)

All Requirements for Credit Must Be Satisfied by June 30, 1997


Sec. 29.331  General principle.

    To determine whether service is creditable for the computation of 
Federal Benefit Payments under this subpart, the controlling factor is 
whether all requirements for the service to be creditable under the 
Police and Firefighters Plan or the Teachers Plan were satisfied as of 
June 30, 1997.


Sec. 29.332  Unused sick leave.

    (a) For employees separated for retirement as of June 30, 1997, 
Federal Benefit Payments include credit for any unused sick leave that 
is creditable under the applicable plan.
    (b) For employees separated for retirement after June 30, 1997, no 
unused sick leave is creditable toward Federal Benefit Payments.


Sec. 29.333  Military service.

    (a) For employees who entered on duty on or before June 30, 1997, 
and whose military service was performed prior to that date, credit for 
military service is included in Federal Benefit Payments under the 
terms and conditions applicable to each plan.
    (b) For employees who enter on duty after June 30, 1997, military 
service is not creditable toward Federal Benefit Payments, even if 
performed as of June 30, 1997.
    (c) For employees who entered on duty on or before June 30, 1997, 
but who perform military service after that date, the credit for 
military service is not included in Federal Benefit Payments.


Sec. 29.334  Deposit service.

    (a) Teachers Plan. (1) Periods of civilian service that were not 
subject to retirement deductions at the time they were performed are 
creditable for Federal Benefit Payments under the Teachers Plan if the 
deposit for the service was paid in full to the Teachers Plan as of 
June 30, 1997.
    (2) No credit is allowed for Federal Benefit Payments under the 
Teachers Plan for any period of civilian service that was not subject 
to retirement deductions at the time it was performed if the deposit 
for the service was not paid in full as of June 30, 1997.
    (b) Police and Firefighters Plan. No credit is allowed for Federal 
Benefit Payments under the Police and Firefighters Plan for any period 
of civilian service that was not subject to retirement deductions at 
the time that the service was performed. (See definition of 
``governmental service'' at D.C. Code section 4-607(15) (1997).)


Sec. 29.335  Refunded service.

    (a) Periods of civilian service that were subject to retirement 
deductions but for which the deductions were refunded to the employee 
are creditable for Federal Benefit Payments if the redeposit for the 
service was paid in full to the District government as of June 30, 
1997.
    (b) No credit is allowed for Federal Benefit Payments for any 
period of civilian service that was subject to retirement deductions 
but for which the deductions were refunded to the employee if the 
redeposit for the service was not paid in full to the District 
government as of June 30, 1997.

Calculation of the Amount of Federal Benefit Payments


Sec. 29.341  General principle.

    Except for disability retirements after June 30, 1997, and certain 
death benefits based on deaths after June 30, 1997, in which the 
calculation is not based upon length of service (see Sec. 29.344); for 
cases in which some service is creditable on or before June 30, 1997, 
and some service is creditable after June 30, 1997, Federal Benefit 
Payments are computed under the rules of the applicable plan as 
though--
    (a) The employee were eligible to retire effective July 1, 1997, 
under the same conditions as the actual retirement (that is, using the 
annuity computation

[[Page 77505]]

formula that applies under the plan in effect on June 29, 1997, and the 
actual retirement age, including any applicable age reduction, based on 
the age at actual retirement);
    (b) The service that became creditable after June 30, 1997, did not 
exist; and
    (c) The average salary is the average salary at separation.

    Note to Sec. 29.341: See examples 7B, 9, and 13 of appendix A of 
this subpart.

Sec. 29.342  Computed annuity exceeds the statutory maximum.

    (a) In cases in which the total computed annuity exceeds the 
statutory maximum:
    (1) Federal Benefit Payments may equal total benefits even if the 
employee had service after June 30, 1997.
    (2) If the employee had sufficient service as of June 30, 1997, to 
qualify for the maximum annuity under the plan, the Federal Benefit 
Payment is the maximum annuity under the plan. This will be the entire 
benefit except for any amount in excess of the normal maximum due to 
unused sick leave, which is the responsibility of the District. (See 
example 3, of appendix A of this subpart.)
    (b) If the employee did not perform sufficient service as of June 
30, 1997, to reach the statutory maximum benefit, but has sufficient 
service at actual retirement to exceed the statutory maximum, the 
Federal Benefit Payment is the amount earned through June 30, 1997. The 
non-Federal-Benefit-Payment portion of the total benefit consists of 
only the amount by which the total benefit payable exceeds the Federal 
Benefit Payment.


Sec. 29.343  Disability benefits.

    (a) The general rule that Federal Benefit Payments are calculated 
under the applicable retirement plan as though the employee were 
eligible for optional retirement and separated on June 30, 1997, does 
not apply to disability benefits prior to optional retirement age.
    (b) In cases involving disability benefits prior to optional 
retirement age, no Federal Benefit Payment is payable until the retiree 
reaches the age of eligibility to receive a deferred annuity (age 55 
under the Police and Firefighters Plan and age 62 under the Teachers 
Plan). When the age for deferred annuity is reached, the Federal 
Benefit Payment is paid using creditable service accrued as of June 30, 
1997, and average salary (computed under the rules for the applicable 
plan) as of the date of separation. (See examples 6 and 7 of appendix A 
of this subpart.)


Sec. 29.344  Survivor benefits.

    (a) The general rule that Federal Benefit Payments are calculated 
under the applicable retirement plan as though the employee were 
eligible for optional retirement and separated on June 30, 1997, does 
not apply to death benefits that are not determined by length of 
service.
    (b) In cases in which the amount of death benefits is not 
determined by length of service, the amount of Federal Benefit Payments 
is calculated by multiplying the amount of the total benefit payable by 
the number of full months of service through June 30, 1997, and then 
dividing by the number of months of total service at retirement (for 
elected survivor benefits) or death (for guaranteed-minimum death-in-
service survivor benefits). (See example 13 of appendix A of this 
subpart.)


Sec. 29.345  Cost-of-living adjustments.

    Cost-of-living increases are applied directly to Federal Benefit 
Payments, rather than computed on the total benefit and then prorated. 
(See example 14 of appendix A of this subpart.)


Sec. 29.346  Reduction for survivor benefits.

    (a) If a retiree designates a base for a survivor annuity that is 
greater than or equal to the unreduced Federal Benefit Payment, the 
applicable plan's annuity reduction formula is applied to the unreduced 
Federal Benefit Payment to determine the reduced Federal Benefit 
Payment. (See example 10 of appendix A of this subpart.)
    (b) If a retiree designates a base for a survivor annuity that is 
less than the amount of the Federal Benefit Payment, the entire 
survivor reduction applies to the Federal Benefit Payment to determine 
the reduced Federal Benefit Payment.

Appendix A to Subpart C of Part 29--Examples

    This appendix contains sample calculations of Federal Benefit 
Payments in a variety of situations.

Optional Retirement Examples

Example 1: No Unused Sick Leave

    A. In this example, an individual covered by the Police and 
Firefighters Plan hired before 1980 retires in October 1997. At 
retirement, he is age 51 with 20 years and 3 days of departmental 
service plus 3 years, 4 months, and 21 days of military service that 
preceded the departmental service. The Federal Benefit Payment 
begins at retirement. It is based on the 19 years, 8 months, and 22 
days of departmental service and 3 years, 4 months, and 21 days of 
military service performed as of June 30, 1997. Thus, the Federal 
Benefit Payment is based on 23 years and 1 month of service, all at 
the 2.5 percent accrual rate. The total annuity is based on 23 years 
and 4 months of service, all at the 2.5 percent accrual rate.

                      Example 1A.--Police Optional
                              [Pre-80 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/10/46
Hire date: 10/09/77
Separation date: 10/11/97
Department service: 20/00/03
Other service: 03/04/21
Sick leave:
.025 service: 23.333333
.03 service:
Average salary: $45,680.80
Total: $26,647.12
Total/month: $2,221.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 9/10/46
Hire date: 10/09/77
Freeze date: 06/30/97
Department service: 19/08/22
Other service: 03/04/21
Sick leave:
.025 service: 23.083333
.03 service:
Average salary: $45,680.80
Total: $26,361.61
Total/month: $2,197.00
------------------------------------------------------------------------

    B. In this example, the individual covered by the Police and 
Firefighters Plan was hired earlier than in example 1A and thus 
performed more service as of both June 30, 1997, and retirement in 
October 1997. At retirement, he is age 51 with 21 years, 11 months 
and 29 days of departmental service plus 3 years, 4 months, and 21 
days of military service that preceded the departmental service. The 
Federal Benefit Payment begins at retirement. It is based on the 21 
years, 8 months, and 18 days of departmental service and 3 years, 4 
months, and 21 days of military service performed as of June 30, 
1997. Thus, the Federal Benefit Payment is based on 25 years and 1 
month of service, 1 year and 8 months at the 3.0 percent accrual 
rate and 23 years and 5 months at the 2.5 percent accrual rate 
(including 1 month consisting of 18 days of departmental service and 
21 days of other service). The total annuity is based on 25 years 
and 4 months of service, 1 year and 11 months at the 3.0 percent 
accrual rate and 23 years and 5 months at the 2.5 percent accrual 
rate (including 1 month consisting of 29 days of departmental 
service and 21 days of other service).

                      Example 1B.--Police Optional
                              [Pre-80 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/10/46
Hire date: 10/13/75
Separation date: 10/11/97
Department service: 21/11/29
Other service: 03/04/21
Sick leave:
.025 service: 23.416667

[[Page 77506]]

 
.03 service: 1.916667
Average salary: $45,680.80
Total: $29,368.96
Total/month $2,447.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 09/10/46
Hire date: 10/13/75
Freeze date: 06/30/97
Department service: 21/08/18
Other service: 03/04/21
Sick leave:
.025 service: 23.416667
.03 service: 1.666667
Average salary: $45,680.80
Total: $29,026.36
Total/month: $2,419.00
------------------------------------------------------------------------

Example 2: Unused Sick Leave Credit

    In this example, an individual covered by the Police and 
Firefighters Plan and hired before 1980 retires in March 1998. At 
retirement, she is age 48 with 24 years, 8 months, and 6 days of 
departmental service plus 6 months and 4 days of other service 
(deposit paid before June 30, 1997) and 11 months and 11 days of 
unused sick leave. For a police officer (or a non-firefighting 
division firefighter) such an amount of sick leave would be 1968 
hours (246 days, based on a 260-day year, times 8 hours per day). 
For a firefighting division firefighter, such an amount would be 
2069 hours (341 days divided by 360 days per year times 2184 hours 
per year). The Federal Benefit Payment begins at retirement. It is 
based on the 23 years, 11 months, and 23 days of departmental 
service performed as of June 30, 1997, and 6 months and 4 days of 
other service. Thus, the Federal Benefit Payment is based on 20 
years departmental and 6 months of other service at the 2.5 percent 
accrual rate and 3 years and 11 months of service at the 3.0 percent 
accrual rate. The total annuity is based on 20 years and 6 months of 
service at the 2.5 percent accrual rate and 5 years and 7 months of 
service at the 3 percent accrual rate.

                       Example 2.--Police Optional
                              [Pre-80 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 05/01/49
Hire date: 07/08/73
Separation date: 03/13/98
Department service: 24/08/06
Other service: 00/06/04
Sick leave: 00/11/11
.025 service: 20.5
.03 service: 5.583333
Average salary: $61,264.24
Total: $41,659.68
Total/month: $3,472.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 05/01/49
Hire date: 07/08/73
Freeze date: 06/30/97
Department service: 23/11/23
Other service: 00/06/04
Sick leave:
.025 service: 20.5
.03 service: 3.916667
Average salary: $61,264.24
Total: $38,596.47
Total/month: $3,216.00
------------------------------------------------------------------------

Example 3: Calculated Benefit Exceeds Statutory Maximum

    A. In this example, an individual covered by the Police and 
Firefighters Plan hired before 1980 retires in March 1998. At 
retirement, he is age 55 with 32 years and 17 days of departmental 
service. The Federal Benefit Payment begins at retirement. It is 
based on the 31 years, 3 months, and 17 days of departmental service 
performed as of June 30, 1997. Thus, the Federal Benefit Payment is 
based on 20 years of service at the 2.5 percent accrual rate and 11 
years and 3 months of service at the 3.0 percent accrual rate. 
However, the annuity is limited to 80 percent of the basic salary at 
time of retirement. (This limitation does not apply to the unused 
sick leave credit.) The annuity computed as of June 30, 1997, equals 
the full benefit payable; therefore, the Federal Benefit Payment is 
the total benefit.

                      Example 3A.--Police Optional
                              [Pre-80 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 06/12/42
Hire date: 03/14/66
Separation date: 03/30/98
Department service: 32/00/17
Other service:
Sick leave:
.025 service: 20
.03 service: 12
Average salary: $75,328.30
Final salary: $77,180.00
Total: $64,782.34
Total/month: $5,399.00
Maximum: $61,744.00
  $5,145.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 06/12/42
Hire date: 03/14/66
Freeze date: 03/30/97
Department service: 31/03/17
Other service:
Sick leave:
.025 service: 20
.03 service: 11.25
Average salary: $75,328.30
Final salary: $77,180.00
Total: $63,087.45
Total/month: $5,257.00
Maximum: $61,744.00
  $5,145.00
------------------------------------------------------------------------

    B. In this example, the individual in example 3A also has 6 
months of unused sick leave at retirement. The sick leave credit is 
not subject to the 80% limitation and does not become creditable 
service until the date of separation. For a police officer (or a 
non-firefighting division firefighter) such an amount of sick leave 
would be 1040 hours (130 days, based on a 260-day year, times 8 
hours per day). For a firefighting division firefighter, such an 
amount would be 1092 hours (180 days divided by 360 days per year 
times 2184 hours per year). Six months of unused sick leave 
increases the annual total benefit by 1.5 percent of the average 
salary, or in the example by $94 per month. The District is 
responsible for the portion of the annuity attributable to the 
unused sick leave because it became creditable at retirement, that 
is, after June 30, 1997.

                      Example 3B.--Police Optional
                              [Pre-80 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 06/12/42
Hire date: 03/14/66
Separation date: 03/30/98
Department service: 32/00/17
Other service:
Sick leave:
.025 service: 20
.03 service: 12
Average salary: $75,328.30
Final salary: $77,180.00
Total wo/sl credit: $64,782.34
Total/month: $5,399.00
Max wo/sl credit: $61,744.00
Max w/sl credit: $62,873.92
Monthly benefit: $5,239.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 06/12/42
Hire date: 03/14/66
Freeze date: 06/30/97
Department service: 31/03/17
Other service:
Sick leave: none
.025 service: 20
.03 service: 11.25
Average salary: $75,328.30
Final salary: $77,180.00
Total: $63,087.45
Total/month: $5,257.00
Maximum: $61,744.00
Monthly benefit: $5,145.00
------------------------------------------------------------------------

Example 4: Excess Leave Without Pay

    In this example, an individual covered by the Teachers Plan 
hired before 1996 retires in February 1998. At retirement, she is 
age 64 with 27 years of departmental service and 6 years, 7 months, 
and 28 days of other service (creditable before June 30, 1997). 
However, only 6 months of leave in a fiscal year without pay may be 
credited toward retirement under the Teachers Plan. She had 3 months 
and 18 days of excess leave without pay as of June 30, 1997. Since 
the excess leave without pay occurred before June 30, 1997, the time 
attributable to the excess leave without pay is subtracted from the 
service used in both the Federal Benefit Payment and the total 
benefit computations. The Federal Benefit Payment begins at 
retirement. It is

[[Page 77507]]

based on the 32 years and 8 months of service (32 years, 11 months, 
and 28 days minus 3 months and 18 days and the partial month 
dropped); 5 years of service at the 1.5 percent accrual rate, 5 
years of service at the 1.75 percent accrual rate, and 22 years and 
8 months of service at the 2 percent accrual rate. The total annuity 
is based on 33 years and 4 months of service (33 years, 7 months and 
28 days minus 3 months and 18 days and the partial month dropped) 5 
years of service at the 1.5 percent accrual rate, 5 years of service 
at the 1.75 percent accrual rate and 23 years and 4 months of 
service at the 2 percent accrual rate.

    Note: For the Teachers Plan, section 1230(a) of title 31 of the 
DC Code (1997) allows for 6 months leave without pay in any fiscal 
year. For the Police and Firefighters Plan, section 610(d) of title 
4 of the DC Code (1997) allows for 6 months leave without pay in any 
calendar year.


                      Example 4.--Teachers Optional
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/04/33
Hire date: 03/01/71
Separation date: 02/28/98
Department service: 27/00/00
Other service: 06/07/28
Excess LWOP: 00/03/18
.015 service: 5
.0175 service: 5
.02 service: 23.333333
Average salary: $53,121.00
Total: $33,421.98
Total/month: $2,785.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/04/33
Hire date: 03/01/71
Freeze date: 06/30/97
Department service: 26/04/00
Other service: 06/07/28
Excess LWOP: 00/03/18
.015 service: 5
.0175 service: 5
.02 service: 22.666667
Average salary: $53,121.00
Total: $32,713.66
Total/month: $2,726.00
------------------------------------------------------------------------

Example 5: Service Credit Deposits

    A. An individual covered by the Teachers Plan hired before 1996 
retires in October 1997. At retirement, he is age 61 with 30 years 
and 3 days of departmental service plus 3 years, 4 months, and 21 
days of other service that preceded the departmental service for 
which the deposit was fully paid on or before June 30, 1997. The 
Federal Benefit Payment begins at retirement. It is based on the 29 
years, 8 months, and 22 days of departmental service and 3 years, 4 
months, and 21 days of service performed as of June 30, 1997. Thus, 
the Federal Benefit Payment is based on 33 years and 1 month of 
service; 5 years of service at the 1.5 percent accrual rate, 5 years 
of service at the 1.75 percent accrual rate, and 23 years and 1 
month of service at the 2 percent accrual rate. The total annuity is 
based on 33 years and 4 months of service; 5 years of service at the 
1.5 percent accrual rate, 5 years of service at the 1.75 percent 
accrual rate and 23 years and 4 months of service at the 2 percent 
accrual rate.

                     Example 5A.--Teachers Optional
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/10/36
Hire date: 10/09/67
Separation date: 10/11/97
Department Service: 30/00/03
Other service: 03/04/21
Deposit paid before freeze date:
Other service credit allowed:
Sick leave:
.015 service: 5
.0175 service: 5
.02 service: 23.333333
Average salary: $45,680.80
Total: $28,740.85
Total/month: $2,395.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 09/10/36
Hire date: 10/09/67
Freeze date: 06/30/97
Department service: 29/08/22
Other service: 03/04/21
Deposit paid before freeze date:
Other service credit allowed:
Sick Leave:
.015 service: 5
.0175 service: 5
.02 service: 23.08333; 13 days dropped
Average salary: $45,680.80
Total: $28,512.45
Total/month: $2,376.00
------------------------------------------------------------------------

    B. In this example, the employee in example 5A did not pay any 
of the deposit to obtain credit for the 3 years, 4 months, and 21 
days of other service as of June 30, 1997. Thus, none of the other 
service is used in the computation of the Federal Benefit Payment. 
An individual covered by the Teachers Plan hired before 1996 retires 
in October 1997. At retirement, he is age 61 with 30 years and 3 
days of departmental service plus 3 years, 4 months, and 21 days of 
other service that preceded the departmental service for which the 
deposit was paid in full in October 1997 (at retirement). The 
Federal Benefit Payment begins at retirement. It is based on only 
the 29 years, 8 months, and 22 days of departmental service 
performed as of June 30, 1997; 5 years of service at the 1.5 percent 
accrual rate, 5 years of service at the 1.75 percent accrual rate, 
and 19 years and 8 months of service at the 2 percent accrual rate. 
The total annuity is based on 33 years and 4 months of service; 5 
years of service at the 1.5 percent accrual rate, 5 years of service 
at the 1.75 percent accrual rate and 23 years and 4 months of 
service at the 2 percent accrual rate.

                     Example 5B.--Teachers Optional
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/10/36
Hire date: 10/09/67
Separation date: 10/11/97
   $0.00
Department service: 30/00/03
Other service: 03/04/21
Total deposit paid after 6/30/97
Sick leave:
.015 service: 5
.0175 service: 5
.02 service: 23.333333
Average salary: $45,680.80
Total: $28,740.85
Total/month: $2,395.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 09/10/36
Hire date: 10/09/67
Freeze date: 06/30/97
Department service: 29/08/22
Other service: none
Total deposit paid after 6/30/97:
Sick leave:
.015 service: 5
.0175 service: 5
.02 service: 19.666667; 22 days dropped
Average salary: $45,680.80
Total: $25,390.90
Total/month: $2,116.00
------------------------------------------------------------------------

    C. In this example, the employee in examples 5A and B began 
installment payments on the deposit to obtain credit for the 3 
years, 4 months, and 21 days of other service as of June 30, 1997, 
but did not complete the deposit until October 1997 (at retirement). 
The other service is not used in the computation of the Federal 
Benefit Payment because the payment was not completed as of June 30, 
1997. Thus, the result is the same as in example 5B.

                     Example 5C.--Teachers Optional
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/10/36
Hire date: 10/09/67
Separation date: 10/11/97
Department service: 30/00/03
Other service: 03/04/21
Partial deposit paid as of 6/30/97:
Deposit completed after 6/30/97:
Sick leave:
.015 service: 5
.0175 service: 5
.02 service: 23.333333
Average salary: $45,680.80
Total: $28,740.85
Total/month: $2,395.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 09/10/36
Hire date: 10/09/67
Freeze date: 06/30/97
Department service: 29/08/22
Other service: none

[[Page 77508]]

 
Partial deposit paid as of 6/30/97:
Deposit completed after 6/30/97:
Sick leave:
.015 service: 5
.0175 service: 5
.02 service: 19.666667; 22 days dropped
Average salary: $45,680.80
Total: $25,390.90
Total/month: $2,116.00
------------------------------------------------------------------------

Disability Retirement Examples

Example 6: Disability Occurs Before Eligibility for Optional Retirement

    A. In this example, an individual covered by the Police and 
Firefighters Plan hired before 1980 retires based on a disability in 
the line of duty in October 1997. At retirement, he is age 45 with 
18 years, 5 months, and 11 days of departmental service. Since he 
had performed less than 20 years of service and had not reached the 
age of eligibility for an optional retirement, the Federal Benefit 
Payment does not begin at retirement. When the disability annuitant 
reaches age 55, he satisfies the age and service requirements for 
deferred retirement. At that time (August 20, 2007), the Federal 
Benefit Payment begins. It is based on the 18 years, 1 month, and 17 
days of departmental service performed as of June 30, 1997, all at 
the 2.5 percent accrual rate.

         Example 6A.--Police Disability in Line of Duty, Age 45
                              [Pre-80 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 08/20/52
Hire date: 05/14/79
Separation date: 10/24/97
Department service: 18/05/11
Other service:
Sick leave:
.025 service: 18.416667
.03 service:
Average salary: $47,788.64
Final salary: $50,938.00
Total: $22,002.70
Total/month: $1,834.00
\2/3\ of average pay: $31,859.11
Monthly: $2,655.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 08/20/52
Hire date: 05/14/79
Freeze date: 06/30/97
Department service: 18/01/17
Other service:
Sick leave:
.025 service: 18.083333
.03 service:
Average salary: $47,788.64
Final salary: $50,938.00
Total: $21,604.43
Total/month: $1,800.00; deferred
------------------------------------------------------------------------

    B. In this example, an individual covered by the Teachers Plan 
hired before 1996 retires based on a disability in December 1997. At 
retirement, she is age 49 with 27 years and 4 months of departmental 
service which includes 3 years, 3 months and 14 days of excess leave 
without pay (prior to June 30, 1997). Since she does not qualify for 
optional retirement at separation, the Federal Benefit Payment does 
not begin at separation. When the disability annuitant reaches age 
62, she will satisfy the age and service requirements for deferred 
retirement. At that time (March 9, 2010), the Federal Benefit 
Payment begins. The time attributable to the excess leave without 
pay is subtracted from the service used to compute the Federal 
Benefit Payment. Since the excess leave without pay occurred before 
June 30, 1997, the deferred Federal Benefit Payment is based on the 
23 years and 6 months of service; 5 years of service at the 1.5 
percent accrual rate, 5 years of service at the 1.75 percent accrual 
rate, and 13 and 6 months of service at the 2 percent accrual rate.

                 Example 6B--Teachers Disability Age 49
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 03/09/48
Hire date: 09/01/70
Separation date: 12/31/97
Department service: 27/04/00
Other service:
Excess LWOP: 03/03/14
.015 service: 5
.0175 service: 5
.02 service: 14
Average salary: $53,121.00
Total: $23,506.04
Total/month: $1,959.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 03/09/48
Hire date: 09/01/70
Freeze date: 06/30/97
Department service: 26/10/00
Other service:
Excess LWOP: 03/03/14
.015 service: 5
.0175 service: 5
.02 service: 13.5
Average salary: $53,121.00
Total: $22,974.83
Total/month: $1,915.00; deferred
------------------------------------------------------------------------

Example 7: Disability Occurs After Eligibility for Optional Retirement

    A. In this example, an individual covered by the Police and 
Firefighters Plan hired before 1980 retires based on a disability in 
the line of duty in October 1997. At retirement, she is age 55 with 
24 years, 5 months, and 11 days of departmental service. Since she 
was also eligible for optional retirement at the time of separation, 
the Federal Benefit Payment commences at retirement. It is based on 
the 24 years, 1 month, and 17 days of departmental service performed 
as of June 30, 1997. Thus, the Federal Benefit Payment is based on 
20 years of service at the 2.5 percent accrual rate and 4 years and 
1 month of service at the 3 percent accrual rate. The total annuity 
is based on the disability formula and is equal to two-thirds of 
average pay because that amount is higher than the 63.25 percent 
payable based on total service.

          Example 7A.--Police Disability in Line of Duty Age 55
                              [Pre-80 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 10.01/42
Hire date: 05/14/73
Separation date: 10/24/97
Department service: 24/05/11
Other service:
Sick leave:
.025 service: 20
.03 service: 4.416667
Average salary: $47,788.64
Final salary: $50,938.00
Total: $30,226.31
Total/month: $2,519.00
2/3 of average pay: $31,859.11
Monthly: $2,655.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 10/01/42
Hire date: 05/14/73
Freeze date: 06/30/97
Department service: 24/01/17
Other service:
Sick leave:
.025 service: 20
.03 service: 4.083333
Average salary: $47,788.64
Final salary: $50,938.00
Total: $29,748.43
Total/month: $2,479.00
------------------------------------------------------------------------

    B. In this example, an individual covered by the Teachers Plan 
hired before 1996 retires based on a disability in December 1997. At 
retirement, he is age 60 with 27 years and 4 months of departmental 
service which includes 3 years, 3 months and 14 days of excess leave 
without pay (prior to June 30, 1997). Since he qualifies for 
optional retirement at separation, the Federal Benefit Payment 
begins at retirement. Since the excess leave without pay occurred 
before June 30, 1997, and the total annuity is based on actual 
service (that is, exceeds the guaranteed disability minimum), the 
time attributable to the excess leave without pay is subtracted from 
the service used to compute the Federal Benefit Payment and total 
benefit. The Federal Benefit Payment is based on 23 years and 6 
months of service; 5 years of service at the 1.5 percent accrual 
rate, 5 years of service at the 1.75 percent accrual rate, and 13 
years and 6 months of service at the 2 percent accrual rate. The 
total annuity payable is based on 24 years of service; 5 years of 
service at the 1.5 percent accrual rate, 5 years of service at the 
1.75 percent accrual rate, and 14 years of service at the 2 percent 
accrual rate.

[[Page 77509]]



                 Example 7B.--Teachers Disability Age 60
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        TotaL Annuity Computation
------------------------------------------------------------------------
Birth date: 03/09/37
Hire date: 09/01/70
Separation date: 12/31/97
Department service: 27/04/00
Other service:
Excess LWOP: 03/03/14
.015 service: 5
.0175 service: 5
.02 service: 14
Average salary: $53,121.00
Total: $23,506.04
Total/month: $1,959.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 03/09/37
Hire date: 09/01/70
Freeze date: 06/30/97
Department service: 26/10/00
Other service:
Excess LWOP: 03/03/14
.015 service: 5
.0175 service: 5
.02 service: 13.5
Average salary: $53,121.00
Total: $22,974.83
Total/month: $1,915.00
------------------------------------------------------------------------

Deferred Retirement Examples

Example 8: All Service Before June 30, 1997

    In this example, an individual covered by the Police and 
Firefighters Plan hired before 1980 separated in March 1986 with 
title to a deferred annuity. In November 1997, he reaches age 55 and 
becomes eligible for the deferred annuity based on his 15 years, 9 
months, and 8 days of departmental service, all at the 2.5 percent 
accrual rate. The total annuity is based on the same 15 years, 9 
months, and 8 days of service all at the 2.5 percent accrual rate. 
Since all the service is creditable as of June 30, 1997, the Federal 
Benefit Payment equals the total annuity.

                       Example 8.--Police Deferred
                              [Pre-80 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/20/42
Hire date: 06/01/70
Separation date: 03/08/86
Department service: 15/09/08
Other service:
Sick leave:
.025 service: 15.75
.03 service: 0
Average salary: $30,427.14
Final salary: $45,415.00
Total: $11,980.69
Total/month: $998.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/20/42
Hire date: 06/01/70
Freeze date: 03/08/86
Department service: 15/09/08
Other service:
Sick leave:
.025 service: 15.75
.03 service: 0
Average salary: $30,427.14
Final salary: $45,415.00
Total: $11,980.69
Total/month: $998.00
------------------------------------------------------------------------

Example 9: Service Straddles June 30, 1997

    In this example, an individual covered by the Police and 
Firefighters Plan hired before 1980 separated in December 1997 with 
title to a deferred annuity. In November 2007, he will reach age 55 
and becomes eligible to receive a deferred annuity. At that time, 
the Federal Benefit Payment begins. It is based on the 18 years and 
1 month of departmental service performed as of June 30, 1997, all 
at the 2.5 percent accrual rate. The total annuity begins at the 
same time, based on his 18 years, 6 months, and 8 days of 
departmental service, all at the 2.5 percent accrual rate.

                       Example 9.--Police Deferred
                              [Pre-80 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/20/52
Hire date: 06/01/79
Separation date: 12/08/97
Department service: 18/06/08
Other service:
Sick leave:
.025 service: 18.5
.03 service: 0
Average salary: $30,427.14
Final salary: $45,415.00
Total: $14,072.55
Total/month: $1,173.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/20/52
Hire date: 06/01/79
Freeze date: 06/30/97
Department service: 18/01/00
Other service:
Sick leave:
.025 service: 18.083333
.03 service: 0
Average salary: $30,427.14
Final salary: $45,415.00
Total: $13,755.60
Total/month: $1,146.00; deferred
------------------------------------------------------------------------

Reduction To Provide a Survivor Annuity Examples

Example 10: Survivor Reduction Calculations

    Both of the following examples involve a former teacher who 
elected a reduced annuity to provide a survivor benefit:
    A. In this example, the employee elected full survivor benefits. 
The Federal Benefit Payment is reduced by 2\1/2\ percent of the 
first $3600 and 10 percent of the balance. The total annuity is also 
reduced by 2\1/2\ percent of the first $3600 and 10 percent of the 
balance.

           Example 10A.--Teachers Optional W/Survivor Reduction
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 11/01/68
Separation date: 12/31/97
Department service: 29/02/00
Other service: 03/09/18
Military: 00/09/11
.015 service: 5
.0175 service: 5
.02 service: 23.666667
Average salary: $66,785.00
Total unreduced: $42,464.13
Reduction: $3,976.41
Total reduced: $38,487.72
Total/month: $3,207.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 11/01/68
Freeze date: 06/30/97
Department service: 28/08/00
Other service: 03/09/18
Military: 00/09/11
.015 service: 5
.0175 service: 5
.02 service: 23.166667
Average salary: $66,785.00
Total unreducted: $41,796.28
Reduction: $3,909.63
Total reduced: $37,886.65
Total/month: $3,157.00
------------------------------------------------------------------------

    B. In this example, the employee elects to provide a partial 
survivor annuity based on $3600 per year. The Federal Benefit 
Payment is reduced by $90 per year. The total benefit is reduced by 
$90 per year.

          Example 10B.--Teachers Optional W/Survivor Reduction
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 11/01/68
Separation date: 12/31/97
Department service: 29/02/00
Other service: 03/09/18
Military: 00/09/11
.015 service: 5
.0175 service: 5
.02 service: 23.666667
Average salary: $66,785.00
Total unreduced: $42,464.13
Reduction: $90.00
Total reduced: $42,374.13
Total/month: $3,531.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire Date: 11/01/68
Freeze date: 06/30/97
Department service: 28/08/00
Other service: 03/09/18

[[Page 77510]]

 
Military: 00/09/11
.015 service: 5
.0175 service: 5
.02 service: 23.166667
Average salary: $66,785.00
Total unreduced: $41,796.28
Reduction: $90.00
Total reduced: $41,706.28
Total/month: $3,476.00
------------------------------------------------------------------------

Early Optional or Involuntary Retirement Examples

Example 11: Early Optional With Age Reduction

    In this example, an individual covered by the Teachers Plan 
hired before 1996 retires voluntarily in February 1998, under a 
special program that allows early retirement with at least 20 years 
of service at age 50 older, or at least 25 years of service at any 
age. At retirement, she is 6 full months short of age 55. She has 25 
years and 5 months of departmental service; 6 years, 2 months, and 
19 days of other service (creditable before June 30, 1997); and 2 
months and 9 days of unused sick leave. Since she is not eligible 
for optional retirement and she is eligible to retire voluntarily 
only because of the District-approved special program, the Federal 
Benefit Payment is calculated similar to a disability retirement. It 
does not begin until she becomes eligible for a deferred annuity at 
age 62. When it commences the Federal Benefit Payment will be based 
on the service creditable as of June 30, 1997: 30 years and 11 
months of service; 5 years of service at the 1.5 percent accrual 
rate, 5 years of service at the 1.75 percent accrual rate, and 20 
years and 11 months of service at the 2 percent accrual rate. The 
total annuity is based on 5 years of service at the 1.5 percent 
accrual rate, 5 years of service at the 1.75 percent accrual rate 
and 21 years and 9 months of service at the 2 percent accrual rate 
(including the unused sick leave). Because the Federal Benefit 
Payment is based on the deferred annuity, rather than the early 
voluntary retirement, it is not reduced by the age reduction factor 
used to compute the total benefit.

             Example 11.--Teachers Early Out W/Age Reduction
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/20/43
Hire date: 10/01/72
Separation date: 02/28/98
Department service: 25/05/00
Other service: 06/02/19
Sick leave: 00/02/09
.015 service: 5
.0175 service: 5
.02 service: 21.75
Average salary: $69,281.14
Total unreduced: $41,395.48
Age reduction factor: 0.990000
Total reduced: $40,981.53
Total/month: $3,415.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 09/20/43
Hire date: 10/01/72
Freeze date: 06/30/97
Department service: 24/09/00
Other service: 06/02/19
.015 service: 5
.0175 service: 5
.02 service: 20.916667
Average salary: $69,281.14
Total unreduced: $40,240.80
Reduction factor: 1.000000 no reduction
Total reduced: $40,240.80
Total/month: $3,353.00 deferred
------------------------------------------------------------------------

Example 12: Involuntary With Age Reduction

    In this example, an individual covered by the Teachers Plan 
hired before 1996 retires involuntarily in February 1998. At 
retirement, she is 6 full months short of age 55. She has 25 years 
and 5 months of departmental service; 6 years, 2 months, and 19 days 
of other service (creditable before June 30, 1997); and 2 months and 
9 days of unused sick leave. The Federal Benefit Payment begins at 
retirement. It is based on the 30 years and 11 months of service; 5 
years of service at the 1.5 percent accrual rate, 5 years of service 
at the 1.75 percent accrual rate, and 20 years and 11 months of 
service at the 2 percent accrual rate. The total annuity is based on 
5 years of service at the 1.5 percent accrual rate, 5 years of 
service at the 1.75 percent accrual rate and 21 years and 9 months 
of service at the 2 percent accrual rate (including the unused sick 
leave). Both the Federal Benefit Payment and the total benefit are 
reduced by the age reduction factor.

            Example 12.--Teachers Involuntary W/Age Reduction
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/20/43
Hire date: 10/01/72
Separation date: 02/28/98
Department service: 25/05/00
Other service: 06/02/19
Sick leave: 00/02/09
.015 service: 5
.0175 service: 5
.02 service: 21.75
Average salary: $69,281.14
Total unreduced: $41,395.48
Age reduction factor: 0.990000
Total reduced: $40,981.53
Total/month: $3,415.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 09/20/43
Hire date: 10/01/72
Freeze date: 06/30/97
Department service: 24/09/00
Other service: 06/02/19
.015 service: 5
.0175 service: 5
.02 service: 20.916667
Average salary: $69,281.14
Total unreduced: $40,240.80
Age reduction factor: 0.990000
Total reduced: $39,838.39
Total/month: $3,320.00
------------------------------------------------------------------------

Death Benefits Example

Example 13: Death Benefits Calculation

    Regardless of whether death occurs in service or after 
retirement, if the death benefit is not based on the length of 
service, the portion of a death benefit that is a Federal Benefit 
Payment is based on the ratio of the number of months of the 
deceased employee's service as of June 30, 1997, to the number of 
months of the deceased employee's total service. This proration will 
always apply to cases of death after retirement in which the 
survivor annuity is based on the reduction in the employee's annuity 
to provide the benefit. It also applies to lump-sum benefits and 
benefits computed under a guaranteed-minimum or a percentage-of-
disability-at-retirement formula.
    A. In this example, an individual covered by the Teachers Plan 
retires in April 1998 with 30 years of service and elects to provide 
a full survivor annuity. He dies in June 1998. The Federal Benefit 
Payment is 97\1/2\ percent (351 months/360 months) of the total 
survivor benefit.

                  Example 13A.--Teachers Death Benefits
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 04/01/46
Hire date: 04/01/68
Separation date: 04/01/98
Death date: 06/24/98
Department service: 30/00/00
Other service:
Sick leave:
Months: 360
Annual Benefit: $12,000.00
Monthly Benefit: $1,000.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 04/01/46
Hire date: 04/01/68
Freeze date: 06/30/97
Death date: 06/24/98
Department service: 29/03/00
Other service:
Months: 351
   $11,700.00
   $975.00
------------------------------------------------------------------------

    B. In this example, a teacher dies in service on June 30, 1998 
after 31 years of

[[Page 77511]]

departmental service. Since the survivor annuity is based on actual 
service, the Federal Benefit Payment is based on the 30 years of 
service as of June 30, 1997. The total benefit is based on the 31 
years of total service. No proration is appropriate.

                  Example 13B.--Teachers Death Benefits
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 07/01/39
Hire date: 07/01/67
Separation date: 06/30/98
Death date: 06/30/98
Department service: 31/00/00
Other service:
Sick leave:
Average salary: $38,787.88
Annual Benefit: $12,426.67
Monthly Benefit: $1,036.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 07/01/39
Hire date: 07/01/67
Freeze date: 06/30/97
Death date: 06/30/98
Department service: 30/00/00
Other service:
Average salary: $38,787.88
 $12,000.00
   $1,000.00
------------------------------------------------------------------------

    C. In this example, a teacher dies in service on April 1, 1998 
after 15 years of departmental service. Since the survivor annuity 
is based on the guaranteed minimum, the Federal Benefit Payment is a 
prorated portion of the total benefit. Since the teacher had 171 
months of service as of the freeze date and 180 months of service at 
death, the Federal Benefit Payment equals 171/180ths of the total 
benefit.

                  Example 13C.--Teachers Death Benefits
                              [pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 04/01/61
Hire date: 04/01/83
Separation date: 04/01/98
Death date: 04/01/98
Department service: 15/00/01
Average salary: $36,000.00
Months: 180
Annual Benefit: $7,920.00
Monthly Benefit: $660.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 04/01/61
Hire date: 04/01/83
Freeze date: 06/30/97
Death date: 04/01/98
Department Service: 14/03/00
Average salary: $36,000.00
Months: 171
Ratio (171/180): 0.950000
   $7,524.00
   $627.00
------------------------------------------------------------------------

    D. In this example, as in the prior example, a teacher dies in 
service on April 1, 1998 after 15 years of departmental service. 
However, in this example, the teacher was age 40 on the hire date. 
The amount of service used in the survivor annuity calculation 
equals the amount of service that the teacher would have had if the 
teacher continued covered employment until age 60. Since the 
survivor annuity is based on projected service, a form of the 
guaranteed minimum, the Federal Benefit Payment is a prorated 
portion of the total benefit. Since the teacher had 171 months of 
service as of the freeze date and 180 months of service at death, 
the Federal Benefit Payment equals 171/180ths of the total benefit.

                  Example 13D.--Teachers Death Benefits
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 04/01/43
Hire date: 04/01/83
Separation date: 04/01/98
Death date: 04/01/98
Department service: 15/00/01
Departmental Service projected to age 60: 20/00/01
.015 service: 5
.0175 service: 5
.02 service: 10
Average salary: $36,000.00
Months: 180
Annual Benefit: $7,177.50
Monthly Benefit: $598.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 04/01/43
Hire date: 04/01/83
Freeze date: 06/30/97
Death date: 04/01/98
Department service: 14/03/00
Average salary: $36,000.00
Months: 171
Ratio (171/180): 0.950000
   $6,818.63
   $568.00
------------------------------------------------------------------------

Cost of Living Adjustment Examples

Example 14: Application of Cost of Living Adjustments

    Cost of living adjustments are applied directly to the Federal 
Benefit Payment to determine the new rate of the Federal Benefit 
Payment after a cost of living adjustment.
    A. In this example, the cost of living adjustment is the same 
for the Federal Benefit Payment and the non-Federal Benefit Payment 
portion of the total benefit. Effectively, the total cost of living 
adjustment is proportionally split between the Federal Benefit 
Payment and the non-Federal Benefit Payment.

            Example 14A.--Teachers Cost of Living Adjustment
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                   Benefit Computation (at retirement)
------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
  Birth date: 11/04/48
  Hire date: 03/01/86
  Separation date: 02/28/2013
  Department service: 27/00/00
  Other service paid in 1995: 06/07/28
  Excess LWOP in 1990: 00/03/18
  .015 service: 5
  .0175 service: 5
  .02 service: 23.333333
  Average salary: $53,121.00
  Total: $33,421.98
  Total/month: $2,785.00
------------------------------------------------------------------------
                   Benefit Computation (at retirement)
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
  Birth date: 11/04/48
  Hire date: 03/01/86
  Freeze date: 06/30/1997
  Department service: 11/04/00
  Other service paid in 1995: 06/07/28
  Excess LWOP in 1990: 00/03/18
  .015 service: 5
  .0175 service: 5
  .02 service: 7.666667
  Average salary: $53,121.00
  Total: $16,777.38
  Total/month: $1,398.00
------------------------------------------------------------------------
                            COLA Computation
------------------------------------------------------------------------
DC COLA rate 4%
Total COLA: 111
New rate: 2896
Federal COLA rate 4%
  Federal COLA: 56
  New rate: 1454
------------------------------------------------------------------------

    B. In this example, a new District plan applies a different cost 
of living adjustment than is provided for the Federal Benefit 
Payment. The Federal Benefit Payment will be unaffected by the new 
District plan. In such a case, the total cost of living adjustment 
is no longer proportionally split between the Federal Benefit 
Payment and the non-Federal Benefit Payment.

            Example 14B.--Teachers Cost of Living Adjustment
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                   Benefit Computation (at retirement)
------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
  Birth date: 11/04/48
  Hire date: 03/01/86
  Separation date: 02/28/2013
  Department service: 27/00/00
  Other service paid in 1995: 06/07/28
  Excess LWOP in 1990: 00/03/18
  .015 service: 5
  .0175 service: 5
  .02 service: 23.333333
  Average salary: $53,121.00

[[Page 77512]]

 
  Total: $33,421.96
  Total/month: $2,785.00
------------------------------------------------------------------------
                   Benefit Computation (at retirement)
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
  Birth date: 11/04/48
  Hire date: 03/01/86
  Freeze date: 06/30/1997
  Department service: 11/04/00
  Other service paid in 1995: 06/07/28
  Excess LWOP in 1990: 00/03/18
  .015 service: 5
  .0175 service: 5
  .02 service: 7.666667
  Average salary: $53,121.00
  Total: $16,777.38
  Total/month: $1,398.00
------------------------------------------------------------------------
                       COLA Computation Variations
 
                               Variation 1
------------------------------------------------------------------------
DC COLA rate 5% of total benefit:
Total COLA: $139.00
New rate: $2,924.00
Federal COLA rate 4% of Federal
Benefit Payment:
Federal COLA: $56.00
  New rate: $1,454.00
------------------------------------------------------------------------
                               Variation 2
------------------------------------------------------------------------
DC COLA rate 5% of DC Payment:
  Total COLA: $125.00
  New rate: $2,910.00
Federal COLA rate 4% of Federal
    Benefit Payment:
  Federal COLA: $56.00
  New rate: $1,454.00
------------------------------------------------------------------------

Retroactive Payment of Accrued Annuity Example

Example 15: Accrual of Federal Benefit Payment

    The Federal Benefit Payment begins to accrue on the annuity 
commencing date, regardless of whether the employee is added to the 
annuity roll in time for the regular payment cycle. If the employee 
is due a retroactive payment of accrued annuity, the portion of the 
retroactive payment that would have been Federal Benefit Payment (if 
it were made in the regular payment cycle) is still Federal Benefit 
Payment. In this example, a teacher retired effective September 11, 
1998. She was added to the retirement rolls on the pay date November 
1, 1998 (October 1 to October 31 accrual cycle). Her Federal Benefit 
Payment is $3000 per month and her total benefit payment is $3120 
per month. Her initial check is $5200 because it includes a prorated 
payment for 20 days (September 11 to September 30). The Federal 
Benefit Payment is $5000 of the initial check ($3000 for the October 
cycle and $2000 for the September cycle).

                  Example 15.--Teachers Accrued Benefit
                              [Pre-96 hire]
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 09/01/66
Separation date: 09/10/98
Department service: 32/00/10
.015 service: 5
.0175 service: 5
.02 service: 22
Average salary: $62,150.00
Total: $37,445.38
Total/month: $3,120.00
Sept 11-30: $2,080.00
Oct 1-31: $3,120.00
Nov 1-30: $3,120.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 09/01/66
Freeze date: 06/30/97
Department service: 30/10/00
.15 service: 5
.0175 service: 5
.02 service: 20.833333
Average salary: $62,150.00
Total: $35,995.21
Total/month: $3,000.00
Sept 11-30: $2,000.00
Oct 1-31: $3,000.00
Nov 1-30: $3,000.00
------------------------------------------------------------------------

[FR Doc. 00-31249 Filed 12-11-00; 8:45 am]
BILLING CODE 4810-25-P