S 1725 ISCommentsClose CommentsPermalink

To amend the Employee Retirement Income Security Act of 1974, the Internal Revenue Code of 1986, and title 5, United States Code, to improve the protection of pension benefits, and for other purposes.CommentsClose CommentsPermalink

June 28, 2007

Mr. HARKIN introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and PensionsCommentsClose CommentsPermalink

To amend the Employee Retirement Income Security Act of 1974, the Internal Revenue Code of 1986, and title 5, United States Code, to improve the protection of pension benefits, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the `Restoring Pension Promises to Workers Act'.CommentsClose CommentsPermalink

TITLE I--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 AND THE INTERNAL REVENUE CODE OF 1986

SEC. 101. NO EXCLUSION FOR COMPENSATION UNDER NONQUALIFIED DEFERRED COMPENSATION PLANS UNLESS EMPLOYER MAINTAINS QUALIFIED EMPLOYER PLAN.

(a) In General- Paragraph (1) of section 409A(a) of the Internal Revenue Code of 1986 (relating to inclusion in gross income of deferred compensation under nonqualified deferred compensation plans) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph:CommentsClose CommentsPermalink





`(B) GROSS INCOME INCLUSION FOR EMPLOYER FAILURES- If at any time during a taxable year an employer maintaining a nonqualified deferred compensation plan fails to meet the requirements of subsection (e), all compensation deferred under the plan for the taxable year and all preceding taxable years shall be includible in gross income for the taxable year to the extent not subject to a substantial risk of forfeiture and not previously included in gross income.'.CommentsClose CommentsPermalink





(b) Requirement To Maintain Qualified Employer Plan- Section 409A of the Internal Revenue Code of 1986 (relating to inclusion in gross income of deferred compensation under nonqualified deferred compensation plans) is amended by redesignating subsection (e) as subsection (f) and by adding after subsection (d) the following new subsection:CommentsClose CommentsPermalink





`(e) Requirement That Employer Maintain Qualified Employer Plans-CommentsClose CommentsPermalink





`(1) IN GENERAL- An employer meets the requirements of this subsection only if, at all times during the taxable year, the employer maintains 1 or more qualified employer plans which are defined benefit plans and which meet--CommentsClose CommentsPermalink





`(A) the participation requirements of paragraph (2),CommentsClose CommentsPermalink





`(B) the vesting requirements of paragraph (3), andCommentsClose CommentsPermalink





`(C) the minimum benefit requirements of paragraph (4).CommentsClose CommentsPermalink





`(2) PARTICIPATION REQUIREMENTS- A qualified employer plan shall meet the requirements of this paragraph if the plan meets the requirements of section 410(b).CommentsClose CommentsPermalink





`(3) VESTING REQUIREMENTS- A qualified employer plan shall meet the requirements of this paragraph if the plan meets the requirements of section 416(b)(1).CommentsClose CommentsPermalink





`(4) MINIMUM BENEFIT REQUIREMENTS- A qualified employer plan shall meet the requirements of this paragraph if the plan meets the requirements of section 416(c)(1), except that such section shall be applied for purposes of this paragraph by determining the applicable percentage under section 416(c)(1)(B)(i) (and without regard to section 416(c)(1)(B)(ii)).CommentsClose CommentsPermalink





`(5) APPLICABLE RULES- The Secretary shall prescribe rules for the application of sections 410(b), 416(b), and 416(c)(1) for purposes of this subsection. Such rules shall provide--CommentsClose CommentsPermalink





`(A) for such modifications to such sections are necessary to apply such sections to a qualified employer plan which is not a plan described in section 401(a) which includes a trust exempt from tax under section 501(a), including for the exclusion of employees from the application of section 410(b) in the same manner as employees may be excluded under paragraphs (3) and (4) of section 410(b), andCommentsClose CommentsPermalink





`(B) for the application of section 416 to a qualified employer plan which is not a top-heavy plan.'.CommentsClose CommentsPermalink





(c) Effective Date-CommentsClose CommentsPermalink





(1) IN GENERAL- The amendments made by this section shall apply to taxable years beginning after December 31, 2007, except that the amendments shall only apply to amounts deferred after December 31, 2007 (and to earnings on such amounts).CommentsClose CommentsPermalink





(2) GUIDANCE RELATING TO CERTAIN EXISTING ARRANGEMENTS- Not later than 60 days after the date of the enactment of this Act, the Secretary of the Treasury shall issue guidance providing a limited period during which a nonqualified deferred compensation plan adopted before such date of enactment, may, without violating the requirements of section 409A(a) of such Code, be amended--CommentsClose CommentsPermalink





(A) to provide that a participant may, no later than December 31, 2008--CommentsClose CommentsPermalink





(i) terminate participation in the plan, orCommentsClose CommentsPermalink





(ii) cancel or modify an outstanding deferral election with regard to all or a portion of amounts deferred after December 31, 2007, to the extent necessary for the plan to meet the requirements of section 409A(a)(1)(B) of such Code (as added by the amendments made by this section),CommentsClose CommentsPermalink





but only if amounts subject to the termination, cancellation, or modification are, to the extent not previously included in gross income, includible in income of the participant when no longer subject to substantial risk of forfeiture, andCommentsClose CommentsPermalink





(B) to conform to the requirements of section 409A(a)(1)(B) of such Code (as added by the amendments made by this section) with regard to amounts deferred after December 31, 2007.CommentsClose CommentsPermalink

SEC. 102. LIMITATIONS ON RECOVERY OF OVERPAYMENTS TO PARTICIPANTS AND BENEFICIARIES.

(a) In General- Section 206 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1056) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(h) Special Rules Relating To Plan Recovery of Overpayment of Benefits-CommentsClose CommentsPermalink





`(1) NO RECOVERY IN CASES OF HARDSHIP OR INSIGNIFICANT AMOUNTS- Each pension plan shall provide that the plan shall not take any action to recover any applicable overpayment if the recovery--CommentsClose CommentsPermalink





`(A) would be against equity and good conscience by reason of the hardship the recovery would impose on the participant or beneficiary, orCommentsClose CommentsPermalink





`(B) is of an amount that the plan's actuary determines is actuarially insignificant.CommentsClose CommentsPermalink





For purposes of subparagraph (B), if the error resulting in the overpayment also resulted in overpayments to 1 or more other participants or beneficiaries, the determination as to whether any such overpayment is actuarially insignificant shall be made by reference to the aggregate of all such overpayments rather than each such overpayment.CommentsClose CommentsPermalink





`(2) TIME LIMITATION ON RECOVERY- Each pension plan shall provide that the plan shall not initiate any action to recover any applicable overpayment if the plan did not initiate any such action with respect to the overpayment during the 3-year period beginning on the date the overpayment was made.CommentsClose CommentsPermalink





`(3) NOTICE REQUIREMENT- Any notice to a plan participant or beneficiary with respect to an applicable overpayment shall include notice of the participant's or beneficiary's rights to appeal any administrative decision of the plan with respect to the overpayment.CommentsClose CommentsPermalink





`(4) SATISFACTION OF FIDUCIARY RESPONSIBILITY- A fiduciary of a plan shall not be treated as violating any fiduciary responsibility under part 4 of this subtitle solely by reason of a failure to recover any applicable overpayment in accordance with the requirements of this subsection.CommentsClose CommentsPermalink





`(5) APPLICABLE OVERPAYMENT- The term `applicable overpayment' means any payment of benefits to a participant or beneficiary in excess of the amount to which the participant or beneficiary is entitled to under the plan which is not due to the fault of the participant or beneficiary.'.CommentsClose CommentsPermalink





(b) Effective Date-CommentsClose CommentsPermalink





(1) IN GENERAL- The amendment made by this section shall apply to any overpayment of benefits made on or after the date of the enactment of this Act.CommentsClose CommentsPermalink





(2) PREVIOUS OVERPAYMENTS- The amendment made by this section shall apply to any overpayment of benefits made before the date of the enactment of this Act if, on or before such date, the plan has not initiated any action to recover such overpayment.CommentsClose CommentsPermalink





(3) GUIDANCE- Not later than 90 days after the date of the enactment of this Act, the Secretary of Labor shall issue guidance on the method or methods for determining whether an overpayment is actuarially insignificant for purposes of section 206(h)(1)(B) of the Employee Retirement Income Security Act of 1974 (as added by this section).CommentsClose CommentsPermalink

SEC. 103. PROTECTION OF SUBSIDIZED EARLY RETIREMENT BENEFITS IN CORPORATE MERGERS AND ACQUISITIONS.

(a) Amendment to ERISA- Section 208 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1058) is amended by--CommentsClose CommentsPermalink





(1) striking `A pension plan' and inserting `(a) In General- A pension plan'; andCommentsClose CommentsPermalink





(2) adding at the end the following:CommentsClose CommentsPermalink





`(b) Protection of Pro-Rata Share of Early Retirement Subsidy- If--CommentsClose CommentsPermalink





`(1) an employee, following the sale of a corporation or a corporate division, liquidation, merger, consolidation, sale of an interest in another corporation, partnership, or joint venture, or other similar transaction, continues employment with the employer that acquires all or part of the trade or business in such transaction (referred to in this subsection as the `successor employer'), andCommentsClose CommentsPermalink





`(2) the employee was a participant in a pension plan maintained by the previous employer before such transaction,CommentsClose CommentsPermalink





then, solely for the purpose of determining eligibility for any subsidized early retirement benefit provided by such plan, there shall be taken into account any periods of service with the successor employer that would have been taken into account had such transaction not occurred.'.CommentsClose CommentsPermalink





(b) Amendment to the Internal Revenue Code- Section 414(l) of the Internal Revenue Code of 1986 (relating to mergers and consolidations of plans) is amended by adding at the end the following:CommentsClose CommentsPermalink





`(3) PROTECTION OF PRO-RATA SHARE OF EARLY RETIREMENT SUBSIDY- If--CommentsClose CommentsPermalink





`(A) an employee, following the sale of a corporation or a corporate division, liquidation, merger, consolidation, sale of an interest in another corporation, partnership, or joint venture, or other similar transaction, continues employment with the employer that acquires all or part of the trade or business in such transaction (referred to in this paragraph as the `successor employer'), andCommentsClose CommentsPermalink





`(B) the employee was a participant in a pension plan maintained by the previous employer before such transaction,CommentsClose CommentsPermalink





then, solely for the purpose of determining eligibility for any subsidized early retirement benefit provided by such plan, there shall be taken into account any periods of service with the successor employer that would have been taken into account had such transaction not occurred.'.CommentsClose CommentsPermalink

SEC. 104. OFFICE OF PENSION PARTICIPANT ADVOCACY.

(a) In General- Title III of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1201 et seq.) is amended by adding at the end the following:CommentsClose CommentsPermalink

`Subtitle D--Office of Pension Participant Advocacy

`SEC. 3051. OFFICE OF PENSION PARTICIPANT ADVOCACY.

`(a) Establishment-CommentsClose CommentsPermalink





`(1) IN GENERAL- There is established in the Department of Labor an office to be known as the `Office of Pension Participant Advocacy'.CommentsClose CommentsPermalink





`(2) PENSION PARTICIPANT ADVOCATE- The Office of Pension Participant Advocacy shall be under the supervision and direction of an official to be known as the `Pension Participant Advocate' who shall--CommentsClose CommentsPermalink





`(A) have demonstrated experience in the area of pension participant assistance, andCommentsClose CommentsPermalink





`(B) be selected by the Secretary after consultation with pension participant advocacy organizations.CommentsClose CommentsPermalink





The Pension Participant Advocate shall report directly to the Secretary and shall be entitled to compensation at the same rate as the highest rate of basic pay established for the Senior Executive Service under section 5382 of title 5, United States Code.CommentsClose CommentsPermalink





`(b) Functions of Office- It shall be the function of the Office of Pension Participant Advocacy to--CommentsClose CommentsPermalink





`(1) evaluate the efforts of the Federal Government, business, and financial, professional, retiree, labor, women's, and other appropriate organizations in assisting and protecting pension plan participants, including--CommentsClose CommentsPermalink





`(A) serving as a focal point for, and actively seeking out, the receipt of information with respect to the policies and activities of the Federal Government, business, and such organizations which affect such participants,CommentsClose CommentsPermalink





`(B) identifying significant problems for pension plan participants and the capabilities of the Federal Government, business, and such organizations to address such problems, andCommentsClose CommentsPermalink





`(C) developing proposals for changes in such policies and activities to correct such problems, and communicating such changes to the appropriate officials,CommentsClose CommentsPermalink





`(2) promote the expansion of pension plan coverage and the receipt of promised benefits by increasing the awareness of the general public of the value of pension plans and by protecting the rights of pension plan participants, including--CommentsClose CommentsPermalink





`(A) enlisting the cooperation of the public and private sectors in disseminating information, andCommentsClose CommentsPermalink





`(B) forming private-public partnerships and other efforts to assist pension plan participants in receiving their benefits,CommentsClose CommentsPermalink





`(3) advocate for the full attainment of the rights of pension plan participants, including by making pension plan sponsors and fiduciaries aware of their responsibilities,CommentsClose CommentsPermalink





`(4) give priority to the special needs of low and moderate income participants, andCommentsClose CommentsPermalink





`(5) develop needed information with respect to pension plans, including information on the types of existing pension plans, levels of employer and employee contributions, vesting status, accumulated benefits, benefits received, and forms of benefits.CommentsClose CommentsPermalink





`(c) Reports-CommentsClose CommentsPermalink





`(1) ANNUAL REPORT- Not later than December 31 of each calendar year, the Pension Participant Advocate shall report to the Committees on Education and Labor and Ways and Means of the House of Representatives and the Committees on Health, Education, Labor, and Pensions and Finance of the Senate on its activities during the fiscal year ending in the calendar year. Such report shall--CommentsClose CommentsPermalink





`(A) identify significant problems the Advocate has identified,CommentsClose CommentsPermalink





`(B) include specific legislative and regulatory changes to address the problems, andCommentsClose CommentsPermalink





`(C) identify any actions taken to correct problems identified in any previous report.CommentsClose CommentsPermalink





The Pension Participant Advocate shall submit a copy of such report to the Secretary and any other appropriate official at the same time it is submitted to the committees of Congress.CommentsClose CommentsPermalink





`(2) SPECIFIC REPORTS- The Pension Participant Advocate shall report to the Secretary or any other appropriate official any time the Advocate identifies a problem which may be corrected by the Secretary or such official.CommentsClose CommentsPermalink





`(3) REPORTS TO BE SUBMITTED DIRECTLY- The report required under paragraph (1) shall be provided directly to the committees of Congress without any prior review or comment by any person other than the Secretary or any other Federal officer or employee.CommentsClose CommentsPermalink





`(d) Specific Powers-CommentsClose CommentsPermalink





`(1) RECEIPT OF INFORMATION- Subject to such confidentiality requirements as may be appropriate, the Secretary and other Federal officials shall, upon request, provide such information (including plan documents) as may be necessary to enable the Pension Participant Advocate to carry out the Advocate's responsibilities under this section.CommentsClose CommentsPermalink





`(2) APPEARANCES- The Pension Participant Advocate may represent the views and interests of pension plan participants before any Federal agency, including, upon request of a participant, in any proceeding involving the participant.CommentsClose CommentsPermalink





`(3) CONTRACTING AUTHORITY- In carrying out responsibilities under subsection (b)(5), the Pension Participant Advocate may, in addition to any other authority provided by law--CommentsClose CommentsPermalink





`(A) contract with any person to acquire statistical information with respect to pension plan participants, andCommentsClose CommentsPermalink





`(B) conduct direct surveys of pension plan participants.'.CommentsClose CommentsPermalink





(b) Conforming Amendment- The table of contents for title III of such Act is amended by adding at the end the following:CommentsClose CommentsPermalink

`Subtitle D--Office of Pension Participant Advocacy

`3051. Office of Pension Participant Advocacy.'.CommentsClose CommentsPermalink





(c) Effective Date- The amendment made by this section shall take effect on January 1, 2009.CommentsClose CommentsPermalink

SEC. 105. PROSPECTIVE APPLICATION OF REQUIRED BENEFIT REDUCTIONS UNDER PLANS IN CRITICAL STATUS.

(a) In General-CommentsClose CommentsPermalink





(1) AMENDMENT TO ERISA- Clause (ii) of section 305(e)(8)(A) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(e)(8)(A)(ii)) is amended by striking `the date on which the plan provides notice to the participant or beneficiary under subsection (b)(3)(D) for the initial critical year' and inserting `the effective date of the reduction specified in the notice which the plan provides to the participant or beneficiary under subparagraph (C)'.CommentsClose CommentsPermalink





(2) AMENDMENT TO 1986 CODE- Clause (ii) of section 432(e)(8)(A) of the Internal Revenue Code of 1986 is amended by striking `the date on which the plan provides notice to the participant or beneficiary under subsection (b)(3)(D) for the initial critical year' and inserting `the effective date of the reduction specified in the notice which the plan provides to the participant or beneficiary under subparagraph (C)'.CommentsClose CommentsPermalink





(b) Notice Requirements-CommentsClose CommentsPermalink





(1) AMENDMENT TO ERISA- Subclause (II) of section 305(b)(3)(D)(ii) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(b)(3)(D)(ii)(II)) is amended by striking `the date such notice is provided for the first plan year in which the plan is in critical status' and inserting `the effective date of the reduction specified in the notice which the plan provides to the participant or beneficiary under subsection (e)(8)(C)'.CommentsClose CommentsPermalink





(2) AMENDMENT TO 1986 CODE- Subclause (II) of section 432(b)(3)(D)(ii) of the Internal Revenue Code of 1986 is amended by striking `the date such notice is provided for the first plan year in which the plan is in critical status' and inserting `the effective date of the reduction specified in the notice which the plan provides to the participant or beneficiary under subsection (e)(8)(C)'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect as if included in the amendments made by sections 202 and 212 of the Pension Protection Act of 2006 to which they relate.CommentsClose CommentsPermalink

TITLE II--PROTECTION FOR THE SPOUSES OF FEDERAL EMPLOYEES

SEC. 201. SURVIVOR ANNUITIES FOR WIDOWS, WIDOWERS, AND FORMER SPOUSES OF FEDERAL EMPLOYEES WHO DIE BEFORE ATTAINING AGE FOR DEFERRED ANNUITY UNDER CIVIL SERVICE RETIREMENT SYSTEM.

(a) Definition- Section 8341(a) of title 5, United States Code, is amended--CommentsClose CommentsPermalink





(1) in paragraph (1), by striking `employee or Member' and inserting `employee, Member, or annuitant, or of a former employee or Member,'; andCommentsClose CommentsPermalink





(2) in paragraph (2), by striking `employee or Member' and inserting `employee, Member, or annuitant, or of a former employee or Member,'.CommentsClose CommentsPermalink





(b) Benefits for Widow, Widower, or Former Spouse-CommentsClose CommentsPermalink





(1) IN GENERAL- Section 8341 of title 5, United States Code, is amended by adding at the end the following:CommentsClose CommentsPermalink





`(l) If a former employee heretofore or hereafter separated from the service with title to deferred annuity from the Fund hereafter dies before having established a valid claim for annuity and is survived by a widow or widower to whom married at the date of separation, the widow or widower--CommentsClose CommentsPermalink





`(1) is entitled to an annuity equal to 55 percent of the deferred annuity of the former employee commencing on the day after the former employee dies and terminating on the last day of the month before the widow or widower dies or remarries before becoming 55 years of age; orCommentsClose CommentsPermalink





`(2) may elect to receive the lump-sum credit instead of annuity if the widow or widower is the individual who would be entitled to the lump-sum credit and files application therefor with the Office before the award of the annuity.CommentsClose CommentsPermalink





Notwithstanding the preceding sentence, an annuity payable under this subsection to the widow or widower of a former employee may not exceed the difference between--CommentsClose CommentsPermalink





`(A) the annuity which would otherwise be payable to such widow or widower under this subsection, andCommentsClose CommentsPermalink





`(B) the amount of the survivor annuity payable to any former spouse of such former employee under subsection (h) of this section.'.CommentsClose CommentsPermalink





(2) TECHNICAL AND CONFORMING AMENDMENTS- Section 8339(j) of title 5, United States Code, is amended--CommentsClose CommentsPermalink





(A) in paragraph (3)(A)(ii), by striking `and (h)' and inserting `(h), and (l)'; andCommentsClose CommentsPermalink





(B) in paragraph (4), by striking `and (h)' and inserting `(h), and (l)'.CommentsClose CommentsPermalink





(c) Benefits for Former Spouse- Section 8341(h) of title 5, United States Code, is amended--CommentsClose CommentsPermalink





(1) in paragraph (1), by adding after the first sentence `Subject to paragraphs (2) through (5) of this subsection, a former spouse of a former employee who dies after having separated from the service with title to a deferred annuity under section 8338(a) but before having established a valid claim for annuity is entitled to a survivor annuity under this subsection, if and to the extent expressly provided for in an election under section 8339(j)(3) of this title, or in the terms of any decree of divorce or annulment or any court order or court-approved property settlement agreement incident to such decree.'; andCommentsClose CommentsPermalink





(2) in paragraph (2)--CommentsClose CommentsPermalink





(A) in subparagraph (A)(ii), by striking `or annuitant,' and inserting `annuitant, or former employee'; andCommentsClose CommentsPermalink





(B) in subparagraph (B)--CommentsClose CommentsPermalink





(i) in clause (ii), by striking `or' at the end;CommentsClose CommentsPermalink





(ii) in clause (iii), by striking the period and inserting `; or'; andCommentsClose CommentsPermalink





(iii) by adding at the end the following:CommentsClose CommentsPermalink





`(iv) under subparagraph (A) of subsection (l) of this section in the case of a widow or widower, if the deceased was a former employee described in the first sentence of such subsection.'.CommentsClose CommentsPermalink





(d) Protection of Survivor Benefit Rights- Section 8339(j)(3) of title 5, United States Code, is amended by inserting at the end the following:CommentsClose CommentsPermalink





`The Office shall provide by regulation for the application of this subsection to the widow, widower, or surviving former spouse of a former employee who dies after having separated from the service with title to a deferred annuity under section 8338(a) but before having established a valid claim for annuity.'.CommentsClose CommentsPermalink





(e) Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act and shall apply only in the case of a former employee who dies on or after such date.CommentsClose CommentsPermalink

SEC. 202. COURT ORDERS RELATING TO FEDERAL RETIREMENT BENEFITS FOR FORMER SPOUSES OF FEDERAL EMPLOYEES.

(a) Civil Service Retirement System- Section 8345(j) of title 5, United States Code, is amended--CommentsClose CommentsPermalink





(1) by redesignating paragraph (3) as paragraph (4); andCommentsClose CommentsPermalink





(2) by inserting after paragraph (2) the following:CommentsClose CommentsPermalink





`(3)(A) A court decree, court order, property settlement, or similar process referred to under paragraph (1)(A) shall be treated as meeting the requirements of that paragraph if it requires that payment of benefits be made to the former spouse of the employee, Member, or annuitant--CommentsClose CommentsPermalink





`(i) in the case of any payment before the employee, Member, or annuitant has separated from service, on or after the date on which the employee, Member, or annuitant attains (or would have attained) the earliest retirement age,CommentsClose CommentsPermalink





`(ii) as if the employee, Member, or annuitant had retired on the date on which such payment is to begin under such order (but taking into account only the present value of the benefits actually accrued and not taking into account the present value of any employer subsidy for early retirement), andCommentsClose CommentsPermalink





`(iii) in any form in which such benefits may be paid under this chapter to the employee, Member, or annuitant (other than in the form of a joint and survivor annuity with respect to the former spouse and his or her subsequent spouse).CommentsClose CommentsPermalink





For purposes of clause (ii), the interest rate assumption used in determining the present value shall be the interest rate specified under this chapter or, if no rate is specified, 5 percent.CommentsClose CommentsPermalink





`(B) In this paragraph, the term `earliest retirement age' means the earlier of--CommentsClose CommentsPermalink





`(i) the date on which the employee, Member, or annuitant is entitled to a distribution under this chapter, orCommentsClose CommentsPermalink





`(ii) the later of--CommentsClose CommentsPermalink





`(I) the date the employee, Member, or annuitant attains age 50, orCommentsClose CommentsPermalink





`(II) the earliest date on which the employee, Member, or annuitant could begin receiving benefits under this chapter if the employee, Member, or annuitant separated from service.'.CommentsClose CommentsPermalink





(b) Federal Employees Retirement System- Section 8467 of title 5, United States Code, is amended--CommentsClose CommentsPermalink





(1) by redesignating subsection (c) as subsection (d); andCommentsClose CommentsPermalink





(2) by inserting after subsection (b) the following:CommentsClose CommentsPermalink





`(c)(1) A court decree, court order, property settlement, or similar process referred to under subsection (a)(1) shall be treated as meeting the requirements of that subsection if it requires that payment of benefits be made to the former spouse of the employee, Member, or annuitant--CommentsClose CommentsPermalink





`(A) in the case of any payment before the employee, Member, or annuitant has separated from service, on or after the date on which the employee, Member, or annuitant attains (or would have attained) the earliest retirement age,CommentsClose CommentsPermalink





`(B) as if the employee, Member, or annuitant had retired on the date on which such payment is to begin under such order (but taking into account only the present value of the benefits actually accrued and not taking into account the present value of any employer subsidy for early retirement), andCommentsClose CommentsPermalink





`(C) in any form in which such benefits may be paid under this chapter to the employee, Member, or annuitant (other than in the form of a joint and survivor annuity with respect to the alternate payee and his or her subsequent spouse).CommentsClose CommentsPermalink





For purposes of subparagraph (B), the interest rate assumption used in determining the present value shall be the interest rate specified under this chapter or, if no rate is specified, 5 percent.CommentsClose CommentsPermalink





`(2) In this subsection, the term `earliest retirement age' means the earlier of--CommentsClose CommentsPermalink





`(A) the date on which the employee, Member, or annuitant is entitled to a distribution under this chapter, orCommentsClose CommentsPermalink





`(B) the later of--CommentsClose CommentsPermalink





`(i) the date the employee, Member, or annuitant attains age 50, orCommentsClose CommentsPermalink





`(ii) the earliest date on which the employee, Member, or annuitant could begin receiving benefits under this chapter if the employee, Member, or annuitant separated from service.'CommentsClose CommentsPermalink





(c) Effective Date and Application- The amendments made by this section shall take effect on the date of the enactment of this Act and apply to any court decree, court order, property settlement, or similar process issued or approved before, on, or after that date.CommentsClose CommentsPermalink

SEC. 203. ELIMINATION OF CERTAIN BARS TO ELIGIBILITY FOR SURVIVOR ANNUITY.

Section 4(b) of the Civil Service Spouse Equity Act of 1984 (5 U.S.C. 8341 note) is amended--CommentsClose CommentsPermalink





(1) in paragraph (1)(B)(i), by striking `after September 14, 1978, and'; andCommentsClose CommentsPermalink





(2) by striking paragraph (4).CommentsClose CommentsPermalink

SEC. 204. ORDER OF PRECEDENCE FOR DISPOSITION OF AMOUNTS REMAINING IN THE THRIFT SAVINGS ACCOUNT OF A FEDERAL EMPLOYEE (OR FORMER EMPLOYEE) WHO DIES BEFORE MAKING AN EFFECTIVE ELECTION CONTROLLING SUCH DISPOSITION.

(a) In General- Section 8433(e) of title 5, United States Code, is amended--CommentsClose CommentsPermalink





(1) by striking `(e)' and inserting `(e)(1)';CommentsClose CommentsPermalink





(2) by striking all that follows `paid' and inserting `in accordance with paragraph (2).'; andCommentsClose CommentsPermalink





(3) by adding at the end the following:CommentsClose CommentsPermalink





`(2)(A) An amount under paragraph (1) shall be paid in a manner consistent with the provisions of section 8424(d), except that, in applying the order of precedence under such provisions--CommentsClose CommentsPermalink





`(i) the widow or widower of the decedent shall be the first party entitled to receive (instead of any designated beneficiary); andCommentsClose CommentsPermalink





`(ii) if there is no widow or widower, the party next entitled to receive shall be the beneficiary or beneficiaries designated by the employee or Member (or former employee or Member) in accordance with the procedures that would otherwise normally apply, subject to such additional conditions as the Executive Director shall by regulation prescribe based on section 205(c)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1055(c)(2)).CommentsClose CommentsPermalink





`(B) The order of precedence under subparagraph (A) shall not apply if the widow or widower consents in writing to the application of the order of precedence under section 8424(d).'CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall take effect on the 90th day after the date of the enactment of this Act, and shall apply in the case of any individual who dies on or after such 90th day.CommentsClose CommentsPermalink