Thursday, May 21, 2009

CRS Report on The Federal Retirement Reform Act of 2009

HR 1804, The Federal Retirement Reform Act of 2009
Congressional Research Service
Patrick Purcell
May 20, 2009


On April 1, 2009, the House of Representatives passed  H.R. 1804, the Federal Retirement Reform Act of 2009, under suspension of the rules. As passed by the House, H.R. 1804 would:

    • provide for newly hired federal employees to be enrolled automatically in the Thrift Savings Plan (TSP) at a default contribution rate of 3% of pay;
    • require the Federal Retirement Thrift Investment Board to establish within the TSP a qualified Roth contribution program that provides for after-tax contributions and tax-free distributions;
    • *give the Federal Retirement Thrift Investment Board authority to include self-directed investment options in the TSP;
    • require the Thrift Board to submit to Congress an annual report that includes demographic information about TSP participants and fund managers;
    • require the computation of an annuity under the Federal Employees’ Retirement System to include an employee’s unused sick leave in his or her length of service;
    • allow certain redeposits to the Civil Service Retirement System for periods of service between October 1990 and February 1991 to exclude interest payments;
    • require CSRS annuities for employees whose careers include part-time service to be computed under the same rules that apply to part-time annuities under FERS;
    • require the Secretary of Defense to report to Congress the estimated cost of an agency match on contributions to the TSP by members of the uniformed services;
    • allow former employees who withdrew contributions to the FERS at the time of separation from federal service to redeposit those contributions, plus interest, to the FERS in the event that they are re-employed by the federal government;
    • allow certain service performed as an employee of the District of Columbia to be credited as federal service for purposes of determining retirement benefits; and
    • increase the monthly indemnity allowance for surviving spouses of deceased members of the armed forces who are affected by certain benefit offsets.

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