Text: H.R.4040 — 106th Congress (1999-2000)All Information (Except Text)

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Public Law No: 106-265 (09/19/2000)

 
[106th Congress Public Law 265]
[From the U.S. Government Printing Office]


<DOC>
[DOCID: f:publ265.106]


[[Page 761]]

                    FEDERAL LONG-TERM CARE INSURANCE

[[Page 114 STAT. 762]]

Public Law 106-265
106th Congress

                                 An Act


 
 To amend title 5, United States Code, to provide for the establishment 
 of a program under which long-term care insurance is made available to 
 Federal employees, members of the uniformed services, and civilian and 
  military retirees, provide for the correction of retirement coverage 
      errors under chapters 83 and 84 of such title, and for other 
           purposes. <<NOTE: Sept. 19, 2000 -  [H.R. 4040]>> 

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

TITLE <<NOTE: Long-Term Care Security Act.>>  I--FEDERAL LONG-TERM CARE 
INSURANCE

SEC. 1001. SHORT TITLE. <<NOTE: 5 USC 9001 note.>> 

    This title may be cited as the ``Long-Term Care Security Act''.

SEC. 1002. LONG-TERM CARE INSURANCE.

    (a) In General.--Subpart G of part III of title 5, United States 
Code, is amended by adding at the end the following:

                 ``CHAPTER 90--LONG-TERM CARE INSURANCE

``Sec.
``9001. Definitions.
``9002. Availability of insurance.
``9003. Contracting authority.
``9004. Financing.
``9005. Preemption.
``9006. Studies, reports, and audits.
``9007. Jurisdiction of courts.
``9008. Administrative functions.
``9009. Cost accounting standards.

``Sec. 9001. Definitions

    For purposes of this chapter:
            ``(1) Employee.--The term `employee' means--
                    ``(A) an employee as defined by section 8901(1);
                    ``(B) an individual described in section 2105(e); 
                and
                    ``(C) an individual employed by the Tennessee Valley 
                Authority,
        but does not include an individual employed by the government of 
        the District of Columbia.
            ``(2) Annuitant.--The term `annuitant' has the meaning such 
        term would have under paragraph (3) of section 8901 if, for 
        purposes of such paragraph, the term `employee' were considered 
        to have the meaning given to it under paragraph (1) of this 
        subsection.

[[Page 114 STAT. 763]]

            ``(3) Member of the uniformed services.--The term `member of 
        the uniformed services' means a member of the uniformed 
        services, other than a retired member of the uniformed services, 
        who is--
                    ``(A) on active duty or full-time National Guard 
                duty for a period of more than 30 days; and
                    ``(B) a member of the Selected Reserve.
            ``(4) Retired member of the uniformed services.--The term 
        `retired member of the uniformed services' means a member or 
        former member of the uniformed services entitled to retired or 
        retainer pay, including a member or former member retired under 
        chapter 1223 of title 10 who has attained the age of 60 and who 
        satisfies such eligibility requirements as the Office of 
        Personnel Management prescribes under section 9008.
            ``(5) Qualified relative.--The term `qualified relative' 
        means each of the following:
                    ``(A) The spouse of an individual described in 
                paragraph (1), (2), (3), or (4).
                    ``(B) A parent, stepparent, or parent-in-law of an 
                individual described in paragraph (1) or (3).
                    ``(C) A child (including an adopted child, a 
                stepchild, or, to the extent the Office of Personnel 
                Management by regulation provides, a foster child) of an 
                individual described in paragraph (1), (2), (3), or (4), 
                if such child is at least 18 years of age.
                    ``(D) An individual having such other relationship 
                to an individual described in paragraph (1), (2), (3), 
                or (4) as the Office may by regulation prescribe.
            ``(6) Eligible individual.--The term `eligible individual' 
        refers to an individual described in paragraph (1), (2), (3), 
        (4), or (5).
            ``(7) Qualified carrier.--The term `qualified carrier' means 
        an insurance company (or consortium of insurance companies) that 
        is licensed to issue long-term care insurance in all States, 
        taking any subsidiaries of such a company into account (and, in 
        the case of a consortium, considering the member companies and 
        any subsidiaries thereof, collectively).
            ``(8) State.--The term `State' includes the District of 
        Columbia.
            ``(9) Qualified long-term care insurance contract.--The term 
        `qualified long-term care insurance contract' has the meaning 
        given such term by section 7702B of the Internal Revenue Code of 
        1986.
            ``(10) Appropriate secretary.--The term `appropriate 
        Secretary' means--
                    ``(A) except as otherwise provided in this 
                paragraph, the Secretary of Defense;
                    ``(B) with respect to the Coast Guard when it is not 
                operating as a service of the Navy, the Secretary of 
                Transportation;
                    ``(C) with respect to the commissioned corps of the 
                National Oceanic and Atmospheric Administration, the 
                Secretary of Commerce; and
                    ``(D) with respect to the commissioned corps of the 
                Public Health Service, the Secretary of Health and Human 
                Services.

[[Page 114 STAT. 764]]

``Sec. 9002. Availability of insurance

    ``(a) In General.--The Office of Personnel Management shall 
establish and, in consultation with the appropriate Secretaries, 
administer a program through which an individual described in paragraph 
(1), (2), (3), (4), or (5) of section 9001 may obtain long-term care 
insurance coverage under this chapter for such individual.
    ``(b) General Requirements.--Long-term care insurance may not be 
offered under this chapter unless--
            ``(1) the only coverage provided is under qualified long-
        term care insurance contracts; and
            ``(2) each insurance contract under which any such coverage 
        is provided is issued by a qualified carrier.

    ``(c) Documentation Requirement.--As a condition for obtaining long-
term care insurance coverage under this chapter based on one's status as 
a qualified relative, an applicant shall provide documentation to 
demonstrate the relationship, as prescribed by the Office.
    ``(d) Underwriting Standards.--
            ``(1) Disqualifying condition.--Nothing in this chapter 
        shall be considered to require that long-term care insurance 
        coverage be made available in the case of any individual who 
        would be eligible for benefits immediately.
            ``(2) Spousal parity.--For the purpose of underwriting 
        standards, a spouse of an individual described in paragraph (1), 
        (2), (3), or (4) of section 9001 shall, as nearly as 
        practicable, be treated like that individual.
            ``(3) Guaranteed issue.--Nothing in this chapter shall be 
        considered to require that long-term care insurance coverage be 
        guaranteed to an eligible individual.
            ``(4) Requirement that contract be fully insured.--In 
        addition to the requirements otherwise applicable under section 
        9001(9), in order to be considered a qualified long-term care 
        insurance contract for purposes of this chapter, a contract must 
        be fully insured, whether through reinsurance with other 
        companies or otherwise.
            ``(5) Higher standards allowable.--Nothing in this chapter 
        shall, in the case of an individual applying for long-term care 
        insurance coverage under this chapter after the expiration of 
        such individual's first opportunity to enroll, preclude the 
        application of underwriting standards more stringent than those 
        that would have applied if that opportunity had not yet expired.

    ``(e) Guaranteed Renewability.--The benefits and coverage made 
available to eligible individuals under any insurance contract under 
this chapter shall be guaranteed renewable (as defined by section 7A(2) 
of the model regulations described in section 7702B(g)(2) of the 
Internal Revenue Code of 1986), including the right to have insurance 
remain in effect so long as premiums continue to be timely made. 
However, the authority to revise premiums under this chapter shall be 
available only on a class basis and only to the extent otherwise 
allowable under section 9003(b).

``Sec. 9003. Contracting authority

    ``(a) In General.--The Office of Personnel Management shall, without 
regard to section 5 of title 41 or any other statute requiring 
competitive bidding, contract with one or more qualified carriers for a 
policy or policies of long-term care insurance. The Office

[[Page 114 STAT. 765]]

shall ensure that each resulting contract (hereafter in this chapter 
referred to as a `master contract') is awarded on the basis of 
contractor qualifications, price, and reasonable competition.
    ``(b) Terms and Conditions.--
            ``(1) In general.--Each master contract under this chapter 
        shall contain--
                    ``(A) a detailed statement of the benefits offered 
                (including any maximums, limitations, exclusions, and 
                other definitions of benefits);
                    ``(B) the premiums charged (including any 
                limitations or other conditions on their subsequent 
                adjustment);
                    ``(C) the terms of the enrollment period; and
                    ``(D) such other terms and conditions as may be 
                mutually agreed to by the Office and the carrier 
                involved, consistent with the requirements of this 
                chapter.
            ``(2) Premiums.--Premiums charged under each master contract 
        entered into under this section shall reasonably and equitably 
        reflect the cost of the benefits provided, as determined by the 
        Office. The premiums shall not be adjusted during the term of 
        the contract unless mutually agreed to by the Office and the 
        carrier.
            ``(3) Nonrenewability.--Master contracts under this chapter 
        may not be made automatically renewable.

    ``(c) Payment of Required Benefits; Dispute Resolution.--
            ``(1) In general.--Each master contract under this chapter 
        shall require the carrier to agree--
                    ``(A) to provide payments or benefits to an eligible 
                individual if such individual is entitled thereto under 
                the terms of the contract; and
                    ``(B) with respect to disputes regarding claims for 
                payments or benefits under the terms of the contract--
                          ``(i) to establish internal procedures 
                      designed to expeditiously resolve such disputes; 
                      and
                          ``(ii) to establish, for disputes not resolved 
                      through procedures under clause (i), procedures 
                      for one or more alternative means of dispute 
                      resolution involving independent third-party 
                      review under appropriate circumstances by entities 
                      mutually acceptable to the Office and the carrier.
            ``(2) Eligibility.--A carrier's determination as to whether 
        or not a particular individual is eligible to obtain long-term 
        care insurance coverage under this chapter shall be subject to 
        review only to the extent and in the manner provided in the 
        applicable master contract.
            ``(3) Other claims.--For purposes of applying the Contract 
        Disputes Act of 1978 to disputes arising under this chapter 
        between a carrier and the Office--
                    ``(A) the agency board having jurisdiction to decide 
                an appeal relative to such a dispute shall be such board 
                of contract appeals as the Director of the Office of 
                Personnel Management shall specify in writing (after 
                appropriate arrangements, as described in section 8(c) 
                of such Act); and
                    ``(B) <<NOTE: Courts.>>  the district courts of the 
                United States shall have original jurisdiction, 
                concurrent with the United States Court of Federal 
                Claims, of any action described in section 10(a)(1) of 
                such Act relative to such a dispute.

[[Page 114 STAT. 766]]

            ``(4) Rule of construction.--Nothing in this chapter shall 
        be considered to grant authority for the Office or a third-party 
        reviewer to change the terms of any contract under this chapter.

    ``(d) Duration.--
            ``(1) In general.--Each master contract under this chapter 
        shall be for a term of 7 years, unless terminated earlier by the 
        Office in accordance with the terms of such contract. However, 
        the rights and responsibilities of the enrolled individual, the 
        insurer, and the Office (or duly designated third-party 
        administrator) under such contract shall continue with respect 
        to such individual until the termination of coverage of the 
        enrolled individual or the effective date of a successor 
        contract thereto.
            ``(2) Exception.--
                    ``(A) Shorter duration.--In the case of a master 
                contract entered into before the end of the period 
                described in subparagraph (B), paragraph (1) shall be 
                applied by substituting `ending on the last day of the 
                7-year period described in paragraph (2)(B)' for `of 7 
                years'.
                    ``(B) Definition.--The period described in this 
                subparagraph is the 7-year period beginning on the 
                earliest date as of which any long-term care insurance 
                coverage under this chapter becomes effective.
            ``(3) <<NOTE: Deadline. President.>>  Congressional 
        notification.--No later than 180 days after receiving the second 
        report required under section 9006(c), the President (or his 
        designee) shall submit to the Committees on Government Reform 
        and on Armed Services of the House of Representatives and the 
        Committees on Governmental Affairs and on Armed Services of the 
        Senate, a written recommendation as to whether the program under 
        this chapter should be continued without modification, 
        terminated, or restructured. During the 180-day period following 
        the date on which the President (or his designee) submits the 
        recommendation required under the preceding sentence, the Office 
        of Personnel Management may not take any steps to rebid or 
        otherwise contract for any coverage to be available at any time 
        following the expiration of the 7-year period described in 
        paragraph (2)(B).
            ``(4) Full portability.--Each master contract under this 
        chapter shall include such provisions as may be necessary to 
        ensure that, once an individual becomes duly enrolled, long-term 
        care insurance coverage obtained by such individual pursuant to 
        that enrollment shall not be terminated due to any change in 
        status (such as separation from Government service or the 
        uniformed services) or ceasing to meet the requirements for 
        being considered a qualified relative (whether as a result of 
        dissolution of marriage or otherwise).

``Sec. 9004. Financing

    ``(a) In General.--Each eligible individual obtaining long-term care 
insurance coverage under this chapter shall be responsible for 100 
percent of the premiums for such coverage.
    ``(b) Withholdings.--
            ``(1) In general.--The amount necessary to pay the premiums 
        for enrollment may--

[[Page 114 STAT. 767]]

                    ``(A) in the case of an employee, be withheld from 
                the pay of such employee;
                    ``(B) in the case of an annuitant, be withheld from 
                the annuity of such annuitant;
                    ``(C) in the case of a member of the uniformed 
                services described in section 9001(3), be withheld from 
                the pay of such member; and
                    ``(D) in the case of a retired member of the 
                uniformed services described in section 9001(4), be 
                withheld from the retired pay or retainer pay payable to 
                such member.
            ``(2) Voluntary withholdings for qualified relatives.--
        Withholdings to pay the premiums for enrollment of a qualified 
        relative may, upon election of the appropriate eligible 
        individual (described in section 9001(1)-(4)), be withheld under 
        paragraph (1) to the same extent and in the same manner as if 
        enrollment were for such individual.

    ``(c) Direct Payments.--All amounts withheld under this section 
shall be paid directly to the carrier.
    ``(d) Other Forms of Payment.--Any enrollee who does not elect to 
have premiums withheld under subsection (b) or whose pay, annuity, or 
retired or retainer pay (as referred to in subsection (b)(1)) is 
insufficient to cover the withholding required for enrollment (or who is 
not receiving any regular amounts from the Government, as referred to in 
subsection (b)(1), from which any such withholdings may be made, and 
whose premiums are not otherwise being provided for under subsection 
(b)(2)) shall pay an amount equal to the full amount of those charges 
directly to the carrier.
    ``(e) <<NOTE: Records.>>  Separate Accounting Requirement.--Each 
carrier participating under this chapter shall maintain records that 
permit it to account for all amounts received under this chapter 
(including investment earnings on those amounts) separate and apart from 
all other funds.

    ``(f ) Reimbursements.--
            ``(1) Reasonable initial costs.--
                    ``(A) In general.--The Employees' Life Insurance 
                Fund is available, without fiscal year limitation, for 
                reasonable expenses incurred by the Office of Personnel 
                Management in administering this chapter before the 
                start of the 7-year period described in section 
                9003(d)(2)(B), including reasonable implementation 
                costs.
                    ``(B) Reimbursement requirement.--Such Fund shall be 
                reimbursed, before the end of the first year of that 7-
                year period, for all amounts obligated or expended under 
                subparagraph (A) (including lost investment income). 
                Such reimbursement shall be made by carriers, on a pro 
                rata basis, in accordance with appropriate provisions 
                which shall be included in master contracts under this 
                chapter.
            ``(2) Subsequent costs.--
                    ``(A) In general.--There is hereby established in 
                the Employees' Life Insurance Fund a Long-Term Care 
                Administrative Account, which shall be available to the 
                Office, without fiscal year limitation, to defray 
                reasonable expenses incurred by the Office in 
                administering this chapter after the start of the 7-year 
                period described in section 9003(d)(2)(B).

[[Page 114 STAT. 768]]

                    ``(B) <<NOTE: Contracts.>>  Reimbursement 
                requirement.--Each master contract under this chapter 
                shall include appropriate provisions under which the 
                carrier involved shall, during each year, make such 
                periodic contributions to the Long-Term Care 
                Administrative Account as necessary to ensure that the 
                reasonable anticipated expenses of the Office in 
                administering this chapter during such year (adjusted to 
                reconcile for any earlier overestimates or 
                underestimates under this subparagraph) are defrayed.

``Sec. 9005. Preemption

    ``The terms of any contract under this chapter which relate to the 
nature, provision, or extent of coverage or benefits (including payments 
with respect to benefits) shall supersede and preempt any State or local 
law, or any regulation issued thereunder, which relates to long-term 
care insurance or contracts.

``Sec. 9006. Studies, reports, and audits

    ``(a) <<NOTE: Contracts.>>  Provisions Relating to Carriers.--Each 
master contract under this chapter shall contain provisions requiring 
the carrier--
            ``(1) to furnish such reasonable reports as the Office of 
        Personnel Management determines to be necessary to enable it to 
        carry out its functions under this chapter; and
            ``(2) to permit the Office and representatives of the 
        General Accounting Office to examine such records of the carrier 
        as may be necessary to carry out the purposes of this chapter.

    ``(b) <<NOTE: Records. Certification.>>  Provisions Relating to 
Federal Agencies.--Each Federal agency shall keep such records, make 
such certifications, and furnish the Office, the carrier, or both, with 
such information and reports as the Office may require.

    ``(c) Reports by the General Accounting Office.--The General 
Accounting Office shall prepare and submit to the President, the Office 
of Personnel Management, and each House of Congress, before the end of 
the third and fifth years during which the program under this chapter is 
in effect, a written report evaluating such program. Each such report 
shall include an analysis of the competitiveness of the program, as 
compared to both group and individual coverage generally available to 
individuals in the private insurance market. The Office shall cooperate 
with the General Accounting Office to provide periodic evaluations of 
the program.

``Sec. 9007. Jurisdiction of courts

    ``The district courts of the United States have original 
jurisdiction of a civil action or claim described in paragraph (1) or 
(2) of section 9003(c), after such administrative remedies as required 
under such paragraph (1) or (2) (as applicable) have been exhausted, but 
only to the extent judicial review is not precluded by any dispute 
resolution or other remedy under this chapter.

``Sec. 9008. Administrative functions

    ``(a) <<NOTE: Regulations.>>  In General.--The Office of Personnel 
Management shall prescribe regulations necessary to carry out this 
chapter.

    ``(b) Enrollment Periods.--The Office shall provide for periodic 
coordinated enrollment, promotion, and education efforts in consultation 
with the carriers.
    ``(c) <<NOTE: Regulations.>>  Consultation.--Any regulations 
necessary to effect the application and operation of this chapter with 
respect to an eligible

[[Page 114 STAT. 769]]

individual described in paragraph (3) or (4) of section 9001, or a 
qualified relative thereof, shall be prescribed by the Office in 
consultation with the appropriate Secretary.

    ``(d) Informed Decisionmaking.--The Office shall ensure that each 
eligible individual applying for long-term care insurance under this 
chapter is furnished the information necessary to enable that individual 
to evaluate the advantages and disadvantages of obtaining long-term care 
insurance under this chapter, including the following:
            ``(1) The principal long-term care benefits and coverage 
        available under this chapter, and how those benefits and 
        coverage compare to the range of long-term care benefits and 
        coverage otherwise generally available.
            ``(2) Representative examples of the cost of long-term care, 
        and the sufficiency of the benefits available under this chapter 
        relative to those costs. The information under this paragraph 
        shall also include--
                    ``(A) the projected effect of inflation on the value 
                of those benefits; and
                    ``(B) a comparison of the inflation-adjusted value 
                of those benefits to the projected future costs of long-
                term care.
            ``(3) Any rights individuals under this chapter may have to 
        cancel coverage, and to receive a total or partial refund of 
        premiums. The information under this paragraph shall also 
        include--
                    ``(A) the projected number or percentage of 
                individuals likely to fail to maintain their coverage 
                (determined based on lapse rates experienced under 
                similar group long-term care insurance programs and, 
                when available, this chapter); and
                    ``(B)(i) a summary description of how and when 
                premiums for long-term care insurance under this chapter 
                may be raised;
                    ``(ii) the premium history during the last 10 years 
                for each qualified carrier offering long-term care 
                insurance under this chapter; and
                    ``(iii) if cost increases are anticipated, the 
                projected premiums for a typical insured individual at 
                various ages.
            ``(4) The advantages and disadvantages of long-term care 
        insurance generally, relative to other means of accumulating or 
        otherwise acquiring the assets that may be needed to meet the 
        costs of long-term care, such as through tax-qualified 
        retirement programs or other investment vehicles.

``Sec. 9009. Cost accounting standards

    ``The cost accounting standards issued pursuant to section 26(f ) of 
the Office of Federal Procurement Policy Act (41 U.S.C. 422(f )) shall 
not apply with respect to a long-term care insurance contract under this 
chapter.''.
    (b) Conforming Amendment.--The analysis for part III of title 5, 
United States Code, is amended by adding at the end of subpart G the 
following:

``90. Long-Term Care Insurance..................................9001.''.

[[Page 114 STAT. 770]]

 SEC. 1003. EFFECTIVE DATE. <<NOTE: 5 USC 9001 note.>> 

    The Office of Personnel Management shall take such measures as may 
be necessary to ensure that long-term care insurance coverage under 
title 5, United States Code, as amended by this title, may be obtained 
in time to take effect not later than the first day of the first 
applicable pay period of the first fiscal year which begins after the 
end of the 18-month period beginning on the date of the enactment of 
this Act.

   TITLE II--FEDERAL RETIREMENT <<NOTE: Federal Erroneous Retirement 
Coverage Corrections Act. 5 USC 8331 note.>>  COVERAGE ERRORS CORRECTION

SEC. 2001. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This title may be cited as the ``Federal Erroneous 
Retirement Coverage Corrections Act''.
    (b) Table of Contents.--The table of contents for this title is as 
follows:

         TITLE II--FEDERAL RETIREMENT COVERAGE ERRORS CORRECTION

Sec. 2001. Short title; table of contents.
Sec. 2002. Definitions.
Sec. 2003. Applicability.
Sec. 2004. Irrevocability of elections.

  Subtitle A--Description of Retirement Coverage Errors to Which This 
           Title Applies and Measures for Their Rectification

 Chapter 1--Employees and Annuitants Who Should Have Been FERS Covered, 
 but Who Were Erroneously CSRS Covered or CSRS-Offset Covered Instead, 
             and Survivors of Such Employees and Annuitants

Sec. 2101. Employees.
Sec. 2102. Annuitants and survivors.

   Chapter 2--Employee Who Should Have Been FERS Covered, CSRS-Offset 
 Covered, or CSRS Covered, but Who Was Erroneously Social Security-Only 
                             Covered Instead

Sec. 2111. Applicability.
Sec. 2112. Correction mandatory.

 Chapter 3--Employee Who Should or Could Have Been Social Security-Only 
  Covered but Who Was Erroneously CSRS-Offset Covered or CSRS Covered 
                                 Instead

Sec. 2121. Employee who should be Social Security-Only covered, but who 
           is erroneously CSRS or CSRS-Offset covered instead.

          Chapter 4--Employee Who Was Erroneously FERS Covered

Sec. 2131. Employee who should be Social Security-Only covered, CSRS 
           covered, or CSRS-Offset covered and is not FERS-Eligible, but 
           who is erroneously FERS covered instead.
Sec. 2132. FERS-Eligible employee who should have been CSRS covered, 
           CSRS-Offset covered, or Social Security-Only covered, but who 
           was erroneously FERS covered instead without an election.
Sec. 2133. Retroactive effect.

 Chapter 5--Employee Who Should Have Been CSRS-Offset Covered, but Who 
                  Was Erroneously CSRS Covered Instead

Sec. 2141. Applicability.
Sec. 2142. Correction mandatory.

   Chapter 6--Employee Who Should Have Been CSRS Covered, but Who Was 
                 Erroneously CSRS-Offset Covered Instead

Sec. 2151. Applicability.

[[Page 114 STAT. 771]]

Sec. 2152. Correction mandatory.

                     Subtitle B--General Provisions

Sec. 2201. Identification and notification requirements.
Sec. 2202. Information to be furnished to and by authorities 
           administering this title.
Sec. 2203. Service credit deposits.
Sec. 2204. Provisions related to Social Security coverage of 
           misclassified employees.
Sec. 2205. Thrift Savings Plan treatment for certain individuals.
Sec. 2206. Certain agency amounts to be paid into or remain in the 
           CSRDF.
Sec. 2207. CSRS coverage determinations to be approved by OPM.
Sec. 2208. Discretionary actions by Director.
Sec. 2209. Regulations.

                      Subtitle C--Other Provisions

Sec. 2301. Provisions to authorize continued conformity of other Federal 
           retirement systems.
Sec. 2302. Authorization of payments.
Sec. 2303. Individual right of action preserved for amounts not 
           otherwise provided for under this title.

                       Subtitle D--Effective Date

Sec. 2401. Effective date.

SEC. 2002. DEFINITIONS. <<NOTE: 5 USC 8331 note.>> 

    For purposes of this title:
            (1) Annuitant.--The term ``annuitant'' has the meaning given 
        such term under section 8331(9) or 8401(2) of title 5, United 
        States Code.
            (2) CSRS.--The term ``CSRS'' means the Civil Service 
        Retirement System.
            (3) CSRDF.--The term ``CSRDF'' means the Civil Service 
        Retirement and Disability Fund.
            (4) CSRS covered.--The term ``CSRS covered'', with respect 
        to any service, means service that is subject to the provisions 
        of subchapter III of chapter 83 of title 5, United States Code, 
        other than service subject to section 8334(k) of such title.
            (5) CSRS-offset covered.--The term ``CSRS-Offset covered'', 
        with respect to any service, means service that is subject to 
        the provisions of subchapter III of chapter 83 of title 5, 
        United States Code, and to section 8334(k) of such title.
            (6) Employee.--The term ``employee'' has the meaning given 
        such term under section 8331(1) or 8401(11) of title 5, United 
        States Code.
            (7) Executive director.--The term ``Executive Director of 
        the Federal Retirement Thrift Investment Board'' or ``Executive 
        Director'' means the Executive Director appointed under section 
        8474 of title 5, United States Code.
            (8) FERS.--The term ``FERS'' means the Federal Employees' 
        Retirement System.
            (9) FERS covered.--The term ``FERS covered'', with respect 
        to any service, means service that is subject to chapter 84 of 
        title 5, United States Code.
            (10) Former employee.--The term ``former employee'' means an 
        individual who was an employee, but who is not an annuitant.
            (11) OASDI taxes.--The term ``OASDI taxes'' means the OASDI 
        employee tax and the OASDI employer tax.
            (12) OASDI employee tax.--The term ``OASDI employee tax'' 
        means the tax imposed under section 3101(a) of the

[[Page 114 STAT. 772]]

        Internal Revenue Code of 1986 (relating to Old-Age, Survivors 
        and Disability Insurance).
            (13) OASDI employer tax.--The term ``OASDI employer tax'' 
        means the tax imposed under section 3111(a) of the Internal 
        Revenue Code of 1986 (relating to Old-Age, Survivors and 
        Disability Insurance).
            (14) OASDI trust funds.--The term ``OASDI trust funds'' 
        means the Federal Old-Age and Survivors Insurance Trust Fund and 
        the Federal Disability Insurance Trust Fund.
            (15) Office.--The term ``Office'' means the Office of 
        Personnel Management.
            (16) Retirement coverage determination.--The term 
        ``retirement coverage determination'' means a determination by 
        an employee or agent of the Government as to whether a 
        particular type of Government service is CSRS covered, CSRS-
        Offset covered, FERS covered, or Social Security-Only covered.
            (17) Retirement coverage error.--The term ``retirement 
        coverage error'' means an erroneous retirement coverage 
        determination that was in effect for a minimum period of 3 years 
        of service after December 31, 1986.
            (18) Social security-only covered.--The term ``Social 
        Security-Only covered'', with respect to any service, means 
        Government service that--
                    (A) constitutes employment under section 210 of the 
                Social Security Act (42 U.S.C. 410); and
                    (B)(i) is subject to OASDI taxes; but
                    (ii) is not subject to CSRS or FERS.
            (19) Survivor.--The term ``survivor'' has the meaning given 
        such term under section 8331(10) or 8401(28) of title 5, United 
        States Code.
            (20) Thrift savings fund.--The term ``Thrift Savings Fund'' 
        means the Thrift Savings Fund established under section 8437 of 
        title 5, United States Code.

SEC. 2003. APPLICABILITY. <<NOTE: 5 USC 8331 note.>> 

    (a) In General.--This title shall apply with respect to retirement 
coverage errors that occur before, on, or after the date of the 
enactment of this Act.
    (b) Limitation.--Except as otherwise provided in this title, this 
title shall not apply to any erroneous retirement coverage determination 
that was in effect for a period of less than 3 years of service after 
December 31, 1986.

SEC. 2004. IRREVOCABILITY OF ELECTIONS. <<NOTE: 5 USC 8331 note.>> 

    Any election made (or deemed to have been made) by an employee or 
any other individual under this title shall be irrevocable.

[[Page 114 STAT. 773]]

  Subtitle A--Description of Retirement Coverage Errors to Which This 
           Title Applies and Measures for Their Rectification

 CHAPTER 1--EMPLOYEES AND ANNUITANTS WHO SHOULD HAVE BEEN FERS COVERED, 
 BUT WHO WERE ERRONEOUSLY CSRS COVERED OR CSRS-OFFSET COVERED INSTEAD, 
             AND SURVIVORS OF SUCH EMPLOYEES AND ANNUITANTS

SEC. 2101. EMPLOYEES. <<NOTE: 5 USC 8331 note.>> 

    (a) Applicability.--This section shall apply in the case of any 
employee or former employee who should be (or should have been) FERS 
covered but, as a result of a retirement coverage error, is (or was) 
CSRS covered or CSRS-Offset covered instead.
    (b) Uncorrected Error.--
            (1) Applicability.--This subsection applies if the 
        retirement coverage error has not been corrected before the 
        effective date of the regulations described under paragraph (3). 
        As soon as practicable after discovery of the error, and subject 
        to the right of an election under paragraph (2), if CSRS covered 
        or CSRS-Offset covered, such individual shall be treated as 
        CSRS-Offset covered, retroactive to the date of the retirement 
        coverage error.
            (2) Coverage.--
                    (A) Election.--Upon written notice of a retirement 
                coverage error, an individual may elect to be CSRS-
                Offset covered or FERS covered, effective as of the date 
                of the retirement coverage error. <<NOTE: Deadline.>>  
                Such election shall be made not later than 180 days 
                after the date of receipt of such notice.
                    (B) Nonelection.--If the individual does not make an 
                election by the date provided under subparagraph (A), a 
                CSRS-Offset covered individual shall remain CSRS-Offset 
                covered and a CSRS covered individual shall be treated 
                as CSRS-Offset covered.
            (3) Regulations.--The Office shall prescribe regulations to 
        carry out this subsection.

    (c) Corrected Error.--
            (1) Applicability.--This subsection applies if the 
        retirement coverage error was corrected before the effective 
        date of the regulations described under subsection (b).
            (2) Coverage.--
                    (A) Election.--
                          (i) <<NOTE: Deadline. Regulations.>>  CSRS-
                      offset covered.--Not later than 180 days after the 
                      date of the enactment of this Act, the Office 
                      shall prescribe regulations authorizing 
                      individuals to elect, during the 18-month period 
                      immediately following the effective date of such 
                      regulations, to be CSRS-Offset covered, effective 
                      as of the date of the retirement coverage error.
                          (ii) Thrift savings fund contributions.--If 
                      under this section an individual elects to be 
                      CSRS-Offset covered, all employee contributions to 
                      the Thrift

[[Page 114 STAT. 774]]

                      Savings Fund made during the period of FERS 
                      coverage (and earnings on such contributions) may 
                      remain in the Thrift Savings Fund in accordance 
                      with regulations prescribed by the Executive 
                      Director, notwithstanding any limit under title 5, 
                      United States Code, that would otherwise be 
                      applicable.
                    (B) Previous settlement payment.--An individual who 
                previously received a payment ordered by a court or 
                provided as a settlement of claim for losses resulting 
                from a retirement coverage error shall not be entitled 
                to make an election under this subsection unless that 
                amount is waived in whole or in part under section 2208, 
                and any amount not waived is repaid.
                    (C) Ineligibility for election.--An individual who, 
                subsequent to correction of the retirement coverage 
                error, received a refund of retirement deductions under 
                section 8424 of title 5, United States Code, or a 
                distribution under section 8433(b), (c), or (h)(1)(A) of 
                title 5, United States Code, may not make an election 
                under this subsection.
            (3) Corrective action to remain in effect.--If an individual 
        is ineligible to make an election or does not make an election 
        under paragraph (2) before the end of any time limitation under 
        this subsection, the corrective action taken before such time 
        limitation shall remain in effect.

SEC. 2102. ANNUITANTS AND SURVIVORS. <<NOTE: 5 USC 8331 note.>> 

    (a) In General.--This section shall apply in the case of an 
individual who is--
            (1) an annuitant who should have been FERS covered but, as a 
        result of a retirement coverage error, was CSRS covered or CSRS-
        Offset covered instead; or
            (2) a survivor of an employee who should have been FERS 
        covered but, as a result of a retirement coverage error, was 
        CSRS covered or CSRS-Offset covered instead.

    (b) Coverage.--
            (1) <<NOTE: Deadline. Regulations.>>  Election.--Not later 
        than 180 days after the date of the enactment of this Act, the 
        Office shall prescribe regulations authorizing an individual 
        described under subsection (a) to elect CSRS-Offset coverage or 
        FERS coverage, effective as of the date of the retirement 
        coverage error.
            (2) <<NOTE: Deadline.>>  Time limitation.--An election under 
        this subsection shall be made not later than 18 months after the 
        effective date of the regulations prescribed under paragraph 
        (1).
            (3) Reduced annuity.--
                    (A) <<NOTE: Regulations.>>  Amount in account.--If 
                the individual elects CSRS-Offset coverage, the amount 
                in the employee's Thrift Savings Fund account under 
                subchapter III of chapter 84 of title 5, United States 
                Code, on the date of retirement that represents the 
                Government's contributions and earnings on those 
                contributions (whether or not such amount was 
                subsequently distributed from the Thrift Savings Fund) 
                will form the basis for a reduction in the individual's 
                annuity, under regulations prescribed by the Office.
                    (B) Reduction.--The reduced annuity to which the 
                individual is entitled shall be equal to an amount 
                which, when taken together with the amount referred to 
                in

[[Page 114 STAT. 775]]

                subparagraph (A), would result in the present value of 
                the total being actuarially equivalent to the present 
                value of an unreduced CSRS-Offset annuity that would 
                have been provided the individual.
            (4) Reduced benefit.--If--
                    (A) a surviving spouse elects CSRS-Offset benefits; 
                and
                    (B) a FERS basic employee death benefit under 
                section 8442(b) of title 5, United States Code, was 
                previously paid,
        then the survivor's CSRS-Offset benefit shall be subject to a 
        reduction, under regulations prescribed by the Office. The 
        reduced annuity to which the individual is entitled shall be 
        equal to an amount which, when taken together with the amount of 
        the payment referred to under subparagraph (B) would result in 
        the present value of the total being actuarially equivalent to 
        the present value of an unreduced CSRS-Offset annuity that would 
        have been provided the individual.
            (5) Previous settlement payment.--An individual who 
        previously received a payment ordered by a court or provided as 
        a settlement of claim for losses resulting from a retirement 
        coverage error may not make an election under this subsection 
        unless repayment of that amount is waived in whole or in part 
        under section 2208, and any amount not waived is repaid.

    (c) Nonelection.--If the individual does not make an election under 
subsection (b) before any time limitation under this section, the 
retirement coverage shall be subject to the following rules:
            (1) Corrective action previously taken.--If corrective 
        action was taken before the end of any time limitation under 
        this section, that corrective action shall remain in effect.
            (2) Corrective action not previously taken.--If corrective 
        action was not taken before such time limitation, the employee 
        shall be CSRS-Offset covered, retroactive to the date of the 
        retirement coverage error.

   CHAPTER 2--EMPLOYEE WHO SHOULD HAVE BEEN FERS COVERED, CSRS-OFFSET 
 COVERED, OR CSRS COVERED, BUT WHO WAS ERRONEOUSLY SOCIAL SECURITY-ONLY 
                             COVERED INSTEAD

SEC. 2111. APPLICABILITY. <<NOTE: 5 USC 8331 note.>> 

    This chapter shall apply in the case of any employee who--
            (1) should be (or should have been) FERS covered but, as a 
        result of a retirement coverage error, is (or was) Social 
        Security-Only covered instead;
            (2) should be (or should have been) CSRS-Offset covered but, 
        as a result of a retirement coverage error, is (or was) Social 
        Security-Only covered instead; or
            (3) should be (or should have been) CSRS covered but, as a 
        result of a retirement coverage error, is (or was) Social 
        Security-Only covered instead.

SEC. 2112. CORRECTION MANDATORY. <<NOTE: 5 USC 8331 note.>> 

    (a) Uncorrected Error.--If the retirement coverage error has not 
been corrected, as soon as practicable after discovery of the error, 
such individual shall be covered under the correct retirement coverage, 
effective as of the date of the retirement coverage error.

[[Page 114 STAT. 776]]

    (b) Corrected Error.--If the retirement coverage error has been 
corrected, the corrective action previously taken shall remain in 
effect.

 CHAPTER 3--EMPLOYEE WHO SHOULD OR COULD HAVE BEEN SOCIAL SECURITY-ONLY 
  COVERED BUT WHO WAS ERRONEOUSLY CSRS-OFFSET COVERED OR CSRS COVERED 
                                 INSTEAD

SEC. 2121. <<NOTE: 5 USC 8331 note.>>  EMPLOYEE WHO SHOULD BE SOCIAL 
            SECURITY-ONLY COVERED, BUT WHO IS ERRONEOUSLY CSRS OR CSRS-
            OFFSET COVERED INSTEAD.

    (a) Applicability.--This section applies in the case of a retirement 
coverage error in which a Social Security-Only covered employee was 
erroneously CSRS covered or CSRS-Offset covered.
    (b) Uncorrected Error.--
            (1) Applicability.--This subsection applies if the 
        retirement coverage error has not been corrected before the 
        effective date of the regulations described in paragraph (3).
            (2) Coverage.--In the case of an individual who is 
        erroneously CSRS covered, as soon as practicable after discovery 
        of the error, and subject to the right of an election under 
        paragraph (3), such individual shall be CSRS-Offset covered, 
        effective as of the date of the retirement coverage error.
            (3) Election.--
                    (A) In general.--Upon written notice of a retirement 
                coverage error, an individual may elect to be CSRS-
                Offset covered or Social Security-Only covered, 
                effective as of the date of the retirement coverage 
                error. <<NOTE: Deadline.>>  Such election shall be made 
                not later than 180 days after the date of receipt of 
                such notice.
                    (B) Nonelection.--If the individual does not make an 
                election before the date provided under subparagraph 
                (A), the individual shall remain CSRS-Offset covered.
                    (C) Regulations.--The Office shall prescribe 
                regulations to carry out this paragraph.

    (c) Corrected Error.--
            (1) Applicability.--This subsection applies if the 
        retirement coverage error was corrected before the effective 
        date of the regulations described under subsection (b)(3).
            (2) <<NOTE: Deadline. Regulations.>>  Election.--Not later 
        than 180 days after the date of the enactment of this Act, the 
        Office shall prescribe regulations authorizing individuals to 
        elect, during the 18-month period immediately following the 
        effective date of such regulations, to be CSRS-Offset covered or 
        Social Security-Only covered, effective as of the date of the 
        retirement coverage error.
            (3) Nonelection.--If an eligible individual does not make an 
        election under paragraph (2) before the end of any time 
        limitation under this subsection, the corrective action taken 
        before such time limitation shall remain in effect.

[[Page 114 STAT. 777]]

          CHAPTER 4--EMPLOYEE WHO WAS ERRONEOUSLY FERS COVERED

SEC. 2131. <<NOTE: 5 USC 8331 note.>>  EMPLOYEE WHO SHOULD BE SOCIAL 
            SECURITY-ONLY COVERED, CSRS COVERED, OR CSRS-OFFSET COVERED 
            AND IS NOT FERS-ELIGIBLE, BUT WHO IS ERRONEOUSLY FERS 
            COVERED INSTEAD.

    (a) Applicability.--This section applies in the case of a retirement 
coverage error in which a Social Security-Only covered, CSRS covered, or 
CSRS-Offset covered employee not eligible to elect FERS coverage under 
authority of section 8402(c) of title 5, United States Code, was 
erroneously FERS covered.
    (b) Uncorrected Error.--
            (1) Applicability.--This subsection applies if the 
        retirement coverage error has not been corrected before the 
        effective date of the regulations described in paragraph (2).
            (2) Coverage.--
                    (A) Election.--
                          (i) In general.--Upon written notice of a 
                      retirement coverage error, an individual may elect 
                      to remain FERS covered or to be Social Security-
                      Only covered, CSRS covered, or CSRS-Offset 
                      covered, as would have applied in the absence of 
                      the erroneous retirement coverage determination, 
                      effective as of the date of the retirement 
                      coverage error. <<NOTE: Deadline.>>  Such election 
                      shall be made not later than 180 days after the 
                      date of receipt of such notice.
                          (ii) Treatment of fers election.--An election 
                      of FERS coverage under this subsection is deemed 
                      to be an election under section 301 of the Federal 
                      Employees Retirement System Act of 1986 (5 U.S.C. 
                      8331 note; Public Law 99-335; 100 Stat. 599).
                    (B) Nonelection.--If the individual does not make an 
                election before the date provided under subparagraph 
                (A), the individual shall remain FERS covered, effective 
                as of the date of the retirement coverage error.
            (3) Employee contributions in thrift savings fund.--If under 
        this section, an individual elects to be Social Security-Only 
        covered, CSRS covered, or CSRS-Offset covered, all employee 
        contributions to the Thrift Savings Fund made during the period 
        of erroneous FERS coverage (and all earnings on such 
        contributions) may remain in the Thrift Savings Fund in 
        accordance with regulations prescribed by the Executive 
        Director, notwithstanding any limit under section 8351 or 8432 
        of title 5, United States Code.
            (4) Regulations.--Except as provided under paragraph (3), 
        the Office shall prescribe regulations to carry out this 
        subsection.

    (c) Corrected Error.--
            (1) Applicability.--This subsection applies if the 
        retirement coverage error was corrected before the effective 
        date of the regulations described under paragraph (2).
            (2) <<NOTE: Deadline. Regulations.>>  Election.--Not later 
        than 180 days after the date of the enactment of this Act, the 
        Office shall prescribe regulations authorizing individuals to 
        elect, during the 18-month period immediately following the 
        effective date of such regulations to remain Social Security-
        Only covered, CSRS covered,

[[Page 114 STAT. 778]]

        or CSRS-Offset covered, or to be FERS covered, effective as of 
        the date of the retirement coverage error.
            (3) Nonelection.--If an eligible individual does not make an 
        election under paragraph (2), the corrective action taken before 
        the end of any time limitation under this subsection shall 
        remain in effect.
            (4) Treatment of fers election.--An election of FERS 
        coverage under this subsection is deemed to be an election under 
        section 301 of the Federal Employees Retirement System Act of 
        1986 (5 U.S.C. 8331 note; Public Law 99-335; 100 Stat. 599).

SEC. 2132. <<NOTE: 5 USC 8331 note.>>  FERS-ELIGIBLE EMPLOYEE WHO SHOULD 
            HAVE BEEN CSRS COVERED, CSRS-OFFSET COVERED, OR SOCIAL 
            SECURITY-ONLY COVERED, BUT WHO WAS ERRONEOUSLY FERS COVERED 
            INSTEAD WITHOUT AN ELECTION.

    (a) In General.--
            (1) FERS election prevented.--If an individual was prevented 
        from electing FERS coverage because the individual was 
        erroneously FERS covered during the period when the individual 
        was eligible to elect FERS under title III of the Federal 
        Employees Retirement System Act or the Federal Employees' 
        Retirement System Open Enrollment Act of 1997 (Public Law 105-
        61; 111 Stat. 1318 et seq.), the individual--
                    (A) is deemed to have elected FERS coverage; and
                    (B) shall remain covered by FERS, unless the 
                individual declines, under regulations prescribed by the 
                Office, to be FERS covered.
            (2) Declining fers coverage.--If an individual described 
        under paragraph (1)(B) declines to be FERS covered, such 
        individual shall be CSRS covered, CSRS-Offset covered, or Social 
        Security-Only covered, as would apply in the absence of a FERS 
        election, effective as of the date of the erroneous retirement 
        coverage determination.

    (b) Employee Contributions in Thrift Savings Fund.--If under this 
section, an individual declines to be FERS covered and instead is Social 
Security-Only covered, CSRS covered, or CSRS-Offset covered, as would 
apply in the absence of a FERS election, all employee contributions to 
the Thrift Savings Fund made during the period of erroneous FERS 
coverage (and all earnings on such contributions) may remain in the 
Thrift Savings Fund in accordance with regulations prescribed by the 
Executive Director, notwithstanding any limit under title 5, United 
States Code, that would otherwise be applicable.
    (c) Inapplicability of Duration of Erroneous Coverage.--This section 
shall apply regardless of the length of time the erroneous coverage 
determination remained in effect.

SEC. 2133. <<NOTE: 5 USC 8331 note.>>  RETROACTIVE EFFECT.

    This <<NOTE: Effective date.>>  chapter shall be effective as of 
January 1, 1987, except that section 2132 shall not apply to individuals 
who made or were deemed to have made elections similar to those provided 
in this section under regulations prescribed by the Office before the 
effective date of this title.

[[Page 114 STAT. 779]]

 CHAPTER 5--EMPLOYEE WHO SHOULD HAVE BEEN CSRS-OFFSET COVERED, BUT WHO 
                  WAS ERRONEOUSLY CSRS COVERED INSTEAD

SEC. 2141. APPLICABILITY. <<NOTE: 5 USC 8331 note.>> 

    This chapter shall apply in the case of any employee who should be 
(or should have been) CSRS-Offset covered but, as a result of a 
retirement coverage error, is (or was) CSRS covered instead.

SEC. 2142. CORRECTION MANDATORY. <<NOTE: 5 USC 8331 note.>> 

    (a) Uncorrected Error.--If the retirement coverage error has not 
been corrected, as soon as practicable after discovery of the error, 
such individual shall be covered under the correct retirement coverage, 
effective as of the date of the retirement coverage error.
    (b) Corrected Error.--If the retirement coverage error has been 
corrected before the effective date of this title, the corrective action 
taken before such date shall remain in effect.

   CHAPTER 6--EMPLOYEE WHO SHOULD HAVE BEEN CSRS COVERED, BUT WHO WAS 
                 ERRONEOUSLY CSRS-OFFSET COVERED INSTEAD

SEC. 2151. APPLICABILITY. <<NOTE: 5 USC 8331 note.>> 

    This chapter shall apply in the case of any employee who should be 
(or should have been) CSRS covered but, as a result of a retirement 
coverage error, is (or was) CSRS-Offset covered instead.

SEC. 2152. CORRECTION MANDATORY. <<NOTE: 5 USC 8331 note.>> 

    (a) Uncorrected Error.--If the retirement coverage error has not 
been corrected, as soon as practicable after discovery of the error, 
such individual shall be covered under the correct retirement coverage, 
effective as of the date of the retirement coverage error.
    (b) Corrected Error.--If the retirement coverage error has been 
corrected before the effective date of this title, the corrective action 
taken before such date shall remain in effect.

                     Subtitle B--General Provisions

SEC. 2201. IDENTIFICATION AND NOTIFICATION REQUIREMENTS. <<NOTE: 5 USC 
            8331 note.>> 

    Government agencies shall take all such measures as may be 
reasonable and appropriate to promptly identify and notify individuals 
who are (or have been) affected by a retirement coverage error of their 
rights under this title.

SEC. 2202. <<NOTE: 5 USC 8331 note.>>  INFORMATION TO BE FURNISHED TO 
            AND BY AUTHORITIES ADMINISTERING THIS TITLE.

    (a) Applicability.--The authorities identified in this subsection 
are--
            (1) the Director of the Office of Personnel Management;
            (2) the Commissioner of Social Security; and
            (3) the Executive Director of the Federal Retirement Thrift 
        Investment Board.

[[Page 114 STAT. 780]]

    (b) Authority To Obtain Information.--Each authority identified in 
subsection (a) may secure directly from any department or agency of the 
United States information necessary to enable such authority to carry 
out its responsibilities under this title. Upon request of the authority 
involved, the head of the department or agency involved shall furnish 
that information to the requesting authority.
    (c) Authority To Provide Information.--Each authority identified in 
subsection (a) may provide directly to any department or agency of the 
United States all information such authority believes necessary to 
enable the department or agency to carry out its responsibilities under 
this title.
    (d) Limitation; Safeguards.--Each of the respective authorities 
under subsection (a) shall--
            (1) request or provide only such information as that 
        authority considers necessary; and
            (2) establish, by regulation or otherwise, appropriate 
        safeguards to ensure that any information obtained under this 
        section shall be used only for the purpose authorized.

SEC. 2203. SERVICE CREDIT DEPOSITS. <<NOTE: 5 USC 8331 note.>> 

    (a) CSRS Deposit.--In the case of a retirement coverage error in 
which--
            (1) a FERS covered employee was erroneously CSRS covered or 
        CSRS-Offset covered;
            (2) the employee made a service credit deposit under the 
        CSRS rules; and
            (3) there is a subsequent retroactive change to FERS 
        coverage,

the excess of the amount of the CSRS civilian or military service credit 
deposit over the FERS civilian or military service credit deposit, 
together with interest computed in accordance with paragraphs (2) and 
(3) of section 8334(e) of title 5, United States Code, and regulations 
prescribed by the Office, shall be paid to the employee, the annuitant 
or, in the case of a deceased employee, to the individual entitled to 
lump-sum benefits under section 8424(d) of title 5, United States Code.
    (b) FERS Deposit.--
            (1) Applicability.--This subsection applies in the case of 
        an erroneous retirement coverage determination in which--
                    (A) the employee owed a service credit deposit under 
                section 8411(f ) of title 5, United States Code; and
                    (B)(i) there is a subsequent retroactive change to 
                CSRS or CSRS-Offset coverage; or
                    (ii) the service becomes creditable under chapter 83 
                of title 5, United States Code.
            (2) Reduced annuity.--
                    (A) <<NOTE: Regulations.>>  In general.--If at the 
                time of commencement of an annuity there is remaining 
                unpaid CSRS civilian or military service credit deposit 
                for service described under paragraph (1), the annuity 
                shall be reduced based upon the amount unpaid together 
                with interest computed in accordance with section 
                8334(e)(2) and (3) of title 5, United States Code, and 
                regulations prescribed by the Office.
                    (B) Amount.--The reduced annuity to which the 
                individual is entitled shall be equal to an amount that, 
                when

[[Page 114 STAT. 781]]

                taken together with the amount referred to under 
                subparagraph (A), would result in the present value of 
                the total being actuarially equivalent to the present 
                value of the unreduced annuity benefit that would have 
                been provided the individual.
            (3) Survivor annuity.--
                    (A) In general.--If at the time of commencement of a 
                survivor annuity, there is remaining unpaid any CSRS 
                service credit deposit described under paragraph (1), 
                and there has been no actuarial reduction in an annuity 
                under paragraph (2), the survivor annuity shall be 
                reduced based upon the amount unpaid together with 
                interest computed in accordance with section 8334(e)(2) 
                and (3) of title 5, United States Code, and regulations 
                prescribed by the Office.
                    (B) Amount.--The reduced survivor annuity to which 
                the individual is entitled shall be equal to an amount 
                that, when taken together with the amount referred to 
                under subparagraph (A), would result in the present 
                value of the total being actuarially equivalent to the 
                present value of an unreduced survivor annuity benefit 
                that would have been provided the individual.

SEC. 2204. <<NOTE: 5 USC 8331 note.>>  PROVISIONS RELATED TO SOCIAL 
            SECURITY COVERAGE OF MISCLASSIFIED EMPLOYEES.

    (a) Definitions.--In this section, the term--
            (1) ``covered individual'' means any employee, former 
        employee, or annuitant who--
                    (A) is or was employed erroneously subject to CSRS 
                coverage as a result of a retirement coverage error; and
                    (B) is or was retroactively converted to CSRS-offset 
                coverage, FERS coverage, or Social Security-Only 
                coverage; and
            (2) ``excess CSRS deduction amount'' means an amount equal 
        to the difference between the CSRS deductions withheld and the 
        CSRS-Offset or FERS deductions, if any, due with respect to a 
        covered individual during the entire period the individual was 
        erroneously subject to CSRS coverage as a result of a retirement 
        coverage error.

    (b) Reports to Commissioner of Social Security.--
            (1) In general.--In order to carry out the Commissioner of 
        Social Security's responsibilities under title II of the Social 
        Security Act, the Commissioner may request the head of each 
        agency that employs or employed a covered individual to report 
        (in coordination with the Office of Personnel Management) in 
        such form and within such timeframe as the Commissioner may 
        specify, any or all of--
                    (A) the total wages (as defined in section 3121(a) 
                of the Internal Revenue Code of 1986) paid to such 
                individual during each year of the entire period of the 
                erroneous CSRS coverage; and
                    (B) such additional information as the Commissioner 
                may require for the purpose of carrying out the 
                Commissioner's responsibilities under title II of the 
                Social Security Act (42 U.S.C. 401 et seq.).

[[Page 114 STAT. 782]]

            (2) Compliance.--The head of an agency or the Office shall 
        comply with a request from the Commissioner under paragraph (1).
            (3) Wages.--For purposes of section 201 of the Social 
        Security Act (42 U.S.C. 401), wages reported under this 
        subsection shall be deemed to be wages reported to the Secretary 
        of the Treasury or the Secretary's delegates pursuant to 
        subtitle F of the Internal Revenue Code of 1986.

    (c) Payment Relating to OASDI Employee Taxes.--The Office shall 
transfer from the Civil Service Retirement and Disability Fund to the 
General Fund of the Treasury an amount equal to the lesser of the excess 
CSRS deduction amount or the OASDI taxes due for covered individuals (as 
adjusted by amounts transferred relating to applicable OASDI employee 
taxes as a result of corrections made, including corrections made before 
the date of the enactment of this Act). If the excess CSRS deductions 
exceed the OASDI taxes, any difference shall be paid to the covered 
individual or survivors, as appropriate.
    (d) Payment of OASDI Employer Taxes.--
            (1) In general.--Each employing agency shall pay an amount 
        equal to the OASDI employer taxes owed with respect to covered 
        individuals during the applicable period of erroneous coverage 
        (as adjusted by amounts transferred for the payment of such 
        taxes as a result of corrections made, including corrections 
        made before the date of the enactment of this Act).
            (2) Payment.--Amounts paid under this subsection shall be 
        determined subject to any limitation under section 6501 of the 
        Internal Revenue Code of 1986.

SEC. 2205. <<NOTE: 5 USC 8331 note.>>  THRIFT SAVINGS PLAN TREATMENT FOR 
            CERTAIN INDIVIDUALS.

    (a) Applicability.--This section applies to an individual who--
            (1) is eligible to make an election of coverage under 
        section 2101 or 2102, and only if FERS coverage is elected (or 
        remains in effect) for the employee involved; or
            (2) is described in section 2111, and makes or has made 
        retroactive employee contributions to the Thrift Savings Fund 
        under regulations prescribed by the Executive Director.

    (b) Payment Into Thrift Savings Fund.--
            (1) In general.--
                    (A) Payment.--With respect to an individual to whom 
                this section applies, the employing agency shall pay to 
                the Thrift Savings Fund under subchapter III of chapter 
                84 of title 5, United States Code, for credit to the 
                account of the employee involved, an amount equal to the 
                earnings which are disallowed under section 8432a(a)(2) 
                of such title on the employee's retroactive 
                contributions to such Fund.
                    (B) Amount.--Earnings under subparagraph (A) shall 
                be computed in accordance with the procedures for 
                computing lost earnings under section 8432a of title 5, 
                United States Code. The amount paid by the employing 
                agency shall be treated for all purposes as if that 
                amount had actually been earned on the basis of the 
                employee's contributions.
                    (C) Exceptions.--If an individual made retroactive 
                contributions before the effective date of the 
                regulations

[[Page 114 STAT. 783]]

                under section 2101(c), the Director may provide for an 
                alternative calculation of lost earnings to the extent 
                that a calculation under subparagraph (B) is not 
                administratively feasible. The alternative calculation 
                shall yield an amount that is as close as practicable to 
                the amount computed under subparagraph (B), taking into 
                account earnings previously paid.
            (2) Additional employee contribution.--In cases in which the 
        retirement coverage error was corrected before the effective 
        date of the regulations under section 2101(c), the employee 
        involved shall have an additional opportunity to make 
        retroactive contributions for the period of the retirement 
        coverage error (subject to applicable limits), and such 
        contributions (including any contributions made after the date 
        of the correction) shall be treated in accordance with paragraph 
        (1).

    (c) Regulations.--
            (1) Executive director.--The Executive Director shall 
        prescribe regulations appropriate to carry out this section 
        relating to retroactive employee contributions and payments made 
        on or after the effective date of the regulations under section 
        2101(c).
            (2) Office.--The Office, in consultation with the Federal 
        Retirement Thrift Investment Board, shall prescribe regulations 
        appropriate to carry out this section relating to the 
        calculation of lost earnings on retroactive employee 
        contributions made before the effective date of the regulations 
        under section 2101(c).

SEC. 2206. <<NOTE: 5 USC 8331 note.>>  CERTAIN AGENCY AMOUNTS TO BE PAID 
            INTO OR REMAIN IN THE CSRDF.

    (a) Certain Excess Agency Contributions To Remain in the CSRDF.--
            (1) In general.--Any amount described under paragraph (2) 
        shall--
                    (A) remain in the CSRDF; and
                    (B) may not be paid or credited to an agency.
            (2) Amounts.--Paragraph (1) refers to any amount of 
        contributions made by an agency under section 8423 of title 5, 
        United States Code, on behalf of any employee, former employee, 
        or annuitant (or survivor of such employee, former employee, or 
        annuitant) who makes an election to correct a retirement 
        coverage error under this title, that the Office determines to 
        be excess as a result of such election.

    (b) Additional Employee Retirement Deductions To Be Paid by 
Agency.--If a correction in a retirement coverage error results in an 
increase in employee deductions under section 8334 or 8422 of title 5, 
United States Code, that cannot be fully paid by a reallocation of 
otherwise available amounts previously deducted from the employee's pay 
as employment taxes or retirement deductions, the employing agency--
            (1) shall pay the required additional amount into the CSRDF; 
        and
            (2) shall not seek repayment of that amount from the 
        employee, former employee, annuitant, or survivor.

[[Page 114 STAT. 784]]

SEC. 2207. <<NOTE: 5 USC 8331 note.>>  CSRS COVERAGE DETERMINATIONS TO 
            BE APPROVED BY OPM.

    No agency shall place an individual under CSRS coverage unless--
            (1) the individual has been employed with CSRS coverage 
        within the preceding 365 days; or
            (2) the Office has agreed in writing that the agency's 
        coverage determination is correct.

SEC. 2208. DISCRETIONARY ACTIONS BY DIRECTOR. <<NOTE: 5 USC 8331 
            note.>> 

    (a) In General.--The Director of the Office of Personnel Management 
may--
            (1) extend the deadlines for making elections under this 
        title in circumstances involving an individual's inability to 
        make a timely election due to a cause beyond the individual's 
        control;
            (2) provide for the reimbursement of necessary and 
        reasonable expenses incurred by an individual with respect to 
        settlement of a claim for losses resulting from a retirement 
        coverage error, including attorney's fees, court costs, and 
        other actual expenses;
            (3) compensate an individual for monetary losses that are a 
        direct and proximate result of a retirement coverage error, 
        excluding claimed losses relating to forgone contributions and 
        earnings under the Thrift Savings Plan under subchapter III of 
        chapter 84 of title 5, United States Code, and all other 
        investment opportunities; and
            (4) waive payments required due to correction of a 
        retirement coverage error under this title.

    (b) Similar Actions.--In exercising the authority under this 
section, the Director shall, to the extent practicable, provide for 
similar actions in situations involving similar circumstances.
    (c) Judicial Review.--Actions taken under this section are final and 
conclusive, and are not subject to administrative or judicial review.
    (d) Regulations.--The Office of Personnel Management shall prescribe 
regulations regarding the process and criteria used in exercising the 
authority under this section.
    (e) <<NOTE: Deadline.>>  Report.--The Office of Personnel Management 
shall, not later than 180 days after the date of the enactment of this 
Act, and annually thereafter for each year in which the authority 
provided in this section is used, submit a report to each House of 
Congress on the operation of this section.

SEC. 2209. REGULATIONS. <<NOTE: 5 USC 8331 note.>> 

    (a) In General.--In addition to the regulations specifically 
authorized in this title, the Office may prescribe such other 
regulations as are necessary for the administration of this title.
    (b) Former Spouse.--The regulations prescribed under this title 
shall provide for protection of the rights of a former spouse with 
entitlement to an apportionment of benefits or to survivor benefits 
based on the service of the employee.

[[Page 114 STAT. 785]]

                      Subtitle C--Other Provisions

SEC. 2301. <<NOTE: 5 USC 8331 note.>>  PROVISIONS TO AUTHORIZE CONTINUED 
            CONFORMITY OF OTHER FEDERAL RETIREMENT SYSTEMS.

    (a) <<NOTE: Applicability.>>  Foreign Service.--Sections 827 and 851 
of the Foreign Service Act of 1980 (22 U.S.C. 4067 and 4071) shall apply 
with respect to this title in the same manner as if this title were part 
of--
            (1) the Civil Service Retirement System, to the extent this 
        title relates to the Civil Service Retirement System; and
            (2) the Federal Employees' Retirement System, to the extent 
        this title relates to the Federal Employees' Retirement System.

    (b) <<NOTE: Applicability.>>  Central Intelligence Agency.--Sections 
292 and 301 of the Central Intelligence Agency Retirement Act (50 U.S.C. 
2141 and 2151) shall apply with respect to this title in the same manner 
as if this title were part of--
            (1) the Civil Service Retirement System, to the extent this 
        title relates to the Civil Service Retirement System; and
            (2) the Federal Employees' Retirement System, to the extent 
        this title relates to the Federal Employees' Retirement System.

SEC. 2302. AUTHORIZATION OF PAYMENTS. <<NOTE: 5 USC 8331 note.>> 

    All payments authorized or required by this title to be paid from 
the Civil Service Retirement and Disability Fund, together with 
administrative expenses incurred by the Office in administering this 
title, shall be deemed to have been authorized to be paid from that 
Fund, which is appropriated for the payment thereof.

SEC. 2303. INDIVIDUAL RIGHT OF ACTION PRESERVED FOR AMOUNTS NOT 
            OTHERWISE PROVIDED FOR UNDER THIS TITLE. <<NOTE: 5 USC 8331 
            note.>> 

    Nothing in this title shall preclude an individual from bringing a 
claim against the Government of the United States which such individual 
may have under section 1346(b) or chapter 171 of title 28, United States 
Code, or any other provision of law (except to the extent the claim is 
for any amounts otherwise provided for under this title).

[[Page 114 STAT. 786]]

                       Subtitle D--Effective Date

SEC. 2401. EFFECTIVE DATE. <<NOTE: 5 USC 8331 note.>> 

    Except as otherwise provided in this title, this title shall take 
effect on the date of the enactment of this Act.

    Approved September 19, 2000.

LEGISLATIVE HISTORY--H.R. 4040 (S. 2420):
---------------------------------------------------------------------------

HOUSE REPORTS: No. 106-610, Pt. 1 (Comm. on Government Reform).
SENATE REPORTS: No. 106-344 accompanying S. 2420 (Comm. on Governmental 
Affairs).
CONGRESSIONAL RECORD, Vol. 146 (2000):
            May 9, considered and passed House.
            July 25, considered and passed Senate, amended, in lieu of 
                S. 2420.
            July 27, House concurred in Senate amendments with 
                amendments.
             Senate concurred in House amendments.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 36 (2000):
            Sept. 19, Presidential remarks and statement.

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