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                                                       Calendar No. 309
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-178
_______________________________________________________________________




                     FEDERAL ERRONEOUS RETIREMENT


                       COVERAGE CORRECTIONS ACT

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 1232

   TO PROVIDE FOR THE CORRECTION OF RETIREMENT COVERAGE ERRORS UNDER 
           CHAPTERS 83 AND 84 OF TITLE 5, UNITED STATES CODE




                October 8, 1999.--Ordered to be printed

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
79-010                     WASHINGTON : 1999


                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
GEORGE VOINOVICH, Ohio               RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico         ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania          JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
             Hannah S. Sistare, Staff Director and Counsel
                      Dan G. Blair, Senior Counsel
  Michael L. Loesch, Counsel, Subcommittee on International Security,
                   Proliferation and Federal Services
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                  Lawrence B. Novey, Minority Counsel
           Nanci E. Langley, Minority Deputy Staff Director,
   Subcommittee on International Security, Proliferation and Federal 
                                Services
                 Darla D. Cassell, Administrative Clerk

                                                       Calendar No. 309
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-178

======================================================================



 
         FEDERAL ERRONEOUS RETIREMENT COVERAGE CORRECTIONS ACT

                                _______
                                

                October 8, 1999.--Ordered to be printed

                                _______


Mr. Thompson, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 1232]

    The Committee on Governmental Affairs, to which was 
referred the bill (S. 1232) to provide for the correction of 
retirement coverage errors under chapters 83 and 84 of Title 5, 
United States Code, and for other purposes, having considered 
the same, reports favorably thereon with an amendment and 
recommends by voice vote that the bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. Purpose..........................................................1
 II. Background.......................................................2
III. Legislative History..............................................4
 IV. Section-by-Section Analysis......................................4
  V. Regulatory Impact Statement......................................6
 VI. CBO Cost Estimate................................................7
VII. Executive Communications........................................14
VIII.Changes to Existing Law.........................................16


                               I. Purpose

    The purpose of S. 1232, the Federal Erroneous Retirement 
Coverage Corrections Act, is to provide for the correction of 
certain retirement coverage errors affecting federal employees, 
and certain service credit and Thrift Savings Plan portability 
problems affecting Federal Reserve Board employees.

                             II. Background

    In 1984, the Federal government made a transition from the 
Civil Service Retirement System (CSRS) to the Federal Employees 
Retirement System (FERS). As government agencies carried out 
the complex job of applying two sets of transition rules, 
errors occurred, and thousands of employees were placed in the 
wrong retirement system--many learning that their pensions 
would be less than expected.
    The CSRS and the FERS are two distinct retirement systems. 
The CSRS is a stand-alone defined benefit pension plan that 
does not include Social Security coverage. Benefits are based 
on a formula involving length of service, high-three average 
salary and an accrual rate. The FERS is a three-tiered 
retirement system combining Social Security, a defined benefit 
component and a defined contribution component known as the 
Thrift Savings Plan (TSP). The TSP is similar to 401(k) plans 
as found in the private sector. In order for employees covered 
by the FERS to have similar income replacement rates in 
retirement to those covered by the CSRS, participation in the 
Thrift Savings Plan, with its government match for employee 
contributions, is necessary. (A third system, the ``CSRS-
Offset'' system, covers employees who vested in the CSRS before 
separating from government service for more than one year. This 
offset system is a hybrid, combining Social Security coverage 
with a defined benefit component with the aggregate benefit 
amount intended to equal the amount the employee would have 
received under the CSRS.)
    Under current statute, federal agencies have no choice but 
to correct a retirement coverage error when it is discovered, 
effectively forcing employees into a new retirement plan. Since 
most of the retirement coverage errors involve employees 
wrongfully placed in the CSRS or the CSRS-Offset system, 
employees whose coverage is corrected often have not 
participated in the TSP. Thus, the automatic correction of a 
retirement coverage error can have a harmful impact on an 
employee's financial ability to plan for retirement.
    In the 105th Congress, Senator Cochran introduced S. 1710, 
the Retirement Coverage Error Correction Act of 1998. S. 1710 
was introduced on March 4, 1998, to provide for the correction 
of retirement coverage errors affecting federal employees. On 
March 20, 1998, the bill was referred to the Subcommittee on 
International Security, Proliferation, and Federal Services.
    On May 13, 1998, the Subcommittee on International 
Security, Proliferation, and Federal Services held a hearing to 
examine S. 1710 and erroneous retirement coverage issues. The 
following witnesses presented testimony at the hearing: William 
E. Flynn, Associate Director for Retirement and Insurance at 
the Office of Personnel Management; Roger W. Mehle, Executive 
Director of the Federal Retirement Thrift Investment Board; 
Dallas Salisbury, President of the Employee Benefit Research 
Institute; and Daniel F. Geisler, President of the American 
Foreign Service Association. Subsequently, the Subcommittee on 
International Security, Proliferation and Federal Services 
unanimously reported S. 1710 to the full Committee on 
Governmental Affairs by polling letter on June 8, 1998. 
However, preliminary cost estimates prepared by the 
Congressional Budget Office raised questions regarding the 
potential costs of the proposed legislation and additional 
information and discussions were required to address these 
issues. The bill was held in abeyance pending the outcome of 
these discussions with the Office of Personnel Management, the 
Congressional Budget Office and other interested stakeholders.
    In the 106th Congress, Senator Cochran, along with Senator 
Akaka, introduced S. 1232, the Federal Erroneous Retirement 
Coverage Corrections Act. The Committee's work in the previous 
Congress served as the foundation for this proposal, which is 
designed to provide long-awaited relief to many federal 
employees, retirees, survivors, and their families who, through 
no fault of their own, find themselves the victims of 
retirement coverage errors.
    S. 1232 provides thorough and equitable relief to 
employees, former employees, retirees, and survivors who are 
affected by retirement coverage errors. It presents most 
affected individuals with a choice between corrected retirement 
coverage and the coverage the employee expected to receive, 
without disturbing Social Security coverage law.
    For each type of retirement coverage error, individuals are 
furnished the opportunity to maintain their expected level of 
retirement benefits without a change in their retirement 
savings and planning. For example, current law requires FERS 
eligible employees who were incorrectly placed in the CSRS-
Offset system to be automatically placed in FERS. However, S. 
1232 would provide these employees with the option to be 
corrected to FERS or remain in the CSRS-Offset system. Many 
employees do not have the financial resources to make the 
retroactive TSP contributions necessary to maintain their 
expected level of retirement benefits under FERS. This 
legislation provides these employees with equitable relief by 
furnishing them the option to remain in the CSRS-Offset system 
and receive the retirement benefits they expected. Among other 
provisions, this legislation also provides certain employees 
who missed an opportunity to contribute to the Thrift Savings 
Plan due to a coverage error the opportunity to receive 
interest on their TSP make-up contributions.
    The Committee believes the Federal Erroneous Retirement 
Coverage Corrections Actprovides a comprehensive solution to 
the problems faced by federal employees due to retirement coverage 
errors, and that it does so at a reasonable cost and without creating 
unnecessary administrative burdens. By affording affected federal 
employees the opportunity to be made whole, S. 1232 strikes the 
appropriate balance between the needs of those affected by retirement 
errors and federal agencies struggling to fulfill their mandates with 
already tight budgets.
    S. 1232 also addresses certain issues affecting only 
employees of the Federal Reserve Board of Governors. First, the 
bill authorizes Federal Reserve Board employees to receive 
credit under the Federal Employees Retirement System (FERS) for 
post-1988 Board employment should they leave the Federal 
Reserve Board to take a position with another federal agency. 
Current law prevents the transfer of credit for Federal Reserve 
Board service after 1988. Thus, Federal Reserve Board employees 
are potentially subject to reduced retirement benefits should 
they begin working for another federal agency. S. 1232 corrects 
this problem by providing retirement portability for Federal 
Reserve Board employees.
    Second, the bill permits employees who have transferred or 
will transfer to the Federal Reserve Board to move the funds in 
their Thrift Savings Plan (TSP) accounts to the Board's Thrift 
Plan. Under current law federal employees participating in the 
Thrift Savings Plan who transfer to the Federal Reserve Board 
are not permitted to withdraw funds from their TSP accounts. S. 
1232 corrects this situation by authorizing TSP withdrawals 
under certain circumstances.
    S. 1232 has been endorsed by the Administration and the two 
largest federal employee unions, the American Federation of 
Government Employees and the National Treasury Employees Union.

                        III. Legislative History

    S. 1232 was introduced on June 17, 1999, by Senator 
Cochran, for himself and Senator Akaka, and referred to the 
Committee on Governmental Affairs. On June 21, 1999, the bill 
was referred to the Subcommittee on International Security, 
Proliferation, and Federal Services.
    On July 16, 1999, the Subcommittee on International 
Security, Proliferation, and Federal Services reported S. 1232 
to the Committee on Governmental Affairs by polling letter. On 
August 3, 1999, the Committee held a business meeting and voted 
unanimously, by voice vote, to favorably report S. 1232 without 
amendment.
    S. 1232 has been cosponsored by Senators Thompson, 
Lieberman, Warner, Sarbanes, Leahy, Robb, Jeffords and Snowe.

                    IV. Section-by-Section Analysis

    Section 1: Provides the short title (``Federal Erroneous 
Retirement Coverage Corrections Act'') and the table of 
contents.
    Section 2: Defines the terms used throughout the Act.
    Section 3: Provides coverage under the Act for all errors 
that have been in effect for at least three years of service 
after December 31, 1986.
    Section 4: Provides that elections made under this Act are 
irrevocable.

  Title I: Description of Retirement Coverage Errors and Measures for 
                             Rectification

    This title details the specific types of retirement 
coverage errors and the remedies provided by the Act.
    Subtitle A: Covers employees and annuitants who should have 
been FERS covered, but were erroneously covered under CSRS or 
CSRS Offset. These individuals are provided a choice between 
correction to FERS or coverage under CSRS Offset. Includes 
provisions that allow all employee contributions, and earnings 
thereon, to remain in the TSP account if CSRS Offset is elected 
by certain employees who were previously corrected.
    Subtitle B: Covers employees who should have been covered 
by a retirement plan (CSRS, CSRS Offset, or FERS), but were 
erroneously covered by Social Security only. In all cases, 
coverage is corrected to the appropriate plan so that the 
employee has retirement coverage.
    Subtitle C: Covers employees who should have been covered 
by Social Security only, but were erroneously covered by CSRS 
or CSRS Offset. These individuals are provided a choice between 
correction to Social Security only or coverage under CSRS 
Offset.
    Subtitle D: Covers employees who should have been covered 
by CSRS, CSRS Offset, or Social Security only, but were 
erroneously covered by FERS. These individuals are provided a 
choice between correction to the appropriate plan or coverage 
under FERS. Includes provisions that allow all employee 
contributions, and earnings thereon, to remain in the TSP 
account if coverage other than FERS is elected.
    Subtitle E: Covers employees who should have been covered 
by CSRS Offset, but were erroneously covered by CSRS. Coverage 
is corrected to CSRS Offset to conform with Social Security 
coverage law.
    Subtitle F: Covers employees who should have been covered 
by CSRS, but were erroneously covered by CSRS Offset. Coverage 
is corrected to CSRS to conform with Social Security coverage 
law.

                      Title II: General Provisions

    Section 201: Requires that all government agencies make 
reasonable efforts to identify and notify individuals affected 
by retirement coverage errors.
    Section 202: Authorizes OPM, SSA, and TSP to obtain any 
information necessary to carry out the responsibilities of this 
Act.
    Section 203: Provides for payment of interest on certain 
deposits made by employees that, due to correction of a 
retirement coverage error, are returned to the employee. Allows 
retirement credit for certain periods of service without 
payment of a service credit deposit. Provides that the 
retirement or survivor benefit is actuarially reduced by the 
amount of deposit owed.
    Section 204: Provides that the employing agency pays any 
employer OASDI taxes due for the period of erroneous coverage, 
subject to the three-year statute of limitations in the 
Internal Revenue Code. OPM will transfer excess employee 
retirement deductions to the OASDI Trust Funds to fund the 
employee share of the OASDI taxes. In no case will an employee 
be required to pay additional OASDI taxes.
    Section 205: Provides that certain employees who missed an 
opportunity to contribute to TSP due to a coverage error may 
receive interest on their own TSP make-up contributions. 
``Lost'' interest will be paid by the employing agency. Note: 
Current law already provides that certain employees who missed 
an opportunity to contribute to TSP due to a coverage error may 
receive agency matching contributions on TSP make-up 
contributions, agency automatic one percent contributions to 
TSP, and interest on both.
    Section 206: Provides that employing agencies may not 
remove excess agency retirement contributions from the Civil 
Service Retirement and Disability Fund.
    Section 207: Requires that agencies obtain written approval 
from OPM before placing certain employees under CSRS coverage.
    Section 208: Authorizes the Director of OPM to extend 
deadlines, reimburse individuals for reasonable expenses 
incurred by reason of the coverage error or for losses, and 
waive repayments required under the Act.
    Section 209: Authorizes OPM to prescribe regulations to 
administer the Act.

                      Title III: Other Provisions

    Section 301: Makes remedies provided under the Act also 
available to employees of the Foreign Service and the Central 
Intelligence Agency.
    Section 302: Authorizes payments from the Civil Service 
Retirement and Disability Fund for administrative expenses 
incurred by OPM and for other payments required under the Act.
    Section 303: Allows individuals to bring suit against the 
United States Government for matters not covered under this 
Act.
    Section 304: Provides that the Act is effective from the 
date of enactment.

                        Title IV: Tax Provisions

    Section 401: Provides that transfers and payments of 
contributions under this Act will not result in an income tax 
liability for affected employees.

              Title V: Miscellaneous Retirement Provisions

    Section 501: Allows portability of service credit between 
Federal Reserve service and FERS.
    Section 502: Provides technical amendments to chapter 84 of 
title 5, United States Code, that allow certain transfers to 
other federal retirement systems to be treated as separations 
from federal service for TSP purposes.

                     V. Regulatory Impact Statement

    Paragraph 11(b)(1) of rule XXVI of the Standing Rules of 
the Senate requires that each report accompanying a bill 
evaluate ``the regulatory impact which would be incurred in 
carrying out this bill.''
    S. 1232 would change the way the government of the District 
of Columbia corrects errors associated with the incorrect 
enrollment of employees in federal retirement plans. This 
requirement would constitute an intergovernmental mandate as 
defined by the Unfunded Mandates Reform Act (UMRA). However, 
costs associated with making those corrections would be 
minimal, as only a small number of District of Columbia 
employees have been affected by errors addressed by the bill. 
Consequently, the Congressional Budget Office (CBO) estimates 
that the total cost of the mandate would be minimal and would 
not exceed the thresholds established in UMRA.
    S. 1232 would also create a new private-sector mandate by 
requiring Gallaudet University to rectify errors where 
employees were improperly covered under CSRS or FERS. Because 
only a small number of Gallaudet University employees have been 
affected by such errors and the cost per correction would be 
low, CBO estimates that the cost of the mandate would be small.

             VI. Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 24, 1999.
Hon. Fred Thompson,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1232, the Federal 
Erroneous Retirement Coverage Corrections Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Eric Rollins.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 1232--Federal Erroneous Retirement Coverage Corrections Act

            Summary
    S. 1232 would alter the procedures for correcting 
situations where federal employees have been mistakenly placed 
in the wrong retirement system. Many of these retirement 
coverage errors occurred between 1984, when the Civil Service 
Retirement System (CSRS) was closed to new entrants, and 1987, 
when the Federal Employees' Retirement System (FERS) was 
created.
    CBO estimates that this bill would decrease discretionary 
spending by $42 million over the 2000-2004 period, primarily 
because of lower agency contributions to the Civil Service 
Retirement and Disability Fund (CSRDF). The resulting drop in 
receipts by the CSRDF would also increase direct spending by 
$42 million over the same period. The bill would have only a 
minor impact on federal retirement benefits during the next 
several years because the affected employees are generally 
still in the middle of their careers. Because the bill would 
affect direct spending and receipts, pay-as-you-go procedures 
would apply.
    Because the District of Columbia would be required to 
continue retirement coverage for some employees who have been 
mistakenly enrolled in the wrong retirement system, S. 1232 
contains an intergovernmental mandate as defined by the 
Unfunded Mandates Reform Act (UMRA). S. 1232 would also create 
a new private-sector mandate by requiring Gallaudet University 
to rectify errors where employees were improperly covered under 
CSRS or FERS. CBO estimates that the cost of these mandates 
would be small and would not exceed the threshold established 
in UMRA.
            Estimated cost to the Federal Government
    The estimated budgetary impact of S. 1232 is shown in the 
following table.

                                 TABLE 1. ESTIMATED BUDGETARY EFFECTS OF S. 1232
----------------------------------------------------------------------------------------------------------------
                                                     By fiscal year, in millions of dollars--
                                 -------------------------------------------------------------------------------
                                   2000    2001    2002    2003    2004    2005    2006    2007    2008    2009
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Makeup Contributions to TSP.....      -1      16       3      -3      -4      -5      -5      -6      -7      -8
Makeup Payments to Social            (1)     (1)       0       0       0       0       0       0       0       0
 Security.......................
Makeup Payments to the CSRDF....      -3       2      -4      -4      -4      -4      -5      -5      -5      -6
Agency Retirement Contributions.     (1)      -2      -3      -5      -6      -6      -7      -7      -8      -8
Employer TSP Contributions......      -1      -3      -6      -7      -7      -8      -8      -9     -10     -10
Employer Social Security             (1)     (1)       0       0       0       0       0       0       0       0
 Contributions..................
                                 -------------------------------------------------------------------------------
      Total.....................      -5      13     -10     -19     -21     -23     -25     -28     -30     -32

                                           CHANGES IN DIRECT SPENDING

On-Budget:
    Makeup Payments to the CSRDF       5      -2       5       6       6       7       7       8       8       9
    Agency Retirement                (1)       2       4       8       9       9      10      11      12      13
     Contributions..............
    Transfers from CSRDF to           -3       3       0       0       0       0       0       0       0       0
     Social Security............
                                 -------------------------------------------------------------------------------
      Subtotal..................       2       3       9      13      15      16      17      19      20      22
                                 ===============================================================================
Off-Budget:
    Makeup Payments to Social          1      -1       0       0       0       0       0       0       0       0
     Security...................
    Employer Social Security         (1)     (1)       0       0       0       0       0       0       0       0
     Contributions..............
    Transfers from CSRDF to            3      -3       0       0       0       0       0       0       0       0
     Social Security............
                                 -------------------------------------------------------------------------------
      Subtotal..................       4      -4       0       0       0       0       0       0       0       0
                                 ===============================================================================
      Total.....................       6      -1       9      13      15      16      17      19      20      22

                                               CHANGES IN REVENUES

On-Budget:
    Employee Retirement              (1)     (1)     (1)     (1)     (1)     (1)     (1)     (1)     (1)     (1)
     Contributions..............
Off-Budget:
    Employer Social Security         (1)     (1)       0       0       0       0       0       0       0       0
     Taxes......................
                                 -------------------------------------------------------------------------------
      Total.....................     (1)     (1)     (1)     (1)     (1)     (1)     (1)     (1)     (1)     (1)

                                              TOTAL COST OF S. 1232

Direct Spending and Revenues....       6      -1       9      13      15      16      17      19      20      21
All Spending and Revenues.......       1      12      -1      -5      -6      -7      -8      -9     -10    -11
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.

Notes: Components may not sum to totals because of rounding.

    The mandatory costs of this legislation would fall within 
budget functions 600 (Income Security), 650 (Social Security), 
and 950 (Undistributed Offsetting Receipts). This estimate 
assumes that S. 1232 is enacted by October 1, 1999.
            Basis of estimate

Background

    There are two main retirement programs for full-time 
regular federal employees. Most full-time employees hired 
before 1984 are in the Civil Service Retirement System (CSRS), 
a defined benefit plan that does not include Social Security. 
Those hired after 1983 are generally covered by the Federal 
Employees' Retirement System (FERS), which features Social 
Security, a more limited defined benefit, and the defined 
contribution Thrift Savings Plan (TSP) with government matching 
contributions. Employees who return to government service after 
1987 and have five years of prior service under CSRS may be 
covered by a hybrid plan known as CSRS Offset that features a 
combination of CSRS and Social Security benefits.
    FERS employees may contribute up to 10 percent of their pay 
to the TSP. They receive an automatic contribution from their 
employing agency equal to 1 percent of their pay and may also 
receive an additional 4 percent in matching contributions. CSRS 
and CSRS Offset employees may also participate in the TSP, but 
they may only contribute up to 5 percent of their pay and do 
not receive any government contributions.

Assumptions about retirement coverage errors

    CBO estimated the number of retirement coverage errors that 
have been made based on discussions with personnel officials in 
a number of large government agencies, including the Postal 
Service and the Departments of Defense, Veterans Affairs, and 
Agriculture. These agencies comprise approximately 70 percent 
of the federal civilian workforce. On the basis of these 
discussions, CBO estimates that approximately 18,000 coverage 
errors have occurred throughout the government, of which 
approximately 11,000 have already been corrected. The two most 
common types of coverage errors appear to involve employees who 
should be in FERS but were accidentally put in CSRS and 
employees with prior service who returned to government service 
and were misplaced in either FERS or CSRS Offset.
    Under current law, coverage errors are usually corrected by 
converting the employee to the proper retirement system, 
retroactive to the original date of the error. However, some 
employees who were accidentally placed in FERS are able to 
remain in FERS by making a retroactive election of FERS 
coverage.
    S. 1232 would allow most employees affected by coverage 
errors to choose whether they would like to be placed in the 
proper retirement system or make their incorrect coverage 
permanent. Employees who have been incorrectly covered by CSRS 
could elect only CSRS Offset or FERS. Employees whose coverage 
errors have not been corrected would have 180 days after the 
discovery of the error to make an election; employees whose 
coverage errors have already been fixed would have 18 months 
after the issuance of final implementing regulations to make 
their election. All elections would be irrevocable, and 
employees who did not make an election would remain in their 
current coverage. Coverage errors lasting less than three years 
would not be covered by the bill. CBO assumed that under the 
bill agencies would stop correcting coverage errors for the 
first six months of 2000 pending the issuance of final 
regulations to implement the bill, and that they would finish 
processing the resulting backlog by the end of 2001.
    Employees who are incorrectly covered by CSRS rather than 
FERS are unable to participate fully in the TSP. Under current 
law, when an individual's coverage is corrected to FERS, the 
employing agency makes a lump-sum deposit into his TSP account 
equal to the government contributions and related earnings that 
would have been made to the employee's previous TSP 
contributions under FERS rules. If the employee did not have a 
TSP account, only a deposit for the automatic 1-percent 
contributions is made. Earnings are calculated using the 
individual's own fund allocation decisions (if he had a TSP 
account) or the G Fund rate (otherwise). Employees may provide 
makeup contributions to their TSP accounts out of future pay. 
These makeup contributions receive agency matching 
contributions (up to the 5-percent FERS maximum) and related 
earnings as if the contributions had been made at the proper 
time. However, back earnings are paid only on the agency's 
matching funds, not the employee's makeup contributions.
    The bill would require agencies to pay lost earnings on 
employee makeup contributions to the TSP for employees who 
elect FERS coverage. (Employees whose coverage had been 
corrected to FERS before the bill's enactment would receive 
makeup earnings on any makeup contributions made prior to 
enactment.)
    CBO assumed that these employees' choice of retirement 
coverage would be strongly influenced by whether or not they 
had made significant contributions to the TSP while they were 
incorrectly covered by CSRS or CSRS Offset. Most employees with 
little or no priorTSP contributions would need to make 
retroactive contributions for a substantial amount of time--as much as 
eight or nine years--in order to make up the contributions they would 
have made under FERS. For these employees, CSRS Offset coverage would 
be relatively attractive. In contrast, employees with significant prior 
TSP contributions might need only two to three years to catch up. As a 
result, many of these employees would still choose to have their 
coverage corrected to FERS.
    Most employees covered by CSRS have not made regular 
contributions to the TSP. According to the Federal Retirement 
Thrift Investment Board, only 22 percent of CSRS employees made 
contributions to the TSP in 1989 (the earliest year of data 
available). This percentage has since risen but did not exceed 
50 percent until 1996. CBO estimates that only a third of 
employees erroneously placed in CSRS or CSRS Offset have made 
significant contributions to the TSP, and assumed that 80 
percent of these employees would elect FERS coverage. Two-
thirds of employees incorrectly placed in CSRS or CSRS Offset 
have little or no TSP contributions, and CBO assumed that 80 
percent of these employees would elect CSRS Offset coverage. 
Overall, 60 percent of these employees would elect CSRS Offset 
coverage and 40 percent would elect FERS.

Effects on discretionary spending

    Makeup Contributions to the TSP. S. 1232 would have two 
effects on the makeup contributions that agencies pay to the 
TSP. Agencies would not have to pay makeup contributions for 
employees who elect CSRS Offset coverage instead of FERS, but 
payments for individuals who elect FERS coverage would be 
higher than under current law. This latter effect would 
predominate in 2001 and 2002, when agencies would pay 
additional lost earnings on the makeup contributions made by 
employees whose coverage errors were corrected before the 
bill's enactment. In later years, annual agency spending on 
makeup contributions would decline because many employees would 
elect CSRS Offset coverage and not be eligible for makeup TSP 
contributions. CBO estimates that overall agency spending on 
makeup TSP contributions would increase by $11 million over the 
2000-2004 period.
    Makeup Payments to Social Security. Agencies are currently 
responsible for paying makeup Social Security payroll taxes 
covering the last 3 years, 3 months, and 15 days for employees 
whose coverage is changed from CSRS to FERS or CSRS Offset. 
Since agencies would stop correcting coverage errors in the 
first six months of 2000 (and thus make fewer corrections than 
under current law), CBO estimates that makeup payments would 
decrease slightly in that year. However, makeup payments would 
be slightly higher in 2001 as agencies work through the backlog 
of uncorrected errors.
    Makeup Payments to the CSRDF. Under current law, 
adjustments to past agency contributions to the CSRDF are 
completely retroactive. Agencies contribute 8.51 percent of 
basic pay for employees covered by CSRS or CSRS Offset and 10.7 
percent of basic pay for most employees under FERS. Agencies 
thus make additional contributions for employees whose coverage 
is changed from CSRS or CSRS Offset to FERS and receive a 
partial refund of their retirement contributions for employees 
whose coverage is changed from FERS to CSRS or CSRS Offset. 
This bill would have similar requirements, except that agencies 
could no longer receive partial refunds of their contributions. 
Since many employees who would be switched to FERS coverage 
under current law would elect CSRS Offset coverage under the 
bill, the payments that agencies make for retroactive 
adjustments would decrease by $13 million over the 2000-2004 
period.
    Agency Retirement Contributions. The amount that agencies 
contribute toward their employees' retirement would decline by 
$16 million over the 2000-2004 period as more employees are 
covered by CSRS Offset rather than FERS compared to current 
law.
    Employer TSP Contributions. The employees who elect CSRS 
Offset coverage under S. 1232 would no longer be eligible for 
the automatic and matching TSP contributions available under 
FERS, lowering agency spending on TSP contributions by $24 
million over the 2000-2004 period.
    Employer Social Security Contributions. Agency payments of 
Social Security payroll taxes would decline by negligible 
amounts in 2000 and 2001, due primarily to timing differences 
in the number of coverage errors corrected.

Effects on direct spending (on-budget)

    Makeup Payments to the CSRDF. The decrease in agency makeup 
payments to the CSRDF would lower both agency outlays and 
offsetting receipts to the CSRDF. As a result, receipts to the 
trust fund would decrease by $20 million over the 2000-2004 
period. The decrease in receipts is larger than the decrease in 
agency makeup payments because the receipts figure includes 
payments by the Postal Service. (The estimate assumes that 
changes in costs to the Postal Service would be offset by 
changes in postal rates.)
    Agency Retirement Contributions. The decrease in agency 
retirement contributions under the bill would decrease CSRDF 
receipts by $23 million over the 2000-2004 period. The decrease 
in receipts is larger than the decrease in agency retirement 
contributions because the receipts figure includes payments by 
the Postal Service.
    Transfers from the CSRDF to Social Security. Employees who 
have been mistakenly covered by CSRS when they should have been 
in CSRS Offset or FERS have been contributing 7 percent of 
their basic pay to the CSRDF, instead of contributing 0.8 
percent to the CSRDF and 6.2 percent to Social Security. When 
the coverage error is corrected under current law, the 6.2 
percent in erroneous CSRS contributions (up to the Social 
Security taxable maximum) is generally transferred to the 
Social Security trust funds. S. 1232 would continue this 
practice, but transfers from the CSRDF to Social Security would 
decrease by $3 million in 2000 and rise by $3 million in 2001 
due to timing effects.

Effects on direct spending (off-budget)

    CBO estimates that S. 1232 would reduce offsetting receipts 
to the Social Security trust funds by $4 million in 2000 and 
increase receipts by $4 million 2001. These effects reflect the 
fact that agencies would correct fewer coverage errors in 2000 
under S. 1232 but would catch up to their current-law pace by 
the end of 2001.

Effects on revenues

    Employee retirement contributions, which are on-budget, 
would be slightly higher under the bill because it would allow 
a small number of employees who would ordinarily be covered 
only by Social Security to participate in FERS or CSRS Offset 
as well. The amount of the increase would be less than $200,000 
annually. Employee Social Security taxes, which are off-budget, 
would be slightly lower in 2000 and 2001 due to the bill's 
impact on slowing down the correction of coverage errors in 
those years.

Other provisions

    Title V of the bill contains a number of provisions that 
would better integrate CSRS and FERS with the retirement plans 
of the Board of Governors of the Federal Reserve System. The 
bill would allow federal employees who have prior service with 
the Federal Reserve Board to receive full credit for that 
service under FERS. The Bill would also allow individuals who 
switch jobs from other federal agencies to the Federal Reserve 
Board to withdraw their balances in the TSP. Finally, S. 1232 
would exempt from FERS coverage certain employees who return to 
federal employment after a break in service and have five or 
more years of service under the Federal Reserve Board's 
counterpart to CSRS. CBO estimates that these provisions would 
affect only a handful of employees and would not have a 
significant effect on the federal budget.
            Pay-as-you-go-considerations
    The provisions of S. 1232 would affect on-budget direct 
spending and revenues and therefore be subject to pay-as-you-go 
procedures. The pay-as-you-go procedures cover only the current 
year, budget year, and the succeeding four years. The pay-as-
you-go effects of the bill are shown in table 2.

                                    TABLE 2. SUMMARY OF PAY-AS-YOU-GO EFFECTS
----------------------------------------------------------------------------------------------------------------
                                                          By fiscal year, in millions of dollars--
                                           ---------------------------------------------------------------------
                                             2000   2001   2002   2003   2004   2005   2006   2007   2008   2009
----------------------------------------------------------------------------------------------------------------
Change in outlays.........................      2      3      9     13     15     16     17     19     20     22
Change in receipts........................      0      0      0      0      0      0      0      0      0      0
----------------------------------------------------------------------------------------------------------------

            Intergovernmental and private-sector impact
    S. 1232 would change the way the government of the District 
of Columbia corrects errors associated with the incorrect 
enrollment of employees in federal retirement plans. This 
requirement would constitute an intergovernmental mandate as 
defined by UMRA. However, costs associated with making those 
corrections would be minimal, and only a small number of 
District of Columbia employees have been affected by errors 
addressed by the bill. Consequently, CBO estimates that the 
total cost of the mandate would be minimal and would not exceed 
the thresholds established in UMRA.
    S. 1232 would also create a new private-sector mandate by 
requiring Gallaudet University to rectify errors where 
employees were improperly covered under CSRS or FERS. Because 
only a small number of Gallaudet University employees have been 
affected by such errors and the cost per correction would be 
low, CBO estimates that the cost of the mandate would be small.
            Comparison with other estimates
    In March 1999, the house of Representatives approved H.R. 
416, which would also alter the procedures for correcting 
retirement coverage errors. CBO estimated that H.R. 416 would 
increase discretionary spending by $346 million and reduce 
direct spending by $113 million over the 2000-2004 period. The 
drop in direct spending largely reflects additional receipts by 
the Social Security trust funds, which are off-budget.
    CBO's estimate for H.R. 416 differs from that for S. 1232 
for two main reasons. First H.R. 416 has different provisions 
regarding the makeup TSP payments that agencies would make for 
employees who were incorrectly covered by CSRS or CSRS Offset 
when they should have been in FERS. Under the House bill, 
agencies would make lump-sum payments that include imputed 
employee contributions for the period of erroneous coverage 
plus lost earnings. These payments would be significantly 
larger than those required under the Senate bill. Second, H.R. 
416 would require agencies to make additional retroactive 
contributions to the Social Security trust funds. Together, 
these two factors increase discretionary spending and reduce 
off-budget direct spending relative to the provisions in S. 
1232.
    Estimate prepared by: Federal cost: Eric Rollins; impact on 
state, local, and tribal governments: Leo Lex; impact on the 
private sector: John Harris.
    Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                     VII. Executive Communications

                            Office of Personnel Management,
                                                    Washington, DC.
Hon. Fred Thompson,
Chairman, Committee on Governmental Affairs,
Senate, Washington, DC.
    Dear Mr. Chairman: I am writing to offer the views of the 
Office of Personnel Management (OPM) on S. 1232, the ``Federal 
Erroneous Retirement Coverage Corrections Act,'' as introduced 
in the Senate on June 17, 1999. We deeply appreciate the 
attentive and sincere effort on the part of the Committee on 
Governmental Affairs to craft an equitable solution to the 
problems created by erroneous retirement coverage 
determinations. I believe that S. 1232 provides comprehensive 
and equitable relief at a reasonable cost to the Federal 
Government.
    Under current law, Federal agencies have no choice but to 
correct a retirement coverage error when it is discovered, 
effectively ``forcing'' the employee into a new retirement 
plan. For many employees, the correction of a retirement 
coverage error can have devastating consequences on an 
employee's financial circumstances. I have heard heartbreaking 
accounts from Federal employees and their families who find 
they are affected by a retirement coverage error.
    While the format of the bill has changed to mirror the 
House of Representatives' coverage correction bill (H.R. 416), 
S. 1232 is in fact closely based on the Administration's 
proposal for an appropriate and comprehensive solution to the 
problem of erroneous retirement coverage. S. 1232 and the 
Administration's proposal both provide employees affected by a 
retirement coverage error with a choice between corrected 
retirement coverage and the benefit the employee expected to 
receive. S. 1232 further parallels the Administration's 
proposal by keeping the administrative burden and cost of the 
remedy to a minimum. While S. 1232 differs from the 
Administration's proposal in some areas, OPM has no objection 
to the changes concerning the ability of employees to elect 
their coverage. S. 1232 provides a remedy that deals with all 
significant issues concerning the classification of employees. 
Employees, former employees, retirees, and survivors alike are 
covered by this proposal.
    Following is a discussion of the differences between the 
Administration's proposal and S. 1232.

Thrift Savings Plan

    S. 1232 provides that an employee who, due to a retirement 
coverage error, makes retroactive contributions to the Thrift 
Savings Plan (TSP) will receive lost earnings on the make-up 
contributions. The lost earnings will be based on the 
employee's TSP investment history, or the G Fund rate, if there 
is no employee history. S. 1232 requires that the lost earnings 
be paid by the employing agency.
    S. 1232 also contains provisions that permit excess 
employee contributions to remain in the employee's TSP account 
after correction of a retirement coverage error. Currently, 
certain retirement coverage error corrections require that any 
employee TSP contributions that exceed 5 percent of salary be 
returned to the employee. Although this return is not 
considered an early withdrawal from a qualified retirement 
plan, the excess employee TSP contributions are refunded in one 
lump-sum and could significantly increase an employee's tax 
burden for that calendar year. S. 1232 simply provides that the 
excess employee TSP contributions may remain in the employee's 
TSP account, thereby maintaining the tax-deferred status of 
those contributions until the employee chooses to withdraw from 
the account.
    The Administration's proposal would not amend current law 
with regard to the TSP.

Payment of retirement contributions

    S. 1232 stipulates that any excess employer retirement 
contributions created by an employee election will remain in 
the Civil Service Retirement and Disability Fund (CSRDF). It 
also provides that if, due to a retirement coverage error, an 
agency has failed to withhold sufficient employee retirement 
contributions from salary, the agency, rather than the 
employee, must pay the additional employee retirement 
contributions due to the CSRDF.
    The Administration's proposal would not amend current law 
with regard to payment of retirement contributions.

Social Security

    S. 1232 provides that all excess employee retirement 
contributions would be transferred from the CSRDF to the Social 
Security Trust Funds and that employees would not be liable for 
any back Old Age, Survivors, and Disability Insurance (OASDI) 
taxes. Employing agencies will be required to pay into the 
Social Security Trust Funds the employer share of the Social 
Security taxes, subject to the current statute of limitations 
found in the Internal Revenue Code. These provisions, in 
concert with other provisions in the bill concerning the 
reporting of wages to Social Security and existing provisions 
of the Social Security Act, will, in most cases, provide the 
Social Security Trust Funds with more than the amount of taxes 
required under current law. I support the general approach 
taken in the bill regarding Social Security taxes and transfers 
to the Social Security Trusts Funds, but recognize that there 
are some technical issues to resole. I'm happy to work with the 
Committee to assist in drafting the necessary technical 
amendments.
    The Administration's proposal would amend current law by 
requiring transfers to the Social Security Trust Funds from the 
CSRDF and correspondingly reducing the general fund transfers 
to the Social Security Trust Funds that would otherwise occur. 
The Administration's proposal would clearly provide that 
neither the employee nor the employing agency would owe any 
back OASDI taxes or, unlike S. 1232, any amounts equivalent 
thereto.

Technical amendments

    S. 1232 also contains a number of technical amendments that 
are improvements over the Administration's proposal. It extends 
the remedy provisions to a small class of individuals 
erroneously covered by the Federal Employees Retirement System 
that were inadvertently excluded from the Administration's 
proposal. The bill applies the service credit deposit 
provisions found in the Administration's proposal to other 
similarly situated employees. These technical enhancements 
further address the inequities created by errors in retirement 
coverage determinations.

Summary

    In summary, I have no objection to the Senate's passage of 
S. 1232 with the amendments as noted above. It will provide 
long-awaited relief to many federal employees and their 
families who, through no fault of their own, find they are 
affected by a retirement coverage error.
    The Office of Management and Budget advises that there is 
no objection to the submission of this report from the 
standpoint of the Administration's program.
            Sincerely,
                                      Janice R. Lachance, Director.

                     VIII. Changes to Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
material is printed in italic, existing law in which no change 
is proposed is shown in roman):

                     TITLE 5, UNITED STATES CODE

           *       *       *       *       *       *       *


                         PART III--EMPLOYEES

           *       *       *       *       *       *       *


                  Subpart G--Insurance and Annuities

           *       *       *       *       *       *       *


                         CHAPTER 83--RETIREMENT

           *       *       *       *       *       *       *



               Subchapter III--Civil Service Retirement

           *       *       *       *       *       *       *



Sec. 8351. Participation in the Thrift Savings Plan

    (a) * * *
    (b)(1) Except as otherwise provided in this subsection, the 
provisions of subchapters III and VII of chapter 84 of this 
title shall apply with respect to employees and Members making 
contributions to the Thrift Savings Fund under subsection (a) 
of this section.

           *       *       *       *       *       *       *

    [(11)] (8) In applying section 8432b to an employee 
contributing to the Thrift Savings Fund after being restored to 
or reemployed in a position subject to this subchapter, 
pursuant to chapter 43 of title 38--
          (A) reference in such section to contributions under 
        section 8432(a) shall be considered a reference to 
        employee contributions under this section;
          (B) the contribution rate under section 
        8432b(b)(2)(A) shall be the maximum percentage 
        allowable under subsection (b)(2) of this section; and
          (C) subsections (c) and (d) of section 8432b shall be 
        disregarded.
    (9) For the purpose of this section, separation from 
Government employment includes a transfer described in section 
8431. 

           *       *       *       *       *       *       *


            CHAPTER 84--FEDERAL EMPLOYEES' RETIREMENT SYSTEM


                    Subchapter I--General Provisions

Sec.
8401. Definitions.

           *       *       *       *       *       *       *


                  Subchapter III--Thrift Savings Plan

8431. Certain transfers to be treated as a separation.

           *       *       *       *       *       *       *


                   Subchapter I--General Provisions

           *       *       *       *       *       *       *



Sec. 8402. Federal Employees' Retirement System; exclusions

    (a) The provisions of this chapter comprise the Federal 
Employees' Retirement System.
    (b) The provisions of this chapter shall not apply with 
respect to--
          (1) * * *
          [(2)(A) any employee or Member who has separated from 
        the service after--
                  [(i) having been subject to subchapter III of 
                chapter 83 of this title, or subchapter I of 
                chapter 8 of the Foreign Service Act of 1980; 
                and
                  [(ii) having completed at least 5 years of 
                civilian service creditable under subchapter 
                III of chapter 83 of this title, or at least 5 
                years of civilian service creditable under 
                subchapter I of the Foreign Service Act of 1980 
                (determined without regard to any such deposit 
                or redeposit requirement under either such 
                subchapter, or any requirement that the 
                individual become subject to either such 
                subchapter after performing the service 
                involved); or]
          (2)(A) any employee or Member who has separated from 
        the service after--
                  (i) having been subject to--
                          (I) subchapter III of chapter 83 of 
                        this title;
                          (II) subchapter I of chapter 8 of 
                        title I of the Foreign Service Act of 
                        1980; or
                          (III) the benefit structure for 
                        employees of the Board of Governors of 
                        the Federal Reserve System appointed 
                        before January 1, 1984, that is a 
                        component of the Retirement Plan for 
                        Employees of the Federal Reserve 
                        System, established under section 10 of 
                        the Federal Reserve Act; and
                  (ii) having completed--
                          (I) at least 5 years of civilian 
                        service creditable under subchapter III 
                        of chapter 83 of this title;
                          (II) at least 5 years of civilian 
                        service creditable under subchapter I 
                        of chapter 8 of title I of the Foreign 
                        Service Act of 1980; or
                          (III) at least 5 years of civilian 
                        service (other than any service 
                        performed in the employ of a Federal 
                        Reserve Bank) creditable under the 
                        benefit structure for employees of the 
                        Board of Governors of the Federal 
                        Reserve System appointed before January 
                        1, 1984, that is a component of the 
                        Retirement Plan for Employees of the 
                        Federal Reserve System, established 
                        under section 10 of the Federal Reserve 
                        Act,
        determined without regard to any deposit or redeposit 
        requirement under either such subchapter or under such 
        benefit structure, or any requirement that the 
        individual become subject to either such subchapter or 
        to such benefit structure after performing the service 
        involved; or

           *       *       *       *       *       *       *

    [(d) Paragraph (2) of subsection (b) shall not apply to an 
individual who becomes subject to subchapter II of chapter 8 of 
title I of the Foreign Service Act of 1980 (relating to the 
Foreign Service Pension System) pursuant to an election and who 
subsequently enters a position in which, but for such paragraph 
(2), he would be subject to this chapter.]
    (d) Paragraph (2) of subsection (b) shall not apply to an 
individual who--
          (1) becomes subject to--
                  (A) subchapter II of chapter 8 of title I of 
                the Foreign Service Act of 1980 (relating to 
                the Foreign Service Pension System) pursuant to 
                an election; or
                  (B) the benefit structure in which employees 
                of the Board of Governors of the Federal 
                Reserve System appointed on or after January 1, 
                1984, participate, which benefit structure is a 
                component of the Retirement Plan for Employees 
                of the Federal Reserve System, established 
                under section 10 of the Federal Reserve Act 
                (and any redesignated or successor version of 
                such benefit structure, if so identified in 
                writing by the Board of Governors of the 
                Federal Reserve System for purposes of this 
                chapter); and
          (2) subsequently enters a position in which, but for 
        paragraph (2) of subsection (b), such individual would 
        be subject to this chapter.

           *       *       *       *       *       *       *


                     Subchapter II--Basic Annuity

           *       *       *       *       *       *       *



Sec. 8411. Creditable service

    (a) * * *
    (b) For the purpose of this chapter, creditable service of 
an employee or Member includes--
          (1) * * *

           *       *       *       *       *       *       *

          (3) except as provided in subsection (f) or (h), any 
        civilian service (performed before January 1, 1989, 
        other than any service under paragraph (1) or (2)) 
        which, but for the amendments made by subsections 
        (a)(4) and (b) of section 202 of the Federal Employees' 
        Retirement System Act of 1986, would be creditable 
        under subchapter III of chapter 83 of this title 
        (determined without regard to any deposit or redeposit 
        requirement under such subchapter, any requirement that 
        the individual become subject to such subchapter after 
        performing the service involved, or any requirement 
        that the individual give notice in writing to the 
        official by whom the individual is paid of such 
        individual's desire to become subject to such 
        subchapter); [and]
          (4) a period of service (other than any service under 
        any [of the proceeding provisions] other paragraph of 
        this subsection and other than military service) that 
        was creditable under the Foreign Service Pension System 
        described in subchapter II of chapter 8 of the Foreign 
        Service Act of 1980, if the employee or Member waives 
        credit for such service under the Foreign Service 
        Pension System and makes a payment to the Fund equal to 
        the amount that would have been deducted from pay under 
        section 8422(a) had the employee been subject to this 
        chapter during such period of service (together with 
        interest on such amount computed under paragraphs (2) 
        and (3) of section 8334 (e)) [.]; and
          (5) a period of service (other than any service under 
        any other paragraph of this subsection, any military 
        service, and any service performed in the employ of a 
        Federal Reserve Bank) that was creditable under the 
        Bank Plan (as defined in subsection (i)), if the 
        employee waives credit for such service under the Bank 
        Plan and makes a payment to the Fund equal to the 
        amount that would have been deducted from pay under 
        section 8422 (a) had the employee been subject to this 
        chapter during such period of service (together with 
        interest on such amount computed under paragraphs (2) 
        and (3) of section 8334 (e)).
Paragraph (5) shall not apply in the case of any employee as to 
whom subsection (g) (or, to the extent subchapter III of 
chapter 83 is involved, section 8332 (n)) otherwise applies.

           *       *       *       *       *       *       *

    (i) For purposes of subsection (b)(5), the term ``Bank 
Plan'' means the benefit structure in which employees of the 
Board of Governors of the Federal Reserve System appointed on 
or after January 1, 1984, participate, which benefit structure 
is a component of the Retirement Plan for Employees of the 
Federal Reserve System, established under section 10 of the 
Federal Reserve Act (and any redesignated or successor version 
of such benefit structure, if so identified in writing by the 
Board of Governors of the Federal Reserve System for purposes 
of this chapter).

           *       *       *       *       *       *       *


                  Subchapter III--Thrift Savings Plan


Sec. 8431. Certain transfers to be treated as a separation

    (a) For purposes of this subchapter, separation from 
Government employment includes a transfer from a position that 
is subject to one of the retirement systems described in 
subsection (b) to a position that is not subject to any of 
them.
    (b) The retirement systems described in this subsection 
are--
          (1) the retirement system under this chapter;
          (2) the retirement system under subchapter III of 
        chapter 83; and
          (3) any other retirement system under which 
        individuals may contribute to the Thrift Savings Fund 
        through withholdings from pay.

           *       *       *       *       *       *       *