sa 1825 to s.1813 including phased retirement authority

8/2/2019 SA 1825 to S.1813 Including Phased Retirement Authority

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Note: Section regarding phased retirement for federal employees

begins on page 9. The potential significance of the phased-retirement concept for the U.S. Postal Service is explored in Why Not

Allow Phased Retirement for Postal Workers?at Dead Tree Edition,which is written by D. Eadward Tree, who posted this document.

SA 1825. Mr. BAUCUS (for himself, Mr. Bingaman, Mr. Wyden, Mr.Merkley, Mr. Tester, Mr. Crapo, Mr. Risch, and Ms. Murkowski)submitted an amendment intended to be proposed by him to the billS. 1813, to reauthorize Federal-aid highway and highway safetyconstruction programs, and for other purposes; as follows:

At the end of division D, insert the following:

TITLE IV--REAUTHORIZATION OF CERTAIN PROGRAMS

Subtitle A--Secure Rural Schools and Community Self-determinationProgram

SEC. 40401. SECURE RURAL SCHOOLS AND COMMUNITY SELF-DETERMINATION PROGRAM.

(a)Amendments.--The Secure Rural Schools and Community Self-Determination Act of 2000 (16 U.S.C. 7101 et seq.) is amended--

(1) in section 3(11)--

(A) in subparagraph (A), by striking ``and'' after the semicolon at theend;

(B) in subparagraph (B)--

(i) by striking ``fiscal year 2009 and each fiscal year thereafter'' andinserting ``each of fiscal years 2009 through 2011''; and

(ii) by striking the period at the end and inserting ``; and''; and
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(C) by adding at the end the following:

``(C) for fiscal year 2012 and each fiscal year thereafter, the amountthat is equal to 95 percent of the full funding amount for the preceding fiscalyear.'';

(2) in sections 101, 102, 203, 207, 208, 304, and 402, by striking``2011'' each place it appears and inserting ``2012'';

(3) in section 102--

(A) by striking ``2008'' each place it appears and inserting ``2012'';

(B) in subsection (b)(2)(B), by inserting ``in 2012'' before ``, theelection''; and

(C) in subsection (d)--

(i) in paragraph (1)(A), by striking ``paragraph (3)(B)'' and inserting``subparagraph (D)''; and

(ii) in paragraph (3)--

(I) by striking subparagraph (A) and inserting the following:

``(A) NOTIFICATION.--The Governor of each eligible State shall notify

the Secretary concerned of an election by an eligible county under thissubsection not later than September 30, 2012, and each September 30thereafter for each succeeding fiscal year.'';

(II) by redesignating subparagraph (B) as subparagraph (D) and movingthe subparagraph so as to appear at the end of paragraph (1) of subsection(d); and

(III) by inserting after subparagraph (A) the following:

``(B) FAILURE TO ELECT.--If the Governor of an eligible State fails to

notify the Secretary concerned of the election for an eligible county by thedate specified in subparagraph (A)--

``(i) the eligible county shall be considered to have elected to expend 80percent of the funds in accordance with paragraph (1)(A); and


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``(ii) the remainder shall be available to the Secretary concerned to carryout projects in the eligible county to further the purpose described in section202(b).'';

(4) in section 103(d)(2), by striking ``fiscal year 2011'' and inserting

`èach of fiscal years 2011 and 2012'';

(5) in section 202, by adding at the end the following:

``(c)Administrative Expenses.--A resource advisory committee may, inaccordance with section 203, propose to use not more than 10 percent ofthe project funds of an eligible county for any fiscal year for administrativeexpenses associated with operating the resource advisory committee underthis title.'';

(6) in section 204(e)(3)(B)(iii), by striking `ànd 2011'' and inserting``through 2012'';

(7) in section 205(a)(4), by striking ``2006'' each place it appears andinserting ``2011'';

(8) in section 208(b), by striking ``2012'' and inserting ``2013'';

(9) in section 302(a)(2)(A), by inserting `ànd'' after the semicolon; and

(10) in section 304(b), by striking ``2012'' and inserting ``2013''.

(b) Failure to Make Election.--For each county that failed to make anelection for fiscal year 2011 in accordance with section 102(d)(3)(A) of theSecure Rural Schools and Community Self-Determination Act of 2000 (16U.S.C. 7112(d)(3)(A)), there shall be available to the Secretary ofAgriculture to carry out projects to further the purpose described in section202(b) of that Act (16 U.S.C. 7122(b)), from amounts in the Treasury nototherwise appropriated, the amount that is equal to 15 percent of the totalshare of the State payment that otherwise would have been made to thecounty under that Act for fiscal year 2011.

Subtitle B--Payment in Lieu of Taxes Program

SEC. 40411. PAYMENTS IN LIEU OF TAXES.


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Section 6906 of title 31, United States Code, is amended by striking``2012'' and inserting ``2013''.

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Subtitle C--Offsets

SEC. 40421. TAX REPORTING FOR LIFE SETTLEMENTTRANSACTIONS.

(a) In General.--Subpart B of part III of subchapter A of chapter 61 of theInternal Revenue Code of 1986 is amended by adding at the end thefollowing new section:

``SEC. 6050X. RETURNS RELATING TO CERTAIN LIFE INSURANCECONTRACT TRANSACTIONS.

``(a) Requirement of Reporting of Certain Payments.--

``(1) IN GENERAL.--Every person who acquires a life insurance contractor any interest in a life insurance contract in a reportable policy sale duringany taxable year shall make a return for such taxable year (at such time andin such manner as the Secretary shall prescribe) setting forth--

``(A) the name, address, and TIN of such person,

``(B) the name, address, and TIN of each recipient of payment in thereportable policy sale,

``(C) the date of such sale,

``(D) the name of the issuer of the life insurance contract sold and thepolicy number of such contract, and

``(E) the amount of each payment.

``(2) STATEMENT TO BE FURNISHED TO PERSONS WITH RESPECTTO WHOM INFORMATION IS REQUIRED.--Every person required tomake a return under this subsection shall furnish to each person whosename is required to be set forth in such return a written statement showing--


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``(1) IN GENERAL.--Every person who makes a payment of reportabledeath benefits during any taxable year shall make a return for such taxableyear (at such time and in such manner as the Secretary shall prescribe)setting forth--

``(A) the name, address, and TIN of the person making such payment,

``(B) the name, address, and TIN of each recipient of such payment,

``(C) the date of each such payment, and

``(D) the amount of each such payment.

``(2) STATEMENT TO BE FURNISHED TO PERSONS WITH RESPECTTO WHOM INFORMATION IS REQUIRED.--Every person required tomake a return under this subsection shall furnish to each person whose

name is required to be set forth in such return a written statement showing--

``(A) the name, address, and phone number of the information contactof the person required to make such return, and

``(B) the information required to be shown on such return with respect toeach recipient of payment whose name is required to be set forth in suchreturn.

``(d) Definitions.--For purposes of this section:

``(1) PAYMENT.--The term `payment' means the amount of cash andthe fair market value of any consideration transferred in a reportable policysale.

``(2) REPORTABLE POLICY SALE.--The term `reportable policy sale'has the meaning given such term in section 101(a)(3)(B).

``(3) ISSUER.--The term `issuer' means any life insurance companythat bears the risk with respect to a life insurance contract on the date any

return or statement is required to be made under this section.

``(4) REPORTABLE DEATH BENEFITS.--The term `reportable deathbenefits' means amounts paid by reason of the death of the insured under alife insurance contract that has been transferred in a reportable policy sale.''.


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(b) Clerical Amendment.--The table of sections for subpart B of part III ofsubchapter A of chapter 61 of the Internal Revenue Code of 1986 isamended by inserting after the item relating to section 6050W the followingnew item:

``Sec..6050X..Returns relating to certain life insurance contracttransactions.''.

(c) Conforming Amendments.--

(1) Subsection (d) of section 6724 of the Internal Revenue Code of 1986is amended--

(A) by striking `òr'' at the end of clause (xxiv) of paragraph (1)(B), bystriking `ànd'' at the end of clause (xxv) of such paragraph and inserting`òr'', and by inserting after such clause (xxv) the following new clause:

``(xxvi) section 6050X (relating to returns relating to certain lifeinsurance contract transactions), and'', and

(B) by striking `òr'' at the end of subparagraph (GG) of paragraph (2),by striking the period at the end of subparagraph (HH) of such paragraphand inserting ``, or'', and by inserting after such subparagraph (HH) thefollowing new subparagraph:

``(II) subsection (a)(2), (b)(2), or (c)(2) of section 6050X (relating to

returns relating to certain life insurance contract transactions).''.

(2) Section 6047 of such Code is amended--

(A) by redesignating subsection (g) as subsection (h),

(B) by inserting after subsection (f) the following new subsection:

``(g) Information Relating to Life Insurance Contract Transactions.--Thissection shall not apply to any information which is required to be reportedunder section 6050X.'', and

(C) by adding at the end of subsection (h), as so redesignated, thefollowing new paragraph:

``(4) For provisions requiring reporting of information relating to certainlife insurance contract transactions, see section 6050X.''.


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(d) Effective Date.--The amendments made by this section shall apply to--

(1) reportable policy sales after December 31, 2012, and

(2) reportable death benefits paid after December 31, 2012.

SEC. 40422. CLARIFICATION OF TAX BASIS OF LIFE INSURANCECONTRACTS.

(a) Clarification With Respect to Adjustments.--Paragraph (1) of section1016(a) of the Internal Revenue Code of 1986 is amended by strikingsubparagraph (A) and all that follows and inserting the following:

``(A) for--

``(i) taxes or other carrying charges described in section 266; or

``(ii) expenditures described in section 173 (relating to circulationexpenditures),

for which deductions have been taken by the taxpayer in determiningtaxable income for the taxable year or prior taxable years; or

``(B) for mortality, expense, or other reasonable charges incurred underan annuity or life insurance contract;''.

(b) Effective Date.--The amendment made by this section shall apply totransactions entered into after August 25, 2009.

SEC. 40423. EXCEPTION TO TRANSFER FOR VALUABLECONSIDERATION RULES.

(a) In General.--Subsection (a) of section 101 of the Internal RevenueCode of 1986 is amended by adding at the end the following new paragraph:

``(3) EXCEPTION TO VALUABLE CONSIDERATION RULES FOR

COMMERCIAL TRANSFERS.--

``(A) IN GENERAL.--The second sentence of paragraph (2) shall notapply in the case of a transfer of a life insurance contract, or any interesttherein, which is a reportable policy sale.

``(B) REPORTABLE POLICY SALE.--For purposes of this paragraph, theterm `reportable policy sale' means the acquisition of an interest in a life


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insurance contract, directly or indirectly, if the acquirer has no substantialfamily, business, or financial relationship with the insured apart from theacquirer's interest in such life insurance contract. For purposes of thepreceding sentence, the term `indirectly' applies to the acquisition of aninterest in a partnership, trust, or other entity that holds an interest in the

life insurance contract.''.

(b) Conforming Amendment.--Paragraph (1) of section 101(a) of theInternal Revenue Code of 1986 is amended by striking ``paragraph (2)'' andinserting ``paragraphs (2) and (3)''.

(c) Effective Date.--The amendments made by this section shall apply totransfers after December 31, 2012.

SEC. 40424. PHASED RETIREMENT AUTHORITY.

(a) CSRS.--Chapter 83 of title 5, United States Code, is amended--

(1) in section 8331--

(A) in paragraph (30) by striking ``and'' at the end;

(B) in paragraph (31) by striking the period at the end and inserting ``;and''; and

(C) by adding at the end the following:

``(32) `Director' means the Director of the Office of PersonnelManagement.'';

(2) by inserting after section 8336 the following:`` 8336a. Phasedretirement

``(a) For the purposes of this section--

``(1) the term `composite retirement annuity' means the annuitycomputed when a phased retiree attains full retirement status;

``(2) the term `full retirement status' means that a phased retiree hasceased employment and is entitled, upon application, to a compositeretirement annuity;

``(3) the term `phased employment' means the less-than-full-timeemployment of a phased retiree;


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``(4) the term `phased retiree' means a retirement-eligible employeewho--

``(A) makes an election under subsection (b); and

``(B) has not entered full retirement status;

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``(5) the term `phased retirement annuity' means the annuity payableunder this section before full retirement;

``(6) the term `phased retirement percentage' means the percentagewhich, when added to the working percentage for a phased retiree, producesa sum of 100 percent;

``(7) the term `phased retirement period' means the period beginning onthe date on which an individual becomes entitled to receive a phasedretirement annuity and ending on the date on which the individual dies orseparates from phased employment;

``(8) the term `phased retirement status' means that a phased retiree isconcurrently employed in phased employment and eligible to receive aphased retirement annuity;

``(9) the term `retirement-eligible employee'--

``(A) means an individual who, if the individual separated from theservice, would meet the requirements for retirement under subsection (a) or(b) of section 8336; and

``(B) does not include--

``(i) an individual who, if the individual separated from the service,would meet the requirements for retirement under subsection (c), (e), (m),or (n) of section 8336; or

``(ii) a law enforcement officer, firefighter, nuclear materials courier, airtraffic controller, customs and border protection officer, or member of theCapitol Police or Supreme Court Police; and

``(10) the term `working percentage' means the percentage of full-timeemployment equal the quotient obtained by dividing--


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``(A) the number of hours per pay period to be worked by a phasedretiree as scheduled in accordance with subsection (b)(2); by

``(B) the number of hours per pay period to be worked by an employeeserving in a comparable position on a full-time basis.

``(b)(1) With the concurrence of the head of the employing agency, andunder regulations promulgated by the Director, a retirement-eligibleemployee who has been employed on a full time basis for not less than the3-year period ending on the date on which the retirement-eligible employeemakes an election under this subsection may elect to enter phasedretirement status.

``(2)(A) Subject to subparagraph (B), at the time of entering phasedretirement status, a phased retiree shall be appointed to a position for whichthe working percentage is 50 percent.

``(B) The Director may, by regulation, provide for working percentagesdifferent from the percentage specified under subparagraph (A), which shallbe not less than 20 percent and not more than 80 percent.

``(C) The working percentage for a phased retiree may not be changedduring the phased retiree's phased retirement period.

``(D)(i) Not less than 20 percent of the hours to be worked by a phasedretiree shall consist of mentoring.

``(ii) The Director may, by regulation, provide for exceptions to therequirement under clause (i).

``(3) A phased retiree--

``(A) may not be employed in more than one position at any time; and

``(B) may transfer to another position in the same or a different agency,if the transfer does not result in a change in the working percentage.

``(4) A retirement-eligible employee may make only one election underthis subsection during the retirement-eligible employee's lifetime.

``(5) A retirement-eligible employee who makes an election under thissubsection may not make an election under section 8343a.


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``(c)(1) Except as otherwise provided under this subsection, the phasedretirement annuity for a phased retiree is the product obtained bymultiplying--

``(A) the amount of an annuity computed under section 8339 that would

have been payable to the phased retiree if, on the date on which the phasedretiree enters phased retirement status, the phased retiree had separatedfrom service and retired under section 8336(a) or (b); by

``(B) the phased retirement percentage for the phased retiree.

``(2) A phased retirement annuity shall be paid in addition to the basicpay for the position to which a phased retiree is appointed during phasedemployment.

``(3) A phased retirement annuity shall be adjusted in accordance withsection 8340.

``(4)(A) A phased retirement annuity shall not be subject to reduction forany form of survivor annuity, shall not serve as the basis of the computationof any survivor annuity, and shall not be subject to any court order requiringa survivor annuity to be provided to any individual.

``(B) A phased retirement annuity shall be subject to a court orderproviding for division, allotment, assignment, execution, levy, attachment,garnishment, or other legal process on the same basis as other annuities.

``(5) Any reduction of a phased retirement annuity based on an electionunder section 8334(d)(2) shall be applied to the phased retirement annuityafter computation under paragraph (1).

``(6)(A) Any deposit, or election of an actuarial annuity reduction in lieuof a deposit, for military service or for creditable civilian service for whichretirement deductions were not made or refunded shall be made by aretirement-eligible employee at or before the time the retirement-eligibleemployee enters phased retirement status. No such deposit may be made,or actuarial adjustment in lieu thereof elected, at the time a phased retiree

enters full retirement status.

``(B) Notwithstanding subparagraph (A), if a phased retiree does notmake such a deposit and dies in service as a phased retiree, a survivor ofthe phased retiree shall have the same right to make such deposit as wouldhave been available had the employee not entered phased retirement statusand died in service.


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``(C) If a phased retiree makes an election for an actuarial annuityreduction under section 8334(d)(2) and dies in service as a phased retiree,the amount of any deposit upon which such actuarial reduction shall havebeen based shall be deemed to have been fully paid.

``(7) A phased retirement annuity shall commence on the date on whicha phased retiree enters phased employment.

``(8) No unused sick leave credit may be used in the computation of thephased retirement annuity.

``(d) All basic pay not in excess of the full-time rate of pay for theposition to which a phased retiree is appointed shall be deemed to be basicpay for purposes of section 8334.

``(e) Under such procedures as the Director may prescribe, a phasedretiree may elect to enter full retirement status at any time. Upon makingsuch an election, a phased retiree shall be entitled to a composite retirementannuity.

``(f)(1) Except as provided otherwise under this subsection, a compositeretirement annuity is a single annuity computed under regulationsprescribed by the Director, equal to the sum of--

``(A) the amount of the phased retirement annuity as of the date of fullretirement, before any reduction based on an election under section

8334(d)(2), and including any adjustments made under section 8340; and

``(B) the product obtained by multiplying--

``(i) the amount of an annuity computed under section 8339 that wouldhave been payable at the time of full retirement if the individual had notelected a phased retirement and as if the individual was employed on a full-time basis in the position occupied during the phased retirement period andbefore any reduction for survivor annuity or reduction based on an electionunder section 8334(d)(2); by

``(ii) the working percentage.

``(2) After computing a composite retirement annuity under paragraph(1), the Director shall adjust the amount of the annuity for any applicablereductions for a survivor annuity and any previously elected actuarialreduction under section 8334(d)(2).


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``(3) A composite retirement annuity shall be adjusted in accordancewith section 8340, except that subsection (c)(1) of that section shall notapply.

``(4) In computing a composite retirement annuity under paragraph

(1)(B)(i), the unused sick leave to the credit of a phased retiree at the timeof entry into full retirement status shall be adjusted by dividing the numberof hours of unused sick leave by the working percentage.

``(g)(1) Under such procedures and conditions as the Director mayprovide, and with the concurrence of the head of the employing agency, aphased retiree may elect to terminate phased retirement status and returnto a full-time work schedule.

``(2) Upon entering a full-time work schedule based upon an electionunder paragraph (1), the phased retirement annuity of a phased retiree shallterminate.

``(3) After the termination of a phased retirement annuity under thissubsection, the individual's rights under this subchapter shall be determinedbased on the law in effect at the time of any subsequent separation fromservice. For purposes of this subchapter or chapter 84, at time of thesubsequent separation from service, the phased retirement period shall betreated as if it had been a period of part-time employment with the workschedule described in subsection (b)(2).

``(h) For purposes of section 8341--

``(1) the death of a phased retiree shall be deemed to be the death inservice of an employee; and

``(2) the phased retirement period shall be deemed to have been aperiod of part-time employment with the work schedule described insubsection (b)(2).

``(i) Employment of a phased retiree shall not be deemed to be part-timecareer employment, as defined in section 3401(2).

``(j) A phased retiree is not eligible to apply for an annuity under section8337.

``(k) For purposes of section 8341(h)(4), retirement shall be deemed tooccur on the date on which a phased retiree enters into full retirementstatus.


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``(l) For purposes of sections 8343 and 8351, and subchapter III ofchapter 84, a phased retiree shall be deemed to be an employee.

``(m) A phased retiree is not subject to section 8344.

``(n) For purposes of chapter 87, a phased retiree shall be deemed to bereceiving basic pay at the rate of a full-time employee in the position towhich the phased retiree is appointed.''; and

(3) in the table of sections by inserting after the item relating to section8336 the following:

``8336a. Phased retirement.''.

(b) FERS.--Chapter 84 of title 5, United States Code, is amended--

(1) by inserting after section 8412 the following new section:`` 8412a.Phased retirement

``(a) For the purposes of this section--

``(1) the term `composite retirement annuity' means the annuitycomputed when a phased retiree attains full retirement status;

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``(2) the term `full retirement status' means that a phased retiree hasceased employment and is entitled, upon application, to a compositeretirement annuity;

``(3) the term `phased employment' means the less-than-full-timeemployment of a phased retiree;

``(4) the term `phased retiree' means a retirement-eligible employeewho--

``(A) makes an election under subsection (b); and

``(B) has not entered full retirement status;

``(5) the term `phased retirement annuity' means the annuity payableunder this section before full retirement;


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``(6) the term `phased retirement percentage' means the percentagewhich, when added to the working percentage for a phased retiree, producesa sum of 100 percent;

``(7) the term `phased retirement period' means the period beginning on

the date on which an individual becomes entitled to receive a phasedretirement annuity and ending on the date on which the individual dies orseparates from phased employment;

``(8) the term `phased retirement status' means that a phased retiree isconcurrently employed in phased employment and eligible to receive aphased retirement annuity;

``(9) the term `retirement-eligible employee'--

``(A) means an individual who, if the individual separated from theservice, would meet the requirements for retirement under subsection (a) or(b) of section 8412; and

``(B) does not include--

``(i) an individual who, if the individual separated from the service,would meet the requirements for retirement under subsection (d) or (e) ofsection 8412; or

``(ii) a law enforcement officer, firefighter, nuclear materials courier, air

traffic controller, customs and border protection officer, or member of theCapitol Police or Supreme Court Police; and

``(10) the term `working percentage' means the percentage of full-timeemployment equal to the quotient obtained by dividing--

``(A) the number of hours per pay period to be worked by a phasedretiree as scheduled in accordance with subsection (b)(2); by

``(B) the number of hours per pay period to be worked by an employeeserving in a comparable position on a full-time basis.

``(b)(1) With the concurrence of the head of the employing agency, andunder regulations promulgated by the Director, a retirement-eligibleemployee who has been employed on a full time basis for not less than the3-year period ending on the date on which the retirement-eligible employeemakes an election under this subsection may elect to enter phasedretirement status.


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``(2)(A) Subject to subparagraph (B), at the time of entering phasedretirement status, a phased retiree shall be appointed to a position for whichthe working percentage is 50 percent.

``(B) The Director may, by regulation, provide for working percentages

different from the percentage specified under subparagraph (A), which shallbe not less than 20 percent and not more than 80 percent.

``(C) The working percentage for a phased retiree may not be changedduring the phased retiree's phased retirement period.

``(D)(i) Not less than 20 percent of the hours to be worked by a phasedretiree shall consist of mentoring.

``(ii) The Director may, by regulation, provide for exceptions to therequirement under clause (i).

``(3) A phased retiree--

``(A) may not be employed in more than one position at any time; and

``(B) may transfer to another position in the same or a different agency,if the transfer does not result in a change in the working percentage.

``(4) A retirement-eligible employee may make only one election underthis subsection during the retirement-eligible employee's lifetime.

``(5) A retirement-eligible employee who makes an election under thissubsection may not make an election under section 8420a.

``(c)(1) Except as otherwise provided under this subsection, the phasedretirement annuity for a phased retiree is the product obtained bymultiplying--

``(A) the amount of an annuity computed under section 8415 that wouldhave been payable to the phased retiree if, on the date on which the phasedretiree enters phased retirement status, the phased retiree had separated

from service and retired under section 8412 (a) or (b); by

``(B) the phased retirement percentage for the phased retiree.

``(2) A phased retirement annuity shall be paid in addition to the basicpay for the position to which a phased retiree is appointed during the phasedemployment.


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``(3) A phased retirement annuity shall be adjusted in accordance withsection 8462.

``(4)(A) A phased retirement annuity shall not be subject to reduction forany form of survivor annuity, shall not serve as the basis of the computation

of any survivor annuity, and shall not be subject to any court order requiringa survivor annuity to be provided to any individual.

``(B) A phased retirement annuity shall be subject to a court orderproviding for division, allotment, assignment, execution, levy, attachment,garnishment, or other legal process on the same basis as other annuities.

``(5)(A) Any deposit, or election of an actuarial annuity reduction in lieuof a deposit, for military service or for creditable civilian service for whichretirement deductions were not made or refunded, shall be made by aretirement-eligible employee at or before the time the retirement-eligibleemployee enters phased retirement status. No such deposit may be made,or actuarial adjustment in lieu thereof elected, at the time a phased retireeenters full retirement status.

``(B) Notwithstanding subparagraph (A), if a phased retiree does notmake such a deposit and dies in service as a phased retiree, a survivor ofthe phased retiree shall have the same right to make such deposit as wouldhave been available had the employee not entered phased retirement statusand died in service.

``(6) A phased retirement annuity shall commence on the date on whicha phased retiree enters phased employment.

``(7) No unused sick leave credit may be used in the computation of thephased retirement annuity.

``(d) All basic pay not in excess of the full-time rate of pay for theposition to which a phased retiree is appointed shall be deemed to be basicpay for purposes of section 8422 and 8423.

``(e) Under such procedures as the Director may prescribe, a phased

retiree may elect to enter full retirement status at any time. Upon makingsuch an election, a phased retiree shall be entitled to a composite retirementannuity.

``(f)(1) Except as provided otherwise under this subsection, a compositeretirement annuity is a single annuity computed under regulationsprescribed by the Director, equal to the sum of--


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``(A) the amount of the phased retirement annuity as of the date of fullretirement, including any adjustments made under section 8462; and

``(B) the product obtained by multiplying--

``(i) the amount of an annuity computed under section 8412 that wouldhave been payable at the time of full retirement if the individual had notelected a phased retirement and as if the individual was employed on a full-time basis in the position occupied during the phased retirement period andbefore any adjustment to provide for a survivor annuity; by

``(ii) the working percentage;

``(2) After computing a composite retirement annuity under paragraph(1), the Director shall adjust the amount of the annuity for any applicablereductions for a survivor annuity.

``(3) A composite retirement annuity shall be adjusted in accordancewith section 8462, except that subsection (c)(1) of that section shall notapply.

``(4) In computing a composite retirement annuity under paragraph(1)(B)(i), the unused sick leave to the credit of a phased retiree at the timeof entry into full retirement status shall be adjusted by dividing the numberof hours of unused sick leave by the working percentage.

``(g)(1) Under such procedures and conditions as the Director mayprovide, and with the concurrence of the head of employing agency, aphased retiree may elect to terminate phased retirement status and returnto a full-time work schedule.

``(2) Upon entering a full-time work schedule based on an election underparagraph (1), the phased retirement annuity of a phased retiree shallterminate.

``(3) After termination of the phased retirement annuity under thissubsection, the individual's rights under this chapter shall be determined

based on the law in effect at the time of any subsequent separation fromservice. For purposes of this chapter, at the time of the subsequentseparation from service, the phased retirement period shall be treated as if ithad been a period of part-time employment with the work scheduledescribed in subsection (b)(2).

``(h) For purposes of subchapter IV--


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``(1) the death of a phased retiree shall be deemed to be the death inservice of an employee;

``(2) except for purposes of section 8442(b)(1)(A)(i), the phasedretirement period shall be deemed to have been a period of part-time

employment with the work schedule described in subsection (b)(2) of thissection; and

``(3) for purposes of section 8442(b)(1)(A)(i), the phased retiree shall bedeemed to have been at the full-time rate of pay for the position occupied.

``(i) Employment of a phased retiree shall not be deemed to be part-timecareer employment, as defined in section 3401(2).

``(j) A phased retiree is not eligible to receive an annuity supplementunder section 8421.

``(k) For purposes of subchapter III, a phased retiree shall be deemed tobe an employee.

``(l) For purposes of section 8445(d), retirement shall be deemed tooccur on the date on which a phased retiree enters into full retirementstatus.

``(m) A phased retiree is not eligible to apply for an annuity undersubchapter V.

``(n) A phased retiree is not subject to section 8468.

``(o) For purposes of chapter 87, a phased retiree shall be deemed to bereceiving basic pay at the rate of a full-time employee in the position towhich the phased retiree is appointed.''; and

(2) in the table of sections by inserting after the item relating to section8412 the following:

``8412a. Phased retirement.''.

(c) Effective Date.--The amendments made by this section shall takeeffect on the effective date of the implementing regulations issued by theDirector of the Office of Personnel Management.

sa 1825 to s.1813 including phased retirement authority

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