[Senate Report 112-205]
[From the U.S. Government Publishing Office]
112th Congress Report
SENATE
2d Session 112-205
_______________________________________________________________________
Calendar No. 496
UNITED STATES SECRET SERVICE RETIREMENT ACT OF 2012
__________
R E P O R T
of the
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
to accompany
S. 1515
TO PERMIT CERTAIN MEMBERS OF THE UNITED STATES SECRET SERVICE AND
CERTAIN MEMBERS OF THE UNITED STATES SECRET SERVICE UNIFORMED DIVISION
WHO WERE APPOINTED IN 1984, 1985, OR 1986 TO ELECT TO BE COVERED UNDER
THE DISTRICT OF COLUMBIA POLICE AND FIREFIGHTER RETIREMENT AND
DISABILITY SYSTEM IN THE SAME MANNER AS MEMBERS APPOINTED PRIOR TO 1984
August 28, 2012.--Ordered to be printed
Filed, under authority of the order of the Senate of August 2, 2012
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri ROB PORTMAN, Ohio
JON TESTER, Montana RAND PAUL, Kentucky
MARK BEGICH, Alaska JERRY MORAN, Kansas
Michael L. Alexander, Staff Director
Beth M. Grossman, Deputy Staff Director and Chief Counsel
Kenya N. Wiley, Counsel
Nicholas A. Rossi, Minority Staff Director
Mark B. LeDuc, Minority General Counsel
John A. Kane, Minority Professional Staff Member
Trina Driessnack Tyrer, Chief Clerk
Calendar No. 496
112th Congress Report
SENATE
2d Session 112-205
======================================================================
UNITED STATES SECRET SERVICE RETIREMENT OF 2012
_______
August 28, 2012.--Ordered to be printed
Filed, under authority of the order of the Senate of August 2, 2012
_______
Mr. Lieberman, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. 1515]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 1515) to permit
certain members of the United States Secret Service and certain
members of the United States Secret Service Uniformed Division
who were appointed in 1984, 1985, or 1986 to elect to be
covered under the District of Columbia Police and Firefighter
Retirement and Disability System in the same manner as members
appointed prior to 1984, having considered the same, reports
favorably thereon with an amendment in the nature of a
substitute and recommends that the bill do pass.
CONTENTS
Page
I. Purpose and Summary.............................................1
II. Background and Need for the Legislation.........................2
III. Legislative History.............................................3
IV. Section-by-Section Analysis.....................................4
V. Evaluation of Regulatory Impact.................................5
VI. Congressional Budget Office Estimate............................5
VII. Changes in Existing Law Made by the Bill, as Reported...........8
I. Purpose and Summary
The purpose of S. 1515 is to permit certain employees of
the U.S. Secret Service (USSS) who were hired between January
1, 1984 and December 31, 1986, to transfer from the Federal
Employees' Retirement System (FERS) to the District of Columbia
Police and Firefighter Retirement and Disability System (DC
Retirement System). The bill would thereby resolve a
longstanding dispute between the federal government and these
employees regarding the employees' appropriate retirement
coverage and help ensure that the USSS does not lose a
significant number of highly experienced and critical
personnel.
II. Background and Need for the Legislation
The Uniformed Division (UD) of the USSS has its origins in
a local District of Columbia special police force dedicated to
protecting the White House, known as the White House Police.
Although UD officers became federal employees in the first half
of the last century, the local origins of the USSS led to an
unusual situation in which these federal employees, as well as
their colleagues in the Secret Service division responsible for
protecting current and former Presidents and their families
(USSS agents),\1\ received their retirement coverage under the
DC Retirement System.\2\ That began to change in the mid-1980s,
when Congress enacted sweeping reforms to Federal employees'
retirement coverage. The Federal Employees' Retirement System
Act of 1986 (the FERS Act) began the process of phasing out the
Civil Service Retirement System (CSRS) by putting most federal
employees hired after December 31, 1983 into the Federal
Employees' Retirement System, which was slated to be up and
running in 1987. The FERS Act required Federal employees
participating in FERS to make Social Security contributions and
made them eligible for Social Security benefits upon
retirement. The FERS Act also established the Thrift Savings
Plan (TSP), a defined contribution plan through which each
employee contributes into an individual retirement savings
account. The Executive Branch has long interpreted the FERS Act
as requiring USSS agents and UD officers hired after December
31, 1983 to receive their retirement coverage through FERS, not
the DC Retirement System.\3\
---------------------------------------------------------------------------
\1\Unlike Uniformed Division Officers, who were automatically
placed into the DC Retirement System, agents who were hired before
January 1, 1984 who had accrued 10 years of protection time were
eligible to transfer into the DC Retirement System.
\2\The USSS reimburses the District of Columbia on a monthly basis
to cover the cost of annuity benefits for UD officers and agents,
pursuant to P.L. 71-221 and P.L. 76-847.
\3\See USSS memorandum on the District of Columbia Police and
Firefighters Retirement and Disability System, March 27, 2001.
---------------------------------------------------------------------------
Many USSS agents and UD officers hired between January 1,
1984 and December 31, 1986, however, have since their hiring
alleged that the USSS, in part as a recruiting and subsequently
as a retention tool, promised them eligibility for retirement
under the more generous DC Retirement System.\4\ Many of them
have filed judicial or administrative actions seeking to obtain
coverage under the DC Retirement System, but they have thus far
been unsuccessful in obtaining relief.\5\
---------------------------------------------------------------------------
\4\Numerous agents and officers submitted letters to senior USSS
employees attesting that when they were recruited, they were informed
of the generous retirement system and the ability to participate in the
DC Retirement System.
\5\The USSS agents and UD officers have pursued actions to
participate in the DC Retirement System through the Office of Personnel
Management (OPM), the Merit Systems Protection Board (MSPB), the U.S.
Secret Service, and the U.S. District Court for the District of
Columbia.
---------------------------------------------------------------------------
After reviewing the matter, the Committee has determined
that the interests of the government in retaining the services
of these highly qualified and experienced USSS employees
warrant enabling certain USSS agents and UD officers to
transfer from the FERS system to the DC Retirement System. As
an increasing number of this group of agents and officers
become eligible for retirement\6\ without the option to elect
into the DC Retirement System, many are leaving the Secret
Service for higher-paying positions in the private sector.\7\
The reasons are clear: Secret Service employees participating
in the DC Retirement System have a significantly greater
incentive to continue working after 20 years of service than do
those covered by FERS. Those covered by the DC Retirement
System receive an additional 3 percent of their pay for each
year they work after twenty years of service, while FERS
employees receive only an additional 1 percent for each year
over twenty.
---------------------------------------------------------------------------
\6\The number of FERS retirees covered under S. 1515 retiring every
year has increased from 4 retirees in Fiscal Year 2004 to 10 retirees
in Fiscal Year 2009. Currently, 121 agents and officers hired between
1984 and 1986 are eligible to retire.
\7\According to the USSS, more than 65 percent of the agents and
officers eligible to retire hold senior leadership positions within the
agency.
---------------------------------------------------------------------------
To remedy this situation, S. 1515 would offer a very
carefully defined group of UD officers and Secret Service
agents the opportunity to transfer into the DC Retirement
System.\8\ Only agents and officers hired between January 1,
1984 and December 31, 1986 would be eligible to transfer into
the DC Retirement System. In order to make the transfer, the
employees would have to apply and would agree to give up
certain benefits established under the FERS Act, such as the
agency contributions in their individual TSP accounts. Also, S.
1515 would only apply to current Secret Service employees, and
thus, this legislation would not be applicable to current
retirees who were hired between January 1, 1984 and December
31, 1986.
---------------------------------------------------------------------------
\8\The USSS informs the Committee that the bill would apply to
approximately 121 employees.
---------------------------------------------------------------------------
III. Legislative History
S. 1515 was introduced by Senator Lieberman on September 6,
2011, and referred to the Committee. The Committee considered
the bill at a business meeting on May 16, 2012. The Committee
adopted by voice vote a substitute amendment offered by Senator
Lieberman and then voted to report the bill, also by voice
vote. Chairman Lieberman, Senators Levin, Akaka, Carper, Pryor,
Tester, Begich, Collins, and Brown were present for both votes.
Senators Coburn, Johnson, and Moran asked by proxy to be
recorded as voting against S. 1515.
The substitute amends S. 1515 to require the USSS agents
and UD officers covered under S. 1515 to make a lump sum
payment for deposit into the USSS appropriations account in
order to participate in the DC Retirement System. The
substitute also requires the USSS agents and officers who
transition into the DC Retirement System to forfeit all
contributions to the Thrift Savings Fund made by the Secret
Service. Finally, the substitute clarifies that those electing
to transfer into the DC Retirement System will be subject to
the same provisions governing federal reemployment as other
federal retirees, which restrict individuals' ability to
receive both a full pension and a salary at the same time.
IV. Section-by-Section Analysis
Section 1. Short title
This section provides that the short title of the bill is
the ``United States Secret Service Retirement Act of 2012.''
Section 2. Sense of the Senate
This section provides that it is the sense of the Senate
that Secret Service agents and officers hired between January
1, 1984 and December 31, 1986, were promised that, in part as a
recruitment and retention tool, that they would be eligible to
participate in the District of Columbia Police and Firefighters
Retirement System.
Section 3. Authority of certain members of United States Secret Service
to elect coverage under District of Columbia Police and
Firefighter Retirement System.
This section sets forth the criteria for coverage under S.
1515 and the procedures for transferring covered USSS employees
from FERS to the DC Retirement System.
Subsection (a) provides that covered employees, after
receiving notification of the transition costs, must make a
lump sum payment for deposit into the USSS appropriations
account in order to participate in the DC Retirement System.
The covered employees who transition into the DC Retirement
System will continue to make Social Security contributions and
will be entitled to the same benefits, subject to existing
offset requirements designed to ensure against overlapping or
duplicative contributions and benefits.
Subsection (a) defines ``covered employees'' as individuals
who: (1) were hired as members of the U.S. Secret Service
Division (USSS agents) or the U.S. Secret Service Uniformed
Division (UD officers) between January 1, 1984 through December
31, 1986; (2) actively performed duties directly related to the
protection mission of the USSS for 10 or more years; (3) serve
as agents or UD officers on the enactment date of S. 1515; and
(4) are covered under FERS on the date of enactment.
Subsection (b) provides that not later than 30 days after
the date of enactment of this Act, the Director of the Secret
Service must notify each covered employee that he or she is
covered by this law. The Director must also notify each covered
employee of the transition costs not later than 15 days after
determining the costs to transition from FERS to the DC
Retirement System.
Subsection (c) provides that within 60 days after the date
of enactment of S. 1515, the Office of Pay and Retirement
Services of the District of Columbia must calculate the
transition costs for each agent and officer covered under S.
1515.
Section 4. Forfeiture of employer contributions for Thrift Savings plan
This section provides that the USSS agents and officers
covered under S. 1515 must forfeit all contributions to the
Thrift Savings Fund made by an employing agency.
Section 5. Treatment of reemployed annuitants
This section provides that USSS annuitants covered under S.
1515 who transition into the DC Retirement System and accept
full time employment with another federal agency will be
subject to the same pension offset provisions under title 5,
United States Code, that currently apply to reemployed
annuitants under the Federal Employees Retirement System and
the Civil Service Retirement System.
Section 6. PAYGO compliance
This section provides that the budgetary effects of the
Secret Service Retirement Act shall be determined by the
``Budgetary Effects of PAYGO Legislation.''
V. Evaluation of Regulatory Impact
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of S. 1515. The Committee
agrees with the Congressional Budget Office (CBO) that the bill
would impose an intergovernmental mandate as defined in the
Unfunded Mandates Reform Act (UMRA). The Committee also agrees
with CBO that the bill contains no new private-sector mandates
as defined in UMRA. The enactment of this legislation will not
have significant regulatory impact.
VI. Congressional Budget Office Cost Estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, August 1, 2012.
Hon. Joseph I. Lieberman,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1515, the United
States Secret Service Retirement Act of 2012.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Santiago
Vallinas.
Sincerely,
Robert A. Sunshine
(For Douglas W. Elmendorf, Director).
Enclosure.
S. 1515--United States Secret Service Retirement Act of 2012
Summary: S. 1515 would permit certain current employees of
the U.S. Secret Service hired between January 1, 1984, and
December 31, 1986, to move from the Federal Employees
Retirement System (FERS) to the District of Columbia Police and
Firefighter Retirement and Disability System (D.C. system). The
bill would require that agents who elect to change systems pay
for the additional retirement benefits provided under the D.C.
system over the next 11 years (referred to in the bill as
transition costs). This bill also would require Secret Service
agents who choose to be covered under the D.C. system to
forfeit all contributions to the Thrift Savings Plan (TSP) made
on their behalf by the Secret Service or any other agencies.
Pay-as-you-go procedures apply because enacting the
legislation would affect direct spending and revenues.
CBO estimates that enacting S. 1515 would, on net, generate
an insignificant amount of budgetary savings over the 2013-2022
period. Increased direct spending resulting from the additional
retirement benefits under the D.C. system would total $7
million over the 10-year period, but those costs would be
offset by the payment in 2013 of transition costs by employees
who switch retirement plans. Such employees would also convert
from contributing to FERS (which would reduce revenues), to
contributing to the D.C. system (which would increase
offsetting receipts by a similar amount).
Because S. 1515 would require the District of Columbia to
determine the cost for some members of the Secret Service to
switch to the D.C. system, the bill would impose an
intergovernmental mandate as defined in the Unfunded Mandates
Reform Act (UMRA). CBO estimates that the cost of the mandate
would be minimal and would not exceed the threshold established
in UMRA for intergovernmental mandates ($73 million in 2012,
adjusted annually for inflation). This bill contains no new
private-sector mandates as defined in UMRA.
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 1515 is shown in the following table.
The costs of this legislation fall within budget function 600
(income security).
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
----------------------------------------------------------------------------------------
2013-
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013-2017 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDINGa
Estimated Budget Authority..................................... -7 1 1 1 1 1 1 1 1 1 -4 *
Estimated Outlays.............................................. -7 1 1 1 1 1 1 1 1 1 -4 *
CHANGES IN REVENUES
Estimated Revenues............................................. * * * 0 0 0 0 0 0 0 * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: *= between -$500,000 and zero: Components may not sum to totals because of rounding.
aCBO estimates that discretionary costs of S. 1515 would not be significant.
Basis of estimate: For the purposes of this estimate, CBO
assumes that S. 1515 will be enacted late in 2012. Based on
information from the Secret Service and the Office of
Management and Budget, CBO estimates that 121 employees would
be eligible to transfer to the D.C. retirement system under
this bill. However, based on an analysis of the costs and
benefits to individuals faced with the option of making the
switch, CBO estimates that it is unlikely that more than 10
percent of eligible employees would choose to make that change.
The number of employees taking advantage of this option would
probably be small because the cost they would face to switch
retirement systems (on average, between $300,000 and $400,000)
would be very high. Furthermore, the net benefit over time of
switching would not be large.
Direct spending and revenues
Because the D.C. system provides a higher basic pension
than FERS, the current retirement plan for the eligible Secret
Service employees, CBO estimates that enacting the bill would
result in additional federal costs of about $7 million for
benefit payments over the 2013-2022 period if 10 percent of
eligible employees transfer. (The D.C. system is run by the
government of Washington, D.C., but receives a payment from the
federal government to cover certain federal employees.) That
additional spending would be partially offset by the higher
contributions totaling less than $500,000 that employees would
make to the D.C. system over the 10-year period. The bill also
would require that all employees electing to move to the D.C.
system pay for the additional retirement benefits they would
receive through 2022. The transactions for this cohort of
employees in the D.C. system would be recorded in the federal
budget. CBO estimates those one-time payments would increase
offsetting receipts (a credit against direct spending) by about
$7 million in 2013.
In addition, the bill would reduce revenues by less than
$500,000 over the 2013-2022 period, because individuals who
elect to transfer to the D.C. system would no longer contribute
to FERS. (Contributions to FERS are classified as revenues.)
Spending subject to appropriation
The bill would authorize an appropriation of $75,000 to the
District of Columbia to calculate the transition costs. CBO
estimates that the other discretionary costs would not be
significant. All of the discretionary budgetary effects of
implementing S. 1515 would be subject to the availability of
appropriated funds.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays and revenues that are
subject to those pay-as-you-go procedures are shown in the
following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 1515, AS ORDERED REPORTED BY THE SENATE COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS ON MAY 16,
2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
--------------------------------------------------------------------------------------------------
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012-2017 2012-2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact....................... 0 -7 1 1 1 1 1 1 1 1 1 -4 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding.
Estimated impact on state, local, and tribal governments:
The bill would impose an intergovernmental mandate by requiring
the Office of Pay and Retirement Services of the District of
Columbia to determine the cost for some members of the Secret
Service to change retirement plans. Based on information from
agency sources, CBO estimates that the cost of the mandate
would be minimal and would not exceed the threshold established
in UMRA for intergovernmental mandates ($73 million in 2012,
adjusted annually for inflation). The bill would authorize the
appropriation of $75,000 for the District to carry out the
requirement.
Estimated impact on the private sector: This bill contains
no new private-sector mandates as defined in UMRA.
Estimate prepared by: Federal Costs: Santiago Vallinas and
Sheila Dacey; Impact on State, Local, and Tribal Governments:
Elizabeth Cove Delisle; Impact on the Private Sector: Paige
Piper/Bach.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
VII. Changes in Existing Law Made by the Bill, as Reported
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the following 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 matter is printed in italic, existing law in
which no change is proposed is shown in roman):
DISTRICT OF COLUMBIA OFFICIAL CODE
* * * * * * *
DIVISION I--GOVERNMENT OF DISTRICT
* * * * * * *
TITLE 5--POLICE, FIREFIGHTERS, AND CHIEF MEDICAL EXAMINER
* * * * * * *
CHAPTER 7--POLICE AND FIREFIGHTERS RETIREMENT AND DISABILITY
* * * * * * *
Sec. 5-703. United States Secret Service Division; transfer of civil
service funds; credit for prior service with other
police forces
[Whenever any member] (1) In General.--Whenever any member
of the United States Secret Service Division has actively
performed duties other than clerical for 10 years or more
directly related to the protection of the President, such
member shall be authorized to transfer all funds to his credit
in the Civil Service Retirement and Disability Fund continued
by Sec. Sec. 8331(5) and 8348 of Title 5, United States Code,
to the general revenues of the District of Columbia and after
the transfer of such funds the salary of such member shall be
subject to the same deductions for credit to the general
revenues of the District of Columbia as the deductions from
salaries of other members under this subchapter, and he shall
be entitled to the same benefits as the other members to whom
such sections apply. Any member of the United States Secret
Service Division appointed from the United States Secret
Service Uniformed Division and assigned to duties directly
related to the protection of the President shall receive credit
for periods of prior service with the Metropolitan Police
force, the United States Park Police force, or the United
States Secret Service Uniformed Division toward the required 10
years or more service.
(2) Coverage of Certain Other Employees of Secret
Service.--
(A) In general.--Paragraph (1) shall apply with
respect to a covered employee in the same manner as
such paragraph applies to an individual who is
authorized to make a transfer of funds under such
paragraph, but only if--
(i) not later than 60 days after receiving
notification of the transition cost associated
with the application of paragraph (1) to the
covered employee (as provided under section
3(b)(2) of the United States Secret Service
Retirement Act of 2012), the covered employee
provides a notification to the Director of the
United States Secret Service containing such
information and assurances as the Director may
require; and
(ii) on or before the date the covered
employee provides a notification under clause
(i), the employee makes a lump sum payment in
an amount equal to the transition cost
associated with the application of paragraph
(1) to the covered employee, determined in
accordance with section 3(c) of the United
States Secret Service Retirement Act of 2012,
for deposit into the Contributions for Annuity
Benefits, United States Secret Service
appropriations account of the Department of
Homeland Security.
(B) Adjustment to reflect social security
contributions and benefits.--In the case of a covered
employee who authorizes a transfer of funds under
paragraph (1), such covered employee shall be subject
to the same deductions and shall be entitled to the
same benefits as provided for under paragraph (1),
subject to offset in accordance with section 103(e) of
Public Law 100-238 (5 U.S.C. 8334 note).
(C) Covered employee defined.--In this paragraph, the
term ``covered employee'' means an individual who--
(i) was appointed during 1984, 1985, or
1986--
(I) as a member of the United States
Secret Service Uniformed Division as
defined under section 10201(1) of title
5, United States Code; or
(II) to the United States Secret
Service as a criminal investigator as
defined under section 5545a(a)(2) of
title 5, United States Code;
(ii) has actively performed duties other than
clerical for 10 or more years directly related
to the protection mission of the United States
Secret Service described under section 3056 of
title 18, United States Code;
(iii) is serving as an officer or member of
the United States Secret Service Uniformed
Division as defined under section 10201(1) of
title 5, United States Code, or is employed by
the United States Secret Service as a criminal
investigator as defined under section
5545a(a)(2) of title 5, United States Code; and
(iv) is covered under the Federal Employees'
Retirement System under chapter 84 of title 5,
United States Code, on the date of enactment of
this paragraph.
* * * * * * *