[Senate Report 117-175]
[From the U.S. Government Publishing Office]
Calendar No. 525
117th Congress } { Report
SENATE
2d Session } { 117-175
_______________________________________________________________________
U.S. CUSTOMS AND BORDER PROTECTION
OFFICER RETIREMENT TECHNICAL
CORRECTIONS ACT
__________
R E P O R T
of the
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
to accompany
S. 3868
TO CORRECT THE INEQUITABLE DENIAL OF ENHANCED
RETIREMENT AND ANNUITY BENEFITS TO CERTAIN U.S. CUSTOMS
AND BORDER PROTECTION OFFICERS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
October 18, 2022.--Ordered to be printed
Filed, under authority of the order of the Senate of October 14, 2022
__________
U.S. GOVERNMENT PUBLISHING OFFICE
39-010 WASHINGTON : 2022
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware ROB PORTMAN, Ohio
MAGGIE HASSAN, New Hampshire RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona RAND PAUL, Kentucky
JACKY ROSEN, Nevada JAMES LANKFORD, Oklahoma
ALEX PADILLA, California MITT ROMNEY, Utah
JON OSSOFF, Georgia RICK SCOTT, Florida
JOSH HAWLEY, Missouri
David M. Weinberg, Staff Director
Zachary I. Schram, Chief Counsel
Lena C. Chang, Director of Governmental Affairs
Devin M. Parsons, Professional Staff Member
Pamela Thiessen, Minority Staff Director
Sam J. Mulopulos, Minority Deputy Staff Director
Jeremy H. Hayes, Minority Senior Professional Staff Member
Laura W. Kilbride, Chief Clerk
Calendar No. 525
117th Congress } { Report
SENATE
2d Session } { 117-175
======================================================================
U.S. CUSTOMS AND BORDER PROTECTION OFFICER RETIREMENT TECHNICAL
CORRECTIONS ACT
_______
October 18, 2022.--Ordered to be printed
Filed, under authority of the order of the Senate of October 14, 2022
_______
Mr. Peters, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. 3868]
[Including cost estimate of the Congressional Budget Office]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 3868), to correct
the inequitable denial of enhanced retirement and annuity
benefits to certain U.S. Customs and Border Protection
Officers, having considered the same, reports favorably thereon
with an amendment, in the nature of a substitute, and
recommends that the bill, as amended, do pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................2
III. Legislative History..............................................4
IV. Section-by-Section Analysis of the Bill, as Reported.............4
V. Evaluation of Regulatory Impact..................................5
VI. Congressional Budget Office Cost Estimate........................5
VII. Changes in Existing Law Made by the Bill, as Reported...........10
I. PURPOSE AND SUMMARY
S. 3868, the U.S. Customs and Border Protection (CBP)
Officer Retirement Technical Corrections Act, would address a
CBP error involving at least 1,352 officers told by the agency
that they were eligible for an enhanced retirement benefit
without mandatory retirement requirements, also known as a
proportional annuity. Officers impacted by this error were
hired before the enhanced benefit took effect on July 6, 2008
but not yet on payroll until after that date. Over a decade
later, CBP realized its error and rescinded these officers'
eligibility for a proportional annuity in 2021. The bill
directs CBP to reinstate the proportional annuity for such
officers and includes a retroactive annuity adjustment for
eligible individuals who retire before the date of enactment of
this bill. In addition, the bill grants the Department of
Homeland Security (DHS) the authority to waive maximum entry
age requirements for impacted officers as needed.
II. BACKGROUND AND NEED FOR THE LEGISLATION
In December 2007, Congress passed legislation that included
provisions to establish an enhanced retirement benefit for CBP
officers, which the President signed into law.\1\ This
legislation structured the new retirement benefit for CBP
officers similar to retirement provisions for other special
retirement groups, such as law enforcement officers, nuclear
material couriers, and firefighters.\2\ For such positions with
heightened physical and mental demands, the 1.7% enhanced
annuity is coupled with a mandatory retirement age and maximum
age of entry, designed to provide retirees with a sufficient
income after they complete 20 years of service before age
57.\3\ Both the employee and the agency pay higher
contributions toward the officer's retirement, aligned with the
higher annuity level.\4\
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\1\Consolidated Appropriations Act, 2008, Pub. L. 110-161, Division
E, Sec. 535.
\2\Letter from Acting Director Kathleen McGettigan, Office of
Personnel Management, to Anthony M. Reardon, National President of the
National Treasury Employees Union (Apr. 1, 2021).
\3\Congressional Research Service, Retirement Benefits for Federal
Law Enforcement Personnel (R42631) (Sep. 5, 2017).
\4\Letter from Acting Director Kathleen McGettigan, supra note 2.
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The enhanced annuity benefit that the legislation
established for CBP officers took effect prospectively,
starting on the first day of the pay period six months after
the legislation's enactment, meaning July 6, 2008.\5\ The
legislation included transition rules allowing for a hybrid
retirement benefit, referred to as a ``proportional annuity,''
for individuals already serving as CBP officers at the time the
new benefit took effect.\6\ Specifically, the legislative text
states that individuals ``serving as a customs and border
protection officer on the effective date [. . .] pursuant to an
appointment made before that date'' are eligible for the
enhanced annuity calculation going forward without being
subject to the mandatory separation provisions or the 20-years-
of-service requirement.\7\
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\5\Consolidated Appropriations Act, 2008, Pub. L. 110-161, Division
E, Sec. 535(e)(1).
\6\Consolidated Appropriations Act, 2008, Pub. L. 110-161, Division
E, Sec. 535(e)(2).
\7\Id.
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The CBP Office of Human Resources Management (HRM)
coordinated with the CBP Office of Chief Counsel, DHS, and
Office of Personnel Management (OPM) to implement the enhanced
retirement for CBP officers over a six month period in 2008.
The HRM Office of Compensation and Organizational Effectiveness
Division; Benefits, Medical and Worklife Division; and the
Hiring Center worked together on guidance for implementing the
enhanced benefit.\8\ The guidance stated that employees who
received a tentative job offer before July 6, 2008 but entered
on duty after this date are eligible for the proportional
annuity, even if they leave the position before 20 years.\9\
This classification resulted in the CBP Hiring Center using the
``O52'' remark code in the personnel records for this group of
officers, which states that the officer is ``[e]xempt from
mandatory retirement and eligible for prorated Annuity upon
retirement.''\10\
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\8\U.S. Customs and Border Protection, Office of Human Resources
Management, Production to Senate Homeland Security and Governmental
Affairs Committee (copy on file with Committee); and Email from Allie
Cleaves, Office of Congressional Affairs, U.S. Customs and Border
Protection, to Senate Homeland Security and Governmental Affairs Staff
(Jan. 19, 2022).
\9\U.S. Customs and Border Protection, Office of Human Resources
Management, Talent Management Directorate, CBP Hiring Center: CBP
Officer Enhanced Retirement Coverage-Eligible for a Prorated Annuity
(Jul. 2020).
\10\Id.
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In July 2011, OPM, in consultation with DHS, published
final regulations for the enhanced CBP officer retirement
benefit.\11\ The regulations further clarify that the
proportional annuity computation applies only to ``an employee
serving in a primary or secondary customs and border protection
officer position on July 6, 2008.''\12\ Both the regulations
and the underlying statute specify that individuals who enter
on duty as a CBP officer after July 6, 2008 are not eligible
for the proportional annuity.
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\11\Office of Personnel Management, Customs and Border Protection
Officer Retirement, 76 FR 41993 (Jul. 18, 2011) (Rule).
\12\17 CFR Sec. 842.1009.
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In 2020, a CBP employee requested information from the
agency about the prorated annuity described in the individual's
O52 code.\13\ This employee had entered on duty after July 6,
2008, even though CBP had offered the position to the
individual prior to that date. The CBP officer's inquiry in
2020 brought the O52 code to the agency's attention after over
a decade of having implemented the benefit, along with the
realization that CBP Human Resources Management failed to
comply with federal statute or the related OPM regulations that
had since been finalized.\14\ OPM confirmed the error on the
part of CBP upon CBP's request in January 2021.\15\ In
response, CBP rescinded the O52 remark code in February 2021
from the personnel record of any officer who had not
technically entered on duty prior to or on July 6, 2008, even
if the officer had been offered a position before that date.
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\13\U.S. Customs and Border Protection, Office of Human Resources
Management, Production to Senate Homeland Security and Governmental
Affairs Committee (copy on file with Committee).
\14\Id.
\15\Id.
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CBP's error resulted in a number of officers becoming
ineligible for the proportional annuity they had been promised
and contributed toward since the beginning of their careers as
CBP officers.\16\ At least 1,352 officers have been impacted by
this CBP error.\17\ Of this total, CBP identified 1,077
employees who entered on duty as officers before age 37, the
maximum entry age since the start of the enhanced benefit.\18\
Although these employees will reach the 20-year mark at or
below the mandatory retirement age of 57, they had still been
told at the time of their hiring that they did not necessarily
have to follow this timeline in order to access their benefits.
Additionally, there are at least 275 officers who are at an
even higher risk of losing their enhanced benefits because they
entered on duty as a CBP officer after age 37 and may not be
able to work a total of 20 years.
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\16\Id.
\17\Id.
\18\Id.
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Unless there is a legislative fix, officers who are not
able to reach 20 years of service will only receive a 1%
annuity calculation rather than 1.7% annuity calculation, and
they would not be reimbursed for the higher contributions they
have made toward their retirement over the years.\19\ That is
why the CBP Officer Retirement Technical Corrections Act is
necessary for this group of over 1,300 officers and their
families.
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\19\ Id.; and National Treasury Employees Union, CBP Proportional
Retirement Update (Aug. 24, 2021) (www.nteu.org//media//Files/nteu/
docs/public/cbp/leo/enhanced-retirement-eligibility-faqs) (accessed May
17, 2022).
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This bill would ensure impacted officers can receive the
retirement benefits they were promised when starting their
service. It does so by directing CBP to identify eligible
individuals and notify them of the correction. Those identified
would then be eligible for a correction that would align their
retirement benefits with the proportional annuity. The
legislation also includes a retroactive annuity adjustment for
eligible individuals who retire before the date of enactment of
this bill and grants DHS the authority to waive maximum entry
age requirements for eligible officers as needed. In hopes of
preventing a future error like that one that had a negative
impact on over 1,300 officers and their families, the bill
further includes a provision to have the Comptroller General
review CBP's internal controls and training to ensure CBP is
complying with laws and regulations.
III. LEGISLATIVE HISTORY
Chairman Gary Peters (D-MI) introduced S. 3868, the U.S.
Customs and Border Protection Officer Retirement Technical
Corrections Act, on March 17, 2022 with Senator Josh Hawley (R-
MO). The bill was referred to the Committee on Homeland
Security and Governmental Affairs.
The Committee considered S. 3868 at a business meeting on
March 30, 2022. Chairman Peters and Ranking Member Rob Portman
(R-OH) offered a substitute amendment that added a subsection
directing the Government Accountability Office to review CBP's
hiring practices, policies, and procedures related to
eligibility for the enhanced retirement benefit. The substitute
amendment was adopted by voice vote en bloc. The bill, as
amended, was ordered reported favorably by voice vote en bloc
with Senators Peters, Carper, Hassan, Sinema, Rosen, Padilla,
Ossoff, Paul, Lankford, Romney, Scott, and Hawley present.
IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED
Section 1. Short title
This section establishes the short title of the bill as the
``U.S. Customs and Border Protection Officer Retirement
Technical Corrections Act.''
Sec. 2. Adjustment related to transition rules
Subsection (a) defines the term ``eligible individual'' in
the context of this section. Officers are eligible if they
received and accepted an offer of employment before July 6,
2008 and entered into duty on or after July 6, 2008.
Subsection (b) describes the benefits these eligible
officers are entitled to receive, to align with the benefits
promised by the agency between 2008 and 2021. They may receive
the enhanced annuity starting in 2008 without being subject to
mandatory retirement requirements.
Subsection (c) directs DHS, within 120 days, to create a
list of impacted officers, notify the impacted officers of the
correction, and provide OPM with the information necessary for
the annuity correction. OPM is directed to make the annuity
correction after receiving the information, including
retroactively for impacted officers who retired before this
bill's enactment.
Subsection (d) provides DHS with the authority to waive
maximum entry age requirements for the group of impacted
officers. It also directs OPM, in consultation with DHS, to
issue appropriate guidance to assist in the implementation of
the annuity correction.
Subsection (e) directs the Government Accountability Office
to review the CBP hiring practices, policies, and procedures
related to eligibility for the enhanced retirement benefit and
training of the senior leaders of CBP to submit a report to
Senate Homeland Security and Governmental Affairs Committee and
the House Committee on Homeland Security. This report will
assist Congress in understanding the process of how this error
occurred and how to prevent CBP from issuing guidance in the
future that does not comply with federal law.
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 this bill and determined
that the bill will have no regulatory impact within the meaning
of the rules. The Committee agrees with the Congressional
Budget Office's statement that the bill contains no
intergovernmental or private sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would impose no costs
on state, local, or tribal governments.
VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 12, 2022.
Hon. Gary Peters,
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. 3868, the U.S.
Customs and Border Protection Officer Retirement Technical
Corrections Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Amber
Marcellino.
Sincerely,
Phillip L. Swagel,
Director.
Enclosure.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The bill would:
Allow certain Customs and Border Protection
Officers to retire with an increased retirement benefit
Make those officers eligible for an annuity
that would treat a portion of their years of service
similarly to the treatment of time in service for
federal law enforcement officers and firefighters
Estimated budgetary effects would mainly stem from:
Larger retirement annuities for certain
Customs and Border Protection Officers
Retroactive revisions and adjustments to the
annuities of affected officers who retire before
enactment
Bill summary: S. 3868 would allow certain Customs and
Border Protection Officers (CBPOs) to retire with a more
generous civil service retirement benefit.
Estimated Federal cost: The estimated budgetary effect of
S. 3868 is shown in Table 1. The costs of the legislation
mostly fall within budget function 600 (income security).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF S. 3868
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By fiscal year, millions of dollars--
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2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2022-2027 2022-2032
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Increases in Direct Spending
Estimated Budget Authority................ 0 * 1 2 2 2 2 2 2 2 2 7 18
Estimated Outlays......................... 0 * 1 2 2 2 2 2 2 2 2 7 18
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* = between zero and $500,000.
CBO estimates that administrative costs associated with the identification of people affected by S. 3868 and the processing of retirement annuity
revisions would increase spending subject to appropriation by less than $500,000 over the 2022-2027 period.
Basis of estimate: For this estimate, CBO assumes that S.
3868 will be enacted before the end of calendar year 2022.
Background: In 2007, the Consolidated Appropriations Act,
2008, authorized enhanced retirement coverage for CBPOs that is
similar to coverage that applies to federal law enforcement
officers and firefighters. That coverage took effect on July 6,
2008, but implementation was different for CBPOs who already
were working on that date and those whose service began after
that date.
CBPOs who entered duty after July 6, 2008, and who complete
20 years of service qualify for a retirement benefit that uses
a higher multiplier in the annuity calculation: 1.7 percent of
an employee's highest three consecutive years of qualifying pay
(or high-3) multiplied by the required 20 years of CBPO
service. (For any years of federal service beyond 20, 1 percent
of the employee's high-3 is included in the annuity
calculation.) In addition, officers cannot begin working after
age 36 and they generally must retire by age 57. The age limit
for starting work ensures that CBPOs can work the 20 years they
need to receive enhanced retirement before they reach the
mandatory retirement age. (In contrast, the federal retirement
benefit under non-enhanced retirement generally is calculated
at 1 percent of an employee's high-3 for all years of
service.)\1\
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\1\The calculations described apply to retirements under the
Federal Employees Retirement System (FERS), the system that generally
covers federal employees who started service after 1986 and includes
most of the individuals affected by S. 3868.
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CBPOs who already were serving on the effective date are
eligible for a proportional annuity, which provides a larger
benefit without the requirement to complete 20 years of covered
CBPO service--that is, service that occurs on or after July 6,
2008. Upon retirement, their annuities will be prorated, with
the enhanced rate of 1.7 percent applying to years of CBPO
service after July 6, 2008, and the standard rate of 1 percent
applying to years of service before that date.
Some CBPOs were offered employment before, but did not
start until after, July 6, 2008: Customs and Border Protection
originally informed those officers (a group of about 1,400)
that they would be eligible for the proportional annuity.
However, in 2021, the Office of Personnel Management (OPM)
determined that the proportional annuity provisions would not
apply because those officers had not entered duty by the
effective date. As a result, those CBPOs either will retire
with a smaller than expected annuity (the non-enhanced annuity
calculation will apply to all their years of service, including
years of CBPO service after the effective date) or they will
need to continue working until they completed a full 20 years
of covered service to be eligible for the enhanced benefit.
S. 3868 would, for the purposes of retirement, consider all
members of the affected group as having been in their positions
on the effective date, thus making them eligible for the
proportional annuity calculation.
Direct spending: S. 3868 would increase direct spending
relative to current law because it would allow the affected
officers to receive enhanced retirement benefits for some (but
not all) years of their service. In total, CBO estimates,
enacting the bill would increase direct spending by $18 million
over the 2022-2032 period.
The largest budgetary effect of S. 3868 would stem from
benefits for CBPOs who were hired--but did not begin service--
before July 6, 2008, at an age older than 36 (the maximum age
to begin work, under current law). Before enhanced retirement
coverage for CBPOs was implemented, there was no maximum age,
so some officers hired before the effective date were older,
and some had previous years of federal service at other
agencies. CBO estimates that about 140 of those older CBPOs
either are already eligible for regular retirement on the basis
of their age and total years of service or will become so
before they achieve the 20 years of covered service following
July 6, 2008, necessary to receive enhanced coverage. Moreover,
because of the mandatory retirement age of 57, CBO expects that
most of those older officers would not or could not work enough
additional years to meet the 20-year requirement for enhanced
coverage.
Under current law, those officers will receive a regular
retirement benefit.\2\ If enacted, S. 3868 would allow them to
retire with the proportional annuity calculation, instead of
the regular annuity calculation. CBO estimates that the
proportional calculation would increase their initial
retirement benefit by 57 percent, or by about $12,000, on
average. Federal retirement benefits are adjusted annually for
inflation and thus generally increase over time. On that basis,
CBO estimates that the larger benefits for those retirees would
increase direct spending by $16 million over the 2022-2032
period.
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\2\Most federal employees become eligible for regular retirement at
one of several combinations of age and years of service: age 62 with 5
years, 60 with 20 years, or 55 to 57 (depending on the year of birth)
with 30 years.
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S. 3868 also would direct OPM to retroactively revise the
annuities of any affected officer who retires before enactment
to use the proportional annuity calculation. As of August 2022,
about 20 retired CBPOs would qualify for the revised benefit.
Including the retroactive adjustment, CBO estimates that
revising pre-enactment retirements would initially increase
benefits for the group by about $9,000 each, on average. Those
benefits also would increase annually to account for inflation
and would thus increase direct spending by $2 million over the
2022-2032 period, CBO estimates.
Most of the remaining CBPOs who would be affected by the
bill (a little more than 1,200) were younger than 37 when they
were hired and generally would not be eligible to retire before
they complete the 20 years of covered service required to
qualify for the enhanced retirement. Thus, CBO expects that
enacting S. 3868 would not lead to significant costs for that
group of officers.
Spending subject to appropriation: S. 3868 would direct the
Secretary of Homeland Security to identify and notify anyone
affected by the bill and to provide necessary information to
OPM to facilitate the processing of any required annuity
corrections for that group. CBO estimates that the cost would
be less than $500,000 over the 2022-2027 period; any spending
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 that are subject to those
pay-as-you-go procedures are shown in Table 1.
Increase in long-term deficits: CBO estimates that enacting
S. 3868 would not increase on-budget deficits by more than $5
billion in any of the four consecutive 10-year periods
beginning in 2033.
Mandates: None.
Estimate prepared by: Federal Costs: Amber Marcellino;
Mandates: Rachel Austin.
Estimate reviewed by: Christina Hawley Anthony, Chief,
Projections Unit; H. Samuel Papenfuss, Deputy Director of
Budget Analysis; Theresa Gullo, Director of Budget Analysis.
VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
Because S. 3868 would not repeal or amend any provision of
current law, it would make no changes in existing law within
the meaning of clauses (a) and (b) of paragraph 12 of rule XXVI
of the Standing Rules of the Senate.
[all]