Sec. 1616. PILOT PROGRAMS FOR DEFENSE EMPLOYEES CONVERTED TO CONTRACTOR EMPLOYEES DUE TO PRIVATIZATION AT CLOSED MILITARY INSTALLATIONS
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## SEC. 1616 PILOT PROGRAMS FOR DEFENSE EMPLOYEES CONVERTED TO CONTRACTOR EMPLOYEES DUE TO PRIVATIZATION AT CLOSED MILITARY INSTALLATIONS **[**[5 U.S.C. 8331 note](/us/usc/t5/s8331)**]** ###
(a)Pilot Programs Authorized ####
(1)The Secretary of Defense, after consultation with the Director of the Office of Personnel Management, may establish one or more pilot programs under which Federal retirement benefits are provided in accordance with this section to persons who convert from Federal employment to employment by a Department of Defense contractor in connection with the privatization of the performance of functions at selected military installations being closed under the base closure and realignment process. ####
(2)The Secretary of Defense shall select the military installations to be covered by a pilot program under this section. ###
(b)Eligible Converted Employees ####
(1)A person is a converted employee eligible for Federal retirement benefits under this section if the person is a former employee of the Department of Defense (other than a temporary employee) who— #####
(A)while employed by the Department of Defense at a military installation selected to participate in a pilot program, performed a function that was recommended, in a report of the Defense Base Closure and Realignment Commission submitted to the President under the Defense Base Closure and Realignment Act of 1990 (title XXIX of Public Law 101–510; 10 U.S.C. 2687 note), to be privatized for performance by a defense contractor at the same installation or in the vicinity of the installation; #####
(B)while so employed, separated from Federal service after being notified that the employee would be separated in a reduction in force resulting from such privatization; #####
(C)at the time separated from Federal service, was covered under the Civil Service Retirement System, but was not eligible for an immediate annuity under the Civil Service Retirement System; #####
(D)does not withdraw retirement contributions under section 8342 of title 5, United States Code; #####
(E)within 60 days following such separation, is employed by the defense contractor selected to privatize the function to perform substantially the same function performed by the person before the separation; and #####
(F)remains employed by the defense contractor (or a successor defense contractor) or subcontractor of the defense contractor (or successor defense contractor) until attaining early deferred retirement age (unless the employment is sooner involuntarily terminated for reasons other than performance or conduct of the employee). ####
(2)A person who, under paragraph (1), would otherwise be eligible for an early deferred annuity under this section shall not be eligible for such benefits if the person received separation pay or severance pay due to a separation described in subparagraph
(B)of that paragraph unless the person repays the full amount of such pay with interest (computed at a rate determined appropriate by the Director of the Office of Personnel Management) to the Department of Defense before attaining early deferred retirement age. ###
(c)Retirement Benefits of Converted Employees In the case of a converted employee covered by a pilot program, payment of a deferred annuity for which the converted employee is eligible under section 8338(a) of title 5, United States Code, shall commence on the first day of the first month that begins after the date on which the converted employee attains early deferred retirement age, notwithstanding the age requirement under that section. If the employment of a converted employee is involuntarily terminated by the defense contractor or subcontractor as described in subsection (b)(1)(F) and the converted employee resumes Federal service before the converted employee attains early deferred retirement age, the converted employee shall once again be covered under the Civil Service Retirement System instead of the pilot program. ###
(d)Computation of Average Pay ####
(1)#####
(A)This paragraph applies to a converted employee who was employed in a position classified under the General Schedule immediately before the employee's covered separation from Federal service. #####
(B)Subject to subparagraph (C), for purposes of computing the deferred annuity for a converted employee referred to in subparagraph (A), the average pay of the converted employee, computed under section 8331(4) of title 5, United States Code, as of the date of the employee's covered separation from Federal service, shall be adjusted at the same time and by the same percentage that rates of basic pay are increased under section 5303 of such title during the period beginning on that date and ending on the date on which the converted employee attains early deferred retirement age. #####
(C)The average pay of a converted employee, as adjusted under subparagraph (B), may not exceed the amount to which an annuity of the converted employee could be increased under section 8340 of title 5, United States Code, in accordance with the limitation in subsection (g)(1) of such section (relating to maximum pay, final pay, or average pay). ####
(2)#####
(A)This paragraph applies to a converted employee who was a prevailing rate employee (as defined under section 5342(2) of title 5, United States Code) immediately before the employee's covered separation from Federal service. #####
(B)For purposes of computing the deferred annuity for a converted employee referred to in subparagraph (A), the average pay of the converted employee, computed under section 8331(4) of title 5, United States Code, as of the date of the employee's covered separation from Federal service, shall be adjusted at the same time and by the same percentage that pay rates for positions that are in the same area as, and are comparable to, the last position the converted employee held as a prevailing rate employee, are increased under section 5343(a) of such title during the period beginning on that date and ending on the date on which the converted employee attains early deferred retirement age. ###
(e)Payment of Unfunded Liability ####
(1)The military department concerned shall be liable for that portion of any estimated increase in the unfunded liability of the Civil Service Retirement and Disability Fund established under section 8348 of title 5, United States Code, which is attributable to any benefits payable from such Fund to a converted employee, and any survivor of a converted employee, when the increase results from— #####
(A)an increase in the average pay of the converted employee under subsection
(d)upon which such benefits are computed; and #####
(B)the commencement of an early deferred annuity in accordance with this section before the attainment of 62 years of age by the converted employee. ####
(2)The estimated increase in the unfunded liability for each department referred to in paragraph
(1)shall be determined by the Director of the Office of Personnel Management. In making the determination, the Director shall consider any savings to the Fund as a result of a pilot program established under this section. The Secretary of the military department concerned shall pay the amount so determined to the Director in 10 equal annual installments with interest computed at the rate used in the most recent valuation of the Civil Service Retirement System, with the first payment thereof due at the end of the fiscal year in which an increase in average pay under subsection
(d)becomes effective. ###
(f)Contractor Service Not Creditable Service performed by a converted employee for a defense contractor after the employee's covered separation from Federal service is not creditable service for purposes of subchapter III of chapter 83 of title 5, United States Code. ###
(g)Receipt of Benefits While Employed by a Defense Contractor A converted employee may commence receipt of an early deferred annuity in accordance with this section while continuing to work for a defense contractor. ###
(h)Lump-Sum Credit Payment If a converted employee dies before attaining early deferred retirement age, such employee shall be treated as a former employee who dies not retired for purposes of payment of the lump-sum credit under section 8342(d) of title 5, United States Code. ###
(i)Continued Federal Health Benefits Coverage Notwithstanding section 8905a(e)(1)(A) of title 5, United States Code, the continued coverage of a converted employee for health benefits under chapter 89 of such title by reason of the application of section 8905a of such title to such employee shall terminate 90 days after the date of the employee's covered separation from Federal employment. For the purposes of the preceding sentence, a person who, except for subsection (b)(2), would be a converted employee shall be considered a converted employee. ###
(j)Report by General Accounting Office The Comptroller General shall conduct a study of each pilot program, if any, established under this section and submit a report on the pilot program to Congress not later than two years after the date on which the program is established. The report shall contain the following: ####
(1)A review and evaluation of the program, including— #####
(A)an evaluation of the success of the privatization outcomes of the program; #####
(B)a comparison and evaluation of such privatization outcomes with the privatization outcomes with respect to facilities at other military installations closed or realigned under the base closure laws; #####
(C)an evaluation of the impact of the program on the Federal workforce and whether the program results in the maintenance of a skilled workforce for defense contractors at an acceptable cost to the military department concerned; and #####
(D)an assessment of the extent to which the program is a cost-effective means of facilitating privatization of the performance of Federal activities. ####
(2)Recommendations relating to the expansion of the program to other installations and employees. ####
(3)Any other recommendation relating to the program. ###
(k)Implementing Regulations Not later than 30 days after the Secretary of Defense notifies the Director of the Office of Personnel Management of a decision to establish a pilot program under this section, the Director shall prescribe regulations to carry out the provisions of this section with respect to that pilot program. Before prescribing the regulations, the Director shall consult with the Secretary. ###
(l)Definitions In this section: ####
(1)The term “**converted employee**” means a person who, pursuant to subsection (b), is eligible for benefits under this section. ####
(2)The term “**covered separation from Federal service**” means a separation from Federal service as described under subsection (b)(1)(B). ####
(3)The term “**Civil Service Retirement System**” means the retirement system under subchapter III of chapter 83 of title 5, United States Code. ####
(4)The term “**defense contractor**” means any entity that— #####
(A)contracts with the Department of Defense to perform a function previously performed by Department of Defense employees; #####
(B)performs that function at the same installation at which such function was previously performed by Department of Defense employees or in the vicinity of that installation; and #####
(C)is the employer of one or more converted employees. ####
(5)The term “**early deferred retirement age**” means the first age at which a converted employee would have been eligible for immediate retirement under subsection
(a)or
(b)of section 8336 of title 5, United States Code, if such converted employee had remained an employee within the meaning of section 8331(1) of such title continuously until attaining such age. ####
(6)The term “**severance pay**” means severance pay payable under section 5595 of title 5, United States Code. ####
(7)The term “**separation pay**” means separation pay payable under section 5597 of title 5, United States Code. ###
(m)Application of Pilot Program In the event that a pilot program is established for a military installation, the pilot program shall apply to a covered separation from Federal service by an employee of the Department of Defense at the installation occurring on or after August 1, 1996. * * * * * * * # TITLE XXIX MILITARY LAND WITHDRAWALS * * * * * * * ## Subtitle B El Centro Naval Air Facility Ranges Withdrawal1 1This subtitle is part of title XXIX of division B of the National Defense Authorization Act for Fiscal Year 1997 (Pub. Law 104–201).
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- Pub. L. 101-510
- Pub. L. 104-201
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Sec. 1616
PILOT PROGRAMS FOR DEFENSE EMPLOYEES CONVERTED TO CONTRACTOR EMPLOYEES DUE TO PRIVATIZATION AT CLOSED MILITARY INSTALLATIONS
Pub. L.Pub. L. 101-510
Pub. L.Pub. L. 104-201
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