HR3305-119

What This Bill Does

The LEO Fair Retirement Act responds to premium-pay caps that can reduce federal law enforcement retirement calculations. For CSRS and FERS annuities calculated at least one year after enactment, premium pay that an officer would have received but for section 5547 caps can be included in average pay if the officer makes a lump-sum payment to OPM equal to the missing employee and employer retirement contributions for the relevant high-3 period, or elects an actuarial annuity reduction. Officers can request estimates 180 days before annuity commencement and must elect within 90 days after receiving the estimate. OPM must issue regulations within one year, including procedures for using Thrift Savings Fund transfers and agency payroll retention. The bill also extends availability pay treatment to Postal Inspectors, GS-1811 criminal investigators, Federal air marshals, Diplomatic Security Service special agents, probation officers, and pretrial services officers. It creates an income tax credit for lump-sum payments made under the new annuity rules.

Who Benefits and How

Federal law enforcement officers benefit because capped premium pay can count toward annuity average pay if they make the required payment or accept an actuarial reduction. Postal Inspectors benefit because availability pay rules are extended to them as covered employees. Federal air marshals benefit from availability pay eligibility and retirement treatment aligned with criminal investigators. Probation officers and pretrial services officers benefit from inclusion in the availability pay definition.

Who Bears the Burden and How

OPM retirement staff must calculate estimates, receive lump-sum payments, administer annuity reductions, and issue regulations within one year. Federal agencies employing officers must retain and provide payroll data showing compensation lost to premium pay caps. Thrift Savings Board staff must coordinate transfer procedures for officers using TSP funds for lump-sum payments. Federal taxpayers bear costs from higher annuities and tax credits for lump-sum payments.

Key Provisions

• Adds uncapped premium pay to law enforcement annuity calculations when officers make required payments or accept actuarial reductions.
• Requires OPM estimates, 90-day elections, one-year regulations, TSP transfer procedures, and agency payroll data retention.
• Extends availability pay to Postal Inspectors, GS-1811 criminal investigators, Federal air marshals, DSS agents, probation officers, and pretrial services officers.
• Creates a tax credit for lump-sum payments made to receive the adjusted annuity treatment.