A bill to amend Title 5, United States Code, to provide for retention of grade and pay for certain employees.

Permits any Federal employee who, as a result of a reduction in force, is placed in a position in a lower grade than his or her previous position to retain such previous higher position for a period of two years after such reduction, provided such employee has been in such higher position for at least one year prior to such reduction. Permits a Federal employee who is in a position which has been reduced in grade to retain the pre-reduction grade of such position for as long as he or she continues in such position.

Entitles Federal employees who are subject to a reduction in pay rate as a result of: (1) the expiration of the two-year period after a reduction in force specified in this Act; (2) the termination of a special pay rate; or (3) other specified reason to a pay rate in the amount of the lower of the employee's previous higher pay rate or 150 percent of the rate of pay for such employee's position after such reduction, plus a specified amount.

Requires Federal agencies to report position vacancies to the Civil Service Commission and to take other steps to assist employees subject to this Act to obtain positions at a higher rate to minimize the need to resort to the application of the benefits created by this Act. Permits benefits authorized by this Act to be terminated with respect to any employee who declines a reasonable offer of a position the grade of pay of which was equal to or greater than the retained grade or pay.