District of Columbia Retirement Reform Act

(Reported to Senate from the Committee on Governmental Affairs with amendment, S. Rept. 95-869)

District of Columbia Retirement Reform Act - =Title I: Financing of Retirement Benefits= - Establishes the District of Columbia Retirement Board to exercise exclusive authority to manage and control the funds established by this Title. Details provisions relating to the Board's composition, the election and terms of office of Board members, the procedures to be followed by the Board, and the financing of the Board's operations.

Establishes the District of Columbia Police Officers and Fire Fighters' Retirement Fund into which shall be deposited: (1) amounts withheld from the salaries of, and deposited by, members of the Metropolitan Police and the Fire Department of the District of Columbia, pursuant to the Policemen and Firemen's Retirement and Disability Act, (2) amounts appropriated to the Fund pursuant to this Act, and (3) amounts made as return on investment of the assets of the Fund.

Establishes the District of Columbia Teachers' Retirement Fund into which shall be deposited: (1) amounts withheld from the salaries, and amounts deposited or transferred by, each teacher in the public schools of the District of Columbia for such teachers' retirement account, (2) assets transferred and amounts appropriated to the Fund pursuant to this Act, and (3) amounts made as return on investment of the assets of the Fund.

Establishes the District of Columbia Judges Retirement Fund into which shall be deposited: (1) amounts withheld from the salaries of, and amounts deposited or transferred by, judges of the District of Columbia Court of Appeals and the Superior Court of the District of Columbia, (2) assets transferred and amounts appropriated to the Fund pursuant to this Act, and (3) amounts made as return on investment of the assets of the Fund.

Requires that the assets of each Fund established by this Act be kept separate from other moneys, but not necessarily kept separate from one another if the Board determines that commingling of such assets is advisable for investment purposes.

Requires the Board to maintain a cash reserve for the Funds sufficient to meet current annuity and disability benefits outlays.

Prohibits the investment of assets of the funds in: (1) interest-bearing bonds, notes, or certificates of indebtedness of the government of the District of Columbia, or of the Commonwealth of Virginia, or of the State of Maryland, or of any political subdivision thereof, or of any entity subject to control by any such government or combination of such governments; and (2) obligations fully guaranteed as to payment of both principal and interest by the government of the District of Columbia, the government of Maryland, or the government of Virginia. Requires that assets of the funds be invested in Federal instruments or certificates of deposit pending the commencement of Board responsibility. Directs the Board to engage an enrolled actuary to periodically determine: (1) the amount required to be deposited in each Fund annually in perpetuity in order to meet the cost of annuities and other retirement and disability benefits payable in perpetuity from the fund less the amount of employee contributions to the Fund, and (2) the amount required to meet the obligations of each Fund for the next fiscal year less employee contributions for such period.

Sets forth formulae to determine annual Federal amortization payments and annual District of Columbia payments to each Fund.

Authorizes the appropriation of specified sums for Federal and District of Columbia contributions to each Fund.

Directs the Board to publish annual reports with respect to each retirement program and corresponding Fund to which this Act applies. Requires that each such report include: (1) a financial statement containing a statement of Fund assets and liabilities, a statement of changes in net assets available for benefits under the retirement program, and other specified information; (2) an investment evaluation statement; (3) an actuarial statement containing specified information relating to the Fund and retirement program; (4) information relating to the number of employees covered by the retirement program, persons receiving compensation from the Fund, and specified changes to the Fund's operation; and (5) a report from each insurance company or similar organization from which program benefits are purchased or which guarantees such benefits.

Direct the Board to prepare summary retirement programs descriptions to be supplied to each participant in, and beneficiary under, each retirement program to which this Act applies.

Requires that annual reports and copies of summary retirement program descriptions be filed with the Mayor of the District of Columbia, the District of Columbia Council, the Speaker of the House of Representatives, and the President pro tempore of the Senate.

Empowers the Mayor, the Council, or either House of Congress to reject any filing upon making specified findings. Suspends Federal contributions to any Fund with respect to which a filing is rejected or no timely filing has been made pending an acceptable filing.

Requires that copies of filed reports and descriptions be made available for public inspection.

Authorizes the Board to designate one or more persons to exercise fiduciary responsibilities with respect to Funds established by this Act but places with the Board fiduciary responsibility for the oversight of any person so designated. Lists standards and guidelines to be followed by fiduciaries in the discharge of their duties. Specifies circumstances under which a fiduciary shall be liable for a breach of fiduciary duty by another fiduciary. Prohibits a fiduciary from causing the Fund to engage in specified transactions with interested parties or with itself.

Deems void any provision in an agreement of instrument which purports to relieve a fiduciary from responsibility or liability. Permits the Board, fiduciaries, and groups of retirement program participants to purchase insurance to cover liability or losses arising from a breach of fiduciary duty.

Prohibits any person convicted of specified crimes from serving as an administrator, fiduciary, counsel, or employee of, or as a consultant to, any Fund established by this Act within five years of any such conviction or release from imprisonment, unless the Board of Parole of the United States determines that such person's service with the Fund would not be contrary to the purposes of this Act. Requires that certain fund fiduciaries with limited assets be bonded.

Sets forth criminal penalties for violation of fiduciary obligations. Creates civil causes of action for the benefit of specified plaintiffs to enforce the provisions of this Act. Specifies time limits within which civil actions grounded on breach of fiduciary duty must be brought.

=Title II: Changes in Retirement Benefits= - Sets the salary base period for computation of annuities with respect to participants in the District of Columbia Policemen and Firemen's Retirement Fund hired at least 90 days subsequent to the enactment of this Act at the highest annual rate resulting from averaging such participant's rates of basic salary for any 36 months rather than for any 12 months of consecutive service.

Prohibits any such new participant from qualifying for service retirement before having served 25 years and reached age 50.

Removes as a basis for disability retirement the aggravation of a pre-existing injury or disease not incurred in the line of duty, and conditions disability retirement due to aggravation while on duty of an injury or disease which was received in the line of duty on prompt reporting of the injury or disease.

Creates a percentage disability system for computation and payment of annuities. Sets forth procedures and criteria for determining the percentage of disability. Authorizes redetermination of the percentage of disability of an annuitant until he reaches age 50.

Permits cessation of disability annuities of an annuitant under 50 years of age who refuses to accept an offer of reemployment in the department from which he retired at the same grade or rank held at retirement.

Reduces the annuities of certain annuitants on the basis of outside earned income according to a specified formula.

Requires mandatory annual physical examinations of annuitants under age 50.

Entitles any participant who completes five years of service and who is thereafter separated from service other than through disability retirement or voluntary optional retirement to elect to either (1) receive at the time of separation, the amount of deductions from such individual's salary deposited in the Fund, or (2) receive an annuity beginning on the first day of the month during which such participant attains age 55 or on the first day of the month after such participant's separation from service, whichever occurs later. Grants a further option to persons electing to receive an annuity to receive reduced benefits beginning at age 50

Permits officers and members of the Metropolitan Police Force or the Fire Department who are on approved leave without pay to serve as a full-time officer or employee of a labor organization to purchase service credits toward retirement.

Revises the method for computing police and fire fighter survivors' annuities.

Sets forth guidelines for securing service credit toward law enforcement and fire fighter retirement for past service performed through redeposits of refunded retirement monies.

Authorizes cost-of-living adjustments, based upon increases in the consumer price index for urban consumers, in (1) annuities payable from the District of Columbia Police Officers' and Fire Fighters' Retirement Fund, and (2) benefits for survivors of members of the United States Park Police, the Executive Protective Service, and the United States Secret Service Division.

Eliminates the one percent increase added on to cost-of- living increases in the annuities of District of Columbia public school teachers and judges.