Federal Retirement Reform Act of 1985

(Measure indefinitely postponed in Senate (See H.R. 2672 as passed Senate for similar provisions))

Federal Retirement Reform Act of 1985 - Title I: Federal Retirement System - Establishes the Federal Retirement System for Federal employees, postal employees, and Members of Congress who began service after December 31, 1983. Sets forth provisions for the basic plan, including: (1) entitlements to retirement based on age and years of service; (2) the formulas for computing an annuity; (3) funding and contributions; and (4) the payment of lump-sum benefits.

Requires employees of nonappropriated funds instrumentalities who are post-1983 employees to be participants in the Federal Retirement System.

Grants Federal retirees an 18-month period after their retirement date to elect a survivor annuity for their spouses, such annuity. Declares such election ineffective unless: (1) the spouse is notified in advance of the election; and (2) the necessary amount to cover such election is deposited in the Civil Service Retirement and Disability Fund prior to the expiration of the 18-month period.

Declares that a survivor annuity election made under the provisions of this Act voids any such previous election.

Directs the Office of Personnel Management (OPM) to annually inform each employee and Member of his or her right of such election, including applicable procedures and deadlines.

Establishes a tax-deferred Thrift Savings Plan under which a participant may contribute up to ten percent of his or her annual basic pay or disability benefits. Requires the employing agency of such participant to match such contribution up to five percent. Excludes amounts contributed to such plan from an employee's gross income for income tax purposes. Provides a vesting schedule for the plan. Describes the optional ways an employee may elect to receive entitlements upon separation from Government.

Establishes in the Treasury the Thrift Savings Fund for deposit of amounts contributed under the plan. Prescribes how money in such Fund shall be invested.

Authorizes the making of loans from the Fund to participants.

Describes the survivor benefits of the basic plan and the thrift plan.

Describes the disability benefits available to a participant with at least 18 months of service. Establishes in the Treasury the Federal Employee's Disability Insurance Fund to which agencies must make payments from salary appropriations.

Sets forth general and administrative provisions.

Directs OPM to pay all benefits payable under the basic plan of the pension system and administer provisions not specifically assigned to another entity.

Provides for annual cost-of-living adjustments in basic pensions based upon an increase in the Consumer Price Index.

Sets forth transition provisions for certain individuals subject to the Civil Service Retirement and Disability System who elect to participate in the Federal Retirement System.

Establishes provisions for crediting the service of individuals who transfer among government retirement systems.

Establishes in the Executive branch the Federal Retirement Thrift Investment Board to be responsible for policies and regulations for, and review of, the investment and management of the Thrift Savings Fund. Directs the Board (headed by an Executive Director) to establish a Federal Retirement Thrift Advisory Committee and an Employee Advisory Committee to advise the Board on matters relating to investment policies for the Fund.

Title II: Amendments Relating to Social Security - Amends the Social Security Act and the Internal Revenue Code of 1954 to cover service by an individual who participates in the pension system.

Title III: Miscellaneous and Conforming Amendments - Makes miscellaneous, technical, and conforming amendments as a result of provisions of this Act.

Increases disability protection for certain occupationally disabled employees.

Directs OPM to: (1) establish a training program for retirement counselors of Federal agencies; and (2) publicize a telephone number for the exclusive use of annuitants with questions relating to retirement benefits. Requires the Director of OPM to assign knowledgeable staff to respond to such calls. Requires the training program to provide comprehensive training on provisions relating to, and the administration of, civil service retirement benefits. Requires that such training be designed to promote fully informed retirement decisions by employees and be revised as necessary to assure that current information is furnished to counselors.

Requires the Director to conduct a training session once each quarter-year. Requires each retirement counselor to complete a training session once each year.

Title IV: Central Intelligence Agency Retirement - Amends the Central Intelligence Agency Retirement Act of 1964 for Certain Employees to revise the method of computing employee contributions to the Central Intelligence Agency Retirement and Disability Fund for employees whose service began prior to January 1, 1984.

Provides a formula for an offset in annuities by the amount of social security benefits received by an annuitant or survivor.

Makes recall service provisions inapplicable to retirees who become subject to the retirement system for post-1983 employees.

Establishes the Central Intelligence Agency Pension System for officers and employees whose service began after December 31, 1983, comparable to the Federal Retirement System. Sets forth special entitlement provisions for employees subject to hazardous duty abroad.

Directs the Director of the Central Intelligence Agency to administer the pension system and perform the functions and duties which would otherwise be performed by the Office of Personnel Management.

Requires the Director to determine whether it would be appropriate to expand the coverage of the Central Intelligence Agency Retirement and Disability System to include officers and employees who are subject to the Civil Service Retirement and Disability System. Requires a report to the Congress on such determinations within one year of enactment of this Act.

Title V: Foreign Service Retirement - Amends the Foreign Service Act of 1980 to revise the method of computing employee contributions to the Foreign Service Retirement and Disability Fund for employees whose service began before January 1, 1984.

Provides a formula for an offset in annuities by the amount of social security benefits received by an annuitant or survivor.

Revises recall and reemployment provisions.

Amends the Foreign Service Act of 1980 to establish the Foreign Service Pension System for members of the Foreign Service whose service began after December 31, 1983, similar to the Federal Retirement System.

Title VI: Authorizations, Application, and Effective Dates - Authorizes appropriations to the Federal Retirement Thrift Investment Board for FY 1986 and 1987. Declares the effective date of this Act to be January 1, 1987, except certain other specified provisions.