USC - Computation of annuities

View all text of Part C [§ 2031 - § 2036]

§ 2031. Computation of annuities

(a) Annuity of participant

(1) Computation of annuityThe annuity of a participant is the product of—

(A) the participant’s high-3 average pay (as defined in paragraph (4)); and

(B) the number of years, not exceeding 35, of service credit (determined in accordance with sections 2081 and 2082 of this title) multiplied by 2 percent.

(2) Credit for unused sick leave

(3) Crediting of part-time service

(A) In general

(B) Computation of pre-April 7, 1986, annuity

(C) Computation of post-April 6, 1986, annuityThe portion of an annuity referred to in subparagraph (A) with respect to service after April 6, 1986, shall be the product of—

(i) the amount computed under paragraph (1), using the participant’s length of service after that date and the participant’s high-3 average pay, as determined by using the annual rate of basic pay that would be payable for full-time service; and

(ii) the ratio which the participant’s actual service after April 6, 1986 (as determined by prorating the participant’s total service after that date to reflect the service that was performed on a part-time basis) bears to the total service after that date that would be creditable for the participant if all the service had been performed on a full-time basis.

(D) Treatment of employment on temporary or intermittent basis

(4) High-3 average pay defined

(5) Computation of service

(b) Spouse or former spouse survivor annuity

(1) Reduction in participant’s annuity to provide spouse or former spouse survivor annuity

(A) General rule

(B) Joint election for waiver or reduction of spouse survivor annuity

(D) Unilateral elections in absence of spouse or former spouse

(2) Amount of reduction in participant’s annuity

(3) Amount of surviving spouse annuity

(A) In general

(B) Limitation

(1) Survivor annuity elections

(A) Election when spouse coverage waived at time of retirementA participant or former participant who retires after March 31, 1992 and who—

(i) is married at the time of retirement; and

(ii) elects at that time (in accordance with subsection (b)) to waive a survivor annuity for the spouse,

may, during the 18-month period beginning on the date of the retirement of the participant, elect to have a reduction under subsection (b) made in the annuity of the participant (or in such portion thereof as the participant may designate) in order to provide a survivor annuity for the participant’s spouse.

(B) Election when reduced spouse annuity electedA participant or former participant who retires after March 31, 1992, and—

(i) who, at the time of retirement, is married, and

(ii) who, at that time designates (in accordance with subsection (b)) that a portion of the annuity of such participant is to be used as the base for a survivor annuity,

may, during the 18-month period beginning on the date of the retirement of such participant, elect to have a greater portion of the annuity of such participant so used.

(2) Deposit required

(A) Requirement

(B) Amount of depositThe amount to be deposited with respect to an election under this subsection is the amount equal to the sum of the following:

(i) Additional cost to systemThe additional cost to the system that is associated with providing a survivor annuity under subsection (b) and that results from such election, taking into account—(I) the difference (for the period between the date on which the annuity of the participant or former participant commences and the date of the election) between the amount paid to such participant or former participant under this subchapter and the amount which would have been paid if such election had been made at the time the participant or former participant applied for the annuity; and(II) the costs associated with providing for the later election.

(ii) Interest

(3) Voiding of previous elections

(4) Reductions in annuity

(5) Rights and obligations resulting from reduced annuity election

(d) Annuities for surviving children

(1) Participants dying before April 1, 1992In the case of a retired participant who died before April 1, 1992, and who is survived by a child or children—

(A) if the retired participant was survived by a spouse, there shall be paid from the fund to or on behalf of each such surviving child an annuity determined under paragraph (3)(A); and

(B) if the retired participant was not survived by a spouse, there shall be paid from the fund to or on behalf of each such surviving child an annuity determined under paragraph (3)(B).

(2) Participants dying on or after April 1, 1992In the case of a retired participant who dies on or after April 1, 1992, and who is survived by a child or children—

(A) if the retired participant is survived by a spouse or former spouse who is the natural or adoptive parent of a surviving child of the participant, there shall be paid from the fund to or on behalf of each such surviving child an annuity determined under paragraph (3)(A); and

(B) if the retired participant is not survived by a spouse or former spouse who is the natural or adoptive parent of a surviving child of the participant, there shall be paid to or on behalf of each such surviving child an annuity determined under paragraph (3)(B).

(3) Amount of annuity

(A) The annual amount of an annuity for the surviving child of a participant covered by paragraph (1)(A) or (2)(A) of this subsection (or covered by paragraph (1)(A) or (2)(A) of section 2052(c) of this title) is the smallest of the following:

(i) 60 percent of the participant’s high-3 average pay, as determined under subsection (a)(4), divided by the number of children.

(ii) $900, as adjusted under section 2131 of this title.

(iii) $2,700, as adjusted under section 2131 of this title, divided by the number of children.

(B) The amount of an annuity for the surviving child of a participant covered by paragraph (1)(B) or (2)(B) of this subsection (or covered by paragraph (1)(B) or (2)(B) of section 2052(c) of this title) is the smallest of the following:

(i) 75 percent of the participant’s high-3 average pay, as determined under subsection (a)(4), divided by the number of children.

(ii) $1,080, as adjusted under section 2131 of this title.

(iii) $3,240, as adjusted under section 2131 of this title, divided by the number of children.

(4) Recomputation of child annuities

(A) In the case of a child annuity payable under paragraph (1), upon the death of a surviving spouse or the termination of the annuity of a child, the annuities of any remaining children shall be recomputed and paid as though the spouse or child had not survived the retired participant.

(B) In the case of a child annuity payable under paragraph (2), upon the death of a surviving spouse or former spouse or termination of the annuity of a child, the annuities of any remaining children shall be recomputed and paid as though the spouse, former spouse, or child had not survived the retired participant. If the annuity of a surviving child who has not been receiving an annuity is initiated or resumed, the annuities of any other children shall be recomputed and paid from that date as though the annuities of all currently eligible children were then being initiated.

(5) “Former spouse” defined

(e) Commencement and termination of child annuities

(1) Commencement

(2) Termination

(f) Participants not married at time of retirement

(1) Designation of persons with insurable interest

(A) Authority to make designation

(B) Reduction in participant’s annuity

(D) Recomputation of participant’s annuity on death of designated individual

(2) Election of survivor annuity upon subsequent marriage

(g) Effect of divorce after retirement

(1) Recomputation of retired participant’s annuity upon divorce

(2) Election of survivor annuity upon subsequent remarriage

(A) In general

(B) When annuity previously not (or not fully) reduced

(i) Election

(ii) Deposit required(I) The retired participant shall, within two years after the date of the remarriage (or by August 14, 1993 for any remarriage that occurred before August 14, 1991), deposit in the fund an amount determined by the Director, as nearly as may be administratively feasible, to reflect the amount by which the retired participant’s annuity would have been reduced if the election had been in effect since the date the annuity commenced, plus interest.(II) The annual rate of interest for each year during which the retired participant’s annuity would have been reduced if the election had been in effect since the date the annuity commenced shall be 6 percent.(III) If the retired participant does not make the deposit, the Director shall collect such amount by offset against the participant’s annuity, up to a maximum of 25 percent of the net annuity otherwise payable to the retired participant, and the retired participant is deemed to consent to such offset.(IV) The deposit required by this subparagraph may be made by the surviving spouse of the retired participant.

(h) Conditional election of insurable interest survivor annuity by participants married at the time of retirement

(1) Authority to make designation

(2) Reduction in participant’s annuity

Commencement of survivor annuity

(4) Recomputation of participant’s annuity on death of designated individual

(i) Coordination of annuities

(1) Surviving spouse

(2) Former spouse

(3) Surviving spouse of post-retirement marriage

(j) Supplemental survivor annuities

(1) Spouse of recalled annuitant

(2) Regulations

(k) Offset of annuities by amount of social security benefit

(l) Information from other agencies

(1) Other agenciesFor the purpose of ensuring the accuracy of the information used in the determination of eligibility for and the computation of annuities payable from the fund under this subchapter, at the request of the Director—

(A) the Secretary of Defense shall provide information on retired or retainer pay paid under title 10;

(B) the Secretary of Veterans Affairs shall provide information on pensions or compensation paid under title 38;

(C) the Secretary of Health and Human Services shall provide information contained in the records of the Social Security Administration; and

(D) the Secretary of Labor shall provide information on benefits paid under subchapter I of chapter 81 of title 5.

(2) Limitation on information requested

(3) Limitation on uses of information

(m) Information on rights under systemThe Director shall, on an annual basis—

(1) inform each retired participant of the participant’s right of election under subsections (c), (f)(2), and (g); and

(2) to the maximum extent practicable, inform spouses and former spouses of participants, former participants, and retired participants of their rights under this chapter.

(Pub. L. 88–643, title II, § 221, as added Pub. L. 102–496, title VIII, § 802, Oct. 24, 1992, 106 Stat. 3204; amended Pub. L. 103–178, title II, § 202(a)(4), Dec. 3, 1993, 107 Stat. 2026; Pub. L. 116–92, div. E, title LXII, § 6202(a)(1), Dec. 20, 2019, 133 Stat. 2184.)