Lump-sum benefits; designation of beneficiary; order of precedence

5 U.S.C. § 8342

• Title: 5 — Government Organization and Employees
• Chapter: SUBCHAPTER III—CIVIL SERVICE RETIREMENT

Text

(a) Subject to subsection (j) of this section, an employee or Member who—
(1)(A) is separated from the service for at least thirty-one consecutive days; or
(B) is transferred to a position in which he is not subject to this subchapter, or chapter 84 of this title, and remains in such a position for at least thirty-one consecutive days;
(2) files an application with the Office of Personnel Management for payment of the lump-sum credit;
(3) is not reemployed in a position in which he is subject to this subchapter, or chapter 84 of this title, at the time he files the application; and
(4) will not become eligible to receive an annuity within thirty-one days after filing the application,
is entitled to be paid the lump-sum credit. Except as provided in section 8343a or 8334(d)(2) of this title, the receipt of the payment of the lump-sum credit by the employee or Member voids all annuity rights under this subchapter based on the service on which the lump-sum credit is based, until the employee or Member is reemployed in the service subject to this subchapter. In applying this subsection to an employee or Member who becomes subject to chapter 84 (other than by an election under title III of the Federal Employees' Retirement System Act of 1986) and who, while subject to such chapter, files an application with the Office for a payment under this subsection—
(i) entitlement to payment of the lump-sum credit shall be determined without regard to paragraph (1) or (3) if, or to the extent that, such lump-sum credit relates to service of a type described in clauses (i) through (iii) of section 302(a)(1)(C) of the Federal Employees' Retirement System Act of 1986; and
(ii) if, or to the extent that, the lump-sum credit so relates to service of a type referred to in clause (i), it shall (notwithstanding section 8331(8)) consist of—
(I) the amount by which any unrefunded amount described in section 8331(8)(A) or (B) relating to such service, exceeds 1.3 percent of basic pay for such service; and
(II) interest on the amount payable under subclause (I), computed in a manner consistent with applicable provisions of section 8331(8).
(b) Under regulations prescribed by the Office, a present or former employee or Member may designate a beneficiary or beneficiaries for the purpose of this subchapter.
(c) Lump-sum benefits authorized by subsections (d)–(f) of this section shall be paid to the person or persons surviving the employee or Member and alive at the date title to the payment arises in the following order of precedence, and the payment bars recovery by any other person:
First, to the beneficiary or beneficiaries designated by the employee or Member in a signed and witnessed writing received in the Office before his death. For this purpose, a designation, change, or cancellation of beneficiary in a will or other document not so executed and filed has no force or effect.
Second, if there is no designated beneficiary, to the widow or widower of the employee or Member.
Third, if none of the above, to the child or children of the employee or Member and descendants of deceased children by representation.
Fourth, if none of the above, to the parents of the employee or Member or the survivor of them.
Fifth, if none of the above, to the duly appointed executor or administrator of the estate of the employee or Member.
Sixth, if none of the above, to such other next of kin of the employee or Member as the Office determines to be entitled under the laws of the domicile of the employee or Member at the date of his death.
For the purpose of this subsection, "child" includes a natural child and an adopted child, but does not include a stepchild.
(d) If an employee or Member dies—
(1) without a survivor; or
(2) with a survivor or survivors and the right of all survivors terminates before a claim for survivor annuity is filed;
or if a former employee or Member not retired dies, the lump-sum credit shall be paid.
(e) If all annuity rights under this subchapter based on the service of a deceased employee or Member terminate before the total annuity paid equals the lump-sum credit, the difference shall be paid.
(f) If an annuitant dies, annuity accrued and unpaid shall be paid.
(g) Annuity accrued and unpaid on the termination, except by death, of the annuity of an annuitant or survivor annuitant shall be paid to that individual. Annuity accrued and unpaid on the death of a survivor annuitant shall be paid in the following order of precedence, and the payment bars recovery by any other person:
First, to the duly appointed executor or administrator of the estate of the survivor annuitant.
Second, if there is no executor or administrator, payment may be made, after 30 days from the date of death of the survivor annuitant, to such next of kin of the survivor annuitant as the Office determines to be entitled under the laws of the domicile of the survivor annuitant at the date of his death.
(h) Amounts deducted and withheld from the basic pay of an employee or Member from the first day of the first month which begins after he has performed sufficient service (excluding service which the employee or Member elects to eliminate for the purpose of annuity computation under section 8339 of this title) to entitle him to the maximum annuity provided by section 8339 of this title, together with interest on the amounts at the rate of 3 percent a year compounded annually from the date of the deductions to the date of retirement or death, shall be applied toward any deposit due under section 8334 of this title, and any balance not so required is deemed a voluntary contribution for the purpose of section 8343 of this title.
(i) An employee who—
(1) is separated from the service before July 12, 1960; and
(2) continues in the service after July 12, 1960, without break in service of 1 workday or more;
is entitled to the benefits of subsection (h) of this section.
(j)(1)(A) Payment of the lump-sum credit under subsection (a) may be made only if the spouse, if any, and any former spouse of the employee or Member are notified of the employee or Member's application.
(B) The Office shall prescribe regulations under which the lump-sum credit shall not be paid without the consent of a spouse or former spouse of the employee or Member where the Office has received such additional information and documentation as the Office may require that—
(i) a court order bars payment of the lump-sum credit in order to preserve the court's ability to award an annuity under section 8341(h) or section 8345(j); or
(ii) payment of the lump-sum credit would extinguish the entitlement of the spouse or former spouse, under a court order on file with the Office, to a survivor annuity under section 8341(h) or to any portion of an annuity under section 8345(j).
(2)(A) Notification of a spouse or former spouse under this subsection shall be made in accordance with such requirements as the Office shall by regulation prescribe.
(B) Under the regulations, the Office may provide that paragraph (1)(A) of this subsection may be waived with respect to a spouse or former spouse if the employee or Member establishes to the satisfaction of the Office that the whereabouts of such spouse or former spouse cannot be determined.
(3) The Office shall prescribe regulations under which this subsection shall be applied in any case in which the Office receives two or more such orders or decrees.

History

(Pub. L. 89–554, Sept. 6, 1966, 80 Stat. 579; Pub. L. 90–83, §1(81), Sept. 11, 1967, 81 Stat. 217; Pub. L. 95–454, title IX, §906(a)(2), (3), Oct. 13, 1978, 92 Stat. 1224; Pub. L. 97–253, title III, §303(c), Sept. 8, 1982, 96 Stat. 794; Pub. L. 97–346, §3(f), Oct. 15, 1982, 96 Stat. 1648; Pub. L. 98–615, §2(5), Nov. 8, 1984, 98 Stat. 3201; Pub. L. 99–251, title II, §208, Feb. 27, 1986, 100 Stat. 25; Pub. L. 99–335, title II, §§204(b)(2), 207(h), June 6, 1986, 100 Stat. 592, 596; Pub. L. 100–238, title I, §105(b), Jan. 8, 1988, 101 Stat. 1746; Pub. L. 101–508, title VII, §7001(b)(2)(D), Nov. 5, 1990, 104 Stat. 1388–329; Pub. L. 106–361, §3(a), Oct. 27, 2000, 114 Stat. 1402.)

Editorial Notes

In subsection (a), the words "before October 1, 1956" are substituted for "prior to the effective date of the Civil Service Retirement Act Amendments of 1956" on authority of §406 of the Act of July 31, 1956, ch. 804, 70 Stat. 761.
In subsection (g), the words "the expiration of" are omitted as surplusage.
Standard changes are made to conform with the definitions applicable and the style of this title as outlined in the preface to the report.
In subsection (a), the amendment is made for consistency within the subchapter and to reflect that it is the individual, rather than the position, that is subject to the subchapter.
In the last sentence of subsection (c), the words "this subsection" are substituted for "section 11" to reflect the codification of title 5, United States Code.

Editorial Notes

References in Text
The Federal Employees' Retirement System Act of 1986, referred to in subsec. (a), is Pub. L. 99–335, June 6, 1986, 100 Stat. 514. Title III of the Federal Employees' Retirement System Act of 1986 amended sections 3121 and 6103 of Title 26, Internal Revenue Code, section 1005 of Title 39, Postal Service, and section 410 of Title 42, The Public Health and Welfare, enacted provisions set out as notes under sections 8331, 8401, 8432, and 8472 of this title and section 6103 of Title 26, and amended provisions set out as a note under section 8331 of this title. Section 302 of that Act is set out as a note under section 8331 of this title. For complete classification of this Act to the Code, see Short Title note set out under section 8401 of this title and Tables.

Amendments
2000—Subsec. (j)(1). Pub. L. 106–361 amended par. (1) generally. Prior to amendment, par. (1) read as follows: "Payment of the lump-sum credit under subsection (a) of this section—
"(A) may be made only if any current spouse and any former spouse of the employee or Member are notified of the employee or Member's application; and
"(B) shall be subject to the terms of a court decree of divorce, annulment, or legal separation or any court order or court approved property settlement agreement incident to such decree if—
"(i) the decree, order, or agreement expressly relates to any portion of the lump-sum credit involved; and
"(ii) payment of the lump-sum credit would extinguish entitlement of the employee's or Member's spouse or former spouse to a survivor annuity under section 8341(h) of this title or to any portion of an annuity under section 8345(j) of this title."
1990—Subsec. (a). Pub. L. 101–508 inserted "or 8334(d)(2)" after "8343a" in second sentence.
1988—Subsec. (a). Pub. L. 100–238 amended last sentence of subsec. (a) generally. Prior to amendment, last sentence read as follows: "In applying this subsection with respect to an employee or Member who becomes subject to chapter 84 of this title, entitlement to payment of the lump-sum credit shall be determined without regard to paragraph (1) or (3) if, and to the extent that, such lump-sum credit relates to service of a type described in clauses (i) through (iii) of section 302(a)(1)(C) of the Federal Employees' Retirement System Act of 1986."
1986—Subsec. (a). Pub. L. 99–335 inserted ", or chapter 84 of this title," in pars. (1)(B) and (3), substituted "Except as provided in section 8343a of this title, the" for "The" in second sentence, and inserted provisions regarding entitlement by an employee or Member who becomes subject to chapter 84 of this title to payment of a lump-sum credit.
Subsec. (j)(1)(B). Pub. L. 99–251 amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: "in any case in which there is a former spouse, shall be subject to the terms of a court order or decree issued with respect to such former spouse if—
"(i) the order or decree expressly relates to any portion of the lump-sum credit involved, and
"(ii) payment of the lump-sum credit would extinguish entitlement of the former spouse to a survivor annuity under section 8341(h) of this title or to any portion of an annuity under section 8345(j) of this title."
1984—Subsec. (a). Pub. L. 98–615, §2(5)(A), substituted "Subject to subsection (j) of this section, an" for "An" in provisions preceding par. (1).
Subsec. (j). Pub. L. 98–615, §2(5)(B), added subsec. (j).
1982—Subsec. (a). Pub. L. 97–346 substituted "such a position" for "such position" in par. (1)(B).
Pub. L. 97–253, §303(c), substituted provisions that an employee or Member who is separated from the service for at least 31 consecutive days or is transferred to a position in which he is not subject to this subchapter for 31 days, and who files an application with the Office of Personnel Management for payment of a lump-sum credit, is not reemployed in a position subject to this subchapter at the time of filing, and will not be eligible for an annuity within 31 days of filing, is entitled to be paid the lump-sum credit and upon receipt of such payment, all annuity rights based on the service upon which the credit is based are voided until reemployment under this subchapter occurs for provisions that such employee or Member who was separated from the service, or was transferred to a position in which he did not continue subject to this subchapter, was entitled to be paid the lump-sum credit if his separation or transfer occurred and application for payment was filed with the Office of Personnel Management at least 31 days before the earliest commencing date of any annuity for which he was eligible, that the receipt of payment of the lump-sum credit by the individual voided all annuity rights under this subchapter until he was reemployed in the service subject to this subchapter, and that this subsection also applied to an employee or Member separated before October 1, 1956, after completing at least 20 years of civilian service.
1978—Subsecs. (a) to (c), (g). Pub. L. 95–454 substituted "Office of Personnel Management" for "Civil Service Commission" and "Office" for "Commission".

Statutory Notes and Related Subsidiaries

Effective Date of 1990 Amendment
Amendment by Pub. L. 101–508 effective with respect to any annuity having a commencement date later than Dec. 1, 1990, see section 7001(b)(3) of Pub. L. 101–508, set out as a note under section 8334 of this title.

Effective Date of 1986 Amendment
Amendment by Pub. L. 99–335 effective Jan. 1, 1987, see section 702(a) of Pub. L. 99–335, set out as an Effective Date note under section 8401 of this title.

Effective Date of 1984 Amendment
Amendment by Pub. L. 98–615 effective May 7, 1985, with enumerated exceptions and specific applicability provisions, see section 4(a)(1) of Pub. L. 98–615, as amended, set out as a note under section 8341 of this title.

Effective Date of 1982 Amendment
Section 303(d)(2) of Pub. L. 97–253 provided that: "The amendment made by subsection (c) [amending this section] shall take effect October 1, 1982."

Effective Date of 1978 Amendment
Amendment by Pub. L. 95–454 effective 90 days after Oct. 13, 1978, see section 907 of Pub. L. 95–454, set out as a note under section 1101 of this title.

Reestablishment of Right To Receive Annuity by Judges Who Received Lump-sum Credit
Pub. L. 96–504, §2, Dec. 5, 1980, 94 Stat. 2741, provided that: "A present or former justice or judge of the United States, as defined by section 451 of title 28, United States Code, who, prior to the effective date of this section [Dec. 5, 1980], voided his right to receive an annuity under subchapter III of chapter 83 of title 5, United States Code, by applying for and receiving a refund of his lump-sum credit while serving as such a justice or judge may, upon application filed with the Office of Personnel Management within one year following the effective date of this section, redeposit such refund with interest computed under section 8334(e) of such title 5 and thereby reestablish his right to receive an annuity under such subchapter effective on the date he otherwise was eligible to receive an annuity. The surviving spouse of any such justice or judge who dies before the effective date of this section may apply to make such redeposit within one year following the effective date of this section and receive both (1) the amount of the annuity which the justice or judge would have been entitled to receive before his death had application been made by him for the annuity and (2) any survivor annuity the justice or judge could have provided under the provisions of law in effect at the time of separation from the service on which title to the annuity is based."