LEO Fair Retirement Act of 2025

Bill Number

H.R. 3305

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Government Operations and Politics

Status

Introduced

Latest Action

2025-05-08: Referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Last Updated

2026-05-21T08:08:24Z

AI-Generated Summary

Purpose of the Legislation

The "LEO Fair Retirement Act of 2025" (H.R. 3305) aims to improve retirement benefits for federal law enforcement officers by allowing them to receive credit in their pensions for overtime hours they worked but were not paid due to existing pay caps. It recognizes the unique demands and risks of federal law enforcement roles, seeking to aid recruitment and retention amid national security challenges.

Key Provisions

• Inclusion of Unpaid Overtime in Retirement Calculations:
• Amends the Civil Service Retirement System (CSRS, under 5 U.S.C. § 8339) and Federal Employees Retirement System (FERS, under 5 U.S.C. § 8415) to include "hypothetical" premium pay (overtime compensation capped under 5 U.S.C. § 5547) in the average pay used to compute an officer's annuity (pension).
• Applies only if the officer makes a one-time lump-sum payment to the Office of Personnel Management (OPM) to cover the difference in contributions (employee and employer shares) for the three-year average pay period, or elects an actuarial reduction (a permanent decrease in the annuity to offset the cost).
• Officers can request an estimate of the payment and annuity impact up to 180 days before retirement and must elect within 90 days of receiving it.
• Definition of "law enforcement officer" aligns with "qualified public safety employee" under Internal Revenue Code § 72(t)(10), covering roles like federal criminal investigators.

• Eligibility for Availability Pay:
• Extends "availability pay" (a 25% premium for criminal investigators on call 24/7, under 5 U.S.C. § 5545a) to "covered employees," including Postal Inspectors, GS-1811 criminal investigators, Federal Air Marshals, Diplomatic Security Service special agents, probation officers, and pretrial services officers.
• Treats these employees as criminal investigators for pay and overtime exemption purposes under federal labor laws.

• Tax Credit for Lump-Sum Payments:
• Provides a non-refundable personal tax credit equal to the lump-sum payment made for annuity adjustments, reducing the individual's federal income tax liability.

• Implementation and Regulations:
• Applies to annuities calculated one year after enactment.
• OPM must issue regulations within one year, including procedures for using Thrift Savings Plan (TSP) funds for lump-sum payments, agency payroll record-keeping (e.g., tracking unpaid overtime differences), and data solicitation from agencies.

Significant Changes to Existing Law

• Retirement Annuity Computation: Previously, capped premium pay was excluded from average pay calculations for pensions under both CSRS and FERS. This bill introduces an optional mechanism to include it via a lump-sum or reduction, effectively crediting unpaid overtime in retirement without altering active-duty pay caps.
• Availability Pay Expansion: Broadens eligibility beyond traditional criminal investigators to include additional federal roles (e.g., postal and judicial officers), aligning them with overtime exemptions under the Fair Labor Standards Act.
• Tax Treatment: Introduces a new tax credit specifically for these retirement-related payments, which did not exist before.
• Administrative Requirements: Mandates new OPM regulations and agency obligations for retaining historical payroll data, changing how federal employment records are managed.

Potential Impacts

• On Government Agencies: Increases administrative workload for OPM (e.g., processing estimates, payments, and regulations) and employing agencies (e.g., tracking and reporting unpaid overtime data). Could raise long-term pension costs due to higher annuities, potentially straining federal budgets.
• On Citizens (Federal Employees): Benefits eligible law enforcement officers by allowing higher retirement income (if they opt in), improving financial security after careers involving irregular hours and risks. May enhance job appeal, aiding retention in high-stress roles.
• On International Relations: No direct impact, though it could indirectly support U.S. agencies like the Diplomatic Security Service in maintaining personnel for overseas security operations.

Main Stakeholders Affected

• Federal Law Enforcement Officers: Primary beneficiaries, including those in investigative, protective, and judicial roles across agencies like the FBI, DEA, U.S. Postal Service, Department of Justice, and Department of State.
• Office of Personnel Management (OPM): Responsible for implementation, regulations, and annuity adjustments.
• Federal Agencies Employing Officers: Must provide payroll data and comply with new record-keeping.
• Internal Revenue Service (IRS) and Treasury Department: Handle the new tax credit.
• Thrift Savings Plan (TSP) Participants: Can use TSP funds for lump-sum payments, affecting retirement savings options.

Notable Legal, Constitutional, or Political Implications

• Legal Implications: Strengthens federal employee benefits law by addressing a gap in premium pay caps (established in 5 U.S.C. § 5547), ensuring consistency with tax code definitions. The irrevocable election and actuarial options provide clear procedural safeguards but may lead to disputes over payroll data accuracy.
• Constitutional Implications: None significant; the bill operates within Congress's authority over federal compensation (Article I, Section 8) and does not infringe on individual rights.
• Political Implications: Bipartisan sponsorship (introduced by Rep. Pou with Republicans and Democrats) highlights cross-party support for law enforcement. It underscores ongoing debates on federal worker pay equity, potentially setting precedent for similar adjustments in other high-risk public safety roles, while raising fiscal concerns about unfunded pension liabilities.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Pou, Nellie [D-NJ-9]

Cosponsors (9)

Rep. Bacon, Don [R-NE-2], Rep. Fitzpatrick, Brian K. [R-PA-1], Rep. Connolly, Gerald E. [D-VA-11], Rep. Gooden, Lance [R-TX-5], Rep. Thanedar, Shri [D-MI-13], Rep. Sewell, Terri A. [D-AL-7], Rep. Lawler, Michael [R-NY-17], Rep. McDonald Rivet, Kristen [D-MI-8], Rep. Neguse, Joe [D-CO-2]

Recent Actions

• 2025-05-08: Referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-05-08: Referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-05-08: Introduced in House
• 2025-05-08: Introduced in House

Bill Versions

• LEO Fair Retirement Act of 2025 — issued 2025-05-08 — PDF (10 pages)