AMENDMENTS RELATING TO DISABILITY ANNUITIES.

SEC. 122. AMENDMENTS RELATING TO DISABILITY ANNUITIES. (a) Initial Disability Annuity Offset To Be Based on Actual Social Security Disability Insurance Benefit; Amount of Offset Not Subject to Adjustment Until After the First Year.— Section 8452(a)(2)(B)(i) of title 5, United States Code, is amended to read as follows: “(B) (i) For purposes of this paragraph, the assumed disability insurance benefit of an annuitant for any month shall be equal to— “(I) the amount of the disability insurance benefit to which the annuitant is entitled under section 223 of the Social Security Act for the month in which the annuity under this subchapter commences, or is restored, or, if no entitlement to such disability insurance benefits exists for such month, the first month thereafter for which the annuitant is entitled both to an annuity under this subchapter and disability insurance benefits under section 223 of the Social Security Act, adjusted by “(II) all adjustments made under section 8462(b) after the end of the period referred to in paragraph (1)(A)(i) (or, if later, after the end of the month preceding the first month for which the annuitant is entitled both to an annuity under this subchapter and disability insurance benefits under section 223 of the Social Security Act) and before the start of the month involved (without regard to whether the annuitant’s annuity was affected by any of those adjustments).”. (b) Revised Method for Redetermining a Disability Annuity at Age 62.— Section 8452(b) of title 5, United States Code, is amended to read as follows: “(b) (1) Except as provided in subsection (d), if an annuitant is entitled to an annuity under this subchapter as of the day before the date of the sixty-second anniversary of the annuitant’s birth (hereinafter in this section referred to as the annuitant’s ‘redetermination date’), such annuity shall be redetermined by the Office in accordance with paragraph (2). Effective as of the annuitant’s redetermination date, the annuity (as so redetermined) shall be in lieu of any annuity to which such annuitant would otherwise be entitled under this subchapter. “(2) (A) An annuity redetermined under this subsection shall be equal to the amount of the annuity to which the annuitant would be entitled under section 8415, taking into account the provisions of subparagraph (B). “(B) In performing a computation under this paragraph— “(i) creditable service of an annuitant shall be increased by including any period (or periods) before the annuitant’s redeter-101 STAT. 1754mination date during which the annuitant was entitled to an annuity under this subchapter; and “(ii) the average pay which would otherwise be used shall be adjusted to reflect all adjustments made under section 8462(b) with respect to any period (or periods) referred to in clause (i) (without regard to whether the annuitant’s annuity was affected by any of those adjustments).’’. (c) Method for Applying Cost-of-Living Adjustments to Certain Disability Annuity Provisions.— (1) Minimum disability annuity amount subject to adjustment after the first year.— Section 8452 is amended— (A) by redesignating subsection (d) as subsection (d)(1); and (B) by adding after subsection (d)(1), as so redesignated, the following: “(2) In applying this subsection with respect to any annuitant, the amount of an annuity so computed under section 8415 shall be adjusted under section 8462 (including subsection (c) thereof)— “(A) to the same extent, and otherwise in the same manner, as if it were an annuity— “(i) subject to adjustment under such section; and “(ii) with a commencement date coinciding with the date the annuitant’s annuity commenced or was restored under this subchapter, as the case may be; and “(B) whether the amount actually payable to the annuitant under this section in any month is determined under this subsection or otherwise.”. (2) Disability annuity colas.— (A) In general.— Section 8452(a)(1)(B) of title 5, United States Code, is amended to read as follows: “(B) An annuity computed under this paragraph— “(i) shall not, during any period referred to in subparagraph (A)(i), be adjusted under section 8462; but “(ii) shall, after the end of any period referred to in subparagraph (A)(i), be adjusted to reflect all adjustments made under section 8462(b) after the end of the period referred to in subparagraph (A)(i), whether the amount actually payable to the annuitant under this section in any month is determined under this subsection or otherwise.”. (B) Clarifying amendment.— Section 8452(a) of title 5, United States Code, is amended by adding at the end the following: “(3) Section 8462 shall apply with respect to amounts under this subsection only as provided in paragraphs (1) and (2).”. (d) Effective Date.— The amendments made by this section shall be effective as of January 1, 1987, as if they had been enacted as part of the Federal Employees’ Retirement System Act of 1986 (Public Law 99–335; 100 Stat. 514 and following).