SEPARATION PAY.

SEC. 4436. SEPARATION PAY. (a) In General.— (1) Subchapter DC of chapter 55 of title 5, United States Code, is amended by adding at the end the following: “§ 5597. Separation pay “(a) For the purpose of this section— “(1) the term ‘Secretary1 means the Secretary of Defense; “(2) the term ‘defense agency1 means an agency of the Department of Defense, as further defined under regulations prescribed by the Secretary; and “(3) the term ‘employee’ means an employee of a defense agency, serving under an appointment without time limitation, who has been currently employed for a continuous period of at least 12 months, except that such term does not include— “(A) a reemployed annuitant under subchapter III of chapter 83, chapter 84, or another retirement system for employees of the Government; or “(B) an employee having a disability on the basis of which such employee is or would be eligible for disability retirement under any of the retirement systems referred to in subparagraph (A). “(b) In order to avoid or minimize the need for involuntary separations due to a reduction in force, base closure, reorganization, transfer of function, or other similar action affecting 1 or more defense agencies, the Secretary shall establish a program under which separation pay may be offered to encourage eligible employees to separate from service voluntarily (whether by retirement or resignation). “(c) Under the program, separation pay may be offered by a defense agency only— “(1) with the prior consent, or on the authority, of the Secretary; and “(2) to employees within such occupational groups or geographic locations, or subject to such other similar limitations or conditions, as the Secretary may require. “(d) Such separation pay— “(1) shall be paid in a lump sum; “(2) shall be equal to the lesser of— “(A) an amount equal to the amount the employee would be entitled to receive under section 5595(c) if the employee were entitled to payment under such section; or “(B) $25,000; “(3) shall not be a basis for payment, and shall not be included in the computation, of any other type of Government benefit; and 106 STAT. 2724 “(4) shall not be taken into account for purposes of deter159mining the amount of any severance pay to which an individual may be entitled under section 5595 based on any other separation. “(e) No amount shall be payable under this section based on any separation occurring after September 30, 1997. “(f) The Secretary shall prescribe such regulations as may be necessary to carry out this section.”. (2) The table of sections at the beginning of chapter 55 of title 5, United States Code, is amended by adding at the end the following: “5597. Separation pay.”. (b) Source of Payments.— (1) For fiscal years after fiscal year 1993, separation pay shall be paid by an agency out of any funds or appropriations available for salaries and expenses of such agency. (2) Of the amount authorized to be appropriated in section 301(5) for operation and maintenance for the Defense Agencies, $70,000,000 shall be made available for payment of separation pay under section 5597 of title 5, United States Code, as added by subsection (a). (c) Report.—At the end of each of fiscal years 1993 through 1998, the Secretary of Defense shall submit to the President, the Congress, and the Director of the Office of Personnel Management a report on the effectiveness and costs of carrying out the amendments made by this section. (d) Timely Processing of Retirement Benefits.— (1) In order to ensure the timely processing of applications for retirement benefits, under the Civil Service Retirement System or the Federal Employees’ Retirement System, for civilian employees of the Department of Defense and other employees who retire when their agency is undergoing a major reorganization, a major reduction in force, or a major transfer of function, the costs incurred by the Office of Personnel Management in processing any such application shall be deemed to be an administrative expense described in section 8348(a)(1)(B) of title 5, United States Code. (2) This subsection shall apply with respect to applications for retirement benefits based on separations occurring before January 1, 1998.