H.R. 3305 — LEO Fair Retirement Act of 2025

This section cites the Act as the “LEO Fair Retirement Act of 2025” and states congressional findings on the unique duties and compensation challenges of federal law enforcement officers, including overtime pay limitations under 5 U.S.C. §5547 that result in uncompensated hours.

This section authorizes law enforcement officers (defined as qualified public safety employees under IRC §72(t)(10)) to include in their high-3 average pay, for Civil Service Retirement System (CSRS) annuity computation under 5 USC §8339, premium pay capped under the aggregate pay limitation of 5 USC §5547(a) (i.e., basic pay plus premium pay under specified authorities not to exceed GS-15 maximum rate or Executive Schedule level V, whichever greater). (Thus, officers may receive a higher annuity reflecting overtime work beyond the cap, provided they make a lump-sum payment to the Office of Personnel Management (OPM) equal to the difference between actual and would-be employee/employer contributions under 5 USC §8334 for the high-3 years, or elect an actuarial annuity reduction; the general CSRS annuity cap under §8339(f) continues to apply.) It makes parallel changes for Federal Employees Retirement System (FERS) annuities under 5 USC §8415. The changes apply to annuities calculated on or after one year post-enactment. This section further directs OPM to issue implementing regulations within one year, including procedures for lump-sum payments from Thrift Savings Plan accounts and agency retention/submittal of payroll data on capped premium pay.

This section establishes eligibility for availability pay (i.e., premium pay equal to 25% of basic pay for federal criminal investigators required to work substantial unscheduled overtime) under 5 U.S.C. 5545a for covered employees—(1) Postal Inspectors, (2) GS–1811 criminal investigators (or successor series), (3) Federal air marshals, (4) Diplomatic Security Service special agents, (5) probation officers, and (6) pretrial services officers—by deeming them criminal investigators as defined in that section (and for purposes of 5 U.S.C. 5542(d) and FLSA exemptions at 29 U.S.C. 213(a)(16) and (b)(30)). The section also amends 39 U.S.C. 410(b)(11) to authorize the Postal Service to provide availability pay in addition to allotments for allotments for employees.

This section establishes a nonrefundable personal tax credit equal to lump-sum payments made by certain federal law enforcement annuitants pursuant to 5 U.S.C. § 8339(v)(2) or § 8415(o)(2). (Those sections allow eligible Civil Service Retirement System or Federal Employees Retirement System annuitants to make such payments to receive credit for prior uncompensated premium pay (i.e., law enforcement availability and night differential pay) in their annuity computation.)