LEO Fair Retirement Act of 2025

The LEO Fair Retirement Act of 2025 would change how federal law enforcement officers’ retirement annuities are calculated by allowing premium pay that was capped or unreimbursed to be counted in computing annuities under both the CSRS and FERS retirement systems. To do this, the bill creates a one-time mechanism for law enforcement officers to make a lump-sum payment (or elect an actuarial reduction) to restore credit for premium pay that would have been earned but was limited by existing caps. It also expands availability pay eligibility to certain criminal investigators and adds a tax credit to offset the cost of the lump-sum payments. The changes would take effect for annuities calculated on or after one year from enactment, and the implementing regulations would be issued by the Office of Personnel Management (OPM) with guidance on payroll data retention and lump-sum transfers from the Thrift Savings Plan (TSP). In short, the bill aims to correct undercredit in retirement for overtime premium pay that federal law enforcement officers would have earned but for statutory pay caps, while creating new administrative and fiscal steps to implement that correction.