
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC1465]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle A--General Military Law
 
                           PART II--PERSONNEL
 
       CHAPTER 74--DEPARTMENT OF DEFENSE MILITARY RETIREMENT FUND
 
Sec. 1465. Determination of contributions to the Fund

    (a) Not later than six months after the Board of Actuaries is first 
appointed, the Board shall determine the amount that is the present 
value (as of October 1, 1984) of future benefits payable from the Fund 
that are attributable to service in the armed forces performed before 
October 1, 1984. That amount is the original unfunded liability of the 
Fund. The Board shall determine the period of time over which the 
original unfunded liability should be liquidated and shall determine an 
amortization schedule for the liquidation of such liability over that 
period. Contributions to the Fund for the liquidation of the original 
unfunded liability in accordance with such schedule shall be made as 
provided in section 1466(b) of this title.
    (b)(1) The Secretary of Defense shall determine each year, in 
sufficient time for inclusion in budget requests for the following 
fiscal year, the total amount of Department of Defense contributions to 
be made to the Fund during that fiscal year under section 1466(a) of 
this title. That amount shall be the sum of the following:
        (A) The product of--
            (i) the current estimate of the value of the single level 
        percentage of basic pay to be determined under subsection 
        (c)(1)(A) at the time of the next actuarial valuation under 
        subsection (c); and
            (ii) the total amount of basic pay expected to be paid 
        during that fiscal year to members of the armed forces (other 
        than the Coast Guard) on active duty (other than active duty for 
        training) or full-time National Guard duty (other than full-time 
        National Guard duty for training only).

        (B) The product of--
            (i) the current estimate of the value of the single level 
        percentage of basic pay and of compensation (paid pursuant to 
        section 206 of title 37) to be determined under subsection 
        (c)(1)(B) at the time of the next actuarial valuation under 
        subsection (c); and
            (ii) the total amount of basic pay and of compensation (paid 
        pursuant to section 206 of title 37) expected to be paid during 
        that fiscal year to members of the Ready Reserve of the armed 
        forces (other than the Coast Guard and other than members on 
        full-time National Guard duty other than for training) who are 
        not otherwise described in subparagraph (A)(ii).

    (2) The amount determined under paragraph (1) for any fiscal year is 
the amount needed to be appropriated to the Department of Defense for 
that fiscal year for payments to be made to the Fund during that year 
under section 1466(a) of this title. The President shall include not 
less than the full amount so determined in the budget transmitted to 
Congress for that fiscal year under section 1105 of title 31. The 
President may comment and make recommendations concerning any such 
amount.
    (c)(1) Not less often than every four years, the Secretary of 
Defense shall carry out an actuarial valuation of Department of Defense 
military retirement and survivor benefit programs. Each actuarial 
valuation of such programs shall include--
        (A) a determination (using the aggregate entry-age normal cost 
    method) of a single level percentage of basic pay for members of the 
    armed forces (other than the Coast Guard) on active duty (other than 
    active duty for training) or full-time National Guard duty (other 
    than full-time National Guard duty for training only); and
        (B) a determination (using the aggregate entry-age normal cost 
    method) of a single level percentage of basic pay and of 
    compensation (paid pursuant to section 206 of title 37) for members 
    of the Ready Reserve of the armed forces (other than the Coast Guard 
    and other than members on full-time National Guard duty other than 
    for training) who are not otherwise described by subparagraph (A).

Such single level percentages shall be used for the purposes of 
subsection (b) and section 1466(a) of this title.
    (2) If at the time of any such valuation (or any valuation carried 
out in order to comply with chapter 95 of title 31) there has been a 
change in benefits under a military retirement or survivor benefit 
program that has been made since the last such valuation and such change 
in benefits increases or decreases the present value of amounts payable 
from the Fund, the Secretary of Defense shall determine an amortization 
methodology and schedule for the amortization of the cumulative unfunded 
liability (or actuarial gain to the Fund) created by such change and any 
previous such changes so that the present value of the sum of the 
amortization payments (or reductions in payments that would otherwise be 
made) equals the cumulative increase (or decrease) in the present value 
of such amounts.
    (3) If at the time of any such valuation (or any valuation carried 
out in order to comply with chapter 95 of title 31) the Secretary of 
Defense determines that, based upon changes in actuarial assumptions 
since the last valuation, there has been an actuarial gain or loss to 
the Fund, the Secretary shall determine an amortization methodology and 
schedule for the amortization of the cumulative gain or loss to the Fund 
created by such change in assumptions and any previous such changes in 
assumptions through an increase or decrease in the payments that would 
otherwise be made to the Fund.
    (4) Contributions to the Fund in accordance with amortization 
schedules under paragraphs (2) and (3) shall be made as provided in 
section 1466(b) of this title.
    (d) All determinations under this section shall be made using 
methods and assumptions approved by the Board of Actuaries (including 
assumptions of interest rates and inflation) and in accordance with 
generally accepted actuarial principles and practices.
    (e) The Secretary of Defense shall provide for the keeping of such 
records as are necessary for determining the actuarial status of the 
Fund.

(Added Pub. L. 98-94, title IX, Sec. 925(a)(1), Sept. 24, 1983, 97 Stat. 
646; amended Pub. L. 98-525, title XIV, Sec. 1405(28), Oct. 19, 1984, 98 
Stat. 2623; Pub. L. 99-500, Sec. 101(c) [title IX, Sec. 9131], Oct. 18, 
1986, 100 Stat. 1783-82, 1783-128, and Pub. L. 99-591, Sec. 101(c) 
[title IX, Sec. 9131], Oct. 30, 1986, 100 Stat. 3341-82, 3341-128; Pub. 
L. 99-661, div. A, title VI, Sec. 661(a), Nov. 14, 1986, 100 Stat. 
3891.)

                          Codification

    Pub. L. 99-591 is a corrected version of Pub. L. 99-500.
    Amendment of section by Pub. L. 99-500 and Pub. L. 99-591 is based 
on section 642 of S. 2638, Ninety-ninth Congress, as passed by the 
Senate on Aug. 9, 1986, which was enacted into permanent law by Pub. L. 
99-500 and Pub. L. 99-591. S. 2638 was subsequently enacted as Pub. L. 
99-661.


                               Amendments

    1985--Subsec. (b)(1). Pub. L. 99-500 and Pub. L. 99-591, Pub. L. 99-
661, Sec. 661(a), amended par. (1) identically, inserting second 
sentence and striking out the existing second sentence which read as 
follows: ``That amount shall be determined as the product of--
        ``(A) the current estimate of the value of the single level 
    percentage of basic pay to be determined at the time of the next 
    actuarial valuation under subsection (c); and
        ``(B) the total amount of basic pay expected to be paid during 
    that fiscal year to members of the armed forces (other than the 
    Coast Guard) on active duty or in the Selected Reserve.''
    Subsec. (c)(1). Pub. L. 99-500 and Pub. L. 99-591, Pub. L. 99-661, 
Sec. 661(a)(2), amended par. (1) identically, inserting second and third 
sentences and striking out existing second sentence which read as 
follows: ``Each actuarial valuation of such programs shall include a 
determination (using the aggregate entry-age normal cost method) of a 
single level percentage of basic pay to be used for the purposes of 
subsection (b) and section 1466(a) of this title.''
    1984--Subsec. (c)(1). Pub. L. 98-525 struck out ``(A)'' after 
``(c)(1)''.


                    Effective Date of 1986 Amendments

    Section 642(c) of S. 2638, as passed by the Senate on Aug. 9, 1986, 
and as enacted into law by section 101(c) [title IX, Sec. 9131] of Pub. 
L. 99-500 and Pub. L. 99-591, and section 661(d) of Pub. L. 99-661, 
provided respectively that: ``The amendments made by this section 
[amending this section and section 1466 of this title] shall take effect 
on October 1, 1986, or the date of the enactment of this Act [Oct. 18, 
1986], whichever is later, and shall apply to payments required to be 
made under section 1466(a) of title 10, United States Code, as amended 
by this section, for months beginning on or after that effective date.'' 
and ``The amendments made by subsections (a) and (b) [amending this 
section and section 1466 of this title] shall apply to payments required 
to be made under section 1466(a) of title 10, United States Code, as 
amended by subsection (b), for months beginning on or after the date of 
the enactment of this Act [Nov. 14, 1986].''

                  Section Referred to in Other Sections

    This section is referred to in sections 1464, 1466 of this title.
