
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 107-107 Section 654(b)]
[CITE: 10USC2006]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle A--General Military Law
 
                    PART III--TRAINING AND EDUCATION
 
                     CHAPTER 101--TRAINING GENERALLY
 
Sec. 2006. Department of Defense Education Benefits Fund

    (a) There is established on the books of the Treasury a fund to be 
known as the Department of Defense Education Benefits Fund (hereinafter 
in this section referred to as the ``Fund''), which shall be 
administered by the Secretary of the Treasury. The Fund shall be used 
for the accumulation of funds in order to finance armed forces education 
liabilities on an actuarially sound basis.
    (b) In this section:
        (1) The term ``armed forces education liabilities'' means 
    liabilities of the armed forces for benefits under chapter 30 of 
    title 38 and for Department of Defense benefits under chapter 1606 
    of this title.
        (2) The term ``normal cost'', with respect to any period of 
    time, means the total of the following:
            (A) The present value of the future benefits payable from 
        the Fund for amounts attributable to increased amounts of 
        educational assistance authorized under section 3015(d) of title 
        38 to persons who were not on active duty on July 1, 1985, and 
        who during such period enter on active duty.
            (B) The present value of the future benefits payable from 
        the Fund for amounts attributable to educational assistance 
        authorized under subchapter III of chapter 30 of title 38 to 
        persons who were not on active duty on July 1, 1985, and who 
        during such period--
                (i) enter a fourth year of active duty, in the case of 
            persons eligible for basic educational assistance under 
            section 3011 of such title; or
                (ii) enter a period of service that will establish 
            entitlement to such educational assistance under section 
            3021(b) of such title, in the case of persons eligible for 
            basic educational assistance under section 3012 of such 
            title.

            (C) The present value of the future Department of Defense 
        benefits payable from the Fund for educational assistance under 
        chapter 1606 of this title to persons who during such period 
        become entitled to such assistance.

    (c) There shall be deposited into the Fund the following, which 
shall constitute the assets of the Fund:
        (1) Amounts paid into the Fund by the Secretary of Defense and 
    the Secretary of the Department in which the Coast Guard is 
    operating under subsection (g).
        (2) Any amount appropriated to the Fund.
        (3) Any return on investment of the assets of the Fund.

    (d) The Secretary of the Treasury shall transfer from the Fund to 
the Secretary of Veterans Affairs such amounts as may be necessary to 
enable the Secretary of Veterans Affairs to make required payments of 
armed forces education liabilities. The Secretary of the Treasury, the 
Secretary of Defense, the Secretary of the Department in which the Coast 
Guard is operating, and the Secretary of Veterans Affairs shall enter 
into an agreement as to how and when, and the amounts in which, such 
transfers shall be made. Except for investments under subsection (h), 
amounts in the Fund may not be used for any purpose other than transfers 
as described in this subsection.
    (e)(1)(A) There is established in the Department of Defense a 
Department of Defense Education Benefits Board of Actuaries (hereinafter 
in this section referred to as the ``Board''). The Board shall consist 
of three members, who shall be appointed by the Secretary of Defense 
from among qualified professional actuaries who are members of the 
Society of Actuaries.
    (B)(i) Except as provided in clause (ii), the members of the Board 
shall serve for a term of fifteen years, except that a member of the 
Board appointed to fill a vacancy occurring before the end of the term 
for which his predecessor was appointed shall only serve until the end 
of such term. A member may serve after the end of his term until his 
successor has taken office. A member of the Board may be removed by the 
Secretary of Defense for misconduct or failure to perform functions 
vested in the Board, and for no other reason.
    (ii) Of the members of the Board who are first appointed under this 
paragraph, one each shall be appointed for terms ending five, ten, and 
fifteen years, respectively, after the date of appointment, as 
designated by the Secretary of Defense at the time of appointment.
    (C) A member of the Board who is not otherwise an employee of the 
United States is entitled to receive pay at the daily equivalent of the 
annual rate of basic pay of the highest rate of basic pay then currently 
being paid under the General Schedule of subchapter III of chapter 53 of 
title 5, for each day the member is engaged in the performance of duties 
vested in the Board and is entitled to travel expenses, including a per 
diem allowance, in accordance with section 5703 of title 5.
    (2) The Board shall report to the Secretary of Defense annually on 
the actuarial status of the Fund and shall furnish its advice and 
opinion on matters referred to it by the Secretary.
    (3) The Board shall review valuations of the Fund under subsection 
(f) and shall recommend to the President and Congress such changes as in 
the Board's judgment are necessary to protect the public interest and 
maintain the Fund on a sound actuarial basis.
    (4) The Secretary shall keep, or cause to be kept, such records as 
necessary for determining the actuarial status of the Fund.
    (f)(1) The Secretary of Defense shall carry out periodic actuarial 
valuations of the educational programs described in subsection (b)(1).
    (2) Based on the most recent such valuation, the Secretary of 
Defense shall estimate the normal cost for the next fiscal year.
    (3) If at the time of any such valuation there has been a change in 
benefits under an education program described in subsection (b)(1) that 
has been made since the last such valuation and that increases or 
decreases the present value of benefits payable from the Fund, the 
Secretary of Defense shall determine an amortization methodology and 
schedule for the liquidation of the unfunded liability (or negative 
unfunded liability) thus created such that the present value of the sum 
of the amortization payments equals the increase or decrease in the 
present value of such benefits.
    (4) If at the time of any such valuation 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 liquidation of such gain or loss through an increase or decrease 
in the payments that would otherwise be made to the Fund.
    (5) Based on the determinations under paragraphs (2), (3), and (4) 
the Secretary of Defense shall determine the amount needed to be 
appropriated to the Department of Defense and the Department in which 
the Coast Guard is operating for the next fiscal year for payments to be 
made to the Fund under subsection (g). The President shall include not 
less than the full amount so determined in the budget transmitted to 
Congress for the next fiscal year under section 1105 of title 31. The 
President may comment and make recommendations concerning any such 
amount.
    (6) All determinations under this subsection 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.
    (g)(1) The Secretary of Defense and the Secretary of the Department 
in which the Coast Guard is operating shall pay into the Fund each month 
the amount that, based upon the most recent actuarial valuation of the 
education programs described in subsection (b)(1), is equal to the 
actual total normal cost for the preceding month.
    (2) The Secretary of Defense and the Secretary of the Department in 
which the Coast Guard is operating shall pay into the Fund at the 
beginning of each fiscal year (or as soon thereafter as appropriations 
are available for such purpose) the sum of the following:
        (A) The amount of the payment for that year, if any, for the 
    amortization of any liability to the Fund resulting from a change in 
    benefits, as determined by the Secretary of Defense under subsection 
    (f)(3).
        (B) The amount of the payment for that year, if any, for the 
    amortization of any actuarial gain or loss to the Fund, as 
    determined by the Secretary of Defense under subsection (f)(4).

    (3) Amounts paid into the Fund under this subsection shall be paid 
from appropriations available for the pay of members of the armed forces 
under the jurisdiction of the Secretary concerned.
    (h) The Secretary of the Treasury shall invest such portion of the 
Fund as is not in the judgment of the Secretary required to meet current 
withdrawals. Such investments shall be in public debt securities with 
maturities suitable to the needs of the Fund, as determined by the 
Secretary, and bearing interest at rates determined by the Secretary, 
taking into consideration current market yields on outstanding 
marketable obligations of the United States of comparable maturities. 
The income on such investments shall be credited to and form a part of 
the Fund.

(Added Pub. L. 98-525, title VII, Sec. 706(a)(1), Oct. 19, 1984, 98 
Stat. 2568; amended Pub. L. 100-26, Sec. 7(k)(2), Apr. 21, 1987, 101 
Stat. 284; Pub. L. 101-189, div. A, title XVI, Sec. 1621(a)(2), (6), 
Nov. 29, 1989, 103 Stat. 1603; Pub. L. 101-510, div. A, title XIII, 
Sec. 1322(a)(2), title XIV, Sec. 1484(j)(2), Nov. 5, 1990, 104 Stat. 
1671, 1718; Pub. L. 103-337, div. A, title X, Sec. 1070(e)(6), Oct. 5, 
1994, 108 Stat. 2859; Pub. L. 104-106, div. A, title XV, 
Secs. 1501(c)(21), 1503(a)(17), Feb. 10, 1996, 110 Stat. 499, 512; Pub. 
L. 106-65, div. A, title V, Sec. 550, Oct. 5, 1999, 113 Stat. 611.)


                               Amendments

    1999--Subsec. (a). Pub. L. 106-65, Sec. 550(1), substituted ``armed 
forces education liabilities'' for ``Department of Defense education 
liabilities''.
    Subsec. (b)(1). Pub. L. 106-65, Sec. 550(2), amended par. (1) 
generally. Prior to amendment, par. (1) read as follows: ``The term 
`Department of Defense education liabilities' means liabilities of the 
Department of Defense for benefits under chapter 30 of title 38 and for 
benefits under chapter 1606 of this title.''
    Subsec. (b)(2)(C). Pub. L. 106-65, Sec. 550(3), inserted 
``Department of Defense'' after ``future'' and substituted ``chapter 
1606'' for ``chapter 106''.
    Subsec. (c)(1). Pub. L. 106-65, Sec. 550(4), inserted ``and the 
Secretary of the Department in which the Coast Guard is operating'' 
after ``Defense''.
    Subsec. (d). Pub. L. 106-65, Sec. 550(5), substituted ``armed 
forces'' for ``Department of Defense'' and inserted ``the Secretary of 
the Department in which the Coast Guard is operating,'' after 
``Secretary of Defense,''.
    Subsec. (f)(5). Pub. L. 106-65, Sec. 550(6), inserted ``and the 
Department in which the Coast Guard is operating'' after ``Department of 
Defense''.
    Subsec. (g). Pub. L. 106-65, Sec. 550(7), inserted ``and the 
Secretary of the Department in which the Coast Guard is operating'' 
after ``The Secretary of Defense'' in pars. (1) and (2) and substituted 
``concerned'' for ``of a military department'' in par. (3).
    1996--Subsec. (b)(1). Pub. L. 104-106, Sec. 1501(c)(21), substituted 
``chapter 1606 of this title'' for ``chapter 106 of this title''.
    Subsec. (b)(2)(B)(ii). Pub. L. 104-106, Sec. 1503(a)(17), 
substituted ``section 3012 of such title'' for ``section 1412 of such 
title''.
    1994--Subsec. (b)(2). Pub. L. 103-337 substituted ``section 
3015(d)'', ``section 3011'', and ``section 3021(b)'' for ``section 
1415(c)'', ``section 1411'', and ``section 1421(b)'', respectively.
    1990--Subsec. (d). Pub. L. 101-510, Sec. 1484(j)(2), substituted 
``enable the Secretary of Veterans Affairs'' for ``enable the 
Administrator''.
    Subsec. (e)(3). Pub. L. 101-510, Sec. 1322(a)(2), substituted ``and 
shall recommend to the President and Congress'' for ``and report 
periodically, not less than once every four years, to the President and 
Congress on the status of the Fund and shall recommend''.
    1989--Subsec. (d). Pub. L. 101-189 substituted ``Secretary of 
Veterans Affairs'' for ``Administrator of Veterans' Affairs'' in first 
sentence and ``Secretary of Veterans Affairs'' for ``Administrator'' in 
second sentence.
    1987--Subsec. (b). Pub. L. 100-26 inserted ``The term'' after each 
par. designation and substituted ``normal'' for ``Normal'' in par. (2).


                    Effective Date of 1996 Amendment

    Section 1501(c) of Pub. L. 104-106 provided that the amendment made 
by that section is effective as of Dec. 1, 1994, and as if included as 
an amendment made by the Reserve Officer Personnel Management Act, title 
XVI of Pub. L. 103-337, as originally enacted.


         References in Other Laws to GS-16, 17, or 18 Pay Rates

    References in laws to the rates of pay for GS-16, 17, or 18, or to 
maximum rates of pay under the General Schedule, to be considered 
references to rates payable under specified sections of Title 5, 
Government Organization and Employees, see section 529 [title I, 
Sec. 101(c)(1)] of Pub. L. 101-509, set out in a note under section 5376 
of Title 5.


                         First Payment Into Fund

    Section 706(b) of Pub. L. 98-525 directed that first payment into 
Department of Defense Education Benefits Fund under this section be made 
not later than three months after Board of Actuaries determined amounts 
needed to be paid into Fund for that portion of fiscal year 1985 
beginning on July 1, 1985, with first payment in a lump sum equal to 
total of amounts that would have been paid to Fund each month between 
July 1, 1985, and time such first payment was made.

                  Section Referred to in Other Sections

    This section is referred to in section 12521 of this title; title 38 
section 3035.
