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GOVERNMENT OF THE DISTRICT OF COLUMBIA
OFFICE OF THE CHIEF FINANCIAL OFFICER
John A. Wilson Building * 1350 Pennsylvania Avenue, NW * Suite 203 * Washington, DC 20004
Phone: (202) 727-2476 * Fax: (202) 727-1643 * www.cfo.dc.gov
Glen Lee
Chief Financial Officer
March 13, 2026
The Honorable Phil Mendelson
Chairman
Council of the District of Columbia
1350 Pennsylvania Avenue, NW, Suite 504
Washington, D.C. 20004
Re: Pro posed Pension Law Amendments
Dear Chairman Mendelson:
This letter transmits my request to the Council to enact the proposed Frequency Standardization
for Contributions in Support of District Government Employee Benefits Amendment Act of
2026.
In order to strengthen the District’s liquidity and financial position, I am proposing legislation to
amend the timing of the District’s contributions to:
(1) the
Other Post-Employment Benefits Fund, codified at D.C. Official § 1-621.09(d),
from “every fiscal year” to “on a regular per pay period basis.” Amendments are also
proposed to D.C. Official § 1-621.09(d-3);
(2) the
Defined Contribution Payment Plan, codified at D.C. Official § 1-626.09, also
known as the Section 401(a) Trust, from “not less frequently than quarterly,” to “per pay
period;” and
(3) th
e Police Officers, Fire Fighters, and Teachers Retirement Benefit Replacement
Plan, codified at D.C. Code § 1–907.02, from “not more than 30 days after it is
appropriated or 30 days after the beginning of the fiscal year for which it is appropriated,
whichever is later” to “on the 15th and last day of every month.”
All
owing the District to make smaller payments over the course of a year, in lieu of annual or
quarterly payments, will provide greater financial flexibility and enhance our ability to address
changes in financial circumstances.
Proposed Pension Law Amendments
Page 2
I have attached the proposed act and the fiscal impact statement for the Council’s consideration. I
am available to discuss any questions you may have regarding this legislation at 727-2476.
Sin
cerely,
Glen
Lee
Chief Financial Officer
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~~ Chairman Phil Mendelson
at the request of the Chief Financial Officer
A Bill
IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
22 To amend the District of Columbia Government Comprehensive Merit Personnel Act of 1978
23 and the Police Officers, Fire Fighters, and Teachers Retirement Benefit Replacement
24 Plan Act of 1998 to standardize and align the frequency of the District contributions in
25 support of benefits for employees of the District government.
26
27 BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
28 act may be cited as the "Frequency Standardization for Contributions in Support of District
29 Government Employee Benefits Amendment Act of 2026".
30 Sec. 2. Subsections (d) and (d-3) of Section 2109 of the District of Columbia
31 Government Comprehensive Merit Personnel Act of 1978, effective April 7, 2017 (D.C. Law 2-
32 139; D .C. Official Code§ 1-621.109), as added October 1, 1987, D.C. Law 7-26, Section 2(d),
33 34 DCR 5079, are amended as follows:
34 "( d) On a regular pay period basis, the Chief Financial Officer shall deposit into the
35 Fund the amount that has been appropriated for the purpose of funding the District contribution
36 for the health and life insurance premiums of annuitants. The Chief Financial Officer may also
2
deposit into the Fund any balances in rate stabilization fund reserves that are refunded to the 37
District by a health insurance carrier.” 38
“(d-3) All expenses incurred by the OCFO in administering the Fund, including hiring 39
staff for the OCFO, shall be paid out of the Fund. The budget prepared and submitted by the 40
Mayor pursuant to § 1-204.42 shall include recommended expenditures at a reasonable level for 41
the forthcoming fiscal year for the administrative expenses of the Fund. The budget enacted 42
pursuant to § 1-204.46 may designate the portion of the Fund to be allocated for the 43
administrative expenses of the Fund; provided, that it shall not specify the specific manner in 44
which, or the specific purposes for which, the OCFO may expend such portion of the Fund.” 45
Sec. 3. Subsections (c) and (d) of Section 2609 of the District of Columbia Government 46
Comprehensive Merit Personnel Act of 1978, effective March 3, 1979 (D.C. Law 2-139; D.C. 47
Official Code § 1-626.09), as added October 1, 1987, D.C. Law 7-27, § 2(g), 34 DCR 5079, are 48
amended to read as follows: 49
“(c) The District shall contribute an amount equal to not less than 5% of the base salary 50
of each employee participating in the defined contribution plan under § 1-626.05(3). The 51
District contribution shall be made on a regular pay period basis and shall be placed in the 52
Section 401(a) Trust established by § 1-626.11.” 53
“(d) In addition to the contribution under subsection (c) of this section, the District shall 54
contribute no less than an additional .5% of a detention officer’s base salary to the Section 55
401(a) Trust established by § 1-626.11. The contribution shall be made on a regular pay period 56
basis.” 57
Sec. 4. Subsection 132 of the Police Officers, Fire Fighters, and Teachers Retirement 58
Benefit Replacement Plan Act of 1998, effective September 19, 1998 (D.C. Law 12-152; D.C. 59
3
Official Code § 1-907.02(b)), is amended to read as follows: 60
“(b) The amount appropriated as the District of Columbia payment shall be deposited in 61
the appropriate separate fund comprising the Funds on the 15th and last day of every month by 62
the Office of the Chief Financial Officer.” 63
Sec. 5. Applicability. 64
This subtitle shall apply as of October 1, 2026. 65
Sec. 6. Fiscal impact statement. 66
The Council adopts the fiscal impact statement in the committee report as the fiscal 67
impact statement required by section 602(c)(3) of the District of Columbia Home Rule Act, 68
approved December 24, 1973 (87 Stat. 813; D.C. Official Code§ l-206.02(c)(3)). 69
Sec. 7. Effective date. 70
This act shall take effect following approval by the Mayor (or in the event of veto by the 71
Mayor, action by the Council to override the veto), a 30-day period of congressional review as 72
provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 73
24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)), and publications in the District of 74
Columbia Register. 75
Government of the District of Columbia
Office of the Chief Financial Officer
Glen Lee
Chief Financial Officer
1350 Pennsylvania Avenue, NW, Suite 203, Washington, DC 20004 (202)727 -2476
www.cfo.dc.gov
MEMORANDUM
TO: The Honorable Phil Mendelson
Chairman, Council of the District of Columbia
FROM: Glen Lee
Chief Financial Officer
DATE: March 12, 2026
SUBJECT: Fiscal Impact Statement – Frequency Standardization for Contributions
in Support of District Government Employee Benefits Amendment Act
of 2026
REFERENCE: Draft Bill as provided to the Office of Revenue Analysis on January 30,
2026
Conclusion
Funds are sufficient in the fiscal year 2026 through fiscal year 2029 budget and financial plan to
implement the bill. The bill will increase costs beginning in fiscal year 2029 , but revenue increases
from the bill more than offset the increased costs. The bill increases District Local Fund resources,
beginning in fiscal year 2027, by $4.6 million in fiscal year 2027 and a total of $12.3 million through
fiscal year 20291.
Background
The bill amends District law to provide that the appropriated amounts for the District’s required
contributions to the Other Post-Employment Benefits (OPEB) Fund be made on a regular pay-period
basis. It also amends the required deposit schedule for the District’ s contributions to the Police
Officers and Fire Fighters’ Retirement Fund and the Teachers’ Retirement Fund (collectively the
Retirement Funds) to make the payments due on the 15th and last day of every month rather than by
30 days after the start of each fiscal year.
1 The financial plan will extend to fiscal year 2030 with the submission of the Mayor’s proposed fiscal year
2027 budget. The fiscal impact of the bill through fiscal year 2030 is a $13.76 million increase in Local Fund
resources.
The Honorable Phil Mendelson
FIS: “Frequency Standardization for Contributions in Support of District Government Employee Benefits
Amendment Act of 2026” Draft bill as provided to the Office of Revenue Analysis January 30, 2026
Page 2 of 3
Employees who participate in the District’s deferred compensation plan pursuant to Section 457 of
the Internal Revenue Code receive a District contribution 2 to a Section 401(a) 3 Trust. Current law
requires the District’s contributions to be made no less frequently than quarterly, and the bill amends
the timing to be on a regular pay-period basis.
Financial Plan Impact
Funds are sufficient in the fiscal year 2026 through fiscal year 2029 budget and financial plan to
implement the bill. The bill will increase costs beginning in fiscal year 20 29, but revenue increases
from the bill more than offset the increased costs. The bill increases District Local Fund resources,
beginning in fiscal year 2027, by $4.6 million in fiscal year 2027 and a total of $12.3 million through
fiscal year 20294.
Currently, the entire amount appropriated each fiscal year for the District’s required contributions
to the OPEB Fund and the Retirement Funds are made each October, at the beginning of each fiscal
year. In fiscal year 2027, the District expects to make a total of approximately $309 million in these
contributions. The bill defers the annual OPEB and Retirement Funds contributions from being made
in one payment in the first month of the fiscal year to regular semi-monthly installments. Under the
bill’s payment schedule, the District will increase its average cash balance for fiscal year 2027 by
approximately $150 million. The additional balance in fiscal year 2027, and similar balances in each
year of the financial plan, are projected to increase interest earnings by $4.6 million in fiscal year
2027 and a total of $13.15 million through fiscal year 20295.
The OPEB Fund and the Retirement Funds will have less cash to invest over the course of each fiscal
year under the bill. The District’s annual required contributions to the funds decrease and increase
in part due to investment performance of the fund, but such fluctuations are amortized over a twenty-
year period. The first actuarial valuation to be performed after fiscal year 2027 will be the valuation
to calculate required District contributions for fiscal year 2029. This fiscal impact assumes the funds
will earn their long -term expected average rate of return in fiscal year 2027 and each year. Under
this assumption, the bill will increase the District’s OPEB and Retirement Funds contributions by
approximately $840,000 in fiscal year 20296.
Specifying that the District makes contributions to employee’s 401(a) Trust accounts on a regular
pay-period basis does not have a cost; the bill codifies current practice.
2 In an amount of 5% of base salary, or 5.5% in the case of corrections officers.
3 Internal Revenue Code, 26 U.S.C. § 401.
4 The financial plan will extend to fiscal year 2030 with the submission of the Mayor’s proposed fiscal year
2027 budget. The fiscal impact of the bill through fiscal year 2030 is a $13.76 million increase in Local Fund
resources.
5 The total revenue increase through fiscal year 2030 will be $16.27 million.
6 The required increase in the fiscal year 2030 OPEB and Retirement Fund contributions will be $1.68 million.
The Honorable Phil Mendelson
FIS: “Frequency Standardization for Contributions in Support of District Government Employee Benefits
Amendment Act of 2026” Draft bill as provided to the Office of Revenue Analysis January 30, 2026
Page 3 of 3
Frequency Standardization for Contributions in Support of District Government
Employee Benefits Amendment Act of 2026
Fiscal Year 2026 – Fiscal Year 2029
($ thousands)
FY 2026 FY 2027 FY 2028 FY 2029 Total
Revenue Increase – Interest
Earning $0 $4,645 $4,590 $3,919 $13,154
Less: Increase in OPEB
contribution ($0) ($0) ($0) ($250) ($250)
Less: Increase in Retirement
Funds contribution ($0) ($0) ($0) ($590) ($590)
Net Impact $0 $4,645 $4,590 $3,079 $12,314
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Health Benefits
D.C. Code § 1–621.09. District contribution.
(a) The District’s contribution to the cost of any health benefit plan shall be an amount equal to
75% of the subscription charge of the standard option indemnity plan, except that in no event shall the
District’s contribution exceed 75% of the total subscription charge of any plan or option in which the
employee is enrolled. The District’s contribution shall be paid on a regular pay period basis.
(b) The Mayor shall determine the amount of the District contribution for individual and for self
and family enrollments before the beginning date of each contract period.
(c) There is established the Other Post-Employment Benefits Fund (“Fund”) from which the
District’s contribution for health and life insurance for annuitants shall be paid. The monies in the Fund
shall not be a part of, or lapse into, the General Fund of the District or any other fund of the District and,
subject to authorization in an approved budget and financial plan, any funds appropriated in the Fund
shall be continually available without regard to fiscal year limitation.
(d) On a regular pay period basis, the Office of the Chief Financial Officer (“OCFO”) shall
deposit into the Fund the amount that has been appropriated for the purpose of funding the District
contribution for the health and life insurance premiums of annuitants. The OCFO may also deposit into
the Fund any balances in rate stabilization fund reserves that are refunded to the District by a health
insurance carrier.
(d-1) Each fiscal year, the District shall ensure that a sufficient amount is appropriated for the
Fund, as the District of Columbia payment to the Fund, which shall be equal to, or greater than, the
amount calculated as provided for in § 1-621.09a, and as determined by the enrolled actuary engaged
pursuant to § 1-621.09a(a).
(d-2) If at any time the balance of the Fund is not sufficient to meet all obligations against the
Fund, the Fund shall have claims on the revenues of the District of Columbia to the extent necessary to
meet the obligation, subject to appropriation.
(d-3) All expenses incurred by the OCFO in administering the Fund, including hiring staff for the
OCFO, shall be paid out of the Fund. The budget prepared and submitted by the Mayor pursuant to § 1-
204.42 shall include recommended expenditures at a reasonable level for the forthcoming fiscal year for
the administrative expenses of the Fund. The budget enacted pursuant to § 1-204.46 may designate the
portion of the Fund to be allocated for the administrative expenses of the Fund; provided, that it shall not
specify the specific manner in which, or the specific purposes for which, the OCFO may expend such
portion of the Fund.
(e) Notwithstanding the other provisions of this chapter, the Mayor may issue rules to establish
vesting requirements for the provision of other post-employment benefits to annuitants. Any proposed
rules promulgated by the Mayor shall be submitted to the Council for a 60-day period of review,
excluding Saturdays, Sundays, legal holidays, and days of Council recess. If the Council does not approve
or disapprove the proposed rules within the 60-day period, by resolution, the proposed rules shall be
deemed disapproved.
(f) In the case of an annuitant who has separated pursuant to the District Retirement Benefit
Program, no contribution shall be made by the District until the annuitant attains 62 years of age. The
annuitant shall pay 100% of the cost of any health benefit plan selected by the annuitant until the
annuitant attains age 62. Upon attaining 62 years of age, the District shall pay a portion of the cost of any
health benefit plan selected by the annuitant in accordance with subsections (h)(1) or (2) of this section.
(g) In the case of an annuitant who retired pursuant to the Teachers’ Retirement System, or the
Judges’ Retirement System or the Teachers’ Insurance and Annuity Association programs, the District
shall pay the portion of the cost of any health benefit plan selected by the annuitant in accordance with
subsection (h) of this section.
(h) The District contribution to post-employment health benefits for an annuitant described in
subsection (g) of this section (and following the annuitant’s death, the annuitant’s eligible family
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members) shall be determined as follows:
(1) For annuitants who retire with at least 10 years of creditable District service, but less
than 30 years of creditable District service, the District contribution to the cost of a health benefit plan
selected by the annuitant shall be an amount equal to 25% of the cost of the selected health benefit plan
(as secondary to Medicare) and 20% for the covered family member of the annuitant, plus an additional
2.5% for each year of creditable District service over 10 years; provided, that the District contribution
shall not exceed 75% of the cost of the selected health benefits plan and 60% for the covered family
member of the annuitant. The annuitant and family member shall contribute the applicable balance of the
cost of the selected health benefit plan.
(2) For annuitants with 30 or more years of creditable District service, the District
contribution shall be an amount equal to 75% of the cost of the selected health benefit plan and the
annuitant shall contribute 25% of the cost of the selected health benefit plan. For a covered family
member of an annuitant, the District contribution shall be an amount equal to 60% of the cost of the
selected health benefit plan and the covered family member shall contribute 40% of the cost of the
selected health benefit plan.
(3) For annuitants who are injured or killed in the line of duty, the District’s contribution
shall be an amount equal to 75% of the cost of the selected health benefit plan and the annuitant shall
contribute 25% of the cost of the selected health benefit plan. For a covered family member of an
annuitant, the District contribution shall be an amount equal to 75% of the cost of the selected health
benefit plan and the family member shall contribute 25% of the cost of the selected health benefit plan.
This paragraph shall apply as of October 1, 2009.
(i) In the case of an annuitant who retired pursuant to the Police and Fire Retirement System, the
District shall pay the portion of the cost of any health benefit plan selected by the annuitant in accordance
with subsection (j) of this section.
(j) The District contribution to post-employment health benefits for an annuitant described in
subsection (i) of this section (and following the annuitant’s death, the annuitant’s eligible family
members) shall be determined as follows:
(1) For annuitants hired before November 10, 1996, who retire with at least 5 years of
creditable District service, the District contribution shall be an amount equal to 75% of the cost of the
selected health benefit plan and the annuitant shall contribute 25% of the cost of the selected health
benefit plan. For a covered family member of an annuitant, the District contribution shall be an amount
equal to 60% of the cost of the selected health benefit plan and the covered family member shall
contribute 40% of the cost of the selected health benefit plan.
(2) For annuitants hired on or after November 10, 1996, with at least 10 years of
creditable District service, but less than 25 years of creditable District service, the District contribution to
the cost of a health benefit plan selected by the annuitant shall be an amount equal to 30% of the cost of
the selected health benefit plan (as secondary to Medicare) for the annuitant, plus an additional 3% for
each year of creditable District service over 10 years, and 25% for the covered family member of the
annuitant, plus an additional 3% for each year of creditable District service over 10 years; provided, that
the District contribution shall not exceed 75% of the cost of the selected health benefits plan for the
annuitant and 60% of the cost of the selected health benefits plan for the covered family member of the
annuitant. The annuitant and family member shall contribute the applicable balance of the cost of the
selected health benefit plan.
(k) In the case of an individual who would otherwise be subject to the Police and Fire Retirement
System upon retirement but who is killed in the line of duty and in the case of an individual who retires
under the Police and Fire Retirement System due to an injury that occurred in the line of duty, the District
shall pay the portion of the cost of any health benefit plan selected by the individual or the individual
family member in accordance with subsection (l) of this section.
(l) For an individual covered by subsection (k) of this section, the District’s contribution to the
cost of the selected health benefits plan of the individual shall be an amount equal to 75% of the cost of
the selected health benefit plan and the individual shall contribute 25% of the cost of the selected health
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benefit plan. For a covered family member of the individual, the District contribution to the cost of the
selected health benefit plan of the family member shall be an amount equal to 75% of the cost of the
selected health benefit plan and the family member shall contribute 25% of the cost of the selected health
benefit plan.
(m) An individual described in subsection (k) of this section shall be considered an annuitant for
the purposes of this section.
Defined Contribution Pension Plan
D.C. Code § 1–626.09. Contributions.
(a) The District and each employee shall contribute to the defined benefit plan under § 1-
626.05(1) the social security amounts mandated by federal law.
(b) Each employee may voluntarily contribute to the deferred compensation plan under § 1-
626.05(2) in amounts not exceeding the limits set by section 457 of the Internal Revenue Code.
(c) The District shall contribute an amount equal to not less than 5% of the base salary of each
employee participating in the defined contribution plan under § 1-626.05(3). The District contribution
shall be made on a regular pay period basis and shall be placed in the Section 401(a) Trust established by
§ 1-626.11.
(d) In addition to the contribution under subsection (c) of this section, the District shall contribute
no less than an additional .5% of a detention officer’s base salary to the Section 401(a) Trust established
by § 1-626.11. The contribution shall be made on a regular pay period basis.
(e) On behalf of each employee of the Council, the Office of the District of Columbia Auditor,
and the Office of Advisory Neighborhood Commissions participating in the deferred compensation plan
established by § 1-626.05(2), the District shall contribute to the defined contribution plan established by §
1-626.05(4) each pay period an amount equal to that employee's contribution pursuant to subsection (b) of
this section for that pay period; provided, that the District’s contribution pursuant to this subsection on
behalf of an employee in any pay period shall not exceed 3% of the employee's base salary during that
pay period.
Police Officers, Fire Fighters, and Teachers Retirement Benefit Replacement Plan.
D.C. Code § 1–907.02. District of Columbia payment to the Funds.
(a) Each fiscal year, the District shall insure that a sufficient amount is appropriated for each
separate fund comprising the Funds, as the District of Columbia payment to the appropriate separate fund
comprising the Funds, which shall be equal to, or greater than, the amount calculated as provided for in §
1-907.03, as determined by the enrolled actuary, engaged pursuant to § 1-907.03(a).
(b) The amount appropriated as the District of Columbia payment shall be deposited in the
appropriate separate fund comprising the Funds on the 15th and last day of every month by the Office of
the Chief Financial Officer.
(c) At the end of each fiscal year, the District shall provide to the enrolled actuary the actual
aggregate amount of earnable compensation (“covered payroll”) paid to each participant group covered
by the Retirement Program. The enrolled actuary shall determine whether the amount appropriated for the
applicable fiscal year resulted in an overpayment or a shortfall based upon the actual covered payroll.
(1) If a shortfall exists, the Mayor and the Council shall include within the ensuing
budget cycle a line item that requests funding equal to the full amount of shortfall for the appropriate
separate fund comprising the Funds.
(2) If an overpayment exists, the Mayor and the Council shall include within the ensuing
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budget cycle a line item that requests a reduction in the amount appropriated as the District of Columbia
payment to the Funds equal to the full amount of the overpayment.
(3) Overpayments or shortfall reductions shall be made in addition to, and
notwithstanding, any other payment required herein.
(d) If at any time the balance of any separate fund comprising the Funds is not sufficient to meet
all obligations against the Funds, the Funds shall have claims on the revenues of the District of Columbia
to the extent necessary to meet the obligation.