restored, whichever is earlier. Earning capacity is deemed restored if in each of 2 succeeding calendar years the income of the annuitant from wages or self-employment or both equals at least 80 percent of the current rate of pay of the position occupied immediately before retirement.

(e) If an annuitant whose annuity is terminated under subsection (d) of this section is not reemployed in a position in which he is subject to this subchapter, he is deemed, except for service credit, to have been involuntarily separated from the service for the purpose of this subchapter as of the date of termination of the disability annuity, and after that termination is entitled to annuity under the applicable provisions of this subchapter. If an annuitant whose annuity is heretofore or hereafter terminated because of an earning capacity provision of this subchapter or an earlier statute

(1) is not reemployed in a position within the purview of this subchapter; and

(2) has not recovered from the disability for which he was retired;

his annuity shall be restored at the same rate effective the first of the year following any calendar year in which his income from wages or self-employment or both is less than 80 percent of the current rate of pay of the position occupied immediately before retirement. If an annuitant whose annuity is heretofore or hereafter terminated because of a medical finding that he has recovered from disability is not reemployed in a position in which he is subject to this subchapter, his annuity shall be restored at the same rate effective from the date of medical examination showing a recurrence of the disability. The second and third sentences of this subsection do not apply to an individual who has become 62 years of age and is receiving or is eligible to receive annuity under the first sentence of this subsection.

(f) An individual is not entitled to receive an annuity under this subchapter and compensation for injury or disability to himself under subchapter I of chapter 81 of this title covering the same period of time. This provision does not bar the right of a claimant to the greater benefit conferred by either subchapter for any part of the same period of time. Neither this provision nor any provision of subchapter I of chapter 81 of this title denies to an individual an annuity accruing to him under this subchapter on account of service performed by him, or denies any concurrent benefit to him under subchapter I of chapter 81 of this title on account of the death of another individual.

(g) The right of an individual entitled to an annuity under this subchapter is not affected because he has received a lump-sum payment for compensation under section 8135 of this title. However, if the annuity is payable on account of the same disability for which compensation under section 8135 of this title has been paid, so much of the compensation as has been paid for a period extended beyond the date the annuity becomes effective, as determined by the Department of Labor, shall be refunded to that Department to be covered into the Employees' Compensation Fund. Before the individual may receive the annuity he shall

(1) refund to the Department of Labor the amount representing the commuted compensation payments for the extended period; or

(2) authorize the deduction of that amount from the annuity payable to him under this subchapter, which amount shall be transmitted to the Department of Labor for reimbursement to the Employees' Compensation Fund.

Deductions from the annuity may be made from accrued and accruing payments. When the Department of Labor finds that the financial circumstances of the annuitant warrant deferred refunding, deductions from the annuity may be prorated against and paid from accruing payments in such manner as that Department determines. (Pub. L. 89-554, Sept. 6, 1966, 80 Stat. 572, amended Pub. L. 90–83, § 1(76), Sept. 11, 1967, 81 Stat. 214.)

§ 8338. Deferred retirement

(a) An employee who is separated from the service or transferred to a position in which he does not continue subject to this subchapter after completing 5 years of civilian service is entitled to an annuity beginning at the age of 62 years.

(b) A Member who, after December 31, 1955, is separated from the service as a Member after completing 5 years of civilian service is entitled to an annuity beginning at the age of 62 years. A Member who is separated from the service after completing 10 or more years of Member service is entitled to an annuity beginning at the age of 60 years. A Member who is separated from the service after completing 20 or more years of service, including 10 or more years of Member service, is entitled to a reduced annuity beginning at the age of 50 years.

(c) An annuity or reduced annuity authorized by this section is computed under section 8339 of this title. (Pub. L. 89-554, Sept. 6, 1966, 80 Stat. 574, amended Pub. L. 90-83, § 1(77), Sept. 11, 1967, 81 Stat. 214.)

§ 8339. Computation of annuity

(a) Except as otherwise provided by this section, the annuity of an employee retiring under this subchapter is

(1) 112 percent of his average pay multiplied by so much of his total service as does not exceed 5 years; plus

(2) 134 percent of his average pay multiplied by so much of his total service as exceeds 5 years but does not exceed 10 years; plus (3) 2 percent of his average pay multiplied by so much of his total service as exceeds 10 years.

However, when it results in a larger annuity, 1 percent of his average pay plus $25 is substituted for the percentage specified by paragraph (1), (2), or (3) of this subsection, or any combination thereof.

(b) The annuity of a Congressional employee, or former Congressional employee, retiring under this subchapter is computed under subsection (a) of this section, except, if he has had—

(1) at least 5 years' service as a Congressional employee or Member or any combination therof; and

(2) deductions withheld from his pay or has made deposit covering his last 5 years of civilian service;

his annuity is computed, with respect to his service as a Congressional employee, his military service not exceeding 5 years, and any Member service, by multiplying 212 percent of his average pay by the years of that service.

(c) The annuity of a Member, or former Member with title to Member annuity, retiring under this subchapter is computed under subsection (a) of this section, except, if he has had at least 5 years' service as a Member or Congressional employee or any combination thereof, his annuity is computed with respect to

(1) his service as a Member and so much of his military service as is creditable for the purpose of this paragraph; and

(2) his Congressional employee service;

by multiplying 212 percent of his average pay by the years of that

service.

(d) The annuity of an employee retiring under section 8336 (c) of this title is 2 percent of his average pay multiplied by his total service. (e) The annuity computed under subsections (a)-(d) of this section may not exceed 80 percent of

(1) the average pay of the employee; or

(2) the greater of

(A) the final basic pay of the Member; or

(B) the final basic pay of the appointive position of a former Member who elects to have his annuity computed or recomputed under section 8344 (b) (1) of this title.

(f) The annuity of an employee or Member retiring under section 8337 of this title is at least the smaller of—

(1) 40 percent of his average pay; or

(2) the sum obtained under subsections (a)-(c) of this section after increasing his service of the type last performed by the period elapsing between the date of separation and the date he becomes 60 years of age.

(g) The annuity computed under subsections (a), (b), and (e) of this section for an employee retiring under section 8336 (d) of this title is reduced by 1% of 1 percent for each full month the employee is under 55 years of age at the date of separation. The annuity computed under subsections (c) and (e) of this section for a Member retiring under the second or third sentence of section 8336 (f) of this title or the third sentence of section 8338 (b) of this title is reduced by 12 of 1 percent for each full month not in excess of 60 months, and 1% of 1 percent for each full month in excess of 60 months, the Member is under 60 years of age at the date of separation.

(h) The annuity computed under subsections (a)-(g) of this section is reduced by 10 percent of a deposit described by section 8334 (c) of this title remaining unpaid, unless the employee or Member elects to eliminate the service involved for the purpose of annuity computation.

(i) The annuity computed under subsections (a)-(h) of this section for a married employee or Member retiring under this subchapter, or any portion of that annuity designated in writing for the purpose of section 8341 (b) of this title by the employee or Member

at the time of retirement, is reduced by 212 percent of so much thereof as does not exceed $3,600 and by 10 percent of so much thereof as exceeds $3,600, unless the employee or Member notifies the Civil Service Commission in writing at the time of retirement that he does not desire his spouse to receive an annuity under section 8341(b) of this title.

(j) At the time of retiring under section 8336 or 8338 of this title, an unmarried employee or Member who is found to be in good health by the Commission may elect a reduced annuity instead of an annuity computed under subsections (a)-(h) of this section and name in writing an individual having an insurable interest in the employee or Member to receive an annuity under section 8341 (c) of this title after the death of the retired employee or Member. The annuity of the employee or Member making the election is reduced by 10 percent, and by 5 percent for each full 5 years the individual named is younger than the retiring employee or Member. However, the total reduction may not exceed 40 percent.

(k) The annuity computed under subsections (a)-(j) of this section for an employee who is a citizen of the United States is increased by $36 for each year of service in the employ of

(1) the Alaska Engineering Commission, or The Alaska Railroad, in Alaska between March 12, 1914, and July 1, 1923; or

(2) the Isthmian Canal Commission, or the Panama Railroad Company on the Isthmus of Panama between May 4, 1904, and April 1, 1914.

(1) In determining service for the purpose of computing an annuity under each paragraph of this section, 45 per centum of each year, or fraction thereof, of service referred to in section 8332(b) (6) which was performed prior to the effective date of the National Guard Technicians Act of 1968 shall be disregarded.

(m) In computing any annuity under subsections (a)-(d) of this section, the total service of an employee who retires on an immediate annuity or dies leaving a survivor or survivors entitled to annuity includes, without regard to the limitations imposed by subsection (e) of this section, the days of unused sick leave to his credit under a formal leave system, except that these days will not be counted in determining average pay or annuity eligibility under this subchapter. (Pub. L. 89-554, Sept. 6, 1966, 80 Stat. 574, amended Pub. L. 90-83, §1(78), Sept. 11, 1967, 81 Stat. 214; Pub. L. 90-206, title II, § 224 (b), Dec. 16, 1967, 81 Stat. 642; Pub. L. 90-486, § 5(c), Aug. 13, 1968, 82 Stat. 642; Pub. L. 91–93, § 203, Oct. 20, 1969, 81 Stat. 139.) § 8340. Cost-of-living adjustment of annuities

(a) Effective December 1, 1965, each annuity payable from the Fund having a commencing date before December 2, 1965, is increased by

(1) the percent rise in the price index, adjusted to the nearest 1/10 of 1 percent, determined by the Civil Service Commission on the basis of the annual average price index for calendar year 1962 and the price index for the base month of July 1965; plus

his annuity is computed, with respect to his service as a Congressional employee, his military service not exceeding 5 years, and any Member service, by multiplying 22 percent of his average pay by the years of that service.

(c) The annuity of a Member, or former Member with title to Member annuity, retiring under this subchapter is computed under subsection (a) of this section, except, if he has had at least 5 years' service as a Member or Congressional employee or any combination thereof, his annuity is computed with respect to

(1) his service as a Member and so much of his military service as is creditable for the purpose of this paragraph; and

(2) his Congressional employee service;

by multiplying 22 percent of his average pay by the years of that

service.

(d) The annuity of an employee retiring under section 8336 (c) of this title is 2 percent of his average pay multiplied by his total service. (e) The annuity computed under subsections (a)-(d) of this section may not exceed 80 percent of

(1) the average pay of the employee; or

(2) the greater of

(A) the final basic pay of the Member; or

(B) the final basic pay of the appointive position of a former Member who elects to have his annuity computed or recomputed under section 8344 (b) (1) of this title.

(f) The annuity of an employee or Member retiring under section 8337 of this title is at least the smaller of

(1) 40 percent of his average pay; or

(2) the sum obtained under subsections (a)-(c) of this section after increasing his service of the type last performed by the period elapsing between the date of separation and the date he becomes 60 years of age.

(g) The annuity computed under subsections (a), (b), and (e) of this section for an employee retiring under section 8336 (d) of this title is reduced by 1% of 1 percent for each full month the employee is under 55 years of age at the date of separation. The annuity computed under subsections (c) and (e) of this section for a Member retiring under the second or third sentence of section 8336 (f) of this title or the third sentence of section 8338 (b) of this title is reduced by 12 of 1 percent for each full month not in excess of 60 months, and 1% of 1 percent for each full month in excess of 60 months, the Member is under 60 years of age at the date of separation.

(h) The annuity computed under subsections (a)-(g) of this section is reduced by 10 percent of a deposit described by section 8334 (c) of this title remaining unpaid, unless the employee or Member elects to eliminate the service involved for the purpose of annuity computation.

(i) The annuity computed under subsections (a)-(h) of this section for a married employee or Member retiring under this subchapter, or any portion of that annuity designated in writing for the purpose of section 8341 (b) of this title by the employee or Member