LEO Fair Retirement Act of 2025

This bill lets certain federal law enforcement officers count unpaid overtime (blocked by pay caps) toward their retirement pension. To do this, an officer can make a one-time payment to cover the retirement contributions that would have been taken from that overtime. Instead of paying all at once, they may choose a small ongoing reduction to their pension. Officers can request an estimate before retiring and must decide within a set window. These changes apply under both main federal retirement systems.

It also expands “availability pay” to more jobs that often work unpredictable hours, including postal inspectors, criminal investigators (GS‑1811), federal air marshals, Diplomatic Security Service special agents, probation officers, and pretrial services officers. The Office of Personnel Management must set rules within a year, allow transfers from the Thrift Savings Plan to cover the payment, and require agencies to keep and share payroll records needed to do the math. A non‑refundable federal tax credit is offered equal to the lump‑sum payments officers make for this purpose. Most changes start one year after the law takes effect.

• Who is affected: Federal law enforcement officers in CSRS or FERS; and covered jobs for availability pay (postal inspectors, GS‑1811 investigators, federal air marshals, DSS special agents, probation and pretrial services officers).
• What changes: Unpaid overtime can boost retirement pension if the officer makes a payment or accepts a small pension reduction; expanded availability pay; tax credit for the payment; TSP transfers allowed; agencies must keep/payroll records for calculations.
• When: Applies to pensions calculated one year after enactment; OPM rules due within one year.