“(a) In General.—This section shall apply in the case of an individual who is—“(1) an annuitant who should have been FERS covered but, as a result of a retirement coverage error, was CSRS covered or CSRS-Offset covered instead; or
“(2) a survivor of an employee who should have been FERS covered but, as a result of a retirement coverage error, was CSRS covered or CSRS-Offset covered instead.
“(b) Coverage.—“(1) Election.—Not later than 180 days after the date of the enactment of this Act [Sept. 19, 2000], the Office shall prescribe regulations authorizing an individual described under subsection (a) to elect CSRS-Offset coverage or FERS coverage, effective as of the date of the retirement coverage error.
“(2) Time limitation.—An election under this subsection shall be made not later than 18 months after the effective date of the regulations prescribed under paragraph (1).
“(3) Reduced annuity.—“(A) Amount in account.—If the individual elects CSRS-Offset coverage, the amount in the employee’s Thrift Savings Fund account under subchapter III of chapter 84 of title 5, United States Code, on the date of retirement that represents the Government’s contributions and earnings on those contributions (whether or not such amount was subsequently distributed from the Thrift Savings Fund) will form the basis for a reduction in the individual’s annuity, under regulations prescribed by the Office.
“(B) Reduction.—The reduced annuity to which the individual is entitled shall be equal to an amount which, when taken together with the amount referred to in subparagraph (A), would result in the present value of the total being actuarially equivalent to the present value of an unreduced CSRS-Offset annuity that would have been provided the individual.
“(4) Reduced benefit.—If—“(A) a surviving spouse elects CSRS-Offset benefits; and
“(B) a FERS basic employee death benefit under section 8442(b) of title 5, United States Code, was previously paid,
then the survivor’s CSRS-Offset benefit shall be subject to a reduction, under regulations prescribed by the Office. The reduced annuity to which the individual is entitled shall be equal to an amount which, when taken together with the amount of the payment referred to under subparagraph (B) would result in the present value of the total being actuarially equivalent to the present value of an unreduced CSRS-Offset annuity that would have been provided the individual.
“(5) Previous settlement payment.—An individual who previously received a payment ordered by a court or provided as a settlement of claim for losses resulting from a retirement coverage error may not make an election under this subsection unless repayment of that amount is waived in whole or in part under section 2208, and any amount not waived is repaid.
“(c) Nonelection.—If the individual does not make an election under subsection (b) before any time limitation under this section, the retirement coverage shall be subject to the following rules:“(1) Corrective action previously taken.—If corrective action was taken before the end of any time limitation under this section, that corrective action shall remain in effect.
“(2) Corrective action not previously taken.—If corrective action was not taken before such time limitation, the employee shall be CSRS-Offset covered, retroactive to the date of the retirement coverage error.