Federal Employees' Retirement System Act of 1986

Designates the New York Bulk and Foreign Mail Center in Jersey City, New Jersey as the New Jersey International and Bulk Mail Center.

Declares that a portion of the street at the Mail Center shall be named Michael McDermott Place.

Federal Employees' Retirement System Act of 1986 - Title I: Federal Employees' Retirement System - Establishes the Federal Employees' Retirement System for Federal employees, postal employees, and Members of Congress who began service after December 31, 1983.

Declares that benefits payable under the System are in addition to those payable under the Social Security Act. Sets forth provisions for the benefit plan including: (1) eligibility for an annuity after five years of creditable service; (2) entitlements to retirement based on age and years of service; (3) the formulas for computing an annuity; (4) survivor election reductions; and (5) funding. Sets forth provisions for mandatory retirement for air traffic controllers, law enforcement officers, and firefighters.

Establishes a Thrift Savings Plan under which participants may contribute up to ten percent of their annual basic pay. Provides a formula to determine the appropriate contribution by the employing agency. Provides for the payment of benefits, lump sum or annuity, at the employee's separation from service. Establishes in the Treasury the Thrift Savings Fund for the deposit and accounting of amounts under the Plan. Prescribes how money in such Fund shall be invested.

Describes survivor annuities under the Federal Employees' Retirement System. Describes disability benefits for employees who have completed 18 months of creditable service.

Sets forth general and administrative provisions. Directs the Office of Personnel Management to pay all benefits payable under the benefit plan and administer provisions not specifically assigned to another entity. Directs the Office to adjudicate all claims under provisions it administers.

Provides for annual cost-of-living adjustments in basic pensions based upon an increase in the Consumer Price Index.

Provides for withholding of State income taxes from retirement annuities.

Declares that basic annuities, survivor annuities, and disability benefits are exempt from legal process (i.e., levy, attachment, garnishment) unless otherwise provided by Federal law.

Establishes in the executive branch the Federal Retirement Thrift Investment Board to be responsible for policies and regulations for, and review of, the investment and management of the Thrift Savings Fund. Directs the Board to establish an Employees Thrift Advisory Council to advise the Board on matters relating to investment policies for the Fund. Directs the Board to appoint an Executive Director to carry out its policies, investment and manage the fund, and administer provisions of the Thrift Savings Plan.

Title II: Other Amendments to Title 5 of the United States Code - Provides for civil service retirement for certain employees excluded from the Federal Employees' Retirement System.

Requires a reduction in benefits payable to retirees under the System if they also receive social security benefits.

Directs the Office of Personnel Management to provide alternative forms of annuity benefits. Requires the alternatives to include: (1) payment of the lump-sum credit to the retiree; and (2) payment of an annuity for life.

Directs the Office to establish a training program for retirement counselors of Federal agencies.

Authorizes participation in the Thrift Savings Plan by any Federal employee or Member of Congress.

Title III: Other Provisions Relating to the Federal Employees' Retirement System and the Civil Service Retirement System - Sets forth transition provisions for certain individuals subject to the Civil Service Retirement and Disability System who elect to participate in the Federal Retirement System. Establishes provisions for crediting the service of individuals who transfer among government retirement systems.

Amends the Social Security Act and the Internal Revenue Code to cover service by an individual who participates in the pension system.

Amends the Federal Employees' Retirement Contribution Temporary Adjustment Act of 1983 to extend its provisions until January 1, 1987. Requires the refund of any excess contributions made by an employee due to the expiration of such Act.

Directs the Secretary of Defense and the Secretary of Transportation to study the retirement systems provided for employees of nonappropriated fund instrumentalities under their respective jurisdictions and develop a plan to provide portability of vested retirement benefits among such retirement systems and other Federal retirement systems.

Authorizes the Commissioner of Social Security to disclose to the Office of Personnel Management certain tax return information necessary for the administration of the retirement system. Directs the Office to reimburse the Commissioner for the costs of providing such information.

Title IV: Foreign Service Retirement - Foreign Service Pension System Act of 1986 - Amends the Foreign Service Act of 1980 to revise the method of computing employee contributions to the Foreign Service Retirement and Disability Fund for employees whose service began before January 1, 1984.

Provides a formula for an offset in annuities by the amount of social security benefits received by an annuitant or survivor.

Revises recall and reemployment provisions of such Act.

Amends the Act to establish the Foreign Service Pension System for members of the Foreign Service whose service began after December 31, 1983, similar to the Federal Retirement System.

Title V: Central Intelligence Agency Retirement and Related Matters - Amends the Central Intelligence Agency Retirement Act of 1964 for Certain Employees to revise the method of computing employee contributions to the Central Intelligence Agency Retirement and Disability Fund for employees whose service began prior to January 1, 1984.

Provides a formula for an offset in annuities by the amount of social security benefits received by an annuitant or survivor.

Provides that all agency personnel hired after December 31, 1983, shall be subject to the Federal Employees' Retirement System, except those employees engaged in hazardous duty abroad. Sets forth special rules for such employees, for other employees who have served abroad, and for former spouses. Extends the special retirement accrual benefit provided to intelligence personnel to such personnel of the National Security Agency and the Defense Intelligence Agency.

Title VI: Miscellaneous Provisions - Amends the District of Columbia Code to revise provisions relating to survivor annuities of District of Columbia judges.

Title VII: Authorization of Appropriations; Effective Dates - Authorizes appropriations to the Federal Retirement Thrift Investment Board for FY 1986 and 1987. Declares the effective date of this Act to be January 1, 1987, except for certain specified provisions.