August 9, 1999
MEMORANDUM FOR SEE DISTRIBUTION
SUBJECT: Appropriated Fund/Non-Appropriated Fund Portability Issues
Department of Defense (DOD) employees, who move between Non-Appropriated Fund (NAF) and Appropriated Fund (AF) employment systems without a break in service of more than three days, are covered by the Portability Act. The act provides pay, leave, health and life insurance coverage, and other benefit protection. It is essential that these actions be properly coded and processed to ensure that Defense Finance and Accounting Service (DFAS) payroll offices do not make lump sum payments of annual leave, and do make payroll deductions, as appropriate. Appendix F to DOD 1401.1-M, DOD Personnel Policy Manual for Nonappropriated Fund Instrumentalities, applies to both NAF and AF employees. It contains information concerning portability of benefits and may be viewed on the Internet at http://www.cpms.osd.millcpmlcpm.html.
Recently we have had several cases of AF employees moving to NAF employment and employees moving to NAF from AF.
These actions require close coordination between the gaining NAF personnel staff and the Civilian Personnel Operations Center (CPOC) processing the separation. Please ensure that this information is provided to your processing clerks and to your Civilian Personnel Advisory Centers (CPACs) that have NAF employment staffs.
If an individual is moving from one employment system to another without a break in service of more than 3 days, then Public Law 101-508 as amended by Public Law 104-106 applies. These laws require that annual leave and sick leave balances MUST be transferred.
If the employee keeps only their NAF retirement, no forms need to be sent to DFAS, but the Retirement Code must be a 5 and the NAF Indicator must flow to DCPS when the employee's information is entered into DCPDS.
If the employee keeps their NAF 401k, the EEB 401(k) Enrollment Form, which shows the current 401(k) deferral percentage, must be sent to DFAS. Plus, the Retirement Code must be a 5 and the NAF Indicator must flow to DCPS when the employee's information is entered into DCPDS.
The point of contact for this action is Ms. Debra Chiles. She can be contacted at (703) 325-9985, DSN 221-9985,
or e-mail chilesd@(email address expired).
Elizabeth B. Throckmorton
Chief, Policy and Program
OFFICE, SECRETARY OF THE ARMY (JDPES-W)
U.S. ARMY EUROPE AND SEVENTH ARMY
EIGHTH U.S. ARMY
U.S. ARMY FORCES COMMAND
U.S. ARMY MATERIEL COMMAND
U.S. ARMY TRAINING AND DOCTRINE COMMAND
U.S. ARMY CORPS OF ENGINEERS
U.S. ARMY PACIFIC
MILITARY TRAFFIC MANAGEMENT COMMAND
U.S. ARMY CRIMINAL INVESTIGATION COMMAND
U.S. ARMY MEDICAL COMMAND
U.S. ARMY IN'TELLIGENCE AND SECURITY COMMAND
U.S. ARMY MILITARY DISTRICT OF WASHINGTON
U.S. ARMY SOUTH
U.S. ARMY SPECIAL OPERATIONS COMMAND
U.S. ARMY RESERVE PERSONNEL COMMAND
U.S. MILITARY ENTRANCE PROCESSING COMMAND
U.S. ARMY RECRUITING COMMAND
U.S. ARMY SPACE AND MISSILE DEFENSE COMMAND
SUPERINTENDENT, U.S. MILITARY ACADEMY