[Title 5 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2006 Edition]
[From the U.S. Government Printing Office]



[[Page i]]



          5


          Parts 700 to 1199

                         Revised as of January 1, 2006


          Administrative Personnel
          
          


________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of January 1, 2006
          With Ancillaries
                    Published by
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register

[[Page ii]]

          U.S. GOVERNMENT OFFICIAL EDITION NOTICE

          Legal Status and Use of Seals and Logos
          
          
          The seal of the National Archives and Records Administration 
              (NARA) authenticates the Code of Federal Regulations (CFR) as 
              the official codification of Federal regulations established 
              under the Federal Register Act. Under the provisions of 44 
              U.S.C. 1507, the contents of the CFR, a special edition of the 
              Federal Register, shall be judicially noticed. The CFR is 
              prima facie evidence of the original documents published in 
              the Federal Register (44 U.S.C. 1510).

          It is prohibited to use NARA's official seal and the stylized Code 
              of Federal Regulations logo on any republication of this 
              material without the express, written permission of the 
              Archivist of the United States or the Archivist's designee. 
              Any person using NARA's official seals and logos in a manner 
              inconsistent with the provisions of 36 CFR part 1200 is 
              subject to the penalties specified in 18 U.S.C. 506, 701, and 
              1017.

          Use of ISBN Prefix

          This is the Official U.S. Government edition of this publication 
              and is herein identified to certify its authenticity. Use of 
              the 0-16 ISBN prefix is for U.S. Government Printing Office 
              Official Editions only. The Superintendent of Documents of the 
              U.S. Government Printing Office requests that any reprinted 
              edition clearly be labeled as a copy of the authentic work 
              with a new ISBN.

              
              
          U . S . G O V E R N M E N T P R I N T I N G O F F I C E

          ------------------------------------------------------------------

          U.S. Superintendent of Documents  Washington, DC 
              20402-0001

          http://bookstore.gpo.gov

          Phone: toll-free (866) 512-1800; DC area (202) 512-1800

[[Page iii]]




                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 5:
          Chapter I--Office of Personnel Management                  3
  Finding Aids:
      Table of CFR Titles and Chapters........................     619
      Alphabetical List of Agencies Appearing in the CFR......     637
      List of CFR Sections Affected...........................     647

[[Page iv]]





                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 5 CFR 715.201 refers 
                       to title 5, part 715, 
                       section 201.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, January 1, 2006), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 2001, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, 1973-1985, or 1986-2000, published in 11 separate 
volumes. For the period beginning January 1, 2001, a ``List of CFR 
Sections Affected'' is published at the end of each CFR volume.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I). A list of CFR titles, chapters, 
and parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of textual material 
appearing in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-741-6000 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, Washington, DC 20408 or e-mail 
[email protected].

SALES

    The Government Printing Office (GPO) processes all sales and 
distribution of the CFR. For payment by credit card, call toll-free, 
866-512-1800, or DC area, 202-512-1800, M-F 8 a.m. to 4 p.m. e.s.t. or 
fax your order to 202-512-2250, 24 hours a day. For payment by check, 
write to the Superintendent of Documents, Attn: New Orders, P.O. Box 
371954, Pittsburgh, PA 15250-7954. For GPO Customer Service call 202-
512-1803.

ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, the LSA (List of 
CFR Sections Affected), The United States Government Manual, the Federal 
Register, Public Laws, Public Papers, Weekly Compilation of Presidential 
Documents and the Privacy Act Compilation are available in electronic 
format at www.gpoaccess.gov/nara (``GPO Access''). For more information, 
contact Electronic Information Dissemination Services, U.S. Government 
Printing Office. Phone 202-512-1530, or 888-293-6498 (toll-free). E-
mail, [email protected].

[[Page vii]]

    The Office of the Federal Register also offers a free service on the 
National Archives and Records Administration's (NARA) World Wide Web 
site for public law numbers, Federal Register finding aids, and related 
information. Connect to NARA's web site at www.archives.gov/federal--
register. The NARA site also contains links to GPO Access.

                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

January 1, 2006.

[[Page ix]]



                               THIS TITLE

    Title 5--Administrative Personnel is composed of three volumes. The 
parts in these volumes are arranged in the following order: parts 1-699, 
700-1199 and part 1200-end. The contents of these volumes represent all 
current regulations codified under this title of the CFR as of January 
1, 2006.

    For this volume, Carol A. Conroy was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Frances D. McDonald, assisted by Alomha S. Morris.

[[Page 1]]



                    TITLE 5--ADMINISTRATIVE PERSONNEL




                 (This book contains parts 700 to 1199)

  --------------------------------------------------------------------

  Note: Title 5 of the United States Code was revised and enacted into 
positive law by Pub. L. 89-554, Sept. 6, 1966. New citations for 
obsolete references to sections of 5 U.S.C. appearing in this volume may 
be found in a redesignation table under Title 5, Government Organization 
and Employees, United States Code.
                                                                    Part

chapter i--Office of Personnel Management (Continued).......         715

[[Page 3]]



          CHAPTER I--OFFICE OF PERSONNEL MANAGEMENT (CONTINUED)




  --------------------------------------------------------------------

           SUBCHAPTER B--CIVIL SERVICE REGULATIONS (CONTINUED)
Part                                                                Page
715             Nondisciplinary separations, demotions, and 
                    furloughs...............................           5
720             Affirmative Employment Programs.............           5
723             Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by the Office of 
                    Personnel Management....................          16
724             Implementation of Title II of the 
                    Notification and Federal Employee 
                    Antidiscrimination and Retaliation Act 
                    of 2002.................................          22
730             Notification of post-employment restrictions          23
731             Suitability.................................          24
732             National security positions.................          31
733             Political activity--Federal employees 
                    residing in designated localities.......          33
734             Political activities of Federal employees...          38
735             Employee responsibilities and conduct.......          54
736             Personnel investigations....................          55
752             Adverse actions.............................          57
754             [Reserved]
771             Agency administrative grievance system......          68
772             Interim relief..............................          68
792             Federal employees' health and counseling 
                    programs................................          69
831             Retirement..................................          74
835             Debt collection.............................         174
837             Reemployment of annuitants..................         176
838             Court orders affecting retirement benefits..         189
839             Correction of retirement coverage errors 
                    under the Federal Erroneous Retirement 
                    Coverage Corrections Act................         241
841             Federal Employees Retirement System--General 
                    Administration..........................         257
842             Federal Employees Retirement System--basic 
                    annuity.................................         279

[[Page 4]]

843             Federal Employees Retirement System--death 
                    benefits and employee refunds...........         326
844             Federal Employees' Retirement System--
                    Disability Retirement...................         341
845             Federal Employees Retirement System--debt 
                    collection..............................         349
846             Federal Employees Retirement System--
                    elections of coverage...................         360
847             Elections of retirement coverage by current 
                    and former employees of nonappropriated 
                    fund instrumentalities..................         373
870             Federal employees' group life insurance 
                    program.................................         391
875             Federal long term care insurance program....         423
880             Retirement and insurance benefits during 
                    periods of unexplained absence..........         432
890             Federal Employees Health Benefits Program...         435
891             Retired Federal employees health benefits...         520
892             Federal flexible benefits plan: pre-tax 
                    payment of health benefits premiums.....         529
900             Intergovernmental Personnel Act programs....         535
911             Procedures for States and localities to 
                    request indemnification.................         553
919             Governmentwide debarment and suspension 
                    (nonprocurement)........................         555
930             Programs for specific positions and 
                    examinations (miscellaneous)............         577
950             Solicitation of Federal civilian and 
                    uniformed service personnel for 
                    contributions to private voluntary 
                    organizations...........................         589
960             Federal Executive Boards....................         609
970             [Reserved]
990             General and miscellaneous...................         612
SUBCHAPTER C--REGULATIONS GOVERNING EMPLOYEES OF THE OFFICE OF PERSONNEL 
                               MANAGEMENT
1001            Employee responsibilities and conduct.......         615

[[Page 5]]



           SUBCHAPTER B_CIVIL SERVICE REGULATIONS (CONTINUED)





PART 715_NONDISCIPLINARY SEPARATIONS, DEMOTIONS, AND FURLOUGHS--Table of 
Contents




Subpart A [Reserved]

                     Subpart B_Voluntary Separations

Sec.
715.201 Applicability.
715.202 Resignation.

    Authority: 5 U.S.C. 1302, 3301, 3302, 7301; E.O. 10577, 3 CFR, 1954-
1958 Comp., p. 218; E.O. 11222, 3 CFR, 1964-1965 Comp., p. 306.

Subpart A [Reserved]



                     Subpart B_Voluntary Separations



Sec. 715.201  Applicability.

    This subpart applies to separation actions requested by employees in 
the executive departments and independent establishments of the Federal 
Government, including Government-owned or controlled corporations, and 
in those portions of the legislative and judicial branches of the 
Federal Government and the government of the District of Columbia having 
positions in the competitive service.

[33 FR 12482, Sept. 4, 1968]



Sec. 715.202  Resignation.

    (a) General. An employee is free to resign at any time, to set the 
effective date of his resignation, and to have his reasons for resigning 
entered in his official records.
    (b) Withdrawal of resignation. An agency may permit an employee to 
withdraw his resignation at any time before it has become effective. An 
agency may decline a request to withdraw a resignation before its 
effective date only when the agency has a valid reason and explains that 
reason to the employee. A valid reason includes, but is not limited to, 
administrative disruption or the hiring or commitment to hire a 
replacement. Avoidance of adverse action proceedings is not a valid 
reason.

[33 FR 12482, Sept. 4, 1968, as amended at 36 FR 9765, May 28, 1971; 38 
FR 18446, July 11, 1973; 38 FR 26601, Sept. 24, 1973]



PART 720_AFFIRMATIVE EMPLOYMENT PROGRAMS--Table of Contents




               Subpart A_Principal Statutory Requirements

Sec.
720.101 Federal Equal Opportunity Recruitment Program.

         Subpart B_Federal Equal Opportunity Recruitment Program

720.201 Regulatory requirements.
720.202 Definitions.
720.203 Responsibilities of the Office of Personnel Management.
720.204 Agency programs.
720.205 Agency plans.
720.206 Selection guidelines.
720.207 Reports.

         Subpart C_Disabled Veterans Affirmative Action Program

720.301 Purpose and authority.
720.302 Definition.
720.303 Agency programs.
720.304 Agency plans.
720.305 Agency accomplishment reports.
720.306 Responsibilities of the Office of Personnel Management.
720.307 Interagency report clearance.

Subparts D-I [Reserved]

Subpart J_Equal Opportunity Without Regard to Politics or Marital Status

720.901 Equal opportunity without regard to politics or marital status.

Appendix to Part 720--Guidelines for the Development of a Federal 
          Recruitment Program To Implement 5 U.S.C. Section 7201, as 
          Amended

    Authority: 5 U.S.C. 7201; 42 U.S.C. 2000e, unless otherwise noted.

    Source: 44 FR 22031, Apr. 13, 1979, unless otherwise noted.

[[Page 6]]



               Subpart A_Principal Statutory Requirements



Sec. 720.101  Federal Equal Opportunity Recruitment Program.

    This section incorporates the statutory requirements for 
establishing and conducting an equal opportunity recruitment program 
consistent with law within the Federal civil service. The policy in 5 
U.S.C. 7201(b) reads as follows: ``It is the policy of the United States 
to insure equal employment opportunities for employees without 
discrimination because of race, color, religion, sex, or national 
origin. The President shall use his existing authority to carry out this 
policy.'' 5 U.S.C. 7201(c) requires under regulations prescribed by the 
Office of Personnel Management:

    ``(1) That each Executive agency conduct a continuing program for 
the recruitment of members of minorities for positions in the agency to 
carry out the [anti-discrimination] policy set forth in subsection (b) 
in a manner designed to eliminate underrepresentation of minorities in 
the various categories of civil service employment within the Federal 
service, with special efforts directed at recruiting in minority 
communities, in educational institutions, and from other sources from 
which minorities can be recruited; and
    ``(2) That the Office conduct a continuing program of--
    ``(A) Assistance to agencies in carrying out programs under 
paragraph (1) of this subsection; and
    ``(B) Evaluation and oversight of such recruitment programs to 
determine their effectiveness in eliminating such minority 
underrepresentation.''


This section and all implementing guidance shall be interpreted 
consistent with title VII of the Civil Rights Act of 1964, as amended, 
42 U.S.C. 2000c et seq.

[44 FR 22031, Apr. 13, 1979, as amended at 48 FR 193, Jan. 4, 1983]



         Subpart B_Federal Equal Opportunity Recruitment Program



Sec. 720.201  Regulatory requirements.

    This subpart contains the regulations of the Office of Personnel 
Management which implement the above provisions of title 5, United 
States Code, and are prescribed by the Office under authority of 5 
U.S.C. 7201.



Sec. 720.202  Definitions.

    For the purposes of this subpart:
    (a) Underrepresentation means a situation in which the number of 
women or members of a minority group within a category of civil service 
employment constitutes a lower percentage of the total number of 
employees within the employment category than the percentage women or 
the minority constitutes within the civilian labor force of the United 
States, in accordance with Sec. 720.205 (c) and (d).
    (b) Category of civil service employment means such groupings of 
Federal jobs by grades and/or occupations as the Office of Personnel 
Management deems appropriate within the General Schedule and the 
prevailing wage systems.
    (c) Minority refers only to those groups classified as ``minority'' 
for the purpose of data collection by the Office of Personnel Management 
and the Equal Employment Opportunity Commission in furtherance of 
Federal equal employment opportunity policies. The term, ``women,'' 
includes nonminority as well as minority women.
    (d) Civilian labor force (CLF) includes all persons 16 years of age 
and over, except those in the armed forces, who are employed or who are 
unemployed and seeking work. CLF data are defined by the Bureau of the 
Census and the Bureau of Labor Statistics and are reported in the most 
recent decennial or mid-decade census, or current population survey, 
under title 13 of the United States Code or any other reliable 
statistical study.
    (e) Recruitment means the total process by which the Federal 
Government and the Federal agencies locate, identify and assist in the 
employment of qualified applicants from underrepresented groups for job 
openings in categories of employment where underrepresentation has been 
determined. It includes both innovative internal and external 
recruitment actions. It is also intended to cover processes designed to 
prepare qualifiable applicants (those who have the potential but do not 
presently meet valid qualification requirements) for such job openings 
through

[[Page 7]]

programs of training, work experience or both.
    (f) Applicant pool means all types of listings from which selections 
may be made, including (but not limited to) promotion lists, competitive 
certificates and inventories of eligibles, applicant supply files, and 
lists of eligibles for certain noncompetitive appointments.



Sec. 720.203  Responsibilities of the Office of Personnel Management.

    (a) The Office of Personnel Management will provide appropriate data 
to assist Federal agencies in making determinations of 
underrepresentation. The process for making such determinations is 
described in sections II and III (c) of the ``Guidelines for the 
Development of a Federal Recruitment Program to Implement 5 U.S.C. 7201, 
as amended'' (See appendix to this part). The Office will develop and 
publish more specific criteria for statistical measurements to be used 
by individual agencies, and will develop further guidance on--
    (1) Agency employment statistics and civilian labor force statistics 
to be used in making determinations of underrepresentation, on a 
national, regional or other geographic basis as appropriate;
    (2) Groupings of grades and/or other occupational categories to be 
used in implementing agency programs;
    (3) Occupational categories and job series for which expanded 
external recruitment efforts are most appropriate, and those for which 
expanded and innovative internal recruitment is appropriate; and
    (4) Other factors which may be considered by the agency, in 
consultation with Office of Personnel Management, to make determinations 
of underrepresentation and to develop recruitment programs focused on 
specific occupational categories.
    (b) The Office will assist agencies in carrying out their programs 
by--
    (1) Identifying major recruitment sources of women and members of 
minority groups and providing guidance on internal and external 
recruitment activities directed toward the solution of specific 
underrepresentation problem;
    (2) Supplementing agency recruitment efforts, utilizing existing 
networks for dissemination of job information, and involving the 
participation of minority group and women's organizations where 
practicable;
    (3) Examining existing Federal personnel procedures to identify 
those which (i) may serve as impediments to innovative internal and 
external recruitment and (ii) are within the administrative control of 
the Office or the Federal agencies;
    (4) Determining whether applicant pools used in filling jobs in a 
category of employment where underrepresentation exists include 
sufficient candidates from any underrepresentated groups, except where 
the agency controls such pools (see Sec. 720.204(c));
    (5) Providing such other support, as the Office deems appropriate.
    (c) The Office will monitor and, in conjunction with the personnel 
management evaluation program of the Office, evaluate agency programs to 
determine their effectiveness in eliminating underrrepresentation.
    (d) The Office will work with agencies to develop effective 
mechanisms for providing information on Federal job opportunities 
targeted to reach candidates from underrepresented groups.
    (e) The Office will conduct a continuing program of guidance and 
instruction to supplement these regulations.
    (f) The Office will coordinate further activities to implement equal 
opportunity recruitment programs under this subpart with the Equal 
Employment Opportunity Commission consistent with law, Executive Order 
12067, and Reorganization Plan No. 1 of 1978.



Sec. 720.204  Agency programs.

    (a) Each Executive agency having positions in the pay systems 
covered by this program must conduct a continuing program for the 
recruitment of minorities and women for positions in the agency and its 
components to carry out the policy of the United States to insure equal 
employment opportunities without discrimination because of race, color, 
religion, sex or national origin. The head of each agency must 
specifically assign responsibility for program

[[Page 8]]

implementation to an appropriate agency official. All agency officials 
who have responsibility for the program will be evaluated on their 
effectiveness in carrying it out as part of their periodic performance 
appraisals.
    (b) Programs established under this subpart must be designed to 
cover recruitment for all positions in pay plans covered by this program 
including part-time and temporary positions.
    (c) Where an agency or the Office of Personnel Management has 
determined that an applicant pool does not adequately provide for 
consideration of candidates from any underrepresented group, the agency 
or agency component must take one or more of the following actions:
    (1) Expand or otherwise redirect their recruitment activities in 
ways designed to increase the number of candidates from underrepresented 
groups in that applicant pool;
    (2) Use selection methods involving other applicant pools which 
include sufficient numbers of members of underrepresented groups;
    (3) Notify the office responsible for administering that applicant 
pool, and request its reopening of application receipt in support of 
expanded recruitment activities or certifying from equivalent registers 
existing in other geographic areas; and/or
    (4) Take such other action consistent with law which will contribute 
to the elimination of underrepresentation in the category of employment 
involved.
    (d) Agencies must notify and seek advice and assistance from the 
Office of Personnel Management in cases where their equal opportunity 
recruitment programs are not making measurable progress in eliminating 
identified underrepresentation in the agency work force.



Sec. 720.205  Agency plans.

    (a) Each agency must have an up-to-date equal opportunity 
recruitment program plan covering recruitment for positions at various 
organizational levels and geographic locations within the agency. Such 
plans must be available for review in appropriate offices of the agency 
and must be submitted to the Office of Personnel Management on request. 
In accordance with agreement reached between the Office and the Equal 
Employment Opportunity Commission, such plans must be incorporated in 
the agency's equal employment opportunity plans required under section 
717 of the Civil Rights Act of 1964, as amended, pursuant to regulations 
and instructions of the Commission, provided they are separable parts of 
those plans for purposes of review by and submission to the Office of 
Personnel Management. Agency organizational and geographical components 
which are required to develop and submit Equal Employment Opportunity 
plans, under instructions issued by the Equal Employment Opportunity 
Commission, must also have up-to-date special recruitment program plans. 
On a determination by the Office of Personnel Management, in 
consultation with EEOC, that additional component plans are needed to 
implement an agency's program effectively, the Office will instruct the 
agency to develop additional plans. Agencies must comply with such 
instructions.
    (b) Agency plans must include annual specific determinations of 
underrepresentation for each group and must be accompanied by 
quantifiable indices by which progress toward eliminating 
underrepresentation can be measured.
    (c) Where an agency or agency component is located in a geographical 
area where the percentage of underrepresented groups in the area 
civilian labor force is higher than their percentage in the national 
labor force, the agency or component must base its plans on the higher 
level of representation in the relevant civilian labor force.
    (d) Where an agency or agency component is located in a geographical 
area where participation of a particular underrepresented group is 
significantly lower than its participation in the national labor force, 
the agency or component may, in consultation with the Office of 
Personnel Management, use the lower percentage in determining 
underrepresentation. An agency may not use a figure lower than the 
relevant regional or nationwide labor force percentage where recruitment 
on a regional or nationwide basis is feasible for particular categories 
of employment. Factors such as size of

[[Page 9]]

the agency or unit, nature of jobs and their wage or pay scale may be 
considered in focusing recruitment for various job categories.
    (e) In addition to the underrepresentation determinations described 
in paragraphs (b), (c) and (d) of this section, agency plans must, at a 
minimum, include:
    (1) An assessment of grades or job categories and numbers of jobs in 
such categories expected to be filled in the current year, and on a 
longer term basis (based on anticipated turnover, expansion, hiring 
limits and other relevant factors) identification of those occupational 
categories and positions suitable for external recruitment, and 
description of special targeted recruitment programs for such jobs and 
positions;
    (2) A similar assessment for job categories and positions likely to 
be filled by recruitment from within the agency and/or the Federal civil 
service system and a description of recruitment programs developed to 
increase minority and female candidates from internal sources for such 
positions;
    (3) A further assessment of internal availability of candidates from 
underrepresentated groups for higher job progressions by identifying 
job-related skills, knowledges and abilities which may be obtained at 
lower levels in the same or similar occupational series, or through 
other experience;
    (4) A description of methods the agency intends to use to locate and 
develop minority and female candidates for each category of 
underrepresentation and an indication of how such methods differ from 
and expand upon the recruitment activities of the agency prior to 
establishment of the special recruitment program or the last revision to 
the agency's plans;
    (5) A description of specific, special efforts planned by the agency 
(or agency component) to recruit in communities, educational 
institutions, and other likely sources of qualified minority and female 
candidates;
    (6) A description of efforts which will be undertaken by the agency 
to identify jobs which can be redesigned so as to improve opportunities 
for minorities and women, including jobs requiring bilingual or 
bicultural capabilities or not requiring English fluency.
    (7) A list of priorities for special recruitment program activities 
based on agency identification of:
    (i) Immediate and longer range job openings for each occupational/
grade-level grouping for which underrepresentation has been determined;
    (ii) Hiring authorities which may be used to fill such jobs;
    (iii) The possible impact of its actions on underrepresentation.
    (8) Identification of training and job development programs the 
agency will use to provide skills, knowledge and abilities to qualify 
increased numbers of minorities and women for occupational series and 
grade levels where they are significantly underrepresented.
    (9) Identification of problems for which the assistance of the 
Office of Personnel Management is needed and will be requested.
    (f) Equal opportunity recruitment program plans must be consistent 
with agency Upward Mobility program plans and should be developed with 
full consideration of the agency's overall recruiting and staffing 
planning objectives.
    (g) All plans required under this subpart must be developed not 
later than October 1, 1979.

[44 FR 22031, Apr. 13, 1979, as amended at 44 FR 33046, June 8, 1979]



Sec. 720.206  Selection guidelines.

    This subpart sets forth requirements for a recruitment program, not 
a selection program. Nevertheless, agencies are advised that all 
selection processes including job qualifications, personnel procedures 
and criteria must be consistent with the Uniform Guidelines on Employee 
Selection Procedures (43 FR 38290; August 25, 1978).



Sec. 720.207  Reports.

    (a) Not later than November 1 of each year, agencies must submit an 
annual report on their equal opportunity recruitment program to the 
Office of Personnel Management, in a form prescribed by the Office. The 
Office may require submission of any additional

[[Page 10]]

reports it considers necessary in carrying out its responsibilities 
under this subpart.
    (b) The Office will report to Congress on the implementation and 
operation of the program on a Governmentwide basis not later than 
January 31 of each year, as required by law. Such reports will include 
assessments of agencies progress, or lack of progress, in meeting the 
objectives of the program.



         Subpart C_Disabled Veterans Affirmative Action Program

    Authority: 5 U.S.C. 7201; 42 U.S.C. 2000e; 38 U.S.C. 101(2), 
2011(3), 2014; 5 U.S.C. 3112; 29 U.S.C. 791(b).

    Source: 48 FR 193, Jan. 4, 1983, unless otherwise noted.



Sec. 720.301  Purpose and authority.

    This subpart sets forth requirements for agency disabled veteran 
affirmative action programs (DVAAPs) designed to promote Federal 
employment and advancement opportunities for qualified disabled 
veterans. The regulations in this subpart are prescribed pursuant to 
responsibilities assigned to the Office of Personnel Management (OPM) 
under section 403 of the Vietnam Era Veterans Readjustment Assistance 
Act of 1974, as amended (38 U.S.C. 2014), and section 307 of the Civil 
Service Reform Act of 1978 (5 U.S.C. 3112).

    Effective Date Note: At 70 FR 72068, Dec. 1, 2005, Sec. 720.301 was 
revised, effective Jan. 3, 2006. For the convenience of the user the 
revised text follows.

Sec. 720.301  Purpose and authority.

    This subpart sets forth requirements for agency disabled veteran 
affirmative action programs (DVAAPs) designed to promote Federal 
employment and advancement opportunities for qualified disabled 
veterans. The regulations in this subpart are prescribed pursuant to 
responsibilities assigned to the Office of Personnel Management (OPM) 
under 38 U.S.C. 4214, and section 307 of the Civil Service Reform Act of 
1978 (5 U.S.C. 3112).



Sec. 720.302  Definition.

    As used in this subpart, the terms veteran and disabled veteran have 
the meanings given to these terms in title 38 of the United States Code.



Sec. 720.303  Agency programs.

    (a) Continuing Programs. Each Department, agency, and 
instrumentality in the executive branch, including the U.S. Postal 
Service and the Postal Rate Commission, shall conduct a continuing 
affirmative program for the recruitment, hiring, placement, and 
advancement of disabled veterans.
    (b) Program Responsibility. The head of each agency shall assign 
overall program responsibility to an appropriate agency official. The 
official so designated shall be at a high enough level to ensure 
effective program administration and the devotion of adequate resources 
to the program.
    (c) Problem Analysis. (1) Annually, OPM will provide appropriate 
data on the employment of disabled veterans to each agency participating 
in the Central Personnel Data File (CPDF). These data will be taken from 
CPDF. For DVAAP purposes, CPDF data are considered to be the official 
record of the status of disabled veteran employment within each 
participating agency. Each participating agency is responsible for 
assuring that such records are timely, accurate, and complete.
    (2) CPDF data must be analyzed by participating agencies to identify 
problem areas and deficiencies in the employment and advancement of 
disabled veterans. (OPM will establish with each agency not 
participating in CPDF, the nature and extent of data to be used in 
identifying problems and deficiencies.) Based on this analysis, agencies 
shall develop methods to improve the recruitment, hiring, placement, and 
advancement of disabled veterans, or revise or redirect existing 
methods, as necessary. These methods must then be translated into action 
items.



Sec. 720.304  Agency plan.

    (a) Plan Development. As part of the affirmative action plan it 
prepares pursuant to section 501(b) of the Rehabilitation Act of 1973 
(29 U.S.C. 791 (b)) (``Section 501(b) Plan''), each Department, agency, 
or instrumentality in the executive branch must have an up-to-date 
affirmative action plan for the employment and advancement of disabled 
veterans.

[[Page 11]]

    (1) Each agency must review its plan on an annual basis, together 
with its accomplishments for the previous fiscal year, updated 
employment data, and any changes in agency mission or structure, and 
update the plan as necessary. Agency operating components and field 
installations required to develop separate plans under paragraph (b) of 
this section, below, must perform the same type of annual review and 
update of their plans.
    (2) Plans shall cover a time period of not less than one year and 
may cover a longer period if concurrent with the agency's Section 501(b) 
Plan. Each plan must specify the period of time it covers.
    (3) Initial plans for fiscal year 1983 required under this subpart 
must be developed by January 30, 1983 and must be in effect on that day.
    (b) Plan Coverage. (1) Each agency must have an agencywide plan 
covering all of its operating components and field installations. 
Agencywide plans shall include instructions assigning specific 
responsibilities on affirmative actions to be taken by the agency's 
various operating components and field installations to promote the 
employment and advancement of disabled veterans. OPM must be informed 
when headquarters offices require plans at the field or installation 
level.
    (2) Agency operating components and field installations must have a 
copy of the plan covering them, and must implement their 
responsibilities under it. OPM may require operating components and 
field installations to develop separate plans in accordance with program 
guidance and/or instructions.
    (c) Plan Submission. Affirmative action plans developed under this 
section shall be submitted to OPM upon request. The Office of Personnel 
Management will review a selection of agency plans each fiscal year.
    (d) Plan Certification. Each agency must certify to OPM by December 
1 of each year that it has an up-to-date plan as required by this 
section. This certification must indicate the date the agency's most 
recent plan was effective or was last amended.
    (e) Plan Content. Disabled veteran affirmative action plans shall, 
at a minimum, contain:
    (1) A statement of the agency's policy with regard to the employment 
and advancement of disabled veterans, especially those who are 30 
percent or more disabled.
    (2) The name and title of the official assigned overall 
responsibility for development and implementation of the action plan.
    (3) An assessment of the current status of disabled veteran 
employment within the agency, with emphasis on those veterans who are 30 
percent or more disabled.
    (4) A description of recruiting methods which will be used to seek 
out disabled veteran applicants, including special steps to be taken to 
recruit veterans who are 30 percent or more disabled.
    (5) A description of how the agency will provide or improve internal 
advancement opportunities for disabled veterans.
    (6) A description of how the agency will inform its operating 
components and field installations, on a regular basis, of their 
responsibilities for employing and advancing disabled veterans.
    (7) A description of how the agency will monitor, review, and 
evaluate its planned efforts, including implementation at operating 
component and field installation levels during the period covered by the 
plan.



Sec. 720.305  Agency accomplishment reports.

    (a) Not later than December 1 of each year, agencies must submit an 
annual accomplishment report on their disabled veterans affirmative 
action program to the Office of Personnel Management, covering the 
previous fiscal year.
    (b) Agency annual accomplishment reports must describe:
    (1) Methods used to recruit and employ disabled veterans, especially 
those who are 30 percent or more disabled.
    (2) Methods used to provide or improve internal advancement 
opportunities for disabled veterans.
    (3) A description of how the activities of major operating 
components and field installations were monitored, reviewed, and 
evaluated.

[[Page 12]]

    (4) An explanation of the agency's progress in implementing its 
affirmative action plan during the fiscal year. Where progress has not 
been shown, the report will cite reasons for the lack of progress, along 
with specific plans for overcoming cited obstacles to progress.



Sec. 720.306  Responsibilities of The Office of Personnel Management.

    (a) Program Review. OPM will monitor agency program implementation 
through review of agency plans, direct agency contact, review of 
employment data, and through other appropriate means. As it deems 
appropriate, OPM will conduct onsite evaluations of program 
effectiveness, both at agency headquarters and at field installations or 
operating components.
    (b) Technical Assistance. The Office of Personnel Management will 
provide technical assistance, guidance, instructions, data, and other 
information as appropriate to supplement and support agency programs for 
disabled veterans.
    (c) Semiannual Reports. As provided by 38 U.S.C. 2014(d), OPM will, 
on at least a semiannual basis, publish reports on Government-wide 
progress in implementing affirmative action programs for disabled 
veterans.
    (d) Report to Congress. As required by 38 U.S.C. 2014(e), OPM will 
report to Congress each year on the implementation and progress of the 
program. These reports will include specific assessments of agency 
progress or lack of progress in meeting the objectives of the program.

[48 FR 193, Jan. 4, 1983, as amended at 66 FR 66711, Dec. 27, 2001]



Sec. 720.307  Interagency report clearance.

    The reports contained in this regulation have been cleared in 
accordance with FPMR 101-11.11 and assigned interagency report control 
number 0305-OPM-AN.

Subparts D-I [Reserved]



Subpart J_Equal Opportunity Without Regard to Politics or Marital Status



Sec. 720.901  Equal opportunity without regard to politics or marital 
status.

    (a) In appointments and position changes. In determining the merit 
and fitness of a person for competitive appointment or appointment by 
noncompetitive action to a position in the competitive service, an 
appointing officer shall not discriminate on the basis of the person's 
political affiliations, except when required by statute, or on the basis 
of marital status
    (b) In adverse actions and termination of probationers. An agency 
may not take an adverse action against an employee covered by part 752 
of this chapter, not effect the termination of a probationer under part 
315 of this chapter, (1) for political reasons, except when required by 
statute, or (2) because of marital status.

(5 U.S.C. 2301, 2302, 7202, 7203, 7204)

[44 FR 48149, Aug. 17, 1979]

   Appendix to Part 720--Guidelines for the Development of a Federal 
 Recruitment Program to Implement 5 U.S.C. Section 7201, as Amended \1\
---------------------------------------------------------------------------

    \1\ This section originally was section 701(b) (2nd Proviso) of the 
Civil Rights Act of 1964 (Pub. L. 88-352, July 2, 1964), codified as 5 
U.S.C. 7151. Section 7151 was further amended by section 310 of the 
Civil Service Reform Act of 1978. This Act also redesignated section 
7151 as section 7201, effective January 11, 1979. (Sec. 703(a)(1) of the 
Act.)
---------------------------------------------------------------------------

    I. Background Information. A. In 1964 the Congress adopted a basic 
anti-discrimination policy for Federal employment, stating:

    It is the policy of the United States to insure equal employment 
opportunities for employees without discrimination because of race, 
color, religion, sex or national origin. [5 U.S.C. 7151] \2\
---------------------------------------------------------------------------

    \2\ Ibid.
---------------------------------------------------------------------------

    In 1978, Congress reaffirmed and amended this policy as part of the 
Civil Service Reform Act of 1978 [Sec. 310 of Pub. L. 95-454], requiring 
immediate development of a recruitment program designed to eliminate 
underrepresentation of minority groups in specific Federal job 
categories. Section 310 directs the Equal Employment Opportunity 
Commission:

[[Page 13]]

    1. To establish Guidelines proposed to be used for a program 
designed to eliminate such underrepresentation;
    2. To make, in consultation with OPM, initial determinations of 
underrepresentation which are proposed to be used in this program; and
    3. To transmit the determinations made under (2) above to the 
Executive Agencies, the Office of Personnel Management and the Congress, 
within 60 days of enactment.
    The Office of Personnel Management (OPM) \3\ is directed by this 
amendment:
---------------------------------------------------------------------------

    \3\ This Office was created by Reorganization Plan No. 2, issued 
pursuant to 5 U.S.C. 901 et seq. It will assume personnel management 
functions of the present Office of Personnel Management on January 1, 
1979.
---------------------------------------------------------------------------

    1. To issue regulations to implement a program under EEOC Guidelines 
within 180 days after enactment, which shall provide that Executive 
agencies conduct continuing recruitment programs to carry out the anti-
discrimination policy in a manner designed to eliminate 
underrepresentation in identified categories of civil service;
    2. To provide continuing assistance to Federal agencies in carrying 
out such programs;
    3. To conduct a continuing program of evaluation and oversight to 
determine the effectiveness of such programs;
    4. To establish occupational, professional and other groupings 
within which appropriate recruitment will occur, based upon the 
determinations of underrepresentation pursuant to these Guidelines; and
    5. To report annually to the Congress on this program, not later 
than January 31 of each year.
    Congress further directed that the recruitment program must be 
administered consistent with provisions of Reorganization Plan No. 1 of 
1978.\4\
---------------------------------------------------------------------------

    \4\ Conference Report on Civil Service Reform Act of 1978, No. 95-
1272, p. 145.
---------------------------------------------------------------------------

    B. In framing these Guidelines and making its initial determinations 
of underrepresentation, the Equal Employment Opportunity Commission 
(Commission) is acting pursuant to its obligations and authority under 5 
U.S.C. 7201, as amended; Section 717 of title VII of the Civil Rights 
Act of 1964, as amended; Reorganization Plan No. 1 of 1978 (issued 
pursuant to 5 U.S.C. 901 et seq.) and Executive Order 12067, issued 
under this Plan (43 FR 28967, June 30, 1978). This Commission must 
develop and/or ensure the development of uniform, coherent and effective 
standards for administration and enforcement of all Federal anti-
discrimination and equal employment opportunity laws, policies and 
programs, and to ensure the elimination of duplication and inconsistency 
in such programs.
    C. A review of the legislative history of Federal equal employment 
opportunity policy provides further guidance on the scope and nature of 
determinations and guidelines to be issued for this program.
    The basic policy statement on Federal equal employment policy 
enacted by the Congress in 1964 (5 U.S.C. 7151, redesignated as section 
7201) gave the President authority for implementation. Executive Order 
11246 (1966), expanded and superseded by Executive Order 11478 (1969) 
with respect to Federal employment, required Federal agencies to develop 
affirmative action programs designed to eliminate discrimination and 
assure equal employment opportunity.
    In 1972, Congress found that serious discrimination persisted in 
Federal employment. It found that minorities and women were 
significantly absent at higher levels in Federal employment, and 
severely underrepresented in some Federal agencies and in some 
geographic areas where they constituted significant proportions of the 
population. After a detailed review of Federal employment practices and 
statistics, the Congress concluded that:
    The disproportionate distribution of minorities and women throughout 
the Federal bureaucracy and their exclusion from higher level policy-
making and supervisory positions indicates the government's failure to 
pursue its policy of equal employment opportunity.\5\
---------------------------------------------------------------------------

    \5\ Legislative History of the Equal Employment Opportunity Act of 
1972, p. 83. See pp. 82-86 and 421-425 for Congressional Findings.
---------------------------------------------------------------------------

    Congress found that this exclusion resulted from overt and 
``systemic'' discriminatory practices.
    These findings, among others, led Congress to extend title VII 
coverage to Federal employment in Section 717 of the Equal Employment 
Opportunity Act of 1972.
    The Civil Service Reform Act of 1978 clearly states, for the first 
time, that ``it is the policy of the United States * * * to provide * * 
* a Federal workforce reflective of the Nation's diversity * * *'' \6\ 
The Act establishes in law as the first merit principle that recruitment 
should be designed to achieve a Federal workforce from ``all segments of 
society.'' Among the personnel practices prohibited by the Act is 
discrimination prohibited under title VII of the Civil Rights Act of 
1964, as amended.\7\ Therefore, the Civil Service Reform Act and its 
directive for a special recruitment program clearly unite requirements 
for basic Federal personnel policy with requirements for Federal equal 
employment policy.
---------------------------------------------------------------------------

    \6\ Civil Service Reform Act of 1978, Section 3.
    \7\ Section 101(a) of the Act, 5 U.S.C. 2301(b)(1) and 
2302(b)(1)(A), as amended.
---------------------------------------------------------------------------

    It is clear from the legislative history of Federal equal employment 
policy that the

[[Page 14]]

legal standards of title VII must be applied to Federal employment. 
Thus, guidelines for a recruitment program designed to eliminate 
underrepresentation in Federal agency employment must be developed 
consistent with the framework of affirmative action programs.
    D. Guided by the review of the legislative history, and the 
responsibilities and authorities cited in I(B) of this appendix, the 
Commission is issuing these Guidelines to provide a framework for 
development of recruitment program regulations by OPM. The Commission 
may later provide more detailed guidance, through consultation with OPM, 
designed to achieve an overall Federal equal employment program which is 
consistent with, and which effectively implements title VII 
requirements.
    II. Initial Determinations of Underrepresentation. A. Pursuant to 
Section 7201, underrepresentation exists when the percentages of 
minority and female Federal employees in specific grades are less than 
their percentages in the civilian labor force. ``Minority'' refers only 
to those groups classified as ``minority'' for the purpose of data 
collection by the Commission and OPM in furtherance of Federal equal 
employment opportunity policies. The civilian labor force includes all 
persons 16 years of age and over except the armed forces, who are 
employed or seeking employment. Such a determination of 
underrepresentation is designated in these Guidelines as ``below the 
Section 7201 level''.
    B. The Commission has examined existing data on Federal employment 
and the civilian labor force and has made initial determinations of 
underrepresentation of groups by race, national origin and sex in 
specific grades of the major Federal pay systems, under the legal 
authorities cited in I(B), of this appendix.
    C. The Table which follows shows the grades at which the percentage 
of each group in the Federal workforce falls below its percentage in the 
civilian labor force. The table covers four major Federal pay systems 
which account for more than 95 percent of Federal employees, excluding 
the Postal Service.\8\
---------------------------------------------------------------------------

    \8\ The initial determinations are based on data for only those 
agencies covered by the Civil Service Reform Act of 1978. The Commission 
will make subsequent determinations on other agencies covered by title 
VII, e.g. the U.S. Postal Service, TVA, Central Intelligence Agency, 
Federal Reserve Board.

  Civilian Labor Force and Federal Employment Grades at Which Minorities and Women Are Below the 7201 Level, by
                        Selected Pay Systems, and by Sex, Race, and National Origin--1977
----------------------------------------------------------------------------------------------------------------
                              Percent of                        Grades Below the 7201 Level
                               Civilian  -----------------------------------------------------------------------
  Sex/Race/National Origin       Labor      Gen Sched and      Non-spvsry      Leader Regular    Spvsry Regular
                                 Force       Equivalent       Regular Wage          Wage              Wage
----------------------------------------------------------------------------------------------------------------
Number of Grades............  ..........                18                15                15                19
-----------------------------
Women.......................        41.0                9+                2+                2+               All
White.......................        34.0                9+               All               All               All
Black.......................         4.6               11+                5+                5+                5+
Hispanic....................         1.7                6+               All             2, 4+               All
AsAm/PacIs..................          .6            1, 10+                2+                2+               All
AmIn/AlNa...................          .1               13+                9+       1, 5, 6, 9+         4, 9, 11+
Minority Men................         8.9                3+               13+           11, 14+               13+
Black.......................         5.3             4, 6+               12+               11+               11+
Hispanic....................         2.8               All               14+             1, 15        13-15, 17+
AsAm/PacIs..................          .7      1-8, 10, 16+            9, 14+   1, 3, 8, 9, 12+   1, 3, 8, 9, 17+
AmIn/AlNa...................          .2              None                14            1, 13+               17+
----------------------------------------------------------------------------------------------------------------
Notes. 1. Comparable data for white men shown below are for reference.


White Men...................        50.1               1-8               1-4               1-5               1-3
 
2. + means ``and all grades above''.
3. Detail may not add to total because of rounding.
 
Sources: Civilian Labor Force information based on data from the Current Population Survey, Bureau of Labor
  Statistics, Employment and Earnings, Vol. 25, No. 1, January 1978.
Information on grades below 7201 level based on Office of Personnel Management data from Equal Employment
  Opportunity Statistics, November 20, 1977 (publication in process).

    D. The initial determinations of underrepresentation were based upon 
average 1977 labor force data from the Current Population Survey 
published by the Bureau of Labor Statistics (Employment and Earnings, 
January 1978), and 1977 Federal workforce statistics from Equal 
Employment Opportunity Statistics (publication in process).
    The labor force figures are published annually; the Federal 
employment statistics semiannually. These measures, and any

[[Page 15]]

modifications agreed upon by the Commission and OPM, will be updated 
annually.
    Regional and area Federal employment statistics are available from 
the Office of Personnel Management. The latest reliable local labor 
force data by race, national origin, and sex is from the 1970 Census. 
The Commission and OPM will consult on appropriate labor force measures 
to be used for local analyses.
    E. These initial determinations are based upon a preliminary 
analysis of the data, and may be further refined by the Commission, in 
consultation with OPM, to include geographic and occupational 
underrepresentation. It is further recognized that for the purpose of 
developing regulations, the OPM, in consultation with the Commission, 
will undertake more specific analyses of data use and applicability 
necessary to develop programs for the Federal agencies pursuant to 
Section 7201(a)(2)(C). The OPM may establish criteria for grouping 
agencies, for treating agency components separately and for grouping 
grades and pay systems. In addition, OPM may study other available data 
sources and use other techniques to assure statistically significant 
findings of underrepresentation. Based upon these studies, OPM may make 
recommendations to the Commission for future determinations of 
underrepresentation.
    III. Procedures for Developing Recruitment Programs. A. The program 
developed and implemented by OPM under Section 7201 should be designed 
to result in applicant pools with sufficient qualified members of 
underrepresented groups. Where the supply of such groups initially 
appears to be low for specific occupational, professional and other 
groupings, the program should be designed so that recruitment efforts 
stimulate interest of underrepresented groups in those occupations where 
there are realistic projections of Federal employment opportunities.
    B. In establishing groupings for determining underrepresentation, 
OPM should utilize broad occupational categories to the extent possible.
    C. The Commission recognizes that OPM's regulations should allow 
flexibility in development and design of each Federal agency's 
recruitment program. However, all statistical comparisons must be 
computed in a manner consistent with the method utilized in II C of this 
appendix.
    The Commission recommends that each agency program meet several 
minimum requirements. The program should be based on a determination of 
underrepresentation in the agency's total workforce, in appropriate 
geographic components; by grade; by broad occupational, professional and 
other groupings in comparison to the national civilian labor force, 
according to the criteria developed by OPM under these guidelines.
    Where an agency or major component thereof (such as Headquarters and 
Regional Offices) is located in a geographic area where the percentage 
of underrepresented groups in the area civilian labor force is higher 
than their percentage in the national labor force, the agency or 
appropriate component should conduct its recruitment program for that 
component on the basis of the higher level of representation in the 
relevant civilian labor force.
    Where an agency or major component thereof is located in a 
geographic area where participation of a particular underrepresented 
group in the area labor force is significantly lower than their 
participation in the national labor force, such agency or component may, 
in consultation with OPM, utilize the lower applicable civilian labor 
force percentage in determining underrepresentation for the component. 
In no event, however, may the agency utilize a figure lower than the 
regional or nationwide Section 7201 level for positions where 
recruitment on a regional or nationwide basis is feasible. Factors such 
as size of the agency or unit, nature of jobs and their wage or pay 
scale may be considered to set goals and to justify a recruitment 
program focused on various job categories.
    IV. Scope of Actions Covered by This Program. A. ``Recruitment'' 
under this program is defined as the total process by which the Federal 
Government and the Federal agencies locate, identify and assist in the 
employment of qualified or qualifiable applicants from underrepresented 
groups for job openings in grades and in occupational categories where 
underrepresentation has been determined. This process should include 
innovative internal, as well as targeted external, recruitment actions.
    B. Prior to developing regulations, the Office should review data on 
personnel actions and other information, to identify those job 
categories for which internal recruitment and external recruitment is 
most appropriate and feasible, and to provide guidance to the Federal 
agencies for targeting their recruitment programs, based on this 
information. OPM should advise all agencies that all job qualifications, 
personnel procedures and criteria must be consistent with the Uniform 
Guidelines on Employee Selection Procedures (43 FR 38290 August 25, 
1978) OPM should consider the following in providing guidance to 
agencies:
    1. External Recruitment Programs. a. Such programs should focus on 
grade levels and/or job categories where underrepresentation has been 
identified and where external recruitment realistically will result in 
hiring opportunities.
    Recruitment programs also should include a review of job functions 
to determine those

[[Page 16]]

jobs that may be better performed by persons who are bicultural and who 
have bilingual capabilities, and those jobs that can be performed by 
persons not fluent in English.
    b. Where eligibility lists are used for filling jobs, it is 
recommended that the regulations require, an analysis by race, national 
origin and sex, to determine whether the list contains sufficient 
candidates from groups underrepresented in those jobs. OPM should 
require that where the list does not have such representation, expanded 
recruitment procedures be designed to assure that members of 
underrepresented groups qualified to perform the job(s) are included in 
the pool of applicants from which the selecting official makes the 
selection. Such expanded recruitment procedures may include additional 
external recruitment or various actions (such as described in 2. below) 
to reach members of these groups within the Federal workforce who are 
qualified or qualifiable for these jobs.
    2. Internal Recruitment Programs. a. Internal recruitment programs 
should be designed by agencies to identify currently qualified or 
qualifiable persons for job categories and series where 
underrepresentation prevails, according to the national determinations 
and the determinations made by each agency under these guidelines.
    b. Further, OPM should work with Federal agencies to develop 
effective mechanisms for providing information on Federal job 
opportunities, targeted to reach Federal employees from underrepresented 
groups in all agencies in order to broaden the applicant pool.
    V. Consistency with Reorganization Plan No. 1 of 1978. A. The Office 
shall develop regulations and implement this program in consultation 
with the Commission and with other affected agencies in such manner that 
their recruitment programs may be incorporated as a consistent and 
effective element of the agencies' national and regional equal 
employment opportunity plans. Each agency is required to implement such 
plans under the direction and guidance of the Commission in accordance 
with Section 717 of title VII of the Civil Rights Act of 1964, as 
amended, and Executive Order 12067.
    B. Procedures shall be established by OPM and the Commission to 
assure appropriate consultation in development of the regulations.
    C. Pursuant to Reorganization Plan No. 1 and to Executive Order 
12067 issued thereunder, the Commission will establish procedures to 
provide appropriate consultation and review of the program on a 
continuing basis, to maximize its effectiveness and eliminate any 
duplication, conflict or inconsistency in requirements for equal 
opportunity programs in the Federal agencies.
    D. In preparing its annual report to the Congress pursuant to the 
Act, OPM should do so in consultation with the Commission.

[44 FR 22031, Apr. 13, 1979; 44 FR 76747, Dec. 28, 1979]



PART 723_ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF HANDICAP IN 
PROGRAMS OR ACTIVITIES CONDUCTED BY THE OFFICE OF PERSONNEL MANAGEMENT
--Table of Contents




Sec.
723.101 Purpose.
723.102 Application.
723.103 Definitions.
723.104-723.109 [Reserved]
723.110 Self-evaluation.
723.111 Notice.
723.112-723.129 [Reserved]
723.130 General prohibitions against discrimination.
723.131-723.139 [Reserved]
723.140 Employment.
723.141-723.148 [Reserved]
723.149 Program accessibility: Discrimination prohibited.
723.150 Program accessibility: Existing facilities.
723.151 Program accessibility: New construction and alterations.
723.152-723.159 [Reserved]
723.160 Communications.
723.161-723.169 [Reserved]
723.170 Compliance procedures.

    Authority: 29 U.S.C. 794.

    Source: 53 FR 25880, 25885, July 8, 1988, unless otherwise noted.



Sec. 723.101  Purpose.

    The purpose of this regulation is to effectuate section 119 of the 
Rehabilitation, Comprehensive Services, and Developmental Disabilities 
Amendments of 1978, which amended section 504 of the Rehabilitation Act 
of 1973 to prohibit discrimination on the basis of handicap in programs 
or activities conducted by Executive agencies or the United States 
Postal Service.



Sec. 723.102  Application.

    This regulation (Sec. Sec. 723.101-723.170) applies to all programs 
or activities conducted by the agency, except for programs or activities 
conducted outside the United States that do not involve individuals with 
handicaps in the United States.

[[Page 17]]



Sec. 723.103  Definitions.

    For purposes of this regulation, the term--
    Assistant Attorney General means the Assistant Attorney General, 
Civil Rights Division, United States Department of Justice.
    Auxiliary aids means services or devices that enable persons with 
impaired sensory, manual, or speaking skills to have an equal 
opportunity to participate in, and enjoy the benefits of, programs or 
activities conducted by the agency. For example, auxiliary aids useful 
for persons with impaired vision include readers, Brailled materials, 
audio recordings, and other similar services and devices. Auxiliary aids 
useful for persons with impaired hearing include telephone handset 
amplifiers, telephones compatible with hearing aids, telecommunication 
devices for deaf persons (TDD's), interpreters, notetakers, written 
materials, and other similar services and devices.
    Complete complaint means a written statement that contains the 
complainant's name and address and describes the agency's alleged 
discriminatory action in sufficient detail to inform the agency of the 
nature and date of the alleged violation of section 504. It shall be 
signed by the complainant or by someone authorized to do so on his or 
her behalf. Complaints filed on behalf of classes or third parties shall 
describe or identify (by name, if possible) the alleged victims of 
discrimination.
    Facility means all or any portion of buildings, structures, 
equipment, roads, walks, parking lots, rolling stock or other 
conveyances, or other real or personal property.
    Historic preservation programs means programs conducted by the 
agency that have preservation of historic properties as a primary 
purpose.
    Historic properties means those properties that are listed or 
eligible for listing in the National Register of Historic Places or 
properties designated as historic under a statute of the appropriate 
State or local government body.
    Individual with handicaps means any person who has a physical or 
mental impairment that substantially limits one or more major life 
activities, has a record of such an impairment, or is regarded as having 
such an impairment.
    As used in this definition, the phrase:
    (1) Physical or mental impairment includes--
    (i) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
Neurological; musculoskeletal; special sense organs; respiratory, 
including speech organs; cardiovascular; reproductive; digestive; 
genitourinary; hemic and lymphatic; skin; and endocrine; or
    (ii) Any mental or psychological disorder, such as mental 
retardation, organic brain syndrome, emotional or mental illness, and 
specific learning disabilities. The term physical or mental impairment 
includes, but is not limited to, such diseases and conditions as 
orthopedic, visual, speech, and hearing impairments, cerebral palsy, 
epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, 
diabetes, mental retardation, emotional illness, and drug addiction and 
alcoholism.
    (2) Major life activities includes functions such as caring for 
one's self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning, and working.
    (3) Has a record of such an impairment means has a history of, or 
has been misclassified as having, a mental or physical impairment that 
substantially limits one or more major life activities.
    (4) Is regarded as having an impairment means--
    (i) Has a physical or mental impairment that does not substantially 
limit major life activities but is treated by the agency as constituting 
such a limitation;
    (ii) Has a physical or mental impairment that substantially limits 
major life activities only as a result of the attitudes of others toward 
such impairment; or
    (iii) Has none of the impairments defined in paragraph (1) of this 
definition but is treated by the agency as having such an impairment.
    Qualified individual with handicaps means--
    (1) With respect to preschool, elementary, or secondary education 
services provided by the agency, an individual with handicaps who is a 
member of a class of persons otherwise entitled by

[[Page 18]]

statute, regulation, or agency policy to receive education services from 
the agency;
    (2) With respect to any other agency program or activity under which 
a person is required to perform services or to achieve a level of 
accomplishment, an individual with handicaps who meets the essential 
eligibility requirements and who can achieve the purpose of the program 
or activity without modifications in the program or activity that the 
agency can demonstrate would result in a fundamental alteration in its 
nature;
    (3) With respect to any other program or activity, an individual 
with handicaps who meets the essential eligibility requirements for 
participation in, or receipt of benefits from, that program or activity; 
and
    (4) Qualified handicapped person as that term is defined for 
purposes of employment in 29 CFR 1613.702(f), which is made applicable 
to this regulation by Sec. 723.140.
    Section 504 means section 504 of the Rehabilitation Act of 1973 
(Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by the 
Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 1617); 
the Rehabilitation, Comprehensive Services, and Developmental 
Disabilities Amendments of 1978 (Pub. L. 95-602, 92 Stat. 2955); and the 
Rehabilitation Act Amendments of 1986 (Pub. L. 99-506, 100 Stat. 1810). 
As used in this regulation, section 504 applies only to programs or 
activities conducted by Executive agencies and not to federally assisted 
programs.
    Substantial impairment means a significant loss of the integrity of 
finished materials, design quality, or special character resulting from 
a permanent alteration.



Sec. Sec. 723.104-723.109  [Reserved]



Sec. 723.110  Self-evaluation.

    (a) The agency shall, by September 6, 1989, evaluate its current 
policies and practices, and the effects thereof, that do not or may not 
meet the requirements of this regulation and, to the extent modification 
of any such policies and practices is required, the agency shall proceed 
to make the necessary modifications.
    (b) The agency shall provide an opportunity to interested persons, 
including individuals with handicaps or organizations representing 
individuals with handicaps, to participate in the self-evaluation 
process by submitting comments (both oral and written).
    (c) The agency shall, for at least three years following completion 
of the self-evaluation, maintain on file and make available for public 
inspection:
    (1) A description of areas examined and any problems identified; and
    (2) A description of any modifications made.



Sec. 723.111  Notice.

    The agency shall make available to employees, applicants, 
participants, beneficiaries, and other interested persons such 
information regarding the provisions of this regulation and its 
applicability to the programs or activities conducted by the agency, and 
make such information available to them in such manner as the head of 
the agency finds necessary to apprise such persons of the protections 
against discrimination assured them by section 504 and this regulation.



Sec. Sec. 723.112-723.129  [Reserved



Sec. 723.130  General prohibitions against discrimination.

    (a) No qualified individual with handicaps shall, on the basis of 
handicap, be excluded from participation in, be denied the benefits of, 
or otherwise be subjected to discrimination under any program or 
activity conducted by the agency.
    (b)(1) The agency, in providing any aid, benefit, or service, may 
not, directly or through contractual, licensing, or other arrangements, 
on the basis of handicap--
    (i) Deny a qualified individual with handicaps the opportunity to 
participate in or benefit from the aid, benefit, or service;
    (ii) Afford a qualified individual with handicaps an opportunity to 
participate in or benefit from the aid, benefit, or service that is not 
equal to that afforded others;
    (iii) Provide a qualified individual with handicaps with an aid, 
benefit, or

[[Page 19]]

service that is not as effective in affording equal opportunity to 
obtain the same result, to gain the same benefit, or to reach the same 
level of achievement as that provided to others;
    (iv) Provide different or separate aid, benefits, or services to 
individuals with handicaps or to any class of individuals with handicaps 
than is provided to others unless such action is necessary to provide 
qualified individuals with handicaps with aid, benefits, or services 
that are as effective as those provided to others;
    (v) Deny a qualified individual with handicaps the opportunity to 
participate as a member of planning or advisory boards;
    (vi) Otherwise limit a qualified individual with handicaps in the 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving the aid, benefit, or service.
    (2) The agency may not deny a qualified individual with handicaps 
the opportunity to participate in programs or activities that are not 
separate or different, despite the existence of permissibly separate or 
different programs or activities.
    (3) The agency may not, directly or through contractual or other 
arrangements, utilize criteria or methods of administration the purpose 
or effect of which would--
    (i) Subject qualified individuals with handicaps to discrimination 
on the basis of handicap; or
    (ii) Defeat or substantially impair accomplishment of the objectives 
of a program or activity with respect to individuals with handicaps.
    (4) The agency may not, in determining the site or location of a 
facility, make selections the purpose or effect of which would--
    (i) Exclude individuals with handicaps from, deny them the benefits 
of, or otherwise subject them to discrimination under any program or 
activity conducted by the agency; or
    (ii) Defeat or substantially impair the accomplishment of the 
objectives of a program or activity with respect to individuals with 
handicaps.
    (5) The agency, in the selection of procurement contractors, may not 
use criteria that subject qualified individuals with handicaps to 
discrimination on the basis of handicap.
    (6) The agency may not administer a licensing or certification 
program in a manner that subjects qualified individuals with handicaps 
to discrimination on the basis of handicap, nor may the agency establish 
requirements for the programs or activities of licensees or certified 
entities that subject qualified individuals with handicaps to 
discrimination on the basis of handicap. However, the programs or 
activities of entities that are licensed or certified by the agency are 
not, themselves, covered by this regulation.
    (c) The exclusion of nonhandicapped persons from the benefits of a 
program limited by Federal statute or Executive order to individuals 
with handicaps or the exclusion of a specific class of individuals with 
handicaps from a program limited by Federal statute or Executive order 
to a different class of individuals with handicaps is not prohibited by 
this regulation.
    (d) The agency shall administer programs and activities in the most 
integrated setting appropriate to the needs of qualified individuals 
with handicaps.



Sec. Sec. 723.131-723.139  [Reserved]



Sec. 723.140  Employment.

    No qualified individual with handicaps shall, on the basis of 
handicap, be subject to discrimination in employment under any program 
or activity conducted by the agency. The definitions, requirements, and 
procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 
791), as established by the Equal Employment Opportunity Commission in 
29 CFR part 1613, shall apply to employment in federally conducted 
programs or activities.



Sec. Sec. 723.141-723.148  [Reserved]



Sec. 723.149  Program accessibility: Discrimination prohibited.

    Except as otherwise provided in Sec. 723.150, no qualified 
individual with handicaps shall, because the agency's facilities are 
inaccessible to or unusable by individuals with handicaps, be denied the 
benefits of, be excluded from

[[Page 20]]

participation in, or otherwise be subjected to discrimination under any 
program or activity conducted by the agency.



Sec. 723.150  Program accessibility: Existing facilities.

    (a) General. The agency shall operate each program or activity so 
that the program or activity, when viewed in its entirety, is readily 
accessible to and usable by individuals with handicaps. This paragraph 
does not--
    (1) Necessarily require the agency to make each of its existing 
facilities accessible to and usable by individuals with handicaps;
    (2) In the case of historic preservation programs, require the 
agency to take any action that would result in a substantial impairment 
of significant historic features of an historic property; or
    (3) Require the agency to take any action that it can demonstrate 
would result in a fundamental alteration in the nature of a program or 
activity or in undue financial and administrative burdens. In those 
circumstances where agency personnel believe that the proposed action 
would fundamentally alter the program or activity or would result in 
undue financial and administrative burdens, the agency has the burden of 
proving that compliance with Sec. 723.150(a) would result in such 
alteration or burdens. The decision that compliance would result in such 
alteration or burdens must be made by the agency head or his or her 
designee after considering all agency resources available for use in the 
funding and operation of the conducted program or activity, and must be 
accompanied by a written statement of the reasons for reaching that 
conclusion. If an action would result in such an alteration or such 
burdens, the agency shall take any other action that would not result in 
such an alteration or such burdens but would nevertheless ensure that 
individuals with handicaps receive the benefits and services of the 
program or activity.
    (b) Methods--(1) General. The agency may comply with the 
requirements of this section through such means as redesign of 
equipment, reassignment of services to accessible buildings, assignment 
of aides to beneficiaries, home visits, delivery of services at 
alternate accessible sites, alteration of existing facilities and 
construction of new facilities, use of accessible rolling stock, or any 
other methods that result in making its programs or activities readily 
accessible to and usable by individuals with handicaps. The agency is 
not required to make structural changes in existing facilities where 
other methods are effective in achieving compliance with this section. 
The agency, in making alterations to existing buildings, shall meet 
accessibility requirements to the extent compelled by the Architectural 
Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), and any 
regulations implementing it. In choosing among available methods for 
meeting the requirements of this section, the agency shall give priority 
to those methods that offer programs and activities to qualified 
individuals with handicaps in the most integrated setting appropriate.
    (2) Historic preservation programs. In meeting the requirements of 
Sec. 723.150(a) in historic preservation programs, the agency shall 
give priority to methods that provide physical access to individuals 
with handicaps. In cases where a physical alteration to an historic 
property is not required because of Sec. 723.150(a) (2) or (3), 
alternative methods of achieving program accessibility include--
    (i) Using audio-visual materials and devices to depict those 
portions of an historic property that cannot otherwise be made 
accessible;
    (ii) Assigning persons to guide individuals with handicaps into or 
through portions of historic properties that cannot otherwise be made 
accessible; or
    (iii) Adopting other innovative methods.
    (c) Time period for compliance. The agency shall comply with the 
obligations established under this section by November 7, 1988, except 
that where structural changes in facilities are undertaken, such changes 
shall be made by September 6, 1991, but in any event as expeditiously as 
possible.
    (d) Transition plan. In the event that structural changes to 
facilities will be

[[Page 21]]

undertaken to achieve program accessibility, the agency shall develop, 
by March 6, 1989, a transition plan setting forth the steps necessary to 
complete such changes. The agency shall provide an opportunity to 
interested persons, including individuals with handicaps or 
organizations representing individuals with handicaps, to participate in 
the development of the transition plan by submitting comments (both oral 
and written). A copy of the transition plan shall be made available for 
public inspection. The plan shall, at a minimum--
    (1) Identify physical obstacles in the agency's facilities that 
limit the accessibility of its programs or activities to individuals 
with handicaps;
    (2) Describe in detail the methods that will be used to make the 
facilities accessible;
    (3) Specify the schedule for taking the steps necessary to achieve 
compliance with this section and, if the time period of the transition 
plan is longer than one year, identify steps that will be taken during 
each year of the transition period; and
    (4) Indicate the official responsible for implementation of the 
plan.



Sec. 723.151  Program accessibility: New construction and alterations.

    Each building or part of a building that is constructed or altered 
by, on behalf of, or for the use of the agency shall be designed, 
constructed, or altered so as to be readily accessible to and usable by 
individuals with handicaps. The definitions, requirements, and standards 
of the Architectural Barriers Act (42 U.S.C. 4151-4157), as established 
in 41 CFR 101-19.600 to 101-19.607, apply to buildings covered by this 
section.



Sec. Sec. 723.152-723.159  [Reserved]



Sec. 723.160  Communications.

    (a) The agency shall take appropriate steps to ensure effective 
communication with applicants, participants, personnel of other Federal 
entities, and members of the public.
    (1) The agency shall furnish appropriate auxiliary aids where 
necessary to afford an individual with handicaps an equal opportunity to 
participate in, and enjoy the benefits of, a program or activity 
conducted by the agency.
    (i) In determining what type of auxiliary aid is necessary, the 
agency shall give primary consideration to the requests of the 
individual with handicaps.
    (ii) The agency need not provide individually prescribed devices, 
readers for personal use or study, or other devices of a personal 
nature.
    (2) Where the agency communicates with applicants and beneficiaries 
by telephone, telecommunication devices for deaf persons (TDD's) or 
equally effective telecommunication systems shall be used to communicate 
with persons with impaired hearing.
    (b) The agency shall ensure that interested persons, including 
persons with impaired vision or hearing, can obtain information as to 
the existence and location of accessible services, activities, and 
facilities.
    (c) The agency shall provide signage at a primary entrance to each 
of its inaccessible facilities, directing users to a location at which 
they can obtain information about accessible facilities. The 
international symbol for accessibility shall be used at each primary 
entrance of an accessible facility.
    (d) This section does not require the agency to take any action that 
it can demonstrate would result in a fundamental alteration in the 
nature of a program or activity or in undue financial and administrative 
burdens. In those circumstances where agency personnel believe that the 
proposed action would fundamentally alter the program or activity or 
would result in undue financial and administrative burdens, the agency 
has the burden of proving that compliance with Sec. 723.160 would 
result in such alteration or burdens. The decision that compliance would 
result in such alteration or burdens must be made by the agency head or 
his or her designee after considering all agency resources available for 
use in the funding and operation of the conducted program or activity 
and must be accompanied by a written statement of the reasons for 
reaching that conclusion. If an action required to comply with this 
section would result in such an alteration or such burdens, the agency 
shall take any other action that would not

[[Page 22]]

result in such an alteration or such burdens but would nevertheless 
ensure that, to the maximum extent possible, individuals with handicaps 
receive the benefits and services of the program or activity.



Sec. Sec. 723.161-723.169  [Reserved]



Sec. 723.170  Compliance procedures.

    (a) Except as provided in paragraph (b) of this section, this 
section applies to all allegations of discrimination on the basis of 
handicap in programs and activities conducted by the agency.
    (b) The agency shall process complaints alleging violations of 
section 504 with respect to employment according to the procedures 
established by the Equal Employment Opportunity Commission in 29 CFR 
part 1613 pursuant to section 501 of the Rehabilitation Act of 1973 (29 
U.S.C. 791).
    (c) The Assistant Director for Personnel and EEO shall be 
responsible for coordinating implementation of this section. Complaints 
may be sent to the Assistant Director for Personnel and EEO, Office of 
Personnel Management, Room 1479, 1900 E St., NW., Washington, DC 20415.
    (d) The agency shall accept and investigate all complete complaints 
for which it has jurisdiction. All complete complaints must be filed 
within 180 days of the alleged act of discrimination. The agency may 
extend this time period for good cause.
    (e) If the agency receives a complaint over which it does not have 
jurisdiction, it shall promptly notify the complainant and shall make 
reasonable efforts to refer the complaint to the appropriate Government 
entity.
    (f) The agency shall notify the Architectural and Transportation 
Barriers Compliance Board upon receipt of any complaint alleging that a 
building or facility that is subject to the Architectural Barriers Act 
of 1968, as amended (42 U.S.C. 4151-4157), is not readily accessible to 
and usable by individuals with handicaps.
    (g) Within 180 days of the receipt of a complete complaint for which 
it has jurisdiction, the agency shall notify the complainant of the 
results of the investigation in a letter containing--
    (1) Findings of fact and conclusions of law;
    (2) A description of a remedy for each violation found; and
    (3) A notice of the right to appeal.
    (h) Appeals of the findings of fact and conclusions of law or 
remedies must be filed by the complainant within 90 days of receipt from 
the agency of the letter required by Sec. 723.170(g). The agency may 
extend this time for good cause.
    (i) Timely appeals shall be accepted and processed by the head of 
the agency.
    (j) The head of the agency shall notify the complainant of the 
results of the appeal within 60 days of the receipt of the request. If 
the head of the agency determines that additional information is needed 
from the complainant, he or she shall have 60 days from the date of 
receipt of the additional information to make his or her determination 
on the appeal.
    (k) The time limits cited in paragraphs (g) and (j) of this section 
may be extended with the permission of the Assistant Attorney General.
    (l) The agency may delegate its authority for conducting complaint 
investigations to other Federal agencies, except that the authority for 
making the final determination may not be delegated to another agency.

[53 FR 25880 and 25885, July 8, 1988, as amended at 53 FR 25880, July 8, 
1988]



PART 724_IMPLEMENTATION OF TITLE II OF THE NOTIFICATION AND FEDERAL 
EMPLOYEE ANTIDISCRIMINATION AND RETALIATION ACT OF 2002--Table of Contents




                Subpart A_Reimbursement of Judgment Fund

Sec.
724.101 Purpose and Scope.
724.102 Definitions.
724.103 Agency Obligations.
724.104 Procedures.
724.105 Compliance.
724.106 Effective Date.

Subpart B--Notification of Rights and Protections and Training [Reserved]

Subpart C--Annual Report [Reserved]

Subpart D--Best Practices [Reserved]


[[Page 23]]


    Authority: Sec. 204 of Pub. L. 107-174, 116 Stat. 566; Presidential 
Memorandum dated July 8, 2003, ``Delegation of Authority Under Section 
204(a) of the Notification and Federal Employee Antidiscrimination Act 
of 2002.''

    Source: 69 FR 2998, Jan. 22, 2004, unless otherwise noted.



Sec. 724.101  Purpose and scope.

    This subpart implements Title II of the Notification and Federal 
Employee Antidiscrimination and Retaliation Act of 2002 concerning the 
obligation of Federal agencies to reimburse the Judgment Fund for 
payments. The regulations describe agency obligations and the procedures 
for reimbursement and compliance.



Sec. 724.102  Definitions.

    In this part: Agency means an Executive agency as defined in 5 
U.S.C. 105, the United States Postal Service, or the Postal Rate 
Commission;
    Applicant for Federal employment means an individual applying for 
employment in or under a Federal agency;
    Employee means an individual employed in or under a Federal agency;
    Former employee means an individual formerly employed in or under a 
Federal agency;
    Judgment Fund means the Judgment Fund established by 31 U.S.C. 1304;
    No FEAR Act means the ``Notification and Federal Employee 
Antidiscrimination and Retaliation Act of 2002;''
    Payment means a disbursement from the Judgment Fund on or after 
October 1, 2003, to an employee, former employee, or applicant for 
Federal employment, in accordance with 28 U.S.C. 2414, 2517, 2672, 2677 
or with 31 U.S.C. 1304, that involves alleged discriminatory conduct 
described in 5 U.S.C. 2302(b)(1) and (b)(8) or (b)(9) as applied to 
discriminatory conduct described in 5 U.S.C. 2302(b)(1) and/or (b)(8).



Sec. 724.103  Agency Obligations.

    A Federal agency must reimburse the Judgment Fund for payments 
covered by the No FEAR Act. Such reimbursement must be made within a 
reasonable time as described in Sec. 724.104.



Sec. 724.104  Procedures.

    (a) The procedures that agencies must use to reimburse the Judgment 
Fund are those prescribed by the Financial Management Service (FMS), the 
Department of the Treasury, in Chapter 3100 of the Treasury Financial 
Manual. All reimbursements to the Judgment Fund covered by the No FEAR 
Act are expected to be fully collectible from the agency. FMS will 
provide notice to the agency's Chief Financial Officer within 15 
business days after payment from the Judgment Fund. For any payments 
from the Fund between October 1, 2003, and January 22, 2004, FMS will 
provide such notice within 15 business days after January 22, 2004, if 
it has not already provided such notice.
    (b) Within 45 business days of notice by FMS, agencies must 
reimburse the Judgment Fund or contact FMS to make arrangements in 
writing for reimbursement.



Sec. 724.105  Compliance.

    An agency's failure to reimburse the Judgment Fund or to contact FMS 
within 45 business days of an FMS notice for reimbursement under Sec. 
724.104 will be recorded on an annual basis and posted on the FMS Web 
site.



Sec. 724.106  Effective Date.

    This subpart is effective on October 1, 2003.

Subpart B--Notification of Rights and Protections and Training [Reserved]

Subpart C--Annual Report [Reserved]

Subpart D--Best Practices [Reserved]



PART 730_NOTIFICATION OF POST-EMPLOYMENT RESTRICTIONS--Table of Contents




Sec.
730.101 Purpose.
730.102 Definitions.
730.103 Coverage.
730.104 Notification.
730.105 Savings provision.


[[Page 24]]


    Authority: 5 U.S.C. 7302 and sec. 1125(b) of the National Defense 
Authorization Act for FY 2004, Pub. L. 108-136, 117 Stat. 1392.

    Source: 69 FR 61144, Oct. 15, 2004, unless otherwise noted.



Sec. 730.101  Purpose.

    This part implements 5 U.S.C. 7302, which requires agencies to 
provide written notice to senior executives and other individuals 
covered by 18 U.S.C. 207(c)(2)(A)(ii) that they are subject to certain 
post-employment conflict-of-interest restrictions in 18 U.S.C. 207(c).



Sec. 730.102  Definitions.

    Agency means an Executive agency as defined in 5 U.S.C. 105, but 
does not include the General Accounting Office.
    Senior executive means a member of the Senior Executive Service 
(SES).



Sec. 730.103  Coverage.

    (a) The following individuals are subject to the post-employment 
conflict-of-interest restrictions in 18 U.S.C. 207(c), as amended by 
section 1125(b)(1) of the National Defense Authorization Act for FY 
2004:
    (1) Any individual, including a senior executive, who is paid at a 
rate of basic pay equal to or greater than 86.5 percent of the rate for 
level II of the Executive Schedule; and
    (2) Any individual, including a senior executive, who as of November 
23, 2003, was paid at a rate of basic pay, exclusive of any locality-
based comparability payments under 5 U.S.C. 5304, equal to or greater 
than the rate of basic pay for level 5 of the Senior Executive Service 
on that date (i.e., $134,000). These employees are subject to the post-
employment restrictions through November 24, 2005, without regard to any 
subsequent changes in position or pay.
    (b) Nothing in this part affects individuals serving in positions 
described in 18 U.S.C. 207(c)(2)(A)(i), (iii), (iv), or (v).



Sec. 730.104  Notification.

    (a) Agencies must provide written notification to senior executives 
and other individuals covered by the amendment to 18 U.S.C. 
207(c)(2)(A)(ii) that they are subject to the post-employment conflict-
of-interest restrictions in 18 U.S.C. 207, before, or as part of, any 
personnel action that affects the employee's coverage under 18 U.S.C. 
207(c)(1), including when employment or service in a covered position is 
terminated. A copy of the written notice must be provided simultaneously 
to the Designated Agency Ethics Official (or his or her delegate). The 
written notice must include information on the applicable penalties or 
injunctions that may be imposed under 18 U.S.C. 216(a), (b), and (c) for 
violations of the post-employment restrictions in 18 U.S.C. 207(c). The 
notice also must indicate that employees covered by 18 U.S.C. 207(c) are 
subject to 18 U.S.C. 207(f), which imposes additional post-employment 
restrictions on representing, aiding, or advising certain foreign 
entities.
    (b) Notwithstanding paragraph (a) of this section, the post-
employment restrictions in 18 U.S.C. 207(c) apply to covered employees 
without regard to whether they receive written notice from their 
employing agency.



Sec. 730.105  Savings provision.

    Any post-employment restrictions established under 18 U.S.C. 207 and 
applicable prior to the first day of the first pay period beginning on 
or after January 1, 2004, remain in effect.



PART 731_SUITABILITY--Table of Contents




                             Subpart A_Scope

Sec.
731.101 Purpose.
731.102 Implementation.
731.103 Delegation to agencies.
731.104 Appointments subject to investigation.
731.105 Authority to take suitability actions.
731.106 Designation of public trust positions and investigative 
          requirements.

                  Subpart B_Suitability Determinations

731.201 Standard.
731.202 Criteria.
731.203 Actions by OPM and other agencies.
731.204 Debarment by OPM.
731.205 Debarment by agencies.

               Subpart C_OPM Suitability Action Procedures

731.301 Scope.

[[Page 25]]

731.302 Notice of proposed action.
731.303 Answer.
731.304 Decision.

             Subpart D_Agency Suitability Action Procedures

731.401 Scope.
731.402 Notice of proposed action.
731.403 Answer.
731.404 Decision.

         Subpart E_Appeal to the Merit Systems Protection Board

731.501 Appeal to the Merit Systems Protection Board.

                       Subpart F_Savings Provision

731.601 Savings provision.

    Authority: 5 U.S.C. 1302, 3301, 7301, 7701; E.O. 10577, 3 CFR 1954-
1958 Comp., p. 218; E.O. 12731, 3 CFR, 1990 Comp., p. 306., 5 CFR, part 
5.

    Source: 65 FR 82243, Dec. 28, 2000, unless otherwise noted.



                             Subpart A_Scope



Sec. 731.101  Purpose.

    (a) The purpose of this part is to establish criteria and procedures 
for making determinations of suitability for employment in positions in 
the competitive service and for career appointment in the Senior 
Executive Service (hereinafter in this part, ``competitive service'') 
pursuant to 5 U.S.C. 3301 and Executive Order 10577 (3 CFR, 1954-1958 
Comp., p. 218). Section 3301 of title 5, United States Code, directs 
consideration of ``age, health, character, knowledge, and ability for 
the employment sought.'' Executive Order 10577 directs OPM to examine 
``suitability'' for competitive Federal employment. This part concerns 
only determinations of ``suitability'' based on an individual's 
character or conduct that may have an impact on the integrity or 
efficiency of the service. Determinations made under this part are 
distinct from determinations of eligibility for assignment to, or 
retention in, sensitive national security positions made under Executive 
Order 10450 (3 CFR, 1949-1953 Comp., p. 936), Executive Order 12968, or 
similar authorities.
    (b) Definitions. In this part:
    Applicant. A person being considered for employment.
    Appointee. A person who has entered on duty and is in the first year 
of a subject to investigation appointment (as defined in Sec. 731.104).
    Employee. A person who has completed the first year of a subject to 
investigation appointment.
    Material. A ``material'' statement is one that is capable of 
influencing, or has a natural tendency to affect, an official decision.



Sec. 731.102  Implementation.

    (a) An investigation conducted for the purpose of determining 
suitability under this part may not be used for any other purpose except 
as provided in a Privacy Act system of records notice published by the 
agency conducting the investigation.
    (b) Under OMB Circular No. A-130 Revised, issued February 8, 1996, 
the Director of OPM is to establish policies for Federal personnel 
associated with the design, operation, or use of Federal automated 
information systems. Agencies are to implement and maintain a program to 
ensure that adequate protection is provided for all automated 
information systems. Agency programs should be consistent with 
government-wide policies and procedures issued by OPM. The Computer 
Security Act of 1987 (Public Law 100-235) provides additional 
requirements for Federal automated information systems.
    (c) Policies, procedures, criteria, and guidance for the 
implementation of this part shall be set forth in OPM issuances. OPM may 
revoke an agency's delegation to adjudicate suitability under this part 
if an agency fails to conform to OPM issuances.



Sec. 731.103  Delegation to agencies.

    (a) OPM delegates to the heads of agencies limited authority for 
adjudicating suitability in cases involving applicants for and 
appointees to competitive service positions in the agency (including 
limited, agency-specific debarment authority under Sec. 731.205). OPM 
retains jurisdiction in all competitive service cases involving evidence 
of material, intentional false statement or deception or fraud in 
examination or appointment. Agencies

[[Page 26]]

must refer these cases to OPM for adjudication, or contact OPM for prior 
approval if the agency wants to take action under its own authority (5 
CFR part 315 or 5 CFR part 752). Also, this delegation does not include 
cases involving refusal to furnish testimony as required by Sec. 5.4 of 
this chapter, title, or passover requests involving preference eligibles 
who are 30 percent or more compensably disabled which must be referred 
to OPM for adjudication, as provided under Civil Service Reform Act of 
1978, Public Law 95-454, 92 Stat. 1111 et seq. (Codified as amended in 
scattered sections of 5 U.S.C.)
    (b) Any adjudication by an agency acting under delegated authority 
from OPM which indicates that an extended general, across agency lines, 
debarment by OPM under Sec. 731.204(a) may be an appropriate action 
should be referred to OPM for debarment consideration if not favorably 
adjudicated by the agency. Referral should be made prior to any proposed 
action, but after sufficient resolution of the suitability issue(s) 
through subject contact or investigation to determine if an extended 
general debarment period appears warranted.
    (c) Agencies exercising authority under this part by delegation from 
OPM must show by policies and records that reasonable methods are used 
to ensure adherence to regulations, standards, and quality control 
procedures established by OPM.
    (d) Before making any applicant suitability determination, the 
agency should first ensure the applicant is eligible for the position, 
among the best qualified, and/or within reach of selection. Because 
suitability issues may not be disclosed until late in the application/ 
appointment process, only the best qualified should require a 
suitability determination, with appropriate procedures followed and 
appeal rights provided, if suitability issues would form the only basis 
for elimination from further consideration.
    (e) When an agency, exercising authority under this part by 
delegation from OPM, makes an adjudicative decision under this part, or 
changes a tentative favorable placement decision to an unfavorable 
decision, based on an OPM report of investigation or upon an 
investigation conducted pursuant to OPM-delegated authority, the agency 
should:
    (1) Ensure that the records used in making the decision are 
accurate, relevant, timely, and complete to the extent reasonably 
necessary to ensure fairness to the individual in any determination;
    (2) Ensure that all applicable administrative procedural 
requirements provided by law, the regulations in this part, and OPM 
policy guidance have been observed;
    (3) Consider all available information in reaching its final 
decision, except information furnished by a non-corroborated 
confidential source. Information furnished by a non-corroborated 
confidential source can only be used for limited purposes, such as lead 
information or in interrogatories to a subject if the identity of the 
source is not compromised in any way; and
    (4) Keep any record of the agency action as required by OPM in its 
supplemental guidance.
    (f) Paragraph (a) of this section notwithstanding, OPM may exercise 
its jurisdiction under this part in any case when it, in its discretion, 
deems necessary.
    (g) Any applicant or appointee who is found unsuitable by any agency 
acting under delegated authority from OPM under this part may appeal the 
adverse suitability decision to the Merit Systems Protection Board under 
the Board's regulations.



Sec. 731.104  Appointments subject to investigation.

    (a) To establish a person's suitability for employment, appointments 
to positions in the competitive service require the person to undergo an 
investigation by OPM or by an agency with delegated authority from OPM 
to conduct investigations. Certain appointments do not require 
investigation. Except when required because of risk level changes, a 
person in the competitive service who has undergone a suitability 
investigation need not undergo another one simply because the person has 
been:
    (1) Promoted;
    (2) Demoted;
    (3) Reassigned;

[[Page 27]]

    (4) Converted from career-conditional to career tenure;
    (5) Appointed or converted to an appointment if the person has been 
serving continuously with the agency for at least 1 year in one or more 
positions under an appointment subject to investigation; and
    (6) Transferred, provided the individual has served continuously for 
at least 1 year in a position subject to investigation.
    (b)(1) OPM or an agency with delegated suitability authority may 
investigate and take a suitability action against an applicant, 
appointee, or employee in accordance with Sec. 731.105. There is no 
time limit on the authority of OPM or an agency with delegated 
suitability authority to conduct an investigation of an applicant who 
has been appointed to a position.
    (2) An employee does not have to serve a new probationary or trial 
period merely because his or her appointment is subject to investigation 
under this section. An employee's probationary or trial period is not 
extended because his or her appointment is subject to investigation 
under this section.
    (3) The subject to investigation condition also does not eliminate 
the need to conduct investigations required under Sec. 731.106 for 
public trust positions.



Sec. 731.105  Authority to take suitability actions.

    (a) OPM may take a suitability action under this part against an 
applicant or appointee based on any of the criteria of Sec. 731.202;
    (b) An agency, exercising delegated authority, may take a 
suitability action under this part against an applicant or appointee 
based on the criteria of Sec. 731.202 subject to the agency limitations 
prescribed in Sec. 731.103;
    (c) OPM may take a suitability action under this part against an 
employee only in cases involving material, intentional false statement 
or deception or fraud in examination or appointment, or refusal to 
furnish testimony as required by Sec. 5.4 of this title, or statutory 
or regulatory bar. A statement may be a material statement even if an 
agency does not rely upon it.
    (d) An agency may not take a suitability action against an employee 
under this part. Nothing in this part precludes, or is intended to 
preclude, an agency from taking an adverse action against an employee 
under the procedures and standards of part 752 of this title or 
terminating a probationary employee under the procedures of part 315 of 
this title.



Sec. 731.106  Designation of public trust positions and investigative 
requirements.

    (a) Risk designation. Agency heads shall designate every competitive 
service position within the agency at a high, moderate, or low risk 
level as determined by the position's potential for adverse impact to 
the efficiency and integrity of the service. OPM will provide an example 
of a risk designation system for agency use in supplemental guidance.
    (b) Public Trust positions. Positions at the high or moderate risk 
levels would normally be designated as ``Public Trust'' positions. Such 
positions may involve policy making, major program responsibility, 
public safety and health, law enforcement duties, fiduciary 
responsibilities, or other duties demanding a significant degree of 
public trust; and positions involving access to or operation or control 
of financial records, with a significant risk for causing damage or 
realizing personal gain.
    (c) Investigative requirements. Persons receiving an appointment 
made subject to investigation under this part must undergo a background 
investigation. Minimum investigative requirements correlating to risk 
levels will be established in supplemental guidance provided by OPM. 
Investigations should be initiated before appointment or, at most, 
within 14 calendar days of placement in the position.
    (d) Suitability reinvestigations. Agencies, relying on authorities 
such as the Computer Security Act of 1987 and OMB Circular No. A-130 
Revised (issued February 8, 1996), may require incumbents of certain 
public trust positions to undergo periodic reinvestigations. The 
appropriate level of any reinvestigation will be determined by the

[[Page 28]]

agency, but may be based on supplemental guidance provided by OPM.
    (e) Risk level changes. If an individual experiences a change in 
position risk level (moves to a higher risk level position, or the risk 
level of the position itself is changed) the individual may encumber or 
remain in the position. Any upgrade investigation required for the new 
risk level should be initiated within 14 calendar days after the move or 
the new designation is final.
    (f) Any suitability investigation completed by an agency under 
provisions of paragraphs (d) or (e) of this section must be adjudicated 
by the employing agency. The subject's employment status will determine 
the applicable agency authority and procedures to be followed in any 
action taken.



                  Subpart B_Suitability Determinations



Sec. 731.201  Standard.

    Subject to subpart A of this part, an applicant, appointee, or 
employee may be denied Federal employment or removed from a position 
only when the action will protect the integrity or promote the 
efficiency of the service.



Sec. 731.202  Criteria.

    (a) General. In determining whether its action will protect the 
integrity or promote the efficiency of the service, OPM, or an agency to 
which OPM has delegated authority, shall make its determination on the 
basis of the specific factors in paragraph (b) of this section, with 
appropriate consideration given to the additional considerations 
outlined in paragraph (c) of this section.
    (b) Specific factors. When making a determination under paragraph 
(a) of this section, the following may be considered a basis for finding 
an individual unsuitable:
    (1) Misconduct or negligence in employment;
    (2) Criminal or dishonest conduct;
    (3) Material, intentional false statement or deception or fraud in 
examination or appointment;
    (4) Refusal to furnish testimony as required by Sec. 5.4 of this 
title;
    (5) Alcohol abuse of a nature and duration which suggests that the 
applicant or appointee would be prevented from performing the duties of 
the position in question, or would constitute a direct threat to the 
property or safety of others;
    (6) Illegal use of narcotics, drugs, or other controlled substances, 
without evidence of substantial rehabilitation;
    (7) Knowing and willful engagement in acts or activities designed to 
overthrow the U.S. Government by force;
    (8) Any statutory or regulatory bar which prevents the lawful 
employment of the person involved in the position in question.
    (c) Additional considerations. In making a determination under 
paragraphs (a) and (b) of this section, OPM and agencies shall consider 
the following additional considerations to the extent they deem them 
pertinent to the individual case:
    (1) The nature of the position for which the person is applying or 
in which the person is employed;
    (2) The nature and seriousness of the conduct;
    (3) The circumstances surrounding the conduct;
    (4) The recency of the conduct;
    (5) The age of the person involved at the time of the conduct;
    (6) Contributing societal conditions; and
    (7) The absence or presence of rehabilitation or efforts toward 
rehabilitation.



Sec. 731.203  Actions by OPM and other agencies.

    (a) List of actions. For purposes of this part, an action is one or 
more of the following:
    (1) Cancellation of eligibility;
    (2) Denial of appointment;
    (3) Removal;
    (4) Cancellation of reinstatement eligibility;
    (5) Debarment.
    (b) An applicant's eligibility may be cancelled, an applicant may be 
denied employment, or an appointee may be removed when OPM or an agency 
exercising delegated authority under this part finds that the applicant 
or appointee is unsuitable for the reasons cited in Sec. 731.202 
subject to the agency limitations of Sec. 731.103(a).

[[Page 29]]

    (c) OPM may require that an employee be removed on the basis of a 
material, intentional false statement, or deception or fraud in 
examination or appointment; or refusal to furnish testimony; or a 
statutory or regulatory bar. OPM may also cancel any reinstatement 
eligibility obtained as a result of false statement, deception or fraud 
in the examination or appointment process.
    (d) An action to remove an appointee or employee for suitability 
reasons under this part is not an action under parts 752 or 315 of this 
title. Where behavior covered by this part may also form the basis for a 
part 752 or 315 action, agencies may use part 315 or 752, as 
appropriate, instead of this part.
    (e) Agencies are required to report to OPM all unfavorable 
adjudicative actions taken under this part, and all actions based on an 
OPM investigation.



Sec. 731.204  Debarment by OPM.

    (a) When OPM finds a person unsuitable for any reason listed in 
Sec. 731.202, OPM, in its discretion, may deny that person examination 
for, and appointment to, a competitive service position for a period of 
not more than 3 years from the date of determination of unsuitability.
    (b) On expiration of a period of debarment, OPM or an agency may 
redetermine a person's suitability for appointment in accordance with 
the procedures of this part.
    (c) OPM, in its sole discretion, determines the duration of any 
period of debarment imposed under this section.



Sec. 731.205  Debarment by agencies.

    (a) Subject to the provisions of Sec. 731.103, when an agency finds 
an applicant or appointee unsuitable for reasons listed in Sec. 
731.202, the agency may deny that person examination for, and 
appointment to, all, or specific,, positions within the agency for a 
period of not more than 1 year from the date of determination of 
unsuitability.
    (b) On expiration of a period of agency debarment, the agency may 
redetermine a person's suitability for appointment by the agency, in 
accordance with the procedures of this part.
    (c) The agency is responsible for enforcing the period of debarment 
and taking appropriate action should the individual apply or be 
inappropriately appointed during the debarment period. This does not 
limit OPM's ability to exercise jurisdiction and take an action if it 
deems appropriate.
    (d) The agency, in its sole discretion, determines the duration of 
any period of debarment imposed under this section.



               Subpart C_OPM Suitability Action Procedures



Sec. 731.301  Scope.

    (a) Coverage. This subpart sets forth the procedures to be followed 
when OPM proposes to take, or instructs an agency to take, a final 
suitability action against an applicant, appointee or employee.
    (b) Definition. In this subpart, days mean calendar days.

[65 FR 82243, Dec. 28, 2000; 66 FR 11100, Feb. 21, 2001]



Sec. 731.302  Notice of proposed action.

    (a) OPM shall notify the applicant, appointee, or employee 
(hereinafter, the ``respondent'') in writing of the proposed action and 
of the charges against the respondent (including the availability for 
review, upon request, of the materials relied upon). The notice shall 
state the specific reasons for the proposed action and that the 
respondent has the right to answer the notice in writing. If the 
respondent is an employee, the notice shall further state that the 
employee may also make an oral answer, as specified in Sec. 731.303(a). 
The notice shall further inform the respondent of the time limits for 
response as well as the address to which such response should be made.
    (b) The notice of proposed action shall be served upon the 
respondent by being mailed or hand delivered to the respondent's last 
known residence, and/or duty station, no less than 30 days prior to the 
effective date of the proposed action. If the respondent is employed in 
the competitive service on the date the notice is served, the respondent 
shall be entitled to be retained in a pay status during the notice 
period.

[[Page 30]]

    (c) OPM shall send a copy of this notice to any employing agency 
that is involved.



Sec. 731.303  Answer.

    (a) Respondent's answer. A respondent may answer the charges in 
writing and furnish documentation and/or affidavits in support of the 
response. A respondent who is an employee may also answer orally. The 
respondent may be represented by a representative of the respondent's 
choice, and such representative shall be designated in writing. To be 
timely, a written answer shall be made no more than 30 days after the 
date of the notice of proposed action. In the event an employee requests 
to make an oral answer, the request must be made within this 30 day time 
frame, and OPM shall determine the time and place thereof, and shall 
consider any answer the respondent makes in reaching a decision.
    (b) Agency's answer. An employing agency may also answer the notice 
of proposed action. The time limit for filing an answer is 30 days from 
the date of the notice. OPM shall consider any answer the agency makes 
in reaching a decision.



Sec. 731.304  Decision.

    The decision shall be in writing, dated, and inform the respondent 
of the reasons for the decision. The employing agency shall remove the 
appointee or employee from the rolls within 5 work days of receipt of 
OPM's final decision. The respondent shall also be informed that an 
adverse decision can be appealed in accordance with subpart E of this 
part. OPM shall also notify the respondent's employing agency of its 
decision.

[65 FR 82243, Dec. 28, 2000; 66 FR 11100, Feb. 21, 2001]



             Subpart D_Agency Suitability Action Procedures



Sec. 731.401  Scope.

    (a) Coverage. This subpart sets forth the procedures to be followed 
when an agency proposes to take a final suitability action against an 
applicant or appointee.
    (b) Definition. In this subpart, days mean calendar days.



Sec. 731.402  Notice of proposed action.

    The agency shall provide the applicant or appointee (hereinafter, 
the ``respondent'') reasonable notice in writing of the proposed action 
and of the charges against the respondent (including the availability 
for review, upon request, of the materials relied upon). The notice 
shall state the specific reasons for the proposed action, and that the 
respondent has the right to answer the notice in writing. The notice 
shall inform the respondent of the time limits for response as well as 
the address to which such response should be made. If the respondent is 
employed in the competitive service on the date the notice is served, 
the respondent shall be entitled to be retained in a pay status during 
the notice period.



Sec. 731.403  Answer.

    A respondent may answer the charges in writing and furnish 
documentation and/or affidavits in support of the response.



Sec. 731.404  Decision.

    The decision shall be in writing, dated, and inform the respondent 
of the reasons for the decision. The respondent shall also be informed 
that an adverse decision can be appealed in accordance with subpart E of 
this part. The employing agency shall remove an appointee from the rolls 
within 5 work days of their final decision.



         Subpart E_Appeal to the Merit Systems Protection Board



Sec. 731.501  Appeal to the Merit Systems Protection Board.

    (a) Appeal to the Merit Systems Protection Board. An individual who 
has been found unsuitable for employment may appeal the determination to 
the Merit Systems Protection Board. If the Board finds that one or more 
charges are supported by a preponderance of the evidence, it shall 
affirm the determination. If the Board sustains fewer than all the 
charges, the Board shall remand the case to OPM or the agency to 
determine whether the action taken is

[[Page 31]]

still appropriate based on the sustained charge(s). This determination 
of whether the action taken is appropriate shall be final without any 
further appeal to the Board.
    (b) Appeal procedures. The procedures for filing an appeal with the 
Board are found at part 1201 of this chapter.



                       Subpart F_Savings Provision



Sec. 731.601  Savings provision.

    No provision of the regulations in this part shall be applied in 
such a way as to affect any administrative proceeding pending on January 
29, 2001. An administrative proceeding is deemed to be pending from the 
date of the agency or OPM ``notice of proposed action'' described in 
Sec. 731.402.



PART 732_NATIONAL SECURITY POSITIONS--Table of Contents




                             Subpart A_Scope

Sec.
732.101 Purpose.
732.102 Definition and applicability.

          Subpart B_Designation and Investigative Requirements

732.201 Sensitivity level designations and investigative requirements.
732.202 Waivers and exceptions to investigative requirements.
732.203 Periodic reinvestigation requirements.

                   Subpart C_Due Process and Reporting

732.301 Due process.
732.302 Reporting to OPM.

              Subpart D_Security and Related Determinations

732.401 Reemployment eligibility of certain former Federal employees.

    Authority: 5 U.S.C. 3301, 3302, 7312; 50 U.S.C. 403; E.O. 10450, 3 
CFR, 1949-1953 Comp., p. 936.

    Source: 56 FR 18654, Apr. 23, 1991, unless otherwise noted.



                             Subpart A_Scope



Sec. 732.101  Purpose.

    This part sets forth certain requirements and procedures which each 
agency shall observe for determining national security positions 
pursuant to Executive Order 10450--Security Requirements for Government 
Employment (April 27, 1953), 18 FR 2489, 3 CFR 1949-1953 Comp., p. 936, 
as amended.



Sec. 732.102  Definition and applicability.

    (a) For purposes of this part, the term ``national security 
position'' includes:
    (1) Those positions that involve activities of the Government that 
are concerned with the protection of the nation from foreign aggression 
or espionage, including development of defense plans or policies, 
intelligence or counterintelligence activities, and related activities 
concerned with the preservation of the military strength of the United 
States; and
    (2) Positions that require regular use of, or access to, classified 
information. Procedures and guidance provided in OPM issuances apply.
    (b) The requirements of this part apply to competitive service 
positions, and to Senior Executive Service positions filled by career 
appointment, within the Executive Branch, and agencies may apply them to 
excepted service positions within the Executive Branch.

[56 FR 18654, Apr. 23, 1991, as amended at 66 FR 66711, Dec. 27, 2001]



          Subpart B_Designation and Investigative Requirements



Sec. 732.201  Sensitivity level designations and investigative 
requirements.

    (a) For purposes of this part, the head of each agency shall 
designate, or cause to be designated, any position within the department 
or agency the occupant of which could bring about, by virtue of the 
nature of the position, a material adverse effect on the national 
security as a sensitive position at one of three sensitivity levels: 
Special-Sensitive, Critical-Sensitive, or Noncritical-Sensitive.
    (b) Investigative requirements for each sensitivity level are 
provided in OPM issuances.

[56 FR 18654, Apr. 23, 1991, as amended at 66 FR 66711, Dec. 27, 2001]

[[Page 32]]



Sec. 732.202  Waivers and exceptions to investigative requirements.

    (a) Waivers--(1) General. A waiver of the preappointment 
investigative requirement contained in section 3(b) of Executive Order 
10450 for employment in a sensitive national security position may be 
made only for a limited period: (i) In case of emergency if the head of 
the department or agency concerned finds that such action is necessary 
in the national interest; and (ii) when such finding is made a part of 
the records of the department or agency.
    (2) Specific waiver requirements. (i) The preappointment 
investigative requirement may not be waived for appointment to positions 
designated Special-Sensitive under this part.
    (ii) For positions designated Critical-Sensitive under this part, 
the records of the department or agency required by Sec. 732.202(a)(1) 
of this part shall show what decision was made on obtaining prewaiver 
checks, as follows: (A) The nature of the emergency precluded obtaining 
prewaiver checks; or (B) checks were initiated but not all responses 
were received within 5 days; or (C) checks made and favorably completed 
are listed.
    (iii) The waiver restriction is optional for positions designated 
Noncritical-Sensitive under this part.
    (iv) When waiver is authorized, the required investigation must be 
initiated within 14 days of placement of the individual in the position.
    (b) Exceptions to investigative requirements. (1) Pursuant to 
section 3(a) of E.O. 10450, the following positions are exempt from the 
investigative requirements of E.O. 10450, providing that the employing 
agency conducts such checks as it deems appropriate to insure that the 
employment or retention of individuals in these positions is clearly 
consistent with the interests of the national security:
    (i) Positions that are intermittent, seasonal, per diem, or 
temporary, not to exceed an aggregate of 180 days in either a single 
continuous appointment or series of appointments; or
    (ii) Positions filled by aliens employed outside the United States.
    (2) Other positions that OPM, in its discretion, deems appropriate 
may be made exempt based on a written request to OPM by the agency head 
in whose department or agency the positions are located.



Sec. 732.203  Periodic reinvestigation requirements.

    The incumbent of each position designated Special-Sensitive or 
Critical-Sensitive under this part shall be subject to periodic 
reinvestigation of a scope prescribed by OPM 5 years after placement, 
and at least once each succeeding 5 years. The employing agency will use 
the results of such periodic reinvestigation to determine whether the 
continued employment of the individual in a sensitive position is 
clearly consistent with the interests of the national security.



                   Subpart C_Due Process and Reporting



Sec. 732.301  Due process.

    When an agency makes an adjudicative decision under this part based 
on an OPM investigation, or when an agency, as a result of information 
in an OPM investigation, changes a tentative favorable placement or 
clearance decision to an unfavorable decision, the agency must:
    (a) Insure that the records used in making the decision are 
accurate, relevant, timely, and complete to the extent reasonably 
necessary to assure fairness to the individual in any determination.
    (b) Comply with all applicable administrative due process 
requirements, as provided by law, rule, or regulation.
    (c) At a minimum, provide the individual concerned:
    (1) Notice of the specific reason(s) for the decision; and
    (2) An opportunity to respond; and
    (3) Notice of appeal rights, if any.
    (d) Consider all available information in reaching its final 
decision.
    (e) Keep any record of the agency action required by OPM as 
published in its issuances.

[56 FR 18654, Apr. 23, 1991, as amended at 66 FR 66711, Dec. 27, 2001]



Sec. 732.302  Reporting to OPM.

    (a) In accordance with section 9(a) of E.O. 10450, each agency 
conducting an

[[Page 33]]

investigation under E.O. 10450 is required to notify OPM when the 
investigation is initiated.
    (b) In accordance with section 14(c) of E.O. 10450, agencies shall 
report to OPM the action taken with respect to individuals investigated 
pursuant to E.O. 10450 as soon as possible and in no event later than 90 
days after receipt of the final report of investigation.



              Subpart D_Security and Related Determinations



Sec. 732.401  Reemployment eligibility of certain former Federal 
employees.

    (a) Request. A former employee who was terminated, or who resigned 
while charges were pending, from a department or agency of the 
Government under a statute or executive order authorizing termination in 
the interest of national security or on grounds relating to loyalty, and 
authorizing OPM to determine the eligibility for employment in another 
department or agency of the Government, may request OPM in writing to 
determine whether the individual is eligible for employment in another 
department or agency of the Government.
    (b) Action by OPM. (1) OPM shall determine, and will notify the 
former employee, after appropriate consideration of the case, including 
such investigation as it considers necessary, whether the individual may 
be employed in another department or agency of the Government.
    (2) If a former Federal employee found ineligible under this section 
has had an opportunity to comment on the reasons for the action, or has 
furnished them to OPM or to the former employing agency, OPM may cancel 
the reinstatement eligibility if the eligibility resulted from the last 
Federal employment and was obtained through fraud, and OPM may prescribe 
a period of debarment not to exceed 3 years.



PART 733_POLITICAL ACTIVITY_FEDERAL EMPLOYEES RESIDING IN DESIGNATED 
LOCALITIES--Table of Contents




Sec.
733.101 Definitions.
733.102 Exclusion of employees in the Criminal Division of the United 
          States Department of Justice.
733.103 Permitted political activities--employees who reside in 
          designated localities.
733.104 Prohibited political activities--employees who reside in 
          designated localities.
733.105 Permitted political activities--employees who reside in 
          designated localities and are employed in certain agencies and 
          positions.
733.106 Prohibited political activities--employees who reside in 
          designated localities and are employed in certain agencies and 
          positions.
733.107 Designated localities.

    Authority: 5 U.S.C. 7325; sec. 308 of Pub. L. 104-93, 109 Stat. 961, 
966 (Jan. 6, 1996).

    Source: 63 FR 4558, Jan. 30, 1998, unless otherwise noted.



Sec. 733.101  Definitions.

    In this part:
    Accept means to come into possession of something from a person 
officially on behalf of a candidate, a campaign, a political party, or a 
partisan political group, but does not include ministerial activities 
which precede or follow this official act.
    Candidate means an individual who seeks nomination or election to 
any elective office whether or not the person is elected. An individual 
is deemed to be a candidate if the individual has received political 
contributions or made expenditures or has consented to another person 
receiving contributions or making expenditures with a view to bringing 
about the individual's nomination or election.
    Campaign means all acts done by a candidate and his or her adherents 
to obtain a majority or plurality of the votes to be cast toward a 
nomination or in an election.
    Election includes a primary, special, runoff, or general election.
    Employee means:
    Any individual (other than the President, the Vice President, or a 
member of the uniformed services) employed or holding office in--
    (1) An Executive agency other than the General Accounting Office;
    (2) A position within the competitive service which is not in an 
Executive agency;

[[Page 34]]

    (3) The government of the District of Columbia, other than the Mayor 
or a member of the City Council or the Recorder of Deeds; or
    (4) The United States Postal Service or the Postal Rate Commission.
    On Duty means the period when an employee is:
    (1) In a pay status other than paid leave, compensatory time off, 
credit hours, time off as an incentive award, or excused or authorized 
absence (including leave without pay); or
    (2) Representing any agency or instrumentality of the United States 
Government or any agency or instrumentality of the District of Columbia 
Government in an official capacity.
    Partisan when used as an adjective means related to a political 
party.
    Partisan political group means any committee, club, or other 
organization which is affiliated with a political party or candidate for 
public office in a partisan election, or organized for a partisan 
purpose, or which engages in partisan political activity.
    Partisan political office means any office for which any candidate 
is nominated or elected as representing a party any of whose candidates 
for Presidential elector received votes in the last preceding election 
at which Presidential electors were selected, but does not include any 
office or position within a political party or affiliated organization.
    Person means an individual; a State, local, or foreign government; 
or a corporation and the subsidiaries it controls, company, association, 
firm, partnership, society, joint stock company, or any other 
organization or institution, including any officer, employee, or agent 
of such person or entity.
    Political activity means an activity directed toward the success or 
failure of a political party, candidate for partisan political office, 
or partisan political group.
    Political contribution means any gift, subscription, loan, advance, 
or deposit of money or anything of value, made for any political 
purpose.
    (1) A political contribution includes:
    (i) Any contract, promise, or agreement, express or implied, whether 
or not legally enforceable, to make a contribution for any political 
purpose;
    (ii) Any payment by any person, other than a candidate or a 
political party or affiliated organization, of compensation for the 
personal services of another person which are rendered to any candidate 
or political party or affiliated organization without charge for any 
political purpose; and
    (iii) The provision of personal services, paid or unpaid, for any 
political purpose.
    (2) A political contribution does not include the value of services 
provided without compensation by any individual who volunteers on behalf 
of any candidate, campaign, political party, or partisan political 
group.
    Political management means the direction or supervision of a 
partisan political group or campaign for partisan political office.
    Political party means a national political party, a State political 
party, or an affiliated organization.
    Political purpose means an objective of promoting or opposing a 
political party, candidate for partisan political office, or partisan 
political group.
    Receive means to come into possession of something from a person 
officially on behalf of a candidate, a campaign, a political party, or a 
partisan political group, but does not include ministerial activities 
which precede or follow this official act.
    Room or building occupied in the discharge of official duties by an 
individual employed or holding office in the Government of the United 
States or any agency thereof includes, but is not limited to:
    (1) Any Federally owned space (including, but not limited to, 
``public buildings'' as defined in 40 U.S.C. 612(1)) or Federally leased 
space in which Federal employees perform official duties on a regular 
basis;
    (2) Public areas as defined in 40 U.S.C. 490(a)(17) and 41 CFR 101-
20.003 of buildings under the custody and control of the General 
Services Administration.
    (3) A room or building occupied in the discharge of official duties 
by an individual employed or holding office in the Government of the 
United States or any agency thereof does not include rooms in the White 
House, or in the residence of the Vice President, which are part of the 
Residence area or

[[Page 35]]

which are not regularly used solely in the discharge of official duties.
    Solicit means to request expressly of another person that he or she 
contribute something to a candidate, a campaign, a political party, or 
partisan political group.
    Subordinate refers to the relationship between two employees when 
one employee is under the supervisory authority, control or 
administrative direction of the other employee.
    Uniformed services means uniformed services as defined in 5 U.S.C. 
2101(3).



Sec. 733.102  Exclusion of employees in the Criminal Division of the 
United States Department of Justice.

    Employees in the Criminal Division in the Department of Justice 
(except employees appointed by the President, by and with the advice and 
consent of the Senate) specifically are excluded from coverage under the 
provisions of this part.



Sec. 733.103  Permitted political activities--employees who reside in 
designated localities.

    (a) This section does not apply to an individual who is employed in 
an agency or position described in Sec. 733.105(a), unless that 
individual has been appointed by the President, by and with the advice 
and consent of the Senate.
    (b) Employees who reside in a municipality or political subdivision 
designated by OPM under Sec. 733.107 may:
    (1) Run as independent candidates for election to partisan political 
office in elections for local office in the municipality or political 
subdivision;
    (2) Solicit, accept, or receive a political contribution as, or on 
behalf of, an independent candidate for partisan political office in 
elections for local office in the municipality or political subdivision;
    (3) Accept or receive a political contribution on behalf of an 
individual who is a candidate for local partisan political office and 
who represents a political party;
    (4) Solicit, accept, or receive uncompensated volunteer services as 
an independent candidate, or on behalf of an independent candidate, for 
local partisan political office, in connection with the local elections 
of the municipality or subdivision; and
    (5) Solicit, accept, or receive uncompensated volunteer services on 
behalf of an individual who is a candidate for local partisan political 
office and who represents a political party.



Sec. 733.104  Prohibited political activities--employees who reside 
in designated localities.

    (a) This section does not apply to an individual who is employed in 
an agency or position described in Sec. 733.105(a), unless that 
individual has been appointed by the President, by and with the advice 
and consent of the Senate.
    (b) Employees who reside in a municipality or political subdivision 
designated by OPM under Sec. 733.107 may not:
    (1) Run as the representative of a political party for local 
partisan political office;
    (2) Solicit a political contribution on behalf of an individual who 
is a candidate for local partisan political office and who represents a 
political party;
    (3) Knowingly solicit a political contribution from any Federal 
employee, except as permitted under 5 U.S.C. 7323(a)(2)(A)-(C).
    (4) Accept or receive a political contribution from a subordinate; 
or
    (5) Solicit, accept, or receive uncompensated volunteer services 
from a subordinate for any political purpose.
    (c) An employee covered under this section may not participate in 
political activities:
    (1) While he or she is on duty:
    (2) While he or she is wearing a uniform, badge, or insignia that 
identifies the employing agency or instrumentality or the position of 
the employee;
    (3) While he or she is in any room or building occupied in the 
discharge of official duties by an individual employed or holding office 
in the Government of the United States or any agency or instrumentality 
thereof; or
    (4) While using a Government-owned or leased vehicle or while using 
a privately owned vehicle in the discharge of official duties.
    (d) An employee described in 5 U.S.C. 7324(b)(2) may participate in 
political activity otherwise prohibited by Sec. 733.104(c) if the costs 
associated with

[[Page 36]]

that political activity are not paid for by money derived from the 
Treasury of the United States.
    (e) Candidacy for, and service in, a partisan political office shall 
not result in neglect of, or interference with, the performance of the 
duties of the employee or create a conflict, or apparent conflict, of 
interest.



Sec. 733.105  Permitted political activities--employees who reside in 
designated localities and are employed in certain agencies and positions.

    (a) This section applies to employees who reside in designated 
localities and are employed in the following agencies or positions:
    (1) Federal Election Commission;
    (2) Federal Bureau of Investigation;
    (3) United States Secret Service;
    (4) Central Intelligence Agency;
    (5) National Security Council;
    (6) National Security Agency;
    (7) Defense Intelligence Agency;
    (8) Merit Systems Protection Board;
    (9) United States Office of Special Counsel;
    (10) Office of Criminal Investigation of the Internal Revenue 
Service;
    (11) Office of Investigative Programs of the United States Customs 
Service;
    (12) Office of Law Enforcement of the Bureau of Alcohol, Tobacco, 
and Firearms;
    (13) National Imagery and Mapping Agency;
    (14) Career Appointees in the Senior Executive Service;
    (15) Administrative Law Judges; and
    (16) Contract appeals board members described in 5 U.S.C. 5372a.
    (b) This section does not apply to individuals who have been 
appointed by the President by and with the advice and consent of the 
Senate, even though they are employed in the agencies and positions 
described in paragraph (a) of this section.
    (c) Employees who are covered under this section and who reside in a 
municipality or political subdivision designated by OPM under Sec. 
733.107 may:
    (1) Run as independent candidates for election to partisan political 
office in elections for local office in the municipality or political 
subdivision;
    (2) Solicit, accept, or receive a political contribution as, or on 
behalf of, an independent candidate for partisan political office in 
elections for local office in the municipality or political subdivision;
    (3) Solicit, accept, or receive uncompensated volunteer services as, 
or on behalf of, an independent candidate for partisan political office 
in elections for office in the municipality or subdivision; and
    (4) Take an active part in other political activities associated 
with elections for local partisan political office and in managing the 
campaigns of candidates for election to local partisan political office 
in the municipality or political subdivision, but only as an independent 
candidate or on behalf of, or in opposition to, an independent 
candidate.



Sec. 733.106  Prohibited political activities--employees who reside 
designated localities and are employed in certain agencies and positions.

    (a) This section does not apply to individuals who have been 
appointed by the President, by and with the advice and consent of the 
Senate, even though they are employed in the agencies and positions 
described in Sec. 733.105(a).
    (b) Employees who are employed in the agencies and positions 
described in Sec. 733.105(a), and who reside in a municipality or 
political subdivision designated by OPM under Sec. 733.107, may not:
    (1) Run as the representative of a political party for local 
partisan political office;
    (2) Solicit, accept, or receive a political contribution on behalf 
of an individual who is a candidate for local partisan political office 
and who represents a political party;
    (3) Knowingly solicit a political contribution from any Federal 
employee;
    (4) Accept or receive a political contribution from a subordinate;
    (5) Solicit, accept, or receive uncompensated volunteer services on 
behalf of an individual who is a candidate for local partisan political 
office and who represents a political party;
    (6) Solicit, accept, or receive uncompensated volunteer services 
from a subordinate for any political purpose; or
    (7) Take an active part in other political activities associated 
with elections for local partisan political office, when such 
participation occurs on behalf of a political party, partisan political

[[Page 37]]

group, or a candidate for local partisan political office who represents 
a political party.
    (c) An employee covered under this section may not participate in 
political activities:
    (1) While he or she is on duty:
    (2) While he or she is wearing a uniform, badge, or insignia that 
identifies the employing agency or instrumentality or the position of 
the employee;
    (3) While he or she is in any room or building occupied in the 
discharge of official duties by an individual employed or holding office 
in the Government of the United States or any agency or instrumentality 
thereof; or
    (4) While using a Government-owned or leased vehicle or while using 
a privately owned vehicle in the discharge of official duties.
    (d) Candidacy for, and service in, or partisan political office 
shall not result in neglect of, or interference with, the performance of 
the duties of the employee or create a conflict, or apparent conflict, 
of interest.



Sec. 733.107  Designated localities.

    (a) OPM may designate a municipality or political subdivision in 
Maryland or Virginia and in the immediate vicinity of the District of 
Columbia, or a municipality in which the majority of voters are employed 
by the Government of the United States, when OPM determines that, 
because of special or unusual circumstances, it is in the domestic 
interest of employees to participate in local elections.
    (b) Information as to the documentation required to support a 
request for designation is furnished by the General Counsel of OPM on 
request.
    (c) The following municipalities and political subdivisions have 
been designated, effective on the day specified:

                               In Maryland

Annapolis (May 16, 1941).
Anne Arundel County (March 14, 1973).
Berwyn Heights (June 15, 1944).
Bethesda (Feb. 17, 1943).
Bladensburg (April 20, 1942).
Bowie (April 11, 1952).
Brentwood (Sept. 26, 1940).
Calvert County (June 18, 1992).
Capitol Heights (Nov. 12, 1940).
Cheverly (Dec. 18, 1940).
Chevy Chase, section 3 (Oct. 8, 1940).
Chevy Chase, section 4 (Oct. 2, 1940).
Chevy Chase View (Feb. 26, 1941).
Chevy Chase Village, Town of (March 4, 1941).
College Park (June 13, 1945).
Cottage City (Jan. 15, 1941).
District Heights (Nov. 2, 1940).
Edmonston (Oct. 24, 1940).
Fairmont Heights (Oct. 24, 1940).
Forest Heights (April 22, 1949).
Frederick County (May 31, 1991).
Garrett Park (Oct. 2, 1940).
Glenarden (May 21, 1941).
Glen Echo (Oct. 22, 1940).
Greenbelt (Oct. 4, 1940).
Howard County (April 25, 1974).
Hyattsville (Sept. 20, 1940).
Kensington (Nov. 8, 1940).
Landover Hills (May 5, 1945).
Martin's Additions, Village of (Feb. 13, 1941).
Montgomery County (April 30, 1964).
Morningside (May 19, 1949).
Mount Rainier (Nov. 22, 1940).
New Carrollton (July 7, 1981).
North Beach (Sept. 20, 1940).
North Brentwood (May 6, 1941).
North Chevy Chase (July 22, 1942).
Northwest Park (Feb. 17, 1943).
Prince George's County (June 19, 1962).
Riverdale (Sept. 26, 1940).
Rockville (April 15, 1948).
St. Mary's County (March 2, 1998).
Seat Pleasant (Aug. 31, 1942).
Somerset (Nov. 22, 1940).
Takoma Park (Oct. 22, 1940).
University Park (Jan. 18, 1941).
Washington Grove (April 5, 1941).

                               In Virginia

Alexandria (April 15, 1941).
Arlington County (Sept. 9, 1940).
Clifton (July 14, 1941).
Fairfax, City of (Feb. 9, 1954).
Fairfax County (Nov. 10, 1949).
Falls Church (June 6, 1941).
Herndon (April 7, 1945).
Loudoun County (Oct. 1, 1971).
Manassas (Jan. 8, 1980).
Manassas Park (March 4, 1980).
Portsmouth (Feb. 27, 1958).
Prince William County (Feb. 14, 1967).
Spotsylvania County (March 2, 1998).
Stafford County (Nov. 2, 1979).
Vienna (March 18, 1946).

                          Other Municipalities

Anchorage, Alaska (Dec. 29, 1947).
Benicia, Calif. (Feb. 20, 1948).
Bremerton, Wash. (Feb. 27, 1946).
Centerville, Ga. (Sept. 16, 1971).
Crane, Ind. (Aug. 3, 1967).
Elmer City, Wash. (Oct. 28, 1947).
Huachuca City, Ariz. (April 9, 1959).
New Johnsonville, Tenn. (April 26, 1956).
Norris, Tenn. (May 6, 1959).
Port Orchard, Wash. (Feb. 27, 1946).
Sierra Vista, Ariz. (Oct. 5, 1955).
Warner Robins, Ga. (March 19, 1948).

[[Page 38]]



PART 734_POLITICAL ACTIVITIES OF FEDERAL EMPLOYEES--Table of Contents




                      Subpart A_General Provisions

Sec.
734.101 Definitions.
734.102 Jurisdiction.
734.103 Multicandidate political committees of Federal labor 
          organizations and Federal employee organizations.
734.104 Restriction of political activity.

                     Subpart B_Permitted Activities

734.201 Exclusion from coverage.
734.202 Permitted activities.
734.203 Participation in nonpartisan activities.
734.204 Participation in political organizations.
734.205 Participation in political campaigns.
734.206 Participation in elections.
734.207 Candidacy for public office.
734.208 Participation in fundraising.

                     Subpart C_Prohibited Activities

734.301 Exclusion from coverage.
734.302 Use of official authority; prohibition.
734.303 Fundraising.
734.304 Candidacy for public office.
734.305 Soliciting or discouraging the political participation of 
          certain persons.
734.306 Participation in political activities while on duty, in uniform, 
          in any room or building occupied in the discharge of official 
          duties, or using a Federal vehicle.
734.307 Campaigning for a spouse or family member.

          Subpart D_Employees in Certain Agencies and Positions

734.401 Coverage.
734.402 Expression of an employee's individual opinion.
734.403 Participation in elections.
734.404 Participation in political organizations.
734.405 Campaigning for a spouse or family member.
734.406 Participation in political activities while on duty, in uniform, 
          in any room or building occupied in the discharge of official 
          duties, or using a Federal vehicle; prohibition.
734.407 Use of official authority; prohibition.
734.408 Participation in political management and political campaigning; 
          prohibitions.
734.409 Participation in political organizations; prohibitions.
734.410 Participation in political fundraising; prohibitions.
734.411 Participation in political campaigning; prohibitions.
734.412 Participation in elections; prohibitions.
734.413 Employees of the Federal Election Commission; prohibitions.

  Subpart E_Special Provisions for Certain Presidential Appointees and 
 Employees Paid From the Appropriation for the Executive Office of the 
                                President

734.501 Permitted and prohibited activities.
734.502 Participation in political activity while on duty, in uniform, 
          in any room or building occupied in the discharge of official 
          duties, or using a Federal vehicle.
734.503 Allocation and reimbursement of costs associated with political 
          activities.
734.504 Contributions to political action committees through voluntary 
          payroll allotments prohibited.

    Subpart F_Employees Who Work on an Irregular or Occasional Basis

734.601 Employees who work on an irregular or occasional basis.

             Subpart G_Related Statutes and Executive Orders

734.701 General.
734.702 Related statutes and Executive orders.

    Authority: 5 U.S.C. 1103, 1104, 7325; Reorganization Plan No. 2 of 
1978, 92 Stat. 3783, 3 CFR 1978 Comp. p. 323; and E.O. 12107, 3 CFR 1978 
Comp. p. 264.

    Source: 59 FR 48769, Sept. 23, 1994, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 734.101  Definitions.

    For the purposes of this part:
    Accept means to come into possession of something from a person 
officially on behalf of a candidate, a campaign, a political party, or a 
partisan political group, but does not include ministerial activities 
which precede or follow this official act.
    Candidate means an individual who seeks nomination or election to 
any elective office whether or not the person is elected. An individual 
is deemed to be a candidate if the individual has received political 
contributions or made expenditures or has consented to

[[Page 39]]

another person receiving contributions or making expenditures with a 
view to bringing about the individual's nomination or election.
    Campaign means all acts done by a candidate and his or her adherents 
to obtain a majority or plurality of the votes to be cast toward a 
nomination or in an election.
    Election includes a primary, special, runoff, or general election.
    Employee means any individual (other than the President, Vice 
President, or a member of the uniformed services) employed or holding 
office in--
    (1) An Executive agency other than the General Accounting Office;
    (2) A position within the competitive service which is not in an 
Executive agency;
    (3) The Government of the District of Columbia, other than the Mayor 
or a member of the City Council or the Recorder of Deeds; or
    (4) The United States Postal Service or the Postal Rate Commission.
    Employing office shall have the meaning given by the head of each 
agency or instrumentality of the United States Government or District of 
Columbia Government covered by this part. Each agency or instrumentality 
shall provide notice identifying the appropriate employing offices 
within it through internal agency notice procedures.
    Federal employee organization means any lawful nonprofit 
organization, association, society, or club composed of Federal 
employees.
    Federal labor organization means an organization defined in 5 U.S.C. 
7103(a)(4).
    Multicandidate political committee means an organization defined in 
2 U.S.C. 441a(a)(4).
    Nonpartisan election means--
    (1) An election in which none of the candidates is to be nominated 
or elected as representing a political party any of whose candidates for 
Presidential elector received votes in the last preceding election at 
which Presidential electors were selected; or
    (2) An election involving a question or issue which is not 
specifically identified with a political party, such as a constitutional 
amendment, referendum, approval of a municipal ordinance, or any 
question or issue of a similar character.
    Occasional means occurring infrequently, at irregular intervals, and 
according to no fixed or certain scheme; acting or serving for the 
occasion or only on particular occasions.
    Office means the U.S. Office of Personnel Management.
    On Duty means the time period when an employee is:
    (1) In a pay status other than paid leave, compensatory time off, 
credit hours, time off as an incentive award, or excused or authorized 
absence (including leave without pay); or
    (2) Representing any agency or instrumentality of the United States 
Government or any agency or instrumentality of the District of Columbia 
Government in an official capacity.
    Partisan when used as an adjective means related to a political 
party.
    Partisan political group means any committee, club, or other 
organization which is affiliated with a political party or candidate for 
public office in a partisan election, or organized for a partisan 
purpose, or which engages in partisan political activity.
    Partisan political office means any office for which any candidate 
is nominated or elected as representing a party any of whose candidates 
for Presidential elector received votes in the last preceding election 
at which Presidential electors were selected, but does not include any 
office or position within a political party or affiliated organization.
    Person means an individual; a State, local, or foreign government; 
or a corporation and subsidiaries it controls, company, association, 
firm, partnership, society, joint stock company, or any other 
organization or institution, including any officer, employee, or agent 
of such person or entity.
    Political Action Committee means any committee, association, or 
organization (whether or not incorporated) which accepts contributions 
or makes expenditures for the purpose of influencing, or attempting to 
influence, the nomination or election of one or more individuals to 
Federal, State, or local elective public office.
    Political activity means an activity directed toward the success or 
failure of

[[Page 40]]

a political party, candidate for partisan political office, or partisan 
political group.
    Political contribution means any gift, subscription, loan, advance, 
or deposit of money or anything of value, made for any political 
purpose.
    (a) A political contribution includes:
    (1) Any contract, promise, or agreement, express or implied, whether 
or not legally enforceable, to make a contribution for any political 
purpose;
    (2) Any payment by any person, other than a candidate or a political 
party or affiliated organization, of compensation for the personal 
services of another person which are rendered to any candidate or 
political party or affiliated organization without charge for any 
political purpose; and
    (3) The provision of personal services, paid or unpaid, for any 
political purpose.
    (b) A political contribution does not include the value of services 
provided without compensation by any individual who volunteers on behalf 
of any candidate, campaign, political party, or partisan political 
group.
    Political management means the direction or supervision of a 
partisan political group or campaign for partisan political office.
    Political party means a national political party, a State political 
party, or an affiliated organization.
    Political purpose means an objective of promoting or opposing a 
political party, candidate for partisan political office, or partisan 
political group.
    Receive means to come into possession of something from a person 
officially on behalf of a candidate, a campaign, a political party, or a 
partisan political group, but does not include ministerial activities 
which precede or follow this official act.
    Recurrent means occurring frequently, or periodically on a regular 
basis.
    Room or building occupied in the discharge of official duties by an 
individual employed or holding office in the Government of the United 
States or any agency thereof includes, but is not limited to:
    (1) Any Federally owned space (including, but not limited to, 
``public buildings'' as defined in 40 U.S.C. 612(1)) or Federally leased 
space in which Federal employees perform official duties on a regular 
basis;
    (2) Public areas as defined in 40 U.S.C. 490(a)(17) and 41 CFR 101-
20.003 of buildings under the custody and control of the General 
Services Administration.
    (3) A room or building occupied in the discharge of official duties 
by an individual employed or holding office in the Government of the 
United States or any agency thereof does not include rooms in the White 
House, or in the residence of the Vice President, which are part of the 
Residence area or which are not regularly used solely in the discharge 
of official duties.
    Solicit means to request expressly of another person that he or she 
contribute something to a candidate, a campaign, a political party, or 
partisan political group.
    Subordinate refers to the relationship between two employees when 
one employee is under the supervisory authority, control or 
administrative direction of the other employee.
    Uniformed services means uniformed services as defined in 5 U.S.C. 
2101(3).

[59 FR 48769, Sept. 23, 1994, as amended at 61 FR 35099, July 5, 1996]



Sec. 734.102  Jurisdiction.

    (a) The United States Office of Special Counsel has exclusive 
authority to investigate allegations of political activity prohibited by 
the Hatch Act Reform Amendments of 1993, as implemented by 5 CFR part 
734, prosecute alleged violations before the United States Merit Systems 
Protection Board, and render advisory opinions concerning the 
applicability of 5 CFR part 734 to the political activity of Federal 
employees and employees of the District of Columbia government. (5 
U.S.C. 1212 and 1216. Advice concerning the Hatch Act Reform Amendments 
may be requested from the Office of Special Counsel:
    (1) By letter addressed to the Office of Special Counsel at 1730 M 
Street NW., Suite 300, Washington, DC 20036, or
    (2) By telephone on (202) 653-7188, or (1-800) 854-2824.
    (b) The Merit Systems Protection Board has exclusive authority to 
determine whether a violation of the Hatch

[[Page 41]]

Act Reform Amendments of 1993, as implemented by 5 CFR part 734, has 
occurred and to impose a minimum penalty of suspension for 30 days and a 
maximum penalty of removal for violation of the political activity 
restrictions regulated by this part. (5 U.S.C. 1204 and 7326).
    (c) The Office of Personnel Management is authorized to issue 
regulations describing the political activities which are permitted and 
prohibited under the Hatch Act Reform Amendments of 1993. (5 U.S.C. 
1103, 1104, 7325; Reorganization Plan No. 2 of 1978, 92 Stat. 3783, 3 
CFR 1978 Comp. p. 323; and E.O. 12107, 3 CFR 1978 Comp. p. 264.)

[59 FR 48769, Sept. 23, 1994, as amended at 61 FR 35100, July 5, 1996]



Sec. 734.103  Multicandidate political committees of Federal labor 
organizations and Federal employee organizations.

    (a) In order to qualify under this part, each multicandidate 
political committee of a Federal labor organization must provide to the 
Office the following:
    (1) Information verifying that the multicandidate political 
committee is a multicandidate political committee as defined by 2 U.S.C. 
441a(a)(4);
    (2) Information identifying the Federal labor organization to which 
the multicandidate political committee is connected; and
    (3) Information that identifies the Federal labor organization as a 
labor organization defined at 5 U.S.C. 7103(4).
    (b) In order to qualify under this part, each multicandidate 
political committee of a Federal employee organization must provide to 
the Office the following:
    (1) Information verifying that the multicandidate political 
committee is a multicandidate political committee as defined in 2 U.S.C. 
441a(a)(4);
    (2) Information identifying the Federal employee organization to 
which the multicandidate political committee is connected; and
    (3) Information indicating that the multicandidate political 
committee was in existence as of October 6, 1993.



Sec. 734.104  Restriction of political activity.

    No further proscriptions or restrictions may be imposed upon 
employees covered under this regulation except:
    (a) Employees who are appointed by the President by and with the 
advice and consent of the Senate;
    (b) Employees who are appointed by the President;
    (c) Non-career senior executive service members;
    (d) Schedule C employees, 5 CFR 213.3301, 213.3302; and
    (e) Any other employees who serve at the pleasure of the President.



                     Subpart B_Permitted Activities



Sec. 734.201  Exclusion from coverage.

    This subpart does not apply to employees in the agencies and 
positions described in subpart D of this part.



Sec. 734.202  Permitted activities.

    Employees may take an active part in political activities, including 
political management and political campaigns, to the extent not 
expressly prohibited by law and this part.



Sec. 734.203  Participation in nonpartisan activities.

    An employee may:
    (a) Express his or her opinion privately and publicly on political 
subjects;
    (b) Be politically active in connection with a question which is not 
specifically identified with a political party, such as a constitutional 
amendment, referendum, approval of a municipal ordinance or any other 
question or issue of a similar character;
    (c) Participate in the nonpartisan activities of a civic, community, 
social, labor, or professional organization, or of a similar 
organization; and
    (d) Participate fully in public affairs, except as prohibited by 
other Federal law, in a manner which does not compromise his or her 
efficiency or integrity as an employee or the neutrality, efficiency, or 
integrity of the agency or instrumentality of the United States 
Government or the District of Columbia Government in which he or she is 
employed.


[[Page 42]]


    Example 1: An employee may participate, including holding office, in 
any nonpartisan group. Such participation may include fundraising as 
long as the fundraising is not in any way connected with any partisan 
political issue, group, or candidate, and as long as the fundraising 
complies with part 2635 of this title as well as any other directives 
that may apply, e.g., the Federal Property Management Regulations in 41 
CFR chapter 101.
    Example 2: An employee, individually or collectively with other 
employees, may petition or provide information to Congress as provided 
in 5 U.S.C. 7211.

[59 FR 48769, Sept. 23, 1994, as amended at 61 FR 35100, July 5, 1996]



Sec. 734.204  Participation in political organizations.

    An employee may:
    (a) Be a member of a political party or other political group and 
participate in its activities;
    (b) Serve as an officer of a political party or other political 
group, a member of a national, State, or local committee of a political 
party, an officer or member of a committee of a political group, or be a 
candidate for any of these positions;
    (c) Attend and participate fully in the business of nominating 
caucuses of political parties;
    (d) Organize or reorganize a political party organization or 
political group; and
    (e) Participate in a political convention, rally, or other political 
gathering.
    (f) Serve as a delegate, alternate, or proxy to a political party 
convention.

    Example 1: An employee of the Department of Education may serve as a 
delegate, alternate, or proxy to a State or national party convention.
    Example 2: A noncareer member of the Senior Executive Service, or 
other employee covered under this subpart, may serve as a vice-president 
of a political action committee, as long as the duties of the office do 
not involve personal solicitation, acceptance, or receipt of political 
contributions. Ministerial activities which precede or follow the 
official acceptance and receipt, such as handling, disbursing, or 
accounting for contributions are not covered under the definitions of 
accept and receive in Sec. 734.101. Sections 734.208 and 734.303 
describe in detail permitted and prohibited activities which are related 
to fundraising.
    Example 3: An employee of the Federal Communications Commission may 
make motions or place a name in nomination at a nominating caucus.
    Example 4: An employee of the Department of the Interior may serve 
as an officer of a candidate's campaign committee as long as he does not 
personally solicit, accept, or receive political contributions. Sections 
734.208 and 734.303 of this part describe in detail permitted and 
prohibited activities which are related to fundraising.

[59 FR 48769, Sept. 23, 1994, as amended at 61 FR 35100, July 5, 1996]



Sec. 734.205  Participation in political campaigns.

    Subject to the prohibitions in Sec. 734.306, an employee may:
    (a) Display pictures, signs, stickers, badges, or buttons associated 
with political parties, candidates for partisan political office, or 
partisan political groups, as long as these items are displayed in 
accordance with the provisions of Sec. 734.306 of subpart C of this 
part;
    (b) Initiate or circulate a nominating petition for a candidate for 
partisan political office;
    (c) Canvass for votes in support of or in opposition to a partisan 
political candidate or a candidate for political party office;
    (d) Endorse or oppose a partisan political candidate or a candidate 
for political party office in a political advertisement, broadcast, 
campaign literature, or similar material;
    (e) Address a convention, caucus, rally, or similar gathering of a 
political party or political group in support of or in opposition to a 
partisan political candidate or a candidate for political party office; 
and
    (f) Take an active part in managing the political campaign of a 
partisan political candidate or a candidate for political party office.

    Example 1: An employee of the Environmental Protection Agency may 
broadcast endorsements for a partisan political candidate via a public 
address system attached to his or her private automobile.
    Example 2: An employee of the Department of Interior may canvass 
voters by telephone on behalf of a political party or partisan political 
candidate.
    Example 3: An employee of the Department of Agriculture may stand 
outside of polling places on election day and hand out brochures on 
behalf of a partisan political candidate or political party.
    Example 4: An employee may appear in a television or radio broadcast 
which endorses

[[Page 43]]

a partisan political candidate and is sponsored by the candidate's 
campaign committee, a political party, or a partisan political group.
    Example 5: An independent contractor is not covered by this part and 
may display a political button while performing the duties for which he 
or she is contracted.
    Example 6: An employee of the Department of Commerce who is on 
official travel may take annual leave in the morning to give an address 
at a breakfast for a candidate for partisan political office.
    Example 7: An employee may manage the political campaign of a 
candidate for public office including supervising paid and unpaid 
campaign workers.
    Example 8: While not on duty, a Federal employee may distribute 
campaign leaflets by hand to homes or parked cars even though the 
leaflet may contain information concerning where to send contributions 
among other factual material about a partisan political candidate. 
However, should a member of the public stop the employee and request 
further information about contributions, the employee should refer that 
request to another campaign worker who is not a Federal employee.
    Example 9: An employee may place in his or her front yard a sign or 
banner supporting a partisan political candidate.

[59 FR 48769, Sept. 23, 1994, as amended at 61 FR 35100, July 5, 1996]



Sec. 734.206  Participation in elections.

    An employee may:
    (a) Register and vote in any election;
    (b) Act as recorder, watcher, challenger, or similar officer at 
polling places;
    (c) Serve as an election judge or clerk, or in a similar position; 
and
    (d) Drive voters to polling places for a partisan political 
candidate, partisan political group, or political party.

    Example: An employee may drive voters to polling places in a 
privately owned vehicle, but not in a Government-owned or leased 
vehicle.



Sec. 734.207  Candidacy for public office.

    An employee may:
    (a) Run as an independent candidate in a partisan election covered 
by 5 CFR part 733; and
    (b) Run as a candidate in a nonpartisan election.

    Example 1: An employee who is a candidate for public office in a 
nonpartisan election is not barred by the Hatch Act from soliciting, 
accepting, or receiving political contributions for his or her own 
campaign; however, such solicitation, acceptance, or receipt must comply 
with part 2635 of this title as well as any other directives that may 
apply, e.g., The Federal Property Management Regulations in 41 CFR 
chapter 101.



Sec. 734.208  Participation in fundraising.

    (a) An employee may make a political contribution to a political 
party, political group, campaign committee of a candidate for public 
office in a partisan election and multicandidate political committee of 
a Federal labor or Federal employee organization.
    (b) Subject to the prohibitions stated in section 734.303, an 
employee may--
    (1) Attend a political fundraiser;
    (2) Accept and receive political contributions in a partisan 
election described in 5 CFR part 733;
    (3) Solicit, accept, or receive uncompensated volunteer services 
from any individual; and
    (4) Solicit, accept, or receive political contributions, as long as:
    (i) The person who is solicited for a political contribution belongs 
to the same Federal labor organization, or Federal employee 
organization, as the employee who solicits, accepts, or receives the 
contribution;
    (ii) The person who is solicited for a political contribution is not 
a subordinate employee; and
    (iii) The request is for a contribution to the multicandidate 
political committee of a Federal labor organization or to the 
multicandidate political committee of a Federal employee organization in 
existence on October 6, 1993.
    (c) Subject to the provisions of Sec. 734.306, an employee may make 
a financial contribution to a political action committee through a 
voluntary allotment made under Sec. 550.311(b) of this chapter, if the 
head of the employee's agency permits agency employees to make such 
allotments to political action committees.
    (d) An employee who is covered under this subpart and is a payroll 
official in an agency where employees are permitted to make allotments 
to political action committees may process the completed direct deposit 
forms for voluntary allotments which have been made to such committees 
under section 550.311(b) of this title.


[[Page 44]]


    Example 1: An GS-12 employee of the Department of Treasury who 
belongs to the same Federal employee organization as a GS-5 employee of 
the Department of Treasury may solicit a contribution for the 
multicandidate political committee when she is not on duty as long as 
the GS-5 employee is not under the supervisory authority of the GS-12 
employee.
    Example 2: An employee of the National Park Service may give a 
speech or keynote address at a political fundraiser when he is not on 
duty, as long as the employee does not solicit political contributions, 
as prohibited in Sec. 734.303(b) of this part.
    Example 3: An employee's name may appear on an invitation to a 
political fundraiser as a guest speaker as long as the reference in no 
way suggests that the employee solicits or encourages contributions, as 
prohibited in Sec. 734.303 of this part and described in example 2 
thereunder. However, the employee's official title may not appear on 
invitations to any political fundraiser, except that an employee who is 
ordinarily addressed using a general term of address, such as ``The 
Honorable,'' may use or permit the use of that term of address for such 
purposes.
    Example 4: When an employee of the Department of Transportation is 
not on duty, he or she may engage in activities which do not require 
personal solicitations of contributions, such as organizing mail or 
phone solicitations for political contributions. Activities such as 
stuffing envelopes with requests for political contributions also are 
permitted. However, he or she may not sign the solicitation letter 
unless the solicitation is for the contribution of uncompensated 
volunteer services of individuals who are not subordinate employees. An 
employee may not knowingly send to his or her subordinate employees a 
letter soliciting the contribution of their uncompensated services. 
However, he or she may sign a letter that solicits contributions of 
uncompensated volunteer services as part of a general mass mailing that 
might reach a subordinate employee, as long as the mass mailing is not 
specifically targeted to his or her subordinate employees.
    Example 5: An employee who is not on duty may participate in a phone 
bank soliciting the uncompensated services of individuals. However, an 
employee may not make phone solicitations for political contributions 
even anonymously.
    Example 6: An employee of the Department of Agriculture who is on 
official travel and is not in a pay status nor officially representing 
the Department may write invitations in his hotel room to a meet-the-
candidate reception which he plans to hold in his home.
    Example 7: An employee may serve as an officer or chairperson of a 
political fundraising organization or committee as long as he or she 
does not personally solicit, accept, or receive political contributions. 
For example, the employee may organize or manage fundraising activities 
as long as he or she does not violate the above prohibition.
    Example 8: The head of a cabinet-level department may contribute one 
of her worn-out cowboy boots to the campaign committee of a Senatorial 
candidate to be auctioned off in a fundraising raffle for the benefit of 
the candidate's campaign.
    Example 9: An employee may help organize a fundraiser including 
supplying names for the invitation list as long as he or she does not 
personally solicit, accept, or receive contributions.
    Example 10: An employee on travel may engage in political activity 
when he or she is not on duty without taking annual leave.
    Example 11: A Federal employee may solicit, accept, or receive the 
uncompensated volunteer services of any individual, except a subordinate 
employee, to work on behalf of a partisan political candidate or 
organization. However, such solicitation, acceptance, or receipt must 
comply with part 2635 of this title as well as any other directives that 
may apply, e.g., the Federal Property Management Regulations in 41 CFR 
chapter 101. Further, Federal employees are subject to criminal anti-
coercion provisions found at 18 U.S.C. 610.
    Example 12: An employee who desires to make a financial contribution 
to a political action committee through a voluntary allotment personally 
may obtain blank direct deposit forms from his or her payroll office. 
However, he or she may not complete the form while he or she is on duty, 
on Federal property, or in a Federally owned or leased vehicle. 
Moreover, he or she may not personally deliver his or her completed 
form, or the completed form of another employee, to the payroll office. 
However, the employee may mail his or her direct deposit form to his or 
her agency payroll office.
    Example 13: Employees who are permitted to solicit, accept, or 
receive political contributions under the circumstances described in 
Sec. 734.208(b)(4) may not solicit, accept, or receive such 
contributions either while they are on duty, or while they are on 
Federal premises, or both.

[59 FR 48769, Sept. 23, 1994, as amended at 61 FR 35100, July 5, 1996]



                     Subpart C_Prohibited Activities



Sec. 734.301  Exclusion from coverage.

    This subpart does not apply to employees in the agencies and 
positions described in subpart D of this part.

[[Page 45]]



Sec. 734.302  Use of official authority; prohibition.

    (a) An employee may not use his or her official authority or 
influence for the purpose of interfering with or affecting the result of 
an election.
    (b) Activities prohibited by paragraph (a) of this section include, 
but are not limited to:
    (1) Using his or her official title while participating in political 
activity;
    (2) Using his or her authority to coerce any person to participate 
in political activity; and
    (3) Soliciting, accepting, or receiving uncompensated individual 
volunteer services from a subordinate for any political purpose.

    Example 1: An employee who signs a letter seeking uncompensated 
volunteer services from individuals may not identify himself or herself 
by using his or her official title. However, the employee may use a 
general form of address, such as ``The Honorable.''
    Example 2: A noncareer member of the Senior Executive Service, or 
another employee covered by this subpart, may not ask his or her 
subordinate employees to provide uncompensated individual volunteer 
services for a political party, partisan political group, or candidate 
for partisan political office. Moreover, he or she may not accept or 
receive such services from a subordinate employee who offers to donate 
them.
    Example 3: An employee may not require any person to contribute to a 
partisan political campaign in order to win a Federal contract:

[61 FR 35100, July 5, 1996]



Sec. 734.303  Fundraising.

    An employee may not knowingly:
    (a) Personally solicit, accept or receive a political contribution 
from another person, except under the circumstances specified in Sec. 
734.208(b);
    (b) Personally solicit political contributions in a speech or 
keynote address given at a fundraiser;
    (c) Allow his or her official title to be used in connection with 
fundraising activities; or
    (d) Solicit, accept, or receive uncompensated volunteer services 
from an individual who is a subordinate.

    Example 1: An employee may not host a fundraiser at his or her home. 
However, a spouse who is not covered under this part may host such a 
fundraiser and the employee may attend. The employee may not personally 
solicit contributions to the fundraiser. Moreover, the employee may not 
accept, or receive political contributions, except under the 
circumstances stated in Sec. 734.208(b).
    Example 2: An employee's name may not appear on an invitation to a 
fundraiser as a sponsor of the fundraiser, or as a point of contact for 
the fundraiser.
    Example 3: An employee may not ask a subordinate employee to 
volunteer on behalf of a partisan political campaign.
    Example 4: An employee may not call the personnel office of a 
business or corporation and request that the corporation or business 
provide volunteers or services for a campaign. However, an employee may 
call an individual who works for a business or corporation and request 
that specific individual's services for a campaign.



Sec. 734.304  Candidacy for public office.

    An employee may not run for the nomination or as a candidate for 
election to partisan political office, except as specified in Sec. 
734.207.



Sec. 734.305  Soliciting or discouraging the political participation 
of certain persons.

    (a) An employee may not knowingly solicit or discourage the 
participation in any political activity of any person who has an 
application for any compensation grant, contract, ruling, license, 
permit, or certificate pending before the employee's employing office.
    (b) An employee may not knowingly solicit or discourage the 
participation in any political activity of any person who is the subject 
of, or a participant in, an ongoing audit, investigation, or enforcement 
action being carried out by the employee's employing office.
    (c) Each agency or instrumentality of the United States or District 
of Columbia Government shall determine when a matter is pending and 
ongoing within employing offices of the agency or instrumentality for 
the purposes of this part.

    Example 1: An employee with agency-wide responsibility may address a 
large, diverse group to seek support for a partisan political candidate 
as long as the group has not been specifically targeted as having 
matters before the employing office.
    Example 2: An employee of the Federal Deposit Insurance Corporation 
(FDIC) may not solicit or discourage the participation of an insured 
financial institution or its employees if the institution is undergoing 
examination by the FDIC.

[[Page 46]]

    Example 3: An employee of the Food and Drug Administration may 
address a banquet for a partisan political candidate which is sponsored 
by the candidate's campaign committee, even though the audience includes 
three individuals who are employed by or are officials of a 
pharmaceutical company. However, she may not deliver the address if the 
banquet is sponsored by a lobbying group for pharmaceutical companies, 
of if she knows that the audience will be composed primarily of 
employees or officials of such companies.



Sec. 734.306  Participation in political activities while on duty, in 
uniform, in any room or building occupied in the discharge of official 
duties, or using a Federal vehicle.

    (a) An employee may not participate in political activities subject 
to the provisions of subpart E of this part:
    (1) While he or she is on duty;
    (2) While he or she is wearing a uniform, badge, insignia, or other 
similar item that identifies the employing agency or instrumentality or 
the position of the employee;
    (3) While he or she is in any room or building occupied in the 
discharge of official duties by an individual employed or holding office 
in the Government of the United States or any agency or instrumentality 
thereof; or
    (4) While using a Government-owned or leased vehicle or while using 
a privately-owned vehicle in the discharge of official duties.
    (b) The prohibitions in paragraph (a) of this section do not apply 
to employees covered under subpart E of this part.

    Example 1: While on leave without pay, an employee is not subject to 
the prohibition in Sec. 734.306(a)(1) because he or she is not on duty. 
However, while on leave without pay, the employee remains subject to the 
other prohibitions in subpart C.
    Example 2: A Postal Service employee who uses her private vehicle to 
deliver mail may place a political bumper sticker on the vehicle, as 
long as she covers the bumper sticker while she is on duty.
    Example 3: An employee who uses his or her privately owned vehicle 
on a recurrent basis for official business may place a partisan 
political bumper sticker on the vehicle, as long as he or she covers the 
bumper sticker while the vehicle is being used for official duties.
    Example 4: An employee who uses his or her privately owned vehicle 
on official business, must cover any partisan political bumper sticker 
while the vehicle is being used for official duties, if the vehicle is 
clearly identified as being on official business.
    Example 5: A noncareer member of the Senior Executive Service, or 
any other employee covered by this subpart, who uses his or her 
privately owned vehicle only on an occasional basis to drive to another 
Federal agency for a meeting, or to take a training course, is not 
required to cover a partisan political bumper sticker on his or her 
vehicle.
    Example 6: An employee may not place a partisan political bumper 
sticker on any Government owned or Government leased vehicle.
    Example 7: An employee may place a bumper sticker on his or her 
privately owned vehicle and park his or her vehicle in a parking lot of 
an agency or instrumentality of the United States Government or in a 
non-Federal facility for which the employee receives a subsidy from his 
or her employing agency or instrumentality.
    Example 8: When an agency or instrumentality of the United States 
Government leases offices in a commercial building and that building 
includes the headquarters of a candidate for partisan political office, 
an employee of that agency or instrumentality may do volunteer work, 
when he or she is not on duty, at the candidate's headquarters and in 
other areas of the building that have not been leased by the Government.
    Example 9: A Government agency or instrumentality leases all of the 
space in a commercial building; employees may not participate in 
political activity in the public areas of the leased building.
    Example 10: An employee of the National Aeronautics and Space 
Administration (NASA) may not engage in political activities while 
wearing a NASA flight patch, NASA twenty-year pin or anything with an 
official NASA insignia.
    Example 11: If a political event begins while an employee is on duty 
and continues into the time when he or she is not on duty, the employee 
must wait until he or she is not on duty to attend the event. 
Alternatively, an employee may request annual leave to attend the 
political event when it begins.
    Example 12: Officials of labor organizations who have been given 
official time to perform representational duties are on duty.
    Example 13: An employee may stuff envelopes for a mailing on behalf 
of a candidate for partisan political office while the employee is 
sitting in the park during his or her lunch period if he or she is not 
considered to be on duty during his or her lunch period.
    Example 14: An employee who works at home may engage in political 
activities at home when he or she is not in a pay status or representing 
the Government in an official capacity.
    Example 15: An employee who is appointed by the President by and 
with the advice and

[[Page 47]]

consent of the Senate (PAS) may attend a political event with any non-
PAS employee whose official duties do not require accompanying the PAS 
as long as the non-PAS employee is not on duty.
    Example 16: A noncareer member of the Senior Executive Service, or 
any other employee covered by this subpart, may not wear partisan 
political buttons or display partisan political pictures, signs, 
stickers, or badges while he or she is on duty or at his or her place of 
work.
    Example 17: An employee may not engage in political activity in the 
cafeteria of a Federal building, even if the cafeteria is in space 
leased by a contractor.
    Example 18: An employee who contributes financially to a political 
action committee through a voluntary allotment made under Sec. 
550.311(b) of this title may not complete the direct deposit forms while 
he or she is on duty, in a ``room or building'' defined in Sec. 734.101 
or in a Federally owned or leased vehicle.
    Example 19: An employee who contributes financially to a political 
action committee through a voluntary allotment may not personally 
deliver his or her completed direct deposit form, or the completed 
direct deposit form of another employee, to the payroll employees who 
would process or administer such forms. However, the employee may mail 
his or her direct deposit form to his or her agency payroll office.

[59 FR 48769, Sept. 23, 1994, as amended at 61 FR 35101, July 5, 1996]



Sec. 734.307  Campaigning for a spouse or family member.

    An employee covered under this subpart who is the spouse or family 
member of either a candidate for partisan political office, candidate 
for political party office, or candidate for public office in a 
nonpartisan election, is subject to the same prohibitions as other 
employees covered under this subpart.
    Example 1: An employee who is married to a candidate for partisan 
political office may attend a fundraiser for his or her spouse, stand in 
the receiving line, sit at the head table, and urge others to vote for 
his or her spouse. However, the employee may not personally solicit, 
accept, or receive contributions of money or the paid or unpaid services 
of a business or corporation, or sell or collect money for tickets to 
the fundraiser.
    Example 2: An employee who is the daughter of a candidate for 
partisan political office may appear in a family photograph which is 
printed in a campaign flier. She may distribute fliers at a campaign 
rally as long as she does not personally solicit contributions.
    Example 3: An employee who is married to a candidate for political 
partisan political office may appear with her spouse in a political 
advertisement or a broadcast, and urge others to vote for her spouse, as 
long as the employee does not personally solicit political 
contributions.

[59 FR 48769, Sept. 23, 1994, as amended at 61 FR 35101, July 5, 1996]



          Subpart D_Employees in Certain Agencies and Positions



Sec. 734.401  Coverage.

    (a) This subpart applies to employees in the following agencies and 
positions:
    (1) The Federal Election Commission;
    (2) The Federal Bureau of Investigation;
    (3) The Secret Service;
    (4) The Central Intelligence Agency;
    (5) The National Security Council;
    (6) The National Security Agency;
    (7) The Defense Intelligence Agency;
    (8) The Merit Systems Protection Board;
    (9) The Office of Special Counsel;
    (10) The Office of Criminal Investigation of the Internal Revenue 
Service.
    (11) The Office of Investigative Programs of the United States 
Customs Service;
    (12) The Office of Law Enforcement of the Bureau of Alcohol, 
Tobacco, and Firearms;
    (13) The Criminal Division of the Department of Justice;
    (14) The Central Imagery Office;
    (15) Career Senior Executive Service positions described in 5 U.S.C. 
3132(a)(4);
    (16) Administrative Law Judge positions described in 5 U.S.C. 5372;
    (17) Contract Appeals Board Member positions described in 5 U.S.C. 
5372a.
    (b) Employees appointed by the President by and with the advice and 
consent of the Senate in the agencies and positions described in 
paragraph (a) of this section are excluded from coverage under this 
subpart.
    (c) All employees covered under this subpart are free to engage in 
political activity to the widest extent consistent with the restrictions 
imposed by law and this subpart.

[59 FR 48769, Sept. 23, 1994, as amended at 61 FR 35101, July 5, 1996]

[[Page 48]]



Sec. 734.402  Expression of an employee's individual opinion.

    Each employee covered under this subpart retains the right to 
participate in any of the following political activities, as long as 
such activity is not performed in concert with a political party, 
partisan political group, or a candidate for partisan political office:
    (a) Express his or her opinion as an individual privately and 
publicly on political subjects and candidates;
    (b) Display a political picture, sign, sticker, badge, or button, as 
long as these items are displayed in accordance with the provisions of 
Sec. 734.406;
    (c) Sign a political petition as an individual;
    (d) Be politically active in connection with a question which is not 
specifically identified with a political party, such as a constitutional 
amendment, referendum, approval of a municipal ordinance, or any other 
question or issue of a similar character; and
    (e) Otherwise participate fully in public affairs, except as 
prohibited by other Federal law, in a manner which does not compromise 
his or her efficiency or integrity as an employee or the neutrality, 
efficiency, or integrity of the agency or instrumentality of the United 
States Government in which he or she is employed.

    Example 1: An employee may purchase air time on a radio or 
television station to endorse a partisan political candidate. However, 
he or she may not endorse such a candidate in a commercial or program 
which is sponsored by the candidate's campaign committee, a political 
party, or a partisan political group.
    Example 2: An employee may address a political convention or rally 
but not on behalf, or at the request of, a political party, partisan 
political group, or an individual who is running for the nomination or 
as a candidate for election to partisan political office.
    Example 3: An employee may print at her own expense one thousand 
fliers which state her personal opinion that a partisan political 
candidate is the best suited for the job. She may distribute the fliers 
at a shopping mall on the weekend. However, she may not distribute 
fliers printed by the candidate's campaign committee, a political party, 
or a partisan political group.
    Example 4: An employee may place in his or her yard a sign 
supporting a candidate for partisan political office.
    Example 5: An employee may stand outside of a political party 
convention with a homemade sign which states his or her individual 
opinion that one of the candidates for nomination is the best qualified 
candidate.
    Example 6: An employee, including a career SES employee, may wear a 
button with a partisan political theme when the employee is not on duty 
or at his or her place of work.

[59 FR 48769, Sept. 23, 1994, as amended at 61 FR 35101, July 5, 1996]



Sec. 734.403  Participation in elections.

    Each employee covered under this subpart retains the right to:
    (a) Register and vote in any election;
    (b) Take an active part, as a candidate or in support of a 
candidate, in a nonpartisan election; and
    (c) Serve as an election judge or clerk, or in a similar position, 
to perform nonpartisan duties as prescribed by State or local law.



Sec. 734.404  Participation in political organizations.

    (a) Each employee covered under this subpart retains the right to:
    (1) Participate in the nonpartisan activities of a civic, community, 
social, labor, or professional organization, or of a similar 
organization;
    (2) Be a member of a political party or other partisan political 
group and participate in its activities to the extent consistent with 
other Federal law;
    (3) Attend a political convention, rally, fund-raising function, or 
other political gathering; and
    (4) Make a financial contribution to a political party, partisan 
political group, or to the campaign committee of a candidate for 
partisan political office.
    (b) Subject to the provisions in Sec. 734.406, an employee covered 
under this subpart may make a financial contribution to a political 
action committee through a voluntary allotment made under Sec. 
550.311(b) of this chapter if the head of the employee's agency permits 
agency employees to make such allotments to political action committees.
    (c) An employee who is covered under this subpart and is a payroll 
official in an agency where employees are permitted to make allotments 
to political action committees may process the completed direct deposit 
forms for voluntary allotments which have been

[[Page 49]]

made to such committees under Sec. 550.311(b) of this chapter.

    Example 1: An employee, or a noncareer SES employee who is subject 
to subpart D of part 734, may attend a political convention or rally 
solely as a spectator. However, the employee and noncareer SES employee 
may not participate in demonstrations or parades which are sponsored by 
a political party, a partisan political group, or an individual who is 
running for nomination to be a candidate for partisan political office.
    Example 2: An employee may attend a political party's annual 
barbecue, but he or she may not organize, distribute invitations to, or 
sell tickets to the barbecue.
    Example 3: An employee who desires to contribute to a political 
action committee through an allotment personally may obtain blank direct 
deposit forms from his or her payroll office. The employee may not 
complete the direct deposit form while he or she is on duty, on Federal 
property, or in a Federally owned or leased vehicle. The employee also 
may not personally deliver his or her completed direct deposit form, or 
the completed direct deposit form of another employee, to his or her 
payroll office. However, the employee may mail the completed form to his 
or her agency payroll office.

[61 FR 35101, July 5, 1996]



Sec. 734.405  Campaigning for a spouse or family member.

    An employee covered under this subpart who is the spouse or family 
member of either a candidate for partisan political office, or a 
candidate for political party office, may appear in photographs of the 
candidate's family which might appear in a political advertisement, a 
broadcast, campaign literature, or similar material. A spouse or a 
family member who is covered by the Hatch Act Reform Amendments also may 
attend political functions with the candidate. However, the spouse or 
family member may not distribute campaign literature or solicit, accept, 
or receive political contributions.

    Example 1: An employee who is the spouse of a candidate for partisan 
political office may stand in the receiving line and sit at the head 
table during a political dinner honoring the spouse.
    Example 2: An employee who is the daughter of a candidate for 
partisan political office may appear in a family photograph which is 
printed in a campaign flier, but she may not distribute the flier at a 
campaign rally.



Sec. 734.406  Participation in political activities while on duty, in 
uniform, in any room or building occupied in the discharge of official 
duties, or using a Federal vehicle; prohibition.

    (a) An employee covered under this subpart may not participate in 
political activities:
    (1) While he or she is on duty;
    (2) While he or she is wearing a uniform, badge, or insignia that 
identifies the employing agency or instrumentality or the position of 
the employee;
    (3) While he or she is in any room or building occupied in the 
discharge of official duties by an individual employed or holding office 
in the Government of the United States or any agency or instrumentality 
thereof; or
    (4) While using a Government-owned or leased vehicle or while using 
a privately owned vehicle in the discharge of official duties.

    Example 1: An employee who uses his or her privately owned vehicle 
on a recurrent basis for official business may place a bumper sticker on 
the vehicle, as long as he or she covers the bumper sticker while the 
vehicle is being used for official duties.
    Example 2: An employee who uses his or her privately owned vehicle 
on official business, must cover any partisan political bumper sticker 
while the vehicle is being used for official duties, if the vehicle is 
clearly identified as being on official business.
    Example 3: An employee or career SES employee who uses his or her 
privately owned vehicle only on an occasional basis to drive to another 
Federal agency for a meeting, or to take a training course, if not 
required to cover a partisan political bumper sticker on his or her 
vehicle.
    Example 4: An employee may not place a partisan political bumper 
sticker on any Government owned or Government leased vehicle.
    Example 5: An employee may place a bumper sticker on his or her 
privately owned vehicle and park the vehicle in a parking lot of an 
agency or instrumentality of the United States Government or in a non-
Federal facility for which the employee receives a subsidy from his or 
her employing agency or instrumentality.
    Example 6: An employee, or noncareer SES employee who is subject to 
subpart D of this part 734, may not wear partisan political buttons or 
display partisan political pictures, signs, stickers, or badges while he 
or she is on duty or at his or her place of work.
    Example 7: An employee who contributes financially to a political 
action committee

[[Page 50]]

through a voluntary allotment made under Sec. 550.311(b) of this title 
may not complete the direct deposit forms while he or she is on duty, in 
a ``room or building'' defined in Sec. 734.101, or in a Federally owned 
or leased vehicle.
    Example 8: An employee who contributes financially to a political 
action committee may not personally deliver his or her completed direct 
deposit form, or the completed direct deposit form of another employee, 
to the payroll employees who would process or administer such forms. 
However, the employee may mail his or her direct deposit form to his or 
her agency payroll office.

    (b) [Reserved]

[59 FR 48769, Sept. 23, 1994, as amended at 61 FR 35102, July 5, 1996]



Sec. 734.407  Use of official authority; prohibition.

    An employee covered under this subpart may not use his or her 
official authority or influence for the purpose of interfering with or 
affecting the result of an election.



Sec. 734.408  Participation in political management and political 
campaigning; prohibitions.

    An employee covered under this subpart may not take an active part 
in political management or in a political campaign, except as permitted 
by subpart D of this part.

[61 FR 35102, July 5, 1996]



Sec. 734.409  Participation in political organizations; prohibitions.

    An employee covered under this subpart may not:
    (a) Serve as an officer of a political party, a member of a 
national, State, or local committee of a political party, an officer or 
member of a committee of a partisan political group, or be a candidate 
for any of these positions;
    (b) Organize or reorganize a political party organization or 
partisan political group;
    (c) Serve as a delegate, alternate, or proxy to a political party 
convention; and
    (d) Address a convention, caucus, rally, or similar gathering of a 
political party or partisan political group in support of or in 
opposition to a candidate for partisan political office or political 
party office, if such address is done in concert with such a candidate, 
political party, or partisan political group.



Sec. 734.410  Participation in political fundraising; prohibitions.

    An employee covered under this subpart may not:
    (a) Solicit, accept, or receive political contributions; or
    (b) Organize, sell tickets to, promote, or actively participate in a 
fundraising activity of a candidate for partisan political office or of 
a political party, or partisan political group.



Sec. 734.411  Participation in political campaigning; prohibitions.

    An employee covered under this subpart may not:
    (a) Take an active part in managing the political campaign of a 
candidate for partisan political office or a candidate for political 
party office;
    (b) Campaign for partisan political office;
    (c) Canvass for votes in support of or in opposition to a candidate 
for partisan political office or a candidate for political party office, 
if such canvassing is done in concert with such a candidate, or of a 
political party, or partisan political group;
    (d) Endorse or oppose a candidate for partisan political office or a 
candidate for political party office in a political advertisement, 
broadcast, campaign literature, or similar material if such endorsement 
or opposition is done in concert with such a candidate, political party, 
or partisan political group;
    (e) Initiate or circulate a partisan nominating petition.



Sec. 734.412  Participation in elections; prohibitions.

    An employee covered under this subpart may not:
    (a) Be a candidate for partisan political office;
    (b) Act as recorder, watcher, challenger, or similar officer at 
polling places in concert with a political party, partisan political 
group, or a candidate for partisan political office;
    (c) Drive voters to polling places in concert with a political 
party, partisan

[[Page 51]]

political group, or a candidate for partisan political office.

[59 FR 48769, Sept. 23, 1994, as amended by 61 FR 35102, July 5, 1996]



Sec. 734.413  Employees of the Federal Election Commission; prohibitions.

    (a) An employee of the Federal Election Commission may not request 
or receive from, or give to, an employee, a Member of Congress, or an 
officer of a uniformed service a political contribution.
    (b) This section does not cover employee of the Federal Election 
Commission who are appointed by the President by and with the advice and 
consent of the Senate.



  Subpart E_Special Provisions for Certain Presidential Appointees and 
 Employees Paid from the Appropriation for the Executive Office of the 
                                President



Sec. 734.501  Permitted and prohibited activities.

    Except as otherwise specified in this part 734, employees who are 
appointed by the President by and with the advice and consent of the 
Senate are subject to the provisions of subparts B and C of this part.



Sec. 734.502  Participation in political activity while on duty, in 
uniform, in any room or building occupied in the discharge of official 
duties, or using a Federal vehicle.

    (a) This section applies to an employee:
    (1) The duties and responsibilities of whose position continue 
outside normal duty hours and while away from the normal duty post; and
    (2) Who is--
    (i) An employee paid from an appropriation for the Executive Office 
of President; or
    (ii) An employee appointed by the President by and with the advice 
and consent of the Senate whose position is located within the United 
States, who determines policies to be pursued by the United States in 
relations with foreign powers or in the nationwide administration of 
Federal laws;
    (b) For the purposes of this subpart, normal duty hours and normal 
duty post will be determined by the head of each agency or 
instrumentality of the United States or District of Columbia Government.
    (c) An employee described in paragraph (a) of this section may 
participate, subject to any restrictions that may be imposed in 
accordance with Sec. 734.104, in political activities:
    (1) While he or she is on duty;
    (2) While he or she is wearing a uniform, badge, or insignia that 
identifies the agency or instrumentality of the United States Government 
or the position of the employee;
    (3) While he or she is in any room or building occupied in the 
discharge of official duties by an individual employed or holding office 
in the Government of the United States or any agency or instrumentality 
thereof; or
    (4) While using a Government-owned or leased vehicle or while using 
a privately-owned vehicle in the discharge of official duties.
    (d) An employee, to whom subpart E of this part does not apply, who 
is not on duty may participate in political activities in rooms of the 
White House or the Residence of the Vice President which are part of the 
Residence area or which are not regularly used solely in the discharge 
of official duties.

    Example 1: An Inspector General is appointed under the Inspector 
General Act of 1978, as amended. According to section 3(c) of that Act, 
he or she does not qualify as an employee who determines policies to be 
pursued by the United States in the nationwide administration of Federal 
laws. therefore, he or she may not participate in political activities 
while on duty, while wearing a uniform, badge, or insignia that 
identifies his or her office or position, while in any room or building 
occupied in the discharge of official duties, or while using a 
Government-owned or leased vehicle or while using a privately-owned 
vehicle in the discharge of official duties.
    Example 2: An employee who is covered by this subpart and wears a 
uniform as an incident of her office may wear the uniform while she is 
giving a speech at a political fundraiser.
    Example 3: The head of an executive department may hold a partisan 
political meeting or host a reception which is not a fundraiser in his 
conference room during normal business hours.

[[Page 52]]

    Example 4: An employee accompanies the Secretary of Transportation 
to a political party convention as part of the Secretary's security or 
administrative detail. The employee is considered to be on duty while 
protecting or performing official duties for the Secretary regardless of 
the nature of the function that the Secretary is attending.
    Example 5: An American Ambassador overseas obtains authorization 
from the Department of State to depart post in order to take a vacation 
away from post. During the period she is authorized to be on vacation 
away from post, she is not considered to be on duty for the purpose of 
the Hatch Act Reform Amendments and may engage in any political activity 
permitted under the Hatch Act Reform Amendments of 1993.

[59 FR 48769, Sept. 23, 1994, as amended at 61 FR 35102, July 5, 1996]



Sec. 734.503  Allocation and reimbursement of costs associated with 
political activities.

    (a) The costs associated with the political activities described in 
Sec. 733.502(c) of this chapter may not be paid for by money derived 
from the Treasury of the United States. Costs associated with a 
political activity are deemed not to be paid for by money derived from 
the Treasury of the United States if the Treasury is reimbursed for the 
costs within a reasonable period of time.
    (b) For the purposes of this section, costs associated with a 
political activity do not include any costs that the Government would 
have or have incurred regardless of whether the activity was political. 
Examples of such costs are:
    (1) The compensation of the employee described in Sec. 734.502(a);
    (2) The value of any office or other real property owned or leased 
by the Government;
    (3) The compensation and expenses of any Government employee that is 
required in the performance of his or her duties to accompany or assist 
the person engaging in the political activity; and
    (4) The cost of special security arrangements for the person 
engaging in the political activity, including special transportation 
vehicles or methods.
    (c)(1) An employee covered under this subpart must apportion the 
costs of mixed travel based on the time spent on political activities 
and the time spent performing official duties. Prorating the cost of 
travel involves determining the ``total activity time'' which is the 
amount of time actually spent by the employee in meetings, receptions, 
rallies, and similar activities. Time spent in actual travel, private 
study, or rest and recreation is not included in the computation of the 
``total activity time''. The proration of the cost then is determined 
based on how the ``total activity time'' was spent. The formula is as 
follows:

Time spent in official meetings, receptions, etc. + Time spent in 
    political meetings, receptions, rallies = Total activity time

Time spent in official activity / Total activity time = Percentage of 
    trip that is official
Time spent in political activity / Total activity time = Percentage of 
    trip that is political

The percentage figure that represents the political portion of the trip 
is then multiplied by the amount that would be reimbursed to the 
Government if all of the travel was political. The product of that 
calculation represents the amount to be paid by the political entity or 
organization.

    (2) The allocation method must be applied to all of the relevant 
costs of mixed travel.
    (3) Expenses that are associated specifically with a political 
activity and not with any official activity must be treated as 
political, and expenses associated specifically with an official 
activity and not with any political activity must be treated as 
official.
    (4) In allocating the costs of travel other than air travel, the 
allocation formula should be applied to any Government maximum for that 
type of expenditure.
    (5) The determination of the proper amount of allocation must be 
based on the facts and circumstances involved.
    (6) In the event that a minor, clearly incidental percentage of the 
activity of a mixed trip is devoted to either official or political 
activity, e.g. less than 3%, the entire trip should be treated as if it 
was wholly of the type represented by the substantial figure. The 
balance should be treated as de minimis and

[[Page 53]]

need not be reimbursed as political or charged as official.
    (d) For any cost of a political activity of an employee that is 
required to be reported to the Federal Election Commission under the 
Federal Election Campaign Act (FECA) or the Presidential Election 
Campaign Fund Act (PECFA), the employee shall use the same method of 
allocation as used under the FECA or PECFA and regulations thereunder in 
lieu of the allocation method in paragraph (c) of this section.

    Example 1: The Secretary, an employee described by section 
7324(b)(2) of title 5 of the United States Code, holds a catered 
political activity (other than a fundraiser) in her office. Her security 
detail attends the reception as part of their duty to provide security 
for her. The Secretary will not be in violation of the Hatch Act Reform 
Amendments if the costs of her office, her compensation, and her 
security detail are not reimbursed to the Treasury. A violation of the 
Hatch Act Amendments occurs if Government funds, including reception or 
discretionary funds, are used to cater the political activity, unless 
the Treasury is reimbursed for the cost of the catering within a 
reasonable time.
    Example 2: There should be no allocation between official and 
political funds for a sound system rented for a single event.
    Example 3: If on a mixed trip a Government employee is only entitled 
to $26 per diem for food on a wholly official trip and the trip is 50% 
political and 50% official, the Government share would be 50% of $26, 
not 50% of the actual amount spent.
    Example 4: The President is transported by special motorcade to and 
from the site of the political event. The expense of the motorcade is 
for special security arrangements. Thus, it would not be a violation of 
the Hatch Act Reform Amendments if the costs of the security 
arrangements, including the cost of the motorcade, are not reimbursed to 
the Treasury.



Sec. 734.504  Contributions to political action committees through 
voluntary payroll allotments prohibited.

    An employee described in Sec. 734.502(a) may not financially 
contribute to a political action committee through a voluntary allotment 
made under Sec. 550.311(b) of this title.

[61 FR 35102, July 5, 1996]



    Subpart F_Employees Who Work on An Irregular or Occasional Basis



Sec. 734.601  Employees who work on an irregular or occasional basis.

    An employee who works on an irregular or occasional basis or is a 
special Government employee as defined in 18 U.S.C. 202(a) is subject to 
the provisions of the applicable subpart of this part when he or she is 
on duty.

    Example: An employee appointed to a special commission or task force 
who does not have a regular tour of duty may run as a partisan political 
candidate, but may actively campaign only when he or she is not on duty.



             Subpart G_Related Statutes and Executive Orders



Sec. 734.701  General.

    In addition to the provisions regulating political activity set 
forth in subparts A through G of this part, there are a number of 
statutes and Executive orders that establish standards to which the 
political activity of an employee, a Federal labor organization, a 
Federal employee organization, and a multicandidate political committee 
must conform. The list set forth in Sec. 734.702 references some of the 
more significant of those statutes. It is not comprehensive and includes 
only references to statutes of general applicability.



Sec. 734.702  Related statutes and Executive orders.

    (a) The prohibition against offering anything of value in 
consideration of the use or promise of use of influence to procure 
appointive office (18 U.S.C. 210).
    (b) The prohibition against solicitation or acceptance of anything 
of value to obtain public office for another (18 U.S.C. 211).
    (c) The prohibition against intimidating, threatening, or coercing 
voters in Federal elections (18 U.S.C. 594).
    (d) The prohibition against use of official authority to interfere 
with a Federal election by a person employed in any administrative 
position by the United States in connection with any

[[Page 54]]

activity financed in whole or in part by Federal funds (18 U.S.C. 595).
    (e) The prohibition against the promise of employment, compensation, 
or benefits from Federal funds in exchange for political activity (18 
U.S.C. 600).
    (f) The prohibition against the deprivation of or threat of 
deprivation of employment in exchange for political contributions (18 
U.S.C. 601).
    (g) The prohibition against soliciting political contributions (18 
U.S.C. 602).
    (h) The prohibition against making certain political contributions 
(18 U.S.C. 603).
    (i) The prohibition against soliciting or receiving assessments, 
subscriptions, or contributions for political purposes from persons on 
Federal relief or work relief (18 U.S.C. 604).
    (j) The prohibition against disclosing and receiving lists or names 
of persons on relief for political purposes (18 U.S.C. 605).
    (k) The prohibition against intimidating employees to give or 
withhold a political contribution (18 U.S.C. 606).
    (l) The prohibition against soliciting political contributions in 
navy yards, forts, or arsenals (18 U.S.C. 607).
    (m) The prohibition against coercing employees of the Federal 
Government to engage in, or not to engage in, any political activity (18 
U.S.C. 610).
    (n) The prohibition against certain personnel practices (5 U.S.C. 
2302).
    (o) The prohibition against making, requesting, considering, or 
accepting political recommendations (5 U.S.C. 3303).
    (p) The prohibitions against misuse of a Government vehicle (31 
U.S.C. 1344).
    (q) The requirements and prohibitions stated in the Federal Election 
Campaign Act (2 U.S.C. 431-455).
    (r) The prohibitions against soliciting for gifts to superiors, 
giving donations for such gifts, and accepting gifts from employees who 
receive a lower rate of pay (5 U.S.C. 7351).
    (s) The prohibitions against soliciting or accepting things of value 
from specified persons (5 U.S.C. 7353).
    (t) The prohibitions and requirements stated in the Ethics in 
Government Act of 1978 (5 U.S.C. App.) and Executive Order 12674 (54 FR 
15159-15162; 3 CFR 1989 Comp. 215-218) as modified by Executive Order 
12731 (55 FR 42547-42550; 3 CFR 1990 Comp. 306-311).



PART 735_EMPLOYEE RESPONSIBILITIES AND CONDUCT--Table of Contents




                      Subpart A_General Provisions

Sec.
735.101 Definitions.
735.102 Disciplinary action.
735.103 Other regulations pertaining to conduct.

                     Subpart B_Standards of Conduct

735.201 Gambling.
735.202 Safeguarding the examination process.
735.203 Conduct prejudicial to the Government.

    Authority: 5 U.S.C. 7301; E.O. 12674, 54 FR 15159, 3 CFR, 1989 
Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 
Comp., p. 306.

    Source: 57 FR 56434, Nov. 30, 1992, unless otherwise noted.

    Editorial Note: Part 1001, added to this chapter at 31 FR 873, 
January 22, 1966 and revised at 32 FR 11113, Aug. 1, 1967, 36 FR 6874, 
Apr. 9, 1971, and 61 FR 36996, July 16, 1996, supplements this part 735.



                      Subpart A_General Provisions



Sec. 735.101  Definitions.

    In this part:
    Agency means an Executive agency (other than the General Accounting 
Office) as defined by 5 U.S.C. 105, the Postal Service, and the Postal 
Rate Commission.
    Employee means any officer or employee of an agency, including a 
special Government employee, but does not include a member of the 
uniformed services.
    Special Government employee means a ``special Government employee,'' 
as defined in 18 U.S.C. 202, who is employed in the executive branch, 
but does not include a member of the uniformed services.
    Uniformed services has the meaning given that term by 5 U.S.C. 
2101(3).



Sec. 735.102  Disciplinary action.

    An employee's violation of any of the regulations in subpart B of 
this part

[[Page 55]]

may be cause for disciplinary action by the employee's agency, which may 
be in addition to any penalty prescribed by law.



Sec. 735.103  Other regulations pertaining to conduct.

    In addition to the standards of conduct in subpart B of this part, 
an employee shall comply with the standards of ethical conduct in 5 CFR 
part 2635, as well as any supplemental regulation issued by the 
employee's agency under 5 CFR 2635.105. An employee's violation of those 
regulations may be cause for the employee's agency to take disciplinary 
action, or corrective action as that term is used in 5 CFR part 2635. 
Such disciplinary action or corrective action may be in addition to any 
penalty prescribed by law.



                     Subpart B_Standards of Conduct



Sec. 735.201  Gambling.

    (a) While on Government-owned or leased property or while on duty 
for the Government, an employee shall not conduct, or participate in, 
any gambling activity including the operation of a gambling device, 
conducting a lottery or pool, a game for money or property, or selling 
or purchasing a numbers slip or ticket.
    (b) This section does not preclude activities:
    (1) Necessitated by an employee's official duties; or
    (2) Under section 7 of Executive Order 12353 and similar agency-
approved activities.



Sec. 735.202  Safeguarding the examination process.

    (a) An employee shall not, either for or without compensation, 
engage in teaching, lecturing, or writing for the purpose of the 
preparation of a person or class of persons for an examination of the 
Office of Personnel Management or Board of Examiners for the Foreign 
Service that depends on information obtained as a result of the 
employee's Government employment.
    (b) This section does not preclude the preparation described in 
paragraph (a) of this section if:
    (1) The information upon which the preparation is based has been 
made available to the general public or will be made available on 
request; or
    (2) Such preparation is authorized in writing by the Director of the 
Office of Personnel Management or his or her designee, or by the 
Director General of the Foreign Service of his or her designee, as 
applicable.



Sec. 735.203  Conduct prejudicial to the Government.

    An employee shall not engage in criminal, infamous, dishonest, 
immoral, or notoriously disgraceful conduct, or other conduct 
prejudicial to the Government.



PART 736_PERSONNEL INVESTIGATIONS--Table of Contents




                             Subpart A_Scope

Sec.
736.101 Purpose and definitions.
736.102 Notice to investigative sources.
736.103 Protecting the identity of a source.
736.104 Public availability of investigative files.

                  Subpart B_Investigative Requirements

736.201 Responsibilities of OPM and other Federal agencies.

    Authority: Pub. L. 93-579; (5 U.S.C. 552a).

    Source: 56 FR 18655, Apr. 23, 1991, unless otherwise noted.



                             Subpart A_Scope



Sec. 736.101  Purpose and definitions.

    (a) Purpose. The purpose of this part is to specify certain 
requirements for personnel investigations conducted by OPM, and for 
those conducted under delegated authority from OPM. The requirements of 
this part apply to suitability and national security investigations 
conducted under parts 731 and 732 of this chapter; they also apply to 
investigations to determine eligibility or qualifications not covered in 
parts 731 and 732 of this chapter. The requirements of this part apply 
to employees in the civil service of the Executive Branch and to persons 
performing contract, voluntary or indirect services for the Federal 
Government, as set forth in subsection (b) below.

[[Page 56]]

    (b) Definitions. For the purposes of this part, (1) Federal 
employment includes the following range of services performed for the 
Federal government: (i) All employment in the competitive or excepted 
service or the Senior Executive Service in the Executive Branch; (ii) 
appointments, salaried or unsalaried, to Federal Advisory Committees or 
to membership agencies; (iii) cooperative work assignments in which the 
individual has access to Federal materials such as examination booklets, 
or performs service for, or under supervision of, a Federal agency while 
being paid by another organization such as a State or local government; 
(iv) volunteer arrangements in which the individual performs service 
for, or under the supervision of, a Federal agency; and (v) volunteer or 
other arrangements in which the individual represents the United States 
Government or any agency thereof.
    (2) Agency means any authority of the Government of the United 
States, whether or not it is within or subject to review by another 
agency, and includes any executive department, military department, 
Government corporation, Government-controlled corporation, or other 
establishment in the executive branch of the Government, or any 
independent regulatory agency.
    (3) Personnel investigation means an investigation conducted by 
written or telephone inquiries or through personal contacts to determine 
the suitability, eligibility, or qualifications of individuals for 
Federal employment, for work on Federal contracts, or for access to 
classified information or restricted areas.



Sec. 736.102  Notice to investigative sources.

    (a) The agency investigator will notify the source from whom 
information is requested, whether in person or by telephone, of the 
purpose for which the information is being sought and of the uses that 
may be made of the information. The interviewing agent must notify each 
person interviewed and each custodian of records contacted that all 
information provided, including the record source's identity, may be 
disclosed upon the request of the subject of the investigation.
    (b) The interviewing agent may grant a pledge to keep confidential 
the identity of an information source upon specific request by the 
source. In addition, the agent has discretion to offer the source a 
pledge of confidentiality where the agent believes that such a pledge is 
necessary to obtain information pertinent to the investigation. A pledge 
of confidentiality may not be assumed by the source. The interviewing 
agent may not suggest to a source that the source request 
confidentiality.
    (c) Where information is requested by written inquiry, the form, 
instructions, or correspondence used by an agency will include: (1) 
Notification that all information furnished by the source, including the 
source's identity, except for custodians of law enforcement or 
educational records, may be disclosed upon the request of the subject of 
the investigation; and (2) Space for the information source to request a 
pledge that the source's identity will not be disclosed to the subject 
of the investigation; or (3) An offer to make special arrangements to 
obtain significant information which the source feels unable to furnish 
without a promise that the source's identity will be kept confidential.
    (d) A pledge of confidentiality, if granted, extends only to the 
identity of the source, and to any information furnished by the source 
that would reveal the identity of the source.



Sec. 736.103  Protecting the identity of a source.

    When a source is granted a promise that the source's identity will 
be kept confidential, the investigative agency and all other agencies 
that receive information obtained under the promise are required to take 
all reasonable precautions to protect the source's identity. Each agency 
will prepare for its investigators and agents implementing instructions 
consistent with this part.



Sec. 736.104  Public availability of investigative files.

    (a) Investigative files are records subject to the Privacy Act and 
the Freedom of Information Act and are made available to requesters in 
accordance with the provisions of those Acts.

[[Page 57]]

    (b) Requests for investigative records are to be submitted to the 
Office of Personnel Management, Federal Investigations Processing 
Center, FOI/PA, Boyers, Pennsylvania 16018.



                  Subpart B_Investigative Requirements



Sec. 736.201  Responsibilities of OPM and other Federal agencies.

    (a) Unless provided otherwise by law, the investigation of persons 
entering or employed in the competitive service, or by career 
appointment in the Senior Executive Service, is the responsibility of 
OPM.
    (b) Requests for delegated investigating authority. Agencies may 
request delegated authority from OPM to conduct or contract out 
investigations of persons entering or employed in the competitive 
service or by career appointment in the Senior Executive Service. Such 
requests shall be made in writing by agency heads, or designees, and 
specify the reason(s) for the request.
    (c) Timing of investigations. Investigations required for positions 
must be initiated within 14 days of placement in the position except 
for: Positions designated Critical-Sensitive under part 732 of this 
chapter must be completed preplacement, or post-placement with approval 
of a waiver in accordance with Sec. 732.202(a) of this chapter; and for 
positions designated Special-Sensitive under part 732 of this chapter 
must be completed preplacement.



PART 752_ADVERSE ACTIONS--Table of Contents




Subpart A_Principal Statutory Requirements for Suspension for 14 Days or 
                                  Less

Sec.
752.101 Principal statutory requirements.

  Subpart B_Regulatory Requirements for Suspension for 14 Days or Less

752.201 Coverage.
752.202 Standard for action.
752.203 Procedures.

 Subpart C_Principal Statutory Requirements for Removal, Suspension for 
More Than 14 Days, Reduction In Grade or Pay, or Furlough for 30 Days or 
                                  Less

752.301 Principal statutory requirements.

Subpart D_Regulatory Requirements for Removal, Suspension for More Than 
   14 Days, Reduction in Grade or Pay, or Furlough for 30 Days or Less

752.401 Coverage.
752.402 Definitions.
752.403 Standard for action.
752.404 Procedures.
752.405 Appeal and grievance rights.
752.406 Agency records.

 Subpart E_Principal Statutory Requirements for Taking Adverse Actions 
                   Under the Senior Executive Service

752.501 Principal statutory requirements.

 Subpart F_Regulatory Requirements for Taking Adverse Actions Under the 
                        Senior Executive Service

752.601 Coverage.
752.602 Definitions.
752.603 Standard for action.
752.604 Procedures.
752.605 Appeal rights.
752.606 Agency records.

    Authority: 5 U.S.C. 7504, 7514, and 7543.

    Source: 45 FR 46778, July 11, 1980, unless otherwise noted.



Subpart A_Principal Statutory Requirements for Suspension for 14 Days or 
                                  Less



Sec. 752.101  Principal statutory requirements.

    This subpart incorporates the principal statutory requirements for 
suspensions for 14 days or less, found in subchapter II of chapter 75 of 
title 5, United States Code.

                       CHAPTER 75--ADVERSE ACTIONS

              Subchapter I--Suspension for 14 Days or Less

                         Sec. 7501. Definitions

    For the purpose of this subchapter--
    (1) ``employee'' means an individual in the competitive service who 
is not serving a probationary or trial period under an initial 
appointment or who has completed 1 year of

[[Page 58]]

current continuous employment in the same or similar positions under 
other than a temporary appointment limited to 1 year or less; and
    (2) ``suspension'' means the placing of an employee, for 
disciplinary reasons, in a temporary status without duties and pay.

                       Sec. 7502. Actions covered

    This subchapter applies to a suspension for 14 days or less, but 
does not apply to a suspension under section 7521 or 7532 of this title 
or any action initiated under section 1206 of this title.

                     Sec. 7503. Cause and procedure

    (a) Under regulations prescribed by the Office of Personnel 
Management, an employee may be suspended for 14 days or less for such 
cause as will promote the efficiency of the service (including 
discourteous conduct to the public confirmed by an immediate 
supervisor's report of four such instances within any one-year period or 
any other pattern of discourteous conduct).
    (b) An employee against whom a suspension for 14 days or less is 
proposed is entitled to--
    (1) an advance written notice stating the specific reasons for the 
proposed action;
    (2) a reasonable time to answer orally and in writing and to furnish 
affidavits and other documentary evidence in support of the answer;
    (3) be represented by an attorney or other representative; and
    (4) a written decision and the specific reasons therefor at the 
earliest practicable date.
    (c) Copies of the notice of proposed action, the answer of the 
employee if written, a summary thereof if made orally, the notice of 
decision and reasons therefor, and any order effecting the suspension, 
together with any supporting material, shall be maintained by the agency 
and shall be furnished to the Merit Systems Protection Board upon its 
request and to the employee affected upon the employee's request.

                         Sec. 7504. Regulations

    The Office of Personnel Management may prescribe regulations to 
carry out the purpose of this subchapter.



  Subpart B_Regulatory Requirements for Suspension for 14 Days or Less



Sec. 752.201  Coverage.

    (a) Actions covered. This subpart covers suspension for 14 days or 
less.
    (b) Employees covered. This subpart covers:
    (1) An employee in the competitive service who has completed a 
probationary or trial period;
    (2) An employee in the competitive service serving in an appointment 
which requires no probationary or trial period, and who has completed 1 
year of current continuous employment in the same or similar positions 
under other than a temporary appointment limited to 1 year or less;
    (3) An employee with competitive status who occupies a position 
under Schedule B of part 213 of this chapter;
    (4) An employee who was in the competitive service at the time his 
or her position was first listed under Schedule A, B, or C of the 
excepted service and still occupies that position;
    (5) An employee of the Department of Veterans Affairs appointed 
under section 7401(3) of title 38, United States Code; and
    (6) An employee of the Government Printing Office.
    (c) Exclusions. This subpart does not apply to a suspension for 14 
days or less:
    (1) Of an administrative law judge under 5 U.S.C. 7521;
    (2) Taken for national security reasons under 5 U.S.C. 7531;
    (3) Taken under a provision of statute, other than one codified in 5 
U.S. Code, which excepts the action from subchapter I, chapter 75 of 
title 5, U.S. Code;
    (4) Of a reemployed annuitant; or
    (5) Of a National Guard Technician.
    (d) Definitions. In this subpart--
    (1) Day means a calendar day.
    (2) Current continuous employment means a period of employment 
immediately preceding a suspension action in the same or similar 
positions without a break in Federal civilian employment of a workday.
    (3) Similar positions mean positions in which the duties performed 
are similar in nature and character and require substantially the same 
or similar qualifications, so that the incumbent could be interchanged 
between the positions without significant training or undue interruption 
to the work.
    (4) Suspension means the placing of an employee, for disciplinary 
reasons,

[[Page 59]]

in a temporary status without duties and pay.

[45 FR 46778, July 11, 1980, as amended at 46 FR 12191, Feb. 13, 1981; 
53 FR 21622, June 9, 1988; 57 FR 20043, May 11, 1992; 58 FR 13192, Mar. 
10, 1993]



Sec. 752.202  Standard for action.

    (a) An agency may take action under this subpart only as set forth 
in 5 U.S.C. 7503(a).
    (b) An agency may not take a suspension against an employee on the 
basis of any reason prohibited by 5 U.S.C. 2302.



Sec. 752.203  Procedures.

    (a) Employee entitlements. An employee under this subpart whose 
suspension is proposed under this subpart is entitled to the procedures 
provided in 5 U.S.C. 7503(b).
    (b) Notice of proposed action. The notice of proposal shall inform 
the employee of his or her right to review the material which is relied 
on to support the reasons for action given in the notice.
    (c) Time to answer. The employee shall be given a reasonable time to 
answer but not less than 24 hours.
    (d) Representation. Section 7503(b)(3) of title 5 of the United 
States Code provides that an employee covered by this part whose 
suspension is proposed in entitled to be represented during the action 
by an attorney or other representative. An agency may disallow as an 
employee's representative an individual whose activities as a 
representative would cause a conflict of interest or position, or an 
employee of the agency whose release from his or her official position 
would give rise to unreasonable costs or whose priority work assignments 
preclude his or her release.
    (e) Agency decision. In arriving at its written decision, the agency 
shall consider only the reasons specified in the notice of proposed 
action and shall consider any answer of the employee and/or his or her 
representative made to a designated official. The agency shall deliver 
the notice of decision to the employee at or before the time the action 
will be effective.
    (f) Grievances. The employee may file a grievance through an agency 
administrative grievance system (if applicable) or, if the suspension 
falls within the coverage of an applicable negotiated grievance 
procedure, an employee in an exclusive bargaining unit may file a 
grievance only under that procedure. Sections 7114(a)(5) and 7121(b)(3) 
of title 5 U.S.C., and the terms of any collective bargaining agreement, 
govern representation for employees in an exclusive bargaining unit who 
grieve a suspension under this subpart through the negotiated grievance 
procedure.
    (g) Agency records. The agency shall maintain copies of the items 
specified in 5 U.S.C. 7503(c) and shall furnish them upon request as 
required by that subsection.

[45 FR 46778, July 11, 1980, as amended at 53 FR 21622, June 9, 1988; 60 
FR 47040, Sept. 11, 1995]



 Subpart C_Principal Statutory Requirements for Removal, Suspension for 
More Than 14 Days, Reduction in Grade or Pay, or Furlough for 30 Days or 
                                  Less



Sec. 752.301  Principal statutory requirements.

    This subpart incorporates the principal statutory requirements in 
subchapter II of chapter 75 of title 5, United States Code, for removal, 
suspension for more than 14 days, reduction in grade or pay, or furlough 
for 30 days or less.

                       CHAPTER 75--ADVERSE ACTIONS

 Subchapter II--Removal Suspension for More Than 14 Days, Reduction in 
              Grade or Pay, or Furlough for 30 Days or Less

                  Sec. 7511. Definitions; application

    (a) For the purpose of this subchapter--
    (1) ``employee'' means--
    (A) An individual in the competitive service--
    (i) who is not serving a probationary or trial period under an 
initial appointment; or
    (ii) who has completed 1 year of current continuous service under 
other than a temporary appointment limited to 1 year or less;
    (B) a preference eligible in the excepted service who has completed 
1 year of current continuous service in the same or similar positions--

[[Page 60]]

    (i) in an executive agency; or
    (ii) in the United States Postal Service or Postal Rate Commission; 
and
    (C) an individual in the excepted service other than a preference 
eligible--
    (i) who is not serving a probationary or trial period under an 
initial appointment pending conversion to the competitive service; or
    (ii) who has completed 2 years of current continuous service in the 
same or similar positions in an executive agency under other than a 
temporary appointment limited to 2 years or less;
    (2) ``suspension'' has the meaning as set forth in section 7501(2) 
of this title;
    (3) ``grade'' means a level of classification under a position 
classification system;
    (4) ``pay'' means the rate of basic pay fixed by law or 
administrative action for the position held by an employee; and
    (5) ``furlough'' means the placing of an employee in a temporary 
status without duties and pay because of lack of work or funds or other 
nondisciplinary reasons.
    (b) This subchapter does not apply to an employee--
    (1) whose appointment is made by and with the advice and consent of 
the Senate;
    (2) whose position has been determined to be of a confidential, 
policy-determining, policy-making or policy-advocating character by--
    (A) the President for a position that the President has excepted 
from the competitive service;
    (B) the Office of Personnel Management for a position that the 
Office has excepted from the competitive service; or
    (C) the President or the head of an agency for a position excepted 
from the competitive service by statute;
    (3) whose appointment is made by the President;
    (4) who is receiving an annuity from the Civil Service Retirement 
and Disability Fund, or the Foreign Service Retirement and Disability 
Fund, based on the service of such employee;
    (5) who is described in section 8337(h)(1), relating to technicians 
in the National Guard;
    (6) who is a member of the Foreign Service, as described in section 
103 of the Foreign Service Act of 1980;
    (7) Whose position is within the Central Intelligence Agency or the 
General Accounting Office;
    (8) Whose position is within the United States Postal Service, the 
Postal Rate Commission, the Panama Canal Commission, the Tennessee 
Valley Authority, the Federal Bureau of Investigation, the National 
Security Agency, the Defense Intelligence, Agency, or an intelligence 
activity of a military department covered under section 1590 of title 
10, unless subsection (a)(1)(B) of this section or section 1005(a) of 
title 39 is the basis for this subchapter's applicability;
    (9) Who is described in section 5102(c)(11) of this title; or
    (10) Who holds a position with the Veterans Health Administration 
which has been excluded from the competitive service by or under a 
provision of title 38, unless such employee was appointed to such 
position under section 7401(3) of such title.
    (c) The Office may provide for the application of this subchapter to 
any position or group of positions excepted from the competitive service 
by regulations of the Office which is not otherwise covered by this 
subchapter.

                       Sec. 7512. Actions covered

    This Subchapter applies to--
    (1) a removal;
    (2) a suspension for more than 14 days;
    (3) a reduction in grade;
    (4) a reduction in pay; and
    (5) a furlough of 30 days or less;
but does not apply to--
    (A) a suspension or removal under section 7532 of this title,
    (B) a reduction-in-force action under section 3502 of this title,
    (C) the reduction in grade of a supervisor or manager who has not 
completed the probationary period under section 3321(a)(2) of this title 
if such reduction is to the grade held immediately before becoming such 
a supervisor or manager,
    (D) a reduction in grade or removal under section 4303 of this 
title, or
    (E) an action initiated under section 1206 or 7521 of this title.

                     Sec. 7513. Cause and procedure

    (a) Under regulations prescribed by the Office of Personnel 
Management, an agency may take an action covered by this subchapter 
against an employee only for such cause as will promote the efficiency 
of the service.
    (b) An employee against whom an action is proposed is entitled to--
    (1) at least 30 days' advance written notice, unless there is 
reasonable cause to believe the employee has committed a crime for which 
a sentence of imprisonment may be imposed, stating the specific reasons 
for the proposed action;
    a reasonable time, but not less than 7 days, to answer orally and in 
writing and to furnish affidavits and other documentary evidence in 
support of the answer;
    (3) be represented by an attorney or other representative, and
    (4) a written decision and the specific reasons therefore at the 
earliest practicable date.
    (c) An agency may provide, by regulation, for a hearing which may be 
in lieu of or in

[[Page 61]]

addition to the opportunity to answer provided under subsection (b)(2) 
of this section.
    (d) An employee against whom an action is taken under this section 
is entitled to appeal to the Merit Systems Protection Board under 
section 7701 of this title.
    (e) Copies of the notice of proposed action, the answer of the 
employee when written, a summary thereof when made orally, the notice of 
decision and reasons therefor, and an order effecting an action covered 
by this subchapter, together with any supporting material, shall be 
maintained by the agency and shall be furnished to the Board upon its 
request and to the employee affected upon the employee's request.

                         Sec. 7514. Regulations

    The Office of Personnel Management may prescribe regulations to 
carry out the purpose of this subchapter, except as it concerns any 
matter with respect to which the Merit Systems Protection Board may 
prescribe regulations.

[45 FR 46778, July 11, 1980, as amended at 57 FR 20043, May 11, 1992; 58 
FR 13192, Mar. 10, 1993]



Subpart D_Regulatory Requirements for Removal, Suspension for More Than 
   14 Days, Reduction in Grade or Pay, or Furlough for 30 Days or Less



Sec. 752.401  Coverage.

    (a) Adverse actions covered. This subpart applies to the following 
actions:
    (1) Removals;
    (2) Suspensions for more than 14 days, including indefinite 
suspensions;
    (3) Reductions in grade;
    (4) Reductions in pay; and
    (5) Furloughs of 30 days or less.
    (b) Actions excluded. This subpart does not apply to:
    (1) An action imposed by the Merit Systems Protection Board under 
the authority of 5 U.S.C. 1206;
    (2) The reduction in grade of a supervisor or manager who has not 
completed the probationary period under 5 U.S.C. 3321(a)(2) if such a 
reduction is to the grade held immediately before becoming a supervisor 
or manager;
    (3) A reduction-in-force action under 5 U.S.C. 3502;
    (4) A reduction in grade or removal under 5 U.S.C. 4303;
    (5) An action against an administrative law judge under 5 U.S.C. 
7521;
    (6) A suspension or removal under 5 U.S.C. 7532;
    (7) Actions taken under provision of statute, other than one 
codified in title 5, United States Code, which excepts the action from 
subchapter II of chapter 75 of title 5, United States Code;
    (8) Action that entitles an employee to grade retention under part 
536 of this chapter, and an action to terminate this entitlement;
    (9) A voluntary action by the employee;
    (10) Action taken or directed by the Office of Personnel Management 
under part 731 or part 754 of this chapter;
    (11) Termination of appointment on the expiration date specified as 
a basic condition of employment at the time the appointment was made;
    (12) Action that terminates a temporary or term promotion and 
returns the employee to the position from which temporarily promoted, or 
to a different position of equivalent grade and pay, if the agency 
informed the employee that it was to be of limited duration;
    (13) Cancellation of a promotion to a position not classified prior 
to the promotion;
    (14) Placement of an employee serving on an intermittent or seasonal 
basis in a temporary nonduty, nonpay status in accordance with 
conditions established at the time of appointment; or
    (15) Reduction of an employee's rate of basic pay from a rate that 
is contrary to law or regulation.
    (c) Employees covered. This subpart covers:
    (1) An employee in the competitive service who has completed a 
probationary or trial period;
    (2) An employee in the competitive service serving in an appointment 
that requires no probationary or trial period, and who has completed 1 
year of current continuous service in the same or similar positions 
under other than a temporary appointment limited to 1 year or less;
    (3) An employee in the excepted service who is a preference eligible 
in an executive agency as defined at section 105 of title 5, United 
States Code, the U.S. Postal Service, or the Postal Rate Commission and 
who has completed 1

[[Page 62]]

year of current continuous service in the same or similar positions;
    (4) A Postal Service employee covered by Public Law 100-90 who has 
completed 1 year of current continuous service in the same or similar 
positions and who is either a supervisory or management employee or an 
employee engaged in personnel work in other than a purely 
nonconfidential clerical capacity;
    (5) An employee in the excepted service who is a nonpreference 
eligible in an Executive agency as defined at section 105 of title, 5, 
United States Code, and who has completed 2 years of current continuous 
service in the same or similar positions under other than a temporary 
appointment limited to 2 years or less;
    (6) An employee with competitive status who occupies a position in 
Schedule B of part 213 of this chapter;
    (7) An employee who was in the competitive service at the time his 
or her position was first listed under Schedule A, B, or C of the 
excepted service and who still occupies that position;
    (8) An employee of the Department of Veterans Affairs appointed 
under section 7401(3) of title 38, United States Code; and
    (9) An employee of the Government Printing Office.
    (d) Employees excluded. This subpart does not apply to:
    (1) An employee whose appointment is made by and with the advice and 
consent of the Senate;
    (2) An employee whose position has been determined to be of a 
confidential, policy-determining, policy-making, or policy-advocating 
character by: the President for a position that the President has 
excepted from the competitive service; the Office of Personnel 
Management for a position that the Office has excepted from the 
competitive service (Schedule C); or the President or the head of an 
agency for a position excepted from the competitive service by statute;
    (3) A Presidential appointee;
    (4) A reemployed annuitant;
    (5) A technician in the National Guard described in section 
8337(h)(1) of title 5, United States Code, who is employed under section 
709(b) of title 32, United States Code;
    (6) A Foreign Service member as described in section 103 of the 
Foreign Service Act of 1980;
    (7) An employee of the Central Intelligence Agency or the General 
Accounting Office;
    (8) An employee of the Veterans Health Administration (Department of 
Veterans Affairs) in a position which has been excluded from the 
competitive service by or under a provision of title 38, United States 
Code, unless the employee was appointed to the position under section 
7401(3) of title 5, United States Code;
    (9) A nonpreference eligible employee with the U.S. Postal Service, 
the Postal Rate Commission, the Panama Canal Commission, the Tennessee 
Valley Authority, the Federal Bureau of Investigation, the National 
Security Agency, the Defense Intelligence Agency, or an intelligence 
activity of a military department covered under section 1590 of title 
10, United States Code;
    (10) An employee described in section 5102(c)(11) of title 5, United 
States Code, who is an alien or noncitizen occupying a position outside 
the United States;
    (11) A nonpreference eligible employee serving a probationary or 
trial period under an initial appointment in the excepted service 
pending conversion to the competitive service; and
    (12) An employee whose agency or position has been excluded from the 
appointing provisions of title 5, United States Code, by separate 
statutory authority in the absence of any provision to place the 
employee within the coverage of chapter 75 of title 5, United States 
Code.

[53 FR 21622, June 9, 1988, as amended at 58 FR 13192, Mar. 10, 1993]



Sec. 752.402  Definitions.

    (a) Day means a calendar day.
    (b) Current continuous employment means a period of employment or 
service immediately preceding an adverse action in the same or similar 
positions without a break in Federal civilian employment of a workday.
    (c) Furlough means the placing of an employee in a temporary status 
without duties and pay because of lack of work or funds or other 
nondisciplinary reasons.

[[Page 63]]

    (d) Grade means a level of classification under a position 
classification system.
    (e) Indefinite suspension means the placing of an employee in a 
temporary status without duties and pay pending investigation, inquiry, 
or further agency action. The indefinite suspension continues for an 
indeterminate period of time and ends with the occurrence of the pending 
conditions set forth in the notice of action which may include the 
completion of any subsequent administrative action.
    (f) Pay means the rate of basic pay fixed by law or administrative 
action for the position held by the employee, that is, the rate of pay 
before any deductions and exclusive of additional pay of any kind.
    (g) Similar positions mean positions in which the duties performed 
are similar in nature and character and require substantially the same 
or similar qualifications, so that the incumbent could be interchanged 
between the positions without significant training or undue interruption 
to the work.
    (h) Suspension means the placing of an employee, for disciplinary 
reasons, in a temporary status without duties and pay for more than 14 
days.

[53 FR 21623, June 9, 1988]



Sec. 752.403  Standard for action.

    (a) An agency may take an adverse action, including a performance-
based adverse action, under this subpart only such cause as will promote 
the efficiency of the service.
    (b) An agency may not take an adverse action against an employee on 
the basis of any reason prohibited by 5 U.S.C. 2302.

[45 FR 46778, July 11, 1980, as amended at 53 FR 21623, June 9, 1988]



Sec. 752.404  Procedures.

    (a) Statutory entitlements. An employee against whom action is 
proposed under this subpart is entitled to the procedures provided in 5 
U.S.C. 7513(b).
    (b) Notice of proposed action. (1) The notice of proposal shall 
inform the employee of his or her right to review the material which is 
relied on to support the reasons for action given in the notice. The 
agency may not use material that cannot be disclosed to the employee of 
his or her representative or designated physician under Sec. 297.204(c) 
of this chapter to support the reasons in the notice.
    (2) When some but not all employees in a given competitive level are 
being furloughed, the notice of proposal shall state the basis for 
selecting a particular employee for furlough, as well as the reasons for 
the furlough.
    (3) Under ordinary circumstances, an employee whose removal or 
suspension, including indefinite suspension, has been proposed shall 
remain in a duty status in his or her regular position during the 
advance notice period. In those rare circumstances where the agency 
determines that the employee's continued presence in the workplace 
during the notice period may pose a threat to the employee or others, 
result in loss of or damage to Government property, or otherwise 
jeopardize legitimate Government interests, the agency may elect one or 
a combination of the following alternatives:
    (i) Assigning the employee to duties where he or she is no longer a 
threat to safety, the agency mission, or to Government property;
    (ii) Allowing the employee to take leave, or carrying him or her in 
an appropriate leave status (annual, sick, leave without pay, or absence 
without leave) if the employee has absented himself or herself from the 
worksite without requesting leave;
    (iii) Curtailing the notice period when the agency can invoke the 
provisions of Sec. 752.404(d)(1) of this part, the ``crime provision.'' 
This provision may be invoked even in the absence of judicial action if 
the agency has reasonable cause to believe that the employee has 
committed a crime for which a sentence of imprisonment may be imposed; 
or
    (iv) Placing the employee in a paid, nonduty status for such time as 
is necessary to effect the action.
    (c) Employee's answer. (1) The agency shall give the employee a 
reasonable amount of official time to review the material relied on to 
support its proposal and to prepare an answer and to secure affidavits, 
if he or she is otherwise in an active duty status.

[[Page 64]]

    (2) The agency shall designate an official to hear the employee's 
oral answer who has authority either to make or recommend a final 
decision on the proposed adverse action. The right to answer orally in 
person does not include the right to a formal hearing with examination 
of witnesses unless the agency provides one in its regulations in 
accordance with paragraph (g) of this section.
    (3) If the employee wishes the agency to consider any medical 
condition which may contribute to a conduct, performance, or leave 
problem, the employee shall be given a reasonable time to furnish 
medical documentation (as defined in Sec. 339.102 of this chapter) of 
the condition. Whenever possible, the employee shall supply such 
documentation within the time limits allowed for an answer. After its 
review of the medical documentation supplied by the employee, the agency 
may, if authorized, require a medical examination under the criteria of 
Sec. 339.301(a)(3) and the procedures of Sec. 339.302 of this chapter, 
or otherwise, at its option, offer a medical examination in accordance 
with the criteria of Sec. 339.301(d) and procedures of Sec. 339.302 of 
this chapter. If the employee has the requisite years of service under 
the Civil Service Retirement System or the Federal Employees Retirement 
System, the agency shall provide information concerning disability 
retirement. The agency shall be aware of the affirmative obligations of 
the provisions of 29 CFR 1613.704, which require reasonable 
accommodation of a qualified employee who is handicapped.
    (d) Exceptions. (1) Section 7513(b) of title 5 of the United States 
Code authorizes an exception to the 30 days' advance written notice when 
the agency has reasonable cause to believe that the employee has 
committed a crime for which a sentence of imprisonment may be imposed 
and is proposing a removal or suspension (including indefinite 
suspension). The agency may require the employee to furnish any answer 
to the proposed action, and affidavits and other documentary evidence in 
support of the answer, within such time as would be reasonable, but not 
less than 7 days. When the circumstances require that the employee be 
kept away from the worksite, the agency may place him or her in a 
nonduty status with pay for such time as is necessary to effect the 
action.
    (2) The advance written notice and opportunity to answer are not 
necessary for furlough without pay due to unforeseeable circumstances, 
such as sudden breakdowns in equipment, acts of God, or sudden 
emergencies requiring immediate curtailment of activities.
    (e) Representation. Section 7513(b)(3) of title 5 of the United 
States Code provides that an employee covered by this part is entitled 
to be represented by an attorney or other representative. An agency may 
disallow as an employee's representative an individual whose activities 
as representative would cause a conflict of interest or position, or an 
employee of the agency whose release from his or official position would 
give rise to unreasonable costs or whose priority work assignments 
preclude his or her release.
    (f) Agency decision. In arriving at its decision, the agency shall 
not consider any reasons for action other than those specified in the 
notice of proposed action. It shall consider any answer of the employee 
and/or his or her representative made to a designated official and any 
medical documentation furnished under paragraph (c) of this section. The 
agency shall deliver the notice of decision to the employee at or before 
the time the action will be effective, and advise the employee of appeal 
rights.
    (g) Hearing. Under 5 U.S.C. 7513(c), the agency may in its 
regulations provide a hearing in place of or in addition to the 
opportunity for written and oral answer.
    (h) Applications for disability retirement. Section 831.501(d) of 
this chapter provides that an employee's application for disability 
retirement shall not preclude or delay any other appropriate personnel 
action. Section 831.1203 of this chapter sets forth the basis under 
which an agency shall file an application for disability retirement on 
behalf of an employee.

[45 FR 46778, July 11, 1980, as amended at 48 FR 19349, Apr. 29, 1983; 
48 FR 45526, Oct. 6, 1983; 49 FR 1330, Jan. 11, 1984; 53 FR 21623, June 
9, 1988]

[[Page 65]]



Sec. 752.405  Appeal and grievance rights.

    (a) Appeal rights. Under the provisions of 5 U.S.C. 7513(d), an 
employee against whom an action is taken under this subpart is entitled 
to appeal to the Merit Systems Protection Board.
    (b) Grievance rights. As provided at 5 U.S.C. 7121(e)(1), if a 
matter covered by this subpart falls within the coverage of an 
applicable negotiated grievance procedure, and employee may elect to 
file a grievance under that procedure or appeal to the Merit Systems 
Protection Board under 5 U.S.C. 7701, but not both. 5 U.S.C. 7114(a)(5) 
and 7121(b)(3), and the terms of an applicable collective bargaining 
agreement, govern representation for employees in an exclusive 
bargaining unit who grieve a matter under this subpart through the 
negotiated grievance procedure.

[45 FR 46778, July 11, 1980, as amended at 53 FR 21624, June 9, 1988]



Sec. 752.406  Agency records.

    The agency shall maintain copies of the items specified in 5 U.S.C. 
7513(e) and shall furnish them upon request as required by that 
subsection.



 Subpart E_Principal Statutory Requirements for Taking Adverse Actions 
                   Under the Senior Executive Service



Sec. 752.501  Principal statutory requirements.

    This subpart sets forth for the benefit of the user the statutory 
requirements of subchapter V of Chapter 75 for suspension for more than 
14 days and removal from the civil service. (5 U.S.C. 7541-7543)

                        ``Sec. 7541. Definitions

    ``For the purpose of this subchapter--
    ``(1) `employee' means a career appointee in the Senior Executive 
Service who--
    ``(A) has completed the probationary period prescribed under section 
3393(d) of this title; or
    ``(B) was covered by the provisions of subchapter II of this chapter 
immediately before appointment to the Senior Executive Service; and
    ``(2) `suspension' as the meaning set forth in section 7501(2) of 
this title.

                      ``Sec. 7542. Actions covered

    ``This subchapter applies to a removal from the civil service or 
suspension for more than 14 days, but does not apply to an action 
initiated under section 1206 of this title, to a suspension or removal 
under section 7532 of this title, or to a removal under section 3592 or 
3595 of this title.

                    ``Sec. 7543. Cause and procedure

    ``(a) Under regulations prescribed by the Office of Personnel 
Management, an agency may take an action covered by this subchapter 
against an employee only for misconduct, neglect of duty, malfeasance, 
or failure to accept a directed reassignment or to accompany a position 
in a transfer of function.
    ``(b) An employee against whom an action covered by this subchapter 
is proposed is entitled to--
    ``(1) at least 30 days' advance written notice, unless there is 
reasonable cause to believe that the employee has committed a crime for 
which a sentence of imprisonment can be imposed, stating specific 
reasons for the proposed action;
    ``(2) a reasonable time, but not less than 7 days, to answer orally 
and in writing and to furnish affidavits and other documentary evidence 
in support of the answer;
    ``(3) be represented by an attorney or other representative; and
    ``(4) a written decision and specific reasons therefor at the 
earliest practicable date.
    ``(c) An agency may provide, by regulation, for a hearing which may 
be in lieu of or in addition to the opportunity to answer provided under 
subsection (b)(2) of this section.
    ``(d) An employee against whom an action is taken under this section 
is entitled to appeal to the Merit Systems Protection Board under 
section 7701 of this title.
    ``(e) Copies of the notice of proposed action, the answer of the 
employee when written, and a summary thereof when made orally, the 
notice of decision and reasons therefor, and any order effecting an 
action covered by this subchapter, together with any supporting 
material, shall be maintained by the agency and shall be furnished to 
the Merit Systems Protection Board upon its request and to the employee 
affected upon the employee's request.''.

[45 FR 46778, July 11, 1980, as amended at 52 FR 34624, Sept. 14, 1987]



 Subpart F_Regulatory Requirements for Taking Adverse Actions Under the 
                        Senior Executive Service

    Source: 52 FR 34624, Sept. 14, 1987, unless otherwise noted.

[[Page 66]]



Sec. 752.601  Coverage.

    (a) Adverse actions covered. This subpart applies to suspensions for 
more than 14 days and removals from the civil service as set forth in 5 
U.S.C. 7542.
    (b) Actions excluded. (1) An agency may not take a suspension action 
of 14 days or less.
    (2) This subpart does not apply to actions taken under 5 U.S.C. 
1206(g), 3592, 3595, or 7532.
    (c) Employees covered. This subpart covers the following appointees:
    (1) A career appointee--
    (i) Who has completed the probationary period in the Senior 
Executive Service;
    (ii) Who is not required to serve a probationary period in the 
Senior Executive Service; or
    (iii) Who was covered under 5 U.S.C. 7511 immediately before 
appointment to the Senior Executive Service.
    (2) A limited term or limited emergency appointee--
    (i) Who received the limited appointment without a break in service 
in the same agency as the one in which the employee held a career or 
career-conditional appointment (or an appointment of equivalent tenure 
as determined by the Office of Personnel Management) in a permanent 
civil service position outside the Senior Executive Service; and
    (ii) Who was covered under 5 U.S.C. 7511 immediately before 
appointment to the Senior Executive Service.
    (d) Employees excluded. This subpart does not cover an appointee who 
is serving as a reemployed annuitant.



Sec. 752.602  Definitions.

    In this subpart--
    Career appointee, limited term appointee, and limited emergency 
appointee have the meaning given in 5 U.S.C. 3132(a).
    Day means calendar day.
    Suspension has the meaning given in 5 U.S.C. 7501(2).



Sec. 752.603  Standard for action.

    (a) An agency may take an adverse action under this subpart only for 
reasons of misconduct, neglect of duty, malfeasance., or failure to 
accept a directed reassignment or to accompany a position in a transfer 
of function.
    (b) An agency may not take an adverse action under this subpart on 
the basis of any reason prohibited by 5 U.S.C. 2302.



Sec. 752.604  Procedures.

    (a) Applicability. The procedures provided in 5 U.S.C. 7543(b) apply 
to any appointee covered by this subpart.
    (b) Notice of proposed action. (1) The notice of proposed action 
shall inform the appointee of his or her right to review the material 
that is relied on to support the reasons for action given in the notice.
    (2) The agency may not use material that cannot be disclosed to the 
appointee or to the appointee's representative or designated physician 
under Sec. 297.204(c) of this chapter to support the reasons in the 
notice.
    (3) Under ordinary circumstances, an appointee whose removal has 
been proposed shall remain in a duty status in his or her regular 
position during the advance notice period. In those rare circumstances 
when the agency determines that the appointee's continued presence in 
the work place during the notice period may pose a threat to the 
appointee or others, result in loss of or damage to Government property, 
or otherwise jeopardize legitimate Government interests, the agency 
shall consider whether any of the following alternatives is feasible:
    (i) Assigning the appointee to duties where he or she is no longer a 
threat to safety, the agency mission, or Government property;
    (ii) Placing the appointee on leave with his or her consent;
    (iii) Carrying the appointee on appropriate leave (annual or sick 
leave, leave without pay, or absence without leave) if he or she is 
voluntarily absent for reasons not originating with the agency; or
    (iv) Curtailing the notice period when the agency can invoke the 
provisions of paragraph (d) of this section (the ``crime provision'').
    (4) If none of the alternatives in paragraph (b)(3) of this section, 
is available,

[[Page 67]]

agencies may consider placing the appointee in a paid, nonduty status 
during all or part of the advance notice period.
    (c) Appointee's answer. (1) The agency shall give the appointee a 
reasonable amount of official time to review the material relied on to 
support its proposed action, to prepare an answer orally and in writing, 
and to secure affidavits, if the appointee is in an active duty status.
    (2) The agency shall designate an official to hear the appointee's 
oral answer who has authority either to make or to recommend a final 
decision on the proposed adverse action.
    (3) The right to answer orally in person does not include the right 
to a formal hearing with examination of witnesses unless the agency 
provides for a formal hearing in its regulations in accordance with 
paragraph (g) of this section.
    (4) If the appointee wishes the agency to consider any medical 
condition that may have affected the basis for the adverse action, the 
appointee shall be given reasonable time to furnish medical 
documentation of the condition. The same procedures that are applicable 
in Sec. 752.404(c)(3) of this chapter are also applicable for an 
appointee in the Senior Executive Service.
    (d) Exception. Section 7543(b)(1) of title 5 of the United States 
Code authorizes an exception to the 30 days' advance written notice when 
the crime provision is invoked. This provision may be invoked even in 
the absence of judicial action if the agency has reasonable cause to 
believe that the appointee has committed a crime for which a sentence of 
imprisonment may be imposed. The agency may require the appointee to 
furnish any answer to the proposed action, and affidavits and other 
documentary evidence to support the answer, within such time as under 
the circumstances would be reasonable, but not less than 7 days. When 
the circumstances require immediate action, the agency may place the 
appointee in a nonduty status with pay for such time as is necessary to 
effect the action.
    (e) Representation. (1) Under 5 U.S.C. 7543(b)(3), an appointee 
covered by this subpart is entitled to be represented by an attorney or 
other representative.
    (2) An agency may disallow as an appointee's representative--
    (i) An individual whose activities as a representative would cause a 
conflict of interest or position;
    (ii) An employee of the agency whose release from his or her 
official position would give rise to unreasonable costs; or
    (iii) An employee of the agency whose priority work assignments 
preclude the employee's release.
    (f) Agency decision. In arriving at its written decision, the agency 
may consider only the reasons specified in the notice of proposed 
action. The agency shall consider any reply of the appointee or the 
appointee's representative made to a designated official and any medical 
documentation furnished under paragraph (c) of this section. The agency 
shall deliver the notice of decision to the appointee at or before the 
time the action will be effective. The notice of decision shall inform 
the appointee of his or her appeal rights.
    (g) Hearing. Under 5 U.S.C. 7543(c), the agency may, in its 
regulations, provide a hearing in place of or in addition to the 
opportunity for written and oral reply.



Sec. 752.605  Appeal rights.

    (a) Under 5 U.S.C. 7543(d), a career appointee against whom an 
action is taken under this subpart is entitled to appeal to the Merit 
Systems Protection Board.
    (b) A limited term or limited emergency appointee who is covered 
under Sec. 752.601(c)(2) also may appeal an action taken under this 
subpart to the Merit Systems Protection Board.



Sec. 752.606  Agency records.

    The agency shall maintain copies of the adverse action record items 
specified in 5 U.S.C. 7543(e) and furnish them upon request as required 
by that subsection.

                           PART 754 [RESERVED]

[[Page 68]]



PART 771_AGENCY ADMINISTRATIVE GRIEVANCE SYSTEM--Table of Contents




    Authority: 5 U.S.C. 1302, 3301, 3302, 7301; E.O. 9830, 3 CFR 1945-
1948 Comp., pp. 606-624; E.O. 11222, 3 CFR 1964-1969 Comp., p. 306.



Sec. 771.101  Continuation of Grievance Systems.

    Each administrative grievance system in operation as of October 11, 
1995, that has been established under former regulations under this part 
must remain in effect until the system is either modified by the agency 
or replaced with another dispute resolution process.

[60 FR 47040, Sept. 11, 1995]



PART 772_INTERIM RELIEF--Table of Contents




                            Subpart A_General

Sec.
772.101 Basic authority.
772.102 Interim personnel actions.

    Authority: 5 U.S.C. 1302, 3301, 3302, and 7301; Pub. L. 101-12.

    Source: 57 FR 3712, Jan. 31, 1992, unless otherwise noted.



                            Subpart A_General



Sec. 772.101  Basic authority.

    This part establishes a mechanism for agencies to provide interim 
relief to employees and applicants for employment who prevail in an 
initial decision issued by the Merit Systems Protection Board (MSPB) as 
required by the Whistleblower Protection Act of 1989, Pub. L. 101-12 
(codified at 5 U.S.C. 7701(b)(2)(A)). The interim relief provisions of 
the law are applicable whether or not alleged reprisal for 
whistleblowing is at issue in an appeal to MSPB.



Sec. 772.102  Interim personnel actions.

    When an employee or applicant for employment appeals an action to 
MSPB and the appeal results in an initial decision by an MSPB 
administrative judge granting interim relief under 5 U.S.C. 
7701(b)(2)(A) and a petition for review of the initial decision is filed 
(or will be filed) with the full Board under 5 U.S.C. 7701(e)(1)(A), the 
agency shall provide the relief ordered in the initial decision by 
taking an interim personnel action subject to the following terms:
    (a) Interim personnel actions shall be made effective upon the date 
of issuance of the initial decision and must be initiated on or before 
the date of a petition for review by the agency or within a reasonable 
period after the date it becomes aware of a petition for review by the 
appellant;
    (b) The relief provided by interim personnel actions shall end:
    (1) When the full Board issues a final decision on a petition for 
review filed by an applicant for employment, employee, and/or agency 
under 5 U.S.C. 7701(e)(1)(A),
    (2) When the initial decision becomes final pursuant to an action of 
the full Board or pursuant to a decision by an applicant for employment, 
employee, and/or agency to withdraw (or change intentions to file) any 
petition for review filed under 5 U.S.C. 7701(e)(1)(A), or
    (3) When the applicant for employment or employee requests or 
reaches agreement with the agency that the interim relief ordered in the 
initial decision be cancelled;
    (c) Interim relief shall entitle the applicant for employment or 
employee to the same compensation and benefits he or she would receive 
if the relief effected had not been on an interim basis except as 
provided in paragraph (f) of this section;
    (d) An interim personnel action shall not be taken if the MSPB 
administrative judge, pursuant to 5 U.S.C. 7701(b)(2)(A)(i), determines 
that granting interim relief is not appropriate;
    (e) An interim personnel action under this part shall not entitle 
the applicant for employment or employee to an award of back pay or 
attorney fees.

[57 FR 3712, Jan. 31, 1992, as amended at 59 FR 36353, July 18, 1994; 59 
FR 65704, Dec. 21, 1994]

[[Page 69]]



PART 792_FEDERAL EMPLOYEES' HEALTH AND COUNSELING PROGRAMS--Table of 
Contents




Subpart A_Regulatory Requirements for Alcoholism and Drug Abuse Programs 
               and Services for Federal Civilian Employees

Sec.
792.101 Statutory requirements.
792.102 General.
792.103 Coverage.
792.104 Responsibilities of the Office of Personnel Management.
792.105 Agency responsibilities.

  Subpart B_Agency Use of Appropriated Funds for Child Care Costs for 
     Lower Income Employees_What Is the Child Care Subsidy Program 
                 Legislation and to Whom Does It Apply?

792.200 What are the benefits of the child care subsidy program law?
792.201 What is the purpose of the child care subsidy program law?
792.202 Do agencies have any notification responsibilities before 
          initiating a child care subsidy program and when may agencies 
          obligate funds for the program?
792.203 What materials are available to assist agencies with the process 
          of establishing a child care subsidy program?
792.204 Are there any special reporting and oversight requirements 
          related to the child care subsidy program law?
792.205 Which agency funds may be used for the purpose of child care the 
          subsidy program?
792.206 Are agencies required to participate in this program?
792.207 When does the child care subsidy program law become effective 
          and how may agencies take advantage of this law?
792.208 What is the definition of executive agency?
792.209 What is the definition of child care subsidy program?
792.210 What is the definition of civilian employee?
792.211 What is the definition of a Federally sponsored child care 
          center?
792.212 What is the definition of a child care contractor?
792.213 What is the definition of a child for the purposes of this 
          subpart?
792.214 Which children are eligible for this subsidy?
792.215 What is the definition of a child with disabilities?
792.216 Are Federal employees with children who are enrolled in summer 
          programs and part-time programs eligible for the child care 
          subsidy program?
792.217 Are part-time Federal employees eligible for the child care 
          subsidy program?
792.218 Does the law apply only to on-site Federal child care centers 
          that are utilized by Federal families?
792.219 Are agencies required to negotiate with their Federal labor 
          organizations concerning the implementation of this law?
792.220 What are the requirements that child care providers must meet in 
          order to participate in this program?
792.221 Is there a statutory cap on the amount or the percentage of 
          child care costs that will be subsidized?
792.222 What is the definition of a lower income Federal employee and 
          how is the amount of the child care subsidy determined?
792.223 Who determines if a Federal employee qualifies as a lower income 
          employee and how is the program administered?
792.224 Are child care subsidies paid to the Federal employee using the 
          child care?
792.225 May an agency disburse funds to an organization that administers 
          the child care subsidy program prior to the time the employee 
          receives the child care services?
792.226 How may an agency disburse funds to a Federally sponsored child 
          care center in a multi-tenant building?
792.227 How long will the child care subsidy program be in effect for a 
          Federal employee?
792.228 May these funds be used for children of Federal employees who 
          are already enrolled in child care?
792.229 May an agency place restrictions or requirements on the use of 
          these funds, and may the agency restrict the disbursement of 
          such funds to only one type of care or to one location?
792.230 May an agency use appropriated funds to improve the physical 
          space of the family child care homes or child care centers?
792.231 Is an agency permitted to make advance child care subsidy 
          payments for an individual Federal employee?

    Authority: Sec. 201 of Pub. L. 91-616, 84 Stat. 1849, as amended and 
transferred to sec. 520 of the Public Health Services Act by sec. 2 
(b)(13) of Pub. L. 98-24 (42 U.S.C. 290dd-1) and sec. 413 of Pub. L. 92-
255, 86 Stat. 84, as amended and transferred to sec. 525 of the Public 
Health Service Act by sec. 2(b)(16)(A) of Pub. L. 98-24 (42 U.S. C. 
290ee-l); Sec. 643, Pub. L. 106-58, 113 Stat. 477.

[[Page 70]]



Subpart A_Regulatory Requirements for Alcoholism and Drug Abuse Programs 
               and Services for Federal Civilian Employees



Sec. 792.101  Statutory requirements.

    Sections 290dd-1 and 290ee-1 of 42 United States Code, provide that 
the Office of Personnel Management shall be responsible for developing 
and maintaining, in cooperation with the Secretary of the Department of 
Health and Human Services, and with other Federal departments and 
agencies, appropriate prevention, treatment, and rehabilitation programs 
and services for Federal civilian employees with alcohol and/or drug 
problems. To the extent feasible, agencies are encouraged to extend 
services to families of alcohol and/or drug abusing employees and to 
employees who have family members who have alcohol and/or drug problems. 
Such programs and services shall make optimal use of existing government 
facilities, services, and skills.

[50 FR 16692, Apr. 29, 1985]



Sec. 792.102  General.

    It is the policy of the Federal Government to offer appropriate 
prevention, treatment, and rehabilitation programs and services for 
Federal civilian employees with alcohol and/or drug problems. Short-term 
counseling and/or referral, or offers thereof, shall constitute the 
appropriate prevention, treatment, and rehabilitation programs and 
services for alcohol abuse, alcoholism, and/or drug abuse required under 
42 U.S.C. 290dd-1(a) and 290ee-1(a). Federal departments and agencies 
must establish programs to assist employees with these problems in 
accordance with the legislation cited in Sec. 792.101.

[50 FR 16692, Apr. 29, 1985]



Sec. 792.103  Coverage.

    This part applies to all positions in Executive agencies as defined 
in section 105 of title 5 of the United States Code, and to those 
positions in the legislative and judicial branch of the Federal 
Government which are in the competitive service.

[49 FR 27921, July 9, 1984]



Sec. 792.104  Responsibilities of the Office of Personnel Management.

    OPM shall provide overall leadership for the Government-wide 
alcoholism and drug abuse program in cooperation with the Secretary of 
Health and Human Services. To accomplish this, OPM shall develop and 
issue policy and program guidance, provide technical assistance to 
agencies, and determine the overall effectiveness of the Government-wide 
program, as well as those programs at individual agencies, based on 
program information required of agencies.

[49 FR 27921, July 9, 1984]



Sec. 792.105  Agency responsibilities.

    (a) Agencies shall establish and administer programs through which 
practitioners who are knowledgeable in counseling and referral services 
can offer and provide employees who have alcohol and/or drug problems 
short-term counseling and/or referrals for long-term counseling or 
treatment.
    (b) Agencies shall issue internal instructions implementing the 
requirements of 42 U.S.C. 290dd-1(a) and 290ee-1(a) and this regulation.
    (c) Whenever a manager/supervisor becomes aware that a Federal 
employee's use of alcohol and/or drugs may be contributing to a 
performance or conduct deficiency, the manager/supervisor shall 
recommend counseling and refer the employee to the agency counseling 
program. If an employee fails to participate in any rehabilitative 
program or, having participated, the employee fails to bring conduct or 
performance up to satisfactory level, the agency shall evaluate the 
employee accordingly and initiate an appropriate performance-based or 
adverse action.
    (d) As requested, agencies shall annually submit a report to OPM on 
their counseling activities for the past fiscal year at a time, and in a 
manner, set by OPM.

[49 FR 27921, July 9, 1984, as amended at 50 FR 16692, Apr. 29, 1985]

[[Page 71]]



  Subpart B_Agency Use of Appropriated Funds for Child Care Costs for 
     Lower Income Employees_What Is the Child Care Subsidy Program 
                 Legislation and to Whom Does It Apply?

    Source: 68 FR 14128, Mar. 24, 2003, unless otherwise noted.



Sec. 792.200  What are the benefits of the child care subsidy program law?

    Sec. 630 of Public Law 107-67 permits executive agencies to use 
appropriated funds to improve the affordability of child care for lower 
income Federal employees. The law applies to child care in the United 
States and in overseas locations. Employees can benefit from reduced 
child care rates at Federal child care centers, non-Federal child care 
centers, and in family child care homes for both full-time and part-time 
programs such as before and after school programs and daytime summer 
programs.



Sec. 792.201  What is the purpose of the child care subsidy program law?

    The law is intended to make child care more affordable for lower 
income Federal employees through the use of agency appropriated funds.



Sec. 792.202  Do agencies have any notification responsibilities before 
initiating a child care subsidy program and when may agencies obligate 
funds for the program?

    An agency intending to initiate a child care subsidy program must 
provide notice to the House Subcommittee on Treasury, Postal Service and 
General Government Appropriations; to the Senate Subcommittee on 
Treasury and General Government Appropriations; and to its 
appropriations subcommittees prior to the obligation of funds. The 
agency must also notify OPM of its intention. The agency must give 
notice to these Congressional committees and OPM annually, and funds may 
be obligated immediately after the agency has made these notifications.



Sec. 792.203  What materials are available to assist agencies with the 
process of establishing a child care subsidy program?

    OPM has developed guidance that contains samples of memoranda of 
understanding, marketing tools, child care subsidy program applications, 
and models for determining subsidy program eligibility. These materials 
are found in the ``Guide for Implementing Child Care Legislation--Public 
Law 107-67, Sec. 630.'' The Guide is available on OPM's Web site, http:/
/www.opm.gov/wrkfam. Agencies may also obtain a copy by writing to OPM 
at U.S. Office of Personnel Management, Office of Work/Life Programs, 
1900 E St., NW., Washington, DC 20415.



Sec. 792.204  Are there any special reporting and oversight requirements 
related to the child care subsidy program law?

    Agencies are responsible for tracking the utilization of their funds 
and reporting the results to OPM. OPM will provide agencies the 
mandatory reporting form for this purpose. OPM also will produce an 
annual report for use by the agencies.



Sec. 792.205  Which agency funds may be used for the purpose of the child 
care subsidy program?

    Agencies are permitted to use appropriated funds, including 
revolving funds, that are otherwise available to them for salaries and 
expenses.



Sec. 792.206  Are agencies required to participate in this program?

    Agencies are not required to participate in this program. The 
decision to participate is left to the discretion of the agency. If an 
agency chooses to participate, it may not use funds other than those 
specified in Sec. 792.205.



Sec. 792.207  When does the child care subsidy program law become 
effective and how may agencies take advantage of this law?

    This authority was made permanent on November 12, 2001. Agencies may 
now offer child care subsidy programs to their lower income Federal 
employees to help them reduce their child care costs.

[[Page 72]]



Sec. 792.208  What is the definition of executive agency?

    The term executive agency is defined by section 105 of title 5, 
United States Code, but does not include the General Accounting Office.



Sec. 792.209  What is the definition of child care subsidy program?

    The term child care subsidy program, for the purposes of this 
subpart, means the program that results from the expenditure of agency 
funds to assist lower income Federal employees with child care costs, 
including such activities as: Determining which employees receive a 
subsidy and the size of the subsidy each employee receives; distributing 
agency funds to participating providers; and tracking and reporting to 
OPM information such as total cost and employee use of the program.



Sec. 792.210  What is the definition of civilian employee?

    The term civilian employee, for the purposes of this subpart, means 
all appointive positions in an executive agency (5 U.S.C. 105). It does 
not refer to private contractors hired by the agencies.



Sec. 792.211  What is the definition of a Federally sponsored child 
care center?

    The term Federally sponsored child care center, for the purposes of 
this subpart, is a child care center that is located in a building or 
space that is owned or leased by the Federal Government.



Sec. 792.212  What is the definition of a child care contractor?

    Section 630 of Public Law 107-67 provides that child care services 
provided by contract are encompassed by this new legislation. The term 
child care contractor applies to an organization or individual providing 
child care services for which Federal families are eligible. These 
entities are commonly referred to as ``child care providers'' in the 
child care industry and they provide services under contract in center-
based child care and family child care homes.



Sec. 792.213  What is the definition of a child for the purposes of 
this subpart?

    For the purposes of this subpart, a child is considered to be:
    (a) A biological child who lives with the Federal employee;
    (b) An adopted child;
    (c) A stepchild;
    (d) A foster child;
    (e) A child for whom a judicial determination of support has been 
obtained; or
    (f) A child to whose support the Federal employee, who is a parent 
or legal guardian, makes regular and substantial contributions.



Sec. 792.214  Which children are eligible for this subsidy?

    The law covers the children of Federal employees, excluding contract 
employees, from birth through age 13 and disabled children through age 
18.



Sec. 792.215  What is the definition of a child with disabilities?

    For the purpose of this subpart, a child with disabilities is 
defined as one who is unable to care for himself or herself based on a 
physical or mental incapacity as determined by a physician or licensed 
or certified psychologist.



Sec. 792.216  Are Federal employees with children who are enrolled in 
summer programs and part-time programs eligible for the child care subsidy program?

    Federal employees with children (birth through age 13) and children 
with disabilities (children through age 18) who are enrolled in daytime 
summer programs and part-time programs such as before and after school 
programs are eligible for the child care subsidy program. The summer and 
part-time programs must be licensed and/or regulated.



Sec. 792.217  Are part-time Federal employees eligible for the child care 
subsidy program?

    Federal employees who work part-time are eligible for the child care 
subsidy program.

[[Page 73]]



Sec. 792.218  Does the law apply only to on-site Federal child care 
centers that are utilized by Federal families?

    The bill includes non-Federal center-based child care as well as 
care in family child care homes, as long as the providers are licensed 
and/or regulated by the State and/or local regulating authorities.



Sec. 792.219  Are agencies required to negotiate with their Federal 
labor organizations concerning the implementation of this law?

    Agencies are reminded of their obligation under 5 U.S.C. 7117 to 
negotiate or consult, as appropriate, with the exclusive representatives 
of their employees on the implementation of the regulations in this 
subpart.



Sec. 792.220  What are the requirements that child care providers must 
meet in order to participate in this program?

    The provider, whether center-based or family child care, must be 
licensed and/or regulated by the State and, where applicable, by local 
authorities where the child care service is delivered. Outside of the 
United States, agencies may adopt or create criteria to ensure a child 
care center or family child care home is safe. Agencies must not 
restrict the use of funds to apply to accredited child care providers 
only.



Sec. 792.221  Is there a statutory cap on the amount or the percentage 
of child care costs that will be subsidized?

    The law does not specify a cap on the amount or percentage of child 
care subsidy that may be subsidized.



Sec. 792.222  What is the definition of a lower income Federal employee 
and how is the amount of the child care subsidy determined?

    Each agency decides who qualifies as a lower income Federal employee 
within that agency. OPM has provided guidance for determining 
eligibility in the ``Guide for Implementing Child Care Legislation--
Public Law 107-67, Sec. 630.'' This publication is available on OPM's 
Web site, http://www.opm.gov/wrkfam.



Sec. 792.223  Who determines if a Federal employee qualifies as a lower 
income employee and how is the program administered?

    The agency or another appropriately identified organization 
determines eligibility using certain income and/or subsidy program 
criteria chosen by the agency. If the agency itself does not administer 
the program, it must select another organization to do so, using 
procedures that are in accordance with the Federal Acquisition 
Regulations. Regardless of what organization administers the program, 
the model for determining both the subsidy program eligibility and the 
amount of the subsidy is always determined by the Federal agency.



Sec. 792.224  Are child care subsidies paid to the Federal employee 
using the child care?

    Agencies must pay the child care provider directly, unless one of 
the following exceptions applies:
    (a) If an agency chooses to have an organization administer its 
program (see Sec. 792.223), the organization pays the child care 
provider;
    (b) For overseas locations, the agency may choose to pay the 
employee if the provider deals only in foreign currency; or
    (c) In unique circumstances, an agency may obtain written permission 
from OPM to do so.



Sec. 792.225  May an agency disburse funds to an organization that 
administers the child care subsidy program prior to the time the employee 
receives the child care services?

    The agency may disburse funds to an organization that administers 
the child care subsidy program in one lump sum. The organization will be 
responsible for tracking the funds and providing the agency with regular 
reports. An agency contract should specify that any unexpended funds 
shall be returned to the agency after the contract is completed.

[[Page 74]]



Sec. 792.226  How may an agency disburse funds to a Federally sponsored 
child care center in a multi-tenant building?

    In a multi-tenant building, funds from the agencies may be pooled 
together for the benefit of the employees qualified for the child care 
subsidy program.



Sec. 792.227  How long will the child care subsidy program be in effect 
for a Federal employee?

    The child care subsidy program, in the form of a reduced child care 
cost rate, shall be in effect from the time the agency makes a decision 
for a particular Federal employee and the child is enrolled in the 
program until one of the following occurs:
    (a) The child is no longer enrolled in the program;
    (b) The employee no longer qualifies as a ``lower income employee'; 
or
    (c) The agency no longer has a child care subsidy program.



Sec. 792.228  May these funds be used for children of Federal employees 
who are already enrolled in child care?

    The funds may be used for children currently enrolled in child care 
as long as their families meet the child care subsidy program 
eligibility requirements established by the agency.



Sec. 792.229  May an agency place restrictions or requirements on the 
use of these funds, and may the agency restrict the disbursement of such 
funds to only one type of child care or to one location?

    (a) Depending on the agency's staffing needs and the employees' own 
needs, including the local availability of child care, the agency may 
choose to place restrictions on the use of its funds for the child care 
subsidy program. For example, an agency may decide to restrict use to 
the following:
    (1) Federal employees who are full-time permanent employees;
    (2) Federal employees using an agency on-site child care center;
    (3) Federal employees using full-time child care; or
    (4) Federal employees using child care in specific locations.
    (a) With the exception of Sec. 792.229(c) an agency may determine 
whether and what restrictions to impose on the use of appropriated funds 
for the child care subsidy program.
    (b) Agencies must not restrict the use of funds to apply to 
accredited child care providers only.



Sec. 792.230  May an agency use appropriated funds to improve the 
physical space of the family child care homes or child care centers?

    An agency may not use appropriated funds under this program to 
improve the physical space of child care centers and family child care 
homes.



Sec. 792.231  Is an agency permitted to make advance child care subsidy 
program payments for an individual Federal employee?

    An agency may choose to make advance payments to a child care 
provider in certain situations. Advance payments may be paid to the 
child care provider when the provider requires payment up to one month 
in advance of rendering services. Except in accordance with Sec. 
792.225, an agency may not make advance payments for more than one month 
before the employee receives child care services.



PART 831_RETIREMENT--Table of Contents




             Subpart A_Administration and General Provisions

Sec.
831.101 Administration.
831.102 Basic records.
831.103 Evidence.
831.104 Application.
831.105 Computation of interest.
831.106 Disclosure of information.
831.107 Computation of time.
831.109 Initial decision and reconsideration.
831.110 Appeals.
831.111 Employee deductions and agency contributions.
831.112 Definitions of employee.
831.113 Payments to children.
831.114 Voluntary early retirement-substantial delayering, 
          reorganization, reduction in force, transfer of function, or 
          other workforce restructuring.

                           Subpart B_Coverage

831.201 Exclusions from retirement coverage.
831.202 Continuation of coverage for food service employees of the House 
          of Representatives.

[[Page 75]]

831.203 Continuation of coverage for employees of the Metropolitan 
          Washington Airports Authority.
831.204 Elections of retirement coverage under the District of Columbia 
          Financial Responsibility and Management Assistance Act of 
          1995.
831.205 CSRS coverage determinations to be approved by OPM.

                      Subpart C_Credit for Service

831.301 Military service.
831.302 Unused sick leave.
831.303 Civilian service.
831.304 Service with the Cadet Nurse Corps during World War II.
831.305 Service with a nonappropriated fund instrumentality after June 
          18, 1952, but before January 1, 1966.
831.306 Service as a National Guard technician before January 1, 1969.
831.307 Contract service.

                    Subpart D_Voluntary Contributions

831.401 Purpose and scope.
831.402 Definitions.
831.403 Eligibility to make voluntary contributions.
831.404 Procedure for making voluntary contributions.
831.405 Interest on voluntary contributions.
831.406 Withdrawal of voluntary contributions.
831.407 Purchase of additional annuity.

                  Subpart E_Eligibility for Retirement

831.501 Time for filing applications.
831.502 Automatic separation; exemption.
831.503 Retirement based on involuntary separation.

                      Subpart F_Survivor Annuities

     Organization and Structure of Regulations on Survivor Annuities

831.601 Purpose and scope.
831.602 Relation to other regulations.
831.603 Definitions.

                   Elections at the Time of Retirement

831.611 Election at time of retirement of fully reduced annuity to 
          provide a current spouse annuity.
831.612 Election at time of retirement of a fully reduced annuity or a 
          partially reduced annuity to provide a former spouse annuity.
831.613 Election of insurable interest annuity.
831.614 Election of a self-only annuity or partially reduced annuity by 
          married employees and Members.
831.615 [Reserved]
831.616 Elections by previously retired retiree with new title to an 
          annuity.
831.617 [Reserved]
831.618 Waiver of spousal consent requirement.
831.619 Marital status at time of retirement.

                      Changes of Survivor Elections

831.621 Changes of election before final adjudication.
831.622 Changes of election after final adjudication.

                        Post-Retirement Elections

831.631 Post-retirement election of fully reduced annuity or partially 
          reduced annuity to provide a current spouse annuity.
831.632 Post-retirement election of fully reduced annuity or partially 
          reduced annuity to provide a former spouse annuity.

                               Eligibility

831.641 Division of a survivor annuity.
831.642 Marriage duration requirements.
831.643 Time for filing applications for death benefits.
831.644 Remarriage.
831.645 Elections between survivor annuities.

                      Payment of Survivor Annuities

831.651 Commencing and terminating dates of survivor annuities.

                       Survivor Election Deposits

831.661 Deposits not subject to waiver.
831.662 Deposits required to change an election after final 
          adjudication.
831.663 Actuarial reduction in annuity of retirees who make post-
          retirement elections to provide a current spouse annuity or a 
          former spouse annuity.
831.664 Post-retirement survivor election deposits that were partially 
          paid before October 1, 1993.
831.665 Payment of deposits under Sec. 831.631, Sec. 831.632, Sec. 
          831.682, or Sec. 831.684 under pre-October 1, 1993, law or 
          when the retiree has died prior to October 1, 1993.

                          Children's Annuities

831.671 Proof of eligibility for a child's annuity.
831.672 Annuity for a child age 18 to 22 during full-time school 
          attendance.
831.673 Rates of child annuities.

             Regulations Pertaining to Noncodified Statutes

831.681 Annual notice required by Public Law 95-317.
831.682 Election by a retiree who retired before May 7, 1985, to provide 
          a former spouse annuity.

[[Page 76]]

831.683 Annuities for former spouses of employees or Members retired 
          before May 7, 1985.
831.684 Second chance elections to provide survivor benefits.
831.685 Changes in elections to provide a current spouse annuity by a 
          retiree who retired before May 28, 1986.

                   Subpart G_Computation of Annuities

831.701 Effective dates of annuities.
831.702 Adjustment of annuities.
831.703 Computation of annuities for part-time service.
831.704 Annuities including credit for service with a nonappropriated 
          fund instrumentality.

                  Subpart H_Nuclear Materials Couriers

831.801 Applicability and purpose.
831.802 Definitions.
831.803 Conditions for coverage in primary positions.
831.804 Conditions for coverage in secondary positions.
831.805 Evidence.
831.806 Requests from individuals.
831.807 Withholdings and contributions.
831.808 Mandatory separation.
831.809 Reemployment.
831.810 Review of decisions.
831.811 Oversight of coverage.

           Subpart I_Law Enforcement Officers and Firefighters

831.901 Applicability and purpose.
831.902 Definitions.
831.903 Conditions for coverage in primary positions.
831.904 Conditions for coverage in secondary positions.
831.905 Evidence.
831.906 Requests from individuals.
831.907 Withholdings and contributions.
831.908 Mandatory separation.
831.909 Reemployment.
831.910 Review of decisions.
831.911 Oversight of coverage determinations.

             Regulations Pertaining to Noncodified Statutes

831.912 Elections to be deemed a law enforcement officer for retirement 
          purposes by certain police officers employed by the 
          Metropolitan Washington Airports Authority (MWAA).

                          Subpart J_CSRS Offset

831.1001 Purpose.
831.1002 Definitions.
831.1003 Deductions from pay.
831.1004 Agency contributions.
831.1005 Offset from nondisability annuity.
831.1006 Offset from disability or survivor annuity.

             Subpart K_Prohibition on Payments of Annuities

831.1101 Scope.
831.1102 Definitions.
831.1104 Notice.
831.1105 Answer; request for hearing.
831.1106 Hearing.
831.1107 Powers of presiding officers.
831.1108 Witnesses.
831.1109 Evidence.
831.1110 Initial decision.
831.1111 Appeal and review.
831.1112 Final decision.

                     Subpart L_Disability Retirement

831.1201 Introduction.
831.1202 Definitions.
831.1203 Basic requirements for disability retirement.
831.1204 Filing disability retirement applications: General.
831.1205 Agency-filed disability retirement applications.
831.1206 Evidence supporting entitlement to disability benefits.
831.1207 Withdrawal of disability retirement applications.
831.1208 Termination of disability annuity because of recovery.
831.1209 Termination of disability annuity because of restoration to 
          earning capacity.
831.1210 Annuity rights after a disability annuity terminates.
831.1211 Reinstatement of disability annuity.
831.1212 Administrative review of OPM decisions.

                      Subpart M_Collection of Debts

831.1301 Purpose.
831.1302 Scope.
831.1303 Definitions.
831.1304 Processing.
831.1305 Collection of debts.
831.1306 Collection by administrative offset.
831.1307 Use of consumer reporting agencies.
831.1308 Referral to a collection agency.
831.1309 Referral for litigation.

             Subpart N_Standards for Waiver of Overpayments

831.1401 Conditions for waiver.
831.1402 Fault.
831.1403 Equity and good conscience.
831.1404 Financial hardship.
831.1405 Ordinary and necessary living expenses.
831.1406 Waiver precluded.
831.1407 Burdens of proof.

[[Page 77]]

            Subpart O_Allotments From Civil Service Annuities

831.1501 Definitions.
831.1511 Authorized allottees.
831.1521 Limitations.

Subparts P-Q [Reserved]

 Subpart R_Agency Requests to OPM for Recovery of a Debt From the Civil 
                 Service Retirement and Disability Fund

831.1801 Purpose.
831.1802 Scope.
831.1803 Definitions.
831.1804 Conditions for requesting an offset.
831.1805 Creditor agency processing for non-fraud claims.
831.1806 OPM processing for non-fraud claims.
831.1807 Installment withholdings.
831.1808 Special processing for fraud claims.

                 Subpart S_State Income Tax Withholding

831.1901 Definitions.
831.1902 Federal-State agreements.
831.1903 OPM responsibilities.
831.1904 State responsibilities.
831.1905 Additional provisions.
831.1906 Agreement modification and termination.

                     Subpart T_Payment of Lump Sums

831.2001 Definitions.
831.2002 Eligibility for lump-sum payment upon filing an Application for 
          Refund of Retirement Deductions (SF 2802).
831.2003 Eligibility for lump-sum payment upon death or retirement.
831.2004 Amount of lump-sums.
831.2005 Designation of beneficiary for lump-sum payment.
831.2006 Designation of agent by next of kin.
831.2007 Notification of current and/or former spouse before payment of 
          lump sum.
831.2008 Waiver of spouse and/or former spouse notification requirement.
831.2009 Lump sum payments which include contributions made to a 
          retirement system for employees of a nonappropriated fund 
          instrumentality.
831.2010 Transfers between retirement systems.
831.2011 Effect of part 772 of this chapter on CSRS lump-sum payments.

                 Subpart U_Deposits for Military Service

831.2101 Purpose.
831.2102 Scope.
831.2103 Definitions.
831.2104 Eligibility to make deposits.
831.2105 Filing an application to make deposit.
831.2106 Processing applications for deposit for service.
831.2107 Payments on deposits.

                Subpart V_Alternative Forms of Annuities

831.2201 Purpose.
831.2202 Definitions.
831.2203 Eligibility.
831.2204 Alternative forms of annuities available.
831.2205 Computation of alternative form of annuity.
831.2206 Election to pay deposit or redeposit for civilian service.
831.2207 Partial deferred payment of the lump-sum credit if annuity 
          commences after January 3, 1988, and before October 1, 1989.
831.2208 Partial deferred payment of the lump-sum credit if annuity 
          commences after December 2, 1989, and before October 1, 1995.
831.2209 Redetermined annuity after reemployment.

    Authority: 5 U.S.C. 8347; Sec. 831.102 also issued under 5 U.S.C. 
8334; Sec. 831.106 also issued under 5 U.S.C. 552a; Sec. 831.108 also 
issued under 5 U.S.C. 8336(d)(2); Sec. 831.114 also issued under 5 
U.S.C. 8336(d)(2), and section 1313(b)(5) of Pub. L. 107-296, 116 Stat. 
2135; Sec. 831.201(b)(1) also issued under 5 U.S.C. 8347(g); Sec. 
831.201(b)(6) also issued under 5 U.S.C. 7701(b)(2); Sec. 831.201(g) 
also issued under sections 11202(f), 11232(e), and 11246(b) of Pub. L. 
105-33, 111 Stat. 251; Sec. 831.201(g) also issued under section 7(b) 
and (e) of Pub. L. 105-274, 112 Stat. 2419; Sec. 831.201(i) also issued 
under sections 3 and 7(c) of Pub. L. 105-274, 112 Stat. 2419; Sec. 
831.204 also issued under section 102(e) of Pub. L. 104-8, 109 Stat. 
102, as amended by section 153 of Pub. L. 104-134, 110 Stat. 1321; Sec. 
831.205 also issued under section 2207 of Pub. L. 106-265, 114 Stat. 
784; Sec. 831.301 also issued under section 2203 of Pub. L. 106-265, 114 
Stat. 780; Sec. 831.303 also issued under 5 U.S.C. 8334(d)(2) and 
section 2203 of Pub. L. 106-235, 114 Stat. 780; Sec. 831.502 also issued 
under 5 U.S.C. 8337; Sec. 831.502 also issued under section 1(3), E.O. 
11228, 3 CFR 1965-1965 Comp. p. 317; Sec. 831.663 also issued under 
section 8339(j) and (k)(2); Secs. 831.663 and 831.664 also issued under 
section 11004(c)(2) of Pub. L. 103-66, 107 Stat. 412; Sec. 831.682 also 
issued under section 201(d) of Pub. L. 99-251, 100 Stat. 23; Sec. 
831.912 also issued under section 636 of Appendix C to Pub. L. 106-554, 
114 Stat. 2763A-164; subpart V also issued under 5 U.S.C. 8343a and 
section 6001 of Pub. L. 100-203, 101 Stat. 1330-275; Sec. 831.2203 also 
issued under section 7001(a)(4) of Pub. L. 101-508, 104 Stat. 1388-328.

    Source: 33 FR 12498, Sept. 4, 1968, unless otherwise noted.

[[Page 78]]



             Subpart A_Administration and General Provisions



Sec. 831.101  Administration.

    (a) OPM has charge of the adjudication of all claims arising under 
subchapter III of chapter 83 of title 5, United States Code, and of all 
matters directly or indirectly concerned with these adjudications.
    (b) In the adjudication of claims arising under subchapter III of 
chapter 83 of title 5, United States Code, OPM shall consider and take 
appropriate action on counterclaims filed by the Government as set-offs 
against amounts in the Civil Service Retirement and Disability Fund.
    (c) For purposes of this part, the term ``Associate Director'' means 
the Associate Director for Compensation in OPM.

[33 FR 12498, Sept. 4, 1968, as amended at 34 FR 17617, Oct. 31, 1969]



Sec. 831.102  Basic records.

    Every Federal department, agency, corporation or branch, whether 
executive, legislative, or judicial, and the District of Columbia 
Government (included in this part collectively in the term department or 
agency) having employees or Members of Congress (hereinafter referred to 
in this part as Members) subject to subchapter III of chapter 83 of 
title 5, United States Code, shall initiate and maintain retirement 
accounts for those employees and Members as prescribed by OPM issuances.

[33 FR 12498, Sept. 4, 1968, as amended at 66 FR 66711, Dec. 27, 2001]



Sec. 831.103  Evidence.

    (a) Standard Form 2806 (Individual Retirement Record) is the basic 
record for action on all claims for annuity or refund, and those 
pertaining to deceased employees, deceased Members, or deceased 
annuitants.
    (b) When the records of the department or agency concerned are lost, 
destroyed, or incomplete, the department or agency shall request the 
General Accounting Office, through OPM, to furnish the data that it 
considers necessary for a proper determination of the rights of the 
claimant. When an official record cannot develop the required 
information, the department, agency, or OPM should request inferior or 
secondary evidence which is then admissible.



Sec. 831.104  Application.

    (a) Except as provided in paragraph (b) of this section, 
applications under subchapter III of chapter 83 of title 5, United 
States Code, shall be filed with OPM and shall be on forms prescribed by 
OPM.
    (b) Applications to make deposit for military service shall be filed 
in accordance with subpart U of this part.

[48 FR 38783, Aug. 26, 1983]



Sec. 831.105  Computation of interest.

    (a) The computation of interest is on the basis of 30 days to the 
month. Interest is computed for the actual calendar time involved in 
each case, but whenever applicable the rule of average applies.
    (b) Interest is allowed on current deductions and deposits at the 
rate of 4 percent per year to December 31, 1947, and 3 percent per year 
thereafter, compounded annually, to December 31, 1956. After December 
31, 1956, except as provided below, interest is allowed at the rate of 3 
percent per year, compounded annually, to date of final separation or 
transfer to a position that is not covered by the retirement system. 
After December 31, 1956, interest is not allowed:
    (1) When an employee has one year or less of covered service,
    (2) For any fractional part of a month in the total service, or
    (3) For more than five years' civilian service.
    (c) Interest at the rate of 3 percent per year through December 31, 
1984, and, thereafter, at the yearly rate determined by the Secretary of 
Treasury, compounded annually, is allowed on voluntary contributions 
during periods of employment and, after the employee or Member has 
completed at least 5 years' civilian service, during periods of 
separation until the beginning date of annuity or death, whichever is 
earlier. For refund purposes, however, interest on voluntary 
contributions terminates on the date of the employee's or Member's final 
separation or on the

[[Page 79]]

date of the employee's or Member's last transfer to a position in which 
he or she is not subject to subchapter III of chapter 83 of title 5, 
United States Code
    (d) For noncontributory service performed before October 1, 1982, 
and for redeposits of refunds paid on an application received by either 
the individual's employing agency or OPM before October 1, 1982, 
interest at the rate of 4 percent per year to December 31, 1947, and at 
the rate of 3 percent per year thereafter, compounded annually, is 
charged. Interest is charged on the outstanding balance of a deposit 
from the midpoint of each service period for which deposit is involved; 
interest is charged on the outstanding balance of a refund from the date 
the refund was paid. Interest is charged to the date of deposit or 
commencing date of annuity, whichever is earlier, except that interest 
is not charged for any period of separation from the service which began 
before October 1, 1956.
    (e) For noncontributory service performed on or after October 1, 
1982, and for redeposits of refunds paid on an application received by 
the individual's employing agency or OPM on or after October 1, 1982, 
interest is charged at the rate of 3 percent per year through December 
31, 1984, and, thereafter, at the yearly rate determined by the 
Secretary of Treasury, compounded annually. Interest is charged on the 
outstanding balance of a deposit from the midpoint of each service 
period for which deposit is involved; interest is charged on the 
outstanding balance of a refund from the date the refund was paid. 
Interest is charged to the date of deposit.
    (f) No interest is charged on a deposit for military service if that 
deposit is made before October 1, 1984, or within 2 years of the date 
that an individual first becomes an employee or Member under the civil 
service retirement system, whichever is later. When interest is charged 
on a deposit for military service, it is charged on the outstanding 
balance at the rate of 3 percent per year, compounded annually, from 
October 1, 1984, or 2 years from the date the individual first becomes 
an employee or Member, whichever is later, through December 31, 1984, 
and thereafter at the yearly rate determined by the Secretary of the 
Treasury.
    (g) For calendar year 1985 and for each subsequent calendar year, 
OPM will publish a notice in the Federal Register to notify the public 
of the interest rate that will be in effect during that calendar year.
    (h) Interest under Sec. Sec. 831.631, 831.632, 831.682, and 831.684 
is compounded annually and accrued monthly.
    (1) The initial interest on each monthly difference between the 
reduced annuity rate and the annuity rate actually paid equals the 
amount of the monthly difference times the difference between (i) 1.06 
raised to the power whose numerator is the number of months between the 
date when the monthly difference in annuity rates occurred and the date 
when the initial interest is computed and whose denominator is 12; and 
(ii) 1.
    (2) The total initial interest due is the sum of all of the initial 
interest on each monthly difference computed in accordance with 
paragraph (h)(1) of this section.
    (3) Additional interest on any uncollected balance will be 
compounded annually and accrued monthly. The additional interest due 
each month equals the remaining balance due times the difference between 
(i) 1.06 raised to the 1/12th power; and (ii) 1.
    (i)(1) When an individual's civilian service involves several 
deposit and/or redeposit periods, OPM will normally use the following 
order of precedence in applying each installment payment against the 
full amount due:
    (i) Redeposits of refunds paid on applications received by the 
individual's employing agency or OPM on or after October 1, 1982;
    (ii) Redeposits of refunds paid on applications received by the 
individual's employing agency or OPM before October 1, 1982;
    (iii) Deposits for noncontributory civilian service performed on or 
after October 1, 1982; and
    (iv) Deposits for noncontributory service performed before October 
1, 1982.
    (2) If an individual specifically requests a different order of 
precedence, that request will be honored.

[[Page 80]]

    (j) Interest under Sec. 831.662 is compounded annually and accrued 
monthly.
    (1) The initial interest on each monthly difference between the 
reduced annuity rate and the annuity rate actually paid equals the 
amount of the monthly difference times the difference between--
    (i) The sum of one plus the interest rate set under Sec. 831.105(g) 
raised to the power whose numerator is the number of months between the 
date when the monthly difference in annuity rates occurred and the date 
when the initial interest is computed and whose denominator is 12; and
    (ii) 1.
    (2) The total initial interest due is the sum of all of the initial 
interest on each monthly difference computed in accordance with 
paragraph (j)(1) of this section.

[33 FR 12498, Sept. 4, 1968, as amended at 47 FR 43637, Oct. 1, 1982; 48 
FR 38783, Aug. 26, 1983; 51 FR 31931, Sept. 8, 1986; 52 FR 32287, Aug. 
27, 1987; 55 FR 9099, Mar. 12, 1990; 58 FR 52880, Oct. 13, 1993]



Sec. 831.106  Disclosure of information.

    (a)(1) The Office has in its possession or under its control records 
containing the following types of information:
    (i) Documentation of Federal service subject to the Civil Service 
Retirement System.
    (ii) Documentation of service credit and refund claims made under 
the Civil Service Retirement System.
    (iii) Retirement and death claims files, including documents 
supporting the retirement application, health benefits and life 
insurance eligibility, medical records supporting disability claims, and 
designations of beneficiaries.
    (iv) Claims review and correspondence files pertaining to benefits 
under the Federal Employees Health Benefits Program.
    (v) Suitability determination files on applicants for Federal 
employment found unsuitable for employment on medical grounds.
    (vi) Documentation of claims made for life insurance and health 
benefits by annuitants under a Federal Government retirement system 
other than the Civil Service Retirement System.
    (vii) Documentation of voluntary contributions made by eligible 
individuals.
    (viii) Health Unit medical records for OPM employees.
    (2) These records may be disclosed to the individual to whom the 
information pertains, or with prior written consent of the individual to 
any agency or other person, except that medical evidence about which a 
prudent physician would hesitate to inform the individual, will be 
disclosed only to a licensed physician designated in writing for that 
purpose by the individual or by his or her representative.
    (3) Civil service retirement records will be disclosed consistent 
with the provisions of the Privacy Act of 1974 (5 U.S.C. 552a), 
including, but not limited to, disclosures.
    (i) Pursuant to a routine use promulgated for such records and 
printed in the Office's annual publication of notices of systems of 
records, except that;
    (ii) A beneficiary designated in accordance with the provisions of 
the Civil Service Retirement law (5 U.S.C. 8342(b)) shall, during the 
lifetime of the designator, be disclosed to the designator only, at his 
or her signed, written request. Such beneficiary designations that may 
appear in records being disclosed must be removed before access to a 
record is permitted. If information pertaining to a designation of 
beneficiary is specifically asked for by a court of competent 
jurisdiction, it may be released to the court, but with a written notice 
that it is released under protest.
    (4) Except as provided in paragraphs (a)(2) and (a)(3) of this 
section, the Office shall not disclose information from the files, 
records, reports, or other papers and documents pertaining to a claim 
filed with the Office, whether potential, pending, or adjudicated. This 
information is deemed privileged and confidential.
    (b) On written request the Office shall return, to the person 
entitled to them, certificates of discharges, adoption papers, marriage 
certificates, decrees of divorce, letters testamentary or of 
administration, when they are no longer needed in the settlement of the 
claim. If papers returned constitute

[[Page 81]]

part of the material and essential evidence in a claim, the Office shall 
retain in the file photo or other copies of them or of the parts which 
appear to be of evidential value.

[47 FR 12937, Mar. 26, 1982]



Sec. 831.107  Computation of time.

    In computing a period of time prescribed by this part, the day of 
the action or event after which the designated period of time begins to 
run is not included. The last day of the period is included unless it is 
a Saturday, a Sunday, or a legal holiday; in this event, the period runs 
until the end of the next day which is not a Saturday, a Sunday, or a 
legal holiday.

[33 FR 12498, Sept. 4, 1968. Redesignated at 44 FR 37889, June 29, 1979]



Sec. 831.109  Initial decision and reconsideration.

    (a) Who may file. Except as noted in paragraph (b) of this section 
any individual or agency whose rights or interests under the Civil 
Service Retirement System are affected by an initial decision of the 
Office of Personnel Management (OPM) may request OPM to review its 
initial decision.
    (b) Actions covered elsewhere. (1) A request for reconsideration of 
termination of annuity payments under 5 U.S.C. 8311-22 shall be made in 
accordance with the procedures set out in subpart K of this part.
    (2) A request for reconsideration of a decision to collect a debt 
will be made in accordance with Sec. 831.1304(b).
    (c) Initial decision. A decision shall be considered an initial 
decision when rendered by OPM in writing and stating the right to 
reconsideration.
    (d) Reconsideration. A request for reconsideration must be in 
writing, must include the individual's name, address, date of birth and 
claim number, if applicable, and must state the basis for the request.
    (e) Time limits on reconsideration. (1) A request for 
reconsideration must be received by OPM within 30 calendar days from the 
date of the original decision.
    (2) The representative of the Associate Director for Compensation 
responsible for reconsiderations may extend the time limit for filing 
when the individual shows that he/she was not notified of the time limit 
and was not otherwise aware of it, or that he/she was prevented by 
circumstances beyond his/her control from making the request within the 
time limit.
    (f) Final decision. (1) After reconsideration, the Associate 
Director's representative shall issue a final decision which shall be in 
writing, shall fully set forth the findings and conclusions of the 
reconsideration, and shall contain notice of the right to request an 
appeal provided in Sec. 831.110. Copies of the final decision shall be 
sent to the individual, to any competing claimants and, where 
applicable, to the agency.
    (2) OPM may issue a final decision providing the opportunity to 
appeal under Sec. 831.110 rather than an opportunity to request 
reconsideration under paragraph (c) of this section. Such a decision 
must be in writing and state the right to appeal under Sec. 831.110.
    (g) Competing claimants. (1) When a competing claimant files a 
request for reconsideration under this section, the other competing 
claimants shall be notified of the request and given an opportunity to 
submit written substantiation of their claim.
    (2) When a determination in favor of one claimant would affect 
another claimant, all claimants concerned will be notified of that 
decision and those adversely affected will be given an opportunity to 
request reconsideration. OPM shall not execute its decision until the 
time limit for requesting reconsideration has expired. If 
reconsideration has been requested, OPM shall take no action after the 
reconsideration decision is rendered until the time limit to appeal has 
expired.

[45 FR 23632, Apr. 8, 1980, as amended at 49 FR 1330, Jan. 11, 1984; 50 
FR 34664, Aug. 27, 1985; 62 FR 22873, Apr. 28, 1997]



Sec. 831.110  Appeals.

    Appeals to MSPB. Except as noted in this paragraph, an individual or 
agency whose rights or interests under the Civil Service Retirement 
System (Subchapter III of chapter 83, title 5, United States Code) are 
affected by a final decision of the representative of the Associate 
Director for Compensation, Office of Personnel Management, may request 
the Merit Systems Protection

[[Page 82]]

Board to review such decision in accord with procedures prescribed by 
the Board. Decisions of OPM and the Associate Director for Compensation 
made in accord with the procedures referenced in Sec. 831.109(b)(1) are 
made under subchapter II of chapter 83, title 5, United States Code. 
Such decisions are not appealable to the Merit Systems Protection Board 
under 5 U.S.C. 8347(d).

[44 FR 37890, June 29, 1979, as amended at 45 FR 23633, Apr. 8, 1980; 48 
FR 38784, Aug. 26, 1983]



Sec. 831.111  Employee deductions and agency contributions.

    (a) Agency share. When an agency fails to withhold some or all of an 
employee deduction under 5 U.S.C. 8334(a) for any pay period, the agency 
is still responsible for submitting the correct agency contribution to 
OPM. The agency must submit as the agency share, a payment equal to the 
amount that would have been submitted if the error had not been made (or 
a payment equal to the difference between the amount already submitted 
as the agency share and the amount that should have been submitted). The 
payment should be submitted to OPM in the manner currently prescribed 
for the transmission of withholdings and contributions as soon as 
possible, but not later than provided by standards established by OPM.
    (b) Employee share. (1) If, through administrative error, an agency 
did not withhold any of the employee deductions required by 5 U.S.C. 
8334(a) for any pay period, the employee may, at his or her option--
    (i) Request the agency that employed him or her when the error was 
made to correct his or her records and arrange to pay any resulting 
overpayment of pay to the agency (unless it is waived by the agency); or
    (ii) Pay the deposit plus any applicable interest (under certain 
conditions, the deposit may be made at any time until the final 
adjudication of his or her application for retirement) directly to OPM 
by submitting SF 2803; or
    (iii) Have the period of service treated like the nondeduction 
service described in Sec. 831.303.
    (2) When the agency withholds part of the required employee 
deductions for any pay period, the balance must be submitted to OPM in 
the manner currently prescribed for the transmission of withholdings and 
contributions as soon as possible, but not later than provided by 
standards established by OPM. The agency must correct its error. The 
employee does not have the option to pay a deposit directly to OPM when 
partial deductions have been withheld.
    (3) If the agency waives the employee's repayment of the salary 
overpayment that resulted from the administrative error, the agency must 
also submit (in addition to the agency contribution) the employee's 
share of the unpaid contributions to OPM in the manner currently 
prescribed for the transmission of withholdings and contributions.

[53 FR 35295, Sept. 13, 1988, as amended at 66 FR 66711, Dec. 27, 2001]



Sec. 831.112  Definitions of employee.

    (a) Determinations involving an employee's ability to make a deposit 
or redeposit. A person may make a deposit or redeposit under section 
8334 of title 5, United States Code, if he or she is an ``employee.'' 
For purposes of this paragraph, an employee is--
    (1) A person currently employed in a position subject to the civil 
service retirement law; or
    (2) A former employee (whose annuity has not been finally 
adjudicated) who retains civil service retirement annuity rights based 
on a separation from a position in which retirement deductions were 
properly withheld and remain (or have been redeposited in whole or in 
part) in the Civil Service Retirement and Disability Fund.
    (b) Determinations involving the payment of survivor benefits at an 
employee's or former employee's death. To determine entitlement to 
survivor benefits, OPM establishes whether the deceased individual was 
an ``employee'' or a ``retiree'' on the date of death. If the decedent 
was an ``employee'' on the date of death, survivor benefits are paid as 
though the individual died in service. If the decedent was a ``retiree'' 
on the date of death, survivor benefits are

[[Page 83]]

only paid as provided in the individual's election, provided it was 
properly made. However, if a former employee was eligible only for a 
deferred annuity at age 62, survivor benefits are only paid if the 
individual was a ``retiree'' on the date of death. For purposes of this 
paragraph--
    (1) Employee is a person--
    (i) Who had not been separated from service prior to his or her 
death, even if he or she had applied for retirement (for example, an 
applicant for disability annuity) and the application had been approved; 
or
    (ii) Whose death occurs before the commencing date of annuity, even 
though separation has occurred.
    (2) Retiree or annuitant is a person--
    (i) Who has been separated from service and met all the requirements 
to receive an annuity including having filed an application for the 
annuity prior to his or her death; and
    (ii) Whose death occurs on or after the commencing date of annuity.
    (c) Determinations involving the requirement of spousal consent for 
elections of alternative annuity and survivor annuity benefits. Spousal 
consent is required as specified in Sec. Sec. 831.614 and 831.2203(c), 
if the employee/annuitant is married on the commencing date of annuity, 
regardless of whether that date is before or after the date of 
separation from service.

[56 FR 45883, Sept. 9, 1991, as amended at 58 FR 52880, Oct. 13, 1993]



Sec. 831.113  Payments to children.

    For purposes of section 8345(e) of title 5, United States Code, 
persons who have attained age 18 are considered adults regardless of the 
age of majority in the jurisdiction in which they reside.

[56 FR 45884, Sept. 9, 1991]



Sec. 831.114  Voluntary early retirement-substantial delayering, 
reorganization, reduction in force, transfer of function, or other 
workforce restructuring.

    (a) A specific designee is defined as a senior official within an 
agency who has been specifically designated to sign requests for 
voluntary early retirement authority under a designation from the head 
of the agency. Examples include a Chief Human Capital Officer, an 
Assistant Secretary for Administration, a Director of Human Resources 
Management, or other official.
    (b) An agency's request for voluntary early retirement authority 
must be signed by the head of the agency or by a specific designee.
    (c) The request must contain the following information:
    (1) Identification of the agency or specified component(s) for which 
the authority is being requested;
    (2) Reasons why the agency needs voluntary early retirement 
authority. This must include a detailed summary of the agency's 
personnel and/or budgetary situation that will result in an excess of 
personnel because of a substantial delayering, reorganization, reduction 
in force, transfer of function, or other workforce restructuring or 
reshaping, consistent with agency human capital goals;
    (3) The date on which the agency expects to effect the substantial 
delayering, reorganization, reduction in force, transfer of function, or 
other workforce restructuring or reshaping;
    (4) The time period during which the agency plans to offer voluntary 
early retirement;
    (5) The total number of non-temporary employees in the agency (or 
specified component(s));
    (6) The total number of non-temporary employees in the agency (or 
specified component(s)) who may be involuntarily separated, downgraded, 
transferred, or reassigned as a result of the substantial delayering, 
reorganization, reduction in force, transfer of function, or other 
workforce restructuring or reshaping;
    (7) The total number of employees in the agency (or specified 
component(s)) who are eligible for voluntary early retirement;
    (8) An estimate of the total number of employees in the agency (or 
specified component(s)) who are expected to retire early during the 
period covered by the request for voluntary early retirement authority; 
and
    (9) A description of the types of personnel actions anticipated as a 
result of the agency's need for voluntary early retirement authority. 
Examples

[[Page 84]]

include separations, transfers, reassignments, and downgradings.
    (d) OPM will evaluate a request for voluntary early retirement based 
on:
    (1) A specific request to OPM from the agency for voluntary early 
retirement authority;
    (2) A voluntary separation incentive payment implementation plan, as 
discussed in part 576, subpart A, of this chapter, which must outline 
the intended use of the incentive payments and voluntary early 
retirement; or
    (3) The agency's human capital plan, which must outline its intended 
use of voluntary separation incentive payments and voluntary early 
retirement authority, and the changes in organizational structure it 
expects to make as the result of projected separations and early 
retirements.
    (e) Regardless of the method used, the request must include all of 
the information required by paragraph (c) of this section.
    (f) OPM may approve an agency's request for voluntary early 
retirement authority to cover the entire period of the substantial 
delayering, reorganization, reduction in force, transfer of function, or 
other workforce restructuring or reshaping described by the agency, or 
the initial portion of that period with a requirement for subsequent 
information and justification if the period covers multiple years.
    (g) After OPM approves an agency's request, the agency must 
immediately notify OPM of any subsequent changes in the conditions that 
served as the basis for the approval of the voluntary early retirement 
authority. Depending upon the circumstances involved, OPM will modify 
the authority as necessary to better suit the agency's needs.
    (h) The agency may further limit voluntary early retirement offers 
based on:
    (1) An established opening and closing date for the acceptance of 
applications that is announced to employees at the time of the offer; or
    (2) The acceptance of a specified number of applications for 
voluntary early retirement, provided that, at the time of the offer, the 
agency notified employees that it retained the right to limit the number 
of voluntary early retirements.
    (i) Within the timeframe specified for its approved voluntary early 
retirement authority, the agency may subsequently establish a new or 
revised closing date, or reduce or increase the number of early 
retirement applications it will accept, if management's downsizing and/
or reshaping needs change. If the agency issues a revised closing date, 
or a revised number of applications to be accepted, the new date or 
number of applications must be announced to the same group of employees 
included in the original announcement. If the agency issues a new window 
period with a new closing date, or a new instance of a specific number 
of applications to be accepted, the new window period or number of 
applications to be accepted may be announced to a different group of 
employees as long as they are covered by the approved voluntary early 
retirement authority.
    (j) Chapter 43 of title 38, United States Code, requires that 
agencies treat employees on military duty, for all practical purposes, 
as though they were still on the job. Further, employees are not to be 
disadvantaged because of their military service. In accordance with 
these provisions, employees on military duty who would otherwise be 
eligible for an offer of voluntary early retirement will have 30 days 
following their return to duty to either accept or reject an offer of 
voluntary early retirement. This will be true even if the voluntary 
early retirement authority provided by OPM has expired.
    (k) An employee who separates from the service voluntarily after 
completing 25 years of service, or becoming age 50 and completing 20 
years of service, is entitled to an annuity if, on the date of 
separation, the employee:
    (1) Is serving in a position covered by a voluntary early retirement 
offer; and
    (2) Meets the following conditions which are covered in 5 U.S.C. 
8336(d)(2):
    (i) Has been employed continuously, by the agency in which the 
employee is serving, for at least the 31-day period ending on the date 
on which such agency requests the determination referred to in section 
831.114(b);
    (ii) Is serving under an appointment that is not time limited;

[[Page 85]]

    (iii) Has not been duly notified that such employee is to be 
involuntarily separated for misconduct or unacceptable performance;
    (iv) Is separated from the service voluntarily during a period in 
which, as determined by the Office of Personnel Management (upon request 
of the agency) under regulations prescribed by the Office:
    (A) Such agency (or, if applicable, the component in which the 
employee is serving) is undergoing substantial delayering, substantial 
reorganization, substantial reductions in force, substantial transfer of 
function, or other substantial workforce restructuring (or shaping);
    (B) A significant percentage of employees serving in such agency (or 
component) are likely to be separated or subject to an immediate 
reduction in the rate of basic pay (without regard to subchapter VI of 
chapter 53, or comparable provisions); or
    (C) Identified as being in positions which are becoming surplus or 
excess to the agency's future ability to carry out its mission 
effectively; and
    (v) As determined by the agency under regulations prescribed by the 
Office, is within the scope of the offer of voluntary early retirement, 
which may be made based on the following criteria:
    (A) 1 or more organizational units;
    (B) 1 or more occupational series or levels;
    (C) 1 or more geographical locations;
    (D) Specific periods;
    (E) Skills, knowledge, or other factors related to a position; or
    (F) Any appropriate combination of such factors.
    (l) Agencies are responsible for ensuring that employees are not 
coerced into voluntary early retirement. If an agency finds any 
instances of coercion, it must take appropriate corrective action.
    (m) Except as provided in paragraph (j) of this section, an agency 
may not offer or process voluntary early retirements beyond the stated 
expiration date of a voluntary early retirement authority or offer early 
retirements to employees who are not within the scope of the voluntary 
early retirement authority approved by OPM.
    (n) OPM may terminate a voluntary early retirement authority if it 
determines that the condition(s) that formed the basis for the approval 
of the authority no longer exist.
    (o) OPM may amend, limit, or terminate a voluntary early retirement 
authority to ensure that the requirements of this subpart are properly 
being followed.
    (p) Agencies must provide OPM with interim and final reports for 
each voluntary early retirement authority, as covered in OPM's approval 
letter to the agency. OPM may suspend or cancel a voluntary early 
retirement authority if the agency is not in compliance with the 
reporting requirements or reporting schedule specified in OPM's 
voluntary early retirement authority approval letter.

[69 FR 33278, June 15, 2004, as amended at 69 FR 50265, Aug. 16, 2004]



                           Subpart B_Coverage



Sec. 831.201  Exclusions from retirement coverage.

    (a) The following groups of employees in the executive branch of the 
Government are excluded from subchapter III of chapter 83 of title 5, 
United States Code:
    (1) Employees serving under appointments limited to one year or 
less, except annuitants appointed by the President to fill unexpired 
terms of office on or after January 1, 1976.
    (2) Intermittent employees--non-full-time employees without a 
prearranged regular tour of duty.
    (3) Employees whose salary, pay, or compensation on an annual basis 
is $12 a year or less.
    (4) Member or patient employees in Government hospitals or homes.
    (5) Employees paid on a piecework basis, except those whose work 
schedule provides for regular or full-time service.
    (6) Intermittent alien employees engaged on work outside the 
continental limits of the United States.
    (7) Employees serving under temporary appointments pending 
establishment of registers, or pending final determination of 
eligibility for permanent appointment.

[[Page 86]]

    (8) Officers in Charge, clerks in fourth-class post offices, 
substitute rural carriers, and special-delivery messengers at second- 
third-, and fourth-class post offices.
    (9) Consular agents appointed under authority of section 551 of the 
Foreign Service Act of 1946 (22 U.S.C. 951).
    (10) Employees serving under emergency-indefinite appointments not 
exceeding 5 years.
    (11) United States citizens given ``overseas limited appointments.''
    (12) Employees serving under nonpermanent appointments made pursuant 
to section 1 of Executive Order 10180 of November 13, 1950.
    (13) Employees serving under nonpermanent appointments, designated 
as indefinite, made after January 23, 1955, the effective date of the 
repeal of Executive Order 10180.
    (14) Employees serving under term appointments.
    (15) Temporary employees of the Census Bureau employed under 
temporary limited appointments exceeding 1 year.
    (16) Employees serving under limited term, limited emergency and 
noncareer (designated as indefinite) appointments in the Senior 
Executive Service.
    (17) Health care employees of the National Health Service Corps 
serving under appointments limited to four years or less in health 
manpower shortage areas.
    (b) Paragraph (a) of this section does not deny retirement coverage 
when:
    (1) Employment in an excluded category follows employment subject to 
subchapter III of chapter 83 of title 5, United States Code, without a 
break in service or after a separation from service of 3 days or less, 
except in the case of:
    (i) An alien employee whose duty station is located in a foreign 
country; or
    (ii) An employee hired by the Census Bureau under a temporary, 
intermittent appointment to perform decennial census duties.
    (2) The employee receives a career or career-conditional appointment 
under part 315 of this chapter;
    (3) The employee is granted competitive status under legislation, 
Executive order, or civil service rules and regulations, while he or she 
is serving in a position in the competitive service; or
    (4) The employee is granted merit status under 35 CFR chapter I, 
subchapter E;
    (5) The appointment meets the definition of a provisional 
appointment contained in Sec. Sec. 316.401 and 316.403 of this chapter;
    (6) The employee receives an interim appointment under Sec. 772.102 
of this chapter and was covered by CSRS at the time of the separation 
for which interim relief is required.
    (c) Members of the following boards and commissions of the 
government of the District of Columbia appointed on or after August 13, 
1960, are excluded from subchapter III of chapter 83 of title 5, United 
States Code, except that this exclusion does not operate in the case of 
a member serving on August 13, 1960, who is reappointed on expiration of 
term without a break in service or after a separation from service of 3 
days or less:

    Board of Accountancy.
    Board of Examiners and Registrars of Architects.
    Board of Barber Examiners.
    Boxing Commission.
    Board of Cosmetology.
    Board of Dental Examiners.
    Electrical Board.
    Commission on Licensure to Practice the Healing Arts.
    Board of Examiners in the Basic Sciences.
    Board of Examiners in Medicine and Osteopathy.
    Motion Picture Operators' Board.
    Nurses' Examining Board.
    Board of Optometry.
    Board of Pharmacy.
    Plumbing Board.
    Board of Podiatry Examiners.
    Board of Registration for Professional Engineers.
    Real Estate Commission.
    Refrigeration and Air Conditioning Board.
    Steam and Other Operating Engineers' Board.
    Undertakers' Committee.
    Board of Examiners of Veterinarian Medicine.

    (d) The following groups of employees of the government of the 
District of Columbia, appointed on or after October 1, 1965, are 
excluded from subchapter III of chapter 83 of title 5, United States 
Code:
    (1) Employees serving under appointments limited to one year or 
less, except temporary teachers of the District of Columbia public 
school system.

[[Page 87]]

    (2) Intermittent employees--non-full-time employees without a 
prearranged regular tour of duty.
    (3) Employees whose pay on an annual basis is $12.00 per year or 
less.
    (4) Patient or inmate employees in District Government hospitals, 
homes or penal institutions.
    (5) Employees paid on a contract or fee basis.
    (6) Employees paid on a piecework basis, except those whose work 
schedule provides for regular or full-time service.
    (7) Employees serving under temporary appointments pending 
establishment of registers, or pending final determination of 
eligibility for permanent appointment.
    (e) Paragraph (d) of this section does not deny retirement coverage 
when (1) employment in an excluded category follows employment subject 
to subchapter III of chapter 83 of title 5, United States Code, without 
a break in service or after a separation from service of 3 days or less, 
or (2) the employee is granted competitive status under legislation, 
Executive order, or the Civil Service rules and regulations, while he is 
serving in a position in the competitive service.
    (f) Also excluded are any temporary employees, appointed for one 
year or less, by the government of the District of Columbia under any 
program or project established pursuant to the Economic Opportunity Act 
of 1964 (42 U.S.C. 2701 et seq.), and summer trainees employed by the 
Government of the District of Columbia in furtherance of the President's 
Youth Opportunity Campaign.
    (g) Individuals first employed by the government of the District of 
Columbia on or after October 1, 1987, in a position subject to 
subchapter III of chapter 83 of title 5, United States Code, are 
excluded from such subchapter, except:
    (1) Employees of St. Elizabeths Hospital who were covered under 
subchapter III of chapter 83 of title 5, United States Code, before 
October 1, 1987, appointed by the District of Columbia government on 
October 1, 1987, as provided in section 6 of Pub. L. 98-621, and deemed 
employed by the District of Columbia government before October 1, 1987, 
under section 109 of Pub. L. 100-238;
    (2) Effective on and after October 1, 1997, the effective date of 
section 11246 of Pub. L. 105-33, 111 stat. 251, nonjudicial employees of 
the District of Columbia Courts employed in a position which is not 
excluded from CSRS under the provisions of this section;
    (3) Effective on and after April 1, 1999, the effective date of 
section 7(e) of Pub. L. 105-274, 112 Stat. 2419, employees of the Public 
Defender Service of the District of Columbia employed in a position 
which is not excluded from CSRS under the provisions of this section;
    (4) The District of Columbia Department of Corrections Trustee, 
authorized by section 11202 of Pub. L. 105-33, 111 Stat. 251, and an 
employee of the Trustee if the Trustee or employee is a former Federal 
employee appointed with a break in service of 3 days or less, and in the 
case of an employee of the Trustee is employed in a position which is 
not excluded from CSRS under the provisions of this section;
    (5) The District of Columbia Pretrial Services, Parole, Adult 
Probation and Offender Supervision Trustee, authorized by section 11232 
of Pub. L. 105-33, 111 Stat. 251, as amended by section 7(b) of Pub. L. 
105-274, 112 Stat. 2419, and an employee of the Trustee, if the Trustee 
or employee is a former Federal employee appointed with a break in 
service of 3 days or less, and, in the case of an employee of the 
Trustee, is employed in a position which is not excluded from CSRS under 
the provisions of this section, and;
    (6) Subject to an election under Sec. 831.204, employees of the 
District of Columbia Financial Responsibility and Management Assistance 
Authority.
    (h) Employees who have elected coverage under another retirement 
system in accordance with part 847 of this chapter are excluded from 
subchapter III of chapter 83 of title 5, United States Code, during that 
and all subsequent periods of service (including service as a reemployed 
annuitant).
    (i)(1) A former employee of the District of Columbia who is 
appointed in a Federal position by the Department of Justice, or by the 
Court Services and

[[Page 88]]

Offender Supervision Agency established by section 11233(a) of Pub. L. 
105-33, 111 Stat. 251, as amended by section 7(c) of Pub. L. 105-274, 
112 Stat. 2419, is excluded from CSRS beginning on the date of the 
Federal appointment, if the employee elects to continue coverage under a 
retirement system for employees of the District of Columbia under 
section 3 of Pub. L. 105-274, 112 Stat. 2419, and if the following 
conditions are met:
    (i) The employee is hired by the Department of Justice or by the 
Court Services and Offender Supervision Agency during the period 
beginning August 5, 1997, and ending 1 year after the date on which the 
Lorton Correctional Complex is closed, or 1 year after the date on which 
the Court Services and Offender Supervision Agency assumes its duties, 
whichever is later; and
    (ii) The employee elects to continue coverage under a retirement 
system for employees of the District of Columbia no later than June 1, 
1999 or 60 days after the date of the Federal appointment, whichever is 
later.
    (2) An individual's election to continue coverage under a retirement 
system for employees of the District of Columbia remains in effect until 
the individual separates from service with the Department of Justice or 
the Court Services and Offender Supervision Agency.

[33 FR 12498, Sept. 4, 1968, as amended at 45 FR 24856, Apr. 11, 1980; 
45 FR 46782, July 11, 1980; 47 FR 2285, Jan. 15, 1982; 48 FR 38784, Aug. 
26, 1983; 51 FR 23037, June 25, 1986; 52 FR 38220, Oct. 15, 1987; 53 FR 
42936, Oct. 25, 1988; 56 FR 4930, Feb. 7, 1991; 56 FR 10142, Mar. 11, 
1991; 57 FR 3713, Jan. 31, 1992; 61 FR 41720, Aug. 9, 1996; 62 FR 50996, 
Sept. 30, 1997; 63 FR 9402, Feb. 25, 1998; 64 FR 15288, Mar. 31, 1999]



Sec. 831.202  Continuation of coverage for food service employees of the 
House of Representatives.

    (a) Congressional employees who provide food service operations for 
the House of Representatives can elect to continue their retirement 
coverage under subchapter III of chapter 83 of title 5, United States 
Code, when such food service operations are transferred to a private 
contractor. These regulations also apply to any successor contractors.
    (b) Eligibility requirements. To be eligible for continuation of 
retirement coverage, an employee must:
    (1) Be a Congressional employee (as defined in section 2107 of title 
5, United States Code), other than an employee of the Architect of the 
Capitol, engaged in providing food service operations for the House of 
Representatives under the administrative control of the Architect of the 
Capitol;
    (2) Be subject to subchapter III of chapter 83 of title 5, United 
States Code;
    (3) Elect to remain covered under civil service retirement 
provisions no later than the day before the date on which the food 
service operations transfer from the House of Representatives to a 
private contractor; and
    (4) Become employed to provide food services under contract without 
a break in service. A ``break in service'' means a separation from 
employment of at least three calendar days.
    (c) Employee deductions. An employee who elects to continue coverage 
under title 5 retirement provisions is deemed to consent to deductions 
from his or her basic pay for the Civil Service Retirement and 
Disability Fund in the amount determined in accordance with 5 U.S.C. 
8334(k). The employer providing the food services under contract must, 
in accordance with procedures established by OPM, pay into the Civil 
Service Retirement and Disability Fund the amounts deducted from an 
employee's pay.
    (d) Employer contributions. The employer providing food services 
under contract must, in accordance with procedures established by OPM, 
pay into the Civil Service Retirement and Disability Fund amounts equal 
to any agency contributions that would be required if the individual 
were a Congressional employee covered by the Civil Service Retirement 
System.

[52 FR 5069, Feb. 19, 1987, and 53 FR 10055, Mar. 29, 1988. Redesignated 
at 53 FR 10055, Mar. 29, 1988]



Sec. 831.203  Continuation of coverage for employees of the Metropolitan 
Washington Airports Authority.

    (a) Permanent Federal Aviation Administration employees assigned to 
Washington National Airport or Dulles

[[Page 89]]

International Airport who elect to transfer to the Metropolitan 
Washington Airports Authority, retain their retirement coverage under 
subchapter III of chapter 83 of title 5, United States Code.
    (b) Eligibility requirements. To be eligible for continuation of 
retirement coverage, an employee must (1) be a permanent Federal 
Aviation Administration employee assigned to the Metropolitan Washington 
Airports who elects to transfer to the Airports Authority; (2) be 
subject to subchapter III chapter 83 of title 5 United States Code on 
the day before the date the lease takes effect; and (3) become 
continually employed by the Airports Authority without a break in 
service. A ``break in service'' means a separation from employment of at 
least 3 calendar days.
    (c) Employee deductions. Employees of the Airports Authority who 
have continuing coverage under title 5 retirement provisions are deemed 
to consent to deductions from their basic pay for the Civil Service 
Retirement and Disability Fund. The amounts deducted will be the same as 
if the employees were still employed by the Federal Government. The 
Airports Authority must, in accordance with procedures established by 
OPM, pay into the Civil Service Retirement and Disability Fund the 
amounts deducted from an employee's pay.
    (d) Employer contributions. The Airports Authority must, in 
accordance with procedures established by OPM, pay into the Civil 
Service Retirement and Disability Fund amounts equal to any agency 
contributions that would be required for employees covered by the Civil 
Service Retirement System.
    (e) Sick leave. An employee who retires, or dies leaving a survivor 
entitled to an annuity, from the Airports Authority within the 5 year 
period beginning on the date the lease takes effect will be permitted to 
credit unused sick leave in his or her annuity computation. After the 5 
year period, use of unused sick leave in the annuity computation will be 
permitted if the employee is under a formal leave system as defined in 
Sec. 831.302.

[52 FR 19125, May 21, 1987, and 53 FR 10055, Mar. 29, 1988. Redesignated 
at 53 FR 10055, Mar. 29, 1988]



Sec. 831.204  Elections of retirement coverage under the District of 
Columbia Financial Responsibility and Management Assistance Act of 1995.

    (a) Who may elect--(1) General rule. Any individual appointed by the 
District of Columbia Financial Responsibility and Management Assistance 
Authority (the Authority) in a position not excluded from CSRS coverage 
under Sec. 831.201 may elect to be deemed a Federal employee for CSRS 
purposes unless the employee has elected to participate in a retirement, 
health or life insurance program offered by the District of Columbia.
    (2) Exception. A former Federal employee being appointed by the 
Authority on or after October 26, 1996, no more than 3 days (not 
counting District of Columbia holidays) after separation from Federal 
employment cannot elect to be deemed a Federal employee for CSRS 
purposes unless the election was made before separation from Federal 
employment.
    (b) Opportunity to elect FERS. An individual who elects CSRS under 
paragraph (a) of this section after a break of more than 3 days between 
Federal service and employment with the Authority may elect FERS in 
accordance with 5 CFR 846.201(b)(ii).
    (c) Procedure for making an election. The Authority or the agency 
providing administrative support services to the Authority 
(Administrative Support Agency) must establish a procedure for notifying 
employees of their election rights and for accepting elections.
    (d) Time limit for making an election. (1) An election under 
paragraph (a)(1) of this section must be made within 30 days after the 
employee receives the notice under paragraph (c) of this section.
    (2) The Authority or its Administrative Support Agency will waive 
the time limit under paragraph (d)(1) of this section upon a showing 
that--
    (i) The employee was not advised of the time limit and was not 
otherwise aware of it; or

[[Page 90]]

    (ii) Circumstances beyond the control of the employee prevented him 
or her from making a timely election and the employee thereafter acted 
with due diligence in making the election.
    (e) Effect of an election. (1) An election under paragraph (a) of 
this section is effective on the commencing date of the employee's 
service with the Authority.
    (2) An individual who makes an election under paragraph (a) of this 
section is ineligible, during the period of employment covered by that 
election, to participate in any retirement system for employees of the 
government of the District of Columbia.
    (f) Irrevocability. An election under paragraph (a) of this section 
becomes irrevocable when received by the Authority or its Administrative 
Support Agency.
    (g) Employee deductions. The Authority or its Administrative Support 
Agency must withhold, from the pay of an employee of the District of 
Columbia Financial Responsibility and Assistance Authority who has 
elected to be deemed a Federal employee for CSRS purposes, an amount 
equal to the percentage withheld from Federal employees' pay for periods 
of service covered by CSRS and, in accordance with procedures 
established by OPM, pay into the Civil Service Retirement and Disability 
Fund the amounts deducted from an employee's pay.
    (h) Employer contributions. The District of Columbia Financial 
Responsibility and Assistance Authority must, in accordance with 
procedures established by OPM, pay into the Civil Service Retirement and 
Disability Fund amounts equal to any agency contributions required under 
CSRS.

[61 FR 58458, Nov. 15, 1996]



Sec. 831.205  CSRS coverage determinations to be approved by OPM.

    If an agency determines that an employee is CSRS-covered, the agency 
must submit its determination to OPM for written approval. This 
requirement does not apply if the employee has been employed in Federal 
service with CSRS coverage within the preceding 365 days.

[66 FR 15608, Mar. 19, 2001]



                      Subpart C_Credit for Service



Sec. 831.301  Military service.

    (a) Service of an individual who first became an employee or Member 
under the civil service retirement system before October 1, 1982. A 
period of honorable active service after December 31, 1956, in the Army, 
Navy, Marine Corps, Air Force, or Coast Guard of the United States, or, 
after June 30, 1960, in the Regular Corps or Reserve Corps of the Public 
Health Service, or, after June 30, 1961, as a commissioned officer of 
the National Oceanic and Atmospheric Administration (formerly Coast and 
Geodetic Survey and Environmental Science Services Administration), 
performed before the date of separation on which civil service annuity 
entitlement is based shall be included in the computation of the annuity 
provided--
    (1) The employee or Member has completed 5 years' (18 months' for 
survivors of employees or Members who die in service) civilian service;
    (2) The employee or Member is not receiving military retired pay 
awarded for reasons other than (i) service-connected disability incurred 
in combat with an enemy of the United States, (ii) service-connected 
disability caused by an instrumentality of war and incurred in line of 
duty during a period of war (as that term is used in chapter 11 of title 
38, United States Code), or (iii) under chapter 67 of title 10, United 
States Code; and
    (3)(i) The employee, Member, or survivor is not entitled, or upon 
application would not be entitled, to monthly old-age or survivors 
benefits under Sec. 202 of the Social Security Act (41 U.S.C. 402) 
based on the individual's wages or self-employment income, or
    (ii) For an employee, Member, or survivor who is entitled, or upon 
application would be entitled, to monthly old-age or survivors benefits 
under section 202 of the Social Security Act (41 U.S.C. 402) based on 
the individual's wages or self-employment income, the employee, Member, 
or survivor has completed a deposit in accordance with subpart U of this 
part, or the annuity has been reduced under Sec. 831.303(d), for each 
full period of such military service performed after December 1956. If a 
deposit has not been completed or the

[[Page 91]]

annuity has not been reduced under Sec. 831.303(d), periods of military 
service performed after December 31, 1956 (other than periods of 
military service covered by military leave with pay from a civilian 
position), are excluded from credit from and after the first day of the 
month in which the individual (or survivor) becomes entitled, or upon 
proper application would be entitled, to Social Security benefits under 
section 202. Military service performed prior to January 1957 is 
included in the computation of the annuity regardless of whether a 
deposit is made for service after December 31, 1956.
    (ii) For an employee, Member, or survivor who is entitled, or upon 
application would be entitled, to monthly old-age or survivors benefits 
under Sec. 202 of the Social Security Act (41 U.S.C. 402) based on the 
individual's wages or self-employment income, the employee, Member, or 
survivor has completed a deposit in accordance with subpart U of this 
part, for each full period of such military service performed after 
December 1956.

If a deposit has not been completed, periods of military service 
performed after December 31, 1956 (other than periods of military 
service covered by military leave with pay from a civilian position), 
are excluded from credit from and after the first day of the month in 
which the individual (or survivor) becomes entitled, or upon proper 
application would be entitled, to Social Security benefits under Sec. 
202. Military service performed prior to January 1957 is included in the 
computation of the annuity regardless of whether a deposit is made for 
service after December 31, 1956.
    (b) Service of an individual who first becomes an employee or Member 
under the civil service retirement system on or after October 1, 1982. A 
period of honorable active service after December 31, 1956, in the Army, 
Navy, Marine Corps, Air Force, or Coast Guard of the United States, or, 
after June 30, 1960, in the Regular Corps or Reserve Corps of the Public 
Health Service, or, after June 30, 1961, as a commissioned officer of 
the National Oceanic and Atmospheric Administration (formerly Coast and 
Geodetic Survey and Environmental Science Services Administration), 
performed before the date of separation on which civil service annuity 
entitlement is based shall be included in the computation of the annuity 
provided--
    (1) The employee or Member has completed 5 years' (18 months' for 
survivors of employees or Members who die in service) civilian service;
    (2) The employee or Member is not receiving military retired pay 
awarded for reasons other than (i) service-connected disability incurred 
in combat with an enemy of the United States, (ii) service-connected 
disability caused by an instrumentality of war and incurred in line of 
duty during a period of war (as that term is used in chapter 11 of title 
38, United States Code), or (iii) under chapter 67 of title 10, United 
States Code; and
    (3) The employee, Member, or survivor has completed a deposit in an 
amount equal to 7 percent of his or her basic pay under section 204 of 
title 37, United States Code, (plus interest, if any) or the annuity has 
been reduced under Sec. 831.303(d), for each full period of such 
military service performed after December 1956. Military service 
performed prior to January 1957 is included in the computation of the 
annuity regardless of whether a deposit is made for service after 
December 31. 1956.
    (c) Military retirees and recipients of Veterans Administration 
benefits. An employee or Member applying for annuity, who otherwise 
meets all conditions for receiving credit for military service, but who 
is in receipt of retired or retainer pay which bars credit for military 
service, may elect to waive the retired or retainer pay and have the 
military service added to civilian service for annuity computation 
purposes. An applicant for disability retirement, who is receiving a 
Veterans Administration pension or compensation in lieu of military 
retired or retainer pay, may elect to waive the retired or retainer pay 
and renounce the Veterans Administration pension or compensation and 
have the military service added to civilian service for annuity 
computation purposes.
    (d) Widow(er)s and former spouses entitled to annuity based on the 
service of employees or Members who die in service--(1) Military service 
is included unless the

[[Page 92]]

widow(er) or former spouse elects otherwise. Effective April 25, 1987, 
unless a widow(er) or former spouse of an employee or Member who dies--
on or after that date--before being separated from service files a 
written election to the contrary, his or her annuity will include credit 
for periods of military service (subject to the provisions of paragraphs 
(a) and (b) of this section) that would ordinarily be excluded from the 
computation of the employee's or Member's annuity under 5 U.S.C. 
8332(c)(2).
    (2) Reduction by the amount of survivor benefits payable based on 
the military service. (i) In paragraph (d)(2)(ii) of this section, 
``survivor benefits under a retirement system for members of the 
uniformed services'' means survivor benefits before any offsets for 
benefits payable from another Federal benefit system except for those 
payable under title II of the Social Security Act. The amount of the 
survivor benefit to be deducted will be the amount payable to the 
current or former spouse and attributable to the decedent's retired or 
retainer pay for the period of military service to be included in the 
CSRS survivor annuity. However, the survivor benefit will never be 
reduced below the amount payable based on the civilian service alone.
    (ii) OPM will obtain information on the amount of any monthly 
survivor benefits payable to each applicant for CSRS current or former 
spouse annuity. OPM will reduce the CSRS survivor annuity by the monthly 
military survivor benefit on its commencing date. OPM will not make a 
subsequent adjustment unless it is necessary to increase or decrease the 
CSRS survivor benefit because of a change in the amount of military 
survivor benefits attributable to the period of service or a change in 
the period of military service to be included in the CSRS annuity when 
the survivor annnuitant becomes eligible for benefits under title II of 
the Social Security Act.
    (3) Widow(er)s or former spouses of employees or Members who die on 
or after April 25, 1987--election not to be included. OPM will accept a 
written election from a widow(er) or former spouse who does not wish to 
be covered by Sec. 831.301(d) provided it is postmarked within the 
period ending 30 calendar days after the date of the first regular 
monthly annuity payment.
    (4) Widow(er)s or former spouses of employees or Members who die 
before April 25, 1987--application to OPM for credit. Widow(er)s or 
former spouses of employees or Members who died before April 25, 1987, 
must apply to OPM in writing to have credit for military service 
included in the survivor annuity computation. If the survivor annuity is 
increased by including credit for the military service, the increase 
will be effective on the first of the month following the 60th calendar 
day after the date the written application for inclusion of the military 
service is received in OPM.

[48 FR 38784, Aug. 26, 1983, as amended at 51 FR 31931, Sept. 8, 1986; 
52 FR 10026, Mar. 30, 1987; 53 FR 6555, Mar. 2, 1988; 66 FR 15608, Mar. 
19, 2001]



Sec. 831.302  Unused sick leave.

    (a) For annuity computation purposes, the service of an employee who 
retires on immediate annuity or dies leaving a survivor entitled to 
annuity is increased by the days of unused sick leave to his credit 
under a formal leave system.
    (b) An immediate annuity is one which begins to accrue not later 
than 1 month after the employee is separated.
    (c) A formal leave system is one which is provided by law or 
regulation or operates under written rules specifying a group or class 
of employees to which it applies and the rate at which sick leave is 
earned.
    (d) In general, 8 hours of unused sick leave increases total 
services by 1 day. In cases where more or less than 8 hours of sick 
leave would be charged for a day's absence, total service is increased 
by the number of days in the period between the date of separation and 
the date that the unused sick leave would have expired had the employee 
used it (except that holidays falling within the period are treated as 
work days, and no additional leave credit is earned for that period).
    (e) If an employee's tour of duty changes from part time to full 
time or full time to part time within 180 days

[[Page 93]]

before retirement, the credit for unused sick leave is computed as 
though no change had occurred.

[34 FR 17617, Oct. 31, 1969]



Sec. 831.303  Civilian service.

    (a) Periods of civilian service performed before October 1, 1982, 
for which retirement deductions have not been taken. Periods of 
creditable civilian service performed by an employee or Member after 
July 31, 1920, but before October 1, 1982, for which retirement 
deductions have not been taken shall be included in determining length 
of service to compute annuity under subchapter III of chapter 83 of 
title 5, United States Code; however, if the employee, Member, or 
survivor does not elect either to complete the deposit describes by 
section 8334(c) of title 5, United States Code, or to eliminate the 
service from annuity computation, his or her annuity is reduced by 10 
percent of the amount which should have been deposited (plus interest) 
for the period of noncontributory service.
    (b) Periods of service for which refunded deductions have not been 
redeposited, and periods of civilian service performed on or after 
October 1, 1982, for which retirement deductions have not been taken. 
Except as provided in paragraph (c) of this section, a period of service 
for which refunded deductions have not been redeposited, and a period of 
creditable civilian service performed by an employee or Member on or 
after October 1, 1982, for which retirement deductions have not been 
taken, shall be included in determining length of service to compute the 
annuity under subchapter III of chapter 83 of title 5, United States 
Code, only if--
    (1) The employee or Member subsequently becomes eligible for an 
annuity payable under subchapter III of chapter 83 of title 5, United 
States Code; and
    (2) The employee, Member, or survivor makes a deposit (or redeposit) 
for the full period of service. If more than one distinct period of 
service is covered by a single refund, the periods of service covered by 
that refund are considered to be single full periods of service. 
However, in all other instances, a distinct period of nondeduction 
civilian service (i.e., a period of nondeduction service that is not 
interrupted by a break in service of more than three days) and a 
distinct period of redeposit civilian service (i.e., a period of 
redeposit service that is not interrupted by a break in service of more 
than three days) are considered as separate full periods of service, 
even when they are immediately consecutive. A period of nondeduction 
service which begins before October 1, 1982, and ends on or after that 
date is also considered two full periods of service: one ending on 
September 30, 1982, and the other beginning on October 1, 1982.
    (c)(1) An employee or Member who has not completed payment of a 
redeposit for refunded deductions based on a period of service that 
ended before October 1, 1990, will receive credit for that service in 
computing the nondisability annuity for which the individual is eligible 
under subchapter III of chapter 83 of title 5, United States Code, 
provided the nondisability annuity commences after December 1, 1990.
    (2) The beginning monthly rate of annuity payable to a retiree whose 
annuity includes service credited in accordance with paragraph (c)(1) of 
this section will be reduced by an amount equal to the redeposit owed, 
or unpaid balance thereof, divided by the present value factor for the 
retiree's attained age (in full years) at the time of retirement. The 
reduced monthly rate will then be rounded down to the next lower dollar 
amount and becomes the rate of annuity payable.
    (3) For the purpose of paragraph (b)(2) of this section, the terms 
``present value factor'' and ``time of retirement'' have the same 
meaning as in Sec. 831.2202.
    (d)(1) Civilian and military service of an individual affected by an 
erroneous retirement coverage determination. An employee or survivor who 
owed a deposit under section 8411(c)(1)(B) or 8411(f) of title 5, United 
States Code (FERS rules) for:
    (i) Civilian service that was not subject to retirement deductions, 
or
    (ii) Military service performed after December 31, 1956, will 
receive credit for the service without payment of the deposit if, 
because of an erroneous retirement coverage determination, the service 
is subsequently credited under

[[Page 94]]

chapter 83 of title 5, United States Code (CSRS rules).
    (2)(i) The beginning monthly rate of annuity payable to a retiree 
whose annuity includes service credited under paragraph (d)(1) of this 
section and service creditable under CSRS rules that would not be 
creditable under FERS rules is reduced by an amount equal to the CSRS 
deposit owed, or unpaid balance thereof, divided by the present value 
factor for the retiree's age (in full years) at the time of retirement. 
The result is rounded to the next highest dollar amount, and is the 
monthly actuarial reduction amount.
    (ii)(A) The beginning monthly rate of annuity payable to a survivor 
whose annuity includes service credited under paragraph (d)(1) of this 
section is reduced by an amount equal to the CSRS deposit owed, or 
unpaid balance thereof, divided by the present value factor for the 
survivor's age (in full years) at the time of death. The result is 
rounded to the next highest dollar amount, and is the monthly actuarial 
reduction amount.
    (B) The survivor annuity is not reduced if the employee annuity was 
reduced under paragraph (d)(2)(i) of this section.
    (3) For the purpose of paragraph (d)(2) of this section, the terms 
``present value factor'' and ``time of retirement'' have the same 
meaning as in Sec. 831.2202 of this chapter.

[48 FR 38785, Aug. 26, 1983, as amended at 56 FR 6550, Feb. 19, 1991; 66 
FR 15608, Mar. 19, 2001]



Sec. 831.304  Service with the Cadet Nurse Corps during World War II.

    (a) Definitions and special usages. In this section--
    (1) Basic pay is computed at the rate of $15 per month for the first 
9 months of study; $20 per month for the 10th through the 21st month of 
study; and $30 per month for any month in excess of 21.
    (2) Cadet Nurse Corps service means any student or graduate nurse 
training, in a non-Federal institution, as a participant in a plan 
approved under section 2 of the Act of June 15, 1943 (57 Stat. 153).
    (3) CSRS means the Civil Service Retirement System.
    (b) Conditions for creditability. As provided by Pub. L. 99-638, an 
individual who performed service with the Cadet Nurse Corps is entitled 
to credit under CSRS if--
    (1) The service as a participant in the Corps totaled 2 years or 
more;
    (2) The individual submits an application for service credit to OPM 
no later than January 10, 1988;
    (3) The individual is employed by the Federal Government in a 
position subject to CSRS at the time he or she applies to OPM for 
service credit; and
    (4) The individual makes a deposit for the service before separating 
from the Federal Government for retirement purposes. Contrary to the 
policy ``deeming'' the deposit to be made for alternative annuity 
computation purposes, these deposits must be physically in the 
possession of the individual's employing agency before his or her 
separation for retirement purposes.
    (c) Processing the application for service credit. Upon receiving an 
application requesting credit for service with the Cadet Nurse Corps, 
OPM will determine whether all conditions for creditability have been 
met, compute the deposit (including any interest) as specified by 
sections 8334(e) (2) and (3) of title 5, United States Code, based upon 
the appropriate percentage of basic pay that would have been deducted 
from the individual's pay at the time the service was performed, and 
advise the agency and the employee of the total amount of the deposit 
due.
    (d) Agency collection and submission of deposit. (1) The 
individual's employing agency must establish a deposit account showing 
the total amount due and a payment schedule (unless deposit is made in 
one lump sum), and record the date and amount of each payment.
    (2) lf the individual cannot make payment in one lump sum, the 
employing agency must accept installment payments (by allotments or 
otherwise). However, the employing agency is not required to accept 
individual checks in amounts less than $50.
    (3) If the employee dies before completing the deposit, the 
surviving spouse may elect to complete the payment to the employing 
agency in one lump sum; however, the surviving

[[Page 95]]

spouse will not be able to initiate an application for such service 
credit.
    (4) Payments received by the employing agency must be remitted to 
OPM immediately for deposit to the Civil Service Retirement and 
Disability Fund.
    (5) Once the employee's deposit has been paid in full or closed out, 
the employing agency must submit the documentation pertaining to the 
deposit to OPM in accordance with published instructions.

[52 FR 43047, Nov. 9, 1987]



Sec. 831.305  Service with a nonappropriated fund instrumentality after 
June 18, 1952, but before January 1, 1966.

    (a) Definitions and special usages. In this section--
    (1) Service in a nonappropriated fund instrumentality is any service 
performed by an employee that involved conducting arts and crafts, 
drama, music, library, service (i.e., recreation) club, youth 
activities, sports or recreation programs (including any outdoor 
recreation programs) for personnel of the armed forces. Service is not 
creditable if it was performed in programs other than those specifically 
named in this subsection.
    (2) Certification by the head of a nonappropriated fund 
instrumentality can also be certification by the National Personnel 
Records Center or by an official of another Federal agency having 
possession of records that will verify an individual's service.
    (3) CSRS means the Civil Service Retirement System.
    (b) Conditions for creditability. Pursuant to Pub. L. 99-638 and 
provided the same period of service has not been used to obtain annuity 
payable from a nonappropriated fund retirement plan, an individual who 
performed service in a nonappropriated fund instrumentality is entitled 
to credit under CSRS if--
    (1) The service was performed after June 18, 1952, but before 
January 1, 1966; and
    (2) The individual was employed in a position subject to CSRS on 
November 9, 1986.
    (c) Deposit for service is not necessary. It is not necessary for an 
individual to make a deposit for service performed with a 
nonappropriated fund instrumentality to receive credit for such service. 
However, if the individual does not elect to make a deposit, his or her 
annuity is reduced by 10 percent of the amount that should have been 
deposited for the period of service (including any interest) as 
specified by sections 8334(e) (2) and (3) of title 5, United States 
Code. When an employee elects an alternative annuity and also elects to 
make the deposit, OPM will deem the deposit to be made for purposes of 
computing the alternative annuity.
    (d) Crediting other service in a nonappropriated fund 
instrumentality. Service not creditable under this section may become 
creditable for retirement eligibility purposes under the provisions 
outlined in 5 CFR part 847, subpart H.

[52 FR 43048, Nov. 9, 1987, as amended at 68 FR 2178, Jan. 16, 2003]



Sec. 831.306  Service as a National Guard technician before January 1, 
1969.

    (a) Definitions. In this section--(1) Service as a National Guard 
technician is service performed under section 709 of title 32, United 
States Code (or under a prior corresponding provision of law) before 
January 1, 1969.
    (2) CSRS means the Civil Service Retirement System.
    (b) Conditions for crediting service to CSRS employees after 
November 5, 1990. An employee subject to CSRS retirement deductions 
whose only service as a National Guard technician was performed prior to 
January 1, 1969, is entitled to credit under CSRS if--
    (1) The individual submits to OPM an application for service credit 
in a form prescribed by OPM;
    (2) The individual is employed by the Federal Government in a 
position subject to CSRS retirement deductions after November 5, 1990; 
and
    (3) The individual completes the deposit for the service through 
normal service credit channels before final adjudication of his or her 
application for retirement or has the deposit deemed made when he or she 
elects the alternative form of annuity.
    (c) Processing the CSRS employee's application for service credit. 
(1) If an employee described in paragraph (b) of

[[Page 96]]

this section makes an application for service credit, OPM will determine 
whether all conditions for creditability have been met, compute the 
deposit and send the employee notice of the payment required and the 
procedures for submitting the payments to OPM.
    (2) The deposit will be computed based on--
    (i) The appropriate percentage of basic pay that would have been 
deducted from the individual's pay at the time the service was 
performed; and
    (ii) Interest at the rate of 3 percent per year computed as 
specified by section 8334(e)(2) of title 5, United States Code, until 
the date the deposit is paid.
    (d) Conditions for crediting service to CSRS annuitants and former 
Federal employees who separated after December 31, 1968, and before 
November 6, 1990--(1) Former Federal employees. Former Federal employees 
who were subject to CSRS retirement deductions and separated after 
December 31, 1968, but before November 6, 1990, with title to a deferred 
annuity, may make a deposit for pre-1969 National Guard technician 
service provided they--
    (i) Submit a written service credit application for the pre-1969 
National Guard technician service to OPM before November 6, 1991; and
    (ii) Complete a deposit for the additional service in a lump sum or 
in installment payments of $50 or more. Payments must be completed 
before their retirement claim is finally adjudicated, unless the deposit 
is deemed made when they elect an alternative form of annuity.
    (2) Annuitants and survivors. Individuals who were entitled to 
receive an immediate annuity (or survivor annuity benefits) as of 
November 6, 1990, may make a deposit for pre-1969 National Guard 
technician service provided they--
    (i) Submit a written application for service credit to OPM before 
November 6, 1991; and
    (ii) Complete a deposit for the additional service in a lump sum or 
in equal monthly annuity installments to be completed within 24 months 
of the date of the complete written application.
    (3) To determine the commencing date of the deposit installment 
payment period for annuitants and survivors, the ``date of application'' 
will be considered to be the first day of the second month beginning 
after OPM receives a complete written application from the individual.
    (4) To be a complete application, the individual's written request 
for pre-1969 National Guard technician service credit must also include 
a certification of the dates of employment and the rates of pay received 
by the individual during the employment period. The individual may 
obtain certification of his or her service from the Adjutant General of 
the State in which the service was performed.
    (e) Processing annuitants', survivors' or former employees' 
applications for service credit--(1) OPM determines creditable service. 
OPM will determine whether all conditions for crediting the additional 
service have been met, compute the amount of the deposit, and notify the 
individual.
    (2) Computing the deposit. The deposit will be computed based on--
    (i) The appropriate percentage of basic pay that would have been 
deducted from the individual's pay at the time the service was 
performed; and
    (ii) Interest at the rate of 3 percent per year as specified by 
section 8334(e)(2) of title 5, United States Code, to--
    (A) The midpoint of the 24-month installment period or if paid in a 
lump sum, the date payment is made if the individual is an annuitant or 
survivor; or
    (B) The date the deposit is paid or the commencing date of annuity, 
whichever comes first, if the individual is a former employee.
    (3) Individuals who are annuitants or survivors as of November 6, 
1990. (i) OPM will notify annuitants and survivors of the amount of the 
deposit and give them a proposed installment schedule for paying the 
deposit from monthly annuity payments. The proposed installment payments 
will consist of equal monthly payments that will not exceed a period 24 
months from the date a complete written application is received by OPM.
    (ii) The annuitant or survivor may allow the installments to be 
deducted from his or her annuity as proposed or

[[Page 97]]

make payment in a lump sum within 30 days from the date of the notice.
    (iii) Increased annuity payments will begin to accrue the first day 
of the month after OPM receives a complete written application.
    (iv) If an annuitant dies before completing the deposit installment 
payments, the remaining installments will be deducted as established for 
the annuitant, from benefits payable to the survivor annuitant (but not 
if the only survivor benefit is payable to a child or children of the 
deceased), if any. If no survivor annuity is payable, OPM may collect 
the balance of the deposit from any lump-sum benefits payable or the 
decedent's estate, if any.
    (4) Former employees who separated after December 31, 1968, but 
before November 6, 1990. A former employee with title to a deferred 
annuity that commences after November 6, 1990, will be billed for the 
amount of the deposit due and informed of the procedures for sending 
payments to OPM. If payment is to be made in installments, each payment 
must be at least $50 and the total deposit due must be completed before 
final adjudication of the retirement claim, unless the deposit is deemed 
made when he or she elects an alternative form of annuity.

[56 FR 6554, Feb. 19, 1991, as amended at 56 FR 55595, Oct. 29, 1991; 56 
FR 67467, Dec. 31, 1991]



Sec. 831.307  Contract service.

    Contract service with the United States will only be included in the 
computation of, or used to establish title to, an annuity under 
subchapter III of chapter 83 of title 5, United States Code, if--
    (a) The employing agency exercised an explicit statutory authority 
to appoint an individual into the civil service by contract; or
    (b) The head of the agency which was party to the contract, based on 
a timely-filed application, in accordance with section 110 of Public Law 
100-238, and the regulations promulgated by OPM pursuant to that 
statute, certifies that the agency intended that an individual be 
considered as having been appointed to a position in which (s)he would 
have been subject to subchapter III of chapter 83 of title 5, United 
States Code, and deposit has been paid in accordance with OPM's 
regulations.

[55 FR 53135, Dec. 27, 1990]



                    Subpart D_Voluntary Contributions

    Source: 56 FR 43863, Sept. 5, 1991, unless otherwise noted.



Sec. 831.401  Purpose and scope.

    This subpart describes the procedures that employees and Members 
must follow in making voluntary contributions under the Civil Service 
Retirement System (CSRS). This subpart also describes the procedures 
that the Office of Personnel Management (OPM) will follow in accepting 
voluntary contributions, crediting interest on voluntary contribution 
accounts, and paying benefits based on voluntary contributions.



Sec. 831.402  Definitions.

    In this subpart:
    Applicant for retirement means a person who is currently eligible to 
retire under CSRS on an immediate or deferred annuity, and who has filed 
an application to retire that has not been finally adjudicated.
    Balance means the amount of voluntary contributions deposited and 
not previously withdrawn, plus earned interest on those voluntary 
contributions, less any amount paid as additional annuities (including 
any amount paid as survivor annuity) based on the voluntary 
contributions.
    CSRS means the Civil Service Retirement System as described in 
subchapter III of chapter 83 of title 5, United States Code.
    Eligible individual means a person eligible to make voluntary 
contributions under Sec. 831.403.
    Voluntary contributions means contributions to the Civil Service 
Retirement and Disability Fund under section 8343 of title 5, United 
States Code.



Sec. 831.403  Eligibility to make voluntary contributions.

    (a) Voluntary contributions may be made only by--
    (1) Employees or Members currently subject to CSRS, and
    (2) Applicants for retirement.

[[Page 98]]

    (b) Voluntary contributions may not be accepted from an employee, 
Member, or applicant for retirement who--
    (1) Has not deposited amounts covering all creditable civilian 
service performed by him or her; or
    (2) Has previously received a refund of voluntary contributions and 
who has not been reemployed subject to CSRS after a separation of more 
than 3 calendar days.
    (c) An employee or Member covered by the Federal Employees 
Retirement System (FERS), including an employee or Member who elected to 
transfer or was automatically placed in FERS, may not open a voluntary 
contributions account or make additional contributions to an existing 
voluntary contribution account.



Sec. 831.404  Procedure for making voluntary contributions.

    (a) To make voluntary contributions to the Civil Service Retirement 
and Disability Fund, an eligible individual must first apply on a form 
prescribed by OPM. OPM will establish a voluntary contribution account 
for each eligible individual who elects to make voluntary contributions 
and notify the individual that a voluntary contribution account has been 
established. An eligible individual may not make voluntary contributions 
until notified by OPM that an account has been so established.
    (b) After receiving notice from OPM under paragraph (a) of this 
section, an eligible individual may forward voluntary contributions to 
the Office of Personnel Management, at the address designated for that 
purpose. Voluntary contributions must be in the amount of $25 or 
multiples thereof, by money order, draft, or check payable to OPM.
    (c) The total voluntary contributions made by an employee or Member 
may not exceed, as of the date any contribution is received, 10 percent 
of the aggregate basic pay received by the eligible individual.
    (1) Employees are responsible for not exceeding the 10 percent 
limit.
    (2) When the employee retires or withdraws the voluntary 
contributions, OPM will check to determine whether the 10 percent limit 
has been exceeded.
    (3) If the total of voluntary contributions received from the 
employee exceeds the 10 percent limit, OPM will refund without interest 
any amount that exceeds the 10 percent limit.



Sec. 831.405  Interest on voluntary contributions.

    (a) Interest on voluntary contributions is computed under Sec. 
831.105.
    (b) Voluntary contributions begin to earn interest on the date 
deposited by OPM.
    (c) Except as provided in paragraph (d) of this section, voluntary 
contributions stop earning interest on the earliest of--
    (1) The date when OPM authorizes payment to the individual of the 
balance as a withdrawal (831.406);
    (2) The date when the employee or Member separates or transfers to a 
position not subject to CSRS or FERS; or
    (3) The date when the employee transfers to a retirement system 
other than CSRS or FERS.
    (d) If an employee separates with entitlement to a deferred annuity 
and either dies without withdrawing his or her voluntary contributions 
or uses his or her voluntary contributions to purchase additional 
annuity, voluntary contributions stop earning interest on the earlier 
of--
    (1) The date the former employee or Member dies; or
    (2) The commencing date of the former employee's or Member's 
deferred annuity.



Sec. 831.406  Withdrawal of voluntary contributions.

    (a) Before receiving additional annuity payments based on the 
voluntary contributions, a person who has made voluntary contributions 
may withdraw the balance while still an employee or Member, or after 
separation.
    (b) A person entitled to payment of lump-sum benefits under the CSRS 
order for precedence set forth in section 8342(c) of title 5, United 
States Code, is entitled to payment of the balance, if any, on the death 
of--
    (1) An employee or Member;
    (2) A separated employee or Member who has not retired;

[[Page 99]]

    (3) A retiree, unless a survivor benefit is payable based on an 
election under Sec. 831.407; or
    (4) A person receiving a survivor annuity based on voluntary 
contributions.



Sec. 831.407  Purchase of additional annuity.

    (a) At the time of retirement CSRS (or under FERS, if transferred 
from CSRS), a person may use the balance of a voluntary contribution 
account to purchase one of the following types of additional annuity:
    (1) Annuity without survivor benefit; or
    (2) Reduced annuity payable during the life of the employee or 
Member with one-half of the reduced annuity to be payable after his or 
her death to a person, named at time of retirement, during the life of 
the named person.
    (b) Any natural person may be designated as survivor under paragraph 
(a)(2) of this section.
    (c) If the applicant for retirement elects an annuity without 
survivor benefit, each $100 credited to his or her voluntary 
contribution account, including interest, purchases an additional 
annuity at the rate of $7 per year, plus 20 cents for each full year, if 
any, he or she is over age 55 at date of retirement.
    (d) If the applicant for retirement elects an annuity with survivor 
benefit, each $100 credited to his or her voluntary contribution 
account, including interest, purchases an additional annuity at the rate 
of $7 per year, plus 20 cents for each full year, if any, he or she is 
over age 55 at date of retirement, multiplied by the following 
percentage:
    (1) Ninety percent of such amount if the named person is the same 
age or older than the applicant for retirement, or is less than 5 years 
younger than the applicant for retirement;
    (2) Eighty-five percent if the named person is 5 but less than 10 
years younger;
    (3) Eighty percent if the named person is 10 but less than 15 years 
younger;
    (4) Seventy-five percent if the named person is 15 but less than 20 
years younger;
    (5) Seventy percent if the named person is 20 but less than 25 years 
younger;
    (6) Sixty-five percent if the named person is 25 but less than 30 
years younger; and
    (7) Sixty percent if the named person is 30 or more years younger.



                  Subpart E_Eligibility for Retirement



Sec. 831.501  Time for filing applications.

    Employees or Members who are eligible for retirement must file a 
retirement application with their agency. Former employees or Members 
who are eligible for retirement must file a retirement application with 
OPM. The application should not be filed more than 60 days before 
becoming eligible for benefits. If the application is for disability 
retirement, the applicant and the employing agency should refer to 
subpart L of this part.

[58 FR 49179, Sept. 22, 1993]



Sec. 831.502  Automatic separation; exemption.

    (a) When an employee meets the requirements for age retirement on 
any day within a month, he is subject to automatic separation at the end 
of that month. The department or agency shall notify the employee of the 
automatic separation at least 60 days in advance of the separation. If 
the department or agency fails through error to give timely notice, the 
employee may not be separated without his consent until the end of the 
month in which the notice expires.
    (b)(1) The head of the agency, when in his or her judgment the 
public interest so requires, may exempt a law enforcement officer, 
firefighter or nuclear materials courier from automatic separation until 
that employee becomes 60 years of age.
    ((b)(2) The Secretary of Transportation and the Secretary of 
Defense, under such regulations as each may prescribe, may exempt an air 
traffic controller having exceptional skills and experience as a 
controller from automatic separation until that controller becomes 61 
years of age.
    (c) When a department or agency lacks authority and wishes to secure

[[Page 100]]

an exemption from automatic separation for one of its employees other 
than a Presidential appointee, beyond the age(s) provided by statute, 
i.e., age 60 for a law enforcement officer, firefighter or nuclear 
materials courier, age 61 for an air traffic controller, and age 62 for 
an employee of the Alaska Railroad in Alaska or an employee who is a 
citizen of the United States employed on the Isthmus of Panama by the 
Panama Canal Commission, the department or agency head shall submit a 
recommendation to that effect to OPM.
    (1) The recommendation shall contain:
    (i) A statement that the employee is willing to remain in service;
    (ii) A statement of facts tending to establish that his/her 
retention would be in the public interest;
    (iii) The period for which the exemption is desired, which period 
may not exceed 1 year; and,
    (iv) The reasons why the simpler method of retiring the employee and 
immediately reemploying him or her is not being used.
    (2) The recommendation shall be accompanied by a medical certificate 
showing the physical fitness of the employee to perform his or her work.
    (d) OPM may approve an exemption only before the automatic 
separation date applicable to the employee. For this reason, the 
department or agency shall forward the recommendation to OPM at least 30 
days before this separation date.

[33 FR 12498, Sept. 4, 1968, as amended at 34 FR 593, Jan. 16, 1969; 48 
FR 38786, Aug. 26, 1983. Redesignated at 58 FR 49179, Sept. 22, 1993; 65 
FR 2522, Jan. 18, 2000]



Sec. 831.503  Retirement based on involuntary separation.

    (a) General. An employee who would otherwise be eligible for 
retirement based on involuntary separation from the service is not 
entitled to an annuity under section 8336(d)(1) of title 5, United 
States Code, if the employee has declined a reasonable offer of another 
position.
    (b) Criteria for reasonable offer. For the purposes of determining 
entitlement to annuity based on such involuntary separation, the offer 
of a position must meet all of the following conditions to be considered 
a reasonable offer:
    (1) The offer must be made in writing;
    (2) The employee must meet established qualification requirements; 
and
    (3) The offered position must be--
    (i) In the employee's agency, including an agency to which the 
employee with his or her function is transferred in a transfer of 
functions between agencies;
    (ii) Within the employee's commuting area as defined in Sec. 
831.1202 of this part, unless geographic mobility is a condition of the 
employee's employment;
    (iii) Of the same tenure and work schedule; and
    (iv) Not lower than the equivalent of two grades or pay levels below 
the employee's current grade or pay level, without consideration of the 
employee's eligibility to retain his or her current grade or pay under 
part 536 of this chapter or other authority. In movements between pay 
schedules or pay systems, the representative rate of the grade or pay 
level that is two grades below that of the current position shall be 
compared with the representative rate of the grade or pay level of the 
offered position. For this purpose, ``representative rate'' has the 
meaning given that term in Sec. 536.103 of this chapter.

[48 FR 38786, Aug. 26, 1983. Redesignated and amended at 58 FR 49179, 
Sept. 22, 1993; 70 FR 31315, May 31, 2005]



                      Subpart F_Survivor Annuities

    Source: 50 FR 20070, May 13, 1985, unless otherwise noted.

     Organization and Structure of Regulations on Survivor Annuities



Sec. 831.601  Purpose and scope.

    (a) This subpart explains the annuity benefits payable in the event 
of the death of employees, retirees, and Members; the actions that 
employees, retirees, Members, and their current spouses, former spouses, 
and eligible

[[Page 101]]

children must take to qualify for survivor annuities; and the types of 
evidence required to demonstrate entitlement to provide survivor 
annuities or qualify for survivor annuities.
    (b) Unless otherwise specified, this subpart, except Sec. Sec. 
831.682 and 831.683 and the provisions relating to children's survivor 
annuities, only applies to employees and Members who retire under a 
provision of law that permits election of a reduced annuity to provide a 
survivor annuity.

[55 FR 9099, Mar. 12, 1990, as amended at 58 FR 52880, Oct. 13, 1993]



Sec. 831.602  Relation to other regulations.

    (a) Part 838 of this chapter contains information about former 
spouses' entitlement to survivor annuities based on provisions in court 
orders or court-approved property settlement agreements.
    (b) Subpart T of this part contains information about entitlement to 
lump-sum death benefits.
    (c) Parts 870, 871, 872 and 873 of this chapter contain information 
about coverage under the Federal Employees' Group Life Insurance 
Program.
    (d) Part 890 of this chapter contains information about coverage 
under the Federal Employees Health Benefits Program.
    (e) Section 831.109 contains information about the administrative 
review rights available to a person who has been denied a survivor 
annuity or an opportunity to make an election under this subpart.
    (f) Subparts C and U of this part contain information about service 
credit deposits by survivors of employees or Members.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31931, Sept. 8, 1986; 58 
FR 43493, Aug. 17, 1993]



Sec. 831.603  Definitions.

    As used in this subpart--
    CSRS means subchapter III of chapter 83 of title 5, United States 
Code.
    Current spouse means a living person who is married to the employee, 
Member, or retiree at the time of the employee's, Member's, or retiree's 
death.
    Current spouse annuity means a recurring benefit under CSRS that is 
payable (after the employee's, Member's, or retiree's death) to a 
current spouse who meets the requirements of Sec. 831.642.
    Deposit means a deposit required by the Civil Service Retirement 
Spouse Equity Act of 1984, Pub. L. 98-615, 98 Stat. 3195. Deposit, as 
used in this subpart does not include a service credit deposit or 
redeposit under sections 8334(c) or (d) of title 5, United States Code.
    First regular monthly payment means the first annuity check payable 
on a recurring basis (other than an estimated payment or an adjustment 
check) after OPM has initially adjudicated the regular rate of annuity 
payable under CSRS and has paid the annuity accrued since the time of 
retirement. The ``first regular monthly payment'' is generally preceded 
by estimated payments before the claim can be adjudicated and by an 
adjustment check (including the difference between the estimated rate 
and the initially adjudicated rate).
    Former spouse means a living person who was married for at least 9 
months to an employee, Member, or retiree who performed at least 18 
months of creditable service in a position covered by CSRS and whose 
marriage to the employee was terminated prior to the death of the 
employee, Member, or retiree. Except in Sec. Sec. 831.682 and 831.683, 
former spouse includes only persons who were married to an employee or 
Member on or after May 7, 1985, or who were the spouse of a retiree who 
retired on or after May 7, 1985, regardless of the date of termination 
of the marriage.
    Former spouse annuity means a recurring benefit under CSRS that is 
payable to a former spouse after the employee's, Member's, or retiree's 
death.
    Fully reduced annuity means the recurring payments under CSRS 
received by a retiree who has elected the maximum allowable reduction in 
annuity to provide a current spouse annuity and/or a former spouse 
annuity or annuities.
    Insurable interest annuity means the recurring payments under CSRS 
to a retiree who has elected a reduction in annuity to provide a 
survivor annuity to a person with an insurable interest in the retiree.
    Marriage means a marriage recognized in law or equity under the 
whole

[[Page 102]]

law of the jurisdiction with the most significant interest in the 
marital status of the employee, Member, or retiree unless the law of 
that jurisdiction is contrary to the public policy of the United States. 
If a jurisdiction would recognize more than one marriage in law or 
equity, the Office of Personnel Management (OPM) will recognize only one 
marriage, but will defer to the local courts to determine which marriage 
should be recognized.
    Member means a Member of Congress.
    Net annuity means the net annuity as defined in Sec. 838.103 of 
this chapter.
    Partially reduced annuity means the recurring payments under CSRS to 
a retiree who has elected less than the maximum allowable reduction in 
annuity to provide a current spouse annuity or a former spouse annuity.
    Present value factor means the amount of money (earning interest at 
an assumed rate) required at the time of retirement to fund an annuity 
that starts out at the rate of $1 a month and is payable in monthly 
installments for the annuitant's lifetime based on mortality rates for 
non-disability annuitants under the Civil Service Retirement System; and 
increases each year at an assumed rate of inflation. Interest, 
mortality, and inflation rates used in computing the present value are 
those used by the Board of Actuaries of the Civil Service Retirement 
System for valuation of the System, based on dynamic assumptions. The 
present value factors are unisex factors obtained by averaging six 
distinct present value factors, weighted by the total dollar value of 
annuities typically paid to new retirees at each age.
    Qualifying court order means a court order that awards a former 
spouse annuity and that satisfies the requirements of section 8341(h) of 
title 5, United States Code, for awarding a former spouse annuity.
    Retiree means a former employee or Member who is receiving recurring 
payments under CSRS based on service by the employee or Member. 
``Retiree,'' as used in this subpart, does not include a current spouse, 
former spouse, child, or person with an insurable interest receiving a 
survivor annuity.
    Self-only annuity means the recurring unreduced payments under CSRS 
to a retiree with no survivor annuity to anyone.
    Time of retirement means the effective commencing date for a retired 
employee's or Member's annuity.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31931, Sept. 8, 1986; 57 
FR 33597-33598, July 29, 1992; 58 FR 52880, Oct. 13, 1993]

                   Elections at the Time of Retirement



Sec. 831.611  Election at time of retirement of fully reduced annuity 
to provide a current spouse annuity.

    (a) A married employee or Member retiring under CSRS will receive a 
fully reduced annuity to provide a current spouse annuity unless--
    (1) The employee or Member, with the consent of the current spouse, 
elects a self-only annuity, a partially reduced annuity, or a fully 
reduced annuity to provide a former spouse annuity, in accordance with 
Sec. 831.612(b) or Sec. 831.614; or
    (2) The employee or Member elects a self-only annuity, a partially 
reduced annuity or a fully reduced annuity to provide a former spouse 
annuity, and current spousal consent is waived in accordance with Sec. 
831.608.
    (b) Qualifying court orders that award former spouse annuities 
prevent payment of current spouse annuities to the extent necessary to 
comply with the court order and Sec. 831.614.
    (c) The maximum rate of a current spouse annuity is 55 percent of 
the rate of the retiring employee's or Member's self-only annuity if the 
employee or Member is retiring based on a separation from a position 
under CSRS on or after October 11, 1962. The maximum rate of a current 
spouse annuity is 50 percent of the rate of the retiring employee's or 
Member's self-only annuity if the employee or Member is retiring based 
on a separation from a position covered under CSRS between September 30, 
1956, and October 11, 1962.
    (d)(1) The amount of the reduction to provide a current spouse 
annuity equals 2\1/2\ percent of the first $3600 of the designated 
survivor base plus 10 percent of the portion of the designated survivor 
base which exceeds $3600, if--
    (i) The employee's or Member's separation on which the retirement is 
based was on or after October 11, 1962; or

[[Page 103]]

    (ii) The reduction is to provide a current spouse annuity (under 
Sec. 831.631) for a spouse acquired after retirement.
    (2) The amount of the reduction to provide a current spouse annuity 
under this section for former employees or Members whose retirement is 
based on separations before October 11, 1962, equals 2\1/2\ percent of 
the first $2400 of the designated survivor base plus 10 percent of the 
portion of the designated survivor base which exceeds $2400.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31931, Sept. 8, 1986; 58 
FR 52880, Oct. 13, 1993. Redesignated at 58 FR 52882, Oct. 13, 1993]

    Editorial Note: At 58 FR 52880, Oct. 13, 1993, in Sec. 831.604, 
paragraph (b) was amended by changing the reference ``831.608'' and 
paragraph (c) was amended by changing the reference ``831.614''. 
However, neither of these references exist in their respective 
paragraphs in the 1993 edition of this volume.



Sec. 831.612  Election at time of retirement of a fully reduced annuity 
or a partially reduced annuity to provide a former spouse annuity.

    (a) An unmarried employee or Member retiring under CSRS may elect a 
fully reduced annuity or a partially reduced annuity to provide a former 
spouse annuity or annuities.
    (b) A married employee or Member retiring under CSRS may elect a 
fully reduced annuity or a partially reduced annuity to provide a former 
spouse annuity or annuities instead of a fully reduced annuity to 
provide a current spouse annuity, if the current spouse consents to the 
election in accordance with Sec. 831.614 or spousal consent is waived 
in accordance with Sec. 831.618.
    (c) An election under paragraph (a) or (b) of this section is void 
to the extent that it--
    (1) Conflicts with a qualifying court order; or
    (2) Would cause the total of current spouse annuities and former 
spouse annuities payable based on the employee's or Member's service to 
exceed 55 percent (or 50 percent if based on a separation before October 
11, 1962) of the self-only annuity to which the employee or Member would 
be entitled.
    (d) Any reduction in an annuity to provide a former spouse annuity 
will terminate on the first day of the month after the former spouse 
remarries before age 55 or dies, or the former spouse's eligibility for 
a former spouse annuity terminates under the terms of a qualifying court 
order, unless--
    (1) The retiree elects, within 2 years after the former spouse's 
death or remarriage, to continue the reduction to provide or increase a 
former spouse annuity for another former spouse, or to provide or 
increase a current spouse annuity; or
    (2) A qualifying court order requires the retiree to provide another 
former spouse annuity.
    (e) The maximum rate of a former spouse annuity under this section 
or Sec. 831.632 is 55 percent of the rate of the retiring employee's or 
Member's self-only annuity if the employee or Member is retiring based 
on a separation from a position under CSRS on or after October 11, 1962. 
The maximum rate of a former spouse annuity under this section or Sec. 
831.632 is 50 percent of the rate of the retiring employee's or Member's 
self-only annuity if the employee or Member is retiring based on a 
separation from a position covered under CSRS between September 30, 
1956, and October 11, 1962.
    (f)(1) The amount of the reduction to provide one or more former 
spouse annuities or a combination of a current spouse annuity and one or 
more former spouse annuities under this section equals 2\1/2\ percent of 
the first $3600 of the total designated survivor base plus 10 percent of 
the portion of the total designated survivor base which exceeds $3600, 
if--
    (i) The employee's or Member's separation on which the retirement is 
based was on or after October 11, 1962; or
    (ii) The reduction is to provide a former spouse annuity (under 
Sec. 831.632) for a former spouse from whom the employee or Member was 
divorced after retirement.
    (2) The amount of the reduction to provide one or more former spouse 
annuities or a combination of a current spouse annuity and one or more 
former spouse annuities under this section for employees or Members 
whose retirement is based on separations before October 11, 1962, equals 
2\1/2\ percent of the

[[Page 104]]

first $2400 of the total designated survivor base plus 10 percent of the 
portion of the total designated survivor base which exceeds $2400.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31931, Sept. 8, 1986; 55 
FR 9100, Mar. 12, 1990; 58 FR 52880, Oct. 13, 1993. Redesignated at 58 
FR 52882, Oct. 13, 1993]



Sec. 831.613  Election of insurable interest annuity.

    (a) At the time of retirement, an employee or Member in good health, 
who is applying for a non-disability annuity, may elect an insurable 
interest annuity. Spousal consent is not required, but an election under 
this section does not exempt a married employee or Member from the 
provisions of Sec. 831.611(a).
    (b) An insurable interest annuity may be elected by an employee or 
Member electing a fully reduced annuity or a partially reduced annuity 
to provide a current spouse annuity or a former spouse annuity or 
annuities.
    (c)(1) In the case of a married employee or Member, an election 
under this section may not be made on behalf of a current spouse unless 
that current spouse has consented to an election not to provide a 
current spouse annuity in accordance with Sec. 831.611(a)(1).
    (2) A consent (to an election not to provide a current spouse 
annuity in accordance with Sec. 831.611(a)(1)) required by paragraph 
(c)(1) of this section to be eligible to be the beneficiary of an 
insurable interest annuity is cancelled if--
    (i) The retiree fails to qualify to receive the insurable interest 
annuity; or
    (ii) The retiree changes his or her election to receive an insurable 
interest annuity under Sec. 831.621; or
    (iii) The retiree elects a fully or partially reduced annuity to 
provide a current spouse annuity under Sec. 831.685.
    (3) An election of a partially reduced annuity under Sec. 
831.622(b) or Sec. 831.685 to provide a current spouse annuity for a 
current spouse who is the beneficiary of an insurable interest annuity 
is void unless the spouse consents to the election.
    (4) If a retiree who had elected an insurable interest annuity to 
benefit a current spouse elects a fully reduced annuity to provide a 
current spouse annuity (or, with the consent of the current spouse, a 
partially reduced annuity to provide a current spouse annuity) under 
Sec. 831.622(b) or Sec. 831.685, the election of the insurable 
interest annuity is cancelled.
    (5)(i) A retiring employee or Member may not elect a fully reduced 
annuity or a partially reduced annuity to provide a former spouse 
annuity and an insurable interest annuity to benefit the same former 
spouse.
    (ii) If a retiring employee or Member who is required by court order 
to provide a former spouse annuity elects an insurable interest annuity 
to benefit the former spouse with the court-ordered entitlement--
    (A) If the benefit based on the election is greater than or equal to 
the benefit based on the court order, the election of the insurable 
interest annuity will satisfy the requirements of the court order as 
long as the insurable interest annuity continues.
    (B) If the benefit based on the election is less than the benefit 
based on the court order, the election of the insurable interest annuity 
is void.
    (iii) An election under Sec. 831.632 of a fully reduced annuity or 
a partially reduced annuity to benefit a former spouse by a retiree who 
elected and continues to receive an insurable interest annuity to 
benefit that former spouse is void.
    (d) To elect an insurable interest annuity, an employee or Member 
must indicate the intention to make the election on the application for 
retirement; submit evidence to demonstrate that he or she is in good 
health; and arrange and pay for the medical examination that shows that 
he or she is in good health. A report of the medical examination, signed 
and dated by a licensed physician, must be furnished to OPM on such 
forms and at such time and place as OPM may prescribe.
    (e) An insurable interest annuity may be elected to provide a 
survivor benefit only for a person who has an insurable interest in the 
retiring employee or Member.
    (1) An insurable interest is presumed to exist with--
    (i) The current spouse;
    (ii) A blood or adopted relative closer than first cousins;

[[Page 105]]

    (iii) A former spouse;
    (iv) A person to whom the employee or Member is engaged to be 
married;
    (v) A person with whom the employee or Member is living in a 
relationship which would constitute a common-law marriage in 
jurisdictions recognizing common-law marriages.
    (2) When an insurable interest in not presumed, the employee or 
Member must submit affidavits from one or more persons with personal 
knowledge of the named beneficiary's insurable interest in the employee 
or Member. The affidavits must set forth the relationship, if any, 
between the named beneficiary and the employee or Member, the extent to 
which the named beneficiary is dependent on the employee or Member, and 
the reasons why the named beneficiary might reasonably expect to derive 
financial benefit from the continued life of the employee or Member.
    (3) The employee or Member may be required to submit documentary 
evidence to establish the named beneficiary's date of birth.
    (f) After receipt of all required evidence to support an election of 
an insurable interest annuity, OPM will notify the employee or Member of 
initial monthly annuity rates with and without the election of an 
insurable interest annuity and the initial rate payable to the named 
beneficiary. No election of an insurable interest annuity is effective 
unless the employee or Member confirms the election in writing, dies, or 
becomes incompetent no later than 60 days after the date of the notice 
described in this paragraph.
    (g) (1) When an employee or Member elects both an insurable interest 
annuity and a fully reduced annuity or a partially reduced annuity to 
provide a current spouse annuity and/or a former spouse annuity or 
annuities, each reduction is computed based on the self-only annuity 
computation. The combined reduction may exceed the maximum 40 percent 
reduction in the retired employee's or Member's annuity permitted under 
section 8339(k)(1) of title 5, United States Code, applicable to 
insurable interest annuities.
    (2) The rate of annuity paid to the beneficiary of an insurable 
interest election, when the employee or Member also elected a fully 
reduced annuity or a partially reduced annuity, equals 55 (or 50 percent 
if based on a separation before October 11, 1962) percent of the rate of 
annuity after the insurable interest reduction. The additional reduction 
to provide a current spouse annuity or a former spouse annuity is not 
considered in determining the rate of annuity paid to the beneficiary of 
the insurable interest election.
    (h)(1) Except as provided in Sec. 831.612(d), if a retiree who is 
receiving a fully reduced annuity or a partially reduced annuity to 
provide a former spouse annuity has also elected an insurable interest 
annuity to benefit a current spouse and if the eligible former spouse 
remarries before age 55, dies, or loses eligibility under the terms of 
the court order, and no other former spouse is entitled to a survivor 
annuity based on an election made in accordance with Sec. 831.632 or a 
qualifying court order, the retiree may elect, within 2 years after the 
former spouse's remarriage, death, or loss of eligibility under the 
terms of the court order, to convert the insurable interest annuity to a 
fully reduced annuity to provide a current spouse annuity, effective on 
the first day of the month following the event causing the former spouse 
to lose eligibility.
    (2) An election under paragraph (h)(1) of this section cancels any 
consent not to receive a current spouse annuity required by paragraph 
(c) of this section for the current spouse to be eligible for an annuity 
under this section.
    (3) When a former spouse receiving an annuity under section 8341(h) 
of title 5, United States Code, loses eligibility to that annuity, a 
beneficiary of an insurable interest annuity who was the current spouse 
at both the time of the retiree's retirement and death may, within 2 
years after the former spouse's death, remarriage, or loss of 
eligibility under the terms of the court order, elect to receive a 
current spouse annuity instead of the annuity he or she had been 
receiving. The election is effective on the first day of the month 
following the event causing the former spouse to lose eligibility.
    (i) Upon the death of the current spouse, a retiree whose annuity is 
reduced to provide both a current spouse

[[Page 106]]

annuity and an insurable interest benefit for a former spouse is not 
permitted to convert the insurable interest annuity to a reduced annuity 
to provide a former spouse annuity.
    (j) An employee or Member may name only one natural person as the 
named beneficiary of an insurable interest annuity. OPM will not accept 
the designation of contingent beneficiaries and such a designation is 
void.
    (k)(1) An election under this section is prospectively voided by an 
election of a reduced annuity to provide a current spouse annuity under 
Sec. 831.631 that would benefit the same person.
    (2)(i) If the spouse is not the beneficiary of the election under 
this section, a retiree may prospectively void an election under this 
section at the time the retiree elects a reduced annuity to provide a 
current spouse annuity under Sec. 831.631.
    (ii) A retiree's election to void an election under paragraph 
(k)(2)(i) of this section must be filed at the same time as the election 
under Sec. 831.631.
    (3) An annuity reduction under this section terminates on the first 
day of the month after the beneficiary of the insurable interest annuity 
dies.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31931, Sept. 8, 1986; 52 
FR 10216, Mar. 31, 1987; 55 FR 9100, Mar. 12, 1990; 58 FR 52880, Oct. 
13, 1993. Redesignated at 58 FR 52882, Oct. 13, 1993; as amended at 66 
FR 66711, Dec. 27, 2001]



Sec. 831.614  Election of a self-only annuity or partially reduced 
annuity by married employees and Members.

    (a) A married employee may not elect a self-only annuity or a 
partially reduced annuity to provide a current spouse annuity without 
the consent of the current spouse or a waiver of spousal consent by OPM 
in accordance with Sec. 831.618.
    (b) Evidence of spousal consent or a request for waiver of spousal 
consent must be filed on a form prescribed by OPM.
    (c) The form will require that a notary public or other official 
authorized to administer oaths certify that the current spouse presented 
identification, gave consent, signed or marked the form, and 
acknowledged that the consent was given freely in the notary's or 
official's presence.
    (d) The form described in paragraph (c) of this section may be 
executed before a notary public, an official authorized by the law of 
the jurisdiction where executed to administer oaths, or an OPM employee 
designated for that purpose by the Associate Director.

[50 FR 20070, May 13, 1985, as amended at 55 FR 9100, Mar. 12, 1990; 58 
FR 52880, Oct. 13, 1993. Redesignated at 58 FR 52882, Oct. 13, 1993]



Sec. 831.615  [Reserved]



Sec. 831.616  Elections by previously retired retiree with new title 
to an annuity.

    (a) A reemployed retiree (after 5 or more years of reemployed 
annuitant service) who elects a redetermined annuity under section 8344 
of title 5, United States Code, is subject to Sec. Sec. 831.611 through 
831.622 at the time of the redetermination.
    (b) A disability retiree who recovers from disability or is restored 
to earning capacity is subject to Sec. Sec. 831.611 through 622 at the 
time that he or she retires under section 8336 or 8338 of title 5, 
United States Code.
    (c) A retiree who is dropped from the retirement rolls and 
subsequently gains a new annuity right by fulfilling the requirements of 
section 8333(b) of title 5, United States Code, is subject to Sec. Sec. 
831.611 through 831.622 when he or she retires under that new annuity 
right.

[50 FR 20070, May 13, 1985, as amended at 58 FR 52881, Oct. 13, 1993. 
Redesignated at 58 FR 52882, Oct. 13, 1993]



Sec. 831.617  [Reserved]



Sec. 831.618  Waiver of spousal consent requirement.

    (a) The spousal consent requirement will be waived upon a showing 
that the spouse's whereabouts cannot be determined. A request for waiver 
on this basis must be accompanied by--
    (1) A judicial determination that the spouse's whereabouts cannot be 
determined; or
    (2) (i) Affidavits by the employee or Member and two other persons, 
at least

[[Page 107]]

one of whom is not related to the employee or Member, attesting to the 
inability to locate the current spouse and stating the efforts made to 
locate the spouse; and
    (ii) Documentary corroboration such as tax returns filed separately 
or newspaper stories about the spouse's disappearance.
    (b) The spousal consent requirement will be waived based on 
exceptional circumstances if the employee or Member presents a judicial 
determination finding that--
    (1) The case before the court involves a Federal employee who is in 
the process of retiring from Federal employment and the spouse of that 
employee;
    (2) The nonemployee spouse has been given notice and an opportunity 
to be heard concerning this order;
    (3) The court has considered sections 8339(j)(1) of title 5, United 
States Code, and this section as they relate to waiver of the spousal 
consent requirement for a married Federal employee to elect an annuity 
without a reduction to provide a survivor benefit to a spouse at 
retirement; and
    (4) The court finds that exceptional circumstances exist justifying 
waiver of the nonemployee spouse's consent.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31932, Sept. 8, 1986; 55 
FR 9100, Mar. 12, 1990. Redesignated at 58 FR 52882, Oct. 13, 1993]



Sec. 831.619  Marital status at time of retirement.

    An employee or Member is unmarried at the time of retirement for all 
purposes under this subpart only if the employee or Member was unmarried 
on the date that the annuity begins to accrue.

[50 FR 20070, May 13, 1985. Redesignated at 58 FR 52882, Oct. 13, 1993]

                      Changes of Survivor Elections



Sec. 831.621  Changes of election before final adjudication.

    An employee or Member may name a new survivor or change his election 
of type of annuity if, not later than 30 days after the date of the 
first regular monthly payment, the named survivor dies or the employee 
or Member files with OPM a new written election. All required evidence 
of spousal consent or justification for waiver of spousal consent, if 
applicable, must accompany any new written election under this section.

[50 FR 20070, May 13, 1985. Redesignated at 58 FR 52882, Oct. 13, 1993]



Sec. 831.622  Changes of election after final adjudication.

    (a) Except as provided in section 8339 (j) or (k) of title 5, United 
States Code, or Sec. Sec. 831.682, 831.684, 831.685, or paragraph (b) 
of this section, an employee or Member may not revoke or change the 
election or name another survivor later than 30 days after the date of 
the first regular monthly payment.
    (b)(1) Except as provided in Sec. 831.613 and paragraphs (b)(2) and 
(b)(3) of this section, a retiree who was married at the time of 
retirement and has elected a self-only annuity, or a partially reduced 
annuity to provide a current spouse annuity, or a fully reduced annuity 
or a partially reduced annuity to provide a former spouse annuity, or an 
insurable interest annuity may elect, no later than 18 months after the 
time of retirement, an annuity reduction or an increased annuity 
reduction to provide a current spouse annuity.
    (2) A current spouse annuity based on an election under paragraph 
(b)(1) of this section cannot be paid if it will, when combined with any 
former spouse annuity or annuities that are required by court order, 
exceed the maximum survivor annuity permitted under Sec. 831.641.
    (3) To make an election under paragraph (b)(1) of this section, the 
retiree must pay, in full, a deposit determined under Sec. 831.662, 
plus interest, at the rate provided under Sec. 831.105(g), no later 
than 18 months after the time of retirement.
    (4) If a retiree makes an election under paragraph (b)(1) of this 
section and is prevented from paying the deposit within the 18-month 
time limit because OPM did not send him or her a notice of the amount of 
the deposit at least 30 days before the time limit expires, the time 
limit for making the deposit will be extended to 30 days after OPM sends 
the notice of the amount of the deposit.

[[Page 108]]

    (5) An election under paragraph (b)(1) of this section, cancels any 
spousal consent under Sec. 831.611 to the extent of the election.
    (6) An election under paragraph (b)(1) of this section is void 
unless it is filed with OPM before the retiree dies.
    (7) If a retiree who had elected a fully reduced annuity or a 
partially reduced annuity to provide a former spouse annuity or former 
spouse annuities makes an election under paragraph (b)(1) of this 
section which would cause the combined current spouse annuity and former 
spouse annuity (or annuities) to exceed the maximum allowed under Sec. 
831.641, the former spouse annuity (or annuities) must be reduced to not 
exceed the maximum allowable under Sec. 831.641.

[51 FR 31932, Sept. 8, 1986, as amended at 58 FR 52881, Oct. 13, 1993. 
Redesignated at 58 FR 52882, Oct. 13, 1993]

                        Post-Retirement Elections



Sec. 831.631  Post-retirement election of fully reduced annuity or 
partially reduced annuity to provide a current spouse annuity.

    (a) Except as provided in paragraph (c) of this section, in cases of 
retirees who retired before May 7, 1985, and married after retirement 
but before February 27, 1986:
    (1) A retiree who was unmarried at the time of retirement may elect, 
within 1 year after a post-retirement marriage, a fully reduced annuity 
or a partially reduced annuity to provide a current spouse annuity.
    (2) A retiree who was married and elected a fully reduced annuity or 
a partially reduced annuity at the time of retirement may elect, within 
1 year after a postretirement marriage, to provide a current spouse 
annuity. If a retiree elects a fully reduced annuity or a partially 
reduced annuity under this paragraph, the election must equal the 
election made at the time of retirement.
    (3) The reduction under paragraphs (a)(1) or (a)(2) of this section 
commences on the first day of the month beginning 1 year after the date 
of the post-retirement marriage.
    (b) Except as provided in paragraph (c) of this section, in cases 
involving retirees who retired on or after May 7, 1985, or married on or 
after February 27, 1986--
    (1) A retiree who was unmarried at the time of retirement may elect, 
within 2 years after a post-retirement marriage, a fully reduced annuity 
or a partially reduced annuity to provide a current spouse annuity.
    (2) A retiree who was married at the time of retirement may elect, 
within 2 years after a post-retirement marriage--
    (i) A fully reduced annuity or a partially reduced annuity to 
provide a current spouse annuity if--
    (A) The retiree was awarded a fully reduced annuity under Sec. 
831.611 at the time of retirement; or
    (B) The election at the time of retirement was made with a waiver of 
spousal consent in accordance with Sec. 831.618; or
    (C) The marriage at the time of retirement was to a person other 
than the spouse who would receive a current spouse annuity based on the 
post-retirement election; or
    (ii) A partially reduced annuity to provide a current spouse annuity 
no greater than the current spouse annuity elected for the current 
spouse at retirement if--
    (A) The retiree elected a partially reduced annuity under Sec. 
831.614 at the time of retirement;
    (B) The election at the time of retirement was made with spousal 
consent in accordance with Sec. 831.614; and
    (C) The marriage at the time of retirement was to the same person 
who would receive a current spouse annuity based on the post-retirement 
election.
    (3)(i) Except as provided in paragraph (b)(3)(ii) or (b)(4) of this 
section, a retiree making an election under this section must deposit an 
amount equal to the difference between the amount of annuity actually 
paid to the retiree and the amount of annuity that would have been paid 
if the reduction elected under paragraphs (b)(1) or (b)(2) of this 
section had been in effect continuously since the time of retirement, 
plus 6 percent annual interest, computed under Sec. 831.105, from the 
date when each difference occurred.
    (ii) An election under this section may be made without deposit, if 
that

[[Page 109]]

election prospectively voids an election of an insurable interest 
annuity.
    (4)(i) An election under this section is irrevocable when received 
by OPM.
    (ii) An election under this section is effective when the marriage 
duration requirements of Sec. 831.642 are satisfied.
    (iii) If an election under paragraph (b)(1) or (b)(2) of this 
section does not become effective, no deposit under paragraph (b)(3) of 
this section is required.
    (iv) If payment of the deposit under paragraph (b)(3) of this 
section is not required because the election never became effective and 
if some or all of the deposit has been paid, the amount paid will be 
returned to the retiree, or, if the retiree has died, to the person who 
would be entitled to any lump-sum benefits under the order of precedence 
in section 8342 of title 5, United States Code.
    (5) Any reduction in an annuity to provide a current spouse annuity 
will terminate effective on the first day of the month after the 
marriage to the current spouse ends, unless--
    (i) The retiree elects, within 2 years after a divorce terminates 
the marriage, to continue the reduction to provide for a former spouse 
annuity; or
    (ii) A qualifying court order requires the retiree to provide a 
former spouse annuity.
    (c)(1) Qualifying court orders prevent payment of current spouse 
annuities to the extent necessary to comply with the court order and 
Sec. 831.641.
    (2) If an election under this section causes the total of all 
current and former spouse annuities provided by a qualifying court order 
or elected under Sec. 831.612, Sec. 831.632, or this section to exceed 
the maximum survivor annuity permitted under Sec. 831.641, OPM will 
accept the election but will pay the portion in excess of the maximum 
only when permitted by Sec. 831.641(c).
    (d) The amount of the reduction to provide a current spouse annuity 
under this section equals 2\1/2\ percent of the first $3600 of the 
designated survivor base plus 10 percent of the portion of the 
designated survivor base which exceeds $3600.

[55 FR 9101, Mar. 12, 1990, as amended at 56 FR 16263, Apr. 22, 1991; 58 
FR 52881, Oct. 13, 1993. Redesignated at 58 FR 52882, Oct. 13, 1993]



Sec. 831.632  Post-retirement election of fully reduced annuity or 
partially reduced annuity to provide a former spouse annuity.

    (a)(1) Except as provided in paragraphs (b) and (c) of this section, 
when the marriage of a retiree who retired on or after May 7, 1985, 
terminates after retirement, he or she may elect in writing a fully 
reduced annuity or a partially reduced annuity to provide a former 
spouse annuity. Such an election must be filed with OPM within 2 years 
after the retiree's marriage to the former spouse terminates.
    (2) Except as provided in paragraphs (b) and (c) of this section, a 
retiree who retired before May 7, 1985, and whose marriage was 
terminated on or after May 7, 1985, may elect in writing a fully reduced 
annuity or a partially reduced annuity to provide a former spouse 
annuity if the retiree while married to the former spouse had elected, 
prior to May 7, 1985, a reduced annuity to provide a current spouse 
annuity for that spouse. Such an election must be filed with OPM within 
2 years after the retiree's marriage to the former spouse terminates.
    (3) Except as provided in paragraphs (b) and (c) of this section, a 
retiree who retired on or after May 7, 1985, and before February 27, 
1986, and whose marriage terminated before May 7, 1985, may elect in 
writing a fully reduced annuity or a partially reduced annuity to 
provide a former spouse annuity. Such an election must be made no later 
than February 27, 1988.
    (b)(1) Qualifying court orders prevent payment of former spouse 
annuities to the extent necessary to comply with the court order and 
Sec. 831.641.
    (2) A retiree who elects a fully or partially reduced annuity to 
provide a former spouse annuity may not elect to provide a former spouse 
annuity in an amount that either--
    (i) Is smaller than the amount required by a qualifying court order; 
or

[[Page 110]]

    (ii) Would cause the sum of all current and former spouse annuities 
based on a retiree's elections under Sec. Sec. 831.611, 831.612, 
831.631 and this section to exceed 55 percent of the rate of the 
retiree's self-only annuity if the retiree's retirement was based on a 
separation from a position under CSRS on or after October 11, 1962, or 
50 percent of the rate of the retiree's self-only annuity if the 
retiree's retirement was based on a separation from a position under 
CSRS before October 11, 1962.
    (3) An election under this section is void--
    (i) In the case of a married retiree, if the current spouse does not 
consent to the election on a form as described in Sec. 831.614(c) and 
spousal consent is not waived by OPM in accordance with Sec. 831.618; 
or
    (ii) To the extent that it provides a former spouse annuity for the 
spouse who was married to the retiree at the time of retirement in an 
amount that is inconsistent with any joint designation or waiver made at 
the time of retirement under Sec. 831.611 (a)(1) or (a)(2); or
    (iii) In the case of an election under paragraph (a)(2) of this 
section, to the extent that it provides a former spouse annuity that 
exceeds the proportion of the retiree's annuity to which the former 
spouse would have been entitled as a current spouse annuity as of May 7, 
1985.
    (c) An election under this section is not permitted unless the 
retiree agrees to deposit the amount equal to the difference between the 
amount of annuity actually paid to the retiree and the amount of annuity 
that would have been paid if the reduction elected under paragraph (a) 
of this section had been in effect continuously since the time of 
retirement, plus 6 percent annual interest, computed under Sec. 
831.105, from the date when each difference occurred.
    (d) Any reduction in an annuity to provide a former spouse annuity 
will terminate on the first day of the month after the former spouse 
remarries before age 55 or dies, or the former spouse's eligibility for 
a former spouse annuity terminates under the terms of a qualifying court 
order, unless--
    (1) The retiree elects, within 2 years after the event causing the 
former spouse to lose eligibility, to continue the reduction to provide 
or increase a former spouse annuity for another former spouse, or to 
provide or increase a current spouse annuity; or
    (2) A qualifying court order requires the retiree to provide another 
former spouse annuity.
    (e)(1) The amount of the reduction to provide one or more former 
spouse annuities or a combination of a current spouse annuity and one or 
more former spouse annuities under this section equals 2\1/2\ percent of 
the first $3600 of the total designated survivor base plus 10 percent of 
the portion of the total designated survivor base which exceeds $3600, 
if--
    (i) The employee's or Member's separation on which the retirement is 
based was on or after October 11, 1962; or
    (ii) The reduction is to provide a former spouse annuity (under 
Sec. 831.632) for a former spouse whom the employee or Member married 
after retirement.
    (2) The amount of the reduction to provide one or more former spouse 
annuities or a combination of a current spouse annuity and one or more 
former spouse annuities under this section for employees or Members 
whose retirement is based on separations before October 11, 1962, equals 
2\1/2\ percent of the first $2400 of the total designated survivor base 
plus 10 percent of the portion of the total designated survivor base 
which exceeds $2400.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31932, Sept. 8, 1986; 52 
FR 3209, Feb. 3, 1987; 55 FR 9100, Mar. 12, 1990; 56 FR 16262, Apr. 22, 
1991; 58 FR 52881, Oct. 13, 1993. Redesignated at 58 FR 52882, Oct. 13, 
1993]

                               Eligibility



Sec. 831.641  Division of a survivor annuity.

    (a) Except as provided in Sec. Sec. 831.682 and 831.683, the 
maximum combined total of all current and former spouse annuities (not 
including any benefits based on an election of an insurable interest 
annuity) payable based on the service of a former employee or Member 
equals 55 percent (or 50 percent if based on a separation before October

[[Page 111]]

11, 1962) of the rate of the self-only annuity that otherwise would have 
been paid to the employee, Member, or retiree.
    (b) By using the elections available under this subpart or to comply 
with a court order under subpart Q, a survivor annuity may be divided 
into a combination of former spouse annuities and a current spouse 
annuity so long as the aggregate total of current and former spouse 
annuities does not exceed the maximum limitation in paragraph (a) of 
this section.
    (c) Upon termination of former spouse annuity payments because of 
death or remarriage of the former spouse, or by operation of a court 
order, the current spouse will be entitled to a current spouse annuity 
or an increased current spouse annuity if--
    (1) The employee or Member died while employed in a position covered 
under CSRS; or
    (2) The current spouse was married to the employee or Member 
continuously from the time of retirement and did not consent to an 
election not to provide a current spouse annuity; or
    (3) The current spouse married a retiree after retirement and the 
retiree elected, under Sec. 831.631, to provide a current spouse 
annuity for that spouse in the event that the former spouse annuity 
payments terminate.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31933, Sept. 8, 1986; 58 
FR 52881, Oct. 13, 1993. Redesignated at 58 FR 52282, Oct. 13, 1993]



Sec. 831.642  Marriage duration requirements.

    (a) The surviving spouse of a retiree who retired on or after May 7, 
1985, or of a retiree who retired before May 7, 1985, but married that 
surviving spouse on or after November 8, 1984, or of an employee or 
Member who dies while serving in a position covered by CSRS on or after 
May 7, 1985, or of an employee or Member who died while serving in a 
position covered by CSRS before May 7, 1985, but married that surviving 
spouse on or after November 8, 1984, can qualify for a current spouse 
annuity only if--
    (1) The surviving spouse and the employee, Member, or retiree had 
been married for at least 9 months, as explained in paragraph (b) of 
this section; or
    (2) A child was born of the marriage, as explained in paragraph (c) 
of this section; or
    (3) The death of the employee, Member, or retiree was accidental as 
explained in paragraph (d) of this section.
    (b) For satisfying the 9-month marriage requirement of paragraph 
(a)(1) of this section, the aggregate time of all marriages between the 
spouse applying for a current spouse annuity and the employee, Member, 
or retiree is included.
    (c) For satisfying the child-born-of-the-marriage requirement of 
paragraph (a)(2) of this section, any child, including a posthumous 
child, born to the spouse and the employee, Member, or retiree is 
included. This includes a child born out of wedlock or of a prior 
marriage between the same parties.
    (d)(1) A death is accidental if it results from homicide or from 
bodily injuries incurred solely through violent, external, and 
accidental means. The term ``accidental'' does not include a death--
    (i) Caused wholly or partially, directly or indirectly, by disease 
or bodily or mental infirmity, or by medical or surgical treatment or 
diagnosis thereof; or
    (ii) Caused wholly or partially, directly, or indirectly, by 
ptomaine, by bacterial infection, except only septic infection of and 
through a visible wound sustained solely through violent, external, and 
accidental means; or
    (iii) Caused wholly or partially, directly or indirectly, by hernia, 
no matter how or when sustained; or
    (iv) Caused by or the result of intentional self-destruction or 
intentionally self-inflicted injury, while sane or insane; or
    (v) Caused by or as a result of the self-administration or illegal 
or illegally obtained drugs.
    (2) A State judicial or administrative adjudication of the cause of 
death for criminal or insurance purposes is conclusive evidence of 
whether a death is accidental.
    (3) A death certificate showing the cause of death as accident or 
homicide

[[Page 112]]

is prima facie evidence that the death was accidental.

[50 FR 20070, May 13, 1985; 50 FR 21031, May 22, 1985, as amended at 51 
FR 31933, Sept. 8, 1986; 56 FR 16263, Apr. 22, 1991. Redesignated at 58 
FR 52882, Oct. 13, 1993]



Sec. 831.643  Time for filing applications for death benefits.

    (a) A survivor of a deceased employee, Member, or retiree, may file 
an application for annuity, personally or through a representative, at 
any time within 30 years after the death of the employee, Member, or 
retiree.
    (b) A former spouse claiming eligibility for an annuity based on 
Sec. 831.683 may file an application at any time between November 8, 
1984 and May 7, 1989. Within this period, the date that the first 
correspondence indicating a desire to file a claim is received by OPM 
will be treated as the application date for meeting timeliness deadlines 
and determining the commencing date of the survivor annuity under Sec. 
831.683 if the former spouse is eligible on that date.

[55 FR 9102, Mar. 12, 1990, as amended at 58 FR 52881, Oct. 13, 1993. 
Redesignated at 58 FR 52882, Oct. 13, 1993]



Sec. 831.644  Remarriage.

    (a)(1) If a recipient of a current spouse annuity remarried before 
November 8, 1984, the current spouse annuity terminates on the last day 
of the month before the recipient remarried before attaining age 60.
    (2) If a recipient of a current spouse annuity remarries on or after 
November 8, 1984, a current spouse annuity terminates on the last day of 
the month before the recipient remarries before attaining age 55.
    (b) A former spouse annuity or eligibility for a future former 
spouse annuity terminates on the last day of the month before the month 
in which the former spouse remarries before attaining age 55.
    (c) If a current spouse annuity is terminated because of remarriage 
of the recipient, the annuity is reinstated on the day of the 
termination of the remarriage by death, annulment, or divorce if--
    (1) The surviving spouse elects to receive this annuity instead of a 
survivor benefit to which he or she may be entitled, under CSRS or 
another retirement system for Government employees, by reason of the 
remarriage; and
    (2) Any lump sum paid on termination of the annuity is repaid (in a 
single payment or by withholding payment of the annuity until the amount 
of the lump sum has accrued).
    (d) (1) If present or future entitlement to a former spouse annuity 
is terminated because of remarriage before age 55, the entitlement will 
not be reinstated upon termination of the remarriage by death or 
divorce.
    (2) If present or future entitlement to a former spouse annuity is 
terminated because of remarriage before age 55, the entitlement will not 
be reinstated upon annulment of the remarriage unless--
    (i) The decree of annulment states that the marriage is without 
legal effect retroactively from the marriage's inception; and
    (ii) The former spouse's entitlement is based on section 4(b)(1)(B) 
or section (4)(b)(4) of Pub. L. 98-615.
    (3) If a retiree who is receiving a reduced annuity to provide a 
former spouse annuity and who has remarried that former spouse (before 
the former spouse attained age 55) dies, the retiree will be deemed to 
have elected to continue the reduction to provide a current spouse 
annuity unless the retiree requests (or has requested) in writing that 
OPM terminate the reduction.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31935, Sept. 8, 1986. 
Redesignated at 58 FR 52882, Oct. 13, 1993, as amended at 60 FR 14202, 
Mar. 16, 1995]



Sec. 831.645  Elections between survivor annuities.

    (a) A current spouse annuity cannot be reinstated under Sec. 
831.644 unless--
    (1) The surviving spouse elects to receive the reinstated current 
spouse annuity instead of any other payments (except any accrued but 
unpaid annuity and any unpaid employee contributions) to which he or she 
may be entitled under CSRS, or any other retirement system for 
Government employees, by reason of the remarriage; and
    (2) Any lump sum paid on termination of the annuity is returned to 
the Civil Service Retirement and Disability Fund.

[[Page 113]]

    (b) A current spouse is entitled to a current spouse annuity based 
on an election under Sec. 831.631 only upon electing this current 
spouse annuity instead of any other payments (except any accrued but 
unpaid annuity and any unpaid employee contributions) to which he or she 
may be entitled under CSRS, or any other retirement system for 
Government employees.
    (c) A former spouse who marries a retiree is entitled to a former 
spouse annuity based on an election by that retiree under Sec. 831.632, 
or Sec. 831.682, or a qualifying court order terminating that marriage 
to that retiree only upon electing this former spouse annuity instead of 
any other payments (except any accrued but unpaid annuity and any unpaid 
employee contributions) to which he or she may be entitled under CSRS, 
or any other retirement system for Government employees.
    (d) As used in this section, ``any other retirement system for 
Government employees'' does not include Survivor Benefit Payments from a 
military retirement system or social security benefits.

[55 FR 9103, Mar. 12, 1990, as amended at 58 FR 52881, Oct. 13, 1993. 
Redesignated at 58 FR 52882, Oct. 13, 1993]

                      Payment of Survivor Annuities



Sec. 831.651  Commencing and terminating dates of survivor annuities.

    (a) Except as provided in paragraph (b) of this section, current 
spouse annuities, former spouse annuities, children's survivor 
annuities, and survivor annuities for beneficiaries of insurable 
interest annuities under CSRS begin to accrue on the day after death of 
the employee, Member, or retiree.
    (b)(1) A current spouse annuity begins to accrue--
    (i) Upon attainment of age 50 when, under section 12 of the Civil 
Service Retirement Act Amendments of February 29, 1948, the annuity is 
deferred until age 50; or
    (ii) Upon OPM's receipt of a claim for an annuity authorized for 
unremarried widows and widowers by section 2 of the Civil Service 
Retirement Act Amendments of June 25, 1958, 72 Stat. 218.
    (2) A former spouse annuity begins to accrue--
    (i) For annuities under Sec. 831.683, on the later of the day after 
date of death of the retiree or the first day of the second month after 
the date the application for annuity is received in OPM; or
    (ii) For annuities when a former spouse annuity is authorized by 
court order under section 8341(h) of title 5, United States Code, on the 
later of the day after the date of death of the employee, Member, or 
retiree or the first day of the second month after the court order 
awarding the former spouse annuity and the supporting documentation 
required by Sec. 838.721 or Sec. 838.1005 of this chapter are received 
in OPM.
    (c) A survivor annuity terminates at the end of the month preceding 
death or any other terminating event.
    (d) A current spouse annuity terminated for reasons other than death 
may be restored under conditions defined in sections 8341(e)(2) and 
8341(g) of title 5, United States Code.
    (e) A survivor annuity accrues on a daily basis, one-thirtieth of 
the monthly rate constituting the daily rate. An annuity does not accrue 
for the 31st day of any month, except in the initial month if the 
survivor's (of a deceased employee) annuity commences on the 31st day. 
For accrual purposes, the last day of a 28-day month constitutes 3 days 
and the last day of a 29-day month constitutes 2 days.
    (f) Initial cost-of-living increases on current and former spouse 
annuities, and annuities to beneficiaries of insurable interest 
annuities are prorated under section 8340(c) of title 5, United States 
Code.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31933, Sept. 8, 1986; 55 
FR 9102, Mar. 12, 1990; 57 FR 33597, July 29, 1992; 58 FR 52881, Oct. 
13, 1993. Redesignated at 58 FR 52882, Oct. 13, 1993]

                       Survivor Election Deposits



Sec. 831.661  Deposits not subject to waiver.

    (a) The deposits required to elect fully or partially reduced 
annuities under Sec. Sec. 831.622, 831.631, 831.632, 831.682,

[[Page 114]]

831.684, or 831.685 are not annuity overpayments and their collection is 
not subject to waiver. They are subject to reconsideration only to 
determine whether the amount has been correctly computed.
    (b) [Reserved]

[50 FR 20070, May 13, 1985, as amended at 51 FR 31935, Sept. 8, 1986; 57 
FR 33597, July 29, 1992; 58 FR 52881, Oct. 13, 1993. Redesignated and 
amended at 58 FR 52882, Oct. 13, 1993]



Sec. 831.662  Deposits required to change an election after final 
adjudication.

    The amount of the deposit required under Sec. 831.622 or Sec. 
831.685 equals the sum of the monthly differences between the annuity 
paid to the retiree and the annuity that would have been paid if the 
additional annuity reduction elected under Sec. 831.622 or Sec. 
831.685 had been in effect since the time of retirement, plus 24.5 
percent of the increase in the designated base (computed as of the time 
of retirement) on which the survivor annuity is calculated.

[51 FR 31935, Sept. 8, 1986, as amended at 58 FR 52881, Oct. 13, 1993. 
Redesignated and amended at 58 FR 52882, Oct. 13, 1993]



Sec. 831.663  Actuarial reduction in annuity of retirees who make 
post-retirement elections to provide a current spouse annuity or a 
former spouse annuity.

    (a) Applicability of this section. This section applies to all 
retirees who are required to pay deposits under Sec. 831.631 or Sec. 
831.632 and have not paid any portion of the deposit prior to October 1, 
1993, or from annuity accruing before that date.
    (b) Other methods of payment not available. Retirees described in 
paragraph (a) of this section must have a permanent annuity reduction 
computed under paragraph (d) of this section.
    (c) Commencing date of the reduction. A reduction under this section 
commences on the same date as the annuity reduction under Sec. 831.631 
or Sec. 831.632.
    (d) Computing the amount of the reduction. The annuity reduction 
under this section is equal to the lesser of--
    (1) The amount of the deposit under Sec. 831.631 or Sec. 831.632 
divided by the present value factor for the retiree's age on the 
commencing date of the reduction under paragraph (c) of this section 
(plus any previous reduction(s) in the retiree's annuity required under 
this section Sec. 831.664); or
    (2) Twenty-five percent of the rate of the retiree's self-only 
annuity on the commencing date of the reduction under paragraph (c) of 
this section.
    (e) Termination of the reduction. (1) The reduction under this 
section terminates on the date that the retiree dies.
    (2) If payment of a retiree's annuity is suspended or terminated and 
later reinstated, or if a new annuity becomes payable, OPM will increase 
the amount of the original reduction computed under paragraph (d) of 
this section by any cost-of-living adjustments under section 8340 of 
title 5, United States Code, occurring between the commencing date of 
the original reduction and the commencing date of the reinstated or new 
annuity (but the adjusted reduction may not exceed 25 percent of the 
rate of the reinstated or new self-only annuity).

[58 FR 52882, Oct. 13, 1993]



Sec. 831.664  Post-retirement survivor election deposits that were 
partially paid before October 1, 1993.

    (a) Applicability of this section. This section applies to all 
retirees who are required to pay deposits under Sec. 831.631, Sec. 
831.632, Sec. 831.682, or Sec. 831.684 and have paid some portion (but 
not all) of the deposit prior to October 1, 1993, or from annuity 
accruing before that date.
    (b) Other methods of payment not available. Retirees described in 
paragraph (a) of this section must have a permanent annuity reduction 
computed under paragraph (d) of this section.
    (c) Commencing date of the reduction. A reduction under this section 
commences on October 1, 1993.
    (d) Computing the amount of the reduction. The annuity reduction 
under this section is equal to the lesser of--
    (1) The amount of the principal balance remaining to be paid on 
October 1, 1993, divided by the present value factor for the retiree's 
age on October 1, 1993; or
    (2) Twenty-five percent of the rate of the retiree's self-only 
annuity on October 1, 1993.

[[Page 115]]

    (e) Termination of the reduction. (1) The reduction under this 
section terminates on the date that the retiree dies.
    (2) If payment of a retiree's annuity is suspended or terminated and 
later reinstated, or if a new annuity becomes payable, OPM will increase 
the amount of the original reduction computed under paragraph (d) of 
this section by any cost-of-living adjustments under section 8340 of 
title 5, United States Code, occurring between the commencing date of 
the original reduction and the commencing date of the reinstated or new 
annuity (but the adjustment reduction may not exceed 25 percent of the 
rate of the reinstated or new self-only annuity).

[58 FR 52883, Oct. 13, 1993]



Sec. 831.665  Payment of deposits under Sec. 831.631, Sec. 831.632, 
Sec. 831.682, or Sec. 831.684 under pre-October 1, 1993, law or when 
the retiree has died prior to October 1, 1993.

    (a) If a retiree fails to make a deposit required under Sec. 
831.682 or Sec. 831.684 within 60 days after the date of the notice 
required by Sec. 831.682(e) or Sec. 831.684(c), the deposit will be 
collected by offset from his or her annuity in installments equal to 25 
percent of the retiree's net annuity (as defined in Sec. 838.103 of 
this chapter).
    (b) If a retiree fails to make a deposit required by Sec. 831.631 
or Sec. 831.632 within 2 years after the date of the post-retirement 
marriage or divorce, the deposit will be collected by offset from his or 
her annuity in installments equal to 25 percent of the retiree's net 
annuity (as defined in Sec. 838.103 of this chapter).
    (c) If a retiree dies before a deposit required under Sec. Sec. 
831.631, 831.632, 831.682, or 831.684 is fully made, the deposit will be 
collected from the survivor annuity (for which the election required the 
deposit) before any payments of the survivor annuity are made.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31935, Sept. 8, 1986; 57 
FR 33597, July 29, 1992; 58 FR 52881, Oct. 13, 1993. Redesignated and 
amended at 58 FR 52882, Oct. 13, 1993]

                          Children's Annuities



Sec. 831.671  Proof of eligibility for a child's annuity.

    (a) Proof of paternity. (1) A judicial determination of parentage 
conclusively establishes the paternity of a child.
    (2) Except as provided in paragraph (a)(1) of this section, a child 
born to the wife of a married person is presumed to be the child of the 
wife's husband. This presumption may be rebutted only by clear and 
convincing evidence that the husband is not the father of the child.
    (3) When paternity is not established under paragraph (a)(1) or 
(a)(2) of this section, paternity is determined by a preponderance of 
the credible evidence as defined in Sec. 1201.56(c)(2) of this title.
    (b) Proof of adoption. (1) An adopted child is--
    (i) A child adopted by the employee or retiree before the death of 
the employee or retiree; or
    (ii) A child who lived with the employee or retiree and for whom a 
petition for adoption was filed by the employee or retiree and who is 
adopted by the current spouse of the employee or retiree after the death 
of the employee or retiree.
    (2) The only acceptable evidence to prove status as an adopted child 
under paragraph (b)(1)(i) of this section is a copy of the judicial 
decree of adoption.
    (3) The only acceptable evidence to prove status as an adopted child 
under paragraph (b)(1)(ii) of this section is copies of--
    (i) The petition for adoption filed by the employee or retiree 
(clearly showing the date filed); and
    (ii) The judicial decree of adoption.
    (c) Dependency. To be eligible for survivor annuity benefits, a 
child must have been dependent on the employee or retiree at the time of 
the employee's or retiree's death.
    (d) Proof of dependency. (1) A child is presumed to have been 
dependent on the deceased employee or retiree if he or she is--
    (i) A legitimate child; or
    (ii) An adopted child; or
    (iii) A stepchild or recognized natural child who lived with the 
employee or

[[Page 116]]

retiree in a regular parent-child relationship at the time of the 
employee's or retiree's death; or
    (iv) A recognized natural child for whom a judicial determination of 
support was obtained; or
    (v) A recognized natural child to whose support the employee or 
retiree made regular and substantial contributions.
    (2) The following are examples of proofs of regular and substantial 
support. More than one of the following proofs may be required to show 
support of a child who did not live with the employee or retiree in a 
regular parent-child relationship and for whom a judicial determination 
of support was not obtained.
    (i) Evidence of eligibility as a dependent child for benefits under 
other State or Federal programs;
    (ii) Proof of inclusion of the child as a dependent on the 
decedent's income tax returns for the years immediately before the 
employee's or retiree's death;
    (iii) Cancelled checks, money orders, or receipts for periodic 
payments received from the employee or retiree for or on behalf of the 
child;
    (iv) Evidence of goods or services that shows regular contributions 
of considerable value;
    (v) Proof of coverage of the child as a family member under the 
employee's or retiree's Federal Employees Health Benefits enrollment; 
and
    (vi) Other proof of a similar nature that OPM may find to be 
sufficient to demonstrate support or parentage.
    (3) Survivor benefits may be denied--
    (i) If evidence shows that the deceased employee or retiree did not 
recognize the claimant as his or her own despite a willingness to 
support the child; or
    (ii) If evidence casts doubt upon the parentage of the claimant, 
despite the deceased employee's or retiree's recognition and support of 
the child.

[55 FR 9102, Mar. 12, 1990, as amended at 58 FR 43493, Aug. 17, 1993. 
Redesignated at 58 FR 52882, Oct. 13, 1993]



Sec. 831.672  Annuity for a child age 18 to 22 during full-time school 
attendance.

    (a) General requirements for an annuity. (1) For a child age 18 to 
22 to be eligible to receive an annuity as a full-time student, the 
child must also meet all other requirements applicable to qualify for an 
annuity by a child who has not attained age 18.
    (2) In addition to the requirements of paragraph (a)(1) of this 
section, OPM must receive certification, in a form prescribed by OPM, 
that the child is regularly pursuing a full-time course of study in an 
accredited institution.
    (b) Full-time course of study. (1) Generally, a full-time course of 
study is a noncorrespondence course which, if successfully completed, 
will lead to completion of the education within the period generally 
accepted as minimum for completion, by a full-time day student, of the 
academic or training program concerned.
    (2) A certification by an accredited institution that the student's 
workload is sufficient to constitute a full-time course of study for the 
program in which the student is enrolled is prima facie evidence that 
the student is pursuing a full-time course of study.
    (c) Certification of school attendance. (1) OPM may periodically 
request the recipient of a child's annuity payments to furnish 
certification of school attendance. The certification must be completed 
in the form prescribed by OPM.
    (2) If OPM requests the recipient of a child's annuity payments to 
provide a self-certification of school attendance, the recipient must 
complete and sign the certification form.
    (3) If OPM requests the recipient of a child's annuity payments to 
provide a certification by the school, the certification must be signed 
by an official who is either in charge of the school or in charge of the 
school's records. OPM will not accept certification forms signed by 
instructors, counselors, aides, roommates, or others not in charge of 
the school or the records.
    (i) If the educational institution is above the high school level, 
the certification must be signed by the president or chancellor, vice 
president or vice

[[Page 117]]

chancellor, dean or assistant dean, registrar or administrator, 
assistant registrar or assistant administrator, or the equivalent.
    (ii) If the educational institution is at the high school level, the 
certification must be signed by the superintendent of schools, assistant 
superintendent of schools, principal, vice principal, assistant 
principal, or the equivalent.
    (iii) If the educational institution is a technical or trade school, 
the certification must be signed by the president, vice president, 
director, assistant director, or the equivalent.
    (4) OPM will accept a facsimile signature of a school official only 
if it is accompanied by a raised seal of the institution or other 
evidence clearly demonstrating the authenticity of the certification and 
making unauthorized use of the signature stamp unlikely.
    (d) Continuation of annuity during interim breaks. A child's annuity 
continues during interim breaks between school years if the following 
conditions are satisfied:
    (1) The student must have been a full-time student at the end of the 
school term immediately before the break.
    (2) The break between the end of the last term of full-time 
attendance and the return to full-time attendance must not exceed 5 
months. (See Sec. 831.107, concerning calculation of this time period.)
    (3) The recipient of a child's annuity payments must show that the 
student has a bona fide intent to return to school as a full-time 
student immediately after the break. The full-time certification for the 
prior term and the certification (in a form prescribed by OPM) by the 
recipient of a child's annuity payments that the student intends to 
return to school (immediately after the break) as a full-time student 
constitute prima facie evidence of a bona fide intent to return to 
school.
    (e) Benefits after age 22. (1) A student's eligibility for a child's 
annuity terminates based on reaching age 22 on--
    (i) June 30 of the calendar year of the child's 22nd birthday if the 
child's birthday is before July 1; or
    (ii) The last day of the month before the child's 22nd birthday if 
the child's birthday occurs after June 30 but before September 1 of the 
calendar year; or
    (iii) June 30 of the year after the one in which the child attains 
age 22 if the child's birthday is after August 31 of the calendar year.
    (2)(i) An otherwise eligible child who becomes a full-time student 
after his or her 22nd birthday but before the date the annuity 
terminates under paragraph (e)(1) of this section is eligible for 
annuity while he or she is a full-time student until the termination 
date under paragraph (e)(1) of this section.
    (ii) An otherwise eligible child who is a full-time student, and 
whose parent dies after the child's 22nd birthday but before the date 
the annuity terminates under paragraph (e)(1) of this section, is 
eligible for annuity while he or she is a full-time student after the 
death of the parent until the termination date under paragraph (e)(1) of 
this section.

[58 FR 32052, June 8, 1993. Redesignated at 58 FR 52882, Oct. 13, 1993]



Sec. 831.673  Rates of child annuities.

    (a) (1) The rate of annuity payable to a child survivor whose 
annuity commenced before February 27, 1986, is computed in accordance 
with the law in effect on the date when the annuity began to accrue, 
unless the rate of annuity is recomputed under paragraph (e) of this 
section on or after February 27, 1986.
    (2) The rate of annuity payable to a child survivor whose annuity 
commenced on or after February 27, 1986, or was recomputed under 
paragraph (e) of this section on or after February 27, 1986, is computed 
under paragraph (b), (c), or (d) of this section.
    (b) Except as provided in paragraph (a) of this section, the rate of 
annuity of a child survivor is computed under section 8341(e)(2) (i) 
through (iii) of title 5, United States Code, with adjustments in 
accordance with section 8340 of title 5, United States Code, when the 
deceased employee, Member or annuitant was never married to a natural or 
adoptive parent of that surviving child of the former employee or 
Member.

[[Page 118]]

    (c) Except as provided in paragraphs (a) and (b) of this section, 
the rate of annuity payable to a child survivor is computed under 
section 8341(e)(2) (A) through (C) of title 5, United States Code, with 
adjustments in accordance with section 8340 of title 5, United States 
Code, whenever a deceased employee, Member, or retiree is survived by a 
natural or adoptive parent of that surviving child of the employee, 
Member, or retiree.
    (d) Except as provided in paragraph (a) of this section, the rate of 
annuity payable to a child survivor is computed under section 8341(e)(2) 
(i) through (iii) of title 5, United States Code, with adjustments in 
accordance with section 8340 of title 5, United States Code, when the 
deceased employee, Member, or retiree is not survived by a natural or 
adoptive parent of that surviving child of the former employee or 
Member.
    (e) On the death of a natural or adoptive parent or termination of 
the annuity of a child, the annuity of any other child or children is 
recomputed and paid as though the parent or child had not survived the 
former employee or Member.

[51 FR 31933, Sept. 8, 1986. Redesignated at 58 FR 52882, Oct. 13, 1993]

             Regulations Pertaining to Noncodified Statutes



Sec. 831.681  Annual notice required by Public Law 95-317.

    At least once every 12 consecutive months, OPM will send a notice to 
all retirees to inform them about the survivor annuity elections 
available to them, under sections 8339(j), 8339(k)(2), and 8339(o) of 
title 5, United States Code.

[56 FR 16263, Apr. 22, 1991, as amended at 58 FR 43493, Aug. 17, 1993. 
Redesignated at 58 FR 52882, Oct. 13, 1993]



Sec. 831.682  Election by a retiree who retired before May 7, 1985, 
to provide a former spouse annuity.

    (a) A retiree who retired before May 7, 1985, including a retiree 
receiving a fully reduced annuity to provide a current spouse annuity, 
may elect a fully reduced annuity or a partially reduced annuity to 
provide a former spouse annuity.
    (b) The election should be made by letter addressed to OPM. The 
election must--
    (1) Be in writing; and
    (2) Agree to pay any deposit due under paragraph (c) of this 
section; and
    (3) Be signed by the retiree; and
    (4) Be filed with OPM before September 8, 1987.
    (c)(1)(i) If a retiree who is receiving an insurable interest 
annuity elects a fully reduced annuity or a partially reduced annuity 
under this section to benefit the same person, the insurable interest 
annuity terminates. A retiree who is receiving an insurable interest 
annuity at the time that an annuity is elected under this section does 
not owe any further deposit.
    (ii) If a retiree who had been receiving an insurable interest 
annuity, which was terminated to elect a reduced annuity to provide a 
current spouse annuity for a spouse acquired after retirement, elects to 
provide a former spouse annuity for a former spouse who was the 
beneficiary of the insurable interest annuity, the retiree must deposit 
an amount equal to the sum of the monthly differences between the self-
only annuity and a fully reduced annuity or partially reduced annuity 
(with the same base as elected to provide the former spouse annuity) 
from the date the insurable interest annuity terminated, plus 6 percent 
annual interest, computed under Sec. 831.105, from the date to which 
each monthly difference is attributable.
    (2) A retiree who elects a fully reduced annuity or a partially 
reduced annuity under this section, to provide a former spouse annuity 
for a former spouse for whom the retiree had elected (during the 
marriage to that former spouse) a reduced annuity to provide a current 
spouse annuity, must deposit an amount equal to the sum of the monthly 
differences between the self-only annuity and the amount of annuity that 
would have been in effect had a fully reduced annuity or partially 
reduced annuity (with the same base as elected to provide the former 
spouse annuity) been in effect continuously since the time of 
retirement, plus 6 percent annual interest, computed

[[Page 119]]

under Sec. 831.105, from the date to which each monthly difference is 
attributable, except that the retiree will not be charged for any period 
during which the survivor reduction was in effect for that former 
spouse.
    (3) A retiree who elects a fully reduced annuity or a partially 
reduced annuity under this section, and is not covered under paragraph 
(c)(1) or (c)(2) of this section, must deposit an amount equal to the 
sum of the monthly difference between the self-only annuity and a fully 
reduced annuity or a partially reduced annuity (with the same base as 
elected to provide the former spouse annuity) since the time of 
retirement, plus 6 percent annual interest, computed under Sec. 
831.105, from the date to which each monthly difference is attributable.
    (d) If a retiree who is receiving a fully reduced annuity or a 
partially reduced annuity to provide a current spouse annuity elects a 
fully reduced annuity or a partially reduced annuity under this section 
to provide a former spouse annuity, the annuity will be reduced 
separately to provide for the current and former spouse annuities. Each 
separate reduction will be computed based on the self-only annuity, and 
the separate reductions are cumulative.
    (e)(1) In response to a retiree's inquiry about providing a former 
spouse annuity under this section, OPM will send an application form. 
The application form will include a notice to retirees that filing the 
application constitutes an official election which cannot be revoked 
after 30 days after the annuity check in which the annuity reduction 
first appears.
    (2) If the retiree returns the application electing a fully reduced 
annuity or a partially reduced annuity under this section, OPM will 
notify the retiree of--
    (i) The rate of the fully reduced annuity or partially reduced 
annuity; and
    (ii) The rate of the potential former spouse annuity; and
    (iii) The amount of the deposit, including interest, that is due as 
of the date that the annuity reduction is scheduled to begin; and
    (iv) The amount and duration of installment payments if no deposit 
is made.
    (3) The notice under paragraph (e)(2) of this section will advise 
the retiree that the deposit will be collected in installments under 
Sec. 831.665, unless lump-sum payment is made within 60 days from the 
date of the notice.
    (4) OPM will reduce the annuity and begin collection of the deposit 
in installments effective with the first check payable more than 60 days 
after the date on the notice required under paragraph (e)(2) of this 
section.
    (f)(1) A retiree who made an election under this section prior to 
September 9, 1986 may modify that election by designating a lesser 
portion of the retiree's annuity be used as the base for the annuity 
reduction and the former spouse annuity.
    (2) Any modification under paragraph (f)(1) of this section must be 
in writing and received in OPM no later than the date provided for 
applications in paragraph (b)(4) of this section.
    (g) The annuity reduction resulting in a fully reduced annuity or 
partially reduced annuity to provide a former spouse annuity under this 
section terminates on the first day of the month after the former spouse 
remarries before age 55 or dies.
    (h) A former spouse is eligible to receive only one survivor annuity 
based on the service of one employee or Member.
    (i) If a former spouse is entitled to a former spouse annuity based 
on an election under this section, but absent that election would have 
been entitled to a former spouse annuity under Sec. 831.683 (i.e., 
filed a timely application as well as meeting all other requirements), 
the amount of the former spouse annuity payable will equal 55 percent of 
the annuity of the retiree on whose service the survivor annuity is 
based.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31934, Sept. 8, 1986; 55 
FR 9102, Mar. 12, 1990; 56 FR 16263, Apr. 22, 1991; 58 FR 52881, Oct. 
13, 1993. Redesignated at 58 FR 52882, Oct. 13, 1993]



Sec. 831.683  Annuities for former spouses of employees or Members 
retired before May 7, 1985.

    (a)(1) The former spouse of a retiree who retired before May 7, 1985 
(or of an employee or Member who died before

[[Page 120]]

May 7, 1985, was employed in a position covered by CSRS at the time of 
death, and was eligible to retire at the time of death), is entitled, 
after the death of the retiree, employee, or Member, to a survivor 
annuity equal to 55 percent of the self-only annuity of the retiree on 
whose service the survivor annuity is based if the former spouse, at the 
time of application, meets all of the following requirements:
    (i) The former spouse's marriage to the retiree, employee, or Member 
was dissolved after September 14, 1978, and before May 8, 1987. The date 
of dissolution of a marriage is the date when the marriage between the 
former spouse and the retiree, employee, or Member ended under the law 
of the jurisdiction that terminated the marriage, rather than the date 
when restrictions on remarriage ended. The date of entry of the decree 
terminating the marriage will be rebuttably presumed to be the date when 
the marriage was dissolved.
    (ii) The former spouse was married to the retiree, employee, or 
Member for at least 10 years of the retiree's, employee's, or Member's 
creditable service. Creditability of service is determined in accordance 
with section 8332 of title 5, United States Code, and subpart C of this 
part.
    (iii) The former spouse has not remarried before reaching age 55.
    (iv) The former spouse applies to OPM for a survivor annuity, in 
accordance with paragraph (b) of this section and Sec. 831.643(b), 
before May 8, 1989.
    (v) The former spouse is at least 50 years old on May 7, 1987, and 
when filing the application.
    (2) A former spouse who is not eligible for an annuity under 
paragraph (a)(1) of this section and who is the former spouse of a 
retiree who retired before May 7, 1985 (or of an employee or Member who 
died before May 7, 1985, was employed in a position covered by CSRS at 
the time of death, and was eligible to retire at the time of death), is 
entitled, after the death of the retiree, employee, or Member, to a 
survivor annuity equal to 55 percent of the self-only annuity of the 
retiree on whose service the survivor annuity is based if the former 
spouse, at the time of application, meets all of the following 
requirements:
    (i) The former spouse was married to the retiree, employee, or 
Member for at least 10 years of the retiree's, employee's, or Member's 
creditable service. Creditability of service is determined in accordance 
with section 8332 of title 5, United States Code, and subpart C of this 
part.
    (ii) The former spouse has not remarried after September 14, 1978, 
before reaching age 55.
    (iii) The former spouse applies to OPM for a survivor annuity, in 
accordance with paragraph (b) of this section and Sec. 831.643(b), 
before May 8, 1989.
    (iv) The former spouse is at least 50 years old on May 7, 1987, and 
when filing the application.
    (v) No current spouse, other former spouse, or insurable interest 
designee is receiving or has been designated to receive a survivor 
annuity based on the service of the employee, Member, or retiree.
    (3) If two or more eligible former spouses of a retiree, employee, 
or Member apply for annuities under paragraph (a)(2) of this section 
based on the service of the same retiree, employee, or Member, and 
neither meets the requirements of paragraph (a)(1) of this section, the 
former spouse whose application OPM receives first is entitled to the 
annuity.
    (b)(1) Application must be filed on the form prescribed for that 
purpose by OPM. The application form will require the former spouse to 
certify under the penalty provided by section 1001 of title 18, United 
States Code, that he or she meets the requirements listed in paragraph 
(a) of this section.
    (2) In addition to the application form required in paragraph (b)(1) 
of this section, the former spouse must submit proof of his or her age 
and the date when the marriage to the retiree commenced, and a certified 
copy of the divorce decree terminating the marriage to the retiree.
    (3)(i) Former spouses applying for benefits under this section must 
meet the requirements of paragraph (a) of this section at the time of 
application.
    (ii) An annuity under this section terminates on the last day of the 
month before the former spouse remarries before age 55 or dies, except 
that a remarriage before September 15, 1978,

[[Page 121]]

does not cause termination of a former spouse annuity under this 
section. A former spouse who is receiving a former spouse annuity under 
this section must notify OPM within 30 days after he or she remarries 
before age 55.
    (c) Survivor annuities payable under this section commence on the 
later of the day after the date of death of the retiree or the first day 
of the second month after the application is filed under Sec. 
831.643(b).
    (d) Cost-of-living adjustments under section 8340 of title 5, United 
States Code, are applicable to annuities payable under this section.
    (e) If a former spouse is eligible for a former spouse annuity under 
this section and another current spouse annuity or former spouse annuity 
(under the Civil Service Retirement System or the Federal Employees 
Retirement System) resulting from the death of the same retiree, the 
annuity under this section will be paid instead of the other current 
spouse annuity or former spouse annuity.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31933, Sept. 8, 1986; 55 
FR 9103, Mar. 12, 1990; 56 FR 16263, Apr. 22, 1991; 58 FR 52881, Oct. 
13, 1993. Redesignated at 58 FR 52882, Oct. 13, 1993]



Sec. 831.684  Second chance elections to provide survivor benefits.

    (a) A married retiree who retired before May 7, 1985, and is not 
currently receiving a fully or partially reduced annuity to provide a 
current spouse annuity may elect a fully or partially reduced annuity to 
provide a current spouse annuity for a spouse acquired after retirement 
if the following conditions are met:
    (1) (i) The retiree was married at the time of retirement and did 
not elect a survivor annuity at that time; or
    (ii) The retiree failed to elect a fully or partially reduced 
annuity within 1 year after a post-retirement marriage that occurred 
before November 8, 1984, and the retiree attempted to elect a fully or 
partially reduced annuity after the time limit expired and that request 
was disallowed as untimely.
    (2) The retiree applies for a fully or partially reduced annuity 
under this section before November 9, 1985.
    (3) The retiree agrees to pay the amount due under paragraph (d) of 
this section.
    (b) Applications must be filed on the form prescribed by OPM, except 
filing the form is excused when the retiree dies before filing the 
required form if:
    (1) The retiree made a written request, after November 8, 1984, to 
elect a fully or partially reduced annuity under this section, and
    (2) The retiree was denied the opportunity to file the required form 
because the retiree, without fault, did not receive the form in 
sufficient time for the retiree to be reasonably expected to complete 
the form before death.
    (c)(1) In response to a retiree's inquiry about providing a current 
spouse annuity under this section, OPM will send an application form. 
This application will include instructions to assist the retiree in 
estimating the amount of reduction in the annuity to provide the current 
spouse annuity and the amount of the required deposit. The application 
form will include a notice to retirees that filing the application 
constitutes an official election which cannot be revoked after 30 days 
after the annuity check in which the annuity reduction first appears.
    (2) If the retiree returns the application electing a fully or 
partially reduced annuity under this section, OPM will notify the 
retiree of--
    (i) The rate of the fully reduced annuity; and
    (ii) The rate of the potential current spouse annuity; and
    (iii) The amount of the deposit, including interest, that is due as 
of the date that the annuity reduction is scheduled to begin; and
    (iv) The amount and duration of installment payments if no deposit 
is made.
    (3) The notice under paragraph (c)(2) of this section will advise 
the retiree that the deposit will be collected in installments under 
Sec. 831.665, unless lump-sum payment is made within 60 days from the 
date of this notice.
    (4) OPM will reduce the annuity and begin collection of the deposit 
in installments effective with the first check payable more than 60 days 
after the date on the notice required under paragraph (c)(2) of this 
section.

[[Page 122]]

    (d) The retiree must state on the application form whether the 
application is made under paragraph (a)(1)(i) of this section or 
paragraph (a)(1)(ii) of this section. If the application is made under 
paragraph (a)(1)(ii) of this section, the retiree must prove that he or 
she had attempted to elect a fully reduced annuity and that OPM rejected 
that application because it was filed too late. The proof must consist 
of a copy of OPM's letter rejecting the previous election as untimely 
filed or an affidavit swearing or affirming that he or she made an 
untimely application which OPM rejected. The affidavit is sufficient 
documentation to provide proof of the retiree's attempt to elect a 
reduced annuity, unless the record contains convincing evidence to rebut 
the certification.
    (e) A retiree who elects to provide a current spouse annuity under 
this section must agree to pay a deposit equal to the difference between 
the amount of annuity actually paid to the retiree and the amount of 
annuity that would have been paid if a fully reduced annuity were being 
paid continuously since the time of retirement, plus 6 percent annual 
interest, computed under Sec. 831.105, from the date when each 
difference occurred.
    (f) The rate of a survivor annuity under this section will be 
computed under the laws in effect at the time of the retiree's 
separation from the Federal service.

[50 FR 20070, May 13, 1985, as amended at 51 FR 31935, Sept. 8, 1986; 58 
FR 52881, Oct. 13, 1993. Redesignated at 58 FR 52882, Oct. 13, 1993]



Sec. 831.685  Changes in elections to provide a current spouse annuity 
by a retiree who retired before May 28, 1986.

    (a) Except as provided in Sec. 831.613 and paragraphs (b) and (c) 
of this section, a retiree who retired before May 28, 1986, was married 
at the time of retirement, and at the time of retirement did not elect a 
fully reduced annuity to provide a current spouse annuity may elect a 
fully reduced annuity or a greater partially reduced annuity to provide 
a current spouse annuity.
    (b)(1) An election under paragraph (a) of this section may be made 
only by a retiree who is married to the same spouse to whom the retiree 
was married at the time of retirement.
    (2) A current spouse annuity based on an election under paragraph 
(a) of this section cannot be paid if it will, when combined with any 
former spouse annuity or annuities that are required by court order, 
exceed the maximum survivor annuity permitted under Sec. 831.641.
    (3)(i) Except as provided in paragraph (b)(4) of this section, to 
make an election under paragraph (a) of this section, the retiree must 
pay the deposit computed under Sec. 831.662, in full, no later than 
November 28, 1987.
    (ii) Except as provided in paragraph (b)(4) of this section, failure 
to pay the deposit, in full, before November 29, 1987, voids an election 
made under paragraph (a) of this section.
    (4) If a retiree makes an election under paragraph (a) of this 
section and is prevented from paying the deposit within the 18-month 
time limit because OPM did not send him or her a notice of the amount of 
the deposit at least 30 days before the time limit expires, the time 
limit for making the deposit will be extended to 30 days after OPM sends 
the notice of the amount of the deposit.
    (5) For a retiree whose annuity commenced on or after May 7, 1985, 
an election under paragraph (a) of this section cancels any spouse 
consent under Sec. 831.611 to the extent of the election.
    (c) If a retiree who had elected a fully reduced annuity or a 
partially reduced annuity to provide a former spouse annuity makes an 
election under paragraph (a) of this section that would cause the 
combined current spouse annuity and former spouse annuity (or annuities) 
to exceed the maximum allowed under Sec. 831.641, the former spouse 
annuity (or annuities) must be reduced to conform with that allowed 
under Sec. 831.641.
    (d) An election under paragraph (a) of this section is void unless 
it is filed with OPM before the retiree dies.

[51 FR 31935, Sept. 8, 1986, as amended at 55 FR 9103, Mar. 12, 1990; 58 
FR 52881, Oct. 13, 1993. Redesignated at 58 FR 52882, Oct. 13, 1993]

[[Page 123]]



                   Subpart G_Computation of Annuities



Sec. 831.701  Effective dates of annuities.

    (a) Except as provided in paragraphs (b) and (c) of this section, an 
annuity of an employee or Member commences on the first day of the month 
after--
    (1) Separation from the service; or
    (2) Pay ceases and the service and age requirements for title to 
annuity are met, if earlier than the date of separation.
    (b) An annuity of--
    (1) An employee involuntarily separated from service (except by 
removal for cause on charges of misconduct or delinquency) and eligible 
for an immediate annuity based on that involuntary separation;
    (2) An employee or Member retiring due to a disability; and
    (3) An employee or Member retiring after serving three days or less 
in the month of retirement--shall commence on the day after separation 
from the service or the day after pay ceases and the service and age or 
disability requirements for title to annuity are met.
    (c) An annuity granted under section 8338, title 5, United States 
Code, commences on the appropriate birthday of the employee or Member.
    (d) Survivor annuities commence as provided in Sec. 831.651.
    (e) Except as provided in Sec. 831.502, annuity terminates on the 
date of death or on the date of any other terminating event in each case 
when OPM terminates the annuity.
    (f) Annuity accrues on a daily basis, one-thirtieth of the monthly 
rate constituting the daily rate. Annuity does not accrue for the 
thirty-first day of any month, except in the initial month if the 
employee's annuity commences on the 31st of a 31-day month. For accrual 
purposes, the last day of a 28-day month constitutes 3 days and the last 
day of a 29-day month constitutes 2 days.

[48 FR 38786, Aug. 26, 1983, as amended at 51 FR 31936, Sept. 8, 1986; 
58 FR 52881, Oct. 13, 1993]



Sec. 831.702  Adjustment of annuities.

    (a)(1) An annuity which includes creditable National Guard 
technician service performed prior to January 1, 1969, shall be reduced 
by the portion of any benefits under any State retirement system to 
which an annuitant is entitled (or on proper application would be 
entitled) for any month in which the annuitant is eligible for State 
benefits based on the same pre-1969, service.
    (2) Any cost-of-living increases in the State benefit shall require 
a corresponding deduction in the civil service annuity.
    (3) Any cost-of-living increase to a civil service annuity shall 
apply to the gross annuity before deduction for benefits under any State 
retirement system.
    (b) In the adjudication of claims arising under subchapter III of 
chapter 83 of title 5, United States Code, OPM shall take appropriate 
action to obtain the data that it considers necessary to assure the 
proper annuity deduction. Upon request by OPM, an annuitant shall 
promptly submit this data.

[48 FR 38786, Aug. 26, 1983]



Sec. 831.703  Computation of annuities for part-time service.

    (a) Purpose. The computational method in this section shall be used 
to determine the annuity for an employee who has part-time service on or 
after April 7, 1986.
    (b) Definitions. In this section--
    Full-time service means any actual service in which the employee is 
schedule to work the number of hours and days required by the 
administrative workweek for his or her grade or class (normally 40 
hours).
    Intermittent service means any actual service performed with no 
prescheduled regular tour of duty.
    Part-time service means any actual service performed on a less than 
full-time basis, by an individual whose appointment describes a 
regularly scheduled tour of duty, and any period of time credited as non 
pay status time under 5 U.S.C. 8332(f), which follows a period of part-
time service without any intervening period of actual service other than 
part-time service. This definition is not limited to part-time career 
employment because it includes part-time temporary employment as well.

[[Page 124]]

    Post-April 6, 1986 average pay means the largest annual rate 
resulting from averaging, over any period of 3 consecutive years of 
creditable service, the annual rate of basic pay that would be payable 
for full-time service by an employee during that period, with each rate 
weighted by the time it was in effect, except that for periods of 
service before April 7, 1986, the actual rate of basic pay based on the 
employee's established tour of duty, if different, is used in the 
computation. The rates of pay included in the computation for 
intermittent service or temporary service performed on a full-time basis 
are the actual rates of basic pay during those periods of creditable 
service.
    Pre-April 7, 1986, average pay means the largest annual rate 
resulting from averaging, over any period of 3 consecutive years of 
creditable service, an employee's actual rates of basic pay during that 
period, with each rate weighted by the time it was in effect.
    Proration factor means a fraction expressed as a percentage rounded 
to the nearest percent. The numerator is the sum of the number of hours 
the employee actually worked during part-time service, and the 
denominator is the sum of the number of hours that a full-time employee 
would be schedule to work during the same period of service included in 
the numerator. If an employee has creditable service in addition to 
part-time service (full-time service, intermittent service, or temporary 
service performed on a full-time basis), such service must be included 
in the numerator and denominator of the fraction. In general, this is 
done by including the number of days of such intermittent service, 
multiplied by 8, and the number of weeks of such temporary service or 
full-time service, multiplied by 40 in both the numerator and the 
denominator. The additional credit for unused sick leave under 5 U.S.C. 
8339(m) is not included in the fraction.
    Temporary service means service under an appointment limited to one 
year or less, exclusive of intermittent service.
    (c) Pre-April 7, 1986, basic annuity. The partial annuity for pre-
April 7, 1986, service is computed in accordance with 5 U.S.C. 8339 
using the pre-April 7, 1986, average pay and length of service 
(increased by the unused sick leave credit at time of retirement) prior 
to April 7, 1986.
    (d) Post-April 6, 1986, basic annuity. The partial annuity for post-
April 6, 1986, service is computed in accordance with 5 U.S.C. 8339 
using the post-April 6, 1986, average pay and length of service after 
April 6, 1986. This amount is then multiplied by the proration factor.
    (e) Combined basic annuity. The combined basic annuity is equal to 
the sum of the partial annuity amounts computed under paragraphs (c) and 
(d). This amount is the yearly rate of annuity (on which the monthly 
rate is based) before reductions for retirement before age 55; pre-
October 1, 1982, nondeduction service and survivor benefits; or the 
reduction for an alternative annuity under section 204 of Pub. L 99-335.
    (f) Limitations. The use of the post-April 6, 1986, average pay is 
limited to the purposes stated in this section. It may not be used as 
the basis for computing:
    (1) The 80-percent limit on annuity under 5 U.S.C. 8339(f);
    (2) The minimum annuity amount under 5 U.S.C. 8339(e) (concerning 
air traffic controller annuity) or 5 U.S.C. 8339(g) (concerning 
disability annuity); or
    (3) A supplemental annuity under 5 U.S.C. 8344(a).

[52 FR 22434, June 12, 1987]



Sec. 831.704  Annuities including credit for service with a 
nonappropriated fund instrumentality.

    (a) An annuity that includes credit for service with a 
nonappropriated fund instrumentality performed after December 31, 1965, 
based on an election under 5 CFR part 847, subpart D, is computed under 
5 CFR part 847, subpart F.
    (b) An annuity that includes credit for service with a 
nonappropriated fund instrumentality based on an election under 5 CFR 
part 847, subpart H, is computed under 5 CFR part 847, subpart I.

[68 FR 2178, Jan. 16, 2003]

[[Page 125]]



                  Subpart H_Nuclear Materials Couriers

    Source: 65 FR 2522, Jan. 18, 2000, unless otherwise noted.



Sec. 831.801  Applicability and purpose.

    (a) This subpart contains regulations of the Office of Personnel 
Management (OPM) to supplement 5 U.S.C. 8336(c), which establishes 
special retirement eligibility for nuclear materials couriers employed 
under the Civil Service Retirement System; 5 U.S.C. 8334(a)(1) and (c), 
pertaining to deductions, contributions, and deposits; 5 U.S.C. 8335(b), 
pertaining to mandatory retirement; and 5 U.S.C. 8339(d), pertaining to 
computation of annuity.
    (b) The regulations in this subpart are issued pursuant to the 
authority given to OPM in 5 U.S.C. 8347 to prescribe regulations to 
carry out 5 U.S.C., chapter 83, subchapter III, and in 5 U.S.C. 1104 to 
delegate authority for personnel management to the heads of agencies.



Sec. 831.802  Definitions.

    In this subpart--
    Agency head means the Secretary of Energy. For purposes of this 
subpart, agency head is also deemed to include the designated 
representative of the Secretary of Energy, except that the designated 
representative must be a department headquarters-level official who 
reports directly to the Secretary of Energy, or to the Deputy Secretary 
of Energy, and who is the sole such representative for the entire 
department.
    Nuclear materials courier means an employee of the Department of 
Energy, the duties of whose position are primarily to transport, and 
provide armed escort and protection during transit of, nuclear weapons, 
nuclear weapon components, strategic quantities of special nuclear 
materials or other materials related to national security, including an 
employee engaged in this activity who is transferred directly to a 
supervisory or administrative position within the same Department of 
Energy organization, after performing this activity for at least 3 
years. (See 5 U.S.C. 8331(27).)
    Primary duties are those duties of a position that--
    (1)(i) Are paramount in influence or weight; that is, constitute the 
basic reasons for the existence of the position;
    (ii) Occupy a substantial portion of the individual's working time 
over a typical work cycle; and
    (iii) Are assigned on a regular and recurring basis.
    (2) Duties that are of an emergency, incidental, or temporary nature 
cannot be considered primary even if they meet the substantial portion 
of time criterion. In general, if an employee spends an average of at 
least 50 percent of his or her time performing a duty or group of 
duties, they are his or her primary duties.
    Primary position means a position that is in an organization of the 
Department of Energy and whose primary duties are to transport, and 
provide armed escort and protection during transit of, nuclear weapons, 
nuclear weapon components, strategic quantities of special nuclear 
materials or other materials related to national security.
    Secondary position means a position that:
    (1) Is clearly in the nuclear materials transportation field;
    (2) Is in an organization of the Department of Energy having a 
nuclear materials transportation mission; and
    (3) Is either--
    (i) Supervisory; i.e., a position whose primary duties are as a 
first-level supervisor of nuclear materials couriers in primary 
positions; or
    (ii) Administrative; i.e., an executive, managerial, technical, 
semiprofessional, or professional position for which experience in a 
primary nuclear materials courier position is a prerequisite.



Sec. 831.803  Conditions for coverage in primary positions.

    (a) An employee's service in a position that has been determined by 
the Secretary of the Department of Energy to be a primary nuclear 
materials courier position is covered under the provisions of 5 U.S.C. 
8336(c).
    (b) An employee who is not in a primary position, nor covered while 
in a secondary position, and who is detailed or temporarily promoted to 
a primary

[[Page 126]]

position is not covered under the provisions of 5 U.S.C. 8336(c).



Sec. 831.804  Conditions for coverage in secondary positions.

    (a) An employee's service in a position that has been determined by 
the Secretary of the Department of Energy to be a secondary nuclear 
materials courier position following 3 years of service in a primary 
nuclear materials courier position is covered under the provisions of 5 
U.S.C. 8336(c) if all of the following criteria are met:
    (1) The employee is transferred directly (i.e., without a break in 
service exceeding 3 days) from a primary position to a secondary 
position; and
    (2) If applicable, the employee has been continuously employed in 
secondary positions since transferring from a primary position without a 
break in service exceeding 3 days, except that a break in employment in 
secondary positions which begins with an involuntary separation (not for 
cause), within the meaning of 5 U.S.C. 8336(d)(1), is not considered in 
determining whether the service in secondary positions is continuous for 
this purpose.
    (b) An employee who is not in a primary position, nor covered while 
in a secondary position, and who is detailed or temporarily promoted to 
a secondary position is not covered under the provisions of 5 U.S.C. 
8336(c).



Sec. 831.805  Evidence.

    (a) The Secretary of Energy's determination under Sec. 831.803 that 
a position is a primary position must be based solely on the official 
position description of the position in question, and any other official 
description of duties and qualifications. The official documentation for 
the position must establish that it satisfies the requirements defined 
in Sec. 831.802.
    (b) A determination under Sec. 831.804 must be based on the 
official position description and any other evidence deemed appropriate 
by the agency head for making the determination.
    (c) If an employee is in a position not subject to the one-half 
percent higher withholding rate of 5 U.S.C. 8334(a)(1), and the employee 
does not, within 6 months after entering the position or after any 
significant change in the position, formally and in writing seek a 
determination from the employing agency that his or her service is 
properly covered by the higher withholding rate, the agency head's 
determination that the service was not so covered at the time of the 
service is presumed to be correct. This presumption may be rebutted by a 
preponderance of the evidence that the employee was unaware of his or 
her status or was prevented by cause beyond his or her control from 
requesting that the official status be changed at the time the service 
was performed.



Sec. 831.806  Requests from individuals.

    (a) An employee who requests credit for service under 5 U.S.C. 
8336(c) bears the burden of proof with respect to that service, and must 
provide the employing agency with all pertinent information regarding 
duties performed.
    (b) An employee who is currently serving in a position that has not 
been approved as a primary or secondary position, but who believes that 
his or her service is creditable as service in a primary or secondary 
position may request the agency head to determine whether or not the 
employee's current service should be credited and, if it qualifies, 
whether it should be credited as service in a primary or secondary 
position. A written request for current service must be made within 6 
months after entering the position or after any significant change in 
the position.
    (c) A current or former employee (or the survivor of a former 
employee) who believes that a period of past service in an unapproved 
position qualifies as service in a primary or secondary position and 
meets the conditions for credit may request the agency head to determine 
whether or not the employee's past service should be credited and, if it 
qualifies, whether it should be credited as service in a primary or 
secondary position. A written request for past service must be made no 
later than December 31, 2000.
    (d) The agency head may extend the time limit for filing under 
paragraph (b) or (c) of this section when, in the judgment of such 
agency head, the individual shows that he or she was prevented by 
circumstances beyond his or

[[Page 127]]

her control from making the request within the time limit.



Sec. 831.807  Withholdings and contributions.

    (a) During the service covered under the conditions established by 
Sec. 831.803 and Sec. 831.804, the Department of Energy will deduct 
and withhold from the employee's base pay the amount required under 5 
U.S.C. 8334(a) for such positions and submit that amount, together with 
agency contributions required by 5 U.S.C. 8334(a), to OPM in accordance 
with payroll office instructions issued by OPM.
    (b) If the correct withholdings and/or Government contributions are 
not submitted to OPM for any reason whatsoever, including cases in which 
it is finally determined that past service of a current or former 
employee was subject to the higher deduction and Government contribution 
rates, the Department of Energy must correct the error by submitting the 
correct amounts (including both employee and agency shares) to OPM as 
soon as possible. Even if the Department of Energy waives collection of 
the overpayment of pay under any waiver authority that may be available 
for this purpose, such as 5 U.S.C. 5584, or otherwise fails to collect 
the debt, the correct amount must still be submitted to OPM without 
delay as soon as possible.
    (c) Upon proper application from an employee, former employee or 
eligible survivor of a former employee, the Department of Energy will 
pay a refund of erroneous additional withholdings for service that is 
found not to have been covered service. If an individual has paid to OPM 
a deposit or redeposit, including the additional amount required for 
covered service, and the deposit or redeposit is later determined to be 
erroneous because the service was not covered service, OPM will pay the 
refund, upon proper application, to the individual, without interest.
    (d) The additional employee withholding and agency contribution for 
covered or creditable service properly made as required under 5 U.S.C. 
8334(a)(1) or deposited under 5 U.S.C. 8334(c) are not separately 
refundable, even in the event that the employee or his or her survivor 
does not qualify for a special annuity computation under 5 U.S.C. 
8339(d).
    (e) While an employee who does not hold a primary or secondary 
position is detailed or temporarily promoted to a primary or secondary 
position, the additional withholdings and agency contributions will not 
be made. While an employee who does hold a primary or secondary position 
is detailed or temporarily promoted to a position which is not a primary 
or secondary position, the additional withholdings and agency 
contributions will continue to be made.



Sec. 831.808  Mandatory separation.

    (a) Effective on and after October 17, 1999, the mandatory 
separation provisions of 5 U.S.C. 8335(b) apply to all nuclear materials 
couriers in primary and secondary positions. A mandatory separation 
under 5 U.S.C. 8335(b) is not an adverse action under part 752 of this 
chapter or a removal action under part 359 of this chapter. Section 
831.502 provides the procedures for requesting an exemption from 
mandatory separation.
    (b) In the event an employee is separated mandatorily under 5 U.S.C. 
8335(b), or is separated for optional retirement under 5 U.S.C. 8336(c), 
and OPM finds that all or part of the minimum service required for 
entitlement to immediate annuity was in a position which did not meet 
the requirements of a primary or secondary position and the conditions 
set forth in this subpart, such separation will be considered erroneous.



Sec. 831.809  Reemployment.

    An employee who has been mandatorily separated under 5 U.S.C. 
8335(b) is not barred from reemployment in any position except a primary 
position after age 60. Service by a reemployed annuitant is not covered 
by the provisions of 5 U.S.C. 8336(c).



Sec. 831.810  Review of decisions.

    The following decisions may be appealed to the Merit Systems 
Protection Board under procedures prescribed by the Board:
    (a) The final decision of the Department of Energy issued to an 
employee, former employee, or survivor as the result of a request for 
determination filed under Sec. 831.806; and

[[Page 128]]

    (b) The final decision of the Department of Energy that a break in 
service referred to in Sec. 831.804(a)(2) did not begin with an 
involuntary separation within the meaning of 5 U.S.C. 8336(d)(1).



Sec. 831.811  Oversight of coverage determinations.

    (a) Upon deciding that a position is a nuclear materials courier 
position, the agency head must notify OPM (Attention: Associate Director 
for Retirement and Insurance) stating the title of each position, the 
number of incumbents, and whether the position is primary or secondary. 
The Director of OPM retains the authority to revoke the agency head's 
determination that a position is a primary or secondary position, or 
that an individual's service in any other position is creditable under 5 
U.S.C. 8336(c).
    (b) The Department of Energy must establish a file containing each 
coverage determination made by the agency head under Sec. 831.803 and 
Sec. 831.804, and all background material used in making the 
determination.
    (c) Upon request by OPM, the Department of Energy will make 
available the entire coverage determination file for OPM to audit to 
ensure compliance with the provisions of this subpart.
    (d) Upon request by OPM, the Department of Energy must submit to OPM 
a list of all covered positions and any other pertinent information 
requested.



           Subpart I_Law Enforcement Officers and Firefighters

    Source: 58 FR 64367, Dec. 7, 1993, unless otherwise noted.



Sec. 831.901  Applicability and purpose.

    (a) This subpart contains regulations of the Office of Personnel 
Management (OPM) to supplement 5 U.S.C. 8336(c), which establishes 
special retirement eligibility for law enforcement officers and 
firefighters employed under the Civil Service Retirement System; 5 
U.S.C. 8331(3) (C) and (D), pertaining to basic pay; 5 U.S.C. 8334(a) 
(1) and (c), pertaining to deductions, contributions, and deposits; 5 
U.S.C. 8335(b), pertaining to mandatory retirement; and 5 U.S.C. 
8339(d), pertaining to computation of annuity.
    (b) The regulations in this subpart are issued pursuant to the 
authority given to OPM in 5 U.S.C. 8347 to prescribe regulations to 
carry out subchapter III of chapter 83 of title 5 of the United States 
Code, and in 5 U.S.C. 1104 to delegate authority for personnel 
management to the heads of agencies.



Sec. 831.902  Definitions.

    In this subpart--
    Agency head means, for the executive branch agencies, the head of an 
executive agency as defined in 5 U.S.C. 105; for the legislative branch, 
the Secretary of the Senate, the Clerk of the House of Representatives, 
or the head of any other legislative branch agency; for the judicial 
branch, the Director of the Administrative Office of the U.S. Courts; 
for the Postal Service, the Postmaster General; and for any other 
independent establishment that is an entity of the Federal Government, 
the head of the establishment. For the purpose of an approval of 
coverage under this subpart, agency head is also deemed to include the 
designated representative of the head of an executive department as 
defined in 5 U.S.C. 101, except that the designated representative must 
be a department headquarters-level official who reports directly to the 
executive department head, or to the deputy department head, and who is 
the sole such representative for the entire department. For the purpose 
of a denial of coverage under this subpart, agency head is also deemed 
to include the designated representative of the agency head, as defined 
in the first sentence of this definition, at any level within the 
agency.
    Detention duties means duties that require frequent direct contact 
in the detention, direction, supervision, inspection, training, 
employment, care, transportation, or rehabilitation of individuals 
suspected or convicted of offenses against the criminal laws of the 
United States or the District of Columbia or offenses against the 
punitive articles of the Uniform Code of Military Justice (10 U.S.C. 
chapter 47). (See 5 U.S.C. 8331(20).)

[[Page 129]]

    Firefighter means an employee, whose duties are primarily to perform 
work directly connected with the control and extinguishment of fires or 
the maintenance and use of firefighting apparatus and equipment. Also 
included in this definition is an employee engaged in this activity who 
is transferred to a supervisory or administrative position. (See 5 
U.S.C. 8331(21).) An employee whose primary duties are the performance 
of routine fire prevention inspection is excluded from this definition.
    Frequent direct contact means personal, immediate, and regularly-
assigned contact with detainees while performing detention duties, which 
is repeated and continual over a typical work cycle.
    Law enforcement officer means an employee, the duties of whose 
position are primarily the investigation, apprehension, or detention of 
individuals suspected or convicted of offenses against the criminal laws 
of the United States, including an employee engaged in this activity who 
is transferred to a supervisory or administrative position. (See 5 
U.S.C. 8331(20).) The definition does not include an employee whose 
primary duties involve maintaining law and order, protecting life and 
property, guarding against or inspecting for violations of law, or 
investigating persons other than persons who are suspected or convicted 
of offenses against the criminal laws of the United States.
    Primary duties are those duties of a position that--
    (1) (i) Are paramount in influence or weight; that is, constitute 
the basic reasons for the existence of the position;
    (ii) Occupy a substantial portion of the individual's working time 
over a typical work cycle; and
    (iii) Are assigned on a regular and recurring basis.
    (2) Duties that are of an emergency, incidental, or temporary nature 
cannot be considered ``primary'' even if they meet the substantial 
portion of time criterion. In general, if an employee spends an average 
of at least 50 percent of his or her time performing a duty or group of 
duties, they are his or her primary duties.
    Primary position means a position whose primary duties are:
    (1) To perform work directly connected with controlling and 
extinguishing fires or maintaining and using firefighter apparatus and 
equipment; or
    (2) Investigation, apprehension, or detention of individuals 
suspected or convicted of offenses against the criminal laws of the 
United States.
    Secondary position means a position that:
    (1) Is clearly in the law enforcement or firefighting field;
    (2) Is in an organization having a law enforcement or firefighting 
mission; and
    (3) Is either--
    (i) Supervisory; i.e., a position whose primary duties are as a 
first-level supervisor of law enforcement officers or firefighters in 
primary positions; or
    (ii) Administrative; i.e., an executive, managerial, technical, 
semiprofessional, or professional position for which experience in a 
primary law enforcement or firefighting position, or equivalent 
experience outside the Federal government, is a prerequisite.

[58 FR 64367, Dec. 7, 1993, as amended at 60 FR 3339, Jan. 17, 1995; 66 
FR 38524, July 25, 2001; 70 FR 42253, July 22, 2005]



Sec. 831.903  Conditions for coverage in primary positions.

    (a) An employee's service in a position that has been determined by 
the employing agency head to be a primary law enforcement officer or 
firefighter position is covered under the provisions of 5 U.S.C. 
8336(c).
    (b) An employee who is not in a primary position, nor covered while 
in a secondary position, and who is detailed or temporarily promoted to 
a primary position is not covered under the provisions of 5 U.S.C. 
8336(C)



Sec. 831.904  Conditions for coverage in secondary positions.

    (a) An employee's service in a position that has been determined by 
the employing agency head to be a secondary law enforcement officer or 
firefighter position is covered under the provisions of 5 U.S.C. 8336(c) 
if all of the following criteria are met:
    (1) The employee is transferred directly (i.e., without a break in 
service

[[Page 130]]

exceeding 3 days) from a primary position to a secondary position; and
    (2) If applicable, the employee has been continuously employed in 
secondary positions since transferring from a primary position without a 
break in service exceeding 3 days, except that a break in employment in 
secondary positions which begins with an involuntary separation (not for 
cause), within the meaning of 8336(d)(1) of title 5, United States Code, 
is not considered in determining whether the service in secondary 
positions is continuous for this purpose.
    (b) This requirement for continuous employment in a secondary 
position applies only to voluntary breaks in service beginning after 
January 19, 1988.
    (c) An employee who is not in a primary position, nor covered while 
in a secondary position, and who is detailed or temporarily promoted to 
a secondary position is not covered under the provisions of 5 U.S.C. 
8336(c).
    (d) The service of an employee who is in a position on January 19, 
1988, that has been approved as a secondary position under this subpart 
will continue to be covered under the provisions of 5 U.S.C. 8336(c) as 
long as the employee remains in that position without a voluntary break 
in service, and coverage is not revoked by OPM under Sec. 831.911, or 
by the agency head.



Sec. 831.905  Evidence.

    (a) An agency head's determination that a position is a primary 
position must be based solely on the official position description of 
the position in question, and any other official description of duties 
and qualifications. The official documentation for the position must 
establish that it satisfies the requirements defined in Sec. 831.902.
    (b) A determination under Sec. 831.904 must be based on the 
official position description and any other evidence deemed appropriate 
by the agency head for making the determination.



Sec. 831.906  Requests from individuals.

    (a) An employee who requests credit for service under 5 U.S.C. 
8336(c) bears the burden of proof with respect to that service, and must 
provide the employing agency with all pertinent information regarding 
duties performed, including--
    (1) For law enforcement officers, a list of the provisions of 
Federal criminal law the incumbent is responsible for enforcing and 
arrests made; and
    (2) For firefighters, number of fires fought, names of fires fought, 
dates of fires, and position occupied while on firefighting duty.
    (b) An employee who is currently serving in a position that has not 
been approved as a primary or secondary position, but who believes that 
his or her service is creditable as service in a primary or secondary 
position may request the agency head to determine whether or not the 
employee's service should be credited and, if it qualifies, whether it 
should be a primary or secondary position.
    (c) A current or former employee (or the survivor of a former 
employee) who believes that a period of past service in an unapproved 
position qualifies as service in a primary or secondary position and 
meets the conditions for credit must follow the procedure in paragraph 
(b) of this section. Except as provided in paragraph (d) of this 
section, the request must be made to the agency where the claimed 
service was performed.
    (d) For a current or former employee seeking credit under 5 U.S.C. 
8336(c) for service performed at an agency that is no longer in 
existence, and for which there is no successor agency, OPM will accept, 
directly from the current or former employee (or the survivor of a 
former employee), a request for a determination as to whether a period 
of past service qualifies as service in a primary or secondary position 
and meets the conditions for credit.
    (e) Coverage in a position or credit for past service will not be 
granted for a period greater than 1 year prior to the date that the 
request from an individual is received under paragraphs (b), (c), or (d) 
of this section by the employing agency, the agency where past service 
was performed, or OPM.
    (f) An agency head, in the case of a request filed under paragraph 
(b) or (c) of this section, or OPM, in the case of request filed under 
paragraph (d) of this section, may extend the time limit for filing 
when, in the judgment of such

[[Page 131]]

agency head or OPM, the individual shows that he or she was prevented by 
circumstances beyond his or her control from making the request within 
the time limit.



Sec. 831.907  Withholdings and contributions.

    (a) During the service covered under the conditions established by 
Sec. 831.903 and Sec. 831.904, the employing agency will deduct and 
withhold from the employee's base pay the amount required under 5 U.S.C. 
8334(a) for such positions and submit that amount, together with agency 
contributions required by 5 U.S.C. 8334(a), to OPM in accordance with 
payroll office instructions issued by OPM.
    (b) If the correct withholdings and/or Government contributions are 
not submitted to OPM for any reason whatsoever, including cases in which 
it is finally determined that past service of a current or former 
employee was subject to the higher deduction and Government contribution 
rates, the employing agency must correct the error by submitting the 
correct amounts (including both employee and agency shares) to OPM as 
soon as possible. Even if the agency waives collection of the 
overpayment of pay under any waiver authority that may be available for 
this purpose, such as 5 U.S.C. 5584, or otherwise fails to collect the 
debt, the correct amount must still be submitted to OPM without delay as 
soon as possible.
    (c) Upon proper application from an employee, former employee or 
eligible survivor of a former employee, an employing agency or former 
employing agency will pay a refund of erroneous additional withholdings 
for service that is found not to have been covered service. If an 
individual has paid to OPM a deposit or redeposit, including the 
additional amount required for covered service, and the deposit or 
redeposit is later determined to be erroneous because the service was 
not covered service, OPM will pay the refund, upon proper application, 
to the individual, without interest.
    (d) The additional employee withholding and agency contribution for 
covered or creditable service properly made as required under 5 U.S.C. 
8334(a)(1) or deposited under 5 U.S.C. 8334(c) are not separately 
refundable, even in the event that the employee or his or her survivor 
does not qualify for a special annuity computation under 5 U.S.C. 
8339(d).
    (e) While an employee who does not hold a primary or secondary 
position is detailed or temporarily promoted to a primary or secondary 
position, the additional withholdings and agency contributions will not 
be made. While an employee who does hold a primary or secondary position 
is detailed or temporarily promoted to a position which is not a primary 
or secondary position, the additional withholdings and agency 
contributions will continue to be made.

[58 FR 64367, Dec. 7, 1993, as amended at 60 FR 3339, Jan. 17, 1995]



Sec. 831.908  Mandatory separation.

    (a) The mandatory separation provisions of 5 U.S.C. 8335(b) apply to 
all law enforcement officers and firefighters in primary and secondary 
positions. A mandatory separation under section 8335(b) is not an 
adverse action under part 752 of this chapter or a removal action under 
part 359 of this chapter. Section 831.502 provides the procedures for 
requesting an exemption from mandatory separation.
    (b) In the event an employee is separated mandatorily under 5 U.S.C. 
8335(b), or is separated for optional retirement under 5 U.S.C. 8336(c), 
and OPM finds that all or part of the minimum service required for 
entitlement to immediate annuity was in a position which did not meet 
the requirements of a primary or secondary position and the conditions 
set forth in this subpart, such separation will be considered erroneous.

[58 FR 64367, Dec. 7, 1993, as amended at 66 FR 38524, July 25, 2001]



Sec. 831.909  Reemployment.

    An employee who has been mandatorily separated under 5 U.S.C. 
8335(b) is not barred from reemployment in any position except a primary 
position after age 60. Service by a reemployed annuitant is not covered 
by the provisions of 5 U.S.C. 8336(c).

[[Page 132]]



Sec. 831.910  Review of decisions.

    (a) The final decision of an agency head or OPM issued to an 
employee, former employee, or survivor as the result of a request for 
determination filed under Sec. 831.906 may be appealed to the Merit 
Systems Protection Board under procedures prescribed by the Board.
    (b) The final decision of an agency head that a break in service 
referred to in Sec. 831.904(a)(2) did not begin with an involuntary 
separation within the meaning of 5 U.S.C. 8336(d)(1) may be appealed to 
the Merit Systems Protection Board under procedures prescribed by the 
Board.

[66 FR 38524, July 25, 2001]



Sec. 831.911  Oversight of coverage determinations.

    (a) Upon deciding that a position is a law enforcement officer or 
firefighter position, each agency head must notify OPM (Attention: 
Associate Director for Retirement and Insurance) stating the title of 
each position, the number of incumbents, and whether the position is 
primary or secondary. The Director of OPM retains the authority to 
revoke an agency head's determination that a position is a primary or 
secondary position, or that an individual's service in any other 
position is creditable under 5 U.S.C. 8336(c).
    (b) Each agency must establish a file containing each coverage 
determination made by an agency head under Sec. 831.903 and Sec. 
831.904, and all background material used in making the determination.
    (c) Upon request by OPM, the agency will make available the entire 
coverage determination file for OPM to audit to ensure compliance with 
the provisions of this subpart.
    (d) Upon request by OPM, an agency must submit to OPM a list of all 
covered positions and any other pertinent information requested.
    (e) A coverage determination issued by OPM or its predecessor, the 
Civil Service Commission, will not be reopened by an employing agency, 
unless the agency head determines that new and material evidence is 
available that, despite due diligence, was not available before the 
decision was issued.

             Regulations Pertaining to Noncodified Statutes



Sec. 831.912  Elections to be deemed a law enforcement officer for 
retirement purposes by certain police officers employed by the 
Metropolitan Washington Airports Authority (MWAA).

    (a) Who may elect. Metropolitan Washington Airports Authority (MWAA) 
police officers employed as members of the MWAA police force as of 
December 21, 2000, who are covered by the provisions of the Civil 
Service Retirement System by 49 U.S.C. 49107(b) may elect to be deemed a 
law enforcement officer for retirement purposes and have past service as 
a member of the MWAA and Federal Aviation Administration police forces 
credited as law enforcement officer service.
    (b) Procedure for making an election. Elections by an MWAA police 
officer to be treated as a law enforcement officer for retirement 
purposes must be made in writing to the MWAA and filed in the employee's 
personnel file in accordance with procedures established by OPM in 
consultation with the MWAA.
    (c) Time limit for making an election. An election under paragraph 
(a) of this section must be made either before the MWAA police officer 
separates from service with the MWAA or July 25, 2002.
    (d) Effect of an election. An election under paragraph (a) of this 
section is effective on the beginning of the first pay period following 
the date of the MWAA police officer's election.
    (e) Irrevocability. An election under paragraph (a) of this section 
becomes irrevocable when received by the MWAA.
    (f) Employee payment for past service. (1) An MWAA police officer 
making an election under this section must pay an amount equal to the 
difference between law enforcement officer retirement deductions and 
retirement deductions actually paid by the police officer for the police 
officer's past police officer service with the Metropolitan Washington 
Airports Authority and Federal Aviation Administration. The amount paid 
under this paragraph shall be computed with interest in accordance with 
5

[[Page 133]]

U.S.C. 8334(e) and paid to the MWAA prior to separation.
    (2) Starting with the effective date under paragraph (d) of this 
section, the MWAA must make deductions and withholdings from the 
electing MWAA police officer's base pay in accordance with 5 CFR 
831.907.
    (g) Employer contributions. (1) Upon the police officer's payment 
for past service credit under paragraph (f) of this section, the MWAA 
must, in accordance with procedures established by OPM, pay into the 
Civil Service Retirement and Disability Fund the additional agency 
retirement contribution amounts required for the police officer's past 
service, plus interest.
    (2) Starting with the effective date under paragraph (d) of this 
section, the MWAA must make agency contributions for the electing police 
officer in accordance with 5 CFR 831.907.
    (h) Mandatory Separation. (1) An MWAA police officer who elects to 
be treated as a law enforcement officer for CSRS retirement purposes is 
subject to the mandatory separation provisions of 5 U.S.C. 8335(b) and 5 
CFR 831.502(a).
    (2) The President and Chief Operating Officer of the MWAA is deemed 
to be the head of an agency for the purpose of exempting an MWAA police 
officer from mandatory separation in accordance with the provisions of 5 
U.S.C. 8335(b) and 5 CFR 831.502.
    (i) Reemployment. An MWAA police officer who has been mandatorily 
separated under 5 U.S.C. 8335(b) is not barred from reemployment after 
age 60 in any position except a CSRS primary or secondary law 
enforcement officer position or a FERS rigorous law or secondary 
enforcement officer position. Service by a reemployed former MWAA police 
officer who retired under 5 U.S.C. 8336(c) is not covered by the 
provisions of 5 U.S.C. 8336(c).

[66 FR 38524, July 25, 2001]



                          Subpart J_CSRS Offset

    Source: 57 FR 38743, Aug. 27, 1992, unless otherwise noted.



Sec. 831.1001  Purpose.

    This subpart sets forth the provisions concerning employees and 
Members who are simultaneously covered by the Old Age, Survivors, and 
Disability Insurance (OASDI) tax and the Civil Service Retirement System 
(CSRS). Except as provided under this subpart, these employees and 
Members are treated the same as other covered employees and Members 
under the CSRS.



Sec. 831.1002  Definitions.

    Contribution and benefit base means the contribution and benefit 
base in effect with respect to the tax year involved, as determined 
under section 230 of the Social Security Act (42 U.S.C. 430).
    CSRS means the Civil Service Retirement System established under 
subchapter III of chapter 83 of title 5, United States Code.
    Employee means an employee subject to CSRS.
    Federal service means service covered under CSRS and subject to the 
OASDI tax by operation of section 101 of Public Law 98-21 (42 U.S.C. 
410(a)). Federal service does not include--
    (1) Service performed before January 1, 1984;
    (2) Service subject to the OASDI tax only (that is, no simultaneous 
CSRS deductions), except in the case of an employee or Member who 
elected not to have any CSRS deductions withheld from salary pursuant to 
section 208(a)(1)(A) of Public Law 98-168, 97 Stat. 1111, or section 
2206(b) of Public Law 98-369, 98 Stat. 1059, (relating to certain senior 
officials; and
    (3) Service subject to the full rate of CSRS deductions (7, 7\1/2\, 
or 8 percent) and the OASDI tax, pursuant to an election under section 
208(a)(1)(B) of Public Law 98-168, 97 Stat. 1111, except in the case of 
an employee or Member who elects to become subject to this subpart under 
section 301(b) of Public Law 99-335, 100 Stat. 599.
    Federal wages means basic pay, as defined under 5 U.S.C. 8331(4), of 
an employee or Member performing Federal service.
    Member means a Member of Congress as defined by 5 U.S.C. 8331(2).
    OASDI tax means, with respect to Federal wages, the Old Age, 
Survivors, and Disability Insurance tax imposed under section 3101(a) of 
the Internal Revenue Code of 1986 (31 U.S.C. 3101(a)).

[[Page 134]]



Sec. 831.1003  Deductions from pay.

    (a) Except as otherwise provided in this section, the employing 
agency, the Secretary of the Senate, or the Clerk of the House of 
Representatives must withhold 7 percent of an employee's Federal wages 
to cover both the OASDI tax and the CSRS deduction. The difference 
between the OASDI tax and the full amount withheld under this paragraph 
is the CSRS deduction.
    (b) For a Congressional employee as defined by 5 U.S.C. 2107 and a 
law enforcement officer or firefighter as defined by 5 U.S.C. 8331, the 
appropriate percentage under paragraph (a) of this section is 7\1/2\ 
percent.
    (c) For a Member, a judge of the United States Court of Military 
Appeals, a United States magistrate, and a bankruptcy judge as defined 
by 5 U.S.C. 8331(22), the appropriate percentage under paragraph (a) of 
this section is 8 percent.
    (d) For any amount of Federal wages paid after reaching the 
contribution and benefit base calculated including all wages, but before 
reaching the contribution and benefit base calculated using only Federal 
wages, the amount withheld under this section is the difference between 
7, 7\1/2\, or 8 percent, as appropriate, and the OASDI tax rate, even 
though the Federal wages in question are not subject to the OASDI tax.
    (e) For any amount of Federal wages paid after reaching the 
contribution and benefit base calculated on the basis of Federal wages 
only, the full percentage required under paragraph (a), (b), or (c) of 
this section (7, 7\1/2\, or 8 percent) must be withheld from Federal 
wages.



Sec. 831.1004  Agency contributions.

    The employing agency, the Secretary of the Senate, and the Clerk of 
the House of Representatives must submit to OPM, in accordance with 
instructions issued by OPM, a contribution to the CSRS equal to the 
amount required to be contributed for the employee or Member under 5 
U.S.C. 8334(a)(1) as if the employee or Member were not subject to the 
OASDI tax.



Sec. 831.1005  Offset from nondisability annuity.

    (a) OPM will reduce the annuity of an individual who has performed 
Federal service, if the individual is entitled, or on proper application 
would be entitled, to old-age benefits under title II of the Social 
Security Act.
    (b) The reduction required under paragraph (a) of this section is 
effective on the 1st day of the month during which the employee--
    (1) Is entitled to an annuity under CSRS; and
    (2) Is entitled, or on proper application would be entitled, to old-
age benefits under title II of the Social Security Act.
    (c) Subject to paragraphs (d) and (e) of this section, the amount of 
the reduction required under paragraph (a) of this section is the lesser 
of--
    (1) The difference between--
    (i) The Social Security old-age benefit for the month referred to in 
paragraph (b) of this section; and
    (ii) The old-age benefit that would be payable to the individual for 
the month referred to in paragraph (b) of this section, excluding all 
wages from Federal service, and assuming the annuitant was fully insured 
(as defined by section 215(a) of the Social Security Act (42 U.S.C. 
414(a)); or
    (2) The product of--
    (i) The old-age benefit to which the individual is entitled or 
would, on proper application, be entitled; and
    (ii) A fraction--
    (A) The numerator of which is the annuitant's total Federal service, 
rounded to the nearest whole number of years not exceeding 40 years; and
    (B) The denominator of which is 40.
    (d) Cost-of-living adjustments under 5 U.S.C. 8340 occurring after 
the effective date of the reduction required under paragraph (a) of this 
section will be based on only the annuity remaining after reduction 
under this subpart.
    (e) The amounts for paragraphs (c)(1)(i), (c)(1)(ii), and (c)(2)(i) 
of this section are computed without regard to subsections (b) through 
(l) of section 203 of the Social Security Act (42 U.S.C. 403) (relating 
to reductions in Social Security benefits), and without applying the 
provisions of the second sentence of section 215(a)(7)(B)(i) or

[[Page 135]]

section 214(d)(5)(ii) of the Social Security Act (42 U.S.C. 
415(a)(7)(B)(i) or 415(d)(5)(ii) (relating to part of the computation of 
the Social Security windfall elimination provisions).
    (f) OPM will accept the determination of the Social Security 
Administration, submitted in a form prescribed by OPM, concerning 
entitlement to Social Security benefits and the date thereof.



Sec. 831.1006  Offset from disability or survivor annuity.

    (a) OPM will reduce the disability annuity (an annuity under 5 
U.S.C. 8337) of an individual who performed Federal service, if the 
individual is (or would on proper application be) entitled to disability 
payments under section 223 of the Social Security Act (42 U.S.C. 423).
    (b)(1) Before an application for disability retirement under 5 
U.S.C. 8337 can be finally approved in the case of an employee who has 
Federal service, the applicant must provide OPM with--
    (i) Satisfactory evidence that the applicant has filed an 
application for disability insurance benefits under section 223 of the 
Social Security Act; or
    (ii) An official statement from the Social Security Administration 
that the individual is not insured for disability insurance benefits as 
defined in section 223(c)(1) of the Social Security Act.
    (2) A disability retirement application under 5 U.S.C. 8337 will be 
dismissed when OPM is notified by the Social Security Administration 
that the application referred to in paragraph (b)(1)(i) of this section 
has been withdrawn unless the evidence described in paragraph (b)(1)(ii) 
of this section has been provided.
    (c) OPM will reduce a survivor annuity (an annuity under 5 U.S.C. 
8341) based on the service of an individual who performed Federal 
service, if the survivor annuitant is entitled, or on proper application 
would be entitled, to survivor benefits under section 202 (d), (e), or 
(f) (relating to children's, widow's, and widowers' benefits, 
respectively) of the Social Security Act (42 U.S.C. 202 (d), (e), or 
(f)).
    (d) The reduction required under paragraphs (a) and (c) of this 
section begins (or is reinstated) on the 1st day of the month during 
which the disability or survivor annuitant--
    (1) Is entitled to disability or survivor annuity under CSRS; and
    (2) Is entitled, or on proper application would be entitled, to 
disability or survivor benefits under the Social Security Act provisions 
mentioned in paragraphs (a) and (c) of this section, respectively.
    (e) The reduction under paragraphs (a) and (c) of this section will 
be computed and adjusted in a manner consistent with the provisions of 
Sec. 831.1005(c) through (e).
    (f) A reduction under paragraph (a) or (c) of this section stops on 
the date entitlement to the disability or survivor benefits under title 
II of the Social Security Act terminates. In the case of a disability or 
survivor annuitant who has not made proper application for the Social 
Security benefit, the reduction under paragraph (a) or (c) of this 
section stops on the date entitlement to such disability or survivor 
benefits would otherwise terminate. If a Social Security benefit is 
reduced under any provision of the Social Security Act, even if reduced 
to zero, entitlement to that benefit is not considered to have 
terminated.
    (g) OPM will accept the determination or certification of the Social 
Security Administration, submitted in a form prescribed by OPM, 
concerning entitlement to Social Security disability or survivor 
benefits and the beginning and ending dates thereof.
    (h) If a disability annuitant who is not entitled to disability 
benefits under title II of the Social Security Act subsequently becomes 
entitled to old-age benefits under the Social Security Act, a reduction 
under Sec. 831.1005 will begin on the 1st day of the month during which 
the annuitant becomes entitled, or on proper application would be 
entitled, to Social Security old-age insurance benefits.



             Subpart K_Prohibition on Payments of Annuities



Sec. 831.1101  Scope.

    This subpart prescribes the procedures to be followed in determining 
whether payment of an annuity under subchapter III of chapter 83 of 
title 5,

[[Page 136]]

United States Code, is prohibited by subchapter II of that chapter.



Sec. 831.1102  Definitions.

    As used in this subpart, ``annuitant'' means an individual who, on 
the basis of his service, or as a survivor annuitant, has met all the 
requirements of subchapter III of chapter 83 of title 5, United States 
Code, for title to an annuity and has filed claim therefor.



Sec. 831.1104  Notice.

    When the Associate Director determines that subchapter II of chapter 
83 of title 5, United States Code, appears to prohibit payment of 
annuity, he shall notify the annuitant in writing of his intention to 
withhold payment of the annuity. The notice shall set forth the reasons 
for this determination. The notice may be served by registered or 
certified mail and shall inform the annuitant that he is entitled to 
submit an answer and request a hearing.

[34 FR 17618, Oct. 31, 1969]



Sec. 831.1105  Answer; request for hearing.

    (a) The annuitant has 30 calendar days from the day he receives the 
notice within which to submit an answer and to request a hearing. The 
Associate Director may extend this time limit for good cause shown. If 
the annuitant answers, he shall specifically admit, deny, or explain 
each fact alleged in the notice, unless he states that he is without 
knowledge. If a hearing is desired, the annuitant must file a specific 
request therefor with or as a part of his answer.
    (b) An annuitant who fails to answer or to request a hearing within 
the time permitted under paragraph (a) of this section is considered to 
have waived his right to answer or to a hearing. If an annuitant neither 
answers nor requests a hearing within the time permitted, or answers but 
fails to request a hearing, the Associate Director shall decide the case 
on the basis of the administrative record, including the notice and any 
documents, affidavits, or other relevant evidence. The decision of the 
Associate Director shall (1) be served on the annuitant or his counsel 
by certified or registered mail; (2) include a statement of findings and 
conclusions with the reasons therefor; and (3) become the final decision 
of OPM unless the case is appealed or reviewed pursuant to Sec. 
831.1111.

[34 FR 17618, Oct. 31, 1969]



Sec. 831.1106  Hearing.

    (a) OPM's hearing examiner shall preside at any hearing held 
pursuant to this subpart, unless OPM designates another presiding 
officer. The presiding officer shall fix the time and place of the 
hearing after giving due consideration to the convenience of the 
annuitant. The hearing is open to the public unless otherwise ordered by 
OPM or the presiding officer.
    (b) The hearing shall be recorded by an official reporter designated 
by OPM. OPM shall furnish to the annuitant, without charge, a copy of 
the transcript of the hearing.



Sec. 831.1107  Powers of presiding officers.

    The presiding officer may:
    (a) Administer oaths and affirmations;
    (b) Rule upon offers of proof and receive relevant evidence;
    (c) Fix the time and place of hearing;
    (d) Regulate the course of the hearing;
    (e) Exclude any person from the hearing for contumacious conduct or 
misbehavior that obstructs the hearing;
    (f) Hold conferences for simplification of the issues, or for any 
other purpose;
    (g) Dispose of procedural requests or similar matters;
    (h) Authorize the filing of briefs and set the time for filing;
    (i) Make initial decisions; and
    (j) Take any other action in the course of the proceeding consistent 
with the purposes of this subpart.



Sec. 831.1108  Witnesses.

    (a) Witnesses shall testify under oath or affirmation and shall be 
subject to cross-examination.
    (b) Each party is responsible for securing the attendance of his 
witnesses. OPM has no power of subpena in these cases.

[[Page 137]]



Sec. 831.1109  Evidence.

    (a) Rules of evidence are not strictly applied, but the presiding 
officer shall exclude irrelevant or unduly repetitious evidence.
    (b) Each exhibit of a documentary character shall be submitted to 
the presiding officer, duly marked, and made a part of the record. An 
exhibit does not become evidence unless received in evidence by the 
presiding officer.



Sec. 831.1110  Initial decision.

    (a) Upon completion of a hearing pursuant to Sec. 831.1106, the 
presiding officer shall make and file an initial decision, a copy of 
which shall be served on each party or counsel by certified or 
registered mail.
    (b) The initial decision shall include a statement of findings and 
conclusions, with the reasons therefor, and shall be based upon a 
consideration of the entire record.
    (c) The initial decision shall become the final decision of OPM 
unless the case is appealed or reviewed pursuant to Sec. 831.1111.



Sec. 831.1111  Appeal and review.

    (a) An appeal from an initial decision, or a decision of the 
Associate Director under Sec. 831.1105(b), may be made to OPM, with 
service on the other party, within 30 calendar days from the date of the 
decision. An appeal shall be in writing and shall state plainly and 
concisely the grounds for the appeal, with a specific reference to the 
record when issues of fact are raised. The other party may file an 
opposition to the appeal within 15 days after service on him. On notice 
to the parties, OPM may extend the time limits prescribed in this 
paragraph.
    (b) Within 30 calendar days from the date of an initial decision or 
a decision of the Associate Director, OPM, on its own motion, may direct 
that the record be certified to it for review.

[34 FR 17618, Oct. 31, 1969]



Sec. 831.1112  Final decision.

    (a) On appeal from or review of an initial decision or a decision of 
the Associate Director, OPM shall decide the case on the record. The 
record shall include the notice, answer, transcript of testimony and 
exhibits, briefs, the initial decision or the decision of the Associate 
Director, the papers filed in connection with the appeal and opposition 
to the appeal and all other papers, requests and exceptions filed in the 
proceeding.
    (b) OPM may adopt, modify, or set aside the findings, conclusions, 
or order of the presiding officer or the Associate Director.
    (c) The final decision of OPM shall be in writing and include a 
statement of findings and conclusions, the reasons or basis therefor, 
and an appropriate order, and shall be served on the parties.

[33 FR 12498, Sept. 4, 1968, as amended at 34 FR 17618, Oct. 31, 1969]



                     Subpart L_Disability Retirement

    Source: 58 FR 49179, Sept. 22, 1993, unless otherwise noted.



Sec. 831.1201  Introduction.

    This subpart sets out the requirements an employee must meet to 
qualify for disability retirement, how an employee applies for 
disability retirement, how an agency applies for disability retirement 
for an employee, when a disability annuity ends, an individual's 
retirement rights after the disability annuity ends, and the effect of 
reemployment in the Federal service on a disability annuitant.



Sec. 831.1202  Definitions.

    As used in this subpart--
    Accommodation means an adjustment made to an employee's job or work 
environment that enables the employee to perform the duties of the 
position. Reasonable accommodation may include modifying the worksite; 
adjusting the work schedule; restructuring the job; obtaining or 
modifying equipment or devices; providing interpreters, readers, or 
personal assistants; and reassigning or retraining the employee.
    Basic pay means the pay an employee receives that is subject to 
civil service retirement deductions. The definition is the same as the 
definition of ``basic pay'' under 5 U.S.C. 8331(3).

[[Page 138]]

    Commuting area means the geographic area that usually constitutes 
one area for employment purposes. It includes a population center (or 
two or more neighboring ones) and the surrounding localities in which 
people live and can reasonably be expected to travel back and forth 
daily from home to work in their usual employment.
    Disabled and disability mean unable or inability, because of disease 
or injury, to render useful and efficient service in the employee's 
current position, or in a vacant position in the same agency at the same 
grade or pay level for which the individual is qualified for 
reassignment.
    Examination and reexamination mean an evaluation of evidentiary 
material related to the question of disability. Unless OPM exercises its 
choice of a physician, the cost of providing medical documentation rests 
with the employee or disability annuitant, who must provide any 
information OPM needs to make an evaluation.
    Medical condition means a health impairment resulting from a disease 
or injury, including a psychiatric disease. This is the same definition 
of ``medical condition'' as in Sec. 339.104 of this chapter.
    Medical documentation and documentation of a medical condition mean 
a statement from a licensed physician or other appropriate practitioner 
that provides information OPM considers necessary to determine an 
individual's entitlement to benefits under this subpart. Such a 
statement must meet the criteria set forth in Sec. 339.104 of this 
chapter.
    Permanent position means an appointment without time limitation.
    Physician and practitioner have the same meanings given in Sec. 
339.104 of this chapter.
    Qualified for reassignment means able to meet the minimum 
requirements for the grade and series of the vacant position in 
question.
    Same grade or pay level means, in regard to a vacant position within 
the same pay system as the employee currently occupies, the same grade 
and an equivalent amount of basic pay. A position under a different pay 
system or schedule is at the ``same pay level'' if the representative 
rate, as defined in Sec. 532.401 of this chapter, equals the 
representative rate of the employee's current position.
    Useful and efficient service means (1) acceptable performance of the 
critical or essential elements of the position; and (2) satisfactory 
conduct and attendance.
    Vacant position means an unoccupied position of the same grade or 
pay level and tenure for which the employee is qualified for 
reassignment that is located in the same commuting area and is serviced 
by the same appointing authority of the employing agency. The vacant 
position must be full time, unless the employee's current position is 
less than full time, in which case the vacant position must have a work 
schedule of no less time than that of the current position. In the case 
of an employee of the United States Postal Service, a vacant position 
does not include a position in a different craft or a position to which 
reassignment would be inconsistent with the terms of a collective 
bargaining agreement covering the employee.



Sec. 831.1203  Basic requirements for disability retirement.

    (a) Except as provided in paragraph (b) of this section, the 
following conditions must be met for an individual to be eligible for 
disability retirement:
    (1) The individual must have completed at least 5 years of civilian 
service that is creditable under the Civil Service Retirement System.
    (2) The individual must, while employed in a position subject to the 
Civil Service Retirement System, have become disabled because of a 
medical condition, resulting in a service deficiency in performance, 
conduct, or attendance, or if there is no actual service deficiency, the 
disabling medical condition must be incompatible with either useful and 
efficient service or retention in the position.
    (3) The disabling medical condition must be expected to continue for 
at least 1 year from the date the application for disability retirement 
is filed.
    (4) The employing agency must be unable to accommodate the disabling 
medical condition in the position held or in an existing vacant 
position.

[[Page 139]]

    (5) An application for disability retirement must be filed with the 
employing agency before the employee or Member separates from service, 
or with the former employing agency or the Office of Personnel 
Management (OPM) within 1 year thereafter. This time limit can be waived 
only in certain instances explained in Sec. 831.1204.
    (b) A National Guard technician who is retiring under the special 
provisions of 5 U.S.C. 8337(h) is not required to meet the conditions 
given in paragraphs (a) (2), (3), and (4) of this section. Instead, the 
individual must be disabled for membership in the National Guard or for 
the military grade required to hold his or her position and meet the 
other eligibility requirements under 5 U.S.C. 8337(h)(2).

[58 FR 49179, Sept. 22, 1993, as amended at 63 FR 17049, Apr. 8, 1998]



Sec. 831.1204  Filing disability retirement applications: General.

    (a) Except as provided in paragraphs (c) and (d) of this section, an 
application for disability retirement is timely only if it is filed with 
the employing agency before the employee or Member separates from 
service, or with the former employing agency or OPM within 1 year 
thereafter.
    (b) An application for disability retirement that is filed with OPM, 
an employing agency or former employing agency by personal delivery is 
considered filed on the date on which OPM, the employing agency or 
former employing agency receives it. The date of filing by facsimile is 
the date of the facsimile. The date of filing by mail is determined by 
the postmark date; if no legible postmark date appears on the mailing, 
the application is presumed to have been mailed 5 days before its 
receipt, excluding days on which OPM, the employing agency or former 
employing agency, as appropriate, is closed for business. The date of 
filing by commercial overnight delivery is the date the application is 
given to the overnight delivery service.
    (c) An application for disability retirement that is filed with OPM 
or the applicant's former employing agency within 1 year after the 
employee's separation, and that is incompletely executed or submitted in 
a letter or other form not prescribed by OPM, is deemed timely filed. 
OPM will not adjudicate the application or make payment until the 
application is filed on a form prescribed by OPM.
    (d) OPM may waive the 1-year time limit if the employee or Member is 
mentally incompetent on the date of separation or within 1 year 
thereafter, in which case the individual or his or her representative 
must file the application with the former employing agency or OPM within 
1 year after the date the individual regains competency or a court 
appoints a fiduciary, whichever is earlier.
    (e) An agency may consider the existence of a pending disability 
retirement application when deciding whether and when to take other 
personnel actions. An employee's filing for disability retirement does 
not require the agency to delay any appropriate personnel action.

[63 FR 17049, Apr. 8, 1998]



Sec. 831.1205  Agency-filed disability retirement applications.

    (a) Basis for filing an application for an employee. An agency must 
file an application for disability retirement of an employee who has 5 
years of civilian Federal service when all of the following conditions 
are met:
    (1) The agency has issued a decision to remove the employee;
    (2) The agency concludes, after its review of medical documentation, 
that the cause for unacceptable performance, attendance, or conduct is 
disease or injury;
    (3) The employee is institutionalized, or the agency concludes , 
based on a review of medical and other information, that the employee is 
incapable of making a decision to file an application for disability 
retirement;
    (4) The employee has no personal representative or guardian; and
    (5) The employee has no immediate family member who is willing to 
file an application on his or her behalf.
    (b) Agency procedures. (1) When an agency issues a decision to 
remove an employee and not all of the conditions described in paragraph 
(a) of this section have been satisfied, but the removal is based on 
reasons apparently caused by a medical condition, the

[[Page 140]]

agency must advise the employee in writing of his or her possible 
eligibility for disability retirement.
    (2) If the agency is filing a disability retirement application on 
the employee's behalf, the agency must inform the employee in writing at 
the same time it informs the employee of its removal decision, or at any 
time before the separation is effected, that--
    (i) The agency is submitting a disability retirement application on 
the employee's behalf to OPM;
    (ii) The employee may review any medical information in accordance 
with the criteria in Sec. 294.106(d) of this chapter; and
    (iii) The action does not affect the employee's right to submit a 
voluntary application for retirement under this part.
    (3) When an agency submits an application for disability retirement 
to OPM on behalf of an employee, it must provide OPM with copies of the 
decision to remove, the medical documentation, and any other documents 
needed to show that the cause for removal is due to a medical condition. 
Following separation, the agency must provide OPM with a copy of the 
documentation of the separation.
    (c) OPM procedures. (1) OPM will not act on any application for 
disability retirement filed by an agency on behalf on an employee until 
it receives the appropriate documentation of the separation. When OPM 
receives a complete application for disability retirement under this 
section, it will notify the former employee that it has received the 
application, and that he or she may submit medical documentation. OPM 
will determine entitlement to disability benefits under Sec. 831.1206.
    (2) OPM will cancel any disability retirement when a final decision 
of an administrative authority or court reverses the removal action and 
orders the reinstatement of an employee to the agency rolls.



Sec. 831.1206  Evidence supporting entitlement to disability benefits.

    (a) Evidence to support disability retirement application. (1) 
Before OPM determines whether an individual meets the basic requirements 
for disability retirement under Sec. 831.1203, an applicant for 
disability retirement or the employing agency must submit to OPM the 
following forms included in Standard Form 2824, ``Documentation in 
Support of Disability Retirement Application:''
    (i) Standard Form 2824A--``Applicant's Statement;''
    (ii) Standard Form 2824B--``Supervisor's Statement;''
    (iii) Standard Form 2824D--``Agency Certification or Reassignment 
and Accommodation Efforts;'' and
    (iv) Standard Form 2824E--``Disability Retirement Application 
Checklist.''
    (2) Standard Form 2824C--``Physician's Statement'' and the 
supporting medical documentation may be submitted directly to OPM.
    (3) The applicant, or the employing agency, must also obtain and 
submit additional documentation as may be required by OPM to determine 
entitlement to the disability retirement benefit.
    (4) Refusal by the applicant, physician, or employing agency to 
submit the documentation OPM has determined is necessary to decide 
eligibility for disability retirement is grounds for disallowance of the 
application.
    (b) OPM procedures for processing a disability retirement 
application. (1) OPM will review the documentation submitted under 
paragraph (a) of this section in support of an application for 
disability retirement to determine whether the applicant has met the 
conditions stated in Sec. 831.1203 of this part. OPM will issue its 
decision in writing to the applicant and to the employing agency. The 
decision will include a statement of the findings and conclusions, and 
an explanation of the right to request consideration under Sec. 831.109 
of this part.
    (2) OPM may rescind a decision to allow an application for 
disability retirement at any time if there is an indication of error in 
the original decision, such as fraud or misstatement of fact, or if 
additional medical documentation is needed. The written notification 
will include a statement of the findings and conclusions, and an 
explanation of the right to request reconsideration under Sec. 831.109 
of this part.

[[Page 141]]

    (c) Medical examination. OPM may offer the applicant a medical 
examination when it determines that additional medical evidence is 
necessary to make a decision on an application. The medical evaluation 
will be conducted by a medical officer of the United States or a 
qualified physician or board of physicians designated by OPM. The 
applicant's refusal to submit to an examination is grounds for 
disallowance of the application.
    (d) Responsibility for providing evidence. It is the responsibility 
of the applicant to obtain and submit documentation that is sufficient 
for OPM to determine whether there is a service deficiency, caused by 
disease or injury, of sufficient degree to preclude useful and efficient 
service, or a medical condition that warrants restriction from the 
critical task or duties of the position held. It is also the 
responsibility of the disability annuitant to obtain and submit evidence 
OPM requires to show continuing entitlement to disability benefits.



Sec. 831.1207  Withdrawal of disability retirement applications.

    (a) OPM will honor, without question, an applicant's request to 
withdraw an employee-filed disability retirement application if it 
receives the withdrawal request before the employing agency has 
separated the current employee, or, if the employee has already 
separated from the service, the withdrawal request is received before 
the official notice of approval has been issued by OPM. Similarly, OPM 
will honor, without question, an agency's request to withdraw an agency-
filed disability retirement application if it receives the withdrawal 
request before the employee has separated from the service. Once the 
request to withdraw the application is accepted, an applicant must 
reapply to receive any further consideration.
    (b) Withdrawal of a disability retirement application does not 
ensure the individual's continued employment. It is the employing 
agency's responsibility to determine whether it is appropriate to 
continue to employ the individual.
    (c) OPM considers voluntary acceptance of a permanent position in 
which the employee has civil service retirement coverage, including a 
position at a lower grade or pay level, to be a withdrawal of the 
employee's disability retirement application. The employing agency must 
notify OPM immediately when an applicant for disability retirement 
accepts a position of this type.
    (d) OPM also considers a disability retirement application to be 
withdrawn when the agency reports to OPM that it has reassigned an 
applicant or an employee has refused a reassignment to a vacant 
position, or the agency reports to OPM that it has successfully 
accommodated the medical condition in the employee's current position. 
Placement consideration is limited only by agency authority and can 
occur after OPM's allowance of the application up to the date of 
separation for disability retirement. The employing agency must notify 
OPM immediately if any of these events occur.
    (e) After OPM allows a disability retirement application and the 
employee is separated, the application cannot be withdrawn. However, an 
individual entitled to a disability annuity may decline to accept all or 
any part of the annuity under the waiver provisions of 5 U.S.C. 8345(d) 
or request to be found medically recovered under Sec. 831.1208(e) of 
this part.



Sec. 831.1208  Termination of disability annuity because of recovery.

    (a) Each annuitant receiving disability annuity from the Fund shall 
be examined under the direction of OPM at the end of 1 year from the 
date of disability retirement and annually thereafter until the 
annuitant becomes 60 years of age unless the disability is found by OPM 
to be permanent in character. OPM may order a medical or other 
examination at any time to determine the facts relative to the nature 
and degree of disability of the annuitant. Failure to submit to 
reexamination shall result in suspension of annuity.
    (b) A disability annuitant may request medical reevaluation under 
the provisions of this section at any time. OPM will reevaluate the 
medical condition of disability annuitants age 60 or over only on their 
own request.

[[Page 142]]

    (c) Recovery based on medical documentation. When an examination or 
reevaluation shows that a disability annuitant has medically recovered 
from the disability, OPM will terminate the annuity effective on the 
first day of the month beginning 1 year after the date of the medical 
examination showing recovery.
    (d) Recovery based on reemployment by the Federal Government. 
Reemployment by an agency at any time before age 60 is evidence of 
recovery if the reemployment is in a permanent position at the same or 
higher grade or pay level as the position from which the disability 
annuitant retired. The permanent position must be full-time unless the 
position the disability annuitant occupied immediately before retirement 
was less than full-time, in which case the permanent position must have 
a work schedule of no less time than that of the position from which the 
disability annuitant retired. In this instance, OPM needs no medical 
documentation to find the annuitant recovered. Disability annuity 
payments will terminate effective on the first day of the month 
following the month in which the recovery finding is made under this 
paragraph.
    (e) Recovery based on a voluntary request. OPM will honor a written 
and signed statement of medical recovery voluntarily filed by a 
disability annuitant when the medical documentation on file does not 
demonstrate that the annuitant is mentally incompetent. OPM needs no 
other documentation to find the annuitant recovered. Disability annuity 
payments will terminate effective on the first day of the month 
beginning 1 year after the date of the statement. A disability annuitant 
can withdraw the statement only if the withdrawal is received by OPM 
before annuity payments terminate.
    (f) When an agency reemploys a recovered disability annuitant at any 
grade or rate of pay within the 1-year period pending termination of the 
disability retirement benefit under paragraph (c), (d), or (e) of this 
section, OPM will terminate the annuity effective on the date of 
reemployment.



Sec. 831.1209  Termination of disability annuity because of restoration 
to earning capacity.

    (a) Restoration to earning capacity. If a disability annuitant is 
under age 60 on December 31 of any calendar year and his or her income 
from wages or self-employment or both during that calendar year equal at 
least 80 percent of the current rate of basic pay of the position 
occupied immediately before retirement, the annuitant's earning capacity 
is considered to be restored. The disability annuity will terminate on 
the June 30 after the end of the calendar year in which earning capacity 
is restored. When an agency reemploys a restored disability annuitant at 
any grade or rate of pay within the 180-day waiting period pending 
termination of the disability retirement benefit, OPM will terminate the 
annuity effective on the date of reemployment.
    (b) Current rate of basic pay for the position occupied immediately 
before retirement. (1) A disability annuitant's income for a calendar 
year is compared to the gross annual rate of basic pay in effect on 
December 31 of that year for the position occupied immediately before 
retirement. The income for most disability annuitants is based on the 
rate for the grade and step which reflects the total amount of basic pay 
(both the grade and step and any additional basic pay) in effect on the 
date of separation from the agency for disability retirement. Additional 
basic pay is included subject to the premium pay restrictions of 5 
U.S.C. 5545 (c)(1) and (c)(2). A higher grade and step will be 
established if it results from using either the date of application for 
disability retirement or the date of reasonable accommodation, as 
adjusted by any increases in basic pay that would have been effected 
between each respective date and the date of final separation. Use of 
these two alternative pay setting methods is subject to paragraph (b)(1) 
(i) and (ii) of this section. The highest grade and step established as 
a result of setting pay under the normal method and the two alternative 
methods is designated as the rate of basic pay for the position occupied 
immediately before retirement and applies only to restoration to earning 
capacity decisions. In cases involving use

[[Page 143]]

of either of the two alternative pay setting methods, the determination 
of the rate of basic pay for the position occupied immediately before 
retirement is made by the employing agency at the time the disability 
retirement is allowed. OPM must review the rate so determined to 
establish whether the correct rate has been established, and will inform 
the employee of the proper rate at the time the disability annuity is 
awarded. This rate of basic pay becomes the basis for all future earning 
capacity determinations.
    (i) The ``date of application for disability retirement'' is the 
date the application is signed by the authorized official of the 
employing agency immediately before forwarding the application to OPM.
    (ii) The ``date of reasonable accommodation'' is the date of the 
employing agency's notice of reasonable accommodation to an employee's 
medical condition (as a result of its review of medical documentation) 
which results in a reduction in the rate of basic pay. The use of the 
date of reasonable accommodation to establish the rate of basic pay for 
the position held at retirement is subject to the following conditions:
    (A) The date of the employing agency's notice to provide 
accommodation is no more than 1 year before the date the disability 
retirement application is signed by the authorized official in the 
employing agency immediately before forwarding it to OPM; and
    (B) A complete record of the date of the personnel decision, the 
medical documentation substantiating the existence of the medical 
condition, and the justification for the accommodation is established in 
writing and included at the time the agency submits the application for 
disability retirement. OPM will review the record to determine whether 
the medical documentation demonstrates that the medical condition 
existed at the time of the accommodation and warranted the accommodation 
made.
    (2) In the case of an annuitant whose basic pay rate on the date 
determined under paragraph (b)(1) of this section did not match a 
specific grade and step in a pay schedule:
    (i) For those retiring from a merit pay position, a position for 
which a special pay rate is authorized (except as provided in paragraph 
(b)(2)(ii) of this section), or any other position in which the rate of 
basic pay is not equal to a grade and step in a pay schedule, the grade 
and step will be established for this purpose at the lowest step in the 
pay schedule grade that is equal to or greater than the actual rate of 
basic pay payable. This rule will not be applied when the rate exceeds 
that of the schedule applicable to the organization from which the 
individual retired, when there is no existing apposite schedule with 
grades and steps, or in other organizations which are excluded from 
coverage of schedules with grades and steps, as in the case of pay 
systems using pay bands.
    (ii) For those retiring with a retained rate of basic pay or from a 
position for which a special pay rate is in effect but whose rate of 
basic pay exceeds the highest rate payable in the pay schedule grade 
applicable to the position held, the grade and step is established for 
this purpose in the grade in the schedule that is closest to the grade 
of the position held and within which the amount of the retained pay 
falls. The step is established for this purpose at the lowest step in 
that grade which equals or exceeds the actual rate of pay payable.
    (iii) When the pay system under which an annuitant retired has been 
either modified or eliminated since the individual retired, the 
individual will be treated as if he or she had been employed at their 
retirement grade and step at the time of the system change, and will be 
deemed to have been placed under the new system using whatever rules 
would have been applicable at that time. This will only apply when a pay 
system has been abolished or modified, and not when the grade and step 
of a position has been modified subsequent to retirement by 
reclassification or other action, in which case the grade and step in 
effect at the time of retirement will control.
    (iv) If using the above rules it is not possible to set a grade and 
step for computing the current rate of pay, then if possible the current 
rate of pay will be set using the relative position

[[Page 144]]

in the range of pay applicable to the position from which the individual 
retired. For example, if at the time of retirement the rate of pay was 
$75,000 in a range from $70,000 to $90,000, for all future 
determinations, the current rate of pay would be 25% up the new pay 
range from the bottom. If the new range was $96,000 to $120,000, then 
the new current rate of pay would be $102,000 ($96,000 plus 0.25 times 
$24,000 ($120,000 minus $96,000)).
    (v) In those cases, such as of some former Congressional staff 
employees and others whose pay is not set under a formal system, where 
none of the above guidelines will yield a current rate of pay, OPM will 
ascertain the current rate of pay after consultation with the former 
employing organization, or successor organization.
    (3) For annuitants retiring from the United States Postal Service, 
only cost-of-living allowances subject to civil service retirement 
deductions are included in determining the current rate of basic pay of 
the position held at retirement.
    (c) Income. Earning capacity for the purposes of this section is 
demonstrated by an annuitant's ability to earn post-retirement income in 
a calendar year through personal work efforts or services. The total 
amount of income from all sources is used to determine earning capacity. 
This includes income received as gross wages from one or more employers, 
net earnings from one or more self-employment endeavors, and deferred 
income that is earned in a calendar year. In determining an annuitant's 
income for a calendar year, the following considerations apply:
    (1) There are two sources of income: wages and self-employment 
income. All income which is subject to Federal employment taxes (i.e., 
social security or Medicare taxes) or self-employment taxes constitutes 
earned income. In addition, any other income as described in this 
section also constitutes earned income. The determination of whether a 
disability annuitant earns wages as an employee of an organization or 
earns income as a self-employed person is based on the usual common law 
rules applicable in determining the existence of an employer-employee 
relationship. Whether the relationship exists under the usual common law 
rules will be determined by OPM after the examination of the particular 
facts of each case.
    (2) Income earned from one source is not offset by losses from 
another source. Income earned as wages is not reduced by a net loss from 
self-employment. The net income from each self-employment endeavor is 
calculated separately, and the income earned as net earnings from one 
self-employment endeavor is not reduced by a net loss from another self-
employment endeavor. The net incomes from each separate self-employment 
endeavor are added together to determine the total amount of income from 
self-employment for a calendar year.
    (3) Only income earned from personal work efforts or services is 
considered in determining earning capacity. All forms of non-work-
related unearned income are excluded. Paragraph (f) of this section 
includes a representative list of the types of unearned income that are 
not considered.
    (4) Income earned in a calendar year may only be reduced by certain 
self-employment business expenses, as provided in paragraph (e) of this 
section; job-connected expenses incurred because of the disabling 
condition, as provided in paragraph (g) of this section; and the return 
from investment allowance, as provided in paragraph (h) of this section. 
Once earned, income cannot be reduced by any other means. Thus, income 
cannot be lowered by such means as leave buy-back provisions, conversion 
of wages for paid time to leave without pay or a similar non-paid 
status, reductions in wages attributable to cash shortages or product 
losses, etc.
    (5) For determining annual income from wages or self-employment or 
both, income is earned in the calendar year the annuitant actually 
renders the personal work effort or service and either actually or 
constructively receives the remuneration, except as provided under 
paragraph (c)(7) of this section. For this purpose, income paid on a 
regular basis (i.e., on a weekly, bi-weekly, monthly or similar pay 
period basis) will be deemed earned in the

[[Page 145]]

year in which payment is made in the regular course of business.
    (6) Deferred income is included as income in the calendar year in 
which it is constructively received. Income is constructively received 
when it is credited, set apart, or otherwise made available so that the 
annuitant may draw upon it at any time, or could draw upon it during the 
calendar year if the annuitant had given notice of the intent to do so. 
Deferred income includes all earnings, whether in the form of cash or 
property or applied to provide a benefit for the employee, which are 
subject to the disability annuitant's designation or assignment. 
Usually, the earnings are set aside by a salary-reduction agreement, a 
deferred compensation arrangement, or the designation of specific 
earnings amounts towards the purchase of non-taxable employee fringe 
benefits. Thus, any earnings for which the individual has the 
opportunity to adjust the amount of income received in a calendar year 
by controlling the remuneration of voluntarily giving up the right to 
control the remuneration, regardless of whether a written instrument 
exists, are income for earning capacity purposes.
    (7) The Internal Revenue Code provides exceptions to the general 
rule on constructive receipt for certain deferred compensation plans 
which, by their design, defer receipt of income for Federal employment 
tax purposes as of the later of when services are performed or when 
there is no substantial risk of forfeiture of the rights to such amount. 
Even though these special deferred compensation plans defer the 
constructive receipt of the income for tax purposes to future years 
beyond the year in which the income is actually earned, the income 
reflects earning capacity. Therefore, employer contributions and 
employee payments to these special deferred compensation plans are 
considered income in the calendar year in which the services are 
performed, even though the Internal Revenue Code may exclude these 
contributions and payments from income for tax purposes.
    (d) Wages. For purposes of earning capacity determinations, the term 
``wages'' means the gross amount of all remuneration for services 
performed by an employee for his or her employer, unless specifically 
excluded herein, before any deductions or withholdings.
    (1) The name by which the remuneration for services is designated is 
immaterial. Remuneration includes but is not limited to one-time or 
recurring--
    (i) Base salary or pay; tips; commissions; professional fees; 
honoraria; bonuses and gift certificates of any type; golden parachute 
payments; payments for any non-work periods, such as vacation, holiday, 
or sick pay; pay advances; overtime pay; severance pay; dismissal pay; 
termination pay; and back pay;
    (ii) Deferred income, within the meaning of paragraphs (c) (6) and 
(7) of this section, or other employer contributions or payments in an 
arrangement in which the employee has the opportunity (whether exercised 
or not) to adjust income by recovering the contributions or payments 
during the calendar year in which earned, for general discretionary 
income purposes;
    (iii) Non-cash wages or payment of in-kind benefits, such as shares 
of stock in the business, real or personal property, stock in trade, 
inventory items, goods, lodging, food, and clothing. The valuation for 
all non-cash wages or other in-kind benefits is determined in a manner 
consistent with the fair value standards that appear in the Social 
Security Administration's regulations at 20 CFR 404.1041(d).
    (2) Any amount offset or deducted under 5 U.S.C. 8344 is treated as 
wages if the annuity continues while the annuitant is reemployed by the 
Federal Government.
    (3) As a general rule, remuneration as wages does not include any 
contribution, payment, benefits furnished, or service provided by an 
employer in any of the following areas:
    (i) The general retirement system established by the employer for 
its employees, usually either a qualified pension, profit-sharing, stock 
bonus plan, or a qualified annuity contract plan;
    (ii) Medical or hospitalization health benefit plans;
    (iii) Life insurance plans;
    (iv) Sickness or accident disability pay beyond 6 months of illness, 
or workers' compensation payments;

[[Page 146]]

    (v) The value of meals and lodgings provided at the convenience of 
the employer;
    (vi) Moving expenses;
    (vii) Educational assistance programs;
    (viii) Dependent care assistance programs;
    (ix) Scholarships and fellowship grants;
    (x) De minimis fringe benefits, such as items of merchandise given 
by the employer at holidays which are not readily convertible into cash 
and courtesy discounts on company products offered not as remuneration 
for services performed but as a means of promoting good will;
    (xi) Qualified group legal services plans;
    (xii) Uniforms and tools supplied by the employer, including 
employer-provided allowances for such items, for the exclusive use by 
the employee on the job; and
    (xiii) Amounts that an employer pays the individual specifically, 
either as advances or reimbursements, for traveling or other ordinary 
and necessary expenses incurred, or reasonably expected to be incurred 
in the employer's business.
    (4) However, there are two exceptions to this general rule:
    (i) When it is provided under circumstances in which either a salary 
reduction or deferral agreement is used (whether evidenced by a written 
instrument or otherwise); or
    (ii) When the employee had the opportunity (whether exercised or 
not) to elect to receive the cash value, whether in the form of money or 
personal or real property, of the employer-provided amount or service.
    (e) Self-employment income. (1) Self-employment income is the 
remuneration that is received as an independent contractor, either as
    (i) A sole proprietor of a business or farm;
    (ii) A professional in one's own practice; or
    (iii) A member of a partnership or corporation, as these terms are 
defined by the Internal Revenue Code, and regardless of whether the 
business entity is operated for profit.
    (2) The term ``net earnings'' from self-employment in a business 
enterprise means the gross revenue to the business endeavor from all 
sources before any other deductions or withholdings, minus
    (i) Allowable business expenses, as provided in paragraph (e)(3) of 
this section;
    (ii) Any job-connected disability expenses, as provided in paragraph 
(g) of this section; and
    (iii) Any return from investment allowance, as provided in paragraph 
(h) of this section.
    (3) Certain expenses of a self-employed business entity may be 
offset from the gross revenue from all sources of that self-employed 
business in determining the amount of net earnings for a particular 
calendar year. Expenses which may be deducted are only those items and 
costs which are permitted by the Internal Revenue Code for income tax 
purposes as ordinary and necessary to the operation of the business. 
However, expenses incurred on behalf of the disability annuitant may not 
be deducted, regardless of whether they are permitted by the Internal 
Revenue Code. These expenses that are incurred but cannot be deducted 
include the costs for wages paid to the individual, interest earnings, 
guaranteed payments, dividends, employee benefits, pension plans, and 
salary reduction or deferral plans. Also, self-employed disability 
annuitants may not deduct the costs of other withdrawals or expenses 
which are not used solely for business purposes. Examples of items that 
cannot be deducted if used at all for personal use by the self-employed 
disability annuitant include personal property items, such as 
automobiles and boats; real property, such as vacation property or 
residences; and memberships, dues, or fees for professional associations 
or public or private organizations or clubs.
    (4) Fees paid to an annuitant as a director of a corporation are a 
part of net earnings from self-employment.
    (f) Income not included. Other types of income not considered in 
determining earning capacity include--
    (1) Investment income, such as interest or dividends from savings 
accounts,

[[Page 147]]

stocks, personal loans or home mortgages held, unless the disability 
annuitant receives the return from capital investment in the course of 
his or her trade or business;
    (2) Capital gains from sales of real or personal property that the 
disability annuitant owns, unless received in the course of his or her 
trade or business:
    (3) Rents or royalties, unless received in the course of his or her 
trade or business;
    (4) Distributions from pension plans, annuity plans, Individual 
Retirement Accounts (IRA's), Simplified Employee Benefit-IRA's (SEP-
IRA's), Keogh Accounts, employee stock ownership plans, profit sharing 
plans, or deferred income payments that are received by the annuitant in 
any year after the calendar year in which the funds were contributed to 
the plan;
    (5) Income earned before the commencing date of civil service 
retirement annuity payments;
    (6) Scholarships or fellowships;
    (7) Proceeds from life insurance, inheritances, estates, trusts, 
endowments, gifts, prizes, awards, gambling or lottery winnings, and 
amounts received in court actions whether by verdict or settlement, 
unless received in the course of their trade or business;
    (8) Unemployment compensation under State or Federal law, 
supplemental unemployment benefits, or workers' compensation:
    (9) Alimony, child support, or separate maintenance payments 
received;
    (10) Pay for jury duty; and
    (11) Entitlement payments from other Federal agencies, such as 
benefits from the Social Security Administration or the Veterans 
Administration, Railroad Retirement System retirement pay, or military 
retirement pay.
    (g) Job-connected expenses incurred because of the disabling 
condition may be deducted from income. (1) Job-connected expenses 
deductible from income for purposes of determining earning capacity are 
those expenses that are primarily for and essential to the annuitant's 
occupation or business and are directly connected with or result from 
the disability for which the disability annuity was allowed.
    (2) The determination of whether a job-connected expense may be 
deducted from income is governed by the following considerations:
    (i) The expense must be directly attributable to the disability and 
must be one which would not have been incurred in the absence of the 
annuitant working in his or her business or occupation. Expenses 
incurred for the preservation of the annuitant's health, alleviation of 
his or her physical or mental discomfort, or other expenses of an 
employed person cannot be deducted.
    (ii) The disability must be of such severity that it requires the 
annuitant to use special means of transportation, services, or equipment 
to perform the duties of the occupation or business. Examples of such 
disabilities include blindness, paraplegia, multiple sclerosis, and 
cerebral hemorrhage. Claims involving transportation or equipment may be 
deducted only in the amount normally allowed for business expenses or as 
depreciation by the Internal Revenue Service for Federal income tax 
purposes.
    (iii) Claims involving services performed by a family member or 
other individual directly employed by the annuitant may be deducted only 
if a true employer-employee relationship exists between the annuitant 
and the employed individual, and the amount claimed as an expense does 
not exceed the local market rate of payment to individuals who provide 
similar services. It is the responsibility of the annuitant to provide 
evidence demonstrating that an employer-employee relationship exists, 
and what the local market rate is for such services. For the purpose of 
this paragraph, to establish that a true employer-employee relationship 
exists, the annuitant must provide evidence that all statutorily 
mandated employment requirements are met, including (but not limited to) 
income tax withholdings, FICA tax deductions and payments, and 
unemployment insurance. If the annuitant fails to provide evidence of 
the local market rate for such services, payments may be deducted only 
if the amount claimed does not exceed the Federal minimum hourly rate in 
effect on December 31 of the calendar year in which claimed. Absent

[[Page 148]]

evidence that it is customary and regular practice in the local labor 
market to work more hours per week, payment may not be deducted for 
services provided by an individual in excess of 40 hours a week.
    (3) A job-connected expense can be deducted only in the calendar 
year in which paid.
    (4) Claims for items used for both personal and job-related purposes 
may be deducted only by the prorated amount attributable to the job-
related use.
    (5) A job-connected expense may not be deducted from income from 
self-employment if the expense has already been deducted as a business 
expense.
    (6) It is the responsibility of the annuitant claiming job-connected 
expense to provide adequate documentation to substantiate the amount 
claimed. Adequate documentation will generally include the following 
information:
    (i) Written recommendation of a physician, vocational rehabilitation 
specialist, occupational health resource specialist, or other similar 
professional specialist that the retiree should use the transportation, 
services, or equipment;
    (ii) A description of the item and an explanation of its use by the 
annuitant in the performance of his or her occupation or business;
    (iii) A copy of the receipt of purchase, bill of sale, or leasing 
agreement for the item claimed with the date, duration of the agreement, 
and agreed upon price clearly specified;
    (iv) A complete supporting explanation of how the amount claimed for 
the job-connected expense has been calculated; and
    (v) An explanation of the circumstances and calculation of the 
prorated cost of the item if used for both personal and business use.
    (h) Return from investment allowance. A disability annuitant may 
reduce the net earnings from a self-employed business endeavor (adjusted 
for any interest paid on borrowed capital) by 6 percent of his or her 
capital investment in that business, owned or borrowed. The capital 
investment's value is its fair-market value as of December 31 of the 
year for which the income is being reported.
    (i) Requirement to report income. All disability annuitants who, on 
December 31 of any calendar year, are under age 60 must report to OPM 
their income from wages or self-employment or both for that calendar 
year. Each year as early as possible, OPM will send a form to annuitants 
to use in reporting their income from the previous calendar year. The 
form specifies the date by which OPM must receive the report. OPM will 
determine entitlement to continued annuity on the basis of the report. 
If an annuitant fails to submit the report, OPM may stop annuity 
payments until it receives the report.



Sec. 831.1210  Annuity rights after a disability annuity terminates.

    (a) An individual is entitled to an immediate annuity when the 
disability annuity stops because of recovery or restoration to earning 
capacity if the individual is not reemployed in a position subject to 
civil service retirement coverage and--
    (1) Is at least age 50 when the disability annuity stops and had 20 
or more years of service at the time of retirement for disability; or
    (2) Had 25 or more years of service at the time of retirement for 
disability regardless of age.
    (b) An individual whose annuity stops because of recovery or 
restoration to earning capacity and who is not eligible for an immediate 
annuity under paragraph (a) of this section, is eligible for a deferred 
annuity upon reaching age 62.
    (c) The disability annuity of an individual whose annuity stopped 
because of recovery or restoration to earning capacity may be reinstated 
under Sec. 831.1212 of this part.



Sec. 831.1211  Reinstatement of disability annuity.

    (a) When a disability annuity stops, the individual must again prove 
that he or she meets the eligibility requirements in order to have the 
annuity reinstated.
    (b) When a recovered disability annuitant under age 62 whose annuity 
was terminated because he or she was found

[[Page 149]]

recovered on the basis of medical evidence (Sec. 831.1208(b)), is not 
reemployed in a position subject to civil service retirement coverage, 
and, based on the results of a current medical examination, OPM finds 
that the individual's medical condition has worsened since the finding 
of recovery and that the original disability on which retirement was 
based has recurred, OPM will reinstate the disability annuity. The right 
to the reinstated annuity begins with the date of the medical 
examination showing that the disability recurred.
    (c) OPM will reinstate the disability annuity of a recovered 
disability annuitant under age 62 whose annuity was terminated because 
he or she was found recovered on the basis of Federal reemployment 
(Sec. 831.1208(c)) when--
    (1) The results of a current medical examination show that the 
disabling medical condition that was the basis of the disability 
retirement continues to exist; and
    (2) Within 1 year after the date of reemployment, this medical 
condition has again caused the individual to be unable to provide useful 
and efficient service, and the employee has been--
    (i) Separated and not reemployed in a position subject to civil 
service retirement coverage; or
    (ii) Placed in a position that results in a reduction in grade or 
pay below the grade from which the individual retired, or in a change to 
a non-permanent position. The right to the reinstated annuity begins 
with the date of the medical examination showing that the disabling 
medical condition continues to exist, but not earlier than the first day 
after separation, or the effective date of the placement in the position 
which results in a reduction in grade or pay or change to a non-
permanent position.
    (d) When a recovered disability annuitant under age 62 whose annuity 
was terminated because he or she was found recovered on the basis of a 
voluntary request (Sec. 831.1208(e)), is not reemployed in a position 
subject to civil service retirement coverage, and, based on the results 
of a current medical examination, OPM finds that the disability has 
recurred, OPM will reinstate the disability annuity. The right to the 
reinstated annuity begins with the date of the medical examination 
showing that the disability recurred, but not earlier than 1 year before 
the date the request for reinstatement is received by OPM.
    (e) When a disability annuitant whose earning capacity has been 
restored but who is not reemployed in a position in which he or she is 
subject to civil service retirement coverage, and who (except in the 
case of a National Guard technician whose annuity was awarded under 5 
U.S.C. 8337(h)), has not recovered from the disability for which 
retired, loses his or her earning capacity, as determined by OPM, before 
reaching age 62, OPM will reinstate the disability annuity. The 
reinstated annuity is payable from January 1 of the year following the 
calendar year in which earning capacity was lost. Earning capacity is 
lost if, during any calendar year, the individual's income from wages or 
self-employment or both is less than 80 percent of the current rate of 
basic pay of the position held at retirement.
    (f) A reinstated annuity is the same type as the original annuity 
and is paid at the rate of annuity to which the annuitant was entitled 
on the date his or her disability annuity was last discontinued.
    (g) Reinstatement of the disability annuity ends the right to any 
other annuity based on the same service, unless the annuitant makes a 
written election to receive the other annuity instead of the disability 
annuity.
    (h) When OPM reinstates an employee's disability annuity, the agency 
must offset the employee's pay by the amount of annuity allocable to the 
period of employment, unless the annuitant is exempted from this 
requirement under the provisions of 5 U.S.C. 8344(i). The offset begins 
on the date of OPM's determination of eligibility for reinstatement. OPM 
must reduce any retroactive payment of annuity for a period of 
employment with an agency before that date by the amount of pay earned 
during that period.
    (i) When an individual's annuity is terminated upon reemployment 
(subject to subchapter III of chapter 83, title 5, United States Code), 
OPM must determine the individual's future annuity rights under the law 
in effect at the

[[Page 150]]

date of his or her subsequent separation. If, upon separation from such 
reemployment, the individual does not meet the eligibility requirements 
under subchapter III of chapter 83, title 5, United States Code, for 
title to annuity based on such separation, OPM will resume payment of 
the terminated annuity at the rate last payable, unless payment is 
otherwise barred.

[58 FR 12498, Sept. 4, 1968. Redesignated at 59 FR 27214, May 26, 1994]



Sec. 831.1212  Administrative review of OPM decisions.

    The right to administrative review of an initial decision of OPM is 
set forth in Sec. 831.109 of this part. The right to appeal a final 
decision of OPM to the Merit Systems Protection Board is set forth in 
Sec. 831.110 of this part.

[58 FR 12498, Sept. 4, 1968. Redesignated at 59 FR 27214, May 26, 1994]



                      Subpart M_Collection of Debts

    Source: 50 FR 34664, Aug. 27, 1985, unless otherwise noted.



Sec. 831.1301  Purpose.

    This subpart prescribes procedures to be followed by the Office of 
Personnel Management (OPM) , which are consistent with the Federal 
Claims Collection Standards (FCCS) (Chapter II of title 4, Code of 
Federal Regulations), in the collection of debts owed to the Civil 
Service Retirement and Disability Fund.



Sec. 831.1302  Scope.

    This subpart covers the collection of debts due the Civil Service 
Retirement and Disability Fund, with the exception of the collection of 
court-imposed judgments, amounts referred to the Department of Justice 
because of fraud, and amounts collected from back pay awards in 
accordance with Sec. 550.805(e)(2) of this chapter.



Sec. 831.1303  Definitions.

    In this subpart--
    Additional charges means interest, penalties, and/or administrative 
costs owed on a debt.
    Annuitant means a retired employee or Member of Congress, spouse, 
widower, or child receiving recurring benefits under the provisions of 
subchapter III, chapter 83, of title 5, United States Code.
    Compromise is an adjustment of the total amount of the debt to be 
collected based upon the considerations established by the FCCS (4 CFR 
part 103).
    Consumer reporting agency has the same meaning provided in 31 U.S.C. 
3701(a)(3).
    Debt means a payment of benefits to an individual in the absence of 
entitlement or in excess of the amount to which an individual is 
properly entitled.
    Delinquent has the same meaning provided in 4 CFR 101.2(b).
    FCCS means the Federal Claims Collection Standards (Chapter II of 
title 4, Code of Federal Regulations).
    Offset means to withhold the amount of a debt, or a portion of that 
amount, from one or more payments due the debtor. Offset also means the 
amount withheld in this manner.
    Reconsideration means the process of reexamining an individual's 
liability for a debt based on--
    (1) Proper application of law and regulation; and
    (2) Correctness of the mathematical computation.
    Repayment schedule means the amount of each payment and number of 
payments to be made to liquidate the debt as determined by OPM.
    Retirement fund means the Civil Service Retirement and Disability 
Fund.
    Voluntary repayment agreement means an alternative to offset that is 
agreed to by OPM and includes a repayment schedule.
    Waiver is a decision not to recover a debt under authority of 5 
U.S.C. 8346(b).



Sec. 831.1304  Processing.

    (a) Notice. Except as provided in Sec. 831.1305, OPM will, before 
starting collection, tell the debtor in writing--
    (1) The reason for and the amount of the debt;
    (2) The date on which the full payment is due;
    (3) OPM's policy on interest, penalties, and administrative charges;

[[Page 151]]

    (4) If payment in full would create financial hardship to the debtor 
and offset is available, the types of payment(s) to be offset, the 
repayment schedule, the right to request an adjustment in the repayment 
schedule and the right to request a voluntary repayment agreement in 
lieu of offset;
    (5) The individual's right to inspect and/or receive a copy of the 
Government's records relating to the debt;
    (6) The method and time period (30 calendar days) for requesting 
reconsideration, waiver, and/or compromise and, in the case of offset, 
an adjustment to the repayment schedule;
    (7) The standards used by OPM for determining entitlement to waiver 
and compromise;
    (8) The right to a hearing by the Merit Systems Protection Board on 
a waiver request (if OPM's waiver decision finds the individual liable) 
in accordance with paragraph (c)(2) of this section; and
    (9) The fact that a timely filing of a request for reconsideration, 
waiver and/or compromise, or a later timely appeal of a waiver denial to 
the Merit Systems Protection Board, will stop collection proceedings, 
unless (i) failure to take the offset would substantially prejudice the 
Government's ability to collect the debt; and (ii) the time before the 
payment is to be made does not reasonably permit the completion of these 
procedures.
    (b) Requests for reconsideration, waiver, and/or compromise. (1) If 
a request for reconsideration, waiver and/or compromise is returned to 
us by mail, it must be postmarked within 30 calendar days of the date of 
the notice detailed in paragraph (a) of this section. If a request for 
reconsideration, waiver, and/or compromise is hand delivered, it must be 
received within 30 calendar days of the date of the notice detailed in 
paragraph (a) of this section. OPM may extend the 30 day time limit for 
filing when individuals can prove that they: (i) Were not notified of 
the time limit and were not otherwise aware of it; or (ii) were 
prevented by circumstances beyond their control from making the request 
within the time limit.
    (2) When a request for reconsideration, waiver, and/or compromise 
covered by this paragraph is properly filed before the death of the 
debtor, it will be processed to completion unless the relief sought is 
nullified by the debtor's death.
    (3) Individuals requesting reconsideration, waiver, and/or 
compromise will be given a full opportunity to present any pertinent 
information and documentation supporting their position.
    (4) An individual's request for waiver will be evaluated on the 
basis of the standards set forth in subpart N of this part. An 
individual's request for compromise will be evaluated on the basis of 
standards set forth in the FCCS (4 CFR part 103).
    (c) Reconsideration, waiver, and/or compromise decisions. (1) OPM's 
decision will be based upon the individual's written submissions, 
evidence of record, and other pertinent available information.
    (2) After consideration of all pertinent information, a written 
decision will be issued. The decision will state the extent of the 
individual's liability, and, for waiver and compromise requests, whether 
the debt will be waived or compromised. If the individual is determined 
to be liable for all or a portion of the debt, the decision will 
reaffirm or modify the conditions for the collection previously proposed 
under paragraph (a) of this section. The decision will state the 
individual's right to appeal to the Merit Systems Protection Board as 
provided by Sec. 1201.3 of this title, and, in the case of a denial of 
waiver, that a timely appeal will stop collection of the debt.



Sec. 831.1305  Collection of debts.

    (a) Means of collection. Collection of a debt may be made by means 
of offset under Sec. 831.1306, or under any statutory provision 
providing for offset of money due the debtor from the Federal 
Government, or by referral to the Justice Department for litigation, as 
provided in Sec. 831.1306. Referral may also be made to a collection 
agency under the provisions of the FCCS.
    (b) Additional charges. Interest, penalties, and administrative 
costs will be assessed on the debt in accordance with standards 
established in the FCCS at 4 CFR 102.13. Additional charges will be 
waived when required by the FCCS. In

[[Page 152]]

addition, such charges may be waived when OPM determines--
    (1) Collection would be against equity and good conscience under the 
standards prescribed in Sec. Sec. 831.1403 through 831.1405 of this 
part; or
    (2) Waiver would be in the best interest of the United States.
    (c) Collection in installments. Whenever feasible, debts will be 
collected in one lump sum. However, when the debtor is financially 
unable to pay in one lump sum of fails to respond to a demand for full 
payment and off-set is available, installment payments may be effected. 
The amount of the installment payments will be set in accordance with 
the criteria in 4 CFR 102.11.
    (d) Commencement of collection. (1) Except as provided in paragraph 
(d)(2) of this section, collection will begin after the time limits for 
requesting further rights stated in Sec. 831.1304(a)(6) expire or OPM 
has issued decisions on all timely requests for those rights and the 
Merit Systems Protection Board has acted on any timely appeal of a 
waiver denial, unless: (i) Failure to make an offset would substantially 
prejudice the Government's ability to collect the debt; and (ii) the 
time before the payment is to be made does not reasonably permit the 
completion of the proceedings in Sec. 831.1304 or litigation. When 
offset begins without completion of the administrative review process, 
these procedures will be completed promptly, and amounts recovered by 
offset but later found not owed will be refunded promptly.
    (2) The procedures identified in Sec. 831.1304 will not be applied 
when the debt is caused by (i) a retroactive adjustment in the periodic 
rate of annuity or any deduction taken from annuity when the adjustment 
is a result of the annuitant's election of different entitlements under 
law, if the adjustment is made within 120 days of the effective date of 
the election; or (ii) interim, estimated payments made before the formal 
determination of entitlement to annuity, if the amount is recouped from 
the total annuity payable on the first day of the month following the 
last advance payment or the date the formal determination is made, 
whichever is later.



Sec. 831.1306  Collection by administrative offset.

    (a) Offset from retirement payments. A debt may be collected in 
whole or in part from lump-sum retirement payment or recurring annuity 
payments.
    (b) Offset from other payments--(1) Administrative offset. (i) A 
debt may be offset from other payments due the debtor from other 
agencies in accordance with 4 CFR 102.3, except that offset from back 
pay awarded under the provisions of 5 U.S.C. 5596 (and 5 CFR 550.801 et 
seq.) will be made in accordance with Sec. 550.805(e)(2) of this 
chapter.
    (ii) In determining whether to collect claims by means of 
administrative offset after the expiration of the six year limitation 
provided in 5 U.S.C. 2415, the Director or his designee will determine 
the cost effectiveness of leaving a claim unresolved for more than 6 
years. This decision will be based on such factors as the amount of the 
debt; the cost of collection; and the likelihood of recovering the debt.
    (2) Salary offset. When the debtor is an employee, or a member of 
the Armed Forces or a reserve component of the Armed Forces, OPM may 
effect collection action by offset of the debtor's pay in accordance 
with 5 U.S.C. 5514 and 5 CFR 550.1101 et seq. Due process described in 
Sec. 831.1304 will apply. The questions of fact and liability, and 
entitlements to waiver or compromise determined through that process are 
deemed correct and will not be amended under salary offset procedures. 
When the debtor did not receive a hearing on the amount of the offset 
under Sec. 831.1304 and requests such hearing, one will be conducted in 
accordance with subpart K of part 550 of this chapter.



Sec. 831.1307  Use of consumer reporting agencies.

    (a) Notice. If a debtor's response to the notice described in Sec. 
831.1304(a) does not result in payment in full, payment by offset, or 
payment in accordance with a voluntary repayment agreement or other 
repayment schedule acceptable to OPM, and the debtor's rights under 
Sec. 831.1304 have been exhausted, OPM may report the debtor to a 
consumer reporting agency. In addition, a debtor's failure to make 
subsequent

[[Page 153]]

payments in accordance with a repayment schedule may result in a report 
to a consumer reporting agency. Before making a report to a consumer 
reporting agency, OPM will notify the debtor in writing that--
    (1) The payment is overdue;
    (2) OPM intends, after 60 days, to make a report as described in 
paragraph (b) of this section to a consumer reporting agency;
    (3) The debtor's right to dispute the liability has been exhausted 
under Sec. 831.1304; and
    (4) The debtor may suspend OPM action on referral by paying the debt 
in one lump sum or making payments current under a repayment schedule.
    (b) Report. When a debtor's response to the notice described in 
paragraph (a) of this section fails to comply with paragraph (a)(4) of 
this section and 60 days have elapsed since the notice was mailed, OPM 
may report to a consumer reporting agency that an individual is 
responsible for an unpaid debt and provide the following information:
    (1) The individual's name, address, taxpayer identification number, 
and any other information necessary to establish the identity of the 
individual;
    (2) The amount, status, and history of the debt; and
    (3) The fact that the debt arose in connection with the 
administration of the Civil Service Retirement System.
    (c) Subsequent reports. OPM will update its report to the consumer 
reporting agency whenever it has knowledge of events that substantially 
change the status or the amount of the liability.



Sec. 831.1308  Referral to a collection agency.

    (a) OPM may refer certain debts to commercial collection agencies 
under the following conditions:
    (1) All processing required by Sec. 831.1304 has been completed 
before the debt is released.
    (2) A contract for collection services has been negotiated.
    (3) OPM retains the responsibility for resolving disputes, 
compromising claims, referring the debt for litigation, or suspending or 
terminating collection action.



Sec. 831.1309  Referral for litigation.

    From time to time and in a manner consistent with the General 
Accounting Office's and the Justice Department's instructions, OPM will 
refer certain overpayments to the Justice Department for litigation. 
Referral for litigation will suspend processing under this subpart.



             Subpart N_Standards for Waiver of Overpayments

    Source: 45 FR 23635, Apr. 8, 1980, unless otherwise noted.



Sec. 831.1401  Conditions for waiver.

    Recovery of an overpayment from the Civil Service Retirement and 
Disability Fund may be waived pursuant to section 8346(b), of title 5, 
United States Code, when the annuitant (a) is without fault and (b) 
recovery would be against equity and good conscience. Where it has been 
determined that the recipient of an overpayment is ineligible for 
waiver, the individual is nevertheless entitled to an adjustment in the 
recovery schedule if he/she shows that it would cause him/her financial 
hardship to make payment at the rate scheduled.



Sec. 831.1402  Fault.

    A recipient of an overpayment is without fault if he/she performed 
no act of commission or omission which resulted in the overpayment. The 
fact that the Office of Personnel Management may have been at fault in 
initiating an overpayment will not necessarily relieve the individual 
from liability.
    (a) Considerations. Pertinent considerations in finding fault are--
    (1) Whether payment resulted from the individual's incorrect but not 
necessarily fraudulent statement, which he/she should have known to be 
incorrect;
    (2) Whether payment resulted from the individual's failure to 
disclose material facts in his/her possession which he/she should have 
known to be material; or
    (3) Whether he/she accepted a payment which he/she knew or should 
have known to be erroneous.

[[Page 154]]

    (b) Mitigation factors. The individual's age, physical and mental 
condition or the nature of the information supplied to him/her by OPM or 
a Federal agency may mitigate against finding fault if one or more 
contributed to his/her submission of an incorrect statement, a statement 
which did not disclose material facts in his/her possession, or his/her 
acceptance of an erroneous overpayment.



Sec. 831.1403  Equity and good conscience.

    (a) Defined. Recovery is against equity and good conscience when--
    (1) It would cause financial hardship to the person from whom it is 
sought;
    (2) The recipient of the overpayment can show (regardless of his or 
her financial circumstances) that due to the notice that such payment 
would be made or because of the incorrect payment either he/she has 
relinquished a valuable right or changed positions for the worse; or
    (3) Recovery could be unconscionable under the circumstances.



Sec. 831.1404  Financial hardship.

    Financial hardship may be deemed to exist in--but not limited to--
those situations where the annuitant from whom collection is sought 
needs substantially all of his/her current income and liquid assets to 
meet current ordinary and necessary living expenses and liabilities.
    (a) Considerations. Some pertinent considerations in determining 
whether recovery would cause financial hardship are as follows:
    (1) The individual's financial ability to pay at the time collection 
is scheduled to be made.
    (2) Income to other family member(s), if such member's ordinary and 
necessary living expenses are included in expenses reported by the 
annuitant.
    (b) Exemptions. Assets exempt from execution under State law should 
not be considered in determining an individual's ability to repay the 
indebtedness, rather primary emphasis shall be placed upon the 
annuitant's liquid assets and current income in making such 
determinations.



Sec. 831.1405  Ordinary and necessary living expenses.

    An individual's ordinary and necessary living expenses include rent, 
mortgage payments, utilities, maintenance, food, clothing, insurance 
(life, health and accident), taxes, installment payments, medical 
expenses, support expenses when the annuitant is legally responsible, 
and other miscellaneous expenses which the individual can establish as 
being ordinary and necessary.



Sec. 831.1406  Waiver precluded.

    (a) When not granted. Waiver of an overpayment cannot be granted 
when--
    (1) The overpayment was obtained by fraud; or
    (2) The overpayment was made to an estate.



Sec. 831.1407  Burdens of proof.

    (a) Burden of OPM. The Associate Director for Compensation must 
establish by the preponderance of the evidence that an overpayment 
occurred.
    (b) Burden of annuitant. The recipient of an overpayment must 
establish by substantial evidence that he/she is eligible for waiver or 
an adjustment.



            Subpart O_Allotments From Civil Service Annuities

    Source: 42 FR 52373, Sept. 30, 1977; 42 FR 61240, Dec. 2, 1977, 
unless otherwise noted.



Sec. 831.1501  Definitions.

    (a) Allotment means a specified deduction from the annuity payments 
due an annuitant voluntarily authorized by the annuitant to be paid to 
an allottee.
    (b) Allottee means the institution or organization to which the 
allotment is paid.
    (c) Allotter means the annuitant from whose annuity payments an 
allotment is deducted.
    (d) Annuity Payments means the net monthly annuity payment due an 
annuitant after all authorized deductions (such as those for health 
benefits, Federal income tax, overpayment of annuity, payment of a 
government claim, etc. have been made.

[[Page 155]]



Sec. 831.1511  Authorized allottees.

    (a) An annuitant may make an allotment to the national office or 
headquarters of any of the following organizations:
    (1) A labor organization recognized under Executive Order 11491, as 
amended;
    (2) An employee organization recognized under 5 U.S.C. 8901(8);
    (3) Other lawful organizations which:
    (i) Are national in scope,
    (ii) Are nonprofit and noncommercial, existing primarily for the 
purpose of representing employee or annuitant interests in their 
dealings with employing agencies or OPM,
    (iii) Consist primarily of Federal employees and/or annuitants, and
    (iv) Existed as of December 23, 1975.
    (b) OPM, in its sole discretion, may approve the individual 
organizations which may receive allotments only after the organization 
has collected, in accordance with procedures prescribed by OPM, a 
minimum of two thousand (2,000) allotment authorizations from civil 
service annuitants.
    (c) OPM shall permit an annuitant to make an allotment to an 
organization only when:
    (1) The organization has been approved as an allottee by OPM, and
    (2) The organization has agreed in writing to solicit and process 
allotments in accordance with requirements prescribed by OPM.



Sec. 831.1521  Limitations.

    (a) The amount of any allotment may not be less than one dollar ($1) 
and, in the absence of compelling circumstances, shall be in whole 
dollars.
    (b) The total amount of any allotment(s) may not exceed the net 
monthly annuity due the allotter.
    (c) An annuitant may make only one allotment payable to the same 
allottee at the same time and may make no more than a total of two 
allotments.
    (d) Payment of an allotment shall be discontinued when the 
allotter's annuity payments are terminated or suspended by OPM.
    (e) Allotments shall be disbursed on one of the regularly designated 
paydays of the allotter in accordance with OPM's agreement with the 
allottee.
    (f) Allotters shall agree that OPM shall be held harmless for any 
authorized allotment request made by an allottee in accordance with the 
allottee's agreement with OPM.
    (g) Allotters shall agree that disputes regarding any authorized 
allotment shall be a matter between the allotter and the allottee.
    (h) The total number of allottees shall be limited to twenty (20), 
with first preference given to those organizations participating in the 
Federal Employees Health Benefits Program. Thereafter, preference shall 
be based on the date of application and the number of annuitants who 
have completed allotment authorizations.
    (i) OPM, in its discretion, shall recover from the allottee, the 
incremental costs of making allotments.
    (j) OPM, in its sole discretion, may terminate an allottee's 
participation in the allotment program described by this subpart at any 
time in accordance with its agreement with the allottee.

Subparts P-Q [Reserved]



 Subpart R_Agency Requests to OPM for Recovery of a Debt from the Civil 
                 Service Retirement and Disability Fund

    Source: 51 FR 45443, Dec. 19, 1986, unless otherwise noted.



Sec. 831.1801  Purpose.

    This subpart prescribes the procedures to be followed by a Federal 
agency when it requests the Office of Personnel Management (OPM) to 
recover a debt owed to the United States by administrative offset 
against money due and payable to the debtor from the Civil Service 
Retirement and Disability Fund (the Fund). This subpart also prescribes 
the procedures that OPM must follow to make these administrative 
offsets.



Sec. 831.1802  Scope.

    This subpart applies to agencies, employees, and Members, as defined 
by Sec. 831.1803.

[[Page 156]]



Sec. 831.1803  Definitions.

    For purposes of this subpart, terms are defined as follows--
    Act means the Federal Claims Collection Act of 1966 as amended by 
the Debt Collection Act of 1982 and implemented by 4 CFR 101.1 et seq., 
the Federal Claims Collection Standards (FCCS).
    Administrative offset means withholding money payable from the Fund 
to satisfy a debt to the United States under 31 U.S.C. 3716.
    Agency means (a) an Executive agency as defined in section 105 of 
title 5, United States Code, including the U.S. Postal Service and the 
U.S. Postal Rate Commission; (b) a military department, as defined in 
section 102 of title 5, United States Code; (c) an agency or court in 
the judicial branch, including a court as defined in section 610 of 
title 28, United States Code, the District Court for the Northern 
Mariana Islands, and the Judicial Panel on Multidistrict Litigation; (d) 
an agency of the legislative branch, including the U.S. Senate and the 
U.S. House of Representatives; and (e) other independent establishments 
that are entities of the Federal Government.
    Annuitant has the same meaning as in section 8331(9) of title 5, 
United States Code.
    Annuity means the monthly benefit payable to an annuitant or 
survivor annuitant.
    Compromise has the same meaning as in 4 CFR part 103.
    Consent means the debtor has agreed in writing to administrative 
offset after receiving notice of all rights under 31 U.S.C. 3716 and 
this subpart.
    Creditor agency means the agency to which the debt is owed.
    Debt means an amount owed to the United States on account of loans 
insured or guaranteed by the United States, and other amounts due the 
United States from fees, duties, leases, rents, royalties, services, 
sales of real or personal property, overpayments, fines, penalties, 
damages, interests, taxes, forfeitures, etc.
    Debt claim means an agency request for recovery of a debt in a form 
approved by OPM.
    Debtor means a person who owes a debt, including an employee, former 
employee, Member, former Member, or the survivor of one of these 
individuals.
    Employee has the same meaning as in section 8331(1) of title 5, 
United States Code, and includes reemployed annuitants and employees of 
the U.S. Postal Service.
    Fraud claim means any debt designated by the Attorney General (or 
designee) as involving an indication of fraud, the presentation of a 
false claim, or misrepresentation on the part of the debtor or any other 
party having an interest in the claim.
    Fund means the Civil Service Retirement and Disability Fund 
established under 5 U.S.C. 8348.
    Lump-sum credit has the same meaning as in section 8331(8) of title 
5, United States Code.
    Member has the same meaning as in section 8331(2) of title 5, United 
States Code.
    Net annuity means annuity after excluding amounts required by law to 
be deducted. For example, Federal income tax is excluded up to the 
maximum amount that the individual is entitled to for all dependents. 
Other examples of exclusions are group health insurance premiums 
(including amounts deducted for Medicare) and group life insurance 
premiums.
    Paying agency means the agency that employs the debtor and 
authorizes the disbursement of his or her current pay account.
    Refund means the payment of a lump-sum credit to an individual who 
meets all requirements for payment and files application for it.



Sec. 831.1804  Conditions for requesting an offset.

    An agency may request that money payable from the Fund be offset to 
recover any valid debt due the United States when all of the following 
conditions are met:
    (a) The debtor failed to pay all of the debt on demand, or the 
creditor agency has collected as much as possible from payments due the 
debtor from the paying agency; and
    (b) The creditor agency sends a debt claim to OPM (under Sec. 
831.1805(b) (1), (2), (3), or (4), as appropriate) after doing one of 
the following:

[[Page 157]]

    (1) Obtaining a court judgment for the amount of the debt;
    (2) Following the procedures required by 31 U.S.C. 3716 and 4 CFR 
102.4;
    (3) Following the procedures required by 5 U.S.C. 5514 and Sec. 
550.1107 of this title; or
    (4) Following the procedures agreed upon by the creditor agency and 
OPM, if it is excepted by Sec. 831.1805(b)(4) from the completion of 
procedures prescribed by Sec. 831.1805(b)(3).



Sec. 831.1805  Creditor agency processing for non-fraud claims.

    (a) Where to submit the debt claim, judgment or notice of debt--(1) 
Creditor agencies that are not the debtor's paying agency. (i) If the 
creditor agency knows that the debtor is employed by the Federal 
Government, it should send the debt claim to the debtor's paying agency 
for collection.
    (ii) If some of the debt is unpaid after the debtor separates from 
the paying agency, the creditor agency should send the debt claim to OPM 
as described in paragraph (b) of this section.
    (2) Creditor agencies that are the debtor's paying agency. 
Ordinarily, debts owed the paying agency should be offset under 31 
U.S.C. 3716 from any final payments (salary, accrued annual leave, etc.) 
due the debtor. If a balance is due after offsetting the final payments 
or the debt is discovered after the debtor has been paid, the paying 
agency may send the debt claim to OPM as described in paragraph (b) of 
this section.
    (b) Procedures for submitting a debt claim, judgment or notice of 
debt to OPM--(1) Debt claims for which the agency has a court judgment. 
If the creditor agency has a court judgment against the debtor 
specifying the amount of the debt to be recovered, the agency should 
send the debt claim and two certified copies of the judgment to OPM.
    (2) Debt claims previously processed under 5 U.S.C. 5514. If the 
creditor agency previously processed the debt claim under section 5514, 
it should--
    (i) Notify the debtor that the claim is being sent to OPM to 
complete collection from the Fund; and
    (ii) Send the debt claim (on SF 2805) to OPM with two copies of the 
paying agency's certification of the amount collected and one copy of 
the notice to the debtor that the claim was sent to OPM.
    (3) Debt claims not processed under 5 U.S.C. 5514, reduced to court 
judgment, or excepted by paragraph (b)(4) of this section. (i) If the 
debt claim was not processed under Sec. 5514, reduced to court judgment 
or excepted by paragraph (b)(4) of this section, the creditor agency 
must--
    (A) Comply with the procedures required by 4 CFR 102.4--issuing 
written notice to the debtor of the nature and amount of the debt, the 
agency's intention to collect by offset, the opportunity to inspect and 
copy agency records pertaining to the debt, the opportunity to obtain 
review within the agency of the determination of indebtedness, and the 
opportunity to enter into a written agreement with the agency to repay 
the debt; and
    (B) Complete the appropriate debt claim.
    (ii) If the debtor does not respond to the creditor agency's notice 
within the allotted time and there is no reason to believe that he or 
she did not receive the notice, the creditor agency may submit the debt 
claim to OPM after certifying that notice was issued and the debtor 
failed to reply.
    (iii) If the debtor responds to the notice by requesting a review 
(or hearing if one is available), the review (or hearing) must be 
completed before the creditor agency submits the debt claim.
    (iv) If the debtor receives the notice and responds by consenting to 
the collection, the creditor agency must send a copy of the debtor's 
consent along with the debt claim.
    (4) Debt claims excepted from procedures described in paragraph 
(b)(3) of this section. Creditor agencies follow specific procedures 
approved by OPM, rather than those described in paragraph (b)(3) of this 
section, for the collection of--
    (i) Debts due because of the individual's failure to pay health 
benefits premiums while he or she was in nonpay status or while his or 
her salary was not sufficient to cover the cost of premiums;
    (ii) Unpaid Federal taxes to be collected by Internal Revenue 
Service levy;

[[Page 158]]

    (iii) Premiums due because of the annuitant's election of Part B, 
Medicare coverage (retroactive collection limited to 6 months of 
premiums); or
    (iv) Overpaid military retired pay an annuitant elects in writing to 
have withheld from his or her annuity.
    (5) General certification requirements for debt claims. Creditor 
agencies submitting debt claims must certify--
    (i) That the debt is owed to the United States;
    (ii) The amount and reason for the debt and whether additional 
interest accrues;
    (iii) The date the Government's right to collect the debt first 
accrued;
    (iv) The agency has complied with the applicable statutes, 
regulations, and OPM procedures;
    (v) That if a competent administrative or judicial authority issues 
an order directing OPM to pay a debtor an amount previously paid to the 
agency (regardless of the reasons behind the order), the agency will 
reimburse OPM or pay the debtor directly within 15 days of the date of 
the order (NOTE: OPM may, at its discretion, decline to collect other 
debt claims sent by an agency that does not abide by this 
certification.);
    (vi) If the collection will be in installments, the amount or 
percentage of net annuity in each installment; and,
    (vii) If the debtor does not (in writing) consent to the offset, or 
does not (in writing) acknowledge receipt of the required notices and 
procedures, or the creditor agency does not document a judgment offset 
or a previous salary offset, the action(s) taken to comply with 4 CFR 
102.3, including any required hearing or review, and the date(s) the 
action(s) was taken.
    (6) Notice of debt. When a creditor agency cannot send a complete 
debt claim, it should notify OPM of the existence of the debt so the 
lump-sum will not be paid before the debt claim arrives.
    (i) The notice to OPM must include a statement that the debt is owed 
to the United States, the date the debt first accrued, and the basis for 
and amount of the debt, if known. If the amount of the debt is not 
known, the agency must establish the amount and notify OPM in writing as 
soon as possible after submitting the notice.
    (ii) The creditor agency may either notify OPM by making a notation 
in column 8 [Remarks] under ``Fiscal Record'' on the Standard Form 2806 
(Individual Retirement Record), if the SF 2806 is in its possession, or 
if not, by submitting a separate document identifying the debtor by 
name, giving his or her date of birth, social security number, and date 
of separation, if known.
    (c) Time limits for sending records and debt claims to OPM--(1) Time 
limits for submitting debt claims. Unless there is an application for 
refund pending, there is no specific time for submitting a debt claim or 
notice of debt to OPM. Generally, however, agencies must file a debt 
claim before the statute of limitations expires (4 CFR 102.4(c)) or 
before a refund is paid. Time limits are imposed (see Sec. 831.1806(a)) 
when the debtor is eligible for a refund and OPM receives his or her 
application requesting payment. In the latter situation, creditor 
agencies must file a complete debt claim within 120 days (or 180 days if 
the agency requests an extension of time before the refund is paid) of 
the date OPM requests a complete debt claim.
    (2) Time limit for submitting retirement records to OPM. A paying 
agency must send an individual's SF 2806 to OPM no later than 60 days 
after the separation, termination, or entrance on duty in a position in 
which the employee is not covered by the Civil Service Retirement 
System.



Sec. 831.1806  OPM processing for non-fraud claims.

    (a) Refunds--incomplete debt claims. (1) If a creditor agency sends 
OPM a notice of debt or an incomplete debt claim against a refund OPM is 
processing for payment, OPM will withhold the amount of the debt but 
will not make any payment to the creditor agency. OPM will notify the 
creditor agency that the procedures in this subpart and 4 CFR 102.4 must 
be completed; and a debt claim must be completed and returned to OPM 
within 120 days of the date of OPM's notice to the creditor agency. Upon 
request, OPM

[[Page 159]]

will grant the creditor agency one extension of up to 60 days if the 
request for extension is received before the lump-sum payment has been 
made. The extension will commence on the day after the 120-day period 
expires so that the total time OPM holds payment of the refund will not 
exceed 180 days.
    (2) During the period allotted the creditor agency for sending OPM a 
complete debt claim, OPM will handle the debtor's application for refund 
under section 8342(a) of title 5, United States Code, in one of two 
ways:
    (i) If the amount of the debt is known, OPM will notify the debtor 
of the debt claim against his or her lump-sum credit, withhold the 
amount of the debt, and pay the balance to the debtor, if any.
    (ii) If the amount of the debt is not known, OPM will not pay any 
amount to the debtor until the creditor agency certifies the amount of 
the debt, submits a complete debt claim, or the time limit for 
submission of the debt claim expires, whichever comes first.
    (b) Refunds--complete debt claims--(1) If OPM receives an 
application from the debtor prior to or at the same time as the agency's 
debt claim. (i) If a refund has been paid, we will notify the creditor 
agency there are no funds available for offset. Except in the case of 
debts due because of the employee's failure to pay health benefits 
premiums while he or she is in nonpay status or while his or her salary 
was not sufficient to cover the cost of premiums, creditor agencies 
should refer to the instructions in the FCCS for other measures to 
recover the outstanding debt; however, OPM will retain the SF 2805 on 
file in the event the debtor is once again employed in a position 
subject to retirement deductions.
    (ii) If a refund is payable, and the creditor agency submits a 
complete debt claim in accordance with Sec. 831.1805(b) (1), (2), (3), 
or (4), the debt will be collected from the refund and any balance paid 
to the debtor. OPM will send the debtor a copy of the debt claim, 
judgment, consent, or other document, and notify him or her that the 
creditor agency was paid.
    (2) If OPM has not received an application from the debtor when the 
agency's debt claim is received. If a debtor has not filed application 
for a refund, OPM will retain the debt claim for future recovery. OPM 
will make the collection whenever an application is received, provided 
the creditor agency initiated the administrative offset before the 
statute of limitations expired. (See 4 CFR 102.3(b)(3) and 102.4(c).) 
OPM will notify the creditor agency that it does not have an application 
from the debtor so that the agency may take other action to recover the 
debt. (Note: If the recovery action is successful, the creditor agency 
must notify OPM so it can void the debt claim).
    (3) Future recovery. (i) If OPM receives an application for refund 
within 1 year of the date the agency's debt claim was received and the 
creditor agency does not indicate that interest is accruing on the debt, 
the debt will be processed as stated in paragraph (b)(1)(ii) of this 
section.
    (ii) If OPM receives an application for refund within 1 year of the 
date the agency's debt claim was received and the creditor agency 
indicates that interest accrues on the debt, when necessary, OPM will 
contact the creditor agency to confirm that the debt is outstanding and 
request submission in writing, of the total additional accrued interest. 
OPM will not make interest computations for creditor agencies.
    (iii) When OPM receives an application for refund more than 1 year 
after the creditor agency's debt claim was received, whether interest 
accrues or not, OPM will contact the creditor agency to see if the debt 
is still outstanding and, when necessary, request an update of the 
interest charges. If the debt is still due, the creditor agency must 
give the debtor an opportunity to establish that his or her changed 
financial circumstances, if any, would make the offset unjust. (See 4 
CFR 102.4(c).) If the creditor agency determines that offset as 
requested in the debt claim would be unjust because of the debtor's 
changed financial circumstances, the agency should permit the debtor to 
offer a satisfactory repayment plan in lieu of offset. If the agency 
decides to pursue the offset, it must submit to OPM the requested 
information and any new instructions

[[Page 160]]

within 60 days of the date of OPM's request or the claim may be voided 
and the balance paid to the individual.
    (c) Annuities--incomplete debt claims. If a creditor agency sends 
OPM notice of a debt or an incomplete debt claim against a debtor who is 
receiving an annuity, OPM will not offset the annuity. OPM will notify 
the creditor agency that the procedures in this subpart and 4 CFR 102.4 
must be completed; and a debt claim must be completed and sent to OPM. 
No time limit will be given for the submission of a debt claim against 
an annuity; however, a complete debt claim must be received within 10 
years of the date the Government's right to collect first accrued (4 CFR 
102.3(b)(3)).
    (d) Annuities--complete debt claims--(1) General--(i) Notice. When 
OPM receives a complete debt claim and an application for annuity, OPM 
will offset the annuity, pay the creditor agency, and mail the debtor a 
copy of the debt claim along with notice of the payment to the creditor 
agency.
    (ii) Beginning deductions. If OPM has already established the 
debtor's annuity payment, deductions will begin with the next available 
annuity payment. If OPM is in the process of establishing the annuity 
payments, deductions will not be taken from advance annuity payments, 
but will begin with the annuity payable on the first day of the month 
following the last advance payment.
    (iii) Updating accrued interest. Once OPM has completed a 
collection, if there are additional accrued interest charges, the 
creditor agency must contact OPM regarding any additional amount due 
within 90 days of the date of the final payment.
    (2) Claims held for future recovery. (i) If OPM receives an 
application for annuity within 1 year of the date the agency's debt 
claim was received, the debt will be processed as stated in paragraph 
(d)(1) of this section.
    (ii) If OPM receives an application for annuity more than 1 year 
after the agency's debt claim was submitted, OPM will contact the 
creditor agency to see if the debt is still outstanding. If the debt is 
still due, the creditor agency should permit the debtor to offer a 
satisfactory repayment plan in lieu of offset if the debtor establishes 
that his or her changed financial circumstances would make the offset 
unjust. (See 4 CFR 102.4(c).) If the agency decides to pursue the 
offset, it must submit the requested information and any new 
instructions about the collection to OPM.
    (3) Limitations on OPM review. In no case will OPM review--
    (1) The merits of a creditor agency's decision with regard to 
reconsideration, compromise, or waiver; or
    (2) The creditor agency's decision that a hearing was not required 
in any particular proceeding.



Sec. 831.1807  Installment withholdings.

    (a) When possible, OPM will collect a creditor agency's full claim 
in one payment from the debtor's refund or annuity.
    (b) If collection must be made from an annuity and the debt is 
large, the creditor agency must generally accept payment in 
installments. The responsibility for establishing and notifying the 
debtor of the amount of the installments belongs to the creditor agency 
(see Sec. 831.1805(b)(5)). However, OPM will not make an installment 
deduction for more than 50 percent of net annuity, unless a higher 
percentage is needed to satisfy a judgment against a debtor within 3 
years or the annuitant has consented to the higher amount in writing. 
All correspondence concerning installment deductions received by OPM 
will be referred to the creditor agency for consideration.



Sec. 831.1808  Special processing for fraud claims.

    When an agency sends a claim indicating fraud, presentation of a 
false claim, misrepresentation by the debtor or any other party 
interested in the claim, or any claim based in whole or part on conduct 
violating the antitrust laws, to the Department of Justice (Justice) for 
possible treatment as a fraud claim (4 CFR 101.3), the following special 
procedures apply.
    (a) Agency processing. If the debtor is separated or separates while 
Justice is reviewing the claim, the paying agency must send the SF 2806 
to OPM, as required by Sec. 831.1805(c)(2). The agency where the claim 
arose must send OPM

[[Page 161]]

notice that a claim is pending with Justice. (See Sec. 831.1805(b)(6) 
for instructions on giving OPM a notice of debt.)
    (b) Department of Justice processing. (1) The Attorney General or a 
designee will decide whether a debt claim sent in by an agency will be 
reserved for collection by Justice as a fraud claim. Upon receiving a 
possible fraud claim to be collected by offset from the Fund, the 
Attorney General or a designee must notify OPM. The notice to OPM must 
contain the following:
    (i) The name, date of birth, and social security number of the 
debtor;
    (ii) The amount of the possible fraud claim, if known;
    (iii) The basis of the possible fraud claim; and
    (iv) A statement that the claim is being considered as a possible 
fraud claim, the collection of which is reserved to Justice.
    (2) When there is a pending refund application, the Attorney General 
or designee must file a complaint seeking a judgment on the claim and 
send a copy of the complaint to OPM; or as provided in 4 CFR 101.3, 
refer the claim to the agency where the claim arose and submit a copy of 
the referral to OPM within 180 days of the date of either notice from 
the agency that a claim is pending with Justice (paragraph (a) of this 
section) or notice from Justice that it has received a possible fraud 
claim (paragraph (b)(1) of this section) whichever is earlier. When the 
claim is referred to the agency where it arose, the agency must begin 
administrative collection action under 4 CFR 102.4 and send a complete 
debt claim to OPM as required in Sec. 831.1805.
    (c) OPM processing against refunds. (1) Upon receipt of a notice 
under paragraph (a) or (b)(1) of this section, whichever is earlier, OPM 
will withhold the amount of the debt claim, if known; notify the debtor 
that the amount of the debt will be withheld from the refund for at 
least 180 days from the date of the notice that initiated OPM 
processing; and pay the balance to the debtor. If the amount of the debt 
claim is not known, OPM will notify the debtor that a debt claim may be 
offset against his or her refund and that OPM will not pay any amount 
until either the amount of the debt claim is established, or the time 
limit for filing a complaint in court or submitting the debt claim 
expires, whichever comes first.
    (2) If the Attorney General files a complaint and notifies OPM 
within the applicable 180-day period, OPM will continue to withhold 
payment of the lump-sum credit until there is a final judgment.
    (3) If the Attorney General refers the claim to the agency where the 
claim arose (creditor agency) and notifies OPM within the applicable 
180-day period, OPM will notify the creditor agency that the procedures 
in this subpart and 4 CFR 102.4 must be completed; and a debt claim must 
be sent to OPM within 120 days of the date of OPM's notice to the 
creditor agency. At the request of the creditor agency, one extension of 
time of not more than 60 days will be granted, as provided by Sec. 
831.1806(a).
    (4) If OPM is not notified that a complaint has been filed or that 
the claim has been referred to the creditor agency within the applicable 
180-day period, OPM will pay the balance of the refund to the debtor.
    (d) OPM processing against annuities. If the debtor has filed an 
annuity claim, OPM will not take action against the annuity. OPM will 
continue to pay the annuity unless and until there is a final judgment 
for the United States or submission of a complete debt claim.
    (e) OPM collection and payment of the debt. (1) If the United States 
obtains a judgment against the debtor for the amount of the debt or the 
creditor agency submits a complete debt claim, OPM will collect and pay 
the debt to the creditor agency as provided in Sec. Sec. 831.1806 and 
831.1807.
    (2) If the suit or the administrative proceeding results in a 
judgment for the debtor without establishing a debt to the United 
States, OPM will pay the balance of the refund to the debtor upon 
receipt of a certified copy of the judgment or administrative decision.



                 Subpart S_State Income Tax Withholding

    Source: 47 FR 50679, Nov. 9, 1982, unless otherwise noted.

[[Page 162]]



Sec. 831.1901  Definitions.

    For the purpose of this subpart:
    Agreement means the Federal-State agreement contained in this 
subpart.
    Annuitant means an employee or Member retired, or a spouse, widow, 
or widower receiving survivor benefits, under the provisions of 
subchapter III, chapter 83 of title 5, United States Code.
    Effective date means, with respect to a request or revocation, that 
the request or revocation will be reflected in payments authorized after 
that date, and before the next request or revocation is implemented.
    Fund means the Civil Service Retirement and Disability Fund as 
established and described in section 8348 of title 5, United States 
Code.
    Income tax and State income tax mean any form of tax for which, 
under a State statute, (a) collection is provided, either in imposing on 
employers generally the duty of withholding sums from the compensation 
of employees and making returns of such sums to the State or by granting 
to employers generally the authority to withhold sums from the 
compensation of employees, if any employee voluntarily elects to make 
such sums withheld; and (b) the duty to withhold generally is imposed, 
or the authority to withhold generally is granted, with respect to the 
compensation of employees who are residents of the State.
    Net recurring payment means the amount of annuity or survivor 
benefits (not recurring interim payments made while a claim is pending 
adjudication) payable to the annuitant on a monthly basis less the 
amounts currently being deducted for health benefits, Medicare, life 
insurance, Federal income tax, overpayment of annuity, indebtedness to 
the Government, voluntary allotments, waivers, or being paid to a third 
party or a court officer in compliance with a court order or decree.
    Net withholding means the amount of State income tax deductions 
withheld during the previous calendar quarter as a result of requests 
which designated the State as payee, less similar deductions taken from 
prior payments which were cancelled in the previous calendar quarter. 
Proper State official means a State officer authorized to bind the State 
contractually in matters relating to tax administration.
    Received means, in respect to the magnetic tape containing requests 
and revocations, received at the special mailing address established by 
OPM for income tax requests, or, for those items not so received, 
received at the OPM data processing center charged with processing 
requests.
    Request means, in regard to a request for tax withholding, a change 
in the amount withheld, or revocation of a prior request, a written 
submission from an annuitant in a format acceptable to the State which 
provides the annuitant's name, Civil Service Retirement Claim number, 
Social Security identification number, address, the amount to be 
withheld and the State to which payment is to be made, which is signed 
by the annuitant or, in the case of incompetence, his or her 
representative payee.
    State means a State, the District of Columbia, or any territory or 
possession of the United States.



Sec. 831.1902  Federal-State agreements.

    OPM will enter into an agreement with any State within 120 days of 
an application for agreement from the proper State official. The terms 
of the standard agreement will be Sec. Sec. 831.1903 through 831.1906 
of this subpart. OPM and the State may agree to additional terms and 
provisions, insofar as those additional terms and provisions do not 
contradict or otherwise limit the terms of the standard agreement.



Sec. 831.1903  OPM responsibilities.

    OPM will, in performance of this agreement:
    (a) Process the magnetic tape containing State tax transactions 
against the annuity roll once a month at the time monthly recurring 
payments are prepared for the United States Treasury Department. Errors 
that are identified will not be processed into the file, and will be 
identified and returned to the State for resolution via the monthly 
error report. Collections of State income tax will continue in effect 
until the State requesting the initial action supplies either a valid 
revocation or change. The magnetic tape must be received 35 days prior 
to the

[[Page 163]]

date of the check in which the transactions are to be effective. For 
example, withholding transactions for the July 1 check must be received 
5 days prior to June 1. If the magnetic tape submitted by the State 
cannot be read, OPM will notify the State of this fact, and if a 
satisfactory replacement can be supplied in time for monthly processing, 
it will be processed.
    (b) Deduct from the regular, recurring annuity payments of an 
annuitant the amount he or she has so requested to be withheld, provided 
that:
    (1) The amount of the request is an even dollar amount, not less 
than Five Dollars nor more than the net recurring amount. The State may 
set any even dollar amount above Five Dollars as a minimum withholding 
amount.
    (2) The annuitant has not designated more than one other State for 
withholding purposes within the calendar year. The State can set any 
limit on the number of changes an annuitant may make in the amount to be 
withheld.
    (c) Retain the amounts withheld in the Fund until payment is due.
    (d) Pay the net withholding to the State on the last day of the 
first month following each calendar quarter.
    (e) Make the following reports:
    (1) A monthly report which will include all the State tax 
withholdings, cancellations and adjustments for the month, and also each 
request OPM was not able to process, with an explanation, in coded 
format, of the reason for rejection.
    (2) A quarterly report which will include State, State address, 
quarterly withholdings, quarterly cancellations and adjustments, 
quarterly net withholdings and year-to-date amounts. Where cancelled or 
adjusted payments were made in a previous year, OPM shall append a 
listing of the cancelled or adjusted payments which shows the date and 
amount of each cancelled or adjusted tax withholding, and the name and 
Social Security identification number of the annuitant from whom it was 
withheld. If either party terminates the agreement and the amount of 
cancelled or adjusted deductions exceeds the amount withheld for the 
final quarter, then the quarterly report shall show the amount to be 
refunded to OPM and the address to which payment should be made.
    (3) An annual summary report which contains the name, Social 
Security identification number, and total amount withheld from non-
cancelled payments during the previous calendar year, for each annuitant 
who requested tax withholding payable to the State. In the event the 
annuitant had State income tax withholding in effect for more than one 
State in that calendar year, the report will show only the amount 
withheld for the State receiving the report.
    (4) An annual report to each annuitant for whom State income taxes 
were withheld giving the amount of withholding paid to the State during 
the calendar year.



Sec. 831.1904  State responsibilities.

    The State will, in performance of this agreement:
    (a) Accept requests and revocations from annuitants who have 
designated that State income tax deductions will go to the State.
    (b) Convert these requests on a monthly basis to a machine-readable 
magnetic tape using specifications received from OPM, and forward that 
tape to OPM for processing.
    (c) Inform annuitants whose tax requests are rejected by OPM that 
the request was so rejected and of the reason why it was so rejected.
    (d) Recognize that, to the extent not prohibited by State laws, 
records maintained by the State relating to this program are considered 
jointly maintained by OPM and are subject to the Privacy Act of 1974 (5 
U.S.C. 552a). Accordingly, the States will maintain such records in 
accordance with that statute and OPM's implementing regulations at 5 CFR 
part 297.
    (e) Respond to requests of annuitants for information and advice in 
regard to State income tax withholding.
    (f) Credit the amounts withheld from civil service annuities to the 
State tax liability of the respective annuitants, and, subject to 
applicable provisions of State law to the contrary, refund any balance 
over and above that liability to the annuitant, unless he or she should 
request otherwise.

[[Page 164]]

    (g) Surrender all tax withholding requests to OPM when this 
agreement is terminated or when the documents are not otherwise needed 
for this State tax withholding program.
    (h) Allow OPM, the Comptroller General or any of their duly 
authorized representatives access to, and the right to examine, all 
records, books, papers or documents related to the processing of 
requests for State income tax withholding from civil service annuities.



Sec. 831.1905  Additional provisions.

    These additional provisions are also binding on the State and OPM:
    (a) A request or revocation is effective when processed by OPM. OPM 
will process each request by the first day of the second month following 
the month in which it is received, but incurs no liability or 
indebtedness by its failure to do so.
    (b) Any amount deducted from an annuity payment and paid to the 
State as a result of a request is deemed properly paid, unless the 
annuity payment itself is cancelled.
    (c) OPM will provide the State with the information necessary to 
properly process a request for State income tax withholding.
    (d) If the State is paid withholding which is contrary to the terms 
of the annuitant's request, the State is liable to the annuitant for the 
amount improperly withheld, and subject to account verification from 
OPM, agrees to pay that amount to the annuitant on demand.
    (e) In the case of a disputed amount in any of the reports described 
and authorized by this agreement, the Associate Director for 
Compensation of OPM will issue an accounting. If the State finds this 
accounting unacceptable, it may then and only then pursue such remedies 
as are otherwise available.
    (f) If a State receives an overpayment of monies properly belonging 
to the Fund, OPM will offset the overpayment from a future payment due 
the State. If there are no further payments due the State, OPM will 
inform the State in writing of the amount due. Within 60 days of the 
date of receipt of that communication the State will make payment of the 
amount due.



Sec. 831.1906  Agreement modification and termination.

    This agreement may be modified or terminated in the following 
manner:
    (a) Either party may suggest a modification of non-regulatory 
provisions of the agreement in writing to the other party. The other 
party must accept or reject the modification within 60 calendar days of 
the date of the suggestion.
    (b) The agreement may be terminated by either party on 60 calendar 
days written notice.
    (c) OPM may modify this agreement unilaterally through the rule 
making process described in sections 553, 1103, 1105 of title 5, United 
States Code.



                     Subpart T_Payment of Lump Sums

    Source: 50 FR 20081, May 13, 1985, unless otherwise noted.



Sec. 831.2001  Definitions.

    Court order or decree means the order or decree of any court of any 
State, the District of Columbia, the Commonwealth of Puerto Rico, Guam, 
the Northern Mariana Islands, the Virgin Islands or any Indian court, as 
defined section 8331(24) of title 5, United States Code.
    Current spouse means a person who is married to the employee or 
Member at the time the application for refund is filed.
    Duly appointed representative of the deceased employee's, separated 
employee's, retiree's, survivor's or Member's estate means an individual 
named in an order of a court having jurisdiction over the estate of the 
deceased which grants the individual the authority to receive, or the 
right to possess, the property of the deceased; and also means, where 
the law of the domicile of the deceased has provided for the 
administration of estates through alternative procedures which dispense 
with the need for a court order, an individual who demonstrates that he 
or she is entitled to receive, or possess, the property of the deceased 
under the terms of those alternative procedures.
    Former spouse means a living person who was married for at least 9 
months to an employee or Member who had

[[Page 165]]

performed at least 18 months of creditable service in a position covered 
by the retirement system.
    Retirement system means the civil service retirement system as 
described in subchapter III of chapter 83 of title 5, United States 
Code.

[50 FR 20081, May 13, 1985, as amended at 57 FR 29784, July 7, 1992]



Sec. 831.2002  Eligibility for lump-sum payment upon filing an 
Application for Refund of Retirement Deductions (SF 2802).

    Except as provided in Sec. Sec. 831.2007 through 2009 or in section 
3716 of title 31, United States Code, on administrative offset for 
government claims, a former employee or Member who has been separated 
from a covered position for at least 31 days at the time of filing an 
application for refund and who is ineligible for an annuity commencing 
within 31 days after the date of filing an application for refund is 
eligible for a refund for the total lump-sum credit to his or her credit 
in the Retirement Fund.



Sec. 831.2003  Eligibility for lump-sum payment upon death or retirement.

    (a) If there is no survivor who is entitled to monthly survivor 
annuity benefits on the death of a former employee, Member, annuitant, 
or survivor annuitant, the total lump-sum credit to the former 
employee's or Member's credit in the Retirement Fund is payable, except 
as provided in section 3716 of title 31, United States Code, on 
administrative offset for government claims, to the person(s) entitled 
in the normal order of precedence described in section 8342(c) of title 
5, United States Code. If a deceased employee, separated employee, 
retiree or Member provided in a valid designation of beneficiary that 
the lump sum proceeds shall be payable to the deceased's estate, or to 
the Executor, Administrator, or other representative of the deceased's 
estate, or if the proceeds would otherwise be properly payable to the 
duly appointed representative of the deceased's estate under the order 
of precedence specified in 5 U.S.C. 8342(c), payment of the proceeds to 
the duly appointed representative of the deceased's estate will bar 
recovery by any other person.
    (b) If an annuity is payable, the former employee, Member or the 
person entitled in the order of precedence described in section 8342(c) 
of title 5, United States Code, may be paid, except as provided in 
section 3716 of title 31, United States Code, administrative offset for 
government claims, lump-sum payment of--
    (1) Retirement deductions withheld from the employee's or Member's 
pay after he or she became eligible for the maximum annuity, if the 
employee or Member does not elect to treat those deductions as voluntary 
contributions toward the purchase of an additional annuity; and
    (2) Retirement deductions withheld from the employee's or Member's 
pay during his or her final period of service if the employee or Member 
was not subject to the retirement system for at least one of the last 2 
years before final separation from service and if the service covered by 
the deductions is not used for title to annuity; and
    (3) Except as provided in paragraph (d) of this section, partial 
redeposits of refunds previously paid; and
    (4) Partial deposits for civilian service performed on and after 
October 1, 1982; and
    (5) Partial deposits for post-1956 military service; and
    (6) Annuity accrued and unpaid.
    (c) A former employee, Member, or survivor who is eligible for an 
annuity may not be paid a lump-sum payment of--
    (1) Partial or completed deposits for nondeduction civilian service 
performed before October 1, 1982, unless the service covered by the 
deposit is not creditable under the retirement system; or
    (2) Completed deposits for nondeduction civilian service performed 
on and after October 1, 1982, unless the service covered by the deposit 
is not creditable under the retirement system; or
    (3) Completed deposits for post-1956 military services, unless the 
service covered by the deposit is not creditable under the retirement 
system.


Payments of the partial or completed deposits mentioned in this 
paragraph are subject to 31 U.S.C. 3716 (administrative offset for 
government claims).

[[Page 166]]

    (d) A former employee or Member who is eligible for a nondisability 
annuity may not be paid a lump-sum payment of a partial redeposit for 
refunded deductions relating to a period of service that ended before 
October 1, 1990.

[50 FR 20081, May 13, 1985, as amended at 56 FR 6550, Feb. 19, 1991; 57 
FR 29784, July 7, 1992]



Sec. 831.2004  Amount of lump-sums.

    If applicable, the amount of a refund will include interest computed 
as described in Sec. 831.105(b).



Sec. 831.2005  Designation of beneficiary for lump-sum payment.

    (a) The Designation of Beneficiary must be in writing, signed, and 
witnessed,and received in OPM before the death of the designator.
    (b) No change or cancellation of beneficiary in a last will or 
testament, or in any other document not witnessed and filed as required 
by this section, has any force or effect.
    (c) A witness to a Designation of Beneficiary is ineligible to 
receive payment as a beneficiary.
    (d) Any person, firm, corporation, or legal entity may be named as 
beneficiary.
    (e) A change of beneficiary may be made at any time and without the 
knowledge or consent of the previous beneficiary, and this right cannot 
be waived or restricted.



Sec. 831.2006  Designation of agent by next of kin.

    When a deceased employee, Member, or annuitant has not named a 
beneficiary and one of the next of kin entitled makes a claim for lump-
sum benefit, other next of kin entitled to share in the lump-sum benefit 
may designate the one who made the claim to act as their agent to 
receive their distributive shares.



Sec. 831.2007  Notification of current and/or former spouse before 
payment of lump sum.

    (a) Payment of the lump-sum credit based on a refund application 
filed on or after May 7, 1985, may be made only if any current spouse 
and any former spouse (from whom the employee or Member was divorced 
after May 6, 1985) are notified of the former employee's or Member's 
application.
    (b)(1) Notification of the former spouse will not be required if the 
marriage to the former spouse was of less than 9 months duration or if 
the employee has not completed a total of 18 months of creditable 
service covered under the retirement system.
    (2) Applicants for payment of the lump-sum credit must certify on a 
form prescribed by OPM whether the applicant has a current or former 
spouse subject to the notification requirement.
    (c) Proof of notification will consist of a signed and witnessed 
Statement by the current and/or former spouse on a form provided by OPM 
acknowledging that he or she has been informed of the former employee's 
or Member's application for refund and the consequences of the refund on 
the current or former spouse's possible annuity entitlement. This 
Statement must be presented to the employing agency or OPM when filing 
the Application for Refund of Retirement Deductions.
    (d) If the current and/or former spouse refuses to acknowledge the 
notification or the employee or Member is otherwise unable to obtain the 
acknowledgement, the employee or Member must submit--
    (1) Affidavits signed by two individuals who witnessed the 
employee's or Member's attempt to personally notify the current or 
former spouse. The witnesses must attest that they were in the presence 
of the employee or Member and the current or former spouse when the 
employee or Member gave or attempted to give the notification form to 
the current or former spouse and that the employee's or Member's purpose 
should have been clear to the current or former spouse; or
    (2) The current mailing address of the current or former spouse. OPM 
will attempt to notify (by certified mail--return receipt requested) the 
current or former spouse at the address provided by the employee or 
Member. Except as provided in paragraph (e) of this section, the lump-
sum credit will not be paid until at least 20 days after OPM receives 
the signed return receipt.
    (e) If an OPM notice sent under paragraph (d)(2) of this section is 
returned

[[Page 167]]

and OPM has no reason to believe that the current or former spouse does 
not live at the address to which the notice was sent, OPM will re-mail 
the notice by first class mail and wait at least 20 days after the 
notice has been re-mailed before paying the refund.

[50 FR 20081, May 13, 1985, as amended at 51 FR 31936, Sept. 8, 1986; 55 
FR 9106, Mar. 12, 1990; 55 FR 29340, July 19, 1990]



Sec. 831.2008  Waiver of spouse and/or former spouse notification 
requirement.

    The current and/or former spouse notification requirement will be 
waived upon a showing that the current and/or former spouse's 
whereabouts cannot be determined. A request for waiver on this basis 
must be accompanied by--
    (a) A judicial or administrative determination that the current and/
or former spouse's whereabouts cannot be determined; or
    (b) Affidavits by the former employee or Member and two other 
persons at least one of whom is not related to the former employee or 
Member attesting to the inability to locate the current and/or former 
spouse and stating the efforts made to locate the current and/or former 
spouse.



Sec. 831.2009  Lump sum payments which include contributions made to 
a retirement system for employees of a nonappropriated fund instrumentality.

    A lump sum payment will include employee contributions and interest 
as provided under subpart G of part 847 of this chapter.

[61 FR 41720, Aug. 9, 1996]



Sec. 831.2010  Transfers between retirement systems.

    Transfers of employees' contributions between the Civil Service 
Retirement and Disability Fund and other retirement systems for Federal 
or District of Columbia employees when made in accordance with Federal 
statute for the purpose of transferring retirement service credit to the 
other retirement system are not subject to the notice requirements or 
court order provisions of this subpart.

[51 FR 31937, Sept. 8, 1986]



Sec. 831.2011  Effect of part 772 of this chapter on CSRS lump-sum 
payments.

    (a) An interim appointment under Sec. 772.102 of this chapter does 
not affect the lump-sum payment of retirement contributions made to a 
separated employee unless it becomes effective within 31 days of the 
employee's separation from the service. An interim appointment effective 
within 31 days of the employee's separation makes the employee 
ineligible for the lump-sum payment. Payments made in error will be 
collected under subpart M of part 831 of this chapter.
    (b) When an employee's separation is cancelled after the MSPB 
initial decision becomes final, when the Board issues a final order 
cancelling the employee's separation, or when the agency and the 
employee agree to cancel the separation, the agency must notify OPM and 
request the amount of the erroneous lump-sum payment.
    (c) At the time the employee's separation is cancelled, the agency 
must deduct the amount of the lump-sum payment from any back pay to 
which the employee is entitled as required by 5 CFR 550.805(e).
    (d) Amounts recovered from back pay will not be subject to waiver 
consideration under 5 U.S.C. 8346(b). If there is no back pay or the 
back pay is insufficient to recover the erroneous payment, the employee 
may request that OPM waive the recovery of the uncollected portion of 
the overpayment. If waiver is not granted, the employee must repay the 
erroneous payment.

[57 FR 3713, Jan. 31, 1992]



                 Subpart U_Deposits for Military Service

    Source: 48 FR 38788, Aug. 26, 1983, unless otherwise noted.



Sec. 831.2101  Purpose.

    This subpart prescribes the procedures to be followed when an 
employee or Member (or survivor of an employee or Member) wishes to make 
a deposit for service, and when a former employee or Member who retires 
or separates from civilian service with title to

[[Page 168]]

annuity after September 8, 1982, but before October 1, 1983 (or survivor 
of such employee or Member), wishes to make a deposit for service.



Sec. 831.2102  Scope.

    This subpart applies to all agencies with employees occupying 
positions subject to subchapter III of chapter 83 of title 5, United 
States Code, the United States Senate, and the United States House of 
Representatives.



Sec. 831.2103  Definitions.

    Employee shall have the same meaning as in 5 U.S.C. 8331(1).
    Estimated earnings is an estimate of basic pay for a period of 
military service, as determined by an authorized official of the 
Department of Defense the Department of Transportation, the Department 
of Commerce, or the Department of Health and Human Services.
    Fund is the Civil Service Retirement and Disability Fund.
    Member shall have the same meaning as in 5 U.S.C. 8331(2).
    OPM is the Office of Personnel Management.
    Period of service is the total years, months, and days from date of 
initial entry on active duty (or January 1, 1957, if that is later) to 
date of final discharge for enlisted military personnel, and to date of 
final release from active duty for officers and reservists. ``Period of 
service'' includes consecutive periods of service where there is no 
break in service, but does not include any lost time.
    Service is active honorable military service performed after 
December 31, 1956.
    Sufficient evidence of basic pay for service exists when the 
employee, Member, or survivor eligible to make a deposit for service 
provides copies of all official military pay documents, as identified in 
instructions published by OPM, which show the exact basic pay he or she 
received for a full period of service. If an employee, Member, or 
survivor does not have sufficient evidence of basic pay, he or she shall 
obtain a statement of estimated earnings from the appropriate branch of 
the military service.
    Survivor shall have the same meaning as in 5 U.S.C. 8331(10).

[48 FR 38788, Aug. 26, 1983, as amended at 66 FR 66711, Dec. 27, 2001]



Sec. 831.2104  Eligibility to make deposit.

    The following individuals may make deposit for any full period of 
service performed before the separation on which title to civil service 
annuity is based:
    (a) An employee or Member currently occupying a position subject to 
subchapter III of chapter 83 of title 5, United States Code, and the 
survivor(s) of such an employee or Member who dies in service (including 
a person who was eligible to make a deposit under this paragraph but who 
failed to make the deposit before separation from service due to 
administrative error); and
    (b) A former employee or Member who was separated with title to an 
annuity or who retired from a position subject to subchapter III of 
chapter 83 of title 5, United States Code, after September 8, 1982, and 
before October 1, 1983, and the survivor(s) of such an employee or 
Member.

[48 FR 38788, Aug. 26, 1983, as amended at 49 FR 20631, May 16, 1984]



Sec. 831.2105  Filing an application to make deposit.

    (a) An individual described in Sec. 831.2104(a) of this subpart 
shall file an application for deposit with the appropriate office in the 
employing agency, or, for Members and Congressional employees, with the 
Secretary of the Senate or the Clerk of the House of Representatives, as 
appropriate.
    (b) An individual described in Sec. 831.2104(b) of this subpart 
may, at the time of filing an application for retirement or death 
benefits, file an application for deposit or complete a deposit with 
OPM.



Sec. 831.2106  Processing applications for deposit for service.

    (a) The agency, Clerk of the House of Representatives, or Secretary 
of the Senate shall have the employee or Member:
    (1) Complete an application to make deposit;

[[Page 169]]

    (2) Provide a copy of his or her DD 214 or its equivalent to verify 
the period(s) of service; and
    (3) Provide sufficient evidence of basic pay, if available, or a 
statement of estimated earnings.
    (b) Upon receipt of the application, the DD 214(s), and either 
sufficient evidence of basic pay, if available, or a statement of 
estimated earnings, the agency, Clerk of the House of Representatives, 
or Secretary of the Senate shall multiply the amount of basic pay by 7 
percent to compute the exact deposit owed, exclusive of any interest.
    (c) If interest is applicable, it shall be computed in accordance 
with instructions published by OPM.
    (d) The agency, Clerk of the House of Representatives, or Secretary 
of the Senate shall establish a deposit account showing the total amount 
due, and a payment schedule (unless deposit is made in a lump sum), and 
record the date and amount of each payment.
    (e) An individual who is eligible to make deposit to OPM shall 
submit an application to make deposit, accompanied by a copy of his or 
her DD 214(s) or its (their) equivalent(s), as well as sufficient 
evidence of basic pay, if available, or a statement of estimated 
earnings, to OPM.

[48 FR 38788, Aug. 26, 1983, as amended at 66 FR 66711, Dec. 27, 2001]



Sec. 831.2107  Payments on deposits.

    (a) Deposits made to agencies, the Clerk of the House of 
Representatives or the Secretary of the Senate.
    (1) Deposits made to agencies, the Clerk of the House of 
Representatives or the Secretary of the Senate shall be collected in 
full in one lump sum whenever this is possible. Notwithstanding the 
provisions of paragraph (a)(2) of this section, a separated employee 
who, through administrative error, did not make or complete the deposit 
prior to his or her separation must complete the deposit in a lump sum 
within the time limit set by OPM when it rules that an administrative 
error has been made.
    (2) If the employee or Member cannot make payment in a lump sum, the 
agency, the Clerk of the House of Representatives, or the Secretary of 
the Senate shall accept installment payments (by allotments or 
otherwise). However, agencies, the Clerk of the House of 
Representatives, and the Secretary of the Senate will not be required to 
accept individual checks in amounts of less than $50.
    (3) If the employee or Member dies, the employing agency, the Clerk 
of the House of Representatives or the Secretary of the Senate shall 
advise the survivor of the right to make or complete a deposit. If the 
survivor decides to make or complete the payment, the agency, the Clerk 
of the House of Representatives, or the Secretary of the Senate shall 
collect the amount due in one lump sum.
    (4) Payments received by the employing agency, the Clerk of the 
House of Representatives, or the Secretary of the Senate shall be 
remitted immediately to OPM for deposit to the Fund.
    (5) Once the employee's, Member's, or survivor's deposit has been 
paid in full or closed out, the employing agency, the Clerk of the House 
of Representatives, or the Secretary of the Senate shall submit 
documentation pertaining to the deposit to OPM, in accordance with 
instructions published by OPM issuances.
    (6) Deposits must be made for full periods of service.
    (b) Deposits made to OPM.
    (1) Deposits made to OPM shall be made in a lump sum prior to final 
adjudication of the application for retirement or survivor benefits.
    (2) Deposits must be made for full periods of service.

[48 FR 38788, Aug. 26, 1983, as amended at 49 FR 20631, May 16, 1984; 66 
FR 66711, Dec. 27, 2001]



                Subpart V_Alternative Forms of Annuities

    Source: 51 FR 42989, Nov. 28, 1986, unless otherwise noted.



Sec. 831.2201  Purpose.

    This subpart explains the benefits available to employees and 
Members who elect an alternative form of annuity under section 8343a of 
title 5, United States Code.

[[Page 170]]



Sec. 831.2202  Definitions.

    In this subpart--
    Alternative form of annuity means the benefit elected under Sec. 
831.2204.
    Current spouse annuity has the same meaning as in Sec. 831.603.
    Date of final adjudication means the date 30 days after the date of 
the first regular monthly payment as defined in Sec. 831.603.
    Former spouse annuity has the same meaning as in Sec. 831.603.
    Lump-sum credit has the same meaning as in 5 U.S.C. 8331(8).
    Present value factor represents the amount of money (earning 
interest at an assumed rate) required at the time of retirement to fund 
an annuity that: (a) Starts out at the rate of $1 a month and is payable 
in monthly installments for the annuitant's lifetime based on mortality 
rates for non-disability annuitants under the Civil Service Retirement 
System; and (b) increases each year at an assumed rate of inflation. 
Interest, mortality, and inflation rates used in computing the present 
value are those used by the Board of Actuaries of the Civil Service 
Retirement System for valuation of the System, based on dynamic 
assumptions. The present value factors are unisex factors obtained by 
averaging sex-distinct present value factors, weighted by the total 
dollar value of annuities typically paid to new retirees at each age.
    Time of retirement has the same meaning as in Sec. 831.603.

[51 FR 42989, Nov. 28, 1986, as amended at 54 FR 10136, Mar. 10, 1989]



Sec. 831.2203  Eligibility.

    (a) Except as provided in paragraphs (b), (c), and (h) of this 
section, an employee or Member whose annuity entitlement commences after 
June 5, 1986, under any provision of subchapter III of chapter 83 of 
title 5, United States Code (other than section 8337 of that title), may 
elect an alternative form of annuity instead of any other benefits under 
the subchapter.
    (b) An employee or Member who, at the time of retirement has a 
former spouse who is entitled to a portion of the employee's or Member's 
retirement benefits or a former spouse annuity under a court order 
acceptable for processing as defined by Sec. 838.103 of this chapter or 
under a qualifying court order as defined in Sec. 838.1003 of this 
chapter may not elect an alternative form of annuity.
    (c) An employee or Member who is married at the time of retirement 
may not elect an alternative form of annuity unless the employee's or 
Member's spouse specifically consents to the election before the date of 
final adjudication. OPM may waive spousal consent only under the 
conditions prescribed by Sec. 831.618.
    (d) The election of an alternative form of annuity and evidence of 
spousal consent must be filed on a form prescribed by OPM. The form will 
require that a notary public or other official authorized to administer 
oaths certify that the current spouse presented identification, gave 
consent to the specific election as executed by the retiree, signed or 
marked the form, and acknowledged that the consent was given freely in 
the notary's or official's presence.
    (e) An election of the alternative form of annuity must be in 
writing and received by OPM on or before the date of final adjudication. 
After the date of final adjudication, an election of the alternative 
form of annuity is irrevocable.
    (f) Except as provided in paragraph (g), an annuitant who dies 
before the date of final adjudication is deemed to have made an 
affirmative election under paragraph (a) with a fully reduced annuity to 
provide a current spouse annuity, regardless of any election completed 
under Sec. 831.614, and the lump-sum credit will be paid in accordance 
with the order of precedence established under 5 U.S.C. 8342(c).
    (g) If an annuitant described in paragraph (f) has completed an 
election under Sec. 831.611(a) or (b)--
    (1) The lump-sum credit will be paid in accordance with the order of 
precedence established under 5 U.S.C. 8342(c); and
    (2) The election under Sec. 831.611(a) or (b) will be honored.
    (h)(1)(i) An individual whose annuity commences after December 1, 
1990, and

[[Page 171]]

before October 1, 1994, may elect an alternative form of annuity only if 
that individual is--
    (A) An employee or Member who meets the conditions and fulfills the 
requirements described in Sec. 831.2207(c) (2) and (3); or
    (B) An employee who is separated involuntarily other than for cause 
on charges of misconduct or delinquency;
    (ii) An individual whose annuity commences on or after October 1, 
1994, may elect an alternative form of annuity only if that individual 
is an employee or Member who meets the conditions and fulfills the 
requirements described in Sec. 831.2207(c) (2) and (3).
    (2) For the purpose of paragraph (h)(1)(i)(B) of this section, the 
term ``employee'' does not include--
    (i) Members of Congress;
    (ii) Individuals in positions in the Executive Schedule under 
sections 5312 through 5317 of title 5, United States Code;
    (iii) Presidential appointees under section 105(a)(1), 106(a)(1), or 
107 (a)(1) or (b)(1) of title 3, United States Code, if the maximum 
basic pay for such positions is at or above the rate for Executive 
Schedule, level V;
    (iv) Noncareer appointees in the Senior Executive Service or 
noncareer members of the Senior Foreign Service; and
    (v) Any individual in a position that is excepted from the 
competitive service because of its confidential, policy-determining, 
policy-making, or policy-advocating character.
    (3) Notwithstanding paragraph (h)(1) of this section, an employee 
whose annuity commences after December 1, 1990, and before December 2, 
1991, may elect an alternative form of annuity if that individual--
    (i)(A) Was ordered to active military duty (other than for training) 
before December 1, 1990, in connection with Operation Desert Shield; or
    (B) Is an employee of the Department of Defense who is certified by 
the Secretary of Defense to have performed, after November 30, 1990, 
duties essential to support Operation Desert Shield, and the 
certification is submitted to OPM in a form prescribed by OPM; and
    (ii) Would have been eligible, as of November 30, 1990, to elect an 
alternative form of annuity under paragraph (a) of this section.

[51 FR 42989, Nov. 28, 1986, as amended at 53 FR 11634, Apr. 8, 1988; 56 
FR 6551, Feb. 19, 1991; 57 FR 33598, July 29, 1992; 58 FR 52882, Oct. 
13, 1993; 60 FR 54586, 54587, Oct. 25, 1995]



Sec. 831.2204  Alternative forms of annuities available.

    (a) An employee or Member who is eligible to make an election under 
Sec. 831.2203 may elect to receive his or her lump-sum credit plus an 
annuity computed in accordance with section 8339 of title 5, United 
States Code, for which they qualify (including any reduction for 
survivor benefits) and reduced under Sec. 831.2205.
    (b) A retired employee or Member who elected an alternative form of 
annuity is subject to all provisions of subchapter III of chapter 83 of 
title 5, United States Code, as would otherwise apply to a retired 
employee or Member who did not elect an alternative form of annuity, 
except that an individual who elected an alternative form of annuity is 
not eligible to apply for disability annuity under section 8337 of such 
subchapter.

[51 FR 42989, Nov. 28, 1986, as amended at 53 FR 11634, Apr. 8, 1988; 54 
FR 10136, Mar. 10, 1989]



Sec. 831.2205  Computation of alternative form of annuity.

    (a) To compute the beginning rate of annuity payable to a retiree 
who elects an alternative form of annuity, OPM will first compute the 
monthly rate of annuity otherwise payable under subchapter III of 
chapter 83 of title 5, United States Code, including all reductions 
provided under the subchapter other than those in Sec. 8343a. That 
monthly rate is then reduced by an amount equal to the retiree's lump-
sum credit divided by the present value factor for the retiree's 
attained age (in full years) at the time of retirement. The reduced 
monthly rate is then rounded to the next lowest dollar and becomes the 
rate of annuity payable.
    (b) OPM will publish a notice in the Federal Register announcing any 
proposed adjustments in present value

[[Page 172]]

factors at least 30 days before the effective date of the adjustments.



Sec. 831.2206  Election to pay deposit or redeposit for civilian service.

    (a) If an employee or Member who elects an alternative form of 
annuity owes a deposit or redeposit for civilian service, and elects to 
pay that deposit or redeposit before the date of final adjudication, OPM 
will compute the annuity as if the deposit or redeposit had been made 
and will deem that deposit or redeposit to be included in the lump-sum 
credit for the purpose of computing the reduction in annuity under Sec. 
831.2205.
    (b) The amount of a deposit or redeposit deemed paid under paragraph 
(a) of this section will include any interest owed by the employee or 
Member under 5 U.S.C. 8334.
    (c) For the purpose of paragraph (a) of this section, ``redeposit'' 
does not include a redeposit owed for service for which credit is 
allowed pursuant to Sec. 831.303(c)(1).

[54 FR 10136, Mar. 10, 1989, as amended at 56 FR 43865, Sept. 5, 1991]



Sec. 831.2207  Partial deferred payment of the lump-sum credit if annuity 
commences after January 3, 1988, and before October 1, 1989.

    (a) Except as provided in paragraph (c) of this section, if the 
annuity of an employee or Member commences after January 3, 1988, and 
before October 1, 1989, the lump-sum credit payable under Sec. 831.2204 
is payable to the individual, or his or her survivors, according to the 
following schedule:
    (1) Sixty percent of the lump-sum credit is payable at the time of 
retirement, and
    (2) Forty percent is payable, with interest determined under section 
8334(e)(3) of title 5, United States Code, one year after the time of 
retirement.
    (b) If an employee or Member whose annuity commences after January 
3, 1988, and before October 1, 1989, dies before the date of final 
adjudication, that individual is subject to Sec. 831.2203 (f) or (g), 
but the lump-sum credit will be paid in accordance with the schedule in 
paragraph (a) of this section.
    (c) An annuitant is exempt from the deferred payment schedule under 
paragraph (a) of this section if the individual--
    (1) Separates involuntarily, other than for cause on charges of 
delinquency or misconduct, or
    (2) Has, at the time of retirement, a life-threatening affliction or 
other critical medical condition.
    (3)(i) For the purpose of this section, life-threatening affliction 
or other critical medical condition means a medical condition so severe 
as to reasonably limit an individual's probable life expectancy to less 
than 2 years.
    (ii) The existence of one of the following medical conditions is 
prima facie evidence of a life threatening affliction or other critical 
medical condition:
    (A) Metastatic and/or inoperable neoplasms.
    (B) Aortic stenosis (severe).
    (C) Class IV cardiac disease with congestive heart failure.
    (D) Respiratory failure.
    (E) Cor pulmonale with respiratory failure.
    (F) Emphysema with respiratory failure.
    (G) [Reserved]
    (H) Severe cardiomyopathy--Class IV.
    (I) Aplastic anemia.
    (J) Uncontrolled hypertension with hypertensive encephalopathy.
    (K) Cardiac aneurysm not amenable to surgical treatment.
    (L) Agranulocytosis.
    (M) Severe hepatic failure.
    (N) Severe Hypoxic brain damage.
    (O) Severe portal hypertension with esophageal varices.
    (P) AIDS (Active--Not AIDS Related Complex or only seropositivity).
    (Q) Life threatening infections (encephalitis, meningitis, rabies, 
etc.).
    (R) Scleroderma with severe esophageal involvement.
    (S) Amyotrophic lateral sclerosis (rapidly progressive).
    (T) Hemiplegia with life threatening complications.
    (U) Quadriplegia with life threatening complications.
    (iii) Evidence of the existence of a life-threatening affliction or 
other critical medical condition must be certified by a physician and 
sent to OPM on or before the date the annuitant elects to receive an 
alternative form of

[[Page 173]]

annuity. For the purpose of this section, ``physician'' has the same 
meaning given that term in Sec. 339.102 of this chapter.
    (iv) If a medical condition other than those listed in paragraph 
(c)(3)(ii) of this section is claimed as a basis for exemption from the 
deferred payment schedule, OPM will review the physician's certification 
to determine whether the cited condition is life-threatening or 
critical.
    (v) The cost of providing medical documentation under this paragraph 
rests with the employee or Member, unless OPM exercises its choice of 
physician.

[53 FR 11634, Apr. 8, 1988, as amended at 60 FR 54586, Oct. 25, 1995]



Sec. 831.2208  Partial deferred payment of the lump-sum credit if annuity 
commences after December 2, 1989, and before October 1, 1995.

    (a) Except as provided in paragraph (c) of this section, if the 
annuity of a retiree commences after December 2, 1989, and before 
October 1, 1994, the lump-sum credit payable under Sec. 831.2204 is 
payable to the individual, or his or her survivors, according to the 
following schedule:
    (1) Fifty percent of the lump-sum credit is payable at the time of 
retirement, and
    (2) Fifty percent is payable, with interest determined under section 
8334(e)(3) of title 5, United States Code, 1 year after the time of 
retirement, except if the payment date of the amount specified in 
paragraph (a)(1) of this section was after December 4, 1989, payment 
with interest will be made in the calendar year following the calendar 
year in which the payment specified in paragraph (a)(1) of this section 
was made.
    (b) If a retiree whose annuity commences after December 2, 1989, and 
before October 1, 1994, and who is otherwise entitled to a computation 
under this subpart, dies before the date of final adjudication, that 
individual is subject to Sec. 831.2203 (f) or (g), but the lump-sum 
credit will be paid in accordance with the schedule in paragraph (a) of 
this section.
    (c)(1) A retiree is exempt from the deferred payment schedule under 
paragraph (a) of this section if the individual meets the conditions, 
and fulfills the requirements, described in Sec. 831.2207(c).
    (2)(i) A retiree who is exempt from the deferred payment schedule 
may waive that exemption by notifying OPM, in writing, on or before the 
date he or she elects to receive the alternative form of annuity.
    (ii) Paragraph (c)(2)(i) of this section does not apply to an 
individual whose annuity commences after December 1, 1990, if that 
individual's eligibility to elect an alternative form of annuity is 
pursuant to Sec. 831.2203(h)(1)(i)(A).
    (iii) A waiver under paragraph (c)(2)(i) of this section cannot be 
revoked.

[56 FR 6551, Feb. 19, 1991, as amended at 56 FR 43865, Sept. 5, 1991; 60 
FR 54587, Oct. 25, 1995]



Sec. 831.2209  Redetermined annuity after reemployment.

    (a) For purposes of this section, ``lump-sum credit'' does not 
include--
    (1) The amount by which the lump-sum credit attributable to service 
performed before the annuitant's first retirement was reduced by annuity 
payments that were not reimbursed by the employing agency under section 
8344(a) of title 5, United States Code, or
    (2) Any part of the lump-sum credit attributable to service 
performed before the annuitant's first retirement that has already been 
paid to the annuitant pursuant to an election or an alternative form of 
annuity.
    (b) An annuitant who meets the requirements for a redetermined 
annuity under subpart H, and who meets all requirements of Sec. 
831.2203, may elect an alternative form of annuity.
    (c) To compute the beginning rate of the redetermined annuity 
payable to an annuitant who elects an alternative form of annuity, OPM 
will first compute the monthly rate payable under subchapter III of 
chapter 83 of title 5, United States Code, including all reductions 
provided under the subchapter other than those in section 8343a. That 
monthly rate is then reduced by the sum of--
    (1)(i) Any reduction that was computed under Sec. 831.2205 at the 
time of the annuitant's prior retirement, increased by--

[[Page 174]]

    (ii) All cost-of-living adjustments under section 8340 of title 5, 
United States Code that applied to the annuitant before the commencing 
date of the redetermined annuity, and
    (2) An amount equal to the annuitant's lump-sum credit, divided by 
the present value factor for the annuitant's attained age on the date 
the redetermined annuity commences.
    (d) The beginning rate of a redetermined annuity payable to an 
annuitant who does not elect, or is not eligible to elect, an 
alternative form of annuity will be reduced in accordance with paragraph 
(c)(1) of this section.

[54 FR 10136, Mar. 10, 1989. Redesignated at 55 FR 4597, Feb. 9, 1990]



PART 835_DEBT COLLECTION--Table of Contents




Subparts A-E [Reserved]

       Subpart F_Collection of Debts by Federal Tax Refund Offset

Sec.
835.601 Purpose.
835.602 Past-due legally enforceable debt.
835.603 Notification of intent to collect.
835.604 Reasonable attempt to notify.
835.605 OPM action as a result of consideration of evidence submitted as 
          a result of the notice of intent.
835.606 Change in notification to Internal Revenue Service.
835.607 Administrative charges.

    Authority: 5 U.S.C. 8347(a) and 8461(g). Subpart F also issued under 
31 U.S.C. 3720A.

    Source: 57 FR 61771, Dec. 29, 1992, unless otherwise noted.

Subparts A-E [Reserved]



       Subpart F_Collection of Debts by Federal Tax Refund Offset



Sec. 835.601  Purpose.

    This subpart establishes procedures for OPM to refer past-due 
legally enforceable debts to the Internal Revenue Service (IRS) for 
offset against the income tax refunds of persons owing debts to OPM. It 
specifies the agency procedures and the rights of the debtor applicable 
to claims referred under the Federal Tax Refund Offset Program for the 
collection of debts owed to OPM.



Sec. 835.602  Past-due legally enforceable debt.

    A past-due legally enforceable debt for referral to the IRS is a 
debt that--
    (a) Resulted from--
    (1) Erroneous payments made under the Civil Service Retirement or 
the Federal Employees' Retirement Systems; or
    (2) Unpaid health or life insurance premiums due under the Federal 
Employees' Health Benefits or Federal Employees' Group Life Insurance 
Programs; or
    (3) Any other statute administered by OPM;
    (b) Is an obligation of a debtor who is a natural person;
    (c) Except in the case of a judgment debt, has been delinquent at 
least 3 months but not more than 10 years at the time the offset is 
made;
    (d) Is at least $25.00;
    (e) With respect to which the individual's rights described in 5 CFR 
831.1301 through 831.1309 have been exhausted;
    (f) With respect to which either:
    (1) OPM's records do not contain evidence that the person owing the 
debt (or his or her spouse) has filed for bankruptcy under title 11 of 
the United States Code; or
    (2) OPM can clearly establish at the time of the referral that the 
automatic stay under 11 U.S.C. 362 has been lifted or is no longer in 
effect with respect to the person owing the debt or his or her spouse, 
and the debt was not discharged in the bankruptcy proceeding;
    (g) Cannot currently be collected under the salary offset provisions 
of 5 U.S.C. 5514(a)(1);
    (h) Is not eligible for administrative offset under 31 U.S.C. 
3716(a) because of 31 U.S.C. 3716(c)(2), or cannot currently be 
collected as an administrative offset by OPM under 31 U.S.C. 3716(a) 
against amounts payable to the debtor by OPM; and
    (i) Has been disclosed by OPM to a consumer reporting agency as 
authorized by 31 U.S.C. 3711(f), unless the consumer reporting agency 
would be prohibited from reporting information concerning the debt by 
reason of 15 U.S.C. 1681c, or unless the amount of the debt does not 
exceed $100.

[[Page 175]]



Sec. 835.603  Notification of intent to collect.

    (a) Notification before submission to the IRS. A request for 
reduction of an IRS income tax refund will be made only after OPM makes 
a determination that an amount is owed and past-due and gives or makes a 
reasonable attempt to give the debtor 60 days written notice of the 
intent to collect by IRS tax refund offset.
    (b) Contents of notice. OPM's notice of intention to collect by IRS 
tax refund offset (Notice of Intent) will state:
    (1) The amount of the debt;
    (2) That unless the debt is repaid within 60 days from the date of 
OPM's Notice of Intent, OPM intends to collect the debt by requesting 
the IRS to reduce any amounts payable to the debtor as a Federal income 
tax refund by an amount equal to the amount of the debt and all 
accumulated interest and other charges;
    (3) A mailing address for forwarding any written correspondence and 
a contract name and a telephone number for any questions; and
    (4) That the debtor may present evidence to OPM that all or part of 
the debt is not past due or legally enforceable by--
    (i) Sending a written request for a review of the evidence to the 
address provided in the notice;
    (ii) Stating in the request the amount disputed and the reasons why 
the debtor believes that the debt is not past-due or is not legally 
enforceable;
    (iii) Including in the request any documents that the debtor wishes 
to be considered or stating that the additional information will be 
submitted within the remainder of the 60-day period.



Sec. 835.604  Reasonable attempt to notify.

    In order to constitute a reasonable attempt to notify the debtor, 
OPM must have used a mailing address for the debtor obtained from the 
IRS pursuant to 26 U.S.C. 6103(m)(2) within a period of 1 year preceding 
the attempt to notify the debtor, unless OPM received clear and concise 
notification from the debtor that notices from the agency are to be sent 
to an address different from the address obtained from IRS. Clear and 
concise notice means that the debtor has provided the agency with 
written notification, including the debtor's name and identifying number 
(as defined in 26 CFR 301.6109-1), and the debtor's intent to have the 
agency notices sent to the new address.



Sec. 835.605  OPM action as a result of consideration of evidence 
submitted as a result of the notice of intent.

    (a) Consideration of evidence. If, as a result of the Notice of 
Intent, OPM receives notice that the debtor will submit additional 
evidence or receives additional evidence from the debtor within the 
prescribed time period, any notice to the IRS will be stayed until OPM 
can--
    (1) Consider the evidence presented by the debtor; and
    (2) Determine whether or not all or a portion of the debt is still 
past due and legally enforceable; and
    (3) Notify the debtor of its determination.
    (b) Notification to the debtor. Following review of the evidence, 
OPM will issue a written decision notifying the debtor whether OPM has 
sustained, amended, or canceled its determination that the debt is past-
due and legally enforceable. The notice will advise the debtor of any 
further action to be taken and explain the supporting rationale for the 
decision.
    (c) OPM action on the debt. (1) OPM will notify the debtor of its 
intent to refer the debt to the IRS for offset against the debtor's 
Federal income tax refund, if it sustains its decision that the debt is 
past-due and legally enforceable. OPM will also notify the debtor 
whether the amount of the debt remains the same or is modified.
    (2) OPM will not refer the debt to the IRS for offset against the 
debtor's Federal income tax refund, if it reverses its decision that the 
debt is past-due and legally enforceable.



Sec. 835.606  Change in notification to Internal Revenue Service.

    (a) Except as noted in paragraph (b) of this section, after OPM 
sends IRS notification of an individual's liability for a debt, OPM will 
promptly notify IRS of any change in the notification, if OPM--

[[Page 176]]

    (1) Determines that an error has been made with respect to the 
information contained in the notification;
    (2) Receives a payment or credits a payment to the account of the 
debtor named in the notification that reduces the amount of the debt 
referred to the IRS for offset; or
    (3) Receives notification that the individual owing the debt has 
filed for bankruptcy under title 11 of the United States Code or has 
been adjudicated bankrupt and the debt has been discharged.
    (b) OPM will not notify the IRS to increase the amount of a debt 
owed by a debtor named in OPM's original notification to the IRS.
    (c) If the amount of a debt is reduced after referral by OPM and 
offset by the IRS, OPM will refund to the debtor any excess amount and 
will promptly notify the IRS of any refund made by OPM.



Sec. 835.607  Administrative charges.

    All administrative charges incurred in connection with the referral 
of the debts to the IRS will be assessed on the debt and thus increase 
the amount of the offset.



PART 837_REEMPLOYMENT OF ANNUITANTS--Table of Contents




                      Subpart A_General Provisions

Sec.
837.101 Applicability.
837.102 Definitions.
837.103 Notice.
837.104 Reemployment of former employees of nonappropriated fund 
          instrumentalities.

                 Subpart B_Annuitant and Employee Status

837.201 Annuitant status.
837.202 Annuities that terminate on reemployment.
837.203 Annuities that are suspended during reemployment.

                  Subpart C_Coverage and Contributions

837.301 Coverage.
837.302 Agency contributions.
837.303 Annuity offset.
837.304 Agency liability for payments.
837.305 Lump-sum credit not reduced.
837.306 Refund of lump-sum credit.

             Subpart D_Reemployment of Disability Annuitants

837.401 Generally.
837.402 Special notice.
837.403 Termination of annuity during reemployment.
837.404 Reinstatement of annuity during a period of employment not 
          subject to CSRS or FERS.

               Subpart E_Retirement Benefits on Separation

837.501 Refund of retirement deductions.
837.502 Reinstatement of annuity.
837.503 Supplemental annuity.
837.504 Redetermined annuity.
837.505 Cost-of-living adjustments on Member annuities.
837.506 Computation of redetermined annuity for former employees of 
          nonappropriated fund instrumentalities.

                        Subpart F_Death Benefits

837.601 Generally.
837.602 Lump-sum payment of retirement deductions.
837.603 Increased survivor benefits.

                          Subpart G_CSRS Offset

837.701 Offset from supplemental annuity.
837.702 Offset from supplemental survivor annuity.

       Subpart H_Alternative Entitlements and Canceled Retirements

837.801 Unperfected entitlement to CSRS benefits based on a prior 
          separation.
837.802 Benefits under another retirement system for Federal employees 
          based on the most recent separation.
837.803 Cancellation of retirement by judicial or administrative 
          authority.
837.804 Finality of elections under this subpart.

    Authority: 5 U.S.C. 8337, 8344, 8347, 8455, 8456, 8461, and 8468; 
and section 302 of Pub. L. 99-335, June 6, 1986, as amended.

    Source: 58 FR 48266, Sept. 15, 1993, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 837.101  Applicability.

    (a) This part prescribes rules governing--
    (1) Reemployment of an annuitant by the Federal Government;
    (2) Reemployment of an annuitant by the government of the District 
of Columbia when the annuitant--

[[Page 177]]

    (i) Had been employed subject to CSRS by the District of Columbia 
prior to October 1, 1987;
    (ii) Is an employee of the government of the District of Columbia 
not excluded from CSRS under Sec. 831.201(g) or Sec. 831.201(i); or
    (iii) Is an employee of the District of Columbia who is deemed to be 
a Federal employee for FERS purposes under Sec. 842.107 or Sec. 
842.108 of this chapter; and
    (3) The payment of retirement and death benefits based on 
reemployment covered by this part.
    (b) This part is not applicable to reemployment, in the Executive 
Branch, under 5 U.S.C. 8344(i) or 8468(f) (see part 553 of this 
chapter), relating to reemployment of retirees to meet exceptional 
employment needs, or to employment under 5 U.S.C. 8344 (j) or (k) or 5 
U.S.C. 8468 (g) or (h) in the Judicial or Legislative Branches.

[58 FR 48266, Sept. 15, 1993, as amended at 62 FR 50996, Sept. 30, 1997; 
64 FR 15288, Mar. 31, 1999]



Sec. 837.102  Definitions.

    Actual service means the period of time during which an annuitant is 
reemployed, excluding periods of separation and non-pay status.
    Annuitant means a former employee or Member who is receiving, or 
meets the legal requirements and has filed claim for, annuity under 
either CSRS or FERS based on his or her service.
    Another retirement system or ``other retirement system'' means a 
program created by Federal or District of Columbia statute or regulation 
and administered by an agency of the Federal Government or District of 
Columbia that provides retirement and/or death benefits to Federal or 
District of Columbia employees whose employment would otherwise be 
subject to the provisions of CSRS or FERS, or that credits service in 
the computation of benefits that would otherwise be credited in the 
computation of a CSRS or FERS benefit, or that provides a death benefit 
when a death benefit is payable from CSRS or FERS.
    CSRS means the Civil Service Retirement System, as described in 
subchapter III of chapter 83 of title 5, United States Code.
    CSRS annuitant means an annuitant retired under CSRS.
    CSRS-Offset service means service by a reemployed CSRS annuitant 
that is subject to the OASDI tax by operation of section 101 of Public 
Law 98-21. It does not include any service performed before January 1, 
1984.
    CSRS-Offset wages means basic pay, as defined under 5 U.S.C. 
8331(3), of an employee or Member performing CSRS-Offset service, but 
not to exceed the contribution and benefit base for the calendar year 
involved.
    Continuous service means reemployment without a period of separation 
from service, or conversion to intermittent status, of more than 3 days.
    Contribution and benefit base means the contribution and benefit 
base in effect with respect to the period involved, as determined under 
section 230 of the Social Security Act.
    FEC means Federal Employees Compensation, that is, benefits paid on 
the basis of a work-related disease or injury under the provisions of 
chapter 81 of title 5, United States Code, but does not include a 
scheduled award under the provisions of 5 U.S.C. 8107, or medical 
services under 5 U.S.C. 8103.
    FERS means the Federal Employees Retirement System, as described in 
chapter 84 of title 5, United States Code.
    FERS annuitant means an annuitant who retired under FERS, or a 
reemployed CSRS annuitant whose election of FERS coverage under part 846 
of this chapter is effective on or after January 8, 1988.
    Full-time equivalent to part-time service means the amount of actual 
service that would result if the total hours worked on a part-time basis 
had been performed on a full-time basis, and the remaining portion of 
the period of reemployment was in a non-pay status.
    Full-time service means actual service in which the reemployed 
annuitant is scheduled to work the number of hours and days required by 
the administrative workweek for his or her grade or class (normally 40 
hours).
    Fund means the Civil Service Retirement and Disability Fund as 
described at 5 U.S.C. 8348.
    Intermittent service means any actual service performed on a less 
than full-

[[Page 178]]

time basis with no prescheduled regular tour of duty.
    Lump-sum credit has the same meaning as the term is defined at 
section 8401(19) or section 8331(8) of title 5, United States Code, as 
may be applicable under the circumstances.
    OASDI tax means, with respect to Federal wages, the Old Age, 
Survivors, and Disability Insurance tax imposed under section 3101(a) of 
the Internal Revenue Code of 1986.
    Part-time service means actual service performed on a less than 
full-time basis under a pre-scheduled regular tour of duty.
    Pay means the basic pay of the position to which the reemployed 
annuitant is appointed, prior to reduction for retirement contributions 
and annuity offset, and excludes any other benefits or compensation the 
reemployed annuitant receives, such as benefits authorized under the 
provisions of chapter 81 of title 5, United States Code.
    Reemployed means reemployed in an appointive or elective position 
with the Federal Government, or reemployed in an appointive or elective 
position with the District of Columbia (when the annuitant was first 
employed subject to CSRS by the District of Columbia before October 1, 
1987, or is an employee of the government of the District of Columbia 
not excluded from CSRS under Sec. 831.201(g) or Sec. 831.201(i) of 
this chapter, or is an employee of the government of the District of 
Columbia who is deemed to be a Federal employee for FERS purposes under 
Sec. 842.107 or Sec. 842.108 of this chapter), whether the position is 
subject to CSRS, FERS, or another retirement system, but does not 
include appointment as a Governor of the Board of Governors of the 
United States Postal Service, or reemployment under the provisions of 
law that exclude offset of pay by annuity, that is, sections 8344(i), 
(j), or (k), or 8468(f), (g), or (h) of title 5, United States Code.
    Retired Member means a former Member of Congress, as defined by 5 
U.S.C. 2106, who has met the requirements for Member retirement as 
specified at sections 8336(g), 8337(a), 8338(b), 8412, 8413, and 8451(b) 
of title 5, United States Code, and who has filed claim therefor.
    Suspension, in regard to payment of annuity, means that payment of 
annuity stops but annuitant status continues.
    Termination in regard to payment of annuity, means that both payment 
of annuity and annuitant status cease.

[58 FR 48266, Sept. 15, 1993, as amended at 62 FR 50996, Sept. 30, 1997; 
64 FR 15288, Mar. 31, 1999]



Sec. 837.103  Notice.

    (a) To OPM. On or before the date a reemployed annuitant is 
appointed, the appointing agency must notify OPM in writing of the 
appointment, and provide OPM with the following information--
    (1) The annuitant's name, date of birth, social security number (if 
applicable), and retirement claim number;
    (2) A description of the kind of appointment;
    (3) Whether the amount of annuity allocable to the period of 
reemployment is, or will be, withheld from the reemployed annuitant's 
pay, in accordance with Sec. 837.303 of this part; and
    (4) When the appointment is an interim appointment under Sec. 
772.102 of this chapter, an explicit statement that the appointment is 
required by the Whistleblower Protection Act of 1989.
    (b) To annuitant. The agency should advise the annuitant in writing, 
generally, of the effect reemployment has on annuitant status and/or the 
continued receipt of annuity, the possible, future retirement benefits 
that may be payable to an annuitant on the basis of reemployment, and, 
for CSRS annuitants, whether the annuitant may elect to have retirement 
deductions withheld from his or her basic pay.
    (c) Obligation of annuitant to provide information. Before 
appointment, and as a condition of reemployment, the annuitant must 
provide the employing agency with the following information--
    (1) Whether the annuitant is then in receipt of annuity;
    (2) The gross monthly amount of annuity the annuitant is then 
receiving;
    (3) Whether the annuitant is a disability annuitant, and if so, 
whether

[[Page 179]]

OPM has found the annuitant recovered from his or her disability, or 
restored to earning capacity; and.
    (4) If the annuitant is a CSRS annuitant, whether the annuitant's 
retirement was based on an involuntary separation, not for charges of 
misconduct or delinquency.



Sec. 837.104  Reemployment of former employees of nonappropriated fund 
instrumentalities.

    A former employee of a nonappropriated fund instrumentality who has 
made an election of retirement coverage under part 847 of this chapter 
will continue to be covered under the elected retirement system for all 
periods of service as a reemployed annuitant.

[61 FR 41720, Aug. 9, 1996]



                 Subpart B_Annuitant and Employee Status



Sec. 837.201  Annuitant status.

    Unless his or her annuity is terminated under the provisions of 
Sec. 837.202 or Sec. 837.403 of this part, an annuitant continues to 
be an annuitant throughout the period of reemployment, whether or not he 
or she continues to receive annuity payments during the period of 
reemployment.



Sec. 837.202  Annuities that terminate on reemployment.

    (a) FERS annuitants. (1) The annuity of a FERS annuitant who is a 
disability annuitant whom OPM has found recovered or restored to earning 
capacity prior to reemployment terminates on reemployment.
    (2) The annuity of a FERS annuitant who is a former military reserve 
technician awarded a disability retirement annuity under 5 U.S.C. 8456, 
in addition to being subject to paragraph (a)(1) of this section, shall 
terminate on the date the annuitant declines an offer of employment with 
a department or agency, where the employment is in the same commuting 
area and of the same grade as, or a level equivalent to, the position 
from which the annuitant retired.
    (b) CSRS annuitants. (1) The annuity of a CSRS annuitant terminates 
on reemployment if--
    (i) The annuitant is a disability annuitant whom OPM has found 
recovered or restored to earning capacity prior to reemployment, or 
whose disability annuity was awarded under the provisions of 5 U.S.C. 
8337(h) because the annuitant was a National Guard Technician who was 
medically disqualified for continued membership in the National Guard;
    (ii) The annuitant is not a retired Member and the annuity is based 
on an involuntary separation (other than a separation that was mandated 
by statute based on the annuitant's age and length of service, or a 
separation for cause on charges of misconduct or delinquency) where the 
reemployment would, if the individual were not an annuitant, be covered 
by CSRS;
    (iii) The annuitant is not a retired Member and is appointed by the 
President to a position that would, if the individual were not an 
annuitant, be covered by CSRS; or
    (iv) The annuitant is not a retired Member and is elected as a 
Member.
    (2) A disability annuity awarded a former National Guard Technician 
under the provisions of 5 U.S.C. 8337(h) shall terminate on the date the 
annuitant declines an offer of employment with a department or agency, 
where the employment is in the same commuting area and of the same grade 
as, or a level equivalent to, the position from which the annuitant 
retired.



Sec. 837.203  Annuities that are suspended during reemployment.

    (a) All annuitants. Payment of annuity is suspended when--
    (1) The annuitant is appointed as a justice or judge of the United 
States, as defined by section 451 of title 28, United States Code; or
    (2) The annuitant receives an interim appointment under Sec. 
772.102 of this chapter.
    (b) CSRS annuitants only. Payment of annuity is suspended when the 
annuitant is a retired Member and becomes employed in an elective 
position, or is appointed to a position that is not intermittent or 
without pay.

[[Page 180]]



                  Subpart C_Coverage and Contributions



Sec. 837.301  Coverage.

    (a) When annuity terminates on, or is suspended during, 
reemployment. Retirement coverage under either CSRS or FERS is governed 
by subpart B of part 831 or subpart A of part 842 of this chapter, as is 
appropriate.
    (b) When annuity continues. (1) Unless a reemployed FERS annuitant's 
employment is on an intermittent basis, as an employee subject to 
another retirement system, or as President, deductions for the Fund 
shall be made under 5 U.S.C. 8422(a).
    (2) A CSRS annuitant is not subject to deductions, unless he or she 
is serving in an other-than-intermittent status (except as President), 
is not covered by another retirement system, and elects to have 
retirement deductions made from his or her pay. Generally, deductions 
are made no later than the beginning of the first pay period immediately 
following the date the reemployed annuitant files the election with the 
employing agency. When the annuitant elects to have deductions made, he 
or she may not change the election during continuous service with that 
agency.
    (3) The amount of basic pay prior to offset of annuity under Sec. 
837.303 of this part is used in computing the amount of deductions. The 
rate of retirement deductions is that which attaches to the position 
under the provisions of sections 8334(a), 8334(k), or 8422(a) of title 
5, United States Code, as is applicable.



Sec. 837.302  Agency contributions.

    (a) FERS annuitants. An agency that reemploys a FERS annuitant 
subject to retirement deductions under Sec. 837.301(b)(1) of this part 
shall make contributions, as specified in 5 U.S.C. 8423, to the Fund, 
based on the reemployed annuitant's pay prior to offset of annuity under 
the provisions of Sec. 837.303 of this part.
    (b) CSRS annuitants. An agency that reemploys a CSRS annuitant is 
required to make an agency contribution when--
    (1) The annuity is suspended or terminated under the provisions of 
subpart B of this part; and
    (2) The appointment is subject to CSRS deductions under the 
provisions of subpart B of part 831 of this chapter.



Sec. 837.303  Annuity offset.

    (a) Applicability. When the right to receive annuity continues 
during reemployment (even though actual receipt of annuity may have been 
waived under 5 U.S.C. 8345(d) or 8465(a)), the pay of the reemployed 
annuitant shall be offset by the amount of annuity allocable to the 
period of reemployment, except that--
    (1) No amount shall be offset from pay in accordance with this 
section for a period for which the annuitant has elected to receive FEC 
benefits in lieu of annuity; and
    (2) No amount shall be offset from a lump-sum payment of annual 
leave, made on or after termination of the reemployment period.
    (b) Payment. The employing agency shall pay to the Fund the full 
amount required to be offset from a reemployed annuitant's salary under 
this section in accordance with instructions issued by OPM. Payment in 
full to the Fund is not contingent on actual offset from the reemployed 
annuitant's salary.
    (c) Computation. To compute the amount of the annuity offset for any 
particular pay period, divide the amount of annuity for the calendar 
days included in the pay period by the number of hours that would 
constitute a full-time tour of duty for that pay period, then multiply 
the result by the number of hours actually paid for the pay period, not 
to exceed the number of hours that constitutes a full-time tour of duty.



Sec. 837.304  Agency liability for payments.

    (a) The agency will remit funds properly withheld from the pay of a 
reemployed annuitant in accordance with this subpart to OPM in the 
manner prescribed for the transmission of withholdings and contributions 
as soon as possible, but not later than provided by standards 
established by OPM.

[[Page 181]]

    (b) When the employing agency fails to withhold from the pay of the 
reemployed annuitant some or all of the amounts required to be withheld 
from that pay by this subpart, the employee has received an overpayment 
of pay. The employing agency must collect the overpayment of pay (unless 
it is waived under 5 U.S.C. 5584 or some other applicable statute) and 
remit the proper funds to OPM in the manner prescribed for the 
transmission of withholdings and contributions as soon as possible, but 
not later than provided by standards established by OPM.
    (c) If the employing agency waives the annuitant's repayment of the 
salary overpayment, it must submit--on behalf of the reemployed 
annuitant--an amount equal to the correct deduction from pay (or the 
balance due in the case of a partial deduction) to OPM in the manner 
prescribed for the transmission of withholdings and contributions as 
soon as possible, but not later than provided by standards established 
by OPM.

[58 FR 48266, Sept. 15, 1993, as amended at 66 FR 66711, Dec. 27, 2001]



Sec. 837.305  Lump-sum credit not reduced.

    When annuity continues during the period of reemployment, and the 
reemployment is subject to annuity offset under the provisions of Sec. 
837.303 of this subpart, or any similar provision of law or regulation, 
the amount of an annuitant's lump-sum credit to the Fund shall not be 
reduced by the amount of annuity allocable to the period of 
reemployment.



Sec. 837.306  Refund of lump-sum credit.

    An annuitant serving as a justice or judge of the United States, as 
defined by section 451 of title 28, United States Code, may apply for 
and receive payment of the annuitant's lumpsum credit, less the amount 
of annuity or other benefits previously paid on that account. Receipt of 
a refund under this section will irrevocably terminate the right to 
annuity, and the annuitant status, of the recipient, based on any prior 
separations from employment covered by CSRS or FERS.



             Subpart D_Reemployment of Disability Annuitants



Sec. 837.401  Generally.

    A disability annuitant may be reemployed in any position for which 
he or she is qualified.



Sec. 837.402  Special notice.

    (a) To annuitant. In addition to the advice described in paragraph 
837.103(b) of this part, the agency should generally also advise a 
disability annuitant, in writing, prior to reemployment, that--
    (1) Reemployment on a permanent basis in a position equivalent in 
grade and pay to the position from which the annuitant retired may 
constitute the basis for an OPM finding of recovery from disability;
    (2) Reemployment subject to medical and physical qualification 
standards equivalent to those of the position from which the annuitant 
retired may constitute the basis for an OPM finding of recovery from 
disability;
    (3) The pay of the position in which the annuitant is reemployed, 
prior to the offset of annuity, or the pay of an interim appointment 
under Sec. 772.102 of this chapter, as may be applicable, will be 
included as earnings in determining whether the disability annuity will 
be terminated due to restoration to earning capacity;
    (4) Receipt of, or continued entitlement to receive, full or partial 
FEC benefits during reemployment, when those benefits are based on the 
same injury or medical condition that is the basis for OPM's award of 
disability retirement, is conclusive evidence (unless there is 
contravening medical evidence) that the annuitant has not recovered from 
the disability; and
    (5) A disability annuitant age 60 or over cannot be found by OPM to 
be restored to earning capacity, and can only be found recovered at the 
annuitant's request.
    (b) To OPM. On reemployment of a disability annuitant, the employing 
agency shall, in addition to the notice required by Sec. 837.103(a) of 
this part, notify OPM in writing of--
    (1) The physical and medical requirements of the position (providing 
a copy of the employee's position description);

[[Page 182]]

    (2) The position's grade level and/or rate of pay;
    (3) Whether the employment is full-time, part-time, or intermittent;
    (4) Whether, to the best of the agency's knowledge, the reemployed 
annuitant is receiving, or entitled to receive, FEC benefits; and
    (5) Whether any medical evidence was used in making the employment 
decision, and if so, provide OPM with a copy of the medical information.



Sec. 837.403  Termination of annuity during reemployment.

    (a) Agency action. When a reemployed disability annuitant is found 
recovered from disability or restored to earning capacity by OPM, OPM 
shall terminate the annuity as of the date of the finding, and the 
employing agency shall cease reducing pay by the amount of annuity 
allocable to the period of reemployment effective that same date. If the 
appointment is subject to retirement deductions, retirement deductions 
will begin or continue, as the case may be.
    (b) Subsequent benefits--(1) CSRS. If, on separation from a period 
of reemployment during which the disability annuity was terminated 
because of recovery or restoration to earning capacity, the former 
disability annuitant is entitled to either an immediate or deferred 
annuity based on the most recent separation, any right to an annuity 
based on a prior separation is permanently extinguished. If no such 
right to immediate or deferred annuity accrues based on this most recent 
separation, however, any right to immediate or deferred annuity will be 
determined on the basis of the next prior separation.
    (2) FERS. If a disability annuity is terminated during a period of 
reemployment because of recovery or restoration to earning capacity, any 
right to an annuity based on a prior separation is permanently 
extinguished, except as otherwise provided by Sec. 844.405(b)(2) of 
this chapter.



Sec. 837.404  Reinstatement of annuity during a period of employment 
not subject to CSRS or FERS.

    When OPM reinstates the disability annuity of an individual employed 
in a position not subject to CSRS or FERS, the employing agency shall 
withhold retirement deductions and offset pay subject to the provisions 
of subpart C of this part, as of the date of OPM's administrative 
determination of reinstatement. OPM shall offset from any retroactive 
payment of annuity for a period that is also a period of employment an 
amount equal to the amount of annuity, or the pay for the period of 
employment, whichever is the lesser.



               Subpart E_Retirement Benefits on Separation



Sec. 837.501  Refund of retirement deductions.

    A reemployed annuitant who separates from reemployment without title 
to either a supplemental annuity or a redetermined annuity under this 
subpart is entitled to have any retirement deductions withheld from pay 
during the period of reemployment refunded without interest.



Sec. 837.502  Reinstatement of annuity.

    (a) When appropriate. (1) When an annuity was terminated because of 
reemployment under the provisions of Sec. 837.202 of this part, or any 
similar provision of statute or regulation in effect prior to the 
promulgation of this part, the annuity that was terminated will be 
reinstated effective the date immediately following the date the 
reemployed annuitant separated from reemployment, if--
    (i) The reemployed annuitant's right to annuity has not been 
terminated under any other provision of regulation or statute; and
    (ii) The reemployed annuitant is not entitled to either an immediate 
or deferred CSRS or FERS annuity based on the separation from 
reemployment.
    (2) When an annuity was suspended because of reemployment under the 
provisions of Sec. 837.203 of this part, the annuity that was suspended 
will be reinstated effective the date immediately following the date the 
reemployed annuitant separated from reemployment.
    (b) Amount of reinstated annuity. The amount of an annuity 
reinstated under the provisions of paragraph (a)(2) of this section will 
be the amount of the

[[Page 183]]

annuity at the effective date of termination, adjusted by such 
adjustments as would have occurred had the annuity remained payable 
during the period of reemployment.



Sec. 837.503  Supplemental annuity.

    (a) Title requirements. A reemployed annuitant is entitled, on 
separation, or conversion to intermittent service, to a supplemental 
annuity if--
    (1) The annuitant performed--
    (i) At least 1 year of actual, continuous, full-time service;
    (ii) Actual, continuous part-time service equivalent to 1 year of 
actual full-time service; or
    (iii) A combination of part-time and full-time actual, continuous 
service that is equivalent to 1 year of actual full-time service; and
    (2)(i) The annuity is not terminated or suspended on reemployment; 
and
    (ii) The pay during reemployment was subject to offset by the amount 
of annuity allocable to the period of reemployment; or
    (iii) The reemployed annuitant separates from an interim appointment 
made under the provisions of Sec. 772.102 of this chapter.
    (b) Computation of supplemental annuity--(1) CSRS. (i) That portion 
of a supplemental annuity that is based on the total years and full 
months of creditable reemployment service performed while covered under 
CSRS, is computed under the provisions of 5 U.S.C. 8339(a), (b), (d), 
(e), (h), (i), (n) and (q). Unused sick leave to the reemployed 
annuitant's credit immediately prior to separation from reemployed 
annuitant service will be credited under the rules prescribed in Sec. 
831.302 of this chapter, and 5 U.S.C. 8339(m), not to exceed the amount 
of unused sick leave available immediately before the effective date of 
an election of FERS coverage, and not including any unused sick leave 
included in the computation of an annuity or supplemental annuity the 
annuitant is receiving at the time of separation from the most recent 
period of reemployment.
    (ii) A supplemental annuity computed in whole or in part under the 
provisions of this paragraph, using CSRS-Offset service, is subject to 
reduction under subpart G of this part.
    (2) FERS. That portion of a supplemental annuity that is based on 
the total years and full months of creditable reemployment service 
performed on and after the effective date of FERS coverage is computed 
under the provisions of 5 U.S.C. 8415 (a) through (f).
    (3) Average pay. The average pay used in the computation of a 
supplemental annuity is the average basic pay for the entire period of 
actual continuous reemployment service, excluding intermittent service.
    (4) Survivor reduction. If the reemployed annuitant's annuity, at 
the time he or she applies for supplemental annuity, is reduced to 
provide a survivor benefit for a spouse, (or, for FERS annuitants only, 
a former spouse), the supplemental annuity will be reduced by 10 
percent, and the survivor annuities increased, if the annuitant was 
retired under CSRS, by 55 percent of the supplemental annuity, and if 
the annuitant was retired under FERS, by 50 percent of the supplemental 
annuity, unless the reemployed annuitant notifies OPM at the time of 
application that he or she does not wish to have such reductions and 
increases effected.
    (c) Creditable service. (1) All actual reemployment service 
performed after the date of retirement on a full-time or part-time basis 
may be credited in the computation of a supplemental annuity provided--
    (i) When the reemployment service was performed on or after October 
1, 1982, retirement deductions were withheld or, for CSRS annuitants, a 
deposit has been paid under the provisions of 5 U.S.C. 8334;
    (ii) The reemployment service was not performed subject to another 
retirement system, except when the deductions under the other retirement 
system have been refunded and a deposit paid to OPM, where the law so 
permits, or benefits under the other retirement system have been waived 
in favor of CSRS or FERS benefits; and
    (iii) The reemployment service has not been used in the computation 
of another supplemental or redetermined annuity.
    (2) A period of reemployment service during which annuitant status 
continues and annuity is paid, and which

[[Page 184]]

is excluded from the normal annuity offset from pay by special statutory 
provision, cannot be credited in the computation of a supplemental 
annuity or any subsequent annuity entitlement.
    (d) Commencing date. (1) Except as provided in clause (2) of this 
subparagraph, the supplemental annuity commences on the earlier of the 
first day of the month following--
    (i) The day the annuitant is separated from reemployment; or
    (ii) The day the annuitant is converted to an intermittent status.
    (2) The supplemental annuity of a FERS annuitant, and the 
supplemental annuity of a CSRS reemployed annuitant who has not elected 
FERS coverage and who was--
    (i) Involuntarily separated from the reemployment service (except by 
removal for cause on charges of misconduct or delinquency);
    (ii) Involuntarily converted to an intermittent status, or;
    (iii) Separated from reemployment service, or converted to 
intermittent status, after serving 3 days or less in the month of such 
separation or conversion--shall commence on the earlier of the day after 
separation from reemployment service, the effective date of conversion 
to intermittent status, or the day after the date pay ceases.



Sec. 837.504  Redetermined annuity.

    (a) Title requirements. (1) A reemployed annuitant is entitled, on 
separation, or conversion to intermittent service, to a redetermined 
annuity if--
    (i) The annuitant performed--
    (A) At least 5 years of actual, continuous, full-time service;
    (B) Actual, continuous part-time service equivalent to 5 years of 
actual full-time service, or;
    (C) A combination of part-time and full-time actual, continuous 
service that is equivalent to 5 years of actual full-time service.
    (ii)(A) The annuity was not terminated or suspended during 
reemployment; and
    (B) The pay during reemployment was subject to offset by the amount 
of annuity allocable to the period of reemployment; or
    (C) The reemployed annuitant separated from an interim appointment 
made under the provisions of Sec. 772.102 of this chapter.
    (iii) Retirement deductions are withheld, or a deposit is paid, for 
the entire period of continuous reemployment service immediately 
preceding the most recent separation from reemployment service; and
    (iv) The reemployed annuitant elects the redetermined annuity in 
lieu of his or her prior annuity and the supplemental annuity that would 
be payable under Sec. 837.503 of this subpart.
    (2) An employee whose annuity was terminated under the provisions of 
Sec. 837.202(b)(1)(iii) of this part, and who has not elected FERS 
coverage, is entitled to a redetermined annuity on separation.
    (b) Computation. (1) A redetermined annuity is computed using all 
the reemployed annuitant's creditable service, under the provisions of 
law in effect governing the payment of CSRS and/or FERS annuities, as 
may be applicable, at the time of separation from reemployment service, 
or conversion to intermittent status.
    (2) The amount of the redetermined annuity of an individual whose 
previous annuity was terminated under the provisions of Sec. 
837.202(b)(1)(iii) of this part will at least equal the amount of the 
terminated annuity plus any increases under section 8340 of title 5, 
United States Code, occurring after the termination of the previous 
annuity and before the commencement of the redetermined annuity, 
adjusted by any annuity increase or reduction resulting from additional 
or different elections made by the reemployed annuitant.
    (c) Commencing date. The commencing date of the redetermined annuity 
is the same as the law and/or regulations would provide in the case of a 
retiring employee.



Sec. 837.505  Cost-of-living adjustments on Member annuities.

    (a) Applying cost-of-living adjustments to recomputed Member 
annuities under CSRS. A member annuity benefit that is recomputed under 
section 8344(d)(1) of title 5, United States Code, which applies to 
certain former Members who

[[Page 185]]

become employed in an appointive position subject to CSRS, will include 
the cost-of-living adjustments under section 8340 of title 5, United 
States Code, that are effective after the commencing date of the benefit 
computed under section 8344(d)(1).
    (b) Limitations on cost-of-living adjustments on recomputed Member 
annuities under CSRS. For purposes of determining limitations on cost-
of-living adjustments under section 8340(g) of title 5, United States 
Code, the final (or average) salary of a Member whose benefit has been 
recomputed under section 8344(d)(1) of title 5, United States Code, 
which applies to certain former Members who become employed in an 
appointive position subject to CSRS, will be increased by adjustments in 
the rates of the General Schedule under subpart I of chapter 53 of title 
5, United States Code, that are effective after the commencing date of 
the benefit computed under section 8344(d)(1).

[59 FR 10267, Mar. 4, 1994]



Sec. 837.506  Computation of redetermined annuity for former employees 
of nonappropriated fund instrumentalities.

    (a) The redetermined annuity of a former employee of a 
nonappropriated fund instrumentality who elected CSRS or FERS coverage 
under 5 CFR part 847, subpart D, is recomputed under 5 CFR part 847, 
subpart F.
    (b) The redetermined annuity of a former employee of a 
nonappropriated fund instrumentality who elected CSRS or FERS retirement 
credit under 5 CFR part 847, subpart H, is recomputed under 5 CFR part 
847, subpart I.

[68 FR 2178, Jan. 16, 2003]



                        Subpart F_Death Benefits



Sec. 837.601  Generally.

    Except as otherwise provided by this subpart, when an annuitant who 
is reemployed under circumstances that provide for continuation of 
annuitant status during reemployment dies, death benefits are payable 
under CSRS or FERS as if the individual died as an annuitant, and not as 
employee.



Sec. 837.602  Lump-sum payment of retirement deductions.

    If an annuitant reemployed subject to the provisions of this part 
dies while so reemployed, and the annuitant would not have been entitled 
to a supplemental annuity, had the separation been for reasons other 
than death, or if there is no supplemental spousal survivor annuity 
payable (including a survivor annuity payable to a former spouse, if the 
annuitant retired under FERS) the amount of retirement deductions 
withheld during the period of reemployment will be paid in a lump sum to 
the person entitled under the provisions of 5 U.S.C. 8342(c) or 8424(d), 
as appropriate.



Sec. 837.603  Increased survivor benefits.

    (a) Supplemental survivor annuity. (1) If an annuitant reemployed 
subject to the provisions of this part dies while so reemployed, and the 
annuitant would have been entitled to a supplemental annuity, had the 
separation been for reasons other than death, and there is a spousal 
survivor annuity payable (including a survivor annuity payable to a 
former spouse, if the annuitant retired under FERS) the amount of the 
spousal survivor annuity will, if any necessary deposit for service 
credit is made, be increased by 55 percent of the supplemental annuity, 
if the reemployed annuitant was retired under CSRS, or 50 percent of the 
supplemental annuity, if the reemployed annuitant was retired under 
FERS.
    (2) Supplemental survivor annuity benefits payable under this 
paragraph, computed in whole or in part under the provisions of Sec. 
837.503(b)(1)(i) of this part, using CSRS-Offset service, are subject to 
reduction under subpart G of this part.
    (b) Redetermined survivor annuity. If an annuitant reemployed 
subject to the provisions of this part dies while so reemployed, and the 
annuitant would have been entitled to elect a redetermined annuity, had 
the separation been for reasons other than death, and if there is a 
spousal survivor annuity payable (including a survivor annuity payable 
to a former spouse, if the annuitant retired under FERS), a person 
entitled to a spousal survivor annuity may elect to have his or her 
survivor

[[Page 186]]

annuity computed as if the annuitant had elected a redetermined annuity, 
provided any necessary deposit for service credit is made.



                          Subpart G_CSRS Offset



Sec. 837.701  Offset from supplemental annuity.

    (a) OPM will reduce the supplemental annuity of an individual who 
has performed CSRS-Offset service, if the individual is entitled, or on 
proper application would be entitled, to old-age benefits under title II 
of the Social Security Act.
    (b) The reduction required under paragraph (a) of this section is 
effective on the first day of the month during which the reemployed 
annuitant--
    (1) Is entitled to a supplemental annuity under this part; and
    (2) Is entitled, or on proper application would be entitled, to old-
age benefits under title II of the Social Security Act.
    (c) Subject to paragraphs (d) and (e) of this section, the amount of 
the reduction required under paragraph (a) of this section is the lesser 
of--
    (1) The difference between--
    (i) The social security old-age benefit for the month referred to in 
paragraph (b) of this section; and
    (ii) The old-age benefit that would be payable to the individual for 
the month referred to in paragraph (b) of this section, excluding all 
CSRS-Offset wages as a reemployed annuitant, and assuming the annuitant 
was fully insured (as defined by section 214(a) of the Social Security 
Act); or
    (2) The product of--
    (i) The old-age benefit to which the individual is entitled or 
would, on proper application, be entitled; and
    (ii) A fraction--
    (A) The numerator of which is the annuitant's total CSRS-Offset 
service as a reemployed annuitant, rounded to the nearest whole number 
of years not exceeding 40 years; and
    (B) The denominator of which is 40.
    (d) Cost-of-living adjustments under 5 U.S.C. 8340 occurring after 
the effective date of the reduction required under paragraph (a) of this 
section will be based on only the supplemental annuity remaining after 
reduction under this subpart.
    (e) The amounts for paragraphs (c)(1)(i), (c)(1)(ii), and (c)(2)(i) 
of this section are computed without regard to subsections (b) through 
(1) of section 203 of the Social Security Act (relating to reductions in 
social security benefits), and without applying the provisions of the 
second sentence of section 215(a)(7)(B)(i) or section 215(d)(5)(ii) of 
the Social Security Act (relating to part of the computation of the 
social security windfall elimination provisions).
    (f) OPM will accept the determination of the Social Security 
Administration, submitted in a form prescribed by OPM, concerning 
entitlement to social security benefits and the beginning and ending 
dates thereof.



Sec. 837.702  Offset from supplemental survivor annuity.

    (a) OPM will reduce a supplemental survivor annuity (an annuity 
under 5 U.S.C. 8341) based on the service of an individual who performed 
CSRS-Offset service, if the survivor annuitant is entitled, or on proper 
application would be entitled, to survivor benefits under section 
202(d), (e), or (f) (relating to children's, widows', and widowers' 
benefits, respectively) of the Social Security Act.
    (b) The reduction required under paragraph (a) of this section 
begins (or is reinstated) on the first day of the month during which the 
survivor annuitant--
    (1) Is entitled to a disability or survivor annuity under CSRS; and
    (2) Is entitled, or on proper application would be entitled, to 
survivor benefits under the Social Security Act provisions mentioned in 
paragraphs (a) and (c) of this section, respectively.
    (c) The reduction under paragraphs (a) of this section will be 
computed and adjusted in a manner consistent with the provisions of 
Sec. 837.701 (c) through (e) of this part.
    (d) A reduction under paragraph (a) of this section stops on the 
date entitlement to the disability or survivor benefits under title II 
of the Social Security Act terminates. In the case of a survivor 
annuitant who has not made

[[Page 187]]

proper application for the social security benefit, the reduction under 
paragraph (a) of this section stops on the date entitlement to such 
survivor benefits would otherwise terminate. If a social security 
benefit is reduced under any provision of the Social Security Act, even 
if reduced to zero, entitlement to that benefit is not considered to 
have terminated.
    (e) OPM will accept the determination or certification of the Social 
Security Administration, submitted in a form prescribed by OPM, 
concerning entitlement to social security survivor benefits and the 
beginning and ending dates thereof.



       Subpart H_Alternative Entitlements and Canceled Retirements



Sec. 837.801  Unperfected entitlement to CSRS benefits based on a prior 
separation.

    (a) An employee who meets the age and service requirements for title 
to a non-disability annuity under CSRS on the basis of a prior 
separation, but did not apply for that annuity before a subsequent 
separation from service to which a different annuity entitlement 
attaches, may elect, on application, to receive either--
    (1) The annuity based on the later separation; or
    (2) The annuity based on the prior separation, with payment of 
annuity suspended during the period(s) of employment subsequent to the 
commencing date of annuity, and such benefits as would be payable had 
the subsequent period(s) of employment been performed under the 
provisions of this part.
    (b) When an individual who has applied for a deferred annuity under 
CSRS is reemployed under CSRS before the commencing date of that 
annuity, the application is deemed to have not been made.



Sec. 837.802  Benefits under another retirement system for Federal 
employees based on the most recent separation.

    (a) Generally. An annuitant who has performed reemployment service 
after the commencing date of annuity under the provisions of another 
retirement system, and who is entitled to an annuity benefit from the 
other retirement system during a period in which he or she is also 
entitled to an annuity benefit under CSRS or FERS, may receive both 
benefits simultaneously, or for the same period, except that the 
annuitant may not receive both benefits simultaneously, or for the same 
period, if--
    (1) The provisions of law or regulation governing the other 
retirement system do not permit the annuitant to receive both benefits 
simultaneously, or for the same period of time; or
    (2) Entitlement to the annuity from the other retirement system is 
based on service credited in the computation of the CSRS or FERS 
annuity, or service credited in the computation of the annuity from the 
other retirement system was used in the computation of the CSRS or FERS 
annuity.
    (b) Election of alternative benefits. (1) Where simultaneous receipt 
of, or entitlement to, both annuities is barred under the provisions of 
paragraph (a)(1) of this section, the annuitant must elect to receive 
either the annuity under the other retirement system, or the CSRS 
annuity.
    (2) Where the annuitant, under the provisions of paragraph (b)(1) of 
this section, elects to receive annuity from the other retirement system 
in lieu of the CSRS or FERS annuity, the CSRS or FERS annuity terminates 
as of the commencing date of the other annuity, and any overpayment of 
CSRS annuity will be offset from the other annuity and paid to OPM.
    (c) Recomputation. Where simultaneous receipt of annuities from more 
than one retirement system is barred by paragraph (a)(2), but not by 
paragraph (a)(1), of this section, the CSRS or FERS annuity may be 
recomputed to exclude credit for service credited in determining 
entitlement to, or the amount of, the annuity from the other retirement 
system, effective as of the commencing date of the annuity from the 
other retirement system for Federal employees, and the recomputed

[[Page 188]]

CSRS or FERS annuity may be paid simultaneous with, or for the same 
period as, the annuity from the other retirement system for Federal 
employees.
    (d) Forfeiture. Where an annuitant's coverage as an employee under 
another retirement system, whether by election or by operation of law or 
regulation, results in forfeiture of annuity rights under CSRS or FERS, 
the CSRS or FERS annuity will terminate as of the effective date of 
coverage.
    (e) Survivors. The rules detailed in this section in regard to dual 
entitlement to annuity benefits under CSRS or FERS and another 
retirement system also apply to dual entitlement to survivor benefits 
under CSRS or FERS and another retirement system, unless the particular 
circumstance is otherwise governed by specific provision of statute or 
regulation.
    (f) Agency responsibilities. The agency responsible for 
administering another retirement system must--
    (1) Promptly notify OPM of an election of coverage under that 
retirement system by a reemployed CSRS or FERS annuitant, or the 
coverage of a reemployed CSRS annuitant under that retirement system by 
election or operation of law or regulation, when such coverage affects 
the annuitant's entitlement to CSRS annuity;
    (2) Promptly notify OPM when a reemployed annuitant separates with 
entitlement to an annuity under the other retirement system that cannot, 
under the provisions of paragraph (a) of this section, be paid 
simultaneous with, or during the same period as, the CSRS annuity; and
    (3) Reimburse OPM for overpayments of annuity resulting from a 
failure to comply with paragraphs (b) (1) and (2) of this section.



Sec. 837.803  Cancellation of retirement by judicial or administrative 
authority.

    (a) Cancellation of retirement action. A separation from employment 
on which an application for retirement is based may only be canceled by 
the former employing agency in response to a direct and final order of a 
judicial or administrative body charged with the responsibility of 
reviewing the legality of the separation, and authorized to make such 
order, or by agreement between the annuitant and the former employing 
agency in resolution of a grievance, complaint, dispute, appeal or other 
action, involving an allegedly erroneous separation, before such 
authority.
    (b) Agency notification to OPM. Upon receiving a final order 
requiring cancellation of the annuitant's separation or after the 
annuitant and the agency agree to cancel the separation, the employing 
agency must notify OPM and request the amount of the erroneous payment 
to be recovered under Sec. 550.805(e) of this chapter from any back pay 
adjustment to which the employee may be entitled.
    (c) Collection of erroneously paid retirement benefits. (1) If OPM 
determines that an overpayment of annuity or lump-sum credit has 
occurred and the employee is entitled to receive back pay because of the 
canceled separation, the overpaid retirement benefits must be deducted 
to the extent they can be recovered from the back pay adjustment as 
required by Sec. 550,805(e) of this chapter.
    (2) Amounts recovered from back pay will not be subject to waiver 
consideration under the provisions of 5 U.S.C. 8346(b) or 8470(b). If 
there is no back pay or the back pay is insufficient to recover the 
entire payment, the employee may request that OPM waive the uncollected 
portion of the overpayment. If waiver is not granted, the employee must 
repay the erroneous payment.



Sec. 837.804  Finality of elections under this subpart.

    Except as otherwise provided by this subpart, an election of 
coverage under, or annuity from, another retirement system, in lieu of 
CSRS or FERS coverage or annuity, or the election between simultaneous 
entitlements under CSRS or FERS, is final and conclusive for the period 
of simultaneous entitlement to coverage or annuity.

[[Page 189]]



PART 838_COURT ORDERS AFFECTING RETIREMENT BENEFITS--Table of Contents




                    Subpart A_Court Orders Generally

        Organization and Structure of Regulations on Court Orders

Sec.
838.101 Purpose and scope.
838.102 Regulatory structure.
838.103 Definitions.

                  Statutory Limit on Court's Authority

838.111 Exemption from legal process except as authorized by Federal 
          law.

                      Division of Responsibilities

838.121 OPM's responsibilities.
838.122 State courts' responsibilities.
838.123 Claimants' responsibilities.
838.124 Employees' and retirees' responsibilities.

                Procedures Applicable to All Court Orders

838.131 Computation of time.
838.132 Payment schedules.
838.133 Minimum awards.
838.134 Receipt of multiple court orders.
838.135 Settlements.
838.136 Administrative appeal rights.

                Address for Filing Court Orders With OPM

Appendix A to Subpart A--Addresses for Serving Court Orders Affecting 
          CSRS or FERS Benefits

  Subpart B_Procedures for Processing Court Orders Affecting Employee 
                                Annuities

                          Regulatory Structure

838.201 Purpose and scope.

                          Availability of Funds

838.211 Amounts subject to court orders.

                  Application and Processing Procedures

838.221 Application requirements.
838.222 OPM action on receipt of a court order acceptable for 
          processing.
838.223 OPM action on receipt of a court order not acceptable for 
          processing.
838.224 Contesting the validity of court orders.
838.225 Processing amended court orders.

                           Payment Procedures

838.231 Commencing date of payments.
838.232 Suspension of payments.
838.233 Termination of payments.
838.234 Collection of arrearages.
838.235 Payment of lump-sum awards.
838.236 Court orders barring payment of annuities.
838.237 Death of the former spouse.

               Procedures for Computing the Amount Payable

838.241 Cost-of-living adjustments.
838.242 Computing lengths of service.
838.243 Minimum amount of awards.

  Subpart C_Requirements for Court Orders Affecting Employee Annuities

838.301 Purpose and scope.
838.302 Language not acceptable for processing.
838.303 Expressly dividing employee annuity.
838.304 Providing for payment to the former spouse.
838.305 OPM computation of formulas.
838.306 Specifying type of annuity for application of formula, 
          percentage or fraction.

 Subpart D_Procedures for Processing Court Orders Affecting Refunds of 
                         Employee Contributions

                          Regulatory Structure

838.401 Purpose and scope.

                          Availability of Funds

838.411 Amounts subject to court orders.

                  Application and Processing Procedures

838.421 Application requirements.
838.422 Timeliness of application.
838.423 OPM action on receipt of a court order acceptable for 
          processing.
838.424 OPM action on receipt of a court order not acceptable for 
          processing.
838.425 Contesting the validity of court orders.

                           Payment Procedures

838.431 Correcting failures to provide required spousal notification.
838.432 Court orders barring payment of refunds.

               Procedures for Computing the Amount Payable

838.441 Computing lengths of service.

 Subpart E_Requirements for Court Orders Affecting Refunds of Employee 
                              Contributions

838.501 Purpose and scope.
838.502 Expressly dividing a refund of employee contributions.
838.503 Providing for payment to the former spouse.
838.504 OPM computation of formulas.

[[Page 190]]

838.505 Barring payment of refunds.

Subpart F_Terminology Used in Court Orders Affecting Employee Annuities 
                  or Refunds of Employee Contributions

                          Regulatory Structure

838.601 Purpose and scope.

                       Identification of Benefits

838.611 Identifying the retirement system.
838.612 Distinguishing between annuities and contributions.

                         Computation of Benefits

838.621 Prorata share.
838.622 Cost-of-living and salary adjustments.
838.623 Computing lengths of service.
838.624 Distinguishing between formulas and fixed amounts.
838.625 Types of annuity.

                            Model Paragraphs

Appendix A to Subpart F--Recommended Language for Court Orders Dividing 
          Employee Annuities

Subpart G_Procedures for Processing Court Orders Awarding Former Spouse 
                           Survivor Annuities

                          Regulatory Structure

838.701 Purpose and scope.

                    Limitations on Survivor Annuities

838.711 Maximum former spouse survivor annuity.

                  Application and Processing Procedures

838.721 Application requirements.
838.722 OPM action on receipt of a court order acceptable for 
          processing.
838.723 OPM action on receipt of a court order not acceptable for 
          processing.
838.724 Contesting the validity of court orders.
838.725 Effect on employee and retiree election rights.

                           Payment Procedures

838.731 Commencing date of payments.
838.732 Termination of entitlement.
838.733 Rights of current and other former spouses after termination of 
          a former spouse's entitlement.
838.734 Payment of lump-sum awards by survivor annuity.
838.735 Cost-of-living adjustments.

Subpart H_Requirements for Court Orders Awarding Former Spouse Survivor 
                                Annuities

838.801 Purpose and scope.
838.802 CSRS limitations.
838.803 Language not acceptable for processing.
838.804 Court orders must expressly award a former spouse survivor 
          annuity or expressly direct an employee or retiree to elect to 
          provide a former spouse survivor annuity.
838.805 OPM computation of formulas in computing the designated base.
838.806 Amended court orders.
838.807 Cost must be paid by annuity reduction.

   Subpart I_Terminology Used in Court Orders Awarding Former Spouse 
                           Survivor Annuities

                          Regulatory Structure

838.901 Purpose and scope.

                       Identification of Benefits

838.911 Identifying the retirement system.
838.912 Specifying an award of a former spouse survivor annuity.

                         Computation of Benefit

838.921 Determining the amount of a former spouse survivor annuity.
838.922 Prorata share defined.
838.923 Cost-of-living adjustment before the death of a retiree.

                        Miscellaneous Provisions

838.931 Court orders that provide temporary awards of former spouse 
          survivor annuities.
838.932 Court orders that permit the former spouse to elect to receive a 
          former spouse survivor annuity.
838.933 Payment of the cost of a former spouse survivor annuity.

                            Model Paragraphs

Appendix A to Subpart I--Recommended Language for Court Orders Awarding 
          Former Spouse Survivor Annuities

   Subpart J_Court Orders Affecting Civil Service Retirement Benefits

838.1001 [Reserved]
838.1002 Relation to other regulations.
838.1003 Definitions.
838.1004 Qualifying court orders.
838.1005 Applications by former spouse.
838.1006 Amounts payable.
838.1007 Preliminary review.
838.1008 Notifications.
838.1009 Decisions.
838.1010 Court orders or decrees preventing payment of lump sums.
838.1011 Effective dates.
838.1012 Death of the former spouse.
838.1013 Limitations.

[[Page 191]]

838.1014 Guidelines on interpreting court orders.
838.1015 Liability.
838.1016 Receipt of multiple court orders.
838.1017 Cost-of-living adjustments.
838.1018 Settlements.

Appendix A to Subpart J--Guidelines for Interpreting State Court Orders 
          Dividing Civil Service Retirement Benefits
Appendix B to Subpart J--Guidelines for Interpreting State Court Orders 
          Awarding Survivor Annuity Benefits to Former Spouses

     Subpart K_Court Orders Under the Child Abuse Accountability Act

                          Regulatory Structure

838.1101 Purpose and scope.

                          Availability of Funds

838.1111 Amounts subject to child abuse judgment enforcement orders.

   Application, Processing, and Payment Procedures and Documentation 
                              Requirements

838.1121 Procedures and requirements.

    Authority: 5 U.S.C. 8347(a) and 8461(g). Subparts B, C, D, E, J, and 
K also issued under 5 U.S.C. 8345(j)(2) and 8467(b). Sections 838.221, 
838.422, and 838.721 also issued under 5 U.S.C. 8347(b).

    Source: 57 FR 33574, July 29, 1992, unless otherwise noted.



                    Subpart A_Court Orders Generally

        Organization and Structure of Regulations on Court Orders



Sec. 838.101  Purpose and scope.

    (a)(1) This part regulates the Office of Personnel Management's 
handling of court orders affecting the Civil Service Retirement System 
(CSRS) or the Federal Employees Retirement System (FERS), both of which 
are administered by the Office of Personnel Management (OPM). Generally, 
OPM must comply with court orders, decrees, or court-approved property 
settlement agreements in connection with divorces, annulments of 
marriage, or legal separations of employees, Members, or retirees that 
award a portion of the former employee's or Member's retirement benefits 
or a survivor annuity to a former spouse.
    (2) In executing court orders under this part, OPM must honor the 
clear instructions of the court. Instructions must be specific and 
unambiguous. OPM will not supply missing provisions, interpret ambiguous 
language, or clarify the court's intent by researching individual State 
laws. In carrying out the court's instructions, OPM performs purely 
ministerial actions in accordance with these regulations. Disagreement 
between the parties concerning the validity or the provisions of any 
court order must be resolved by the court.
    (b) This part prescribes--
    (1) The requirements that a court order must meet to be acceptable 
for processing under this part;
    (2) The procedures that a former spouse or child abuse creditor must 
follow when applying for benefits based on a court order under sections 
8341(h), 8345(j), 8445 or 8467 of title 5, United States Code;
    (3) The procedures that OPM will follow in honoring court orders and 
in making payments to the former spouse or child abuse creditor; and
    (4) The effect of certain words and phrases commonly used in court 
orders affecting retirement benefits.
    (c)(1) Subparts A through I of this part apply only to court orders 
received by OPM on or after January 1, 1993.
    (2) Subpart J of this part applies only to court orders received by 
OPM before January 1, 1993.
    (3) Subpart K of this part applies only to court orders received by 
OPM on or after October 14, 1994.
    (d) This part has no application to the Thrift Savings Plan 
described in subchapter III of chapter 84 of title 5, United States 
Code.

[57 FR 33574, July 29, 1992, as amended at 59 FR 66637, 66638, Dec. 28, 
1994]



Sec. 838.102  Regulatory structure.

    (a) This part is organized as follows:
    (1) Subpart A contains information and rules of general application 
to all court orders directed at CSRS or FERS retirement benefits.
    (2) Subparts B and C of this part contain information about court 
orders directed at ongoing employee annuity payments.

[[Page 192]]

    (3) Subparts D and E of this part contain information about court 
orders directed at refunds of employee contributions.
    (4) Subpart F of this part contains information about the effect of 
words and phrases commonly used in court orders affecting ongoing 
employee annuity payments and refunds of employee contributions.
    (5) Subparts G, H, and I of this part contain information about 
court orders awarding former spouse survivor annuities.
    (6) Subpart J of this part contains the rules applicable to court 
orders filed under procedures in effect prior to the implementation of 
this part. These rules continue to apply to court orders received by OPM 
before January 1, 1993.
    (7) Subpart K of this part contains rules applicable to court orders 
for the enforcement of judgments rendered against employees or 
annuitants for physical, sexual, or emotional abuse of a child.
    (b) Part 890 of this chapter contains information about coverage 
under the Federal Employees Health Benefits Program.
    (c) Part 581 of this chapter contains information about garnishment 
of Government payments including salary and CSRS and FERS retirement 
benefits.
    (d) Parts 294 and 297 of this chapter and Sec. Sec. 831.106 and 
841.108 contain information about disclosure of information from OPM 
records.
    (e) Subpart V of part 831 of this chapter and subpart G of part 842 
of this chapter contain information about how court orders affect 
eligibility to make an alternative form of annuity election.
    (f) Part 1600 of this title contains information about court orders 
affecting the Federal Employees Thrift Savings Plan.
    (g) Subpart F of part 831 of this chapter, subpart F of part 841 of 
this chapter, and part 843 of this chapter contain information about 
entitlement to survivor annuities.
    (h) Subpart T of part 831 of this chapter and subpart B of part 843 
of this chapter contain information about refunds of employee 
contributions and lump-sum death benefits.
    (i) Parts 870, 871, 872, and 873 of this chapter contain information 
about the Federal Employees Group Life Insurance Program.

[57 FR 33574, July 29, 1992, as amended at 59 FR 66637, Dec. 28, 1994]



Sec. 838.103  Definitions.

    In this part (except subpart J)--
    Child abuse creditor means an individual who applies for benefits 
under CSRS or FERS based on a child abuse judgment enforcement order.
    Child abuse judgment enforcement order means a court or 
administrative order requiring OPM to pay a portion of an employee 
annuity or a refund of employee contributions to a child abuse creditor 
as a means of collection of a ``judgment rendered for physically, 
sexually, or emotionally abusing a child'' as defined in sections 
8345(j)(3)(B) and 8467(c)(2) of title 5, United States Code.
    Civil Service Retirement System or CSRS means the retirement system 
for Federal employees described in subchapter III of chapter 83 of title 
5, United States Code.
    Court order means any judgment or property settlement issued by or 
approved by any court of any State, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, The Northern Mariana Islands, or the 
Virgin Islands, or any Indian court in connection with, or incident to, 
the divorce, annulment of marriage, or legal separation of a Federal 
employee or retiree.
    Court order acceptable for processing means a court order as defined 
in this section that meets the requirements of subpart C of this part to 
affect an employee annuity, subpart E of this part to affect a refund of 
employee contributions, or subpart H of this part to award a former 
spouse survivor annuity.
    Employee means an employee or Member covered by CSRS or FERS.
    Employee annuity means the recurring payments under CSRS or FERS 
made to a retiree. Employee annuity does not include payments of accrued 
and unpaid annuity after the death of a retiree under section 8342(g) or 
section 8424(h) of title 5, United States Code.

[[Page 193]]

    ERISA means the Employees Retirement Income Security Act, 29 U.S.C. 
1001 et seq.
    Federal Employees Retirement System or FERS means the retirement 
system for Federal employees described in chapter 84 of title 5, United 
States Code.
    Former spouse means (1) in connection with a court order affecting 
an employee annuity or a refund of employee contributions, a living 
person whose marriage to an employee has been subject to a divorce, 
annulment of marriage, or legal separation resulting in a court order, 
or (2) in connection with a court order awarding a former spouse 
survivor annuity, a living person who was married for at least 9 months 
to an employee or retiree who performed at least 18 months of civilian 
service covered by CSRS or who performed at least 18 months of civilian 
service creditable under FERS, and whose marriage to the employee of 
retiree was terminated prior to the death of the employee or retiree.
    Former spouse survivor annuity means a recurring benefit under CSRS 
or FERS, or the basic employee death benefit under FERS as described in 
part 843 of this chapter, that is payable to a former spouse after the 
employee's or retiree's death.
    Gross annuity means the amount of monthly annuity payable after 
reducing the self-only annuity to provide survivor annuity benefits, if 
any, but before any other deduction. Unless the court order expressly 
provides otherwise, gross annuity also includes any lump-sum payments 
made to the retiree under section 8343a or section 8420a of title 5, 
United States Code.
    Member means a Member of Congress covered by CSRS or FERS.
    Net annuity means the amount of monthly annuity payable after 
deducting from the gross annuity any amounts that are--
    (1) Owed by the retiree to the United States;
    (2) Deducted for health benefits premiums under section 8906 of 
title 5, United States Code, and Sec. Sec. 891.401 and 891.402 of this 
chapter;
    (3) Deducted for life insurance premiums under section 8714a(d) of 
title 5, United States Code;
    (4) Deducted for Medicare premiums;
    (5) Properly withheld for Federal income tax purposes, if the 
amounts withheld are not greater than they would be if the retiree 
claimed all dependents to which he or she was entitled;
    (6) Properly withheld for State income tax purposes, if the amounts 
withheld are not greater than they would be if the retiree claimed all 
dependents to which he or she was entitled; or
    (7) Already payable to another person based on a court order 
acceptable for processing or a child abuse judgment enforcement order.

Unless the court order expressly provides otherwise, net annuity also 
includes any lump-sum payments made to the retiree under section 8343a 
or section 8420a of title 5, United States Code.
    Reduction to provide survivor benefits means the reduction required 
by section 8339(j)(4) or section 8419(a) of title 5, United States Code.
    Refund of employee contributions means a payment of the lump-sum 
credit to a separated employee under section 8342(a) or section 8424(a) 
of title 5, United States Code. Refund of employee contributions does 
not include lump-sum payments made under section 8342(c) through (f) or 
section 8424(d) through (g) of title 5, United States Code.
    Retiree means a former employee or Member who is receiving recurring 
payments under CSRS or FERS based on his or her service as an employee. 
Retiree does not include a person receiving an annuity only as a current 
spouse, former spouse, child, or person with an insurable interest. 
Self-only annuity means the recurring payments to a retiree who has 
elected not to provide a survivor annuity to anyone. Unless the court 
order expressly provides otherwise, self-only annuity also includes any 
lump-sum payments made to the retiree under section 8343a or section 
8420a of title 5, United States Code.
    Self-only annuity means the recurring unreduced payments under CSRS 
or FERS to a retiree with no survivor annuity payable to anyone.

[[Page 194]]

    Separated employee means a former employee or Member who has 
separated from a position in the Federal Government covered by CSRS and 
FERS under subpart B of part 831 of this chapter or subpart A of part 
842 of this chapter, respectively, and is not currently employed in such 
a position, and who is not a retiree.

[57 FR 33574, July 29, 1992, as amended at 58 FR 3202, Jan. 8, 1993; 59 
FR 66637, Dec. 28, 1994]

                  Statutory Limit on Court's Authority



Sec. 838.111  Exemption from legal process except as authorized by 
Federal law.

    (a) Employees, retirees, and State courts may not assign CSRS and 
FERS benefits except as provided in this part.
    (b) CSRS and FERS benefits are not subject to execution, levy, 
attachment, garnishment or other legal process except as expressly 
provided by Federal law.

                      Division of Responsibilities



Sec. 838.121  OPM's responsibilities.

    OPM is responsible for authorizing payments in accordance with 
clear, specific and express provisions of court orders acceptable for 
processing.



Sec. 838.122  State courts' responsibilities.

    State courts are responsible for--
    (a) Providing due process to the employee or retiree;
    (b) Issuing clear, specific, and express instructions consistent 
with the statutory provisions authorizing OPM to provide benefits to 
former spouses or child abuse creditors and the requirements of this 
part for awarding such benefits;
    (c) Using the terminology defined in this part only when it intends 
to use the meaning given to that terminology by this part;
    (d) Determining when court orders are invalid; and
    (e) Settling all disputes between the employee or retiree and the 
former spouse or child abuse creditor.

[57 FR 33574, July 29, 1992, as amended at 59 FR 66638, Dec. 28, 1994]



Sec. 838.123  Claimants' responsibilities.

    Claimants are responsible for--
    (a) Filing a certified copy of court orders and all other required 
supporting information with OPM;
    (b) Keeping OPM advised of their current mailing addresses;
    (c) Notifying OPM of any changes in circumstances that could affect 
their entitlement to benefits; and
    (d) Submitting all disputes with employees or retirees to the 
appropriate State court for resolution.



Sec. 838.124  Employees' and retirees' responsibilities.

    Employees and retirees are responsible for--
    (a) Raising any objections to the validity of a court order in the 
appropriate State court; and
    (b) Submitting all disputes with former spouses to the appropriate 
State court for resolution.

                Procedures Applicable to all Court Orders



Sec. 838.131  Computation of time.

    (a) The rules applicable for computation of time under Sec. Sec. 
831.107 and 841.109 of this chapter apply to this part.
    (b)(1) Appendix A of this subpart lists the proper addresses for 
submitting court orders affecting CSRS and FERS benefits.
    (2) A former spouse or child abuse creditor should submit the 
documentation required by this part to the address provided in appendix 
A of this subpart. The component of OPM responsible for processing court 
orders will note the date of receipt on court orders that it receives.
    (3) If a court order is delivered to OPM at an address other than 
the address in appendix A of this subpart, the recipient will forward 
the court order to the component of OPM responsible for processing court 
orders. However, OPM is not considered to have received the court order 
until the court order is received in the component of OPM responsible 
for processing orders.

[57 FR 33574, July 29, 1992, as amended at 59 FR 66638, Dec. 28, 1994]

[[Page 195]]



Sec. 838.132  Payment schedules.

    (a) Under CSRS and FERS, employee annuities and survivor annuities 
are payable on the first business day of the month following the month 
in which the benefit accrues.
    (b) In honoring and complying with a court order, OPM will not 
disrupt the payment schedule described in paragraph (a) of this section, 
despite any provision in the court order directing a different schedule 
of accrual or payment of amounts due the former spouse or child abuse 
creditor.

[57 FR 33574, July 29, 1992, as amended at 59 FR 66638, Dec. 28, 1994]



Sec. 838.133  Minimum awards.

    Payments under this part will not be less than one dollar per month. 
Any court order that awards a former spouse a portion of an employee 
annuity or a former spouse survivor annuity in an amount of less than 
one dollar per month will be treated as an award of an annuity equal to 
one dollar per month.



Sec. 838.134  Receipt of multiple court orders.

    (a) Except as provided in paragraph (c) of this section, for court 
orders affecting employee annuities or awarding former spouse survivor 
annuities, in the event that OPM receives two or more court orders 
acceptable for processing--
    (1) When the court orders relate to two or more individuals (former 
spouses or child abuse creditors), the court orders will be honored in 
the order in which they were received by OPM to the maximum extent 
possible under Sec. 838.211 or Sec. 838.711.
    (2) When two or more court orders relate to the same former spouse, 
separated spouse, or child abuse creditor the one issued last will be 
honored.
    (b)(1) Except as provided in paragraph (c) of this section, for 
court orders affecting refunds of employee contributions, in the event 
that OPM receives two or more court orders acceptable for processing--
    (i) When the court orders affect two or more former spouses--
    (A) The refund will not be paid if either court order prohibits 
payment of the refund of contributions; otherwise,
    (B) The court orders will be honored in the order in which they were 
issued until the contributions have been exhausted.
    (ii) When two or more court orders relate to the same former spouse, 
the one issued last will be honored first.
    (2) In no event will the amount paid out exceed the amount of the 
refund of employee contributions.
    (c) With respect to issues relating to the validity of a court order 
or to the amount of payment--
    (1) If the employee, separated employee, retiree, or other person 
adversely affected by the court order and former spouse submit 
conflicting court orders from the same jurisdiction, OPM will consider 
only the latest court order; or
    (2) If the employee, separated employee, retiree, or other person 
adversely affected by the court order and former spouse submit 
conflicting court orders from different jurisdictions--
    (i) If one of the court orders is from the jurisdiction shown as the 
employee's, separated employee's, or retiree's address in OPM's records, 
OPM will consider only the court order issued by that jurisdiction; or
    (ii) If none of the court orders is from the jurisdiction shown as 
the employee's, separated employee's, or retiree's address in OPM's 
records, OPM will consider only the latest court order.

[57 FR 33574, July 29, 1992, as amended at 59 FR 66638, Dec. 28, 1994]



Sec. 838.135  Settlements.

    (a) OPM must comply with the terms of a properly filed court order 
acceptable for processing even if the retiree and the former spouse 
agree that they want OPM to pay an amount different from the amount 
specified in the court order. Information about OPM's processing of 
amended court orders is contained in Sec. Sec. 838.225 and 838.806.
    (b)(1) OPM will not honor a request from the former spouse that an 
amount less than the amount provided in the court order be withheld from 
an employee annuity or a refund of employee contributions.

[[Page 196]]

    (2) OPM will not honor a request from the retiree that an amount 
greater than the amount provided in the court order be withheld from an 
employee annuity or a refund of employee contributions.

[57 FR 33574, July 29, 1992, as amended at 58 FR 3202, Jan. 8, 1993]



Sec. 838.136  Administrative appeal rights.

    (a) Issues concerning application of these regulations are not 
appealable to the Merit Systems Protection Board. OPM's actions to apply 
these regulations are not subject to further administrative review.
    (b)(1) Issues concerning the validity of these regulations are 
appealable to the Merit Systems Protection Board. Such an appeal must be 
filed in accordance with the procedures established by the Board and may 
not be filed before OPM has issued its final decision, including a 
notice of the right to appeal, on the validity of the regulation. Such 
an appeal is limited to the issue of the validity of the regulation.
    (2) Any claim that a provision of these regulations is invalid, must 
be presented to the Merit Systems Protection Board before the validity 
of the regulation may be reviewed in the Federal courts.

                Address for Filing Court Orders With OPM

Appendix A to Subpart A of Part 838--Addresses for Serving Court Orders 
                     Affecting CSRS or FERS Benefits

    (a) The mailing address for delivery of court orders affecting CSRS 
or FERS benefits by the United States Postal Service is--

Office of Personnel Management, Retirement and Insurance Group, P.O. Box 
17, Washington, DC 20044-0017

    (b) The address for delivery of court orders affecting CSRS or FERS 
benefits by process servers, express carriers, or other forms of 
handcarried delivery is--

Court-ordered Benefits Section, Allotments Branch, Retirement and 
Insurance Group, Office of Personnel Management, 1900 E Street, NW., 
Washington, DC

[57 FR 33574, July 29, 1992, as amended at 58 FR 3202, Jan. 8, 1993]



  Subpart B_Procedures for Processing Court Orders Affecting Employee 
                                Annuities

                          Regulatory Structure



Sec. 838.201  Purpose and scope.

    (a) This subpart regulates the procedures that the Office of 
Personnel Management will follow upon the receipt of claims arising out 
of State court orders directed at employee annuities under CSRS or FERS. 
OPM must comply with qualifying court orders, decrees, or court-approved 
property settlements in connection with divorces, annulments of 
marriages, or legal separations of employees or retirees that award a 
portion of an employee annuity to a former spouse.
    (b) This subpart prescribes--
    (1) The circumstances that must occur before employee annuities are 
available to satisfy a court order acceptable for processing; and
    (2) The procedures that a former spouse must follow when applying 
for a portion of an employee annuity based on a court order under 
section 8345(j) or section 8467 of title 5, United States Code.
    (c)(1) Subpart C of this part contains the rules that a court order 
must satisfy to be a court order acceptable for processing to affect an 
employee annuity.
    (2) Subpart F of this part contains definitions that OPM uses to 
determine the effect on employee annuity of a court order acceptable for 
processing.

                          Availability of Funds



Sec. 838.211  Amounts subject to court orders.

    (a)(1) Employee annuities are subject to court orders acceptable for 
processing only if all of the conditions necessary for payment of the 
employee annuity to the former employee have been met, including, but 
not limited to--
    (i) Separation from a position in the Federal service covered by 
CSRS or FERS under subpart B of part 831 of this chapter or subpart A of 
part 842 of this chapter, respectively;

[[Page 197]]

    (ii) Application for payment of the employee annuity by the former 
employee; and
    (iii) The former employee's immediate entitlement to an employee 
annuity.
    (2) Money held by an employing agency or OPM that may be payable at 
some future date is not available for payment under court orders 
directed at employee annuities.
    (3) OPM cannot pay a former spouse a portion of an employee annuity 
before the employee annuity begins to accrue.
    (b) Payment to a former spouse under a court order may not exceed 
the net annuity.
    (c) Waivers of employee annuity payments under the terms of section 
8345(d) or section 8465(a) of title 5, United States Code, exclude the 
waived portion of the annuity from availability for payment under a 
court order if such waivers are postmarked or received before the date 
that OPM receives a court order acceptable for processing.

                  Application and Processing Procedures



Sec. 838.221  Application requirements.

    (a) A former spouse (personally or through a representative) must 
apply in writing to be eligible for a court-awarded portion of an 
employee annuity. No special form is required.
    (b) The application letter must be accompanied by--
    (1) A certified copy of the court order acceptable for processing 
that is directed at employee annuity;
    (2) A certification from the former spouse or the former spouse's 
representative that the court order is currently in force and has not 
been amended, superseded, or set aside;
    (3) Information sufficient for OPM to identify the employee or 
retiree, such as his or her full name, CSRS or FERS claim number, date 
of birth, and social security number;
    (4) The current mailing address of the former spouse; and
    (5) If the employee has not retired under CSRS or FERS or died, the 
mailing address of the employee.
    (c)(1) When court-ordered payments are subject to termination (under 
the terms of the court order) if the former spouse remarries, no payment 
will be made until the former spouse submits to OPM a statement in the 
form prescribed by OPM certifying--
    (i) That a remarriage has not occurred;
    (ii) That the former spouse will notify OPM within 15 calendar days 
of the occurrence of any remarriage; and
    (iii) That the former spouse will be personally liable for any 
overpayment to him or her resulting from a remarriage.
    (2) OPM may subsequently require periodic recertification of the 
statements required under paragraph (c)(1) of this section.



Sec. 838.222  OPM action on receipt of a court order acceptable for 
processing.

    (a) If OPM receives a court order acceptable for processing that is 
directed at an employee annuity that is in pay status, OPM will inform--
    (1) The former spouse--
    (i) That the court order is acceptable for processing;
    (ii) Of the date on which OPM received the court order, the date on 
which the former spouse's benefit begins to accrue, and if known, the 
date on which OPM commences payment under the order;
    (iii) Of the amount of the former spouse's monthly benefit and the 
formula OPM used to compute the monthly benefit; and
    (iv) That, if he or she disagrees with the amount of the monthly 
benefits, he or she must obtain, and submit to OPM, an amended court 
order clarifying the amount; and
    (2) The retiree--
    (i) That the former spouse has applied for benefits under this 
subpart;
    (ii) That the court order is acceptable for processing and that OPM 
must comply with the court order;
    (iii) Of the date on which OPM received the court order, the date on 
which the former spouse's benefit begins or accrue, and if known, the 
date on which OPM commences payment under the court order;

[[Page 198]]

    (iv) Of the amount of the former spouse's monthly benefit and the 
formula OPM used to compute the monthly benefit;
    (v) That, if he or she contests the validity of the court order, he 
or she must obtain, and submit to OPM, a court order invalidating the 
court order submitted by the former spouse; and
    (vi) That, if he or she disagrees with the amount of the former 
spouse's monthly benefits, he or she must obtain, and submit to OPM, an 
amended court order clarifying the amount.
    (b) If OPM receives a court order acceptable for processing that is 
directed at an employee annuity but the employee has died, or if a 
retiree dies after payments from an employee to a former spouse have 
begun, OPM will inform the former spouse that the employee or retiree 
has died and that OPM can only honor court orders dividing employee 
annuities during the lifetime of the retiree.
    (c) If OPM receives a court order acceptable for processing that is 
directed at an employee annuity that is not in pay status, OPM will 
inform--
    (1) The former spouse--
    (i) That the court order is acceptable for processing;
    (ii) That benefits cannot begin to accrue until the employee 
retires;
    (iii) To the extent possible, the formula that OPM will use to 
compute the former spouse's monthly benefit; and
    (iv) That, if he or she disagrees with the formula, he or she must 
obtain, and submit to OPM, an amended court order clarifying the amount; 
and
    (2) The employee, separated employee, or retiree--
    (i) That the former spouse has applied for benefits under this 
subpart;
    (ii) That the court order is acceptable for processing and that OPM 
must comply with the court order;
    (iii) To the extent possible, the formula that OPM will use to 
compute the former spouse's monthly benefit;
    (iv) That, if he or she contests the validity of the court order, he 
or she must obtain, and submit to OPM, a court order invalidating the 
court order submitted by the former spouse; and
    (v) That, if he or she disagrees with the amount of the former 
spouse's monthly benefits, he or she must obtain, and submit to OPM, an 
amended court order clarifying the amount.
    (d) The failure of OPM to provide, or of the employee, separated 
employee, or retiree or the former spouse to receive, the information 
specified in this section prior to the commencing date of a reduction or 
accrual does not affect--
    (1) The validity of payment under the court order; or
    (2) The commencing date of the reduction in the employee annuity or 
the commencing date of the accrual of former spouse benefits as 
determined under Sec. 838.231.



Sec. 838.223  OPM action on receipt of a court order not acceptable 
for processing.

    If OPM receives an application from a former spouse not based on a 
court order acceptable for processing, OPM will inform the former spouse 
that OPM cannot approve the application and provide the specific 
reason(s) for disapproving the application. Examples of reasons for 
disapproving an application include that the court order does not meet 
the definition of court order in Sec. 838.103 or does not meet one or 
more of the requirements of subpart C of this part.



Sec. 838.224  Contesting the validity of court orders.

    (a) An employee, separated employee, or retiree who alleges that a 
court order is invalid must prove the invalidity of the court order by 
submitting a court order that--
    (1) Declares the court order submitted by the former spouse is 
invalid; or
    (2) Sets aside the court order submitted by the former spouse.
    (b) OPM must honor a court order acceptable for processing that 
appears to be valid and that the former spouse has certified is 
currently in force and has not been amended, superseded, or set aside, 
until OPM receives a court order described in paragraph (a) of this 
section or a court order amending or superseding the court order 
submitted by the former spouse.

[[Page 199]]



Sec. 838.225  Processing amended court orders.

    (a) If the employee, separated employee, retiree, or former spouse 
submits an amended court order pertaining to payment of a portion of the 
employee annuity, OPM will process the amended court order prospectively 
only, effective against employee annuity accruing beginning the first 
day of the second month after OPM receives the amended court order.
    (b) A court order is not effective to adjust payments prior to the 
first day of the second month after OPM receives the court order 
unless--
    (1) The court order--
    (i) Expressly directs OPM to adjust for payment made under the prior 
court order; and
    (ii) Determines the total amount of the adjustment or the length of 
time over which OPM will make the adjustment; and
    (iii) Provides a specific monthly amount of the adjustment or a 
formula to compute the amount of the monthly adjustment; and
    (2) Annuity continues to be available from which to make the 
adjustment.

                           Payment Procedures



Sec. 838.231  Commencing date of payments.

    (a) A court order acceptable for processing is effective against 
employee annuity accruing beginning the first day of the second month 
after OPM receives the court order.
    (b)(1) OPM will not begin payments to the former spouse until OPM 
receives all the documentation required by Sec. 838.221 (b) and (c).
    (2) If payments are delayed under paragraph (b)(1) of this section, 
after OPM receives all required documentation, it will authorize payment 
of the annuity that has accrued since the date determined under 
paragraph (a) of this section but the payment of which was delayed under 
paragraph (b)(1) of this section.



Sec. 838.232  Suspension of payments.

    (a) Payments from employee annuities under this part will be 
discontinued whenever the employee annuity payments are suspended or 
terminated. If employee annuity payments to the retiree are restored, 
payments to the former spouse will also resume subject to the terms of 
any court order acceptable for processing in effect at that time.
    (b) Paragraph (a) of this section will not be applied to permit a 
retiree to deprive a former spouse of payment by causing suspension of 
payment of employee annuity.



Sec. 838.233  Termination of payments.

    A former spouse portion of an employee annuity stops accruing at the 
earliest of--
    (a) The date on which the terms of the court order require 
termination;
    (b)(1) The last day of the first month before OPM receives a court 
order invalidating, vacating, or setting aside the court order submitted 
by the former spouse if OPM receives the latest court order no later 
than 20 days before the end of the month; or
    (2) The last day of the month in which OPM receives a court order 
invalidating, vacating, or setting aside the court order submitted by 
the former spouse if OPM receives the latest court order than 20 days 
before the end of the month; or
    (c) The last day of the first month after OPM receives an amended 
court order;
    (d) The last day of the first month before the death of the retiree; 
or
    (e) Except as provided in Sec. 838.237, the date on which the 
former spouse dies.



Sec. 838.234  Collection of arrearages.

    Specific instructions are required before OPM may pay any arrearage. 
Except as provided in Sec. 838.225(b), OPM will not increase a former 
spouse's share of employee annuity to satisfy an arrearage due the 
former spouse. However, under Sec. 838.225, OPM will prospectively 
honor the terms of an amended court order that either increases or 
decreases the court order's entitlement.



Sec. 838.235  Payment of lump-sum awards.

    If a court order acceptable for processing awards a former spouse a 
lump-sum amount from the employee annuity and does not state the monthly 
rate at which OPM should pay the lump-

[[Page 200]]

sum, OPM will pay the former spouse equal monthly installments at 50 
percent of the gross annuity (subject to the limitations under Sec. 
838.211) at the time of retirement or the date of the order, whichever 
comes later, until the lump-sum amount is paid.



Sec. 838.236  Court orders barring payment of annuities.

    (a) State courts lack authority to prevent OPM from paying employee 
annuities as required by section 8345(a) or section 8463 of title 5, 
United States Code. OPM will not honor court orders directing that OPM 
delay or otherwise not pay employee annuities at the time or in the 
amount required by statute.
    (b) Except as otherwise provided in this subpart, OPM will honor 
court orders acceptable for processing that direct OPM to pay the 
employee annuity to the court, an officer of the court acting as a 
fiduciary, or a State or local government agency during the pendency of 
a divorce or legal separation proceeding.



Sec. 838.237  Death of the former spouse.

    (a) Unless the court order acceptable for processing expressly 
provides otherwise, the former spouse's share of an employee annuity 
terminates on the last day of the month before the death of the former 
spouse, and the former spouse's share of employee annuity reverts to the 
retiree.
    (b) Except as otherwise provided in this subpart, OPM will honor a 
court order acceptable for processing or an amended court order 
acceptable for processing that directs OPM to pay, after the death of 
the former spouse, the former spouse's share of the employee annuity 
to--
    (1) The court;
    (2) An officer of the court acting as fiduciary;
    (3) The estate of the former spouse; or
    (4) One or more of the retiree's children as defined in section 
8342(c) or section 8424(d) of title 5, United States Code.

[57 FR 33574, July 29, 1992, as amended at 58 FR 43493, Aug. 17, 1993]

               Procedures for Computing the Amount Payable



Sec. 838.241  Cost-of-living adjustments.

    Unless otherwise provided in the court order, when the terms of the 
court order or Sec. 838.621 provide for cost-of-living adjustments on 
the former spouse's payment from employee annuity, the cost-of-living 
adjustment will be effected at the same time and at the same percentage 
rate as the cost-of-living adjustment in the employee annuity.



Sec. 838.242  Computing lengths of service.

    (a)(1) The smallest unit of time that OPM will calculate in 
computing a formula in a court order is a month, even where the court 
order directs OPM to make a more precise calculation.
    (2) If the court order states a formula using a specified simple or 
decimal fraction other than twelfth parts of a year, OPM will use the 
specified number to perform simple mathematical computations.
    (b) Unused sick leave is counted as ``creditable service'' on the 
date of separation for an immediate CSRS annuity; it is not apportioned 
over the time when earned. Unused sick leave is not countable as 
``creditable service'' in a FERS annuity (except in a CSRS component for 
an employee who transferred to FERS) or in a deferred CSRS annuity.



Sec. 838.243  Minimum amount of awards.

    OPM will treat any court order that awards a former spouse a portion 
of an employee annuity equal to less than $12 per year as awarding the 
former spouse $1 per month.



  Subpart C_Requirements for Court Orders Affecting Employee Annuities



Sec. 838.301  Purpose and scope.

    This subpart regulates the requirements that a court order directed 
at employee annuity must meet to be a court order acceptable for 
processing.

[[Page 201]]



Sec. 838.302  Language not acceptable for processing.

    (a) Qualifying Domestic Relations Orders. (1) Any court order 
labeled as a ``qualified domestic relations order'' or issued on a form 
for ERISA qualified domestic relations orders is not a court order 
acceptable for processing unless the court order expressly states that 
the provisions of the court order concerning CSRS or FERS benefits are 
governed by this part.
    (2) When a court order is required by paragraph (a)(1) of this 
section to state that the provisions of a court order concerning CSRS or 
FERS benefits are governed by this part the court order must expressly--
    (i) Refer to part 838 of title 5, Code of Federal Regulations, and
    (ii) State that the provisions of the court order concerning CSRS or 
FERS benefits are drafted in accordance with the terminology used in 
this part.
    (3) Although any language satisfying the requirements of paragraph 
(a)(2) of this section is sufficient to prevent a court order from being 
unacceptable under paragraph (a)(1) of this section, OPM recommends the 
use of the language provided in ] 001 in appendix A to subpart F of this 
part to state that the provisions of the court order concerning CSRS or 
FERS benefits are governed by this part.
    (4) A court order directed at employee annuity that contains the 
language described in paragraph (a)(2) of this section must also satisfy 
all other requirements of this subpart to be a court order acceptable 
for processing.
    (b) Benefits for the lifetime of the former spouse. Any court order 
directed at employee annuity that expressly provides that the former 
spouse's portion of the employee annuity may continue after the death of 
the employee or retiree, such as a court order providing that the former 
spouse's portion of the employee annuity will continue for the lifetime 
of the former spouse, is not a court order acceptable for processing.



Sec. 838.303  Expressly dividing employee annuity.

    (a) A court order directed at employee annuity is not a court order 
acceptable for processing unless it expressly divides the employee 
annuity as provided in paragraph (b) of this section.
    (b) To expressly divide employee annuity as required by paragraph 
(a) of this section the court order must--
    (1) Identify the retirement system using terms that are sufficient 
to identify the retirement system as explained in Sec. 838.611; and
    (2) Expressly state that the former spouse is entitled to a portion 
of the employee annuity using terms that are sufficient to identify the 
employee annuity as explained in Sec. 838.612.



Sec. 838.304  Providing for payment to the former spouse.

    (a) A court order directed at employee annuity is not a court order 
acceptable for processing unless it provides for OPM to pay the former 
spouse a portion of an employee annuity as provided in paragraph (b) of 
this section.
    (b) To provide for OPM to pay the former spouse a portion of an 
employee annuity as required by paragraph (a) of this section the court 
order must--
    (1) Expressly direct OPM to pay the former spouse directly;
    (2) Direct the retiree to arrange or to execute forms for OPM to pay 
the former spouse directly; or
    (3) Be silent concerning who is to pay the portion of the employee 
annuity awarded to the former spouse.
    (c) Except when the court order directed at employee annuity 
contains a provision described in paragraph (b)(2) of this section, a 
court order directed at employee annuity that instructs the retiree to 
pay a portion of the employee annuity to the former spouse is not a 
court order acceptable for processing.
    (d) Although paragraphs (b)(2) and (b)(3) of this section provide 
acceptable methods for satisfying the requirement that a court order 
directed at employee annuity provide for OPM to pay the former spouse, 
OPM strongly recommends that any court order directed at employee 
annuity expressly direct OPM to pay the former spouse directly.

[[Page 202]]



Sec. 838.305  OPM computation of formulas.

    (a) A court order directed at employee annuity is not a court order 
acceptable for processing unless the court order provides sufficient 
instructions and information that OPM can compute the amount of the 
former spouse's monthly benefit using only the express language of the 
court order, subparts A, B, and F of this part, and information from 
normal OPM files.
    (b)(1) To provide sufficient instructions and information for OPM to 
compute the amount of the former spouse's share of the employee annuity 
as required by paragraph (a) of this section the court order must state 
the former spouse's share as--
    (i) A fixed amount;
    (ii) A percentage or a fraction of the employee annuity; or
    (iii) A formula that does not contain any variables whose values are 
not readily ascertainable from the face of the court order directed at 
employee annuity or normal OPM files.
    (2) Normal OPM files include information about--
    (i) The dates of employment for all periods of creditable civilian 
and military service;
    (ii) The rate of basic pay for all periods of creditable civilian 
service;
    (iii) The annual rates of basic pay for each grade and step under 
the General Schedule since 1920;
    (iv) The amount of premiums for basic and optional life insurance 
under the Federal Employees Group Life Insurance Program;
    (v) The amount of the Government and the employee shares of premiums 
for any health insurance plan under the Federal Employees Health 
Benefits Program;
    (vi) The standard Federal income tax withholding tables;
    (vii) The amount of cost-of-living adjustments under section 8340 or 
section 8462 of title 5, United States Code, and the amount of the 
percentage change in the national index on which the adjustment is 
based;
    (viii) The amount of pay adjustments to the General Schedule under 
section 5303 (or section 5305 prior to November 5, 1990) of title 5, 
United States Code, and the amount of the percentage change in the 
national index on which the adjustment is based;
    (ix) The provision of law under which a retiree has retired; and
    (x) Whether a retiree has elected to provide survivor benefits for a 
current spouse, former spouse, or a person with an insurable interest.
    (c)(1) A court order directed at employee annuity is not a court 
order acceptable for processing if OPM would have to examine a State 
statute or court decision (on a different case) to understand, 
establish, or evaluate the formula for computing the former spouse's 
share of the employee annuity.
    (2) A court order directed at employee annuity is not a court order 
acceptable for processing if it awards the former spouse a ``community 
property'' fraction, share, or percentage of the employee annuity and 
does not provide a formula by which OPM can compute the amount of the 
former spouse's share of the employee annuity from the face of the court 
order or from normal OPM files.
    (d) A court order directed at employee annuity is not a court order 
acceptable for processing if the court order awards a portion of the 
``present value'' of an annuity unless the amount of the ``present 
value'' is stated in the court order.
    (e) A court order directed at employee annuity is not a court order 
acceptable for processing if the court order directs OPM to determine a 
rate of employee annuity that would require OPM to determine a salary or 
average salary, other than a salary or average salary actually used in 
computing the employee annuity, as of a date prior to the date of the 
employee's separation and to adjust that salary for use in computing the 
former spouse share unless the adjustment is by--
    (1) A fixed amount or fixed annual amounts that are stated in the 
order;
    (2) The rate of cost-of-living or salary adjustments as those terms 
are described in Sec. 838.622;
    (3) The percentage change in pay that the employee actually received 
excluding changes in grade and/or step; or
    (4) The percentage change in either of the national indices used to 
compute

[[Page 203]]

cost-of-living or salary adjustments as those terms are described in 
Sec. 838.622.



Sec. 838.306  Specifying type of annuity for application of formula, 
percentage or fraction.

    (a) A court order directed at employee annuity that states the 
former spouse's share of employee annuity as a formula, percentage, or 
fraction is not a court order acceptable for processing unless OPM can 
determine the type of annuity on which to apply the formula, percentage, 
or fraction.
    (b) The standard types of annuity to which OPM can apply the 
formula, percentage, or fraction are net annuity, gross annuity, or 
self-only annuity, which are defined in Sec. 838.103. Unless the court 
order otherwise directs, OPM will apply the formula, percentage, or 
fraction to gross annuity. Section 838.625 contains information on other 
methods of describing these types of annuity.



 Subpart D_Procedures for Processing Court Orders Affecting Refunds of 
                         Employee Contributions

                          Regulatory Structure



Sec. 838.401  Purpose and scope.

    (a) This subpart regulates the procedures that the Office of 
Personnel Management will follow upon the receipt of claims arising out 
of State court orders that affect refunds of employee contributions 
under CSRS or FERS. OPM must comply with court orders, decrees, or 
court-approved property settlements in connection with divorces, 
annulments of marriages, or legal separations of employees or retirees 
that--
    (1) Award a portion of a refund of employee contributions to a 
former spouse; or
    (2) If the requirements of Sec. Sec. 838.431 and 838.505 are met, 
bar payment of a refund of employee contributions.
    (b) This subpart prescribes--
    (1) The circumstances that must occur before refunds of employee 
contributions are available to satisfy a court order acceptable for 
processing; and
    (2) The procedures that a former spouse must follow when applying 
for a portion of a refund of employee contributions based on a court 
order under section 8345(j) or section 8467 of title 5, United States 
Code.
    (c)(1) Subpart E of this part contains the rules that a court order 
directed at a refund of employee contributions must satisfy to be a 
court order acceptable for processing.
    (2) Subpart F of this part contains definitions that OPM uses to 
determine the effect on a refund of employee contributions of a court 
order acceptable for processing.

                          Availability of Funds



Sec. 838.411  Amounts subject to court orders.

    (a)(1) Refunds of employee contributions are subject to court orders 
acceptable for processing only if all of the conditions necessary for 
payment of the refund of employee contributions to the separated 
employee have been met, including, but not limited to--
    (i) Separation from a covered position in the Federal service;
    (ii) Application for payment of the refund of employee contributions 
by the separated employee; and
    (iii) Immediate entitlement to a refund of employee contributions.
    (2) Money held by an employing agency or OPM that may be payable at 
some future date is not available for payment under court orders 
directed at refunds of employee contributions.
    (b) Payment under a court order may not exceed the amount of the 
refund of employee contributions.

                  Application and Processing Procedures



Sec. 838.421  Application requirements.

    (a) A former spouse (personally or through a representative) must 
apply in writing to be eligible for a court-awarded portion of a refund 
of employee contributions. No special form is required.
    (b) The application letter must be accompanied by--
    (1) A certified copy of the court order acceptable for processing 
that is directed at a refund of employee contributions.

[[Page 204]]

    (2) A certification from the former spouse or the former spouse's 
representative that the court order is currently in force and has not 
been amended, superseded, or set aside;
    (3) Information sufficient for OPM to identify the employee or 
separated employee, such as his or her full name, date of birth, and 
social security number;
    (4) The current mailing address of the former spouse; and
    (5) If the employee or separated employee has not applied for a 
refund of employee contributions, the current mailing address of the 
employee or separated employee.



Sec. 838.422  Timeliness of application.

    (a) Except as provided in Sec. 838.431 and paragraph (b) of this 
section, a court order acceptable for processing that is directed at a 
refund of employee contributions is not effective unless OPM receives 
the documentation required by Sec. 838.421 not later than--
    (1) The last day of the second month before payment of the refund; 
or
    (2) Twenty days after OPM receives the Statement required by Sec. 
831.2007(c) or Sec. 843.208(b) of this chapter if the former spouse has 
indicated on that Statement that such a court order exists.
    (b) If OPM receives a copy of a court order acceptable for 
processing that is directed at a refund of employee contributions but 
not all of the documentation required by Sec. 838.421, OPM will notify 
the former spouse that OPM must receive the missing items within 15 days 
after the date of the notice or OPM cannot comply with the court order.

[57 FR 33574, July 29, 1992, as amended at 58 FR 43493, Aug. 17, 1993]



Sec. 838.423  OPM action on receipt of a court order acceptable for 
processing.

    (a) If OPM receives a court order acceptable for processing that is 
directed at a refund of employee contributions, OPM will inform--
    (1) The former spouse--
    (i) That the court order is acceptable for processing;
    (ii) Of the date on which OPM received the court order;
    (iii) Whether OPM has a record of unrefunded employee contributions 
on the employee;
    (iv) That the former spouse's share of the refund of employee 
contributions cannot be paid unless the employee separates from the 
Federal service and applies for a refund of employee contributions;
    (v) To the extent possible, the formula that OPM will use to compute 
the former spouse's share of a refund of employee contributions; and
    (vi) That, if the former spouse disagrees with the formula, the 
former spouse must obtain, and submit to OPM, an amended court order 
clarifying the amount; and
    (2) The employee or separated employee--
    (i) That the former spouse has applied for benefits under this 
subpart;
    (ii) That the court order is acceptable for processing and that OPM 
must comply with the court order;
    (iii) Of the date on which OPM received the court order;
    (iv) That the former spouse's share of the refund of employee 
contributions cannot be paid unless the employee separates from the 
Federal service and applies for a refund of employee contributions;
    (v) To the extent possible, the formula that OPM will use to compute 
the former spouse's share of the refund of employee contributions;
    (vi) That, if he or she contests the validity of the court order, he 
or she must obtain, and submit to OPM, a court order invalidating the 
court order submitted by the former spouse; and
    (vii) That, if he or she disagrees with the formula, he or she must 
obtain, and submit to OPM, an amended court order clarifying the amount.
    (b) The failure of OPM to provide, or of the employee or separated 
employee or the former spouse to receive, the information specified in 
this section does not affect the validity of payment under the court 
order.



Sec. 838.424  OPM action on receipt of a court order not acceptable 
for processing.

    If OPM receives an application from a former spouse not based on a 
court

[[Page 205]]

order acceptable for processing, OPM will inform the former spouse that 
OPM cannot approve the application and provide the specific reason(s) 
for disapproving the application. Examples of reasons for disapproving 
an application include that the order does not meet the definition of 
court order in Sec. 838.103 or does not meet one or more of the 
requirements of subpart E of this part.



Sec. 838.425  Contesting the validity of court orders.

    (a) An employee or separated employee who alleges that a court order 
is invalid must prove the invalidity of the court order by submitting a 
court order that--
    (1) Declares invalid the court order submitted by the former spouse; 
or
    (2) Sets aside the court order submitted by the former spouse.
    (b) OPM must honor a court order acceptable for processing that 
appears to be valid and that the former spouse has certified is 
currently in force and has not been amended, superseded, or set aside, 
until the employee or separated employee submits a court order described 
in paragraph (a) of this section or a court order amending or 
superseding the court order submitted by the former spouse.

                           Payment Procedures



Sec. 838.431  Correcting failures to provide required spousal 
notification.

    The interests of a former spouse with a court order acceptable for 
processing that is directed at a refund of employee contributions who 
does not receive notice of an application for refund of employee 
contributions because the employee or separated employee submits 
fraudulent proof of notification or fraudulent proof that the former 
spouse's whereabouts are unknown are protected if, and only if--
    (a) The former spouse files a court order acceptable for processing 
that affects or bars the refund of employee contributions with OPM no 
later than the last day of the second month before the payment of the 
refund; or
    (b) The former spouse submits proof that--
    (1) The evidence submitted by the employee was fraudulent; and
    (2) Absent the fraud, the former spouse would have been able to 
submit the necessary documentation required by Sec. 838.421 within the 
time limit prescribed in Sec. 838.422.



Sec. 838.432  Court orders barring payment of refunds.

    A court order, notice, summons, or other document that attempts to 
restrain OPM from paying a refund of employee contributions is not 
effective unless it meets all the requirements of Sec. 838.505 or part 
581 of this chapter.

               Procedures for Computing the Amount Payable



Sec. 838.441  Computing lengths of service.

    (a) The smallest unit of time that OPM will calculate in computing a 
formula in a court order is a month, even where the court order directs 
OPM to make a more precise calculation.
    (b) If the court order states a formula using a specified simple or 
decimal fraction other than twelfth parts of a year, OPM will use the 
specified number to perform simple mathematical computations.



 Subpart E_Requirements for Court Orders Affecting Refunds of Employee 
                              Contributions



Sec. 838.501  Purpose and scope.

    This subpart regulates the requirements that a court order directed 
at or barring a refund of employee contributions must meet to be a court 
order acceptable for processing.
    (a) A court order is directed at a refund of employee contributions 
if it awards a former spouse a portion of a refund of employee 
contributions.
    (b) A court order bars a refund of employee contributions if it 
prohibits payment of a refund of employee contributions to preserve a 
former spouse's court-awarded entitlement to a portion of an employee 
annuity or to a former spouse survivor annuity.



Sec. 838.502  Expressly dividing a refund of employee contributions.

    (a) A court order directed at a refund of employee contributions is 
not a

[[Page 206]]

court order acceptable for processing unless it expressly awards a 
former spouse a portion of a refund of employee contributions as 
provided in paragraph (b) of this section.
    (b) To expressly award a former spouse a portion of a refund of 
employee contributions as required by paragraph (a) of this section, the 
court order must--
    (1) Identify the retirement system using terms that are sufficient 
to identify the retirement system as explained in Sec. 838.611; and
    (2) Expressly state that the former spouse is entitled to a portion 
of a refund of employee contributions using terms that are sufficient to 
identify the refund of employee contributions as explained in Sec. 
838.612.



Sec. 838.503  Providing for payment to the former spouse.

    (a) A court order directed at a refund of employee contributions is 
not a court order acceptable for processing unless it provides for OPM 
to pay a portion of a refund of employee contributions to the former 
spouse as provided in paragraph (b) of this section.
    (b) To provide for OPM to pay a portion of a refund of employee 
contributions to the former spouse as required by paragraph (a) of this 
section, the court order must--
    (1) Expressly direct OPM to pay the former spouse directly;
    (2) Direct the employee or separated employee to arrange or to 
execute forms for OPM to pay the former spouse directly; or
    (3) Be silent concerning who is to pay the portion of the refund of 
employee contributions awarded to the former spouse.
    (c) Although paragraphs (b)(2) and (b)(3) of this section provide 
acceptable methods for satisfying the requirement that the court order 
provide for OPM to pay the former spouse, OPM strongly recommends that 
the court order expressly direct OPM to pay the former spouse directly.



Sec. 838.504  OPM computation of formulas.

    (a) A court order directed at a refund of employee contributions is 
not a court order acceptable for processing unless the court order 
provides sufficient instructions and information so that OPM can compute 
the amount of the former spouse's share of the refund of employee 
contributions using only the express language of the court order, 
subparts A, D, and F of this part, and information from normal OPM 
files.
    (b) To provide sufficient instructions and information that OPM can 
compute the amount of the former spouse's share of the refund of 
employee contributions as required by paragraph (a) of this section 
requires that the court order state the former spouse's share as--
    (1) A fixed amount;
    (2) A percentage or a fraction of the refund of employee 
contributions; or
    (3) A formula that does not contain any variables whose values are 
not readily ascertainable from the face of the court order or normal OPM 
files.
    (c) A court order directed at a refund of employee contributions is 
not a court order acceptable for processing if OPM would have to examine 
a State statute or court decision (on a different case) to understand, 
establish, or evaluate the formula for computing the former spouse's 
share of the refund of employee contributions.



Sec. 838.505  Barring payment of refunds.

    A court order barring payment of a refund of employee contributions 
is not a court order acceptable for processing unless--
    (a) It expressly directs OPM not to pay a refund of employee 
contributions;
    (b) It awards, or a prior court order acceptable for processing has 
awarded, the former spouse a former spouse survivor annuity or a portion 
of the employee annuity; and
    (c) Payment of the refund of employee contributions would prevent 
payment to the former spouse under the court order described in 
paragraph (b) of this section.

[[Page 207]]



Subpart F_Terminology Used in Court Orders Affecting Employee Annuities 
                  or Refunds of Employee Contributions

                          Regulatory Structure



Sec. 838.601  Purpose and scope.

    (a) This subpart regulates the meaning of terms necessary to award 
benefits in a court order directed at an employee annuity or a refund of 
employee contributions. OPM applies the meanings to determine whether a 
court order directed at an employee annuity or a refund of employee 
contributions is a court order acceptable for processing and to 
establish the amount of the former spouse's share of an employee annuity 
or a refund of employee contributions.
    (b)(1) This subpart establishes a uniform meaning to be used for 
terms and phrases frequently used in awarding a former spouse a portion 
of an employee annuity or a refund of employee contributions.
    (2) This subpart informs the legal community about the definitions 
to apply terms used in drafting court orders so that the resulting court 
orders contain the proper language to accomplish the aims of the court.
    (c)(1) To assist attorneys and courts in preparing court orders that 
OPM can honor in the manner that the court intends, appendix A of this 
subpart contains model language to accomplish many of the more common 
objectives associated with the award of a former spouse's share of an 
employee annuity or a refund of employee contributions.
    (2) By using the language in appendix A of this subpart, the court, 
attorneys, and parties will know that the court order will be acceptable 
for processing and that OPM will treat the terminology used in the court 
order in the manner stated in the appendix.

                       Identification of Benefits



Sec. 838.611  Identifying the retirement system.

    (a) To satisfy the requirements of Sec. 838.303(b)(1) or Sec. 
838.502(b)(1), a court order must contain language identifying the 
retirement system to be affected. For example, ``CSRS,'' ``FERS,'' 
``OPM,'' or ``Federal Government'' benefits, or benefits payable ``based 
on service with the U.S. Department of Agriculture,'' etc., are 
sufficient identification of the retirement system.
    (b) Except as provided in paragraphs (b)(1) and (b)(2) of this 
section, language referring to benefits under another retirement system, 
such as military retired pay, Foreign Service retirement benefits or 
Central Intelligence Agency retirement benefits, does not satisfy the 
requirements of Sec. 838.303(b)(1) or Sec. 838.502(b)(1).
    (1) A court order that mistakenly labels CSRS benefits as FERS 
benefits and vice versa satisfies the requirements of Sec. Sec. 
838.303(b)(1) and 838.502(b)(1).
    (2) Unless the court order expressly provides otherwise, for 
employees transferring to FERS, court orders directed at CSRS benefits 
apply to the entire FERS basic benefit, including the CSRS component, if 
any. Such a court order satisfies the requirements of Sec. Sec. 
838.303(b)(1) and 838.502(b)(1).
    (c) A court order affecting military retired pay, even when military 
retired pay has been waived for inclusion in CSRS annuities, does not 
award a former spouse a portion of an employee annuity or a refund of 
employee contributions under CSRS or FERS. Such a court order does not 
satisfy the requirements of Sec. 838.303(b)(1) or Sec. 838.502(b)(1).



Sec. 838.612  Distinguishing between annuities and contributions.

    (a) A court order using ``annuities,'' ``pensions,'' ``retirement 
benefits,'' or similar terms satisfies the requirements of Sec. Sec. 
838.303(b)(2) and 838.502(b)(2) and may be used to divide an employee 
annuity and a refund of employee contributions.
    (b)(1) A court order using ``contributions,'' ``deductions,'' 
``deposits,'' ``retirement accounts,'' ``retirement fund,'' or similar 
terms satisfies the requirements of Sec. 838.502(b)(2) and may be used 
only to divide the amount of contributions that the employee has paid 
into the Civil Service Retirement and Disability Fund.
    (2) Unless the court order specifically states otherwise, when an 
employee annuity is payable, a court order using the terms specified in 
paragraph (b)(1)

[[Page 208]]

of this section satisfies the requirements of Sec. 838.303(b)(2) and 
awards the former spouse a benefit to be paid in equal monthly 
installments at 50 percent of the gross annuity at the time of 
retirement or the date of the court order, whichever comes later, until 
the specific dollar amount is reached.

                         Computation of Benefits



Sec. 838.621  Prorata share.

    (a) Prorata share means one-half of the fraction whose numerator is 
the number of months of Federal civilian and military service that the 
employee performed during the marriage and whose denominator is the 
total number of months of Federal civilian and military service 
performed by the employee.
    (b) A court order that awards a former spouse a prorata share of an 
employee annuity or a refund of employee contributions by using the term 
``prorata share'' and identifying the date when the marriage began 
satisfies the requirements of Sec. Sec. 838.305 and 838.504 and awards 
the former spouse a prorata share as defined in paragraph (a) of this 
section.
    (c) A court order that awards a portion of an employee annuity as of 
a specified date before the employee's retirement awards the former 
spouse a prorata share as defined in paragraph (a) of this section.
    (d) A court order that awards a portion of the ``value'' of an 
annuity as of a specific date before retirement, without specifying what 
``value'' is, awards the former spouse a prorata share as defined in 
paragraph (a) of this section.



Sec. 838.622  Cost-of-living and salary adjustments.

    (a)(1) A court order that awards adjustments to a former spouse's 
portion of an employee annuity stated in terms such as ``cost-of-living 
adjustments'' or ``COLA's'' occurring after the date of the decree but 
before the date of retirement provides increases equal to the 
adjustments described in or effected under section 8340 or section 8462 
of title 5, United States Code.
    (2) A court order that awards adjustments to a former spouse's 
portion of an employee annuity stated in terms such as ``salary 
adjustments'' or ``pay adjustments'' occurring after the date of the 
decree provides increases equal to the adjustments described in or 
effected under section 5303 of title 5, United States Code until the 
date of retirement.
    (b)(1) Unless the court order directly and unequivocally orders 
otherwise, a court order that awards a former spouse a portion of an 
employee annuity either on a percentage basis or by use of a fraction or 
formula provides that the former spouse's share of the employee annuity 
will be adjusted to maintain the same percentage or fraction whenever 
the employee annuity changes as a result of--
    (i) Salary adjustments occurring after the date of the decree and 
before the employee retires; and
    (ii) Cost-of-living adjustments occurring after the date of the 
decree and after the date of the employee's retirement.
    (2) A court order that awards a former spouse a specific dollar 
amount from the employee annuity prevents the former spouse from 
benefiting from salary and cost-of-living adjustments after the date of 
the decree, unless the court expressly orders their inclusion.
    (c)(1)(i) Except as provided in paragraph (b) of this section, a 
court order that contains a general instruction to calculate the former 
spouse's share effective at the time of divorce or separation entitles 
the former spouse to the benefit of salary adjustments occurring after 
the specified date to the same extent as the employee.
    (ii) To prevent the application of salary adjustments after the date 
of the divorce or separation, the court order must either state the 
exact dollar amount of the award to the former spouse or specifically 
instruct OPM not to apply salary adjustments after the specified date in 
computing the former spouse's share of the employee annuity.
    (2)(i) Except as provided in paragraph (b) of this section, a court 
order that requires OPM to compute a benefit as of a specified date 
before the employee's retirement, and specifically instructs OPM not to 
apply salary adjustments after the specified date in computing the 
former spouse's share of

[[Page 209]]

an employee annuity provides that the former spouse is entitled to the 
application of cost-of-living adjustments after the date of the 
employee's retirement in the manner described in Sec. 838.241.
    (ii) To award cost-of-living adjustments between a specified date 
and the employee's retirement, the court order must specifically 
instruct OPM to adjust the former spouse's share of the employee annuity 
by any cost-of-living adjustments occurring between the specified date 
and the date of the employee's retirement.
    (iii) To prevent the application of cost-of-living adjustments that 
occur after the employee annuity begins to accrue to the former spouse's 
share of the employee annuity, the decree must either state the exact 
dollar amount of the award to the former spouse or specifically instruct 
OPM not to apply cost-of-living adjustments occurring after the date of 
the employee's retirement.



Sec. 838.623  Computing lengths of service.

    (a) Sections 838.242 and 838.441 contain information on how OPM 
calculates lengths of service.
    (b) Unless the court order otherwise expressly directs--
    (1) For the purpose of describing a period of time to be excluded 
from any element of a computation, the term ``military service'' means 
military service as defined in section 8331(13) of title 5, United 
States Code, and does not include civilian service with the Department 
of Defense or the Coast Guard; and
    (2) For the purpose of describing a period of time to be included in 
any element of a computation, the term ``military service'' means all 
periods of military and civilian service performed with the Department 
of Defense or the Coast Guard.
    (c)(1) When a court order contains a formula for dividing employee 
annuity that requires a computation of service worked as of a date prior 
to separation and using terms such as ``years of service,'' ``total 
service,'' ``service performed,'' or similar terms, the time 
attributable to unused sick leave will not be included.
    (2) When a court order contains a formula for dividing employee 
annuity that requires a computation of ``creditable service'' (or some 
other phrase using ``credit'' or its equivalent) as of a date prior to 
retirement, unused sick leave will be included in the computation 
(involving a CSRS employee annuity or the CSRS component of a FERS 
employee annuity) as follows:
    (i) If the amount of unused sick leave is specified, the court order 
awards a portion of the employee annuity equal to the monthly employee 
annuity at retirement times a fraction, the numerator of which is the 
number of months of ``creditable service'' as of the date specified plus 
the number of months of unused sick leave specified (which sum is 
rounded to eliminate partial months) and whose denominator is the months 
of ``creditable service'' used in the retirement computation.
    (ii) If the amount of unused sick leave is not specified, the court 
order awards a portion of the employee annuity equal to the monthly rate 
at the time of retirement times a fraction, the numerator of which is 
the number of months of ``creditable service'' as of the date specified 
(no sick leave included) and whose denominator is the number of months 
of ``creditable service'' used in the retirement computation (sick leave 
included).
    (d)(1) General language such as ``benefits earned as an employee 
with the U.S. Postal Service * * *'' provides only that CSRS retirement 
benefits are subject to division and does not limit the period of 
service included in the computation (i.e., service performed with other 
Government agencies will be included).
    (2) To limit the computation of benefits to a particular period of 
employment, the court order must--
    (i) Use language expressly limiting the period of service to be 
included in the computation (e.g., ``only U.S. Postal Service'' or 
``exclusive of any service other than U.S. Postal Service employment''); 
or
    (ii) Specify the number of months to be included in the computation; 
or
    (iii) Describe specifically the period of service to be included in 
the computation (e.g., ``only service performed

[[Page 210]]

during the period Petitioner and Defendant were married'' or ``benefits 
based on service performed through the date of divorce'').



Sec. 838.624  Distinguishing between formulas and fixed amounts.

    (a) A court order that contains both a formula or percentage 
instruction and a dollar amount is deemed to include the dollar amount 
only as the court's estimate of the initial amount of payment. The 
formula or percentage instruction controls.
    (b) A court order that awards a portion of the ``present value'' of 
an employee annuity and specifically states the amount of either the 
``present value'' of the employee annuity or of the award is deemed to 
give the former spouse ``a specific dollar amount'' that is payable from 
a monthly employee annuity and will be paid as a lump-sum award in 
accordance with Sec. 838.235.



Sec. 838.625  Types of annuity.

    (a) Terms that are synonymous with net annuity are--
    (1) Disposable annuity; and
    (2) Retirement check.
    (b) Terms that are synonymous with self-only annuity are--
    (1) Life rate annuity;
    (2) Unreduced annuity; and
    (3) Annuity without survivor benefit.
    (c) All court orders that do not specify net annuity or self-only 
annuity apply to gross annuity.

                            Model Paragraphs

  Appendix A to Subpart F of Part 838--Recommended Language for Court 
                   Orders Dividing Employee Annuities

    This appendix provides recommended language for use in court orders 
attempting to divide employee annuity. A court order directed at 
employee annuity should include five elements:
     Identification of the benefits;
     Instructions that OPM pay the former spouse;
     A method for computing the amount of the former 
spouse's benefit;
     Identification of the type of annuity to which to 
apply a fraction, percentage or formula; and
     Instructions on what OPM should do if the 
employee leaves Federal service before retirement and applies for a 
refund of employee contributions.
    The court order may also include instructions for disposition of the 
former spouse's share if the former spouse dies before the employee. By 
using the model language, courts will know that the court order will 
have the effect described in this appendix.
    The model language in this appendix does not award a benefit that is 
payable after the death of the employee. A separate, distinct award of a 
former spouse survivor annuity is necessary to award a former spouse a 
benefit that is payable after the death of the employee. Appendix A to 
subpart I of this part contains model language for awarding survivor 
annuities and contains some examples that award both a portion of an 
employee annuity and a survivor annuity.
    The model language uses the terms ``[former spouse]'' to identify 
the spouse who is receiving a former spouse's portion of an employee 
annuity and ``[employee]'' to identify the Federal employee whose 
employment was covered by the Civil Service Retirement System or the 
Federal Employees Retirement System. Obviously, in drafting an actual 
court order the appropriate terms, such as ``Petitioner'' and 
``Respondent,'' or the names of the parties should replace ``[former 
spouse]'' and ``[employee].''
    Similarly, the models are drafted for employees covered by the Civil 
Service Retirement System. The name of the retirement system should be 
changed for employees covered by the Federal Employees Retirement 
System.

                            Table of Contents

                000 Series--Special technical provisions.

] 001 Language required in Qualified Domestic Relations Orders.

100 Series--Identification of the benefits and instructions that OPM pay 
                           the former spouse.

] 101 Identifying retirement benefits and directing OPM to pay the 
          former spouse.
] 102-110 [Reserved]
] 111 Protecting a former spouse entitled to military retired pay.

    200 Series--Computing the amount of the former spouse's benefit.

] 201 Award of a fixed monthly amount.
] 202 Award of a percentage.
] 203 Award of a fraction.
] 204 Award of a prorata share.
] 205-210 [Reserved]
] 211 Award based on a stated formula.
] 212-230 [Reserved]
] 231 Awarding COLA's on fixed monthly amounts.
] 232 Excluding COLA's on awards other than fixed monthly amounts.

[[Page 211]]

                      300 Series--Type of annuity.

] 301 Awards based on benefits actually paid.
] 302-310 [Reserved]
] 311 Awards of earned annuity in cases where the actual annuity is 
          based on disability.

             400 Series--Refunds of employee contributions.

] 401 Barring payment of a refund of employee contributions.
] 402 Dividing a refund of employee contributions.

                 500 Series--Death of the former spouse.

] 501 Full annuity restored to the retiree.
] 502 Former spouse share paid to children.
] 503 Former spouse share paid to the court.

                000 Series--Special technical provisions.

 001 Language required in Qualified Domestic Relations Orders.
    Using the following paragraph will expressly state that the 
provisions of the court order concerning CSRS or FERS benefits are 
governed by this part. A court order directed at employee annuity (or 
awarding a survivor annuity) that is labelled a ``Qualified Domestic 
Relations Order'' or is issued on an ERISA form will not be 
automatically rendered unacceptable under Sec. 838.302(a) or Sec. 
838.803(a) if the court order contains the following paragraph.
    ``The court has considered the requirements and standard terminology 
provided in part 838 of Title 5, Code of Federal Regulations. The 
terminology used in the provisions of this order that concern benefits 
under the Civil Service Retirement System are governed by the standard 
conventions established in that part.''

100 Series--Identification of the benefits and instructions that OPM pay 
                           the former spouse.

 101 Identifying retirement benefits and directing OPM to pay 
the former spouse.
    Using the following paragraph will expressly divide employee annuity 
to satisfy the requirements of Sec. 838.303 and direct OPM to pay the 
former spouse a share of an employee annuity to satisfy the requirements 
of Sec. 838.304.
    ``[Employee] is (or will be) eligible for retirement benefits under 
the Civil Service Retirement System based on employment with the United 
States Government. [Insert language for computing the former spouse's 
share from 200 series of this appendix.] The United States Office of 
Personnel Management is directed to pay [former spouse]'s share directly 
to [former spouse].''
 102-110 [Reserved]
 111 Protecting a former spouse entitled to military retired 
pay.
    Using the following paragraph will protect the former spouse 
interest in military retired pay in the event that the employee waives 
the military retired pay to allow crediting the military service under 
CSRS or FERS. The paragraph should be used only if the former spouse is 
awarded a portion of the military retired pay. ``If [Employee] waives 
military retired pay to credit military service under the Civil Service 
Retirement System, [insert language for computing the former spouse's 
share from 200 series of this appendix]. The United States Office of 
Personnel Management is directed to pay [former spouse]'s share directly 
to [former spouse].''

    200 Series--Computing the amount of the former spouse's benefits.

    Paragraphs 201 through 204 contain model language for the most 
common types of wards that court orders make to former spouses. 
Subsequent paragraphs in the 200 series contain model language for less 
common, more complex awards.
    Awards other than fixed amounts require that the court order specify 
the type of annuity (``gross,'' ``net,'' or self-only) on which the 
award is computed. The types of annuity are defined in Sec. 838.103. 
Variations on type of annuity are covered by the 300 series of this 
appendix.
 201 Award of a fixed monthly amount.
    Using the following paragraph will award the former spouse a fixed 
monthly amount. OPM will not apply COLA's to a fixed monthly amount 
unless the court order expressly directs that OPM and COLA's using the 
language in ] 231 of this appendix or similar language.
    ``[Employee] is (or will be) eligible for retirement benefits under 
the Civil Service Retirement System based on employment with the United 
States Government. [Former spouse] is entitled to $[insert a number] per 
month from [employee]'s civil service retirement benefits. The United 
States Office of Personnel Management is directed to pay [former 
spouse]'s share directly to [former spouse].''

 202 Award of a percentage.
    Using the following paragraph will award the former spouse a stated 
percentage of the employee annuity. Unless the court order expressly 
directly that OPM not add COLA's to the former spouse's share of the 
employee annuity, OPM will add COLA's to keep the former spouse's share 
at the stated percentage. Paragraph 232 of this appendix provides 
language for excluding COLA's.
    ``[Employee] is (or will be) eligible for retirement benefits under 
the Civil Service Retirement System based on employment with the United 
States Government. [Former spouse] is entitled to [insert a number] 
percent of [employee]'s [insert ``gross,'' ``net,''

[[Page 212]]

or ``self-only''] monthly annuity under the Civil Service Retirement 
System. The United States Office of Personnel Management is directed to 
pay [former spouse]'s share directly to [former spouse].''

 203 Award of a fraction.
    Using the following paragraph will award the former spouse a stated 
fraction of the employee annuity. Unless the court order expressly 
directly that OPM not add COLA's to the former spouse's share of the 
employee annuity, OPM will add COLA's to keep the former spouse's share 
at the stated percentage. Paragraph 232 of this appendix provides 
language for excluding COLA's.
    ``[Employee] is (or will be) eligible for retirement benefits under 
the Civil Service Retirement System based on employment with the United 
States Government. [Former spouse] is entitled to [insert fraction] ths 
of [employee]'s [insert ``gross,'' ``net,'' or ``self-only''] monthly 
annuity under the Civil Service Retirement System. The United States 
Office of Personnel Management is directed to pay [former spouse]'s 
share directly to [former spouse].''

 204 Award of a prorata share.
    Using the following paragraph will award the former spouse a prorata 
share of the employee annuity. Prorata share is defined in Sec. 
838.621. To award a prorata share the court order must state the date of 
the marriage. Unless the court order specifies a different ending date, 
the marriage ends for computation purposes on the date that the court 
order is filed with the court clerk. Unless the court order expressly 
directs that OPM not add COLA's to the former spouse's share of the 
employee annuity, OPM will add COLA's to keep the former spouse's share 
at the stated percentage. Paragraph 232 of this appendix provides 
language for excluding COLA's.
    ``[Employee] is (or will be) eligible for retirement benefits under 
the Civil Service Retirement System based on employment with the United 
States Government. [Former spouse] is entitled to a prorata share of 
[employee]'s [insert `gross,' `net,' or self-only] monthly annuity under 
the Civil Service Retirement System. The marriage began on [insert 
date]. The United States Office of Personnel Management is directed to 
pay [former spouse]'s share directly to [former spouse].''

 205-210 [Reserved]

 211 Award based on a stated formula.
    Using the following paragraphs will award the former spouse a share 
of the employee annuity based on a formula stated in the court order. 
The formula must be stated in the court order (including a court-
approved property settlement agreement). The formula may not be 
incorporated by reference to a statutory provision or a court decision 
in another case. If the court order uses a formula, the court order must 
include any data that is necessary for OPM to apply the formula unless 
the necessary data is contained in normal OPM files.
    ``[Employee] is (or will be) eligible for retirement benefits under 
the Civil Service Retirement System based on employment with the United 
States Government. [Former spouse] is entitled to a share of 
[employee]'s [insert `gross,' `net,' or self-only] monthly annuity under 
the Civil Service Retirement System to be computed as follows: [Insert 
formula for computing the former spouse's share.]''
    ``The United States Office of Personnel Management is directed to 
pay [former spouse]'s share directly to [former spouse].''

 212-230

 231 Awarding COLA's on fixed monthly amounts.
    Using the following paragraph will award COLA's in addition to a 
fixed monthly amount to the former spouse. The model awards COLA's at 
the same rate applied to the employee annuity.
    ``[Employee] is (or will be) eligible for retirement benefits under 
the Civil Service Retirement System based on employment with the United 
States Government. [Former spouse] is entitled to $[insert a number] per 
month from [employee]'s civil service retirement benefits. When COLA's 
are applied to [employee]'s retirement benefits, the same COLA applies 
to [former spouse]'s share. The United States Office of Personnel 
Management is directed to pay [former spouse]'s share directly to 
[former spouse].''

 232 Excluding COLA's on awards other than fixed monthly 
amounts.
    Using the following paragraph will prevent application of COLA's to 
a former spouse's share of an employee annuity in cases where the former 
spouse has been awarded a percentage, fraction or prorata share of the 
employee annuity, rather than a fixed dollar amount.
    ``[Employee] is (or will be) eligible for retirement benefits under 
the Civil Service Retirement System based on employment with the United 
States Government. [Insert language for computing the former spouse's 
share from ] 202, ] 203, ] 204, or ] 211 of this appendix.] The United 
States Office of Personnel Management is directed to determine the 
amount of [former spouse]'s share on the date [insert `when [employee] 
retires' if the employee has not retired, or `of this order' if the 
employee is already retired] and not to apply COLA's to that amount. The 
United States Office of Personnel Management is directed to pay [former 
spouse]'s share directly to [former spouse].''

[[Page 213]]

                      300 Series--Type of annuity.

    Awards of employee annuity to a former spouse (other than awards of 
fixed dollar amounts) must specify whether OPM will use the ``gross,'' 
``net,'' or self-only annuity as defined in Sec. 838.103 in determining 
the amount of the former spouse's entitlement. The court order may 
contain a formula that has the effect of creating other types of 
annuity, but the court order may only do this by providing a formula 
that starts from ``gross,'' ``net,'' or self-only annuity as defined in 
Sec. 838.103.

 301 Awards based on benefits actually paid.
    The court order may include a formula that effectively uses the 
court's definition of net annuity rather than the one provided by Sec. 
838.103. For example, using the following paragraph will award the 
former spouse a prorata share of the employee annuity reduced only by 
the amount deducted as premiums for basic life insurance under the 
Federal Employee Group Life Insurance Program.
    ``[Employee] is (or will be) eligible for retirement benefits under 
the Civil Service Retirement System based on employment with the United 
States Government. [Former spouse] is entitled to a prorata share of 
[employee]'s monthly annuity under the Civil Service Retirement System, 
where monthly annuity means the self-only annuity less the amount 
deducted as premiums for basic life insurance under the Federal Employee 
Group Life Insurance Program. The marriage began on [insert date]. The 
United States Office of Personnel Management is directed to pay [former 
spouse]'s share directly to [former spouse].''

 302-310 [Reserved]

 311 Awards of earned annuity in cases where the actual annuity 
is based on disability.
    Using the following paragraph will award a former spouse a prorata 
share of what the employee annuity would have been based on only the 
employee's actual service in cases where the actual employee annuity is 
based on disability. The paragraph also allows the court order to 
provide for the former spouse's share to begin when the employee reaches 
a stated age, using age 62 as an example. As with all other formulas the 
court order must specify whether the computation applies to ``gross,'' 
``net,'' or self-only annuity. OPM will apply COLA's that occurred after 
the date of the disability retirement to the former spouse's share. The 
following paragraph should be used only for disability retirees under 
CSRS. Under FERS, section 8452 of title 5, United States Code, provides 
a formula for recomputation of disability annuities at age 62 to 
approximate an earned annuity. Therefore to award a portion of the 
``earned'' benefit under FERS add the introductory phrase, ``Starting 
when [employee] reaches age 62,'' to the paragraph describing how to 
compute the amount.
    ``[Employee] is (or will be) eligible for retirement benefits under 
the Civil Service Retirement System based on employment with the United 
State's Government. Starting when [employee] reaches age 62, [former 
spouse] is entitled to a prorata share of [employee]'s [insert 
``gross,'' ``net,'' or self-only] monthly annuity under the Civil 
Service Retirement System, where monthly annuity means the amount of 
[employee]'s monthly annuity computed as though [employee] had retired 
on an immediate, nondisability annuity on the commencing date of 
[employee]'s annuity based on disability. In computing the amount of the 
immediate annuity, the United States Office of Personnel Management will 
deem [employee] to have been age 62 at the time that [employee] retired 
on disability. The marriage began on [insert date]. The United States 
Office of Personnel Management is directed to pay [former spouse]'s 
share directly to [former spouse].''

             400 Series--Refunds of employee contributions.

    Court orders that award a former spouse a portion of a future 
employee annuity of an employee who is not then eligible to retire 
should include an additional paragraph containing instructions that tell 
OPM what to do if the employee separates before becoming eligible to 
retire and requests a refund of employee contributions. The court order 
may award the former spouse a portion of the refund of employee 
contributions or bar payment of the refund of employee contributions.

 401 Barring payment of a refund of employee contributions.
    Using the following paragraph will bar payment of the refund of 
employee contributions if payment of the refund of employee 
contributions would extinguish the former spouse's entitlement to a 
portion of the employee annuity. ``The United States Office of Personnel 
Management is directed not to pay [employee] a refund of employee 
contributions.''

 402 Dividing a refund of employee contributions.
    Using the following paragraph will allow the refund of employee 
contributions to be paid but will award a prorata share of the refund of 
employee contributions to the former spouse. The sentence on the 
beginning date of the marriage is unnecessary if the beginning is stated 
elsewhere in the order. The award of a prorata share is used only as an 
example; the court order could provide another fraction, percentage, or 
formula, or a fixed amount. Note that a refund of employee contributions 
voids the employee's rights to an employee annuity and the

[[Page 214]]

former spouse's right to any portion of that annuity.
    ``If [employee] becomes eligible and applies for a refund of 
employee contributions, [former spouse] is entitled to a prorata share 
of the refund of employee contributions. The marriage began on [insert 
date]. The United States Office of Personnel Management is directed to 
pay [former spouse]'s share directly to [former spouse].''

                 500 Series--Death of the former spouse.

 501 Full annuity restored to the retiree.
    No special provision is necessary to restore the entire annuity to 
the retiree upon the death of the former spouse. Unless the court order 
expressly provides otherwise, OPM will pay the former spouse's share to 
the retiree after the death of the former spouse.

 502 Former spouse share paid to children.
    Using the following paragraph will award the former spouse's share 
of an employee annuity to the children, including any adopted children, 
of the employee and former spouse.
    ``If [former spouse] dies before [employee], the United States 
Office of Personnel Management is directed to pay [former spouse]'s 
share of [employee]'s civil service retirement benefits to surviving 
children of the marriage including any adopted children, in equal 
shares. Upon the deaths of any child, that child's share will be 
distributed among the other surviving children.''
    The language may be modified to terminate the payments to the 
children when they reach a stated age. A court order that includes such 
a provision for termination must include sufficient information (such as 
the children's dates of birth) to permit OPM to determine when the 
children's interest terminate. OPM will not consider evidence outside 
the court order (and normal OPM files) to establish the children's dates 
of birth.

 503 Former spouse share paid to the court.
    Using the following paragraph will provide for payment of the former 
spouse's share of an employee annuity to the court after the death of 
the former spouse. This would allow a court officer to administer the 
funds. ``If [former spouse] dies before [employee], the United States 
Office of Personnel Management is directed to pay [former spouse]'s 
share of [employee]'s civil service retirement benefits to this court at 
the following address: ``[Insert address where checks should be sent. 
The address may be up to six lines and should include sufficient 
information for court officials to credit the correct account.]''



Subpart G_Procedures for Processing Court Orders Awarding Former Spouse 
                           Survivor Annuities

                          Regulatory Structure



Sec. 838.701  Purpose and scope.

    (a) This subpart regulates the procedures that the Office of 
Personnel Management will follow upon the receipt of claims arising out 
of State court orders awarding former spouse survivor annuities under 
CSRS or FERS (including the FERS basic employee death benefit as defined 
in Sec. 843.102 of this chapter). OPM must comply with qualifying court 
orders, decrees, or court-approved property settlements in connection 
with divorces, annulments of marriages, or legal separations of 
employees or retirees that award former spouse survivor annuities.
    (b) This subpart prescribes--
    (1) The commencing and terminating dates of former spouse survivor 
annuities based on court orders acceptable for processing; and
    (2) The procedures that a former spouse must follow when applying 
for a former spouse survivor annuity based on a court order under 
section 8341(h) or section 8445 of title 5, United States Code.
    (c)(1) Subpart H of this part contains the rules that a court order 
must satisfy to be a court order acceptable for processing to award a 
former spouse survivor annuity.
    (2) Subpart I of this part contains definitions that OPM uses to 
determine the effect of a court order in connection with a former spouse 
survivor annuity.

[57 FR 33574, July 29, 1992, as amended at 58 FR 43493, Aug. 17, 1993]

                    Limitations on Survivor Annuities



Sec. 838.711  Maximum former spouse survivor annuity.

    (a) Under CSRS, payments under a court order may not exceed the 
amount provided in Sec. 831.641 of this chapter.
    (b) Under FERS, payments under a court order may not exceed amount 
provided in Sec. 842.613 of this chapter plus

[[Page 215]]

the basic employee death benefit as defined in Sec. 843.102 of this 
chapter.

[57 FR 33574, July 29, 1992, as amended at 58 FR 52882, Oct. 13, 1993]

                  Application and Processing Procedures



Sec. 838.721  Application requirements.

    (a)(1) A former spouse (personally or through a representative) must 
apply in writing to be eligible for a former spouse survivor annuity 
based on a court order acceptable for processing. No special form is 
required to give OPM notice of the court order.
    (2) OPM may require an additional application after the death of the 
employee, separated employee, or retiree. This additional application 
will be on a form prescribed by OPM.
    (b)(1) The application letter under paragraph (a)(1) of this section 
must be accompanied by--
    (i) A certified copy of the court order;
    (ii) A certification from the former spouse or the former spouse's 
representative that the court order is currently in force and has not 
been amended, superseded, or set aside;
    (iii) Information sufficient for OPM to identify the employee or 
retiree, such as his or her full name, CSRS or FERS claim number, date 
of birth, and social security number;
    (iv) The current mailing address of the former spouse;
    (v) If the employee has not retired or died, the mailing address of 
the employee; and
    (vi) A statement in the form prescribed by OPM certifying--
    (A) That the former spouse has not remarried before age 55;
    (B) That the former spouse will notify OPM within 15 calendar days 
of the occurrence of any remarriage before age 55; and
    (C) That the former spouse will be personally liable for any 
overpayment to him or her resulting from a remarriage before age 55.
    (2) OPM may subsequently require recertification of the statements 
required by this paragraph.



Sec. 838.722  OPM action on receipt of a court order acceptable for 
processing.

    (a) If OPM receives a court order acceptable for processing that 
awards a former spouse survivor annuity based on the service of a living 
retiree, OPM will inform--
    (1) The former spouse--
    (i) That the court order is acceptable for processing;
    (ii) Of the date on which OPM received the court order; and
    (iii) Of the present amount of the monthly former spouse survivor 
annuity if the retiree were to die immediately and the formula OPM used 
to compute the monthly benefit; and
    (2) The retiree--
    (i) That the former spouse has applied for benefits under this 
subpart;
    (ii) That the court order is acceptable for processing and that OPM 
must comply with the court order;
    (iii) Of the date on which OPM received the court order;
    (iv) Of the amount and commencing date of the reduction in the 
retiree's annuity;
    (v) Of the present amount of the monthly former spouse survivor 
annuity if the retiree were to die immediately and the formula OPM used 
to compute the amount of the former spouse survivor annuity; and
    (vi) That, if he or she contests the validity of the court order, he 
or she must obtain, and submit to OPM, a court order invalidating the 
court order submitted by the former spouse.
    (b) If OPM receives a court order acceptable for processing that 
awards a former spouse survivor annuity, but the employee, separated 
employee, or retiree has died, OPM will inform--
    (1) The former spouse--
    (i) That the court order is acceptable for processing;
    (ii) Of the date on which OPM received the court order, the date on 
which the former spouse's benefit will begin to accrue, and if known the 
date on which OPM will commence payment under the court order; and
    (iii) Of the amount on the monthly former spouse survivor annuity 
and the formula OPM used to compute the former spouse survivor annuity.

[[Page 216]]

    (2) Anyone whom OPM knows will be adversely affected by the court 
order--
    (i) That the former spouse has applied for benefits under this 
subpart;
    (ii) That the court order is acceptable for processing and that OPM 
must comply with the court order;
    (iii) Of the date on which OPM received the court order;
    (iv) How the court order may adversely affect him or her; and
    (v) That, if he or she contests the validity of the court order, he 
or she must obtain, and submit to OPM, a court order invalidating the 
court order submitted by the former spouse.
    (c) If OPM receives a court order acceptable for processing that 
awards a former spouse survivor annuity and the employee or separated 
employee has not retired or died, OPM will attempt to inform--
    (1) The former spouse--
    (i) That the court order is acceptable for processing;
    (ii) To the extent possible, the formula that OPM will use to 
compute the former spouse survivor annuity (including the FERS basic 
employee death benefit as defined in Sec. 843.102 of this chapter, if 
applicable); and
    (iii) That, if he or she disagrees with the formula, he or she must 
obtain, and submit to OPM, an amended court order clarifying the amount 
before the employee or separated employee retires or dies; and
    (2) The employee or separated employee--
    (i) That the former spouse has applied for benefits under this 
subpart;
    (ii) That the court order is acceptable for processing and the OPM 
must comply with the court order;
    (iii) To the extent possible, the formula that OPM will use to 
compute the former spouse survivor annuity (including the FERS basic 
employee death benefit as defined in Sec. 843.102 of this chapter, if 
applicable); and
    (iv) That, if he or she--
    (A) Contests the validity of the court order, he or she must obtain, 
and submit to OPM, a court order invalidating the court order submitted 
by the former spouse; or
    (B) Disagrees with the formula, he or she must obtain, and submit to 
OPM, an amended court order clarifying the amount before he or she 
retires or dies.
    (d) The failure of OPM to provide, or of the employee, separated 
employee, or retiree, the former spouse, or anyone else to receive, the 
information specified in this section does not affect--
    (1) The validity of payment under the court order; or
    (2) The commencing date of the reduction in the employee annuity or 
the commencing date of the former spouse's entitlement as determined 
under Sec. 838.731.

[57 FR 33574, July 29, 1992, as amended at 58 FR 43493, Aug. 17, 1993]



Sec. 838.723  OPM action on receipt of a court order not acceptable 
for processing.

    If OPM receives an application from a former spouse not based on a 
court order acceptable for processing, OPM will inform the former spouse 
that OPM cannot approve the application and provide the specific 
reason(s) for disapproving the application. Examples of reasons for 
disapproving an application include that the order does not meet the 
definition of court order in Sec. 838.103 or does not meet one or more 
of the requirements of subpart H of this part.



Sec. 838.724  Contesting the validity of court orders.

    (a) An employee, retiree or person adversely affected by a court 
order who alleges that a court order is invalid must prove the 
invalidity of the court order by submitting to OPM a court order that--
    (1) Declares invalid the court order submitted by the former spouse; 
or
    (2) Sets aside the court order submitted by the former spouse.
    (b) OPM must honor a court order acceptable for processing that 
appears to be valid and that the former spouse has certified is 
currently in force and has not been amended, superseded, or set aside, 
until the employee, separated employee, retiree, or person adversely 
affected by the court order submits to OPM a court order described in 
paragraph (a) of this section or, if issued before the retirement or 
death of the employee or separated employee, a court

[[Page 217]]

order acceptable for processing amending or superseding the court order 
submitted by the former spouse.



Sec. 838.725  Effect on employee and retiree election rights.

    (a) A court order acceptable for processing that awards a former 
spouse survivor annuity does not affect a retiring employee's or 
retiree's rights and obligations to make survivor elections under 
subpart F of part 831 of this chapter or subpart F of part 842 of this 
chapter.
    (b) A court order acceptable for processing that awards a former 
spouse survivor annuity requires OPM to pay a former spouse survivor 
annuity and prevents OPM from paying an elected survivor benefit to a 
widow or widower or another former spouse if the election is 
inconsistent with the court order.

                           Payment Procedures



Sec. 838.731  Commencing date of payments.

    (a) A former spouse survivor annuity based on a court order 
acceptable for processing begins to accrue in accordance with the terms 
of the court order but no earlier than the later of--
    (1) The first day after the date of death of the employee, separated 
employee, or retiree; or
    (2) The first day of the second month after OPM receives a copy of 
the court order acceptable for processing.
    (b) OPM will not authorize payment of the former spouse survivor 
annuity until it receives an application and supporting documentation 
required under Sec. 838.721.



Sec. 838.732  Termination of entitlement.

    (a) A former spouse survivor annuity (other than the FERS basic 
employee death benefit as defined in Sec. 843.102 of this chapter) or 
the right to a future former spouse survivor annuity based on a court 
order acceptable for processing terminates in accordance with the terms 
of the court order but no later than the last day of the month before 
the former spouse remarries before age 55 or dies.
    (b) If the employee dies before the former spouse remarries before 
age 55 or dies, the former spouse's entitlement to the FERS basic 
employee death benefit as defined in Sec. 843.102 of this chapter based 
on a court order acceptable for processing terminates in accordance with 
the terms of the court order.

[57 FR 33574, July 29, 1992, as amended at 58 FR 43493, Aug. 17, 1993]



Sec. 838.733  Rights of current and other former spouses after 
termination of a former spouse's entitlement.

    (a) If a former spouse of a retiree loses entitlement to a former 
spouse survivor annuity based on a court order acceptable for processing 
while the retiree is living and--
    (1) If court orders acceptable for processing award former spouse 
survivor annuities to other former spouses, OPM will continue the 
reduction to comply with court orders in the order specified in Sec. 
838.135;
    (2) If paragraph (a)(1) of this section does not obligate the entire 
entitlement lost by he former spouse, OPM will continue the reduction to 
provide a current spouse survivor annuity or a former spouse survivor 
annuity based on a timely-filed election under Sec. 831.611, Sec. 
831.612, Sec. 831.631, Sec. 831.632, Sec. 842.603, Sec. 842.604, 
Sec. 842.611, or Sec. 842.612 of this chapter; or
    (3) If paragraphs (a)(1) and (a)(2) of this section do not obligate 
the entire entitlement lost by the former spouse, the retiree (except a 
retiree under CSRS who retired before May 7, 1985 and who remarried 
before February 27, 1986) may elect within 2 years after the former 
spouse loses entitlement to continue the reduction to provide a survivor 
annuity for a spouse acquired after retirement.
    (b)(1) If a former spouse of an employee or retiree loses 
entitlement to a former spouse survivor annuity based on a court order 
acceptable for processing after the death of the employee or retiree 
and--
    (i) If court orders acceptable for processing award former spouse 
survivor annuities to other former spouses, OPM will pay the next 
entitled former spouse in the order specified in Sec. 838.135; or

[[Page 218]]

    (ii) If paragraph (b)(1) of this section does not obligate the 
entire entitlement lost by the former spouse, OPM will pay the balance 
to a current spouse of the deceased--
    (A) Retiree who had elected a reduced annuity to provide a current 
spouse annuity (as defined in Sec. 831.603 or Sec. 842.602); or
    (B) Employee.
    (2) Except as provided in Sec. 838.734--
    (i) The former spouse survivor annuity based on paragraph (b)(1)(i) 
of this section begins to accrue in accordance with the terms of the 
court order but no earlier than the later of--
    (A) The first day of the month in which the former spouse with the 
earlier-issued court order loses entitlement; or
    (B) The first day of the second month after OPM receives a copy of 
the court order acceptable for processing; or
    (ii) The current spouse annuity under paragraph (b)(1) (ii) of this 
section begins to accrue on the first day of the month in which the 
former spouse loses entitlement.
    (c) OPM will not authorize payment of the former spouse survivor 
annuity until it receives an application and supporting documentation 
required under Sec. 838.721.

[57 FR 33574, July 29, 1992, as amended at 58 FR 52882, Oct. 13, 1993]



Sec. 838.734  Payment of lump-sum awards by survivor annuity.

    OPM will not honor court orders awarding lump-sum payments (other 
than the FERS basic employee death benefit as defined in Sec. 843.102 
of this chapter) to a former spouse upon the death of an employee or 
retiree.

[57 FR 33574, July 29, 1992, as amended at 58 FR 43493, Aug. 17, 1993]



Sec. 838.735  Cost-of-living adjustments.

    (a) OPM applies cost-of-living adjustments to all former spouse 
survivor annuities in pay status at the time of the adjustment and in 
the amount provided by Federal statute.
    (b) OPM will not honor provisions of a court order that alters the 
time or amount of cost-of-living adjustments or that attempts to prevent 
OPM from applying cost-of-living adjustments to a former spouse survivor 
annuity in pay status.



Subpart H_Requirements for Court Orders Awarding Former Spouse Survivor 
                                Annuities



Sec. 838.801  Purpose and scope.

    This subpart regulates the requirements that a court order awarding 
a former spouse survivor annuity must meet to be a court order 
acceptable for processing.



Sec. 838.802  CSRS limitations.

    (a) A court order awarding a former spouse survivor annuity under 
CSRS is not a court order acceptable for processing unless the marriage 
terminated on or after May 7, 1985.
    (b) In the case of a retiree who retired under CSRS before May 7, 
1985, a court order awarding a former spouse survivor annuity under CSRS 
is not a court order acceptable for processing unless the retiree was 
receiving a reduced annuity to provide a survivor annuity to benefit 
that spouse on May 7, 1985.



Sec. 838.803  Language not acceptable for processing.

    (a) Qualifying Domestic Relations Orders. (1) Any court order 
labeled as a ``qualified domestic relations order'' or issued on a form 
for ERISA qualified domestic relations orders is not a court order 
acceptable for processing unless the court order expressly states that 
the provisions of the court order concerning CSRS or FERS benefits are 
governed by this part.
    (2) When a court order is required by paragraph (a)(1) of this 
section to state that the provisions of a court order concerning CSRS or 
FERS benefits are governed by this part the court order must--
    (i) Expressly refer to part 838 of Title 5, Code of Federal 
Regulations, and
    (ii) Expressly state that the provisions of the court order 
concerning CSRS or FERS benefits are drafted in accordance with the 
terminology used in this part.
    (3) Although any language satisfying the requirement of paragraph 
(a) (2) of

[[Page 219]]

this section is sufficient to prevent a court order from being 
unacceptable under paragraph (a)(1) of this section, OPM recommends the 
use of the language provided in ]001 in appendix A to subpart F of this 
part to state that the provisions of the court order concerning CSRS or 
FERS benefits are governed by this part.
    (4) A court order directed at employee annuity that contains the 
language described in paragraph (a)(2) of this section must also satisfy 
all other requirements of this subpart to be a court order acceptable 
for processing.
    (b) Employee annuity cannot continue after the death of the retiree. 
Any court order that provides that the former spouse's portion of the 
employee annuity shall continue after the death of the employee or 
retiree, by using language such as ``will continue to receive benefits 
after the death of'' the employee, that the former spouse ``will 
continue to receive benefits for his (or her) lifetime,'' or ``that 
benefits will continue after the death of'' the employee, but does not 
use terms such as ``survivor annuity,'' ``death benefits,'' ``former 
spouse annuity,'' or similar terms is not a court order acceptable for 
processing.



Sec. 838.804  Court orders must expressly award a former spouse 
survivor annuity or expressly direct an employee or retiree to elect 
to provide a former spouse survivor annuity.

    (a) A court order awarding a former spouse survivor annuity is not a 
court order acceptable for processing unless it expressly awards a 
former spouse survivor annuity or expressly directs an employee or 
retiree to elect to provide a former spouse survivor annuity as 
described in paragraph (b) of this section.
    (b) To expressly award a former spouse survivor annuity or expressly 
direct an employee or retiree to elect to provide a former spouse 
survivor annuity as required by paragraph (a) of this section the court 
order must--
    (1) Identify the retirement system using terms that are sufficient 
to identify the retirement system as explained in Sec. 838.911; and
    (2) (i) Expressly state that the former spouse is entitled to a 
former spouse survivor annuity using terms that are sufficient to 
identify the survivor annuity as explained in Sec. 838.912; or
    (ii) Expressly direct the retiree to elect to provide a former 
spouse survivor annuity using terms that are sufficient to identify the 
survivor annuity as explained in Sec. 838.912.



Sec. 838.805  OPM computation of formulas in computing the designated 
base.

    (a) A court order awarding a former spouse survivor annuity is not a 
court order acceptable for processing unless the court order provides 
sufficient instructions and information so that OPM can determine the 
amount of the former spouse's monthly benefit using only the express 
language of the court order, subparts A, G and I of this part, and 
information from normal OPM files.
    (b) To provide sufficient instructions and information for OPM to 
compute the amount of a former spouse survivor annuity as required by 
paragraph (a) of this section, if the court order uses a formula to 
determine the former spouse survivor annuity, it must not use any 
variables whose values are not readily ascertainable from the face of 
the court order or normal OPM files.
    (c) A court order awarding a former spouse survivor annuity is not a 
court order acceptable for processing if OPM would have to examine a 
State statute or court decision (on a different case) to understand, 
establish, or evaluate the formula for computing the former spouse 
survivor annuity.



Sec. 838.806  Amended court orders.

    (a) A court order awarding a former spouse survivor annuity is not a 
court order acceptable for processing if it is issued after the date of 
retirement or death of the employee and modifies or replaces the first 
order dividing the marital property of the employee or retiree and the 
former spouse.
    (b) For purposes of awarding, increasing, reducing, or eliminating a 
former spouse survivor annuity, or explaining, interpreting, or 
clarifying a court order that awards, increases, reduces or eliminates a 
former spouse survivor annuity, the court order must be--

[[Page 220]]

    (1) Issued on a day prior to the date of retirement or date of death 
of the employee; or
    (2) The first order dividing the marital property of the retiree and 
the former spouse.
    (c) A court order that awards a former spouse survivor annuity and 
that is issued after the first order dividing the marital property of 
the retiree and the former spouse has been vacated, set aside, or 
otherwise declared invalid is not a court order acceptable for 
processing if--
    (1) It is issued after the date of retirement or death of the 
retiree;
    (2) It changes any provision concerning a former spouse survivor 
annuity in the court order that was vacated, set aside or otherwise 
declared invalid; and
    (3)(i) The court order is effective prior to the date when it is 
issued; or
    (ii) The retiree and former spouse do not compensate the Civil 
Service Retirement and Disability Fund for any uncollected annuity 
reduction due as a result of the court order vacating, setting aside, or 
otherwise invalidating the first order terminating the marital 
relationship between the retiree and the former spouse.
    (d) In this section, ``date of retirement'' means the later of--
    (1) The date that the employee files an application for retirement; 
or
    (2) The effective commencing date for the employee's annuity.
    (e) In this section, ``issued'' means actually filed with the clerk 
of the court, and does not mean the effective date of a retroactive 
court order that is effective prior to the date when actually filed with 
the clerk of the court (e.g., a court order issued nunc pro tunc).
    (f)(1) In this section, the ``first order dividing the marital 
property of the retiree and the former spouse'' means--
    (i) The original written order that first ends (or first documents 
an oral order ending) the marriage if the court divides any marital 
property (or approves a property settlement agreement that divides any 
marital property) in that order, or in any order issued before that 
order); or
    (ii) The original written order issued after the marriage has been 
terminated in which the court first divides any marital property (or 
first approves a property settlement agreement that divides any marital 
property) if no marital property has been divided prior to the issuance 
of that order.
    (2) The first order dividing marital property does not include--
    (i) Any court order that amends, explains, clarifies, or interprets 
the original written order regardless of the effective date of the court 
order making the amendment, explanation, clarification, or 
interpretation; or
    (ii) Any court order issued under reserved jurisdiction or any other 
court order issued subsequent to the original written order that divide 
any marital property regardless of the effective date of the court 
order.

[57 FR 33574, July 29, 1992, as amended at 58 FR 3202, Jan. 8, 1993]



Sec. 838.807  Cost must be paid by annuity reduction.

    (a) A court order awarding a former spouse survivor annuity is not a 
court order acceptable for processing unless it permits OPM to collect 
the annuity reduction required by section 8339(j)(4) or section 8419 of 
title 5, United States Code, from annuity paid by OPM. OPM will not 
honor a court order that provides for the retiree or former spouse to 
pay OPM the amount of the annuity reduction by any other means.
    (b) The amount of the annuity reduction required by section 
8339(j)(4) or section 8419 of title 5, United States Code, may be paid--
    (1) By reduction of the former spouse's entitlement under a court 
order acceptable for processing that is directed at employee annuity; or
    (2) By reduction of the employee annuity.
    (c) Unless the court order otherwise directs, OPM will collect the 
annuity reduction required by section 8339(j)(4) or section 8419 of 
title, 5, United States Code, from the employee annuity.

[[Page 221]]



   Subpart I_Terminology Used in Court Orders Awarding Former Spouse 
                           Survivor Annuities

                          Regulatory Structure



Sec. 838.901  Purpose and scope.

    (a) This subpart regulates the meaning of terms necessary to award a 
former spouse survivor annuity in a court order, and for OPM to 
determine whether a court order awarding a former spouse survivor 
annuity is a court order acceptable for processing and the amount of the 
former spouse survivor annuity.
    (b)(1) This subpart establishes a uniform meaning to be used for 
terms and phrases frequently used in awarding a former spouse survivor 
annuity.
    (2) This subpart informs the legal community about the definition to 
be applied to terms used in court orders, to permit the resulting orders 
to be more carefully drafted, using the proper language to accomplish 
the aims of the court.
    (c)(1) To assist attorneys and courts in preparing court orders that 
OPM can honor in the manner that the court intends, appendix A of this 
subpart contains model language to accomplish many of the more common 
objectives associated with the award of a former spouse survivor 
annuity.
    (2) By using the language in appendix A of this subpart, the court, 
attorneys, and parties will know that the court order will be acceptable 
for processing and that OPM will treat the terminology used in the court 
order in the manner stated in the appendix.

                       Identification of Benefits



Sec. 838.911  Identifying the retirement system.

    (a) To satisfy the requirements of Sec. 838.804(b)(1), a court 
order must contain language identifying the retirement system affected. 
For example, ``CSRS,'' ``FERS,'' ``OPM,'' or ``Federal Government'' 
survivor benefits, or ``survivor benefits payable based on service with 
the U.S. Department of Agriculture,'' etc., are sufficient 
identification of the retirement system.
    (b) Except as provided in paragraphs (b)(1) and (b)(2) of this 
section, language referring to benefits under another retirement system, 
such as military retired pay, Foreign Service retirement benefits and 
Central Intelligence Agency retirement benefits, does not satisfy the 
requirements of Sec. 838.804(b)(1).
    (1) A court order that mistakenly labels CSRS benefits as FERS 
benefits and vice versa satisfies the requirements of Sec. 
838.804(b)(1).
    (2) Unless the court order expressly provides otherwise, for 
employees transferring to FERS, court orders directed at CSRS benefits 
apply to this entire FERS basic benefit, including the CSRS component, 
if any. Such a court order satisfies the requirements of Sec. 
838.804(b)(1).
    (c) A court order affecting military retired pay, even when military 
retired pay has been waived for inclusion in CSRS annuities, does not 
award a former spouse survivor annuity under CSRS or FERS. Such a court 
order does not satisfy the requirements of Sec. 838.804(b)(1).
    (d) A court order that requires an employee or retiree to maintain 
survivor benefits covering the former spouse satisfies the requirements 
of Sec. 838.804(b)(1), if the former spouse was covered by a CSRS or 
FERS survivor annuity or the FERS basic employee death benefit as 
defined in Sec. 843.102 of this chapter at the time of the divorce.

[57 FR 33574, July 29, 1992, as amended at 58 FR 43493, Aug. 17, 1993]



Sec. 838.912  Specifying an award of a former spouse survivor annuity.

    (a) To satisfy the requirements of Sec. 838.804(b)(2), a court 
order must specify that it is awarding a former spouse survivor annuity. 
The court order must contain language such as ``survivor annuity,'' 
``death benefits,'' ``former spouse survivor annuity under 5 U.S.C. 
8341(h)(1),'' etc.
    (b)(1) A court order that provides that the former spouse is to 
``continue as'' or ``be named as'' the beneficiary of CSRS survivor 
benefits or similar language satisfies the requirements of Sec. 
838.804(b)(2).
    (2) A court order that requires an employee or retiree to maintain 
survivor

[[Page 222]]

benefits covering the former spouse satisfies the requirements of Sec. 
838.804(b)(2), if the former spouse was covered by a CSRS or FERS 
survivor annuity or the FERS basic employee death benefit as defined in 
Sec. 843.102 of this chapter at the time of the divorce.
    (c) Two types of potential survivor annuities may be provided by 
retiring employees to cover former spouses. Under CSRS, section 8341(h) 
of title 5, United States Code, provides for ``former spouse survivor 
annuities'' and section 8339(k) of title 5, United States Code, provides 
for ``insurable interest annuities.'' These are distinct benefits, each 
with its own advantages. The corresponding FERS provisions are sections 
8445 and 8444, respectively.
    (1) OPM will enforce court orders to provide section 8341(h) or 
section 8445 annuities. These annuities are less expensive and have 
fewer restrictions than insurable interest annuities but the former 
spouse's interest will automatically terminate upon remarriage before 
age 55. To provide a section 8341(h) or section 8445 annuity, the court 
order must use terms such as ``former spouse survivor annuity,'' 
``section 8341(h) annuity,'' or ``survivor annuity.''
    (2) OPM cannot enforce court orders to provide ``insurable interest 
annuities'' under section 8339(k) or section 8444. These annuities may 
only be elected at the time of retirement by a retiring employee who is 
not retiring under the disability provision of the law and who is in 
good health. The retirees may also elect to cancel the insurable 
interest annuity to provide a survivor annuity for a spouse acquired 
after retirement. The parties might seek to provide this type of annuity 
interest if the nonemployee spouse expects to remarry before age 55, if 
the employee expects to remarry a younger second spouse before 
retirement or if another former spouse has already been awarded a 
section 8341(h) annuity. However, the court will have to provide its own 
remedy if the employee is not eligible for or does not make the 
election. OPM cannot enforce the court order. Language including the 
words ``insurable interest'' or referring to section 8339(k) or section 
8444 does not satisfy the requirements of Sec. 838.804(b)(2).
    (3) In court orders which contain internal contradictions about the 
type of annuity, such as ``insurable interest annuity under section 
8341(h),'' the section reference will control.

[57 FR 33574, July 29, 1992, as amended at 58 FR 43493, Aug. 17, 1993]

                         Computation of Benefit



Sec. 838.921  Determining the amount of a former spouse survivor annuity.

    (a) A court order that contains no provision stating the amount of 
the former spouse survivor annuity provides the maximum former spouse 
survivor annuity permitted under Sec. 831.641 or Sec. 842.613 of this 
chapter and satisfies the requirements of Sec. 838.805.
    (b)(1) A court order that provides that ``a former spouse will 
keep'' or ``an employee or retiree will maintain'' the survivor annuity 
to which he or she was entitled at the time of the divorce satisfies the 
requirements of Sec. 838.805 and provides a former spouse survivor 
annuity in the same proportion to the maximum survivor annuity under 
Sec. 831.641 or Sec. 842.613 of this chapter as the former spouse had 
at the time of divorce. For example, a former spouse of an employee 
would be entitled to a maximum survivor benefit; a former spouse of a 
retiree (who was married to the retiree at retirement and continuously 
until the divorce resulting in the court order) would be entitled to the 
survivor benefit elected at retirement.
    (2) If, at the time of divorce, the employee covered by FERS had at 
least 18 months of civilian service creditable under FERS but less than 
10 years of service creditable under FERS, a former spouse with a court 
order described in paragraph (b)(1) or paragraph (b)(2) of this section 
may be entitled to the basic employee death benefit as defined in Sec. 
843.102 of this chapter, but is not entitled to any other former spouse 
survivor annuity based on the court order.
    (c)(1) A court order that awards a former spouse survivor annuity of 
less than $12 per year satisfies the requirements of Sec. 838.805 and 
provides an initial rate of $1 per month plus all cost-

[[Page 223]]

of-living increases occurring after the later of--
    (i) The date of the court order; or
    (ii) The date when the employee retires.
    (2) The reduction in the employee annuity will be computed as though 
the court order provided a former spouse survivor annuity of $1 per 
month.
    (d)(1) A court order that awards a former spouse survivor annuity 
while authorizing the employee or retiree to elect a lesser former 
spouse survivor annuity upon the employee's or retiree's remarriage 
satisfies the requirements of Sec. 838.805, and provides the former 
spouse survivor annuity at the rate initially provided in the court 
order but does not allow the employee or retiree to elect a lesser 
benefit for the former spouse.
    (2) To provide full survivor annuity benefits to a former spouse 
while authorizing the employee or retiree to elect a lesser former 
spouse survivor annuity benefit in order to provide survivor annuity 
benefits for a subsequent spouse, the court order must provide for a 
reduction in the former spouse survivor annuity upon the employee's or 
retiree's election of survivor annuity benefits for a subsequent spouse.
    (3) A reduction in the amount of survivor benefits provided to the 
former spouse does not satisfy the requirements of Sec. 838.805 if it 
is contingent upon the employee's or annuitant's remarriage rather than 
his or her election of survivor annuity benefits for a subsequent 
spouse.

[57 FR 33574, July 29, 1992, as amended at 58 FR 43493, Aug. 17, 1993; 
58 FR 52882, Oct. 13, 1993]



Sec. 838.922  Prorata share defined.

    (a) Prorata share means the fraction of the maximum survivor annuity 
allowable under Sec. 831.641 or Sec. 842.613 of this chapter whose 
numerator is the number of months of Federal civilian and military 
service that the employee performed during the marriage and whose 
denominator is the total number of months of Federal civilian and 
military service performed by the employee.
    (b) A court order that awards a former spouse a ``prorata share'' of 
a survivor annuity by using that term and identifying the date when the 
marriage began satisfies the requirements of Sec. 838.805 and awards 
the former spouse a former spouse survivor annuity equal to the prorata 
share as defined in paragraph (a) of this section.
    (c) A court order that awards a portion of a survivor annuity, as of 
a specified date before the employee's retirement, awards the former 
spouse a former spouse survivor annuity equal to the prorata share as 
defined in paragraph (a) of this section.
    (d) A court order that awards a portion of the ``value'' of a 
survivor annuity as of a specific date before retirement, without 
specifying what ``value'' is, awards the former spouse a former spouse 
survivor annuity equal to a prorata share as defined in paragraph (a) of 
this section.

[57 FR 33574, July 29, 1992, as amended at 58 FR 52882, Oct. 13, 1993]



Sec. 838.923  Cost-of-living adjustment before the death of a retiree.

    A court order that awards a former spouse survivor annuity is deemed 
to order OPM to add to the survivor annuity rate cost-of-living 
adjustments that occur before the death of a retiree (in the same manner 
as these adjustments are applied to the survivor rate generally) unless 
the court order contains an instruction expressly directing OPM not to 
add these adjustments to the survivor annuity rate. (See Sec. 838.735 
for information concerning cost-of-living adjustments after the death of 
an employee or retiree.)

                        Miscellaneous Provisions



Sec. 838.931  Court orders that provide temporary awards of former spouse 
survivor annuities.

    A provision in a court order that temporarily awards a former spouse 
survivor annuity satisfies the requirements of Sec. 838.804(b)(2), but 
the temporary award becomes permanent on the date on which OPM is barred 
from honoring a modification of the court order (the date of retirement 
or death, or, in the case of a post-retirement divorce, the date of the 
initial court order), as provided in sections 8341(h)(4)

[[Page 224]]

and 8445(d) of title 5, United States Code.

[57 FR 33574, July 29, 1992, as amended at 58 FR 43493, Aug. 17, 1993]



Sec. 838.932  Court orders that permit the former spouse to elect to 
receive a former spouse survivor annuity.

    (a) Except as provided in paragraph (b) of this section, a court 
order that gives the former spouse the right to elect a former spouse 
survivor annuity satisfies the requirements of Sec. 838.804(b)(2) and 
provides a former spouse survivor annuity in the amount otherwise 
provided by the court order.
    (b) A former spouse who has been awarded a former spouse survivor 
annuity by a court order that gives the former spouse the right to elect 
a former spouse survivor annuity may irrevocably elect not to be 
eligible for a former spouse survivor annuity based on the court order.
    (c) The former spouse may make the election under paragraph (b) of 
this section at any time after the issuance of the court order. An 
election under paragraph (b) of this section--
    (1) Must be in writing and in the form prescribed by OPM;
    (2) Is effective on the first day of the month following the month 
in which OPM received the election; and
    (3) Is irrevocable once it has become effective.
    (d) The reduction in an employee annuity based on a court order that 
gives the former spouse the right to elect a former spouse survivor 
annuity terminates on the last day of the month in which OPM receives 
the former spouse's election under paragraph (b) of this section.

[57 FR 33574, July 29, 1992, as amended at 58 FR 43493, Aug. 17, 1993]



Sec. 838.933  Payment of the cost of a former spouse survivor annuity.

    (a) A court order that unequivocally awards a former spouse survivor 
annuity and directs the former spouse to pay for that benefit satisfies 
the requirements of Sec. 838.805, and--
    (1) If the former spouse has also been awarded a portion of the 
employee annuity then the cost of the survivor benefit will be deducted 
from the former spouse's share of the employee annuity (if sufficient to 
cover the total cost--there will be no partial withholding); otherwise,
    (2) The reduction will be taken from the employee annuity and 
collection from the former spouse will be a private matter between the 
parties.
    (b) a court order that conditions the award of a former spouse 
survivor annuity on the former spouse's payment of the cost of the 
benefit satisfies the requirements of Sec. 838.805 only if a court 
order acceptable for processing also awards the former spouse a portion 
of the employee annuity sufficient to cover the cost.

                            Model Paragraphs

  Appendix A to Subpart I of Part 838--Recommended Language for Court 
            Orders Awarding Former Spouse Survivor Annuities

    This appendix provides recommended language for use in court orders 
awarding former spouse survivor annuities. A former spouse survivor 
annuity is not a continuation of a former spouse's share of an employee 
annuity after the death of the employee. A former spouse's entitlement 
to a portion of an employee annuity cannot continue after the death of 
the employee. A court order that attempts to extend the former spouse's 
entitlement to a portion of an employee annuity past the death of the 
employee is not effective. The model language in this appendix does not 
award benefits payable to the former spouse during the lifetime of the 
employee. A separate, distinct award of a portion of the employee 
annuity is necessary to award a former spouse a benefit during the 
lifetime of the employee. Appendix A to subpart F of this part contains 
model language for a portion of an employee annuity.
    Attorneys should exercise great care in preparing provisions 
concerning former spouse survivor annuities because sections 8341(h)(4) 
and 8445(d) of title 5, United States Code, prohibit OPM from accepting 
modifications after the retirement or death of the employee. (See Sec. 
838.806 concerning unacceptable modifications.) A court order awarding a 
former spouse survivor annuity should include four elements:
     Identification of the retirement system;
     Explicit award of the former spouse survivor 
annuity.
     Method for computing the amount of the former 
spouse's benefit; and
     Instructions on what OPM should do if the 
employee leaves Federal service before retirement and applies for a 
refund of employee contributions.

[[Page 225]]

    By using the model language, courts will know that the court order 
will have the effect described in this appendix.
    The model language uses the terms ``[former spouse]'' to identify 
the spouse who is receiving a former spouse survivor annuity and 
``[employee]'' to identify the Federal employee whose employment was 
covered by the Civil Service Retirement System or the Federal Employees 
Retirement System. Obviously, in drafting an actual court order the 
appropriate terms, such as ``Petitioner'' and ``Respondent,'' or the 
names of the parties should replace ``[former spouse]'' and 
``[employee].''
    Similarly, except when the provision applies only to the basic 
employee death benefit (defined in Sec. 843.103 of this chapter) that 
is available only under the Federal Employees Retirement System, the 
models are drafted for employees covered by the Civil Service Retirement 
System (5 U.S.C. 8331 et seq.). The name of the retirement system should 
be changed for employees covered by the Federal Employees Retirement 
System (5 U.S.C. chapter 84.).
    Statutory references used in the models are to CSRS provisions (such 
as section 8341(h) of title 5, United States Code). When appropriate, 
the corresponding FERS provision (such as section 8445 of title 5, 
United States Code) should be used.

                            Table of Contents

    700 Series--Computing the amount of the former spouse's benefit.

] 701 Award of the maximum survivor annuity.
] 702 Award that continues the pre-divorce survivor annuity benefits.
] 703 Award of a prorata share.
] 704 Award of a fixed monthly amount.
] 705-710 [Reserved]
] 711 Award of a percentage or fraction of the employee annuity.
] 712 Award based on a stated formula as a share of employee annuity.
] 713-720 [Reserved]
] 721 Award of a percentage or fraction of the maximum survivor annuity.
] 722 Award based on a stated formula as a share of maximum survivor 
          annuity.
] 723-750 [Reserved]
] 751 Changing amount of former spouse survivor annuity based on 
          remarriage before retirement.
] 752 Changing amount of former spouse survivor annuity based on 
          remarriage after retirement.

    800 Series--Paying the cost of a former spouse survivor annuity.

] 801 Costs to be paid from the employee annuity.
] 802 Costs to be paid from former spouse's share of the employee 
          annuity.

             900 Series--Refunds of employee contributions.

] 901 Barring payment of a refund of employee contributions.
] 902 Dividing a refund of employee contributions.

    700 Series--Computing the amount of the former spouse's benefit.

    Paragraphs 701 through 704 contain model language for awards of 
former spouse survivor annuities in amounts that do not require 
specification of the base on which the former spouse's share will be 
computed. Situations in which the computational base need not be 
specified include amounts defined by law or regulation. For example, the 
maximum former spouse survivor annuity is fixed by statute generally at 
55 percent of the employee annuity under CSRS and 50 percent of the 
employee annuity under FERS.
    Paragraphs 711 and 712 contain model language for awards of former 
spouse survivor annuities that use the employee annuity as the base on 
which the portion awarded will be computed (that is, on which 
percentage, fraction or formula will be applied). Paragraphs 721 and 722 
contain model language for awards of former spouse survivor annuities 
that use the maximum possible survivor annuity as the base on which the 
portion awarded will be computed (that is, on which percentage, fraction 
or formula will be applied). Using the maximum possible survivor annuity 
as the base will generally award 55 percent under CSRS and 50 percent 
under FERS of the amount that using the employee annuity as the base 
would produce.
    Paragraphs 750 and higher contain model language to implement the 
most common other types of awards.
    Each model paragraph includes a reference to the statutory provision 
under CSRS that authorizes OPM to honor court orders awarding former 
spouse survivor annuities. The FERS statutory provision that corresponds 
to section 8341(h) (mentioned in the first sentence of each example) is 
section 8445.

 701 Award of the maximum survivor annuity.
    Using the following paragraph will award the maximum possible former 
spouse survivor annuity. Under CSRS, the maximum possible survivor 
annuity is 55 percent of the employee annuity unless the surviving 
spouse or former spouse was married to the retiree at retirement and 
agreed to a lesser amount at that time. Under FERS, the maximum possible 
survivor annuity is 50 percent of the employee annuity unless the 
surviving spouse or former spouse was married to the retiree at 
retirement and agreed to a lesser amount at that time.
    ``Under section 8341(h)(1) of title 5, United States Code, [former 
spouse] is awarded the maximum possible former spouse survivor

[[Page 226]]

annuity under the Civil Service Retirement System.''

 702 Award that continues the pre-divorce survivor annuity 
benefits.
    Using the following paragraph will award a former spouse survivor 
annuity equal to the amount that the former spouse would have received 
if the marriage were never terminated by divorce.
    ``Under section 8341(h)(1) of title 5, United States Code, [former 
spouse] is awarded a former spouse survivor annuity under the Civil 
Service Retirement System in the same amount to which [former spouse] 
would have been entitled if the divorce had not occurred.''

 703 Award of a prorata share.
    Using the following paragraph will award the former spouse a prorata 
share of the maximum possible survivor annuity. Prorata share is defined 
in Sec. 838.922. To award a prorata share the court order must state 
the date of the marriage. Unless the court order specifies a different 
ending date, the marriage ends for computation purposes on the date that 
the court order is filed with the court clerk.
    ``Under section 8341(h)(1) of title 5, United States Code, [former 
spouse] is awarded a former spouse survivor annuity under the Civil 
Service Retirement System. The amount of the former spouse survivor 
annuity will be equal to a prorate share. The marriage began on [insert 
date].''

 704 Award of a fixed monthly amount.
    Using the following paragraph will award a former spouse survivor 
annuity that will start at the amount stated in the order when the 
employee or retiree dies, unless the stated amount exceeds the maximum 
possible former spouse survivor annuity. If the amount stated in the 
order exceeds the maximum possible former spouse survivor annuity, the 
court order will be treated as awarding the maximum. After payment of 
the former spouse survivor annuity has began, COLA's will be applied in 
accordance with Sec. 838.735. If the final sentence of this model 
paragraph is omitted, OPM will add COLA's occurring after the date of 
the employee's retirement or the date of issuance of the court order, 
whichever is later.
    ``Under section 8341(h)(1) of title 5, United States Code, [former 
spouse] is awarded a former spouse survivor annuity under the Civil 
Service Retirement System. The amount of the former spouse survivor 
annuity will be equal to $[insert a number] per month. The Office of 
Personnel Management is ordered not to increase this amount by COLA's 
occurring before death of [emp]loyee or retiree].''
 705-710 [Reserved]
 711 Award of a percentage or fraction of the employee annuity.
    Using the following paragraph will award a former spouse survivor 
annuity equal to the stated percentage or fraction of the employee 
annuity. The stated percentage or fraction may not exceed 55 percent 
under CSRS or 50 percent under FERS.
    ``Under section 8341(h)(1) of title 5, United States Code, [former 
spouse] is awarded a former spouse survivor annuity under the Civil 
Service Retirement System. The amount of the former spouse survivor 
annuity will be equal to [insert a percentage or fraction] percent of 
the [employee]'s employee annuity.''
 712 Award based on a stated formula as a share of employee 
annuity.
    Using the following paragraphs will award a former spouse survivor 
annuity in an amount to be determined by applying a stated formula to 
employee annuity. The amount of the former spouse survivor annuity may 
not exceed 55 percent of the employee annuity under CSRS or 50 percent 
under FERS. The formula must be stated in the court order (including a 
court-approved property settlement agreement). The formula may not be 
incorporated by reference to a statutory provision or a court decision 
in another case. If the court order uses a formula, the court order must 
include any data that is necessary for OPM to evaluate the formula 
unless the necessary data is contained in normal OPM files.
    ``Under section 8341(h)(1) of title 5, United States Code, [former 
spouse] is awarded a former spouse survivor annuity under the Civil 
Service Retirement System. The amount of the former spouse survivor 
annuity will be the portion of the [employee]'s employee annuity 
computed as follows:
    ``[Insert formula.]''
 713-720 [Reserved]
 721 Award of a percentage or fraction of the maximum survivor 
annuity.
    Using the following paragraph will award a former spouse survivor 
annuity equal to the stated percentage or fraction of the maximum 
possible survivor annuity. The stated percentage or fraction may not 
exceed 100 percent.
    ``Under section 8341(h)(1) of title 5, United States Code, [former 
spouse] is awarded a former spouse survivor annuity under the Civil 
Service Retirement System. The amount of the former spouse survivor 
annuity will be equal to [insert a percentage or fraction] of the 
maximum possible survivor annuity.
 722 Award based on a stated formula as a share of maximum 
survivor annuity.
    Using the following paragraphs will award a former spouse survivor 
annuity based on a stated formula to be applied to the maximum possible 
survivor annuity. The formula must be stated in the court order 
(including a court-approved property settlement agreement). The formula 
may not be

[[Page 227]]

incorporated by reference to a statutory provision or a court decision 
in another case. If the court order uses a formula, the court order must 
include any data that is necessary for OPM to evaluate the formula 
unless the necessary data is contained in normal OPM files.
    ``Under section 8341(h)(1) of title 5, United States Code, [former 
spouse] is awarded a former spouse survivor annuity under the Civil 
Service Retirement System. The amount of the former spouse survivor 
annuity will be the portion of the maximum possible survivor annuity 
computed as follows:
    ``[Insert formula.]''
 723-750 [Reserved]
 751 Changing amount of former spouse survivor annuity based on 
remarriage before retirement.
    Using the following paragraph will award the maximum possible former 
spouse survivor annuity unless the employee remarries before retirement. 
Upon the employee's remarriage before retirement the amount of the 
former spouse survivor annuity changes to a prorata share. The maximum 
possible and prorata share are used as examples only; other amounts may 
be substituted. Similar language is not acceptable for remarriages after 
retirement.
    ``Under section 8341(h)(1) of title 5, United States Code, [former 
spouse] is awarded the maximum possible former spouse survivor annuity 
under the Civil Service Retirement System unless [employee] remarries 
before retirement. If [employee] remarries before retirement, under 
section 8341(h)(1) of title 5, United States Code, [former spouse] is 
awarded a former spouse survivor annuity under the Civil Service 
Retirement System. The amount of the former spouse survivor annuity will 
be equal to a prorata share. The marriage to [former spouse] began on 
[insert data].''
 752 Changing amount of former spouse survivor annuity based on 
remarriage after retirement.
    Using the following paragraph will award the maximum possible former 
spouse survivor annuity unless the employee remarries after retirement 
and elects to provide a survivor annuity for the spouse acquired after 
retirement. Upon the employee's remarriage after retirement and election 
to provide a survivor annuity for the spouse acquired after retirement, 
the amount of the former spouse survivor annuity changes to a prorata 
share. The maximum possible and prorata share are used as examples only; 
other amounts maybe substituted. The change in the amount of the former 
spouse survivor annuity must be triggered by the election, which is a 
part of normal OPM files, rather than the remarriage, which is not 
documented in normal OPM files.
    ``Under section 8341(h)(1) of title 5, United States Code, [former 
spouse] is awarded the maximum possible former spouse survivor annuity 
under the Civil Service Retirement System unless [employee] elects to 
provide a survivor annuity for a new spouse acquired after retirement. 
If [employee] elects to provide a survivor annuity to a new spouse 
acquired after retirement, under section 8341(h)(1) of title 5, United 
States Code, [former spouse] is awarded a former spouse survivor annuity 
under the Civil Service Retirement System. The amount of the former 
spouse survivor annuity will be equal to a prorata share. The marriage 
to [former spouse] began on [insert data].''

    800 Series--Paying the cost of a former spouse survivor annuity.

    A court order awarding a former spouse survivor annuity requires 
that the employee annuity be reduced. The reduction lowers the gross 
employee annuity. The costs associated with providing the former spouse 
survivor annuity must be paid by annuity reduction. Under Sec. 838.807, 
if the former spouse is awarded a portion of the employee annuity 
sufficient to pay the cost associated with providing the survivor 
annuity, the former spouse's share maybe reduced to pay the cost.
 801 Costs to be paid from the employee annuity.
    No special provision on payment of the costs associated with 
providing the former spouse survivor annuity is necessary if the court 
intends the cost to be taken from the employee annuity.
 802 Costs to be paid from former spouse's share of the 
employee annuity.
    Using the following paragraph will award the former spouse a prorata 
share of the employee annuity and a prorata share of the maximum 
possible survivor annuity and provide that the cost associated with the 
survivor annuity be deducted from the former spouse's share of the 
employee annuity. Prorata share and self-only annuity are used as 
examples only; another amount or type of annuity may be substituted.
    ``[Employee] is (or will be) eligible for retirement benefits under 
the Civil Service Retirement System based on employment with the United 
States Government. [Former spouse] is entitled to a prorata share of 
[employee]'s self-only monthly annuity under the Civil Service 
Retirement System. [Former spouse]'s share of [employee]'s employee 
annuity will be reduced by the amount of the costs associated with 
providing the former spouse survivor annuity awarded in the next 
paragraph. The marriage began on [insert date]. The United States Office 
of Personnel Management is directed to pay [former spouse]'s share 
directly to [former spouse].''
    ``Under section 8341(h)(1) of title 5, United States Code, [former 
spouse] is awarded a former spouse survivor annuity under the

[[Page 228]]

Civil Service Retirement System. The amount of the former spouse 
survivor annuity will be equal to a prorata share.

             900 Series--Refunds of employee contributions.

    Court orders that award a former spouse survivor annuity based on 
the service of an employee who is not then eligible to retire should 
include an additional paragraph containing instructions that tell OPM 
what to do if the employee requests a refund of employee contributions 
before becoming eligible to retire. The court order may award the former 
spouse a portion of the refund of employee contributions or bar payment 
of the refund of employee contributions.
 901 Barring payment of a refund of employee contributions.
    Using the following paragraph will bar payment of the refund of 
employee contributions if payment of the refund of employee 
contributions would extinguish the former spouse's entitlement to a 
former spouse survivor annuity. ``The United States Office of Personnel 
Management is directed not to pay [employee] a refund of employee 
contributions.''
 902 Dividing a refund of employee contributions.
    Using the following paragraph will allow the refund of employee 
contributions to be paid but will award a prorata share of the refund of 
employee contributions to the former spouse. The award of a prorata 
share is used only an example; the court order could provide another 
fraction, percentage, or formula, or a fixed amount. A refund of 
employee contributions voids the employee's rights to an employee 
annuity unless the employee is reemployed under the retirement system. 
Payment of the refund of employee contributions will also extinguish the 
former spouse's right to a court-ordered portion of an employee annuity 
or a former spouse survivor annuity unless the employee is reemployed 
and reestablishes title to annuity benefits.
    ``If [employee] becomes eligible and applies for a refund of 
employee contributions, [former spouse] is entitled to a prorata share 
of the refund of employee contributions. The marriage began on [insert 
date]. The United States Office of Personnel Management is directed to 
pay [former spouse]'s share directly to [former spouse.]''



   Subpart J_Court Orders Affecting Civil Service Retirement Benefits

    Source: 50 FR 20077, May 13, 1985, unless otherwise noted. 
Redesignated at 57 FR 33596, July 29, 1992.



Sec. 838.1001  [Reserved]



Sec. 838.1002  Relation to other regulations.

    (a) Part 581 of this chapter contains information about garnishment 
of Government payments including salaries and civil service retirement 
benefits.
    (b) Parts 294 and 297 of this chapter and Sec. 831.106 of this 
chapter contain information about disclosure of information from OPM 
records.
    (c) Subpart F of part 831 of this chapter, subpart F of part 842 of 
this chapter, and subpart C of part 843 of this chapter contain 
information about entitlement to survivor annuities.
    (d) Subpart T of part 831 of this chapter and subpart B of part 843 
of this chapter contain information about entitlement to lump-sum death 
benefits.
    (e) Parts 870, 871, 872, and 873 of this chapter contain information 
about coverage under the Federal Employees' Group Life Insurance 
Program.
    (f) Part 890 of this chapter contains information about coverage 
under the Federal Employees Health Benefits Program.
    (g) Section 831.109 of this chapter contains information about the 
administrative review rights available to a person who has been 
adversely affected by an OPM action under this subpart.

[50 FR 20077, May 13, 1985. Redesignated and amended at 57 FR 33596, 
33598, July 29, 1992]



Sec. 838.1003  Definitions.

    In this subpart:
    Associate Director means the Associate Director for Retirement and 
Insurance in the OPM or an OPM official authorized to act on his or her 
behalf.
    Court order means any judgment or property settlement issued by or 
approved by any court of any State, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, or the 
Virgin Islands, and any Indian court in connection with, or incident to, 
the divorce, annulment of marriage, or legal separation of a Federal 
employee or retiree.
    CSRS means subchapter III of chapter 83 of title 5, United States 
Code.
    Employee retirement benefits means employees' and Members' annuities 
and refunds of retirement contributions but

[[Page 229]]

does not include survivor annuities or lump-sum payments made pursuant 
to section 8342 (c) through (f) of title 5, United States Code.
    Former spouse means (1) in connection with a court order affecting 
employee retirement benefits, a living person whose marriage to an 
employee, Member, or retiree has been subject to a divorce, annulment, 
or legal separation resulting in a court order; or (2) in connection 
with a court order awarding a former spouse annuity, a living person who 
was married for at least 9 months to an employee, Member, or retiree who 
performed at least 18 months of creditable service in a position covered 
by CSRS and whose marriage to the employee was terminated prior to the 
death of the employee, Member, or retiree.
    Former spouse annuity means a former spouse annuity as defined in 
Sec. 831.603 of this chapter.
    Gross annuity means the amount of a self-only annuity less only 
applicable survivor reduction, but before any other deduction.
    Member means a Member of Congress.
    Net annuity means the amount of annuity payable after deducting from 
the gross annuity any amounts that are (1) owed by the retiree to the 
United States, (2) deducted for health benefits premiums pursuant to 
section 8906 of title 5, United States Code, and Sec. Sec. 891.401 and 
891.402 of this title, (3) deducted for life insurance premiums pursuant 
to section 8714a(d) of title 5, United States Code, (4) deducted for 
Medicare premiums, or (5) properly withheld for Federal income tax 
purposes, if amounts withheld are not greater than they would be if the 
individual claimed all dependents to which he or she was entitled.
    Qualifying court order means a court order that meets the 
requirements of Sec. 838.1004.
    Retiree means a former employee or Member who is receiving recurring 
payments under CSRS based on service by the employee or Member. Retiree, 
as used in the subpart, does not include a current spouse, former 
spouse, child or person with an insurable interest.
    Self-only annuity means the recurring payment to a retiree who has 
elected not to provide a survivor annuity to anyone.

[50 FR 20077, May 13, 1985, as amended at 55 FR 9103, Mar. 12, 1990; 56 
FR 45884, Sept. 9, 1991. Redesignated and amended at 57 FR 33596-33598, 
July 29, 1992]



Sec. 838.1004  Qualifying court orders.

    (a) A former spouse is entitled to a portion of an employee's 
retirement benefits only to the extent that the division of retirement 
benefits is expressly provided for by the court order. The court order 
must divide employee retirement benefits, award a payment from employee 
retirement benefits, or award a former spouse annuity.
    (b) The court order must state the former spouse's share as a fixed 
amount, a percentage or a fraction of the annuity, or by a formula that 
does not contain any variables whose value is not readily ascertainable 
from the face of the order or normal OPM files.
    (c)(1) For purposes of payments from employee retirement benefits, 
OPM will review court orders as a whole to determine whether the 
language of the order shows an intent by the court that the former 
spouse should receive a portion of the employee's retirement benefits 
directly from the United States.
    (i) Orders that direct or imply that OPM is to make payment of a 
portion of employee retirement benefits, or are neutral about the source 
of payment, will be honored unless the retiree can demonstrate that the 
order is invalid in accordance with Sec. 838.1009.
    (ii) Orders that specifically direct the retiree to pay a portion of 
employee retirement benefits to a former spouse (and do not contain 
language to show the court intends payment from the Civil Service 
Retirement System) will be honored unless the retiree objects to direct 
payment by OPM within the 30-day notice period prescribed in Sec. 
838.1008, but will not be honored even if the retiree raises only a 
general objection to payment by OPM within that 30-day notice period.
    (2) For purposes of awarding a former spouse annuity, the court 
order must either state the former spouse's entitlement to a survivor 
annuity or direct an employee, Member, or retiree to provide a former 
spouse annuity.

[[Page 230]]

    (d) For purposes of affecting or awarding a former spouse annuity, a 
court order is not a qualifying court order whenever--
    (1) The marriage was terminated before May 7, 1985; or
    (2)(i) The marriage was terminated on or after May 7, 1985; and
    (ii) The employee or Member retired under CSRS before May 7, 1985; 
and
    (iii)(A) The employee or Member had elected not to provide a current 
spouse annuity for that spouse at the time of retirement; or,
    (B) In the case of a post-retirement marriage, the annuitant had not 
elected to provide a survivor annuity for that spouse before May 7, 
1985.
    (e)(1) For purposes of awarding, increasing, reducing, or 
eliminating a former spouse survivor annuity, or explaining, 
interpreting, or clarifying a court order that awards, increases, 
reduces or eliminates a former spouse annuity, the court order must be--
    (i) Issued on a day prior to the date of retirement or date of death 
of the employee; or
    (ii) The first order dividing the marital property of the retiree 
and the former spouse.
    (2) In paragraph (e)(1) of this section, ``date of retirement'' 
means the later of--
    (i) The date that the employee files an application for retirement; 
or
    (ii) The effective commencing date for the employee's annuity.
    (3) In paragraphs (e)(1) and (e)(4) of this section ``issued'' means 
actually filed with the clerk of the court, and does not mean the 
effective date of a retroactive court order that is effective prior to 
the date when actually filed with the clerk of the court (e.g., a court 
order issued nunc pro tunc).
    (4)(i) In paragraph (e)(1)(ii) of this section, the ``first order 
dividing the marital property of the retiree and the former spouse'' 
means--
    (A) The original written order that first ends (or first documents 
an oral order ending) the marriage if the court divides any marital 
property (or approves a property settlement agreement that divides any 
marital property) in that order, or in any order issued before that 
order; or
    (B) The original written order issued after the marriage has been 
terminated in which the court first divides any marital property (or 
first approves a property settlement agreement that divides any marital 
property) if no marital property has been divided prior to the issuance 
of that order.
    (ii) The first order dividing marital property does not include--
    (A) Any court order that amends, explains, clarifies, or interprets 
the original written order regardless of the effective date of the court 
order making the amendment, explanation, clarification, or 
interpretation; or
    (B) Any court order issued under reserved jurisdiction or any other 
court orders issued subsequent to the original written order that divide 
any marital property regardless of the effective date of the court 
order.

[50 FR 20077, May 13, 1985, as amended at 51 FR 31936, Sept. 8, 1986; 52 
FR 3210, Feb. 3, 1987; 53 FR 48896, Dec. 5, 1988; 53 FR 49638, Dec. 8, 
1988. Redesignated and amended at 57 FR 33596-33597, July 29, 1992]



Sec. 838.1005  Applications by former spouse.

    (a) A former spouse (personally or through a representative) must 
apply in writing to be eligible for benefits under this subpart. No 
special form is required.
    (b) The application letter must be accompanied by--
    (1) A certified copy of the court order granting benefits under 
CSRS; and
    (2) A statement that the court order has not been amended, 
superseded, or set aside; and
    (3) Identifying information concerning the employee, Member, or 
retiree such as his or her full name, claim number, date of birth, and 
social security number, if available; and
    (4) The mailing address of the former spouse.
    (c) When payments are subject to termination upon remarriage, no 
payment shall be made until the former spouse submits to the Associate 
Director a statement on the form prescribed by OPM certifying--
    (1) That a remarriage has not occurred; and

[[Page 231]]

    (2) That the former spouse will notify the Associate Director within 
15 calendar days of the occurrence of any remarriage; and
    (3) That the former spouse will be personally liable for any 
overpayment to him or her resulting from a remarriage. The Associate 
Director may subsequently require recertification of these statements.



Sec. 838.1006  Amounts payable.

    (a) Money held by an executive agency or OPM that may be payable at 
some future date is not available for payment under court orders unless 
all of the conditions necessary for payment of the money to the former 
employee or Member have been met, including, but not limited to--
    (1) Separation from a covered position in the Federal service; and
    (2) Application for payment of the money by the former employee or 
Member; and
    (3) The former employee's or Member's immediate entitlement to 
payment of the money subject to the order.
    (b) Waivers of employee or Member annuity payments under the terms 
of section 8345(d) of title 5, United States Code, exclude the waived 
portion of the annuity from availability for payment under a court order 
if such waivers are postmarked before the expiration of the 30-day 
notice period provided by Sec. 838.1008.
    (c) Payment under a court order may not exceed--
    (1) In cases involving employee or Member annuities, the net 
annuity.
    (2) In cases involving lump-sum payments (refunds), the amount of 
the lump-sum credit.
    (3) In cases involving former spouse annuities, the amount provided 
in Sec. 831.641 of this chapter.
    (d) In cases in which court orders award former spouse annuities--
    (1) Except as provided in paragraph (d)(2) of this section, former 
spouse annuities based on qualifying court orders will commence and 
terminate in accordance with the court order.
    (2) A court order will not be honored to the extent it would require 
an annuity to commence prior to the day after the employee, Member, or 
retiree dies, or the first day of the second month beginning after the 
date on which OPM receives written notice of the court order together 
with the additional information required by Sec. 838.1005. Further, a 
court order will not be honored to the extent it requires an annuity to 
be terminated contrary to section 8341(h)(3)(B) of title 5, United 
States Code.
    (3) A court order will not be honored to the extent is is 
inconsistent with any joint designation or waiver previously executed 
under Sec. 831.614 of this chapter with respect to the former spouse 
involved.

[50 FR 20077, May 13, 1985, as amended at 51 FR 31936, Sept. 8, 1986. 
Redesignated and amended at 57 FR 33596-33598, July 29, 1992; 58 FR 
52882, Oct. 13, 1993]



Sec. 838.1007  Preliminary review.

    (a)(1) Upon receipt of a court order and documentation required by 
Sec. 838.1005 affecting the future civil service retirement benefits of 
an employee or Member who is living and has not applied for benefits 
under CSRS, the Associate Director will notify the former spouse that 
OPM has received the court order and documentation. The court order and 
documentation will be filed for further review when the employee or 
Member dies or funds become available under Sec. 838.1006.
    (2) When OPM has received a court order and documentation required 
by Sec. 838.1005 affecting an employee or Member who retires, dies, or 
applies for a lump-sum benefit, the Associate Director will determine 
whether the court order is a qualifying court order under Sec. 
838.1004.
    (3) Upon receipt of a court order and necessary documentation 
required by Sec. 838.1005 affecting employee retirement benefits that 
are available under Sec. 838.1006 or awarding a former spouse annuity 
to a former spouse of an employee who retired under CSRS or died, the 
Associate Director will determine whether the court order is a 
qualifying court order under Sec. 838.1004.
    (b) Upon preliminary determination that the court order is 
qualifying, the Associate Director will give the notifications required 
by Sec. 838.1008.
    (c) Upon preliminary determination that the court order is not 
qualifying,

[[Page 232]]

the former spouse will be notified of the basis for the determination 
and the right to reconsideration under Sec. 831.109 of this chapter.

[50 FR 20077, May 13, 1985. Redesignated and amended at 57 FR 33596-
33598, July 29, 1992]



Sec. 838.1008  Notifications.

    (a) In a case in which the court order affects employee retirement 
benefits:
    (1) The Associate Director will notify the employee, Member, or 
retiree that a court order has been received that appears to require 
that a portion of his or her retirement benefits be paid to a former 
spouse and provide the employee, Member, or retiree with a copy of the 
court order. The notice will inform the former employee or Member--
    (i) That OPM intends to honor the court order; and
    (ii) Of the effect that the court order will have on the former 
employee or Member's retirement benefits; and
    (iii) That no payments will be made to the former spouse for a 
period of 30 days from the notice date to enable the former employee or 
Member to contest the court order.
    (2) The Associate Director will notify the former spouse--
    (i) That OPM intends to honor the court order; and
    (ii) Of the amount that the former spouse is entitled to receive 
under the court order, and in cases that award a portion of the benefits 
on a percentage basis or by a formula, how the amount was computed; and
    (iii) That payment is being delayed for a period of 30 days to give 
the former employee or Member an opportunity to contest the court order.
    (b) In a case in which the court order awards a former spouse 
annuity--
    (1) The Associate Director will notify the retiree, if living, or, 
if the employee, Member, or retiree is dead, his or her surviving 
spouse, or the person entitled to the lump-sum death benefit under 
section 8342 of title 5, United States Code, if possible, that a court 
order has been received that requires the payment of a former spouse 
annuity. The notice will include a copy of the court order. The notice 
will state--
    (i) That OPM intends to honor the court order; and
    (ii) The effect it will have on the potential retirement benefit of 
the person receiving the notice; and
    (iii) That any objection to honoring the court order must be filed 
within 30 days from the notice date.
    (2) The former spouse will be notified--
    (i) That OPM intends to honor the court order; and
    (ii) Of the amount of survivor annuity that he or she will be 
entitled to receive and how the amount was computed; and
    (iii) That anyone adversely affected has a period of 30 days in 
which to contest the court order.
    (c) In a case in which the court order affects employee retirement 
benefits and awards a former spouse annuity all of the notices under 
paragraphs (a) and (b) of this section will be provided.



Sec. 838.1009  Decisions.

    (a)(1) When the individual does not respond within the 30-day notice 
period provided for by Sec. 838.1008, the court order will be honored 
in accordance with the notification.
    (2) When a timely response to the notification is received, the 
Associate Director will consider the response. The former spouse's claim 
will be denied and the former spouse will be notified of the right to 
request reconsideration under Sec. 831.109 of this chapter whenever is 
is shown that--
    (i) The court order is not a qualifying court order; or
    (ii) The court order is inconsistent with a contemporaneous or 
subsequent court order.
    (b) If any person who may lose benefits if OPM honors the court 
order objects to payment based on the validity of the court order and 
the record contains reasonable support for the objection, he or she will 
be granted 30 days to initiate legal action to determine the validity of 
the objection. If funds are available under Sec. 838.1006 and evidence 
is submitted that legal action had been started before the 30 days have 
expired, money will continue to be withheld, but no payment will be

[[Page 233]]

made to the former spouse pending judicial determination of the validity 
of the court order.

[50 FR 20077, May 13, 1985. Redesignated and amended at 57 FR 33596-
33598, July 29, 1992]



Sec. 838.1010  Court orders or decrees preventing payment of lump sums.

    (a) Payment of the lump-sum credit to a former employee or Member 
will be subject to the terms of any court order or decree issued with 
respect to any former spouse or to any current spouse from whom the 
employee or Member was legally separated, if--
    (1) The court order or decree expressly relates to any portion of 
the lump-sum credit involved; and
    (2) Payment of the lump-sum credit would extinguish entitlement of 
the current or former spouse to a survivor annuity under section 8341(h) 
of title 5, United States Code, or to any portion of an annuity under 
section 8345(j) of title 5, United States Code.
    (b) For paragraph (a) of this section to have effect, OPM must be in 
receipt of the court order or decree before authorizing payment of the 
refund.
    (c)(1) In the event that OPM receives two or more court orders or 
decrees--
    (i) When there are two former spouses, the court orders or decrees 
will be honored in the order in which they were issued until the lump-
sum has been exhausted.
    (ii) When there are two or more court orders or decrees relating to 
the same former spouse, the one issued last will be honored first.
    (2) In no event will the amount paid out exceed the amount of the 
lump-sum credit.
    (d) OPM is not liable for any payment made from money due from or 
payable by OPM to any individual pursuant to a court order or decree 
regular on its face, if such payment is made in accordance with this 
subpart.
    (e) Except as provided in paragraph (f) of this section, a court 
order or decree directed at a refund of retirement contributions is not 
effective unless the court order or decree and supporting documentation 
required by Sec. 838.1005 are received by OPM not later than--
    (1) The last day of the second month before payment of the refund; 
or
    (2) Twenty days after OPM receives the Statement required by Sec. 
831.2007(c) of this chapter if the former spouse has indicated on that 
Statement that such an order exists.
    (f) The interests of a former spouse with a court order or decree 
who does not receive notice of a refund application because the former 
employee or Member submits fraudulent proof of notification or 
fraudulent proof that the former spouse's whereabouts are unknown are 
protected if, and only if--
    (1) The former spouse files the court order or decree with OPM no 
later than the last day of the second month before the payment of the 
refund; or
    (2) The former spouse submits proof that--
    (i) The evidence submitted by the employee was fraudulent; and
    (ii) Absent the fraud, the former spouse would have been able to 
submit the necessary documentation required by Sec. 838.1005 within the 
time limit prescribed in paragraph (e) of this section.
    (g) Court orders, notices, summons, or other documents that attempt 
to restrain OPM from paying refunds of retirement contributions are not 
effective unless they meet all the requirements of--
    (1) Paragraph (a) of this section, including the requirement that 
the court order or decree, or a prior court order or decree, has awarded 
the former spouse a former spouse annuity as defined in Sec. 831.603 of 
this chapter or a portion of the employee's or Member's future annuity 
benefit; or
    (2) Part 581 of this chapter.

[50 FR 20081, May 13, 1985, as amended at 51 FR 31937, Sept. 8, 1986; 55 
FR 9106, Mar. 12, 1990. Redesignated and amended at 57 FR 33596-33598, 
July 29, 1992]



Sec. 838.1011  Effective dates.

    (a)(1) The provisions of this subpart apply to any employee 
retirement benefits regardless of the date of issuance of the court 
order or the date when the employee or Member retires.
    (2) The Associate Director will not increase the amount apportioned 
from current retirement benefits to satisfy an arrearage due the former 
spouse unless the court order states the amount of the arrearage and 
directs that it be paid from the employee retirement

[[Page 234]]

benefit. However, the Associate Director will honor the terms of a new 
or revised court order that either increases or decreases the former 
spouse's entitlement. These changes will be prospective only.
    (3) Benefits payable to a former spouse from a retiree's annuity 
begin to accrue no earlier than the beginning of the month after receipt 
of a qualifying court order and the documentation required by Sec. 
838.1005, and terminate no later than the last day of the month before 
the death of the retiree.
    (b)(1) The provisions of this subpart concerning former spouse 
annuities apply only with respect to a former spouse of an employee, 
Member, or retiree who retires or dies while employed in a position 
covered by CSRS on or after May 7, 1985, or a former spouse whose 
marriage to an employee, Member, or retiree is terminated on or after 
May 7, 1985, regardless of the date the employee separates from a 
position covered by CSRS.
    (2) The survivor annuity for a former spouse commences and 
terminates in accordance with the court order. However, a court order 
will not be honored to the extent it would require an annuity to 
commence before--
    (i) The day after the employee, Member, or retiree dies; or
    (ii) The first day of the second month beginning after OPM receives 
the court order, together with such additional information required by 
Sec. 838.1005, whichever is later. Further, a court order will not be 
honored to the extent it requires an annuity to be terminated contrary 
to section 8341(h)(3)(B) of title 5, United States Code.

[50 FR 20077, May 13, 1985, as amended at 51 FR 31936, Sept. 8, 1986. 
Redesignated and amended at 57 FR 33596-33597, July 29, 1992]



Sec. 838.1012  Death of the former spouse.

    (a) Unless the qualifying court order expressly provides otherwise, 
the former spouse's share of employee retirement benefits terminates on 
the last day of the month before the death of the former spouse, and the 
former spouse's share of employee retirement benefits reverts to the 
retiree.
    (b) Except as otherwise provided in this subpart, OPM will honor a 
qualifying court order or an amended qualifying court order that directs 
OPM to pay, after the death of the former spouse, the former spouse's 
share of the employee annuity to--
    (1) The court;
    (2) An officer of the court acting as a fiduciary;
    (3) The estate of the former spouse; or
    (4) One or more of the retiree's children as defined in section 
8342(c) or section 8424(d) of title 5, United States Code.

[57 FR 33597, July 29, 1992, as amended at 58 FR 43493, Aug. 17, 1993]



Sec. 838.1013  Limitations.

    (a) Employee retirement benefits are subject to apportionment by 
court order only while the former employee or Member is living. Payment 
of apportioned amounts will be made only to the former spouse and/or the 
children of the former employee or Member. Payment will not be made to 
any of the following:
    (1) The heirs or legatees of the former spouse; or
    (2) The creditors of the former employee or Member, or the former 
spouse; or
    (3) Other assignees of the former employee or Member, or the former 
spouse.
    (b) The amount of payment under this subpart will not be less than 
one dollar and, in the absence of compelling circumstances, will be in 
whole dollars.
    (c) In honoring and complying with a court order, the Associate 
Director will not disrupt the scheduled method of accruing retirement 
benefits or the normal timing for making such payment, despite the 
existence of a special schedule of accrual or payment of amounts due the 
former spouse.
    (d) Payments from employee retirement benefits under this subpart 
will be discontinued whenever the retiree's annuity payments are 
suspended or terminated. If annuity payments to the retiree are 
restored, payment to the former spouse will also resume.
    (e) Since the former spouse is entitled to payments from employee 
retirement benefits only while the former employee or Member is living, 
the former spouse is personally liable for

[[Page 235]]

any payments from employee retirement benefits received after the death 
of the retiree.



Sec. 838.1014  Guidelines on interpreting court orders.

    As circumstances require, OPM will publish in the Federal Register a 
notice of the guidelines it uses in interpreting court orders. Upon 
publication of the notice in the Federal Register of such guidelines, 
they will become an appendix to this subpart.



Sec. 838.1015  Liability.

    OPM is not liable for any payment made from employee retirement 
benefits pursuant to a court order if such payment is made in accordance 
with the provisions of this subpart.



Sec. 838.1016  Receipt of multiple court orders.

    In the event that OPM receives two or more qualifying court orders--
    (a) When there are two or more former spouses, the court orders will 
be honored in the order in which they were issued to the maximum extent 
possible under Sec. Sec. 831.641 of this chapter and 838.1006.
    (b) Where there are two or more court orders relating to the same 
former spouse, the one issued last will be honored.

[50 FR 20077, May 13, 1985. Redesignated and amended at 57 FR 33596-
33598, July 29, 1992; 58 FR 52882, Oct. 13, 1993]



Sec. 838.1017  Cost-of-living adjustments.

    In cases where the court order apportions a percentage of the 
employee retirement benefit, the Associate Director will initially 
determine the amount of proper payment. That amount will be increased by 
future cost-of-living increases unless the court directs otherwise.



Sec. 838.1018  Settlements.

    The former spouse may request that an amount be withheld from the 
retirement benefits that is less than the amount stipulated in the court 
order. This lower amount will be deemed a complete fulfillment of the 
obligation of OPM for the period in which the request is in effect.

 Appendix A to Subpart J of Part 838--Guidelines for Interpreting State 
         Court Orders Dividing Civil Service Retirement Benefits

                        United States of America

                     Office of Personnel Management

                     Retirement and Insurance Group

 Guidelines for Interpreting State Court Orders Dividing Civil Service 
                           Retirement Benefits

    These guidelines explain the interpretation that the Office of 
Personnel Management (OPM) will place on terms and phrases frequently 
used in dividing benefits. These guidelines are intended not only for 
the use of OPM, but also for the legal community as a whole, with the 
hope that by informing attorneys, in advance, about the manner in which 
OPM will interpret terms written into court orders, the resulting orders 
will be more carefully drafted, using the proper language to accomplish 
the aims of the court.
    A substantial number of State court orders are drafted under the 
mistaken belief that the Employee Retirement Income Security Act (ERISA) 
(29 U.S.C. 1001 et seq.) applies to CSRS benefits. Sections 1003(b)(1) 
and 1051 of title 29, United States Code, exempt CSRS from ERISA, 
because CSRS is a ``governmental plan'' as defined in section 1001(23) 
of title 29, United States Code. Accordingly, OPM does not honor ERISA 
Qualifying Domestic Relations Orders (QDRO's) except to the extent that 
the law governing CSRS expressly authorizes compliance with State court 
orders. OPM will honor the orders to the extent permitted by CSRS. 
However, many provisions of ERISA QDRO's are not authorized under CSRS. 
Most significantly, a court cannot require that payments to the former 
spouse begin before the employee actually retires (i.e., begins to 
receive benefits) and, unless the order expressly provides that the 
former spouse is entitled to a survivor annuity, the payments to the 
former spouse cannot continue after the employee dies.

                        I. Computations generally

    A. Adjustments affecting court-awarded benefits. 1. Orders that 
award adjustments to a former spouse stated in terms such as ``cost-of-
living adjustments'' or ``COLAs'' occurring after the date of the decree 
but before the date of retirement will be interpreted to award increases 
equal to the adjustments described in or effected under section 8340 of 
title 5, United States Code.
    2. Orders that award adjustments to a former spouse stated in terms 
such as ``salary adjustments'' or ``pay adjustments'' occurring after 
the date of the decree will be

[[Page 236]]

interpreted to award increases equal to the adjustments described in or 
effected under section 5303 of title 5, United States Code until the 
date of retirement.
    3. Unless otherwise specified in the order, adjustments described in 
section 8340 of title 5, United States Code will be applied after the 
date of retirement.
    B. Application of COLAs. 1. Unless the court directly and 
unequivocally orders otherwise, decrees that divide annuities either on 
a percentage basis or by use of a formula will be interpreted to entitle 
the former spouse to salary adjustments occurring after the date of the 
decree and cost-of-living adjustments occurring after the date of the 
decree or occurring after the date of the employee's retirement, 
whichever comes later.
    2. On the other hand, decrees that award a former spouse a specific 
dollar amount from the annuity will be interpreted as excluding salary 
and cost-of-living adjustments after the date of the decree, unless the 
court expressly orders their inclusion.
    3. Orders that contain a general instruction to calculate the former 
spouse's share effective at the time of divorce or separation will not 
be interpreted to prevent the inclusion of salary adjustments occurring 
after the specified date. To prevent the application of salary 
adjustments after the date of the divorce or separation, the decree must 
either state the exact dollar amount of the award to the former spouse 
or specifically state that salary adjustments after the specified date 
are to be disregarded in computing the former spouse's share.
    4. Orders that require OPM to compute a benefit as of a specified 
date, and specifically state that salary adjustments after the specified 
date are to be disregarded in computing the former spouse's share will 
not be interpreted to prevent the application of COLAs after the date of 
the Federal employee's retirement. To award COLAs between the specified 
date and the Federal employee's retirement, the order must specifically 
state that the former spouse will receive the benefit of any COLAs 
occurring between the specified date and the date of the Federal 
employee's retirement. To prevent the application of COLAs after the 
retirement date, the decree must either state the exact dollar amount of 
the award to the former spouse or specifically state that the former 
spouse will not receive the benefit of COLAs occurring after the date of 
the Federal employee's retirement.
    C. Present value. 1. Orders that award a portion of the ``present 
value'' of an annuity will not be honored unless the amount of the 
``present value'' is stated in the order. (See 5 CFR 838.1004(b).)
    2. Orders that award a portion of the ``present value'' of an 
annuity stated in the order will be interpreted as awarding ``a specific 
dollar amount.'' Unless the court specifically states otherwise, such an 
award payable from a monthly annuity benefit will be paid in equal 
installments at 50 percent of the monthly annuity rate at the time of 
retirement or the date of the order, whichever comes later, until the 
specific dollar amount is reached.
    3. Orders that award a portion of the ``value'' of an annuity as of 
a specific date before retirement, without specifying what ``value'' is, 
will be interpreted as awarding a portion of the annuity equal to the 
monthly annuity rate at the time of retirement times a fraction, the 
numerator of which is the number of months of ``creditable service'' or 
service worked as of the date specified and the denominator of which is 
the total number of months as of the time of retirement of ``creditable 
service'' or service worked, whichever term is used in the court order. 
(See III. C. of these Guidelines.)
    4. Orders that contain general language awarding a specified portion 
of a Federal employee's ``retirement benefits'' as of a specified date 
before retirement, but do not specify whether OPM should use 
``creditable service'' or ``service worked'' as of the date specified to 
complete the computation, will be interpreted to award a portion of the 
annuity equal to the monthly annuity rate at the time of retirement 
times a fraction, the numerator of which is the number of months of 
service worked as of the date specified and the denominator of which is 
the number of months of ``creditable service'' as of the time of 
retirement.
    D. Annuity as of a date before retirement. Orders that award a 
portion of an employee's annuity as of a specified date before the 
employee's retirement will be interpreted as awarding a portion of the 
annuity equal to the monthly annuity rate at the time of retirement 
times a fraction, the numerator of which is the number of months of 
``creditable service'' or service worked as of the date specified and 
the denominator of which is the number of months of ``creditable 
service'' or service worked used in the retirement computation.
    E. Formulas or percentage instructions. Orders that contain both a 
formula or percentage instruction and a dollar amount will be 
interpreted as including the dollar amount only as the court's estimate 
of the initial amount of payment. The formula or percentage instruction 
will control.
    F. Computation limited to a particular period of employment. In 
order to limit the computation of benefits to a particular period of 
employment, the court order must use language expressly limiting the 
period of service to be included in the computation. General language 
such as ``benefits accrued as a result of employment with the U.S. 
Postal Service * * *'' will be interpreted to mean only that CSRS 
retirement benefits are subject to division (see V.A. of appendix A to 
subpart J of

[[Page 237]]

part 838). Such language will not be interpreted to limit the period of 
service included in the computation (i.e., service performed with other 
Government agencies will be included). To limit the period of service, 
the court order should specify the number of months to be included in 
the computation or should describe specifically the period of service to 
be included in the computation (e.g., ``only U.S. Postal Service'' or 
``exclusive of any service other than U.S. Postal Service employment'' 
or ``only service performed during the period Petitioner and Defendant 
were married'' or ``benefits based on service performed through the date 
of divorce,'' etc.).
    G. Amounts less than $12 per year. Orders awarding a former spouse 
less than $12 per year are qualifying court orders. Such orders will be 
interpreted as an award of $1 per month.

                          II. Types of annuity

    A. Gross annuity will be interpreted as the amount of the annuity 
payable after any applicable survivor reduction but before any other 
deduction.
    B. 1. To divide an annuity before any applicable survivor reduction, 
the decree must contain language to the effect that the division is to 
be made on the self-only annuity, the life-rate annuity, or the annuity 
unreduced for survivor benefit, or equivalent language. A division of 
``gross annuity'' will not accomplish this purpose.
    2. To divide an annuity before the social security offset under 
section 8349 of title 5, United States Code, the order must expressly 
state that the division is to occur before the social security offset. 
The term ``unreduced annuity'' will mean annuity after the social 
security offset.
    C. Net annuity or disposable annuity will be interpreted to mean net 
annuity as defined in Sec. 838.1003.
    D. Orders that fail to state the type of annuity that they are 
dividing will be interpreted as dividing gross annuity (defined above).
    E. Orders dividing a ``retirement check'' will be interpreted as 
dividing net annuity (as defined in Sec. 838.1003).

                          III. Calculating time

    A. The smallest unit of time that will be used in computing a 
formula in a decree is a month.
    1. This policy is based on section 8332 of title 5, United States 
Code, that allows credit for service for years or twelfth parts thereof. 
Requests to calculate smaller units of time will not be honored.
    2. Time calculations by the Office of Personnel Management will be 
no more precise than years and twelfth parts, even where the court order 
directs OPM to make a more precise calculation. However, if the court 
order states a formula using a specified simple or decimal fraction 
other than twelfth parts, OPM will use the specified number to perform 
simple mathematical computations. For example, the share of a former 
spouse awarded a portion of the annuity equal to \1/2\ of the fraction 
whose numerator is 12.863 years and whose denominator is the total 
service on which the annuity is based would be computed by taking \1/2\ 
of the quotient obtained by dividing 12.863 by the total service 
measured in years and twelfth parts.
    B. The term ``military service'' will generally be interpreted to 
include only periods of service within the definition of military 
service contained in section 8331(13) of title 5, United States Code, 
i.e., active duty military service. Civilian service with military 
organizations will not be included as ``military service,'' except where 
the exclusion of such civilian service would be manifestly contrary to 
the intent of the court order.
    C. 1. Unused sick leave is counted as ``creditable service'' on the 
date of separation for immediate retirement; it is not apportioned over 
the time when earned.
    2. When an order contains a formula for dividing annuity that 
requires a computation of service worked as of a date prior to 
separation and using terms such as ``years of service,'' ``total 
service,'' or similar terms, the time attributable to unused sick leave 
will not be included.
    3. When an order contains a formula for dividing annuity that 
requires a computation of ``creditable service'' (or some other phrase 
using ``credit'' or its equivalent) as of a date prior to retirement, 
unused sick leave will be included in the computation as follows--
    (i) If the amount of unused sick leave is specified, the order will 
be interpreted to award a portion of the annuity equal to the monthly 
annuity at retirement times a fraction, the numerator of which is the 
number of months of ``creditable service'' as of the date specified plus 
the number of months of unused sick leave specified and whose 
denominator is the months of ``creditable service'' used in the 
retirement computation.
    (ii) If the amount of unused sick leave is not specified, the order 
will be interpreted to award a portion of the annuity equal to the 
monthly rate at the time of retirement times a fraction, the numerator 
of which is the number of months of ``creditable service'' as of the 
date specified (no sick leave included) and whose denominator is the 
number of months of ``creditable service'' used in the retirement 
computation.

     IV. Distinguishing Between Divisions of Annuity and Refunds of 
                              Contributions

    A. Orders that are unclear about whether they are dividing an 
annuity or a refund of contributions will be interpreted as dividing an 
annuity.

[[Page 238]]

    B. Orders using ``annuities,'' ``pensions,'' ``retirement 
benefits,'' or similar terms will be interpreted as dividing an annuity 
and whatever other employee benefits become payable, such as refunds. 
Orders using ``contributions,'' ``deductions,'' ``deposits,'' 
``retirement accounts,'' ``retirement fund,'' or similar terms will be 
interpreted as dividing the amount of contributions the employee has 
paid into the Civil Service Retirement Fund. Unless the court order 
specifically states otherwise, when an annuity is payable, such orders 
will be paid in equal monthly installments at 50 percent of the monthly 
annuity at the time of retirement or the date of the order, whichever 
comes later, until the specific dollar amount is reached.

                    V. Identifying Benefits Affected

    A. Orders that do not specify what pension or retirement benefits 
are to be divided will not be interpreted as dividing CSRS benefits. 
Terms such as ``CSRS,'' ``United States,'' ``OPM,'' ``Federal 
Government'' benefits, ``Postal Service retirement benefits,'' 
``retirement benefits payable based on service with the U.S. Department 
of Agriculture,'' or similar terms will be considered sufficient to 
identify civil service retirement benefits for division.
    B. Except as provided below, orders directed at other retirement 
systems will not be interpreted as affecting CSRS benefits.
    1. Orders that mistakenly label CSRS benefits as Federal Employees 
Retirement System (FERS) benefits, will be interpreted as dividing CSRS 
benefits and vice versa.
    2. Unless the order expressly provides otherwise, for employees 
transferring to FERS, orders directed at CSRS benefits will be 
interpreted as applying to the entire FERS basic benefit, including the 
CSRS component, if any.
    C. Orders directed at other Federal retirement systems such as 
military retired pay, Foreign Service retirement benefits and Central 
Intelligence Agency retirement benefits will not be interpreted as 
dividing CSRS benefits.
    D. Orders dividing military retired pay, even when military retired 
pay has been waived for inclusion in CSRS annuities, will not be 
interpreted as dividing CSRS benefits. (Such orders cannot be qualifying 
orders under section 838.1004(b), because the amount cannot be computed 
from the face of the order or from normal OPM files.)

               VI. State Law not Specified in Court Orders

    A. 1. Except as provided in Guideline VI.A.2., OPM will not 
research, interpret, or apply State law regarding community or marital 
property rights or divisions.
    2. OPM will not divide disability retirement benefits when such a 
division would be contrary to State law unless the order expressly 
directs division of ``disability'' benefits.
    B. Orders that do not specify the ``community property'' fraction or 
percentage of the former spouse's share will not be considered 
qualifying because the amount of the benefit cannot be computed from the 
face of the order or from normal OPM files (5 CFR 838.1004(b)).

[55 FR 9103, Mar. 12, 1990. Redesignated and amended at 57 FR 33596-
33597, July 29, 1992]

 Appendix B to Subpart J of Part 838--Guidelines for Interpreting State 
    Court Orders Awarding Survivor Annuity Benefits to Former Spouses

                        United States of America

                     Office of Personnel Management

                     Retirement and Insurance Group

Guidelines for Interpreting State Court Orders Awarding Survivor Annuity 
                       Benefits to Former Spouses

    These guidelines explain the interpretation that the Office of 
Personnel Management (OPM) will place on terms and phrases frequently 
used in awarding survivor benefits. These guidelines are intended not 
only for the use of OPM, but also for the legal community as a whole, 
with the hope that by informing attorneys, in advance, about the manner 
in which OPM will interpret terms written into court orders, the 
resulting orders will be more carefully drafted, using the proper 
language to accomplish the aims of the court.

                     I. Insurable Interest Annuities

    Two types of potential survivor annuities may be provided by 
retiring employees to cover former spouses. Section 8341(h) of title 5, 
United States Code, provides for ``former spouse annuities.'' Section 
8339(k) of title 5, United States Code, provides for ``insurable 
interest annuities.'' These are distinct benefits, each with its own 
advantages.
    A. OPM will enforce State court orders to provide section 8341(h) 
annuities. These annuities are less expensive and have fewer 
restrictions than insurable interest annuities but the former spouse's 
interest will automatically terminate upon remarriage before age 55. To 
provide a section 8341(h) annuity, the order must use terms such as 
``former spouse annuity,'' ``section 8341(h) annuity,'' or ``survivor 
annuity.''
    B. OPM will not enforce State court orders to provide ``insurable 
interest annuities'' under section 8339(k). These annuities may

[[Page 239]]

only be elected at the time of retirement by a retiring employee who is 
not retiring under the disability provision of the law and who is in 
good health. The retiree may also elect to cancel the insurable interest 
annuity to provide a survivor annuity for a spouse acquired after 
retirement. The parties might seek to provide this type of annuity 
interest if the non-employee spouse expects to remarry before age 55, if 
the employee expects to remarry a younger second spouse before 
retirement, or if another former spouse has already been awarded a 
section 8341(h) annuity. However, the State court will have to provide 
its own remedy if the employee is not eligible for or does not make the 
election. OPM will not enforce the order. Language including the words 
``insurable interest'' or referring to section 8339(k) will be 
interpreted as providing for this type of survivor benefit.
    C. In orders which contain internal contradictions about the type of 
annuity, such as ``insurable interest annuity under section 8341(h),'' 
the section reference will control.

             II. Orders Directed at Other Retirement Systems

    A. Except as provided in paragraphs A1 and A2, orders directed at 
other retirement systems will not be interpreted as affecting Civil 
Service Retirement System (CSRS) benefits.
    1. Orders that mistakenly label CSRS benefits as Federal Employee's 
Retirement System (FERS) benefits, will be interpreted as affecting CSRS 
benefits and vice versa.
    2. Unless the order expressly provides otherwise, for employees 
transferring to FERS, orders directed at CSRS benefits will be 
interpreted as applying to the entire FERS basic benefit, including the 
CSRS component, if any.
    B. Orders directed at other Federal retirement systems such as 
military retired pay, Foreign Service retirement benefits and Central 
Intelligence Agency retirement benefits will not be interpreted as 
awarding a former spouse annuity under CSRS. Thus, orders should contain 
language identifying the retirement system from which survivor benefits 
are being awarded. For example, orders should contain terms such as 
``CSRS,'' ``OPM,'' ``Federal Government employee survivor benefits,'' or 
``survivor benefits payable based on service with the U. S. Department 
of Agriculture,'' etc.
    C. Orders affecting military retired pay, even when military retired 
pay has been waived for inclusion in CSRS annuities, will not be 
interpreted as awarding a former spouse annuity under CSRS.

       III. Specificity Required To Award a Former Spouse Annuity.

    A. Orders must contain language identifying the benefits affected. 
For example, ``CSRS,'' ``OPM,'' or ``Federal Government'' survivor 
benefits, or ``survivor benefits payable based on service with the U.S. 
Department of Agriculture,'' etc., will be considered sufficient 
identification.
    B. 1. Except as provided paragraphs B2 through B4, orders must 
specify the benefit being awarded. Orders must contain language such as 
``survivor annuity,'' ``death benefits,'' ``former spouse annuity under 
5 U.S.C. 8341(h)(1),'' etc.
    2. Orders that provide that the former spouse is to ``continue as'' 
or ``be named as'' the ``designated beneficiary'' of CSRS benefits will 
be interpreted to award a former spouse annuity.
    3. Orders that provide that the former spouse will ``continue to 
receive benefits after the death of'' the employee or ``that benefits 
will continue after the death of'' the employee, but do not use terms 
such as ``survivor annuity,'' ``death benefits,'' ``former spouse 
annuity,'' or similar terms will not be interpreted to award a former 
spouse annuity.
    4. Orders that give the former spouse the right to elect a former 
spouse annuity will be interpreted to award a former spouse annuity. The 
former spouse does not have an election opportunity. OPM will not accept 
an election by the former spouse to eliminate the court-awarded former 
spouse annuity.
    C. 1. Orders that unequivocally award survivor annuity and direct 
the former spouse to pay for that benefit are qualifying court orders. 
If the former spouse has also been awarded a portion of the retiree's 
benefits then the cost of the survivor benefit will be deducted from the 
former spouse's portion of the annuity (if sufficient to cover the total 
cost--there will be no partial withholding). Otherwise, the reduction 
will be taken from the retiree's annuity and collection from the former 
spouse will be a private matter between the parties.
    2. Orders that condition the award of survivor annuity on the former 
spouse's payment of the cost of the benefit are qualifying only if there 
is also an award of retirement benefits sufficient to cover the cost. 
Absent a sufficient award of employee retirement benefits to pay the 
cost of survivor benefits, the order is not qualifying.
    D. Orders providing that former spouses will keep the survivor 
annuity to which they were entitled at the time of the divorce will be 
interpreted to award a former spouse annuity in the same amount as they 
had at the time of divorce.

[[Page 240]]

    E. Orders that fail to state the amount of the former spouse annuity 
will be interpreted as providing the maximum former spouse annuity.
    F. Orders awarding a former spouse annuity of less than $12 per year 
are qualifying court orders. Such orders will be interpreted to provide 
an initial rate of $1 per month plus all cost-of-living increases 
occurring after the date of the order. The reduction in the retiree's 
annuity will be computed as though the order provided a former spouse 
annuity of $1 per month.
    G. Orders that provide full survivor annuity benefits to a former 
spouse with the contingency that the employee or annuitant may elect a 
lesser benefit for the former spouse upon his or her remarriage will be 
interpreted to provide only a full survivor annuity benefit to the 
former spouse. In order to provide full survivor annuity benefits to a 
former spouse with the contingency that the employee or annuitant may 
provide a lesser survivor annuity benefit to the former spouse in order 
to provide survivor annuity benefits for a subsequent spouse, the order 
should allow a reduction in the former spouse benefit contingent upon 
the employee's or annuitant's election of survivor annuity benefits for 
a subsequent spouse. A reduction in the amount of survivor benefits 
provided to the former spouse will not be permitted if it is contingent 
upon the employee's or annuitant's remarriage rather than his or her 
election of survivor annuity benefits for a subsequent spouse. (See 5 
CFR 838.1004(b).)

[55 FR 9105, Mar. 12, 1990. Redesignated and amended at 57 FR 33596-
33597, July 29, 1992]



     Subpart K_Court Orders Under the Child Abuse Accountability Act

    Source: 59 FR 66637, Dec. 28, 1994, unless otherwise noted.

                          Regulatory Structure



Sec. 838.1101  Purpose and scope.

    (a) This subpart regulates the procedures that the Office of 
Personnel Management will follow upon the receipt of claims arising out 
of child abuse judgment enforcement orders.
    (b) This subpart prescribes--
    (1) The circumstances that must occur before employee annuities or 
refunds of employee contributions are available to satisfy a child abuse 
judgment enforcement order; and
    (2) The procedures that a child abuse creditor must follow when 
applying for a portion of an employee annuity or refund of employee 
contributions based on a child abuse judgment enforcement order.

                          Availability of Funds



Sec. 838.1111  Amounts subject to child abuse judgment enforcement orders.

    (a)(1) Employee annuities and refunds of employee contributions are 
subject to child abuse enforcement orders only if all of the conditions 
necessary for payment of the employee annuity or refund of employee 
contributions to the former employee have been met, including, but not 
limited to--
    (i) Separation from the Federal service;
    (ii) Application for payment of the employee annuity or refund of 
employee contributions by the former employee; and
    (iii) Immediate entitlement to an employee annuity or refund of 
employee contributions.
    (2) Money held by an employing agency or OPM that may be payable at 
some future date is not available for payment under child abuse judgment 
enforcement orders.
    (3) OPM cannot pay a child abuse creditor a portion of an employee 
annuity before the employee annuity begins to accrue.
    (b) Waivers of employee annuity payments under the terms of section 
8345(d) or section 8465(a) of title 5, United States Code, exclude the 
waived portion of the annuity from availability for payment under a 
child abuse judgment enforcement order if such waivers are postmarked or 
received before the date that OPM receives the child abuse judgment 
enforcement order.

   Application, Processing, and Payment Procedures and Documentation 
                              Requirements



Sec. 838.1121  Procedures and requirements.

    (a) Except as otherwise expressly provided in this part, the 
procedures and requirements applicable to legal process under part 581 
of this chapter apply to OPM's administration of child abuse judgment 
enforcement orders.

[[Page 241]]

    (b)(1) OPM will accept for processing any legal process under part 
581 of this chapter that appears valid on its face.
    (2)(i) After OPM has determined that a child abuse judgment 
enforcement order is valid on its face, OPM will not entertain any 
complaint concerning the validity of the order. Such complaints must be 
presented to authorities having jurisdiction to review the validity of 
the legal process.
    (ii) OPM will not delay compliance with a child abuse judgment 
enforcement order based on any complaint concerning the validity of the 
order unless instructed to do so by an appropriate authority under the 
law of the jurisdiction issuing the legal process, the office of the 
United States Attorney for the jurisdiction issuing the legal process, 
or the U.S. Department of Justice.
    (c)(1) The address for service of a child abuse judgment enforcement 
order is provided in appendix A to subpart A of this part.
    (2)(i) OPM considers service of legal process by mailing or delivery 
of the child abuse judgment enforcement order to the designated address 
appropriate service notwithstanding more formal requirements imposed on 
creditors under State law.
    (ii) OPM will execute forms required under a State procedure to 
waive any right to more formal procedures for service of legal process 
than specified in paragraph (c)(2)(i) of this section.



PART 839_CORRECTION OF RETIREMENT COVERAGE ERRORS UNDER THE FEDERAL 
ERRONEOUS RETIREMENT COVERAGE CORRECTIONS ACT--Table of Contents




                      Subpart A_General Provisions

Sec.
839.101 What is the Federal Erroneous Retirement Coverage Corrections 
          Act?
839.102 Definitions.

                          Subpart B_Eligibility

                           General Provisions

839.201 Do these rules apply to me?

                          Election Opportunity

839.211 If these rules apply to me because I had a qualifying retirement 
          coverage error, can I choose which retirement plan I want to 
          be in?
839.212 May I make a retirement coverage election if I received a refund 
          of my retirement deductions after I was corrected to FERS?
839.213 May I make a retirement coverage election if I withdrew all or 
          part of my TSP account after I was corrected to FERS?
839.214 Am I disqualified from making an election of retirement coverage 
          under the FERCCA if I withdrew my TSP account after I retired 
          under FERS?
839.215 May I make a retirement coverage election under the FERCCA if I 
          received a payment as settlement of my claim for losses 
          because of a qualifying retirement coverage error?

                      Previous Election Opportunity

839.221 If my qualifying retirement coverage error was that I was put 
          into FERS by mistake and then, after the error was discovered, 
          I chose my current retirement coverage, can I now make another 
          election?

                Court-Ordered Benefits for Former Spouses

839.231 Can I make an election if my former spouse is entitled to a 
          portion of my retirement benefits by qualifying court order?
839.232 If a deceased employee's survivors include both a current spouse 
          and a former spouse, or spouses who are eligible for survivor 
          annuities, must all of them consent to an election of FERS?

                                Elections

839.241 Am I eligible to make an election under the FERCCA if I had a 
          qualifying retirement coverage error and none of the 
          conditions mentioned in 839.212 through 839.232 apply to me?
839.242 Do these rules apply to me if I had multiple errors?

          Subpart C_Employer Responsibility to Notify Employees

839.301 What should I do if I am not sure whether I am or was in the 
          wrong retirement plan?
839.302 Will my employer give me a written explanation?
839.303 Is my employer required to find employees with a retirement 
          coverage error?

[[Page 242]]

839.304 What if my employer does not notify me?

    Subpart D_Retirement Coverage Elections for Errors That Were Not 
                          Previously Corrected

                      Erroneous CSRS or CSRS Offset

839.401 What can I elect if I was put in CSRS or CSRS Offset by mistake?

                             Erroneous FERS

839.411 What can I elect if I was put in FERS by mistake?

Subpart E_Retirement Coverage Elections for Errors That Were Previously 
                                Corrected

                    Moved Out of CSRS or CSRS Offset

839.501 What can I elect if my employer moved me out of CSRS or CSRS 
          Offset?

                            Moved Out of FERS

839.511 What can I elect under the FERCCA if my employer put me into 
          FERS by mistake and then I was not allowed to remain in FERS 
          when the error was discovered?

                      Subpart F_Making an Election

                           General Provisions

839.601 How do I make an election?
839.602 What if I don't make an election?
839.603 Can I later change my election?
839.604 When is my election effective?

                               Time Limits

839.611 What are the time limits for making an election?
839.612 Can I make a belated election?

                             FERS Elections

839.621 Can I cancel my FERS election if I was in the wrong retirement 
          plan at the time I elected FERS coverage and I have an 
          election opportunity under the FERCCA?
839.622 Can I cancel my FERS election if my qualifying retirement 
          coverage error was previously corrected and I now have an 
          election opportunity under the FERCCA?
839.623 If I decide to keep the FERS election in effect, may I change 
          the effective date of the FERS election?

             Subpart G_Errors That Don't Permit an Election

839.701 Is it correct that even though I had a qualifying retirement 
          coverage error under the FERCCA, I may not have a choice of 
          retirement coverage?
839.702 How do these rules apply to me if I don't have an election right 
          under the FERCCA, but I did have a qualifying retirement 
          coverage error?

       Subpart H_Adjusting Retirement Deductions and Contributions

                     Employee Retirement Deductions

839.801 Do I owe more money if I had a qualifying retirement coverage 
          error and the employee retirement deductions for the new 
          retirement plan are more than what I already paid?
839.802 If I was in CSRS during my qualifying retirement coverage error, 
          paid in more than I would have paid as a CSRS Offset, Social 
          Security-Only, or FERS employee and end up retroactively in 
          one of those retirement plans, will I get a refund of the 
          excess I had withheld from my pay?
839.803 If I am like the person in the previous question, but the amount 
          I paid as deductions under CSRS is more than the amount of 
          combined retirement deductions and Social Security taxes due 
          for my new retirement coverage, will I get a refund of the 
          excess?
839.804 If my qualifying retirement coverage error occurred while I was 
          a reemployed annuitant, and I am later corrected retroactively 
          to a different retirement plan, will I have to pay any 
          additional amount for retirement deductions?

                    Employer Retirement Contributions

839.811 Does my employer owe more money if I had a qualifying retirement 
          coverage error and the employer retirement contributions for 
          my new retirement plan are more than what was already paid?
839.812 Will my employer get a refund if I had a qualifying retirement 
          coverage error and the employer retirement contributions for 
          my new retirement plan are less than what was already paid?

                           Records Correction

839.821 Who is responsible for correcting my records?
839.822 Which employer is responsible for submitting the employee and 
          employer retirement deductions and contributions and 
          correcting my records if I had different employers?

                     Subpart I_Social Security Taxes

839.901 When will my employer begin withholding Social Security taxes if 
          I was erroneously in CSRS during my qualifying retirement 
          coverage error and my corrected coverage will now require me 
          to pay Social Security taxes?
839.902 Will my CSRS retirement deductions be used to pay the Social 
          Security taxes

[[Page 243]]

          for the period of the qualifying retirement coverage error if 
          I was erroneously placed in CSRS and did not pay Social 
          Security taxes?
839.903 What happens to the Social Security taxes I erroneously paid 
          when my employer corrects my retirement coverage to CSRS?

  Subpart J_Lost Earnings for Certain Make-up Contributions to the TSP

839.1001 Does the FERCCA allow me to increase my TSP account if I was in 
          CSRS during my qualifying retirement coverage error and my 
          correct coverage will be FERS?
839.1002 Will OPM compute the lost earnings if my qualifying retirement 
          coverage error was previously corrected and I made TSP make-up 
          contributions?
839.1003 How will OPM compute the amount of lost earnings?
839.1004 Are lost earnings payable if I separated or if the employee 
          died?

                      Subpart K_Effect of Election

                           General Provisions

839.1101 How are my retirement benefits computed if I elect CSRS or CSRS 
          Offset under this part?
839.1102 How are my retirement benefits computed if I elect FERS under 
          this part?
839.1103 If my qualifying retirement coverage error started when I 
          should have been placed under FERS automatically, but my 
          agency put me in CSRS because I had some past service, will I 
          get a CSRS component in my FERS annuity for the service before 
          the error if I elect FERS?

                         Retirees and Survivors

839.1111 If I elect to change my retirement coverage under the FERCCA, 
          can I change the election I originally made at retirement for 
          survivor benefits?
839.1112 If I elect to change my retirement coverage under the FERCCA, 
          can I retroactively revoke the waiver of military retired pay 
          I made at retirement?
839.1113 If I elect to change my retirement coverage under the FERCCA, 
          can I change my decision about making a deposit or redeposit 
          for civilian or military service?
839.1114 Will OPM actuarially reduce my benefit if I elect to change my 
          retirement coverage under these rules?
839.1115 What is an actuarial reduction?
839.1116 If, because of the change in my retirement coverage, I will owe 
          larger deposits for military and civilian service credit, will 
          I have to pay the additional deposit due or will OPM 
          actuarially reduce my annuity?
839.1117 If I elect to change my retirement coverage under the FERCCA, 
          can I get a refund of the service credit deposit I made and 
          receive the actuarial reduction instead?
839.1118 Will my annuity be actuarially reduced because I had Government 
          contributions in my TSP account?
839.1119 How is the actuarial reduction for TSP computed?

                            Survivor Benefits

839.1121 What is the Actuarial Reduction for the Basic Employee Death 
          Benefit (BEDB)?
839.1122 Does receipt of a one-time payment of retirement contributions 
          as a death benefit prevent me from electing CSRS Offset?

                 Subpart L_Discretionary Actions by OPM

839.1201 If I took legal action against my employer because of a 
          qualifying retirement coverage error, can OPM reimburse me for 
          expenses related to my legal actions?
839.1202 Can OPM waive repayment of a monetary award I received as 
          resolution of the harm caused me by a qualifying retirement 
          coverage error?
839.1203 Can OPM compensate me for my losses if I did not take any legal 
          action against my employer, but did incur some expenses 
          because of a qualifying retirement coverage error?
839.1204 On what basis will OPM review claims under this subpart?
839.1205 Does the Director of OPM review the claims?
839.1206 How do I submit a claim under this subpart?

                         Subpart M_Appeal Rights

839.1301 What if my employer determines my error is not subject to these 
          rules?
839.1302 What types of decisions can I appeal?
839.1303 Are there any types of decisions that I cannot appeal?
839.1304 Is there anything else I can do if I am not satisfied with the 
          way my error was corrected?

    Authority: Title II, Pub. L. 106-265, 114 Stat. 770.

    Source: 66 FR 15609, Mar. 19, 2001, unless otherwise noted.

[[Page 244]]



                      Subpart A_General Provisions



Sec. 839.101  What is the Federal Erroneous Retirement Coverage 
Corrections Act?

    (a) The Federal Erroneous Retirement Coverage Corrections Act 
(FERCCA) is Title II of Public Law 106-265, enacted September 19, 2000. 
The FERCCA addresses the problems created when employees are in the 
wrong retirement plan for an extended period.
    (b) Generally, you must be in the wrong retirement plan for at least 
3 years of service after December 31, 1986, before the FERCCA applies to 
you. Depending on the type of error, the FERCCA provides:
    (1) A choice between retirement plans,
    (2) New rules for crediting civilian and military service that was 
not subject to retirement deductions,
    (3) Payment of lost earnings on employee make-up contributions to 
the Thrift Savings Plan, and
    (4) Payment of certain out-of-pocket expenses that are a direct 
result of a retirement coverage error.



Sec. 839.102  Definitions.

    Agency means an executive agency as defined in section 105 of title 
5, United States Code; a legislative branch agency; a judicial branch 
agency; and the U.S. Postal Service and Postal Rate Commission.
    Agency automatic (1%) contributions means contributions made to a 
FERS participant's Thrift Savings Plan account by his or her employing 
agency under 5 U.S.C. 8432(c)(1) or (c)(3).
    Agency matching contributions means contributions made to a FERS 
participant's Thrift Savings Plan account by his or her employing agency 
under 5 U.S.C. 8432(c)(2).
    Annuitant means the same as Retiree.
    Basic Employee Death Benefit or BEDB means the FERS survivor benefit 
payable as a lump sum or over 36 months, described in Sec. 843.309 of 
this chapter.
    Board means the Federal Retirement Thrift Investment Board 
established under 5 U.S.C. 8472.
    CSRS means the Civil Service Retirement System, as described in 
subchapter III of chapter 83 of title 5, United States Code.
    CSRS component means the part of a FERS retirement benefit that is 
computed under CSRS provisions (see Sec. 846.304 of this chapter).
    CSRS Offset means the Civil Service Retirement System Offset plan, 
which is for employees whose service is subject to CSRS deductions and 
Social Security taxes, as described in 5 U.S.C. 8349.
    Employee means an employee or Member individual as defined in 
section 8331(1) and (2) or 8401(11) and (20) of title 5, United States 
Code. Employee includes an individual who has applied for retirement 
benefits, but not separated from service.
    Employee retirement deductions means the amount that is deducted 
from basic pay under section 8334(a) of title 5, United States Code, for 
CSRS employees; or section 8334(k) of title 5, United States Code, for 
CSRS Offset employees; or the portion of the normal cost of FERS 
coverage that is deducted from an employee's basic pay under section 
8422(a) of title 5, United States Code.
    Employer means, with respect to an employee, that individual's 
employing agency.
    Employer retirement contributions means the employer share of 
retirement contributions that are required payments to the Fund under 
sections 8334(a) and 8423(a) of title 5, United States Code.
    Former spouse means a living person who was married to you for at 
least 9 months.
    FERCCA means the Federal Erroneous Retirement Coverage Corrections 
Act.
    FERS means the Federal Employees' Retirement System, as described in 
chapter 84 of title 5, United States Code.
    Fund means the Civil Service Retirement and Disability Fund 
described in section 8348 of title 5, United States Code.
    Government contributions means agency automatic (1%) contributions 
and agency matching contributions.
    Lost earnings means earnings that you would have received had your 
make-up contributions to the Thrift

[[Page 245]]

Savings Fund been made during the period of the error when they should 
have otherwise been made.
    Make-up contributions means employee contributions to the Thrift 
Savings Plan that should have been deducted from a participant's basic 
pay earlier, but were not due to an employing agency error.
    MSPB means the Merit Systems Protection Board described in chapter 
12 of title 5, United States Code.
    OPM means the Office of Personnel Management.
    Present value factor has the same meaning as in Sec. 831.2202 or 
Sec. 842.702 of this chapter, as applicable.
    Previously corrected means a retirement coverage error that has been 
properly corrected before March 19, 2001.
    Qualifying court order has the same meaning as in Sec. 846.702 of 
this chapter, referring to court orders that affect CSRS or FERS 
payments following a divorce or legal separation.
    Qualifying retirement coverage error means an erroneous decision by 
an employee or agent of the Government as to whether Government service 
is CSRS covered, CSRS Offset covered, FERS covered, or Social Security-
Only covered that remained in effect for at least 3 years of service 
after December 31, 1986.
    Reemployed annuitant means a CSRS or FERS retiree who is reemployed 
under conditions that do not terminate the CSRS or FERS annuity. (See 
part 837 of this chapter for additional information on reemployed 
annuitants.)
    Retiree means a former employee or Member who is receiving, or meets 
the statutory age and service requirements for, an annuity under either 
CSRS or FERS. This includes individuals who meet the statutory 
requirements for benefits and chose to postpone the beginning date of 
the annuity under Sec. 842.204(c) or Sec. 842.212(b)(1)(ii) of this 
chapter (pertaining to FERS MRA+10 and FERS deferred benefits). Retiree 
does not include a current spouse, former spouse, child, or person with 
an insurable interest receiving a survivor annuity. An individual who 
has left Federal service after completing 5 years of service but has not 
reached the age at which annuity payments may begin is considered a 
``separated employee'' rather than a retiree.
    Retirement coverage means participation in CSRS, CSRS Offset, FERS, 
or Social Security-Only. Retirement coverage is shown on the 
Notification of Personnel Action (Standard Form 50) or other similar 
record of personnel actions.
    Retirement plan means the same as retirement coverage.
    Separated employee means a former employee or Member who has 
separated from service and who has not met all the requirements for 
retirement under CSRS or FERS.
    Social Security coverage means service as a Federal employee that is 
employment under section 210 of the Social Security Act (42 U.S.C. 410) 
and is subject to Social Security taxes.
    Social Security-Only means coverage under Social Security without 
concurrent coverage under CSRS, CSRS Offset, or FERS.
    Social Security taxes means the Old Age, Survivors, and Disability 
Insurance taxes imposed on employees under section 3101(a) of the 
Internal Revenue Code of 1986 (31 U.S.C. 3101(a)) and on employers under 
section 3111(a) of the Internal Revenue Code of 1986 (31 U.S.C. 
3111(a)).
    Survivor means a person entitled to benefits under chapter 83 or 84 
of title 5, United States Code, based on the service of a deceased 
employee, separated employee, or retiree.
    Thrift Savings Plan or TSP means the Federal Retirement Thrift 
Savings Plan established by the Federal Employees' Retirement System Act 
of 1986, Pub. L. 99-335, 100 Stat. 514, which has been codified, as 
amended, primarily at 5 U.S.C. 8351 and 8401-8479.



                          Subpart B_Eligibility

                           General Provisions



Sec. 839.201  Do these rules apply to me?

    (a) These rules apply to employees who had a qualifying retirement 
coverage error. For all purposes, a qualifying retirement coverage error 
must have lasted for at least 3 years of Federal service after December 
31, 1986, as stated in the definitions section (Sec. 839.102). It does 
not matter whether

[[Page 246]]

you have left Federal service, retired, or have been reemployed as an 
annuitant, as long as you had a qualifying retirement coverage error. In 
addition, the survivor of an employee, separated employee, or retiree 
who had a qualifying retirement coverage error is also covered by these 
rules.
    (b) An error that lasted less than 3 years of Federal service after 
December 31, 1986, is not qualifying under the rules in this part.
    (c) For errors lasting less than 3 years that involve erroneous 
placement in FERS during a period that the employee was eligible to 
elect FERS, see Sec. 846.204(b) of this chapter for guidance.

                          Election Opportunity



Sec. 839.211  If these rules apply to me because I had a qualifying 
retirement coverage error, can I choose which retirement plan I want 
to be in?

    The FERCCA does not provide an election opportunity in all 
situations where there was a qualifying retirement coverage error. Even 
if your error is one that provides an election opportunity under the 
FERCCA, certain events may disqualify you from making an election under 
the FERCCA. If you had a qualifying retirement coverage error, your 
eligibility to choose your retirement plan may be affected by the 
situations described in the next seven questions.



Sec. 839.212  May I make a retirement coverage election if I received 
a refund of my retirement deductions after I was corrected to FERS?

    If your qualifying retirement coverage error was previously 
corrected to FERS and you then received a refund of your FERS retirement 
deductions, you are not allowed to elect retirement plan coverage under 
the FERCCA.



Sec. 839.213  May I make a retirement coverage election if I withdrew 
all or part of my TSP account after I was corrected to FERS?

    (a) You may not make a retirement coverage election if your 
qualifying retirement coverage error was previously corrected to FERS, 
and you later received one of the following TSP withdrawals:
    (1) A TSP annuity after separation from service, but before 
receiving a FERS annuity; or
    (2) A single payment or monthly payments after separation from 
service; or
    (3) An age-based in-service withdrawal.
    (b) If you received an automatic cashout of your TSP account after 
you separated (because your account balance was $3,500 or less), or if 
you received a financial hardship in-service withdrawal, you may make a 
retirement coverage election.



Sec. 839.214  Am I disqualified from making an election of retirement 
coverage under the FERCCA if I withdrew my TSP account after I retired 
under FERS?

    No, you may make an election of retirement coverage under the FERCCA 
if you made a TSP withdrawal as a retiree.



Sec. 839.215  May I make a retirement coverage election under the 
FERCCA if I received a payment as settlement of my claim for losses 
because of a qualifying retirement coverage error?

    You can make a retirement coverage election under the FERCCA if OPM 
waives repayment of the entire amount under Sec. 839.1202. If OPM does 
not waive the entire repayment, you must pay back the amount that OPM 
did not waive.

                      Previous Election Opportunity



Sec. 839.221  If my qualifying retirement coverage error was that I 
was put into FERS by mistake and then, after the error was discovered, 
I chose my current retirement coverage, can I now make another election?

    No, OPM regulations allow certain employees who were put in FERS in 
error to choose between remaining in FERS or being covered under their 
automatic retirement coverage. (See Sec. 846.204(b)(2) of this 
chapter). If you already had this opportunity to choose your retirement 
coverage; then you may not make an election of retirement coverage based 
on the same error under these rules.

[[Page 247]]

                Court-Ordered Benefits for Former Spouses



Sec. 839.231  Can I make an election if my former spouse is entitled 
to a portion of my retirement benefits by qualifying court order?

    Yes, but if you want to elect FERS you need your former spouse's 
consent to the election. If you are subject to a qualifying court order 
and want to elect FERS, the requirements in Sec. 846.722 of this 
chapter (Former Spouse's Consent to an Election of FERS Coverage) apply 
to you.



Sec. 839.232  If a deceased employee's survivors include both a current 
spouse and a former spouse, or spouses, who are eligible for survivor 
annuities, must all of them consent to an election of FERS?

    If the employee dies before making an election of retirement 
coverage under the FERCCA, all eligible potential survivors, that is, 
both the current and any former spouses, must consent to an election of 
FERS coverage. If they do not all consent, the election cannot be made.

                                Elections



Sec. 839.241  Am I eligible to make an election under the FERCCA if I 
had a qualifying retirement coverage error and none of the conditions 
mentioned in Sec. 839.212 through Sec. 839.232 apply to me?

    If you were in CSRS or CSRS Offset and should have been in FERS or 
Social Security-Only, or if you were in FERS and should have been in 
CSRS, CSRS Offset, or Social Security-Only, then you have an election 
opportunity. This is summarized in the following chart:

------------------------------------------------------------------------
            You are or were in:                  And you belong in:
------------------------------------------------------------------------
CSRS or CSRS Offset.......................  FERS.
CSRS or CSRS Offset.......................  Social Security-Only.
FERS......................................  Social Security-Only.
FERS......................................  CSRS.
FERS......................................  CSRS Offset.
------------------------------------------------------------------------



Sec. 839.242  Do these rules apply to me if I had multiple errors?

    You must be in the wrong retirement plan for at least 3 years of 
Federal service after December 31, 1986. You need not be in the same 
wrong retirement plan during the entire 3-year period. If you had more 
than one type of erroneous retirement coverage, then you will have a 
retirement plan election under these rules if one of the errors is of a 
type that qualifies you for an election.



          Subpart C_Employer Responsibility to Notify Employees



Sec. 839.301  What should I do if I am not sure whether I am or was in 
the wrong retirement plan?

    (a) If you are an employee, your employer has your personnel records 
and will review them to determine whether an error has been made. 
Therefore, you should notify your employer's human resources office if 
you believe an error has been made in your case. Notify your current 
employer even if you believe the error occurred while you were employed 
at another agency.
    (b) If you are not currently employed by the Federal Government, you 
should notify OPM at: U.S. Office of Personnel Management, Retirement 
Operations Center, Post Office Box 45, Boyers, Pennsylvania 16017. You 
can also contact us by electronic mail at [email protected]. Notify OPM 
regardless of whether you are a retiree, survivor, or separated 
employee.
    (c) You may also get additional information about the FERCCA and 
whether or not you qualify at: www.opm.gov/benefits/correction.



Sec. 839.302  Will my employer give me a written explanation?

    (a) Your employer must provide you with written notice of the error. 
The notice must include an explanation of the error, your options 
regarding the error, and any time limits that apply.
    (b) Your employer must inform you if they find that you do not have 
a retirement coverage error.



Sec. 839.303  Is my employer required to find employees with a retirement 
coverage error?

    The FERCCA requires your employer to take reasonable and appropriate 
measures to identify individuals affected by a qualifying retirement 
coverage error and notify them of their rights under the law.

[[Page 248]]



Sec. 839.304  What if my employer does not notify me?

    (a) If your error has not previously been corrected, the 6-month 
time limit on making an election of retirement coverage under the FERCCA 
(see Sec. 839.611(a)) does not begin to run until you are notified of 
the error.
    (b) If your error was previously corrected, the 18-month time limit 
on making an election of retirement coverage ends on September 19, 2002. 
Employers and OPM may extend the time limit if you were prevented from 
making a timely election due to a cause beyond your control (see Sec. 
839.612).



    Subpart D_Retirement Coverage Elections for Errors That Were Not 
                          Previously Corrected

                      Erroneous CSRS or CSRS Offset



Sec. 839.401  What can I elect if I was put in CSRS or CSRS Offset by 
mistake?

    If you were placed in CSRS or CSRS Offset due to a qualifying 
retirement coverage error and you should have been in FERS, you may 
elect CSRS Offset or FERS. If you were placed in CSRS or CSRS Offset due 
to a qualifying retirement coverage error and you should have been in 
Social Security-Only, you may elect CSRS Offset or Social Security-Only. 
This is summarized in the following chart:

------------------------------------------------------------------------
                                    And you  belong
           You are in:                    in:           You may elect:
------------------------------------------------------------------------
CSRS............................  FERS..............  CSRS Offset or
                                                       FERS.
CSRS Offset.....................  FERS..............
CSRS............................  Social Security-    CSRS Offset or
                                   Only.               Social Security-
                                                       Only.
CSRS Offset.....................  Social Security-
                                   Only.
------------------------------------------------------------------------

                             Erroneous FERS



Sec. 839.411  What can I elect if I was put in FERS by mistake?

    If you were placed in FERS due to a qualifying retirement coverage 
error and you should have been in CSRS, you may elect FERS or CSRS. If 
you were placed in FERS due to a qualifying retirement coverage error 
and you should have been in CSRS Offset, you may elect FERS or CSRS 
Offset. If you were placed in FERS due to a qualifying retirement 
coverage error and you should have been in Social Security-Only, you may 
elect FERS or Social Security-Only. This is summarized in the following 
chart:

------------------------------------------------------------------------
           You are in:            And you belong in:    You may elect:
------------------------------------------------------------------------
FERS............................  CSRS..............  FERS or CSRS.
FERS............................  CSRS Offset.......  FERS or CSRS
                                                       Offset.
FERS............................  Social Security-    FERS or Social
                                   Only.               Security-Only.
------------------------------------------------------------------------



Subpart E_Retirement Coverage Elections for Errors That Were Previously 
                                Corrected

                    Moved Out of CSRS or CSRS Offset



Sec. 839.501  What can I elect if my employer moved me out of CSRS or 
CSRS Offset?

    If you were moved out of CSRS or CSRS Offset due to a qualifying 
retirement coverage error and were placed in FERS, you may elect CSRS 
Offset or remain in FERS. If you were moved out of CSRS or CSRS Offset 
due to a qualifying retirement coverage error and were placed in Social 
Security-Only, you may elect CSRS Offset or remain in Social Security-
Only. This is summarized in the following chart:

------------------------------------------------------------------------
                                   And your coverage
          You were in:              was previously      You may elect:
                                     corrected to:
------------------------------------------------------------------------
CSRS............................  FERS..............  CSRS Offset or
                                                       FERS.
CSRS Offset.....................  FERS..............
CSRS............................  Social Security-    CSRS Offset or
                                   Only.               Social Security-
                                                       Only.
CSRS Offset.....................  Social Security-
                                   Only..
------------------------------------------------------------------------



Sec. 839.511  What can I elect under the FERCCA if my employer put me 
into FERS by mistake and then I was not allowed to remain in FERS when 
the error was discovered?

    An employee who was erroneously placed in FERS during a time when 
the employee should have had an opportunity to elect FERS is allowed to 
keep the erroneous FERS coverage. If the employee was given an 
opportunity to remain in FERS, then the employee is disqualified from 
making an election of retirement coverage under the

[[Page 249]]

FERCCA (see Sec. 839.221). If you were not allowed to remain in FERS 
and were placed in CSRS due to a qualifying retirement coverage error, 
you may elect FERS or remain in CSRS. If you were not allowed to remain 
in FERS and were placed in CSRS Offset due to a qualifying retirement 
coverage error, you may elect FERS or remain in CSRS Offset. If you were 
not allowed to remain in FERS and were placed in Social Security-Only 
due to a qualifying retirement coverage error, you may elect FERS or 
remain in Social Security-Only. This is summarized in the following 
chart:

------------------------------------------------------------------------
                                   And your coverage
          You were in:              was previously      You may elect:
                                     corrected to:
------------------------------------------------------------------------
FERS............................  CSRS..............  CSRS or FERS.
FERS............................  CSRS Offset.......  CSRS Offset or
                                                       FERS.
FERS............................  Social Security-    Social Security-
                                   Only.               Only or FERS.
------------------------------------------------------------------------



                      Subpart F_Making an Election

                           General Provisions



Sec. 839.601  How do I make an election?

    You may make your election using the form issued by OPM. If you are 
an employee, your employer will provide you with this form. If you are 
not a current employee, OPM will provide the form.



Sec. 839.602  What if I don't make an election?

    (a) If your qualifying retirement coverage error was not previously 
corrected and you fail to make an election within the time limit under 
Sec. 839.611(a), your retirement coverage is summarized in the 
following chart:

------------------------------------------------------------------------
                                                      You are considered
         If you are in:           And you belong in:   to have elected:
------------------------------------------------------------------------
CSRS or CSRS Offset.............  FERS..............  CSRS Offset.
FERS............................  CSRS, CSRS Offset   FERS.
                                   or Social
                                   Security-Only.
CSRS or CSRS Offset.............  Social Security-    CSRS Offset.
                                   Only.
------------------------------------------------------------------------

    (b) If your qualifying retirement coverage error was previously 
corrected and you fail to make an election within the time limit under 
Sec. 839.611(b), you are considered to have elected to remain in your 
current retirement plan.



Sec. 839.603  Can I later change my election?

    Your election is irrevocable once your employer or OPM processes it. 
If you do not make a timely election, the resulting coverage (see Sec. 
839.602) is also irrevocable.



Sec. 839.604  When is my election effective?

    Your election is effective on the date that the retirement coverage 
error first occurred. This means that your election will be retroactive, 
or will change your retirement coverage for a period of service in the 
past.

                               Time Limits



Sec. 839.611  What are the time limits for making an election?

    (a) If your qualifying retirement coverage error was not previously 
corrected, you have 6 months from the date you receive notice of the 
error under Sec. 839.302 to make an election.
    (b) If your qualifying retirement coverage error was previously 
corrected, the time limit for making an election expires on September 
19, 2002.



Sec. 839.612  Can I make a belated election?

    (a) If you are an employee, your employer can waive the time limit 
for making an election if you request such a waiver in writing. The 
employer would have to determine that you exercised due diligence, but 
could not make an election within the time limit because of 
circumstances beyond your control.
    (b) Your employer's decision not to waive the time limit under this 
section must be in writing and include notice of your right to request 
OPM to reconsider the decision.
    (c) OPM can waive the time limit for separated employees, retirees, 
and survivors who exercised due diligence but could not make an election 
because of circumstances beyond their control if a request is submitted 
to OPM, and OPM concludes that a waiver is justified.

[[Page 250]]

                             FERS Elections



Sec. 839.621  Can I cancel my FERS election if I was in the wrong 
retirement plan at the time I elected FERS coverage and I have an 
election opportunity under the FERCCA?

    If you were erroneously in CSRS, CSRS Offset, or Social Security-
Only at the time you elected FERS and you have an election opportunity 
under the FERCCA, you can choose whether you want the FERS election to 
remain in effect. However, you may not choose whether you want your FERS 
election to remain in effect if you chose FERS after your employer 
notified you that you were put in FERS by mistake (see Sec. 839.221).



Sec. 839.622  Can I cancel my FERS election if my qualifying retirement 
coverage error was previously corrected and I now have an election 
opportunity under the FERCCA?

    Yes, your FERS coverage election does not disqualify you from making 
a retirement coverage election under the FERCCA. You can choose whether 
you want the FERS election to remain in effect. However, you may not 
choose whether you want your FERS election to remain in effect if you 
chose FERS after your employer notified you that you were put in FERS by 
mistake (see Sec. 839.221).



Sec. 839.623  If I decide to keep the FERS election in effect, may 
I change the effective date of the FERS election?

    No, If you decide to keep FERS, the original FERS election will 
remain unchanged.



             Subpart G_Errors That Don't Permit an Election



Sec. 839.701  Is it correct that even though I had a qualifying 
retirement coverage error under the FERCCA, I may not have a choice 
of retirement coverage?

    Under the FERCCA, the types of retirement coverage errors listed in 
Sec. 839.241 trigger a right to make a retirement coverage election. 
The following chart summarizes the types of errors that do not trigger 
an election right:

------------------------------------------------------------------------
                                                      Your coverage must
           You are in:            And you belong in:   be corrected to:
------------------------------------------------------------------------
CSRS Offset.....................  CSRS..............  CSRS.
CSRS............................  CSRS Offset.......  CSRS Offset.
Social Security-Only............  CSRS..............  CSRS.
Social Security-Only............  CSRS Offset.......  CSRS Offset.
Social Security-Only............  FERS..............  FERS.
------------------------------------------------------------------------



Sec. 839.702  How do these rules apply to me if I don't have an election 
right under the FERCCA, but I did have a qualifying retirement coverage error?

    After your retirement coverage is corrected to the proper plan, your 
retirement deductions will be adjusted in accordance with subpart H of 
this part and your Social Security taxes will be adjusted in accordance 
with subpart I of this part, if applicable. You may also file a claim 
for losses in accordance with subpart L of this part.



       Subpart H_Adjusting Retirement Deductions and Contributions

                     Employee Retirement Deductions



Sec. 839.801  Do I owe more money if I had a qualifying retirement 
coverage error and the employee retirement deductions for the new 
retirement plan are more than what I already paid?

    (a) No, your employer is responsible for paying any additional 
amount to the Fund. Your employer will not bill you for any additional 
retirement deductions.
    (b) For qualifying retirement coverage errors corrected under this 
part, the rules at Sec. 831.111(b) of this chapter (pertaining to 
employee options when the employer fails to withhold CSRS or CSRS Offset 
retirement deductions) do not apply.



Sec. 839.802  If I was in CSRS during my qualifying retirement coverage 

error, paid into the Fund more than I would have paid as a CSRS Offset, 
Social Security-Only, or FERS employee, and end up retroactively in 
          one of those retirement plans, will I get a refund of the 
          excess I had withheld from my pay?

    CSRS Offset and FERS require employees to pay Social Security taxes 
in

[[Page 251]]

addition to retirement deductions. When you are retroactively changed 
under the FERCCA to CSRS Offset, FERS, or Social Security-Only, the 
deductions you paid in under CSRS will be used to pay both the amounts 
required for retirement deductions under CSRS Offset or FERS, as 
applicable to you, and also the Social Security taxes that you would 
have paid had you been in CSRS-Offset, FERS, or Social Security-Only.



Sec. 839.803  If I am like the person in the previous question, but 

the amount I paid as deductions under CSRS is more than the amount 
of combined retirement deductions and Social Security taxes due for 
my new retirement 
          coverage, will I get a refund of the excess?

    Yes, either OPM or your employer, as appropriate, will issue the 
payment in accordance with OPM instructions.



Sec. 839.804  If my qualifying retirement coverage error occurred while 

I was a reemployed annuitant, and I am later corrected retroactively to 
a different 
          retirement plan, will I have to pay any additional amount for 
          retirement deductions?

    (a) If you (as a reemployed annuitant) were erroneously in CSRS and 
had retirement deductions withheld from pay, and later are corrected to 
CSRS Offset or FERS coverage, the amount erroneously withheld under CSRS 
will be used to pay the retroactive CSRS Offset or FERS retirement 
deductions and Social Security taxes.
    (b) If you (as a reemployed annuitant) were erroneously placed in 
CSRS and elected not to have retirement deductions withheld from pay, 
and later are corrected to CSRS Offset or FERS, your share of 
retroactive Social Security taxes will be treated as an overpayment of 
salary. If you are corrected to CSRS Offset, you may elect to have 
retirement deductions withheld from future salary as a reemployed 
annuitant and may also make a deposit to cover the retirement deductions 
for past service as a reemployed annuitant in accordance with Sec. 
837.503(c) of this chapter. If you are corrected to FERS, your 
retirement deductions under FERS will be treated as an overpayment of 
salary.
    (c) If you (as a reemployed annuitant) were erroneously in CSRS 
Offset and had retirement deductions withheld from pay, and later are 
corrected to CSRS or FERS coverage, the amount erroneously withheld 
under CSRS Offset will be used to pay the retroactive CSRS or FERS 
retirement deductions. The employer is responsible for paying to the 
Fund any additional retirement deductions.
    (d) If you (as a reemployed annuitant) were erroneously placed in 
CSRS Offset and elected not to have retirement deductions withheld from 
pay, and later are corrected to CSRS, you may elect to have retirement 
deductions withheld from future salary as a reemployed annuitant and may 
also make a deposit to cover the retirement deductions for past service 
as a reemployed annuitant in accordance with Sec. 837.503(c) of this 
chapter. Your retirement deductions under CSRS will be treated as an 
overpayment of salary.
    (e) If you (as a reemployed annuitant) were erroneously placed in 
CSRS Offset and elected not to have retirement deductions withheld from 
pay, and later are corrected to FERS, your retirement deductions under 
FERS will be treated as an overpayment of salary.
    (f) A reemployed annuitant erroneously placed in FERS and later 
corrected to CSRS or CSRS Offset is considered to have elected 
retirement deductions as a reemployed annuitant under the corrected 
coverage. The employer is responsible for paying to the Fund any 
additional retirement deductions under the corrected retirement 
coverage.
    (g) If you have a salary overpayment, your employer will inform you 
of your rights regarding the overpayment.
    (h) These rules are summarized in the following chart:

[[Page 252]]



----------------------------------------------------------------------------------------------------------------
                                         And retirement       And you are corrected
         Wrong coverage is:              deductions were               to                        Then
----------------------------------------------------------------------------------------------------------------
(1) CSRS...........................  Taken.................  CSRS Offset or FERS...   The
                                                                                      erroneous CSRS deductions
                                                                                      are used to pay the
                                                                                      retroactive CSRS Offset or
                                                                                      FERS deductions and Social
                                                                                      Security taxes.
                                                                                     
                                                                                      Retirement deductions will
                                                                                      continue to be withheld
                                                                                      from salary.
                                                                                      Social
                                                                                      Security taxes must be
                                                                                      withheld from salary.
(2) CSRS...........................  Not taken.............  CSRS Offset...........  
                                                                                      Retroactive Social
                                                                                      Security taxes are treated
                                                                                      as an overpayment of
                                                                                      salary.
                                                                                      You may
                                                                                      elect to have retirement
                                                                                      deductions withheld from
                                                                                      future salary.
                                                                                      Social
                                                                                      Security taxes must be
                                                                                      withheld from salary.
                                                                                      You may
                                                                                      pay a deposit to OPM for
                                                                                      past retirement
                                                                                      deductions.
(3) CSRS...........................  Not taken.............  FERS..................  
                                                                                      Retroactive Social
                                                                                      Security taxes are treated
                                                                                      as an overpayment of
                                                                                      salary.
                                                                                     
                                                                                      Retirement deductions and
                                                                                      Social Security taxes must
                                                                                      be withheld from salary.
                                                                                      Your
                                                                                      retirement deductions for
                                                                                      past service under FERS
                                                                                      are treated as an
                                                                                      overpayment of salary.
(4) CSRS Offset....................  Taken.................  CSRS or FERS..........   The
                                                                                      erroneous CSRS Offset
                                                                                      deductions are used to pay
                                                                                      retroactive CSRS or FERS
                                                                                      retirement deductions.
                                                                                     
                                                                                      Retirement deductions will
                                                                                      continue to be withheld
                                                                                      from salary.
                                                                                      Social
                                                                                      Security taxes must be
                                                                                      withheld from salary if
                                                                                      correct coverage is FERS.
                                                                                      Employer
                                                                                      must pay any additional
                                                                                      amount of retirement
                                                                                      deductions.
(5) CSRS Offset....................  Not taken.............  CSRS..................   You may
                                                                                      elect to have retirement
                                                                                      deductions withheld from
                                                                                      future salary.
                                                                                      You may
                                                                                      pay a deposit to OPM for
                                                                                      past retirement
                                                                                      deductions.
(6) CSRS Offset....................  Not taken.............  FERS..................   Your
                                                                                      retirement deductions for
                                                                                      past service under FERS
                                                                                      will be treated as an
                                                                                      overpayment of salary.
(7) FERS...........................  Taken.................  CSRS or CSRS Offset...   You are
                                                                                      considered to have elected
                                                                                      retirement deductions as a
                                                                                      reemployed annuitant under
                                                                                      the corrected coverage.
                                                                                      Employer
                                                                                      must pay any additional
                                                                                      retirement deductions due
                                                                                      for past service.
----------------------------------------------------------------------------------------------------------------

                    Employer Retirement Contributions



Sec. 839.811  Does my employer owe more money if I had a qualifying 
retirement coverage error and the employer retirement contributions 
for my new retirement plan are more than what was already paid?

    Yes, your employer must pay any additional retirement contributions 
to the Fund.



Sec. 839.812  Will my employer get a refund if I had a qualifying 
retirement coverage error and the employer retirement contributions 
for my new retirement plan are less than what was already paid?

    No, if you were erroneously in CSRS, CSRS Offset, or Social 
Security-Only, then a correction of a retirement coverage error will not 
reduce the employer retirement contribution owed. Also, the FERCCA 
states that an employer may not remove from the Fund FERS employer 
contributions when correcting a qualifying retirement coverage error 
under this part.

                           Records Correction



Sec. 839.821  Who is responsible for correcting my records?

    (a) Your current employer will correct your records in accordance 
with OPM instructions. Your employer must not delay correcting your 
records.
    (b) For former employees and retirees, the last employer will 
correct the records. For survivors, the employee's last employer will 
correct the records. If an employer no longer exists as an organization, 
and there is no successor agency, then OPM will correct the records.

[[Page 253]]



Sec. 839.822  Which employer is responsible for submitting the employee 
and employer retirement deductions and contributions and correcting my 
records if I had different employers?

    Your current or most recent employer will be responsible for this 
purpose. Even if that employer was not involved in the retirement 
coverage error, it must issue corrected records for the entire period of 
the retirement coverage error.



                     Subpart I_Social Security Taxes



Sec. 839.901  When will my employer begin withholding Social Security 

taxes if I was erroneously in CSRS during my qualifying retirement 
coverage error and my corrected coverage will now require me to pay 
Social Security taxes?

    (a) If you are in CSRS by mistake and belong in CSRS Offset, FERS, 
or Social Security-Only, your employer must begin withholding Social 
Security taxes by changing your retirement coverage to CSRS Offset. Your 
employer must begin this withholding as soon as possible after the error 
is discovered.
    (b) Your employer will correct your retirement coverage back to the 
date the error first occurred once you are notified of the error and 
have an opportunity to make any elections that you are eligible to make.



Sec. 839.902  Will my CSRS retirement deductions be used to pay the 

Social Security taxes for the period of the qualifying retirement 
coverage error if I was erroneously placed in CSRS and did not pay 
Social Security taxes?

    (a) If your qualifying retirement coverage error was not previously 
corrected, the amount erroneously withheld for CSRS retirement 
deductions will be:
    (1) Used to pay your new retirement deduction amount; and
    (2) Applied toward any Social Security taxes you owe for the time 
you were in the wrong retirement plan.
    (b) You will get Social Security credit for all the time you were 
erroneously covered by CSRS. Your employer will send the Social Security 
Administration a record of your earnings for all the years you should 
have had Social Security coverage.



Sec. 839.903  What happens to the Social Security taxes I erroneously 
paid when my employer corrects my retirement coverage to CSRS?

    (a) Except for the last 3 years, the money you erroneously paid into 
Social Security will remain to your credit in the Social Security fund. 
The Social Security Administration will include all but those last 3 
years in determining your eligibility for, and the amount of, future 
benefits.
    (b) The amount you paid into Social Security for the last 3 years 
will be used to help pay your CSRS retirement deductions.



  Subpart J_Lost Earnings for Certain Make-up Contributions to the TSP



Sec. 839.1001  Does the FERCCA allow me to increase my TSP account if 
I was in CSRS during my qualifying retirement coverage error and my 
correct coverage will be FERS?

    The Board's error correction regulations (5 CFR 1605 of chapter VI) 
generally allow you to increase your TSP account through a schedule of 
make-up contributions to replace the missed employee contributions. In 
addition, the FERCCA allows certain employees who have completed a 
schedule of make-up contributions, or who plan to schedule make-up 
contributions, to receive lost earnings on those contributions under 
certain circumstances. Employees are (and have been) entitled to lost 
earnings on the make-up agency contributions they receive as a result of 
the correction of an agency error.



Sec. 839.1002  Will OPM compute the lost earnings if my qualifying 
retirement coverage error was previously corrected and I made TSP 
make-up contributions?

    If you made contributions to the TSP after your qualifying 
retirement coverage error was previously corrected, OPM will compute the 
lost earnings on your make-up contributions to the TSP under the 
following circumstances:

[[Page 254]]



------------------------------------------------------------------------
                                       And were
          You were in:                previously        And under these
                                     corrected to:     rules you elect:
------------------------------------------------------------------------
CSRS............................  FERS..............  FERS.
CSRS Offset.....................  FERS..............  ..................
Social Security-Only............  FERS..............  No election
                                                       required.
Social Security-Only............  CSRS..............  ..................
Social Security-Only............  CSRS Offset.......  ..................
------------------------------------------------------------------------



Sec. 839.1003  How will OPM compute the amount of lost earnings?

    (a) Lost earnings will generally be computed in accordance with the 
Board's lost earnings regulations (5 CFR 1606 of chapter VI). However, 
the FERCCA states that OPM may compute the lost earnings in an 
alternative manner if such a computation is not administratively 
feasible. The alternative manner will yield an amount that is as close 
as practicable to the amount computed under 5 CFR 1606 of chapter VI.
    (b) Your employer is required to submit to OPM all information 
required to compute the amount of lost earnings.



Sec. 839.1004  Are lost earnings payable if I separated or if the 
employee died?

    (a) Yes. If the TSP account is not withdrawn, the lost earnings are 
paid to the account.
    (b) If there is no TSP account at the time the lost earnings are 
payable, you or your survivors will receive the payment directly.



                      Subpart K_Effect of Election

                           General Provisions



Sec. 839.1101  How are my retirement benefits computed if I elect CSRS 
or CSRS Offset under this part?

    Unless otherwise stated in this part, your retirement benefit is 
computed as if you were properly put in CSRS or CSRS Offset on the 
effective date of the error. All the eligibility and benefit computation 
rules for CSRS or CSRS Offset apply to your retirement benefit.



Sec. 839.1102  How are my retirement benefits computed if I elect FERS 
under this part?

    OPM will compute your retirement benefit as if you were properly put 
in FERS on the effective date of the error. All the eligibility and 
benefit computation rules for FERS apply to your retirement benefit.



Sec. 839.1103  If my qualifying retirement coverage error started when 

I should have been placed under FERS automatically, but my agency put 
me in CSRS because I had some past service, will I get a CSRS component 
in my FERS annuity for the service before the error if I elect FERS?

    No, employees who should have been automatically placed in FERS 
(generally because they did not have 5 years of past service under CSRS 
rules) do not have a CSRS component in their future FERS benefit. All 
service must be treated as FERS service in this circumstance.

                         Retirees and Survivors



Sec. 839.1111  If I elect to change my retirement coverage under the 
FERCCA, can I change the election I originally made at retirement for 
survivor benefits?

    (a) Yes, if you elect to change your retirement coverage under the 
FERCCA, you will have an opportunity to change the election you made for 
survivor benefits.
    (b) If you elect less than the maximum survivor benefit, your 
spouse's consent is necessary in accordance with Sec. 831.614 or Sec. 
842.603(a)(1) of this chapter, as applicable.



Sec. 839.1112  If I elect to change my retirement coverage under the 
FERCCA, can I retroactively revoke the waiver of military retired pay 
I made at retirement?

    Yes, you may retroactively change your decision regarding waiver of 
your military retired pay.



Sec. 839.1113  If I elect to change my retirement coverage under the 
FERCCA, can I change my decision about making a deposit or redeposit 
for civilian or military service?

    Yes, you or your survivor will have a new opportunity to decide 
whether to pay any deposits or redeposits.

[[Page 255]]



Sec. 839.1114  Will OPM actuarially reduce my benefit if I elect to 
change my retirement coverage under these rules?

    Your annuity may be subject to three possible actuarial reductions 
under the FERCCA. These reductions may be required for an unpaid deposit 
(see Sec. 831.303(d) and Sec. 839.1116 of this chapter), for 
Government contributions in a TSP account (see Sec. 839.1118), or for a 
previous payment of the Basic Employee Death Benefit (see Sec. 
839.1121).



Sec. 839.1115  What is an actuarial reduction?

    An actuarial reduction allows you to receive benefits without having 
to pay an amount due in a lump sum. OPM reduces your annuity in a way 
that, on average, allows the Fund to recover the amount of the missing 
lump sum over your lifetime. The actuarial reduction becomes a permanent 
reduction in your benefit. The amount of the reduction depends on your 
age and the amount of the lump sum you would otherwise have to pay at 
that time. To compute an actuarial reduction, OPM divides the lump sum 
amount by the present value factor for your age at retirement.



Sec. 839.1116  If, because of the change in my retirement coverage, I 

will owe larger deposits for military and civilian service credit, will 
I have to pay the additional deposit due or will OPM actuarially reduce 
my 
          annuity?

    You can choose to pay the additional deposit amount. If you choose 
not to pay the deposit, OPM will actuarially reduce your annuity, as 
explained in 831.303(d) of this chapter.



Sec. 839.1117  If I elect to change my retirement coverage under the 
FERCCA, can I get a refund of the service credit deposit I made and 
receive the actuarial reduction instead?

    No, the FERCCA allows OPM to reduce an annuity by an actuarial 
reduction only for the deposit amount that remains unpaid.



Sec. 839.1118  Will my annuity be actuarially reduced because I had 
Government contributions in my TSP account?

    Retirees and survivors of deceased employees who received a 
Government contribution to their TSP account after being corrected to 
FERS and who later elect CSRS Offset under the FERCCA are allowed to 
keep the Government contributions, and earnings on the Government 
contributions in the TSP account. Instead of adjusting the TSP account, 
the FERCCA requires that the CSRS-Offset annuity be reduced actuarially.



Sec. 839.1119  How is the actuarial reduction for TSP computed?

    (a) The part of your TSP account on the date you retired that is 
Government contributions and earnings on those Government contributions 
forms the basis for the actuarial reduction. OPM will divide the 
Government contributions and earnings by the present value factor for 
your age (in full years) at the time you retired. OPM will then round 
the result to the next highest dollar amount, which will be the monthly 
actuarial reduction amount.
    (b) If a survivor annuity is the only benefit that is payable, the 
present value factor for the survivor's age at the time of death is 
used. The survivor benefit is not reduced for TSP if the retiree's rate 
was reduced.

                            Survivor Benefits



Sec. 839.1121  What is the Actuarial Reduction for the Basic Employee 
Death Benefit (BEDB)?

    If you received a BEDB under FERS and you elect CSRS Offset under 
these rules, you do not have to pay back the BEDB. Instead, the FERCCA 
requires that OPM actuarially reduce your survivor annuity. The 
reduction will be the amount of the BEDB divided by the present value 
factor for your age at the time of the employee's death. The result is 
rounded to the next highest dollar amount and is the monthly actuarial 
reduction amount. If you elected to receive the BEDB in installments 
rather than a lump sum, the lump-sum amount is used for the purpose of 
computing the actuarial reduction.

[[Page 256]]



Sec. 839.1122  Does receipt of a one-time payment of retirement 
contributions as a death benefit prevent me from electing CSRS Offset?

    You may still elect CSRS Offset if otherwise eligible. OPM will 
collect the amount of the one-time death benefit from any survivor 
benefits that are payable.



                 Subpart L_Discretionary Actions by OPM



Sec. 839.1201  If I took legal action against my employer because of 
a qualifying retirement coverage error, can OPM reimburse me for expenses 
related to my legal actions?

    (a) The FERCCA allows OPM, in its sole discretion, to reimburse you 
for necessary and reasonable expenses you actually incurred while 
pursuing a legal or administrative remedy of your qualifying retirement 
coverage error.
    (b) Necessary and reasonable expenses include actual amounts paid 
for attorney fees, court costs, expert witness fees, and other 
litigation expenses.
    (c) You may not receive reimbursement under this section if you 
received a monetary award that compensated you for your litigation 
expenses.
    (d) You must support your request for reimbursement with evidence 
that supports your claim.
    (e) In determining what is a necessary and reasonable expense, OPM 
will consider:
    (1) The type and amount of the expense;
    (2) The circumstances that gave rise to the expense; and
    (3) Whether the expense is directly related to litigation concerning 
a retirement coverage error.



Sec. 839.1202  Can OPM waive repayment of a monetary award I received 
as resolution of the harm caused me by a qualifying retirement coverage error?

    (a) The FERCCA allows OPM, in its sole discretion, to waive 
repayment of all or part of a settlement payment or court-ordered 
payment if you can demonstrate that CSRS Offset coverage does not fully 
compensate you for your losses.
    (b) Your request for waiver must state why you believe waiver of 
repayment is appropriate and include any evidence that supports your 
request.



Sec. 839.1203  Can OPM compensate me for my losses if I did not take 
any legal action against my employer, but did incur some expenses 
because of a qualifying retirement coverage error?

    (a) The FERCCA allows OPM, in its sole discretion, to compensate you 
for a monetary loss that is a direct and proximate result of your 
retirement coverage error.
    (b) Monetary losses include payments of additional Social Security 
taxes, payment of additional retirement deductions, and other out-of-
pocket expenses that you incurred because of a retirement coverage 
error.
    (c) You must substantiate your claim for losses with any evidence 
that supports your request.
    (d) OPM cannot pay you for:
    (1) Claimed losses related to forgone contributions and earnings 
under the TSP, other than lost earnings on make-up contributions to the 
TSP as provided in subpart J of this part; and
    (2) Claimed losses related to any other investment opportunities.



Sec. 839.1204  On what basis will OPM review claims under this subpart?

    (a) OPM will base its decision on only the written record, including 
all of your submissions and other documentation in OPM's possession.
    (b) At OPM's discretion, OPM may request your employer to provide an 
administrative report. The report may include:
    (1) A description of the retirement coverage error;
    (2) A statement as to whether a settlement or other court-ordered 
award was made;
    (3) The employer's recommendation for resolution of the claim; and
    (4) Any other information your employer believes OPM should 
consider.
    (c) The burden of proof that the criteria for approving a 
reimbursement of expenses is on you.



Sec. 839.1205  Does the Director of OPM review the claims?

    The Associate Director for Retirement and Insurance and his or her

[[Page 257]]

delegatees have the authority to perform the Director's actions, as set 
out in this subpart (see section 2208 of the FERCCA).



Sec. 839.1206  How do I submit a claim under this subpart?

    (a) No specific form is required. Your request must be in writing 
and contain the following information:
    (1) It must describe the basis for the claim and state the dollar 
amount you seek to receive;
    (2) It must include your name, address, and telephone number;
    (3) It must include the name, address, and telephone number of your 
current or last employer;
    (4) It must be signed by you; and
    (5) It must include any information you believe OPM should consider, 
such as cancelled checks or other evidence of amounts you paid.
    (b) Send your claim to: Office of Personnel Management, Retirement 
and Insurance Service, ATTN: FC Section, Washington, DC 20415-3200



                         Subpart M_Appeal Rights



Sec. 839.1301  What if my employer determines my error is not subject 
to these rules?

    (a) Your employer must provide you with a written decision. The 
decision must include the reason for the decision, and notice of your 
right to appeal the decision to the MSPB.
    (b) If your employer determines that it cannot waive the time limit 
for making an election under Sec. 839.612, the decision must inform you 
of your right to ask OPM to review the decision. OPM will advise you in 
writing of your appeal rights following its review of your employer's 
decision.



Sec. 839.1302  What types of decisions can I appeal?

    (a) You can appeal to the MSPB a decision that affects your rights 
and interests under this part, except an OPM decision under subpart L 
(see Sec. 839.1303). Some examples of decisions are:
    (1) Your employer's determination that your error is not subject to 
these rules;
    (2) Your employer's determination that you are not eligible to elect 
retirement coverage under these rules; and
    (3) OPM's denial of your request for a waiver of the time limit for 
making an election.
    (b) You may not seek review of a decision under any employee 
grievance procedures, including those established by chapter 71 of title 
5, United States Code, and 5 CFR part 771.



Sec. 839.1303  Are there any types of decisions that I cannot appeal?

    Yes, OPM's decisions under subpart L (Discretionary Actions by OPM) 
are final and conclusive and are not subject to administrative or 
judicial review.



Sec. 839.1304  Is there anything else I can do if I am not satisfied 
with the way my error was corrected?

    (a) Except for claims under subpart L (see Sec. 839.1303), and 
after exhausting your administrative remedies as set out in this 
subpart, you may bring a claim against the Government under section 
1346(b) or chapter 171 of title 28, United States Code.
    (b) You may also bring a claim against the Government under any 
other provision of law if your claim is for amounts not otherwise 
provided for under these rules.



PART 841_FEDERAL EMPLOYEES RETIREMENT SYSTEM_GENERAL ADMINISTRATION
--Table of Contents




                      Subpart A_General Provisions

Sec.
841.101 Purpose.
841.102 Regulatory structure for the Federal Employees Retirement 
          System.
841.103 Definitions.
841.104 Special terms defined.
841.105 Administration of FERS.
841.106 Basic records.
841.107 Computation of interest.
841.108 Disclosure of information.
841.109 Computation of time.
841.110 [Reserved]

                   Subpart B_Applications for Benefits

841.201 Purpose.
841.202 Applications required.
841.203 Withdrawal of applications.
841.204 Deemed application to protect survivors.

[[Page 258]]

                       Subpart C_Claims Processing

841.301 Purpose.
841.302 Definitions.
841.303 Applications filed with agencies.
841.304 Applications filed with OPM.
841.305 Decisions subject to reconsideration.
841.306 Reconsideration.
841.307 Final decisions without reconsideration.
841.308 Appeals to MSPB.
841.309 Competing claimants.

                       Subpart D_Government Costs

841.401 Purpose and scope.
841.402 Definitions.
841.403 Categories of employees for computation of normal cost 
          percentages.
841.404 Demographic factors.
841.405 Economic assumptions.
841.406 Determination of normal cost percentages.
841.407 Notice of normal cost percentage determinations.
841.408 Effective date of normal cost percentages.
841.409 Agency appeal right.
841.410 Contents of petition for appeal.
841.411 Appeals procedure.
841.412 Rates determined by appeal.
841.413 Determinations of amount due from each agency.

       Subpart E_Employee Deductions and Government Contributions

841.501 Purpose.
841.502 Definitions.
841.503 Amounts of employee deductions.
841.504 Agency responsibilities.
841.505 Correction of error.
841.506 Effect of part 772 of this chapter on FERS payments.
841.507 Correction of unjustified or unwarranted personnel action.
841.508 Effective date.

                    Subpart F_Computation of Interest

841.601 Purpose.
841.602 Definitions.
841.603 Rate of interest.
841.604 Interest on service credit deposits.
841.605 Interest included in the unexpended balance.
841.606 Interest on survivor reduction deposits.
841.607 Interest on overpayment debts.

                  Subpart G_Cost-of-Living Adjustments

841.701 Purpose and scope.
841.702 Definitions.
841.703 Increases on basic annuities and survivor annuities.
841.704 Proration of COLA's.
841.705 Increases on basic employee death benefits.
841.706 Increases on combined CSRS/FERS annuities.
841.707 COLA's affecting computation of survivor supplements.
841.708 Special provisions affecting retired military reserve 
          technicians.

                      Subpart H_Waiver of Benefits

841.801 Purpose.
841.802 Definitions.
841.803 Waiver of annuity.
841.804 Waiver and court orders.

Subpart I [Reserved]

                 Subpart J_State Income Tax Withholding

841.1001 Purpose.
841.1002 Definitions.
841.1003 Federal-State agreements.
841.1004 OPM responsibilities.
841.1005 State responsibilities.
841.1006 Additional provisions.
841.1007 Agreement modification and termination.

    Authority: 5 U.S.C. 8461; Sec. 841.108 also issued under 5 U.S.C. 
552a; subpart D also issued under 5 U.S.C. 8423; Sec. 841.504 also 
issued under 5 U.S.C. 8422; Sec. 841.507 also issued under section 505 
of Pub. L. 99-335; subpart J also issued under 5 U.S.C. 8469; Sec. 
841.506 also issued under 5 U.S.C. 7701(b)(2); Sec. 841.508 also issued 
under section 505 of Pub. L. 99-335; Sec. 841.604 also issued under 
Title II, Pub. L. 106-265, 114 Stat. 780.



                      Subpart A_General Provisions

    Source: 52 FR 19242, May 21, 1987, unless otherwise noted.



Sec. 841.101  Purpose.

    The purpose of this subpart is to state the administrative rules 
governing the operations of the Federal Employees Retirement System 
(FERS) that have general application to the basic benefits under FERS.



Sec. 841.102  Regulatory structure for the Federal Employees Retirement 
System.

    (a) This part contains the following subparts:
    (1) General provisions (subpart A);
    (2) Applications for benefits (subpart B);
    (3) Claims processing (subpart C);
    (4) Government costs (subpart D);

[[Page 259]]

    (5) Employee deductions and Government contributions (subpart E);
    (6) Computing interest (subpart F);
    (7) Cost-of-Living Adjustments (subpart G);
    (8) Waiver, allotment, or assignment of benefits (subpart H);
    (9) Court orders affecting benefits (subpart I); and
    (10) State income tax withholding (subpart J).
    (b)(1) Part 842 of this chapter contains information about basic 
annuity rights of employees and Members under FERS.
    (2) Part 843 of this chapter contains information about death 
benefits and employee refunds under FERS.
    (3) Part 844 of this chapter contains information about disability 
retirement benefits under FERS.
    (4) Part 845 of this chapter contains information about debt 
collection.
    (5) Part 846 of this chapter contains information about election 
rights available to employees who are eligible to join FERS.
    (c)(1) Part 831 of this chapter contains information about the Civil 
Service Retirement System.
    (2) Part 835 of this chapter contains information about debt 
collection from FERS benefits.
    (3) Part 837 of this chapter contains information about reemployment 
of FERS annuitants.
    (4) Part 838 of this chapter contains information about court orders 
affecting FERS benefits.
    (5) Part 847 of this chapter contains information about elections 
under the Civil Service Retirement System or FERS relating to periods of 
service with a nonappropriated fund instrumentality under the 
jurisdiction of the armed forces.
    (6) Parts 294 and 297 of this chapter and Sec. Sec. 831.106 and 
841.108 of this chapter contain information about disclosure of 
information from OPM records.
    (7) Part 581 of this chapter contains information about garnishment 
of Government payments including salary and CSRS and FERS retirement 
benefits.
    (8) Parts 870, 871, 872, and 873 of this chapter contain information 
about the Federal Employees Group Life Insurance Program.
    (9) Part 890 of this chapter contains information about coverage 
under the Federal Employees Health Benefits Program.
    (10) Chapter II (parts 1200 through 1299) of this title contains 
information about appeals to the Merit Systems Protection Board.
    (11) Chapter VI (parts 1600 through 1699) of this title contains 
information about the Federal Employees Thrift Savings Plan.

[52 FR 19242, May 21, 1987, as amended at 55 FR 14229, Apr. 17, 1990; 61 
FR 41720, Aug. 9, 1996]



Sec. 841.103  Definitions.

    In this subpart--
    CSRS means the Civil Service Retirement System as described in 
subchapter III of chapter 83 of title 5, United States Code.
    FERS means the Federal Employees Retirement System as described in 
chapter 84 of title 5, United States Code.



Sec. 841.104  Special terms defined.

    (a) Unless otherwise defined for use in any subpart, as used in 
connection with FERS (parts 841 through 846 of this chapter), terms 
defined in section 8401 of title 5, United States Code, have the same 
meanings assigned to them by that section.
    (b) Unless otherwise defined for use in any subpart, as used in 
connection with FERS (parts 841 through 846 of this chapter)--
    Agency means an executive agency as defined in section 105 of title 
5, United States Code; a legislative branch agency; a judicial agency; 
and the U.S. Postal Service and Postal Rate Commission.
    Associate Director means the Associate Director for Retirement and 
Insurance in OPM, or his or her designee.
    OPM means the Office of Personnel Management.



Sec. 841.105  Administration of FERS.

    (a) OPM has charge of the adjudication of all claims for basic 
benefits arising under FERS and of all matters directly or indirectly 
concerned with these adjudications.
    (b) In the adjudication of claims arising under FERS, OPM will 
consider

[[Page 260]]

and take appropriate action on counterclaims filed by the Government as 
set-offs against amounts payable from the Civil Service Retirement Fund.



Sec. 841.106  Basic records.

    (a) Agencies having employees or Members subject to FERS must 
establish and maintain retirement accounts for those employees and 
Members.
    (b)(1) The individual retirement record required by Sec. 841.504(c) 
is the basic record for action on all claims for annuity or refund, and 
those pertaining to deceased employees, deceased Members, or deceased 
annuitants.
    (2) When the official records repository for the records in question 
certifies that the records in question are lost, destroyed, or 
incomplete, OPM will accept such inferior or secondary evidence that it 
considers appropriate under the circumstances, and such inferior or 
secondary evidence is then admissible.
    (3) Except as provided in paragraph (b)(2) of this section, inferior 
or secondary evidence will not be considered.

[52 FR 19242, May 21, 1987, as amended at 57 FR 32154, July 21, 1992]



Sec. 841.107  Computation of interest.

    Interest, when applicable, will be computed under subpart F of this 
part.



Sec. 841.108  Disclosure of information.

    (a)(1) Except as provided in section 8461 of title 5, United States 
Code, OPM has in its possession or under its control records containing 
the following types of information:
    (i) Documentation of Federal service subject to FERS.
    (ii) Documentation of service credit and refund claims made under 
FERS.
    (iii) Retirement and death claims files, including documents 
supporting the retirement application, health benefits and life 
insurance eligibility, medical records supporting disability claims, and 
designations of beneficiaries.
    (iv) Claims review and correspondence files pertaining to benefits 
under the Federal Employees Health Benefits Program.
    (v) Documentation of claims made for life insurance and health 
benefits by annuitants under a Federal Government retirement system 
other than FERS.
    (2) These records may be disclosed to the individual to whom the 
information pertains, or, with prior written consent of the individual, 
to any agency or other person, except that medical evidence about which 
a prudent physician would hesitate to inform the individual, will be 
disclosed only to a licensed physician designated in writing for that 
purpose by the individual or by his or her representative.
    (3) Federal employee retirement records will be disclosed consistent 
with the provisions of the Privacy Act of 1974 (5 U.S.C. 552a), 
including, but not limited to, disclosures pursuant to a routine use 
promulgated for such records and printed in OPM's periodic publication 
of notices of systems of records. However, a beneficiary designated in 
accordance with FERS (5 U.S.C. 8424(c)) will, during the lifetime of the 
designator, be disclosed to the designator only, at his or her signed 
written request. Such beneficiary designations that may appear in 
records being disclosed to other than the designator must be removed 
before the record is disclosed. If information pertaining to a 
designation of beneficiary is specifically asked for by a court of 
competent jurisdiction, it may be released to the court, but with a 
written notice that it is released under protest.
    (4) Except as provided in paragraphs (a)(2) and (a)(3) of this 
section, OPM will not disclose information from the files, records, 
reports, or other papers and documents pertaining to a claim filed with 
OPM, whether potential, pending, or adjudicated. This information is 
privileged and confidential.
    (b) On written request OPM will return, to the person entitled to 
them, certificates of discharge, adoption papers, marriage certificates, 
decrees of divorce, letters testamentary or of administration, when they 
are no longer needed in the settlement of the claim. If papers returned 
constitute part of the material and essential evidence in a claim, OPM 
will retain copies of them or of the parts of them that appear to be of 
evidentiary value.

[[Page 261]]



Sec. 841.109  Computation of time.

    In computing a period of time for filing documents, the day of the 
action or event after which the designated period of time begins to run 
is not included. The last day of the period is included unless it is a 
Saturday, a Sunday, or a legal holiday; in this event, the period runs 
until the end of the next day which is not a Saturday, a Sunday, or a 
legal holiday.
Sec. 841.110 [Reserved]



                   Subpart B_Applications for Benefits

    Source: 52 FR 19244, May 21, 1987, unless otherwise noted.



Sec. 841.201  Purpose.

    This subpart states the general application requirement applicable 
under the Federal Employees Retirement System (FERS). Specific 
application requirements for particular benefits are contained with the 
regulations concerning those benefits.



Sec. 841.202  Applications required.

    (a) No benefit is payable under FERS, until after the claimant has 
applied for the benefit in the form prescribed by OPM.
    (b) An employee, Member, or survivor may exercise any option or make 
any election authorized by FERS only in the form prescribed by OPM.



Sec. 841.203  Withdrawal of applications.

    (a) Except as provided in paragraphs (b) and (c) of this section, an 
applicant for benefits under FERS may withdraw his or her application 
for benefits until a payment based on that application has been 
authorized, but not thereafter.
    (b) An applicant for benefits under FERS may not withdraw his or her 
application for benefits after OPM has received a certified copy of a 
court order (under part 581 of this chapter or subpart I of this part) 
affecting the benefits.
    (c) When an ``appropriate authority'' determines that the separation 
upon which payment has been based is an ``unjustified or unwarranted 
personnel action'' as these terms are defined in Sec. 550.804 of this 
chapter, an individual may withdraw his/her application for FERS 
benefits within 60 days of the decision. As provided in Sec. 550.805, 
any FERS payments must be deducted from any back pay award.



Sec. 841.204  Deemed application to protect survivors.

    (a) A former employee is deemed to have filed an application for 
annuity if the former employee--
    (1) Was not reemployed in a position subject to FERS under subpart A 
of part 842 of this chapter on the date of death;
    (2) Dies after separation from Federal service but before actually 
filing an application for benefits; and
    (3) At the time of separation from Federal service, was eligible for 
an immediate annuity under Sec. 842.204(a)(1) and was eligible to elect 
to postpone the commencing date of that annuity under Sec. 842.204(c) 
of this chapter.
    (b) For the purpose of determining entitlement to a survivor 
annuity, a former employee who is deemed to have filed an application 
under paragraph (a) of this section is considered to have died as a 
retiree.
    (c) For purposes of determining the amount of a survivor annuity, 
the annuity of a former employee who, under paragraph (a) of this 
section, is deemed to have filed an application is computed as though 
the commencing date were the first day of the month after the former 
employee's death.

[55 FR 994, Jan. 11, 1990, as amended at 55 FR 41179, Oct. 10, 1990]



                       Subpart C_Claims Processing

    Source: 52 FR 19244, May 21, 1987, unless otherwise noted.



Sec. 841.301  Purpose.

    (a) This subpart explains--
    (1) The procedures that employees. separated employees, retirees, 
and survivors must follow in applying for benefits under FERS;
    (2) The procedures that OPM will generally follow in determining 
eligibility for benefits under FERS;

[[Page 262]]

    (3) The appeal rights available to claimants adversely affected by 
OPM decisions under FERS; and
    (4) The special rules for processing competing claimant cases under 
FERS.
    (b) This subpart does not apply to processing--
    (1) Forfeiture of annuity for conviction of certain criminal 
offenses relating to national security under subchapter II of chapter 83 
of title 5, United States Code (processed under subpart K of part 831 of 
this chapter);
    (2) Court orders affecting FERS benefits (processed under subpart I 
of this part); or
    (3) Collection of debts due to the United States (processed under 
part 845 of this chapter).



Sec. 841.302  Definitions.

    In this subpart--
    Employee means an employee as defined in section 8401(11) of title 
5, United States Code, and a Member as defined in section 8401(20) of 
title 5, United States Code. Employee includes a person who had applied 
for retirement under FERS but had not been separated from the service 
prior to his or her death even if the person's retirement would have 
been retroactively effective upon separation.
    FERS means the Federal Employees Retirement System as described in 
chapter 84 of title 5, United States Code.
    MSPB means the Merit Systems Protection Board described in chapter 
12 of title 5, United States Code.
    Retiree means a former employee or Member who is receiving recurring 
payments under FERS based on service by the employee or Member. Retiree, 
as used in this subpart, does not include a current spouse, former 
spouse, child, or person with an insurable interest receiving a survivor 
annuity. Retiree for purposes of determining a person's status at the 
time of death means that the person had been separated from the service 
and had met all the requirements to receive an annuity including having 
filed an application for the annuity prior to his or her death.
    Separated employee means a former employee or Member who has been 
separated from the service but who has not met all the requirements for 
retirement under FERS or who has not filed an application for retirement 
under FERS.
    Survivor means a person entitled to benefits under part 843 or 846 
of this chapter based on the death of an employee, separated employee, 
retiree, or survivor.



Sec. 841.303  Applications filed with agencies.

    (a) Employees filing applications for retirement or to make deposits 
or redeposits under FERS (including applications for disability 
retirement) and separating employees filing applications for refunds of 
contributions must file their applications with their employing 
agencies.
    (b) Survivors filing applications for death benefits based on the 
death of an employee may file their applications with the employee's 
employing agency.



Sec. 841.304  Applications filed with OPM.

    (a) Separated employees filing applications for retirement or 
refunds of contributions; survivors filing applications for death 
benefits based on the deaths of separated employees, retirees, or 
survivors; and retirees making elections or seeking to change 
information in their retirement records must file their applications 
with OPM.
    (b) Survivors filing applications for death benefits based on the 
death of an employee may file their applications with OPM.



Sec. 841.305  Decisions subject to reconsideration.

    (a) A OPM decision under FERS is subject to reconsideration by OPM, 
whenever the decision is in writing and states the right to 
reconsideration.
    (b) OPM will reconsider a decision subject to reconsideration under 
Sec. 841.306. A decision subject to reconsideration is not subject to 
appeal under Sec. 841.308.



Sec. 841.306  Reconsideration.

    (a) Who may file. Except as noted in paragraph (b) of this section, 
any individual whose rights or interests under FERS are affected by an 
OPM decision (under Sec. 841.305) stating the right to request 
reconsideration may request OPM to review its initial decision.

[[Page 263]]

    (b) Actions covered elsewhere. (1) A request for reconsideration of 
termination of annuity payments under 5 U.S.C. 8311 through 22 will be 
made in accordance with the procedures set out in subpart K of part 831 
of this chapter.
    (2) A request for reconsideration of a decision to collect a debt 
will be made in accordance with Sec. 845.204(b).
    (3) A decision on court orders affecting FERS benefits will be made 
in accordance with subpart I of this part.
    (c) Reconsideration. A request for reconsideration, when applicable, 
must be in writing, must include the applicant's name, address, date of 
birth and claim number, if applicable, and must state the basis for the 
request.
    (d) Time limits on reconsideration. (1) A request for 
reconsideration must be received by OPM within 30 calendar days from the 
date of the initial decision.
    (2) The Associate Director's representative responsible for 
reconsiderations may extend the time limit for filing when the requestor 
shows that he or she was not notified of the time limit and was not 
otherwise aware of it, or that he or she was prevented by circumstances 
beyond his or her control from making the request within the time limit.
    (e) Final decision. After any applicable reconsideration, the 
Associate Director's representative will issue a final decision that 
must be in writing, must fully set forth the findings and conclusions of 
the reconsideration, and must contain notice of the right to request an 
appeal provided in Sec. 841.308. Copies of the final decision must be 
sent to the individual, to any competing claimants and, where 
applicable, to the agency.



Sec. 841.307  Final decisions without reconsideration.

    OPM may issue a final decision providing the opportunity to appeal 
under Sec. 841.308 rather than an opportunity to request 
reconsideration under Sec. 841.306. Such a decision must be in writing 
and state the right to appeal under Sec. 841.308.



Sec. 841.308  Appeals to MSPB.

    Except as noted in this paragraph, an individual whose rights or 
interests under FERS are affected by a final decision of OPM may request 
MSPB to review the decision in accord with procedures prescribed by 
MSPB. Decisions made in accord with the procedures referenced in Sec. 
841.306(b)(1) are made under subchapter II of chapter 83, title 5, 
United States Code. Such decisions are not appealable to MSPB under 
section 8461(e) of title 5, United States Code.



Sec. 841.309  Competing claimants.

    (a) Competing claimants are applicants for survivor benefits based 
on the service of an employee, separated employee, or retiree when--
    (1) A benefit is payable based on the service of the employee, 
separated employee, or retiree; and
    (2) Two or more claimants have applied for benefits based on the 
service of the employee, separated employee, or retiree; and
    (3) An OPM decision in favor of one claimant will adversely affect 
another claimant(s).
    (b) In cases involving competing claimants, the Associate Director 
or his or her designee will issue a final decision that will be in 
writing, will fully set forth findings and conclusions, and will contain 
notice of the right to appeal provided in Sec. 841.308. Copies of the 
final decision will be sent to all competing claimants.
    (c)(1) When OPM receives applications from competing claimants 
before any payments are made based on the service of the employee or 
Member, OPM will begin payments to the claimant(s) found entitled in the 
decision issued under paragraph (b) of this section.
    (2) When OPM does not receive an application from a competing 
claimant(s) until after another person has begun to receive payments 
based on the service of the employee or Member, the payments will 
continue until a decision is issued under paragraph (b) of this section. 
When a decision is issued under paragraph (b) of this section, OPM 
will--
    (i) If OPM affirms its earlier decision, continue payments to the 
claimant(s) OPM originally determined to be entitled; or
    (ii) If OPM reverses its earlier decision, suspend payment to the 
claimant(s) OPM originally determined to be

[[Page 264]]

entitled and immediately begin payment to the claimant(s) OPM determines 
to be entitled in its decision under paragraph (b) of this section. OPM 
will not take action to collect the overpayment until the time limit for 
filing an appeal has expired or the MSPB has issued a final decision on 
a timely appeal, whichever comes later.



                       Subpart D_Government Costs

    Source: 51 FR 47187, Dec. 31, 1986, unless otherwise noted.



Sec. 841.401  Purpose and scope.

    (a) The purpose of this subpart is to regulate the Government 
contributions to the Civil Service Retirement Fund under FERS.
    (b) This subpart covers--
    (1) Factors considered in the computation of agency contributions 
under FERS;
    (2) Publication of notice of the normal cost rates for each category 
of employees;
    (3) Agency appeals of rate determinations; and
    (4) Methodology for determining the amount due from each agency.



Sec. 841.402  Definitions.

    In this subpart--
    Actuary means an associate or fellow in the Society of Actuaries and 
one who is enrolled under section 3042 of Pub. L. 93-406, the ``Employee 
Retirement Income Security Act of 1974.''
    Administrative expenses means the normal cost loading applicable to 
the administration of FERS.
    Age means age, as of the beginning of the fiscal year, rounded to 
the nearest birthday.
    Agency head means, for the executive branch agencies, the head of an 
executive agency as defined in 5 U.S.C. 105; for the legislative branch, 
the Secretary of the Senate, the Clerk of the House of Representatives, 
or the head of any other legislative branch agency; for the judicial 
branch, the Director of the Administrative Office of the United States 
Courts; for the Postal Service, the Postmaster General; for any other 
independent establishment that is an entity of the Federal Government, 
the head of the establishment.
    Board means the Board of Actuaries of the Civil Service Retirement 
System.
    Category of employees means a grouping of employees under Sec. 
841.403.
    Child survivor termination and death rates means the rate, by age of 
the child, at which child survivor benefits terminate.
    CSRS means subchapter III of chapter 83 of title 5, United States 
Code.
    Death and recovery rates for disability annuitants means the rate, 
by age, sex, and duration on the roll, at which disability annuitants 
are removed from the annuity roll because of death; and the rate, by 
age, sex, and duration on the roll, at which disability annuitants are 
removed from the annuity roll because of recovery or restoration to 
earning capacity.
    Death and remarriage rates for surviving spouses means the rate, 
based on the sex of the employee, age of the survivor annuitant, and the 
duration on the annuity roll, at which spousal survivor annuitants are 
removed from the annuity roll because of death; and the rate, based on 
the sex of the employee, age of the survivor annuitant, and the duration 
on the roll, at which survivor annuitants are removed from the annuity 
roll because of remarriage.
    Death rates for non-disability annuitants means the rate, by age and 
sex of the annuitant, at which non- disability annuitants are removed 
from the annuity roll because of death.
    Disability retirement rates means the rate, by age, sex, length of 
service, and whether the employees are eligible for social security 
disability benefits, at which employees retire for disability.
    Duration on the roll means the number of full years on the annuity 
roll as of the beginning of the fiscal year.
    Economic Assumptions means the assumptions used by the Board with 
respect to inflation, interest rates, and wage and salary growth.
    Employee death rates means the rate, by age and sex of the employees 
and whether the employees are survived by spouses entitled to survivor 
annuities, at which employees die in service.
    Employees means employees as defined in section 8401(11) of title 5, 
United States Code, and Members, as

[[Page 265]]

defined in section 8401(20) of title 5, United States Code.
    Family characteristics of annuitants means, based on the annuitant's 
age and sex, and in some cases, on the type of annuity (regular, 
disability, or deferred), the number and average age of child survivors 
at the death of the annuitant, the percentage of annuitants with an 
annuity reduced to provide survivor benefits, the percentage of 
annuitants who actually leave a surviving spouse entitled to a survivor 
annuity at the annuitant's death, and the average age of the surviving 
spouse.
    Family characteristics of employees means, based on the employee's 
age at death and sex, the number and average age of child survivors and 
the average age of the surviving spouse, per death of an employee with a 
survivor.
    FERS means chapter 84 of title 5, United States Code.
    Involuntary retirement rates means, by age and sex of the employee, 
the rate of involuntary retirements (discontinued service and optional 
early retirements).
    Merit salary increases means salary increases, by age and length of 
service, that are not general salary increases. ``Merit salary 
increases'' include promotions and within-grade and similar increases 
based in whole or in part on employee performance, but do not include 
comparability increases, Postal Service COLA, or similar adjustments to 
entire pay scales; or premium pay.
    Military service rates means the fraction, by age and sex, of 
employees who have military service to all employees, and the average 
length of military service and the salary on which their deposits to 
receive credit for military service are based for these employees.
    Normal cost percentage or normal cost means the entry-age normal 
cost of the provisions of FERS which relate to the Fund, computed by the 
Office in accordance with generally accepted actuarial practice and 
standards (using dynamic assumptions) and expressed as a level 
percentage of aggregate basic pay.
    Service means all creditable service, including military service, 
rounded to the nearest number of years as of the beginning of the fiscal 
year.
    Single agency rate means a normal cost percentage for one category 
of employees in one agency. A single agency rate is set under Sec. 
841.412 as a result of a successful appeal.
    Voluntary retirement rates means the rate, based on the sex, age, 
and service of the employee, of regular longevity retirements.
    Withdrawal rates means the rate at which employees leave FERS-
covered service without retiring, including employees who are paid 
refunds and employees who take deferred retirement. These rates are of 
two types: ``not offset for reentry'' and ``offset for reentry.'' These 
rates are by age and service.



Sec. 841.403  Categories of employees for computation of normal cost 
percentages.

    Normal cost percentages will be determined for each of the following 
groups of employees:
    (a) Members;
    (b) Congressional employees;
    (c) Law enforcement officers, firefighters, and employees under 
section 302 of the Central Intelligence Agency Act of 1964 for Certain 
Employees;
    (d) Air traffic controllers;
    (e) Military reserve technicians;
    (f) Employees under section 303 of the Central Intelligence Agency 
Act of 1964 for Certain Employees when serving abroad;
    (g) All other employees.

[52 FR 25196, July 6, 1987]



Sec. 841.404  Demographic factors.

    (a) The Office of Personnel Management (OPM) will consider the 
factors listed below in determining normal cost percentages. To the 
extent data are available for the factor by specific category of 
employees, such data will be used. To the extent category specific data 
are not available, the most relevant available data will be used.
    (1) Distributions of new entrants by age, sex, and service;
    (2) Withdrawal rates;
    (3) Merit salary increases;
    (4) Voluntary retirement rates;
    (5) Involuntary retirement rates;
    (6) Disability retirement rates;
    (7) Employee death rates;
    (8) Military service rates;

[[Page 266]]

    (9) Family characteristics for employees;
    (10) Death rates for non-disability annuitants;
    (11) Death and recovery rates for disability annuitants;
    (12) Child survivor termination and death rates;
    (13) Family characteristics for annuitants; and
    (14) Administrative expenses.
    (b) Generally, each rate, ratio, or fraction must be separately 
considered to determine the rates for males and their survivors and the 
rates for females and their survivors, except those rates for child 
survivors and merit salary increases.



Sec. 841.405  Economic assumptions.

    The determinations of the normal cost percentage will be based on 
the economic assumptions determined by the Board. When an agency's case 
is based in whole or in part on the pattern of merit salary increases 
specific to the agency or to a category of employees within the agency, 
the Board may require modification of the economic assumptions 
concerning salary and wage growth to take into account the combined 
effect of merit and general wage and salary increases.



Sec. 841.406  Determination of normal cost percentages.

    (a) OPM will determine the Government-wide normal cost percentage 
for each category of employees. These normal cost percentages will be 
used by all agencies that have not been granted a single agency rate 
under Sec. 841.412.
    (b) Each normal cost percentage will be rounded to the nearest one-
tenth of a percent.



Sec. 841.407  Notice of normal cost percentage determinations.

    (a) No later than 5 years after the publication of a current notice 
of normal cost percentages, OPM will publish in the Federal Register a 
notice that will contain updated normal cost percentages.
    (b) The notice of normal cost percentage will include a statement 
of--
    (1) The Government-wide normal cost percentage and any single agency 
rates for each category of employees;
    (2) The effective date of any changes made by the notice;
    (3) The address for obtaining information on the data and 
assumptions used in computing the normal cost percentages;
    (4) The time limit for submission of appeals under Sec. 841.409; 
and
    (5) The address for filing an appeal under Sec. 841.409.



Sec. 841.408  Effective date of normal cost percentages.

    (a) Except as provided in paragraph (b) of this section and in Sec. 
841.412, normal cost percentages stated in a notice of normal cost 
percentages under Sec. 841.407 will be effective at the beginning of 
the first full pay period of the first fiscal year that commences at 
least 3 months after the date of publication of the notice.
    (b) The initial normal cost percentages will be effective at the 
beginning of the first pay period on or after January 1, 1987.

[51 FR 47187, Dec. 31, 1986, as amended at 58 FR 43493, Aug. 17, 1993]



Sec. 841.409  Agency appeal right.

    (a)(1) An agency with at least 1,000 employees in the general 
category of employees or 500 employees in any of the special categories 
may appeal to the Board the normal cost percentage for that category as 
applied to that agency.
    (2) The Secretary of the Treasury or the Postmaster General may 
request the Board to reconsider a determination of the amount of any 
supplemental liability due from the Treasury of the United States or the 
United States Postal Service, respectively.
    (b) No appeal will be considered by the Board unless the agency 
files, no later than 6 months after the date of publication of the 
notice of normal cost percentages under Sec. 841.407, a petition for 
appeal that meets all the requirements of Sec. 841.410.
    (c) No request for reconsideration will be considered by the Board 
unless the Secretary of the Treasury or the Postmaster General files, no 
later than 6 months after the date of receipt of the notice of 
supplemental liability, a request for reconsideration supported

[[Page 267]]

by an actuarial report similar to the report described in Sec. 
841.410(c).

[52 FR 25196, July 6, 1987]



Sec. 841.410  Contents of petition for appeal.

    (a) To file an appeal, an agency head must, before expiration of the 
time limit, file with OPM--
    (1) A letter of appeal;
    (2) An actuarial report; and
    (3) A certificate of eligibility (described in paragraph (d) of this 
section).
    (b)(1) The letter of appeal must be in writing and signed by the 
agency head. Delegation of signatory authority is not permitted.
    (2) The letter of appeal may contain any argument the agency wishes 
to make or may simply submit the actuarial report for consideration.
    (c) The actuarial report must contain a detailed actuarial analysis 
of the normal cost of FERS benefits as applied to the employees of that 
agency in the category of employees for which the agency is appealing 
the use of the Government-wide rate. The actuarial report must--
    (1) Be signed by an actuary;
    (2) Use the economic assumptions under Sec. 841.405; and
    (3) Specifically address and consider each of the demographic 
factors listed in Sec. 841.404. The appealing agency is responsible for 
developing data relating to the first nine demographic factors as they 
relate to the category of agency employees for which the appeal is being 
filed. Government-wide demographic factors (available from OPM) will be 
presumed to be sufficient and reliable for factors 10 through 13 unless 
the appealing agency is able to demonstrate, through sufficient and 
reliable data relating to its employees or former employees, the use of 
alternative factors is appropriate. The fourteenth factor, 
administrative expenses, will be supplied by OPM.
    (d) The certificate of eligibility is a letter from the agency's 
director of personnel certifying that the agency has the requisite 1,000 
or 500 in the category of employees under consideration.



Sec. 841.411  Appeals procedure.

    (a) A Government-wide normal cost percentage is presumed to apply to 
all agencies. Any agency appealing application of a Government-wide 
normal cost percentage to any category of employees in its workforce 
must demonstrate to the satisfaction of the Board that the normal cost 
percentage for that category of employees in that agency is 
significantly different from the Government-wide normal cost percentage.
    (b) While an agency has an appeal pending, the Government-wide 
normal cost percentage continues to apply to that agency.
    (c) The Board cannot consider an appeal unless all the documents 
required for a petition for appeal under Sec. 841.410(a) are filed 
before expiration of the time limit for an appeal.
    (d) The Board cannot sustain an appeal unless the Board finds that--
    (1) The data used in the agency's actuarial analysis are sufficient 
and reliable (As a general rule, at least 5 years of data pertaining to 
any group of employees must be analyzed before the results are 
considered sufficient and reliable.);
    (2) The assumptions used in the agency's actuarial analysis are 
justified;
    (3) When all relevant factors are considered together, there is a 
demonstrated difference between the normal cost for the group at issue 
in the appeal and the normal cost for the same group calculated on a 
Government-wide basis; and
    (4) The difference between the Government-wide normal cost 
percentage and the single agency rate would be at least 10 percent of 
the normal cost being appealed.



Sec. 841.412  Rates determined by appeal.

    (a) If the Board finds that a different normal cost is warranted 
based on an agency appeal, it will establish a single agency rate for 
the category of employees in that agency.
    (b) The single agency rate will be effective at the beginning of the 
first pay period beginning 30 days after the date of the Board's 
decision.
    (c) A single agency rate may be higher or lower than the Government-
wide

[[Page 268]]

rate and will remain in force for not less than 3 years.
    (d) After a single agency rate has been in force for at least 3 
years, OPM may--
    (1) Require, no more often than annually, that the agency justify 
continuation of the rate; and/or
    (2) When it publishes a notice of normal cost percentages under 
Sec. 841.407, terminate the single agency rate.



Sec. 841.413  Determinations of amount due from each agency.

    (a) For each pay period, each agency will determine the total amount 
of basic pay paid to employees in each category of employees.
    (b) For each category of employees, the amount due from each agency 
for a pay period is the product of--
    (1) The total amount of basic pay of employees in that category of 
employees in that agency; and
    (2) The normal cost percentage.

[51 FR 47187, Dec. 31, 1986, as amended at 52 FR 25196, July 6, 1987]



       Subpart E_Employee Deductions and Government Contributions

    Source: 52 FR 2057, Jan. 16, 1987, unless otherwise noted.



Sec. 841.501  Purpose.

    This subpart contains regulations concerning deductions from 
employees' pay and government contributions for FERS coverage.



Sec. 841.502  Definitions.

    In this subpart--
    Employee means employee as defined in Sec. 842.102 of this chapter 
or Member as defined in section 8401(20) of title 5, United States Code.
    Employee deduction means the portion of the normal cost of FERS 
coverage which is deducted from an employee's basic pay.
    FERS means chapter 84 of title 5, United States Code.
    Fund means the Civil Service Retirement and Disability Fund.
    Normal cost percentage or Normal cost means the entryage normal cost 
of the provisions of FERS which relate to the Fund, computed by the 
Office in accordance with generally accepted actuarial practice and 
standards (using dynamic assumptions) and expressed as a level 
percentage of aggregate basic pay. Normal cost percentage or normal cost 
include both agency and employee contributions.
    Social security means old age, survivors and disability insurance 
under section 3101(a) of the Internal Revenue Code of 1954.



Sec. 841.503  Amounts of employee deductions.

    (a) Except as provided in paragraph (b) of this section, the rate of 
employee deductions from basic pay for FERS coverage is seven percent of 
basic pay minus the percent of tax which is (or would be) in effect for 
the payment, for the employee cost of social security.
    (b) The rate of employee deductions from basic pay for FERS coverage 
for a Member, law enforcement officer, firefighter, air traffic 
controller, Congressional employee, or employee under section 302 of the 
Central Intelligence Agency Act of 1964 for Certain Employees is seven 
and one-half percent of basic pay, minus the percent of tax which is (or 
would be) in effect for the payment, for the employee cost of social 
security.
    (c) Employee deductions will be at the rate in paragraph (a) or (b) 
of this section as if social security deductions were being made even if 
social security deductions have ceased because of the amount of earnings 
during the year, or are not made for any other reason.

[52 FR 2057, Jan. 16, 1987, as amended at 52 FR 25197, July 6, 1987]



Sec. 841.504  Agency responsibilities.

    (a) Each employing agency is required to contribute the total amount 
of the normal cost percentage for each category of its employees, 
determined under Sec. 841.413 of this part, to the Fund.
    (b) Each employing agency must withhold the appropriate amount of 
employee deductions from the basic pay paid each covered employee for 
each pay period. No employee deduction is due if an employee receives no 
basic pay for a pay period.
    (c) An employing agency must record the appropriate amount of 
employee deductions on an individual retirement

[[Page 269]]

record maintained for each employee in the manner prescribed by OPM.
    (d) When an employee separates from Federal service or transfers to 
another agency, or transfers to a position in which he or she is not 
covered by FERS, the agency must close the employee's Individual 
Retirement Record (IRR) and forward it to OPM within the time standards 
prescribed by OPM. However, if an employee transfers to another position 
covered under FERS--
    (1) Within the same agency, and
    (2) To a position serviced by another payroll office, the agency 
may, in lieu of forwarding an IRR to OPM at the time of the intra-agency 
transfer, record the transfer for future IRR certification in an 
internal automated system of records.
    (e) An agency must maintain payroll systems and records in such 
manner as to permit accurate and timely reporting to OPM, in the manner 
prescribed by OPM.
    (f) An agency must report the employee deduction and agency 
contribution amounts for each pay period in the manner prescribed by 
OPM.
    (g) An agency must make such other reports of the normal cost, 
employee deductions and Government contributions amounts as are 
prescribed and in the manner prescribed by OPM.
    (h) An agency must remit in full the total amount of normal cost 
(which includes both employee deductions and Government contributions), 
so that payment is received by the Fund on the day of payment to the 
employee of the basic pay from which the employee deductions were made.
    (i) Upon the death of an employee whose tour of duty is less than 
full time, the employing agency must certify to OPM--
    (1) The number of hours that the employee was entitled to basic pay 
(whether in a duty or paid-leave status) in the 52-week work year 
immediately preceding the end of the last pay period in which the 
employee was in a pay status; and
    (2) If the employee's tour of duty was part time (regularly 
scheduled), the number of hours of work in the employee's tour of duty.

[52 FR 2057, Jan. 16, 1987, and 52 FR 25196, July 6, 1987, as amended at 
53 FR 16535, May 10, 1988; 65 FR 21119, Apr. 20, 2000]



Sec. 841.505  Correction of error.

    (a) When it is determined that an agency has paid less than the 
correct total amount of the normal cost for any or all of its current or 
past employees, for any reason whatsoever, including but not limited to, 
coverage decisions, correction of the percentage applicable or of the 
amount of basic pay, or additional payment of basic pay, the agency must 
pay the total additional amount payable under 5 U.S.C. 8423 and subpart 
D of the this part to the Fund.
    (b) The agency withholds the appropriate employee deduction from any 
payment of additional basic pay which is part of, or the result of, the 
corrective action.
    (c) The payment to the Fund described in paragraph (a) of this 
section shall be made as soon as possible, but not later than provided 
by standards established by OPM, regardless of whether or when the 
portion which should have been deducted from employee basic pay is 
recovered by the agency.
    (d) Any portion of the payment to the Fund described in paragraph 
(a) of this section which should have been deducted, but was not, from 
employee basic pay constitutes an overpayment of pay, subject to 
collection by the agency from the employee, unless waived under 
applicable authority such as 5 U.S.C. 5584.
    (e) Corrections and the related agency payments and employee 
deductions will be reported to OPM in the manner prescribed by OPM.



Sec. 841.506  Effect of part 772 of this chapter on FERS payments.

    (a) Agency notification to OPM. (1) When it is determined that a 
FERS employee is to be given interim relief under 5 U.S.C. 
7701(b)(2)(A), the employing agency must notify OPM of the effective 
date of the interim appointment under Sec. 772.102 of this chapter.

[[Page 270]]

The notice must specify that the appointment is required by the 
Whistleblower Protection Act of 1989.
    (2) When the MSPB initial decision cancelling the employee's 
separation becomes final, when the Board issues a final order cancelling 
the retiree's separation, or when the agency agrees to cancel the 
separation, the employing agency must notify OPM of the date the interim 
appointment ends and request the amount of the erroneous payment to be 
recovered under Sec. 550.805(e) of this chapter from any back pay 
adjustment to which the employee may be entitled.
    (b) Employee deductions and normal cost percentage. For the duration 
of the appointment, the agency will withhold the appropriate employee 
deduction and contribute the total amount of the normal cost percentage 
for the employee as prescribed by OPM. If and when a separation action 
is cancelled, the agency must make the corrections specified under Sec. 
841.507 of this subpart.

[57 FR 3714, Jan. 31, 1992, as amended at 58 FR 48273, Sept. 15, 1993]



Sec. 841.507  Correction of unjustified or unwarranted personnel action.

    (a) When an ``appropriate authority'' determines that there has been 
an ``unjustified or unwarranted personnel action'' as these terms are 
defined in subpart H of part 550 of this title, the employing agency 
will pay the Fund the amount of the normal cost percentage of the basic 
pay included in back pay. The normal cost percentage owed the Fund is 
computed on the amount of gross basic pay without regard to deductions 
described in Sec. 550.805(e) of this chapter for other amounts earned 
or erroneous payments received.
    (b) The agency will withhold the appropriate employee deductions 
from the amount of basic pay included in gross back pay giving due 
regard to deductions described in Sec. 550.805(e) of this chapter.
    (c) The payment to the Fund described in paragraph (a) of this 
section shall be made within the time period established by OPM 
standards.
    (d)(1) Any FERS benefits--lump-sum payments or annuity benefits--
paid based on a separation that is later cancelled are considered 
erroneous payments that must be repaid to OPM. Agencies must deduct such 
payments from any back pay adjustment to which the employee may be 
entitled as required by 5 CFR 550.805(e).
    (2) Amounts recovered from back pay will not be subject to waiver 
consideration under 5 U.S.C. 8470(b). If there is no back pay, or the 
back pay is insufficient to recover the entire erroneous payment, the 
employee may request that OPM waive recovery of the uncollected portion 
of the overpayment. If waiver is not granted, the employee must repay 
the erroneous payment.

[52 FR 2057, Jan. 16, 1987. Redesignated and amended at 57 FR 3714, Jan. 
31, 1992; 58 FR 43493, Aug. 17, 1993]



Sec. 841.508  Effective date.

    The employee deductions specified in Sec. 841.503 are effective on 
the later of the first day of the first pay period beginning in 1987 or 
the first day an employee is covered by FERS.

[52 FR 2057, Jan. 16, 1987. Redesignated at 57 FR 3714, Jan. 31, 1992]



                    Subpart F_Computation of Interest

    Source: 52 FR 12132, Apr. 15, 1987, unless otherwise noted.



Sec. 841.601  Purpose.

    This subpart regulates the computation of interest under the Federal 
Employees Retirement System (FERS).



Sec. 841.602  Definitions.

    Contributions or deductions means the amounts deducted from an 
employee's pay or deposited as the employee's share of the cost of FERS.
    Individual Retirement Record means the record of individual 
retirement deductions required by Sec. 841.504.
    Last year of service means the calendar year in which deductions 
stop on the Individual Retirement Record under consideration.
    Unexpended balance means the unrefunded amount consisting of--
    (a) Retirement deductions made from the basic pay of an employee 
under subpart E of part 841 of this chapter;

[[Page 271]]

    (b) Amounts deposited by an employee for periods of service 
(including military service) for which--
    (1) No retirement deductions were made; or
    (2) Deductions were refunded to the employee; and
    (c) Interest compounded annually on the deductions and deposits at a 
rate which, for any calendar year, will be equal to the overall average 
yield to the Civil Service Retirement Fund during the preceding fiscal 
year from all obligations purchased by the Secretary of the Treasury 
during that fiscal year under section 8348(c), (d), and (e) of title 5, 
United States Code, as determined by the Secretary of the Treasury. 
Interest on deductions and deposits does not include interest--
    (1) If the service covered by the deductions totals 1 year or less; 
or
    (2) For a fractional part of a month in the total service.
    Year of the computation means the calendar year when the unexpended 
balance is being computed.



Sec. 841.603  Rate of interest.

    For calendar year 1985 and for each subsequent calendar year, OPM 
will publish a notice in the Federal Register to notify the public of 
the interest rate that will be in effect during that calendar year.



Sec. 841.604  Interest on service credit deposits.

    (a) Interest on civilian service credit deposits is computed under 
Sec. 842.305 of this chapter.
    (b) Interest on military service credit deposits is computed under 
Sec. 842.307 of this chapter.
    (c) In the case of a retirement coverage error that was corrected 
under part 839 (pertaining to errors that lasted for at least 3 years of 
service after December 31, 1986) in which:
    (1) A CSRS service credit deposit was made; and
    (2) There is a subsequent retroactive change to FERS, the excess of 
the amount of the CSRS civilian or military service credit deposit over 
the FERS civilian or military deposit, together with interest computed 
under Sec. 842.305 of this chapter, shall be paid to the employee or 
annuitant. In the case of a deceased employee or annuitant, payment is 
made to the individual entitled to lump-sum benefits under subpart B of 
part 843 of this chapter.

[52 FR 12132, Apr. 15, 1987, as amended at 57 FR 32155, July 21, 1992; 
66 FR 15618, Mar. 19, 2001]



Sec. 841.605  Interest included in the unexpended balance.

    (a) Interest on each Individual Retirement Record is computed 
separately.
    (b) For determining the amount of interest in the unexpended balance 
when none of the employee deductions have been returned (e.g., employee 
refunds or at the time of retirement), the amount of interest in the 
unexpended balance equals the sum of the amounts of interest applicable 
to each calendar year's deductions. The amount of interest on each 
calendar year's deductions equals the sum of--
    (1) For the calendar year in which the deductions were taken--
    (i) Except during the last year of service, the amount of the 
employee's deductions for that calendar year times the rate of interest 
set under Sec. 841.603 for that calendar year times the fraction whose 
numerator is the number of full months when deductions were withheld and 
whose denominator is 24;
    (ii) During the last year of service, the amount of the employee's 
deductions for that year times the rate of interest set under Sec. 
841.603 for that year times the fraction--
    (A) Whose numerator equals the sum of--
    (1) One half times the number of months (fractional months rounded 
up) of that year during which the employee was employed;
    (2) One for each full month of that year after the employee's 
service terminated; and
    (B) Whose denominator is 12.
    (2) For each calendar year after the year when the deductions were 
withheld but before the calendar year of the computation, the amount of 
the employee's deductions plus interest for prior years, times the rate 
of interest set under Sec. 841.603 for that year; and
    (3) For the year of the computation--
    (i) If it is not the same calendar year that the deductions were 
withheld, the

[[Page 272]]

amount of the employee's deductions plus interest for prior years, times 
the rate of interest set under Sec. 841.603 for that year times the 
fraction whose numerator is the number of full months that have been 
completed in the year of the computation and whose denominator is 12; or
    (ii) If it is the same calendar year that the deductions were 
withheld, the amount of the employee's deductions for that year times 
the rate of interest set under Sec. 841.603 for that year times the 
fraction--
    (A) Whose numerator equals the sum of--
    (1) One half times the number of months (fractional months rounded 
up) of that year during which the employee was employed;
    (2) One for each full month of that year after the employee's 
service terminated; and
    (B) Whose denominator is 12.
    (c)(1) For adding interest to the unexpended balance after 
retirement, the unexpended balance including interest computed under 
paragraph (b) of this section is computed as of the time of retirement.
    (2) Each month after retirement, the unexpended balance is reduced 
by the amount of annuity paid and interest is added to the remaining 
portion at the rate computed as follows:
    (i) Add one to the interest rate under Sec. 841.603 for the current 
year.
    (ii) Raise the sum produced under paragraph (c)(2)(i) of this 
section to the \1/12\ power.
    (iii) Subtract one from the result of paragraph (c)(2)(ii) of this 
section to produce the interest rate for the month.
    (d)(1) Interest on payments of the unexpended balance will be paid 
for the month unless the payment has been authorized before the 5th 
workday before the end of the month (excluding the 31st day of 31-day 
months).
    (2) For the purposes of paragraph (d)(1) of this section, payment is 
authorized when the person with authority to approve the claim approves 
payment.



Sec. 841.606  Interest on survivor reduction deposits.

    Interest on deposits under subpart F of part 842 of this chapter is 
compounded annually and accrued monthly.
    (a) The initial interest on each monthly difference between the 
reduced annuity rate and the annuity rate actually paid equals the 
amount of the monthly difference times the difference between--
    (1) One and six tenths raised to the power whose numerator is the 
number of months between the date when the monthly difference in annuity 
rates occurred and the date when the initial interest is computed and 
whose denominator is 12; and
    (2) One.
    (b) The total initial interest due is the sum of all of the initial 
interest on each monthly difference computed in accordance with 
paragraph (a) of this section.
    (c) Additional interest on any uncollected balance will be 
compounded annually and accrued monthly. The additional interest due 
each month equals the remaining balance due times the difference 
between--
    (1) One and six tenths raised to the \1/12\ power; and
    (2) One.



Sec. 841.607  Interest on overpayment debts.

    Interest on overpayment debts is computed under Sec. 845.205(b).



                  Subpart G_Cost-of-Living Adjustments

    Source: 55 FR 14229, Apr. 17, 1990, unless otherwise noted.



Sec. 841.701  Purpose and scope.

    (a) The purpose of this subpart is to regulate computation of cost-
of-living adjustments (COLA's) for basic benefits under the Federal 
Employees Retirement System (FERS).
    (b) This subpart provides the methodology for--
    (1) Computing COLA's on each type of FERS basic benefit subject to 
COLA's; and

[[Page 273]]

    (2) Computing COLA's on annuities partially computed under FERS and 
partially computed under the Civil Service Retirement System (CSRS).
    (c) COLA's on children's annuities are not covered by this subpart 
because COLA's on children's annuities are computed under CSRS rules.



Sec. 841.702  Definitions.

    In this subpart--
    Annuity supplement means the benefit under subpart E of part 842 of 
this chapter. An annuity supplement is only payable to retirees.
    Basic annuity means the benefits computed under subpart D of part 
842 of this chapter and payable to retirees.
    Basic employee death benefit means the basic employee death benefit 
as defined in Sec. 843.102 of this chapter.
    Beneficiary of insurable interest annuity means a person receiving a 
recurring benefit under FERS that is payable (after the employee's, 
Members, or retiree's death) to a person designated to receive such an 
annuity under Sec. 842.605 of this chapter.
    COLA means a cost-of-living adjustment.
    Combined CSRS/FERS annuity means the recurring benefit with a CSRS 
component and a FERS component. A ``combined CSRS/FERS annuity'' is only 
payable to a retiree who as an employee elected to transfer to FERS 
under part 846 of this chapter, who at the time of transfer had at least 
5 years of service creditable under CSRS (excluding service that was 
subject to both social security and partial CSRS deductions), and who 
was covered by FERS for at least 1 month.
    CSRS means the Civil Service Retirement System as described in 
subchapter III of chapter 83 of title 5, United States Code.
    CSRS component means the portion of a combined CSRS/FERS annuity 
that is computed under CSRS rules.
    Current spouse annuity means a current spouse annuity as defined in 
Sec. 842.602 of this chapter.
    Disability retiree means a retiree who retired under part 844 of 
this chapter.
    Effective date means the date annuities increased by a COLA begin to 
accrue at the higher rate.
    FERS means the Federal Employees Retirement System as defined in 
chapter 84 of title 5, United States Code.
    FERS component means the portion of a combined CSRS/FERS annuity 
computed under FERS rules.
    Former spouse annuity means a former spouse annuity as defined in 
Sec. 842.602 of this chapter.
    Initial monthly rate means the monthly annuity rate that a retiree 
(other than a disability retiree) is entitled to receive at the time of 
retirement (as defined in Sec. 842.602 of this chapter).
    Percentage change means the percent change in the price index as 
defined in section 8462(a)(2) of title 5, United States Code.
    Retiree means a retiree as defined in Sec. 842.602 of this chapter.
    Survivor means a person receiving a current spouse annuity or a 
former spouse annuity, or the beneficiary of an insurable interest 
annuity. As used in this subpart, ``survivor'' does not include a child 
annuitant.
    Survivor supplement means the recurring benefit payable to a 
survivor under Sec. 843.308 of this chapter.



Sec. 841.703  Increases on basic annuities and survivor annuities.

    (a) Except as provided in Sec. Sec. 841.704, 841.706, and 841.707, 
and paragraph (e) of this section, COLA's on basic annuities and 
survivor annuities are the greater of--
    (1) One dollar per month; or
    (2)(i) If the percentage change is less than 2 percent, the 
percentage change;
    (ii) If the percentage change is at least 2 percent and not greater 
than 3 percent, 2 percent; and
    (iii) If the percentage change exceeds 3 percent, 1 percentage point 
less than the percentage change.
    (b) After survivor annuities commence, they are subject to COLA's 
computed under paragraph (a) of this section, even if they are based on 
a basic employee annuity that includes a CSRS component.
    (c) COLA's apply to basic annuities (not to annuity supplements), 
survivor annuities, and survivor supplements.
    (d) COLA's do not apply for annuitants who are under age 62 as of 
the effective date, except--
    (1) Survivors;

[[Page 274]]

    (2) Disability retirees (other than disability retirees whose 
benefits is based on 60% of high-3 average salary);
    (3) Retirees who retired under Sec. 842.208 of this chapter (the 
special provisions for law enforcement officers and firefighters);
    (4) Retirees who retired under Sec. 842.207 of this chapter (the 
special provision for air traffic controllers);
    (5) Retirees who retired under Sec. 842.210 of this chapter (the 
special provision for military reserve technicians who ceased satisfying 
the requirements of their position) due to a disability.
    (e)(1) Except as provided in paragraph (e)(2) of this section, 
COLA's are not payable to disability retirees during the first year.
    (2) COLA's are payable to disability retirees during the first year 
if the annuity rate payable is the retiree's earned benefit or the 
annuity is redetermined because the retiree has reached age 62.
    (3) After the first year, both the disability benefit and the social 
security offset (it any) are increased by COLA's. Disability retirees' 
earned benefits also increase with COLA's, even when earned benefits are 
not paid. After application of the COLA, the greater of the increased 40 
percent benefit offset by social security or the increased earned 
benefit is paid until the annuity is redetermined at age 62. After age 
62, the redetermined annuity is paid.
    (f) COLA's are payable to retirees and survivors whose annuities 
commence before the effective date.



Sec. 841.704  Proration of COLA's.

    (a) The full amounts of COLA's are payable on annuities having a 
commencing date more than 11 months before the effective date.
    (b)(1) Prorated portions of COLA's are payable of annuities having a 
commencing date within 11 months before the effective date.
    (2) Proration is based on the number of months (with any portion of 
a month counting as a month) between the annuity commencing date and the 
effective date.
    (3) For survivors of deceased retirees, proration is determined by 
the date the annuity was first payable to the deceased retiree.
    (4) Proration applied to the assume social security disability 
insurance benefit is based on the commencing date of the disability 
annuity, not the beginning of the social security disability benefit.



Sec. 841.705  Increases on basic employee death benefits.

    (a) COLA's on the basic employee death benefit increase the $15,000 
component by the percentage change.
    (b) Recipients of the basic employee death benefit are entitled to 
COLA's if the employee or Member died on or after the effective date.



Sec. 841.706  Increases on combined CSRS/FERS annuities.

    (a) COLA's on combined CSRS/FERS annuities are computed by 
increasing the CSRS component by the percentage change and the FERS 
component by the amount of COLA's under Sec. 841.703(a).
    (b) The initial monthly rate is computed by--
    (1) Applying CSRS rules to CSRS service to obtain the annual rate of 
the self-only annuity (as defined in Sec. 831.603 of this chapter) 
based on the CSRS service; then
    (2) Applying FERS rules to FERS service to obtain the annual rate of 
annuity determined under Sec. Sec. 842.403, 842.405, 842.406, or 
842.407 of this chapter based on the FERS service; then
    (3) Making any applicable FERS reductions for age and/or survivor 
benefits to the amounts computed under paragraphs (b)(1) and (b)(2) of 
this section; then
    (4) Dividing the sum of the reduced amounts computed under paragraph 
(b)(3) of this section by 12; then
    (5) Dropping any cents.
    (c) The initial monthly CSRS component is computed by--
    (1) Applying CSRS rules to CSRS service to obtain the annual rate of 
the self-only annuity (as defined in Sec. 831.603 of this chapter) 
based on the CSRS service; then
    (2) Making any applicable FERS reductions for age and/or survivor 
benefits; then
    (3) Dividing the annual amount by 12; then
    (4) Dropping any cents.

[[Page 275]]

    (d) The initial monthly FERS component is computed by subtracting 
the initial monthly CSRS component from the initial monthly rate.
    (e) A retiree who was covered under FERS for at least one month has 
a FERS component. If the amount of the FERS component as computed under 
paragraph (d) of this section is zero (because the CSRS component is 
equal to the monthly rate, leaving no balance for the FERS component), 
the FERS component is $1 per month. The retiree is due a full dollar 
increase on the FERS component with the next COLA. An employee with less 
than a month of FERS service has no FERS component and is not due any 
FERS COLA's.
    (f) COLA's are determined by applying the appropriate increase to 
each component and rounding to the next lower dollar (each component 
must increase by at least one dollar if a COLA applies to each 
component) before adding them together for the new monthly amount 
payable.



Sec. 841.707  COLA's affecting computation of survivor supplements.

    For purposes of computing the assumed CSRS annuity under Sec. 
843.308 of this chapter, the assumed CSRS annuity includes COLA's 
computed under CSRS rules.



Sec. 841.708  Special provisions affecting retired military reserve 
technicians.

    (a) Military reserve technicians who retire as a result of a medical 
disability are excepted from the bar against COLA increases for retirees 
under age 62.
    (b) Military reserve technicians have retired as a result of a 
medical disability if they retire under--
    (1) Section 8451(a)(1)(B) of title 5, United States Code (allowing 
retirement by military reserve technicians who are medically disabled 
for their positions); or
    (2) Section 8456 of title 5, United States Code (allowing retirement 
by military reserve technicians who are not disabled for their positions 
and who are not eligible under the special military technician 
discontinued service provisions (section 8414(c)) but who are medically 
disqualified for military service or the rank required to hold their 
positions).
    (c)(1) Military reserve technicians have not retired as a result of 
a medical disability if they retire under section 8414(c) of title 5, 
United States Code (allowing retirement by military reserve technicians 
who may not be disabled for their positions, but are medically or 
nonmedically disqualified for military service or the rank required to 
hold the position, and who are at least age 50 with 25 years of 
service), unless they provide OPM official documentation showing that 
their disqualification was for medical reasons.
    (2) When OPM receives no information about the reason for the 
disqualification of a military reserve technician retiring under section 
8414(c) of title 5, United States Code, OPM will process the case 
assuming that the disqualification was for nonmedical reasons. OPM will 
inform these retirees that they will not receive COLA's until they reach 
age 62 unless they provide an official certification from the military 
showing that their disqualification was for medical reasons.



                      Subpart H_Waiver of Benefits

    Source: 52 FR 2058, Jan. 16, 1987, unless otherwise noted.



Sec. 841.801  Purpose.

    This subpart regulates the statutory provision on waiver of annuity 
benefits under the Federal Employees' Retirement System.



Sec. 841.802  Definitions.

    As used in this subpart--
    Annuitant means a person receiving or who is entitled and has made 
application to receive retirement or survivor benefits under subchapter 
II, IV, or V of chapter 84 of title 5, United States Code.
    Annuity means the gross monthly annuity rate payable before any 
authorized deductions (such as those for health benefits and life 
insurance premiums).
    Qualifying court order means a court order acceptable for processing 
as defined in Sec. 838.103 of this chapter or a qualifying court order 
as defined in Sec. 838.1003 of this chapter.

[[Page 276]]

    Waiver means an annuitant's written request to forfeit a specified 
amount of annuity as described in this subpart.

[52 FR 2058, Jan. 16, 1987, as amended at 57 FR 33598, July 29, 1992]



Sec. 841.803  Waiver of annuity.

    (a) An annuitant may decline to accept all or any part of the amount 
of his or her annuity by a waiver signed and filed with the Office of 
Personnel Management (OPM).
    (b) A waiver is effective the first day of the month following the 
month in which it is received in OPM, unless a later effective date is 
specified by the annuitant.
    (c) A waiver remains in effect until revoked or changed by the 
annuitant in writing, except as provided in paragraph (f) of this 
section. The effective date of a revocation or change will be the first 
day of the month following the month in which the request to revoke or 
change is received in OPM, unless a later date is specified by the 
annuitant.
    (d) The amount of annuity that is waived is forfeited during the 
period the waiver is in effect and cannot be recovered.
    (e) An annuity which has a waiver in effect will not be increased by 
cost-of-living adjustments (COLA) authorized under 5 U.S.C. 8462. Upon 
cancellation of a waiver, the rate of annuity will be increased by any 
COLA authorized during the period a waiver was in effect.
    (f) Upon the death of an annuitant with a waiver in effect, any 
survivor annuity payable will be authorized at the full rate of annuity 
as though the waiver had not been in effect, unless the survivor 
annuitant executes a waiver.



Sec. 841.804  Waivers and court orders.

    The effect of a qualifying court order on a waiver is controlled by 
Sec. 838.111(c) of this chapter.

[52 FR 2058, Jan. 16, 1987, as amended at 57 FR 33598, July 29, 1992]

Subpart I [Reserved]



                 Subpart J_State Income Tax Withholding

    Source: 52 FR 5432, Feb. 23, 1987, unless otherwise noted.



Sec. 841.1001  Purpose.

    This subpart regulates state income tax withholding from payments of 
basic benefits under the Federal Employees Retirement System (FERS).



Sec. 841.1002  Definitions.

    For the purpose of this subchapter:
    Agreement means the Federal-State agreement contained in this 
subpart.
    Annuitant means an employee or Member retired, or a spouse, widow, 
or widower receiving survivor benefits, under chapter 84 of title 5, 
United States Code.
    Effective date means, with respect to a request or revocation, that 
the request or revocation will be reflected in payments authorized after 
that date, and before the next request or revocation is implemented.
    Fund means the Civil Service Retirement and Disability Fund as 
established and described in section 8348 of title 5, United States 
Code.
    Income tax and State income tax mean any form of tax for which, 
under a State statute, (a) collection is provided, either in imposing on 
employers generally the duty of withholding sums from the compensation 
of employees and making returns of such sums to the State or by granting 
to employers generally the authority to withhold sums from the 
compensation of employees, if any employee voluntarily elects to have 
such sums withheld; and (b) the duty to withhold generally is imposed, 
or the authority to withhold generally is granted, with respect to the 
compensation of employees who are residents of the State.
    Net recurring payment means the amount of annuity or survivors 
benefits (not recurring interim payments made while a claim is pending 
adjudication) payable to the annuitant on a monthly basis less the 
amounts currently being deducted for health benefits, Medicare, life 
insurance, Federal income tax, overpayment of annuity, indebtedness to 
the Government, voluntary allotments, waivers, or being

[[Page 277]]

paid to a third party or a court officer in compliance with a court 
order or decree.
    Net withholding means the amount of State income tax deductions 
withheld during the previous calendar quarter as a result of requests 
which designated the State as payee, less similar deductions taken from 
prior payments which are cancelled in the previous calendar quarter.
    Proper State Official means a State officer authorized to bind the 
State contractually in matters relating to tax administration.
    Received means, in respect to the magnetic tape containing requests 
and revocations, received at the special mailing address established by 
OPM for income tax requests, or, for those items not so received, 
received at the OPM data processing center charged with processing 
requests.
    Requests means, in regard to a request for tax withholdings, a 
change in the amount withheld, or revocation of a prior request, a 
written submission from an annuitant in a format acceptable to the State 
which provides the annuitant's name, FERS claim number, Social Security 
identification number, address, the amount to be withheld and the State 
to which payment is to be made, which is signed by the annuitant or, in 
the case of incompetence, his or her representative payee.
    State means a State, the District of Columbia, or any territory or 
possession of the United States.



Sec. 841.1003  Federal-State agreements.

    OPM will enter into an agreement with any State within 120 days of 
an application for agreement from the proper State official. The terms 
of the standard agreement will be Sec. Sec. 841.1004 through 841.1007 
of this subpart. OPM and the State may agree to additional terms and 
provisions, insofar as those additional terms and provisions do not 
contradict or otherwise limit the terms of the standard agreement.



Sec. 841.1004  OPM responsibilities.

    OPM will, in performance of this agreement:
    (a) Process the magnetic tape containing State tax transactions 
against the annuity roll once a month at the time monthly recurring 
payments are prepared for the United States Treasury Department. Errors 
that are identified will not be processed into the file, and will be 
identified and returned to the State for resolution via the monthly 
error report. Collections of State income tax will continue in effect 
until the State requesting the initial action supplies either a valid 
revocation or change. The magnetic tape must be received 35 days prior 
to the date of the check in which the transactions are to be effective. 
For example, withholding transactions for the July 1 check must be 
received 5 days prior to June 1. If the magnetic tape submitted by the 
State cannot be read, OPM will notify the State of this fact, and if a 
satisfactory replacement can be supplied in time for monthly processing, 
it will be processed.
    (b) Deduct from the regular, recurring annuity payments of an 
annuitant the amount he or she has so requested to be withheld, provided 
that:
    (1) The amount of the request is an even dollar amount, not less 
than Five Dollars nor more than the net recurring amount. The State may 
set any even dollar amount above Five Dollars as a minimum withholding 
amount.
    (2) The annuitant has not designated more than one other State for 
withholding purposes within the calendar year. The State can set any 
limit on the number of changes an annuitant may make in the amount to be 
withheld.
    (c) Retain the amounts withheld in the Fund until payment is due.
    (d) Pay the net withholding to the State on the last day of the 
first month following each calendar quarter.
    (e) Make the following reports:
    (1) A monthly report which will include all the State tax 
withholdings, cancellations and adjustments for the month, and also each 
request OPM was not able to process, with an explanation, in coded 
format, of the reason for rejection.
    (2) A quarterly report which will include State, State address, 
quarterly withholdings, quarterly cancellations and adjustments, 
quarterly net withholdings and year-to-date amounts. Where cancelled or 
adjusted

[[Page 278]]

payments were made in a previous year, OPM shall append a listing of the 
cancelled or adjusted payments which shows the date and amount of each 
cancelled or adjusted tax withholding, and the name and Social Security 
identification number of the annuitant from whom it was withheld. If 
either party terminates the agreement and the amount of cancelled or 
adjusted deductions exceeds the amount withheld for the final quarter, 
then the quarterly report shall show the amount to be refunded to OPM 
and the address to which payment should be made.
    (3) An annual summary report which contains the name, Social 
Security identification number, and total amount withheld from non-
cancelled payments during the previous calendar year, for each annuitant 
who requested tax withholding payable to the State. In the event the 
annuitant had State income tax withholding in effect for more than one 
State in that calendar year, the report will show only the amount 
withheld for the State receiving the report.
    (4) An annual report to each annuitant for whom State income taxes 
were withheld giving the amount of withholding paid to the State during 
the calendar year.



Sec. 841.1005  State responsibilities.

    The State will, in performance of this agreement:
    (a) Accept requests and revocations from annuitants who have 
designated that State income tax deductions will go to the State.
    (b) Convert these requests on a monthly basis to a machine-readable 
magnetic tape using specifications received from OPM, and forward that 
tape to OPM for processing.
    (c) Inform annuitants whose tax requests are rejected by OPM that 
the request was so rejected and of the reason why it was so rejected.
    (d) Recognize that, to the extent not prohibited by State laws, 
records maintained by the State relating to this program are considered 
jointly maintained by OPM and are subject to the Privacy Act of 1974 (5 
U.S.C. 552a). Accordingly, the States will maintain such records in 
accordance with that statute and OPM's implementing regulations at 5 CFR 
part 297.
    (e) Respond to requests of annuitants for information and advice in 
regard to State income tax withholding.
    (f) Credit the amounts withheld from FERS annuities to the State tax 
liability of the respective annuitants, and, subject to applicable 
provisions of State law to the contrary, refund any balance over and 
above that liability to the annuitant, unless he or she should request 
otherwise.
    (g) Surrender all tax withholding requests to OPM when this 
agreement is terminated or when the documents are not otherwise needed 
for this State tax withholding program.
    (h) Allow OPM, the Comptroller General or any of their duly 
authorized representatives access to, and the right to examine, all 
records, books, papers or documents related to the processing of 
requests for State income tax withholding from FERS annuities.



Sec. 841.1006  Additional provisions.

    These additional provisions are also binding on the State and OPM:
    (a) A request or revocation is effective when processed by OPM. OPM 
will process each request by the first day of the second month following 
the month in which it is received, but incurs no liability or 
indebtedness by its failure to do so.
    (b) Any amount deducted from an annuity payment and paid to the 
State as a result of a request is deemed properly paid, unless the 
annuity payment itself is cancelled.
    (c) OPM will provide the State with the information necessary to 
properly process a request for State income tax withholding.
    (d) If the State is paid withholding which is contrary to the terms 
of the annuitant's request, the State is liable to the annuitant for the 
amount improperly withheld, and subject to account verification from 
OPM, agrees to pay that amount to the annuitant on demand.
    (e) In the case of a dispute amount in any of the reports described 
and authorized by this agreement, the Associate Director will issue an 
accounting. If the State finds this accounting unacceptable, it may then 
and only then

[[Page 279]]

pursue such remedies as are otherwise available.
    (f) If a State received an overpayment of monies properly belonging 
to the Fund, OPM will offset the overpayment from a future payment due 
the State. If there are no further payments due the State, OPM will 
inform the State in writing of the amount due. Within 60 days of the 
date of receipt of that communication that State will make payment of 
the amount due.



Sec. 841.1007  Agreement modification and termination.

    This agreement may be modified or terminated in the following 
manner:
    (a) Either party may suggest a modification of non-regulatory 
provisions of the agreement in writing to the other party. The other 
party must accept or reject the modification within 60 calendar days of 
the date of the suggestion.
    (b) The agreement may be terminated by either party on 60 calendar 
days written notice.
    (c) OPM may modify this agreement unilaterally through the rule 
making process described in sections 553, 1103, and 1105 of title 5, 
United States Code.



PART 842_FEDERAL EMPLOYEES RETIREMENT SYSTEM_BASIC ANNUITY--Table of 
Contents




                           Subpart A_Coverage

Sec.
842.101 Purpose and scope.
842.102 Definitions.
842.103 General.
842.104 Statutory exclusions.
842.105 Regulatory exclusions.
842.106 Elections of retirement coverage under the District of Columbia 
          Financial Responsibility and Management Assistance Act of 
          1995.
842.107 Employees covered under the National Capital Revitalization and 
          Self-Government Improvement Act of 1997.
842.108 Employees covered under the District of Columbia Courts and 
          Justice Technical Corrections Act of 1998.

                          Subpart B_Eligibility

842.201 Purpose.
842.202 Definitions.
842.203 General eligibility requirement.
842.204 Immediate voluntary retirement--basic age and service 
          requirements.
842.206 Involuntary retirement.
842.207 Air traffic controllers.
842.208 Firefighters and law enforcement officers.
842.209 Members of Congress.
842.210 Military reserve technicians.
842.211 Senior Executive Service, Defense Intelligence Senior Executive 
          Service, and Senior Cryptologic Executive Service.
842.212 Deferred retirement.
842.213 Voluntary early retirement-substantial delayering, 
          reorganization, reduction in force, transfer of function, or 
          other workforce restructuring.

                      Subpart C_Credit for Service

842.301 Purpose.
842.302 Definitions.
842.303 General.
842.304 Civilian service.
842.305 Deposits for civilian service.
842.306 Military service.
842.307 Deposits for military service.
842.308 Refunds of deductions and service credit deposits made before 
          becoming subject to FERS.
842.309 Contract service.
842.310 Service not creditable because of an election under part 847 of 
          this chapter.

                         Subpart D_Computations

842.401 Purpose.
842.402 Definitions.
842.403 Computation of basic annuity.
842.404 Reductions in basic annuity.
842.405 Air traffic controllers, firefighters, and law enforcement 
          officers.
842.406 Members of Congress and Congressional employees.
842.407 Proration of annuity for part-time service.

                      Subpart E_Annuity Supplement

842.501 Purpose.
842.502 Definitions.
842.503 Eligibility for annuity supplement.
842.504 Amount of annuity supplement.
842.505 Reduction in annuity supplement because of excess earnings.

                      Subpart F_Survivor Elections

842.601 Purpose.
842.602 Definitions.
842.603 Election at time of retirement of a fully reduced annuity to 
          provide a current spouse annuity.
842.604 Election at time of retirement of a fully reduced annuity or a 
          one-half reduced annuity to provide a former spouse annuity.
842.605 Election of insurable interest rate.

[[Page 280]]

842.606 Election of a self-only annuity or a one-half reduced annuity by 
          married employees and Members.
842.607 Waiver of spousal consent requirement.
842.608 Changes of election before final adjudication.
842.609 [Reserved]
842.610 Changes of election after final adjudication.
842.611 Post-retirement election of a fully reduced annuity or one-half 
          reduced annuity to provide a former spouse annuity.
842.612 Post-retirement election of a fully reduced annuity or one-half 
          reduced annuity to provide a current spouse annuity.
842.613 Division of a survivor annuity.
842.614 Computation of partial annuity reduction.
842.615 Deposits required.

                Subpart G_Alternative Forms of Annuities

842.701 Purpose.
842.702 Definitions.
842.703 Eligibility.
842.704 Election requirements.
842.705 Alternative forms of annuities available.
842.706 Computation of alternative form of annuity.
842.707 Partial deferred payment of the lump-sum credit if annuity 
          commences after January 3, 1988, and before October 1, 1989.
842.708 Partial deferred payment of the lump-sum credit if annuity 
          commences after December 2, 1989, and before October 1, 1995.

   Subpart H_Law Enforcement Officers, Firefighters, and Air Traffic 
                               Controllers

842.801 Applicability and purpose.
842.802 Definitions.
842.803 Conditions for coverage.
842.804 Evidence.
842.805 Withholdings and contributions.
842.806 Mandatory separation.
842.807 Review of decisions.
842.808 Oversight of coverage determinations.
842.809 Transitional provisions.

             Regulations Pertaining to Noncodified Statutes

842.810 Elections to be deemed a law enforcement officer for retirement 
          purposes by certain police officers employed by the 
          Metropolitan Washington Airports Authority (MWAA).
842.811 Deposits for second-level supervisory air traffic controller 
          service performed before February 10, 2004.

                  Subpart I_Nuclear Materials Couriers

842.901 Applicability and purpose.
842.902 Definitions.
842.903 Conditions for coverage in primary positions.
842.904 Conditions for coverage in secondary positions.
842.905 Evidence.
842.906 Requests from individuals.
842.907 Withholding and contributions.
842.908 Mandatory separation.
842.909 Review of decisions.
842.910 Oversight of coverage determinations.

    Authority: 5 U.S.C. 8461(g); Secs. 842.104 and 842.106 also issued 
under 5 U.S.C. 8461(n); Sec. 842.104 also issued under sections 3 and 
7(c) of Pub. L. 105-274, 112 Stat. 2419; Sec. 842.105 also issued under 
5 U.S.C. 8402(c)(1) and 7701(b)(2); Sec. 842.106 also issued under 
section 102(e) of Pub. L. 104-8, 109 Stat. 102, as amended by section 
153 of Pub. L. 104-134, 110 Stat. 1321-102; Sec. 842.107 also issued 
under sections 11202(f), 11232(e), and 11246(b) of Pub. L. 105-33, 111 
Stat. 251, and section 7(b) of Pub. L. 105-274, 112 Stat. 2419; Sec. 
842.108 also issued under section 7(e) of Pub. L. 105-274, 112 Stat. 
2419; Sec. 842.213 also issued under 5 U.S.C. 8414(b)(1)(B) and section 
1313(b)(5) of Pub. L. 107-296, 116 Stat. 2135; Secs. 842.304 and 842.305 
also issued under section 321(f) of Pub. L. 107-228, 116 Stat. 1383, 
Secs. 842.604 and 842.611 also issued under 5 U.S.C. 8417; Sec. 842.607 
also issued under 5 U.S.C. 8416 and 8417; Sec. 842.614 also issued under 
5 U.S.C. 8419; Sec. 842.615 also issued under 5 U.S.C. 8418; Sec. 
842.703 also issued under section 7001(a)(4) of Pub. L. 101-508, 104 
Stat. 1388; Sec. 842.707 also issued under section 6001 of Pub. L. 100-
203, 101 Stat. 1300; Sec. 842.708 also issued under section 4005 of Pub. 
L. 101-239, 103 Stat. 2106 and section 7001 of Pub. L. 101-508, 104 
Stat. 1388; subpart H also issued under 5 U.S.C. 1104; Sec. 842.810 also 
issued under section 636 of Appendix C to Pub. L. 106-554 at 114 Stat. 
2763A-164; Sec. 842.811 also issued under section 226(c)(2) of Public 
Law 108-176, 117 Stat. 2529.



                           Subpart A_Coverage

    Source: 51 FR 47197, Dec. 31, 1986, unless otherwise noted.



Sec. 842.101  Purpose and scope.

    (a) This subpart contains regulations concerning automatic coverage 
under the Federal Employees Retirement System (FERS). References to FERS 
coverage in this subpart are to automatic, as opposed to elective, FERS 
coverage.

[[Page 281]]

    (b) Part 846 of this chapter contains regulations concerning 
elective FERS coverage. FERS elections are available under limited 
circumstances to employees not subject to automatic FERS coverage.

[59 FR 64282, Dec. 14, 1994]



Sec. 842.102  Definitions.

    In this subpart--
    CSRS means the Civil Service Retirement System as described in 
subchapter III of chapter 83 of title 5, United States Code;
    Employee means the following individuals listed in 5 U.S.C. 8401(11) 
whose service is employment for the purposes of title II of the Social 
Security Act and chapter 21 of the Internal Revenue Code of 1954:
    (a) An employee as defined by 5 U.S.C. 2105;
    (b) A U.S. Commissioner whose total pay for services performed as 
Commissioner is not less than $3,000 in each of the last three 
consecutive calendar years ending after December 31, 1954;
    (c) An individual employed by a county committee established under 
16 U.S.C. 590h(b);
    (d) An individual employed by Gallaudet College;
    (e) An individual appointed to a position on the office staff of a 
former President under section 1(b) of the ``Act of August 25, 1958'' 
(72 Stat 838);
    (f) An alien (1) who was previously employed by the Government; (2) 
who is employed full time by a foreign government to protect or further 
the interests of the United States during an interruption of diplomatic 
or consular relations; and (3) for whose services reimbursement is made 
to the foreign government by the United States;
    (g) A Congressional employee as defined in 5 U.S.C. 2107, including 
a temporary Congressional employee and an employee of the Congressional 
Budget Office; and
    (h) The following individuals are excluded from the definition of 
``employee'' in 5 U.S.C. 8401 (11):
    (1) A justice or judge of the United States as defined by 28 U.S.C. 
451;
    (2) A temporary employee of the Administrative Office of the United 
States Courts or of a court named by 28 U.S.C. 610;
    (3) A construction employee or other temporary, part-time, or 
intermittent employee of the Tennessee Valley Authority;
    (4) A student employee as defined by 5 U.S.C. 5351;
    (5) Teachers in dependents' schools of the Department of Defense in 
overseas areas with respect to Federal employment, other than teaching, 
performed during a recess period between two school years;
    (6) An individual subject to another retirement system for 
Government employees (other than an employee of the United States Park 
Police, or the United States Secret Service) any of whose civilian 
employment after December 31, 1983, is employment subject to social 
security; and
    (7) An individual excluded by OPM regulation in Sec. 842.105.
    FERS means the Federal Employees Retirement System as described in 
chapter 84 of title 5, United States Code.
    Member has the same meaning provided in 5 U.S.C. 2106, except that 
the term does not include an individual who irrevocably elects, by 
written notice to the official by whom such individual is paid, not to 
participate in FERS.
    NAF employee means an employee of an instrumentality described in 
section 2105(c) of title 5, United States Code.
    OPM means the Office of Personnel Management.
    Social security means coverage under the Old Age, Survivors, and 
Disability Insurance (OASDI) programs of the Social Security Act.

[51 FR 47197, Dec. 31, 1986, as amended at 52 FR 25197, July 6, 1987; 56 
FR 4931, Feb. 7, 1991]



Sec. 842.103  General.

    To be covered under FERS, an individual must:
    (a) Be an employee, Member, or specifically covered by another 
provision of law;
    (b) Be covered by social security;
    (c) Have retirement deductions withheld from pay and have agency 
contributions made; and
    (d) Be paid based on units of time.

Except as provided in Sec. 842.104 and as excluded by Sec. 842.105, an 
employee or Member is covered by FERS.

[[Page 282]]



Sec. 842.104  Statutory exclusions.

    (a) Lack of social security coverage. An individual not covered by 
social security (title II of the Social Security Act and chapter 21 of 
the Internal Revenue Code of 1954), including an individual covered by 
full CSRS (and thereby excluded from social security coverage), is 
excluded from FERS coverage.
    (b) Senior officials subject to social security coverage despite 
continuous service. An individual who has served without a break in 
service of more than 365 days since December 31, 1983, in one or more of 
the following positions is excluded from FERS coverage.
    (1) The Vice President;
    (2) A Member of Congress;
    (3) A non-SES appointee to a position listed in 5 U.S.C. 5312 
through 5317;
    (4) A Senior Executive Service or Senior Foreign Service noncareer 
appointee; or
    (5) An individual appointed by the President (or his designee) or 
the Vice President under section 105(a)(1), 107(a)(1), or (b)(1) of 
title 3, United States Code, to a position for which the maximum rate of 
basic pay payable is at or above the rate for Level V of the Executive 
Schedule.
    (c) Employees rehired after December 31, 1986, following a break in 
service. An employee who is rehired after December 31, 1986, who has had 
a break in service and who, at the time of the last separation from the 
service, had at least 5 years of civilian service creditable under CSRS 
rules, any part of which was covered by CSRS or the Foreign Service 
Retirement System, is excluded from FERS coverage.
    (d) Employees who have not had a break in service ending after 
December 31, 1986. An employee who has not had a break in service of 
more than 3 days ending after December 31, 1986, and who, as of December 
31, 1986, had at least 5 years of credible civilian service under CSRS 
rules (even if none of this service was covered by CSRS), is excluded 
from FERS coverage.
    (e) Break in service. For the purposes of paragraph (c) and (d) of 
this section, ``break in service'' means a separation from CSRS-covered 
service lasting at least 4 days, or a transfer or separation of less 
than 4 days when the employee becomes subject to automatic coverage 
under social security (title II of the Social Security Act and chapter 
21 of the Internal Revenue Code of 1954).
    (f) Coverage under a retirement system for NAF employees. An 
employee who has elected coverage under a retirement system for NAF 
employees in accordance with part 847 of this chapter is excluded from 
FERS coverage during that and all subsequent periods of service, 
including service as a reemployed annuitant.
    (g) Certain Federal employees who elect to continue coverage under a 
retirement system for employees of the District of Columbia. (1) A 
former employee of the District of Columbia who is appointed in a 
Federal position by the Department of Justice, or by the Court Services 
and Offender Supervision Agency established by section 11233(a) of Pub. 
L. 105-33, 111 Stat. 251, as amended by section 7(c) of Pub. L. 105-274, 
112 Stat. 2419, is excluded from FERS coverage beginning on the date of 
the Federal appointment, if the employee elects to continue coverage 
under a retirement system for employees of the District of Columbia 
under section 3 of Pub. L. 105-274, 112 Stat. 2419, and if the following 
conditions are met:
    (i) The employee is hired by the Department of Justice or by the 
Court Services and Offender Supervision Agency during the period 
beginning August 5, 1997, and ending 1 year after the date on which the 
Lorton Correctional Complex is closed, or 1 year after the date on which 
the Court Services and Offender Supervision Agency assumes its duties, 
whichever is later; and
    (ii) The employee elects to continue coverage under a retirement 
system for employees of the District of Columbia no later than June 1, 
1999 or 60 days after the date of the Federal appointment, whichever is 
later.
    (2) An individual's election to continue coverage under a retirement 
system for employees of the District of Columbia remains in effect until 
the individual separates from service with the Department of Justice or 
the Court Services and Offender Supervision Agency.

[59 FR 64283, Dec. 14, 1994, as amended at 61 FR 41720, Aug. 9, 1996; 64 
FR 15289, Mar. 31, 1999]

[[Page 283]]



Sec. 842.105  Regulatory exclusions.

    (a) OPM is authorized in 5 U.S.C. 8402(c)(1) to ``exclude from the 
operation of this chapter an employee or group of employees in or under 
an Executive agency, the United States Postal Service, or the Postal 
Rate Commission, whose employment is temporary or intermittent, except 
an employee whose employment is part-time career employment (as defined 
in section 3401(2)).'' Therefore, under this authority, OPM is excluding 
the following:
    (1) Employees serving under appointments limited to 1 year or less, 
unless such appointments meet the definition of provisional appointments 
contained in Sec. Sec. 316.401 and 316.403 of this chapter; and
    (2) Intermittent employees serving under other than career or career 
conditional appointments.
    (b) When an employee who is covered by FERS moves to a position 
listed in paragraph (a) of this section without a break in service or 
after a separation of 3 days or less, his or her FERS coverage will 
continue, except in the case of an employee hired by the Census Bureau 
under a temporary, intermittent appointment to perform decennial census 
duties.
    (c) Paragraph (a) of this section does not deny FERS coverage to an 
employee who receives an interim appointment under Sec. 772.102 of this 
chapter and was covered by FERS at the time of the separation for which 
interim relief is required.

[51 FR 47197, Dec. 31, 1986, as amended at 56 FR 10143, Mar. 11, 1991; 
57 FR 3714, Jan. 31, 1992; 63 FR 9402, Feb. 25, 1998]



Sec. 842.106  Elections of retirement coverage under the District of 
Columbia Financial Responsibility and Management Assistance Act of 1995.

    (a) Who may elect--(1) General rule. Any individual appointed by the 
District of Columbia Financial Responsibility and Management Assistance 
Authority (the Authority) in a position not excluded from FERS coverage 
under Sec. 842.105 may elect to be deemed a Federal employee for FERS 
purposes unless the employee has elected to participate in a retirement, 
health or life insurance program offered by the District of Columbia.
    (2) Exception. A former Federal employee being appointed by the 
Authority on or after October 26, 1996, no more than 3 days (not 
counting District of Columbia holidays) after separation from Federal 
employment cannot elect to be deemed a Federal employee for FERS 
purposes unless the election was made before separation from Federal 
employment.
    (b) Procedure for making an election. The Authority or the agency 
providing administrative support services to the Authority 
(Administrative Support Agency) must establish a procedure for notifying 
employees of their election rights and for accepting elections.
    (c) Time limit for making an election. (1) An election under 
paragraph (a)(1) of this section must be made within 30 days after the 
employee received the notice under paragraph (b) of this section.
    (2) The Authority or its Administrative Support Agency will waive 
the time limit under paragraph (c)(1) of this section upon a showing 
that--
    (i) The employee was not advised of the time limit and was not 
otherwise aware of it; or
    (ii) Circumstances beyond the control of the employee prevented him 
or her from making a timely election and the employee thereafter acted 
with due diligence in making the election.
    (d) Effect of an election. (1) An election under paragraph (a) of 
this section is effective on the commencing date of the employee's 
service with the Authority.
    (2) An individual who makes an election under paragraph (a) of this 
section is ineligible, during the period of employment covered by that 
election, to participate in any retirement system for employees of the 
government of the District of Columbia.
    (e) Irrevocability. An election under paragraph (a) of this section 
becomes irrevocable when received by the Authority or its Administrative 
Support Agency.
    (f) Employee deductions. The Authority or its Administrative Support 
Agency must withhold, from the pay of

[[Page 284]]

an employee of the District of Columbia Financial Responsibility and 
Assistance Authority who has elected to be deemed a Federal employee for 
FERS purposes, an amount equal to the percentage withheld from Federal 
employees' pay for periods of service covered by FERS and, in accordance 
with procedures established by OPM, pay into the Civil Service 
Retirement and Disability Fund the amounts deducted from an employee's 
pay.
    (g) Employer contributions. The District of Columbia Financial 
Responsibility and Assistance Authority must, in accordance with 
procedures established by OPM, pay into the Civil Service Retirement and 
Disability Fund amounts equal to any agency contributions required under 
FERS.

[61 FR 58459, Nov. 15, 1996]



Sec. 842.107  Employees covered under the National Capital Revitalization 
and Self-Government Improvement Act of 1997.

    The following categories of employees of the District of Columbia 
Government are deemed to be Federal employees for FERS purposes on and 
after October 1, 1997:
    (a) Nonjudicial employees of the District of Columbia Courts;
    (b) The District of Columbia Department of Corrections Trustee, 
authorized by section 11202 of Pub. L. 105-33, 111 Stat. 251, and an 
employee of the Trustee if the Trustee or employee is a former Federal 
employee appointed with a break in service of 3 days or less;
    (c) The District of Columbia Pretrial Services, Parole, Adult 
Probation and Offender Supervision Trustee, authorized by section 11232 
of Pub. L. 105-33, 111 Stat. 251, as amended by section 7(b) of Pub. L. 
105-274, 112 Stat. 2419, and an employee of the Trustee, if the Trustee 
or employee is a former Federal employee appointed with a break in 
service of 3 days or less.

[62 FR 50997, Sept. 30, 1997, as amended at 64 FR 15289, Mar. 31, 1999]



Sec. 842.108  Employees covered under the District of Columbia Courts 
and Justice Technical Corrections Act of 1998.

    Employees of the Public Defender Service of the District of Columbia 
are deemed to be Federal employees for FERS purposes on and after April 
1, 1999.

[64 FR 15289, Mar. 31, 1999]



                          Subpart B_Eligibility

    Source: 52 FR 4473, Feb. 11, 1987, unless otherwise noted.



Sec. 842.201  Purpose.

    This subpart regulates the statutory provisions on eligibility for 
nondisability retirement under the Federal Employees Retirement System 
(FERS).



Sec. 842.202  Definitions.

    In this subpart--
    Commuting area has the same meaning given that term in Sec. 351.203 
of this chapter.
    Minimum retirement age means an age based on an individual's year of 
birth, as follows:

------------------------------------------------------------------------
               Year of Birth                   Minimum Retirement Age
------------------------------------------------------------------------
Before 1948...............................  55 years.
1948......................................  55 years and 2 months.
1949......................................  55 years and 4 months.
1950......................................  55 years and 6 months.
1951......................................  55 years and 8 months.
1952......................................  55 years and 10 months.
1953-1964.................................  56 years.
1965......................................  56 years and 2 months.
1966......................................  56 years and 4 months.
1967......................................  56 years and 6 months.
1968......................................  56 years and 8 months.
1969......................................  56 years and 10 months.
1970 and after............................  57 years.
------------------------------------------------------------------------



Sec. 842.203  General eligibility requirement.

    An employee must have at least 5 years of civilian service 
creditable under FERS to be eligibile for an annuity under this subpart, 
except as provided under part 846 of this chapter.



Sec. 842.204  Immediate voluntary retirement--basic age and service 
requirements.

    (a) An employee or Member who separates from service is entitled to 
an annuity--

[[Page 285]]

    (1) Except as provided in paragraph (d) of this section, after 
attaining the minimum retirement age and completing 10 years of service; 
or
    (2) After becoming age 60 and completing 20 years of service; or
    (3) After becoming age 62 and completing 5 years of service.
    (b)(1) Except as provided in paragraph (b)(2) or (c) of this 
section, an annuity payable under paragraph (a) of this section 
commences on the first day of the month following separation.
    (2) An annuity payable under paragraph (a) of this section commences 
on the day after separation, if that separation occurs upon the 
expiration of a term (or other period) for which the individual was 
appointed or elected.
    (c)(1) An employee or Member entitled to an annuity under paragraph 
(a)(1) of this section may elect to postpone the commencing date of that 
annuity, provided the individual--
    (i) Has completed less than 30 years of service; and
    (ii) Is not entitled to an immediate annuity under any other 
provision of this subpart. An immediate annuity means an annuity that 
will begin within 31 days of separation.
    (2) A postponed commencing date may not precede the later of--
    (i) The first day of the month after the date of separation of the 
employee or Member; or
    (ii) The 31st day after the date of filing the election of a 
commencing date.
    (3) A postponed commencing date must be no later than the second day 
before the employee's 62nd birthday.
    (4) The election of a commencing date may be filed not more than 90 
days before the commencing date elected by the employee or Member, and 
must be filed in a form prescribed by the Office of Personnel Management 
(OPM).
    (5) A written election that is not in the prescribed form, but which 
designates a specific commencing date, and otherwise conforms to the 
time limits in paragraphs (c)(2) through (c)(4) of this section, will be 
accepted as an informal election subject to ratification in the 
prescribed form.
    (6) The election of a commencing date becomes irrevocable on the 
date OPM authorizes the first annuity payment.
    (d)(1) If an employee or Member separates from service after 
attaining the minimum retirement age and completing 10 years of service, 
but is reemployed before filing an application for retirement based on 
that separation, the individual may not elect an annuity commencing date 
that precedes separation from the reemployment service.
    (2) In the case of an employee or Member who separates from service 
after attaining the minimum retirement age and completing 10 years of 
service, and is reemployed after filing an application for retirement 
based on that separation, that individual may not elect an annuity 
commencing date that precedes separation from the reemployment service 
if he or she is reemployed prior to a postponed commencing date elected 
under paragraph (c) of this section.

[51 FR 47197, Dec. 31, 1986, as amended at 56 FR 65418, Dec. 17, 1991]



Sec. 842.206  Involuntary retirement.

    (a) An employee, other than an employee entitled to an annuity under 
Sec. 842.207 or Sec. 842.208, who separates from the service 
involuntarily after completing 25 years of service, or after becoming 
age 50 and completing 20 years of service is entitled to an annuity, 
except as provided in paragraphs (b) and (c) of this section.
    (b) An employee who is separated for cause on charges of misconduct 
or delinquency is not entitled to an annuity under paragraph (a) of this 
section.
    (c) An employee who would otherwise be entitled to an annuity under 
paragraph (a) of this section is not so entitled if the employee has 
declined a reasonable offer of another position that meets all of the 
following conditions:
    (1) The offer must be made in writing;
    (2) The employee must meet established qualification requirements; 
and
    (3) The offered position must be--
    (i) In the employee's agency, including an agency to which the 
employee would be transferred in a transfer of function(s) between 
agencies;

[[Page 286]]

    (ii) Within the employee's commuting area unless geographic mobility 
is a condition of the employee's employment;
    (iii) Of the same tenure and work schedule; and
    (iv) Not lower than the equivalent of two grades or pay levels below 
the employee's current grade or pay level, without consideration of the 
employee's eligibility to retain his or her current grade or pay under 
part 536 of this chapter or other authority. In movements between pay 
schedules or pay systems, the representative rate of the grade or pay 
level that is two grades below that of the current position will be 
compared with the representative rate of the grade or pay level of the 
offered position. For this purpose, ``representative rate'' has the 
meaning given that term in Sec. 536.103 of this chapter.
    (d) An annuity payable under paragraph (a) of this section commences 
on the day after separation from the service.

[52 FR 4473, Feb. 11, 1987, as amended at 70 FR 31315, May 31, 2005]



Sec. 842.207  Air traffic controllers.

    (a) An employee who separates from service, except by removal for 
cause or charges of delinquency or misconduct, is entitled to an 
annuity--
    (1) After completing 25 years of service as an air traffic 
controller; or
    (2) After becoming age 50 and completing 20 years of service as an 
air traffic controller.
    (b) An annuity payable under paragraph (a) of this section commences 
on the first day of the month following separation.



Sec. 842.208  Firefighters, law enforcement officers, and nuclear 
materials couriers.

    (a) An employee who separates from service, except by removal for 
cause on charges of delinquency or misconduct, is entitled to an 
annuity--
    (1) After completing any combination of service as a firefighter,law 
enforcement officer or nuclear materials courier totaling 25 years; or
    (2) After becoming age 50 and completing any combination of service 
as a firefighter, law enforcement officer or nuclear materials courier 
totaling 20 years.
    (b) An annuity payable under paragraph (a) of this section commences 
on the first day of the month following separation.

[52 FR 4473, Feb. 11, 1987, as amended at 65 FR 2524, Jan. 18, 2000]



Sec. 842.209  Members of Congress.

    (a) A Member, except one separated by resignation or expulsion, is 
entitled to an annuity--
    (1) After completing 25 years of service; or
    (2) After becoming age 50 and completing 20 years of service.
    (b) An annuity payable under paragraph (a) of this section commences 
on the day after separation from the service.



Sec. 842.210  Military reserve technicians.

    (a) A military reserve technician as defined in 5 U.S.C. 8401(30) 
who is separated from civilian service because of ceasing to qualify as 
a member of a military reserve component after reaching age 50 and 
completing 25 years of service is entitled to an annuity.
    (b) An annuity payable under paragraph (a) of this section commences 
on the day after separation.



Sec. 842.211  Senior Executive Service, Defense Intelligence Senior 
Executive Service, and Senior Cryptologic Executive Service.

    (a) A member of the Senior Executive Service, the Defense 
Intelligence Senior Executive Service, or the Senior Cryptologic Senior 
Executive Service who is removed or who resigns after receipt of written 
notice of proposed removal for less than fully successful executive 
performance, or for failure to be recertified as a senior executive, is 
entitled to an annuity--
    (1) After completing 25 years of service; or
    (2) After becoming age 50 and completing 20 years of service.
    (b) Removed for less than fully successful executive performance 
means (1) with respect to a member of the Senior Executive Service, 
removal in accordance with procedures in subpart E of part 359 of this 
chapter; and (2) with respect to

[[Page 287]]

a member of the Defense Intelligence Senior Executive Service or the 
Senior Cryptologic Executive Service, a certification by the head of the 
Defense Intelligence Agency or National Security Agency (or their 
designees) that the employee has been removed for less than fully 
successful executive performance.
    (c) Removed for failure to be recertified as a senior executive 
means (1) With respect to a member of the Senior Executive Service, 
removal in accordance with the procedures in subpart C of part 359 of 
this chapter, and (2) with respect to a member of the Defense 
Intelligence Senior Executive Service or the Senior Cryptologic 
Executive Service, a certification by the head of the Defense 
Intelligence Agency or National Security Agency (or their designees) 
that the employee has been removed for failure to be recertified under 
10 U.S.C. 1601(a) or section 12(a)(1) of the National Security Agency 
Act, respectively.
    (d) An annuity payable under paragraph (a) of this section commences 
on the day after separation from service.

[52 FR 4473, Feb. 11, 1987, as amended at 56 FR 173, Jan. 3, 1991]



Sec. 842.212  Deferred retirement.

    (a) An employee or Member who, after completing 5 years of service, 
separates from service or transfers to a position not covered by FERS is 
entitled to a deferred annuity beginning on the first day of the month 
after the individual attains age 62.
    (b)(1) Except as provided in paragraphs (b)(3) and (c) of this 
section, an employee or Member who has not attained the minimum 
retirement age, and who, after completing 10 years of service, is 
separated or transferred to a position in which the individual is no 
longer covered by FERS, is entitled to a deferred annuity commencing--
    (i) The first day of the month following the date on which the 
individual attains the minimum retirement age or, if later,
    (ii) A date the individual designates that follows the date on which 
the designation is filed.
    (2) The election of a commencing date may be filed no more than 90 
days before that commencing date, and must be elected in a form 
prescribed by OPM. A written election that is not in the prescribed 
form, but which designates a specific commencing date, will be accepted 
for as an informal election, subject to ratification in the prescribed 
form.
    (3) An employee or Member is not entitled to a deferred annuity 
under paragraph (b)(1) of this section if the individual is eligible for 
an annuity under Sec. Sec. 842.205 through 842.211 or will, within 31 
days after filing the election of a commencing date, attain age 62.
    (4) The election of a commencing date becomes irrevocable on the 
date OPM authorizes the first annuity payment.
    (c)(1) If an employee or Member separates from service after 
completing 10 years of service but before attaining the minimum 
retirement age, and is reemployed before filing an application for 
retirement based on that separation, that individual may not elect an 
annuity commencing date that precedes separation from the reemployment 
service.
    (2) In the case of an employee or Member who separates from service 
after completing 10 years of service but before attaining the minimum 
retirement age, and is reemployed after filing an application for 
retirement based on that separation, that individual may not elect an 
annuity commencing date that precedes separation from the reemployment 
service if he or she is reemployed prior to a postponed commencing date 
elected under paragraph (b).

[51 FR 47197, Dec. 31, 1986, as amended at 56 FR 65418, Dec. 17, 1991]



Sec. 842.213  Voluntary early retirement-substantial delayering, 
reorganization, reduction in force, transfer of function, or other 
workforce restructuring.

    (a) A specific designee is defined as a senior official within an 
agency who has been specifically designated to sign requests for 
voluntary early retirement authority under a designation from the head 
of the agency. Examples include a Chief Human Capital Officer, an 
Assistant Secretary for Administration, a Director of Human Resources 
Management, or other official.

[[Page 288]]

    (b) An agency's request for voluntary early retirement authority 
must be signed by the head of the agency or by a specific designee.
    (c) The request must contain the following information:
    (1) Identification of the agency or specified component(s) for which 
the authority is being requested;
    (2) Reasons why the agency needs voluntary early retirement 
authority. This must include a detailed summary of the agency's 
personnel and/or budgetary situation that will result in an excess of 
personnel because of a substantial delayering, reorganization, reduction 
in force, transfer of function, or other workforce restructuring or 
reshaping, consistent with agency human capital goals;
    (3) The date on which the agency expects to effect the substantial 
delayering, reorganization, reduction in force, transfer of function, or 
other workforce restructuring or reshaping;
    (4) The time period during which the agency plans to offer voluntary 
early retirement;
    (5) The total number of non-temporary employees in the agency (or 
specified component(s));
    (6) The total number of non-temporary employees in the agency (or 
specified component(s)) who may be involuntarily separated, downgraded, 
transferred, or reassigned as a result of the substantial delayering, 
reorganization, reduction in force, transfer of function, or other 
workforce restructuring or reshaping;
    (7) The total number of employees in the agency (or specified 
component(s)) who are eligible for voluntary early retirement;
    (8) An estimate of the total number of employees in the agency (or 
specified component(s)) who are expected to retire early during the 
period covered by the request for voluntary early retirement authority; 
and
    (9) A description of the types of personnel actions anticipated as a 
result of the agency's need for voluntary early retirement authority. 
Examples include separations, transfers, reassignments, and 
downgradings.
    (d) OPM will evaluate a request for voluntary early retirement based 
on:
    (1) A specific request to OPM from the agency for voluntary early 
retirement authority;
    (2) A voluntary separation incentive payment implementation plan, as 
discussed in part 576, subpart A, of this chapter, which must outline 
the intended use of the incentive payments and voluntary early 
retirement; or
    (3) The agency's human capital plan, which must outline its intended 
use of voluntary separation incentive payments and voluntary early 
retirement authority, and the changes in organizational structure it 
expects to make as the result of projected separations and early 
retirements.
    (e) Regardless of the method used, the request must include all of 
the information required by paragraph (c) of this section.
    (f) OPM may approve an agency's request for voluntary early 
retirement authority to cover the entire period of the substantial 
delayering, reorganization, reduction in force, transfer of function, or 
other workforce restructuring or reshaping described by the agency, or 
the initial portion of that period with a requirement for subsequent 
information and justification if the period covers multiple years.
    (g) After OPM approves an agency's request, the agency must 
immediately notify OPM of any subsequent changes in the conditions that 
served as the basis for the approval of the voluntary early retirement 
authority. Depending upon the circumstances involved, OPM will modify 
the authority as necessary to better suit the agency's needs.
    (h) The agency may further limit voluntary early retirement offers 
based on:
    (1) An established opening and closing date for the acceptance of 
applications that is announced to employees at the time of the offer; or
    (2) The acceptance of a specified number of applications for 
voluntary early retirement, provided that, at the time of the offer, the 
agency notified employees that it retained the right to limit the number 
of voluntary early retirements.

[[Page 289]]

    (i) Within the timeframe specified for its approved voluntary early 
retirement authority, the agency may subsequently establish a new or 
revised closing date, or reduce or increase the number of early 
retirement applications it will accept, if management's downsizing and/
or reshaping needs change. If the agency issues a revised closing date, 
or a revised number of applications to be accepted, the new date or 
number of applications must be announced to the same group of employees 
included in the original announcement. If the agency issues a new window 
period with a new closing date, or a new instance of a specific number 
of applications to be accepted, the new window period or number of 
applications to be accepted may be announced to a different group of 
employees as long as they are covered by the approved voluntary early 
retirement authority.
    (j) Chapter 43 of title 38, United States Code, requires that 
agencies treat employees on military duty, for all practical purposes, 
as though they were still on the job. Further, employees are not to be 
disadvantaged because of their military service. In accordance with 
these provisions, employees on military duty who would otherwise be 
eligible for an offer of voluntary early retirement will have 30 days 
following their return to duty to either accept or reject an offer of 
voluntary early retirement. This will be true even if the voluntary 
early retirement authority provided by OPM has expired.
    (k) An employee who separates from the service voluntarily after 
completing 25 years of service, or becoming age 50 and completing 20 
years of service, is entitled to an annuity if, on the date of 
separation, the employee:
    (1) Is serving in a position covered by a voluntary early retirement 
offer; and
    (2) Meets the following conditions which are covered in 5 U.S.C. 
8414(b)(1)(B):
    (i) Has been employed continuously, by the agency in which the 
employee is serving, for at least the 31-day period ending on the date 
on which such agency requests the determination referred to in section 
842.213(b);
    (ii) Is serving under an appointment that is not time limited;
    (iii) Has not been duly notified that such employee is to be 
involuntarily separated for misconduct or unacceptable performance;
    (iv) Is separated from the service voluntarily during a period in 
which, as determined by the Office of Personnel Management (upon request 
of the agency) under regulations prescribed by the Office:
    (A) Such agency (or, if applicable, the component in which the 
employee is serving) is undergoing substantial delayering, substantial 
reorganization, substantial reductions in force, substantial transfer of 
function, or other substantial workforce restructuring (or shaping);
    (B) A significant percentage of employees serving in such agency (or 
component) are likely to be separated or subject to an immediate 
reduction in the rate of basic pay (without regard to subchapter VI of 
chapter 53, or comparable provisions); or
    (C) Identified as being in positions which are becoming surplus or 
excess to the agency's future ability to carry out its mission 
effectively; and
    (v) As determined by the agency under regulations prescribed by the 
Office, is within the scope of the offer of voluntary early retirement, 
which may be made based on the following criteria:
    (A) 1 or more organizational units;
    (B) 1 or more occupational series or levels;
    (C) 1 or more geographical locations;
    (D) Specific periods;
    (E) Skills, knowledge, or other factors related to a position; or
    (F) Any appropriate combination of such factors.
    (l) Agencies are responsible for ensuring that employees are not 
coerced into voluntary early retirement. If an agency finds any 
instances of coercion, it must take appropriate corrective action.
    (m) Except as provided in paragraph (j) of this section, an agency 
may not offer or process voluntary early retirements beyond the stated 
expiration date of a voluntary early retirement authority or offer early 
retirements to employees who are not within the scope of the voluntary 
early retirement authority approved by OPM.

[[Page 290]]

    (n) OPM may terminate a voluntary early retirement authority if it 
determines that the condition(s) that formed the basis for the approval 
of the authority no longer exist.
    (o) OPM may amend, limit, or terminate a voluntary early retirement 
authority to ensure that the requirements of this subpart are properly 
being followed.
    (p) Agencies must provide OPM with interim and final reports for 
each voluntary early retirement authority, as covered in OPM's approval 
letter to the agency. OPM may suspend or cancel a voluntary early 
retirement authority if the agency is not in compliance with the 
reporting requirements or reporting schedule specified in OPM's 
voluntary early retirement authority approval letter.

[69 FR 33279, June 15, 2004, as amended at 69 FR 50265, Aug. 16, 2004]



                      Subpart C_Credit for Service

    Source: 52 FR 18193, May 14, 1987, unless otherwise noted.



Sec. 842.301  Purpose.

    This subpart sets forth the provisions governing credit for service 
under the Federal Employees Retirement System (FERS), 5 U.S.C. 8411. 
Except as provided by section 302 of the Federal Employees' Retirement 
System Act of 1986, Pub. L. 99-335 (the special provisions for employees 
who elect to transfer to FERS), service not creditable under this 
subpart is not creditable either for the purposes of determining 
eligibility to an annuity or in computing the rate of an annuity benefit 
under subchapter II (basic annuity), IV (survivor annuity), or V 
(disability annuity) of chapter 84 of title 5 of the United States Code.



Sec. 842.302  Definitions.

    Cadet Nurse Corps means any training as a student or graduate nurse 
under a plan approved under section 2 of the Act of June 15, 1943 (57 
Stat. 153).
    Employee means an employee as defined by 5 U.S.C. 8401(11).
    FERS means the Federal Employees Retirement System as established 
under chapter 84 of title 5, United States Code.
    Government means the Federal Government and Gallaudet College.
    Member means a Member of Congress as defined by 5 U.S.C. 8401(20).
    Military service means honorable active service in the armed forces 
of the United States; in the commissioned corps of the Public Health 
Service after June 30, 1960; or in the commissioned corps of the 
National Oceanic and Atmospheric Administration, or a predecessor entity 
in function, after June 30, 1961. ``Military service'' does not include 
service in the National Guard except when ordered to active duty in the 
service of the United States.
    Survivor means a current spouse, a child or a former spouse who is 
entitled to an annuity in accordance with part 843 of this chapter.



Sec. 842.303  General.

    (a)(1) Except as provided in paragraph (a)(2) of this section, no 
service credit is allowed for a period of separation from service.
    (2) Service credit is allowed for a period of separation of less 
than 4 days and for a period of separation during which an individual 
was receiving benefits under subchapter I of chapter 81 of title 5, 
United States Code, provided the individual returns to duty in the 
Government subject to FERS.
    (b) Service credit cannot be granted in excess of actual calendar 
time from the date of appointment to the date of separation from 
service.
    (c) Any period of time for which service credit under chapter 84 of 
title 5, United States Code, is specifically allowed by a provision of 
law is creditable under this subpart subject to any applicable deposit 
requirements.



Sec. 842.304  Civilian service.

    (a) Except as otherwise provided under title III of the Federal 
Employees' Retirement System Act of 1986, an employee or Member is 
entitled to credit for all purposes under FERS for a period of civilian 
service with the Government or the U.S. Postal Service--
    (1) Performed after December 31, 1986, which is covered service 
under subpart

[[Page 291]]

A of this part and for which deductions required under 5 U.S.C. 8422(a) 
have not been refunded;
    (2) That, other than service under paragraph (a)(1) of this 
section--
    (i) Was performed before 1989;
    (ii) Would have been creditable under 5 U.S.C. 8332 if the employee 
or Member were subject to subchapter III of chapter 83 of title 5, 
United States Code, without regard to any deposit, redeposit, or 
coverage requirement under that subchapter; and
    (iii) Is covered by deductions or a deposit required by Sec. 
842.305 and the deductions or deposit have not been refunded after the 
employee or Member first became subject to FERS;
    (3) That was creditable under subchapter II of chapter 8 of title 1 
of the Foreign Service Act of 1980 (Foreign Service Pension System), 
provided--
    (i) The employee or Member waives credit for the service under the 
Foreign Service Pension System; and
    (ii) The employee or Member makes the deposit required by Sec. 
842.305, and the deposit is not refunded;
    (4) While on leave of absence without pay, subject to a limit of 6 
months per calendar year, except that the 6-month limit does not apply 
while--
    (i) Performing military service; or
    (ii) Receiving benefits under subchapter I of chapter 81 of title 5, 
United States Code;
    (5) While on approved leave without pay granted to serve as a full-
time officer or employee of an organization composed primarily of 
employees, as defined by section 8331(1) or 8401(11) of title 5, United 
States Code, provided--
    (i) The employee elects, within 60 days after the commencing date of 
leave without pay, to pay to the employing agency the retirement 
deductions and agency contributions that would be applicable if the 
employee were in a pay status;
    (ii) Payments of the deductions and contributions begin on a regular 
basis within 60 days after the commencing date of leave without pay; and
    (iii) Payments of the required deductions and contributions are 
completed and not refunded; and
    (6) While assigned on detail or leave without pay to a State or 
local government under 5 U.S.C. 3373, provided--
    (i) The normal cost percentage (under subpart D of part 841 of this 
chapter) for the employee (who is deemed to continue in the same normal 
cost percentage category as applicable on the date of the assignment) is 
remitted to OPM for each pay period during the assignment; and
    (ii) The employee, or, if he or she dies without making an election, 
his or her survivor, does not elect to receive benefits under any State 
or local government retirement law or program, which OPM determines to 
be similar to FERS.
    (b) Cadet Nurse Corps. (1) Service credit is allowed under Pub. L. 
99-638 for a period of service performed with the Cadet Nurse Corps 
provided--
    (i) The service totaled 2 years or more;
    (ii) The individual submits an application for service credit to OPM 
no later than January 10, 1988;
    (iii) The individual is employed by the Federal Government in a 
position subject to subchapter III of chapter 83 of title 5, United 
States Code (other than 5 U.S.C. 8344) or chapter 84 of that title 
(other than 5 U.S.C. 8468) at the time he or she applies to OPM for 
service credit under this provision; and
    (iv) The individual makes a deposit for the service in accordance 
with Sec. 842.305(g) before the date of separation from service on 
which the individual's entitlement to annuity is based.
    (c) National Guard technician service before January 1, 1969--(1) 
Definition. In this section, service as a National Guard technician is 
service performed under section 709 of title 32, United States Code (or 
under a prior corresponding provision of law) before January 1, 1969.
    (2) Employees on or after November 6, 1990. Employees, subject to 
FERS retirement deductions, whose only service as a National Guard 
technician was performed prior to January 1, 1969, are entitled to 
credit under FERS if they--
    (i) Submit to OPM an application for service credit in a form 
prescribed by OPM;
    (ii) Are employed by the Federal Government in a position subject to 
FERS retirement deductions after November 5, 1990; and
    (iii) Complete the deposit for the service through normal service 
credit

[[Page 292]]

channels before final adjudication of their application for retirement 
or have the deposit deemed made when they elect the alternative form of 
annuity.
    (3) Former Federal employees. Former Federal employees who were 
subject to FERS retirement deductions and separated after December 31, 
1968, but before November 6, 1990, with title to a deferred annuity, may 
make a deposit for pre-1969 National Guard technician service provided 
they--
    (i) Submit a written application for the pre-1969 National Guard 
technician service to OPM before November 6, 1991; and
    (ii) Complete a deposit for the additional service in a lump sum or 
in installment payments of $50 or more. Payments must be completed 
before their retirement claim is finally adjudicated, unless the deposit 
is deemed made when they elect an alternative form of annuity.
    (4) Annuitants and survivors. (i) Individuals who were entitled to 
receive an immediate annuity (or survivor annuity benefits) as of 
November 6, 1990, may make a deposit for pre-1969 National Guard 
technician service provided they--
    (A) Submit a written application for service credit to OPM before 
November 6, 1991; and
    (B) Complete a deposit for the additional service in a lump sum or 
in equal monthly annuity installments to be completed within 24 months 
of the date of the written application.
    (ii) To determine the commencing date of the deposit installment 
payment period for annuitants and survivors, the ``date of application'' 
will be considered to be the first day of the second month beginning 
after OPM receives a complete written application from the individual.
    (iii) To be a complete application, the individual's written request 
for pre-1969 National Guard technician service credit must also include 
a certification of the dates of employment and the rates of pay received 
by the individual during the employment period. The individual may 
obtain certification of service from the Adjutant General of the State 
in which the service was performed.
    (d) Credit for service performed as an employee of a nonappropriated 
fund instrumentality. (1) Credit for service with a nonappropriated fund 
instrumentality is allowed in accordance with an election under 5 CFR 
part 847, subpart D or H.
    (2) Service under FERS for which the employee withdrew all 
deductions is creditable in accordance with an election made under 5 CFR 
part 847, subpart D.
    (3) An annuity that includes credit for service with a 
nonappropriated fund instrumentality under 5 CFR part 847, subpart D, or 
refunded service under paragraph (d)(2) of this section is computed 
under 5 CFR part 847, subpart F.
    (4) An annuity that includes credit for service with a 
nonappropriated fund instrumentality under 5 CFR part 847, subpart H, is 
computed under 5 CFR part 847, subpart I.
    (e) Certain Government service performed abroad after December 31, 
1988, and before May 24, 1998--(1) Definition. In this section, certain 
Government service performed abroad is service performed at a United 
States diplomatic mission, consular post (other than a consular agency), 
or other Foreign Service post abroad under a temporary appointment 
pursuant to sections 309 and 311 of the Foreign Service Act of 1980 (22 
U.S.C. 3949 and 3951).
    (2) Conditions for Creditability. Service credit is allowed under 
section 321 of Pub. L. 107-228 for certain Government service performed 
abroad after December 31, 1988, and before May 24, 1998, provided--
    (i) The service in the aggregate totaled 90 days or more;
    (ii) The individual performing the service would have satisfied all 
eligibility requirements under regulations of the Department of State 
(as in effect on September 30, 2002) for a family member limited 
noncareer appointment (within the meaning of such regulations, as in 
effect on September 30, 2002) at the time the service was performed, 
except that, in applying this paragraph, an individual not employed by 
the Department of State while performing the service shall be treated as 
if then so employed;

[[Page 293]]

    (iii) The service would have been creditable under FERS had it been 
performed before 1989 and had the deposit requirements of Sec. 842.305 
been met;
    (iv) The service is not otherwise creditable under FERS or any other 
retirement system for employees of the U.S. Government (disregarding 
title II of the Social Security Act);
    (v) The individual applying for the service credit submits a written 
application to make a deposit with the department or agency where the 
service was performed, and completes the deposit, in accordance with 
Sec. 842.305(j); and
    (vi) The department or agency where the service was performed remits 
Government contributions for the service to OPM in accordance with Sec. 
842.305(j).
    (3) Departments or agencies no longer in existence. If the 
department or agency where the individual performed certain Government 
service abroad no longer exists, the Department of State must process 
applications for service credit under this section. Government 
contributions for the service will not need to be remitted to OPM.

[52 FR 18193, May 14, 1987, as amended at 56 FR 6554, Feb. 19, 1991; 56 
FR 55596, Oct. 29, 1991; 61 FR 41720, Aug. 9, 1996; 68 FR 2178, Jan. 16, 
2003; 70 FR 50953, Aug. 29, 2005]



Sec. 842.305  Deposits for civilian service.

    (a) Eligibility--current and former employees or Members. An 
employee or Member subject to FERS and a former employee or Member who 
is entitled to an annuity may make a deposit for civilian service 
described under paragraphs (a)(2) and (a)(3) of Sec. 842.304 upon 
application to OPM in a form prescribed by OPM. A deposit for civilian 
service cannot be made later than 30 days after the first regular 
monthly payment as defined in Sec. 842.602.
    (b) Eligibility--survivors. If an employee or Member was, at the 
time of death, eligible to make a deposit, the employee's survivor may 
make the deposit for civilian service. A deposit under this paragraph 
cannot be made after adjudication of the survivor's application for 
benefits becomes final, which is 30 days after the date of OPM's notice 
to the survivor of the annuity rates with and without making the 
deposit.
    (c) Distinct period of service. A deposit is not considered to have 
been made for any distinct period of service unless the total amount due 
for the period is paid in full. A distinct period of civilian service 
for this purpose is a period of civilian service that is not interrupted 
by a break in service of more than 3 days.
    (d) Amount of deposits. The amount of a deposit for a period of 
service under Sec. 842.304(a)(2) equals 1.3 percent of the basic pay 
for the service, plus interest. The amount of a deposit for a period of 
service under Sec. 842.304(a)(3) equals the amount that would have been 
deducted from pay under 5 U.S.C. 8422(a) had the employee been subject 
to FERS during the service, plus interest.
    (e) Interest. (1) Interest is charged at the rate of 4 percent a 
year through December 31, 1947; 3 percent a year beginning January 1, 
1948, through December 31, 1984; and thereafter at a rate as determined 
by the Secretary of the Treasury for each calendar year that equals the 
overall average yield to the Civil Service Retirement and Disability 
Fund (the Fund) during the preceding fiscal year from all obligations 
purchased by the Secretary during such fiscal year under 5 U.S.C. 8348 
(c), (d), and (e).
    (2) The computation of interest is on the basis of 30 days to the 
month. Interest is computed for the actual calendar time involved in 
each case; but, whenever applicable, the rule of average applies.
    (3) Interest is computed from the midpoint of each service period 
included in the computation. The interest accrues annually on the 
outstanding portion, and is compounded annually, until the portion is 
deposited. Interest is not charged after the commencing date of annuity 
or for a period of separation from the service that began before October 
1, 1956.
    (f) Forms of deposit. Deposits may be made in a single lump sum or 
in installments not smaller than $50 each.
    (g) Cadet Nurse Corps. (1) Upon receiving an application for service 
credit with the Cadet Nurse Corps, OPM will determine whether all the 
conditions for creditability (Sec. 842.304(b)) have been

[[Page 294]]

met; compute the deposit, including interest; and advise the employing 
agency and the employee of the total amount of the deposit due. The rate 
of basic pay for this purpose is deemed to be $15 per month for the 
first 9 months of study; $20 per month for the 10th through the 21st 
months of study; and $30 per month for any month in excess of 21 months. 
Interest is computed in accordance with paragraph (e) of this section.
    (2) The employing agency must establish a deposit account showing 
the total amount due and a payment schedule (unless deposit is made in 
one lump sum) to record the date and amount of each payment.
    (3) If the individual cannot make payment in one lump sum, the 
employing agency must accept installment payments (by allotments or 
otherwise). The employing agency, however, is not required to accept 
individual checks in amounts less than $50.
    (4) Payments received by the employing agency must be remitted to 
OPM immediately for deposit to the Civil Service Retirement and 
Disability Fund.
    (5) Once the employee's deposit has been paid in full or closed out, 
the employing agency must submit the documentation pertaining to the 
deposit to OPM in accordance with instructions issued by OPM.
    (h) Processing applications for pre-1969 National Guard technician 
service credit for employees subject to FERS retirement deductions after 
November 5, 1990--(1) OPM determines creditable service. OPM will 
determine whether all conditions for crediting the additional service 
have been met, compute the deposit, and notify the employee of the 
amount of and the procedures for submitting the deposit payments to OPM 
to obtain credit for the service.
    (2) Computing the deposit. (i) For individuals who will not have a 
CSRS component, the deposit will be computed based on--
    (A) One and three tenths percent of basic pay at the time the 
service was performed; and
    (B) Interest at the rate of 3 percent per year computed as specified 
by section 8334(e)(2) of title 5, United States Code, until the date the 
deposit is paid.
    (ii) For individuals who will have a CSRS component, the deposit 
will be computed as specified in 5 CFR 831.306(c).
    (i) Processing applications for pre-1969 National Guard technician 
service credit for annuitants (and survivors) and for former employees 
who separated after December 31, 1968, and before November 6, 1990--(1) 
OPM determines creditable service. OPM will determine whether all 
conditions for crediting the additional service have been met, compute 
the amount of the deposit, and notify the individual.
    (2) Computing the deposit for annuitants and survivors. (i) For 
individuals who do not have a CSRS component, the deposit will be 
computed based on--
    (A) One and three tenths percent of basic pay at the time the 
service was performed; and
    (B) Interest at the rate of 3 percent per year as specified by 
section 8334(e)(2) of title 5, United States Code, to the midpoint of 
the 24-month installment period, or if paid in a lump sum, the date the 
deposit is paid.
    (ii) For individuals who will have a CSRS component, the deposit 
will be computed as specified in 5 CFR 831.306(e)(2)(i) and (ii)(A).
    (iii)(A) OPM will notify annuitants and survivors of the amount of 
the deposit and give them a proposed installment schedule for paying the 
deposit from monthly annuity payments. The proposed installment payments 
will consist of equal monthly payments that will not exceed a period 24 
months from the date a complete written application is received by OPM.
    (B) The annuitant or survivor may allow the deposit installments to 
be deducted from his or her annuity as proposed or make payment in a 
lump sum within 30 days from the date of the notice.
    (C) Increased annuity payments will begin to accrue the first day of 
the month after OPM receives the complete written application.
    (iv) If an annuitant dies before completing the deposit installment 
payments, the remaining installments will be deducted as established for 
the annuitant from benefits payable to the survivor annuitant (but not 
if the only

[[Page 295]]

survivor benefit is payable to a child or children of the deceased), if 
any. If no survivor annuity is payable, OPM may collect the balance of 
the deposit from any lump sum benefits payable or from the decedent's 
estate, if any.
    (3) Computing the deposit for former Federal employees separated 
after December 31, 1968 but before November 6, 1990. For former 
employees with title to a deferred annuity that commences after November 
6, 1990, the deposit will be computed as provided in paragraph (i)(2) 
above, except that interest will be computed through the commencing date 
of annuity or the date the deposit is paid, whichever comes first.
    (j) Certain Government service performed abroad after December 31, 
1988, and before May 24, 1998--(1) Eligibility-current and former 
employees, and retirees. A current or former employee, or a retiree who 
performed certain Government service abroad described in Sec. 
842.304(e) may make a deposit for such service, in a form prescribed by 
OPM.
    (2) Eligibility-survivors. A survivor of a current employee, former 
employee, or a retiree eligible to make a deposit under paragraph (j)(1) 
of this section may make a deposit under this section if the current or 
former employee, or retiree is deceased and the survivor is eligible or 
would be eligible for a survivor annuity under FERS based on the service 
of the current or former employee, or retiree.
    (3) Filing of deposit application. An individual eligible to make a 
deposit under paragraphs (j)(1) and (2) of this section for service 
described in Sec. 842.304(e) must submit a written application to make 
a deposit for such service with the appropriate office in the department 
or agency where such service was performed. If the department or agency 
where the service was performed no longer exists, the individual must 
submit the written application to the appropriate office in the 
Department of State.
    (4) Time limit for filing application. An application to make a 
deposit under this section must be submitted on or before August 29, 
2008.
    (5) Amount of deposit. (i) A deposit under this section must be 
computed using distinct periods of service. For the purpose of this 
section, a distinct period of service means a period of service not 
interrupted by a break in service of more than 3 days. A deposit may be 
made for any or all distinct periods of service.
    (ii) The amount of deposit under this section equals the amount of 
deductions from basic pay that would have been required under section 
8422 of title 5, United States Code, if at the time the service was 
performed the service had been subject to FERS deductions under that 
section, plus interest.
    (6) Forms of deposit. A deposit under this section must be made as a 
single lump sum within 180 days of being notified of the deposit amount.
    (7) Processing deposit applications and payments. (i) The department 
or agency where the service described in Sec. 842.304(e) was performed 
must process the deposit applications and payments under this section. 
If the department or agency where the service was performed no longer 
exists, the Department of State must process the deposit applications 
and payments under this section.
    (ii) Whenever requested, the Department of State must assist the 
department or agency responsible for processing deposit applications 
under this section determine whether the application meets the 
requirements of Sec. 842.304(e ).
    (iii) Upon receiving a deposit application under this section, the 
department or agency must determine whether the application meets the 
requirements of Sec. 842.304(e); compute the deposit, including 
interest; and advise the applicant of the total amount of deposit due.
    (iv) The department or agency must establish a deposit account 
showing the total amount due.
    (v) When it receives an individual's payment for the service, the 
department or agency must remit the payment to OPM immediately for 
deposit to the Civil Service Retirement and Disability Fund in 
accordance with instructions issued by OPM.
    (vi) Once a deposit has been paid in full or otherwise closed out, 
the department or agency must submit the documentation pertaining to the 
deposit to OPM in accordance with instructions issued by OPM.

[[Page 296]]

    (8) Government contributions. (i) The department or agency where 
service described in Sec. 842.304(e) was performed must pay Government 
contributions for each period of service covered by a deposit under this 
section.
    (ii) The amount of contributions under this section equals the 
amount of Government contributions which would have been required for 
the service under section 8423 of title 5, United States Code, if the 
service had been covered under chapter 84 of title 5, United States 
Code, plus interest.
    (iii) The department or agency must remit the amount of Government 
contributions under this section to OPM at the same time it remits the 
employee deposit for this service to OPM in accordance with instructions 
issued by OPM.
    (9) Interest. Interest must be computed as described under 
paragraphs (2) and (3) of 5 U.S.C. 8334(e). Interest must be computed 
for each distinct period of service from the midpoint of each distinct 
period of service. The interest accrues annually on the outstanding 
deposit and is compounded annually, until the deposit is paid.
    (10) Effect of deposit. An individual completing a deposit under 
this section will receive retirement credit for the service covered by 
the deposit when OPM receives certification that the deposit has been 
paid in full, and the deposit payment and agency contributions are 
remitted to the Civil Service Retirement and Disability Fund.
    (11) Appeal rights. When the department or agency processing an 
application for deposit under this section determines that the 
individual is not eligible to make a deposit for a period of service, it 
must provide the individual with a written decision explaining the 
reason for the decision and explaining the individual's right to appeal 
the decision to the Merit Systems Protection Board.

[52 FR 18193, May 14, 1987, as amended at 56 FR 55597, Oct. 29, 1991; 56 
FR 65419, Dec. 17, 1991; 70 FR 50953, Aug. 29, 2005]



Sec. 842.306  Military service.

    (a) Except as provided in paragraph (b), and unless otherwise 
provided under title III of the Federal Employees' Retirement System Act 
of 1986, an employee's or Member's military service is creditable if it 
was performed--
    (1) Before January 1, 1957; or
    (2) After December 31, 1956, subject to payment, before separation 
from service, of the deposit required by Sec. 842.307.
    (b) Credit for a period of military service is not allowed if the 
employee or Member is receiving military retired pay for such period 
awarded for reasons other than--
    (1) Service-connected disability incurred in combat with an enemy of 
the United States;
    (2) Service-connected disability caused by an instrumentality of war 
and incurred in the line of duty during a period of war (within the 
meaning of chapter 11 of title 38, United States Code); or
    (3) Retirement under chapter 67 of title 10, United States Code.
    (c) When adjudicating annuity claims, OPM will accept determinations 
made by the agency that authorized military retired pay concerning--
    (1) The effective date of a waiver of military retired pay;
    (2) Whether an individual's military retired pay was awarded for any 
of the reasons mentioned under paragraph (b) of this section; and
    (3) Whether a period of military service forms the basis for 
military retired pay.
    (d)(1) Except as provided in paragraphs (d)(2) and (d)(3) of this 
section, the computation of a survivor's annuity includes credit for any 
military service allowable under paragraph (a) of this section.
    (2) If the separated employee (as defined in Sec. 843.102 of this 
chapter) was awarded military retired pay, died after the date of 
separation from civilian service, and did not waive military retired pay 
effective before the date of death, military service upon which the 
military retired pay was based is not creditable.
    (3) If the survivor of a deceased employee who had been awarded 
military retired pay files, in a form prescribed by OPM, an election not 
to have a period of military service included in the computation of 
survivor benefits, that period of military service is not included in 
the computation of survivor benefits.

[[Page 297]]



Sec. 842.307  Deposits for military service.

    (a) Eligibility to make a deposit. (1) An employee or Member subject 
to FERS may make a deposit for any distinct period of military service 
by filing an application in a form prescribed by OPM.
    (2) An application to make a deposit is filed with the appropriate 
office in the employing agency, or, for Members and Congressional 
employees, with the Secretary of the Senate, or the Clerk of the House 
of Representatives, as appropriate.
    (3) An employee's or Member's deposit for military service must be 
completed before separation from service. If a deceased employee or 
Member was, at the time of death, eligible to make a deposit, the 
employee's or Member's survivor may make the deposit in one lump sum to 
the former employing agency, the Secretary of the Senate or the Clerk of 
the House of Representatives, before OPM completes adjudication of the 
survivor annuity application. A person who was eligible to make a 
deposit for military service but failed to complete the deposit within 
the time limits provided in this paragraph, may complete the deposit in 
a lump sum within the time limit set by OPM when it rules that an 
administrative error has been made.
    (b) Amount of deposit. (1) The amount of a deposit for military 
service equals 3 percent of the basic pay for the service under 37 
U.S.C. 207, or an estimate of the basic pay (see paragraph (c)(1)(iii) 
of this section), plus interest, unless interest is not required under 
paragraph (b)(4) of this section.
    (2) Interest is charged at a rate as determined by the Secretary of 
the Treasury for each calendar year that equals the overall average 
yield to the Fund during the preceding fiscal year from all obligations 
purchased by the Secretary during such fiscal year under 5 U.S.C. 
8348(c), (d), and (e).
    (3) The computation of interest is on the basis of 30 days to the 
month. Interest is computed for the actual calendar time involved in 
each case; but whenever applicable, the rule of average applies.
    (4) Interest is computed from the mid-point of each full period of 
service included in the computation. The interest accrues annual on the 
outstanding portion beginning on the second anniversary of the 
employee's or Member's beginning date of coverage under FERS, and is 
compounded annually, until the portion is deposited. Interest is charged 
to the date of deposit. No interest will be charged if the deposit is 
completed before the end of the year after interest begins. For example, 
if an employee becomes subject to FERS on March 1, 1988, interest begins 
to accrue on March 1, 1990; however, no interest would be included in 
the deposit due if the deposit is completed by February 28, 1991.
    (c) Processing deposit applications and payments. (1) The agency, 
Clerk of the House of Representatives, or Secretary of the Senate will 
have the employee or Member--
    (i) Complete an application to make deposit;
    (ii) Provided a copy of his or her DD Form 214 or its equivalent to 
verify the period(s) of service; and
    (iii) Provide copies of all official military pay documents, as 
identified in instructions issued by OPM, which show the exact basic pay 
he or she received for full period of service; or, if such evidence is 
not available, obtain a statement of estimated earnings from the 
appropriate branch of the military service and submit the statement.
    (2) Upon receipt of the application, the DD Form 214, and either the 
evidence of exact basic pay or the statement of estimated earnings, the 
agency, Clerk of the House of Representatives, or Secretary of the 
Senate will establish a deposit account showing--
    (i) The total amount due, including interest, if any;
    (ii) A payment schedule (unless deposit is made in a lump sum); and
    (iii) The date and amount of each payment.
    (3) Deposits may be made in a single lump sum or in installments. 
The agency, Clerk of the House of Representatives, and Secretary of the 
Senate are not required to accept installment payments in amounts less 
than $50.
    (4) Payments received by the employing agency, the Clerk of the 
House of Representatives, or the Secretary of the Senate will be 
remitted to OPM for deposit to the Fund in accordance with

[[Page 298]]

payroll office instructions issued by OPM.
    (d) Distinct periods of service. A deposit is not considered to have 
been made for any distinct period of service unless the total amount due 
for the period is paid in full. A ``distinct period'' for this purpose 
is the total years, months, and days from the date of entry on active 
duty (or from January 1, 1957, if later) to the date of final discharge 
for enlisted military personnel, or to the date of final release from 
active duty for officers and reservists. A ``distinct period'' also 
includes consecutive periods of service where there is no break in 
service, but does not include any lost time.



Sec. 842.308  Refunds of deductions and service credit deposits made 
before becoming subject to FERS.

    (a) An employee or Member who, while currently employed, is eligible 
under 5 U.S.C. 8342(a) for a refund of deductions or deposits (relating 
to civilian service performed before becoming subject to FERS and 
totaling less than 5 years, not counting service after 1983 that was 
covered simultaneously by both CSRS and social security) that were 
previously made for a period of service performed before becoming 
subject to FERS is eligible for a refund, upon proper application in a 
form prescribed by OPM. The amount of this refund is the difference 
between--
    (1) The amount of deductions and deposits to his or her credit for 
such service, plus any interest computed in accordance with 5 U.S.C. 
8331(8): and
    (2) The amount of the deposit required for such service under Sec. 
842.305.
    (b) A former employee or Member who is eligible under 5 U.S.C. 
8342(a) for a refund of deductions or deposits covering civilian service 
of the types described in paragraph (a) of this section is eligible for 
a refund, upon proper application in a form prescribed by OPM. The 
individual may irrevocably elect a refund, with resepct to this service, 
of either--
    (1) The amount provided under paragraph (a) of this section; or
    (2) The full amount of deductions and deposits to his or her credit 
for such service, plus any interest computed in accordance with 5 U.S.C. 
8331(8). If the full amount of deductions and deposits is elected by the 
former employee or Member, no future deposit for the service may be 
made.
    (c) An employee or Member, who, before becoming subject to FERS, 
made a deposit for military service is eligible upon proper application 
in a form prescribed by OPM, while currently employed, for a refund of 
the amount deposited, excluding interest, to the extent that this amount 
exceeds the amount of the deposit required for such service under Sec. 
842.307.
    (d) A former employee or Member who, before becoming subject to 
FERS, made a deposit for military service is eligible for a refund, upon 
proper application in a form prescribed by OPM. The former employee or 
Member may irrevocably elect to receive either--
    (1) The amount provided under paragraph (c) of this section; or
    (2) The full amount deposited and remaining to the individual's 
credit. If the full amount of the deposit is elected, no future deposit 
for the service may be made.
    (e) If the current employing agency holds all necessary records 
pertaining to the amounts in question under paragraph (a) or (c) of this 
section, the current employing agency will pay the refund in accordance 
with OPM instructions. Otherwise, OPM will pay the refund.



Sec. 842.309  Contract service.

    Contract service with the United States will only be included in the 
computation of, or used to establish title to, an annuity under chapter 
84 of title 5, United States Code, if--
    (a) The employing agency exercised an explicit statutory authority 
to appoint an individual into the civil service by contract; or
    (b) The head of the agency which was party to the contract, based on 
a timely-filed application, in accordance with section 110 of Public Law 
100-238, and the regulations promulgated by OPM pursuant to that 
statute, certifies that the agency intended that an individual be 
considered as having been appointed to a position in which (s)he would 
have been subject to subchapter III of chapter 83 of title 5, United 
States Code,

[[Page 299]]

and deposit has been paid in accordance with OPM's regulations.

[55 FR 53136, Dec. 27, 1990]



Sec. 842.310  Service not creditable because of an election under 
part 847 of this chapter.

    Any FERS service which becomes creditable under a retirement system 
established for nonappropriated fund employees due to an election made 
under part 847 of this chapter is not creditable for any purpose under 
FERS.

[61 FR 41721, Aug. 9, 1996]



                         Subpart D_Computations

    Source: 52 FR 4475, Feb. 11, 1987, unless otherwise noted.



Sec. 842.401  Purpose.

    This subpart regulates the basic annuity computation under the 
Federal Employees Retirement System (FERS).



Sec. 842.402  Definitions.

    In this subpart--
    Full-time service means any actual service in which the employee is 
scheduled to work the number of hours and days required by the 
administrative workweek for his or her grade or class (normally 40 
hours).
    Part-time service means any actual service performed on a less than 
full-time basis, by an individual whose appointment describes a 
regularly scheduled tour of duty, and any period of time credited as 
nonpay status time under 5 U.S.C 8411(d), that follows a period of part-
time service without any intervening period of actual service other than 
part-time service.
    Proration factor means a fraction expressed as a percentage rounded 
to the nearest percent. The numerator is the sum of the number of hours 
the employee actually worked during part-time service; and the 
denominator is the sum of the number of hours that a full-time employee 
would be scheduled to work during the same period of service included in 
the numerator. If an employee has creditable service in addition to 
part-time service, such service must be included in the numerator and 
denominator of the fraction.
    Total service means the full years and twelfth parts thereof of an 
employee's or Member's service creditable under subpart C of this part, 
excluding any fractional part of a month.

[52 FR 4475, Feb. 11, 1987, as amended at 52 FR 22436, June 12, 1987; 58 
FR 43493, Aug. 17, 1993]



Sec. 842.403  Compution of basic annuity.

    (a) Except as provided in paragraph (b) of this section and 
Sec. Sec. 842.405 and 842.406, the annuity of an employee or Member is 
1 percent of average pay multiplied by total service.
    (b) The annuity of an employee is 1.1 percent of average pay 
multiplied by total service, provided the individual--
    (1) Has completed 20 years of service; and
    (2) At the time of separation on which entitlement to an annuity is 
based--
    (i) Is at least age 62; and
    (ii) Is not a Member, Congressional employee, military reserve 
technician, law enforcement officer, firefighter, or air traffic 
controller.



Sec. 842.404  Reductions in basic annuity.

    The annuity of an employee or Member retiring under Sec. 
842.204(a)(1) or Sec. 842.212(b) is reduced by five-twelfths of 1 
percent for each full month by which the commencing date of annuity 
precedes the 62nd birthday of the employee or Member, unless the 
individual--
    (a) Has completed 30 years of service; or
    (b)(1) Has completed 20 years of service; and
    (2) Is at least age 60 on the commencing date of annuity; or
    (c) Has completed 20 years of service as--
    (1) An air traffic controller, except one separated by removal for 
cause on charges of misconduct or delinquency;
    (2) A firefighter and/or law enforcement officer, except one 
separated by removal for cause on charges of misconduct of delinquency; 
or
    (3) A Member, except one separated by resignation or expulsion.

[[Page 300]]



Sec. 842.405  Air traffic controllers, firefighters, law enforcement 
officers, and nuclear materials couriers.

    The annuity of an air traffic controller retiring under Sec. 
842.207 or a law enforcement officer, firefighter or nuclear materials 
courier retiring under Sec. 842.208 is--
    (a) One and seven-tenths percent of average pay multiplied by 20 
years; plus
    (b) One percent of average pay multiplied by the years of service 
exceeding 20 years.

[52 FR 4475, Feb. 11, 1987, as amended at 65 FR 2524, Jan. 18, 2000]



Sec. 842.406  Members of Congress and Congressional employees.

    The annuity of an employee or Member who has had at least 5 years of 
service as a congressional employee, Member, or any combination thereof 
totaling 5 years is--
    (a) One and seven-tenths percent of average pay multiplied by the 
total number of years of service as a Member and/or congressional 
employee not exceeding 20 years: plus
    (b) One percent of average pay multiplied by the years of service 
other than that of a Member and/or congressional employee.



Sec. 842.407  Proration of annuity for part-time service.

    The annuity of an employee whose service includes part-time service 
is computed in accordance with Sec. 842.403, using the average pay 
based on the annual rate of basic pay for full-time service. This amount 
is then multiplied by the proration factor. The result is the annual 
rate of annuity before reductions for retirement before age 62, survivor 
benefits, or the reduction for an alternative form of annuity required 
by Sec. 842.706.

[52 FR 22436, June 12, 1987]



                      Subpart E_Annuity Supplement

    Source: 52 FR 4479, Feb. 11, 1987, unless otherwise noted.



Sec. 842.501  Purpose.

    This subpart regulates the annuity supplement payable to eligible 
employees under sections 8421 and 8421(a) of title 5, United State Code.



Sec. 842.502  Definitions.

    In this subpart--
    Age 62 means the day before an individual's sixty-second birthday.
    Annuity Supplement means the monthly benefit described in Sec. 
842.504.
    Applicable exempt amount and earnings have the same meanings as in 
section 203 of the Social Security Act.
    Excess earnings means 50 percent of an individual's earnings which 
exceed the applicable exempt amount during a calendar year or, if less, 
an amount equal to the total annuity supplement paid to the individual 
in that year, but does not include earnings prior to an individual's 
attainment of the minimum retirement age.
    FERS means chapter 84 of title 5, United States Code.
    Minimum retirement age has the same meaning as in Sec. 842.202.
    Test year means the calendar year immediately before the one in 
which any reductions required by 5 U.S.C. 8421a and Sec. 842.505 are 
applied.



Sec. 842.503  Eligibility for annuity supplement.

    (a) Except as provided in paragraph (b) of this section, an employee 
or Member receiving an annuity under any of the following sections is 
entitled to receive an annuity supplement:
    (1) Section 842.204(a)(1) if the employee or Member has completed at 
least 30 years of service;
    (2) Section 842.204(a)(2) governing retirement at age 60 with 20 
years of service;
    (3) Section 842.205 governing retirement at age 50 with 20 years of 
service or at any age during a major reorganization or reduction in 
force;
    (4) Section 842.206 governing discontinued service retirement;
    (5) Section 842.07 governing early retirement for air traffic 
controllers;
    (6) Section 842.208 governing early retirement for law enforcement 
officers;
    (7) Section 842.209 governing early retirement for Members of 
Congress;
    (8) Section 842.210 governing early retirement for military reserve 
technicians; or

[[Page 301]]

    (9) Section 842.211 governing early retirement for members of the 
Senior Executive Service.
    (b) An employee or Member who retires under any of the following 
sections before attaining the minimum retirement age is not entitled to 
receive an annuity supplement until he or she attains that age:
    (1) Section 842.205;
    (2) Section 842.206;
    (3) Section 842.209; or
    (4) Section 842.211, except that an individual entitled to an 
annuity under 5 U.S.C. 8414(a) for failure to be recertified as a senior 
executive shall be entitled to an annuity supplement without regard to 
the minimum retirement age.
    (c) An employee or Member ceases to be entitled to an annuity 
supplement on the earlier of--
    (1) The last day of the month in which the individual becomes age 
62; or
    (2) The last day of the month before the first month for which the 
individual would, upon proper application, be entitled to social 
security benefits.

[52 FR 4479, Feb. 11, 1987, as amended at 56 FR 173, Jan. 3, 1991]



Sec. 842.504  Amount of annuity supplement.

    (a) Subject to paragraph (b) of this section, an annuity supplement 
is an amount equal to the old-age insurance benefit payable under title 
II of the Social Security Act, multiplied by a fraction--
    (1) The numerator of which is the annuitant's total service 
creditable under FERS, excluding military service not performed during 
an absence of leave without pay from civilian service, rounded to the 
nearest whole number of years not exceeding 40 years; and
    (2) The denominator of which is 40.
    (b)(1) The benefit referred to in paragraph (a) of this section is 
computed--
    (i) As if the annuitant were age 62 and fully insured on January 1 
of the year the annuity supplement commences;
    (ii) Without regard to the Social Security earnings test (section 
203 of the Social Security Act);
    (iii) Without regard to the Social Security windfall elimination 
provisions (sections 215(a)(7) and 215(d)(5) of the Social Security 
Act); and
    (iv) Using the actuarial reduction (section 202(q) of the Social 
Security Act) prescribed in the following table:

------------------------------------------------------------------------
                                                               Reduction
                        Year of Birth                          (percent)
------------------------------------------------------------------------
1937 and before.............................................          20
1938........................................................     20\5/6\
1939........................................................     21\2/3\
1940........................................................     22\1/2\
1941........................................................     23\1/3\
1942........................................................     24\1/6\
1943-54.....................................................          25
1955........................................................     25\5/6\
1956........................................................     26\2/3\
1957........................................................     27\1/2\
1958........................................................     28\1/3\
1959........................................................     29\1/6\
1960 and later..............................................          30
------------------------------------------------------------------------

    (2) In computing the primary insurance amount--
    (i) The number of elapsed years used to compute the number of 
benefit computation years does not include the years beginning with the 
year in which the annuity supplement commences;
    (ii) For an employee or Member who retires under Sec. Sec. 842.205, 
842.206, 842.209, or 842.211 before reaching the minimum retirement age, 
wages in calendar years beginning after the date of separation on which 
the retirement is based, are deemed to be zero.
    (iii) Only basic pay for full calendar years of service creditable 
under FERS is taken into account in computing the retiree's wages for a 
benefit computation year;
    (iv) For a benefit computation year after age 21 during which the 
retiree did not perform a full calendar year of service creditable under 
FERS the retiree's wages are deemed to equal the product of--
    (A) The National Average Wage Index (as determined by the 
Commissioner of the Social Security Administration) corresponding to 
that year, multiplied by
    (B) A fraction--
    (1) The numerator of which is the retiree's basic pay for his or her 
first full year of service creditable under FERS; and

[[Page 302]]

    (2) The denominator of which is the National Average Wage Index (as 
determined by the Commissioner of the Social Security Administration) 
corresponding to the retiree's first full year of service creditable 
under FERS.

[52 FR 4479, Feb. 11, 1987, as amended at 69 FR 69806, Dec. 1, 2004]



Sec. 842.505  Reduction in annuity supplement because of excess earnings.

    (a)(1) Except as provided in paragraphs (a)(2) and (b) of this 
section, the annuity supplement payable under Sec. 842.504 is reduced 
by excess earnings in the test year, divided by twelve.
    (2) Any annuity supplement payable during the year in which an 
individual loses entitlement to the annuity supplement by reason of 
Sec. 842.503(c) is reduced by excess earnings in the test year divided 
by the number of months for which the annuity supplement is payable.
    (b) Any reduction in the annuity supplement during a month because 
of excess earnings may not exceed the amount of annuity supplement 
payable during that month.
    (c) Earnings and estimated earnings for each test year will be 
furnished by retirees in a form prescribed by OPM.
    (d) Failure to furnish earnings and estimated earnings in the form 
or at the times prescribed by OPM is cause to suspend payment of the 
supplement until the annuitant establishes to the satisfaction of OPM 
that he/she continues to be eligible for the supplement.
    (e) The reductions described in paragraphs (a) and (b) of this 
section are not subject to the due process procedures described in 5 
U.S.C. 8461(e).



                      Subpart F_Survivor Elections

    Source: 52 FR 2061, Jan. 16, 1987, unless otherwise noted.



Sec. 842.601  Purpose.

    This subpart explains the survivor annuity elections available under 
FERS for retirees, and retiring employees and Members, and the actions 
that they must take to provide these survivor annuities.



Sec. 842.602  Definitions.

    In this subpart--
    Current spouse means a living person who is married to the employee, 
Member, or retiree at the time of the employee's, Member's, or retiree's 
death.
    Current spouse annuity means a recurring benefit under FERS that is 
payable (after the employee's, Member's or retiree's death) to a current 
spouse who meets the requirements of Sec. 843.303 of this chapter.
    Deposit means a deposit required to provide a survivor benefit. 
Deposit, as used in this subpart, does not include a service credit 
deposit or redeposit.
    FERS means chapter 84 of title 5, United States Code.
    First regular monthly payment means the first annuity check payable 
on a recurring basis (other than an estimated payment or an adjustment 
check) after OPM has initially adjudicated the regular rate of annuity 
payable under FERS and has paid the annuity accrued since the time of 
retirement. The first regular monthly payment is generally preceded by 
estimated payments before the claim can be adjudicated and by an 
adjustment check (including the difference between the estimated rate 
and the initially adjudicated rate).
    Former spouse means a living person who was married for at least 9 
months to an employee, Member, or retiree who performed at least 18 
months of creditable service under FERS. The ``former spouse's'' 
marriage to the employee must have been terminated prior to the death of 
the employee, Member, or retiree.
    Former spouse annuity means a recurring benefit under FERS that is 
payable to a former spouse after the employee's, Member's, or retiree's 
death.
    Fully reduced annuity means the recurring payments under FERS 
received by a retiree who has elected the maximum reduction in his or 
her annuity to provide a current spouse annuity and/or a former spouse 
annuity or annuities.
    Insurable interest rate means the recurring payments under FERS to a 
retireee who has elected a reduction in annuity to provide a survivor 
annuity to a person with an insurable interest in the retiree.

[[Page 303]]

    Marriage has the same meaning as in Sec. 843.102 of this chapter.
    Member means a Member of Congress.
    Net annuity means the net annuity as defined in Sec. 838.103 of 
this chapter.
    One-half reduced annuity means the recurring payments under FERS 
received by a retiree who has elected one-half of the full reduction in 
his or her annuity to provide a partial current spouse annuity or a 
partial former spouse annuity or annuities.
    Present value factor means the amount of money (earning interest at 
an assumed rate) required at the time of retirement to fund an annuity 
that starts out at the rate of $1 a month and is payable in monthly 
installments for the annuitant's lifetime based on mortality rates for 
non-disability annuitants under the Civil Service Retirement System; and 
increases each year at an assumed rate of inflation. Interest, 
mortality, and inflation rates used in computing the present value are 
those used by the Board of Actuaries of the Civil Service Retirement 
System for valuation of the System, based on dynamic assumptions. The 
present value factors are unisex factors obtained by averaging six 
distinct present value factors, weighted by the total dollar value of 
annuities typically paid to new retirees at each age.
    Qualifying court order means a court order that awards a former 
spouse annuity and that satisfies the requirements of section 8445 of 
title 5, United States Code, for awarding a former spouse annuity.
    Retiree means a former employee or Member who is receiving recurring 
payments under FERS based on service by the employee or Member. 
``Retiree,'' as used in this subpart, does not include a current spouse, 
former spouse, child, or person with an insurable interest receiving a 
survivor annuity.
    Self-only annuity means the recurring unreduced payments under FERS 
to a retiree with no survivor annuity payable to anyone.
    Time of retirement means the effective commencing date for retired 
employee's or Member's annuity. An employee or Member is unmarried at 
the time of retirement for all purposes under this subpart only if the 
employee or Member was unmarried on the date that the annuity begins to 
accrue.

[52 FR 2061, Jan. 16, 1987, as amended at 56 FR 65419, Dec. 17, 1991; 57 
FR 33598, July 29, 1992; 57 FR 54678, Nov. 20, 1992; 58 FR 52883, Oct. 
13, 1993]



Sec. 842.603  Election at time of retirement of a fully reduced annuity 
to provide a current spouse annuity.

    (a) A married employee or Member retiring under FERS will receive a 
fully reduced annuity to provide a current spouse annuity unless--
    (1) The employee or Member, with the consent of the current spouse, 
elects a self-only annuity, a one-half reduced annuity to provide a 
current spouse annuity, or a fully reduced annuity or a one-half reduced 
annuity to provide a former spouse annuity, in accordance with Sec. 
842.604 or Sec. 842.606; or
    (2) The employee or Member elects a self-only annuity or a fully 
reduced annuity or a one-half reduced annuity to provide a former spouse 
annuity, and current spousal consent is waived in accordance with Sec. 
842.607.
    (b) Qualifying court orders that award former spouse annuities 
prevent payment of current spouse annuities to the extent necessary to 
comply with the court order and Sec. 842.613.
    (c) The amount of the reduction to provide a current spouse annuity 
under this section is 10 percent of the retiree's annuity.

[52 FR 2061, Jan. 16, 1987, as amended at 57 FR 54678, Nov. 20, 1992]



Sec. 842.604  Election at time of retirement of a fully reduced annuity 
or a one-half reduced annuity to provide a former spouse annuity.

    (a) An unmarried employee or Member retiring under FERS may elect a 
fully reduced annuity or a one-half reduced annuity to provide a former 
spouse annuity or annuities.
    (b) A married employee or Member retiring under FERS may elect a 
fully reduced annuity or a one-half reduced annuity to provide a former 
spouse annuity or annuities instead of a fully reduced annuity to 
provide a current spouse annuity, if the current spouse consents to the 
election in accordance with Sec. 842.606 or spousal consent is waived 
in accordance with Sec. 842.607.

[[Page 304]]

    (c) An election under paragraph (a) or (b) of this section is void 
to the extent that it--
    (1) Conflicts with a qualifying court order; or
    (2) Would cause the total of current spouse annuities and former 
spouse annuities payable based on the employee's or Member's service to 
exceed the maximum amount of survivor annuity that the employee or 
Member is entitled to provide under Sec. 842.613.
    (d) Any reduction in an annuity to provide a former spouse annuity 
will terminate on the first day of the month after the former spouse 
remarries before age 55 or dies, or the former spouse's eligibility for 
a former spouse annuity terminates under the terms of a qualifying court 
order, unless--
    (1) The retiree elects, within 2 years after the former spouse's 
death or remarriage, to continue the reduction to provide a former 
spouse annuity for another former spouse, or to provide a current spouse 
annuity; or
    (2) A qualifying court order requires the retiree to provide another 
former spouse annuity.
    (e) Except as provided in Sec. 842.614, the amount of the reduction 
to provide a former spouse annuity equals--
    (1) Ten percent of the employee's or Member's annuity if the 
employee or Member elects a fully reduced annuity; or
    (2) Five percent of the employee's or Member's annuity if the 
employee or Member elects a one-half reduced annuity.

[52 FR 2061, Jan. 16, 1987, as amended at 57 FR 54678, Nov. 20, 1992]



Sec. 842.605  Election of insurable interest rate.

    (a) At the time of retirement, an employee or Member in good health 
and who is applying for a non-disability annuity may elect an insurable 
interest rate. An election under this section does not exempt a married 
employee or Member from the provisions of Sec. 842.603(a).
    (b) An insurable interest rate may be elected by an employee or 
Member electing a fully reduced annuity or a one-half reduced annuity to 
provide a current spouse annuity or a former spouse annuity or 
annuities.
    (c)(1) In the case of a married employee or Member, an election 
under this section may not be made on behalf of a current spouse unless 
that current spouse has consented to an election not to provide a 
current spouse annuity in accordance with Sec. 842.603(a)(1).
    (2) A consent (to an election not to provide a current spouse 
annuity in accordance with Sec. 842.603(a)(1)) required by paragraph 
(c)(1) of this section to be eligible to be the beneficiary of an 
insurable interest rate is cancelled if--
    (i) The retiree fails to qualify to receive the insurable interest 
rate; or
    (ii) The retiree changes his or her election to receive an insurable 
interest rate under Sec. 842.608; or
    (iii) The retiree elects a fully reduced annuity to provide a 
current spouse annuity under Sec. 842.610.
    (3) An election of a one-half reduced annuity under Sec. 842.610(b) 
to provide a current spouse annuity for a current spouse who is the 
beneficiary of an insurable interest rate is void unless the spouse 
consents to the election.
    (4) If a retiree who had elected an insurable interest rate to 
benefit a current spouse elects a fully reduced annuity to provide a 
current spouse annuity (or with the consent of the spouse, a one-half 
reduced annuity to provide a current spouse annuity) under Sec. 
842.610(b), the election of the insurable interest rate is cancelled.
    (5)(i) A retiring employee or Member may not elect a fully reduced 
annuity or a one-half reduced annuity to provide a former spouse annuity 
and an insurable interest rate to benefit the same former spouse.
    (ii) If a retiring employee or Member who is required by court order 
to provide a former spouse annuity elects an insurable interest rate to 
benefit the former spouse with the court-ordered entitlement--
    (A) If the benefit based on the election is greater than or equal to 
the benefit based on the court order, the election of the insurable 
interest rate will satisfy the requirements of the court order as long 
as the insurable interest rate continues.
    (B) If the benefit based on the election is less than the benefit 
based on the court order, the election of the insurable interest rate is 
void.

[[Page 305]]

    (iii) An election under Sec. 842.611 of a fully reduced annuity or 
a one-half reduced annuity to benefit a former spouse by a retiree who 
elected and continues to receive an insurable interest rate to benefit 
that former spouse is void.
    (d) To elect an insurable interest rate, an employee or Member must 
indicate the intention to make the election on the application for 
retirement and must submit a certificate of good health in a form 
prescribed by OPM.
    (e) An insurable interest rate may be elected to provide a survivor 
benefit only for a person who has an insurable interest in the retiring 
employee or Member.
    (1) An insurable interest is presumed to exist with--
    (i) The current spouse;
    (ii) A blood or adopted relative closer than first cousins;
    (iii) A former spouse;
    (iv) A person to whom the employee or Member is engaged to be 
married;
    (v) A person with whom the employee or Member is living in a 
relationship that would constitute a common-law marriage in 
jurisdictions recognizing common-law marriages.
    (2) When an insurable interest is not presumed, the employee or 
Member must submit affidavits from one or more persons with personal 
knowledge of the named beneficiary's having an insurable interest in the 
employee or Member. The affidavits must set forth the relationship, if 
any, between the named beneficiary and the employee or Member, the 
extent to which the named beneficiary is dependent on the employee or 
Member, and the reasons why the named beneficiary might reasonably 
expect to derive financial benefit from the continued life of the 
employee or Member.
    (3) The employee or Member may be required to submit documentary 
evidence to establish the named beneficiary's date of birth.
    (f) OPM will notify the employee or Member of initial monthly 
annuity rates with and without the election of an insurable interest 
rate and the initial rate payable to the named beneficiary. No election 
of an insurable interest rate is effective unless the employee or Member 
confirms the election in writing or dies no later than 60 days after the 
date of the notice described in this paragraph.
    (g)(1) When an employee or Member elects both an insurable interest 
rate, and a fully reduced annuity or a one-half reduced annuity, the 
combined reduction may exceed the maximum 40 percent reduction in the 
retired employee's or Member's annuity permitted under section 8420 of 
title 5, United States Code, applicable to insurable interest annuities.
    (2) The additional reduction to provide a current spouse annuity or 
a former spouse annuity is not considered in determining the rate of 
annuity payable to a beneficiary of an insurable interest election.
    (h)(1) Except as provided in Sec. 842.604(d), if a retiree who is 
receiving a fully reduced annuity or a one-half reduced annuity to 
provide a former spouse annuity has also elected an insurable interest 
rate to benefit a current spouse and if the eligible former spouse 
remarries before age 55, dies, or loses eligibility under the terms of 
the court order, and no other former spouse is entitled to a survivor 
annuity based on an election made in accordance with Sec. 842.611 or a 
qualifying court order, the retiree may elect, within 2 years after the 
former spouse's remarriage, death, or loss of eligibility under the 
terms of the court order, to convert the insurable interest rate to a 
fully reduced annuity to provide a current spouse annuity, effective on 
the first day of the month following the event causing the former spouse 
to lose eligibility.
    (2) An election under paragraph (h)(1) of this section cancels any 
consent not to receive a current spouse annuity required by paragraph 
(c) of this section for the current spouse to be eligible for an annuity 
under this section.
    (3) When a former spouse receiving an annuity under section 8445 of 
title 5, United States Code, loses eligibility to that annuity, a 
beneficiary of an insurable interest rate who was the current spouse at 
both the time of the retiree's retirement and death may, within 2 years 
after the former spouse's death, remarriage, or loss of eligibility 
under the terms of the court order, elect to

[[Page 306]]

receive a current spouse annuity instead of the annuity he or she had 
been receiving.
    The election is effective on the first day of the month following 
the event causing the former spouse to lose eligibility.
    (i) Upon the death of the current spouse, a retiree whose annuity is 
reduced to provide both a current spouse annuity and an insurable 
interest benefit for a former spouse is not permitted to convert the 
insurable interest rate to a reduced annuity to provide a former spouse 
annuity.
    (j) An employee or Member may name only one natural person as the 
named beneficiary of an insurable interest rate. OPM will not accept the 
designation of contingent beneficiaries and such a designation is void.
    (k)(1) An election under this section is prospectively voided by an 
election of a fully reduced annuity to provide a current spouse annuity 
under Sec. 842.612 that would benefit the same person.
    (2)(i) If the current spouse is not the beneficiary of the election 
under this section, a retiree may prospectively void an election under 
this section at the time the retiree elects a reduced annuity to provide 
a current spouse annuity under Sec. 842.612.
    (ii) A retiree's election to void an election under paragraph 
(k)(2)(i) of this section must be filed at the same time as the election 
under Sec. 842.612.
    (3) An annuity reduction under this section terminates on the first 
day of the month after the beneficiary of the insurable interest rate 
dies.

[52 FR 2061, Jan. 16, 1987, as amended at 57 FR 54679, Nov. 20, 1992]



Sec. 842.606  Election of a self-only annuity or a one-half reduced 
annuity by married employees and Members.

    (a) A married employee may not elect a self-only annuity or a one-
half reduced annuity to provide a current spouse annuity without the 
consent of the current spouse or a waiver of spousal consent by OPM in 
accordance with Sec. 842.607.
    (b) Evidence of spousal consent or a request for waiver of spousal 
consent must be filed on a form prescribed by OPM.
    (c) The spousal consent form will require that a notary public or 
other official authorized to administer oaths certify that the current 
spouse presented identification, gave consent, signed or marked the 
form, and acknowledged that the consent was given freely in the notary's 
or official's presence.
    (d) The form described in paragraph (c) of this section may be 
executed before a notary public, an official authorized by the law of 
the jurisdiction where executed to administer oaths, or an OPM employee 
designated for that purpose by the Associate Director.
    (e) A request for waiver of the spousal consent requirement must be 
by letter and fully state the basis for the request.
    (f) The amount of the reduction in the retiree's annuity for a one-
half reduced annuity to provide a current spouse annuity is 5 percent of 
the retiree's annuity.

[52 FR 2061, Jan. 16, 1987, as amended at 57 FR 54679, Nov. 20, 1992]



Sec. 842.607  Waiver of spousal consent requirement.

    (a) The spousal consent requirement will be waived upon a showing 
that the spouse's whereabouts cannot be determined. A request for waiver 
on this basis must be accompanied by--
    (1) A judicial determination that the spouse's whereabouts cannot be 
determined; or
    (2)(i) Affidavits by the employee or Member and two other persons, 
at least one of whom is not related to the employee or Member, attesting 
to the inability to locate the current spouse and stating the efforts 
made to locate the spouse; and
    (ii) Documentary corroboration such as tax returns filed separately 
or newspaper stories about the spouse's disappearance.
    (b) The spousal consent requirement will be waived based on 
exceptional circumstances if the employee or Member presents a judicial 
determination finding that--
    (1) The case before the court involves a Federal employee who is in 
the process of retiring from Federal employment and the spouse of that 
employee;

[[Page 307]]

    (2) The nonemployee spouse has been given notice and an opportunity 
to be heard concerning this order;
    (3) The court has considered sections 8416(a) of title 5, United 
States Code, and this section as they relate to waiver of the spousal 
consent requirement for a married Federal employee to elect an annuity 
without a reduction to provide a survivor benefit to a spouse at 
retirement; and
    (4) The court finds that exceptional circumstances exist justifying 
waiver of the nonemployee spouse's consent.

[52 FR 2061, Jan. 16, 1987, as amended at 57 FR 54679, Nov. 20, 1992]



Sec. 842.608  Changes of election before final adjudication.

    An employee or Member may name a new survivor or change his or her 
election of type of annuity if, not later than 30 days after the date of 
the first regular monthly payment, the named survivor dies or the 
employee or Member files with OPM a new written election. All required 
evidence of spousal consent or justification for waiver of spousal 
consent, if applicable, must accompany any new written election under 
this section.

[56 FR 65419, Dec. 17, 1991]
Sec. 842.609 [Reserved]



Sec. 842.610  Changes of election after final adjudication.

    (a) Except as provided in Sec. 842.611, Sec. 842.612, or paragraph 
(b) of this section, an employee or Member may not revoke or change the 
election or name another survivor later than 30 days after the date of 
the first regular monthly payment.
    (b)(1) Except as provided in Sec. 842.605 and paragraphs (b)(2) and 
(b)(3) of this section, a retiree who was married at the time of 
retirement and has elected a self-only annuity, a one-half reduced 
annuity to provide a current spouse annuity, a fully reduced annuity or 
a one-half reduced annuity to provide a former spouse annuity, or an 
insurable interest rate may elect, no later than 18 months after the 
time of retirement, an annuity reduction or an increased annuity 
reduction to provide a current spouse annuity.
    (2) A current spouse annuity based on an election under paragraph 
(b)(1) of this section cannot be paid if it will, when combined with any 
former spouse annuity or annuities that are required by court order, 
exceed the maximum survivor annuity permitted under Sec. 842.613.
    (3) To make an election under paragraph (b)(1) of this section, the 
retiree must pay, in full no later than 18 months after the time of 
retirement, a deposit equal to the sum of the monthly differences 
between the annuity paid to the retiree and the annuity that would have 
been paid if the additional annuity reduction elected under paragraph 
(b)(1) of this section had been in effect since the time of retirement, 
plus--
    (i) If the election under paragraph (b)(1) of this section changes 
the annuity from a self only annuity to a fully reduced annuity, 24.5 
percent of the retiree's annual annuity, plus 6 percent interest on 
both; or
    (ii) If the election under paragraph (b)(1) of this section changes 
the annuity from a self only annuity to a one-half reduced annuity or 
from a one-half reduced annuity to a fully reduced annuity, 12.25 
percent of the retiree's annual annuity, plus 6 percent interest on 
both.
    (4) If a retiree makes an election under paragraph (b)(1) of this 
section and is prevented from paying the deposit within the 18-month 
time limit because OPM did not send him or her a notice of the amount of 
the deposit at least 30 days before the time limit expires, the time 
limit for making the deposit will be extended 30 days after OPM sends 
the notice of the amount of the deposit.
    (5) An election under paragraph (b)(1) of this section cancels any 
spousal consent under Sec. 842.603.
    (6) An election under paragraph (b)(1) of this section is void 
unless filed with OPM before the retiree dies.
    (7) If a retiree who had elected a fully reduced annuity or a one-
half reduced annuity to provide a former spouse annuity (or annuities) 
makes an election under paragraph (b)(1) of this section which would 
cause the combined current spouse annuity and former spouse annuity (or 
annuities) to exceed the maximum allowed under Sec. 842.613, the former 
spouse annuity (or annuities)

[[Page 308]]

must be reduced to not exceed the maximum allowable under Sec. 842.613.

[52 FR 2061, Jan. 16, 1987, as amended at 56 FR 65419, Dec. 17, 1991; 57 
FR 54680, Nov. 20, 1992]



Sec. 842.611  Post-retirement election of a fully reduced annuity or 
one-half reduced annuity to provide a former spouse annuity.

    (a) Except as provided in paragraphs (b) and (c) of this section, 
when a retiree's marriage terminates after retirement, the retiree may 
elect in writing a fully reduced annuity or a one-half reduced annuity 
to provide a former spouse annuity. Such an election must be filed with 
OPM within 2 years after the retiree's marriage to the former spouse 
terminates.
    (b)(1) Qualifying court orders prevent payment of former spouse 
annuities to the extent necessary to comply with the court order and 
Sec. 842.613.
    (2) A retiree who elects a fully reduced annuity or a one-half 
reduced annuity to provide a former spouse annuity may not elect to 
provide a former spouse annuity in an amount that either--
    (i) Is smaller than the amount required by a qualifying court order; 
or
    (ii) Would cause the sum of all current and former spouse annuities 
based on a retiree's elections under Sec. Sec. 842.603, 842.604, 
842.612 and this section to exceed the maximum allowed under Sec. 
842.613.
    (3) An election under this section is void--
    (i) In the case of a married retiree, if the current spouse does not 
consent to the election on a form as described in Sec. 842.606(c) and 
spousal consent is not waived by OPM in accordance with Sec. 842.607; 
or
    (ii) To the extent that it provides a former spouse annuity for the 
spouse who was married to the retiree at the time of retirement in an 
amount that is inconsistent with any joint designation or waiver made at 
the time of retirement under Sec. 842.603(a)(1) or (a)(2).
    (c) An election under this section is not permitted unless the 
retiree agrees to deposit the amount equal to the difference between the 
amount of annuity actually paid to the retiree and the amount of annuity 
that would have been paid if the reduction elected under paragraph (a) 
of this section had been in effect continuously since the time of 
retirement, plus 6 percent annual interest (computed under Sec. 841.107 
of this chapter) from the date when each difference occurred.
    (d) Any reduction in an annuity to provide a former spouse annuity 
will terminate on the first day of the month after the former spouse 
remarries before age 55 or dies, or the former spouse's eligibility for 
a former spouse annuity terminates under the terms of a qualifying court 
order, unless--
    (1) The retiree elects, within 2 years after the event causing the 
former spouse to lose eligibility, to continue the reduction to provide 
or increase a former spouse annuity for another former spouse, or to 
provide or increase a current spouse annuity; or
    (2) A qualifying court order requires the retiree to provide another 
former spouse annuity.
    (e) The amount of the reduction to provide one or more former spouse 
annuities or a combination of a current spouse annuity and one or more 
former spouse annuities under this section equals--
    (1) Ten percent of the employee's or Member's annuity if the 
employee or Member elects a fully reduced annuity; or
    (2) Five percent of the employee's or Member's annuity if the 
employee or Member elects a one-half reduced annuity.

[52 FR 2061, Jan. 16, 1987, as amended at 57 FR 54680, Nov. 20, 1992]



Sec. 842.612  Post-retirement election of a fully reduced annuity or 
one-half reduced annuity to provide a current spouse annuity.

    (a) Except as provided in paragraph (c) of this section, a retiree 
who was unmarried at the time of retirement may elect, within 2 years 
after a post-retirement marriage, a fully reduced annuity or a one-half 
reduced annuity to provide a current spouse annuity.
    (b) Except as provided in paragraph (c) of this section, a retiree 
who was married at the time of retirement may elect, within 2 years 
after a post-retirement marriage--

[[Page 309]]

    (1) A fully reduced annuity or a one-half reduced annuity to provide 
a current spouse annuity if--
    (i) The retiree was awarded a fully reduced annuity under Sec. 
842.603 at the time of retirement; or
    (ii) The election at the time of retirement was made with a waiver 
of spousal consent in accordance with Sec. 842.607; or
    (iii) The marriage at the time of retirement was to a person other 
than the spouse who would receive a current spouse annuity based on the 
post-retirement election; or
    (2) A one-half reduced annuity to provide a current spouse annuity 
if--
    (i) The retiree elected a one-half reduced annuity under Sec. 
842.606 at the time of retirement;
    (ii) The election at the time of retirement was made with spousal 
consent in accordance with Sec. 842.606; and
    (iii) The marriage at the time of retirement was to the same person 
who would receive a current spouse annuity based on the post-retirement 
election.
    (c)(1) Qualifying court orders prevent payment of current spouse 
annuities to the extent necessary to comply with the court order and 
Sec. 842.613.
    (2) If an election under this section causes the total of all 
current and former spouse annuities provided by a qualifying court order 
or elected under Sec. 842.604, Sec. 842.611, or this section to exceed 
the maximum survivor annuity permitted under Sec. 842.613, OPM will 
accept the election but will pay the portion in excess of the maximum 
only when permitted by Sec. 842.613(c).
    (d)(1) Except as provided in paragraph (d)(2) or (e)(3) of this 
section, a retiree making an election under this section must deposit an 
amount equal to the difference between the amount of annuity actually 
paid to the retiree and the amount of annuity that would have been paid 
if the reduction elected under paragraphs (a) or (b) of this section had 
been in effect continuously since the time of retirement, plus 6 percent 
annual interest, computed under Sec. 841.606 of this chapter, from the 
date when each difference occurred.
    (2) An election under this section may be made without deposit, if 
that election prospectively voids an election of an insurable interest 
annuity.
    (e)(1) An election under this section is irrevocable when received 
by OPM.
    (2) An election under this section is effective when the marriage 
duration requirements of Sec. 843.303 of this chapter are satisfied.
    (3) If an election under paragraph (a) or (b) of this section does 
not become effective, no deposit under paragraph (d) of this section is 
required.
    (4) If payment of the deposit under paragraph (d) of this section is 
not required because the election never became effective and if some or 
all of the deposit has been paid, the amount paid will be returned to 
the retiree, or, if the retiree has died, to the person who would be 
entitled to any lump-sum benefits under the order of precedence in 
section 8424 of title 5, United States Code.
    (f) Any reduction in an annuity to provide a current spouse annuity 
will terminate effective on the first day of the month after the 
marriage to the current spouse ends, unless--
    (1) The retiree elects, within 2 years after a divorce terminates 
the marriage, to continue the reduction to provide for a former spouse 
annuity; or
    (2) A qualifying court order requires the retiree to provide a 
former spouse annuity.
    (g) The amount of the reduction to provide a current spouse annuity 
under this section equals--
    (1) Ten percent of the employee's or Member's annuity if the 
employee or Member elects a fully reduced annuity; or
    (2) Five percent of the employee's or Member's annuity if the 
employee or Member elects a one-half reduced annuity.
    (h) If a retiree who is receiving a reduced annuity to provide a 
former spouse annuity and who has remarried that former spouse (before 
the former spouse attained age 55) dies, the retiree will be deemed to 
have elected to continue the reduction to provide a current spouse 
annuity unless the retiree requests (or has requested) in writing that 
OPM terminate the reduction.

[57 FR 54680, Nov. 20, 1992, as amended at 60 FR 14202, Mar. 16, 1995]

[[Page 310]]



Sec. 842.613  Division of a survivor annuity.

    (a) The maximum combined total of all current and former spouse 
annuities (not including any benefits based on an election of an 
insurable interest rate) payable based on the service of a former 
employee or Member equals 50 percent of the rate of the self-only 
annuity that otherwise would have been paid to the employee, Member, or 
retiree.
    (b) By using the elections available under this subpart or to comply 
with a court order under subpart I of part 841 of this chapter, a 
survivor annuity may be divided into a combination of former spouse 
annuities and a current spouse annuity so long as the aggregate total of 
the current and former spouse annuities does not exceed the maximum 
limitation in paragraph (a) of this section.
    (c) Upon termination of former spouse annuity payments because of 
death or remarriage of the former spouse, or by operation of a court 
order, the current spouse will be entitled to a current spouse annuity 
or an increased current spouse annuity if--
    (1) The employee or Member died while employed in a position covered 
under FERS; or
    (2) The current spouse was married to the employee or Member 
continuously from the time of retirement and did not consent to an 
election not to provide a current spouse annuity; or
    (3) The current spouse married a retiree after retirement and the 
retiree elected, under Sec. 842.612, to provide a current spouse 
annuity for that spouse in the event that the former spouse annuity 
payments terminate.



Sec. 842.614  Computation of partial annuity reduction.

    If a court order or the death of a current or former spouse results 
in providing less than the maximum permitted survivor reduction under 
Sec. 842.613, the reduction in the employee's annuity will be 10 
percent of the amount of the employee's annuity on which the survivor 
benefits will be computed (called the ``base'').



Sec. 842.615  Deposits required.

    (a) The deposits required to elect reduced annuities under 
Sec. Sec. 842.610, 842.611, and 842.612 are not annuity overpayments 
and their collection is not subject to waiver.
    (b) Actuarial reduction in annuity of retirees who make post-
retirement elections to provide a current spouse annuity or a former 
spouse annuity. (1) The annuity reduction required by paragraph (b)(2) 
of this section applies to all retirees who are required to pay deposits 
under Sec. 842.611 or Sec. 842.612 and have not paid any portion of 
the deposit prior to October 1, 1993, or from annuity accruing before 
that date.
    (2) Retirees described in paragraph (b)(1) of this section must have 
a permanent annuity reduction computed under paragraph (b)(4) of this 
section.
    (3) A reduction under paragraph (b)(2) of this section commences on 
the same date as the annuity reduction under Sec. 842.611 or Sec. 
842.612.
    (4) The annuity reduction under paragraph (b)(2) of this section is 
equal to the lesser of--
    (i) The amount of the deposit under Sec. 842.611 or Sec. 842.612 
divided by the present value factor for the retiree's age on the 
commencing date of the reduction under paragraph (b)(3) of this section 
(plus any previous reduction(s) in the retiree's annuity required under 
paragraph (b)(2) or (c)(2) of this section); or
    (ii) Twenty-five percent of the rate of the retiree's self-only 
annuity on the commencing date of the reduction (under paragraph (b)(3) 
of this section).
    (5)(i) The reduction under paragraph (b)(2) or paragraph (c)(2) of 
this section terminates on the date that the retiree dies.
    (ii) If payment of a retiree's annuity is suspended or terminated 
and later reinstated, or if a new annuity becomes payable, OPM will 
increase the amount of the original reduction computed under paragraph 
(b)(4) or paragraph (c)(4) of this section by any cost-of-living 
adjustments under section 8462 of title 5, United States Code, occurring 
between the commencing date of the original reduction and the commencing 
date of the reinstated or new annuity (but the adjusted reduction may 
not

[[Page 311]]

exceed 25 percent of the rate of the reinstated or new self-only 
annuity).
    (c) Post-retirement survivor election deposits that were partially 
paid before October 1, 1993. (1) The annuity reduction required by 
paragraph (c)(2) of this section applies to all retirees who are 
required to pay deposits under Sec. 842.611 or Sec. 842.612 and have 
paid any portion (but not all) of the deposit prior to October 1, 1993, 
or from annuity accruing before that date.
    (2) Retirees described in paragraph (c)(1) of this section must have 
a permanent annuity reduction computed under paragraph (c)(4) of this 
section.
    (3) A reduction under paragraph (c)(2) of this section commences on 
October 1, 1993.
    (4) The annuity reduction under paragraph (c)(2) of this section is 
equal to the lesser of--
    (i) The amount of the principal balance remaining to be paid on 
October 1, 1993, divided by the present value factor for the retiree's 
age on October 1, 1993; or
    (ii) Twenty-five percent of the rate of the retiree's self-only 
annuity on October 1, 1993.
    (5)(i) The reduction under paragraph (c)(2) of this section 
terminates on the date that the retiree dies.
    (ii) If payment of a retiree's annuity is suspended or terminated 
and later reinstated, or if a new annuity becomes payable, OPM will 
increase the amount of the original reduction computed under paragraph 
(b)(4) or paragraph (c)(4) of this section by any cost-of-living 
adjustments under section 8462 of title 5, United States Code, occurring 
between the commencing date of the original reduction and the commencing 
date of the reinstated or new annuity (but the adjusted reduction may 
not exceed 25 percent of the rate of the reinstated or new self-only 
annuity).
    (d) For retirees who die before October 1, 1993, any unpaid portion 
of the deposit required under Sec. 842.611 or Sec. 842.612 will be 
collected from the survivor annuity (for which the election required the 
deposit) before OPM pays any survivor annuity.

[52 FR 2061, Jan. 16, 1987, as amended at 58 FR 52883, Oct. 13, 1993]



                Subpart G_Alternative Forms of Annuities

    Source: 52 FR 2067, Jan. 16, 1987, unless otherwise noted.



Sec. 842.701  Purpose.

    This subpart explains the benefits available to employees and 
Members who elect alternative forms of annuity under section 8420a of 
title 5, United States Code.



Sec. 842.702  Definitions.

    In this subpart--
    Alternative form of annuity means the benefit elected under Sec. 
842.705.
    Current spouse annuity has the same meaning as in Sec. 842.602.
    Date of final adjudication means the date 30 days after the date of 
the first regular monthly payment as defined in Sec. 831.603.
    Former spouse annuity has the same meaning as in Sec. 842.602.
    Present value factor represents the amount of money (earning 
interest at an assumed rate) required at the time of retirement to fund 
an annuity that (a) starts out at the rate of $1 a month and is payable 
in monthly installments for the annuitant's lifetime based on mortality 
rates for non-disability annuitants; and (b) increases each year at an 
assumed rate of inflation. Interest, mortality, and inflation rates used 
in computing the present value are those used by the Board of Actuaries 
for valuation of the System, based on dynamic assumptions. The present 
value factors are unisex factors obtained by averaging sex-distinct 
present value factors, weighted by the total dollar value of annuities 
typically paid to new retirees at each age.
    Time of retirement has the same meaning as in Sec. 842.602.

[52 FR 2067, Jan. 16, 1987, as amended at 53 FR 11635, Apr. 8, 1988]



Sec. 842.703  Eligibility.

    (a) Except as provided in paragraphs (b), (c), and (d) of this 
section, an employee or Member who retires under any provision of 
subchapter II of chapter 84 of title 5, United States Code,

[[Page 312]]

may elect an alternative form of annuity instead of any other benefits 
under the subchapter.
    (b) An employee or Member who, at the time of retirement has a 
former spouse who is entitled to a portion of the employee's or Member's 
retirement benefits or a former spouse annuity under a court order 
acceptable for processing as defined by Sec. 838.103 of this chapter or 
a qualifying court order as defined in Sec. 838.1003 of this chapter 
may not elect an alternative form of annuity.
    (c) An employee or Member who is married at the time of retirement 
may not elect an alternative form of annuity unless the employee's or 
Member's spouse specifically consents to the election. OPM may waive 
spousal consent only under the conditions prescribed by Sec. 842.607.
    (d)(1)(i) An individual whose annuity commences after December 1, 
1990, and before October 1, 1994, may elect an alternative form of 
annuity only if that individual is--
    (A) An employee or Member who meets the conditions and fulfills the 
requirements described in Sec. 842.707(c) (2) and (3); or
    (B) An employee who is separated involuntarily other than for cause 
on charges of misconduct or delinquency;
    (ii) An individual whose annuity commences on or after October 1, 
1994, may elect an alternative form of annuity only if that individual 
is an employee or Member who meets the conditions and fulfills the 
requirements described in Sec. 842.707(c) (2) and (3).
    (2) For the purpose of paragraph (d)(1)(i)(B) of this section, the 
term ``employee'' does not include--
    (i) Members of Congress;
    (ii) Individuals in positions in the Executive Schedule under 
sections 5312 through 5317 of title 5, United States Code;
    (iii) Presidential appointees under section 105(a)(1), 106(a)(1), or 
107 (a)(1) or (b)(1) of title 3, United States Code, if the maximum 
basic pay for such positions is at or above the rate for Executive 
Schedule, level V;
    (iv) Noncareer appointees in the Senior Executive Service or 
noncareer members of the Senior Foreign Service; and
    (v) Any individual in a position that is excepted from the 
competitive service because of its confidential, policy-determining, 
policy-making, or policy-advocating character.
    (3) Notwithstanding paragraph (d)(1) of this section, an employee 
whose annuity commences after December 1, 1990, and before December 2, 
1991, may elect an alternative form of annuity if that individual--
    (i)(A) Was ordered to active military duty (other than for training) 
before December 1, 1990, in connection with Operation Desert Shield; or
    (B) Is an employee of the Department of Defense who is certified by 
the Secretary of Defense to have performed, after November 30, 1990, 
duties essential to support Operation Desert Shield, and the 
certification is submitted to OPM in a form prescribed by OPM; and
    (ii) Would have been eligible, as of November 30, 1990, to elect an 
alternative form of annuity under paragraph (a) of this section.

[52 FR 2067, Jan. 16, 1987, as amended at 56 FR 6551, Feb. 19, 1991; 56 
FR 43866, Sept. 5, 1991; 57 FR 33598, July 29, 1992; 60 FR 54587, Oct. 
25, 1995]



Sec. 842.704  Election requirements.

    (a) The election of an alternative form of annuity and evidence of 
spousal consent must be filed on a form prescribed by OPM within the 
time limit prescribed in paragraph (b)(2) of this section. The form will 
require that a notary public or other official authorized to administer 
oaths certify that the current spouse presented identification, gave 
consent to the specific election as executed by the retiree, signed or 
marked the form, and acknowledged that the consent was given freely in 
the notary's or official's presence.
    (b) An election of the alternative form of annuity must be in 
writing and received by OPM on or before the date of final adjudication. 
After the date of final adjudication, an election of the alternative 
form of annuity is irrevocable.
    (c) Except as provided in paragraph (d), an annuitant who dies 
before the time limit prescribed in paragraph (b)(2) of this section is 
deemed to have

[[Page 313]]

made an affirmative election under Sec. 842.703(a) with a reduced 
annuity to provide a current spouse annuity, regardless of any election 
completed under Sec. 842.606, and the lump-sum credit will be paid in 
accordance with the order of precedence described in section 8424 of 
title 5, United States Code.
    (d) If an annuitant described in paragraph (c) has completed an 
election under Sec. 842.604 (a) or (b)--
    (1) The lump-sum credit will be paid in accordance with the order of 
precedence described in section 8424 of title 5, United States Code; and
    (2) The election under Sec. 842.604 (a) or (b) will be honored.

[53 FR 11635, Apr. 8, 1988, as amended at 56 FR 6552, Feb. 19, 1991; 60 
FR 54587, Oct. 25, 1995]



Sec. 842.705  Alternative forms of annuities available.

    (a) An employee or Member who is eligible to make an election under 
Sec. 842.703 may elect to receive his or her lump-sum credit, excluding 
interest, plus an annuity computed in accordance with sections 8415 and 
8421 of title 5, United States Code, for which they qualify (including 
any reduction for survivor benefits) and reduced under Sec. 842.706.
    (b) A retired employee or Member who elected an alternative form of 
annuity is subject to all provisions of subchapters II and IV of chapter 
84 of title 5, United States Code, as would otherwise apply to a retired 
employee or Member who did not elect an alternative form of annuity. An 
individual who has elected an alternative form of annuity is not 
eligible to apply for disability annuity under subchapter V of such 
chapter.

[52 FR 2067, Jan. 16, 1987, as amended at 53 FR 11635, Apr. 8, 1988]



Sec. 842.706  Computation of alternative form of annuity.

    (a) To compute the beginning rate of annuity payable to a retiree 
who elects an alternative form of annuity, OPM will first compute the 
monthly rate of annuity (and annuity supplement, if any), otherwise 
payable under subchapter II of chapter 84 of title 5, United States 
Code, including all reductions provided under the subchapter other than 
those in section 8420a of that title. That monthly rate is then reduced 
by an amount equal to the retiree's lump-sum credit, excluding interest, 
divided by the applicable present value factor for the retiree's 
attained age (in full years) at the time of retirement. The reduced 
monthly rate is then rounded to the next lowest dollar and becomes the 
rate of annuity payable.
    (b) OPM will publish a notice in the Federal Register announcing any 
proposed adjustments in present value factors at least 30 days before 
the effective date of the adjustments.



Sec. 842.707  Partial deferred payment of the lump-sum credit if 
annuity commences after January 3, 1988, and before October 1, 1989.

    (a) Except as provided in paragraph (c) of this section, if the 
annuity of an employee or Member commences after January 3, 1988, and 
before October 1, 1989, the lump-sum credit payable under Sec. 842.705 
is payable to the individual, or his or her survivors, according to the 
following schedule:
    (1) Sixty percent of the lump-sum credit is payable at the time of 
retirement, and
    (2) Forty percent is payable, with interest determined under section 
8334(e)(3) of title 5, United States Code, one year after the time of 
retirement.
    (b) If an employee or Member whose annuity commences after January 
3, 1988, and before October 1, 1989, dies before the time limit 
prescribed in Sec. 842.704(b)(2), that individual is subject to Sec. 
842.704 (c) or (d), but the lump-sum credit will be paid in accordance 
with the schedule in paragraph (a) of this section.
    (c) An annuitant is exempt from the deferred payment schedule under 
paragraph (a) of this section if the individual--
    (1) Separates involuntarily, other than for cause on charges of 
delinquency or misconduct, or
    (2) Has, at the time of retirement, a life-threatening affliction or 
other critical medical condition.
    (3)(i) For the purpose of this section, life-threatening affliction 
or other critical medical condition means a medical condition so severe 
as to reasonably limit

[[Page 314]]

an individual's probable life expectancy to less than 2 years.
    (ii) The existence of one of the following medical conditions is 
prima facie evidence of a life-threatening affliction or other critical 
medical condition:
    (A) Metastatic and/or inoperable neoplasms.
    (B) Aortic stenosis (severe).
    (C) Class IV cardiac disease with congestive heart failure.
    (D) Respiratory failure.
    (E) Cor pulmonale with respiratory failure.
    (F) Emphysema with respiratory failure.
    (G) [Reserved]
    (H) Severe cardiomyopathy--Class IV.
    (I) Aplastic anemia.
    (J) Uncontrolled hypertension with hypertensive encephalopathy.
    (K) Cardiac aneurysm not amenable to surgical treatment.
    (L) Agranulocytosis.
    (M) Severe hepatic failure.
    (N) Severe hypoxic brain damage.
    (O) Severe portal hypertension with esophageal varices.
    (P) AIDS (Active--Not AIDS Related Complex or only seropositivity).
    (Q) Life-threatening infections (encephalitis, meningitis, rabies, 
etc.).
    (R) Scleroderma with severe esophageal involvement.
    (S) Amyotrophic lateral sclerosis (rapidly progressive).
    (T) Hemiplegia with life threatening complications.
    (U) Quadriplegia with life threatening complications.
    (iii) Evidence of the existence of a life-threatening affliction or 
other critical medical condition must be certified by a physician and 
sent to OPM on or before the date the annuitant elects to receive an 
alternative form of annuity. For the purpose of this section, 
``physician'' has the same meaning given that term in Sec. 339.102 of 
this chapter.
    (iv) If a medical condition other than those listed in paragraph 
(c)(3)(ii) of this section is claimed as a basis for exemption from the 
deferred payment schedule, OPM will review the physician's certification 
to determine whether the cited condition is life-threatening or 
critical.
    (v) The cost of providing medical documentation under this paragraph 
rests with the employee or Member, unless OPM exercises its choice of 
physician.

[53 FR 11635, Apr. 8, 1988, as amended at 60 FR 54587, Oct. 25, 1995]



Sec. 842.708  Partial deferred payment of the lump-sum credit if 
annuity commences after December 2, 1989, and before October 1, 1995.

    (a) Except as provided in paragraph (c) of this section, if the 
annuity of a retiree commences after December 2, 1989, and before 
October 1, 1994, the lump-sum credit payable under Sec. 842.705 is 
payable to the individual, or his or her survivors, according to the 
following schedule:
    (1) Fifty percent of the lump-sum credit is payable at the time of 
retirement, and
    (2) Fifty percent is payable, with interest determined under section 
8334(e)(3) of title 5, United States Code, one year after the time of 
retirement, except if the payment date of the amount specified in 
paragraph (a)(1) of this section was after December 4, 1989, payment 
with interest will be made in the calendar year following the calendar 
year in which the payment specified in paragraph (a)(1) of this section 
was made.
    (b) If a retiree whose annuity commences after December 2, 1989, and 
before October 1, 1994, dies before the time limit prescribed in Sec. 
842.704(b)(2), that individual is subject to Sec. 842.704 (c) or (d), 
but the lump-sum credit will be paid in accordance with the schedule in 
paragraph (a) of this section.
    (c)(1) A retiree is exempt from the deferred payment schedule under 
paragraph (a) of this section if the individual meets the conditions, 
and fulfills the requirements, described in Sec. 842.707(c).
    (2)(i) A retiree who is exempt from the deferred payment schedule 
may waive that exemption by notifying OPM, in writing, on or before the 
date he or she elects to receive the alternative form of annuity.
    (ii) Paragraph (c)(2)(i) of this section does not apply to an 
individual whose annuity commences after December 1, 1990, if that 
individual's eligibility to

[[Page 315]]

elect an alternative form of annuity is pursuant to Sec. 
842.703(d)(1)(i)(A).
    (iii) A waiver under paragraph (c)(2)(i) of this section cannot be 
revoked.

[56 FR 6552, Feb. 19, 1991, as amended at 60 FR 54587, Oct. 25, 1995]



   Subpart H_Law Enforcement Officers, Firefighters, and Air Traffic 
                               Controllers

    Source: 52 FR 2069, Jan. 16, 1987, unless otherwise noted.



Sec. 842.801  Applicability and purpose.

    (a) This subpart contains regulations of the Office of Personnel 
Management (OPM) to supplement--
    (1) 5 U.S.C. 8412 (d) and (e), which establish special retirement 
eligibility for law enforcement officers, firefighters, and air traffic 
controllers employed under the Federal Employees Retirement System 
(FERS);
    (2) 5 U.S.C. 8422(a)(2)(B), pertaining to deductions;
    (3) 5 U.S.C. 8423(a), pertaining to Government contributions; and
    (4) 5 U.S.C. 8425, pertaining to mandatory retirement.
    (b) The regulations in this subpart are issued pursuant to the 
authority given to OPM in 5 U.S.C. 8461(g) to prescribe regulations to 
carry out the provisions of chapter 84 of title 5 of the United States 
Code, and in 5 U.S.C. 1104 to delegate authority for personnel 
management to the heads of agencies.

[52 FR 2069, Jan. 16, 1987, as amended at 57 FR 32689, July 23, 1992]



Sec. 842.802  Definitions.

    In this subpart--
    Agency head means, for the executive branch agencies, the head of an 
executive agency as defined in 5 U.S.C. 105; for the legislative branch, 
the Secretary of State, the Clerk of the House of representatives, or 
the head of any other legislative branch agency; for the judicial 
branch, the Director of the Administrative Office of the U.S. Courts; 
for the Postal Service, the Postmaster General; and for any other 
independent establishment that is an entity of the Federal Government, 
the head of the establishment. For the purpose of an approval of 
coverage under this subpart, agency head is also deemed to include the 
designated representative of the head of an executive department as 
defined in 5 U.S.C. 101, except that, for provisions dealing with law 
enforcement officers and firefighters, the designated representative 
must be a department headquarters-level official who reports directly to 
the executive department head, or to the deputy department head, and who 
is the sole such represenative for the entire department. For the 
purpose of a denial coverage under this subpart, agency head is also 
deemed to include the designated representative of the agency head, as 
defined in the first sentence of this definition, at any level within 
the agency.
    Air traffic controller means a civilian employee of the Department 
of Transportation or the Department of Defense in an air traffic control 
facility or flight service station facility who is actively engaged in 
the separation and control of air traffic or in providing preflight, 
inflight, or airport advisory service to aircraft operators, or who is 
the immediate supervisor of such an employee, as provided by 5 U.S.C. 
8401(35)(A). Also included in this definition is a civilian employee of 
the Department of Transportation or the Department of Defense who is the 
immediate supervisor of a person described under 5 U.S.C. 2109(1)(B) 
(i.e., a second-level supervisor), as provided by 5 U.S.C. 8401(35)(B).
    Detention duties means duties that require frequent direct contact 
in the detention, direction, supervision, inspection, training, 
employment, care, transportation, or rehabilitation of individuals 
suspected or convicted of offenses against the criminal laws of the 
United States or the District of Columbia or offenses against the 
punitive articles of the Uniform Code of Military Justice (chapter 47 of 
title 10, United States Code). (See 5 U.S.C. 8401(17).)
    Employee means an employee as defined by 5 U.S.C. 8401(11).
    Firefighter means an employee occupying a rigorous position, whose 
primary duties are to perform work directly connected with the control 
and extinguishment of fires, as provided in 5 U.S.C. 8401(14). Also 
included in this

[[Page 316]]

definition is an employee occupying a rigorous firefighter position who 
moves to a supervisory or administrative position and meets the 
conditions of Sec. 842.803(b).
    First-level supervisors are employees classified as supervisors who 
have direct and regular contact with the employees they supervise. 
First-level supervisors do not have subordinate supervisors. A first-
level supervisor may occupy a rigorous position or a secondary position 
if the appropriate definition is met.
    Frequent direct contact means personal, immediate, and regularly-
assigned contact with detainees while performing detention duties, which 
is repeated and continual over a typical work cycle.
    Law enforcement officer means an employee occupying a rigorous 
position, whose primary duties are the investigation, apprehension, or 
detention of individuals suspected or convicted of offenses against the 
criminal laws of the United States, or the protection of officials of 
the United States against threats to personal safety, as provided in 5 
U.S.C. 8401(17). Also included in this definition is an employee 
occupying a rigorous law enforcement officer position who moves to a 
supervisory or administrative position and meets the conditions of Sec. 
842.803(b). Law enforcement officer also includes, as required by 5 
U.S.C. 8401(17)(B), an employee of the Department of the Interior or the 
Department of the Treasury who occupies a position that, but for 
enactment of chapter 84 of title 5, United States Code, would be subject 
to the District of Columbia Police and Firefighters' Retirement System, 
as determined by the Secretary of the Interior or the Secretary of the 
Treasury, as appropriate. Except as provided above, the definition does 
not include an employee whose primary duties involve maintaining order, 
protecting life and property, guarding against or inspecting for 
violations of law, or investigating persons other than those who are 
suspected or convicted of offenses against the criminal laws of the 
United States.
    Primary duties means those duties of a position that--
    (a) Are paramount in influence or weight; that is, constitute the 
basic reasons for the existence of the position;
    (b) Occupy a substantial portion of the individual's working time 
over a typical work cycle; and
    (c) Are assigned on a regular and recurring basis.
    Duties that are of an emergency, incidental, or temporary nature 
cannot be considered ``primary'' even if they meet the substantial 
portion of time criterion. In general, if an employee spends an average 
of at least 50 percent of his or her time performing a duty or group of 
duties, they are his or her primary duties.
    Rigorous position means a position the duties of which are so 
rigorous that employment opportunities should, as soon as reasonably 
possible, be limited (through establishment of a maximum entry age and 
physical qualifications) to young and physically vigorous individuals 
whose primary duties are--
    (a) To perform work directly connected with controlling and 
extinguishing fires; or
    (b) Investigating, apprehending, or detaining individuals suspected 
or convicted of offenses against the criminal laws of the United States 
or protecting the personal safety of United States officials.

The condition in this definition that employment opportunities be 
limited does not apply with respect to an employee who moves directly 
(i.e., without a break in service exceeding 3 days) from one rigorous 
law enforcement officer position to another or from one rigorous 
firefighter position to another. Rigorous position is also deemed to 
include a position held by a law enforcement officer as identified in 5 
U.S.C. 8401(17)(B) (related to certain employees in the Departments of 
the Interior and the Treasury).
    Secondary position means a position that--
    (a) Is clearly in the law enforcement or firefighting field;
    (b) Is in an organization having a law enforcement or firefighting 
mission; and
    (c) Is either--
    (1) Supervisory; that is, a position whose primary duties are as a 
first-

[[Page 317]]

level supervisor or law enforcement officers or firefighters in rigorous 
positions; or
    (2) Administrative; that is, an executive, managerial, technical, 
semiprofessional, or professional position for which experience in a 
rigorous law enforcement or firefighting position, or equivalent 
experience outside the Federal Government, is a mandatory prerequisite.

[52 FR 2069, Jan. 16, 1987, as amended at 57 FR 32689-32690, July 23, 
1992; 60 FR 3339, Jan. 17, 1995; 66 FR 38525, July 25, 2001; 70 FR 
32710, June 6, 2005; 70 FR 42254, July 22, 2005]



Sec. 842.803  Conditions for coverage.

    (a) Rigorous positions. (1) An employee's service in a position that 
has been determined by the employing agency head to be a rigorous law 
enforcement officer or firefighter position is covered under the 
provisions of 5 U.S.C. 8412(d).
    (2) An employee who is not in a rigorous position, nor covered while 
in a secondary position, and who is detailed or temporarily promoted to 
a rigorous position is not covered under the provisions of 5 U.S.C. 
8412(d).
    (3) A first-level supervisor position may be determined to be a 
rigorous position if it satisfies the conditions set forth in Sec. 
842.802.
    (b) Secondary positions. (1) An employee's service in a position 
that has been determined by the employing agency head to be a secondary 
law enforcement officer or firefighter position is covered under the 
provisions of 5 U.S.C. 8412(d), if all of the following criteria are 
met:
    (i) The employee, while covered under the provisions of 5 U.S.C 
8412(d), moves directly (that is, without a break in service exceeding 3 
days) from a rigorous position to a secondary position;
    (ii) The employee has completed 3 years of service in a rigorous 
position, including any such service during which no FERS deductions 
were withheld; and
    (iii) The employee has been continuously employed in a secondary 
position or positions since moving from a rigorous position without a 
break in service exceeding 3 days, except that a break in employment in 
secondary positions that begins with an involuntary separation (not for 
cause), within the meaning of 5 U.S.C. 8414(b)(1)(A), is not considered 
in determining whether the service in secondary positions is continuous 
for this purpose.
    (2) An employee who is not a rigorous position, nor covered while in 
a secondary position, and who is detailed or temporarily promoted to a 
secondary position is not covered under the provisions of 5 U.S.C. 
8412(d).
    (c) Air traffic controller. An employee's service in a position that 
has been determined to be an air traffic controller position by the 
employing agency head is covered under the provisions of 5 U.S.C. 
8412(e).
    (d) Except as specifically provided in this subpart, an agency 
head's authority under this section cannot be delegated.

[52 FR 2069, Jan. 16, 1987, as amended at 57 FR 32690, July 23, 1992]



Sec. 842.804  Evidence.

    (a) An agency head's determination under Sec. 842.803(a) (finding 
that a position is a rigorous position) must be based solely on the 
official position description of the position in question and any other 
official description of duties and qualifications. The official 
documentation for the position should, as soon as is reasonably 
possible, establish that the primary duties of the position are so 
rigorous that the agency does not allow individuals to enter the 
position if they are over a certain age or if they fail to meet certain 
physical qualifications (that is, physical requirements and/or medical 
standards), as determined by the employing agency head based on the 
personnel management needs of the agency for the positions in question.
    (b) A determination under Sec. Sec. 842.803 (b) or (c) must be 
based on the official position description and any other evidence deemed 
appropriate by the agency head for making the determination.
    (c) If an employee is in a position not subject to the one-half 
percent higher withholding rate of 5 U.S.C. 8422(a)(2)(B), and the 
employee does not, within 6 months after entering the position or after 
any significant change in the position, formally and in writing seek a 
determination from the employing agency that his position is properly

[[Page 318]]

covered by the higher withholding rate, the agency head's determination 
that the service was not so covered at the time of the service is 
presumed to be correct. This presumption may be rebutted by a 
preponderance of the evidence that the employee was unaware of his or 
her status or was prevented by cause beyond his or her control from 
requesting that the official status be changed at the time the service 
was performed.

[52 FR 2069, Jan. 16, 1987, as amended at 57 FR 32690, July 23, 1992]



Sec. 842.805  Withholding and contributions.

    (a) During service covered under the conditions established by Sec. 
842.803 (a), (b), or (c), the employing agency will deduct and withhold 
from the employee's base pay the amounts required under 5 U.S.C. 
8422(a)(2)(B) and submit that amount to OPM in accordance with payroll 
office instructions issued by OPM.
    (b) During service described in paragraph (a) of this section, the 
employing agency must submit to OPM the Government contributions 
required under 5 U.S.C. 8423(a)(1)(B) in accordance with payroll office 
instructions issued by OPM.
    (c) If the correct withholdings and/or Government contributions are 
not timely submitted to OPM for any reason whatsover, including cases in 
which it is finally determined that past service of a current or former 
employee was subject to the higher deduction and Government contribution 
rates, the employing agency must correct the error by submitting the 
correct amounts (including both employee and agency shares) to OPM as 
soon as possible. Even if the agency waives collection of the 
overpayment of pay under any waiver authority that may be available for 
this purpose, such as 5 U.S.C. 5584, or otherwise fails to collect the 
debt, the correct amount must still be submitted to OPM as soon as 
possible.
    (d) Upon proper application from an employee, former employee or 
eligible survivor of a former employee, an employing agency or former 
employing agency will pay a refund or erroneous additional withholdings 
for service that is found not to have been covered service. If an 
individual has paid to OPM a deposit or redeposit, including the 
additional amount required for covered service, and the deposit is later 
determined to be erroneous because the service was not covered service, 
OPM will pay the refund, upon proper application, to the individual, 
without interest.
    (e) The additional employee withholding and agency contributions for 
covered service properly made are not separately refundable, even in the 
event that the employee or his or her survivor does not qualify for a 
special annuity computation under 5 U.S.C. 8415(d).
    (f) While an employee who does not hold a rigorous, secondary, or 
air traffic controller position is detailed or temporarily promoted to 
such a position, the additional withholdings and agency contributions 
will not be made.
    (g) While an employee who holds a rigorous, secondary, or air 
traffic controller position is detailed or temporarily promoted to a 
position that is not a rigorous, secondary, or air traffic controller 
position, the additional withholdings and agency contributions will 
continue to be made.

[52 FR 2069, Jan. 16, 1987, as amended at 57 FR 32690, July 23, 1992; 60 
FR 3340, Jan. 17, 1995]



Sec. 842.806  Mandatory separation.

    (a) The mandatory separation provisions of 5 U.S.C. 8425 apply to 
all law enforcement officers and firefighters, including those in 
secondary positions, and air traffic controllers, with the exception of 
a civilian employee of the Department of Transportation or the 
Department of Defense who is the immediate supervisor of a person 
described under 5 U.S.C. 2109(1)(B) (i.e., a second-level supervisor). A 
mandatory separation under 5 U.S.C. 8425 is not an adverse action under 
part 752 of this chapter or a removal action under part 359 of this 
chapter.
    (b) Exemptions from mandatory separation are subject to the 
conditions set forth under 5 U.S.C. 8425. An exemption may be granted at 
the sole discretion of the head of the employing agency or by the 
President in accordance with 5 U.S.C. 8425(c).

[[Page 319]]

    (c) In the event that an employee is separated mandatorily under 5 
U.S.C. 8425, or is separated for optional retirement under 5 U.S.C. 8412 
(d) or (e), and OPM finds that all or part of the minimum service 
required for entitlement to immediate annuity was in a position that did 
not meet the requirements of a primary or secondary position and the 
conditions set forth in this subpart or, if applicable, in part 831 of 
this chapter, such separation will be considered erroneous.

[52 FR 2069, Jan. 16, 1987, as amended at 70 FR 32710, June 6, 2005]



Sec. 842.807  Review of decisions.

    (a) The final decision of an agency head denying an individual's 
request for approval of a position as a rigorous, secondary, or air 
traffic controller position made under Sec. 842.804(c) may be appealed 
to the Merit Systems Protection Board under procedures prescribed by the 
Board.
    (b) The final decision of an agency head denying an individual 
coverage while serving in an approved secondary position because of 
failure to meet the conditions in Sec. 842.803(b) may be appealed to 
the Merit Systems Protection Board under procedures prescribed by the 
Board.

[66 FR 38525, July 25, 2001]



Sec. 842.808  Oversight of coverage determinations.

    (a) Upon deciding that a position is a law enforcement officer or 
firefighter position, each agency head must notify OPM (Attention: 
Associate Director for Retirement and Insurance) stating the title of 
each position, the number of incumbents, whether the position is 
rigorous or secondary, and, if the position is rigorous, the established 
maximum entry age (or if no maximum entry age has yet been established, 
the date by which it will be established). The Director of OPM retains 
the authority to overrule an agency head's determination that a position 
is a rigorous or secondary position, except such a determination under 5 
U.S.C. 8401(17)(B) (concerning certain employees in the Departments of 
the Interior and the Treasury) or under 5 U.S.C. 8401(17)(D) (concerning 
certain positions primarily involved in detention activities).
    (b) Each agency must establish a file containing all coverage 
determinations made by an agency head under Sec. 842.803, and all 
background material used in making the determination.
    (c) Upon request by OPM, the agency will make available the entire 
coverage determination file for OPM to audit to ensure compliance with 
the provisions of this subpart.
    (d) Upon request by OPM, an agency must submit to OPM a list of all 
covered positions and any other pertinent information requested. For 
rigorous positions, the list must show the specific entry age 
requirement and physical qualification requirements for each position.

[52 FR 2069, Jan. 16, 1987, as amended at 57 FR 32691, July 23, 1992]



Sec. 842.809  Transitional provisions.

    (a) Any service as an air traffic controller, within the meaning of 
this term under 5 U.S.C. 2109 as in effect on or after January 1, 1987--
even if performed before that date--is included in determining an 
employee's length of air traffic controller service under 5 U.S.C. 
8412(e) for the purposes of retirement eligibility and for mandatory 
separation under 5 U.S.C. 8425(a) as long as the annuity is based on a 
separation from service occurring after 1986.
    (b) Any service as a law enforcement officer or firefighter, within 
the meaning of these terms under 5 U.S.C. 8331 (20) and (21), that was 
performed before the date on which an employee becomes subject to 
chapter 84 of title 5, United States Code, is included in determining 
the employee's length of law enforcement officer and firefighter service 
under 5 U.S.C. 8412(d) for the purposes of retirement eligibility and 
mandatory separation under 5 U.S.C. 8425(b). Service performed as a law 
enforcement officer or firefighter within the meaning of 5 U.S.C. 8331, 
other than service in a supervisory or administrative position, is 
considered to be service in a rigorous position for the purpose of the 
3-year requirement of Sec. 842.803(b)(1)(ii). The FERS definitions of 
firefighter under 5 U.S.C. 8401(14) and law enforcement officer under 5 
U.S.C.

[[Page 320]]

8401(17) are not applicable to service performed--
    (1) Before 1987; or
    (2) After 1986 and before an employee first becomes subject to 
chapter 84 (that is, subject to FERS deductions), unless that service 
was neither subject to CSRS deductions nor creditable in a CSRS 
component as described in Sec. 846.304(b).
    (c)(1) An individual who--
    (i) Is covered as a law enforcement officer or firefighter under 5 
U.S.C. 8336(c) in a supervisory or administrative position, having 
already met the transfer requirement of subpart I of part 831 of this 
chapter; and
    (ii) Elects under section 301 of Pub. L. 99-335 to become subject to 
chapter 84 of such title and begins service in a secondary position with 
no break in service is considered to have met the transfer and 3-year 
requirements of Sec. Sec. 842.803(b)(1)(i) and (ii) for coverage in a 
secondary position upon the effective date of the election.
    (2) An individual who--
    (i) Is covered as a law enforcement officer or firefighter under 5 
U.S.C. 8336(c) in a supervisory or administrative position, having 
already met the transfer requirement of subpart I of part 831 of this 
chapter; and
    (ii) Automatically becomes subject to chapter 84 of title 5 of the 
United States Code (not by election under section 301 of Pub. L. 99-335) 
serving in a secondary position is considered to have met the 3-year 
requirement of Sec. 842.803(b)(1)(ii) for coverage in a secondary 
position. The employee is not covered as a law enforcement officer or 
firefighter in a secondary position if he or she had a break in coverage 
as a law enforcement officer or firefighter (within the meaning of 5 
U.S.C. 8331) exceeding 3 days immediately before becoming subject to 
chapter 84 of title 5 of United States Code. However, a break in 
coverage in supervisory or administrative positions occurring before the 
individual becomes subject to such chapter 84 that began with an 
involuntary separation (not for cause), within the meaning of 5 U.S.C. 
8414(b)(1)(A), is not considered to be a break in service for this 
purpose.
    (d) (1) The CSRS definitions of law enforcement officer under 5 
U.S.C. 8331(20) and firefighter under 5 U.S.C. 8331(21) are applicable 
to service performed before an employee became subject to chapter 84 if 
the service was--
    (i) Subject to CSRS deductions at the time it was performed 
(including service that becomes creditable under FERS annuity 
computation rules);
    (ii) Performed before 1987 and not subject to retirement deductions; 
or
    (iii) Performed after 1986 and not subject to retirement deductions 
but is creditable in a CSRS component as described in Sec. 846.304(b).
    (2) The determination of whether any service meets the CSRS 
definitions of law enforcement officer under 5 U.S.C. 8331 (20) or 
firefighter under 5 U.S.C. 8331(21) must be made in accordance with the 
provisions of subpart I of part 831 of this chapter.

[52 FR 2069, Jan. 16, 1987, as amended at 57 FR 32691, July 23, 1992]

             Regulations Pertaining to Noncodified Statutes



Sec. 842.810  Elections to be deemed a law enforcement officer for 
retirement purposes by certain police officers employed by the 
Metropolitan Washington Airports Authority (MWAA).

    (a) Who may elect. Metropolitan Washington Airports Authority (MWAA) 
police officers employed as members of the MWAA police force as of 
December 21, 2000, who are covered by the provisions of the Federal 
Employees Retirement System by 49 U.S.C. 49107(b) may elect to be deemed 
a law enforcement officer for retirement purposes and have past service 
as a member of the MWAA and Federal Aviation Administration police 
forces credited as law enforcement officer service.
    (b) Procedure for making an election. Elections by an MWAA police 
officer to be treated as a law enforcement officer for retirement 
purposes must be made in writing to the MWAA and filed in the employee's 
personnel file in accordance with procedures established by OPM in 
consultation with the MWAA.
    (c) Time limit for making an election. An election under paragraph 
(a) of this section must be made either before the MWAA police officer 
separates from

[[Page 321]]

service with the MWAA or July 25, 2002, whichever occurs first.
    (d) Effect of an election. An election under paragraph (a) of this 
section is effective on the beginning of the first pay period following 
the date of the MWAA police officer's election.
    (e) Irrevocability. An election under paragraph (a) of this section 
becomes irrevocable when received by the MWAA.
    (f) Employee payment for past service. (1) An MWAA police officer 
making an election under this section must pay an amount equal to the 
difference between law enforcement officer retirement deductions and 
retirement deductions actually paid by the police officer for the police 
officer's past police officer service with the Metropolitan Washington 
Airports Authority and Federal Aviation Administration. The amount paid 
under this paragraph shall be computed with interest in accordance with 
5 U.S.C. 8334(e) and paid to the MWAA prior to separation.
    (2) Starting with the effective date under paragraph (d) of this 
section, the MWAA must make deductions and withholdings from the 
electing MWAA police officer's base pay in accordance with 5 CFR 
832.805.
    (g) Employer contributions. (1) Upon the police officer's payment 
for past service credit under paragraph (f) of this section, the MWAA 
must, in accordance with procedures established by OPM, pay into the 
Civil Service Retirement and Disability Fund the additional agency 
retirement contribution amounts required for the police officer's past 
service, plus interest.
    (2) Starting with the effective date under paragraph (d) of this 
section, the MWAA must make agency contributions for the electing police 
officer in accordance with 5 CFR 842.805.
    (h) Mandatory Separation. (1) An MWAA police officer who elects to 
be treated as a law enforcement officer for FERS retirement purposes is 
subject to the mandatory separation provisions of 5 U.S.C. 8425(b) and 5 
CFR 831.502.
    (2) The President and Chief Operating Officer of the MWAA is deemed 
to be the head of an agency for the purpose of exempting an MWAA police 
officer from mandatory separation in accordance with the provisions of 5 
U.S.C. 8425(b) and 5 CFR 831.502(b)(1).
    (i) Reemployment. An MWAA police officer who has been mandatorily 
separated under 5 U.S.C. 8425(b) is not barred from reemployment in any 
position except a FERS rigorous or secondary law enforcement officer 
position after age 60. Service by a reemployed former MWAA police 
officer who retired under 5 U.S.C. 8412(d) is not covered by the 
provisions of 5 U.S.C. 8412(d).

[66 FR 38525, July 25, 2001]



Sec. 842.811  Deposits for second-level supervisory air traffic 
controller service performed before February 10, 2004.

    (a)(1) Eligibility--current and former employees, and retirees. A 
current or former employee, or a retiree who was employed as a civilian 
employee of the Department of Transportation or the Department of 
Defense before February 10, 2004, as the immediate supervisor of a 
person described in 5 U.S.C. 2109(1)(B) may make a deposit for such 
service, in a form prescribed by OPM, so that such service may be 
credited as air traffic controller service for FERS purposes subject to 
paragraph (h) of this section.
    (2) Eligibility--survivors. A survivor of a current employee, former 
employee, or a retiree eligible to make a deposit under paragraph (a)(1) 
of this section may make a deposit under this section when the current 
or former employee, or a retiree--
    (i) Dies during the period beginning February 10, 2004, and ending 
November 28, 2006, without submitting an application under this section; 
or
    (ii) Dies after submitting an application to make a deposit under 
this section within the time limit set out in paragraph (c) of this 
section without completing a deposit.
    (b) Filing of deposit application. An individual eligible to make a 
deposit under paragraph (a) of this section for service described under 
paragraph (a)(1) of this section must submit a written application to 
make a deposit for such service with the appropriate office in the 
agency where such service was performed.
    (c) Time limit for filing application. An application to make a 
deposit under

[[Page 322]]

this section must be submitted on or before November 28, 2006.
    (d)(1) Amount of deposit. A deposit under this section shall be 
computed using distinct periods of service. For the purpose of this 
section, a distinct period of service means a period of service not 
interrupted by a break in service of more than 3 days. A deposit may be 
made for a distinct period of service; however, such a deposit shall be 
ineffective if deposits are not completed for all distinct periods of 
service described under paragraph (a) of this section.
    (2) The amount of deposit under this section shall be an amount 
equal to the amount by which the deductions from pay which would have 
been required under 5 U.S.C. chapter 84, subchapter II, if at the time 
the service was performed the service had been air traffic controller 
service exceeds the unrefunded deductions or deposits actually made 
under 5 U.S.C. chapter 84, subchapter II, with respect to such service, 
plus interest.
    (e)(1) Interest. Interest shall be computed as described under 
paragraphs (2) and (3) of 5 U.S.C. 8334(e). Interest shall be computed 
for each distinct period of service from the midpoint of the distinct 
period of service.
    (2) The computation of interest is on the basis of 30 days to the 
month. Interest is computed for the actual calendar time involved in 
each case.
    (f) Forms of deposit. A deposit under this section may be made as a 
single lump sum or in installments.
    (g)(1) Processing deposit applications and payments. Upon receiving 
an application for deposit under this section, the agency shall 
determine whether the application meets the requirements of this 
section; compute the deposit, including interest; and advise the 
applicant of the total amount of deposit due.
    (2) The agency shall establish a deposit account showing the total 
amount due and a payment schedule (unless deposit is made in one lump 
sum) to record the date and amount of each payment.
    (3) If an eligible individual cannot make payment in one lump sum, 
the agency shall accept installment payments (by allotments or 
otherwise). The agency, however, is not required to accept individual 
checks in amounts less than $50.
    (4) Payments received by the agency shall be remitted to OPM 
immediately for deposit to the Civil Service Retirement and Disability 
Fund.
    (5) Once a deposit has been paid in full or otherwise closed out, 
the agency shall submit the documentation pertaining to the deposit to 
OPM in accordance with instructions issued by OPM.
    (h) Effect of deposit. An individual completing a deposit under this 
section whose entitlement to an annuity is based on a separation from 
service on or after February 10, 2004, will receive air traffic 
controller retirement credit for such service, for annuity entitlement 
and computation purposes, when OPM receives certification that the 
deposit has been paid in full, and the deposit payment is remitted to 
the Civil Service Retirement and Disability Fund.

[70 FR 32710, June 6, 2005]



                  Subpart I_Nuclear Materials Couriers

    Source: 65 FR 2524, Jan. 18, 2000, unless otherwise noted.



Sec. 842.901  Applicability and purpose.

    (a) This subpart contains regulations of the Office of Personnel 
Management (OPM) to supplement--
    (1) 5 U.S.C. 8412(d) and (e), which establish special retirement 
eligibility for law enforcement officers, firefighters, air traffic 
controllers, and nuclear materials couriers employed under the Federal 
Employees Retirement System (FERS);
    (2) 5 U.S.C. 8422(a), pertaining to deductions;
    (3) 5 U.S.C. 8423(a), pertaining to Government contributions; and
    (4) 5 U.S.C. 8425, pertaining to mandatory retirement.
    (b) The regulations in this subpart are issued pursuant to the 
authority given to OPM in 5 U.S.C. 8461(g) to prescribe regulations to 
carry out the provisions of 5 U.S.C. chapter 84 and in 5 U.S.C. 1104 to 
delegate authority for

[[Page 323]]

personnel management to the heads of agencies.



Sec. 842.902  Definitions.

    Agency head means the Secretary of Energy. For purposes of this 
subpart, agency head is also deemed to include the designated 
representative of the Secretary of Energy, except that the designated 
representative must be a department headquarters-level official who 
reports directly to the Secretary of Energy, or to the Deputy Secretary 
of Energy, and who is the sole such representative for the entire 
department.
    Employee means an employee as defined by 5 U.S.C. 8401(11).
    Nuclear materials courier means an employee of the Department of 
Energy, the duties of whose position are primarily to transport, and 
provide armed escort and protection during transit of, nuclear weapons, 
nuclear weapon components, strategic quantities of special nuclear 
materials or other materials related to national security, including an 
employee engaged in this activity who is transferred directly to a 
supervisory or administrative position within the same Department of 
Energy organization, after performing this activity for at least 3 
years. (See 5 U.S.C. 8331(27).)
    Primary duties means those duties of a position that--
    (1)(i) Are paramount in influence or weight; that is, constitute the 
basic reasons for the existence of the position;
    (ii) Occupy a substantial portion of the individual's working time 
over a typical work cycle; and
    (iii) Are assigned on a regular and recurring basis.
    (2) Duties that are of an emergency, incidental, or temporary nature 
cannot be considered ``primary'' even if they meet the substantial 
portion of time criterion. In general, if an employee spends an average 
of at least 50 percent of his or her time performing a duty or group of 
duties, they are his or her primary duties.
    Primary position means a position that is in an organization of the 
Department of Energy and whose primary duties are to transport, and 
provide armed escort and protection during transit of, nuclear weapons, 
nuclear weapon components, strategic quantities of special nuclear 
materials or other materials related to national security.
    Secondary position means a position that--
    (1) Is clearly in the nuclear materials transportation field;
    (2) Is in an organization of the Department of Energy having a 
nuclear materials transportation mission; and
    (3) Is either--
    (i) Supervisory; that is, a position whose primary duties are as a 
first-level supervisor of nuclear materials couriers in primary 
positions; or
    (ii) Administrative; that is, an executive, managerial, technical, 
semiprofessional, or professional position for which experience in a 
primary nuclear materials courier position is a prerequisite.



Sec. 842.903  Conditions for coverage in primary positions.

    (a) An employee's service in a position that has been determined by 
the Secretary of the Department of Energy to be a primary nuclear 
materials courier position is covered under the provisions of 5 U.S.C. 
8412(d).
    (b) An employee who is not in a primary position, nor covered while 
in a secondary position, and who is detailed or temporarily promoted to 
a primary position is not covered under the provisions of 5 U.S.C. 
8412(d).



Sec. 842.904  Conditions for coverage in secondary positions.

    (a) An employee's service in a position that has been determined by 
the Secretary of the Department of Energy to be a secondary nuclear 
materials courier position following 3 years of service in a primary 
nuclear materials courier position is covered under the provisions of 5 
U.S.C. 8412(d) if all of the following criteria are met:
    (1) The employee is transferred directly (i.e., without a break in 
service exceeding 3 days) from a primary position to a secondary 
position; and
    (2) If applicable, the employee has been continuously employed in 
secondary positions since transferring from a primary position without a 
break in service exceeding 3 days, except that a break in employment in

[[Page 324]]

secondary positions which begins with an involuntary separation (not for 
cause), within the meaning of 5 U.S.C. 8414(b)(1)(A), is not considered 
in determining whether the service in secondary positions is continuous 
for this purpose.
    (b) An employee who is not in a primary position, nor covered while 
in a secondary position, and who is detailed or temporarily promoted to 
a secondary position is not covered under the provisions of 5 U.S.C. 
8412(d).



Sec. 842.905  Evidence.

    (a) The Secretary of Energy's determination under Sec. 842.903 that 
a position is a primary position must be based solely on the official 
position description of the position in question, and any other official 
description of duties and qualifications. The official documentation for 
the position must establish that it satisfies the requirements defined 
in Sec. 842.902.
    (b) A determination under Sec. 842.904 must be based on the 
official position description and any other evidence deemed appropriate 
by the agency head for making the determination.
    (c) If an employee is in a position not subject to the one-half 
percent higher withholding rate of 5 U.S.C. 8422(a)(3), and the employee 
does not, within 6 months after entering the position or after any 
significant change in the position, formally and in writing seek a 
determination from the employing agency that his or her service is 
properly covered by the higher withholding rate, the agency head's 
determination that the service was not so covered at the time of the 
service is presumed to be correct. This presumption may be rebutted by a 
preponderance of the evidence that the employee was unaware of his or 
her status or was prevented by cause beyond his or her control from 
requesting that the official status be changed at the time the service 
was performed.



Sec. 842.906  Requests from individuals.

    (a) An employee who requests credit for service under 5 U.S.C. 
8412(d) bears the burden of proof with respect to that service, and must 
provide the employing agency with all pertinent information regarding 
duties performed.
    (b) An employee who is currently serving in a position that has not 
been approved as a primary or secondary position, but who believes that 
his or her service is creditable as service in a primary or secondary 
position may request the agency head to determine whether or not the 
employee's current service should be credited and, if it qualifies, 
whether it should be credited as service in a primary or secondary 
position. A written request for current service must be made within 6 
months after entering the position or after any significant change in 
the position.
    (c) A current or former employee (or the survivor of a former 
employee) who believes that a period of past service in an unapproved 
position qualifies as service in a primary or secondary position and 
meets the conditions for credit may request the agency head to determine 
whether or not the employee's past service should be credited and, if it 
qualifies, whether it should be credited as service in a primary or 
secondary position. A written request for past service must be made no 
later than December 31, 2000.
    (d) The agency head may extend the time limit for filing under 
paragraph (b) or (c) of this section when, in the judgment of such 
agency head, the individual shows that he or she was prevented by 
circumstances beyond his or her control from making the request within 
the time limit.



Sec. 842.907  Withholding and contributions.

    (a) During service covered under the conditions established by Sec. 
842.903 (a) or (b), the Department of Energy will deduct and withhold 
from the employee's base pay the amounts required under 5 U.S.C. 
8422(a)(3) and submit that amount to OPM in accordance with payroll 
office instructions issued by OPM.
    (b) During service described in paragraph (a) of this section, the 
employing agency must submit to OPM the Government contributions 
required under 5 U.S.C. 8423(a) in accordance with payroll office 
instructions issued by OPM.
    (c) If the correct withholding and/or Government contributions are 
not timely submitted to OPM for any reason whatsoever, including cases 
in

[[Page 325]]

which it is finally determined that past service of a current or former 
employee was subject to the higher deduction and Government contribution 
rates, the employing agency must correct the error by submitting the 
correct amounts (including both employee and agency shares) to OPM as 
soon as possible. Even if the agency waives collection of the 
overpayment of pay under any waiver authority that may be available for 
this purpose, such as 5 U.S.C. 5584, or otherwise fails to collect the 
debt, the correct amount must still be submitted to OPM as soon as 
possible.
    (d) Upon proper application from an employee, former employee or 
eligible survivor of a former employee, an employing agency or former 
employing agency will pay a refund of erroneous additional withholdings 
for service that is found not to have been covered service. If an 
individual has paid to OPM a deposit or redeposit, including the 
additional amount required for covered service, and the deposit is later 
determined to be erroneous because the service was not covered service, 
OPM will pay the refund, upon proper application, to the individual, 
without interest.
    (e) The additional employee withholding and agency contributions for 
covered service properly made are not separately refundable, even in the 
event that the employee or his or her survivor does not qualify for a 
special annuity computation under 5 U.S.C. 8415(d).
    (f) While an employee who does not hold a primary or secondary 
position is detailed or temporarily promoted to such a position, the 
additional withholdings and agency contributions will not be made.
    (g) While an employee who holds a primary or secondary position is 
detailed or temporarily promoted to a position that is not a primary or 
secondary position, the additional withholdings and agency contributions 
will continue to be made.



Sec. 842.908  Mandatory separation.

    (a) Effective on and after October 17, 1999, the mandatory 
separation provisions of 5 U.S.C. 8425 apply to all nuclear materials 
couriers including those in secondary positions. A mandatory separation 
under 5 U.S.C. 8425 is not an adverse action under part 752 of this 
chapter or a removal action under part 359 of this chapter.
    (b) Exemptions from mandatory separation are subject to the 
conditions set forth under 5 U.S.C. 8425. An exemption may be granted at 
the sole discretion of the head of the employing agency or by the 
President in accordance with 5 U.S.C. 8425(c).
    (c) In the event that an employee is separated mandatorily under 5 
U.S.C. 8425, or is separated for optional retirement under 5 U.S.C. 8412 
(d) or (e), and OPM finds that all or part of the minimum service 
required for entitlement to immediate annuity was in a position that did 
not meet the requirements of a primary or secondary position and the 
conditions set forth in this subpart or, if applicable, in part 831 of 
this chapter, such separation will be considered erroneous.



Sec. 842.909  Review of decisions.

    The following decisions may be appealed to the Merit Systems 
Protection Board under procedures prescribed by the Board:
    (a) The final decision of the Department of Energy issued to an 
employee, former employee, or survivor as the result of a request for 
determination filed under Sec. 842.906; and
    (b) The final decision of the Department of Energy that a break in 
service referred to in Sec. 842.904(a)(2) did not begin with an 
involuntary separation within the meaning of 5 U.S.C. 8414(b)(1)(A).



Sec. 842.910  Oversight of coverage determinations.

    (a) Upon deciding that a position is a nuclear materials courier 
position, the agency head must notify OPM (Attention: Associate Director 
for Retirement and Insurance) stating the title of each position, the 
number of incumbents, and whether the position is primary or secondary. 
The Director of OPM retains the authority to revoke the agency head's 
determination that a position is a primary or secondary position, or 
that an individual's service in any other position is creditable under 5 
U.S.C. 8412(d).

[[Page 326]]

    (b) The Department of Energy must establish a file containing each 
coverage determination made by the agency head under Sec. 842.903 and 
Sec. 842.904, and all background material used in making the 
determination.
    (c) Upon request by OPM, the Department of Energy will make 
available the entire coverage determination file for OPM to audit to 
ensure compliance with the provisions of this subpart.
    (d) Upon request by OPM, the Department of Energy must submit to OPM 
a list of all covered positions and any other pertinent information 
requested.



PART 843_FEDERAL EMPLOYEES RETIREMENT SYSTEM_DEATH BENEFITS AND 
EMPLOYEE REFUNDS--Table of Contents




                      Subpart A_General Provisions

Sec.
843.101 Purpose.
843.102 Definitions.
843.103 Application required.

                       Subpart B_One-time Payments

843.201 Purpose.
843.202 Eligibility for payment of the unexpended balance to a separated 
          employee.
843.203 Eligibility for a one-time payment upon death of an employee, 
          separated employee, or retiree if no one is eligible for an 
          annuity.
843.204 Eligibility for a one-time payment upon death of an employee, 
          separated employee, or retiree if someone is eligible for an 
          annuity.
843.205 Designation of beneficiary--form and execution.
843.206 Designation of beneficiary--proof of receipt.
843.207 Agent of next of kin.
843.208 Notification of current and/or former spouse before payment of 
          unexpended balance to a separated employee.
843.209 Waiver of notification requirement.
843.210 Transfers between retirement systems.
843.211 Determining when children prevent payment of the unexpended 
          balance.
843.212 Lump-sum payments which include contributions made to a 
          retirement system for employees of a nonappropriated fund 
          instrumentality.

              Subpart C_Current and Former Spouse Benefits

843.301 Purpose.
843.302 Time for filing applications for death benefits.
843.303 Marriage duration requirements.
843.304 Commencing and terminating dates of survivor annuities.
843.305 Reinstatement.
843.306 Basic benefits on death of a non-disability retiree.
843.307 Basic benefits on death of a disability retiree.
843.308 Supplementary benefits on death of a retiree.
843.309 Basic employee death benefit.
843.310 Annuity based on death of an employee.
843.311 Annuity based on death of a separated employee.
843.312 Payment to former spouses.
843.313 Elections between survivor annuities.
843.314 Amount of survivor annuity where service includes credit for 
          service with a nonappropriated fund instrumentality.

Appendix A to Subpart C--Present Value Conversion Factors for Earlier 
          Commencing Date of Annuities of Current and Former Spouses of 
          Deceased Separated Employees

                        Subpart D_Child Annuities

843.401 Purpose.
843.402 Eligibility requirements.
843.403 Proof of parentage.
843.404 Proof of adoption.
843.405 Dependency.
843.406 Proof of dependency.
843.407 Disabilities.
843.408 Commencing and terminating dates of child annuities.
843.409 Rates of annuities.
843.410 Annuity for a child age 18 to 22 during full-time school 
          attendance.
843.411 Direct payments to children.

                 Subpart E_Insurable Interest Annuities

843.501 Purpose.
843.502 Eligibility.
843.503 Commencing and terminating dates.
843.504 Rate of annuity.

    Authority: 5 U.S.C. 8461; Sec. Sec. 843.205, 843.208, and 843.209 
also issued under 5 U.S.C. 8424; Sec. 843.309 also issued under 5 
U.S.C. 8442; Sec. 843.406 also issued under 5 U.S.C. 8441.

    Source: 52 FR 2074, Jan. 16, 1987, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 843.101  Purpose.

    (a) This part regulates death benefits and employee refunds under 
FERS.

[[Page 327]]

    (b) This subpart contains definitions and regulations that have 
general application throughout this part.



Sec. 843.102  Definitions.

    In this part--
    Accrued benefit means the accrued, unpaid annuity payable after the 
death of a retiree.
    Adult child means a child who has attained age 18.
    Basic annuity means the recurring payments (after the death of an 
employee, separated employee, or retiree) made to a current or former 
spouse of a deceased retiree, employee, or separated employee under 
subsection (a), (b)(1)(B), or (c)(2) of section 8442 of title 5, United 
States Code.
    Basic child's annuity rate means the total amount that all surviving 
children of an employee or retiree would receive under CSRS.
    Basic employee death benefit means the payment to the current spouse 
of a deceased employee equal to $15,000 (indexed under section 8462 of 
title 5, United States Code), plus one-half of the employee's final 
salary (or average salary, if higher).
    Child means a child as defined in section 8441(4) of title 5, United 
States Code.
    Compensationer means a person receiving recurring benefits under 
chapter 81 of title 5, United States Code.
    CSRS means subchapter III of chapter 83 of title 5, United States 
Code.
    Current spouse means a living person who is married to the employee, 
separated employee, or retiree at the time of the employee's, separated 
employee's or retiree's death. Current spouse includes a spouse who is 
legally separated but not divorced from the employee, separated 
employee, or retiree.
    Current spouse annuity means the basic annuity (and supplementary 
annuity, if any) payable to a current spouse.
    Duly appointed representative of the deceased employee's, separated 
employee's, retiree's, survivor's or Member's estate means an individual 
named in an order of a court having jurisdiction over the estate of the 
deceased which grants the individual the authority to receive, or the 
right to possess, the property of the deceased; and also means, where 
the law of the domicile of the deceased has provided for the 
administration of estates through alternative procedures which dispense 
with the need for a court order, an individual who demonstrates that he 
or she is entitled to receive, or possess, the property of the deceased 
under the terms of those alternative procedures.
    Employee means an employee as defined in section 8401(11) of title 
5, United States Code, and a Member as defined in section 8401(20) of 
title 5, United States Code. ``Employee'' includes a person who has 
applied for retirement under FERS but had not been separated from the 
service prior to his or her death, even if the person's retirement would 
have been retroactively effective upon separation.
    FERS means chapter 84 of title 5, United States Code.
    Final annual rate of basic pay means the basic pay that an employee 
or Member would receive in a year at the current rate of pay. A pay rate 
other than an annual salary is converted to an annual rate by 
multiplying the prescribed rate by the number of pay units in a 52-week 
work year.
    (a) The annual pay of a part-time (regularly scheduled) employee is 
the product of the employee's final hourly rate of pay and the higher 
of--
    (1) The number of hours that the employee was entitled to basic pay 
whether in a duty or paid leave status (not to exceed 2000 for Postal 
employees or 2080 for non-postal employees) in the 52-week work year 
immediately preceding the end of the last pay period in which the 
employee was in a pay status; or
    (2) The number of hours in the employee's regularly scheduled tour 
of duty in a 52-week work year.
    (b) The annual pay of an intermittent (not regularly scheduled) 
employee is the product of the employee's final hourly rate of pay and 
the number of hours that the employee was entitled to basic pay whether 
in a duty or paid leave status (not to exceed 2000 for Postal employees 
or 2080 for non-Postal employees) in the 52-week work year immediately 
preceding the end of the last pay period in which the employee was in a 
pay status.
    (c) If the part-time or intermittent employee's current appointment 
began

[[Page 328]]

less than 52 weeks prior to the end of the last pay period in which the 
employee was in a pay status, the number of hours that the employee was 
entitled to basic pay is computed by multiplying the number of hours 
that the employee was paid basic pay by a fraction whose numerator is 52 
and whose denominator is the number of weeks between the date of 
appointment and the end of the last pay period in which the employee was 
in a pay status.
    (d) The annual pay for customs officers is the sum of the employee's 
general schedule pay, locality pay, and the lesser of--
    (1) Two times the employee's final hourly rate of pay times the 
number of hours for which the employee was paid two times salary as 
compensation for overtime inspectional service under section 5(a) of the 
Act of February 11, 1911 (19 U.S.C. 261 and 267) plus three times the 
employee's final hourly rate of pay times the number of hours for which 
the employee was paid three times salary as compensation for overtime 
inspectional service under section 5(a) in the 52-week work year 
immediately preceding the end of the last pay period in which the 
employee was in pay status; or
    (2) $12,500.
    Former spouse means a living person who was married for at least 9 
months to an employee, separated employee, or retiree who performed at 
least 18 months of service creditable under FERS and whose marriage to 
the employee, separated employee, or retiree was terminated before the 
death of the employee, separated employee, or retiree.
    Former spouse annuity means the basic annuity (and supplementary 
annuity, if any) payable to a former spouse.
    Insurable interest beneficiary means a person designated to receive 
a survivor annuity under Sec. 842.605 of this chapter.
    Insurable interest reduction means the reduction in a retiree's 
annuity because the retiree elected to provide a survivor annuity to an 
insurable interest beneficiary.
    Marriage means a marriage recognized in law or equity under the 
whole law of the jurisdiction with the most significant interest in the 
marital status of the employee, Member, or retiree. If a jurisdiction 
would recognize more than one marriage in law or equity, the Office of 
Personnel Management (OPM) will recognize only one marriage but will 
defer to the local courts to determine which marriage should be 
recognized.
    Minimum retirement age means the minimum retirement age as defined 
in Sec. 842.202 of this chapter.\1\
---------------------------------------------------------------------------

    \1\ The definition of minimum retirement age which will be codified 
at 5 CFR 842.202 reads:
    Minimum retirement age means an age based on an individual's year of 
birth, as follows:

 
                                              Minimum retirement age
 
Year of birth:
  Before 1948...........................  55 years.
  1948..................................  55 years and 2 months.
  1949..................................  55 years and 4 months.
  1950..................................  55 years and 6 months.
  1951..................................  55 years and 8 months.
  1952..................................  55 years and 10 months.
  1953-1964.............................  56 years.
  1965..................................  56 years and 2 months.
  1966..................................  56 years and 4 months.
  1967..................................  56 years and 6 months.
  1968..................................  56 years and 8 months.
  1969..................................  56 years and 10 months.
  1970 and after........................  57 years.
 

    Qualifying court order means a court order that awards a former 
spouse annuity and that satisfies the requirements of section 8445 of 
title 5, United States Code, for awarding a former spouse annuity.
    Retiree means a former employee or Member who is receiving recurring 
payments under FERS based on service by the employee or Member. Retiree, 
as used in this subpart, does not include a current spouse, former 
spouse, child, or person with an insurable interest receiving a survivor 
annuity. Retiree for purposes of determining a person's status at the 
time of death means that the person had been separated from the service 
and had met all the requirements to receive an annuity including having 
filed an application for the annuity prior to his or her death.
    Separated employee means a former employee who has been separated 
from the service but who has not met all the requirements for retirement 
under FERS or who has not filed an application for retirement under 
FERS.
    Step-child means a child who is the issue of a current or former 
spouse of

[[Page 329]]

the employee or retiree but is not the issue of the employee or retiree. 
A child is not a step-child unless the relationship between the employee 
or retiree and the child's parent is a marriage.
    Supplementary annuity means the recurring payment under section 
8442(f) of title 5, United States Code.
    Unexpended balance means the unrefunded amount consisting of--
    (a) Retirement deductions made from the basic pay of an employee 
under subpart E of part 841 of this chapter;
    (b) Amount deposited by an employee for periods of service 
(including military service) for which--
    (1) No retirement deductions were made; or
    (2) Deductions were refunded to the employee; and
    (c) Interest compounded annually on the deductions and deposits at a 
rate which, for any calendar year, will be equal to the overall average 
yield to the Civil Service Retirement Fund during the preceding fiscal 
year from all obligations purchased by the Secretary of the Treasury 
during that fiscal year under section 8348 (c), (d), and (e) of title 5, 
United States Code, as determined by the Secretary of the Treasury. 
Interest on deductions and deposits does not include interest--
    (1) If the service covered by the contributions totals 1 year or 
less; or
    (2) For a fractional part of a month in the total service.

[52 FR 2074, Jan. 16, 1987; 52 FR 2352, Jan. 21, 1987, and 52 FR 23014, 
June 17, 1987; 53 FR 16536, May 10, 1988; 57 FR 29784, July 7, 1992; 57 
FR 33599, July 29, 1992; 60 FR 13035, Mar. 10, 1995]



Sec. 843.103  Application required.

    (a) No person is entitled to benefits under this part unless an 
application on behalf of that person is filed with OPM no later than 30 
years after the death of the employee, separated employee, or retiree on 
whose service the benefit is based.
    (b) Applications for benefits under this part must be filed on the 
form provided by OPM for that purpose.



                       Subpart B_One-time Payments



Sec. 843.201  Purpose.

    This subpart explains the requirements under FERS--
    (a) For payment of employee contributions to the Civil Service 
Retirement Fund--
    (1) As a refund of contribution, to separated employees; or
    (2) As a death benefit, to survivors of employees, separated 
employees, and retirees; and
    (b) For payment of any accrued, but unpaid, annuity to survivors of 
retirees.



Sec. 843.202  Eligibility for payment of the unexpended balance to a 
separated employee.

    (a) Except as provided in Sec. Sec. 843.208 and 843.209 or in 
section 3716 of title 31, United States Code, on administrative offset 
for Government claims, a separated employee who has been separated from 
a covered position for at least 31 days and who is ineligible for an 
annuity commencing within 31 days after the date of filing an 
application for refund is eligible for a payment of the unexpended 
balance.
    (b) Periods of service for which employee contributions have been 
refunded are not creditable service in determining whether the employee 
has sufficient service to have title to an annuity or for any other 
purpose.



Sec. 843.203  Eligibility for a one-time payment upon death of an 
employee, separated employee, or retiree if no one is eligible for 
an annuity.

    (a) If there is no survivor who is entitled to monthly survivor 
annuity benefits on the death of an employee, separated employee, 
retiree, or survivor annuitant, the unexpended balance is payable, 
except as provided in section 3716 of title 31, United States Code, on 
administrative offset for Government claims, to the person(s) entitled 
in the normal order of precedence described in section 8424 of title 5, 
United States Code.
    (b) If a deceased employee, separated employee, retiree or Member 
provided in a valid designation of beneficiary that the lump sum 
proceeds shall be payable to the deceased's estate, or to

[[Page 330]]

the Executor, Administrator, or other representative of the deceased's 
estate, or if the proceeds would otherwise be properly payable to the 
duly appointed representative of the deceased's estate under the order 
of precedence specified in 5 U.S.C. 8424(d), payment of the proceeds to 
the duly appointed representative of the deceased's estate will bar 
recovery by any other person.

[52 FR 2074, Jan. 16, 1987, as amended at 57 FR 29784, July 7, 1992]



Sec. 843.204  Eligibility for a one-time payment upon death of an 
employee, separated employee, or retiree if someone is eligible for 
an annuity.

    (a) Except as provided in section 3716 of title 31, United States 
Code, on administrative offset for Government claims, even if an annuity 
is payable, the person entitled in the order of precedence described in 
section 8424 of title 5, United States Code, may be paid--
    (1) Partial deposits for civilian service performed on and after 
October 1, 1982; and
    (2) Partial deposits for post-1956 military service; and
    (3) The accrued benefit.
    (b) Except as provided in subpart G of part 842 of this chapter or 
Sec. 843.311, when someone is eligible for an annuity, the person 
entitled in the order of precedence may not be paid--
    (1) Partial or completed deposits for nondeduction civilian service 
performed before October 1, 1982, unless the service covered by the 
deposit is not creditable under FERS; or
    (2) Completed deposits for nondeduction civilian service performed 
on and after October 1, 1982, unless the service covered by the deposit 
is not creditable under or FERS; or
    (3) Completed deposits for post-1956 military service, unless the 
service covered by the deposit is not creditable under FERS.
    (c) Payments of the partial or completed deposits mentioned in 
paragraph (b) of this section are subject to section 3716 of title 31, 
United States Code (administrative offset for Governmental claims).



Sec. 843.205  Designation of beneficiary--form and execution.

    (a) A designation of beneficiary must be in writing, signed and 
witnessed, and received in the employing office (or in OPM, in the case 
of a retiree, or a compensationer, or a separated employee) before the 
death of the designator.
    (b) A change or cancellation of beneficiary in a last will or 
testament, or in any other document not witnessed and filed as required 
by this section, will not have any force or effect.
    (c) A witness to a designation of beneficiary is ineligible to 
receive payment as a beneficiary.
    (d) Any person, firm, corporation, or legal entity may be named as 
beneficiary.
    (e) A change of beneficiary may be made at any time and without the 
knowledge or consent of the previous beneficiary. This right cannot be 
waived or restricted.
    (f) A designation of beneficiary is automatically cancelled whenever 
a separated employee is paid the unexpended balance.
    (g)(1) If the shares designated equal less than 100 percent, the 
undesignated portion will be paid according to the order of precedence 
provided in section 8424 of title 5, United States Code.
    (2) If the shares designated exceed 100 percent, each designee's 
share will be in proportion to the share originally designated. Each 
share is computed by multiplying the percentage designated for that 
designee by a fraction whose numerator is 100 and whose denominator is 
the total number of percent designated.



Sec. 843.206  Designation of beneficiary--proof of receipt.

    (a) Upon receipt of a designation of beneficiary, the agency (or 
OPM) will mark the designation to show the date of receipt.
    (b) The date of receipt of designation of beneficiary is presumed to 
be the date marked by the agency (or OPM).



Sec. 843.207  Agent of next of kin.

    When a deceased employee or retiree has not named a beneficiary and 
one of the next of kin entitled makes a claim for the accrued benefit, 
other next of

[[Page 331]]

kin entitled to share in the unexpended balance or accrued benefit may 
designate the one who made the claim to act as their agent to receive 
their distributive shares.



Sec. 843.208  Notification of current and/or former spouse before 
payment of unexpended balance to a separated employee.

    (a) Payment to an employee of the unexpended balance may be made 
only if current and former spouses are notified of the former employee's 
application.
    (b) Proof of notification will consist of a signed and witnessed 
statement by the current and/or former spouse on a form provided by OPM 
acknowledging that he or she has been informed of the former employee's 
application for the unexpended balance and the consequences of the 
refund on the current or former spouse's possible annuity entitlement. 
This statement must be presented to the employing agency or OPM when 
filing the application for the unexpended balance.
    (c) If the current and/or former spouse refuses to acknowledge the 
notification or the employee is otherwise unable to obtain the 
acknowledgment, the employee must submit--
    (1) Affidavits signed by two individuals who witnessed the 
employee's attempt to personally notify the current or former spouse. 
The witnesses must attest that they were in the presence of the employee 
and the current or former spouse and that the employee's purpose should 
have been clear to the current or former spouse; or
    (2) The current mailing address of the current or former spouse. OPM 
will attempt to notify (by certified mail--return receipt requested) the 
current or former spouse at the address provided by the employee. The 
unexpended balance will not be paid until OPM receives the signed return 
receipt.



Sec. 843.209  Waiver of notification requirement.

    The current and/or former spouse notification requirement will be 
waived upon a showing that the current and/or former spouse's 
whereabouts cannot be determined. A request for waiver on this basis 
must be accompanied by--
    (a) A judicial or administrative determination that the current and/
or former spouse's whereabouts cannot be determined; or
    (b) Affidavits by the former employee and two other persons, at 
least one of whom is not related to the former employee, attesting to 
the inability to locate the current and/or former spouse and stating the 
efforts made to locate the current and/or former spouse.



Sec. 843.210  Transfers between retirement systems.

    Transfers of employees' contributions between the Civil Service 
Retirement Fund and other retirement systems for Federal or District of 
Columbia employees when made in accordance with Federal statute for the 
purpose of transferring retirement service credit to the other 
retirement system are not subject to the notice requirements of this 
subpart.



Sec. 843.211  Determining when children prevent payment of the unexpended 
balance.

    Someone entitled to an annuity for purposes of Sec. Sec. 843.203 
and 843.204 includes a child, even if the amount of the child's annuity 
is zero because the amount of the social security child survivor 
benefits exceeds the child survivor benefits payable under CSRS, 
unless--
    (a) The child's annuity entitlement has terminated under Sec. 
843.408(b); or
    (b) The child is--
    (1) A disabled child under Sec. 843.407,
    (2) At least age 23, and
    (3) Entitled to social security child survivor benefits in an amount 
that equals or exceeds the amount of the child survivor benefits payable 
under CSRS.

[52 FR 23014, June 17, 1987]



Sec. 843.212  Lump-sum payments which include contributions made to a 
retirement system for employees of a nonappropriated fund instrumentality.

    A lump-sum payment will include employee contributions and interest 
as provided under subpart G of part 847 of this chapter.

[61 FR 41721, Aug. 9, 1996]

[[Page 332]]



              Subpart C_Current and Former Spouse Benefits



Sec. 843.301  Purpose.

    This subpart explains the survivor benefits payable under FERS to 
current and former spouses based on the death or retirees, employees, 
and separated employees.



Sec. 843.302  Time for filing applications for death benefits.

    A current or former spouse of a deceased retiree, employee, or 
separated employee may file an application for benefits under this 
subpart, personally or through a representative, at any time within 30 
years after the death of the retiree, employee, or separated employee.



Sec. 843.303  Marriage duration requirements.

    (a) The current spouse of a retiree, an employee, or a separated 
employee can qualify for a current spouse annuity or the basic employee 
death benefit only if--
    (1) The current spouse and the retiree, employee, or separated 
employee had been married for at least 9 months, as explained in 
paragraph (b) of this section; or
    (2) A child was born of the marriage, as explained in paragraph (c) 
of this section; or
    (3) The death of the retiree, employee, or separated employee was 
accidental as explained in paragraph (d) of this section.
    (b) For satisfying the 9-month marriage requirement of paragraph 
(a)(1) of this section, the aggregate time of all marriages between the 
spouse applying for a current spouse annuity and the retiree, employee, 
or separated employee is included.
    (c) For satisfying the child-born-of-the-marriage requirement of 
paragraph (a)(2) of this section, any child, including a posthumous 
child, born to the spouse and the retiree, employee, or separated 
employee is included. This includes a child born out of wedlock if the 
parents later married or of a prior marriage between the same parties.
    (d)(1) A death is accidental if it results from homicide or from 
bodily injuries incurred solely through violent, external, and 
accidental means. The term ``accidental'' does not include a death 
caused by or the result of intentional self-destruction or intentionally 
self-inflicted injury, while sane or insane.
    (2) A State judicial or administrative adjudication of the cause of 
death for criminal or insurance purposes is conclusive evidence of 
whether a death is accidental.
    (3) A death certificate showing the cause of death as accident or 
homicide is prima facie evidence that the death was accidental.

[52 FR 2074, Jan. 16, 1987, as amended at 52 FR 23014, June 17, 1987]



Sec. 843.304  Commencing and terminating dates of survivor annuities.

    (a) A current or former spouse annuity under this subpart commences 
on the day after the death of the person on whose service the annuity is 
based.
    (b) A current or former spouse annuity under this subpart terminates 
on the last day of the month before the current or former spouse 
remarries before age 55 or dies.
    (c) A current spouse annuity under this subpart terminated for 
reasons other than death may be restored under Sec. 843.305.
    (d) A survivor annuity accrues on a daily basis, one-thirtieth of 
the monthly rate constituting the daily rate. An annuity does not accrue 
for the 31st day of any month, except in the initial month if the 
survivor's (of a deceased employee) annuity commences on the 31st day. 
For accrual purposes, the last day of a 28-day month constitutes 3 days 
and the last day of a 29-day month constitutes 2 days.



Sec. 843.305  Reinstatement.

    (a) If a current spouse annuity is terminated because of a 
remarriage of the recipient, the annuity is reinstated on the day of the 
termination of the remarriage by death, annulment, or divorce if--
    (1) The surviving spouse elects to receive this annuity instead of 
another survivor benefit to which he or she may be entitled (under FERS 
or another retirement system for Government employees) by reason of the 
remarriage; and

[[Page 333]]

    (2) Any lump sum paid on termination of the annuity is repaid (in a 
single payment or by withholding payment of the annuity until the amount 
of the lump sum has accrued).
    (b) If present or future entitlement to a former spouse annuity 
terminates because of remarriage of the recipient or potential 
recipient, the entitlement is permanently extinguished. An annulment of 
the remarriage does not reinstate the entitlement.



Sec. 843.306  Basic benefits on death of a non-disability retiree.

    (a) Except as provided in Sec. Sec. 843.307 and 843.312, and 
paragraph (b) of this section, if an annuitant dies and is survived by a 
current spouse, the current spouse is entitled to a current spouse 
annuity equal to 50 percent of an annuity computed under subpart D of 
part 842 of this chapter, with respect to the retiree, unless--
    (1) The right to a current spouse annuity was waived under Sec. 
842.603 of this chapter (and no election was subsequently made under 
Sec. 842.610 of this chapter nullifying the waiver); or
    (2) In the case of a marriage after retirement, the retiree did not 
file an election under Sec. 842.612 of this chapter.
    (b) A current spouse who married the retiree after retirement is 
entitled to an annuity under paragraph (a) of this section only upon 
electing this annuity instead of any other survivor benefit to which 
such spouse may be entitled under this subpart, subpart B of this part, 
or under another retirement system for Government employees.

[52 FR 2074, Jan. 16, 1987, as amended at 52 FR 23014, June 17, 1987]



Sec. 843.307  Basic benefits on death of a disability retiree.

    (a) Except as provided in Sec. 843.312, the widow or widower of a 
retiree who retired based on disability under part 844 of this chapter 
is entitled to a current spouse annuity based on the service of the 
disability annuitant computed under paragraph (b) of this section.
    (b)(1) In the case of a current spouse entitled to an annuity based 
on the service of a disability annuitant who died after attaining age 
62, the amount of the current spouse annuity is one-half of the amount 
of the annuity to which such disability annuitant was entitled as 
computed under part 844 of this chapter (including any appropriate 
reduction under Sec. 844.302(b)(2) or (c)(2) of this chapter, and any 
adjustments under section 8462 of title 5, United States Code) as of the 
day before the date of the disability annuitant's death.
    (2) In the case of a current spouse entitled to an annuity based on 
the service of a disability annuitant who dies before age 62, the amount 
of the current spouse annuity equals 50 percent of the amount to which 
the disability annuitant would have been entitled under Sec. 844.303 of 
this chapter, if the disability annuitant had attained age 62 on the day 
before his or her death. However, in determining the amount under Sec. 
844.303(a) of this chapter, creditable service includes the period of 
time between the date of death and the date of the 62nd anniversary of 
the birth of the annuitant, but average pay is adjusted (under section 
8462 of title 5, United States Code) only through date of death.

[52 FR 2074, Jan. 16, 1987, as amended at 52 FR 23014, June 17, 1987]



Sec. 843.308  Supplementary benefits on death of a retiree.

    (a) Except as provided in Sec. 843.312 and paragraph (d) of this 
section, a current spouse of a deceased retiree who is entitled to a 
current spouse annuity based on the retiree's service is also entitled 
to a supplementary annuity.
    (b) The amount of the supplementary annuity under this section 
equals the lesser of--
    (1) The amount by which the survivor's assumed CSRS annuity exceeds 
the annuity payable to the current spouse under Sec. 843.306 or Sec. 
843.307; or
    (2) The amount equal to the widow's or widower's insurance benefits 
that would be payable to him or her under title II of the Social 
Security Act (without regard to section 202(f)(2) of the Act) based on 
the wages and self-employment income of the deceased annuitant, except 
that for purposes of this calculation--
    (i) The social security earnings test (section 203 of the Act) does 
not apply; and
    (ii) The benefit is computed--

[[Page 334]]

    (A) As of the date on which the retiree dies; and
    (B) As if the survivor had attained age 60 and made application for 
those benefits under subsection (e) or (f) of section 202 of the Act; 
and
    (iii) In computing the primary insurance amount--
    (A) For years of service under FERS, only the retiree's basic pay is 
considered to be wages; and
    (B) For each year after age 21 for which the retiree did not work 
under FERS, the retiree's wages are deemed to equal the National Average 
Wage Index (as determined by the Commissioner of the Social Security 
Administration) corresponding to that year, multiplied by the retiree's 
basic pay for his or her first full year of employment under FERS, 
divided by the National Average Wage Index corresponding to the 
retiree's first full year of employment under FERS.
    (c)(1) The supplementary annuity terminates at the beginning of the 
month in which the survivor first satisfies the minimum age requirement 
under section 202(e)(1)(B)(i) or 202(f)(1)(B)(i) of the Social Security 
Act.
    (2) The supplementary annuity is not payable to a survivor--
    (i) Who would not be entitled to benefits under section 202 (e) or 
(f) of the Social Security Act based on the wages and self-employment 
income of the deceased annuitant (determined, as of the date of the 
annuitant's death, as if the survivor had attained age 60 and made 
appropriate application for benefits, but without regard to any 
restriction relating to remarriage); or
    (ii) For any calendar month in which the survivor is entitled (or 
would, on proper application, be entitled) to benefits under section 
202(g) of the Social Security Act (relating to mother's and father's 
insurance benefits), or under section 202 (e) or (f) of the Act by 
reason of having become disabled, based on the wages and self-employment 
income of the deceased annuitant.
    (d) For purposes of this section--
    (1) ``Assumed CSRS annuity,'' as used in the case of a survivor, 
means the amount of the annuity to which such survivor would be entitled 
under CSRS based on the service of the deceased annuitant, which is 
determined--
    (i) As of the day after the date of the annuitant's death;
    (ii) As if the survivor had made appropriate application therefor; 
and
    (iii) As if the service of the deceased annuitant were creditable 
under CSRS.
    (2) ``Basic pay'' means ``basic pay'' as defined in section 8401 of 
title 5, United States Code.
    (e) An amount payable under this section will be adjusted under 
section 8462 of title 5, United States Code, and will be treated in the 
same way as an amount payable under Sec. 843.306 or Sec. 843.307.

[52 FR 2074, Jan. 16, 1987, as amended at 69 FR 69806, Dec. 1, 2004]



Sec. 843.309  Basic employee death benefit.

    (a) Except as provided in Sec. 843.312, if an employee or Member 
dies after completing at least 18 months of civilian service creditable 
under subpart C of part 842 of this chapter and is survived by a current 
spouse who meets the requirements of Sec. 843.303, the current spouse 
is entitled to the basic employee death benefit equal to the sum of--
    (1) Fifty percent of the final annual rate of basic pay (or of the 
average pay, if higher) of the employee; and
    (2) Fifteen thousand dollars as adjusted under section 8462 of title 
5, United States Code.
    (b) The current spouse may elect to receive the basic employee death 
benefit in one of the following forms--
    (1) A one-time payment; or
    (2) For deaths occurring on or after October 1, 2004, 36 equal 
monthly installments of 3.03771 percent of the amount of the basic 
employee death benefit.
    (c)(1)(i) A current spouse who has elected to receive the basic 
employee death benefit in 36 installments under paragraph (b)(2) of this 
section may elect to receive the remaining portion of the basic employee 
death benefit in one payment.
    (ii) The election to receive the remaining portion of the basic 
employee death benefit in one payment must be in writing and signed by 
the current spouse.
    (iii) The election to receive the remaining portion of the basic 
employee

[[Page 335]]

death benefit in one payment is irrevocable when OPM authorizes the 
payment.
    (2) Upon the death of a current spouse who was receiving the basic 
employee death benefit in 36 installments under paragraph (b)(2) of this 
section, the remaining portion of the basic employee death benefit will 
be paid as one payment to the estate of the current spouse.
    (3) As used in this section, ``remaining portion of the basic 
employee death benefit'' means the amount of the basic employee death 
benefit computed under paragraph (a) of this section that has not been 
paid. The amount is the remaining principal computed based on an 
amortization schedule with the initial principal equal to the amount 
computed under paragraph (a) of this section and the interest rate based 
on the applicable factor under paragraph (b)(2) of this section.

[52 FR 2074, Jan. 16, 1987, as amended at 52 FR 23014, June 17, 1987; 52 
FR 36389, Sept. 29, 1987; 56 FR 65419, Dec. 17, 1991; 69 FR 69806, Dec. 
1, 2004]



Sec. 843.310  Annuity based on death of an employee.

    Except as provided in Sec. 843.312, if an employee dies after 
completing at least 10 years of service, a current spouse is entitled to 
an annuity equal to 50 percent of the annuity computed under subpart D 
of part 842 of this chapter (without reduction for age), with respect to 
the employee. The annuity is in addition to the benefit described in 
Sec. 843.309.

[52 FR 2074, Jan. 16, 1987, as amended at 52 FR 23014, June 17, 1987]



Sec. 843.311  Annuity based on death of a separated employee.

    (a) Except as provided in Sec. 843.312, if a separated employee who 
has completed at least 10 years of service dies after having separated 
from the service with title to a deferred annuity under Sec. 842.212 of 
this chapter, but before having established a valid claim for an 
annuity, and is survived by a current spouse to whom he or she was 
married on the date of separation, the current spouse may elect to 
receive--
    (1) An annuity under paragraph (b) of this section; or
    (2) The unexpended balance, if the current spouse is the individual 
who would be entitled to the unexpended balance.
    (b) Except as provided in Sec. 843.312 and paragraph (c) of this 
section, the current spouse annuity under this section equals 50 percent 
of an annuity computed under subpart D of part 842 of this chapter, for 
the separated employee. If the separated employee died before having 
attained the minimum retirement age, the computation is made as if the 
separated employee had attained the minimum retirement age.
    (c)(1) The current spouse annuity commences on the day after the 
separated employee would have attained--
    (i) Age 62 if the separated employee had less than 20 years of 
creditable service,
    (ii) Age 60 if the employee had at least 20 years of creditable 
service but less than 30 years of creditable service; or
    (iii) The minimum retirement age if the employee had at least 30 
years of creditable service.
    (2)(i) The current spouse may elect to receive an adjusted annuity 
beginning on the day after the death of the separated employee.
    (ii) The rate of the adjusted annuity equals the annuity computed 
under paragraph (b) of this section multiplied by the factor in appendix 
A of this subpart for the age of the retiree as of the birthday before 
the retiree's death.

[52 FR 2074, Jan. 16, 1987, as amended at 52 FR 23014, June 17, 1987; 57 
FR 54681, Nov. 20, 1992]



Sec. 843.312  Payment to former spouses.

    (a) Any benefit (or a portion of any benefit) payable to a current 
spouse under this subpart is payable to a former spouse instead if the 
former spouse is entitled to that benefit under the terms of a 
qualifying court order or an election under subpart F of part 842 of 
this chapter.
    (b) A current spouse annuity may not exceed the difference between--
    (1) The amount of the annuity that would otherwise be payable to the 
current spouse under this subpart; and
    (2) The amount of the annuity payable to any former spouse of the 
deceased employee, retiree, or separated

[[Page 336]]

employee based on an election made under subpart F of part 842 of this 
chapter or a qualifying court order.
    (c) The basic employee death benefit paid to a current spouse may 
not exceed the difference between--
    (1) The amount that would otherwise be payable to the current spouse 
under Sec. 843.310; and
    (2) The portion of the basic employee death benefit payable to a 
former spouse based on a qualifying court order.



Sec. 843.313  Elections between survivor annuities.

    (a) A current spouse annuity cannot be reinstated under Sec. 
843.305 unless--
    (1) The surviving spouse elects to receive the reinstated current 
spouse annuity instead of any other payments (except any accrued but 
unpaid annuity and any unpaid employee contributions) to which he or she 
may be entitled under FERS, or any other retirement system for 
Government employees, by reason of the remarriage; and
    (2) Any lump sum paid on termination of the annuity is returned to 
the Civil Service Retirement and Disability Fund.
    (b) A current spouse is entitled to a current spouse annuity based 
on an election under Sec. 842.612 only upon electing this current 
spouse annuity instead of any other payments (except any accrued but 
unpaid annuity and any unpaid employee contributions) to which he or she 
may be entitled under FERS, or any other retirement system for 
Government employees.
    (c) A former spouse who marries a retiree is entitled to a former 
spouse annuity based on an election by that retiree under Sec. 842.611, 
or a qualifying court order terminating that marriage to that retiree 
only upon electing this former spouse annuity instead of any other 
payments (except any accrued but unpaid annuity and any unpaid employee 
contributions) to which he or she may be entitled under FERS, or any 
other retirement system for Government employees.
    (d) As used in this section, ``any other retirement system for 
Government employees'' does not include Survivor Benefit Payments from a 
military retirement system or social security benefits.

[57 FR 54681, Nov. 20, 1992]



Sec. 843.314  Amount of survivor annuity where service includes credit 
for service with a nonappropriated fund instrumentality.

    (a) The survivor annuity based on service that includes service with 
a nonappropriated fund instrumentality made creditable by an election 
under 5 CFR part 847, subpart D, is computed under 5 CFR part 847, 
subpart F.
    (b) The survivor annuity based on service that includes service with 
a nonappropriated fund instrumentality made creditable by an election 
under 5 CFR part 847, subpart H, is computed under 5 CFR part 847, 
subpart I.

[68 FR 2178, Jan. 16, 2003]

 Appendix A to Subpart C of Part 843--Present Value Conversion Factors 
 for Earlier Commencing Date of Annuities of Current and Former Spouses 
                     of Deceased Separated Employees

    With at least 10, but less than 20 years of creditable service--

------------------------------------------------------------------------
     Age of separated employee at birthday before death       Multiplier
------------------------------------------------------------------------
26..........................................................      0.0600
27..........................................................       .0640
28..........................................................       .0696
29..........................................................       .0738
30..........................................................       .0810
31..........................................................       .0865
32..........................................................       .0925
33..........................................................       .0995
34..........................................................       .1067
35..........................................................       .1155
36..........................................................       .1238
37..........................................................       .1334
38..........................................................       .1426
39..........................................................       .1551
40..........................................................       .1667
41..........................................................       .1800
42..........................................................       .1940
43..........................................................       .2097
44..........................................................       .2260
45..........................................................       .2437
46..........................................................       .2634
47..........................................................       .2855
48..........................................................       .3082
49..........................................................       .3343
50..........................................................       .3615
51..........................................................       .3922
52..........................................................       .4251
53..........................................................       .4616
54..........................................................       .5018
55..........................................................       .5455
56..........................................................       .5936
57..........................................................       .6452
58..........................................................       .7033

[[Page 337]]

 
59..........................................................       .7669
60..........................................................       .8369
61..........................................................       .9144
------------------------------------------------------------------------

    With at least 20, but less than 30 years of creditable service--

------------------------------------------------------------------------
     Age of separated employee at birthday before death       Multiplier
------------------------------------------------------------------------
36..........................................................      0.1489
37..........................................................       .1601
38..........................................................       .1714
39..........................................................       .1858
40..........................................................       .2001
41..........................................................       .2161
42..........................................................       .2328
43..........................................................       .2516
44..........................................................       .2709
45..........................................................       .2922
46..........................................................       .3159
47..........................................................       .3423
48..........................................................       .3695
49..........................................................       .4005
50..........................................................       .4332
51..........................................................       .4698
52..........................................................       .5090
53..........................................................       .5527
54..........................................................       .6005
55..........................................................       .6526
56..........................................................       .7098
57..........................................................       .7717
58..........................................................       .8407
59..........................................................       .9165
------------------------------------------------------------------------

    With at least 30 years of creditable service--

------------------------------------------------------------------------
                                             Multiplier by separated
                                             employee's year of birth
 Age of separated employee at birthday  --------------------------------
              before death                          From 1950
                                           After     through     Before
                                            1966       1966       1950
------------------------------------------------------------------------
46.....................................     0.4110     0.4477     0.4872
47.....................................      .4449      .4844      .5270
48.....................................      .4805      .5231      .5691
49.....................................      .5204      .5666      .6162
50.....................................      .5630      .6130      .6667
51.....................................      .6101      .6641      .7221
52.....................................      .6609      .7194      .7822
53.....................................      .7172      .7805      .8486
54.....................................      .7787      .8472      .9209
55.....................................      .8458      .9202     1.0000
56.....................................      .9194     1.0000     1.0000
------------------------------------------------------------------------


[69 FR 69806, Dec. 1, 2004]



                        Subpart D_Child Annuities



Sec. 843.401  Purpose.

    This subpart explains the survivor benefits payable under FERS to 
children based on the deaths of employees and retirees.



Sec. 843.402  Eligibility requirements.

    A surviving child of an employee or retiree who dies after 
completing 18 months of civilian service creditable under FERS is 
entitled to an annuity under this subpart.



Sec. 843.403  Proof of parentage.

    (a) A judicial determination of parentage conclusively establishes 
the paternity of a child.
    (b) Except as provided in paragraph (a) of this section, a child 
born to the wife of a married person is presumed to be the child of the 
wife's husband. This presumption may be rebutted only by clear and 
convincing evidence that the husband is not the father of the child.
    (c) When paternity is not established under paragraph (a) or (b) of 
this section, paternity is determined by a preponderance of the credible 
evidence as defined in Sec. 1201.56(c)(2) of this title.



Sec. 843.404  Proof of adoption.

    (a) An adopted child is--
    (1) A child adopted by the employee or retiree before the death of 
the employee or retiree; or
    (2) A child who lived with the employee or retiree and for whom a 
petition for adoption was filed by the employee or retiree and who is 
adopted by the current spouse of the employee or retiree after the death 
of the employee or retiree.
    (b) The only acceptable evidence to prove status as an adopted child 
under paragraph (a)(1) of this section is a copy of the judicial decree 
of adoption.
    (c) The only acceptable evidence to prove status as an adopted child 
under paragraph (a)(2) of this section is copies of--
    (1) The petition for adoption (clearly showing the date filed); and
    (2) The judicial decree of adoption.



Sec. 843.405  Dependency.

    To be eligible for survivor annuity benefits, a child must have been 
dependent on the employee or retiree at the time of the employee's or 
retiree's death.

[[Page 338]]



Sec. 843.406  Proof of dependency.

    (a) A child is considered to have been dependent on the deceased 
employee or retiree if he or she is--
    (1) A legitimate child; or
    (2) An adopted child; or
    (3) A stepchild or recognized natural child who lived with the 
employee or retiree in a regular parent-child relationship at the time 
of the employee's or retirees death; or
    (4) A recognized natural child for whom a judicial determination of 
support was obtained; or
    (5) A recognized natural child to whose support the employee or 
retiree made regular and substantial contributions.
    (b) The following are examples of proofs of regular and substantial 
support. More than one of the following proofs may be required to show 
support of a natural child who did not live with the employee or retiree 
in a regular parent-child relationship and for whom a judicial 
determination of support was not obtained.
    (1) Evidence of eligibility as a dependent child for benefits under 
other State or Federal programs;
    (2) Proof of inclusion of the child as a dependent on the decedent's 
income tax returns for the years immediately before the employee's or 
retiree's death;
    (3) Cancelled checks, money orders, or receipts for periodic 
payments received from the employee or retiree for or on behalf of the 
child;
    (4) Evidence of goods or services that show regular contributions of 
considerable value;
    (5) Proof of coverage of the child as a family member under the 
employee's or retiree's Federal Employees Health Benefits enrollment; 
and
    (6) Other proof of a similar nature that OPM may find to be 
sufficient to demonstrate support or parentage.
    (c) Survivor benefits may be denied--
    (1) If evidence shows that the deceased employee or retiree did not 
recognize the claimant as his or her own despite a willingness to 
support the child; or
    (2) If evidence casts doubt upon the parentage of the claimant, 
despite the deceased employee's or retiree's recognition and support of 
the child.



Sec. 843.407  Disabilities.

    A child is eligible for continued annuity because the child is 
incapable of self-support if the Social Security Administration finds 
that the child is eligible for continued social security child's 
benefits because the child is incapable of self-support.



Sec. 843.408  Commencing and terminating dates of child annuities.

    (a) An annuity under this subpart--
    (1) Commences on the day after the retiree or employee dies;
    (2) Commences or resumes on the first day of the month in which the 
child later becomes or again becomes a student as described by Sec. 
843.313, if any lump sum paid is returned to the Civil Service 
Retirement Fund; or
    (3) Commences or resumes on the first day of the month in which the 
child later becomes or again becomes incapable of self-support because 
of a mental or physical disability incurred before age 18 (or a later 
recurrence of such disability), if any lump sum is returned to the Fund.
    (b) An annuity under this subpart terminates on the last day of the 
month before the child--
    (1) Becomes 18 years of age unless he or she is a student as 
described in Sec. 843.410 or is incapable of self-support;
    (2) Becomes capable of self-support after becoming 18 years of age 
unless he or she is a student as described in Sec. 843.410;
    (3) Becomes 22 years of age if he or she is a student as described 
in Sec. 843.410 and--
    (i) Capable of self-support; or
    (ii) Incapable of self-support because of a mental or physical 
disability incurred after age 18;
    (4) Ceases to be such a student as described in Sec. 843.410 after 
becoming 18 years of age unless he or she is incapable of self-support; 
or
    (5) Dies or marries.
    (c) A survivor annuity accrues on a daily basis, one-thirtieth of 
the monthly rate constituting the daily rate. An annuity does not accrue 
for the 31st day of any month, except in the initial month if the 
survivor's (of a deceased employee) annuity commences on the 31st day. 
For accrual purposes, the last day of a 28-day month constitutes 3

[[Page 339]]

days and the last day of a 29-day month constitutes 2 days.



Sec. 843.409  Rates of annuities.

    (a) For each month, the amount of annuity payable to each surviving 
child under this subpart is--
    (1) The difference between the basic child's annuity rate for that 
month and the total amount of child's insurance benefits under title II 
of the Social Security Act payable for that month to all children of the 
employee or retiree based on the total earnings (including any non-
Federal wages or self employment subject to FICA taxes) of the employee 
or retiree;
    (2) Divided by the total number of children entitled to annuity 
based on the service of that employee or retiree.
    (b) On the death of the current spouse or the former spouse or 
termination of the annuity of a child, the annuity of any other child or 
children is recomputed and paid as though the spouse, former spouse, or 
child had not survived the former employee or Member.



Sec. 843.410  Annuity for a child age 18 to 22 during full-time school 
attendance.

    (a) General requirements for an annuity. (1) For a child age 18 to 
22 to be eligible to receive an annuity as a full-time student, the 
child must also meet all other requirements applicable to qualify for an 
annuity by a child who has not attained age 18.
    (2) In addition to the requirements of paragraph (a)(1) of this 
section, OPM must receive certification, in a form prescribed by OPM, 
that the child is regularly pursuing a full-time course of study in an 
accredited institution.
    (b) Full-time course of study. (1) Generally, a full-time course of 
study is a noncorrespondence course which, if successfully completed, 
will lead to completion of the education within the period generally 
accepted as minimum for completion, by a full-time day student, of the 
academic or training program concerned.
    (2) A certification by an accredited institution that the student's 
workload is sufficient to constitute a full-time course of study for the 
program in which the student is enrolled is prima facie evidence that 
the student is pursuing a full-time course of study.
    (c) Certification of school attendance. (1) OPM may periodically 
request the recipient of a child's annuity payments to furnish 
certification of school attendance. The certification must be completed 
in the form prescribed by OPM.
    (2) If OPM requests the recipient of a child's annuity payments to 
provide a self-certification of school attendance, the recipient must 
complete and sign the certification form.
    (3) If OPM requests the recipient of a child's annuity payments to 
provide a certification by the school, the certification must be signed 
by an official who is either in charge of the school or in charge of the 
school's records. OPM will not accept certification forms signed by 
instructors, counselors, aides, roommates, or others not in charge of 
the school or the records.
    (i) If the educational institution is above the high school level, 
the certification must be signed by the president or chancellor, vice 
president or vice chancellor, dean or assistant dean, registrar or 
administrator, assistant registrar or assistant administrator, or the 
equivalent.
    (ii) If the educational institution is at the high school level, the 
certification must be signed by the superintendent of schools, assistant 
superintendent of schools, principal, vice principal, assistant 
principal, or the equivalent.
    (iii) If the educational institution is a technical or trade school, 
the certification must be signed by the president, vice president, 
director, assistant director, or the equivalent.
    (4) OPM will accept a facsimile signature of a school official only 
if it is accompanied by a raised seal of the institution or other 
evidence clearly demonstrating the authenticity of the certification and 
making unauthorized use of the signature stamp unlikely.
    (d) Continuation of annuity during interim breaks. A child's annuity 
continues during interim breaks between school years if the following 
conditions are satisfied:
    (1) The student must have been a full-time student at the end of the

[[Page 340]]

school term immediately before the break.
    (2) The break between the end of the last term of full-time 
attendance and the return to full-time attendance must not exceed 5 
months. (See Sec. 841.109 of this chapter, concerning calculation of 
this time period.)
    (3) The recipient of a child's annuity payments must show that the 
student has a bona fide intent to return to school as a full-time 
student immediately after the break. The full-time certification for the 
period term and the certification (in a form prescribed by OPM) by the 
recipient of a child's annuity payments that the student intends to 
return to school (immediately after the break) as a full-time student 
constitute prima facie evidence of a bona fide intent to return to 
school.
    (e) Benefits after age 22. (1) A student's eligibility for a child's 
annuity terminates based on reaching age 22 on--
    (i) June 30 of the calendar year of the child's 22nd birthday if the 
child's birthday is before July 1; or
    (ii) The last day of the month before the child's 22nd birthday if 
the child's birthday occurs after June 30 but before September 1 of the 
calendar year; or
    (iii) June 30 of the year after the one in which the child attains 
age 22 if the child's birthday is after August 31 of the calendar year.
    (2)(i) An otherwise eligible child who becomes a full-time student 
after his or her 22nd birthday but before the date the annuity 
terminates under paragraph (e)(1) of this section is eligible for 
annuity while he or she is a full-time student until the termination 
date under paragraph (e)(1) of this section.
    (ii) An otherwise eligible child who is a full-time student, and 
whose parent dies after the child's 22nd birthday but before the date 
the annuity terminates under paragraph (e)(1) of this section, is 
eligible for annuity while he or she is a full-time student after the 
death of the parent until the termination date under paragraph (e)(1) of 
this section.

[58 FR 32052, June 8, 1993]



Sec. 843.411  Direct payments to children.

    For purposes of section 8466(c) of title 5, United States Code, 
persons who have attained age 18 are considered adults, regardless of 
the age of majority in the jurisdiction in which they reside.



                 Subpart E_Insurable Interest Annuities



Sec. 843.501  Purpose.

    This subpart explains the benefit payable under FERS to an insurable 
interest beneficiary based on the death of a retiree who elected to take 
an annuity reduction to provide such benefits.



Sec. 843.502  Eligibility.

    An insurable interest beneficiary is eligible for an annuity under 
this subpart upon the death of a retiree if the retiree had elected 
(under Sec. 842.606 of this chapter) to receive an insurable interest 
rate with the insurable interest beneficiary as his or her survivor.



Sec. 843.503  Commencing and terminating dates.

    (a) An annuity under this subpart commences on the day after the 
retiree dies.
    (b) An annuity under this subpart terminates on the last day of the 
month before the insurable interest beneficiary dies.
    (c) A survivor annuity accrues on a daily basis, one-thirtieth of 
the monthly rate constituting the daily rate. An annuity does not accrue 
for the 31st day of any month, except in the initial month if the 
survivor's (of a deceased employee) annuity commences on the 31st day. 
For accrual purposes, the last day of a 28-day month constitutes 3 days 
and the last day of a 29-day month constitutes 2 days.



Sec. 843.504  Rate of annuity.

    The amount of an annuity under this subpart is 55 percent of the 
retiree's annuity after the insurable interest reduction.

[[Page 341]]



PART 844_FEDERAL EMPLOYEES' RETIREMENT SYSTEM_DISABILITY RETIREMENT
--Table of Contents




                      Subpart A_General Provisions

Sec.
844.101 Purpose.
844.102 Definitions.
844.103 Eligibility.
844.104 Administrative review of OPM decisions.
844.105 Relationship to workers' compensation.
844.106 Disability annuities which include credit for service with a 
          nonappropriated fund instrumentality.

            Subpart B_Applications for Disability Retirement

844.201 General requirements.
844.202 Agency-filed disability retirement applications.
844.203 Supporting documentation.

               Subpart C_Computation of Disability Annuity

844.301 Commencing date of disability annuity.
844.302 Computation of disability annuity before age 62.
844.303 Minimum disability annuity.
844.304 Computation of disability annuity for those otherwise eligible 
          to retire.
844.305 Redetermination of disability annuity at age 62.

      Subpart D_Termination and Reinstatement of Disability Annuity

844.401 Recovery from disability.
844.402 Restoration of earning capacity.
844.403 Annuity rights after a disability annuity terminates.
844.404 Reinstatement of disability annuity.

    Authority: 5 U.S.C. 8461.
    Section 844.201 also issued under 5 U.S.C. 1104.

    Source: 55 FR 6598, Feb. 26, 1990, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 844.101  Purpose.

    This part establishes the requirements under the Federal Employees' 
Retirement System (FERS) for eligibility to receive a disability 
annuity, application procedures for disability annuities, rules for 
computing a disability annuity, and the conditions and procedures under 
which a disability annuity is terminated and reinstated.



Sec. 844.102  Definitions.

    In this part:
    Accommodation means a reasonable adjustment made to an employee's 
job or work environment that enables the employee to perform the duties 
of the position. Accommodation may include modifying the worksite; 
adjusting the work schedule; restructuring the job; obtaining or 
modifying equipment or devices; providing interpreters, readers, or 
personal assistants; and retraining the employee.
    Basic pay means the pay an employee receives that is subject to 
deductions under FERS.
    Commuting area has the meaning given the term ``local commuting 
area'' in Sec. 351.203 of this chapter.
    Disabled and disability means unable or inability, because of 
disease or injury, to render useful and efficient service in the 
employee's current position.
    FERS means the Federal Employees' Retirement System established 
under chapter 84 of title 5, United States Code.
    Medical condition means a health impairment resulting from a disease 
or injury, including a psychiatric disease. This is the same definition 
of ``medical condition'' that is found in Sec. 339.104 of this chapter.
    Medical documentation means a statement from a licensed physician, 
which may be supplemented by a statement from another appropriate 
practitioner, that provides information OPM considers necessary to 
determine an individual's entitlement to benefits under this part. Such 
a statement must meet the criteria set forth in Sec. 339.104 of this 
chapter.
    Military reserve technician has the same meaning given this term in 
5 U.S.C. 8401(30).
    OPM means the Office of Personnel Management.
    Permanent position means an appointment without time limitation.
    Physician and practitioner have the same meaning given these terms 
in Sec. 339.104 of this chapter.
    Qualified for reassignment means able to meet the minimum 
requirements for

[[Page 342]]

the grade and series of the vacant position in question.
    Same grade or pay level means, in regard to a vacant position within 
the same pay as the position the employee currently occupies, the same 
grade and an equivalent amount of basic pay. A position under a 
different pay system or schedule is at the same pay level if the 
representative rate, as defined in Sec. 532.401 of this chapter, equals 
the representative rate of the employee's current position.
    Useful and efficient service means acceptable performance of the 
critical or essential elements of the position; and satisfactory conduct 
and attendance.
    Vacant position means an unoccupied position of the same grade or 
pay level and tenure for which the employee is qualified for 
reassignment that is located in the same commuting area and, except in 
the case of a military reserve technician, is serviced by the same 
appointing authority of the employing agency. The vacant position must 
be full time, unless the employee's current position is less than full 
time, in which case the vacant position must have a work schedule of no 
less time than that of the current position. In the case of an employee 
of the United States Postal Service, a vacant position does not include 
a position in a different craft or a position to which reassignment 
would be inconsistent with the terms of a collective bargaining 
agreement covering the employee.



Sec. 844.103  Eligibility.

    (a) Except as provided in paragraph (c) of this section, an 
individual must meet the following requirements in order to receive a 
disability annuity:
    (1) The individual must have completed at least 18 months of 
civilian service that is creditable under FERS, as defined in Sec. 
842.304 of this chapter;
    (2) The individual must, while employed in a position subject to 
FERS, have become disabled because of a medical condition, resulting in 
a deficiency in performance, conduct, or attendance, or if there is no 
such deficiency, the disabling medical condition must be incompatible 
with either useful and efficient service or retention in the position;
    (3) The disabling medical condition must be expected to continue for 
at least 1 year from the date the application for disability retirement 
is filed;
    (4) Accommodation of the disabling medical condition in the position 
held must be unreasonable; and
    (5) The individual must not have declined an offer of reassignment 
to a vacant position.
    (b) The employing agency must consider a disability applicant for 
reassignment to any vacant position. The agency must certify to the 
Office of Personnel Management (OPM) either that there is no vacant 
position or that, although it made no offer of reassignment, it 
considered the individual for a vacant position. If an agency offers a 
reassignment and the individual declines the offer, the individual may 
appeal the agency's determination that the individual is not disabled 
for the position in question to the Merit Systems Protection Board under 
5 U.S.C. 7701.
    (c)(1) Paragraphs (a)(2) through (a)(4) of this section do not apply 
to a military reserve technician who retires under 5 U.S.C. 8456.
    (2) An individual who separates from employment as a military 
reserve technician under circumstances set forth in 5 U.S.C. 8456(a)(1) 
after reaching age 50 and completing 25 years of service is not entitled 
to a disability annuity under this part, but is entitled to an annuity 
under Sec. 842.210 of this chapter.
    (3) A former military reserve technician is not entitled to an 
annuity under 5 U.S.C. 8456 based on service as a technician if the 
technician is subsequently appointed to another position in the Federal 
Government.



Sec. 844.104  Administrative review of OPM decisions.

    Any individual whose rights or interests under FERS are affected by 
an initial decision of OPM may request OPM to review its decision under 
Sec. 841.306.



Sec. 844.105  Relationship to workers' compensation.

    (a) Except as provided in paragraph (b) of this section, an 
individual who is eligible for both an annuity under part

[[Page 343]]

842 or 844 of this chapter and compensation for injury or disability 
under subchapter I of chapter 81 of title 5, United States Code (other 
than a scheduled award under 5 U.S.C. 8107(c)), covering the same period 
of time must elect to receive either the annuity or compensation.
    (b) Notwithstanding the provisions of paragraph (a) of this section, 
an individual may concurrently receive an annuity based on the 
individual's service under part 842 or 844 of this chapter and a benefit 
under subchapter I of chapter 81 of title 5, United States Code, on 
account of the death of another individual. An individual may also 
receive an annuity under part 843 of this chapter and compensation for 
injury or disability to himself or herself under such subchapter I 
covering the same period of time.
    (c) An individual who elects to receive compensation payments under 
paragraph (a) of this section and who has not received a refund of 
contributions under Sec. 843.202 retains the right to elect to receive 
an annuity under part 842 or 844, as the case may be, in the event that 
the individual's compensation payments cease or are reduced.



Sec. 844.106  Disability annuities which include credit for service 
with a nonappropriated fund instrumentality.

    A disability annuity that includes credit for service with a 
nonappropriated fund instrumentality performed after December 31, 1965, 
based on an election under 5 CFR part 847, subpart D, is computed under 
5 CFR part 847, subpart F.

[68 FR 2178, Jan. 16, 2003]



            Subpart B_Applications for Disability Retirement



Sec. 844.201  General requirements.

    (a)(1) Except as provided in paragraphs (a)(3) and (a)(4) of this 
section, an application for disability retirement is timely only if it 
is filed with the employing agency before the employee or Member 
separates from service, or with the former employing agency or OPM 
within 1 year thereafter.
    (2) An application for disability retirement that is filed with OPM, 
an employing agency or former employing agency by personal delivery is 
considered filed on the date on which OPM, the employing agency or 
former employing agency receives it. The date of filing by facsimile is 
the date of the facsimile. The date of filing by mail is determined by 
the postmark date; if no legible postmark date appears on the mailing, 
the application is presumed to have been mailed 5 days before its 
receipt, excluding days on which OPM, the employing agency or former 
employing agency, as appropriate, is closed for business. The date of 
filing by commercial overnight delivery is the date the application is 
given to the overnight delivery service.
    (3) An application for disability retirement that is filed with OPM 
or the applicant's former employing agency within 1 year after the 
employee's separation, and that is incompletely executed or submitted in 
a letter or other form not prescribed by OPM, is deemed timely filed. 
OPM will not adjudicate the application or make payment until the 
application is filed on a form prescribed by OPM.
    (4) OPM may waive the 1-year time limit if the employee or Member is 
mentally incompetent on the date of separation or within 1 year 
thereafter, in which case the individual or his or her representative 
must file the application with the former employing agency or OPM within 
1 year after the date the individual regains competency or a court 
appoints a fiduciary, whichever is earlier.
    (b)(1) Before payment of a disability annuity under this part can be 
authorized, the applicant must provide OPM with:
    (i) Satisfactory evidence that the applicant has filed an 
application for disability insurance benefits under section 223 of the 
Social Security Act; or
    (ii) An official statement from the Social Security Administration 
that the individual is not insured for disability insurance benefits as 
defined in section 223(c)(1) of the Social Security Act.
    (2) A disability retirement application under this part will be 
dismissed when OPM is notified by the Social Security Administration 
that the application referred to in paragraph (b)(1)(i)

[[Page 344]]

of this section has been withdrawn. All rights to an annuity under this 
part terminate upon withdrawal of an application for social security 
disability benefits.
    (c) An agency may consider the existence of a pending disability 
retirement application when deciding whether and when to take other 
personnel actions. An employee's filing for disability retirement does 
not require the agency to delay any appropriate personnel action.

[55 FR 6598, Feb. 26, 1990, as amended at 63 FR 17050, Apr. 8, 1998]



Sec. 844.202  Agency-filed disability retirement applications.

    (a) Basis for filing an application for an employee. An agency must 
file an application for disability retirement of an employee who has 18 
months of Federal civilian service when all of the following conditions 
are met:
    (1) The agency has issued a decision to remove the employee;
    (2) The agency concludes, after its review of medical documentation, 
that the cause for unacceptable performance, attendance, or conduct is 
disease or injury;
    (3) The employee is institutionalized, or the agency concludes, 
based on a review of medical and other information, that the employee is 
incapable of making a decision to file an application for disability 
retirement;
    (4) The employee has no personal representative or guardian; and
    (5) The employee has no immediate family member who is willing to 
file an application on his or her behalf.
    (b) Agency procedures. (1) When an agency issues a decision to 
remove an employee and not all of the conditions described in paragraph 
(a) of this section have been satisfied, but the removal is based on 
reasons apparently caused by a medical condition, the agency must advise 
the employee in writing of his or her possible eligibility for 
disability retirement and of the time limit for filing an application.
    (2) If all of the conditions described in paragraph (a) of this 
section have been met, the agency must inform the employee in writing at 
the same time it informs the employee of its removal decision, or at any 
time before the separation is effected, that:
    (i) The agency is submitting a disability retirement application on 
the employee's behalf to OPM;
    (ii) The employee may review any medical information in accordance 
with Sec. 294.106(d) of this chapter; and
    (iii) The action does not affect the employee's right to submit a 
voluntary application for disability retirement or any other retirement 
benefit to which the employee is entitled under FERS.
    (3) When an agency submits an application for disability retirement 
to OPM on behalf of an employee, it must provide OPM with copies of the 
decision to remove the employee, the medical documentation, and any 
other documents needed to show that the cause for removal results from a 
medical condition. Following separation, the agency must provide OPM 
with a copy of the documentation of the separation.
    (c) OPM procedures. (1) OPM will not act on any application for 
disability retirement filed by an agency on behalf of an employee until 
it receives the appropriate documentation of the separation. When OPM 
receives a complete application for disability retirement under this 
section, it will notify the former employee that it has received the 
application and that he or she may submit medical documentation. OPM 
will determine entitlement to disability benefits under Sec. 844.203.
    (2) OPM will cancel any disability retirement when a final decision 
of an administrative authority or court reverses the removal action and 
orders the reinstatement of an employee to the agency rolls.



Sec. 844.203  Supporting documentation.

    (a) An individual or agency filing an application for disability 
retirement is responsible for providing OPM with the evidence described 
in Sec. 844.201(b)(1), as well as whatever documentation OPM requires 
in order to determine whether the individual meets the eligibility 
requirements set forth in Sec. 844.103. The documentation must be 
provided in a form prescribed by OPM. Failure to submit the 
documentation required is grounds for dismissing the application. It is 
also the responsibility of the disability annuitant to obtain and submit

[[Page 345]]

evidence OPM requires to show continuing entitlement to disability 
benefits. Unless OPM orders an examination by a physician of its choice 
under paragraph (b) of this section, the cost of providing medical 
documentation rests with the applicant or disability annuitant.
    (b) OPM may offer the applicant a medical examination when it 
determines that an independent evaluation of medical evidence is needed 
in order to make a decision regarding an application for a disability 
annuity or a disability annuitant's entitlement to continuing benefits. 
The medical examination will be conducted by a medical officer of the 
United States or a qualified physician or board of physicians designated 
by OPM. The applicant's refusal to submit to an examination is grounds 
for dismissal of the application or termination of payments to an 
annuitant.
    (c)(1) OPM will review the documentation submitted under paragraph 
(a) of this section to determine whether the individual has met the 
eligibility requirements set forth in Sec. 844.103. OPM will issue its 
decision in writing to the individual and to the employing agency. The 
decision will include a statement of OPM's findings and conclusions and 
an explanation of the applicant's right to request reconsideration or 
MSPB review under Sec. 844.104.
    (2) OPM may rescind a decision to allow an application for 
disability retirement at any time if OPM determines that the original 
decision was erroneous due to fraud, misstatement of fact, or upon the 
acquisition of additional medical or other documentation. OPM will 
provide the individual and the employing agency with written 
notification of the rescission, including a statement of OPM's findings 
and conclusions and an explanation of the individual's right to request 
reconsideration or MSPB review under Sec. 844.104.
    (d) Subject to 5 U.S.C. 552a, any supporting documentation provided 
to OPM under this section may be shared with the Social Security 
Administration and the Office of Workers' Compensation Programs of the 
U.S. Department of Labor.



               Subpart C_Computation of Disability Annuity



Sec. 844.301  Commencing date of disability annuity.

    A disability annuity under this part commences on the day after the 
employee separates or the day after pay ceases and the employee meets 
the requirements for title to an annuity.



Sec. 844.302  Computation of disability annuity before age 62.

    (a) For the purposes of this subpart, the ``adjusted social security 
disability benefit'' is the benefit to which an annuitant is entitled 
under section 223 of the Social Security Act:
    (1) For the month in which the annuity under this part commences, or 
is reinstated under Sec. 844.405, or, if later, the first month for 
which the annuitant is entitled to both an annuity under this part and a 
social security disability benefit;
    (2) Including, where appropriate, a reduction under section 224 of 
the Social Security Act, based on the amount of the disability annuity 
under this subpart without regard to paragraphs (b)(2) and (c)(2) of 
this section; and
    (3) Adjusted by each cost-of-living increase effective under 5 
U.S.C. 8462(b) beginning with the later of the month after the 12-month 
period referred to in paragraph (b)(1) of this section, or the first 
month for which the annuitant is entitled to both an annuity under this 
part and a social security disability benefit.
    (b)(1) Except as otherwise provided in this part, the annuity 
payable under this subpart until the end of the 12th month beginning 
after the annuity commences (or is reinstated under Sec. 844.405) is 
equal to 60 percent of the annuitant's average pay.
    (2) For months for which the annuitant is also entitled to a social 
security disability benefit, the amount computed under paragraph (b)(1) 
of this section is reduced by 100 percent of the annuitant's adjusted 
social security disability benefit.
    (c)(1) Except as otherwise provided in this part, the annuity under 
this subpart after the period described in paragraph (b)(1) of this 
section is equal to

[[Page 346]]

40 percent of the annuitant's average pay.
    (2) For months after the period described in paragraph (b)(1) of 
this section for which the annuitant is also entitled to a social 
security disability benefit, the amount computed under paragraph (c)(1) 
of this section is reduced by 60 percent of the annuitant's adjusted 
social security disability benefit.
    (d) For months in which an annuity is reduced under paragraph (b) or 
(c) of this section, any reduction for survivor benefits is made after 
the reduction for social security benefits.



Sec. 844.303  Minimum disability annuity.

    Notwithstanding any other provision of this part, an annuity payable 
under this part cannot be less than the amount of an annuity computed 
under 5 U.S.C. 8415 (excluding subsection (f) of that section) based on 
the annuitant's service.



Sec. 844.304  Computation of disability annuity for those otherwise 
eligible to retire.

    (a) An individual retiring under this part is not entitled to elect 
to receive an alternative form of annuity under 5 U.S.C. 8420a, even if 
the individual meets the requirements for retirement under another part 
and would be entitled to elect an alternative form of annuity in 
connection therewith.
    (b) Notwithstanding any other provision of this part, an annuity 
payable under this part will be computed under 5 U.S.C. 8415 if it 
commences or is reinstated under Sec. 844.405 (b) or (c) of this part 
on or after:
    (1) The annuitant has satisfied the age and service requirements for 
retirement under 5 U.S.C. 8412 (a) through (f); or
    (2) The annuitant has reached age 62.



Sec. 844.305  Redetermination of disability annuity at age 62.

    Effective on and after the annuitant's 62nd birthday, the rate of 
annuity payable to a disability annuitant will be the amount of an 
annuity computed with respect to the annuitant under 5 U.S.C. 8415 
(including subsection (g) of that section), including credit for all 
periods before the annuitant's 62nd birthday during which he or she was 
entitled to an annuity under this part. The average pay used in 
computing the annuity under 5 U.S.C. 8415 is adjusted by all cost-of-
living increases effective under 5 U.S.C. 8462(b) during the period the 
annuitant was receiving the disability annuity under this part.



      Subpart D_Termination and Reinstatement of Disability Annuity



Sec. 844.401  Recovery from disability.

    (a) Each annuitant receiving disability annuity from the Fund shall 
be examined under the direction of OPM at the end of one year from the 
date of disability retirement and annually thereafter until the 
annuitant becomes 60 years of age unless the disability is found by OPM 
to be permanent in character. OPM may order a medical or other 
examination at any time to determine the facts relative to the nature 
and degree of disability of the annuitant. Failure to submit to 
reexamination shall result in suspension of annuity.
    (b) A disability annuitant may request medical reevaluation under 
the provisions of this section at any time. OPM may reevaluate the 
medical condition of disability annuitants age 60 or over only on their 
own request.
    (c) Recovery based on medical or other documentation. When OPM 
determines on the basis of medical documentation or other evidence that 
a disability annuitant has recovered from the disability, OPM will 
terminate the annuity effective on the first day of the month beginning 
1 year after the date of the medical documentation or other evidence 
showing recovery. If an agency reemploys a disability annuitant who has 
been found recovered at any grade or rate of pay within the 1-year 
period pending termination of the disability annuity under this 
paragraph, OPM will terminate the annuity effective on the date of 
reemployment.
    (d) Recovery based on reemployment by the Federal Government. 
Reemployment by an agency at any time before age 60 is evidence of 
recovery if the reemployment is under an appointment not limited to a 
year or less, at the same or

[[Page 347]]

higher grade or pay level as the position from which the disability 
annuitant retired. The new position must be full-time unless the 
position the disability annuitant occupied immediately before retirement 
was less than full-time, in which case the new position must have a work 
schedule of no less time than that of the position from which the 
disability annuitant retired. In this instance, OPM needs no medical 
documentation to find the annuitant recovered. Disability annuity 
payments will terminate effective on the first day of the month 
following the month in which the recovery finding is made under this 
paragraph.



Sec. 844.402  Restoration of earning capacity.

    (a) Earning capacity determinations. If a disability annuitant is 
under age 60 on December 31 of any calendar year and his or her income 
from wages or self-employment or both during that calendar year equals 
at least 80 percent of the current rate of basic pay of the position 
occupied immediately before retirement, the annuitant's earning capacity 
is considered to be restored. The disability annuity will terminate on 
the June 30 after the end of the calendar year in which earning capacity 
is restored.
    (b) Current rate of basic pay for the position occupied immediately 
before retirement. (1) A disability annuitant's income for a calendar 
year is compared to the gross annual rate of basic pay in effect on 
December 31 of that year for the position occupied immediately before 
retirement. The income limitation for most disability annuitants is 
based on the rate for the grade and step that reflects the total amount 
of basic pay (both the grade and step and any additional basic pay) in 
effect on the date of separation from the agency for disability 
retirement. Additional basic pay is included subject to the premium pay 
restrictions of 5 U.S.C. 5545 (c)(1) and (c)(2).
    (2) In the case of an annuitant whose basic pay rate on the date 
determined under paragraph (b)(1) of this section did not match a 
specific grade and step in the pay schedule:
    (i) For those retiring from a Senior Executive Service position, a 
merit pay position, a position for which a special pay rate is 
authorized (except as provided in paragraph (b)(2)(ii) of this section), 
or any other position in which the rate of basic pay is not equal to a 
grade and step in a pay schedule, the grade and step will be established 
for this purpose at the lowest step in the pay schedule grade that is 
equal to or greater than the actual rate of basic pay payable.
    (ii) For those retiring with a retained rate of basic pay or from a 
position for which a special pay rate is in effect but whose rate of 
basic pay exceeds the highest rate payable in the pay schedule grade 
applicable to the position held, the grade is established for this 
purpose at the highest grade in the schedule that is closest to the 
grade of the position held and within which the amount of the retained 
pay falls. The step is established for this purpose at the lowest step 
in that grade that equals or exceeds the actual rate of pay payable.
    (3) For annuitants retiring from the United States Postal Service, 
only cost-of-living allowances subject to FERS deductions are included 
in determining the current rate of basic pay of the position held at 
retirement.
    (c) Income. (1) Earning capacity for the purposes of this section is 
demonstrated by an annuitant's ability to earn post-retirement income in 
exchange for personal services or a work product, or as a profit from 
one or more businesses wholly or partly owned by the disability 
annuitant and in the management of which the annuitant has an active 
role. Income for the purposes of this section is not necessarily the 
same as income for the purposes of the Internal Revenue Code.
    (2) Income earned from one source is not offset by losses from 
another source. Income earned as wages is not reduced by a net loss from 
self-employment. The net income from each self-employment endeavor is 
calculated separately, and the income earned as net earnings from one 
self-employment endeavor is not reduced by a net loss from another self-
employment endeavor. Thus, a net loss from one endeavor is considered to 
be a net income of zero, and the net incomes from each separate self-
employment endeavor are

[[Page 348]]

added together to determine the total amount of income from self-
employment for a calendar year.
    (3) Income is counted in the calendar year in which it is earned, 
even though receipt may be deferred.
    (d) Requirement to report income. All disability annuitants who, on 
December 31 of any calendar year, are under age 60 must report to OPM 
their income from wages or self-employment or both for that calendar 
year. Each year as early as possible, OPM will send a form to annuitants 
to use in reporting their income from the previous calendar year. The 
form specifies the date by which OPM must receive the report. OPM will 
determine entitlement to continued annuity on the basis of the report. 
If an annuitant fails to submit the report, OPM may stop annuity 
payments until it receives the report.



Sec. 844.403  Annuity rights after a disability annuity terminates.

    (a) When a disability annuity is terminated because of recovery or 
restoration of earning capacity and the individual is not employed in 
the Government, the individual is entitled to an annuity:
    (1) Under 5 U.S.C. 8414(b) if the individual:
    (i) Is at least age 50 when the disability annuity ceases and had 20 
or more years of service at the time of retiring for disability; or
    (ii) Has 25 or more years of service at the time of retiring for 
disability, regardless of age; or
    (2) Under 5 U.S.C. 8412(g) if the individual is at least the minimum 
retirement age applicable under 5 U.S.C. 8412(h) when the disability 
annuity ceases and had 10 or more years of service at the time of 
retiring for disability.
    (b) When a disability annuitant whose annuity was terminated because 
of Federal reemployment is separated and meets the age and service 
requirements for immediate retirement under 5 U.S.C. 8412 or 8414, the 
individual is entitled to an annuity computed under 5 U.S.C. 8415.

[55 FR 6598, Feb. 26, 1990. Redesignated at 58 FR 48273, Sept. 15, 1993]



Sec. 844.404  Reinstatement of disability annuity.

    (a) When a disability annuity stops, the individual must again prove 
that he or she meets the eligibility requirements in order to have the 
annuity reinstated.
    (b) Reinstatement of annuity terminated based on recovery. (1) When 
a recovered disability annuitant under age 62 whose annuity was 
terminated because he or she was found recovered on the basis of medical 
evidence (Sec. 844.401) is not reemployed in a position subject to 
FERS, and, based on the results of a current medical examination, OPM 
finds that the disability has recurred, OPM will reinstate the 
disability annuity as provided in paragraph (d) of this section. The 
right to the reinstated annuity begins on the date of the medical 
documentation showing that the disability has recurred, or if the 
medical documentation clearly shows that the disability recurred on an 
earlier date, the annuity will be reinstated on that earlier date.
    (2) Except in the case of an individual receiving an annuity under 
Sec. 844.404(b), OPM will, as provided in paragraph (d) of this 
section, reinstate the disability annuity of a former annuitant whose 
annuity was terminated because he or she was found recovered on the 
basis of Federal reemployment when:
    (i) The results of a current medical examination show that the 
individual's medical condition has worsened since the finding of 
recovery and that the original disability on which retirement was based 
has recurred; and
    (ii) As a result, he or she has been:
    (A) Separated and not reemployed in a position subject to FERS; or
    (B) Placed in a position that results in a reduction in grade or pay 
below that from which the individual retired, or in a change to a 
temporary or intermittent appointment. The right to the reinstated 
annuity begins on the date the reemployment ends or the effective date 
of the placement in the position that results in a reduction in grade or 
pay or change in appointment.
    (c) Reinstatement of annuity terminated because earning capacity was 
restored. (1) OPM will reinstate the disability annuity as provided in 
paragraph (d) of this section when a disability annuitant

[[Page 349]]

whose annuity was terminated under Sec. 844.402(a):
    (i) Is not reemployed in a position subject to FERS;
    (ii) Has not recovered from the disability for which the individual 
retired (except in the case of a military reserve technician whose 
annuity was awarded under 5 U.S.C. 8456); and
    (iii) Again loses earning capacity, as determined by OPM.
    (2) The reinstated annuity is payable from January 1 of the year 
following the calendar year in which earning capacity was lost. Earning 
capacity is lost if, during any calendar year, the individual's income 
from wages or self-employment or both is less than 80 percent of the 
current rate of basic pay of the position held at retirement.
    (d) Except as provided in Sec. Sec. 844.303 and 844.304, a 
disability annuity reinstated under the preceding paragraphs of this 
section is paid at the rate provided under Sec. 844.302(b) until the 
end of the 12th month beginning after the annuity is reinstated. 
Thereafter, the rate determined under Sec. 844.302(c) is payable until 
age 62.
    (e) Notwithstanding the preceding paragraphs, an annuity may not be 
reinstated under this section if the individual is receiving an annuity 
under part 842 of this chapter.

[55 FR 6598, Feb. 26, 1990. Redesignated and amended at 58 FR 48273, 
Sept. 15, 1993]



PART 845_FEDERAL EMPLOYEES RETIREMENT SYSTEM_DEBT COLLECTION--Table 
of Contents




                      Subpart A_General Provisions

Sec.
845.101 Purpose.
845.102 Definitions.
845.103 Prohibition against collection of debts.
845.104 Status of debts.
845.105 Termination and suspension of collection actions.

                Subpart B_Collection of Overpayment Debts

845.201 Purpose.
845.202 Scope.
845.203 Definitions.
845.204 Processing.
845.205 Collection of debts.
845.206 Collection by administrative offset.
845.207 Use of consumer reporting agencies.
845.208 Referral to a collection agency.
845.209 Referral for litigation.

             Subpart C_Standards for Waiver of Overpayments

845.301 Conditions for waiver.
845.302 Fault.
845.303 Equity and good conscience.
845.304 Financial hardship.
845.305 Ordinary and necessary living expenses.
845.306 Waiver precluded.
845.307 Burdens of proof.

 Subpart D_Agency Requests to OPM for Recovery of a Debt from the Civil 
                         Service Retirement Fund

845.401 Purpose.
845.402 Scope.
845.403 Definitions.
845.404 Conditions for requesting an offset.
845.405 Creditor agency processing for non-fraud claims.
845.406 OPM processing for non-fraud claims.
845.407 Installment withholdings.
845.408 Special processing for fraud claims.

    Authority: 5 U.S.C. 8461.

    Source: 52 FR 5931, Feb. 27, 1987; 52 FR 23014, June 17, 1987, 
unless otherwise noted.



                      Subpart A_General Provisions



Sec. 845.101  Purpose.

    (a) This part regulates--
    (1) The recovery of overpayments of FERS basic benefits;
    (2) The standards for waiver of recovery of overpayments of FERS 
basic benefits; and
    (3) The use of FERS basic benefits to recover debts due the United 
States.
    (b) This subpart states the rules of general applicability to this 
part.



Sec. 845.102  Definitions.

    In this subpart--
    FERS means the Federal Employees Retirement System as described in 
chapter 84 of title 5, United States Code.
    FERS basic benefits means any benefits payable under subchapter II, 
IV, or V of chapter 84 of title 5, United States Code.
    Fund means the Civil Service Retirement Fund.

[[Page 350]]



Sec. 845.103  Prohibition against collection of debts.

    (a) Debts may be collected from FERS basic benefits only to the 
extent expressly authorized by Federal statute.
    (b) When collection of a debt from FERS basic benefits is authorized 
under paragraph (a) of this section, the collection will be made in 
accordance with this part.



Sec. 845.104  Status of debts.

    A payment by OPM to a debtor because of an OPM error or the failure 
of the creditor agency to properly and/or timely submit a debt claim 
under subpart D of this part, does not erase the debt or affect the 
validity of the claim by the creditor agency.



Sec. 845.105  Termination and suspension of collection actions.

    The termination or suspension of a collection action, other than 
waiver of an overpayment under subparts B and C of this part, are 
controlled exclusively by the Federal Claims Collection Standards, 
chapter II of title 4, Code of Federal Regulations.



                Subpart B_Collection of Overpayment Debts



Sec. 845.201  Purpose.

    This subpart prescribes procedures to be followed by the Office of 
Personnel Management (OPM), which are consistent with the Federal Claims 
Collection Standards (FCCS) (Chapter II of title 4, Code of Federal 
Regulations), in the collection of debts owed to the Fund.



Sec. 845.202  Scope.

    This subpart covers the collection of debts due the Fund, with the 
exception of the collection of court-imposed judgments, amounts referred 
to the Department of Justice because of fraud, and amounts collected 
from back pay awards in accordance with Sec. 550.805(e)(2) of this 
chapter.



Sec. 845.203  Definitions.

    In this subpart--
    Additional charges means interest, penalties, and/or administrative 
costs owed on a debt.
    Annuitant means a retired employee or Member of Congress, former 
spouse, spouse, widow(er), or child receiving recurring benefits under 
the provisions of chapter 84 of title 5, United States Code.
    Compromise is an adjustment of the total amount of the debt to be 
collected based upon the considerations established by the FCCS (4 CFR 
part 103).
    Consumer reporting agency has the same meaning provided in 31 U.S.C. 
3701(a)(3).
    Debt means a payment of benefits to an individual in the absence of 
entitlement or in excess of the amount to which an individual is 
properly entitled.
    Delinquent has the same meaning provided in 4 CFR 101.2(b).
    FCCS means the Federal Claims Collection Standards (Chapter II of 
title 4, Code of Federal Regulations).
    Offset means to withhold the amount of a debt, or a portion of that 
amount, from one or more payments due the debtor. Offset also means the 
amount withheld in this manner.
    Reconsideration means the process of reexamining an individual's 
liability for a debt based on--
    (a) Proper application of law and regulation; and
    (b) Correctness of the mathematical computation.
    Repayment schedule means the amount of each payment and the number 
of payments to be made to liquidate the debt as determined by OPM.
    Retirement fund means the Civil Service Retirement Fund.
    Voluntary repayment agreement means an alternative to offset that is 
agreed to by OPM and includes a repayment schedule.
    Waiver is a decision not to recover a debt under authority of 5 
U.S.C. 8470(b).



Sec. 845.204  Processing.

    (a) Notice. Except as provided in Sec. 845.205, OPM will, before 
starting collection, tell the debtor in writing--
    (1) The reason for and the amount of the debt;

[[Page 351]]

    (2) The date on which the full payment is due;
    (3) OPM's policy on interest, penalties, and administrative charges;
    (4) That offset is available, the types of payment(s) to be offset, 
the repayment schedule, the right to request an adjustment in the 
repayment schedule and the right to request a voluntary repayment 
agreement in lieu of offset;
    (5) The individual's right to inspect and/or receive a copy of the 
Government's records relating to the debt;
    (6) The method and time period (30 calendar days) for requesting 
reconsideration, waiver, and/or compromise and, in the case of offset, 
an adjustment to the repayment schedule;
    (7) The standards used by OPM for determining entitlement to waiver 
and compromise;
    (8) The right to a hearing by the Merit Systems Protection Board on 
a waiver request (if OPM's waiver decision finds the individual liable) 
in accordance with paragraph (c)(2) of this section; and
    (9) The fact that a timely filing of a request for reconsideration, 
waiver and/or compromise, or a later timely appeal of a reconsideration 
or waiver denial to the Merit Systems Protection Board, will stop 
collection proceedings, unless (i) failure to take the offset would 
substantially prejudice the Government's ability to collect the debt; 
and (ii) the time before the payment is to be made does not reasonably 
permit the completion of these procedures.
    (b) Requests for reconsideration, waiver, and/or compromise. (1) If 
a request for reconsideration, waiver, and/or compromise is returned to 
OPM by mail, it must be postmarked within 30 calendar days of the date 
of the notice detailed in paragraph (a) of this section. If a request 
for reconsideration, waiver, and/or compromise is hand delivered, it 
must be received within 30 calendar days of the date of the notice 
detailed in paragraph (a) of this section. OPM may extend the 30-day 
time limit for filing when individuals can prove that they--
    (i) Were not notified of the time limit and were not otherwise aware 
of it; or
    (ii) Were prevented by circumstances beyond their control from 
making the request within the time limit.
    (2) When a request for reconsideration, waiver, and/or compromise 
covered by this paragraph is properly filed before the death of the 
debtor, it will be processed to completion unless the relief sought is 
nullified by the debtor's death.
    (3) Individuals requesting reconsideration, waiver, and/or 
compromise will be given a full opportunity to present any pertinent 
information and documentation supporting their position.
    (4) An individual's request for waiver will be evaluated on the 
basis of the standards set forth in subpart C of this part. An 
individual's request for compromise will be evaluated on the basis of 
standards set forth in the FCCS (4 CFR part 103).
    (c) Reconsideration, waiver, and/or compromise decisions. (1) OPM's 
decision will be based upon the individual's written submissions, 
evidence of record, and other pertinent available information.
    (2) After consideration of all pertinent information, OPM will issue 
a written decision. The decision will state the extent of the 
individual's liability, and, for waiver and compromise requests, whether 
the debt will be waived or compromised. If the individual is determined 
to be liable for all or a portion of the debt, the decision will 
reaffirm or modify the conditions for the collection previously proposed 
under paragraph (a) of this section. The decision will state the 
individual's right to appeal to the Merit Systems Protection Board as 
provided by Sec. 1201.3 of this title, and, in the case of a denial of 
waiver or reconsideration request that a timely appeal will stop 
collection of the debt.



Sec. 845.205  Collection of debts.

    (a) Means of collection. Collection of a debt may be made by means 
of offset under Sec. 845.206, or under any statutory provision 
providing for offset of money due the debtor from the Federal 
Government, or by referral to the Justice Department for litigation, as 
provided in Sec. 845.206. Referral may also be made to a collection 
agency under the provisions of the FCCS.
    (b) Additional charges. Interest, penalties, and administrative 
costs will be assessed on the debt in accordance with

[[Page 352]]

standards established in the FCCS at 4 CFR 102.13. Additional charges 
will be waived when required by the FCCS. In addition, such charges may 
be waived when OPM determines--
    (1) Collection would be against equity and good conscience under the 
standards prescribed in Sec. Sec. 845.303 through 845.305; or
    (2) Waiver would be in the best interest of the United States.
    (c) Collection in installments. (1) Whenever feasible, debts will be 
collected in one lump sum.
    (2) However, installments payments may be effected when--
    (i) The debtor establishes that he or she is financially unable to 
pay in one lump sum; or
    (ii)(A) The benefit payable is insufficient to make collection in 
one lump sum;
    (B) The debtor fails to respond to a demand for full payment; and
    (C) Offset is available.
    (3) The amount of the installment payments will be set in accordance 
with the criteria in 4 CFR 102.11.
    (d) Commencement of collection. (1) Except as provided in paragraph 
(d)(2) of this section, collection will begin after the time limits for 
requesting further rights stated in Sec. 845.204(a)(6) expire or OPM 
has issued decisions on all timely requests for those rights and the 
Merit Systems Protection Board has acted on any timely appeal of a 
waiver denial, unless failure to make an offset would substantially 
prejudice the Government's ability to collect the debt; and the time 
before the payment is to be made does not reasonably permit the 
completion of the proceedings in Sec. 845.204 or litigation. When 
offset begins without completion of the administrative review process, 
these procedures will be completed promptly, and amounts recovered by 
offset but later found not owed will be refunded promptly.
    (2) The procedures identified in Sec. 845.204 will not be applied 
when the debt is caused by a retroactive adjustment in the periodic rate 
of annuity or any deduction taken from annuity when the adjustment is a 
result of the annuitant's election of different entitlements under law, 
if the adjustment is made within 120 days of the effective date of the 
election; or interim estimated payments made before the formal 
determination of entitlement to annuity, if the amount is recouped from 
the total annuity payable on the first day of the month following the 
last advance payment or the date the formal determination is made, 
whichever is later.



Sec. 845.206  Collection by administrative offset.

    (a) Offset from retirement payments. A debt may be collected in 
whole or in part from any lump-sum retirement payment or recurring 
annuity payments.
    (b) Offset from other payments--(1) Administrative offset. (i) A 
debt may be offset from other payments due the debtor from other 
agencies in accordance with 4 CFR 102.3 except that offset from back pay 
awarded under the provisions of 5 U.S.C. 5596 (and 5 CFR 550.801 et 
seq.) will be made in accordance with Sec. 550.805(e)(2) of this 
chapter.
    (ii) In determining whether to collect claims by means of 
administrative offset after the expiration of the 6-year limitation 
provided in 5 U.S.C. 2415, the Director or his or her designee will 
determine the cost effectiveness of leaving a claim unresolved for more 
than 6 years. This decision will be based on such factors as the amount 
of the debt, the cost of collection, and the likelihood of recovering 
the debt.
    (2) Salary offset. When the debtor is an employee, or a member of 
the Armed Forces, OPM may effect collection action by offset of the 
debtor's pay in accordance with 5 U.S.C. 5514 and 5 CFR 550.1101 et seq. 
Due process described in Sec. 845.204 will apply. The questions of fact 
and liability, and entitlements to waiver or compromise determined 
through that process are deemed correct and will not be amended under 
salary offset procedures. When the debtor did not receive a hearing on 
the amount of the offset under Sec. 845.204 and requests such a 
hearing, one will be conducted in accordance with subpart K of part 550 
of this chapter.



Sec. 845.207  Use of consumer reporting agencies.

    (a) Notice. If a debtor's response to the notice described in Sec. 
845.204(a) does

[[Page 353]]

not result in payment in full, payment by offset, or payment in 
accordance with a voluntary repayment agreement or other repayment 
schedule acceptable to OPM, and the debtor's rights under Sec. 845.204 
have been exhausted, OPM may report the debtor to a consumer reporting 
agency. In addition, a debtor's failure to make subsequent payments in 
accordance with a repayment schedule may result in a report to a 
consumer reporting agency. Before making a report to a consumer 
reporting agency, OPM will notify the debtor in writing that--
    (1) The payment is overdue;
    (2) OPM intends, after 60 days, to make a report as described in 
paragraph (b) of this section to a consumer reporting agency;
    (3) The debtor's right to dispute the liability has been exhausted 
under Sec. 845.204; and
    (4) The debtor may suspend OPM action on referral by paying the debt 
in one lump sum or making payments current under a repayment schedule.
    (b) Report. When a debtor's response to the notice described in 
paragraph (a) of this section fails to comply with paragraph (a)(4) of 
this section or the debtor does not respond, and 60 days have elapsed 
since the notice was mailed, OPM may report to a consumer reporting 
agency that an individual is responsible for an unpaid debt and provide 
the following information:
    (1) The individual's name, address, taxpayer identification number, 
and any other information necessary to establish the identity of the 
individual;
    (2) The amount, status, and history of the debt; and
    (3) The fact that the debt arose in connection with the 
administration of FERS or CSRS.
    (c) Subsequent reports. OPM will update its report to the consumer 
reporting agency whenever it has knowledge of events that substantially 
change the status or the amount of the liability.



Sec. 845.208  Referral to a collection agency.

    (a) OPM retains the responsibility for resolving disputes, 
compromising claims, referring the debt for litigation, or suspending or 
terminating collection action.
    (b) OPM may refer certain debts to commercial collection agencies 
under the following conditions:
    (1) All processing required by Sec. 845.204 has been completed 
before the debt is released; and
    (2) A contract for collection services has been negotiated.



Sec. 845.209  Referral for litigation.

    From time to time and in a manner consistent with the General 
Accounting Office's and the Justice Department's instructions, OPM will 
refer certain overpayments to the Justice Department for litigation. 
Referral for litigation will suspend processing under this subpart.



             Subpart C_Standards for Waiver of Overpayments



Sec. 845.301  Conditions for waiver.

    Recovery of an overpayment from the Fund may be waived pursuant to 
section 8470(b), of title 5, United States Code, when (a) the annuitant 
is without fault and (b) recovery would be against equity and good 
conscience. When it has been determined that the recipient of an 
overpayment is ineligible for waiver, the individual is nevertheless 
entitled to an adjustment in the recovery schedule if he or she shows 
that it would cause him or her financial hardship to make payment at the 
rate scheduled.



Sec. 845.302  Fault.

    A recipient of an overpayment is without fault if he or she 
performed no act of commission or omission that resulted in the 
overpayment. The fact that the Office of Personnel Management (OPM) or 
another agency may have been at fault in initiating an overpayment will 
not necessarily relieve the individual from liability.
    (a) Considerations. Pertinent considerations in finding fault are--
    (1) Whether payment resulted from the individual's incorrect but not 
necessarily fraudulent statement, which he or she should have known to 
be incorrect;
    (2) Whether payment resulted from the individual's failure to 
disclose material facts in his or her possession,

[[Page 354]]

which he or she should have known to be material; or
    (3) Whether he or she accepted a payment that he or she knew or 
should have known to be erroneous.
    (b) Mitigation factors. The individual's age, physical and mental 
condition or the nature of the information supplied to him or her by OPM 
or a Federal agency may mitigate against finding fault if one or more of 
these factors contributed to his or her submission of an incorrect 
statement, a statement that did not disclose material facts in his or 
her possession, or his or her acceptance of an erroneous overpayment.



Sec. 845.303  Equity and good conscience.

    Recovery is against equity and good conscience when--
    (a) It would cause financial hardship to the person from whom it is 
sought;
    (b) The recipient of the overpayment can show (regardless of his or 
her financial circumstances) that due to the notice that such payment 
would be made or because of the incorrect payment he or she either has 
relinquished a valuable right or has changed positions for the worse; or
    (c) Recovery would be unconscionable under the circumstances.



Sec. 845.304  Financial hardship.

    Financial hardship may be deemed to exist in, but not limited to, 
those situations when the annuitant from whom collection is sought needs 
substantially all of his or her current income and liquid assets to meet 
current ordinary and necessary living expenses and liabilities.
    (a) Considerations. Some pertinent considerations in determining 
whether recovery would cause financial hardship are as follows:
    (1) The individual's financial ability to pay at the time collection 
is scheduled to be made.
    (2) Income to other family member(s), if such member's ordinary and 
necessary living expenses are included in expenses reported by the 
annuitant.
    (b) Exemptions. Assets exempt from execution under State law should 
not be considered in determining an individual's ability to repay the 
indebtedness. Rather primary emphasis will be placed upon the 
annuitant's liquid assets and current income in making such 
determinations.



Sec. 845.305  Ordinary and necessary living expenses.

    An individual's ordinary and necessary living expenses include rent, 
mortgage payments, utilities, maintenance, transportation, food, 
clothing, insurance (life, health, and accident), taxes, installment 
payments, medical expenses, support expenses for which the annuitant is 
legally responsible, and other miscellaneous expenses that the 
individual can establish as being ordinary and necessary.



Sec. 845.306  Waiver precluded.

    Waiver of an overpayment cannot be granted when--
    (a) The overpayment was obtained by fraud; or
    (b) The overpayment was made to an estate.



Sec. 845.307  Burdens of proof.

    (a) Burden of OPM. The Associate Director must establish by the 
preponderance of the evidence that an overpayment occurred.
    (b) Burden of annuitant. The recipient of an overpayment must 
establish by substantial evidence that he or she is eligible for waiver 
or an adjustment.



 Subpart D_Agency Requests to OPM for Recovery of a Debt From the Civil 
                         Service Retirement Fund



Sec. 845.401  Purpose.

    This subpart prescribes the procedures to be followed by a Federal 
agency when it requests the Office of Personnel Management (OPM) to 
recover a debt owed to the United States by administrative offset 
against money due and payable to the debtor from the Fund. This subpart 
also prescribes the procedures that OPM must follow to make these 
administrative offsets.



Sec. 845.402  Scope.

    This subpart applies to agencies and debtors, as defined by Sec. 
845.403.



Sec. 845.403  Definitions.

    In this subpart--

[[Page 355]]

    Act means the Federal Claims Collection Act of 1966 as amended by 
the Debt Collection Act of 1982 and implemented by 4 CFR 101.1 et seq., 
the Federal Claims Collection Standards (FCCS).
    Administrative offset means withholding money payable from the Fund 
to satisfy a debt to the United States under 31 U.S.C. 3716.
    Agency means--
    (a) An Executive agency as defined in Sec. 105 of title 5, United 
States Code, including the U.S. Postal Service and the U.S. Postal Rate 
Commission;
    (b) A military department, as defined in Sec. 102 of title 5, 
United States Code;
    (c) An agency or court in the judicial branch, including a court as 
defined in Sec. 610 of title 28, United States Code, the District Court 
for the Northern Mariana Islands, and the Judicial Panel on 
Multidistrict Litigation;
    (d) An agency of the legislative branch, including the U.S. Senate 
and the U.S. House of Representatives; and
    (e) Other independent establishments that are entities of the 
Federal Government.
    Annuitant means an annuitant as defined in Sec. 8401(2) of title 5, 
United States Code, or a survivor as defined in Sec. 8401(28) of title 
5, United States Code.
    Annuity means the monthly benefit of indefinite duration payable to 
an annuitant or survivor annuitant.
    Compromise has the same meaning as in 4 CFR part 103.
    Consent means the debtor has agreed in writing to administrative 
offset after receiving notice of all rights under 31 U.S.C. 3716 and 
this subpart.
    Creditor agency means the agency to which the debt is owed.
    Debt means an amount owed to the United States on account of loans 
insured or guaranteed by the United States, and other amounts due the 
United States from fees, duties, leases, rents, royalties, services, 
sales of real or personal property, overpayments, fines, penalties, 
damages, interest, taxes, forfeitures, etc.
    Debt claim means an agency request for recovery of a debt in a form 
approved by OPM.
    Debtor means a person who owes a debt, including an employee, former 
employee, Member, former Member, or the survivor of one of these 
individuals.
    Employee has the same meaning as in section 8401(11) of title 5, 
United States Code, and includes reemployed annuitants and employees of 
the U.S. Postal Service.
    Fraud claim means any debt designated by the Attorney General (or 
designee) as involving an indication of fraud, the presentation of a 
false claim, or misrepresentation on the part of the debtor or any other 
party having an interest in the claim.
    Individual Retirement Record means the record of retirement 
contributions that must be maintained under Sec. 841.504 of this 
chapter.
    Lump-sum credit has the same meaning as in section 8401(19) of title 
5, United States Code.
    Member has the same meaning as in section 8401(20) of title 5, 
United States Code.
    Net annuity means annuity after excluding amounts required by law to 
be deducted.
    Paying agency means the agency that employs the debtor and 
authorizes the disbursement of his or her current pay account.
    Refund means the payment of a lump-sum credit to an individual who 
meets all requirements for payment and files application for it.



Sec. 845.404  Conditions for requesting an offset.

    An agency may request that money payable from the Fund be offset to 
recover any valid debt due the United States when all of the following 
conditions are met:
    (a) The debtor failed to pay all of the debt on demand, or the 
creditor agency has collected as much as possible from payments due the 
debtor from the paying agency; and
    (b) The creditor agency sends a debt claim to OPM (under Sec. 
845.405(b) (1), (2), (3) or (4), as appropriate) after doing one of the 
following:
    (1) Obtaining a court judgment for the amount of the debt;
    (2) Following the procedures required by 31 U.S.C. 3716 and 4 CFR 
102.4;
    (3) Following the procedures required by 5 U.S.C. 5514 and subpart K 
of part 550 of this chapter; or
    (4) Following the procedures agreed upon by the creditor agency and 
OPM,

[[Page 356]]

if it is excepted by Sec. 845.405(b)(4) from the completion of 
procedures prescribed by Sec. 845.405(b)(3).



Sec. 845.405  Creditor agency processing for non-fraud claims.

    (a) Where to submit the debt claim, judgment or notice of debt--(1) 
Creditor agencies that are not the debtor's paying agency. (i) If the 
creditor agency knows that the debtor is employed by the Federal 
Government, it should send the debt claim to the debtor's paying agency 
for collection.
    (ii) If some of the debt is unpaid after the debtor separates from 
the paying agency, the creditor agency should send the debt claim to OPM 
as described in paragraph (b) of this section.
    (2) Creditor agencies that are the debtor's paying agency. 
Ordinarily, debts owed the paying agency should be offset under 31 
U.S.C. 3716 from any final payments (salary, accrued annual leave, etc.) 
due the debtor. If a balance is due after offsetting the final payments 
or the debt is discovered after the debtor has been paid, the paying 
agency may send the debt claim to OPM as described in paragraph (b) of 
this section.
    (b) Procedures for submitting debt claim, judgment or notice of debt 
to OPM--(1) Debt claims for which the agency has a court judgment. If 
the creditor agency has a court judgment against the debtor specifying 
the amount of the debt to be recovered, the agency should send the debt 
claim and two certified copies of the judgment to OPM.
    (2) Debt claims previously processed under 5 U.S.C. 5514. If the 
creditor agency previously processed the debt claim under 5 U.S.C. 5514, 
it should--
    (i) Notify the debtor that the claim is being sent to OPM to 
complete collection from the Fund; and
    (ii) Send the debt claim to OPM with two copies of the paying 
agency's certification of the amount collected and one copy of the 
notice to the debtor that the claim was sent to OPM.
    (3) Debt claims not processed under 5 U.S.C. 5514, reduced to court 
judgment, or excepted by paragraph (b)(4) of this section. (i) If the 
debt claim was not processed under 5 U.S.C. 5514, reduced to court 
judgment or excepted by paragraph (b)(4) of this section, the creditor 
agency must--
    (A) Comply with the procedures required by 4 CFR 102.4 by issuing 
written notice to the debtor of the nature and amount of the debt, the 
agency's intention to collect by offset, the opportunity to obtain 
review within the agency of the determination of indebtedness, and the 
opportunity to enter into a written agreement with the agency to repay 
the debt; and
    (B) Complete the appropriate debt claim.
    (ii) If the debtor does not respond to the creditor agency's notice 
within the allotted time and there is no reason to believe that he or 
she did not receive the notice, the creditor agency may submit the debt 
claim to OPM after certifying that notice was issued and the debtor 
failed to reply.
    (iii) If the debtor responds to the notice by requesting a review 
(or hearing if one is available), the review (or hearing) must be 
completed before the creditor agency submits the debt claim.
    (iv) If the debtor receives the notice and responds by consenting to 
the collection, the creditor agency must send (to OPM) a copy of the 
debtor's consent along with the debt claim.
    (4) Debt claims excepted from procedures described in paragraph 
(b)(3) of this section. Creditor agencies must follow specific 
procedures approved by OPM, rather than those described in paragraph 
(b)(3) of this section, for the collection of--
    (i) Debts due because of the individual's failure to pay health 
benefits premiums while he or she was in nonpay status or while his or 
her salary was not sufficient to cover the cost of premiums;
    (ii) Unpaid Federal taxes to be collected by Internal Revenue 
Service levy;
    (iii) Premiums due because of the annuitant's election of Part B, 
Medicare coverage (retroactive collection limited to 6 months of 
premiums); or
    (iv) Overpaid military retired pay an annuitant elects in writing to 
have withheld from his or her annuity.
    (5) General certification requirements for debt claims. Creditor 
agencies submitting debt claims must certify--

[[Page 357]]

    (i) That the debt is owed to the United States;
    (ii) The amount and reason for the debt and whether additional 
interest accrues;
    (iii) The date the Government's right to collect the debt first 
accrued;
    (iv) That the agency has complied with the applicable statutes, 
regulations, and OPM procedures;
    (v) That if a competent administrative or judicial authority issues 
an order directing OPM to pay a debtor an amount previously paid to the 
agency (regardless of the reasons behind the order), the agency will 
reimburse OPM or pay the debtor directly within 15 days of the date of 
the order.
    Note: OPM may, at its discretion, decline to collect other debt 
claims sent by an agency that does not abide by this certification.
    (vi) If the collection will be in installments, the amount or 
percentage of net annuity in each installment; and
    (vii) If the debtor does not (in writing) consent to the offset, or 
does not (in writing) acknowledge receipt of the required notices and 
procedures, or the creditor agency does not document a judgment offset 
or a previous salary offset, identify the action(s) taken to comply with 
4 CFR 102.3, including any required hearing or review, and give the 
date(s) the action(s) was taken.
    (6) Notice of debt. When a creditor agency cannot send a complete 
debt claim, it should notify OPM of the existence of the debt so that 
the lump-sum will not be paid before the debt claim arrives.
    (i) The notice to OPM must include a statement that the debt is owed 
to the United States, the date the debt first accrued, and the basis for 
and amount of the debt, if known. If the amount of the debt is not 
known, the agency must establish the amount and notify OPM in writing as 
soon as possible after submitting the notice.
    (ii) The creditor agency may either notify OPM by making a notation 
in column 8 [Remarks] under ``Fiscal Record'' on the Individual 
Retirement Record, if the Individual Retirement Record is in its 
possession, or if not, by submitting a separate document identifying the 
debtor by name, giving his or her date of birth, social security number, 
and date of separation, if known.
    (c) Time limits for sending records and debt claims to OPM--(1) Time 
limits for submitting debt claims. Unless there is an application for 
refund pending, there is no specific time for submitting a debt claim or 
notice of debt to OPM. Generally, however, agencies must file a debt 
claim before the statute of limitations expires (4 CFR 102.4(c)) or 
before a refund is paid. Time limits are imposed (see Sec. 845.406(a)) 
when the debtor is eligible for a refund and OPM receives his or her 
application requesting payment. In this situation, creditor agencies 
must file a complete debt claim within 120 days (or 180 days if the 
agency requests an extension of time before the refund is paid) of the 
date OPM requests a complete debt claim.
    (2) Time limit for submitting retirement records to OPM. A paying 
agency must send the Individual Retirement Record to OPM no later than 
60 days after the separation, termination, or entrance on duty in a 
position in which the employee is not covered by FERS.



Sec. 845.406  OPM processing for non-fraud claims.

    (a) Refunds--incomplete debt claims. (1) If a creditor agency sends 
OPM a notice of debt claim against a refund OPM is processing for 
payment, OPM will withhold the amount of the debt but will not make any 
payment to the creditor agency. OPM will notify the creditor agency that 
the procedures in this subpart and 4 CFR 102.4 must be completed; and a 
debt claim must be completed and returned to OPM within 120 days of the 
date of OPM's notice to the creditor agency. Upon request, OPM will 
grant the creditor agency one extension of up to 60 days if the request 
for extension is received before the lump-sum payment has been made. The 
extension will commence on the day after the 120-day period expires so 
that the total time OPM holds payment of the refund will not exceed 180 
days.
    (2) During the period allotted the creditor agency for sending OPM a 
complete debt claim, OPM will handle the debtor's application for refund 
under section 8424 of title 5, United States Code, in one of two ways:

[[Page 358]]

    (i) If the amount of the debt is known, OPM will notify the debtor 
of the debt claim against his or her lump-sum credit, withhold the 
amount of the debt, and pay the balance to the debtor, if any.
    (ii) If the amount of the debt is not known, OPM will not pay any 
amount to the debtor until the creditor agency certifies the amount of 
the debt, submits a complete debt claim, or the time limit for 
submission of the debt claim expires, whichever comes first.
    (b) Refunds--complete debt claims--(1) OPM receives an application 
from the debtor prior to or at the same time as the agency's debt claim. 
(i) If a refund has been paid, OPM will notify the creditor agency there 
are no funds available for offset. Except in the case of debts due 
because of the employee's failure to pay health benefits premiums while 
he or she is in nonpay status or while his or her salary was not 
sufficient to cover the cost of premiums, creditor agencies should refer 
to the instructions in the FCCS for other measures to recover the 
outstanding debt; however, OPM will retain the debt claim on file in the 
event the debtor is once again employed in a position subject to 
retirement deductions.
    (ii) If a refund is payable and the creditor agency submits a 
complete debt claim in accordance with Sec. 845.405(b) (1), (2), (3), 
or (4), the debt will be collected from the refund and any balance paid 
to the debtor. OPM will send the debtor a copy of the debt claim, 
judgment, consent, or other document, and notify him or her that the 
creditor agency was paid.
    (2) If OPM has not received an application from the debtor when the 
agency's debt claim is received. If a debtor has not filed application 
for a refund, OPM will retain the debt claim for future recovery. OPM 
will make the collection whenever an application is received, provided 
the creditor agency initiated the administrative offset before the 
statute of limitations expired. (See 4 CFR 102.3(b)(3) and 102.4(c).) 
OPM will notify the creditor agency that it does not have an application 
from the debtor so that the agency may take other action to recover the 
debt.
    Note: If the recovery action is successful, the creditor agency must 
notify OPM so it can void the debt claim.
    (3) Future recovery. (i) If OPM receives an application for refund 
within 1 year of the date the agency's debt claim was received and the 
creditor agency does not indicate that interest is accruing on the debt, 
the debt will be processed as stated in paragraph (b)(1)(ii) of this 
section.
    (ii) If OPM receives an application for refund within 1 year of the 
date the agency's debt claim was received and the creditor agency 
indicates that interest accrues on the debt, when necessary, OPM will 
contact the creditor agency to confirm that the debt is outstanding and 
request submission in writing, of the total additional accrued interest. 
OPM will not make interest computations for creditor agencies.
    (iii) When OPM receives an application for refund more than 1 year 
after the creditor agency's debt claim was received, whether interest 
accrues or not, OPM will contact the creditor agency to see if the debt 
is still outstanding and, when necessary, request an update of the 
interest charges. If the debt is still due, the creditor agency must 
give the debtor an opportunity to establish that his or her changed 
financial circumstances, if any, would make the offset unjust. (See 4 
CFR 102.4(c).) If the creditor agency determines that offset as 
requested in the debt claim would be unjust because of the debtor's 
changed financial circumstances, the agency should permit the debtor to 
offer a satisfactory repayment plan in lieu of offset. If the agency 
decides to pursue the offset, it must submit to OPM the requested 
information and any new instructions within 60 days of the date of OPM's 
request or the claim may be voided and the balance paid to the 
individual.
    (c) Annuities--incomplete debt claims. (1) If a creditor agency 
sends OPM notice of a debt or an incomplete debt claim against a debtor 
who is receiving an annuity, OPM will not offset the annuity. OPM will 
notify the creditor agency that--
    (i) The procedures in this subpart and 4 CFR 102.4 must be 
completed; and
    (ii) A debt claim must be completed and sent to OPM.

[[Page 359]]

    (2) No time limit will be given for the submission of a debt claim 
against an annuity; however, a debt claim must be received within 10 
years of the date the Government's right to collect first accrued (4 CFR 
102.3(b)(3)).
    (d) Annuities--complete debt claims--(1) General--(i) Notice. When 
OPM receives a complete debt claim and an application for annuity, OPM 
will offset the annuity, pay the creditor agency, and mail the debtor a 
copy of the debt claim along with notice of the payment to the creditor 
agency.
    (ii) Beginning deductions. If OPM already established the debtor's 
annuity payment, deductions will begin with the next available annuity 
payment. If OPM is in the process of establishing the annuity payments, 
deductions will not be taken from advance annuity payments, but will 
begin with the annuity payable on the first day of the month following 
the last advance payment.
    (iii) Updating accrued interest. Once OPM has completed a 
collection, if there are additional accrued interest charges, the 
creditor agency must contact OPM regarding any additional amount due 
within 90 days of the date of the final payment.
    (2) Claims held for future recovery. (i) If OPM receives an 
application for annuity within 1 year of the date the agency's debt 
claim was received, the debt will be processed as stated in paragraph 
(c)(1) of this section.
    (ii) If OPM receives an application for annuity more than 1 year 
after the agency's debt claim was submitted, OPM will contact the 
creditor agency to see if the debt is still outstanding. If the debt is 
still due, the creditor agency should permit the debtor to offer a 
satisfactory repayment plan in lieu of offset if the debtor establishes 
that his or her changed financial circumstances would make the offset 
unjust. (See 4 CFR 102.4(c).) If the agency decides to pursue the 
offset, it must submit the requested information and any new 
instructions about the collection to OPM.
    (e) Limitations on OPM review. In no case will OPM review--
    (1) The merits of a creditor agency's decision regarding 
reconsideration, compromise, or waiver; or
    (2) The creditor agency's decision that a hearing was not required 
in any particular proceeding.



Sec. 845.407  Installment withholdings.

    (a) When possible, OPM will collect a creditor agency's full claim 
in one payment from the debtor's refund or annuity.
    (b) If collection must be made from an annuity and the debt is 
large, the creditor must generally accept payment in installments. The 
responsibility for establishing and notifying the debtor of the amount 
of the installments belongs to the creditor agency (see Sec. 
845.405(b)(5)). However, OPM will not make an installment deduction for 
more than 50 percent of net annuity, unless a higher percentage is 
needed to satisfy a judgment against a debtor within 3 years or the 
annuitant has consented to the higher amount in writing. All 
correspondence concerning installment deductions received by OPM will be 
referred to the creditor agency for consideration.



Sec. 845.408  Special processing for fraud claims.

    When an agency sends a claim indicating fraud, presentation of a 
false claim, misrepresentation by the debtor or any other party 
interested in the claim, or any claim based in whole or part on conduct 
violating the antitrust laws, to the Department of Justice (Justice) for 
possible treatment as a fraud claim (4 CFR 101.3), the following special 
procedures apply.
    (a) Agency processing. If the debtor is separated or separates while 
Justice is reviewing the claim, the paying agency must send the 
Individual Retirement Record to OPM, as required by Sec. 845.405(c)(2). 
The agency where the claim arose must send OPM notice that a claim is 
pending with Justice. (See Sec. 845.405(b)(6) for instructions on 
giving OPM a notice of debt.)
    (b) Department of Justice processing. (1) The Attorney General or a 
designee will decide whether a debt claim sent in by an agency will be 
reserved for collection by Justice as a fraud claim. Upon receiving a 
possible fraud claim to be collected by offset from the Fund, the 
Attorney General or a designee

[[Page 360]]

must notify OPM. The notice to OPM must contain the following:
    (i) The name, date of birth, and social security number of the 
debtor;
    (ii) The amount of the possible fraud claim, if known;
    (iii) The basis of the possible fraud claim; and
    (iv) A statement that the claim is being considered as a possible 
fraud claim, the collection of which is reserved to Justice.
    (2) When there is a pending refund application, the Attorney General 
or designee must file a complaint seeking a judgment on the claim and 
send a copy of the complaint to OPM; or as provided in 4 CFR 101.3, 
refer the claim to the agency where the claim arose and submit a copy of 
the referral to OPM within 180 days of the date of either notice from 
the agency that a claim is pending with Justice (paragraph (a) of this 
section) or notice from Justice that it has received a possible fraud 
claim (paragraph (b)(1) of this section) whichever is earlier. When the 
claim is referred to the agency where it arose, the agency must begin 
administrative collection action under 4 CFR 102.4 and send a complete 
debt claim to OPM as required in Sec. 845.405.
    (c) OPM processing against refunds. (1) Upon receipt of a notice 
under paragraph (a) or (b)(1) of this section, whichever is earlier, OPM 
will withhold the amount of the debt claim, if known; notify the debtor 
that the amount of the debt will be withheld from the refund for at 
least 180 days from the date of the notice that initiated OPM 
processing; and pay the balance to the debtor. If the amount of the debt 
claim is not known, OPM will notify the debtor that a debt claim may be 
offset against his or her refund and that OPM will not pay any amount 
until either the amount of the debt claim is established, or the time 
limit for filing a complaint in court or submitting the debt claim 
expires, whichever comes first.
    (2) If the Attorney General files a complaint and notifies OPM 
within the applicable 180-day period, OPM will continue to withhold 
payment of the lump-sum credit until there is a final judgment.
    (3) If the Attorney General refers the claim to the agency where the 
claim arose (creditor agency) and notifies OPM within the applicable 
180-day period, OPM will notify the creditor agency that (i) the 
procedures in this subpart and 4 CFR 102.4 must be completed; and (ii) a 
debt claim must be sent to OPM within 120 days of the date of OPM's 
notice to the creditor agency. At the request of the creditor agency, 
one extension of time of not more than 60 days will be granted, as 
provided by Sec. 845.406(a).
    (4) If OPM is not notified that a complaint has been filed or that 
the claim has been referred to the creditor agency within the applicable 
180-day period, OPM will pay the balance of the refund to the debtor.
    (d) OPM processing against annuities. If the debtor has filed an 
annuity claim, OPM will not take action against the annuity. OPM will 
continue to pay the annuity unless and until there is a final judgment 
for the United States or submission of a complete debt claim.
    (e) OPM collection and payment of the debt. (1) If the United States 
obtains a judgment against the debtor for the amount of the debt or the 
creditor agency submits a complete debt claim, OPM will collect and pay 
the debt to the creditor agency as provided in Sec. Sec. 845.406 and 
845.407.
    (2) If the suit or the administrative proceeding results in a 
judgment for the debtor without establishing a debt to the United 
States, OPM will pay the balance of the refund to the debtor upon 
receipt of a certified copy of the judgment or administrative decision.



PART 846_FEDERAL EMPLOYEES RETIREMENT SYSTEM_ELECTIONS OF COVERAGE
--Table of Contents




                      Subpart A_General Provisions

Sec.
846.101 Purpose.
846.102 Definitions.

                           Subpart B_Elections

846.201 Elections to become subject to FERS.
846.202 Condition for making an election.
846.203 Agency responsibilities.

[[Page 361]]

846.204 Belated elections and correction of administrative errors.
846.205 Reconsideration and appeal rights.

        Subpart C_Effect of an Election to Become Subject to FERS

846.301 General rules.
846.302 Crediting civilian service.
846.303 Crediting military service.
846.304 Computing FERS annuities for persons with CSRS service.
846.305 General inapplicability of CSRS provisions.

                 Subpart D_Refunds of CSRS Contributions

846.401 Refunds of excess contributions.
846.402 Refunds of all CSRS contributions.

          Subpart E_Cancellation of Designations of Beneficiary

846.501 Cancellation upon transfer to FERS.

Subpart F [Reserved]

                Subpart G_1998 Open Enrollment Elections

846.701 Purpose and scope.
846.702 Definitions.
846.703 Effective date of FERS coverage.
846.704 Irrevocability of an election of FERS coverage.

                              Who May Elect

846.711 Eligibility to elect FERS coverage during the 1998 open 
          enrollment period.
846.712 Statutory exclusions.
846.713 Former spouse consent requirement.

                           Election Procedures

846.721 Electing FERS coverage.
846.722 Former spouse's consent to an election of FERS coverage.
846.723 Agency responsibilities.
846.724 Belated elections and correction of administrative errors.
846.725 Appeal to the Merit Systems Protection Board.
846.726 Delegation of authority to act as OPM's agent for receipt of 
          employee communications relating to elections.

    Authority: 5 U.S.C. 8347(a) and 8461(g) and Title III of Pub. L. 99-
335, 100 Stat. 517; Sec. 846.201(b) also issued under 5 U.S.C. 
7701(b)(2) and section 153 of Pub. L. 104-134, 110 Stat. 1321; Sec. 
846.201(d) also issued under section 11246(b) of Pub. L. 105-33, 111 
Stat. 251; Sec. 846.201(d) also issued under section 7(e) of Pub. L. 
105-274, 112 Stat. 2419; Sec. 846.202 also issued under section 
301(d)(3) of Pub. L. 99-335, 100 Stat. 517; Sec. 846.204(b) also issued 
under Title II, Pub. L. 106-265, 114 Stat. 778; Sec. 846.726 also issued 
under 5 U.S.C. 1104; subpart G also issued under section 642 of Pub. L. 
105-61, 111 Stat. 1272.

    Source: 52 FR 19235, May 21, 1987, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 846.101  Purpose.

    This part identifies the employees who may transfer to the Federal 
Employees Retirement System (FERS), gives the conditions under which 
they may transfer, and sets forth the method of computing the annuities 
of employees who transfer to FERS.



Sec. 846.102  Definitions.

    In this part--
    CSRS means subchapter III of chapter 83 of title 5, United States 
Code.
    CSRS/SS service means service subject to both CSRS deductions (or 
deductions under another retirement system for Federal employees if such 
service is creditable under CSRS) and social security deductions as a 
result of the Social Security Amendments of 1983. For this purpose, the 
service of an individual is considered CSRS/SS service if the service 
would have been covered under CSRS except for an election under section 
208(a)(1)(A) of the Federal Employees Retirement Contribution Temporary 
Adjustment Act of 1983 to have no CSRS coverage.
    Employee means an employee as defined by Sec. 842.102 of this 
chapter.
    Employing office means the office of an agency to which jurisdiction 
and responsibility for retirement matters for an employee have been 
delegated.
    FERS means the Federal Employees Retirement System as described in 
chapter 84 of title 5, United States Code.
    Former spouse means a former spouse as defined in Sec. 838.103 or 
Sec. 838.1003 of this chapter.
    Member means a Member of Congress as defined in section 2106 of 
title 5, United States Code.
    OPM means the Office of Personnel Management.
    Qualifying court order means a court order acceptable for processing 
as defined in Sec. 838.103 of this chapter or a qualifying court order 
as defined in Sec. 838.1003 of this chapter.

[[Page 362]]

    Social security means coverage under the Old Age, Survivors, and 
Disability Insurance programs of the Social Security Act.

[52 FR 19235, May 21, 1987, as amended at 57 FR 33599, July 29, 1992]



                           Subpart B_Elections



Sec. 846.201  Elections to become subject to FERS.

    (a) Employees and Members subject to CSRS on June 30, 1987. An 
individual who, on June 30, 1987, is employed in the Federal service or 
is a Member and who is covered by CSRS may elect to become subject to 
FERS. An election under this paragraph may not be made before July 1, 
1987, or after December 31, 1987.
    (b)(1) Separated employees who are reemployed. A former employee 
who, after June 30, 1987, becomes reemployed and subject to CSRS may 
elect, during the 6-month period beginning on the date he or she becomes 
subject to CSRS, to become subject to FERS, except that an employee 
serving under an interim appointment under the authority of Sec. 
772.102 of this chapter is not eligible to elect to become subject to 
FERS.
    (2) Separated employees who are employed with the District of 
Columbia Financial Management and Assistance Authority (Authority). A 
former employee who becomes employed with the Authority and subject to 
CSRS may elect, during the 6-month period beginning on the date he or 
she becomes subject to CSRS, to become subject to FERS, except that an 
employee serving under an interim appointment under the authority of 
Sec. 772.102 of this chapter is not eligible to elect to become subject 
to FERS.
    (c) Employees and Members not subject to CSRS. (1) An employee or 
Member who is excluded from FERS coverage on January 1, 1987, by Sec. 
842.104 (d) or (f) of this chapter and who, on December 31, 1986, is not 
subject to CSRS may elect to become subject to FERS. An election under 
this paragraph (c)(1) may not be made before July 1, 1987, or after 
December 31, 1987.
    (2) An employee who, on June 30, 1987, is not covered by CSRS, but 
later becomes so covered, may elect to become subject to FERS. An 
election under this paragraph (c)(2) must be made during the 6-month 
period beginning on the date he or she becomes subject to CSRS.
    (3) An employee who would be subject to CSRS except for the 
exclusions in Sec. 831.201 of this chapter, but is not excluded from 
FERS by 5 U.S.C. 8401 nor by Sec. 842.105 of this chapter, is deemed 
eligible to make an election of FERS coverage under this section. An 
election under this paragraph (c)(3) must be made during the period 
beginning July 1, 1987, and ending December 31, 1987, or, if later, 
during the 6-month period beginning on the date the employment described 
in this paragraph (c)(3) begins.
    (d) Exceptions. (1) An individual who is an employee of the 
government of the District of Columbia may not elect to become subject 
to FERS except an individual so employed who is covered by CSRS and 
eligible for FERS coverage by operation of section 11246 of Pub. L. 105-
33, 111 Stat. 251, or section 7(e) of Pub. L. 105-274, 112 Stat. 2419.
    (2) A Member who has irrevocably elected, by written notice to the 
official by whom the Member is paid, not to participate in FERS may not 
elect to become subject to FERS during the same continuous period of 
service.
    (3) An employee or reemployed annuitant whose appointment is 
excluded from FERS coverage by law or regulation may not become subject 
to FERS by reason of an election under this section except as specified 
in paragraph (c) of this section or as otherwise provided by law.
    (4) An election under this section may not be made by an individual 
who is ineligible for social security coverage.
    (e) Effective date. An election made under this section is effective 
with the first pay period beginning after the date the election is 
properly filed with the employing office.
    (f) Irrevocability. An election made under this section is 
irrevocable.

[52 FR 19235, May 21, 1987, as amended at 57 FR 3714, Jan. 31, 1992; 61 
FR 58459, Nov. 15, 1996; 62 FR 50997, Sept. 30, 1997; 64 FR 15289, Mar. 
31, 1999]

[[Page 363]]



Sec. 846.202  Condition for making an election.

    (a) An election under Sec. 846.102 of this part may not become 
effective unless the election is made with the written consent of any 
former spouse(s) entitled to benefits under subpart F of part 831 of 
this chapter or part 838 of this chapter. As provided in section 
301(d)(2)(A) of the FERS Act of 1986, this section applies only if OPM 
has been duly notified concerning any qualifying court order and has 
received the documentation required in Sec. 838.211, Sec. 838.721, or 
Sec. 838.1005 of this chapter. This section does not apply with respect 
to a former spouse who has ceased to be so entitled because of 
remarrying before age 55.
    (b) OPM may waive the requirement of paragraph (a) of this section 
upon a showing that the former spouse's whereabouts cannot be 
determined. A request for waiver on this basis must be accompanied by--
    (1) A judicial or administrative determination that the former 
spouse's whereabouts cannot be determined; or
    (2)(i) Affidavits by the employee or Member and two other persons, 
at least one of whom is not related to the employee or Member, attesting 
to the inability to locate the former spouse and stating the efforts 
made to locate the spouse; and
    (ii) Documentary corroboration such as newspaper reports about the 
former spouse's disappearance.
    (c) OPM may waive the requirement of paragraph (a) of this section 
based on exceptional circumstances if the employee or Member presents a 
judicial determination regarding the former spouse that would warrant 
waiver of the consent requirement based on exceptional circumstances.
    (d)(1) OPM shall, upon application of an individual, grant an 
extension for such individual to make an election under Sec. 846.201 of 
this part, if the individual--
    (i) Files an application for the extension with OPM before the end 
of the period during which the individual would otherwise be eligible to 
make the election; and
    (ii) Demonstrates to OPM's satisfaction that the extension is needed 
to secure the modification of a decree of divorce or annulment (or court 
ordered or court-approved property settlement incident to any such 
decree) on file at OPM in order to satisfy the consent requirement under 
paragraph (a) of this section.
    (2) The application for extension is deemed to be filed with OPM on 
the date it is received in the employing office.
    (3) An extension granted under this paragraph expires 6 months after 
the date it was granted. OPM may grant one further extension upon 
application by the individual seeking to make an election of FERS 
coverage.
    (e) An electing individual who has a former spouse who may be 
entitled to benefits as described in paragraph (a) of this section must 
submit with the election either--
    (1) The consent of the former spouse in a form prescribed by OPM,
    (2) A request for an extension as described in paragraph (f) of this 
section,
    (3) A request for a waiver of the consent requirement and the 
documentation to support the request as described in paragraph (d) or 
(e) of this section, or
    (4) A request for a determination as to whether a qualifying court 
order as described in paragraph (a) of this section is on file with OPM.
    (f) The request for waiver or extension described in paragraphs (b), 
(c), and (d) of this section must be in a form prescribed by OPM. The 
employing office must forward the request to OPM promptly.
    (g) If OPM does not have a copy of a qualifying court order in its 
possession, OPM's notice to the agency that it has no qualifying court 
order is deemed to complete the individual's election of FERS, which 
becomes effective with the first pay period after the employing office 
receives OPM's notification.
    (h) If OPM has a copy of a qualifying court order, OPM will notify 
both the individual and the employing agency of its determination 
regarding a request for extension.
    (i) If OPM has a copy of a qualifying court order in its possession 
and grants a waiver of the requirement of paragraph (a) of this section, 
OPM will notify both the individual and the employing office of its 
decision. OPM's

[[Page 364]]

notice to the employing office is deemed to complete the individual's 
election, which becomes effective with the first pay period after the 
employing office receives OPM's notice that the waiver is granted.

[52 FR 19235, May 21, 1987, as amended at 57 FR 33599, July 29, 1992]



Sec. 846.203  Agency responsibilities.

    (a) Employing offices must distribute the election forms provided by 
OPM to each eligible individual, including all individuals in a nonduty 
status.
    (b) An employing office must obtain documentation of the 
individual's receipt of the election form specified in paragraph (a) of 
this section and retain the documentation permanently in the 
individual's official personnel folder (or the equivalent). Acceptable 
documentation includes--
    (1) A statement of receipt signed by the individual, or
    (2) A signed postal return receipt showing that the election form 
was received at the individual's address.



Sec. 846.204  Belated elections and correction of administrative errors.

    (a) Belated elections. On determination by an employing office that 
the FERS transfer handbook issued by OPM was not available to an 
individual in a timely manner or an individual was unable, for cause 
beyond his or her control, to elect FERS coverage within the prescribed 
time limit, the employing office may, within 6 months after the 
expiration of the individual's opportunity to elect FERS coverage under 
Sec. 846.201, accept the individual's election of FERS coverage.
    (b)(1) Correction of administrative errors related to election. 
During the 6-month period after the expiration of an individual's 
opportunity to elect FERS coverage under Sec. 846.201, the employing 
office may make prospective corrections of administrative errors 
regarding an individual's opportunity to elect FERS coverage, including 
failure to provide the election form specified in Sec. 846.203(a) to an 
individual.
    (2)(i) Erroneous FERS coverage for a period of less than 3 years of 
service. For an employee, separated employee, or retiree whose employing 
agency erroneously determined that the individual was covered by FERS 
during the period under Sec. 846.201 when the individual was eligible 
to elect FERS, and the employing agency should have placed the 
individual in CSRS, CSRS Offset, or Social Security-Only, under 
conditions that would have included an opportunity to elect FERS 
coverage, and the employee, separated employee, or retiree remained in 
FERS for less than 3 years of service, the employee, separated employee, 
or retiree is deemed to have elected FERS coverage and the individual 
will remain covered by FERS, unless the individual declines under 
paragraph (b)(2)(ii) of this section to be covered by FERS.
    (ii)(A) The employing agency must provide written notice to each 
individual who is deemed to have elected FERS under paragraph (b)(2)(i) 
of this section that the individual may, within 60 days after receiving 
the notice, decline to be deemed to have transferred to FERS.
    (B) If the individual dies during the election period established by 
paragraphs (b)(2)(ii) (A) and (C) of this section, the right of election 
under paragraph (b)(2)(i) of this section may be exercised by any person 
who would be entitled to receive a current spouse survivor annuity or a 
former spouse survivor annuity under CSRS (or CSRS Offset), if any, if 
the error had not occurred (the election by any one such current or 
former spouse not to have the election of FERS coverage deemed is 
controlling); otherwise, by the individual or individuals entitled to 
receive the lump-sum credit under CSRS (or CSRS Offset) if the error had 
not occurred (the election by any individual entitled to a share of the 
lump-sum credit not to have the election of FERS coverage deemed is 
controlling). The time limit for making an election under this paragraph 
is 60 days after the date of the agency's notice to the individual 
(survivor) of the election right.
    (C) The agency may waive the 60-day time limit under paragraphs 
(b)(2)(ii) (A) and (B) of this section if the individual (if living, 
otherwise the appropriate survivor) exercised due diligence in making 
the election but was prevented by circumstances beyond his or her 
control from making the election

[[Page 365]]

within the time limit. An agency decision not to waive the time limit 
under this paragraph must include notice to the individual of the 
individual's right to request OPM to reconsider the denial of the waiver 
of the time limit. OPM's reconsideration decision on denial of a waiver 
of the time limit will notify the individual of the right to appeal to 
the Merit Systems Protection Board under chapter II of this title.
    (iii) The employing agency must document the individual's records to 
reflect his or her decision concerning retirement coverage.
    (c) OPM's reconsideration. An agency decision concerning an 
individual's opportunity to elect FERS coverage or the effective date of 
an election of FERS coverage is subject to reconsideration by OPM under 
Sec. 846.205.
    (d) Correction of other administrative errors. Failure to begin 
employee deductions and Government contributions on the effective date 
of coverage must be corrected in accordance with Sec. 841.505 of this 
chapter.
    (e) Errors lasting for at least 3 years of service. For an employee, 
separated employee, or retiree whose employing agency erroneously 
determined that the individual was covered by FERS during the period 
under Sec. 846.201 of this chapter when the individual was eligible to 
elect FERS and the individual remained in FERS for at least 3 years of 
service, the error is corrected in accordance with part 839 of this 
chapter.

[52 FR 19235, May 21, 1987, as amended at 58 FR 47822, Sept. 13, 1993; 
66 FR 15618, Mar. 19, 2001]



Sec. 846.205  Reconsideration and appeal rights.

    (a) Who may file. An individual may request OPM to reconsider a 
decision of an employing office affecting his or her election of 
coverage under FERS. A request for reconsideration of a decision by OPM 
regarding extension of the time limit or a waiver under Sec. 846.202 or 
refunds under Sec. 846.401 must be made in accordance with Sec. 
841.305 of this chapter.
    (b) Reconsideration. A request for reconsideration of an agency 
decision must be filed within the time limit given in paragraph (c) of 
this section. A request for reconsideration must be made in writing and 
must include the claimant's name, address, date of birth, and the reason 
for the request.
    (c) Time limit. A request for reconsideration of an agency decision 
must be filed within 30 calendar days from the date of the agency's 
decision stating the right to reconsideration. OPM may extend the time 
limit on filing when a person shows that he or she was not notified of 
the time limit and was not otherwise aware of it, or that he or she was 
prevented by circumstances beyond his or her control from making the 
request within the time limit.
    (d) OPM's decision. After reconsideration, OPM issues its final 
decision in writing, setting forth its findings and conclusions.
    (e) Appeals to MSPB. A person whose rights or interests under this 
part are affected by OPM's decision under paragraph (d) of this section 
may request the Merit Systems Protection Board (MSPB) to review such 
decision in accord with procedures prescribed by MSPB.



        Subpart C_Effect of an Election to Become Subject to FERS



Sec. 846.301  General rules.

    (a) An individual who becomes covered by FERS as a result of an 
election under Sec. 846.201 is subject to the provisions of chapter 84 
of title 5, United States Code and parts 841 through 845 of this 
chapter, except as provided in this part.
    (b) Civilian service performed before the effective date of the 
election under Sec. 846.201 is not creditable under FERS except as 
provided in this part.



Sec. 846.302  Crediting civilian service.

    (a) Civilian service performed before the effective date of FERS 
coverage which is CSRS/SS service is creditable under FERS if--
    (1) For service performed before January 1, 1987, 1.3 percent of 
basic pay was withheld as CSRS deductions (or if not withheld or if 
withheld and later refunded, 1.3 percent of basic pay for the period is 
deposited with interest computed under Sec. 831.105(e) of this 
chapter); and
    (2) For service performed after December 31, 1986, and before the 
effective

[[Page 366]]

date of the election, the employee contributes an amount equal to the 
percentage of basic pay for such service required to be withheld under 
part 841, subpart E of this chapter, whether by withholdings from pay or 
by later deposit (if not withheld or withheld and later refunded) with 
interest computed under Sec. 831.105(e) of this chapter.
    (b) Civilian service performed before the effective date of the FERS 
coverage which is not CSRS/SS service is creditable under FERS (subject 
to the deposit requirements of part 842, subpart C of this chapter) if--
    (1) The service would be creditable under CSRS except for Sec. 
846.306 (determined without regard to whether the service was performed 
before, on, or after January 1, 1989, and without regard to the 
provisions of part 842, subpart C of this chapter requiring that deposit 
be made for nondeduction or refunded service to be credited); and
    (2) The service, in the aggregate, is equal to less than 5 years.
    (c) Civilian service performed before the effective date of FERS 
coverage which is not CSRS/SS service is creditable under FERS only for 
the purposes specified in paragraph (d) of this section if--
    (1) The service would be creditable under CSRS except for Sec. 
846.306 (determined without regard to whether the service was performed 
before, on, or after January 1, 1989, and without regard to the 
provisions of part 842, subpart C of this chapter, requiring that 
deposit be made for nondeduction or refunded service to be credited); 
and
    (2) The service, in the aggregate, is equal to 5 years or more.
    (d) The service described in paragraph (c) of this section is 
creditable under FERS for the following purposes:
    (1) The 5 years of civilian service required to be eligible for a 
basic annuity under FERS as set forth in Sec. 842.203 of this chapter.
    (2) The minimum period of service for entitlement to--
    (i) An immediate voluntary annuity under FERS as set forth in Sec. 
842.204 of this chapter;
    (ii) An early retirement under FERS as set forth in Sec. 842.205 of 
this chapter;
    (iii) An involuntary retirement under FERS as set forth in Sec. 
842.206 of this chapter;
    (iv) A Member retirement under FERS as set forth in Sec. 842.209 of 
this chapter;
    (v) A military reserve technician retirement under FERS as set forth 
in Sec. 842.210 of this chapter;
    (vi) A Senior Executive Service, Defense Intelligence Senior 
Executive Service, or Senior Cryptological Executive Service retirement 
under FERS as set forth under Sec. 842.211 of this chapter;
    (vii) A deferred annuity under FERS as set forth in Sec. 842.212 of 
this chapter;
    (viii) A survivor annuity under FERS based on the death in service 
of an employee with at least 10 years of service as set forth in Sec. 
843.310 of this chapter, but only if the survivor is entitled to the 
basic employee death benefit described in Sec. 843.309 of this chapter;
    (ix) A disability retirement under FERS as set forth in subchapter V 
of chapter 84 of title 5 United States Code;
    (x) A firefighter or law enforcement annuity under FERS as set forth 
in Sec. 842.208 of this chapter, but only to the extent that the 
service was as a law enforcement officer or firefighter as described in 
Sec. 842.809(b) of this chapter;
    (xi) An air traffic controller annuity under FERS as set forth in 
Sec. 842.207 of this chapter, but only to the extent that the service 
was as an air traffic controller as described in Sec. 842.809(a) of 
this chapter;
    (3) The computation of benefits under Sec. 846.304(b); and
    (4) The computation of average salary under Sec. 846.304(d).



Sec. 846.303  Crediting military service.

    (a) Military service performed before the effective date of the 
election under Sec. 846.201 creditable as provided under FERS, except 
as provided in paragraphs (b) and (c) of this section.
    (b) Military service described in paragraph (a) of this section 
which would be creditable under CSRS except for the provisions of Sec. 
846.306 and performed by an individual who is subject to an annuity 
computation under Sec. 846.304(b) is creditable for--

[[Page 367]]

    (1) The minimum period for entitlement to an annuity under FERS 
based on--
    (i) The immediate voluntary retirement provisions under Sec. 
842.204 of this chapter;
    (ii) The early retirement provisions under Sec. 842.205 of this 
chapter;
    (iii) The involuntary retirement provisions under Sec. 842.206 of 
this chapter;
    (iv) The Member retirement provisions under Sec. 842.209 of this 
chapter;
    (v) The military reserve technician retirement provisions under 
Sec. 842.210 of this chapter;
    (vi) The Senior Executive Service, Defense Intelligence Senior 
Executive Service, or the Senior Cryptological Executive Service 
retirement provisions under Sec. 842.211 of this chapter; or
    (vii) The deferred retirement provisions under Sec. 842.212 of this 
chapter.
    (2) Computation of benefits under Sec. 846.304(b).
    (c) If the effective date of the election of FERS by an individual 
who is subject to annuity computation under Sec. 846.304(b) occurs when 
the individual is in non-pay status and is performing active military 
service, benefits for the military service performed before the 
effective date of the election are computed under CSRS, and benefits for 
the military service performed after the effective date are computed 
under FERS. The period of military service is considered to be two 
separate full periods of service, one ending the day before the 
effective date of FERS and one beginning on the effective date of FERS. 
The deposit for the period of service before the effective date of FERS 
coverage is computed under CSRS provisions set forth in part 831, 
subpart U of this chapter. The deposit for the period of service 
beginning on the effective date of FERS coverage is computed under FERS 
provisions set forth in part 842, subpart C of this chapter.



Sec. 846.304  Computing FERS annuities for persons with CSRS service.

    (a)(1) The basic annuity of an employee who elected FERS coverage is 
an amount equal to the sum of the accrued benefits under CSRS as 
determined under paragraph (b) of this section and the accrued benefits 
under FERS as determined under paragraph (c) of this section.
    (2) The computation method described in paragraph (a)(1) of this 
section is used in computing basic annuities under part 842, subpart D 
of this chapter, survivor annuities under part 843, subpart C of this 
chapter, and the basic annuities for disability retirement under 
subchapter V of chapter 84 of title 5 United States Code.
    (3) An annuity computed under this paragraph is deemed to be the 
individual's annuity under FERS.
    (b)(1) Except as provided in paragraphs (b)(2) and (b)(3) of this 
section and Sec. 846.305, accrued benefits for civilian service as 
described in Sec. 846.302(c), and military service as described in 
Sec. 846.303(b) are computed under CSRS provisions.
    (2) Reductions to provide survivor benefits required under part 831, 
subpart F of this chapter, and the 50-percent minimum annuity for air 
traffic controllers described in 5 U.S.C. 8339(e) do not apply to 
accrued benefits under this paragraph.
    (3) Sick leave creditable under Sec. 831.302 of this chapter is 
equal to the number of days of unused sick leave to an individual's 
credit as of the day of retirement, death, or as of the effective date 
of the election of FERS coverage, whichever is the lesser amount of sick 
leave, for an individual who--
    (i) Retires under Sec. Sec. 842.204, 842.205, 842.206, 842.207, 
842.208, 842.209, 842.210, or 842.211 of this chapter;
    (ii) Dies leaving a survivor eligible for a monthly FERS survivor 
annuity under Sec. 843.310 or Sec. 843.311 of this chapter; or
    (iii) After retiring for disability, becomes entitled to an annuity 
computation under part 842, subpart D of this chapter.
    (c) Accrued benefits are computed under FERS for the following 
service:
    (1) Creditable civilian service performed on or after the effective 
date of the election of FERS coverage;
    (2) Creditable civilian service other than as described in Sec. 
846.302(c); and
    (3) Creditable military service other than that described in Sec. 
846.303 (b) and (c).
    (d)(1) Except as specified in Sec. 846.305, the average pay for 
computations

[[Page 368]]

under paragraphs (b) and (c) of this section is the largest annual rate 
resulting from averaging the individual's rates of basic pay in effect 
over any 3 consecutive years of creditable service or, in the case of an 
annuity based on service of less than 3 years, over the total period of 
creditable service, with each rate weighted by the period it was in 
effect.
    (2) For the purposes of paragraph (d)(1) of this section, service is 
considered creditable if it is creditable under either CSRS or FERS.
    (e)(1) The cost-of-living adjustments for the annuities of 
individuals electing FERS coverage are made as follows:
    (i) The portion of the annuity computed under paragraph (b) of this 
section is adjusted as provided under CSRS.
    (ii) The portion of the annuity computed under paragraph (c) of this 
section is adjusted as provided under FERS.
    (2) An annuity initially payable to an annuitant's survivor (other 
than a child under part 843, subpart D of this chapter) is increased by 
the total percent by which the annuitant's annuity was increased under 
this paragraph. Thereafter, the survivor annuity is adjusted for cost-
of-living increases under 5 U.S.C. 8462.
    (f) In computing an annuity under paragraph (a) of this section for 
an employee retiring under Sec. 842.204(a)(1) or Sec. 842.212(b) of 
this chapter, any reduction for age required by Sec. 842.404 of this 
chapter applies to the sum computed under paragraph (a) of this section. 
No reduction under CSRS is applicable.
    (g) In computing an annuity under paragraph (a) of this section for 
an employee retiring early under Sec. 842.205 of this chapter or 
involuntarily under Sec. 842.206 of this chapter, the reduction for age 
required by 5 U.S.C. 8339(h) applies to the portion of the annuity 
computed under CSRS provisions.
    (h) In computing an annuity under paragraph (a) for an employee 
retiring as a firefighter or law enforcement officer under Sec. 842.208 
of this chapter or as an air traffic controller under Sec. 842.207 of 
this chapter, there is no applicable reduction for age.
    (i) An annuity supplement under part 842, subpart E of this chapter, 
is computed using the same civilian service used for the computation 
under paragraph (c) of this section.
    (j) An alternative form of annuity for a basic annuity computed 
under paragraph (a) of this section is computed as follows:
    (1) The alternative benefit for the portion of the annuity computed 
under paragraph (b) of this section is computed under CSRS as provided 
in part 831, subpart V of this chapter, except that a refund of CSRS 
contributions based on a refund application filed after the individual 
elects FERS coverage may not be deemed to be redeposited under Sec. 
831.2206 of this chapter if the individual is entitled to a deferred 
annuity under Sec. 842.212 of this chapter.
    (2) The alternative benefit for the portion of the annuity computed 
under paragraph (c) of this section is computed under FERS as provided 
in part 842, subpart G of this chapter.



Sec. 846.305  General inapplicability of CSRS provisions.

    (a) Except as provided by this part, CSRS provisions are not 
applicable with respect to an individual who elects FERS coverage.
    (b) An employee (or an employee's survivor for the purposes of a 
survivor annuity) may make a deposit under CSRS for any civilian service 
under Sec. 846.302(c) of this part or military service under Sec. 
846.303.
    (c) Nothing in paragraph (a) of this section precludes the payment 
of any lump-sum credit (as defined in 5 U.S.C. 8331(8)) in accordance 
with part 831, subpart T of this chapter.

[52 FR 19235, May 21, 1987. Redesignated at 58 FR 48273, Sept. 15, 1993]



                 Subpart D_Refunds of CSRS Contributions



Sec. 846.401  Refunds of excess contributions.

    (a) An individual who elects FERS coverage is entitled to a refund 
of CSRS contributions made prior to the effective date of the election 
for service that is subject to FERS computation under Sec. 846.304(c) 
(if not already refunded) which exceed the contributions

[[Page 369]]

required under FERS, as provided by this section.
    (b) The refund is equal to--
    (1) For service described in Sec. 846.302(a) and performed on or 
after January 1, 1984, and before January 1, 1987, the amount by which 
the amount contributed exceeds 1.3 percent of basic pay;
    (2) For service described in Sec. 846.302(a) and performed on or 
after January 1, 1987, the amount by which the amount contributed 
exceeds the amount required under Sec. 841.503 of this chapter; and
    (3) For service described in Sec. 846.302(b), the amount by which 
the amount contributed exceeds 1.3 percent of basic pay.
    (c) A refund made under this section is payable with interest 
computed as prescribed under Sec. 831.105 (d) and (e) of this chapter. 
Interest is payable regardless of the length of the period of service 
for which refund is being made or the total amount of service the 
employee has.
    (d) A refund described in this section is payable upon the receipt 
of an application by OPM or its designee.



Sec. 846.402  Refunds of all CSRS contributions.

    (a) An individual who elects to transfer to FERS is entitled to a 
refund of all CSRS contributions in accordance with the provisions of 
part 831, subpart T of this chapter.
    (b) An application for refund of FERS retirement contributions under 
Sec. 843.202 of this chapter is deemed to also be an application for 
refund of CSRS retirement contributions under part 831, subpart T of 
this chapter.



          Subpart E_Cancellation of Designations of Beneficiary



Sec. 846.501  Cancellation upon transfer to FERS.

    A designation of beneficiary made under Sec. 831.2005 of this 
chapter is cancelled on the effective date of an election of FERS 
coverage. Designations of beneficiary under FERS must be made in 
accordance with Sec. 843.205 of this chapter and apply to an employee's 
contributions under both CSRS and FERS.

Subpart F [Reserved]



                Subpart G_1998 Open Enrollment Elections

    Source: 63 FR 33233, June 18, 1998, unless otherwise noted.



Sec. 846.701  Purpose and scope.

    This subpart contains OPM's regulations applicable to elections of 
FERS coverage during the 1998 open enrollment period, including--
    (a) The requirements that an individual must satisfy to be eligible 
to make an election; and
    (b) The procedures that--
    (1) Employees must follow to make an election;
    (2) Agencies must follow in advising employees about making an 
election and in processing employees' elections; and
    (3) OPM will follow in cases subject to the former spouse consent 
requirement.



Sec. 846.702  Definitions.

    In this subpart--
    Election means an election of FERS coverage during the 1998 open 
enrollment period.
    Former spouse consent requirement means the condition that must be 
satisfied under section 301(d) of the FERS Act for an employee with a 
former spouse to be eligible to elect FERS coverage.
    Qualifying court order means a court order acceptable for processing 
as defined in Sec. 838.103 of this chapter or a qualifying court order 
as defined in Sec. 838.1003 of this chapter subject to the following 
conditions:
    (1) If OPM has not received (as explained in Sec. 838.131 of this 
chapter) a copy of the court order and identifying information required 
under Sec. 838.221(b)(3), Sec. 838.421(b)(3), Sec. 
838.721(b)(1)(iii), or Sec. 838.1005(b)(3) of this chapter prior to the 
date on which the employing office receives the election to be covered 
by FERS, the court order is not a qualifying court order.
    (2) If the former spouse loses entitlement to all CSRS benefits 
under the court order, the court order ceases to be a qualifying court 
order.

[[Page 370]]

    Social security coverage means coverage under the Old Age, 
Survivors, and Disability Insurance program under the Social Security 
Act.
    1998 open enrollment period means July 1, 1998, through December 31, 
1998.



Sec. 846.703  Effective date of FERS coverage.

    An election under this subpart is effective on the later of--
    (a) The first day of the pay period beginning after the date the 
election and any required supporting documentation is received by the 
employing office; or
    (b) The first day of the pay period beginning after July 1, 1998.



Sec. 846.704  Irrevocability of an election of FERS coverage.

    (a) An election to be covered by FERS becomes irrevocable on the 
date it becomes effective.
    (b) If, during the 1998 open enrollment period, an employee files an 
election on an SF 3109 to remain covered by CSRS, the employee may 
revoke such an election by filing another election during the 1998 open 
enrollment period.

                              Who May Elect



Sec. 846.711  Eligibility to elect FERS coverage during the 1998 open 
enrollment period.

    An employee who is not covered by FERS, and who was an employee on 
January 1, 1998, and who is not otherwise ineligible for FERS coverage 
(under subpart A of part 842 of this chapter or Sec. 846.722) may elect 
FERS coverage during the 1998 open enrollment period.



Sec. 846.712  Statutory exclusions.

    (a) DC government employees. An individual employed by the 
government of the District of Columbia is not eligible to make an 
election, except--
    (1) Non-judicial employees of the District of Columbia Courts, 
District of Columbia Department of Corrections Trustee or the District 
of Columbia Pretrial Services, Defense Services, Parole, Adult Probation 
and Offender Supervision Trustee under the National Capital 
Revitalization and Self-Government Improvement Act of 1997, title XI of 
Public Law 105-33, 111 Stat. 251, who meet the conditions of Sec. 
831.201(g)(2), (3), and (4) of this chapter; and
    (2) Employees of the District of Columbia Financial Responsibility 
and Management Assistance Authority under the District of Columbia 
Financial Responsibility and Management Assistance Act of 1995, Public 
Law 104-8, 109 Stat. 97, as amended, who elected CSRS under Sec. 
831.201(g)(5) of this chapter.
    (b) Members of Congress. A Member (as defined in section 2106 of 
title 5, United States Code) is not eligible to make an election.
    (c) Persons without social security eligibility. An individual is 
not eligible to make an election if that individual is not eligible for 
social security coverage.



Sec. 846.713  Former spouse consent requirement.

    An election of FERS coverage cannot become effective unless the 
election is made with the written consent of any former spouse(s) 
entitled to benefits under part 838 of this chapter.

                           Election Procedures



Sec. 846.721  Electing FERS coverage.

    (a) To elect FERS coverage, an employee must submit a completed FERS 
Election of Coverage form (SF 3109) and any additional documentation 
that may be required under Sec. 846.722 (relating to the former spouse 
consent requirement) to the employing office no later than the close of 
business on December 31, 1998.
    (b) Any writing signed by the employee and filed with the employing 
office may be treated as an election for the purpose of establishing the 
date of the election of FERS coverage if the employee intends that 
document to be an election, but the employee (or, if the employee dies 
after filing the election but before completing the SF 3109, the 
survivor) must submit a completed SF 3109 to confirm any such election.

[[Page 371]]



Sec. 846.722  Former spouse's consent to an election of FERS coverage.

    (a) Employee actions. (1) If the employee is subject to a qualifying 
court order, the employee must submit to the employing office a 
completed--
    (i) SF 3110, Former Spouse's Consent to FERS Election, to document 
the former spouse's consent to the FERS coverage; or
    (ii) SF 3111, Request for Waiver, Extension, or Search, to request a 
waiver of the former spouse consent requirement or to request an 
extension of the time limit for obtaining a former spouse's consent or 
amendment of the court order.
    (2) If the employee states on the SF 3109, the FERS Election of 
Coverage form, that he or she does not know whether he or she is subject 
to a qualifying court order, the employee must submit to the employing 
office a completed SF 3111, Request for Waiver, Extension, or Search, to 
request OPM to determine whether it has a qualifying court order 
relating to the employee.
    (b) OPM actions--(1) Waiver of former spouse consent requirement--
(i) Grounds for waiver. OPM's authority to approve a waiver of the 
former spouse consent requirement is limited to cases in which the 
former spouse's whereabouts cannot be determined or exceptional 
circumstances make requiring the former spouse's consent inappropriate.
    (ii) Whereabouts cannot be determined. OPM will waive the former 
spouse consent requirement upon a showing that the former spouse's 
whereabouts cannot be determined. A request for waiver on this basis 
must be accompanied by--
    (A) A judicial or administrative determination that the former 
spouse's whereabouts cannot be determined; or
    (B)(1) Affidavits by the employee and two other persons, at least 
one of whom is not related to the employee, attesting to the inability 
to locate the former spouse and stating the efforts made to locate the 
spouse; and
    (2) Documentary corroboration such as newspaper reports about the 
former spouse's disappearance.
    (iii) Exceptional circumstances. OPM will waive the former spouse 
consent requirement based on exceptional circumstances if the employee 
presents a judicial determination finding that--
    (A) The case before the court involves a Federal employee who is in 
the process of electing FERS coverage and the former spouse of that 
employee;
    (B) The former spouse has been given notice and an opportunity to be 
heard concerning this proceeding;
    (C) The court has considered sections 301 and 302 of the FERS Act, 
Pub. L. 99-335, 100 Stat. 517, and this section as they relate to waiver 
of the former spouse consent requirement for an employee with a former 
spouse to elect FERS coverage; and
    (D) The court finds that exceptional circumstances exist justifying 
waiver of the former spouse's consent.
    (iv) Approval of a waiver. If OPM grants a waiver of the requirement 
of paragraph (a) of this section, OPM will notify both the individual 
and the employing office of its decision. OPM's notice to the employing 
office is deemed to complete the individual's election, which becomes 
effective with the first pay period after the employing office receives 
OPM's notice that the waiver is granted.
    (2) Extension of the time limit to obtain a former spouse's 
consent--(i) First request. If an employee who is ineligible to elect 
FERS coverage solely because of a qualifying court order files, prior to 
January 1, 1999, a completed SF 3111, Request for Waiver, Extension or 
Search, requesting an extension of the time limit to seek an amendment 
of a qualifying court order, OPM is deemed to have approved the 
extension through June 30, 1999.
    (ii) Second request. OPM will grant one extension of the time limit 
to seek an amendment of a qualifying court order to an individual who 
has been granted an extension under paragraph (b)(2)(i) of this section 
if the individual--
    (A) Files an application for the extension (SF 3109) with the 
employing office before July 1, 1999;
    (B) Has initiated legal proceedings to secure the modification of 
the qualifying court order on file at OPM to satisfy the former spouse 
consent requirement;

[[Page 372]]

    (C) Demonstrates to OPM's satisfaction that the individual has 
exercised due diligence in seeking to obtain the modification; and
    (D) If seeking an extension beyond December 31, 1999, demonstrates 
to OPM's satisfaction that a longer extension is necessary.
    (iii) Expiration date of a second extension. An approved extension 
under paragraph (b)(2)(ii) of this section expires on December 31, 1999, 
unless OPM's decision letter states a later expiration date.
    (3) Search for a qualifying court order. (i) When an employing 
office notifies OPM that it has received an employee's request for a 
determination of whether OPM has a qualifying court order on file, OPM 
will determine whether it has such an order.
    (ii) If OPM does not have a copy of a qualifying court order in its 
possession, OPM's notice to the employing office that it has no 
qualifying court order completes the employee's election of FERS 
coverage and the election becomes effective at the beginning of the 
first pay period after the employing office receives OPM's notification.
    (iii) If OPM has a copy of a qualifying court order, OPM will notify 
both the individual and the employing office that it has a qualifying 
court order and that an extension until June 30, 1999, has been granted.



Sec. 846.723  Agency responsibilities.

    (a) The employing office must determine whether the employee is 
eligible to elect FERS coverage.
    (b)(1) As close as practicable to the beginning of the open 
enrollment period, the employing office must provide each employee 
eligible to elect FERS coverage with notice of that employee's right to 
make an election.
    (2) The employing office must provide each employee eligible to 
elect FERS coverage with a copy of or ready access to the FERS Transfer 
Handbook.
    (c) An election received by an employing office before July 1, 1998, 
is deemed to have been received by the employing office on July 1, 1998.
    (d) An agency decision that an employee is not eligible to elect 
FERS coverage or refusing to accept a belated election under Sec. 
846.724 must be in writing, must fully set forth the findings and 
conclusions of the agency, and must notify the employee of the right to 
appeal the decision under this section to the Merit Systems Protection 
Board, including all information required under the Board's regulations. 
See 5 CFR 1201.21.



Sec. 846.724  Belated elections and correction of administrative errors.

    (a) Belated elections. The employing office may accept a belated 
election of FERS coverage if it determines that--
    (1) The employing office did not provide adequate notice to the 
employee in a timely manner;
    (2) The agency did not provide access to the FERS Transfer Handbook 
to the employee in a timely manner; or
    (3) The employee was unable, for cause beyond his or her control, to 
elect FERS coverage within the prescribed time limit.
    (b) Correction of administrative errors. Failure to begin employee 
deductions and Government contributions on the effective date of 
coverage must be corrected in accordance with Sec. 841.505 of this 
chapter.



Sec. 846.725  Appeal to the Merit Systems Protection Board.

    (a) A person whose rights or interests under this part are affected 
by an agency decision that an employee is not eligible to elect FERS 
coverage or an agency refusal to accept a belated election under Sec. 
846.724, or an OPM decision denying an extension or waiver under Sec. 
846.722, may request the Merit Systems Protection Board (MSPB) to review 
such decision in accord with procedures prescribed by MSPB. MSPB 
regulations relating to appeals are contained in chapter II of this 
title.
    (b) Paragraph (a) of this section is the exclusive remedy for review 
of agency decisions concerning eligibility to make an election under 
this subpart. An agency decision must not allow review under any 
employee grievance procedures, including those established by chapter 71 
of title 5, United States Code, and 5 CFR part 771.

[[Page 373]]



Sec. 846.726  Delegation of authority to act as OPM's agent for receipt 
of employee communications relating to elections.

    The employing office is delegated authority to act as OPM's agent 
for the receipt of any documents that employees are required by this 
subpart to file with OPM. Such documents are deemed received by OPM on 
the date that the employing office receives them.



PART 847_ELECTIONS OF RETIREMENT COVERAGE BY CURRENT AND FORMER 
EMPLOYEES OF NONAPPROPRIATED FUND INSTRUMENTALITIES--Table of Contents




                      Subpart A_General Provisions

Sec.
847.101 Purpose and scope.
847.102 Regulatory structure.
847.103 Definitions.
847.104 OPM responsibilities.
847.105 Agency responsibilities.
847.106 Agency decision concerning eligibility.
847.107 Appeals to MSPB.
847.108 Computation of time.

 Subpart B_Elections to Continue Retirement Coverage After a Qualifying 
                                  Move

847.201 Purpose and scope.
847.202 Definition of qualifying move.
847.203 Elections of CSRS coverage.
847.204 Elections of FERS coverage.
847.205 Elections of NAFI retirement system coverage.
847.206 Time limit for making an election.
847.207 Effective dates of elections.
847.208 Changes of election.
847.209 Collection of CSRS and FERS retirement contributions from NAFI 
          employers.
847.210 Collection of NAFI retirement contributions from Federal 
          agencies.
847.211 Death of employee during election opportunity period.

   Subpart C_Procedures for Elections Under the Retroactive Provisions

847.301 Purpose and scope.
847.302 Notice of election rights.
847.303 Election forms.
847.304 Time limit.
847.305 Basic records.

    Subpart D_Elections of Coverage Under the Retroactive Provisions

                           General Provisions

847.401 Purpose and scope.
847.402 Definition of qualifying move.

Elections of CSRS or FERS Coverage Based on a Move from CSRS or FERS to 
                                  NAFI

847.411 Election requirements.
847.412 Elections of FERS instead of CSRS.
847.413 Effective date of an election.
847.414 Crediting future NAFI service.
847.415 OASDI coverage.
847.416 Credit for refunded FERS service.

Elections to Remain in FERS Coverage with Credit for NAFI Service Based 
                       on a Move from NAFI to FERS

847.421 Election requirements.
847.422 Crediting future NAFI service.
847.423 Credit for refunded FERS service.

Elections to Remain in NAFI Coverage with Credit for FERS Service Based 
                       on a Move from FERS to NAFI

847.431 Election requirements.
847.432 Effect of a refund of FERS deductions.
847.433 Exclusion from FERS for future service.

      Elections of NAFI Coverage Based on a Move from NAFI to FERS

847.441 Election requirements.
847.442 Effective date.
847.443 Exclusion from FERS for future service.

  Subpart E_Transfers of Contributions Under the Retroactive Provisions

847.501 Purpose and scope.
847.502 Transfers to the CSR Fund.
847.503 Transfers from the CSR Fund.
847.504 Amount of transfer.
847.505 When transfer occurs.
847.506 Procedures for transfer.
847.507 Earnings after transfer.

  Subpart F_Additional Employee Costs Under the Retroactive Provisions

847.601 Purpose and scope.
847.602 Present value factors.
847.603 Date of present value and deficiency determinations.
847.604 Methodology for determining deficiency.
847.605 Methodology for determining the present value of annuity with 
          service credit.
847.606 Methodology for determining the present value of annuity without 
          service credit--credit not needed for title.

[[Page 374]]

847.607 Methodology for determining the present value of annuity without 
          service credit--credit needed for title.
847.608 Reduction in annuity due to deficiency.

Appendix A to Subpart F--List of Events for Which Inclusion of NAFI 
          Service May Affect the Rate of Annuity Payable

   Subpart G_Computation of Benefits Under the Retroactive Provisions

847.701 Purpose and scope.
847.702 Lump-sum payments and refunds.
847.703 Reductions in annuity.
847.704 Maximum survivor annuity election.
847.705 Cost-of-living adjustments.

 Subpart H_Electing To Credit NAFI Service for CSRS and FERS Retirement 
                               Eligibility

847.801 What information is in this subpart?
847.802 Who may elect to use NAFI service to qualify for immediate 
          retirement under CSRS or FERS?
847.803 When do employees make the election to use their NAFI service to 
          qualify for an immediate retirement under CSRS or FERS?
847.804 How do employees make an election to use their NAFI service to 
          qualify for an immediate retirement under CSRS or FERS?
847.805 What NAFI service can employees elect to credit toward 
          retirement eligibility under CSRS or FERS?
847.806 How much NAFI service must employees elect to use to qualify for 
          an immediate CSRS or FERS retirement?
847.807 Do employees have to pay CSRS or FERS deposits for the NAFI 
          service they use to qualify for immediate retirement under 
          CSRS or FERS?
847.808 Is money in the NAFI retirement fund covering NAFI service that 
          an employee elects to use for immediate retirement under CSRS 
          or FERS, transferred to the Civil Service Retirement and 
          Disability Fund?
847.809 What effect will NAFI service used to qualify for an immediate 
          retirement have on the amount of the CSRS or FERS annuity?

 Subpart I_Computing the Retirement Annuity for Employees Who Elect To 
  Use NAFI Service to Qualify for an Immediate CSRS or FERS Retirement

847.901 What information is in this subpart?
847.902 How does an election to credit NAFI service for immediate CSRS 
          or FERS retirement under subpart H of this part affect the 
          computation of the CSRS or FERS retirement annuity?
847.903 How is the monthly reduction to the retirement annuity computed?
847.904 What are Present Value Factors?
847.905 How is the present value of an immediate annuity with credit for 
          NAFI service computed?
847.906 How is the present value of a deferred annuity without credit 
          for NAFI service computed?
847.907 How is the monthly annuity rate used to compute the present 
          value of the deferred annuity without credit for NAFI service 
          determined?
847.908 If a retiree who elected to credit NAFI service under subpart H 
          of this part earns a supplemental annuity under 5 CFR part 
          837, how will that supplemental annuity be computed?
847.909 If a retiree who elected to credit NAFI service under subpart H 
          of this part earns a right to a redetermined annuity under 5 
          CFR part 837, how will the redetermined annuity be computed?
847.910 If a retiree who elected to credit NAFI service for CSRS 
          immediate retirement returns to work for the Government under 
          conditions that terminate the annuity, how will the retirement 
          annuity be computed when the employee's service with the 
          Government ends?
847.911 Is an employee who elects to credit NAFI service to qualify for 
          an immediate FERS retirement under subpart H of this part 
          eligible for an FERS annuity supplement under 5 CFR 842 
          subpart E?
847.912 If an employee who elects to credit NAFI service under subpart H 
          of this part elects a survivor annuity will the monthly 
          survivor annuity rate be subject to reduction?

    Authority: 5 U.S.C. 8332(b)(17) and 8411(b)(6) and sections 1131 and 
1132 of Pub. L. 107-107, December 28, 2001, 115 Stat 1242; 5 U.S.C. 
8347(a) and 8461(g) and section 1043(b) of Pub. L. 104-106, Div. A, 
Title X, Feb. 10, 1996, 110 Stat. 434. Subpart B also issued under 5 
U.S.C. 8347(q) and 8461(n).

    Source: 61 FR 41721, Aug. 9, 1996, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 847.101  Purpose and scope.

    (a) This part contains the regulations issued by the Office of 
Personnel Management (OPM) to implement the statutory election rights of 
certain current and former NAFI employees under the Portability of 
Benefits for Nonappropriated Fund Employees Act of 1990, section 1043 of 
the National Defense Authorization Act for Fiscal Year 1996, and 
sections 1131 and 1132 of the

[[Page 375]]

National Defense Authorization Act for Fiscal Year 2002.
    (b) This part establishes--
    (1) The eligibility requirements for making an election;
    (2) The procedures for making elections;
    (3) The methodologies to determine the employee costs associated 
with the elections; and
    (4) The methodologies to calculate benefits that include credit for 
NAFI service based on such elections.
    (c)(1) The regulations in this part apply to individuals covered by 
CSRS or FERS (and their survivors) and the employers of such 
individuals. The Department of Defense and the U.S. Coast Guard will 
issue any necessary regulations to implement these election rights to 
the extent they affect NAFI retirement systems under their jurisdiction.
    (2) The regulations in this part apply only to CSRS benefits and 
FERS basic benefits. They do not apply to benefits under the Thrift 
Savings Plan described in subchapter III of chapter 84, of title 5, 
United States Code.

[61 FR 41721, Aug. 9, 1996, as amended at 68 FR 2179, Jan. 16, 2003]



Sec. 847.102  Regulatory structure.

    (a)(1) Subpart A of this part contains information applicable to all 
elections under this part.
    (2) Subpart B of this part contains information about prospective 
retirement coverage elections under sections 8347(q) and 8461(n) of 
title 5, United States Code.
    (3) Subpart C of this part contains information about the procedures 
applicable to retroactive retirement coverage and alternative credit 
elections under section 1043(c)(2) of the National Defense Authorization 
Act for Fiscal Year 1996.
    (4) Subpart D of this part contains information about the types of 
retroactive elections available, the eligibility requirements for each 
type of election, the effects of an election on CSRS and FERS coverage 
during future employment, and the effective dates of CSRS and FERS 
coverage applicable to elections under section 1043(c)(2) of the 
National Defense Authorization Act for Fiscal Year 1996.
    (5) Subpart E of this part contains information about transferring 
retirement contributions in connection with elections under section 
1043(c)(2) of the National Defense Authorization Act for Fiscal Year 
1996.
    (6) Subpart F of this part contains information about determining 
the employee costs associated with elections under section 1043(c)(2) of 
the National Defense Authorization Act for Fiscal Year 1996.
    (7) Subpart G of this part contains information about benefits 
indirectly affected by elections under section 1043(c)(2) of the 
National Defense Authorization Act for Fiscal Year 1996.
    (8) Subpart H of this part contains information about elections to 
credit NAFI service to qualify for immediate retirement under section 
1132 of Public Law 107-107, the National Defense Authorization Act for 
Fiscal Year 2002.
    (9) Subpart I of this part contains information about how benefits 
are computed when employees elect to credit NAFI service to qualify for 
immediate retirement under section 1132 of Public Law 107-107, the 
National Defense Authorization Act for Fiscal Year 2002.
    (b) Section 831.305 of this chapter contains information about CSRS 
credit for NAFI service performed after June 18, 1952, but before 
January 1, 1966.
    (c)(1) Part 831 of this chapter contains information about the Civil 
Service Retirement System.
    (2) Parts 841 through 844 of this chapter contain information about 
FERS basic benefits.
    (3) Part 837 of this chapter contains information about reemployment 
of annuitants.
    (4) Part 870 of this chapter contains information about the Federal 
Employees' Group Life Insurance Program.
    (5) Part 890 of this chapter contains information about coverage 
under the Federal Employees Health Benefits Program.
    (6) Chapter II (parts 1200 through 1299) of this title contains 
information about appeals to the Merit Systems Protection Board.
    (7) Chapter VI (parts 1600 through 1699) of this title contains 
information

[[Page 376]]

about the Federal Employees Thrift Savings Plan.

[61 FR 41721, Aug. 9, 1996, as amended at 68 FR 2179, Jan. 16, 2003]



Sec. 847.103  Definitions.

    (a) Except as provided in paragraph (b) of this section, the 
definitions in sections 8331 and 8401 of title 5, United States Code, 
apply throughout this part.
    (b) In this part--
    Actuarial present value means the amount of money (earning interest 
at an assumed rate) required at the time of retirement to finance an 
annuity that is payable in monthly installments for the annuitant's 
lifetime based on mortality rates for annuitants under CSRS and FERS; 
and increases each year at an assumed rate of inflation. Interest, 
mortality, and inflation rates used in computing the present value are 
those used by the Board of Actuaries of the Civil Service Retirement 
System for valuation of CSRS and FERS, based on dynamic assumptions.
    Age means the number of years an individual has been alive as of his 
or her last birthday.
    Agency means an executive agency as defined in section 105 of title 
5, United States Code; a legislative branch agency; a judicial agency; 
and the U.S. Postal Service and Postal Rate Commission.
    Annuitant means a retiree or a survivor.
    CSRS or FERS means the Civil Service Retirement System or the 
Federal Employees Retirement System as described in chapters 83 and 84 
of title 5, United States Code.
    Deferred annuity date means the earliest date on which a retiree 
would be eligible, without credit for the NAFI service, to receive a 
deferred annuity based on his or her actual date of separation.
    Deficiency means the remainder of the actuarial present value of 
crediting NAFI service, after subtracting the amount credited to the 
employee from a transfer to the Fund under subpart E of this part, and 
earnings under Sec. 847.507 on the transferred amount.
    Employee contributions with interest means the dollar amount 
deducted from an employee's pay for retirement system participation, 
plus any amounts the employee deposited for civilian service credit 
under the retirement system, and interest, if any, payable under Sec. 
841.605 of this chapter (for FERS) or under applicable NAFI retirement 
system rules.
    Fund means the Civil Service Retirement and Disability Fund 
established in section 8348 of title 5, United States Code.
    Government contributions means the dollar amount which was 
contributed on behalf of an employee by his or her employer for 
retirement system participation.
    Monthly annuity rate means the amount of the monthly single life 
annuity under CSRS or FERS (computed without regard to any survivor 
benefit reductions computed under sections 8339 (j) or (k), and 8418 
through 8420 of title 5, United States Code), before any offset relating 
to benefits under the Social Security Act under section 8349 of title 5, 
United States Code, but after including any reduction for age (5 U.S.C. 
8339(h) or 8415(f)) or for crediting nondeduction civilian service 
performed before October 1, 1982 (5 U.S.C.A. 8339(i), note).
    NAFI means a nonappropriated fund instrumentality described in 
section 2105(c) of title 5, United States Code.
    Retiree means a former employee who, on the basis of his or her 
service meets all the requirements for title to a CSRS or FERS annuity 
and files claim therefor.
    Survivor means a widow, widower, or former spouse entitled to a CSRS 
or FERS annuity based on the service of a deceased employee, separated 
employee, or retiree.

[61 FR 41721, Aug. 9, 1996, as amended at 68 FR 2179, Jan. 16, 2003]



Sec. 847.104  OPM responsibilities.

    (a) OPM will issue guidance to employing agencies to use when 
notifying their employees about the opportunity to make an election 
under this part and for counseling employees in connection with the 
election.
    (b) OPM will issue instructions to agencies concerning the transfer 
of funds and recordkeeping in connection with these elections.

[[Page 377]]

    (c) OPM will determine if an employee who wishes to make an election 
under 5 CFR part 847, subpart H, is eligible to make such an election, 
and OPM's determination is subject to reconsideration under 5 CFR part 
831, subpart A, or 5 CFR part 841, subpart C.

[61 FR 41721, Aug. 9, 1996, as amended at 68 FR 2179, Jan. 16, 2003]



Sec. 847.105  Agency responsibilities.

    (a) Each agency is responsible for notifying its employees of the 
opportunity to make an election under this part and for determining if 
an employee who wishes to make an election under subparts B and D of 
this part is qualified to do so, and for counseling employees in 
accordance with guidance issued by OPM.
    (b) If an agency determines that an employee is not eligible to make 
an election under subparts B and D of this part, the agency shall issue 
a final decision to the employee that meets the requirements of Sec. 
847.106, including notice of the right to appeal under Sec. 847.107.

[68 FR 2179, Jan. 16, 2003]



Sec. 847.106  Agency decision concerning eligibility.

    (a) If the agency determines that the employee is not eligible to 
make an election under subpart B or D of this part, it must issue a 
final decision to the employee.
    (b) A final decision shall be in writing, shall fully set forth the 
findings and conclusions of the agency, and shall contain notice of the 
right to request an appeal provided in Sec. 847.107.

[61 FR 41721, Aug. 9, 1996, as amended at 68 FR 2179, Jan. 16, 2003]



Sec. 847.107  Appeals to MSPB.

    (a) An individual whose rights or interests under the CSRS or FERS 
are affected by a final decision of the employing agency may request the 
Merit Systems Protection Board to review such decision in accordance 
with procedures prescribed by the Board.
    (b) Paragraph (a) of this section is the exclusive remedy for review 
of agency decisions concerning eligibility to make an election under 
subparts B and D of this part. An agency decision must not allow review 
under any employee grievance procedures, including those established by 
5 U.S.C. chapter 71, and 5 CFR part 771.

[61 FR 41721, Aug. 9, 1996, as amended at 68 FR 2179, Jan. 16, 2003]



Sec. 847.108  Computation of time.

    In computing a period of time for filing documents, the day of the 
action or event after which the designated period of time begins to run 
is not included. The last day of the period is included unless it is a 
Saturday, a Sunday, or a legal holiday; in this event, the period runs 
until the end of the next day which is not a Saturday, a Sunday, or a 
legal holiday.



 Subpart B_Elections to Continue Retirement Coverage After a Qualifying 
                                  Move



Sec. 847.201  Purpose and scope.

    This subpart contains OPM's regulations on the procedures, 
eligibility requirements, time limits and effects of elections under 
sections 8347(q) and 8461(n) of title 5, United States Code.



Sec. 847.202  Definition of qualifying move.

    (a) A qualifying move occurring on or after December 28, 2001, that 
would allow an opportunity to elect to continue retirement coverage 
under CSRS and FERS must meet all of the following criteria:
    (1) The employee must not have had a prior opportunity to elect to 
continue CSRS or FERS retirement coverage.
    (2) The employee must have moved from a position covered by CSRS or 
FERS to a retirement-covered position in an NAFI, and
    (3) The employee must begin employment in a retirement-covered 
position in an NAFI no later than 1 year after separation from CSRS- or 
FERS-covered employment.
    (b) A qualifying move occurring on or after December 28, 2001, that 
would allow an opportunity to elect to continue retirement coverage 
under an NAFI retirement system must meet all the following criteria:

[[Page 378]]

    (1) The employee must not have had a prior opportunity to elect to 
continue NAFI retirement system coverage;
    (2) The employee must have moved from an NAFI to a civil service 
position subject to CSRS or FERS coverage; and
    (3) The employee must be appointed to a CSRS- or FERS-covered 
position no later than 1 year after separation from retirement-covered 
NAFI employment.
    (c) A qualifying move occurring on or after August 10, 1996, and 
before December 28, 2001, that would allow an opportunity to elect to 
continue retirement coverage under CSRS and FERS must meet all the 
following criteria:
    (1) The employee must not have had a prior opportunity to elect to 
continue CSRS or FERS retirement coverage;
    (2) The employee must have been vested in CSRS or FERS prior to the 
move to an NAFI;
    (3) The employee must have moved from a position covered by CSRS or 
FERS to a retirement-covered position in an NAFI; and
    (4) The employee must begin employment in a retirement-covered 
position in an NAFI no later than 1 year after separation from CSRS- or 
FERS-covered employment.
    (d) A qualifying move occurring on or after August 10, 1996, and 
before December 28, 2001, that would allow an opportunity to elect to 
continue retirement coverage under an NAFI retirement system must meet 
all the following criteria:
    (1) The employee must not have had a prior opportunity to elect to 
continue NAFI retirement system coverage;
    (2) The employee must have been a vested participant in the NAFI 
retirement system (as the term ``vested participant'' is defined by that 
retirement system) prior to the move to a CSRS- or FERS-covered 
position;
    (3) The employee must have moved from an NAFI to a civil service 
position subject to CSRS or FERS coverage; and
    (4) The employee must be appointed to a CSRS- or FERS-covered 
position no later than 1 year after separation from retirement-covered 
NAFI employment.
    (e) A qualifying move occurring between January 1, 1987, and August 
9, 1996, that would allow an opportunity to elect to continue retirement 
coverage under CSRS or FERS must meet all the following criteria:
    (1) The employee must not have had a prior opportunity to elect to 
continue CSRS or FERS retirement coverage;
    (2) The employee must have been vested in CSRS or FERS prior to the 
move to an NAFI;
    (3) The employee must have moved from a CSRS- or FERS-covered 
position within the Department of Defense or the U.S. Coast Guard to a 
retirement-covered position with an NAFI; and
    (4) The employee must begin employment in a retirement-covered 
position in an NAFI no later than 4 days after separation from CSRS- or 
FERS-covered employment.
    (f) A qualifying move occurring between January 1, 1987, and August 
9, 1996, that would allow an opportunity to elect to continue retirement 
coverage under an NAFI retirement system must meet all the following 
criteria:
    (1) The employee must not have had a prior opportunity to elect to 
continue NAFI retirement system coverage;
    (2) The employee must have been a vested participant in the NAFI 
retirement system (as the term ``vested participant'' is defined by that 
retirement system) prior to the move to the civil service;
    (3) The employee must have moved from an NAFI to a CSRS- or FERS-
covered position within the Department of Defense or the U.S. Coast 
Guard; and
    (4) The employee must be appointed to a CSRS- or FERS-covered 
position no later than 4 days after separation from retirement-covered 
NAFI employment.
    (g) A qualifying move under paragraphs (a), (b), (c), and (d) of 
this section is considered to occur on the date the individual enters 
into the new position, not at the time of separation from the prior 
position.

[[Page 379]]

    (h) A retroactive election opportunity under subpart D of this part 
(pertaining to elections of CSRS, FERS, or NAFI retirement coverage) is 
not considered a prior opportunity to elect retirement coverage under 
this section.

[68 FR 2179, Jan. 16, 2003]



Sec. 847.203  Elections of CSRS coverage.

    (a) An employee who completes a qualifying move (under Sec. 
847.202(a), (c), or (e)) from a CSRS-covered position to an NAFI may 
elect to continue CSRS coverage.
    (b) An employee who elects CSRS coverage under this section will be 
covered by CSRS (or FERS, if the employee subsequently transfers to FERS 
under part 846 of this chapter) during all periods of future service not 
excluded from coverage by CSRS, including any periods of service with a 
NAFI.
    (c) An employee who makes an election under paragraph (a) of this 
section and who has had a break in service exceeding 3 days is eligible 
to elect FERS under part 846 of this chapter.

[61 FR 41721, Aug. 9, 1996, as amended at 68 FR 2180, Jan. 16, 2003]



Sec. 847.204  Elections of FERS coverage.

    (a) An employee who completes a qualifying move under Sec. 
847.202(a), (c) or (e) from an FERS-covered position to an NAFI may 
elect to continue FERS coverage.
    (b) An employee who elects FERS coverage under this section will be 
covered by FERS during all periods of future service not excluded from 
coverage by FERS, including any periods of service with a NAFI.

[61 FR 41721, Aug. 9, 1996, as amended at 68 FR 2180, Jan. 16, 2003]



Sec. 847.205  Elections of NAFI retirement system coverage.

    (a) An employee who completes a qualifying move under Sec. 
847.202(b), (d), or (f), from an NAFI position to a CSRS- or FERS-
covered position may elect to continue coverage under the NAFI 
retirement system.
    (b) An employee who elects NAFI retirement system coverage under 
this section is excluded from coverage under CSRS or FERS during that 
and all subsequent periods of employment, including any periods of 
service as a reemployed annuitant.

[61 FR 41721, Aug. 9, 1996, as amended at 68 FR 2180, Jan. 16, 2003]



Sec. 847.206  Time limit for making an election.

    (a) Except as provided in paragraph (b) of this section, the time 
limit for making the election is 30 days after the qualifying move.
    (b) Agencies may waive the time limit if it finds that the employee 
was not timely given the opportunity to make the election, or, despite 
due diligence, was prevented by circumstances beyond his or her control 
from making an election within the time limit.
    (c) An agency decision to waive the time limit must comply with the 
provisions of Sec. 847.106, including notification of the right of 
appeal under Sec. 847.107.



Sec. 847.207  Effective dates of elections.

    Elections under this subpart are effective on the date of the 
qualifying move.



Sec. 847.208  Changes of election.

    An election under this subpart is irrevocable when received by the 
employing agency.



Sec. 847.209  Collection of CSRS and FERS retirement contributions 
from NAFI employers.

    CSRS and FERS salary deductions and contributions for NAFI employees 
who have elected CSRS or FERS coverage under this subpart must be made 
and submitted to OPM in the manner currently prescribed for the 
transmission of withholdings and contributions.



Sec. 847.210  Collection of NAFI retirement contributions from Federal 
agencies.

    The Department of Defense and the U.S. Coast Guard will establish 
procedures for agencies to withhold and submit retirement contributions 
to the retirement systems for employees who elect to be covered by a 
retirement system for NAFI employees under this subpart.

[[Page 380]]



Sec. 847.211  Death of employee during election opportunity period.

    (a) When an employee eligible to make an election under this subpart 
dies before expiration of the time limit under Sec. 847.206, the 
employee is deemed to have made the election and to be covered, at time 
of death, by the retirement system that covered the employee before the 
qualifying move.
    (b) The deemed election under paragraph (a) of this section does not 
apply if the eligible survivor elects to have it not apply.
    (c) An election by the survivor to decline the deemed election must 
be in writing and filed no later than 30 days after the employing agency 
notifies the survivor of the right to decline the deemed election.



   Subpart C_Procedures for Elections Under the Retroactive Provisions



Sec. 847.301  Purpose and scope.

    This subpart establishes the procedures applicable to elections 
section 1043(c)(2) of the National Defense Authorization Act for Fiscal 
Year 1996.



Sec. 847.302  Notice of election rights.

    The employing agency must provide notice to all eligible employees 
of the opportunity to elect to continue retirement coverage under 
subpart D of this part. Failure to provide notice to the employee is 
justification for waiving the time limit under Sec. 847.304.



Sec. 847.303  Election forms.

    (a) Eligible employees may make an election under subpart D of this 
part on a form prescribed by OPM and filed with the employing agency.
    (b) For elections of retirement coverage under subpart D of this 
part, the election form will require that the employee obtain a 
certification from his or her previous retirement system showing dates 
of service, amounts transferable from the previous retirement system to 
the elected retirement system under subpart E of this part, and that the 
employee became vested in the retirement system. If an employee was 
covered by more than one retirement system, he or she must obtain 
certification from each retirement system.



Sec. 847.304  Time limit.

    (a) Except as provided in paragraph (b) of this section, the time 
limit for making an election under subpart D of this part is August 11, 
1997.
    (b) Because Public Law 104-106 requires that eligible employees 
receive timely notice of the opportunity to make the election under 
subpart D of this part, and that employees must be counseled concerning 
the election opportunity, the employing agency must waive the time limit 
in paragraph (a) of this section in the event that an employee did not 
receive such notice or counselling.



Sec. 847.305  Basic records.

    (a) Agencies must establish and maintain retirement accounts for 
employees subject to CSRS or FERS in the manner prescribed by OPM.
    (b) The individual retirement record (Standard Form 2806 for CSRS, 
or Standard Form 3100 for FERS) is the basic record for action on all 
claims for annuity or refund, and those pertaining to deceased employees 
and annuitants.



    Subpart D_Elections of Coverage Under the Retroactive Provisions

                           General Provisions



Sec. 847.401  Purpose and scope.

    This subpart contains OPM's regulations concerning the types of 
elections available, the eligibility requirements for each type of 
election, the effects of an election on CSRS and FERS coverage during 
future employment, and the effective dates of CSRS and FERS coverage 
applicable to retroactive retirement coverage and credit elections under 
section 1043(c)(2) of the National Defense Authorization Act for Fiscal 
Year 1996.



Sec. 847.402  Definition of qualifying move.

    (a) A qualifying move occurring after December 31, 1965, and before 
August 10, 1996, which would allow an employee the opportunity to elect 
to continue retirement coverage under CSRS or FERS retroactive to the 
date of the

[[Page 381]]

move must meet all the following criteria:
    (1)(i) For moves occurring before February 10, 1996, the employee 
must not have had a prior opportunity to elect to continue CSRS, FERS, 
or NAFI retirement coverage under Sec. 847.202(e) or (f);
    (ii) For moves occurring on or after February 10, 1996, the employee 
must not have made an election under Sec. 847.202(e) or (f);
    (2) The employee must have been vested in CSRS or FERS prior to the 
move to a NAFI;
    (3) The employee must have moved from a position covered by CSRS or 
FERS to a retirement-covered position in a NAFI;
    (4) The employee must have begun employment in a retirement-covered 
position in a NAFI no later than 1 year after separation from CSRS- or 
FERS-covered employment; and
    (5) The employee must, since moving to the NAFI position, have 
continuously participated in a retirement system established for NAFI 
employees, disregarding any break in service of not more than 3 days.
    (b) A qualifying move occurring after December 31, 1965, and before 
August 10, 1996, which would allow an employee the opportunity to elect 
to continue retirement coverage under a NAFI retirement system 
retroactive to the date of the qualifying move must meet all the 
following criteria:
    (1)(i) For moves occurring before February 10, 1996, the employee 
must not have had a prior opportunity to elect to continue CSRS, FERS, 
or NAFI retirement coverage under Sec. 847.202(e) or (f);
    (ii) For moves occurring on or after February 10, 1996, the employee 
must not have made an election under Sec. 847.202(e) or (f);
    (2) The employee must have been a vested participant in the NAFI 
retirement system (as the term ``vested participant'' is defined by that 
retirement system) prior to the move to a FERS-covered position;
    (3) The employee must have moved from a NAFI to a civil service 
position subject to FERS coverage or CSRS/SS coverage, as defined in 
Sec. 846.102 of this chapter, followed by the employee's automatic 
conversion to FERS coverage;
    (4) The employee must have been appointed to a FERS-covered position 
no later than 1 year after separation from retirement-covered NAFI 
employment; and
    (5) The employee must, since moving to the FERS position, have been 
continuously covered by FERS, disregarding any break in service of not 
more than 3 days.
    (c) A move from a NAFI to CSRS, including CSRS/SS as defined under 
Sec. 846.102 of this chapter followed by an election of FERS coverage 
under Sec. 846.201 of this chapter, is not a qualifying move for an 
election of retirement coverage under Sec. 847.431 (pertaining to 
elections of NAFI service credit for FERS service) and Sec. 847.441 
(pertaining to elections of NAFI retirement coverage).
    (d) A qualifying move under paragraphs (a) and (b) of this section 
is considered to occur on the date the individual entered into the new 
position, not at the time of separation from the prior position.

[61 FR 41721, Aug. 9, 1996, as amended at 68 FR 2180, Jan. 16, 2003]

Elections of CSRS or FERS Coverage Based on a Move From CSRS or FERS to 
                                  NAFI



Sec. 847.411  Election requirements.

    (a) An employee who completed a qualifying move under Sec. 
847.402(a) may elect to be covered by CSRS, if the qualifying move was 
from a CSRS-covered position, or FERS, if the qualifying move was from a 
FERS-covered position, for all Federal service following the qualifying 
move. Employees who elect to be covered by CSRS will be prospectively 
covered by the CSRS Offset provisions set out in subpart J of part 831 
of this chapter.
    (b) A survivor eligible for benefits under the NAFI retirement 
system which covered an employee at the time of death may make an 
election under this section if the employee was otherwise eligible to 
make an election, but died before expiration of the time limit under 
Sec. 847.304.

[[Page 382]]



Sec. 847.412  Elections of FERS instead of CSRS.

    (a) An employee who elects CSRS coverage under Sec. 847.411(a) may, 
during the 6-month period beginning on the date the election under Sec. 
847.411(a) is filed with the employing agency, elect to become subject 
to FERS.
    (b) An election of FERS under this section is subject to the 
provisions of part 846 of this subchapter and takes effect on the first 
day of the first pay period after the employing agency receives the 
election.



Sec. 847.413  Effective date of an election.

    (a) An election under Sec. 847.411 is effective on the first day of 
NAFI employment subject to retirement coverage following CSRS- or FERS-
covered employment.
    (b) Deductions and contributions for CSRS or FERS coverage under 
Sec. 831.111 or Sec. 841.501 of this chapter begin effective on the 
first day of the next pay period after the agency receives the 
employee's election under Sec. 847.411(a).
    (c) An election under Sec. 847.411 is irrevocable when received by 
the employing agency.
    (d) NAFI service performed on and after the effective date of an 
election under Sec. 847.411 becomes fully creditable for retirement 
eligibility and computation of the annuity benefit, including 
computation of average pay.



Sec. 847.414  Crediting future NAFI service.

    An employee who elects CSRS or FERS coverage under Sec. 847.411 
will be covered by CSRS or FERS during all periods of future service not 
excluded from coverage by CSRS or FERS, including any periods of service 
with a NAFI and service as a reemployed annuitant.



Sec. 847.415  OASDI coverage.

    An employee who elects CSRS coverage under Sec. 847.411 is 
prospectively subject to both the Old Age, Survivors, and Disability 
Insurance (OASDI) tax and CSRS as described in subpart J of part 831 of 
this chapter, known as CSRS Offset, effective from the first day of the 
next pay period after the employing agency receives the employee's 
election under Sec. 847.411(a).



Sec. 847.416  Credit for refunded FERS service.

    (a) An employee or survivor who elects FERS coverage under Sec. 
847.411 will receive credit in the FERS annuity for the service 
represented by any refund of the unexpended balance under Sec. 843.202 
of this chapter.
    (b) The amount of the refund, increased by interest as computed 
under Sec. 842.305(e) of this chapter, will be added to the deficiency 
computed under Sec. 847.604 and collected in accordance with the 
provisions of Sec. 847.609 (pertaining to a monthly reduction in the 
annuity benefit).

Elections to Remain in FERS Coverage With Credit for NAFI Service Based 
                       on a Move From NAFI to FERS



Sec. 847.421  Election requirements.

    (a)(1)(i) A FERS employee who completed a qualifying move under 
Sec. 847.402(b) may, instead of the election provided by Sec. 847.441 
(pertaining to elections of NAFI retirement coverage), elect to remain 
subject to FERS for all subsequent periods of service.
    (ii) Prior service under a NAFI retirement system becomes creditable 
under FERS rules without regard to whether a refund of contributions for 
such period has been paid by the NAFI retirement system.
    (2) A FERS employee who has had a previous opportunity to elect 
retirement coverage under Sec. 847.202(e) or (f) is not excluded from 
making this election.
    (b) A survivor may make an election under paragraph (a) of this 
section if the employee was otherwise eligible to elect FERS coverage 
and FERS service credit, but died before expiration of the time limit 
under Sec. 847.304.
    (c) NAFI service made creditable under FERS by an election under 
this section become creditable for FERS retirement eligibility and FERS 
annuity computation, including average pay, upon receipt of the election 
by the employing agency.
    (d) A election under this section is irrevocable when received by 
the employing agency.

[61 FR 41721, Aug. 9, 1996, as amended at 68 FR 2180, Jan. 16, 2003]

[[Page 383]]



Sec. 847.422  Crediting future NAFI service.

    An employee who elects to remain in FERS coverage with credit for 
NAFI service under Sec. 847.421(a) will be covered by FERS during all 
periods of future service not excluded from coverage by FERS, including 
any periods of service with a NAFI and service as a reemployed 
annuitant.



Sec. 847.423  Credit for refunded FERS service.

    (a) An employee or survivor who elects FERS coverage with credit for 
NAFI service under Sec. 847.421 will receive credit in the FERS annuity 
for the service represented by any refund of the unexpended balance 
under Sec. 843.202 of this chapter.
    (b) The amount of the refund, increased by interest as computed 
under Sec. 842.305(e) of this chapter, will be added to the deficiency 
computed under Sec. 847.604 and collected in accordance with the 
provisions of Sec. 847.609 (pertaining to a monthly reduction in the 
annuity benefit).

Elections to Remain in NAFI Coverage With Credit for FERS Service Based 
                       on a Move From FERS to NAFI



Sec. 847.431  Election requirements.

    (a)(1)(i) A NAFI employee who completed a qualifying move from FERS 
under Sec. 847.402(a) may, instead of the election provided by Sec. 
847.411 (pertaining to elections of CSRS and FERS coverage), elect to 
remain subject to the current NAFI retirement system for all subsequent 
periods of service.
    (ii) Prior service under FERS becomes credible under the NAFI 
retirement system rules.
    (2) An NAFI employee who has had a previous opportunity to elect 
retirement coverage under Sec. 847.202(e) or (f) is not excluded from 
making this election.
    (b) A survivor may make an election under paragraph (a) of this 
section if the employee was otherwise eligible, but died before 
expiration of the time limit under Sec. 847.304.
    (c) An election under this section is irrevocable when received by 
the employing agency.

[61 FR 41721, Aug. 9, 1996, as amended at 68 FR 2180, Jan. 16, 2003]



Sec. 847.432  Effect of a refund of FERS deductions.

    OPM will inform the NAFI retirement system of the amount of service 
performed under FERS, without regard to whether a refund of 
contributions for such period has been paid under FERS.



Sec. 847.433  Exclusion from FERS for future service.

    (a) An employee who elects NAFI retirement system coverage with 
credit for FERS service under Sec. 847.431(a) is excluded from coverage 
under FERS during that and all subsequent periods of employment, 
including any periods of service as a reemployed annuitant.
    (b) FERS service which becomes creditable in a NAFI retirement 
benefit based on an election under Sec. 847.431 is not creditable for 
any purpose under FERS.

      Elections of NAFI Coverage Based on a Move From NAFI to FERS



Sec. 847.441  Election requirements.

    (a) An employee who completed a qualifying move under Sec. 
847.402(b) may elect to be covered by a NAFI retirement system for all 
Federal service following the qualifying move.
    (b) A survivor eligible for benefits under FERS may make an election 
under this section if the employee was otherwise eligible to make an 
election, but died before expiration of the time limit under Sec. 
847.304.



Sec. 847.442  Effective date.

    (a) An election under Sec. 847.441 is effective on the first day of 
FERS-covered employment following NAFI employment subject to retirement 
coverage.
    (b) Deductions and contributions for NAFI retirement system coverage 
begin effective on the first day of the next pay period after the agency 
receives the employee's election under Sec. 847.441(a).

[[Page 384]]

    (c) An election under Sec. 847.441 is irrevocable when received by 
the employing agency.



Sec. 847.443  Exclusion from FERS for future service.

    An employee who elects NAFI retirement system coverage with credit 
for FERS service under Sec. 847.441(a) is excluded from coverage under 
FERS during that and all subsequent periods of employment, including any 
periods of service as a reemployed annuitant.



  Subpart E_Transfers of Contributions Under the Retroactive Provisions



Sec. 847.501  Purpose and scope.

    This subpart regulates transferring retirement contributions and 
crediting those contributions to offset the employee costs in connection 
with elections section 1043(c)(2) of the National Defense Authorization 
Act for Fiscal Year 1996.



Sec. 847.502  Transfers to the CSR Fund.

    For elections of CSRS or FERS coverage under Sec. 847.411 or FERS 
coverage and service credit under Sec. 847.421, the amount under Sec. 
847.504 will be transferred to the Fund using the procedures established 
under Sec. 847.506.



Sec. 847.503  Transfers from the CSR Fund.

    For elections of NAFI retirement system coverage under Sec. 
847.441, the amount under Sec. 847.504 will be transferred from the 
Fund using the procedures established under Sec. 847.506.



Sec. 847.504  Amount of transfer.

    (a) All transfers must include employee contributions with interest, 
if not previously refunded, and Government contributions for civilian 
service which becomes creditable under the elected retirement system due 
to an election under Sec. Sec. 847.411, 847.421, and 846.441.
    (b) If the employee has withdrawn his or her contributions to the 
retirement system, the amount required by paragraph (a) of this section, 
less the amount refunded, will be transferred.



Sec. 847.505  When transfer occurs.

    (a) OPM, the Department of Defense, and the U.S. Coast Guard will 
transfer the amount specified in Sec. 847.504 as soon as practicable 
after receipt of an election of retirement coverage under subpart D of 
this part.
    (b) The transfer of contributions may not be delayed until the 
employee retires or separates from service.



Sec. 847.506  Procedures for transfer.

    OPM, the Department of Defense, and the U.S. Coast Guard will 
jointly determine the procedure for transfer of contributions.



Sec. 847.507  Earnings after transfer.

    Amounts transferred to the Fund under Sec. 847.502 that are used to 
determine the deficiency under Sec. 847.604 accrue interest at the rate 
prescribed under Sec. 841.603 of this chapter from the date of receipt 
in OPM through the date determined under Sec. 847.603 (pertaining to 
the date of calculation of any deficiency).



  Subpart F_Additional Employee Costs Under the Retroactive Provisions



Sec. 847.601  Purpose and scope.

    (a) The purpose of this subpart is to establish the methodology that 
OPM will use to determine--
    (1) The cost of an employee's election under Sec. 847.411 or Sec. 
847.421; and
    (2) The amount by which annuity payments may be affected as a result 
of the election.
    (b) This subpart applies only to CSRS and FERS benefits. The 
Departments of Defense, and the U.S. Coast Guard will issue regulations 
providing methodologies for NAFI's under their jurisdictions.



Sec. 847.602  Present value factors.

    (a) OPM publishes the following tables (available at personnel and 
payroll offices):
    (1) One table of present value factors for all CSRS annuities;
    (2) One table of present value factors for FERS annuities that do 
not receive cost-of-living adjustments before the retiree attains age 
62; and

[[Page 385]]

    (3) One table of present value factors for FERS annuities that 
receives cost-of-living adjustments before the retiree attains age 62.
    (b)(1) Each present value factor will equal the amount of money 
(earning interest at an assumed rate) required at the date of 
computation to fund an annuity that starts out at the rate of $1 a month 
and is payable in monthly installments for the annuitant's lifetime 
based on mortality rates for annuitants paid from the Fund; and 
increases each year, assuming a certain rate of inflation.
    (2) Interest, mortality, and inflation rates used in computing the 
present value are those used by the Board of Actuaries of the Civil 
Service Retirement System for valuation of CSRS and FERS, based on 
dynamic assumptions.
    (3) The present value factors are unisex factors obtained by 
averaging distinct present value factors, which take into account 
mortality for retirees and survivors under CSRS and FERS.
    (c)(1) When OPM publishes in the Federal Register notice of normal 
cost percentages under Sec. 841.407 of this chapter, it will also 
publish the CSRS and FERS tables of present value factors for use for 
this part.
    (2) The present value factors will be based on the assumptions used 
to compute the normal cost percentages.
    (3) Changes in the tables of present value factors will be effective 
on the first day of the month in which the changes in the normal cost 
percentages become effective.



Sec. 847.603  Date of present value and deficiency determinations.

    (a) For determining the deficiency under Sec. 847.604, OPM will 
determine, under Sec. Sec. 847.605 through 847.607, the present values 
of future retirement benefits (with and without credit for the NAFI 
service) as of the first date on which inclusion of credit for the NAFI 
service will affect the rate of annuity payable.
    (b) Appendix A to this subpart contains a table in which the left 
column is a list of events for which inclusion of credit for the NAFI 
service will affect the rate of annuity payable and the right column 
indicates the date on which the deficiency will be determined.



Sec. 847.604  Methodology for determining deficiency.

    (a) When an event listed in the left column of the table in Appendix 
A to this subpart occurs, OPM will compute the deficiency, as follows:
    (1) As of the date of computation under Sec. 847.603, OPM will 
determine--
    (i) The present value of the annuity including credit for the NAFI 
service under Sec. 847.605;
    (ii) The present value of the annuity without credit for the NAFI 
service under Sec. 847.606 or Sec. 847.607, as applicable; and
    (iii) The amount credited to the employee from a transfer to the 
Fund under subpart E of this part including earnings under Sec. 
847.507.
    (2) OPM will add the amount determined under paragraphs (a)(1)(ii) 
and (iii) of this section and subtract that sum from the amount 
determined under paragraph (a)(1)(i) of this section.
    (b) If the amount determined under paragraph (a)(2) of this section 
is greater than zero, the deficiency is equal to that amount.
    (c) If no event listed in the left column of the table in Appendix A 
to this subpart occurs--that is, the additional service credit does not 
cause an increase in an employee annuity or a survivor annuity actually 
paid--or, if the amount determined under paragraph (a)(2) of this 
section is less than or equal to zero, the deficiency equals zero.



Sec. 847.605  Methodology for determining the present value of annuity 
with service credit.

    (a) OPM will determine the present value of the annuity including 
service credit for NAFI service under paragraph (b) or (c) of this 
section.
    (b) In cases in which the annuity is payable to a retiree, the 
present value under paragraph (a) of this section equals the monthly 
annuity rate including credit for the NAFI service as of the date of 
computation under Sec. 847.603 times the present value factor for the 
retiree's age on that date.

[[Page 386]]

    (c) In cases in which the annuity is payable to a survivor, the 
present value under paragraph (a) of this section equals the monthly 
annuity rate including credit for the NAFI service as of the date of 
computation under Sec. 847.603 times the present value factor for the 
survivor's age on that date.



Sec. 847.606  Methodology for determining the present value of annuity 
without service credit--credit not needed for title.

    (a) If credit for the NAFI service is not necessary to provide title 
to an annuity payable on the date of computation under Sec. 847.603, 
OPM will determine the present value of the annuity without credit for 
the NAFI service under paragraph (b) or (c) of this section.
    (b) In cases in which the annuity is payable to a retiree, the 
present value under paragraph (a) of this section equals the monthly 
annuity rate without credit for the NAFI service as of the date of 
computation under Sec. 847.603 times the present value factor for the 
retiree's age on that date.
    (c) In cases in which the annuity is payable to a survivor, the 
present value under paragraph (a) of this section equals the monthly 
annuity rate including credit for the NAFI service as of the date of 
computation under Sec. 847.603 times the present value factor for the 
survivor's age on that date.



Sec. 847.607  Methodology for determining the present value of annuity 
without service credit--credit needed for title.

    (a) If credit for the NAFI service is necessary to provide title to 
an annuity payable on the date of computation under Sec. 847.603, OPM 
will determine the present value of the annuity without credit for the 
NAFI service under paragraph (b) or (c) of this section.
    (b)(1) In cases in which the annuity is payable to a retiree, the 
present value under paragraph (a) of this section equals the present 
value of the deferred annuity without credit for the NAFI service as of 
the deferred annuity date discounted for interest to that date 
determined under Sec. 847.603.
    (2) The present value of the deferred annuity without credit for the 
NAFI service as of the deferred annuity date equals the retiree's 
monthly annuity rate without credit for the NAFI service as of the 
deferred annuity date times the present value factor for the retiree's 
age on that date.
    (3) The present value under paragraph (b)(2) of this section is 
discounted for interest by dividing that amount by a factor equal to the 
value of exponential function in which--
    (i) The base is one plus the assumed interest rate under Sec. 
841.405 of this chapter on the date determined under Sec. 847.603, and
    (ii) The exponent is one-twelfth of the number of months between the 
date determined under Sec. 847.603 and the deferred annuity date.
    (c) In cases in which the annuity is payable to a survivor, the 
present value under paragraph (a) of this section equals zero, that is, 
no survivor annuity would ever become payable without credit for the 
NAFI service.



Sec. 847.608  Reduction in annuity due to deficiency.

    Any annuity payable in the case of an employee who has made an 
election under subpart D of this part will include credit for the NAFI 
service. The monthly annuity rate on the date determined under Sec. 
847.603 will be permanently reduced by an amount equal to the amount of 
any deficiency divided by the present value factor for the annuitant's 
age on that date.

  Appendix A to Subpart F--List of Events for Which Inclusion of NAFI 
             Service May Affect the Rate of Annuity Payable

------------------------------------------------------------------------
                                               Date deficiency will be
               Type of event                         determined
------------------------------------------------------------------------
CSRS or FERS nondisability retirement.....  Commencing date of annuity.
CSRS disability retirement................  Commencing date of
                                             annuity.\1\
FERS disability retirement................  First day of month following
                                             62nd birthday.\2\
CSRS death in service.....................  Commencing date of survivor
                                             annuity.\3\
FERS death in service.....................  Commencing date of survivor
                                             annuity.
FERS death of disability annuitant prior    Commencing date of survivor
 to age 62.                                  annuity.
FERS death of separated employee..........  Commencing date of survivor
                                             annuity.

[[Page 387]]

 
CSRS or FERS redetermination of annuity...  Commencing date of
                                             redetermined annuity
                                             benefit.
------------------------------------------------------------------------
\1\ Disability annuity with and without credit for NAFI service must be
  computed. If annuity payable under each computation is identical due
  to guaranteed minimum annuity, then deficiency is zero.
\2\ Generally, the date the deficiency is determined will be the
  disability retiree's 62nd birthday. However, if an annuity benefit
  based on the retiree's actual years of service and salary becomes
  payable prior to age 62, the deficiency is computed at that time.
\3\ Deficiency amount could be zero if survivor is eligible for the
  guaranteed minimum annuity amount under both computations.



   Subpart G_Computation of Benefits Under the Retroactive Provisions



Sec. 847.701  Purpose and scope.

    This subpart establishes the methodology that OPM will use to 
determine benefit payable in connection with an election made under 
subpart D of this part.



Sec. 847.702  Lump-sum payments and refunds.

    (a) Employee contributions with interest which are transferred to 
the Fund under subpart E of this part are included in any lump-sum 
credit or unexpended balance payable to the employee or the employee's 
survivors under subpart T of part 831 of this chapter or under part 843 
of this chapter.
    (b) Government contributions which are transferred to the Fund under 
subpart E of this part are not included in any lump-sum credit or 
unexpended balance and are not payable to the employee or the employee's 
survivors.



Sec. 847.703  Reductions in annuity.

    The CSRS or FERS basic annuity of an employee or survivor who has 
elected retirement coverage under subpart D of this part is reduced in 
the following order--
    (a) For age, if applicable, as provided under sections 8339(h) and 
8415(f) of title 5, United States Code.
    (b) For noncontributory service performed before October 1, 1982, if 
applicable, as provided under 5 U.S.C.A. 8339(i), note.
    (c) For deficiency, as determined under subpart F of this part.
    (d) To provide a survivor annuity to a spouse or former spouse, if 
applicable, as provided under sections 8339(j)(4) and 8419(a) of title 
5, United States Code.
    (e) Any other reductions which may apply.



Sec. 847.704  Maximum survivor annuity election.

    The amount of the employee's benefit after reduction for any 
deficiency under Sec. 847.608 is--
    (a) For CSRS, the maximum amount that may be designated as the 
survivor base under section 8339 (j) or (k) to title 5, United States 
Code;
    (b) For FERS, the employee annuity (for survivor benefit purposes) 
under sections 8416 through 8420 of title 5, United States Code.



Sec. 847.705  Cost-of-living adjustments.

    Cost-of-living adjustments are applied to the rate payable to the 
retiree or survivor, including the reduction for any deficiency 
described in Sec. 847.608.



 Subpart H_Electing to Credit NAFI Service for CSRS and FERS Retirement 
                               Eligibility

    Source: 68 FR 2180, Jan. 16, 2003, unless otherwise noted.



Sec. 847.801  What information is in this subpart?

    This subpart contains OPM's regulations on the procedures, 
eligibility requirements, and time limits for elections under 5 U.S.C. 
8332(b)(17) and 5 U.S.C. 8411(b)(6).



Sec. 847.802  Who may elect to use NAFI service to qualify for immediate 
retirement under CSRS or FERS?

    CSRS and FERS employees may elect to credit NAFI service for 
retirement purposes under this subpart if:
    (a) They separate for retirement on or after December 28, 2001;
    (b) They do not otherwise qualify for immediate retirement; and
    (c) They have enough otherwise creditable civilian service to 
qualify for deferred retirement.

[[Page 388]]



Sec. 847.803  When do employees make the election to use their NAFI 
service to qualify for an immediate retirement under CSRS or FERS?

    Employees about to retire must make their election to credit NAFI 
service under this subpart no later than the date of separation on which 
their retirement is based.



Sec. 847.804  How do employees make an election to use their NAFI 
service to qualify for an immediate retirement under CSRS or FERS?

    Employees electing to credit NAFI service under this subpart must:
    (a) Inform the NAFI retirement plan that they are electing to credit 
NAFI service for CSRS or FERS retirement eligibility;
    (b) Document the election on a form prescribed by OPM; and
    (c) Submit the election with their application for immediate 
retirement.



Sec. 847.805  What NAFI service can employees elect to credit toward 
retirement eligibility under CSRS or FERS?

    (a) Employees may elect to credit under this subpart any NAFI 
service that isn't already creditable under 5 U.S.C. 8332(b)(16), or 
under 5 CFR part 847, subpart D.
    (b) NAFI service used to qualify for an immediate annuity based on 
an election in paragraph (a) of this section cannot be credited in a 
NAFI retirement plan for any purpose including eligibility and 
calculations of NAFI benefits.



Sec. 847.806  How much NAFI service must employees elect to use to 
qualify for an immediate CSRS or FERS retirement?

    (a) Employees must elect complete periods of NAFI service under this 
subpart.
    (b) A complete period of NAFI service in paragraph (a) of this 
section consists of the period from the date of appointment with an NAFI 
employer to the date of termination.



Sec. 847.807  Do employees have to pay CSRS or FERS deposits for the 
NAFI service they use to qualify for immediate retirement under CSRS 
or FERS?

    Employees are not required to pay CSRS or FERS deposits for the NAFI 
service they use to qualify for immediate retirement under CSRS or FERS. 
In fact, deposits cannot be made for any NAFI service employees elect to 
credit for immediate retirement under this subpart.



Sec. 847.808  Is money in the NAFI retirement fund covering NAFI service 

that an employee elects to use for immediate retirement under CSRS or 
FERS, transferred to the Civil Service Retirement and Disability 
          Fund?

    Money in the NAFI retirement fund covering NAFI service that an 
employee elects to use for immediate retirement under CSRS or FERS under 
this subpart cannot be transferred to the Civil Service Retirement and 
Disability Fund.



Sec. 847.809  What effect will NAFI service used to qualify for an 
immediate retirement have on the amount of the CSRS or FERS annuity?

    The annuity of a CSRS or FERS employee who elects to credit NAFI 
service under this subpart will be reduced under the provisions outlined 
in subpart I of this part.



 Subpart I_Computing the Retirement Annuity for Employees Who Elect To 
  Use NAFI Service To Qualify for an Immediate CSRS or FERS Retirement

    Source: 68 FR 2181, Jan. 16, 2003, unless otherwise noted.



Sec. 847.901  What information is in this subpart?

    This subpart contains OPM's regulations describing the computation 
of a CSRS or FERS retirement annuity when an employee elects to use NAFI 
service to qualify for immediate retirement under subpart H of this 
part.

[[Page 389]]



Sec. 847.902  How does an election to credit NAFI service for immediate 
CSRS or FERS retirement under subpart H of this part affect the 
computation of the CSRS or FERS retirement annuity?

    The retirement annuity of an employee who elects to use NAFI service 
to qualify for an immediate CSRS or FERS retirement benefit will be 
reduced to ensure the present value of the benefits payable will be 
actuarially equivalent to those that would have been payable if the 
employee had separated on the same date, but without credit for the NAFI 
service.



Sec. 847.903  How is the monthly reduction to the retirement annuity 
computed?

    (a) The reduction equals:
    (1) The difference in the present value of the immediate annuity 
with credit for NAFI service and the deferred annuity without credit for 
NAFI service, divided by
    (2) The present value factor for the retiree's attained age (in full 
years) at the time of retirement.
    (b) The reduction computed in paragraph (a) of this section is 
rounded to the next higher dollar.



Sec. 847.904  What are Present Value Factors

    Present value factors have the same meaning in this subpart as they 
do in 5 CFR 847.602.



Sec. 847.905  How is the present value of an immediate annuity with credit 
for NAFI service computed?

    (a) OPM will determine the present value of the immediate annuity 
including service credit for NAFI service by multiplying the monthly 
annuity rate as of the commencing date of the annuity by the present 
value factor for the retiree's age on that date.
    (b) The monthly annuity rate under paragraph (a) of this section for 
CSRS and CSRS Offset retirees equals the monthly rate of annuity 
otherwise payable under 5 U.S.C. chapter 83, subchapter III, including 
all reductions provided under that subchapter.
    (c) The monthly annuity rate under paragraph (a) of this section for 
FERS retirees equals the monthly rate of annuity otherwise payable under 
5 U.S.C. chapter 84, subchapter II, including all reductions provided 
under that subchapter.



Sec. 847.906  How is the present value of a deferred annuity without 
credit for NAFI service computed?

    (a) The present value of a deferred annuity equals the present value 
of the deferred annuity without credit for the NAFI service as of the 
deferred annuity date discounted for interest to that date.
    (b) The present value of the deferred annuity without credit for the 
NAFI service as of the deferred annuity date equals the retiree's 
monthly annuity without credit for the NAFI service as of the deferred 
annuity date times the present value factor for the retiree's age on 
that date.
    (c) The present value under paragraph (b) of this section is 
discounted for interest by dividing that amount by a factor equal to the 
value of the exponential function in which--
    (1) The base is one plus the assumed interest rate under 5 CFR part 
841, subpart D, on the commencing date of the retiree's immediate 
annuity, and
    (2) The exponent is one-twelfth of the number of months between the 
commencing date of the retiree's immediate annuity and the deferred 
annuity date.



Sec. 847.907  How is the monthly annuity rate used to compute the 
present value of the deferred annuity without credit for NAFI service 
determined?

    (a) The monthly annuity rate used to compute the present value of 
the deferred annuity under Sec. 847.906 of this subpart for CSRS 
retirees equals the monthly annuity otherwise payable under 5 U.S.C. 
chapter 83, subchapter III, including all reductions provided under that 
subchapter.
    (b) The monthly annuity rate used to compute the present value of 
the deferred annuity under Sec. 847.906 of this subpart for CSRS Offset 
retirees is computed as described in paragraph (a) of this section, 
except that the reduction under section 5 U.S.C. 8349 does not apply.
    (c) The monthly annuity rate used to compute the present value of 
the deferred annuity under Sec. 847.906 of this

[[Page 390]]

subpart for FERS retirees equals the monthly rate of annuity otherwise 
payable under 5 U.S.C. chapter 84, subchapter II, including all 
reductions provided under that subchapter.



Sec. 847.908  If a retiree who elected to credit NAFI service under 
subpart H of this part earns a supplemental annuity under 5 CFR part 
837, how will that supplemental annuity be computed?

    This subpart does not affect supplemental annuities under 5 CFR part 
837. Supplemental annuities will be computed in accordance with the 
provisions of that part.



Sec. 847.909  If a retiree who elected to credit NAFI service under 
subpart H of this part earns a right to a redetermined annuity under 
5 CFR part 837, how will the redetermined annuity be computed?

    (a) A redetermined annuity will not be subject to a reduction under 
this subpart if, on the date reemployment with the Government ends, the 
retiree qualifies for an immediate retirement without credit for the 
NAFI service.
    (b) A redetermined annuity will be subject to a reduction under this 
subpart if, on the date reemployment with the Government ends, the 
retiree does not qualify for immediate retirement without credit for the 
NAFI service.
    (c) The reduction in paragraph (b) of this section is computed as in 
accordance with Sec. 847.903 of this subpart as if the individual was 
retiring for the first time.



Sec. 847.910  If a retiree who elected to credit NAFI service for CSRS 

immediate retirement returns to work for the Government under conditions 
that terminate the annuity, how will the retirement annuity be computed 
when the employee's service with the Government ends?

    (a) If an individual whose annuity terminates upon reemployment with 
the Government elects to credit NAFI service under subpart B of this 
part to qualify for a new immediate retirement when the reemployment 
ends, the annuity will be subject to a reduction under this subpart.
    (b) If an individual whose annuity terminates upon reemployment with 
the Government qualifies for a new immediate retirement when the 
reemployment ends without crediting NAFI service, the new annuity will 
not be subject to a reduction under this subpart.
    (c) If an individual whose annuity terminates upon reemployment with 
the Government qualifies for a deferred annuity when the reemployment 
ends, the deferred annuity will not be subject to a reduction under this 
subpart.
    (d) The reduction in paragraph (a) of this section is computed in 
accordance with Sec. 847.903 of this subpart as if the individual was 
retiring for the first time.



Sec. 847.911  Is an employee who elects to credit NAFI service to 
qualify for an immediate FERS retirement under subpart H of this 
part eligible for an FERS annuity supplement under 5 CFR 842 subpart E?

    An FERS Annuity Supplement is not payable to a retiree who elects to 
credit NAFI service under subpart H of this part.



Sec. 847.912  If an employee who elects to credit NAFI service under 
subpart H of this part elects a survivor annuity will the monthly 
survivor annuity rate be subject to reduction?

    (a) The monthly survivor annuity benefit of an employee who elects 
to credit NAFI service under subpart H of this part will be subject to 
reduction.
    (b) The reduction under paragraph (a) of this section equals:
    (1) The difference in the present value of the initial survivor 
annuity generated from the immediate annuity computation with credit for 
NAFI service and the initial survivor annuity generated from the 
deferred annuity computation without credit for NAFI service, divided by
    (2) The present value factor for the retiree's age (in full years) 
at the time of retirement.
    (c) The present value of the survivor annuity generated from the 
immediate annuity with credit for NAFI service in paragraph (b)(1) of 
this section is computed under the provisions of Sec. 847.905 of this 
subpart.
    (d) The present value of the initial survivor annuity generated from 
the deferred annuity without credit for NAFI service in paragraph (b)(1) 
of this

[[Page 391]]

section is computed under the provisions of Sec. 847.906 of this 
subpart.
    (e) The ages of the employee as of the commencing date of the 
immediate retirement and the commencing date of the deferred retirement 
are used to compute the present value of the survivor benefits under 
paragraphs (c) and (d) of this section.



PART 870_FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PROGRAM--Table of 
Contents




             Subpart A_Administration and General Provisions

Sec.
870.101 Definitions.
870.102 The policy.
870.103 Correction of errors.
870.104 Incontestability.
870.105 Initial decision and reconsideration.

                 Subpart B_Types and Amount of Insurance

870.201 Types of insurance.
870.202 Basic insurance amount (BIA).
870.203 Post-election BIA.
870.204 Annual rates of pay.
870.205 Amount of Optional insurance.
870.206 Accidental death and dismemberment.

                          Subpart C_Eligibility

870.301 Eligibility for life insurance.
870.302 Exclusions.
870.303 Eligibility of foster children under Option C.

                       Subpart D_Cost of Insurance

870.401 Withholdings and contributions for Basic insurance.
870.402 Withholdings for Optional insurance.
870.403 Withholdings and contributions following a Living Benefit 
          election.
870.404 Withholdings and contributions provisions that apply to both 
          Basic and Optional insurance.
870.405 Direct premium payments.

                           Subpart E_Coverage

870.501 Basic insurance: Effective dates of automatic coverage.
870.502 Basic insurance: Waiver/cancellation of insurance.
870.503 Basic insurance: Cancelling a waiver.
870.504 Optional insurance: Election.
870.505 Optional insurance: Waiver/cancellation of insurance.
870.506 Optional insurance: Cancelling a waiver.
870.507 Open enrollment periods.
870.508 Nonpay status.
870.509 Transfers to international organizations.

                  Subpart F_Termination and Conversion

870.601 Termination of Basic insurance.
870.602 Termination of Optional insurance.
870.603 Conversion of Basic and Optional insurance.

                Subpart G_Annuitants and Compensationers

870.701 Eligibility for life insurance.
870.702 Amount of Basic insurance.
870.703 Election of Basic insurance.
870.704 Amount of Option A.
870.705 Amount and election of Option B and Option C.
870.706 Reinstatment of life insurance.
870.707 Reemployed annuitants.
870.708 MRA-plus-10 annuitants.

      Subpart H_Order of Precedence and Designation of Beneficiary

870.801 Order of precedence and payment of benefits.
870.802 Designation of beneficiary.
870.803 Child incapable of self-support.

                 Subpart I_Assignments of Life Insurance

870.901 Assignments permitted.
870.902 Making an assignment.
870.903 Effective date of assignment.
870.904 Amount of insurance.
870.905 Withholdings.
870.906 Cancellation of insurance.
870.907 Termination and conversion.
870.908 Annuitants and compensationers.
870.909 Designations and changes of beneficiary.
870.910 Notification of current addresses.

  Subpart J_Benefits for United States Hostages in Iraq and Kuwait and 
               United States Hostages Captured in Lebanon

870.1001 Purpose.
870.1002 Definitions.
870.1003 Coverage and amount of insurance.
870.1004 Effective date of insurance.
870.1005 Premiums.
870.1006 Cancellation of insurance.
870.1007 Termination and conversion.
870.1008 Order of precedence and designation of beneficiary.
870.1009 Responsibilities of the U.S. Department of State.

                        Subpart K_Living Benefits

870.1101 Eligibility for a Living Benefit.
870.1102 Amount of a Living Benefit.
870.1103 Election procedures.

[[Page 392]]

                          Subpart L_Portability

870.1201 Portability permitted.
870.1202 Eligibility.
870.1203 Amount of insurance.
870.1204 Cost of insurance.
870.1205 Electing portability for Option B.
870.1206 Termination and cancellation of ported coverage.
870.1207 Designations, assignments, and court orders.
870.1208 Return to active service.

    Authority: 5 U.S.C. 8716; subpart J also issued under sec. 599C, 
Pub. L. 101-513, 104 Stat. 2064, as amended; Sec. 870.302(a)(3)(ii) 
also issued under sec. 153, Pub. L. 104-134, 110 Stat. 1321; Sec. 
870.302(a)(3) also issued under sections 11202(f), 11232(e), and 
11246(b) and (c) of Pub. L. 105-33, 111 Stat. 251 and sec. 7(e), Pub. L. 
105-274, 112 Stat. 2419.

    Source: 62 FR 48731, Sept. 17, 1997, unless otherwise noted.



             Subpart A_Administration and General Provisions



Sec. 870.101  Definitions.

    Annuitant means a former employee entitled to an annuity under a 
retirement system established for employees. This includes the 
retirement system of a nonappropriated fund instrumentality of the 
Department of Defense or the Coast Guard.
    Assign and assignment refer to an individual's irrevocable transfer 
to another individual, corporation, or trustee all ownership of FEGLI 
coverage (except Option C).
    Assignee means the individual, corporation, or trustee to which an 
individual irrevocably transfers ownership of FEGLI coverage (except 
Option C).
    Child, as used in the definition of Family member for Option C 
coverage, means a legitimate child, an adopted child, a stepchild or 
foster child who lives with the employee or former employee in a regular 
parent-child relationship, or a recognized natural child. It does not 
include a stillborn child or a grandchild (unless the grandchild meets 
all the requirements of a foster child). The child must be under age 22 
or, if age 22 or over, must be incapable of self-support because of a 
mental or physical disability which existed before the child reached age 
22.
    Child, as used in the order of precedence for payment of benefits, 
means a legitimate child, an adopted child, or a recognized natural 
child, of any age. It does not include a stepchild, a stillborn child, a 
grandchild, or a foster child. An individual who has reached age 18 is 
considered an adult and can receive a benefit payment in his/her name. 
However, if the age of adulthood where the individual has his/her legal 
residence is set at a lower age, the individual is considered an adult 
upon reaching that lower age. Adopted children do not inherit from their 
birth parents under the order of precedence stated in 5 U.S.C. 8705, 
other than as designated beneficiaries, but inherit from their adoptive 
parents. However, a child who is adopted by the spouse of a birth parent 
inherits from that birth parent.
    Compensation means compensation under subchapter I of chapter 81 of 
title 5, United States Code, which is payable because of an on-the-job 
injury or disease.
    Compensationer means an employee or former employee who is entitled 
to compensation and whom the Department of Labor determines is unable to 
return to duty.
    Court order means any court decree of divorce, annulment, or legal 
separation, or the terms of any court order or court-approved property 
settlement agreement relating to any court decree of divorce, annulment, 
or legal separation, the terms of which require FEGLI benefits to be 
paid to a specific person or persons.
    Date of retirement, as used in 5 U.S.C. 8706(b)(1)(A), means the 
starting date of annuity.
    Dependent means living with or receiving regular and substantial 
support from the insured individual.
    Duly appointed representative of the insured's estate means an 
individual named in a court order granting the individual the authority 
to receive, or the right to possess, the insured's property; the order 
must be issued by a court having jurisdiction over the insured's estate. 
Where the law of the insured's legal residence provides for the 
administration of estates through alternative procedures which do away 
with the need for a court order, this term also means an individual who 
shows that he/she is entitled to receive, or possess, the insured's 
property under

[[Page 393]]

the terms of those alternative procedures.
    Employee means an individual defined by section 8701(a) of title 5, 
United States Code.
    Employing office means the agency office or retirement system office 
that has responsibility for life insurance actions.
    (1) The Administrative Office of the United States Courts is the 
employing office for judges of the following courts:
    (i) All United States Courts of Appeals;
    (ii) All United States District Courts;
    (iii) The Court of International Trade;
    (iv) The Court of Federal Claims; and
    (v) The District Courts of Guam, the Northern Mariana Islands, and 
the Virgin Islands.
    (2) The Washington Headquarters Services is the employing office for 
judges of the United States Court of Appeals for the Armed Forces.
    (3) The United States Tax Court is the employing office for judges 
of the United States Tax Court.
    (4) The United States Court of Veterans Appeals is the employing 
office for judges of the United States Court of Veterans Appeals.
    Family member means a spouse (including a valid common law marriage) 
and unmarried dependent child(ren).
    Immediate annuity means:
    (1) An annuity that begins no later than 1 month after the date the 
insurance would otherwise stop (the date of separation from service), 
and
    (2) An annuity under Sec. 842.204(a)(1) of this title for which the 
starting date has been postponed under Sec. 842.204(c) of this title.
    Judge means an individual appointed as a Federal justice or judge 
under Article I or Article III of the Constitution.
    OFEGLI means the Office of Federal Employees' Group Life Insurance, 
which pays benefits under the policy.
    OPM means the Office of Personnel Management.
    OWCP means the Office of Workers' Compensation Programs, U.S. 
Department of Labor, which administers subchapter I of chapter 81 of 
title 5, United States Code.
    Parent means the mother or father of a legitimate child or an 
adopted child. The term parent includes the mother of a recognized 
natural child; it also includes the father of a recognized natural child 
if the recognized natural child meets the definition provided below.
    Portability Office means the office OPM designates to manage ported 
coverage and to collect premiums for ported coverage.
    Ported coverage means continued coverage that would otherwise have 
terminated.
    Recognized natural child, with respect to paternity, is one for whom 
the father meets one of the following:
    (1) (i) Has acknowledged paternity in writing;
    (ii) Was ordered by a court to provide support;
    (iii) Before his death, was pronounced by a court to be the father;
    (iv) Was established as the father by a certified copy of the public 
record of birth or church record of baptism, if the insured was the 
informant and named himself as the father of the child; or
    (v) Established paternity on public records, such as records of 
schools or social welfare agencies, which show that with his knowledge 
the insured was named as the father of the child.
    (2) If paternity is not established by paragraph (1) of this 
definition, such evidence as the child's eligibility as a recognized 
natural child under other State or Federal programs or proof that the 
insured included the child as a dependent child on his income tax 
returns may be considered when attempting to establish paternity.
    Reconsideration means the final level of administrative review of an 
employing office's initial decision to determine if the employing office 
followed the law and regulations correctly in making the initial 
decision concerning FEGLI eligibility and coverage.
    Regular parent-child relationship means that the employee or former 
employee is exercising parental authority, responsibility, and control 
over the child by caring for, supporting, disciplining, and guiding the 
child, including making decisions about the child's education and 
medical care.

[[Page 394]]

    Service means civilian service which is creditable under subchapter 
III of chapter 83 or chapter 84 of title 5, United States Code. This 
includes service under a nonappropriated fund instrumentality of the 
Department of Defense or the Coast Guard for an individual who elected 
to remain under a retirement system established for employees described 
in section 2105(c) of title 5.
    Terminally ill means having a medical prognosis of a life expectancy 
of 9 months or less.
    Underdeduction means a failure to withhold the required amount of 
life insurance deductions from an individual's pay, annuity, or 
compensation. This includes nondeductions (when none of the required 
amount was withheld) and partial deductions (when only part of the 
required amount was withheld).

[62 FR 48731, Sept. 17, 1997; 62 FR 52181, Oct. 6, 1997, as amended at 
64 FR 16602, Apr. 6, 1999; 64 FR 72461, Dec. 28, 1999]



Sec. 870.102  The policy.

    Basic, Option A, Option B, and Option C benefits are payable 
according to a contract with the company or companies that issue a 
policy under Sec. 8709 of title 5, United States Code. Any court action 
to obtain money due from this insurance policy must be taken against the 
company that issues the policy.



Sec. 870.103  Correction of errors.

    (a) The employing office may make corrections of administrative 
errors regarding coverage or changes in coverage. Retroactive 
corrections are subject to the provisions of Sec. 870.401(f).
    (b) OPM may order correction of an error after reviewing evidence 
that it would be against equity and good conscience not to do so.



Sec. 870.104  Incontestability.

    (a) If an individual erroneously becomes insured, the coverage will 
remain in effect if at least 2 years pass before the error is 
discovered, and if the individual has paid applicable premiums during 
that time. This applies to errors discovered on or after October 30, 
1998.
    (b) If an employee is erroneously allowed to continue insurance into 
retirement or compensation, the coverage will remain in effect if at 
least 2 years pass before the error is discovered, and if the annuitant 
or compensationer has paid applicable premiums during that time. This 
applies to such errors discovered on or after October 30, 1998.
    (c) If an individual who is allowed to continue erroneous coverage 
because of incontestability does not want the coverage, he/she may 
cancel the coverage on a prospective basis. There is no refund of 
premiums.

[64 FR 72461, Dec. 28, 1999]



Sec. 870.105  Initial decision and reconsideration.

    (a) An individual may ask his/her agency or retirement system to 
reconsider its initial decision denying life insurance coverage, the 
opportunity to change coverage, the opportunity to assign insurance, or 
the opportunity to elect portability for Option B coverage.
    (b) An employing office's decision is an initial decision when the 
employing office gives it in writing and informs the individual of the 
right to an independent level of review (reconsideration) by the 
appropriate agency or retirement system.
    (c) A request for reconsideration must be made in writing and must 
include the employee's (or annuitant's) name, address, date of birth, 
Social Security number, reason(s) for the request, and, if applicable, 
retirement claim number.
    (d) A request for reconsideration must be made within 30 calendar 
days from the date of the initial decision. This time limit may be 
extended when the individual shows that he/she was not notified of the 
time limit and was not otherwise aware of it or that he/she was unable, 
due to reasons beyond his/her control, to make the request within the 
time limit.
    (e) The reconsideration must take place at or above the level at 
which the initial decision was made.
    (f) After reconsideration, the agency or retirement system must 
issue a final decision to the insured individual. This

[[Page 395]]

decision must be in writing and must fully state the findings.

[62 FR 48731, Sept. 17, 1997. Redesignated and amended at 64 FR 72461, 
Dec. 28, 1999]



                 Subpart B_Types and Amount of Insurance



Sec. 870.201  Types of insurance.

    (a) There are two types of life insurance under the FEGLI Program: 
Basic and Optional.
    (b) There are three types of Optional insurance: Option A (standard 
optional insurance), Option B (additional optional insurance), and 
Option C (family optional insurance).



Sec. 870.202  Basic insurance amount (BIA).

    (a)(1) An employee's Basic insurance amount (BIA) is either:
    (i) His/her annual rate of basic pay, rounded to the next higher 
thousand, plus $2,000; or
    (ii) $10,000; whichever is higher, unless an employee has elected a 
Living Benefit under subpart K of this part. Effective for pay periods 
beginning on or after October 30, 1998, there is no maximum BIA.
    (2) The BIA of an individual who is eligible to continue Basic Life 
insurance coverage as an annuitant or compensationer is the BIA in 
effect at the time his/her insurance as an employee would stop under 
Sec. 870.601.
    (b) An employee's BIA automatically changes whenever annual pay is 
increased or decreased by an amount sufficient to raise or lower pay to 
a different $1,000 bracket, unless the employee has elected a Living 
Benefit under subpart K of this part.
    (c) The amount of an employee's Basic Life insurance coverage is 
equal to his/her BIA multiplied by the appropriate factor based on the 
employee's age, as follows:

------------------------------------------------------------------------
                              Age                                 Factor
------------------------------------------------------------------------
35 or under....................................................      2.0
36.............................................................      1.9
37.............................................................      1.8
38.............................................................      1.7
39.............................................................      1.6
40.............................................................      1.5
41.............................................................      1.4
42.............................................................      1.3
43.............................................................      1.2
44.............................................................      1.1
45 or over.....................................................      1.0
------------------------------------------------------------------------


[62 FR 48731, Sept. 17, 1997, as amended at 64 FR 72461, Dec. 28, 1999]



Sec. 870.203  Post-election BIA.

    (a) The BIA of an individual who elects a Living Benefit under 
subpart K of this part is the amount of insurance left after the 
effective date of the Living Benefit election. This amount is the 
individual's post-election BIA.
    (1) The post-election BIA of an individual who elects a full Living 
Benefit is 0.
    (2) The post-election BIA of an employee who elects a partial Living 
Benefit is the BIA as of the date OFEGLI receives the completed Living 
Benefit application (the ``pre-election'' BIA), reduced by the 
percentage which the partial lump-sum payment represents of the full 
Living Benefit payment the employee could have received if he/she 
elected a full Living Benefit; this amount is rounded up or down to the 
nearest multiple of $1,000 or, if midway between multiples, to the next 
higher multiple.
    (b) The post-election BIA cannot change after the effective date of 
the Living Benefit election.
    (c) For purposes of computing the payment of benefits upon the death 
of an insured individual who elected a partial Living Benefit, the post-
election BIA will be multiplied by the age factor in effect on the date 
OFEGLI received the completed Living Benefit application.



Sec. 870.204  Annual rates of pay.

    (a) (1) An insured employee's annual pay is his/her annual rate of 
basic pay as fixed by law or regulation.
    (2) Annual pay for this purpose includes the following:
    (i) Interim geographic adjustments and locality-based comparability 
payments as provided by Pub. L. 101-509 (104 Stat. 1479);
    (ii) Premium pay for standby duty under 5 U.S.C. 5545(c)(1);
    (iii) Premium pay for overtime inspectional service for customs 
officers as provided by Pub. L. 103-66 (107 Stat. 453);

[[Page 396]]

    (iv) For a law enforcement officer as defined under 5 U.S.C. 
8331(20) and Sec. Sec. 831.902 and 842.802 of this title, premium pay 
for administratively uncontrollable overtime under 5 U.S.C. 5545(c)(2);
    (v) Night differential pay for wage employees;
    (vi) Environmental differential pay for employees exposed to danger 
or physical hardship;
    (vii) Tropical differential pay for citizen employees in Panama;
    (viii) Special pay adjustments for law enforcement officers;
    (ix) Availability pay for criminal investigators under 5 U.S.C. 
5545a;
    (x) Bonuses for physicians and dentists of the Department of 
Veterans Affairs under Pub. L. 96-330 (94 Stat. 1030); and
    (xi) Straight-time pay for regular overtime hours for firefighters, 
as provided in 5 U.S.C. 5545b and part 550, subpart M, of this chapter.
    (b) To convert a pay rate of other than annual salary to an annual 
rate, multiply the pay rate by the number of pay units in a 52-week work 
year.
    (c) The annual pay for a part-time employee is his/her basic pay 
applied to his/her tour of duty in a 52-week work year.
    (d) The annual pay for an employee on piecework rates is the total 
basic earnings for the previous calendar year, not counting premium pay 
for overtime or holidays.
    (e) The annual pay for an employee with a regular schedule who works 
at different pay rates is the weighted average of the rates at which the 
employee is paid, projected to an annual basis.
    (f) The annual pay for a non-Postal intermittent employee or an 
employee who works at different pay rates without a regular schedule is 
the annual rate which he/she is receiving at the end of the pay period.
    (g) If an employee legally serves in more than 1 position at the 
same time, and at least 1 of those positions entitles him/her to life 
insurance coverage, the annual pay is the sum of the annual basic pay 
fixed by law or regulation for each position. Exception: this doesn't 
apply to part-time flexible schedule employees in the Postal Service.

[62 FR 48731, Sept. 17, 1997; 62 FR 52181, Oct. 6, 1997, as amended at 
63 FR 64595, Nov. 23, 1998]



Sec. 870.205  Amount of Optional insurance.

    (a) Option A coverage is $10,000. Effective for pay periods 
beginning on or after October 30, 1998, Option A cannot exceed this 
amount. Exception: This does not apply to annuitants who retired with a 
higher amount of Option A before the removal of the maximum on Basic 
insurance (the first pay period beginning on or after October 30, 1998).
    (b)(1) Option B coverage comes in 1, 2, 3, 4, or 5 multiples of an 
employee's annual pay (after the pay has been rounded to the next higher 
thousand, if not already an even thousand). Effective for pay periods 
beginning on or after October 30, 1998, there is no maximum amount for 
each multiple.
    (2) The amount of Option B coverage automatically changes whenever 
annual pay is increased or decreased by an amount sufficient to raise or 
lower pay to a different $1,000 bracket.
    (c) Effective April 24, 1999, Option C coverage comes in 1, 2, 3, 4, 
or 5 multiples of the following amounts: $5,000 on the death of a spouse 
and $2,500 on the death of an eligible child. Payments are made to the 
insured individual.

[62 FR 48731, Sept. 17, 1997, as amended at 64 FR 72461, Dec. 28, 1999]



Sec. 870.206  Accidental death and dismemberment.

    (a) (1) Accidental death and dismemberment coverage is an automatic 
part of Basic and Option A insurance for employees.
    (2) There is no accidental death and dismemberment coverage with 
Options B and C.
    (3) Individuals who are insured as annuitants or compensationers do 
not have accidental death and dismemberment coverage.
    (b) (1) Under Basic insurance, accidental death benefits are equal 
to the BIA, but without the age factor described in Sec. 870.202(c).

[[Page 397]]

    (2) Under Option A, accidental death benefits are equal to the 
amount of Option A.
    (c)(1) Under Basic insurance, accidental dismemberment benefits for 
the loss of a hand, foot, or eye are equal to one-half the BIA. For loss 
of 2 or more of these in a single accident, benefits are equal to the 
BIA.
    (2) Under Option A, accidental dismemberment benefits for the loss 
of a hand, foot, or eye are equal to one-half the amount of Option A. 
For loss of 2 or more of these in a single accident, benefits are equal 
to the amount of Option A.
    (3) Accidental dismemberment benefits are paid to the employee.



                          Subpart C_Eligibility



Sec. 870.301  Eligibility for life insurance.

    (a) Each nonexcluded employee is automatically insured for Basic 
insurance unless he/she waives it.
    (b)(1) Optional insurance must be specifically elected; it is not 
automatic.
    (2) An employee may elect one or more types of Optional insurance 
if:
    (i) He/she has Basic insurance; and
    (ii) He/she does not have a waiver of that type (or types) or 
Optional insurance still in effect.
    (c) Notwithstanding any other provision in this part, the hiring of 
a Federal employee, whether in pay status or nonpay status, for a 
temporary, intermittent position with the decennial census has no effect 
on the amount of his/her Basic or Option B insurance, the withholdings 
or Government contribution for his/her insurance, or the determination 
of when 12 months in nonpay status ends.

[62 FR 48731, Sept. 17, 1997, as amended at 63 FR 9402, Feb. 25, 1998; 
64 FR 72461, Dec. 28, 1999]



Sec. 870.302  Exclusions.

    (a) The following employees are excluded from life insurance 
coverage by law:
    (1) An employee of a corporation suspervised by the Farm Credit 
Administration, if private interests elect or appoint a member of the 
board of directors.
    (2) An individual who is not a citizen or national of the United 
States and whose permanent duty station is outside the United States. 
Exception: an individual who met the definition of employee on September 
30, 1979, by service in an Executive agency, the United States Postal 
Service, or the Smithsonian Institution in the area which was then known 
as the Canal Zone.
    (3) An individual first employed by the government of the District 
of Columbia on or after October 1, 1987. Exceptions:
    (i) An employee of St. Elizabeths Hospital, who accepts employment 
with the District of Columbia Government following Federal employment 
without a break in service, as provided in section 6 of Pub. L. 98-621 
(98 Stat. 3379);
    (ii) An employee of the District of Columbia Financial 
Responsibility and Management Assistance Authority (Authority), who 
makes an election under the Technical Corrections to Financial 
Responsibility and Management Assistance Act (section 153 of Pub. L. 
104-134 (110 Stat. 1321)) to be considered a Federal employee for life 
insurance and other benefits purposes; employees of the Authority who 
are former Federal employees are subject to the provisions of Sec. Sec. 
870.503(d) and 870.705 of this part;
    (iii) The Corrections Trustee and the Pretrial Services, Parole, 
Adult Probation and Offender Supervision Trustee and employees of these 
Trustees who accept employment with the District of Columbia government 
within 3 days after separating from the Federal Government;
    (iv) Effective October 1, 1997, judicial and nonjudicial employees 
of the District of Columbia Courts, as provided by Pub. L. 105-33 (111 
Stat. 251); and
    (v) Effective April 1, 1999, employees of the Public Defender 
Service of the District of Columbia, as provided by Pub. L. 105-274 (112 
Stat. 2419).
    (4) Teachers in Department of Defense dependents schools overseas, 
if employed by the Federal Government in a nonteaching position during 
the recess period between school years.
    (b) The following employees are also excluded from life insurance 
coverage:

[[Page 398]]

    (1) An employee serving under an appointment limited to 1 year or 
less. Exceptions:
    (i) An employee whose full-time or part-time temporary appointment 
has a regular tour of duty and follows a position in which he/she was 
insured, with no break in service or with a break in service of no more 
than 3 days;
    (ii) An acting postmaster;
    (iii) A Presidential appointee appointed to fill an unexpired term; 
and
    (iv) Certain employees who receive provisional appointments as 
defined in Sec. 316.403 of this title.
    (2) An employee who is employed for an uncertain or purely temporary 
period, who is employed for brief periods at intervals, or who is 
expected to work less than 6 months in each year. Exception: An employee 
who is employed under an OPM-approved career-related work-study program 
under Schedule B lasting at least 1 year and who is expected to be in 
pay status for at least one-third of the total period of time from the 
date of the first appointment to the completion of the work-study 
program.
    (3) An intermittent employee (a non-full-time employee without a 
regularly scheduled tour of duty). Exception: An employee whose 
intermittent appointment follows, with no break in service or with a 
break in service of no more than 3 days, a position in which he/she was 
insured and to which he/she is expected to return.
    (4) An employee whose pay, on an annual basis, is $12 a year or 
less.
    (5) A beneficiary or patient employee in a Government hospital or 
home.
    (6) An employee paid on a contract or fee basis. Exception: an 
employee who is a United States citizen, who is appointed by a contract 
between the employee and the Federal employing authority which requires 
his/her personal service, and who is paid on the basis of units of time.
    (7) An employee paid on a piecework basis. Exception: An employee 
whose work schedule provides for full-time or part-time service with a 
regularly scheduled tour of duty.
    (c) OPM makes the final determination about whether the above 
categories apply to a specific employee or group of employees.

[62 FR 48731, Sept. 17, 1997, as amended at 64 FR 15289, Mar. 31, 1999]



Sec. 870.303  Eligibility of foster children under Option C.

    (a) Effective October 30, 1998, foster children are eligible for 
coverage as family members under Option C.
    (b) To qualify for coverage as a foster child, the child must meet 
the following requirements:
    (1) The child must live with the insured employee, annuitant, or 
compensationer;
    (2) The parent-child relationship (as defined in Sec. 870.101) must 
be with the insured employee, annuitant, or compensationer, not the 
biological parent;
    (3) The employee, annuitant, or compensationer must be the primary 
source of financial support for the child; and
    (4) The employee, annuitant, or compensationer must expect to raise 
the child to adulthood.
    (c) A child placed in an insured individual's home by a welfare or 
social service agency under an agreement by which the agency retains 
control of the child or pays for maintenance does not qualify as a 
foster child.
    (d)(1) An insured individual wishing to cover a foster child must 
sign a certification stating that the child meets all the requirements 
and that he/she will notify the employing office or retirement system if 
the child marries, moves out of the home, or stops being financially 
dependent on the employee, annuitant, or compensationer.
    (2) The employing office or retirement system must keep the signed 
certification in the insured individual's file, along with other life 
insurance forms.
    (e) A foster child who moves out of the insured individual's home to 
live with a biological parent loses eligibility and cannot again be 
covered as a foster child unless:
    (1) The biological parent dies;
    (2) The biological parent is imprisoned;
    (3) The biological parent becomes unable to care for the child due 
to a disability; or

[[Page 399]]

    (4) The employee, annuitant, or compensationer obtains a court order 
taking parental responsibility away from the biological parent.

[64 FR 72461, Dec. 28, 1999]



                       Subpart D_Cost of Insurance



Sec. 870.401  Withholdings and contributions for Basic insurance.

    (a)(1) The cost of Basic insurance is shared between the insured 
individual and the Government. The employee pays two-thirds of the cost, 
and the Government pays one-third.
    (2) When OPM makes any adjustment to the Basic life insurance 
premium, it will issue a public notice in the Federal Register.
    (b)(1) During each pay period in which an insured employee is in pay 
status for any part of the period, the employee's share of the premium 
must be withheld from the employee's biweekly pay. The amount withheld 
from the pay of an employee who is paid on other than a biweekly basis 
must be computed and adjusted to the nearest one-tenth of one cent.
    (2) The amount withheld from the pay of an insured employee whose 
annual pay is paid during a period shorter than 52 work weeks is the 
amount obtained by converting the biweekly rate to an annual rate and 
prorating the annual rate over the number of installments of pay 
regularly paid during the year.
    (3) The amount withheld from the pay of an insured employee whose 
BIA changes during a pay period is based on the BIA in force at the end 
of the pay period.
    (c) For each pay period in which an employee is insured, the 
employing agency must contribute an amount equal to one-half the amount 
withheld from the employee's pay. This agency contribution must come 
from the appropriation or fund that is used for the payment of the 
employee's pay. For an elected official, the contribution must come from 
the appropriation or fund that is available for payment of other 
salaries in the same office.
    (d)(1) For an annuitant or compensationer who elects to continue 
Basic insurance and chooses the maximum reduction of 75 percent after 
age 65 under Sec. 870.702(a)(2), the annuitant's share of the premium 
is withheld monthly and the compensationer's share is withheld every 4 
weeks. These withholdings stop the month after the month in which the 
annuitant or compensationer reaches age 65. There are no withholdings 
from individuals who retired or began receiving compensation before 
January 1, 1990, and who elected the 75 percent reduction. For the 
purpose of this paragraph, an individual who separates from service 
after meeting the requirements for an immediate annuity under 5 U.S.C. 
8412(g) is considered to retire on the day before the annuity begins.
    (2) An annuitant or compensationer who elects to continue Basic 
insurance and chooses either the reduction election of 50 percent or the 
election of no reduction after age 65 under Sec. 870.702(a)(3) or (4) 
pays an additional premium for the 50 percent or no reduction election. 
This additional premium is withheld for each $1,000 of the BIA. At age 
65, the Basic premium will stop, but the annuitant or compensationer 
must continue to pay the additional premium for either the 50 percent or 
the no reduction election.
    (e)(1) For each period in which an annuitant or compensationer is 
insured, OPM must contribute an amount equal to one-half the amount that 
would be withheld under paragraph (d)(1) of this section. Exception: for 
USPS employees who become annuitants or compensationers after December 
31, 1989, the Postal Service pays the Government contributions.
    (2) The Government contribution is the same amount whether the 
individual elects a maximum 75 percent reduction, a maximum 50 percent 
reduction, or no reduction.
    (3) The Government contribution stops the month after the month in 
which the individual reaches age 65.
    (f) When an agency withholds less than or none of the proper amount 
of Basic life insurance deductions from an individual's pay, annuity, or 
compensation, the agency must submit an amount equal to the sum of the 
uncollected deduction and any applicable agency contributions required 
under 5

[[Page 400]]

U.S.C. 8708 to OPM for deposit in the Employees' Life Insurance Fund.

[62 FR 48731, Sept. 17, 1997, as amended at 64 FR 22544, Apr. 27, 1999; 
68 FR 59081, Oct. 14, 2003]



Sec. 870.402  Withholdings for Optional insurance.

    (a)(1) The insured individual pays the full cost of all Optional 
insurance. There is no Government contribution toward the cost of any 
Optional insurance.
    (2) Optional insurance premiums are based on 5-year age bands 
beginning at age 35. The last age band for Option A is age 60+. The last 
age band for Options B and C is 80+. For the purpose of this subpart, 
effective April 24, 1999, an individual is considered to reach the next 
age band the 1st day of the pay period following the pay period in which 
his/her birthday occurs.
    (3) When OPM makes any adjustment to the Optional life insurance 
premiums, it will issue a public notice in the Federal Register.
    (b) During each pay period in any part of which an insured employee 
is in pay status, the employing agency must withhold the full cost of 
Optional insurance from his/her pay.
    (c)(1) Subject to the provisions for reemployed annuitants in Sec. 
870.707, the full cost of Optional insurance must be withheld from the 
annuity of an annuitant the compensation of a compensationer.
    (2) The withholdings for Option A stop the month after the month in 
which an annuitant or compensationer reaches age 65.
    (3) For an annuitant or compensationer who elects Full Reduction for 
any Option B or Option C multiples under Sec. 870.705, the withholdings 
for those multiples stop the month after the month in which he/she 
reaches age 65.
    (4) For an annuitant or compensationer who elects No Reduction for 
any Option B or Option C multiples, the withholdings for those multiples 
continue, as long as he/she remains insured.
    (d)(1) For Option A and Option C, the amount withheld from pay, 
annuity, or compensation paid on other than a biweekly basis must be 
computed and adjusted to the nearest cent.
    (2) For Option B, the amount withheld from pay, annuity, or 
compensation paid on other than a biweekly basis must be computed and 
adjusted to the nearest one-tenth of 1 cent.
    (e) If an employee's annual pay is paid during a period shorter than 
52 work weeks, the employing office must determine the amount to 
withhold. To do this, it converts the biweekly cost to an annual cost 
and prorates it over the number of installments of pay regularly paid 
during the year.
    (f) When an agency withholds less than or none of the proper amount 
of Optional life insurance deductions from an individual's pay, annuity, 
or compensation, the agency must submit an amount equal to the 
uncollected deductions required under 5 U.S.C. 8714a, 8714b, and 8714c 
to OPM for deposit in the Employees' Life Insurance Fund.

[68 FR 59081, Oct. 14, 2003]



Sec. 870.403  Withholdings and contributions following a Living 
Benefit election.

    (a) Withholdings and contributions for Basic insurance for an 
individual who elects a full Living Benefit under subpart K of this part 
stop at the end of the pay period in which the Living Benefit election 
is effective.
    (b) Withholdings and contributions for Basic insurance for an 
employee who elects a partial Living Benefit under subpart K of this 
part are based on the post-election BIA. This reduction in withholdings 
and contributions starts at the end of the pay period in which the 
Living Benefit election is effective.
    (c) Withholdings and contributions for Basic insurance for an 
annuitant or compensationer who elected a partial Living Benefit as an 
employee are based on the post-election BIA.
    (d) There is no change in withholdings for Optional insurance for 
individuals who elect a Living Benefit.

[62 FR 48731, Sept. 17, 1997; 62 FR 52181, Oct. 6, 1997]

[[Page 401]]



Sec. 870.404  Withholdings and contributions provisions that apply to 
both Basic and Optional insurance.

    (a) Withholdings (and Government contributions, when applicable) are 
based on the amount of insurance in force at the end of the pay period.
    (b) Withholdings are not required for the period between the end of 
the pay period in which an employee separates from service and the date 
his/her annuity or compensation begins.
    (c) No payment is required while an insured employee is in nonpay 
status for up to 12 months. Exception: an employee who is in nonpay 
status while receiving compensation.
    (d) The deposit described in Sec. Sec. 870.401(f) and 870.402(f) 
must be made no later than 60 calendar days after the date the employing 
office determines the amount of the underdeduction that has occurred, 
regardless of whether or when the underdeduction is recovered by the 
agency. The agency must determine whether to waive collection of the 
overpayment of pay, in accordance with 5 U.S.C. 5584, as implemented by 
4 CFR chapter I, subchapter G. However, if the agency involved is 
excluded from the provisions of 5 U.S.C. 5584, it may use any applicable 
authority to waive the collection.
    (e) Effective October 21, 1972, when there is an official finding 
that an employee was suspended or fired erroneously, no withholdings are 
made from the back pay. Exception: if death or accidental dismemberment 
occurs during the period between the employee's removal and the finding 
that the agency action was erroneous, premiums are withheld from the 
back pay awarded.
    (f) If an individual's periodic pay, compensation, or annuity isn't 
sufficient to cover the full withholdings, any amount available for life 
insurance withholding must be applied first to Basic insurance, with any 
remainder applied to Optional insurance (first to Option B, then Option 
A, then Option C).

[62 FR 48731, Sept. 17, 1997, as amended at 68 FR 59082, Oct. 14, 2003]



Sec. 870.405  Direct premium payments.

    (a) Since January 1, 1988, annuitants who retired under 5 U.S.C. 
chapter 84 (Federal Employees' Retirement System) have been able to make 
direct premium payments if their annuity became too small to cover the 
premiums. Effective the first pay period beginning on or after October 
30, 1998, all employees, annuitants, and compensationers whose pay, 
annuity, or compensation is insufficient to cover the withholdings can 
make direct premium payments.
    (b)(1) For an individual to be eligible to make direct premium 
payments, the employing office or retirement system must determine that 
the pay, annuity, or compensation, after all other deductions, is 
expected to be insufficient on an ongoing basis, i.e., for the next 6 
months or more.
    (2) This section does not apply to employees in nonpay status. 
Employees in nonpay status are governed by Sec. 870.404(c).
    (c)(1) When the employing office or retirement system determines 
that the pay, annuity, or compensation is insufficient, and will be 
insufficient on an ongoing basis, it must notify the insured individual 
(or the assignee, if the individual has assigned his/her insurance under 
subpart I of this part) in writing and inform him/her of the available 
choices.
    (2) Within 31 days of receiving the notice (45 days for individuals 
living overseas), the insured individual (or assignee) must return the 
notice to the employing office or retirement system, choosing either to 
terminate some or all of the insurance or to make direct premium 
payments. An employee, annuitant, or compensationer is considered to 
receive a mailed notice 5 days after the date of the notice.
    (3) If an individual does not return the notice within the required 
time frames, the employing office or retirement system will terminate 
the insurance.
    (d)(1) Terminated coverage stops at the end of the last pay period 
for which premiums were withheld.
    (2) An individual whose insurance terminates, either by choice or by 
failure to return the notice, gets the 31-day extension of coverage and 
right to convert, as provided in subpart F of this part.
    (3)(i) When an employee's pay again becomes sufficient to allow 
premium

[[Page 402]]

withholdings, the employing office will automatically reinstate the 
terminated coverage.
    (ii) An annuitant or compensationer whose coverage terminates cannot 
have the coverage reinstated when the annuity or compensation becomes 
sufficient to cover withholdings.
    (e)(1) Employing offices and retirement systems must establish a 
method for accepting premium payments for insured individuals who choose 
to pay directly.
    (2) Individuals who are paying directly must send the required 
premium payment to the employing office or retirement system for every 
pay period during which coverage continues. The insured individual must 
make the payment after each pay period, according to the schedule 
established by the employing office or retirement system.
    (3)(i) When an employee's pay again becomes sufficient to allow 
premium withholdings, he/she must stop making direct payments. The 
employing office will begin to withhold premiums automatically.
    (ii) An annuitant or compensationer who is making direct premium 
payments must continue to pay directly, even if the annuity or 
compensation becomes sufficient to allow withholdings.
    (f) The employing office or retirement system must submit all direct 
premium payments, along with its regular life insurance premiums, to OPM 
according to procedures set by OPM.
    (g)(1) If an individual on direct pay fails to make the required 
premium payment on time, the employing office or retirement system must 
notify the individual. The individual must make the payment within 15 
days after receiving the notice (45 days if living overseas). An 
individual is considered to receive a mailed notice 5 days after the 
date of the notice.
    (2) If an insured individual fails to make the overdue payment, his/
her insurance cancels. Cancellation is effective at the end of the last 
pay period for which payment was received.
    (3) An individual whose insurance cancels for nonpayment does not 
get the 31-day extension of coverage or the right to convert provided in 
subpart F of this part.
    (4) Coverage that cancels for nonpayment is not reinstated when the 
individual's pay, annuity, or compensation becomes sufficient to allow 
withholdings, except as provided by paragraph (g)(5) of this section.
    (5) If, for reasons beyond his/her control, an insured individual is 
unable to pay within 15 days of receiving the past due notice (45 days 
if living overseas), he/she may request reinstatement of coverage by 
writing to the employing office or retirement system within 30 days from 
the date of cancellation. The individual must provide proof that he/she 
was prevented from paying within the time limit for reasons beyond his/
her control. The employing office or retirement system will decide if 
the individual is eligible for reinstatement of coverage. If the 
employing office or retirement system approves the request, the coverage 
is reinstated back to the date of cancellation, and the individual must 
pay the back premiums.

[64 FR 72462, Dec. 28, 1999]



                           Subpart E_Coverage



Sec. 870.501  Basic insurance: Effective dates of automatic coverage.

    (a)(1) When an employee is appointed or transferred to a position in 
which he/she is eligible for insurance, the employee is automatically 
insured for Basic insurance on the day he/she enters on duty in pay 
status, unless, before the end of the first pay period, the employee 
files a waiver of Basic insurance with the employing office or had 
previously filed a waiver which remains in effect.
    (2) An insured employee who moves to another covered position is 
automatically insured on the effective date of the move, unless the 
employee files a waiver of Basic insurance with the new employing office 
before the end of the first pay period in the new position.
    (3) When an employee of the District of Columbia Financial 
Responsibility and Management Assistance Authority elects to be 
considered a Federal employee under section 153 of Pub. L. 104-134 (110 
Stat. 1321), he/she is automatically insured on (i) the date the 
employee enters on duty in pay status with the Authority, or (ii) the 
date the

[[Page 403]]

Authority receives the employee's election to be considered a Federal 
employee, whichever is later.
    (b) An employee who returns to pay and duty status after a period of 
more than 12 months of nonpay status is automatically insured at the 
time he/she actually enters on duty in pay status, unless, before the 
end of the first pay period, the employee files a waiver of Basic 
insurance coverage with the employing office or had previously filed a 
waiver which remains in effect.
    (c) For an employee who serves in cooperation with a non-Federal 
agency and who is paid in whole or in part from non-Federal funds, OPM 
sets the effective date. This date must be part of an agreement between 
OPM and the non-Federal agency. The agreement must provide either:
    (1) That the required withholdings and contributions be made from 
Federally controlled funds and deposited into the Employees' Life 
Insurance Fund on a timely basis, or
    (2) That the cooperating non-Federal agency, by written agreement 
with the Federal agency, make the required withholdings and 
contributions from non-Federal funds and transmit that amount to the 
Federal agency for deposit into the Employees' Life Insurance Fund on a 
timely basis.
    (d) If an employee waived Basic insurance on or before February 28, 
1981, the waiver was automatically cancelled effective on the 1st day 
the employee entered on duty in pay status on or after April 1, 1981. 
Basic insurance coverage was automatically effective on the date of the 
waiver's cancellation, unless the employee filed a new waiver of Basic 
insurance with the employing office before the end of the pay period 
during which the coverage became effective.



Sec. 870.502  Basic insurance: Waiver/cancellation of insurance.

    (a) An insured individual may cancel his/her Basic insurance at any 
time by filing a waiver of Basic insurance coverage. An employee files 
with the employing office. An annuitant files with OPM or other office 
that administers his/her retirement system. If still employed, a 
compensationer files with the employing office, and if not still 
employed, with OPM. The waiver is effective, and the insurance stops, at 
the end of the pay period in which the waiver is properly filed. 
Exception: an individual who has assigned his/her insurance under 
subpart I of this part cannot cancel the insurance.
    (b) An individual who cancels his/her Basic insurance automatically 
cancels all forms of Optional insurance.



Sec. 870.503  Basic insurance: Cancelling a waiver.

    (a) An annuitant or compensationer who has filed a waiver of Basic 
insurance cannot cancel the waiver.
    (b) An employee who has filed a waiver of Basic insurance may cancel 
the waiver and become insured if:
    (1) At least 1 year has passed since the effective date of the 
waiver, and
    (2) He/she provides satisfactory medical evidence of insurability.
    (c) OFEGLI reviews the Request for Insurance filed by an employee 
who has compiled with paragraph (b) of this section and decides whether 
to approve it. The insurance is effective when, after OFEGLI's approval, 
the employee actually enters on duty in pay status in a position in 
which he/she is eligible for insurance. If the employee doesn't enter on 
duty in pay status within 31 days following the date of OFEGLI's 
approval, the approval is automatically revoked and the employee is not 
insured.
    (d) When an employee who has been separated from service for at 
least 180 days is reinstated on or after April 1, 1981, a previous 
waiver of Basic insurance is automatically cancelled. Unless the 
employee files a new waiver, Basic insurance becomes effective on the 
1st day he/she actually enters on duty in pay status in a position in 
which he/she is eligible for coverage. Exception: for employees who 
waived Basic insurance after February 28, 1981, separated, and returned 
to Federal service before December 9, 1983, the waiver remained in 
effect; these employees were permitted to elect Basic insurance by 
applying to their employing office before March 7, 1984.



Sec. 870.504  Optional insurance: Election.

    (a)(1) Each employee must elect or waive Option A, Option B, and 
Option C

[[Page 404]]

coverage, in a manner designated by OPM, within 31 days after becoming 
eligible unless during earlier employment he/she filed an election or 
waiver which remains in effect. The 31-day time limit for Option B or 
Option C begins on the 1st day after February 28, 1981, on which an 
individual meets the definition of an employee.
    (2) An employee of the District of Columbia Financial Responsibility 
and Management Assistance Authority who elects to be considered a 
Federal employee under section 153 of Pub. L. 104-134 (110 Stat. 1321) 
must elect or waive Option A, Option B, and Option C coverage within 31 
days after the later of:
    (i) The date his/her employment with the Authority begins, or
    (ii) The date the Authority receives his/her election to be 
considered a Federal employee.
    (3) Within 6 months after an employee becomes eligible, an employing 
office may determine that the employee was unable, for reasons beyond 
his/her control, to elect any type of Optional insurance within the time 
limit. In this case, the employee must elect or waive that type of 
Optional insurance within 31 days after he/she is notified of the 
determination. The insurance is retroactive to the 1st day of the first 
pay period beginning after the date the individual became eligible or 
after April 1, 1981, whichever is later. The individual must pay the 
full cost of the insurance from that date for the time that he/she is in 
pay status, retired, or receiving compensation and under age 65.
    (b) Any employee who doesn't file a Life Insurance Election with 
his/her employing office, in a manner designated by OPM, specifically 
electing any type of Optional insurance is considered to have waived it 
and does not have that type of Optional insurance.
    (c) For the purpose of having Option A as an employee, an election 
of this insurance filed on or before February 28, 1981, is considered to 
have been cancelled effective at the end of the pay period which 
included March 31, 1981, unless the employee didn't actually enter on 
duty in pay status during the 1st pay period which began on or after 
April 1, 1981. In that case the election is considered to have been 
cancelled on the first day after the end of the next pay period in which 
the employee actually entered on duty in pay status. In order to have 
Option A as an employee after the date of this cancellation, an employee 
must specifically elect the coverage by filing the Life Insurance 
Election with his/her employing office subject to the provisions of 
Sec. 870.504(a) or Sec. 870.506(b).
    (d) Optional insurance is effective the 1st day an employee actually 
enters on duty in pay status on or after the day the employing office 
receives the election.
    (e) For an employee whose Optional insurance stopped for a reason 
other than a waiver, the insurance is reinstated on the 1st day he/she 
actually enters on duty in pay status in a position in which he/she 
again becomes eligible.

[62 FR 48731, Sept. 17, 1997; 62 FR 52181, Oct. 6, 1997]



Sec. 870.505  Optional insurance: Waiver/cancellation of insurance.

    (a) An insured individual may cancel entirely any type of Optional 
insurance, or reduce the number of multiples of his/her Option B 
insurance, at any time by filing a waiver of Optional insurance 
coverage. An employee files with the employing office. An annuitant 
files with OPM or other office that administers his/her retirement 
system. If still employed, a compensationer files with the employing 
office, and if not still employed, with OPM. Exception: an individual 
who has assigned his/her insurance under subpart I of this part cannot 
cancel Option A or Option B coverage.
    (b) A cancellation of Optional insurance becomes effective, and 
Optional insurance stops, at the end of the pay period in which the 
waiver is properly filed. Exception: if Option C is cancelled because 
there are no eligible family members, the effective date is retroactive 
to the end of the pay period in which there stopped being any eligible 
family members.
    (c) A waiver of Optional insurance remains in effect until it is 
cancelled as provided in Sec. 870.506.

[[Page 405]]



Sec. 870.506  Optional insurance: Cancelling a waiver.

    (a) When there is a change in family circumstances. (1) An employee 
cannot cancel a waiver of Option A due to a change in family 
circumstances.
    (2) An employee who has waived Option B coverage can elect it, and 
an employee who has fewer than 5 multiples of Option B can increase the 
number of multiples, upon his/her marriage or divorce, upon a spouse's 
death, or upon acquiring an eligible child. Exception: Acquiring a 
foster child does not qualify an employee to elect or increase Option B 
coverage.
    (3) The number of multiples of Option B coverage that an employee 
can obtain or add (which cannot exceed a total of 5) is limited to the 
following:
    (i) For marriage, the number of additional family members (spouse 
and eligible children) acquired with the marriage;
    (ii) For acquisition of children, the number of eligible children 
acquired; and
    (iii) For divorce or death of a spouse, the total number of eligible 
children of the employee.
    (4)(i) An employee who has waived Option C coverage can elect it, 
and an employee who has fewer than 5 multiples of Option C can increase 
the number of multiples, upon his/her marriage or upon acquiring an 
eligible child. An employee can also elect Option C coverage upon 
divorce or death of a spouse, if the employee has any eligible children.
    (ii) An employee electing or increasing Option C coverage may elect 
any number of multiples, as long as the total number of multiples does 
not exceed 5.
    (5)(i) Except as stated in paragraph (a)(5)(iii) of this section, 
the employee must file an election under paragraph (a)(2) or (a)(4) of 
this section with the employing office, in a manner designated by OPM, 
along with proof of the event, no later than 60 days following the date 
of the event that permits the election; the employee may instead file 
the election before the event and provide proof no later than 60 days 
following the event.
    (ii) This 60-day time limit may be extended if the individual is not 
serving in a covered position on the date of the event or if the 
individual separates from covered service prior to the end of the 60-day 
time limit. This extension cannot exceed the 31-day time limit for 
electing insurance following employment in a covered position or, for an 
election under paragraph (a)(4) of this section, the 31-day period 
following the 1st day on which the individual becomes eligible to cancel 
a waiver of Basic insurance.
    (iii) An employee making an election under paragraph (a)(4)(i) of 
this section because of acquiring an eligible foster child must file the 
election with the employing office no later than 60 days after 
completing the required certification.
    (iv) Employees who had a change in family circumstances between 
October 30, 1998, and April 23, 1999, had until June 23, 1999, to make 
an election under this section.
    (6)(i) The effective date of Option B insurance elected under 
paragraph (a)(1) of this section is the 1st day the employee actually 
enters on duty in pay status on or after the day the employing office 
receives the election.
    (ii) The effective date of Option C coverage elected because of 
marriage, divorce, death of a spouse, or acquiring an eligible child 
other than a foster child is the day the employing office receives the 
election, or the date of the event, whichever is later. Exception: 
Coverage elected under paragraph (a)(5)(iv) of this section was 
effective April 24, 1999.
    (iii) The effective date of Option C coverage elected because of 
acquiring a foster child is the date the employing office receives the 
election or the date the employee completes the certification, whichever 
is later.
    (b) When there is no change in family circumstances. (1) An employee 
who has waived Option A or Option B coverage may elect it if:
    (i) At least 1 year has passed since the effective date of the 
waiver, and
    (ii) He/she provides satisfactory medical evidence of insurability.
    (2) An employee who has Option B coverage of fewer than five 
multiples of annual pay may increase the number of multiples if:

[[Page 406]]

    (i) At least 1 year has passed since the effective date of his/her 
last election of fewer than five multiples (including a reduction in the 
number of multiples), and
    (ii) He/she provides satisfactory medical evidence of insurability.
    (iii) The requirement for at least 1 year to have passed since the 
effective date of the last election doesn't apply when an employee 
elected fewer than five multiples because of the limitation under 
paragraph (a)(3) of this section.
    (3) A waiver of Option C cannot be cancelled without a change in 
family circumstances, unless authorized during an open enrollment 
period.
    (c) OFEGLI reviews the request filed by an employee who has complied 
with paragraph (b) of this section and decides whether to approve it. 
The Optional insurance is effective when, after OFEGLI's approval, the 
employee actually enters on duty in pay status in a position in which 
he/she is eligible for insurance and files a Life Insurance Election. If 
the employee doesn't enter on duty in pay status within 31 days 
following the date of OFEGLI's approval, the approval is automatically 
revoked and the employee does not have the Optional insurance requested.
    (d) If an employee waived Option A insurance on or before February 
28, 1981, the waiver was automatically cancelled effective on the 1st 
day the employee entered on duty in pay status on or after April 1, 
1981. Option A was effective on the date of the waiver's cancellation, 
if the employee filed an election of Option A during the March 1, 1981, 
through March 31, 1981, open enrollment period. If the employee didn't 
file the election with his/her employing office during the March 1981 
open enrollment period, the employee is considered to have waived Option 
A on March 31, 1981.
    (e) When an employee who has been separated from service for at 
least 180 days is reinstated on or after April 1, 1981, a previous 
waiver of Optional insurance is automatically cancelled, as follows:
    (1) An employee who returned to service between April 1, 1981, and 
December 8, 1983, after a 180-day break in service was permitted to 
elect any form of Optional insurance by applying to his/her employing 
office before March 7, 1984.
    (2) An employee who returns to service after December 8, 1983, 
following a 180-day break in service may elect any form of Optional 
insurance by applying to his/her employing office within 31 days after 
reinstatement. Coverage is effective on the 1st day the employee 
actually enters on duty in pay status in a position in which he/she is 
eligible for insurance on or after the date the employing office 
receives the election. If the employee doesn't file a Life Insurance 
Election, in a manner designated by OPM, within the 31-day period, the 
employee gets whatever Optional insurance coverage he/she had 
immediately before separating from Federal service and is considered to 
have waived any other Optional insurance. However, an employee who fails 
to file during the 31-day period due to reasons beyond his/her control 
may enroll belatedly under the conditions stated in Sec. 870.504(a)(3).
    (f) An annuitant or compensationer is not eligible to cancel a 
waiver of any type of Optional insurance or to increase multiples of 
Option B under this section.

[62 FR 48731, Sept. 17, 1997; 62 FR 52181, Oct. 6, 1997, as amended at 
64 FR 16602, Apr. 6, 1999; 64 FR 72462, Dec. 28, 1999]



Sec. 870.507  Open enrollment periods.

    (a) There are no regularly scheduled open enrollment periods for 
life insurance. Open enrollment periods are held only when specifically 
scheduled by OPM.
    (b) During an open enrollment period, unless OPM announces 
otherwise, eligible employees may cancel their existing waivers of Basic 
and/or Optional insurance by electing the insurance in a manner 
designated by OPM.
    (c)(1) OPM sets the effective date for all insurance elected during 
an open enrollment period. The newly elected insurance is effective on 
the 1st day of the first pay period which begins on or after the OPM-
established date and which follows a pay period during which the 
employee was in pay and duty status for at least 32 hours, unless OPM 
announces otherwise.
    (2) A part-time employee must be in pay and duty status for one-half 
the

[[Page 407]]

regularly scheduled tour of duty shown on his/her current Standard Form 
50 for newly elected coverage to become effective, unless OPM announces 
otherwise.
    (3) An employee who has no regularly scheduled tour of duty or who 
is employed on an intermittent basis must be in pay and duty status for 
one-half the hours customarily worked before newly elected coverage can 
become effective, unless OPM announces otherwise. For the purpose of 
this paragraph, employing offices can determine the number of hours 
customarily worked by averaging the number of hours worked in the most 
recent calender year quarter prior to the start of the open enrollment 
period.
    (d) Within 6 months after an open enrollment period ends, an 
employing office may determine that an employee was unable, for reasons 
beyond his/her control, to cancel an existing waiver by electing to be 
insured during the open enrollment period. In this case, if the employee 
wants coverage, he/she must submit an election within 31 days after 
being notified of the determination. Coverage is retroactive to the 
first pay period which begins on or after the effective date set by OPM 
and which follows a pay period during which the employee was in pay and 
duty status for at least 32 hours, unless OPM announces otherwise. If 
the employee doesn't file an election within this 31-day time limit, he/
she will be considered to have waived coverage.



Sec. 870.508  Nonpay status.

    (a) An employee who is in nonpay status is entitled to continue life 
insurance for up to 12 months. No premium payments are required, unless 
the employee is receiving compensation.
    (b) If an insured employee who is entitled to free insurance while 
in nonpay status accepts a temporary appointment to a position in which 
he/she would normally be excluded from insurance, the insurance 
continues. The amount of Basic insurance is based on whichever 
position's salary is higher. Withholdings are made from the employee's 
pay in the temporary position.
    (c) If an insured employee goes on leave without pay (LWOP) to serve 
as a full-time officer or employee of an employee organization, within 
60 days of the start of the LWOP he/she may elect to continue life 
insurance. The insurance continues for the length of the appointment, 
even if the LWOP lasts longer than 12 months. The employee must pay to 
the employing office the full cost of Basic and Optional insurance. 
There is no Government contribution for these employees.
    (d) If an insured employee goes on LWOP while assigned to a State 
government, local government, or institution of higher education, life 
insurance continues for the length of the assignment, even if the LWOP 
lasts longer than 12 months. The employee must pay his/her premiums to 
the Federal agency on a current basis. The agency must continue to pay 
its contribution as long as the employee makes his/her payments.



Sec. 870.509  Transfers to international organizations.

    An employee transferred to an international organization may 
continue life insurance coverage as provided in 5 U.S.C. 3582. 
Regulations governing these transfers are in part 352 of this title.



                  Subpart F_Termination and Conversion



Sec. 870.601  Termination of Basic insurance.

    (a) Except as provided in Sec. 870.701, the Basic insurance of an 
insured employee stops on the date he/she separates from service, 
subject to a 31-day extension of coverage.
    (b) The Basic insurance of an employee who separates from service 
after meeting the requirement for an immediate annuity under Sec. 
842.204(a)(1) of this title and who postpones receiving the annuity, as 
provided by Sec. 842.204(c) of this title, stops on the date he/she 
separates from service, subject to a 31-day extension of coverage.
    (c) The Basic insurance of an insured employee who moves without a 
break in service to a position in which he/she is excluded from life 
insurance stops on his/her last day in the former position, subject to a 
31-day extension of coverage.

[[Page 408]]

    (d)(1) Except as provided in Sec. 870.701, the Basic insurance of 
an insured employee who is in nonpay status stops on the date the 
employee completes 12 months in nonpay status, subject to a 31-day 
extension of coverage. The 12 months' nonpay status may be broken by 
periods of less than 4 consecutive months in pay status. If an employee 
has at least 4 consecutive months in pay status after a period of nonpay 
status, he/she is entitled to begin the 12 months' continuation of Basic 
insurance again. If an employee has used up his/her 12 months' 
continuation in nonpay status and returns to duty for less than 4 
consecutive months, his/her Basic insurance stops on the 32nd day after 
the last day of the last pay period in pay status.
    (2) For the purpose of paragraph (d)(1) of this section, 4 
consecutive months in pay status means any 4-month period during which 
the employee is in pay status for at least part of each pay period.
    (3) For the purpose of paragraph (d)(1) of this section, an 
individual who is entitled to benefits under part 353 of this chapter is 
considered to be an employee in nonpay status.
    (e) Except for employees, annuitants, and compensationers who elect 
direct payment as provided in Sec. 870.405 of this part, Basic 
insurance stops, subject to a 31-day extension of coverage, at the end 
of the pay period in which the employing office or retirement system 
determines that an individual's periodic pay, annuity, or compensation, 
after all other deductions, is not enough to cover the full cost of 
Basic insurance.

[62 FR 48731, Sept. 17, 1997, as amended at 64 FR 72463, Dec. 28, 1999]



Sec. 870.602  Termination of Optional insurance.

    (a)(1) The Optional insurance of an insured employee stops when his/
her Basic insurance stops, subject to the same 31-day extension of 
coverage.
    (2) An employee who meets the requirements for portability, as 
provided in subpart L of this part, may elect portability for his/her 
Option B coverage, instead of having it terminate.
    (b) The Optional insurance of an employee who separates from service 
after meeting the requirement for an immediate annuity under Sec. 
842.204(a)(1) of this title and who postpones receiving the annuity, as 
provided by Sec. 842.204(c) of this title, stops on the date he/she 
separates from service, subject to a 31-day extension of coverage.
    (c)(1) If an insured employee is not eligible to continue Optional 
coverage as an annuitant or compensationer as provided by Sec. 870.701, 
the Optional insurance stops on the date that his/her Basic insurance is 
continued or reinstated under the provisions of Sec. 870.701, subject 
to a 31-day extension of coverage.
    (2) A compensationer who meets the requirements for portability, as 
provided in subpart L of this part, may elect portability for his/her 
Option B coverage, instead of having it terminate.
    (d) If, at the time of an individual's election of Basic insurance 
during receipt of annuity or compensation, he/she elects no Basic life 
insurance as provided by Sec. 870.702(a)(1), the Optional insurance 
stops at the end of the month in which the election is received in OPM, 
subject to a 31-day extension of coverage.
    (e) Except for employees, annuitants, and compensationers who elect 
direct payment as provided in Sec. 870.405 of this part, Optional 
insurance stops, subject to a 31-day extension of coverage, at the end 
of the pay period in which the employing office or retirement system 
determines that an individual's periodic pay, annuity, or compensation, 
after all other deductions, is not enough to cover the full cost of the 
Optional insurance. If an individual has more than one type of Optional 
insurance and his/her pay, annuity, or compensation is sufficient to 
cover some but not all of the insurance, the multiples of Option C 
terminate first, followed by Option A, and then the multiples of Option 
B.

[62 FR 48731, Sept. 17, 1997, as amended at 64 FR 72463, Dec. 28, 1999]



Sec. 870.603  Conversion of Basic and Optional insurance.

    (a)(1) When group coverage terminates for any reason other than 
voluntary cancellation, an employee may apply to convert all or any part 
of his/her Basic and Optional insurance to an

[[Page 409]]

individual policy; no medical examination is required. The premiums for 
the individual policy are based on the employee's age and class of risk. 
An employee is eligible to convert the policy only if he/she doesn't 
return, within 3 calendar days from the terminating event, to a position 
covered under the group plan. If insurance has been assigned under 
subpart I of this part, it is the assignee(s), not the employee, who 
has(have) the right to convert.
    (2) The employing agency must notify the employee/assignee(s) of the 
loss of coverage and the right to convert to an individual policy either 
before or immediately after the event causing the loss of coverage.
    (3) The employee/assignee(s) must submit the request for conversion 
information to OFEGLI. It must be postmarked within 31 days following 
the date of the terminating event or within 31 days of the date the 
employee/assignee received the notice of loss of group coverage and 
right to convert, whichever is later.
    (4) An employee/assignee who fails to use his/her conversion right 
within 31 days after receiving notice of the right to convert or within 
31 days of the terminating event, whichever is later, is considered to 
have refused coverage, unless OFEGLI determines the failure was for 
reasons beyond the employee's control, as described in paragraph (a)(5) 
of this section.
    (5) When an agency fails to provide the notification required in 
paragraph (a)(2) of this section, or the employee/assignee fails to 
request conversion information within the time limit set in paragraph 
(a)(3) of this section for reasons beyond his/her control, the employee 
may make a belated request by writing to OFEGLI. The employee/assignee 
must make the request within 6 months after becoming eligible to convert 
the insurance. The employee/assignee must show that he/she wasn't 
notified of the loss of coverage and the right to convert and was not 
otherwise aware of it or that he/she was unable to convert to an 
individual policy for reasons beyond his/her control. OFEGLI will 
determine if the employee/assignee is eligible to convert. If the 
request is approved, the employee must convert within 31 days of that 
determination.
    (b) The individual conversion policy is effective the day after the 
group coverage ends. The employee/assignee must pay the premiums for any 
period retroactive to that date.
    (c) The 31-day extension of coverage provided under this subpart 
does not depend upon timely notification of the right to convert to an 
individual policy. The extension cannot be continued beyond 31 days.



                Subpart G_Annuitants and Compensationers



Sec. 870.701  Eligibility for life insurance.

    (a) When an insured employee retires, Basic life insurance (but not 
accidental death and dismemberment) continues or is reinstated if he/
she:
    (1) Is entitled to retire on an immediate annuity under a retirement 
system for civilian employees, including the retirement system of a 
nonappropriated fund instrumentality of the Department of Defense or the 
Coast Guard;
    (2) Was insured for the 5 years of service immediately before the 
date the annuity starts, or for the full period(s) of service during 
which he/she was eligible to be insured if less than 5 years; and
    (3) Has not converted to an individual policy as described in Sec. 
870.603. If it is determined that an individual is eligible to continue 
the group coverage as an annuitant after he/she has already converted to 
an individual policy, the group enrollment may be reinstated. If the 
individual wants the group coverage reinstated, the conversion policy 
must be voided, the group policy must be reinstated retroactively, and 
the premiums already paid on the conversion policy must be refunded to 
the individual.
    (b) Following separation or the completion of 12 months' nonpay 
status, a compensationer's Basic life insurance (but not accidental 
death and dismemberment) continues or is reinstated if he/she:
    (1) Has been insured for the 5 years of service immediately before 
the date of entitlement to compensation, or for the full period(s) of 
service during which he/she was eligible to be insured if less than 5 
years; and

[[Page 410]]

    (2) Has not converted to an individual policy as described in Sec. 
870.603. If it is not determined that an individual is eligible to 
continue the group coverage as a compensationer until after he/she has 
converted, the group enrollment may be reinstated. If the individual 
wants the group coverage reinstated, the conversion policy must be 
voided, the group policy must be reinstated retroactively, and the 
premiums already paid on the conversion policy must be refunded to the 
individual.
    (c) An individual who meets the requirements under paragraphs (a) or 
(b) of this section or Sec. 870.706 for continuation or reinstatement 
of life insurance must complete an election, in a manner designated by 
OPM, at the time entitlement is established. For the election to be 
valid, OPM must receive the election before OPM has made a final 
decision on the individual's application for annuity or supplemental 
annuity or an individual's request to continue life insurance as a 
compensationer. If there is no valid election, OPM considers the 
individual to have chosen the option described in paragraph (a)(2) of 
Sec. 870.702.
    (d) If the annuity or compensation of an insured individual is 
terminated, or if the Department of Labor finds that an insured 
compensationer is able to return to duty, his/her Basic life insurance 
held as an annuitant or compensationer stops on the date of the 
termination or finding. There is no 31-day extension of coverage or 
conversion right.
    (e)(1) An annuitant or compensationer who is eligible to continue or 
have reinstated Basic insurance is also eligible to continue or have 
reinstated Optional insurance if he/she meets the same coverage 
requirements for Optional insurance as those stated in paragraph (a) or 
(b) of this section for Basic insurance.
    (2) For the purpose of continuing insurance as an annuitant or 
compensationer, an employee is not considered to have been eligible for 
Option C during any period when the employee had no eligible family 
members.



Sec. 870.702  Amount of Basic insurance.

    (a) The amount of Basic insurance an annuitant or compensationer can 
continue is the BIA on the date insurance would otherwise have stopped 
because of the individual's separation from service or completion of 12 
months in nonpay status. The amount of Basic insurance in force is the 
BIA minus any reductions applicable under Sec. 870.703(a).
    (b)(1) For the purpose of paying benefits upon the death of an 
insured individual under age 45 who is retired or receiving 
compensation, the BIA will be multiplied by the appropriate age factor 
shown in Sec. 870.202(c) of this part. Exceptions:
    (i) If the insured individual retired or became insured as a 
compensationer before October 10, 1980, or
    (ii) If the insured individual elected a partial Living Benefit as 
an employee under subpart K of this part.
    (2)(i) For an annuitant or compensationer who elected a partial 
Living Benefit as an employee, the amount of Basic insurance he/she can 
continue is the post-election BIA, as shown in Sec. 870.203(a)(2) of 
this part.
    (ii) For the purpose of paying benefits upon the death of an insured 
annuitant or compensationer under age 45 who elected a partial Living 
Benefit as an employee, the BIA will be multiplied by the age factor in 
effect on the date OFEGLI received the completed Living Benefit 
application.

[64 FR 72463, Dec. 28, 1999]



Sec. 870.703  Election of Basic insurance.

    (a) Unless he/she has elected a Living Benefit, an individual who 
makes an election under Sec. 870.701(c) must select one of the 
following options:
    (1) Termination of the insurance. The individual's insurance stops 
upon conversion to an individual policy as provided under Sec. 870.603. 
If the individual doesn't convert to an individual policy, insurance 
stops at the end of the month in which OPM or the employing office 
receives the election;
    (2) Continuation or reinstatement of Basic insurance with a maximum 
reduction of 75 percent during retirement. Premiums are withheld from 
annuity or compensation (except as provided under 870.401(d)(1)). The 
amount of Basic Life insurance in force reduces by 2 percent of the BIA 
each month until the maximum reduction is reached. This reduction starts 
at the beginning of the 2nd month after the

[[Page 411]]

date the insurance would otherwise have stopped or the date of the 
insured's 65th birthday, whichever is later;
    (3) Continuation or reinstatement of Basic insurance with a maximum 
reduction of 50 percent during retirement. Premiums are withheld from 
annuity or compensation. The amount of Basic insurance in force reduces 
by 1 percent of the BIA each month until the maximum reduction is 
reached. This reduction starts at the beginning of the 2nd month after 
the date the insurance would otherwise have stopped or the date of the 
insured's 65th birthday, whichever is later; or
    (4) Continuation or reinstatement of Basic insurance with no 
reduction after age 65. Premiums are withheld from annuity or 
compensation.
    (b)(1) Unless an employee has elected a partial Living Benefit under 
subpart K of this part or an individual has assigned the insurance under 
subpart I of this part, an insured individual may cancel an election 
under paragraph (a)(3) or (a)(4) of this section at any time. The amount 
of Basic insurance automatically switches to the amount that would have 
been in force if the individual had originally elected the 75 percent 
reduction. This revised amount is effective at the end of the month in 
which OPM receives the request to cancel the previous election.
    (2) If an individual files a waiver of insurance, the coverage stops 
without a 31-day extension of coverage or conversion right. This is 
effective at the end of the month in which OPM receives the waiver.
    (c) Unless he/she chooses to terminate his/her insurance, an 
employee who has elected a partial Living Benefit must choose the no 
reduction election under paragraph (a)(4) of this section. He/she cannot 
later change to the 75 percent reduction.
    (d) If an employee has assigned his/her insurance, he/she cannot 
cancel an election under paragraph (a)(3) or (a)(4) of this section. 
Only the assignee(s) may cancel this election. Exception: if the 
employee elected a partial Living Benefit before assigning the remainder 
of his/her insurance, the assignee(s) cannot cancel the election under 
paragraph (a)(4) of this section.

[62 FR 48731, Sept. 17, 1997. Redesignated at 64 FR 72463, Dec. 28, 
1999]



Sec. 870.704  Amount of Option A.

    (a) The amount of Option A coverage an annuitant or compensationer 
can continue is $10,000.
    (b) An annuitant's or compensationer's Option A coverage reduces by 
2 percent of the original amount each month up to a maximum reduction of 
75 percent. This reduction starts at the beginning of the 2nd month 
after the date the insurance would otherwise have stopped or the 
beginning of the 2nd month after the date of the insured's 65th 
birthday, whichever is later.

[64 FR 72463, Dec. 28, 1999]



Sec. 870.705  Amount and election of Option B and Option C.

    (a) The number of multiples of Option B and Option C coverage an 
annuitant or compensationer can continue is the highest number of 
multiples in force during the applicable period of service required to 
continue Option B and Option C.
    (b)(1)(i) At the time an employee retires or becomes insured as a 
compensationer, he/she must elect the number of allowable multiples he/
she wishes to continue during retirement or while receiving 
compensation.
    (ii) An employee who elects to continue fewer multiples than the 
number for which he/she is eligible is considered to have cancelled the 
multiples that are not continued.
    (iii) Employees separating for retirement and employees becoming 
insured as compensationers on or after April 24, 1999, must also elect 
either Full Reduction or No Reduction for all of the multiples being 
continued.
    (iv) An employee who does not make a reduction election is 
considered to have chosen Full Reduction.
    (2)(i) Prior to reaching age 65, an annuitant or compensationer can 
change from No Reduction to Full Reduction at any time. Exception: If 
the individual has assigned his/her insurance as provided in subpart I 
of this part, only the assignee can change from No

[[Page 412]]

Reduction to Full Reduction for the Option B coverage.
    (ii) Prior to reaching age 65, an annuitant or compensationer can 
change from Full Reduction to No Reduction at any time.
    (3)(i) After reaching age 65, an annuitant or compensationer can 
change from No Reduction to Full Reduction at any time. Exception: If 
the individual has assigned his/her insurance as provided in subpart I 
of this part, only the assignee can change from No Reduction to Full 
Reduction for the Option B coverage. If an individual age 65 or over 
changes to Full Reduction, the amount of insurance in force is computed 
as if he/she had elected Full Reduction initially. There is no refund of 
premiums.
    (ii) Except as provided in paragraph (b)(4) of this section, after 
reaching age 65, an annuitant or compensationer cannot change from Full 
Reduction to No Reduction.
    (4)(i) Shortly before an annuitant or compensationer's 65 birthday, 
the retirement system will send a reminder about the election he/she 
made and will offer the individual a chance to change the election. At 
that time, the annuitant or compensationer can choose to have some 
multiples of Option B and Option C reduce and some not reduce.
    (ii) If the individual is already 65 or older at the time of 
retirement or becoming insured as a compensationer, the retirement 
system will send the reminder and give the opportunity to change the 
election as soon as the retirement processing or compensation transfer 
is complete.
    (iii) If the individual assigned his/her insurance as provided in 
subpart I of this part, and if the employee elected No Reduction for 
Option B coverage at the time of retirement or becoming insured as a 
compensationer, the retirement system will send the reminder notice for 
Option B coverage to the assignee.
    (iv) An annuitant or compensationer who wishes to change his/her 
reduction election must return the notice by the end of the month 
following the month in which the individual turns 65, or if already over 
age 65, by the end of the 4th month after the date of the letter. An 
annuitant or compensationer who does not return the election notice will 
keep his/her initial election.
    (c)(1) For each multiple of Option B and/or Option C for which an 
individual elects Full Reduction, the coverage reduces by 2 percent of 
the original amount each month. This reduction starts at the beginning 
of the 2nd month after the date the insurance would otherwise have 
stopped or the beginning of the 2nd month after the insured's 65th 
birthday, whichever is later. At 12:00 noon on the day before the 50th 
reduction, the insurance stops, with no extension of coverage or 
conversion right.
    (2) For each multiple of Option B and/or Option C for which an 
individual elects No Reduction, the coverage in force does not reduce. 
After age 65 the annuitant or compensationer continues to pay premiums 
appropriate to his/her age.
    (d)(1) Employees who were already retired or insured as 
compensationers on April 24, 1999, and who had Option B, were given an 
opportunity to make an election for Option B.
    (i) Annuitants and compensationers who were under age 65 were 
notified of the option to elect No Reduction. The retirement system will 
send these individuals an actual election notice before their 65th 
birthday, as provided in paragraph (b)(4) of this section.
    (ii) Annuitants and compensationers who were age 65 or older, and 
who still had some Option B coverage remaining, were given the 
opportunity to stop further reductions. These individuals had until 
October 24, 1999, to make the No Reduction election. The amount of 
Option B coverage retained was the amount in effect on April 24, 1999. 
Those annuitants and compensationers who elected No Reduction were 
required to pay premiums retroactive to April 24, 1999.
    (2) Employees who were already retired or insured as compensationers 
on April 24, 1999, could not elect No Reduction for Option C.

[64 FR 72464, Dec. 28, 1999]



Sec. 870.706  Reinstatement of life insurance.

    (a) An annuitant whose disability annuity terminates because he/she 
recovers from the disability or because his/

[[Page 413]]

her earning capacity returns, and whose disability annuity is later 
restored under 5 U.S.C. 8337(e) (after December 31, 1983), may elect to 
resume the Basic insurance held immediately before his/her disability 
annuity terminated. OPM must receive the election within 60 days after 
OPM mails a notice of insurance eligibility and an election form.
    (b) An annuitant described in paragraph (a) of this section may 
elect to resume any Optional insurance held immediately before the 
annuity terminated if:
    (1) He/she has made an election under paragraph (a) of this section; 
and
    (2) OPM receives the election within 60 days after OPM mails a 
notice of insurance eligibility and an election form.
    (c) Basic and Optional insurance reinstated under paragraphs (a) and 
(b) of this section is effective on the 1st day of the month after the 
date OPM receives the election. Any applicable annuity withholdings are 
also reinstated on the 1st day of the month after OPM receives the 
election.
    (d) The amounts of Basic and Optional insurance reinstated under 
paragraphs (a) and (b) of this section are the amounts that would have 
been in force if the individual's annuity hadn't terminated.

[62 FR 48731, Sept. 17, 1997; 62 FR 52181, Oct. 6, 1997. Redesignated at 
64 FR 72463, Dec. 28, 1999]



Sec. 870.707  Reemployed annuitants.

    (a)(1) If an insured annuitant is appointed to a position in which 
he/she is eligible for insurance, the amount of his/her Basic life 
insurance as an annuitant (and any applicable annuity withholdings) is 
suspended on the day before the 1st day in pay status under the 
appointment, unless the reemployed annuitant waives all insurance 
coverage. The Basic insurance benefit payable upon the death of a 
reemployed annuitant who has Basic insurance in force as an employee 
can't be less than the benefit which would have been payable if the 
individual hadn't been reemployed.
    (2) Except as provided in paragraph (b) of this section, the Basic 
insurance obtained as an employee stops with no 31-day extension of 
coverage or conversion right, on the date reemployment terminates. Any 
suspended Basic insurance (and any applicable annuity withholdings) is 
reinstated on the day following termination of the reemployment.
    (b) Basic insurance obtained during reemployment can be continued 
after the reemployment terminates if:
    (1) The annuitant qualifies for a supplemental annuity or receives a 
new retirement right;
    (2) He/she has had Basic insurance as an employee for at least 5 
years of service immediately before separation from reemployment or for 
the full period(s) during which such coverage was available to him/her, 
whichever is less; and
    (3) He/she doesn't convert to nongroup insurance when Basic 
insurance as an employee would otherwise terminate.
    (c) If the Basic insurance obtained during reemployment is continued 
as provided in paragraph (b) of this section, any suspended Basic life 
insurance stops, with no 31-day extension of coverage or conversion 
right.
    (d) (1) An annuitant appointed to a position in which he/she is 
eligible for Basic insurance, is also eligible for Optional insurance as 
an employee, unless he/she has on file an uncancelled waiver of Basic or 
Optional insurance.
    (2) If the individual has Option A or C as an annuitant, that 
insurance (and applicable annuity withholdings) is suspended on the day 
before his/her 1st day in pay status under the appointment. Unless he/
she waives Option A or C (or waives Basic insurance), he/she obtains 
Option A or C as an employee.
    (3) If the individual has Option B as an annuitant, that insurance 
(and applicable annuity withholdings) continues as if the individual 
weren't reemployed, unless:
    (i) The individual files with his/her employing office an election 
of Option B, in a manner designated by OPM, within 31 days after the 
date of reemployment. in this case Option B (and applicable annuity 
withholdings) as an annuitant is suspended on the date that Option B as 
an employee becomes effective; or

[[Page 414]]

    (ii) The individual waives Basic insurance.
    (4) The Option B benefit payable upon the death of a reemployed 
annuitant is the amount in effect as an annuitant, unless he/she elected 
to have Option B as an employee.
    (5) Except as provided in paragraph (e) of this section, the 
Optional insurance obtained as an employee stops, with no 31-day 
extension or conversion right, on the date reemployment terminates. The 
amount of suspended Optional insurance which remains in force after 
applicable monthly reductions after age 65 (and corresponding 
withholdings) is reinstated on the day after reemployment terminates.
    (e) Optional life insurance obtained during reemployment may be 
continued after the reemployment terminates if the annuitant:
    (1) Qualifies for a supplemental annuity or receives a new 
retirement right;
    (2) Continues his/her Basic life insurance under paragraph (a) (2), 
(3), or (4) of Sec. 870.702; and
    (3) Has had Optional insurance as an employee for at least the 5 
years of service immediately before separation from reemployment or for 
the full period(s) of service during which it was available to him/her, 
whichever is less.
    (f) If Optional insurance obtained during reemployment is continued 
as provided in paragraph (e) of this section, any suspended Optional 
insurance stops, with no 31-day extension of coverage or conversion 
right.
    (g) If a reemployed annuitant waives life insurance as an employee, 
the waiver also cancels his/her life insurance as an annuitant.

[62 FR 48731, Sept. 17, 1997; 62 FR 52181, Oct. 6, 1997. Redesignated at 
64 FR 72463, Dec. 28, 1999]



Sec. 870.708  MRA-plus-10 annuitants.

    (a) The Basic insurance of an individual whose coverage terminates 
under Sec. 870.601(b), and who meets the requirements for continuing 
Basic insurance after retirement as stated in Sec. 870.701(a), resumes 
on the starting date of annuity or on the date OPM receives the 
application for annuity, whichever is later. The individual must file an 
election as provided in Sec. 870.701(c) so that OPM receives it within 
60 days after OPM mails a notice of insurance eligibility and an 
election form.
    (b) Optional insurance of an individual whose coverage terminates 
under Sec. 870.602(b), and who meets the requirements for continuing 
Optional insurance after retirement under Sec. 870.701(e), resumes on 
the starting date of annuity or on the date OPM receives the application 
for annuity, whichever is later.

[62 FR 48731, Sept. 17, 1997. Redesignated at 64 FR 72463, Dec. 28, 
1999]



      Subpart H_Order of Precedence and Designation of Beneficiary



Sec. 870.801  Order of precedence and payment of benefits.

    (a) Except as provided in paragraph (d) of this section, benefits 
are paid according to the order of precedence stated in 5 U.S.C. 
8705(a), as follows:
    (1) To the designated beneficiary (or beneficiaries);
    (2) If none, to the widow(er);
    (3) If none, to the child, or children in equal shares, with the 
share of any deceased child going to his/her children;
    (4) If none, to the parents in equal shares or the entire amount to 
the surviving parent;
    (5) If none, to the executor or administrator of the estate;
    (6) If none, to the next of kin according to the laws of the State 
in which the insured individual legally resided.
    (b) If an insured individual provides in a valid designation of 
beneficiary for insurance benefits to be payable to the insured's 
estate, or to the Executor, Administrator, or other representative of 
the insured's estate, or if the benefits would otherwise be payable to 
the duly appointed representative of the insured's estate under the 
order of precedence specified in 5 U.S.C. 8705(a), payment of the 
benefits to the duly appointed representative of the insured's estate 
bars recovery by any other person.
    (c) Option A and B insurance in force on a person on the date of 
his/her death is paid, on receipt of a valid claim, in the same order of 
precedence and under the same conditions as Basic insurance. A 
designation of beneficiary for Basic insurance is also a designation of

[[Page 415]]

beneficiary for Options A and B, unless the insured individual states 
otherwise in his/her designation.
    (d)(1) If there is a court order in effect naming a specific person 
or persons to receive life insurance benefits upon the death of an 
insured individual, Basic insurance and Option A and Option B insurance 
will be paid to the person or persons named in the court order, instead 
of according to the order of precedence.
    (2) To qualify a person for such payment, a certified copy of the 
court order must be received by the appropriate office on or after July 
22, 1998, and before the death of the insured.
    (3)(i) For employees, the appropriate office is their employing 
agency.
    (ii) For annuitants, the appropriate office is OPM.
    (iii) For compensationers during the first 12 months of nonpay 
status, the appropriate office is their employing agency.
    (iv) For compensationers after separation or the completion of 12 
months in nonpay status, the appropriate office is OPM.
    (v) For employees and former employees who have ported Option B 
coverage, the appropriate office is the Portability Office.
    (4) If, within the applicable time frames, the appropriate office 
receives conflicting court orders entitling different persons to the 
same insurance, benefits will be paid based on whichever court order was 
issued first.
    (e) Upon the death of an insured family member, Option C benefits 
are paid to the employee, annuitant, or compensationer responsible for 
withholdings under Sec. 870.402(a), except as provided in paragraph (f) 
of this section.
    (f) If an employee, annuitant, or compensationer entitled to receive 
Option C benefits dies before the benefits are paid, the Option C 
benefits are paid to the individual(s) entitled to receive Basic life 
insurance benefits under the statutory order of precedence. However, if 
the insurance has been assigned in accordance with subpart I of this 
part, any prior designations of beneficiary were cancelled; benefits in 
this instance are paid under the statutory order of precedence, starting 
with the second on the list.

[62 FR 48731, Sept. 17, 1997, as amended at 64 FR 16602, Apr. 6, 1999; 
64 FR 72464, Dec. 28, 1999; 68 FR 59082, Oct. 14, 2003]



Sec. 870.802  Designation of beneficiary.

    (a) Except as provided in paragraph (i) of this section, if an 
insured individual wants benefits paid differently from the order of 
precedence, he/she must file a designation of beneficiary. A designation 
of beneficiary cannot be filed by anyone other than the insured 
individual. Exception: if the insurance has been assigned under subpart 
I of this part, the insured individual cannot designate a beneficiary; 
only the assignee(s) can designate beneficiaries.
    (b) A designation of beneficiary must be in writing, signed by the 
insured individual, and witnessed and signed by 2 people. The 
appropriate office must receive the designation before the death of the 
insured.
    (1) For employees, the appropriate office is the employing office.
    (2) For annuitants and compensationers, the appropriate office is 
OPM.
    (3) For employees and former employees who have ported Option B 
coverage, the appropriate office is the Portability Office.
    (c) A designation, change, or cancellation of beneficiary in a will 
or any other document not witnessed and filed as required by this 
section has no legal effect with respect to benefits under this chapter.
    (d) A witness to a designation of beneficiary cannot be named as a 
beneficiary.
    (e) Any individual, firm, corporation, or legal entity can be named 
as a beneficiary, except an agency of the Federal or District of 
Columbia Government.
    (f) An insured individual (or an assignee) may change his/her 
beneficiary at any time without the knowledge or consent of the previous 
beneficiary. This right cannot be waived or restricted.
    (g)(1) A designation of beneficiary is automatically cancelled 31 
days after

[[Page 416]]

the individual stops being insured. Exception: If the individual elects 
portability for Option B, a valid designation remains in effect.
    (2) An assignment under subpart I of this part automatically cancels 
an insured individual's designation of beneficiary.
    (h) An insured individual may provide that a designated beneficiary 
is entitled to the insurance benefits only if the beneficiary survives 
him/her for a specified period of time (not more than 30 days). If the 
beneficiary doesn't survive for the specified period, insurance benefits 
will be paid as if the beneficiary had died before the insured.
    (i)(1) Except as provided in paragraph (i)(2) of this section, if a 
court order has been received in accordance with Sec. 870.801(d), an 
insured individual cannot designate a different beneficiary, unless
    (i) The person(s) named in the court order gives written consent for 
the change, or
    (ii) The court order is modified.
    (2) If a court order has been received in accordance with Sec. 
870.801(d), and the court order applies to only part of the insurance 
benefits, an insured individual can designate a different beneficiary to 
receive the insurance benefits that are not included under the court 
order. If the insured individual does not make a designation for these 
benefits and there is no previous valid designation on file, benefits 
will be paid according to the order of precedence shown in Sec. 
870.801(a).
    (3) If a court order received in accordance with Sec. 870.801(d) is 
subsequently modified without naming a new person to receive the 
benefits, and a certified copy of the modified court order is received 
by the appropriate office before the death of the insured, the insured 
individual can designate a beneficiary. Benefits will be paid according 
to the order of precedence shown in Sec. 870.801(d) if the insured 
individual does not complete a new designation of beneficiary.

[62 FR 48731, Sept. 17, 1997; 62 FR 52181, Oct. 6, 1997, as amended at 
64 FR 16602, Apr. 6, 1999; 64 FR 72464, Dec. 28, 1999]



Sec. 870.803  Child incapable of self-support.

    (a) When it receives a claim for Option C benefits because of the 
death of a child age 22 or older, OFEGLI determines, based on whatever 
evidence it considers necessary, whether the deceased child was 
incapable of self-support because of a mental or physical disability 
which existed before the child reached age 22.
    (b) If an employee elects Option C under Sec. 870.506(a) (3), and 
the opportunity to elect is based solely on the acquisition of a child 
age 22 or older, the employee must submit to the employing office, at 
the time of making the election, a doctor's certificate stating that the 
child is incapable of self-support because of a physical or mental 
disability which existed before the child reached age 22 and which is 
expected to continue for more than 1 year. The certificate must include 
the name of the child, the type of disability, how long it has existed, 
and its expected future course and duration. The certificate must be 
signed by the doctor and show his/her office address.



                 Subpart I_Assignments of Life Insurance



Sec. 870.901  Assignments permitted.

    (a) (1) Section 208 of the Bankruptcy Amendments and Federal 
Judgeship Act of 1984, Pub. L. 98-353 (98 Stat. 355), effective July 10, 
1984, permits Federal judges to irrevocably assign their FEGLI coverage 
to one or more individuals, corporations, or trustees. Section 4 of Pub. 
L. 103-336 (108 Stat. 2661), effective October 3, 1994, extended this 
right to all Federal employees, annuitants, and compensationers.
    (2) An individual may assign ownership of all life insurance under 
this part, except Option C. If an individual wishing to make an 
assignment owns more than one type of coverage, he/she must assign all 
the insurance; an individual cannot assign only a portion of the 
coverage. Option C cannot be assigned.
    (b) An individual cannot name conditional assignees in case the 
primary assignee dies before the insured individual.

[[Page 417]]

    (c) If the insurance is assigned to two or more individuals, 
corporations, or trustees, the insured individual must specify 
percentage shares, rather than dollar amounts or types of insurance, to 
go to each assignee.
    (d) If an individual who has made an assignment later elects 
increased insurance coverage under Sec. 870.506 or during an open 
enrollment period, the increased coverage is considered included in the 
already existing assignment. The right to increase coverage remains with 
the insured individual, rather than transferring to the assignee.
    (e) An individual who assigns ownership of insurance continues to be 
the insured individual, but the assignee receives those rights of an 
insured individual that are specified in this part.
    (f) Once assigned, the value of the insurance increases or decreases 
automatically as provided by this part. Exception: if the insured 
individual elected a Living Benefit before assigning the remainder of 
his/her insurance, the amount of Basic insurance does not increase or 
decrease.
    (g) An insured individual who has assigned his/her insurance cannot 
elect a Living Benefit; nor can an assignee elect a Living Benefit on 
behalf of the insured individual.
    (h) An insured individual who has elected a Living Benefit under 
subpart K of this part may assign the remainder of his/her insurance. 
The assignment would affect Option A, Option B, and, for an employee who 
elected a partial Living Benefit, Basic insurance.
    (i) A court order can direct that an insured individual make an 
irrevocable assignment to the person(s) named in the court order. For an 
assignment to be effective, the insured individual must follow the 
procedures in Sec. 870.902.

[62 FR 48731, Sept. 17, 1997, as amended at 64 FR 16602, Apr. 6, 1999]



Sec. 870.902  Making an assignment.

    (a) To assign insurance, an insured individual must complete an 
approved assignment form. Only the insured individual can make an 
assignment; no one can assign on behalf of an insured individual.
    (b) The individual must submit the completed and signed form to the 
appropriate office indicating the intent to irrevocably assign all 
ownership of the insurance. The form must also be witnessed and signed 
by 2 people.
    (1) For employees, the appropriate office is the employing office.
    (2) For annuitants and compensationers, the appropriate office is 
OPM.
    (3) For employees and former employees who have ported Option B 
coverage, the appropriate office is the Portability Office.

[64 FR 72464, Dec. 28, 1999]



Sec. 870.903  Effective date of assignment.

    An assignment under this subpart is effective on the date the 
employing office receives the properly completed, signed, and witnessed 
assignment form.



Sec. 870.904  Amount of insurance.

    The amount of insurance is the amount of the insured individual's 
Basic insurance, plus any Option A and Option B coverage.



Sec. 870.905  Withholdings.

    Premium withholdings for assigned insurance are withheld from the 
salary, annuity, or compensation of the insured individual, as provided 
in subpart D of this part.



Sec. 870.906  Cancellation of insurance.

    (a) The right to cancel (or reduce) insurance transfers to the 
assignee; the insured individual cannot cancel (or reduce) insurance 
after making an assignment.
    (b) The assignee has the right to cancel insurance according to the 
provisions of Sec. Sec. 870,502 and 870.505. When there is more than 
one assignee, all assignees must agree to the cancellation. A 
cancellation of Basic insurance also cancels all Optional insurance.



Sec. 870.907  Termination and conversion.

    (a) Assigned insurance terminates under the conditions stated in 
subpart F of this part.
    (b)(1) When an insured individual's insurance terminates, an 
assignee has the right to convert all or part of the group insurance to 
an individual policy on the insured individual. The conditions stated in 
subpart F of this part

[[Page 418]]

apply to assignees who elect to convert.
    (2) When there is more than one assignee, each assignee has the 
right to convert all or part of his/her share of the insurance. Any 
assignee who doesn't convert loses all ownership of the insurance.
    (3) When there is more than one assignee, the maximum amount of 
insurance each assignee will be able to convert is determined by the 
dollar amount corresponding to the assignee's share of the total 
insurance. This amount will be rounded up to the next higher thousand, 
if it's not already an even thousand dollar amount.
    (4) Premiums for converted life insurance are based on the insured 
individual's age and class of risk at the time the conversion policy is 
issued.
    (5) The employing office must notify each assignee of the conversion 
right at the time the assigned group insurance terminates.
    (c) An assignment terminates 31 days after the insurance terminates, 
unless the insured individual is reemployed in or returns to a position 
in which he/she is entitled to coverage under this part within 31 days 
after the insurance terminates. Exception: If an employee elects 
portability for Option B coverage, an assignment remains in effect. If 
the individual returns to Federal service, Basic insurance and any 
Option A insurance acquired through returning to service is subject to 
the existing assignment.

[62 FR 48731, Sept. 17, 1997, as amended at 64 FR 72465, Dec. 28, 1999]



Sec. 870.908  Annuitants and compensationers.

    (a) If an employee assigns Basic insurance and later becomes 
eligible to continue such insurance coverage as an annuitant or 
compensationer as provided in Sec. 870.701:
    (1) At the time he/she retires or becomes eligible as a 
compensationer, the insured individual may elect unreduced or partially 
reduced insurance coverage as provided in Sec. 870.702(a). This right 
remains with the insured individual and does not transfer to the 
assignee. Exception: if the insured individual elected a partial Living 
Benefit as an employee under subpart K of this part, he/she can only 
elect unreduced insurance coverage.
    (2) After the individual has made the election described in 
paragraph (a)(1) of this section, the assignee (or, if more than one, 
all of the assignees acting together) may, at any time, elect to cancel 
the annuitant's or compensationer's election of increased coverage, as 
provided in Sec. 870.702(b). The right to cancel the election transfers 
to the assignee; the annuitant or compensationer cannot cancel the 
election after making an assignment. Exception: if the individual 
elected a partial Living Benefit as an employee under subpart K of this 
part, the assignee(s) cannot cancel the election of unreduced insurance 
coverage.
    (b) When more than one assignee has been named, at the time the 
insured individual becomes eligible to continue coverage as an annuitant 
or compensationer, some assignees may choose to convert their part of 
the insurance, while others may choose to continue the coverage during 
the insured individual's retirement or receipt of compensation. The 
amount of each type of continued insurance is determined by the total 
percentage of the shares of the assignees who choose to continue the 
coverage.
    (c)(1) When an annuitant who has assigned his/her insurance is 
reemployed in a position in which he/she is entitled to life insurance 
coverage, the coverage he/she acquires as a reemployed annuitant is 
subject to the existing assignment.
    (2) The right of a reemployed annuitant to elect Option B coverage 
as an employee rather than as an annuitant under Sec. 870.705(d)(3) 
remains with the insured individual and does not transfer to the 
assignee. Any Option B coverage elected as an employee is subject to the 
existing assignment.



Sec. 870.909  Designations and changes of beneficiary.

    (a)(1) An assignment automatically cancels an insured individual's 
prior designation of beneficiary. After making an assignment, an 
individual cannot designate a beneficiary; the right to designate 
beneficiaries transfers to the assignee.

[[Page 419]]

    (2) Each assignee may designate a beneficiary or beneficiaries to 
receive insurance benefits upon the death of the insured individual and 
may also later change the beneficiaries. An assignee may designate 
himself/herself the primary beneficiary and name another contingent 
beneficiary(ies) to receive insurance benefits if the assignee dies 
before the insured individual.
    (b) Benefits for assigned insurance are paid to the assignee(s) if 
the assignee(s) did not designate a beneficiary.
    (c) Benefits for assigned insurance are paid to an assignee's estate 
if the assignee dies before the insured individual and:
    (1) The assignee (or the assignee's heirs) did not designate a 
beneficiary; or
    (2) The assignee's designated beneficiary dies before the insured 
individual.
    (d) The provisions of Sec. 870.802 apply to designations of 
beneficiary made by assignees.



Sec. 870.910  Notification of current addresses.

    Each assignee and each beneficiary of an assignee must keep the 
office where the assignment is filed informed of his/her current 
address.



  Subpart J_Benefits for United States Hostages in Iraq and Kuwait and 
               United States Hostages Captured in Lebanon



Sec. 870.1001  Purpose.

    This subpart sets forth the conditions for life insurance coverage 
according to the provisions of section 599C of Pub. L. 101-513 (104 
Stat. 2035).



Sec. 870.1002  Definitions.

    In this subpart:
    Hostage and hostage status have the meaning set forth in section 
599C of Pub. L. 101-513 (104 Stat. 2035).
    Pay period for individuals insured under this subpart means the pay 
period set by the U.S. Department of State.
    Period of eligibility means the period beginning on the effective 
date set forth in Sec. 870.1004 and ending 12 months after hostage 
status ends for hostages in Iraq and Kuwait and 60 months after hostage 
status ends for hostages captured in Lebanon.



Sec. 870.1003  Coverage and amount of insurance.

    (a) An individual is covered under this subpart when the U.S. 
Department of State determines that the individual is eligible under 
section 599C of Pub. L. 101-513 (104 Stat. 2035).
    (b)(1) The amount of Basic life insurance for these individuals is 
the amount specified in Sec. 870.202, subject to the applicable 
conditions stated in this subpart.
    (2) The BIA under Sec. 870.202 is the amount of the payment 
specified in section 599C(b)(2) of Pub. L. 101-513 (104 Stat. 2035), 
rounded to the next higher $1,000, plus $2,000.
    (c) Individuals who have Basic insurance under this section also 
have group accidental death and dismemberment insurance.
    (d) Individuals insured by this subpart are not eligible for 
Optional insurance.
    (e) Individuals insured by this subpart are not considered employees 
for the purpose of this part.
    (f) Eligibility for insurance under this subpart depends on the 
availability of funds under section 599C(e) of Pub. L. 101-513 (104 
Stat. 2035).



Sec. 870.1004  Effective date of insurance.

    Insurance under this subpart was effective on August 2, 1990, for 
hostages in Iraq and Kuwait and on June 1, 1982, for hostages captured 
in Lebanon, unless the U.S. Department of State sets a later date.



Sec. 870.1005  Premiums.

    (a) Government contributions and employee withholdings required 
under subpart D of this part are paid from the funds provided under 
section 599C(e) of Pub. L. 101-513 (104 Stat. 2035).
    (b) If an individual isn't insured for the full pay period, premiums 
are paid only for the days he/she is actually insured. The daily premium 
is the monthly premium multiplied by 12 and divided by 365.
    (c) OPM may accept the payments required by this section in advance 
from

[[Page 420]]

a State Department appropriation, if necessary to fund the 12-month 
period of coverage beginning the earlier of:
    (1) The day after sanctions or hostilities end; or
    (2) The day after the individual's hostage status ends.
    (d) OPM will place any funds received under paragraph (c) of this 
section in an account set up for that purpose. OPM will make the deposit 
required under 5 U.S.C. 8714 from the account when the appropriate pay 
period occurs.

[62 FR 48731, Sept. 17, 1997; 62 FR 52181, Oct. 6, 1997]



Sec. 870.1006  Cancellation of insurance.

    (a) An individual who is insured under this subpart may cancel his/
her insurance at any time by written request. The cancellation is 
effective on the 1st day of the pay period after the pay period in which 
the U.S. Department of State receives the request.
    (b) Cancellation must be requested by the insured individual and 
cannot be requested by a representative acting on the individual's 
behalf.
    (c) An individual who cancels the insurance under this section 
cannot obtain the insurance again, unless the U.S. Department of State 
determines that it would be against equity and good conscience not to 
allow the individual to be insured.



Sec. 870.1007  Termination and conversion.

    (a) Insurance under this subpart terminates 12 months after hostage 
status ends, unless the individual cancels the insurance earlier.
    (b) Insured individuals whose coverage terminates are eligible for 
the 31-day extension of coverage and conversion as set forth in subpart 
F of this part, unless the individual cancelled the coverage.



Sec. 870.1008  Order of precedence and designation of beneficiary.

    Insurance benefits are paid under the order of precedence set forth 
in 5 U.S.C. 8705(a) and under the provisions of subpart H of this part.



Sec. 870.1009  Responsibilities of the U.S. Department of State.

    (a) The U.S. Department of State functions as the ``employing 
office'' for individuals insured under this subpart.
    (b) The U.S. Department of State must determine the eligibility of 
individuals under Pub. L. 101-513 (104 Stat. 2035) for insurance under 
this subpart. This includes determining whether an individual is barred 
from insurance under chapter 87 of title 5 U.S.C. because of other life 
insurance as provided in section 599C of Pub. L. 101-513 (104 Stat. 
2035).



                        Subpart K_Living Benefits



Sec. 870.1101  Eligibility for a Living Benefit.

    (a) Effective July 25, 1995, an insured individual who is certified 
by his/her doctor as terminally ill, as defined in Sec. 870.101, may 
elect to receive a lump-sum payment of Basic insurance.
    (b) Optional insurance is not available for payment as a Living 
Benefit.
    (c)(1) The effective date of a Living Benefit election is the date 
on which the Living Benefit payment is cashed or deposited. Once an 
election becomes effective, it can't be revoked. No further election of 
Living Benefits can be made.
    (2) If the insured individual dies before cashing or depositing the 
Living Benefit payment, the payment must be returned to OFEGLI.
    (d) If the insured individual has assigned his/her insurance, he/she 
cannot elect a Living Benefit; nor can an assignee elect a Living 
Benefit on behalf of an insured individual.
    (e) If an individual has elected a Living Benefit, he/she may assign 
his/her remaining insurance.



Sec. 870.1102  Amount of a Living Benefit.

    (a)(1) An employee may elect to receive either:
    (i) A full Living Benefit, which is all of his/her Basic insurance, 
or
    (ii) A partial Living Benefit, which is a portion of his/her Basic 
insurance, in a multiple of $1,000.
    (2) An annuitant or compensationer may only elect to receive a full 
Living Benefit.

[[Page 421]]

    (b) The amount of Basic insurance elected as a Living Benefit will 
be reduced by an actuarial amount representing the amount of interest 
lost to the Fund because of the early payment of benefits.
    (c)(1) If an individual elects a full Living Benefit, the post-
election BIA will be 0. If an employee elects a partial Living Benefit, 
the post-election BIA will be the BIA reduced in proportion to the 
amount of Basic insurance elected as a Living Benefit, as prescribed by 
Pub. L. 103-409 (108 Stat. 4231).
    (2) The post-election BIA cannot change after the effective date of 
a Living Benefit election.
    (d)(1) If an employee elects a full Living Benefit, Basic accidental 
death and dismemberment coverage terminates as of the effective date of 
the election.
    (2) If an employee elects a partial Living Benefit, Basic accidental 
death and dismemberment coverage is reduced to equal the post-election 
BIA.



Sec. 870.1103  Election procedures.

    (a) The insured individual must request information on Living 
Benefits and an application form directly from OFEGLI.
    (b)(1) Only the insured individual can apply for a Living Benefit; 
no one can apply on his/her behalf.
    (2) The insured individual must complete the first part of the 
application and have his/her physician complete the second part. The 
completed application must be submitted directly to OFEGLI.
    (c)(1) OFEGLI reviews the application, obtains certification from 
the insured's employing office regarding the amount of insurance and the 
absence of an assignment, and determines whether the individual meets 
the requirements to elect a Living Benefit.
    (2) If OFEGLI needs additional information, it will contact the 
insured or the insured's physician.
    (3) Under certain circumstances, OFEGLI may require a medical 
examination before making a decision. In these cases, OFEGLI is 
financially responsible for the cost of the medical examination.
    (d)(1) If the application is approved, OFEGLI sends the insured a 
check for the Living Benefit payment and an explanation of benefits.
    (i) Until the check has been cashed or deposited, the individual may 
change his/her mind about electing a Living Benefit; if this happens, 
the individual must mark the check ``void'' and return it to OFEGLI.
    (ii) Once the insured individual has cashed or deposited the 
payment, the Living Benefit election becomes effective and cannot be 
revoked; OFEGLI then sends explanations of benefits to the insured's 
employing office, so it can make the necessary changes in withholdings 
and deductions.
    (2) If the application is not approved, OFEGLI will notify the 
insured individual and the employing office. The decision is not subject 
to administrative review; however, the individual can submit additional 
medical information or reapply at a later date if future circumstances 
warrant.

[62 FR 48731, Sept. 17, 1997; 62 FR 52181, Oct. 6, 1997]



                          Subpart L_Portability

    Source: At 64 FR 72465, Dec. 28, 1999, unless otherwise noted.



Sec. 870.1201  Portability permitted.

    (a) Effective April 24, 1999, until April 24, 2002, eligible 
employees may elect portability for Option B coverage that would 
otherwise terminate.
    (b) An individual cannot elect portability for Basic insurance, 
Option A, or Option C.



Sec. 870.1202  Eligibility.

    (a) An employee is eligible to elect portability for Option B if:
    (1) His/her coverage is terminating due to separation or completion 
of 12 months in nonpay status; and
    (2) He/she has had Option B for the 5 years of service immediately 
before the date the coverage would otherwise terminate, or for the full 
period(s) of service during which he/she was eligible to have Option B, 
if less than 5 years.
    (b) If the employee has assigned his/her coverage as provided in 
subpart I of this part, it is the assignee who has the right to elect 
portability.

[[Page 422]]



Sec. 870.1203  Amount of insurance.

    (a) An employee can elect portability for up to the highest number 
of Option B multiples that meet the requirements of Sec. 
870.1202(a)(2).
    (b)(1) An individual with ported coverage can reduce the number of 
multiples at any time. Exception: If the individual assigned his/her 
coverage as provided in subpart I of this part, only the assignee has 
the right to reduce the number of multiples.
    (2) An individual with ported coverage cannot increase the number of 
multiples.
    (c) Salary changes have no effect on the amount of Option B coverage 
in force for an individual with ported coverage.
    (d) The amount of ported coverage in force reduces by 50 percent at 
the beginning of the 2nd calendar month after the individual reaches age 
70 or, if the individual is 70 or older at the time he/she elects 
portability, the 2nd month after the effective date of the ported 
coverage.



Sec. 870.1204  Cost of insurance.

    (a)(1) The cost of ported coverage is the cost shown in Sec. 
870.402(e).
    (2) In addition to the premium payments for Option B, individuals 
with ported coverage must pay a monthly administrative fee, in an amount 
set by OPM.
    (b) The Portability Office will establish a schedule for the premium 
payments. An individual with ported coverage must make payment to the 
Portability Office on a timely basis.



Sec. 870.1205  Electing portability for Option B.

    (a) The employing agency must notify the employee/assignee(s) of the 
loss of coverage and the right to elect portability for Option B either 
before or immediately after the event causing the loss of coverage.
    (b)(1) The employee/assignee(s) must submit the request to elect 
portability to the employing office and to the Portability Office within 
60 days following the date of the terminating event (74 days if living 
overseas). A mailed notification or request is considered to be received 
5 days after the date of the notification/request.
    (2) An employee/assignee who fails to request portability within the 
required time frame is considered to have refused coverage.
    (3) Ported coverage is effective the day after coverage as an 
employee ends.



Sec. 870.1206  Termination and cancellation of ported coverage.

    (a)(1) Ported coverage stops April 24, 2002, subject to the 31-day 
extension of coverage and right to convert, as provided in subpart F of 
this part.
    (2) Ported coverage stops at the beginning of the 2nd calendar month 
after the individual reaches age 80 or, if the individual is age 80 or 
older at the time he/she elects portability, the 2nd month after the 
effective date, subject to the 31-day extension of coverage and right to 
convert, as provided in subpart F of this part.
    (b)(1) An individual with ported coverage can cancel coverage at any 
time. Exception: If the individual assigned his/her coverage as provided 
in subpart I of this part, only the assignee can cancel coverage.
    (2) If an individual with ported coverage does not make a premium 
payment on time, the Portability Office will send him/her a notice 
stating that coverage will continue only if the individual makes payment 
within 15 days after receiving the notice (45 days if living overseas). 
If the individual does not make payment within this time frame, Option B 
coverage cancels.
    (3) An individual whose ported coverage cancels, whether voluntarily 
or for nonpayment, does not get the 31-day extension of coverage or the 
right to convert.



Sec. 870.1207  Designations, assignments, and court orders.

    (a)(1) If an employee has a valid designation of beneficiary on file 
at the time he/she elects portability, that designation remains in 
effect.
    (2) An individual with ported coverage who wishes to file a 
designation of beneficiary must submit the form to the Portability 
Office.
    (3) If an individual with ported coverage returns to Federal 
service, any designation of beneficiary remains in effect.

[[Page 423]]

    (b)(1) If an employee assigns his/her coverage before electing 
portability for Option B, that assignment remains in effect.
    (2) If an individual with ported coverage wishes to make an 
assignment, he/she must submit the form to the Portability Office.
    (3) If an individual with ported coverage returns to Federal 
service, any assignment of coverage remains in effect. Basic insurance 
and any Option A coverage acquired through the return to service are 
subject to the existing assignment.
    (c)(1) If the employing office received a valid court order on or 
after July 22, 1998, that court order remains valid for the ported 
coverage.
    (2) Anyone wishing to submit a court order relating to an individual 
with ported coverage must submit it to the Portability Office.
    (3) If an individual with ported coverage returns to Federal 
service, any valid court order on file remains in effect.
    (d) When an individual submits a request to elect portability for 
Option B coverage, the employing office must send the originals of all 
designations, assignments, and court orders on file to the Portability 
Office.



Sec. 870.1208  Return to active service.

    (a)(1) When an individual with ported coverage returns to Federal 
service, the agency must notify the Portability Office.
    (2) The Portability Office must terminate the ported coverage and 
send the originals of all designations, assignments, and court orders to 
the new employing office.
    (b) The employee will get back the number of multiples of Option B 
he/she had before the terminating event. Exceptions:
    (1) A person who cancels a multiple or multiples of Option B 
coverage after electing portability will get back only the number of 
multiples remaining.
    (2) A person whose ported coverage cancels for nonpayment of 
premiums will not get back any Option B coverage automatically.



PART 875_FEDERAL LONG TERM CARE INSURANCE PROGRAM--Table of Contents




             Subpart A_Administration and General Provisions

Sec.
875.101 Definitions.
875.102 Where do I send benefit claims?
875.103 Do I need to authorize release of my medical records when I file 
          a claim?
875.104 What are the steps required to resolve a dispute involving 
          benefit eligibility or payment of a claim?
875.105 May OPM correct errors?
875.106 What responsibilities do agencies have under this Program?
875.107 What are OPM's responsibilities as regulator under this Program?
875.108 If the Carrier approves my application, will I get a certificate 
          of insurance?
875.109 Is there a delegation of authority for resolving contract 
          disputes between OPM and the Carrier?

                          Subpart B_Eligibility

875.201 Am I eligible as a Federal civilian or Postal employee?
875.202 Am I eligible as a Federal annuitant?
875.203 Am I eligible if I separated under the FERS MRA+10 provision?
875.204 Am I eligible as a member of the uniformed services?
875.205 Am I eligible as a retired member of the uniformed services?
875.206 As a new active workforce member, when may I apply?
875.207 What happens if I am in nonpay status during an open season?
875.208 May I apply as a qualified relative if the person on whom I am 
          basing my eligibility status has died?
875.209 How do I demonstrate that I am eligible to apply for coverage?
875.210 What happens if I become ineligible after I submit an 
          application?
875.211 What happens if my eligibility status changes after I submit my 
          application?
875.212 Is there a minimum application age?

                             Subpart C_Cost

875.301 Is there a Government contribution toward premiums?
875.302 What are the options for making premium payments?
875.303 How are premium payment errors corrected?
875.304 How does the Carrier account for FLTCIP funds?

                           Subpart D_Coverage

875.401 How do I apply for coverage?

[[Page 424]]

875.402 When will open seasons be held?
875.403 May I apply for coverage outside of an open season?
875.404 What is the effective date of coverage?
875.405 If I marry, may my new spouse apply for coverage?
875.406 May I change my coverage?
875.407 Who makes insurability decisions?
875.408 What is the significance of incontestability?
875.409 Must I provide an authorization to release medical information?
875.410 May I continue my coverage when I leave Federal or military 
          service?
875.411 May I continue my coverage when I am no longer a qualified 
          relative?
875.412 When will my coverage terminate?
875.413 Is it possible to have coverage reinstated?
875.414 Will benefits be coordinated with other coverage?

    Authority: 5 U.S.C. 9008.

    Source: 68 FR 5534, Feb. 4, 2003, unless otherwise noted.



             Subpart A_Administration and General Provisions



Sec. 875.101  Definitions.

    This part is written as if the reader were an applicant or enrollee. 
Accordingly, the terms ``you,'' ``your,'' etc., refer, as appropriate, 
to the applicant or enrollee.
    In this part, the terms annuitant, employee, member of the uniformed 
services, retired member of the uniformed services, and qualified 
relative have the meanings set forth in section 9001 of title 5, United 
States Code, and supplement the following definitions:
    Abbreviated underwriting is a type of underwriting that asks fewer 
questions about your health status than with full underwriting to enable 
the Carrier to determine whether your application for coverage will be 
approved. The Carrier may also require review of your medical records, a 
phone interview, or an in-home interview.
    Actively at work means:
    (1) That as an active workforce member other than a member of the 
uniformed services you meet all of the following conditions:
    (i) You are reporting for work at an approved work location and you 
work at least one-half of your regularly scheduled hours for that day; 
and
    (ii) You are able to perform all the usual and customary duties of 
your employment on your regular work schedule.
    (2) For a member of the uniformed services, that you are on active 
duty and are physically able to perform the duties of your position.
    Carrier means a qualified carrier as defined in section 9001 of 
title 5, United States Code, with which OPM has contracted to provide 
long term care insurance coverage under this section. A Carrier may 
designate 1 or more administrators to perform some of its obligations.
    Eligible individual means an annuitant, active workforce member, 
member of the uniformed services, retired member of the uniformed 
services or qualified relative, as defined in section 9001 of title 5, 
United States Code.
    Enrollee means an eligible individual whose application for coverage 
the Carrier has approved and whose coverage is in effect.
    FLTCIP means the Federal Long Term Care Insurance Program.
    Free look means that within 30 days after you receive the Benefit 
Booklet, you may cancel your coverage if you are not satisfied with it 
and receive a refund of any premium you paid. It will be as if the 
coverage was never issued.
    Full underwriting is the more comprehensive type of underwriting 
under the FLTCIP, which requires that you answer many questions about 
your health status to enable the Carrier to determine whether your 
application for coverage will be approved. The Carrier may also require 
review of your medical records, a phone interview, or an in-home 
interview.
    Stepparent means any person, other than your mother or father, who 
is currently married to one of your parents, or, if one of your parents 
is dead, a person who was married to that parent at the time of that 
parent's death.
    Underwriting requirements means the information about your current 
health status and history and other information that you must provide to 
the Carrier with your application for coverage to enable the Carrier to 
determine your insurability.
    Workforce member means a Federal civilian or Postal employee, member 
of

[[Page 425]]

the uniformed services, Federal annuitant, retired member of the 
uniformed services, or member of any other eligible group, as defined in 
section 9001 of title 5, United States Code. An active workforce member 
is one who is currently employed or is on active duty.

[68 FR 5534, Feb. 4, 2003, as amended at 70 FR 30606, May 27, 2005]



Sec. 875.102  Where do I send benefit claims?

    You must submit your benefit claims to the FLTCIP Carrier or its 
designee.



Sec. 875.103  Do I need to authorize release of my medical records 
when I file a claim?

    Yes, if you file a claim for benefits, the Carrier needs to have a 
valid authorization from you to release your medical records.



Sec. 875.104  What are the steps required to resolve a dispute involving 
benefit eligibility or payment of a claim?

    (a) If you dispute the Carrier's denial of your eligibility for 
benefits or your claim for payment of benefits, you must first send a 
written request for reconsideration to the Carrier no later than 60 days 
from the date of its decision.
    (b) The Carrier must provide you with written notice of its review 
decision no later than 60 days after the date it receives your 
reconsideration request.
    (c) If the Carrier upholds its denial (or does not respond within 60 
days), you have the right to appeal its reconsideration decision 
directly to the Carrier. You must make this appeal in writing within 60 
days from the date of the Carrier's notice upholding its decision. You 
will be notified of the decision on your appeal in writing no later than 
60 days from receipt of your appeal request.
    (d) If a denial of your eligibility for benefits or a denial of your 
claim is upheld upon appeal due to the evaluation of your medical 
condition/functional capacity, the Carrier will inform you that you may 
request that an independent third party, mutually agreed to by OPM and 
the Carrier, review the decision. You must make this request in writing 
within 60 days from the date of the notice informing you of the appeal 
decision. The independent third party must notify you in writing of its 
decision no later than 60 days from the Carrier's or its designee's 
receipt of your request for appeal to the third party. This is the final 
administrative remedy available to you. The decision of the independent 
third party is final and binding on the Carrier.
    (e) You may seek judicial review of the final administrative denial 
of a claim. Such action may not be brought prior to exhaustion of the 
administrative process provided in this section. To pursue such judicial 
review, you must bring legal action against the Carrier in an 
appropriate United States district court within 2 years from the date of 
the final decision. You may not sue OPM, the independent reviewer, or 
any other entity. If you prevail in court, your recovery is limited to 
the amount of benefits payable under your benefit booklet and schedule 
of benefits.

[68 FR 5534, Feb. 4, 2003, as amended at 70 FR 30607, May 27, 2005]



Sec. 875.105  May OPM correct errors?

    OPM may order correction of administrative errors after reviewing 
evidence and finding that it would be against equity and good conscience 
not to do so.



Sec. 875.106  What responsibilities do agencies have under this Program?

    Federal agencies and uniformed services establishments are 
responsible for:
    (a) Providing access to information about the FLTCIP to eligible 
individuals;
    (b) Responding to questions from the Carrier, including questions on 
the employment status of an applicant or enrollee;
    (c) Providing reports as OPM requires;
    (d) Complying with Benefits Administration Letters and other OPM 
issuances/instructions; and
    (e) Deducting premiums as authorized by a workforce member and as 
requested by the Carrier, when possible.

[[Page 426]]



Sec. 875.107  What are OPM's responsibilities as regulator under this 
Program?

    Consistent with the authority and discretion given to OPM by the 
FLTCIP law, OPM's responsibilities include those functions typically 
associated with, and preemptive of, State insurance regulatory 
authorities such as:
    (a) Reviewing and approving the content and format of materials 
associated with the FLTCIP pursuant to section 9008(d) of title 5, 
United States Code;
    (b) Reviewing and approving rates, forms, and marketing materials; 
and
    (c) Determining the qualifications of enrollment personnel and the 
Program administrator(s).



Sec. 875.108  If the Carrier approves my application, will I get a 
certificate of insurance?

    If the Carrier approves your application for coverage, OPM and/or 
the Carrier will make available to you a benefit booklet and schedule of 
benefits with complete coverage information, which will serve as your 
proof of insurance. You will also get a copy of your approved 
application for coverage.



Sec. 875.109  Is there a delegation of authority for resolving contract 
disputes between OPM and the Carrier?

    For the purpose of making findings of fact and to the extent that 
conclusions of law may be required under any proceeding conducted in 
accordance with the provisions of the disputes clause included in the 
FLTCIP master contract, OPM delegates this function to the Armed 
Services Board of Contract Appeals.



                          Subpart B_Eligibility



Sec. 875.201  Am I eligible as a Federal civilian or Postal employee?

    (a) If you are a Federal civilian or Postal employee whose current 
position conveys eligibility for Federal Employees Health Benefits under 
part 890 of this chapter, you are also eligible to apply for coverage, 
with the following exceptions:
    (1) If you are a District of Columbia employee or retiree, you are 
not eligible to apply for coverage, regardless of whether you are 
eligible for Federal Employees Health Benefits coverage. There is a 
related exception, however: D.C. government employees and retirees who 
were first employed by the D.C. government before October 1, 1987 are 
eligible to apply for coverage.
    (2) If you are a Tennessee Valley Authority employee or retiree, you 
are eligible to apply for coverage, even though you may not be eligible 
for Federal Employees Health Benefits coverage.
    (3) If you are a Non-Appropriated Fund (NAF) employee or retiree you 
are eligible to apply when the Secretary of Defense determines such 
eligibility for the NAF instrumentality that employs you, and you will 
be treated the same as a Federal civilian employee or retiree (as 
applicable) under this Part.
    (b) If you are a Federal civilian or Postal employee whose current 
position is excluded from Federal Employees Health Benefits eligibility 
under Sec. 890.102 of this chapter, you are excluded from applying for 
coverage unless paragraph (a)(2) of this section applies.
    (c) If you are an annuitant reemployed by the Federal Government, 
you may apply for coverage as an employee.

[68 FR 5534, Feb. 4, 2003, as amended at 70 FR 30607, May 27, 2005]



Sec. 875.202  Am I eligible as a Federal annuitant?

    If you are a Federal annuitant, including a survivor annuitant, a 
deferred annuitant, or a compensationer, you are eligible to apply for 
coverage. Separated Federal employees with title to a deferred annuity 
may apply for coverage, even if they are not yet receiving that annuity.

[68 FR 5534, Feb. 4, 2003, as amended at 70 FR 30607, May 27, 2005]



Sec. 875.203  Am I eligible if I separated under the FERS MRA+10 
provision?

    If you have separated from service under the FERS Minimum Retirement 
Age and 10 years of service (MRA+10) provision of 5 U.S.C. 8412(g), and 
have postponed receiving an annuity under that provision, you are 
eligible to apply for coverage under this part. For

[[Page 427]]

underwriting purposes, you will be considered an annuitant.



Sec. 875.204  Am I eligible as a member of the uniformed services?

    (a) You are eligible to apply for coverage if you are on active duty 
or full-time National Guard duty for more than a 30-day period.
    (b) You are eligible to apply for coverage if you are a member of 
the Selected Reserve, which consists of:
    (1) Drilling Reservists and Guardsmembers assigned to Reserve 
Component Units;
    (2) Individual Mobilization Augmentees who are Reservists assigned 
to Reserve Component billets in Active Component units (you may be 
performing duty in a pay or non-pay status); and
    (3) Active Guard and Reserve members who are full-time Reserve 
members on full-time National Guard duty or active duty in support of 
the National Guard or Reserves.
    (c) You are not eligible to apply for coverage if you belong to the 
Individual Ready Reserve. The Individual Ready Reserves includes 
Reservists who are assigned to a Voluntary Training Unit in the Naval 
Reserve and Category E in the Air Force Reserve.



Sec. 875.205  Am I eligible as a retired member of the uniformed services?

    (a) You are eligible to apply for coverage if you are a retired 
member of the uniformed services entitled to retired or retainer pay 
(including disability retirement pay).
    (b) You are eligible to apply for coverage if you are a retired 
reservist who is currently receiving retirement pay.
    (c) You are eligible to apply for coverage as a retired (``grey'') 
reservist, even if not yet receiving retirement pay.

[68 FR 5534, Feb. 4, 2003, as amended at 70 FR 30607, May 27, 2005]



Sec. 875.206  As a new active workforce member, when may I apply?

    (a) As a new, newly eligible, or returning active workforce member, 
you may apply as follows:
    (1) If you are a new active workforce member entering a position 
that conveys eligibility, you may apply for coverage within 60 days 
after becoming eligible.
    (2) If you are entering a position that conveys eligibility as an 
active workforce member from a position that did not convey eligibility, 
you may apply for coverage within 60 days after becoming eligible.
    (3) If you return to active service after a break in service of 180 
days or more to a position that conveys eligibility, you may apply for 
coverage within 60 days after becoming eligible.
    (b) Your spouse may also apply during that 60-day period after you 
become eligible.
    (c) The underwriting requirements that will be required will be 
those applicable to active workforce members and their spouses during 
the last open season for enrollment before the date of your application.
    (d) After the 60-day period ends, you may still apply for coverage, 
as may your spouse, but full underwriting requirements will apply.
    (e) If your employing office determines that you were unable, for a 
cause beyond your control, to submit an application during the initial 
60-day period, you may submit an application within 60 days after your 
employing office advises you of that determination. Similarly, your 
employing office may make this determination if your spouse is unable to 
submit an application during the same time period for a cause beyond 
his/her control. This employing office authority only applies within 6 
months after the beginning date of the initial eligibility period. The 
underwriting requirements will be as specified in paragraph (c) of this 
section.
    (f) Your other qualified relatives may apply for coverage at any 
time. They will be subject to full underwriting requirements.

[68 FR 5534, Feb. 4, 2003, as amended at 70 FR 30607, May 27, 2005]



Sec. 875.207  What happens if I am in nonpay status during an open season?

    (a) If you return to a pay status from nonpay status during the open 
season, you have 60 days from the date of your return, or until the end 
of the open season, whichever gives you more time, to apply for coverage 
pursuant to the open season underwriting requirements

[[Page 428]]

for Federal civilian or Postal employees and members of the uniformed 
services.
    (b) If you return to pay status from nonpay status after the open 
season, you have 60 days from the date of your return to apply for 
coverage pursuant to the underwriting requirements specified for Federal 
civilian or Postal employees and members of the uniformed services in 
the immediately preceding open season.
    (c) Paragraphs (a) and (b) of this section apply only when you have 
been in nonpay status for more than one-half of an open season, unless 
you went into nonpay status for a reason beyond your control.



Sec. 875.208  May I apply as a qualified relative if the person on 
whom I am basing my eligibility status has died?

    You may not apply as a qualified relative if the workforce member on 
whom you are basing your qualified relative status died prior to the 
time you apply for coverage, unless you are receiving a survivor annuity 
as the spouse of a deceased workforce member. In this case, your adult 
children and your current spouse are also considered to be qualified 
relatives.

[68 FR 5534, Feb. 4, 2003, as amended at 70 FR 30607, May 27, 2005]



Sec. 875.209  How do I demonstrate that I am eligible to apply for 
coverage?

    (a) When you submit your application for coverage, you must make 
known your status as a member of an eligible group.
    (b) If the Carrier finds that you misrepresented your eligibility 
status, the Carrier has the right to void your coverage and return to 
you any premiums you paid, without interest. The incontestability 
provisions in Sec. 875.409 do not apply to this section.



Sec. 875.210  What happens if I become ineligible after I submit an 
application?

    (a) You must be eligible at the time of your application and at the 
time your coverage is scheduled to go into effect. Except as noted in 
paragraph (b) of this section, if you lose your status as part of an 
eligible group before your coverage goes into effect, you are no longer 
eligible for FLTCIP coverage. You are required to inform the Carrier 
that you are no longer eligible.
    (b) In two instances, you will continue to be eligible for coverage 
even if you lose your status as part of an eligible group after you 
submit an application for coverage, but before your coverage becomes 
effective. The two instances are:
    (1) When you are involuntarily separated from Federal civilian 
service (except for misconduct) or from the uniformed services (except 
for a dishonorable discharge). In either of these events, your qualified 
relatives will continue to be eligible.
    (2) When you are the qualified relative of a workforce member who 
dies.



Sec. 875.211  What happens if my eligibility status changes after I 
submit my application?

    (a) If you applied as an active workforce member, and separate from 
service under the MRA+10 provisions of 5 U.S.C. 8412(g), or retire after 
you submit an application for coverage, but before your coverage becomes 
effective, you must reapply as an annuitant and submit to full 
underwriting requirements.
    (b) If you applied as an active workforce member, and otherwise 
separate from service, but you are a qualified relative of another 
workforce member, you must reapply based on the additional underwriting 
requirements specified for that type of qualified relative.

[70 FR 30607, May 27, 2005]



Sec. 875.212  Is there a minimum application age?

    Yes, there is a minimum application age. You must be at least 18 
years old at the time you submit an application for coverage.



                             Subpart C_Cost



Sec. 875.301  Is there a Government contribution toward premiums?

    There is no Government premium contribution toward the cost of long 
term care insurance.

[[Page 429]]



Sec. 875.302  What are the options for making premium payments?

    (a) Premium payments may be made by Federal payroll or annuity 
deduction, uniformed services retirement pay deduction, by pre-
authorized debit, or by direct billing.
    (b) You must continue to make premium payments when they are due for 
your coverage to stay in effect.



Sec. 875.303  How are premium payment errors corrected?

    (a) If the Carrier finds that you have underpaid the premium rate 
for your age and/or level of coverage, you must pay retroactive premiums 
to the Carrier for the amount due. If you fail to pay back premiums 
within the time provided by the Carrier to correct the error, the 
Carrier may terminate your coverage.
    (b) If the Carrier finds that you have overpaid premiums, the 
Carrier will either reimburse you or reduce a future premium payment(s) 
by the amount of the overpayment.
    (c) If you die while you have coverage, any premiums paid for the 
period beyond the date of your death will be refunded to your estate or 
to an alternate payee. If there is no estate, the Carrier will determine 
whether to pay the refund to an alternate payee. If you cancel your 
coverage, any premiums paid in advance for the period following the 
effective date of your cancellation will be refunded to you.
    (d) Any premiums you paid will be returned if you cancel coverage 
within the ``free look'' period specified in the benefit booklet.



Sec. 875.304  How does the Carrier account for FLTCIP funds?

    The Carrier must keep account of all funds received under this 
section separate from all other funds. The Carrier may use FLTCIP funds 
only for purposes specifically related to the FLTCIP.



                           Subpart D_Coverage



Sec. 875.401  How do I apply for coverage?

    (a) To apply for coverage, you must complete the application in a 
form appropriate for your eligibility status as prescribed by the 
Carrier and approved by OPM.
    (b) If you are the qualified relative of a workforce member, you may 
apply for coverage even if the workforce member does not apply for 
coverage.



Sec. 875.402  When will open seasons be held?

    (a) The first open season for enrollment under this section began 
July 1, 2002, as described in a Federal Register Notice (67 FR 43691, 
June 28, 2002), including the open season ending date(s) and which 
eligible individuals may apply based on abbreviated underwriting.
    (b) There are no regularly scheduled open seasons for long term care 
insurance. OPM will announce any subsequent open seasons via a Federal 
Register Notice. The Notice will include the requirements for applicants 
during the open season.
    (c) In situations where new eligibility groups are added to the 
Program, and OPM determines that it is appropriate to have an open 
season, OPM will provide notice and set the requirements for a special 
open season limited to those eligible individuals.

[68 FR 5534, Feb. 4, 2003, as amended at 70 FR 30607, May 27, 2005]



Sec. 875.403  May I apply for coverage outside of an open season?

    If you are eligible for coverage, you may submit an application at 
any time outside of an open season. You will be subject to full 
underwriting requirements. The only exceptions to the full underwriting 
requirements outside of an open season are described in Sec. 875.206 
and Sec. 875.405.

[68 FR 5534, Feb. 4, 2003, as amended at 70 FR 30607, May 27, 2005]



Sec. 875.404  What is the effective date of coverage?

    (a) The effective dates of coverage under open season enrollments 
will be announced in a Federal Register Notice that announces open 
season dates.
    (b)(1) If you enroll at any time outside of an open season, your 
coverage effective date is the 1st day of the month after the date your 
application is approved.

[[Page 430]]

    (2) If you are an active workforce member and you are applying for 
coverage under abbreviated underwriting, you also must be actively at 
work at least 1 day during the calendar week immediately before the week 
which contains your coverage effective date for your coverage to become 
effective. You must inform the Carrier if you do not meet this 
requirement. In the event you do not meet this requirement, the Carrier 
will issue you a revised effective date, which will be the 1st day of 
the next month. You also must meet the actively at work requirement for 
any revised effective date for coverage to become effective, or you will 
be issued another revised effective date in the same manner.

[68 FR 5534, Feb. 4, 2003, as amended at 70 FR 30607, May 27, 2005]



Sec. 875.405  If I marry, may my new spouse apply for coverage?

    (a)(1) If you are a Federal civilian or Postal employee or member of 
the uniformed services and you have married, your spouse is eligible to 
submit an application for coverage under this section within 60 days 
from the date of your marriage, and will be subject to the underwriting 
requirements in force for the spouses of civilian employees and members 
of the uniformed services during the most recent open season. You, 
however, are not eligible for abbreviated underwriting because of your 
marriage. You may apply for coverage along with your spouse, but full 
underwriting will be required for you.
    (2) After 60 days, your spouse may still apply for coverage but will 
be subject to full underwriting. Your new qualified relatives (such as 
parents-in-law) may apply for coverage with full underwriting at any 
time following the marriage.
    (b) The new spouse and other qualified relatives of an annuitant or 
retired member of the uniformed services may apply for coverage with 
full underwriting at any time following the marriage.



Sec. 875.406  May I change my coverage?

    (a) You may make the following changes to your coverage:
    (1) You may apply to increase your coverage at any time. Full 
underwriting is required, except when an open season allows abbreviated 
underwriting.
    (2) If you increase your coverage by adding to your daily benefit 
amount, the premiums for the additional coverage will be based on your 
age, prevailing premium rates, and coverage rules in effect at the time 
you purchase the additional coverage.
    (3) For other types of coverage increases, your entire premium will 
be based on your age, prevailing premium rates, and coverage rules in 
effect at the time you purchase the increased coverage. Any increase in 
coverage will take effect on the 1st day of the month following the date 
the Carrier approves your request for an increase.
    (b) You may decrease your coverage at any time, although any 
decrease will be subject to coverage rules at the time of the decrease. 
Decreased coverage takes effect on the 1st day of the month after the 
Carrier receives your request. You will not receive any refund of 
premiums paid for coverage you held before the decrease; however, your 
subsequent premiums will be reduced based on your new, lower level of 
coverage. The Carrier will refund or credit any portion of premium paid 
in advance for the period following the date on which you decrease your 
coverage.
    (c) You may cancel your coverage at any time.
    (1) If you cancel during the free look period, your premiums will be 
refunded to you.
    (2) If you cancel your coverage at any time other than during the 
free look period, cancellation will take effect on your requested 
cancellation date or at the end of the period covered by your last 
premium payment, whichever occurs first. You will not receive any refund 
of premiums paid, other than any premiums paid in advance for the period 
following the effective date of your cancellation of coverage, and you 
will not have to pay any more premiums unless you owed retroactive 
premiums.



Sec. 875.407  Who makes insurability decisions?

    The Carrier determines the insurability of all applicants. The 
Carrier's decision may not be appealed to OPM.

[[Page 431]]



Sec. 875.408  What is the significance of incontestability?

    (a) Incontestability means coverage issued based on an erroneous 
application may remain in effect. Such coverage will not remain in 
effect, and your claim may be denied, under any of the following 
conditions:
    (1) If your coverage has been in force for less than 6 months, the 
Carrier may void your coverage or deny a claim upon a showing that 
information on your signed application that was material to your 
approval for coverage is different than what is shown in your medical 
records.
    (2) If your coverage has been in force for at least 6 months but 
less than 2 years, the Carrier may void your coverage or deny a claim 
upon a showing that information on your signed application that was 
material to your approval for coverage is different than what is shown 
in your medical records, and pertains to the condition for which 
benefits are sought.
    (3) After your coverage has been in effect for 2 years, the Carrier 
may void your coverage only upon a showing that you knowingly and 
intentionally made a false or misleading statement or omitted 
information in your signed application for coverage regarding your 
health status.
    (b) Your coverage can be contested at any time when the Carrier 
finds that you were not an eligible individual at the time you applied 
and were approved for coverage.
    (c) If the Carrier voids coverage after it has paid benefits, it 
cannot recover the benefits already paid.
    (d) Incontestability does not apply when you have not paid your 
premiums on a timely basis.



Sec. 875.409  Must I provide an authorization to release medical 
information?

    You must provide the Carrier with an authorization to release 
medical information when requested. The Carrier may deny a claim for 
benefits or void your coverage if the Carrier does not receive an 
authorization to release medical information within 3 weeks after its 
request (4 weeks for those outside the United States).



Sec. 875.410  May I continue my coverage when I leave Federal or 
military service?

    If you are a Federal civilian or Postal employee or member of the 
uniformed services, your coverage will automatically continue when you 
leave active service, as long as the Carrier continues to receive the 
required premium when due. However, once you leave active service, you 
are no longer eligible for any abbreviated underwriting provided during 
any future open season.



Sec. 875.411  May I continue my coverage when I am no longer a 
qualified relative?

    If you are already enrolled as a qualified relative, you may 
continue your FLTCIP coverage if you subsequently lose qualified 
relative status (such as upon divorce), as long as the Carrier receives 
the required premium when due.



Sec. 875.412  When will my coverage terminate?

    Your coverage will terminate on the earliest of the following dates:
    (a) The date you specify to the Carrier that you wish your coverage 
to end;
    (b) The date of your death;
    (c) The end of the period covered by your last premium payment if 
you do not pay the required premiums when due, after a grace period of 
30 days; or
    (d) The date you have exhausted your maximum lifetime benefit. 
(However, in this event, care coordination services will continue.)



Sec. 875.413  Is it possible to have coverage reinstated?

    (a) Under certain circumstances, your coverage can be reinstated. 
The Carrier will reinstate your coverage if it receives proof 
satisfactory to it, within 6 months from the termination date, that you 
suffered from a cognitive impairment or loss of functional capacity, 
before the grace period ended, that caused you to miss making premium 
payments. In that event, you will not be required to submit to 
underwriting. Your coverage will be reinstated retroactively to the 
termination date but you must pay back premiums for that period. The 
premium will be

[[Page 432]]

the same as it was prior to termination.
    (b) If your coverage has terminated because you did not pay premiums 
or because you requested cancellation, the Carrier may reinstate your 
coverage within 12 months from the termination date at your request. You 
will be required to reapply based on full underwriting, and the Carrier 
will determine whether you are still insurable. If you are insurable, 
your coverage will be reinstated retroactively to the termination date 
and you must pay back premiums for that period. The premium will be the 
same as it was prior to termination.



Sec. 875.414  Will benefits be coordinated with other coverage?

    Yes, benefits will be coordinated with other plans, following the 
coordination of benefits (COB) guidelines set by the National 
Association of Insurance Commissioners. The total benefits from all 
plans that pay a long term care benefit to you should not exceed the 
actual costs you incur. The other plans that are considered for COB 
purposes include government programs, group medical benefits, and other 
employer-sponsored long term care insurance plans. Medicaid, individual 
insurance policies, and association group insurance policies are not 
taken into consideration under this provision.



PART 880_RETIREMENT AND INSURANCE BENEFITS DURING PERIODS OF UNEXPLAINED 
ABSENCE--Table of Contents




                            Subpart A_General

Sec.
880.101 Purpose and scope.
880.102 Regulatory structure.
880.103 Definitions.

                          Subpart B_Procedures

880.201 Purpose and scope.
880.202 Referral to Associate Director.
880.203 Missing annuitant status and suspension of annuity.
880.204 Restoration of annuity.
880.205 Determinations of death.
880.206 Date of death.
880.207 Adjustment of accounts after finding of death.

                   Subpart C_Continuation of Benefits

880.301 Purpose.
880.302 Payments of CSRS or FERS benefits.
880.303 FEHBP coverage.
880.304 FEGLI coverage.

    Authority: 5 U.S.C. 8347(a), 8461(g), 8716, 8913.

    Source: 63 FR 10291, Mar. 3, 1998, unless otherwise noted.



                            Subpart A_General



Sec. 880.101  Purpose and scope.

    (a) The purpose of this part is to establish a uniform standard that 
OPM will use in its administration of benefits for CSRS, FERS, FEHBP and 
FEGLI in cases in which an annuitant becomes a missing annuitant.
    (b) This part establishes the procedures that OPM will follow to--
    (1) Determine--
    (i) Who is a missing annuitant,
    (ii) When a missing annuitant has died,
    (iii) When benefits will be paid in missing annuitant cases, and
    (iv) FEHBP coverage for family members of a missing annuitant; and
    (2) Make adjustments to CSRS and FERS benefit payments, FEHBP 
coverage and premiums, and FEGLI benefit payments and premiums after a 
determination that a missing annuitant is dead.
    (c) This part applies only to situations in which an individual who 
satisfies the statutory definition of an annuitant under section 8331(9) 
or section 8401(2) of title 5, United States Code, disappears and has 
not been determined to be dead by an authorized institution. This part 
does not apply to--
    (1) An employee, regardless of whether the absence is covered by 
subchapter VII of chapter 55 of title 5, United States Code; or
    (2) A separated employee who either--
    (i) Does not meet the age and service requirements for an annuity, 
or
    (ii) Has not filed an application for annuity.



Sec. 880.102  Regulatory structure.

    (a) This part contains the following subparts:

[[Page 433]]

    (1) Subpart A contains general information about this part and 
related subjects.
    (2) Subpart B establishes the procedures that OPM will follow in 
missing annuitant cases.
    (3) Subpart C establishes the methodologies that OPM will apply in 
determining continuations of coverage and amounts of payments in missing 
annuitant cases.
    (b) Part 831 of this chapter contains information about benefits 
under CSRS.
    (c) Part 838 of this chapter contains information about benefits 
available to former spouses under court orders.
    (d) Parts 841 through 844 of this chapter contain information about 
benefits under FERS.
    (e) Part 870 of this chapter contains information about benefits 
under FEGLI.
    (f) Part 890 of this chapter contains information about benefits 
under FEHBP.
    (g) Part 1200 of this title contains information about Merit Systems 
Protection Board review of OPM decisions affecting interests in CSRS or 
FERS benefits.
    (h) Part 1600 of this title contains information about benefits 
under the Thrift Savings Plan.



Sec. 880.103  Definitions.

    For purposes of this part--
    Annuitant means an individual who has separated from the Federal 
service with, and has retained, title to a CSRS or FERS annuity, has 
satisfied the age and service requirements for commencement of that 
annuity, and has filed an application for that annuity;
    Associate Director means OPM's Associate Director for Retirement and 
Insurance or his or her designee;
    Authorized institution means a government organization or official 
legally charged with making determinations of death in the State or 
country of the missing annuitant's domicile, citizenship, or 
disappearance;
    CSRS means the Civil Service Retirement System established in 
subchapter III of chapter 83 of title 5, United States Code;
    FEGLI means the Federal Employees Group Life Insurance program 
established in chapter 87 of title 5, United States Code;
    FEHBP means the Federal Employees Health Benefits Program 
established in chapter 89 of title 5, United States Code;
    FERS means the basic benefit portion of the Federal Employees 
Retirement System established in subchapters I, II, IV, V, and VI of 
chapter 84 of title 5, United States Code; FERS does not include 
benefits under the Thrift Savings Plan established under subchapters III 
and VII of chapter 84 of title 5, United States Code;
    Missing annuitant means an individual who has acquired the status of 
missing annuitant under Sec. 880.203(b).



                          Subpart B_Procedures



Sec. 880.201  Purpose and scope.

    This subpart establishes the procedures that OPM will use to--
    (a) Determine that an individual is a missing annuitant;
    (b) Suspend payment of annuity to a missing annuitant;
    (c) Notify individuals affected by such a suspension of payments; 
and
    (d) Determine that a missing annuitant has died.



Sec. 880.202  Referral to Associate Director.

    Any OPM office that receives information concerning the possibility 
that an annuitant might have disappeared will notify the Associate 
Director.



Sec. 880.203  Missing annuitant status and suspension of annuity.

    (a) Upon receipt of information concerning the possibility that an 
annuitant has disappeared, the Associate Director will conduct such 
inquiry as he or she determines to be necessary to determine whether the 
annuitant is alive and whether the annuitant's whereabouts can be 
determined.
    (b) If during an inquiry under paragraph (a) of this section, or 
upon subsequent receipt of additional information, the Associate 
Director finds substantial evidence (as defined in Sec. 1201.56(c)(1) 
of this title) to believe that an annuitant is either not alive or

[[Page 434]]

that the annuitant's whereabouts cannot be determined, the annuitant 
acquires the status of missing annuitant. The Associate Director will 
then--
    (1) Suspend payments to the missing annuitant; and
    (2) Notify individuals who may be able to qualify for payments under 
Sec. 880.302 that--
    (i) OPM has suspended the annuity payments to the missing annuitant;
    (ii) Payment may be made under Sec. 880.302, including the amount 
available for payment, how that amount was determined, and the 
documentation required (if any) to qualify for such payments; and
    (iii) In response to an inquiry from any person seeking CSRS, FERS, 
FEHBP, or FEGLI benefits, OPM will provide information about 
documentation necessary to establish a claim for such benefits.



Sec. 880.204  Restoration of annuity.

    (a) If the missing annuitant's whereabouts are determined, and he or 
she is alive and--
    (1) Competent, OPM will resume payments to the annuitant and pay 
retroactive annuity for the period in missing status less any payment 
made to the family during that period; or
    (2) Incompetent, OPM will resume payments to a representative payee 
under section 8345(e) or section 8466(c) of title 5, United States Code, 
and pay retroactive annuity for the period in missing status less any 
payment made to the family during that period.
    (b) If the missing annuitant's whereabouts cannot be determined, 
missing annuitant status continues until an authorized institution 
determines that the missing annuitant is dead. (See Sec. 880.205.)



Sec. 880.205  Determinations of death.

    OPM does not make findings of presumed death. A claimant for CSRS, 
FERS, or FEGLI death benefits (other than payments under Sec. 880.302) 
or an individual seeking an adjustment of accounts under Sec. 880.207 
must submit a death certificate or other legal certification of death 
issued by an authorized institution.



Sec. 880.206  Date of death.

    (a) Except as provided in paragraph (b) of this section, for the 
purpose of benefits administered by OPM, the date of death of a missing 
annuitant who has been determined to be dead by an authorized 
institution is the date of disappearance as determined by the Associate 
Director.
    (b) For the purpose of determining whether a claim is untimely under 
any statute of limitations applicable to CSRS, FERS or FEGLI benefits 
(section 8345(i)(2), section 8466(b), or section 8705(b) through (d) of 
title 5, United States Code), the time between the date of disappearance 
and the date on which the authorized institution issues its decision 
that the missing annuitant is dead is excluded.



Sec. 880.207  Adjustment of accounts after finding of death.

    After a missing annuitant is determined to be dead under Sec. 
880.205, OPM will review the case to determine whether additional 
benefits are payable or excess insurance premiums have been withheld.



                   Subpart C_Continuation of Benefits



Sec. 880.301  Purpose.

    This subpart establishes OPM's policy concerning the availability 
and amount of CSRS and FERS annuity payments and the continuation of 
FEHBP and FEGLI coverage and premiums while an annuitant is classified 
as a missing annuitant.



Sec. 880.302  Payments of CSRS or FERS benefits.

    (a) OPM will pay an amount equal to the survivor annuity that would 
be payable as CSRS or FERS survivor annuity to an account in a financial 
institution designated (under electronic funds transfer regulations in 
part 209 or part 210 of Title 31, Code of Federal Regulations) by an 
individual who, if the missing annuitant were dead, would be entitled to 
receive payment of a survivor annuity.
    (b) If more than one individual would qualify for survivor annuity 
payments in the event of the missing annuitant's

[[Page 435]]

death, OPM will make separate payments in the same manner as if the 
missing annuitant were dead.



Sec. 880.303  FEHBP coverage.

    (a) If the missing annuitant had a family enrollment, the enrollment 
will be transferred to the eligible family members under Sec. 
890.303(c) of this chapter. If there is only one eligible family member, 
the enrollment will be changed to a self-only enrollment under Sec. 
890.306(r) of this chapter. The changes will be effective the first day 
of the pay period following the date of disappearance.
    (b) If the missing annuitant was covered by a self only enrollment 
or if there is no eligible family member remaining, the enrollment 
terminates at midnight of the last day of the pay period in which he or 
she disappeared, subject to the temporary extension of coverage for 
conversion.
    (c) If the missing annuitant is found to be alive, the coverage held 
before the disappearance is reinstated effective with the pay period 
during which the annuitant is found, unless the annuitant, or the 
annuitant's representative, requests that the enrollment be restored 
retroactively to the pay period in which the disappearance occurred.



Sec. 880.304  FEGLI coverage.

    (a) FEGLI premiums will not be collected during periods when an 
annuitant is a missing annuitant.
    (b)(1) If the annuity of a missing annuitant is restored under Sec. 
880.204(a), OPM will deduct the amount of FEGLI premiums attributable to 
the period when the annuitant was a missing annuitant from any 
adjustment payment due the annuitant under Sec. 880.204(a).
    (2) If a missing annuitant is determined to be dead under Sec. 
880.205, FEGLI premiums and benefits will be computed using the date of 
death established under Sec. 880.206(a).



PART 890_FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM--Table of Contents




             Subpart A_Administration and General Provisions

Sec.
890.101 Definitions; time computations.
890.102 Coverage.
890.103 Correction of errors.
890.104 Initial decision and reconsideration on enrollment.
890.105 Filing claims for payment or service.
890.106 Delegation of authority for resolving certain contract disputes.
890.107 Court review.
890.108 Waiver of requirements for continued coverage during retirement.
890.109 Exclusion of certain periods of eligibility when determining 
          continued coverage during retirement.
890.110 Enrollment reconciliation.

                     Subpart B_Health Benefits Plans

890.201 Minimum standards for health benefits plans.
890.202 Minimum standards for health benefits carriers.
890.203 Application for approval of, and proposal of amendments to, 
          health benefit plans.
890.204 Withdrawal of approval of health benefits plans or carriers.
890.205 Nonrenewal of contracts of health benefits plans.

                          Subpart C_Enrollment

890.301 Opportunities for employees who are not participants in premium 
          conversion to enroll or change enrollment; effective dates.
890.302 Coverage of family members.
890.303 Continuation of enrollment.
890.304 Termination of enrollment.
890.305 Reinstatement of enrollment after military service.
890.306 When can annuitants or survivor annuitants change enrollment or 
          reenroll and what are the effective dates?
890.307 Waiver or suspension of annuity or compensation.
890.308 Disenrollment.

        Subpart D_Temporary Extension of Coverage and Conversion

890.401 Temporary extension of coverage and conversion.

                Subpart E_Contributions and Withholdings

890.501 Government contributions.
890.502 Employee withholdings and contributions.
890.503 Reserves.

[[Page 436]]

890.504 Disposition of contingency reserves upon reorganization or 
          merger of plans.
890.505 Recurring premium payments to carriers.

   Subpart F_Transfers From Retired Federal Employees Health Benefits 
                                 Program

890.601 Coverage.
890.602 Opportunity to change enrollment.
890.603 Effective date.
890.604 [Reserved]
890.605 Persons confined on effective date.

            Subpart G_Benefits in Medically Underserved Areas

890.701 Definitions.
890.702 Payment to any licensed practitioner.

                  Subpart H_Benefits for Former Spouses

890.801 Introduction.
890.802 Definition.
890.803 Who may enroll.
890.804 Coverage.
890.805 Application time limitations.
890.806 When can former spouses change enrollment or reenroll and what 
          are the effective dates?
890.807 When do enrollments terminate, cancel or suspend?
890.808 Employing office responsibilities.

 Subpart I_Limit on Inpatient Hospital Charges, Physician Charges, and 
                          FEHB Benefit Payments

890.901 Purpose.
890.902 Definition.
890.903 Covered services.
890.904 Determination of FEHB benefit payment.
890.905 Limits on inpatient hospital and physician charges.
890.906 Retired enrolled individuals coinsurance payments.
890.907 Effective dates.
890.908 Notification of HHS
890.909 End-of-year settlements.
890.910 Provider information.

Subpart J_Administrative Sanctions Imposed Against Health Care Providers

                   General Provisions and Definitions

890.1001 Scope and purpose.
890.1002 Use of terminology.
890.1003 Definitions.

                          Mandatory Debarments

890.1004 Bases for mandatory debarments.
890.1005 Time limits for OPM to initiate mandatory debarments.
890.1006 Notice of proposed mandatory debarment.
890.1007 Minimum length of mandatory debarments.
890.1008 Mandatory debarment for longer than the minimum length.
890.1009 Contesting proposed mandatory debarments.
890.1010 Debarring official's decision of contest.

                          Permissive Debarments

890.1011 Bases for permissive debarments.
890.1012 Time limits for OPM to initiate permissive debarments.
890.1013 Deciding whether to propose a permissive debarment.
890.1014 Notice of proposed permissive debarment.
890.1015 Minimum and maximum length of permissive debarments.
890.1016 Aggravating and mitigating factors used to determine the length 
          of permissive debarments.
890.1017 Determining length of debarment based on revocation or 
          suspension of a provider's professional licensure.
890.1018 Determining length of debarment for an entity owned or 
          controlled by a sanctioned provider.
890.1019 Determining length of debarment based on ownership or control 
          of a sanctioned entity.
890.1020 Determining length of debarment based on false, wrongful, or 
          deceptive claims.
890.1021 Determining length of debarment based on failure to furnish 
          information needed to resolve claims.
890.1022 Contesting proposed permissive debarments.
890.1023 Information considered in deciding a contest.
890.1024 Standard and burden of proof for deciding contests.
890.1025 Cases where additional fact-finding is not required.
890.1026 Procedures if a fact-finding proceeding is not required.
890.1027 Cases where an additional fact-finding proceeding is required.
890.1028 Conducting a fact-finding proceeding.
890.1029 Deciding a contest after a fact-finding proceeding.

                               Suspension

890.1030 Effect of a suspension.
890.1031 Grounds for suspension.
890.1032 Length of suspension.
890.1033 Notice of suspension.
890.1034 Counting a period of suspension as part of a subsequent 
          debarment.
890.1035 Provider contests of suspensions.
890.1036 Information considered in deciding a contest.
890.1037 Cases where additional fact-finding is not required.

[[Page 437]]

890.1038 Deciding a contest without additional fact-finding.
890.1039 Cases where additional fact-finding is required.
890.1040 Conducting a fact-finding proceeding.
890.1041 Deciding a contest after a fact-finding proceeding.

                           Effect of Debarment

890.1042 Effective dates of debarments.
890.1043 Effect of debarment on a provider.

    Notifying Outside Parties about Debarment and Suspension Actions

890.1044 Entities notified of OPM-issued debarments and suspensions.
890.1045 Informing persons covered by FEHBP about debarment or 
          suspension of their provider.

                 Exceptions to the Effect of Debarments

890.1046 Effect of debarment or suspension on payments for services 
          furnished in emergency situations.
890.1047 Special rules for institutional providers.
890.1048 Waiver of debarment for a provider that is the sole source of 
          health care services in a community.

              Special Exceptions to Protect Covered Persons

890.1049 Claims for non-emergency items or services furnished by a 
          debarred or suspended provider.
890.1050 Exception to a provider's debarment for an individual enrollee.

                              Reinstatement

890.1051 Applying for reinstatement when period of debarment expires.
890.1052 Reinstatements without application.
890.1053 Table of procedures and effective dates for reinstatements.
890.1054 Agencies and entities to be notified of reinstatements.
890.1055 Contesting a denial of reinstatement.

           Civil Monetary Penalties and Financial Assessments

890.1060 Purpose and scope of civil monetary penalties and assessments.
890.1061 Bases for penalties and assessments.
890.1062 Deciding whether to impose penalties and assessments.
890.1063 Maximum amounts of penalties and assessments.
890.1064 Determining the amounts of penalties and assessments to be 
          imposed on a provider.
890.1065 Deciding whether to suspend or debar a provider in a case that 
          also involves penalties and assessments.
890.1066 Notice of proposed penalties and assessments.
890.1067 Provider contests of proposed penalties and assessments.
890.1068 Effect of not contesting proposed penalties and assessments.
890.1069 Information the debarring official must consider in deciding a 
          provider's contest of proposed penalties and assessments.
890.1070 Deciding contests of proposed penalties and assessments.
890.1071 Further appeal rights after final decision to impose penalties 
          and assessments.
890.1072 Collecting penalties and assessments.

              Subpart K_Temporary Continuation of Coverage

890.1101 Purpose.
890.1102 Definitions.
890.1103 Eligibility.
890.1104 Notification by agency.
890.1105 Initial election of temporary continuation of coverage; 
          application time limitations and effective dates.
890.1106 Coverage.
890.1107 Length of temporary continuation of coverage.
890.1108 Opportunities to change enrollment; effective dates.
890.1109 Premium payments.
890.1110 Termination of enrollment or coverage.
890.1111 Employing office responsibilities.
890.1112 Denial of continuation of coverage due to involuntary 
          separation for gross misconduct.
890.1113 The administrative charge.

  Subpart L_Benefits for United States Hostages in Iraq and Kuwait and 
               United States Hostages Captured in Lebanon

890.1201 Purpose.
890.1202 Definitions.
890.1203 Coverage.
890.1204 Effective date of coverage.
890.1205 Change in type of enrollment.
890.1206 Cancellation of coverage.
890.1207 Termination of coverage.
890.1208 Premiums.
890.1209 Responsibilities of the U.S. Department of State.
890.1210 Reconsideration and appeal rights.

   Subpart M_Department of Defense Federal Employees Health Benefits 
                      Program Demonstration Project

890.1301 Purpose.
890.1302 Duration.

[[Page 438]]

890.1303 Eligibility.
890.1304 Enrollment.
890.1305 Termination and cancellation.
890.1306 Government premium contributions.
890.1307 Data collection.
890.1308 Carrier participation.

    Authority: 5 U.S.C. 8913; 890.303 also issued under 50 U.S.C. 403p, 
22 U.S.C. 4069c and 4069c-1; subpart L also issued under sec. 599C of 
Pub. L. 101-513, 104 Stat. 2064, as amended; Sec. 890.102 also issued 
under sections 11202(f), 11232(e), 11246(b) and (c) of Pub. L. 105-33, 
111 Stat. 251; and section 721 of Pub. L. 105-261, 112 Stat. 2061 unless 
otherwise noted.

    Source: 33 FR 12510, Sept. 4, 1968, unless otherwise noted.



             Subpart A_Administration and General Provisions



Sec. 890.101  Definitions; time computations.

    (a) In this part, the terms annuitant, carrier, employee, employee 
organization, former spouse, health benefits plan, member of family, and 
service, have the meanings set forth in section 8901 of title 5, United 
States Code, and supplement the following definitions:
    Appropriate request means a properly completed health benefits 
registration form or an alternative method acceptable to both the 
employing office and OPM. Alternative methods must be capable of 
transmitting to the health benefits plans the information they require 
before accepting an enrollment, change of enrollment, or cancellation. 
Electronic signatures, including the use of Personal Identification 
Numbers (PIN), have the same validity as a written signature.
    Basic employee death benefit has the meaning set out at Sec. 
843.102. Survivors receiving this benefit are deemed to be 
``annuitants'' for purposes of this chapter.
    Cancel means to submit to the employing office an appropriate 
request electing not to be enrolled by an enrollee who is eligible to 
continue enrollment.
    Change the enrollment means to submit to the employing office an 
appropriate request electing a change of enrollment to a different plan 
or option, or to a different type of coverage (self only or self and 
family).
    Claim means a request for (i) payment of a health-related bill; or 
(ii) provision of a health-related service or supply.
    Compensation means compensation under subchapter I of chapter 81 of 
title 5, United States Code, which is payable because of a job-related 
injury or disease.
    Compensationer means an employee or former employee who is entitled 
to compensation and whom the Department of Labor determines is unable to 
return to duty. A compensationer is also an annuitant for purposes of 
chapter 89 of title 5, United States Code.
    Covered individual means an enrollee or a covered family member.
    Covered family member means a member of the family of an enrollee 
with a self and family enrollment who meets the requirements of 
Sec. Sec. 890.302, 890.804, or 890.1106(a), as appropriate to the type 
of enrollee.
    Election not to enroll means to submit to the employing office an 
appropriate request electing not to be enrolled by an employee who is 
eligible to enroll.
    Eligible means eligible under the law and this part to be enrolled.
    Employing office means the office of an agency to which jurisdiction 
and responsibility for health benefits actions for an employee, an 
annuitant, a former spouse eligible for continued coverage under subpart 
H of this part, or an individual eligible for temporary continuation of 
coverage under subpart K of this part, have been delegated.
    (1) For an enrolled annuitant (including survivor annuitant, former 
spouse annuitant, and surviving spouses receiving a basic employee death 
benefit under 5 U.S.C. 8442(b)(1)(A)) who is not also an eligible 
employee, employing office is the office which has the authority to 
approve payment of annuity, basic employee death benefit, or workers' 
compensation for the annuitant concerned.
    (2) For a former spouse of an annuitant whose marriage dissolved 
after the employee's retirement and who has entitlement to receive 
future annuity payments under sections 8341(h), 8345(j), 8445, or 8467 
of title 5, United States Code, employing office is the office that has 
the authority to approve

[[Page 439]]

payment of annuity for the annuitant or former spouse concerned.
    (3) For a former spouse of a current employee, and a former spouse 
of an annuitant or separated employee having title to a deferred annuity 
or to an immediate annuity under 5 U.S.C. 8412(g), whose marriage 
dissolved during the employee's Federal service, employing office is the 
agency that employed the employee or annuitant at the time the marriage 
was dissolved.
    (4) For a surviving spouse in receipt of a basic employee death 
benefit under 5 U.S.C. 8442(b)(1)(A) who is not also an eligible 
employee, the employing office is the retirement system which has 
authority to approve the basic employee death benefit.
    (5) For a former spouse of an employee or former employee of the 
Central Intelligence Agency (CIA) whose marriage was dissolved before 
May 7, 1985, and who meets the requirements under Sec. 
890.803(a)(3)(iv), the employing office is the CIA.
    (6) For a former spouse of an employee or former employee of the 
Foreign Service whose marriage was dissolved before May 7, 1985, and who 
meets the requirements under Sec. 890.803(a)(3)(v) of this part, the 
employing office is the Department of State.
    (7) [Reserved]
    (8) For a former spouse of an employee who separated from service 
after qualifying for an immediate annuity under 5 U.S.C. 8412(g), whose 
marriage dissolves after the employee separated from service but before 
the date the separated employee's annuity commences, and who is entitled 
to continued coverage under subpart H of this part, employing office is 
the office that has the authority to approve payment of annuity for the 
annuitant or former spouse concerned.
    Enroll means to submit to the employing office an appropriate 
request electing to be enrolled in a health benefits plan.
    Enrolled means an appropriate request has been accepted by the 
employing office and the enrollment in a health benefits plan approved 
by OPM under this part has not been terminated or cancelled.
    Enrollee means the individual in whose name the enrollment is 
carried. The term includes employees, annuitants, former employees, 
former spouses, or children who are enrolled after completing an 
appropriate request under the provisions of Sec. Sec. 890.301, 890.306, 
890.601, 890.803, or 890.1103 or have continued an enrollment as an 
annuitant or survivor annuitant under 5 U.S.C. 8905(b) or Sec. 890.303.
    Foster child means a child who:
    (1) Lives with an employee, former employee, or annuitant or with a 
child enrolled under Sec. 890.1103(a)(2) in a regular parent-child 
relationship and
    (2) Is expected to be raised to adulthood by the enrollee.
    Immediate annuity means an annuity which begins to accrue not later 
than 1 month after the date enrollment under a health benefits plan 
would cease for an employee or member of family if he were not entitled 
to continue enrollment as an annuitant. Notwithstanding the foregoing, 
an annuity which commences on the birth of the posthumous child of an 
employee or annuitant is an immediate annuity. For an individual who 
separates from service upon meeting the requirements for an annuity 
under Sec. 842.204(a)(1) of this chapter, immediate annuity includes an 
annuity for which the commencing date is postponed under Sec. 
842.204(c).
    Letter of credit is defined in 48 CFR 1602.170-10.
    Option means a level of benefits. It does not include distinctions 
as to whether the members of the family are covered.
    OWCP means the Office of Workers' Compensation Programs, U.S. 
Department of Labor, which administers subchapter I of chapter 81 of 
title 5, United States Code.
    Pay period means the biweekly pay period established pursuant to 
section 5504 of title 5, United States Code, for the employees to whom 
that section applies and the regular pay period for employees not 
covered by that section. Pay period, as it relates to a former spouse or 
annuitant who is not actively receiving an annuity, including surviving 
spouses receiving a basic employee death benefit, and enrollees 
temporarily continuing coverage under subpart K of this part, means any 
regular pay period for employees of the

[[Page 440]]

agency to which jurisdiction and responsibility for health benefits 
actions for the enrollee have been delegated as provided under the 
definition of ``employing office'' in this section. Pay period for 
annuitants in active receipt of annuity means the period for which a 
single installment of annuity is customarily paid.
    Reconsideration means the final level of administrative review of an 
employing office's initial decision to determine if the employing office 
correctly applied the law and regulations.
    Underdeduction means a failure to withhold the required amount of 
health benefits contributions from an individual's pay, annuity, or 
compensation. This definition includes both nondeductions (when none of 
the required amounts was withheld) and partial deductions (when only 
part of the required amount was withheld). Though FEHB contributions are 
required to cover a period of nonpay status, the nonpayment of 
contributions during such period does not result in an underdeduction.
    (b) Whenever, in this part, a period of time is stated as a number 
of days or a number of days from an event, the period is computed in 
calendar days, excluding the day of the event. Whenever, in this part, a 
period of time is defined by beginning and ending dates, the period 
includes the beginning and ending dates.

[33 FR 12510, Sept. 4, 1968]

    Editorial Note: For Federal Register citations affecting Sec. 
890.101, see the List of Sections Affected in the Finding Aids section 
of this volume.



Sec. 890.102  Coverage.

    (a) Each employee, other than those excluded by paragraph (c) of 
this section, is eligible to be enrolled in a health benefits plan at 
the time and under the conditions prescribed in this part.
    (b) An employee who serves in cooperation with non-Federal agencies 
and is paid in whole or in part from non-Federal funds may register to 
be enrolled within the period prescribed by OPM for the group of which 
the employee is a member following approval by OPM of arrangements 
providing that (1) the required withholdings and contributions will be 
made from Federally-controlled funds and timely deposited into the 
Employees Health Benefits Fund, or (2) the cooperating non-Federal 
agency will, by written agreement with the Federal agency, make the 
required withholdings and contributions from non-Federal funds and 
transmit them for timely deposit into the Employees Health Benefits 
Fund.
    (c) The following employees are not eligible:
    (1) An employee (other than an acting postmaster, a Presidential 
appointee appointed to fill an unexpired term, and an appointee whose 
appointment meets the definition of provisional appointment set out in 
Sec. Sec. 316.401 and 316.403 of this chapter) who is serving under an 
appointment limited to 1 year or less and who has not completed 1 year 
of current continuous employment, excluding any break in service of 5 
days or less.
    (2) An employee who is expected to work less than 6 months in each 
year, except for an employee who is employed under an OPM approved 
career-related work-study program under Schedule B of at least 1 year's 
duration and who is expected to be in a pay status for at least one-
third of the total period of time from the date of the first appointment 
to the completion of the work-study program.
    (3) An intermittent employee--a non-full-time employee without a 
prearranged regular tour of duty.
    (4) A beneficiary or patient employee in a Government hospital or 
home.
    (5) An employee paid on a contract or fee basis, except an employee 
who is a citizen of the United States who is appointed by a contract 
between the employee and the Federal employing authority which requires 
his personal service and is paid on the basis of units of time.
    (6) An employee paid on a piecework basis, except one whose work 
schedule provides for full-time service or part-time service with a 
regular tour of duty.
    (7) An individual first employed by the government of the District 
of Columbia on or after October 1, 1987. However, this exclusion does 
not apply to:
    (i) Employees of St. Elizabeths Hospital who accept offers of 
employment

[[Page 441]]

with the District of Columbia government without a break in service, as 
provided in section 6 of Pub. L. 98-621 (98 Stat. 3379);
    (ii) The Corrections Trustee and the Pretrial Services, Defense 
Services, Parole, Adult Probation and Offender Supervision Trustee and 
employees of these Trustees who accept employment with the District of 
Columbia government within 3 days after separating from the Federal 
Government; and
    (iii) Effective October 1, 1997, judges and nonjudicial employees of 
the District of Columbia Courts, as provided by Pub. L. 105-33 (111 
Stat. 251).
    (8) An individual first employed by the government of the District 
of Columbia on or after October 1, 1987. However, this exclusion does 
not apply to:
    (i) Employees of St. Elizabeths Hospital who accept offers of 
employment with the District of Columbia government without a break in 
service, as provided in section 6 of Pub. L. 98-621 (98 Stat. 3379);
    (ii) The Corrections Trustee and the Pretrial Services, Parole, 
Adult Probation and Offender Supervision Trustee and employees of these 
Trustees who accept employment with the District of Columbia government 
within 3 days after separating from the Federal Government;
    (iii) Effective October 1, 1997, judges and nonjudicial employees of 
the District of Columbia Courts, as provided by Pub. L. 105-33 (111 
Stat. 251); and
    (iv) Effective April 1, 1999, employees of the Public Defender 
Service of the District of Columbia, as provided by Pub. L. 105-274 (112 
Stat. 2419).
    (d) Paragraph (c) of this section does not deny coverage to:
    (1) An employee appointed to perform ``part-time career 
employment,'' as defined in section 3401(2) of title 5, United States 
Code, and 5 CFR part 340, subpart B; or
    (2) An employee serving under an interim appointment established 
under Sec. 772.102 of this chapter.
    (e) The Office of Personnel Management makes the final determination 
of the applicability of this section to specific employees or groups of 
employees.
    (f) An employee of the District of Columbia Financial Responsibility 
and Management Assistance Authority (the Authority) who makes an 
election under the Technical Corrections to Financial Responsibility and 
Management Assistance Act (section 153 of Pub. L. 104-134, 110 Stat. 
1321) to be considered a Federal employee for health benefits and other 
benefit purposes is subject to this part. If the employee is eligible to 
make an election to enroll under Sec. 890.301, such election must be 
made within 60 days after the later of either the date the employment 
with the Authority begins or the date the Authority receives his or her 
election to be considered a Federal employee. Employees of the Authority 
who are former Federal employees are subject to the provisions of Sec. 
890.303(a), except that a former Federal employee employed by the 
Authority before October 26, 1996, and within 3 days following the 
termination of the Federal employment may make an election to enroll 
under Sec. 890.301(c). Annuitants who have continued their coverage 
under this part as annuitants are not eligible to enroll under this 
paragraph. An election to enroll under this part is effective under the 
provisions of Sec. 890.306(a) unless the employee requests the 
Authority to make the enrollment effective on the first day of the first 
pay period following the date the employee entered on duty in a pay 
status with the Authority.
    (g) Notwithstanding any other provision in this part, the hiring of 
a Federal employee, whether in pay status or nonpay status, for a 
temporary, intermittent position with the decennial census has no effect 
on the withholding or Government contribution for his/her coverage or 
the determination of when 365 days in nonpay status ends.

[33 FR 12510, Sept. 4, 1968, as amended at 33 FR 20002, Dec. 31, 1968; 
35 FR 753, Jan. 20, 1970; 44 FR 57382, Oct. 5, 1979; 46 FR 25595, May 8, 
1981; 52 FR 38220, Oct. 15, 1987; 54 FR 7755, Feb. 23, 1989; 56 FR 
10143, Mar. 11, 1991; 57 FR 3715, Jan. 31, 1992; 61 FR 58460, Nov. 15, 
1996; 62 FR 50997, Sept. 30, 1997; 63 FR 9402, Feb. 25, 1998; 63 FR 
28891, May 27, 1998; 64 FR 15289, Mar. 31, 1999]

    Editorial Note: At 64 FR 15289, Mar. 31, 1999, paragraph (c)(8) of 
Sec. 890.102 was revised; however paragraph (c)(8) did not exist in the 
1999 edition of this volume.

[[Page 442]]



Sec. 890.103  Correction of errors.

    (a) The employing office may make prospective corrections of 
administrative errors as to enrollment at any time. The employing office 
may make retroactive corrections of administrative errors that occur 
after December 31, 1994.
    (b) OPM may order correction of an administrative error upon a 
showing satisfactory to OPM that it would be against equity and good 
conscience not to do so.
    (c) The employing office may make retroactive correction of enrollee 
enrollment code errors if the enrollee reports the error by the end of 
the pay period following the one in which he or she received the first 
written documentation (i.e. pay statement or enrollment change 
confirmation) indicating the error.
    (d) OPM may order the termination of an enrollment in any 
comprehensive medical plan described in section 8903(4) of title 5, 
United States Code, and permit the individual to enroll in another 
health benefits plan for purposes of this part, upon a showing 
satisfactory to OPM that the furnishing of adequate medical care is 
jeopardized by a seriously impaired relationship between a patient and 
the comprehensive medical plan's affiliated health care providers.
    (e) Retroactive corrections are subject to withholdings and 
contributions under the provisions of Sec. 890.502.

[45 FR 23637, Apr. 8, 1980, as amended at 53 FR 2, Jan. 4, 1988; 54 FR 
52336, Dec. 21, 1989; 55 FR 22891, June 5, 1990; 59 FR 66437, Dec. 27, 
1994; 62 FR 38435, July 18, 1997]



Sec. 890.104  Initial decision and reconsideration on enrollment.

    (a) Who may file. Except as provided under Sec. 890.1112, an 
individual may request an agency or retirement system to reconsider an 
initial decision of its employing office denying coverage or change of 
enrollment.
    (b) Initial employing office decision. An employing office's 
decision is considered an initial decision as used in paragraph (a) of 
this section when rendered by the employing office in writing and 
stating the right to an independent level of review (reconsideration) by 
the agency or retirement system. However, an initial decision rendered 
at the highest level of review available within OPM is not subject to 
reconsideration.
    (c) Reconsideration. (1) A request for reconsideration must be made 
in writing, must include the claimant's name, address, date of birth, 
Social Security number, name of carrier, reason(s) for the request, and, 
if applicable, retirement claim number.
    (2) The reconsideration review must be an independent review 
designated at or above the level at which the initial decision was 
rendered.
    (d) Time limit. A request for reconsideration of an initial decision 
must be filed within 30 calendar days from the date of the written 
decision stating the right to a reconsideration. The time limit on 
filing may be extended when the individual shows that he or she was not 
notified of the time limit and was not otherwise aware of it, or that he 
or she was prevented by circumstances beyond his or her control from 
making the request within the time limit. An agency or retirement system 
decision in response to a request for reconsideration of an employing 
office's decision is a final decision as described in paragraph (e) of 
this section.
    (e) Final decision. After reconsideration, the agency or retirement 
system must issue a final decision, which must be in writing and must 
fully set forth the findings and conclusions.

[59 FR 66437, Dec. 27, 1994]



Sec. 890.105  Filing claims for payment or service.

    (a) General. (1) Each health benefits carrier resolves claims filed 
under the plan. All health benefits claims must be submitted initially 
to the carrier of the covered individual's health benefits plan. If the 
carrier denies a claim (or a portion of a claim), the covered individual 
may ask the carrier to reconsider its denial. If the carrier affirms its 
denial or fails to respond as required by paragraph (c) of this section, 
the covered individual may ask OPM to review the claim. A covered 
individual must exhaust both the carrier and OPM review processes 
specified in this section before seeking judicial review of the denied 
claim.
    (2) This section applies to covered individuals and to other 
individuals or

[[Page 443]]

entities who are acting on the behalf of a covered individual and who 
have the covered individual's specific written consent to pursue payment 
of the disputed claim.
    (b) Time limits for reconsidering a claim. (1) The covered 
individual has 6 months from the date of the notice to the covered 
individual that a claim (or a portion of a claim) was denied by the 
carrier in which to submit a written request for reconsideration to the 
carrier. The time limit for requesting reconsideration may be extended 
when the covered individual shows that he or she was prevented by 
circumstances beyond his or her control from making the request within 
the time limit.
    (2) The carrier has 30 days after the date of receipt of a timely-
filed request for reconsideration to:
    (i) Affirm the denial in writing to the covered individual;
    (ii) Pay the bill or provide the service; or
    (iii) Request from the covered individual or provider additional 
information needed to make a decision on the claim. The carrier must 
simultaneously notify the covered individual of the information 
requested if it requests additional information from a provider. The 
carrier has 30 days after the date the information is received to affirm 
the denial in writing to the covered individual or pay the bill or 
provide the service. The carrier must make its decision based on the 
evidence it has if the covered individual or provider does not respond 
within 60 days after the date of the carrier's notice requesting 
additional information. The carrier must then send written notice to the 
covered individual of its decision on the claim. The covered individual 
may request OPM review as provided in paragraph (b)(3) of this section 
if the carrier fails to act within the time limit set forth in this 
paragraph (b)(2)(iii).
    (3) The covered individual may write to OPM and request that OPM 
review the carrier's decision if the carrier either affirms its denial 
of a claim or fails to respond to a covered individual's written request 
for reconsideration within the time limit set forth in paragraph (b)(2) 
of this section. The covered individual must submit the request for OPM 
review within the time limit specified in paragraph (e)(1) of this 
section.
    (4) The carrier may extend the time limit for a covered individual's 
submission of additional information to the carrier when the covered 
individual shows he or she was not notified of the time limit or was 
prevented by circumstances beyond his or her control from submitting the 
additional information.
    (c) Information required to process requests for reconsideration. 
(1) The covered individual must put the request to the carrier to 
reconsider a claim in writing and give the reasons, in terms of 
applicable brochure provisions, that the denied claim should have been 
approved.
    (2) If the carrier needs additional information from the covered 
individual to make a decision, it must:
    (i) Specifically identify the information needed;
    (ii) State the reason the information is required to make a decision 
on the claim;
    (iii) Specify the time limit (60 days after the date of the 
carrier's request) for submitting the information; and
    (iv) State the consequences of failure to respond within the time 
limit specified, as set out in paragraph (b)(2) of this section.
    (d) Carrier determinations. The carrier must provide written notice 
to the covered individual of its determination. If the carrier affirms 
the initial denial, the notice must inform the covered individual of:
    (1) The specific and detailed reasons for the denial;
    (2) The covered individual's right to request a review by OPM; and
    (3) The requirement that requests for OPM review must be received 
within 90 days after the date of the carrier's denial notice and include 
a copy of the denial notice as well as documents to support the covered 
individual's position.
    (e) OPM review. (1) If the covered individual seeks further review 
of the denied claim, the covered individual must make a request to OPM 
to review the carrier's decision. Such a request to OPM must be made:

[[Page 444]]

    (i) Within 90 days after the date of the carrier's notice to the 
covered individual that the denial was affirmed;
    (ii) If the carrier fails to respond to the covered individual as 
provided in paragraph (b)(2) of this section, within 120 days after the 
date of the covered individual's timely request for reconsideration by 
the carrier; or
    (iii) Within 120 days after the date the carrier requests additional 
information from the covered individual, or the date the covered 
individual is notified that the carrier is requesting additional 
information from a provider. OPM may extend the time limit for a covered 
individual's request for OPM review when the covered individual shows he 
or she was not notified of the time limit or was prevented by 
circumstances beyond his or her control from submitting the request for 
OPM review within the time limit.
    (2) In reviewing a claim denied by the carrier, OPM may:
    (i) Request that the covered individual submit additional 
information;
    (ii) Obtain an advisory opinion from an independent physician;
    (iii) Obtain any other information as may in its judgment be 
required to make a determination; or
    (iv) Make its decision based solely on the information the covered 
individual provided with his or her request for review.
    (3) When OPM requests information from the carrier, the carrier must 
release the information within 30 days after the date of OPM's written 
request unless a different time limit is specified by OPM in its 
request.
    (4) Within 90 days after receipt of the request for review, OPM will 
either:
    (i) Give a written notice of its decision to the covered individual 
and the carrier; or
    (ii) Notify the individual of the status of the review. If OPM does 
not receive requested evidence within 15 days after expiration of the 
applicable time limit in paragraph (e)(3) of this section, OPM may make 
its decision based solely on information available to it at that time 
and give a written notice of its decision to the covered individual and 
to the carrier.
    (5) OPM, upon its own motion, may reopen its review if it receives 
evidence that was unavailable at the time of its original decision.

[61 FR 15178, Apr. 5, 1996]



Sec. 890.106  Delegation of authority for resolving certain contract 
disputes.

    For the purpose of making findings of fact and to the extent that 
conclusions of law may be required under any proceeding conducted in 
accordance with the provisions of the disputes clause included in health 
benefits contracts, OPM delegates this function to the Armed Services 
Board of Contract Appeals.

[40 FR 50023, Oct. 28, 1975; 40 FR 55829, Dec. 2, 1975. Redesignated at 
44 FR 37895, June 29, 1979 and 45 FR 23637, Apr. 8, 1980]



Sec. 890.107  Court review.

    (a) A suit to compel enrollment under Sec. 890.102 must be brought 
against the employing office that made the enrollment decision.
    (b) A suit to review the legality of OPM's regulations under this 
part must be brought against the Office of Personnel Management.
    (c) Federal Employees Health Benefits (FEHB) carriers resolve FEHB 
claims under authority of Federal statute (5 U.S.C. chapter 89). A 
covered individual may seek judicial review of OPM's final action on the 
denial of a health benefits claim. A legal action to review final action 
by OPM involving such denial of health benefits must be brought against 
OPM and not against the carrier or carrier's subcontractors. The 
recovery in such a suit shall be limited to a court order directing OPM 
to require the carrier to pay the amount of benefits in dispute.
    (d) An action under paragraph (c) of this section to recover on a 
claim for health benefits:
    (1) May not be brought prior to exhaustion of the administrative 
remedies provided in Sec. 890.105;
    (2) May not be brought later than December 31 of the 3rd year after 
the year in which the care or service was provided; and
    (3) Will be limited to the record that was before OPM when it 
rendered its decision affirming the carrier's denial of benefits.

[61 FR 15179, Apr. 5, 1996]

[[Page 445]]



Sec. 890.108  Waiver of requirements for continued coverage during 
retirement.

    (a) OPM may waive the eligibility requirements under 5 U.S.C. 
8905(b) for health benefits coverage as an annuitant in the case of an 
individual who fails to satisfy such requirements if OPM, in its sole 
discretion, determines that, because of exceptional circumstances, it 
would be against equity and good conscience not to allow such individual 
to be enrolled as an annuitant in a health benefits plan under this 
part.
    (b) OPM may grant a waiver as described in paragraph (a) of this 
section to an annuitant in rare and unusual circumstances if the 
annuitant shows by the preponderance of the evidence that--
    (1) There is evidence demonstrating that the individual intended to 
be covered as an annuitant;
    (2) The circumstance(s) that prevented the completion of the 
requirements of 5 U.S.C. 8905(b) was (were) essentially outside the 
individual's control; and
    (3) The individual exercised due diligence in protecting the right 
to coverage as an annuitant.
    (c) OPM will not grant a waiver solely because--
    (1) An individual's retirement is based on disability or an 
involuntary separation; or
    (2) An individual was misadvised (or not advised) by his or her 
employing office regarding the requirements for continuation of health 
benefits coverage into retirement.

[52 FR 3, Jan. 2, 1987]



Sec. 890.109  Exclusion of certain periods of eligibility when 
determining continued coverage during retirement.

    (a) Except as provided in paragraph (b) of this section, periods 
during which temporary employees are eligible under 5 U.S.C. 8906a to 
receive health benefits by enrolling and paying the full subscription 
charge, but are not eligible to participate in a retirement system, are 
not considered when determining eligibility for continued coverage 
during retirement. For the purpose of continuing coverage during 
retirement, an employee is considered to have enrolled at his or her 
first opportunity if the employee registered to be enrolled when he or 
she received a permanent appointment entitling him or her to participate 
in a retirement system and to receive the Government contribution toward 
the health benefits premium payments.
    (b) A temporary employee eligible under 5 U.S.C. 8906a may continue 
enrollment as a compensationer if he or she has been enrolled or covered 
as a family member under another enrollment under this part for:
    (1) The 5 years of service immediately preceding the commencement of 
his or her monthly compensation; or
    (2) During all periods of service since his or her first opportunity 
to enroll, if less than 5 years. For the purpose of this paragraph, an 
employee is considered to have enrolled at his or her first opportunity 
if the employee registered to be enrolled when he or she first became 
eligible under 5 U.S.C. 8906a.

[58 FR 47824, Sept. 13, 1993]



Sec. 890.110  Enrollment reconciliation.

    (a) Each employing office must report to each carrier or its 
surrogate on a quarterly basis the names of the individuals who are 
enrolled in the carrier's plan in a format and containing such 
information as required by OPM.
    (b) The carrier must compare the data provided with its own 
enrollment records. When the carrier finds in its total enrollment 
records individuals whose names do not appear in the report from the 
employing office of record, the carrier must request the employing 
office to provide the documentation necessary to resolve the 
discrepancy.

[63 FR 59459, Nov. 4, 1998; 63 FR 64761, Nov. 23, 1998]



                     Subpart B_Health Benefits Plans



Sec. 890.201  Minimum standards for health benefits plans.

    (a) To qualify for approval by OPM, a health benefits plan shall 
meet the following standards. Once approved, a health benefits plan 
shall continue to meet the minimum standards. Failure on the part of the 
carrier's plan to meet the standards is cause for OPM's

[[Page 446]]

withdrawal of approval of the plan in accordance with 5 CFR 890.204. A 
health benefits plan shall:
    (1) Comply with chapter 89 of title 5, United States Code, and this 
part, as amended from time to time.
    (2) Accept the enrollment, in accordance with this part, and without 
regard to age, race, sex, health status, or hazardous nature of 
employment, of each eligible employee, annuitant, former spouse, former 
employee, or child, except that a plan that is sponsored or underwritten 
by an employee organization may not accept the enrollment of a person 
who is not a member of the organization, but it may not limit membership 
in the organization on account of the prohibited factors (age, race, 
sex, health status, or hazardous nature of employment). The carrier may 
terminate the enrollment of an enrollee other than a survivor annuitant, 
a former spouse continuing coverage under Sec. 890.803, or person 
continuing coverage under Sec. 890.1103(a) (2) or (3), in a health 
benefits plan sponsored or underwritten by an employee organization on 
account of termination of membership in the organization. A carrier that 
wants to terminate the enrollment of an enrollee under this paragraph 
may do so by notifying the employing office in writing, with a copy of 
the notice to the enrollee. The termination is effective at the end of 
the pay period in which the employing office receives the notice. A 
comprehensive medical plan need not enroll an employee, annuitant, 
former employee, former spouse, or child residing outside the geographic 
areas specified by the plan.
    (3) Provide health benefits for each enrollee and covered family 
member wherever they may be.
    (4) Provide for conversion to a contract for health benefits 
regularly offered by the carrier, or an appropriate affiliate, for group 
conversion purposes, which must be guaranteed renewable, subject to such 
amendments as apply to all contracts of this class, except that it may 
be canceled for fraud, overinsurance, or nonpayment of periodic charges. 
A carrier must permit conversion within the time allowed by the 
temporary extension of coverage provided under Sec. 890.401 for each 
enrollee and covered family member entitled to convert. When an 
employing office gives an enrollee written notice of his or her 
privilege of conversion, the carrier must permit conversion at any time 
before 31 days after the date of notice or 91 days after the enrollment 
is terminated, whichever is earlier. Belated conversion opportunities as 
provided in Sec. 890.401(c) must also be permitted by the carrier. When 
OPM requests an extension of time for conversion because of delayed 
determination of ineligibility for immediate annuity, the carrier must 
permit conversion until the date specified by OPM in its request for 
extension. On conversion, the contract becomes effective as of the day 
following the last day of the temporary extension, and the enrollee or 
covered family member, as the case may be, must pay the entire cost 
thereof directly to the carrier. The nongroup contract may not deny or 
delay any benefit covered by the contract for a person converting from a 
plan approved under this part except to the extent that benefits are 
continued under the health benefits plan from which he or she converts.
    (5) Provide that each enrollee receive an identification card or 
cards or other evidence of enrollment.
    (6) Provide a standard rate structure which contains, for each 
option, one standard individual rate, and one standard family rate.
    (7) Maintain statistical records regarding the plan, separately from 
those of any other activities conducted or benefits offered by the 
carrier sponsoring or underwriting the plan.
    (8) Provide for a special reserve for the plan. The carrier shall 
account for amounts retained by it as reserves for the plan separately 
from reserves maintained by it for other plans. The carrier shall invest 
the special reserve and income derived from the investment of the 
special reserve shall be credited to the special reserve. If the 
contract is terminated or approval of the plan is withdrawn, the carrier 
shall return the special reserve to the Employees Health Benefits Fund. 
However, in the case of a comprehensive medical plan, the carrier, 
without regard to the foregoing provisions of this paragraph, shall 
follow such financial

[[Page 447]]

procedures as are mutually agreed on by the carrier and OPM.
    (9) Provide for continued enrollment to the end of the current pay 
period, or termination date, if earlier, of each enrollee enrolled at 
the effective date of termination of a contract. The carrier is entitled 
to subscription charges for this continued enrollment.
    (10) Provide that any covered expenses incurred from January 1 to 
the effective date of an open season change count toward the losing 
carrier's prior year deductible. If the prior year deductible or family 
limit on deductibles of the losing carrier had previously been met, the 
enrolled individual (and eligible family members) shall be eligible for 
reimbursement by the losing carrier for covered expenses incurred during 
the current year. Reimbursement of covered expenses shall apply only to 
covered expenses incurred from January 1 to the effective date of the 
open season change. This section shall not apply to any other 
permissible changes made during a contract year.
    (11) Except where OPM determines otherwise, have 300 or more 
employees and annuitants, exclusive of family members, enrolled in the 
plan at some time during the preceding two contract terms.
    (b) To be qualified to be approved by OPM and, once approved, to 
continue to be approved, a health benefits plan shall not:
    (1) Deny a covered person a benefit provided by the plan for a 
service performed on or after the effective date of coverage solely 
because of a preexisting physical or mental condition.
    (2) Require a waiting period for any covered person for benefits 
which it provides.
    (3) Have more than two options and a high deductible health plan (26 
U.S.C. 223(c)(2)(A).
    (4) Have an initiation, service, enrollment, or other fee or charge 
in addition to the rate charged for the plan, except that a 
comprehensive medical plan may impose an additional charge to be paid 
directly by the enrollee for certain medical supplies and services, if 
the supplies and services on which additional charges are imposed are 
clearly set forth in advance and are applicable to all enrollees. This 
subparagraph does not apply to charges for membership in employee 
organizations sponsoring or underwriting plans.
    (5) Paragraphs (b)(1) and (2) of this section do not preclude a plan 
offering benefits for dentistry or cosmetic surgery, or both, limited to 
conditions arising after the effective date of coverage.
    (c) The Director or his or her designee will determine whether to 
propose withdrawal of approval of the plan and hold a hearing based on 
the seriousness of the carrier's actions and its proposed method to 
effect corrective action.

[33 FR 12510, Sept. 4, 1968, as amended at 43 FR 52460, Nov. 13, 1978; 
47 FR 14871, Apr. 6, 1982; 49 FR 48905, Dec. 17, 1984; 52 FR 10217, Mar. 
31, 1987; 54 FR 52336, Dec. 21, 1989; 55 FR 9108, Mar. 12, 1990; 55 FR 
22891, June 5, 1990; 69 FR 31721, June 7, 2004]



Sec. 890.202  Minimum standards for health benefits carriers.

    The minimum standards for health benefits carriers for the FEHB 
Program shall be those contained in 48 CFR subpart 1609.70.

[57 FR 14324, Apr. 20, 1992]



Sec. 890.203  Application for approval of, and proposal of amendments 
to, health benefit plans.

    (a) New plan applications. (1) The Director of OPM shall consider 
applications to participate in the FEHB Program from comprehensive 
medical plans (CMP's) at his or her discretion. CMP's are automatically 
invited to submit applications annually to participate in the FEHB 
Program unless otherwise notified by OPM. If the Director should 
determine that it is not beneficial to the enrollees and the Program to 
consider applications for a specific contract year, OPM will publish a 
notice with a 60 day comment period in the Federal Register no less than 
7 months prior to the date applications would be due for the specific 
contract year for which applications will not be accepted.
    (2) When applications are considered, CMP's should apply for 
approval by writing to the Office of Personnel Management, Washington, 
DC 20415. Application letters must be accompanied by any descriptive 
material, financial

[[Page 448]]

data, or other documentation required by OPM. Plans must submit the 
letter and attachments in the OPM-specified format by January 31, or 
another date specified by OPM, of the year preceding the contract year 
for which applications are being accepted. Plans must submit evidence 
demonstrating they meet all requirements for approval by March 31 of the 
year preceding the contract year for which applications are being 
accepted. Plans that miss either deadline cannot be considered for 
participation in the next contract year. All newly approved plans must 
submit benefit and rate proposals to OPM by May 31 of the year preceding 
the contract year for which applications are being accepted in order to 
be considered for participation in that contract year. OPM may make 
counter-proposals at any time.
    (3) OPM may approve such comprehensive medical plans as, in the 
judgment of OPM, may be in the best interest of enrollees in the 
Program. In addition to specific requirements set forth in 5 U.S.C. 
chapter 89, in chapter 1 and other relevant portions of title 48 of the 
Code of Federal Regulations, and in other sections of this part, to be 
approved, an applicant plan must actually be delivering medical care at 
the time of application; must be in compliance with applicable State 
licensing and operating requirements; must not be a Federal, State, 
local, or territorial governmental entity; and must not be debarred, 
suspended, or ineligible to participate in Government contracting or 
subcontracting for any reason, including fraudulent health care 
practices in other Federal health care programs.
    (4) Applications must identify those individuals who have the legal 
authority and responsibility to enter into and guarantee contracts. The 
applications will be reviewed for evidence of substantial compliance 
with the following standards:
    (i) Health plan management: Stable management with experience 
pertinent to the prepaid health care provider industry; sufficient 
operating experience to enable OPM to realistically evaluate the plan's 
past and expected future performance;
    (ii) Marketing: A rate of enrollment that ensures equalization of 
income and expenses within projected timeframes and sufficient 
subscriber income to operate within budget thereafter; enrollment 
dispersed among groups such that there is not a concentration of 
enrollment with one or a few groups so that the loss of one or more 
contracts by the carrier would not jeopardize its financial viability; 
feasible projections of future enrollment and employer distribution, as 
well as the potential enrollment area for marketing purposes;
    (iii) Health care delivery system: A health care delivery system 
providing reasonable access to and choice of quality primary and 
specialty medical care throughout the service area; specifically, in the 
individual practice setting, contractual arrangements for the services 
of a significant number of primary care and specialty physicians in the 
service area; and in the group practice setting, compliance with 5 
U.S.C. 8903(4)(A) preferably demonstrated by full-time providers 
specializing in internal medicine, family practice, pediatrics, and 
obstetrics/gynecology; and
    (iv) Financial condition: Establishment of firm budget projections 
and demonstrated success in meeting or exceeding those projections on a 
regular basis; evidence of the ability to sustain operation in the 
future and to meet obligations under the contract OPM might enter into 
with the plan; clearly specified committed funding to see the plan to an 
expected break-even point including a sufficient amount for unexpected 
contingencies; adequate current and projected funding, such as estimated 
premium income or commitment from a financially sound and acceptable 
parent organization or a mature stable entity outside the plan; 
insolvency protection, such as stop-loss reinsurance services and 
agreements with all plan providers that they will hold members harmless 
if, for any reason, the plan is unable to pay its providers.
    (5) A comprehensive medical plan that has been certified either as a 
qualified Health Maintenance Organization (HMO) or as a qualified 
Competitive Medical Plan by the Department of Health and Human Services

[[Page 449]]

(HHS) at the time of application to OPM, and whose qualification status 
is not under investigation by HHS, will need to submit only an 
abbreviated application to OPM. The extent of the data and documentation 
to be submitted by a plan so qualified by HHS, as well as by a non-
qualified plan, for a particular review cycle may be obtained by writing 
directly to the Office of Insurance Programs, Retirement and Insurance 
Service, Office of Personnel Management, Washington, DC 20415.
    (b) Participating plans. Changes in rates and benefits for approved 
health benefits plans shall be considered at the discretion of the 
Director of OPM. If the Director of OPM determines that it is beneficial 
to enrollees and the Federal Employees Health Benefits Program to invite 
health plan benefit and/or rate changes for a given contract period, a 
``call letter'' shall be issued to the carrier approximately 9 months 
prior to the expiration of the current contract period. Any proposal for 
change shall be in writing, specifically describe the change proposed, 
and be signed by an authorized official of the carrier. OPM will review 
any requested proposal for change and will notify the carrier of its 
decision to accept or reject the change. OPM may make a counter proposal 
or at any time propose changes on its own motion. Benefits changes and 
rate proposals, when requested by OPM, shall be submitted not less than 
7 months before the expiration of the then current contract period, 
unless the Director of OPM determines that a later date is acceptable. 
The negotiation period shall begin approximately 7 months before the 
expiration of the current contract period, and OPM shall seek to 
complete all benefit and rate negotiations no later than 4 months 
preceding the contract period to which they will apply. If OPM and the 
carrier do not reach agreement by this date, either party may give 
written notice of nonrenewal in accordance with Sec. 890.205 of this 
part.

[37 FR 20668, Oct. 3, 1972, as amended at 41 FR 40090, Sept. 17, 1976; 
43 FR 52461, Nov. 13, 1978; 48 FR 16232, Apr. 15, 1983; 50 FR 8315, Feb. 
28, 1985; 52 FR 23934, June 26, 1987; 54 FR 52337, Dec. 21, 1989; 55 FR 
22891, June 5, 1990; 57 FR 19374, May 6, 1992; 59 FR 62284, Dec. 5, 
1994; 60 FR 62988, Dec. 8, 1995]



Sec. 890.204  Withdrawal of approval of health benefits plans or carriers.

    (a) The Director may withdraw approval of a health benefits plan or 
carrier if the standards at Sec. 890.201 of this part and 48 CFR 
subpart 1609.70 are not met. Such action carries with it the right to a 
hearing as provided in paragraph (a)(2) of this section.
    (1) Before withdrawing approval, the Director or his or her 
representative shall notify the carrier of the plan, by certified mail, 
that OPM intends to withdraw approval of the health benefits plan and/or 
carrier. The notice shall set forth the reasons why approval is to be 
withdrawn. The carrier is entitled to reply in writing within 15 
calendar days after its receipt of the notice, stating the reasons why 
approval should not be withdrawn.
    (2) On receipt of the reply, or in the absence of a timely reply, 
the Director or representative shall set a date, time, and place for a 
hearing. The carrier shall be notified by certified mail at least 15 
calendar days in advance of the hearing. The hearing officer shall be 
the Director, or a representative designated by the Director, who shall 
not otherwise have been a party to the initial administrative decision 
to issue a letter of intent to withdraw the plan's or carrier's 
approval. The hearing officer shall conduct the hearing unless it is 
waived in writing by the carrier. The carrier is entitled to appear by 
representative and present oral or documentary evidence, including 
rebuttal evidence, in opposition to the proposed action.
    (i) A transcribed record shall be kept of the hearing and shall be 
the exclusive record of the proceeding.
    (ii) After the hearing is held, or after OPM's receipt of the 
carrier's written waiver of the hearing, the Director shall make a 
decision on the record,

[[Page 450]]

taking into consideration any recommendation submitted by the hearing 
officer, and send it to the carrier by certified mail. A decision of the 
Director shall be considered a final decision for the purposes of this 
section. The Director, or his or her representative, may set a future 
effective date for withdrawal of approval.
    (3) The Director, or his or her representative, may give written 
notice of non-renewal of the contract of a carrier whose plan does not 
meet the minimum enrollee requirement in Sec. 890.201(a)(11). However, 
the Director may defer withdrawing approval of a plan not meeting the 
requirement in Sec. 890.201(a)(11) of this part when, in the judgment 
of OPM, the carrier shows good cause. The Director or representative may 
authorize a plan with fewer than 300 employees or annuitants to remain 
in the FEHB Program when he or she determines, in his or her discretion, 
that it is in the best interest of the Program (e.g., when the plan is 
the only plan available to enrollees in a rural area).
    (b) During a current contract term, the Director, in his or her 
discretion, may reinstate approval of a plan or carrier under this 
section on a finding that the reasons for withdrawing approval no longer 
exist.

[55 FR 9109, Mar. 12, 1990, as amended at 57 FR 14324, Apr. 20, 1992]



Sec. 890.205  Nonrenewal of contracts of health benefits plans.

    (a) Either OPM or the carrier may terminate a contract by giving a 
written notice of nonrenewal which includes an indication of the reason 
for the intended action.
    (b) Where termination by notice of intent not to renew is made by 
OPM, the carrier contesting that notice may request that OPM review the 
proposed decision. Such review shall be conducted by the Director or a 
representative designated by the Director, who shall not otherwise have 
been a party to the initial decision to issue a notice of intent not to 
renew. A request for such review, which may include a request that a 
representative of the carrier appear personally before OPM, shall be in 
writing. That request must be received within 10 calendar days of the 
carrier's receipt of the notice of intent not to renew. Such request 
shall include a detailed statement as to why the carrier disagrees with 
OPM's notice of nonrenewal and shall be accompanied by appropriate 
supporting documentation. Where a carrier has requested review under 
this section, the final decision by OPM not to renew a health benefits 
contract shall be communicated to the carrier in writing not more than 
30 days after OPM's receipt of the carrier's request for review, unless 
a later date is mutually agreed upon.
    (c) In the absence of a timely request for review as set forth in 
paragraph (b) of this section, OPM's notice of intent not to renew will 
become final without further notification.

[57 FR 19374, May 6, 1992]



                          Subpart C_Enrollment



Sec. 890.301  Opportunities for employees who are not participants in 
premium conversion to enroll or change enrollment; effective dates.

    (a) Initial opportunity to enroll. An employee who becomes eligible 
may elect to enroll or not to enroll within 60 days after becoming 
eligible.
    (b) Effective date--generally. Except as otherwise provided, an 
enrollment or change of enrollment takes effect on the first day of the 
first pay period that begins after the date the employing office 
receives an appropriate request to enroll or change the enrollment and 
that follows a pay period during any part of which the employee is in 
pay status.
    (c) Belated enrollment. When an employing office determines that an 
employee was unable, for cause beyond his or her control, to enroll or 
change the enrollment within the time limits prescribed by this section, 
the employee may enroll or change the enrollment within 60 days after 
the employing office advises the employee of its determination.
    (d) Enrollment by proxy. Subject to the discretion of the employing 
office, an employee's representative, having written authorization to do 
so, may enroll or change the enrollment for the employee.

[[Page 451]]

    (e) Change to self only. (1) Subject to two exceptions, an employee 
may change the enrollment from self and family to self only at any time. 
Exceptions:
    (i) An employee participating in health insurance premium conversion 
may change to self only during an open season or because of and 
consistent with a qualifying life event as defined in Part 892 of this 
chapter.
    (ii) An employee who is subject to a court or administrative order 
as discussed in Sec. 890.301(g)(3) may not make this change as long as 
the court or administrative order is still in effect and the employee 
has at least one child identified in the order who is still eligible 
under the FEHB Program, unless the employee provides documentation to 
the agency that he or she has other coverage for the child(ren).
    (2) A change of enrollment to self only takes effect on the first 
day of the first pay period that begins after the date the employing 
office receives an appropriate request to change the enrollment, except 
that at the request of the employee and upon a showing satisfactory to 
the employing office that there was no family member eligible for 
coverage by the family enrollment, the employing office may make the 
change effective on the first day of the pay period following the one in 
which there was no family member.
    (f) Open season. (1) An open season will be held each year from the 
Monday of the second full workweek in November through the Monday of the 
second full workweek in December.
    (2) The Director of the Office of Personnel Management may modify 
the dates specified in paragraph (f)(1) of this section or hold 
additional open seasons.
    (3) With one exception, during an open season, an eligible employee 
may enroll and an enrolled employee may change his or her existing 
enrollment from self only to self and family, may change from one plan 
or option to another, or may make any combination of these changes. 
Exception: An employee who is subject to a court or administrative order 
as discussed in Sec. 890.301(g)(3) may not cancel his or her 
enrollment, change to self only, or change to a comprehensive medical 
plan that does not serve the area where his or her child or children 
live as long as the court or administrative order is still in effect and 
the employee has at least one child identified in the order who is still 
eligible under the FEHB Program, unless the employee provides 
documentation to the agency that he or she has other coverage for the 
child(ren).
    (4)(i) An open season new enrollment takes effect on the first day 
of the first pay period that begins in the next following year and which 
follows a pay period during any part of which the employee is in a pay 
status.
    (ii) An open season change of enrollment takes effect on the first 
day of the first pay period which begins in January of the next 
following year.
    (5) When a belated open season enrollment or change of enrollment is 
accepted by the employing office under paragraph (c) of this section, it 
takes effect as required by paragraph (f)(4) of this section.
    (g) Change in family status. (1) An eligible employee may enroll and 
an enrolled employee may change the enrollment from self only to self 
and family, from one plan or option to another, or make any combination 
of these changes when the employee's family status changes, including a 
change in marital status or any other change in family status. The 
employee must enroll or change the enrollment within the period 
beginning 31 days before the date of the change in family status, and 
ending 60 days after the date of the change in family status.
    (2) An enrollment or change of enrollment made in conjunction with 
the birth of a child, or the addition of a child as a new family member 
in some other manner, takes effect on the first day of the pay period in 
which the child is born or becomes an eligible family member.
    (3)(i) If an employing office receives a court or administrative 
order on or after October 30, 2000, requiring an employee to provide 
health benefits for his or her child or children, the employing office 
will determine if the employee has a self and family enrollment in a 
health benefits plan that provides full benefits in the area where the 
child or children live. If the employee does

[[Page 452]]

not have the required enrollment, the agency must notify him or her that 
it has received the court or administrative order and give the employee 
until the end of the following pay period to change his or her 
enrollment or provide documentation to the employing office that he or 
she has other coverage for the child or children. If the employee does 
not comply within these time frames, the employing office must enroll 
the employee involuntarily as stated in paragraph (g)(3)(ii) of this 
section.
    (ii) If the employee is not enrolled or does not enroll, the agency 
must enroll him or her for self and family coverage in the option that 
provides the lower level of coverage in the Service Benefit Plan. If the 
employee has a self only enrollment, the employing office must change 
the enrollment to self and family in the same option and plan, as long 
as the plan provides full benefits in the area where the child or 
children live. If the employee is enrolled in a comprehensive medical 
plan that does not serve the area in which the child or children live, 
the employing office must change the enrollment to self and family in 
the option that provides the lower level of coverage in the Service 
Benefit Plan.
    (4) Subject to two exceptions, the effective date of an involuntary 
enrollment under paragraph (g)(3) of this section is the 1st day of the 
pay period that begins after the date the employing office completes the 
enrollment request. Exceptions:
    (i) If the court or administrative order requires an earlier 
effective date, the effective date will be the 1st day of the pay period 
that includes that date. Effective dates may not be retroactive to a 
date more than 2 years earlier, or prior to October 30, 2000.
    (ii) If after an involuntary enrollment becomes effective and the 
employing office finds that circumstances beyond the employee's control 
prevented him or her from enrolling or changing the enrollment within 
the time limits in this section, the employee may change the enrollment 
prospectively within 60 days after the employing office advises the 
employee of its finding.
    (h) Change in employment status. An eligible employee may enroll and 
an enrolled employee may change the enrollment from self only to self 
and family, from one plan or option to another, or make any combination 
of these changes when the employee's employment status changes. Except 
as otherwise provided, an employee must enroll or change the enrollment 
within 60 days after the change in employment status. Employment status 
changes include, but are not limited to--
    (1) A return to pay status following loss of coverage under either--
    (i) Section 890.304(a)(1)(v) due to the expiration of 365 days in 
leave without pay (LWOP) status, or
    (ii) Section 890.502(b)(5) due to the termination of coverage during 
LWOP status.
    (2) Reemployment after a break in service of more than 3 days.
    (3) Restoration to a civilian position after serving in the 
uniformed services under conditions that entitle him or her to benefits 
under part 353 of this chapter, or similar authority.
    (4) A change from a temporary appointment in which the employee is 
eligible to enroll under 5 U.S.C. 8906a, which requires payment of the 
full premium with no Government contribution, to an appointment that 
entitles the employee to receive the Government contribution.
    (5) Separation from Federal employment when the employee or the 
employee's spouse is pregnant and the employee supplies medical 
documentation of the pregnancy. An employee who enrolls or changes the 
enrollment under this paragraph (h)(5) must do so during his or her 
final pay period. The effective date of an enrollment or a change of 
enrollment under this paragraph (h)(5) is the first day of the pay 
period which the employing office receives an appropriate request to 
enroll or change the enrollment.
    (6) A transfer from a post of duty within a State of the United 
States or the District of Columbia to a post of duty outside a State of 
the United States or the District of Columbia, or the reverse. An 
employee who enrolls or changes the enrollment under this paragraph 
(h)(6) must do so within the period beginning 31 days before leaving

[[Page 453]]

the old post of duty and ending 60 days after arriving at the new post 
of duty.
    (7) A change, without a break in service or after a separation of 3 
days or less, to part-time career employment as defined in 5 U.S.C. 
3401(2) and 5 CFR part 340, subpart B, or a change from such part-time 
career employment to full-time employment that entitles the employee to 
the full Government contribution.
    (i) Loss of coverage under this part or under another group 
insurance plan. An eligible employee may enroll and an enrolled employee 
may change the enrollment from self only to self and family, from one 
plan or option to another, or make any combination of these changes when 
the employee or an eligible family member of the employee loses coverage 
under this part or another group health benefits plan. Except as 
otherwise provided, an employee must enroll or change the enrollment 
within the period beginning 31 days before the date of loss of coverage, 
and ending 60 days after the date of loss of coverage. Losses of 
coverage include, but are not limited to--
    (1) Loss of coverage under another FEHB enrollment due to the 
termination, cancellation, or a change to self only, of the covering 
enrollment.
    (2) Loss of coverage under another federally-sponsored health 
benefits program.
    (3) Loss of coverage due to the termination of membership in an 
employee organization sponsoring or underwriting an FEHB plan.
    (4) Loss of coverage due to the discontinuance of an FEHB plan in 
whole or in part. For an employee who loses coverage under this 
paragraph (i)(4):
    (i) If the discontinuance is at the end of a contract year, the 
employee must change the enrollment during the open season, unless OPM 
establishes a different time. If the discontinuance is at a time other 
than the end of the contract year, OPM must establish a time and 
effective date for the employee to change the enrollment.
    (ii) If the whole plan is discontinued, an employee who does not 
change the enrollment within the time set is considered to have canceled 
the plan in which enrolled.
    (iii) If one option of a plan that has two options is discontinued, 
an employee who does not change the enrollment is considered to be 
enrolled in the remaining option of the plan.
    (5) Loss of coverage under the Medicaid program or similar State-
sponsored program of medical assistance for the needy.
    (6) Loss of coverage under a non-Federal health plan because an 
employee moves out of the commuting area to accept another position and 
the employee's non-federally employed spouse terminates employment to 
accompany the employee. An employee may enroll or change the enrollment 
within the period beginning 31 days before the date the employee leaves 
employment in the old commuting area and ending 180 days after entry on 
duty at place of employment in the new commuting area.
    (7) Loss of coverage under a non-Federal health plan.
    (j) Move from comprehensive medical plan's area. An employee in a 
comprehensive medical plan who moves or becomes employed outside the 
geographic area from which the plan accepts enrollments, or if already 
outside this area, moves or becomes employed further from this area, may 
change the enrollment upon notifying the employing office of the move or 
change of place of employment. Similarly, an employee whose covered 
family member moves outside the geographic area from which the plan 
accepts enrollments, or if already outside this area, moves further from 
this area, may change the enrollment upon notifying the employing office 
of the family member's move. The change of enrollment takes effect on 
the first day of the pay period that begins after the employing office 
receives an appropriate request.
    (k) On becoming eligible for Medicare. An employee may change the 
enrollment from one plan or option to another at any time beginning on 
the 30th day before becoming eligible for coverage under title XVIII of 
the Social Security Act (Medicare). A change of enrollment based on 
becoming eligible for Medicare may be made only once.

[[Page 454]]

    (l) Salary of temporary employee insufficient to pay withholdings. 
If the salary of a temporary employee eligible under 5 U.S.C. 8906a is 
not sufficient to pay the withholdings for the plan in which the 
employee is enrolled, the employing office shall notify the employee of 
the plans available at a cost that does not exceed the employee's 
salary. The employee may enroll in another plan whose cost is no greater 
than his or her salary within 60 days after receiving such notification 
from the employing office. The change of enrollment takes effect 
immediately upon termination of the prior enrollment.

[62 FR 38435, July 18, 1997; 62 FR 49557, Sept. 22, 1997, as amended at 
65 FR 44646, July 19, 2000; 68 FR 56524, Oct. 1, 2003; 69 FR 56928, 
Sept. 23, 2004]



Sec. 890.302  Coverage of family members.

    (a)(1) An enrollment for self and family includes all family members 
who are eligible to be covered by the enrollment. Except as provided in 
paragraphs (a) (2), (3), and (4) of this section, no employee, former 
employee, annuitant, child, or former spouse may enroll or be covered as 
a family member if he or she is covered under another person's self and 
family enrollment in the FEHB Program.
    (2) Dual enrollment--spouse. (i) To protect the interests of the 
children, an employee or annuitant may enroll in his or her own right in 
a self and family enrollment even though his or her spouse also has a 
self and family enrollment. Generally, such dual enrollments are 
permitted only where two employees or annuitants are married, each with 
children from prior marriages who do not live with them, or are legally 
separated, with each spouse retaining custody of his or her own children 
by a prior marriage. To ensure that no person receives benefits under 
more than one enrollment, each enrollee must tell the insurance carrier 
which family members are covered under his or her enrollment. These 
individuals are not covered under the other enrollment.
    (ii) To protect the interests of legally separated Federal 
employees, annuitants and their children, a legally separated employee 
or annuitant may enroll in his or her own right in a self only or self 
and family enrollment even though his or her spouse also has a self and 
family enrollment. To ensure that no person receives benefits under more 
than one enrollment, each enrollee must tell the insurance carrier which 
family members are covered under his or her enrollment. These 
individuals are not covered under the other enrollment.
    (3) Dual enrollment--child. (i) When natural parents are divorced or 
legally separated and children are included as family members under the 
enrollment of both natural parents or of a natural parent and a step-
parent, the children are entitled to receive benefits under only one 
enrollment. Each enrollee must notify his or her insurance carrier of 
the name(s) of the child(ren) to be covered under his or her enrollment 
that are not named under the other enrollment.
    (ii) When an employee who is under age 22 and covered under a 
parent's self and family enrollment becomes the parent of a child, the 
employee may elect to enroll for self and family coverage. Because the 
employee is entitled to receive benefits under only one enrollment, each 
enrollee must notify his or her insurance carrier of the names of the 
persons to be covered under his or her enrollment that are not named 
under the other enrollment.
    (4) Dual enrollment--spouse and child. Where a situation such as 
that in paragraph (a)(2) of this section occurs (that is, two employees 
or annuitants are married, but each has children from prior marriages 
who do not live with them) and there are also children who are the issue 
of the marriage, an employee or annuitant may enroll in his or her own 
right in a self and family enrollment even though his or her spouse also 
has a self and family enrollment. Because no person is entitled to 
receive benefits under more than one enrollment, each enrollee must 
notify his or her insurance carrier of the names of the family members 
to be covered under his or her enrollment that are not covered under the 
other enrollment.
    (b) Proof of dependency. (1) A child is considered to be dependent 
on an enrolled employee or annuitant or a former employee or child 
enrolled

[[Page 455]]

under Sec. 890.1103 of this part if he or she is:
    (i) A legitimate child;
    (ii) An adopted child;
    (iii) A stepchild, foster child, or recognized natural child who 
lives with the enrollee in a regular parent-child relationship.
    (iv) A recognized natural child for whom a judicial determination of 
support has been obtained; or
    (v) A recognized natural child to whose support the enrollee makes 
regular and substantial contributions.
    (2) The following are examples of proof of regular and substantial 
support. More than one of the following proofs may be required to show 
support of a recognized natural child who does not live with the 
enrollee in a regular parent-child relationship and for whom a judicial 
determination of support has not been obtained.
    (i) Evidence of eligibility as a dependent child for benefits under 
other State or Federal programs;
    (ii) Proof of inclusion of the child as a dependent on the 
enrollee's income tax returns;
    (iii) Canceled checks, money orders, or receipts for periodic 
payments from the enrollee for or on behalf of the child.
    (iv) Evidence of goods or services which show regular and 
substantial contributions of considerable value;
    (v) Any other evidence which OPM shall find to be sufficient proof 
of support or of paternity or maternity.
    (c) Exceptions. Coverage as a family member may be denied:
    (1) If evidence shows that the enrollee did not recognize the child 
as his or her own, despite a willingness to support the child, or
    (2) If evidence calls the child's paternity or maternity into doubt, 
despite the enrollee's recognition and support of the child.
    (d) Child incapable of self-support. When an individual enrolls for 
a family that includes a child who has become 22 years of age and is 
incapable of self-support, the employing office must require such 
enrollee to submit a physician's certificate verifying the child's 
disability. The certificate must--
    (1) State that the child is incapable of self-support because of a 
physical or mental disability that existed before the child became 22 
years of age and that can be expected to continue for more than 1 year;
    (2) Include a statement of the name of the child, the nature of the 
disability, the period of time it has existed, and its probable future 
course and duration; and,
    (3) Be signed by the physician and show the physician's office 
address. The employing office must require the enrollee to submit the 
certificate on or before the date the child becomes 22 years of age. 
However, the employing office may accept otherwise satisfactory evidence 
of incapacity that is not timely filed.
    (e) Renewal of certificates of incapacity. The employing office must 
require an enrollee who has submitted a certificate of incapacity to 
renew that certificate on the expiration of the minimum period of 
disability certified.
    (f) Determination of incapacity. (1) Except as provided in paragraph 
(f)(2) of this section, the employing office shall make determinations 
of incapacity.
    (2) Either the employing office or the carrier may make a 
determination of incapacity if a medical condition, as specified by OPM, 
exists that would cause a child to be incapable of self-support during 
adulthood.
    (g) Meaning of unmarried. A child who has never married or whose 
marriage has been annulled, or a child who is divorced or widowed is 
considered to be unmarried.

[33 FR 12510, Sept. 4, 1968, as amended at 43 FR 52460, Nov. 13, 1978; 
45 FR 76088, Nov. 18, 1980; 46 FR 35082, July 7, 1981; 49 FR 1047, Jan. 
9, 1984; 51 FR 15748, Apr. 28, 1986; 53 FR 45070, Nov. 8, 1988; 54 FR 
52338, Dec. 21, 1989; 55 FR 22891, June 5, 1990; 59 FR 60296, Nov. 23, 
1994; 62 FR 38437, July 18, 1997]



Sec. 890.303  Continuation of enrollment.

    (a) On transfer or retirement. (1) Except as otherwise provided by 
this part, the enrollment of an employee or annuitant eligible to 
continue enrollment continues without change when he or she moves from 
one employing office to another, without a break in service of more than 
3 days, whether the personnel action is designated as a transfer or not.

[[Page 456]]

    (2) In order for an employee to continue an enrollment as an 
annuitant, he or she must meet the participation requirements set forth 
at 8905(b) of title 5, United States Code, for continuing an enrollment 
as an annuitant as of the commencing date of his or her annuity or 
monthly compensation.
    (3) For the purpose of this part, an employee is considered to have 
enrolled at his or her first opportunity if the employee enrolled during 
the first of the periods set forth in Sec. 890.301 in which he or she 
was eligible to enroll or was covered at that time by the enrollment of 
another employee or annuitant, or whose enrollment was effective not 
later than December 31, 1964.
    (4) Enrollment or eligibility for enrollment under subparts H or K 
of this part of an individual who is not an employee eligible for 
coverage under other provisions of this part is not considered in 
determining whether a retiring employee has met the participation 
requirements of Sec. 8905(b) of title 5, U.S. Code. Coverage under 
subparts H or K of this part of an individual who is an employee 
eligible for coverage under other provisions of this part may be 
considered in determining whether a retiring employee has met the 
participation requirements.
    (b) Change of enrolled employees to certain excluded positions. 
Employees and annuitants enrolled under this part who move, without a 
break in service or after a separation of 3 days or less, to an 
employment in which they are excluded by Sec. 890.102(c), continue to 
be enrolled unless excluded by paragraphs (c) (4), (5), (6), or (7) of 
Sec. 890.102.
    (c) On death. The enrollment of a deceased employee or annuitant who 
is enrolled for self and family (as opposed to self only) is transferred 
automatically to his or her eligible survivor annuitants. The enrollment 
is considered to be that of (1) the survivor annuitant from whose 
annuity all or the greatest portion of the withholding for health 
benefits is made or (2) the surviving spouse entitled to a basic 
employee death benefit. The enrollment covers members of the family of 
the deceased employee or annuitant. In those instances in which the 
annuity is split among surviving family members, multiple enrollments 
are allowed. A remarried spouse is not a member of the family of the 
deceased employee or annuitant unless annuity under section 8341 or 8442 
of title 5, United States Code, continues after remarriage.
    (d)(1) Survivor annuitants. If an employee who is entitled to health 
benefits coverage as a survivor annuitant elects to enroll or to 
continue to be enrolled under his eligibility as an employee, and is 
thereafter separated without entitlement to continued enrollment based 
on his own service, he is entitled to reinstatement of his employee-
acquired enrollment on application to his retirement office. 
Reinstatement is effective immediately after termination of his 
employee-acquired enrollment if the application is received by the 
retirement office within 60 days of separation; otherwise reinstatement 
is effective on the first day of the first pay period after receipt of 
the application. The retirement office shall withhold from the annuity 
that the former employee receives as a survivor annuitant, the amounts 
necessary to pay his share of the cost of the enrollment.
    (2) Employee becomes a survivor annuitant. (i) If an employee who is 
entitled to health benefits coverage as a survivor annuitant elects to 
enroll or to continue to be enrolled under his or her eligibility as an 
employee, and is thereafter separated without entitlement to continued 
enrollment based on his or her own service, the employee is entitled to 
reinstatement of the enrollment as a survivor annuitant on application 
to the retirement office. Reinstatement as a survivor annuitant is 
effective on the day after the termination date of the employee-acquired 
enrollment if the application is received by the retirement office 
within 60 days of separation; otherwise, reinstatement is effective on 
the first day of the first pay period after receipt of the application. 
The retirement office shall withhold from the annuity that the former 
employee receives as a survivor annuitant the amounts necessary to pay 
the health benefits premium.
    (ii) If the surviving spouse of a deceased employee or annuitant is 
enrolled as an employee with a self and

[[Page 457]]

family enrollment (or, if both the decedent and the surviving spouse 
were enrolled in a self only enrollment) at the time the surviving 
spouse becomes a survivor annuitant and the surviving spouse is 
thereafter separated without entitlement to continued enrollment as a 
retiree, the surviving spouse is entitled to enroll as a survivor 
annuitant. The change from coverage as an employee to coverage as a 
survivor annuitant must be made with 30 days of separation from service.
    (iii) Except for an employee who meets the definition of former 
spouse under 5 U.S.C. 8901(10) based on an individual's deferred annuity 
under 5 U.S.C. 8341(h) or 8445(f), the employee survivor of an annuitant 
receiving deferred retirement benefits is not eligible for FEHB Program 
enrollment as a survivor annuitant and therefore may not enroll as a 
survivor annuitant based on coverage obtained as an employee.
    (3) Insurance interest survivor annuity. A current spouse who is an 
insurable interest beneficiary under Sec. 831.606(b) or Sec. 
842.605(b) of this title is eligible to continue health benefits 
enrollment as an insurable interest survivor annuitant so long as he or 
she was covered as a family member at the time of the annuitant's death. 
This entitlement applies even if the spouse is eligible for continued 
enrollment as a survivor annuitant under another section of 5 CFR parts 
831 or 843. To prevent dual coverage, the spouse must be covered under 
only one health benefits enrollment under this part.
    (e) In nonpay status. (1) Except as otherwise provided by law, the 
enrollment of an employee continues while he/she is in nonpay status for 
up to 365 days. The 365 days' nonpay status may be continuous or broken 
by periods of less than 4 consecutive months in pay status. If an 
employee has at least 4 consecutive months in pay status after a period 
of nonpay status he/she is entitled to begin the 365 days' continuation 
of enrollment anew. For the purposes of this paragraph, 4 consecutive 
months in pay status means any 4-month period during which the employee 
is in pay status for at least part of each pay period.
    (2) However, in the case of an employee who is employed under an OPM 
approved career-related work-study program under Schedule B of at least 
one year's duration and who is expected to be in a pay status during not 
less than one-third of the total period of time from the date of the 
first appointment to the completion of the work-study program, his/her 
enrollment continues while he/she is in nonpay status so long as he/she 
is participating in the work-study program.
    (f) [Reserved]
    (g) Former spouse entitled to coverage as employee or member of 
family. An individual entitled to health benefits as a former spouse who 
also has or becomes entitled to health benefits coverage as a Federal 
employee or as a family member under another enrollment under this part 
may defer or suspend coverage as a former spouse and continue his or her 
coverage as an employee or family member. The former spouse must have 
established entitlement to the health benefits coverage under Sec. 
890.803 of this part and filed all required documents with the employing 
office responsible for maintaining the former spouse enrollment within 
the time limits specified in Sec. 890.805 of this part. The employing 
office shall note in the former spouse's file that the former spouse 
health benefits enrollment is being deferred or suspended until coverage 
as a Federal employee or as a family member ends. Upon loss of coverage 
as a Federal employee or as a family member, the individual is entitled 
to enroll or resume the enrollment as a former spouse, provided he or 
she remains eligible as such. A former spouse who enrolls because he or 
she lost coverage under another enrollment under this part for a reason 
other than cancellation must meet the requirements of Sec. 
890.301(g)(2). A former spouse who enrolls because he or she lost 
coverage under another enrollment under this part as a result of 
cancellation of the covering enrollment must meet the requirements of 
Sec. 890.301(g)(4).
    (h) Temporary continuation of coverage. Certain former employees who 
lose coverage because of a separation from Federal service, certain 
children who lose coverage because they cease to meet the requirements 
for coverage

[[Page 458]]

as children, and certain former spouses who lose coverage because their 
marriage to the enrollee ends and who are not eligible for coverage 
under subpart H of this part may elect temporary continuation of 
coverage under the provisions of subpart K of this part.
    (i) Service in the uniformed services. The enrollment of an 
individual who separates to enter the uniformed services under 
conditions that entitle him or her to benefits under part 353 of this 
chapter, or similar authority, may continue for the 18-month period 
beginning on the date that the absence to serve in the uniformed 
services begins, provided that the individual continues to be entitled 
to benefits under part 353 of this chapter, or similar authority. The 
enrollment of an employee who enters on military furlough or is placed 
in nonpay status to serve in the uniformed services may continue for the 
18-month period beginning on the date that the absence to serve in the 
uniformed service begins, provided that the employee continues to be 
entitled to benefits under part 353 of this chapter, or similar 
authority. An employee in nonpay status is entitled to continued 
coverage under paragraph (e) of this section if the employee's 
entitlement to benefits under part 353 of this chapter, or similar 
authority, ends before the expiration of 365 days in nonpay status. The 
enrollment of an employee who met the requirements of chapter 43 of 
title 38, United States Code, on October 13, 1994, may continue for the 
18-month period beginning on the date that the absence to serve in the 
uniformed services began, provided that the employee continues to be 
entitled to continued coverage under part 353 of this chapter, or 
similar authority. If the enrollment of such an employee had terminated 
due to the expiration of 365 days in nonpay status or because of the 
employee's separation from service, it may be reinstated for the 
remainder of the 18-month period beginning on the date that the absence 
to service in the uniformed service began, provided that the employee 
continues to be entitled to continued coverage under part 353 of this 
chapter, or similar authority.

[33 FR 12510, Sept. 4, 1968, as amended at 47 FR 30962, July 16, 1982; 
52 FR 17388, May 8, 1987; 52 FR 39496, Oct. 22, 1987, and 53 FR 32368, 
Aug. 25, 1988; 53 FR 40716, Oct. 18, 1988; 53 FR 45070, Nov. 8, 1988; 54 
FR 52338, Dec. 21, 1989; 55 FR 1782, Jan. 19, 1990; 55 FR 13502, Apr. 
11, 1990; 55 FR 22891, June 5, 1990; 57 FR 21191, May 19, 1992; 60 FR 
45657, Sept. 1, 1995; 62 FR 38437, July 18, 1997; 63 FR 28891, May, 27, 
1998; 64 FR 31487, June 11, 1999]



Sec. 890.304  Termination of enrollment.

    (a) Employees. (1) An employee's enrollment terminates, subject to 
the temporary extension of coverage for conversion, at midnight of the 
earliest of the following dates:
    (i) The last day of the pay period in which he/she is separated from 
the service other than by retirement under conditions entitling him/her 
to continue his/her enrollment.
    (ii) The last day of the pay period in which he or she separates 
after meeting the requirements for an immediate annuity under Sec. 
842.204(a)(1) of this chapter, but postpones receipt of annuity as 
provided by Sec. 842.204(c).
    (iii) The last day of the pay period in which his employment status 
changes so that he is excluded from enrollment.
    (iv) The last day of the pay period in which he dies, unless he 
leaves a member of the family entitled to continue enrollment as a 
survivor annuitant.
    (v) The last day of the pay period which includes the day on which 
the continuation of enrollment under Sec. 890.303(e) expires, or, if 
he/she is not entitled to any further continuation because he/she has 
not had 4 consecutive months of pay status since exhausting his/her 365 
days' continuation of coverage in nonpay status, the last day of his/her 
last pay period in pay status.
    (vi) The day he or she is separated, furloughed, or placed on leave 
of absence to serve in the uniformed services under conditions entitling 
him or her to benefits under part 353 of this chapter, or similar 
authority, for the purpose of performing duty not limited to 30 days or 
less, provided the employee elects in writing to have the enrollment so 
terminated.
    (vii) For an employee who separates to serve in the uniformed 
services

[[Page 459]]

under conditions entitling him or her to benefits under part 353 of this 
chapter, or similar authority, for the purpose of performing duty not 
limited to 30 days or less, the date that is 18 months after the date 
that the absence to serve in the uniformed services began or the date 
entitlement to benefits under part 353 of this chapter, or similar 
authority, ends, whichever is earlier, unless the enrollment is 
terminated under paragraph (a)(1)(vi) of this section.
    (viii) For an employee who is furloughed or placed on leave of 
absence under conditions entitling him or her to benefits under part 353 
of this chapter, or similar authority, the date that is 18 months after 
the date that the absence to serve in the uniformed services began or 
the date entitlement to benefits under part 353 of this chapter, or 
similar authority, ends, whichever is earlier, but not earlier than the 
date the enrollment would otherwise terminate under paragraph (a)(1)(v) 
of this section.
    (2) If the pay of a temporary employee eligible under 5 U.S.C. 8906a 
is insufficient to pay the withholdings for the plan in which the 
employee is enrolled, and the employee does not, or cannot, elect a plan 
under Sec. 890.301(l) at a cost to him or her not in excess of the pay, 
the employing office must terminate the employee's enrollment effective 
as of the end of the last period for which withholding was made. Each 
temporary employee whose enrollment is so terminated is entitled to a 
31-day extension of coverage for conversion.
    (b) Annuitants. (1) If the annuity of an annuitant is insufficient 
to pay the withholdings for the plan in which the annuitant is enrolled, 
the annuitant may elect one of the two opportunities offered under Sec. 
890.306(q) of this part (electing a plan with a withholding not in 
excess of the annuity; or, paying premiums directly to the retirement 
system in accordance with Sec. 890.502(f) of this part). The retirement 
system will send two notices to the annuitant, including one by 
certified mail return receipt requested. Continuation of coverage rests 
upon electing direct payment or new coverage within 15 days (45 days for 
annuitants residing overseas) after receipt of the final notice. Except 
as provided in paragraph (b)(3) of this section, the enrollment of an 
individual who fails to make an election within the specified time frame 
will be terminated. An annuitant whose enrollment is terminated because 
of failure to make an election may not reenroll or reinstate coverage, 
except as provided in paragraph (b)(2) of this section. Each annuitant 
whose enrollment is so terminated is entitled to a 31-day extension of 
coverage for conversion.
    (2) If the individual was prevented by circumstances beyond his or 
her control from making an election within the time limit after receipt 
of the final notice, he or she may request reinstatement of coverage by 
writing to the retirement system. The retirement system will determine 
if the individual is eligible for reinstatement of coverage; and, when 
the determination is affirmative, the individual's coverage may be 
reinstated retroactively to the date of termination or prospectively. If 
the determination is negative, the individual may request 
reconsideration of the decision from OPM.
    (3) If the annuitant does not make an election under paragraph 
(b)(1) of this section and is enrolled in the high option of a plan that 
has two options, the annuitant is deemed to have elected enrollment in 
the standard option of the same plan unless the annuity is insufficient 
to pay the withholdings for the standard option.
    (4) An annuitant's enrollment terminates, subject to the temporary 
extension of coverage for conversion, at midnight of the last day of the 
pay period in which he dies, unless he leaves a member of the family 
entitled to continue enrollment as a survivor annuitant, or, if his 
enrollment is not terminated by death, at midnight of the earliest of 
the following dates:
    (i) The last day of the last pay period for which he is entitled to 
annuity, unless he is eligible for continued enrollment as an employee 
in which case his enrollment continues without change.
    (ii) The last day of the pay period in which his title to 
compensation under subchapter I of chapter 81 of title 5, United States 
Code, terminates, or in which he is held by the Secretary of

[[Page 460]]

Labor to be able to return to duty, unless he is eligible for continued 
enrollment as an employee or as an annuitant under a retirement system 
for civilian employees in which case his enrollment continues without 
change.
    (iii) The day he enters on active duty in a uniformed service for 
the purpose of performing duty not limited to 30 days or less, provided 
the annuitant elects, in writing, to terminate the enrollment.
    (iv) The last day of the month preceding the month in which a 
survivor annuitant in receipt of basic employee death benefits under 5 
U.S.C. 8442(b)(1)(A) remarries before attaining age 55.
    (c) Coverage of family members. The coverage of a family member of 
an enrollee terminates, subject to the temporary extension of coverage 
for conversion, at midnight of the earlier of the following dates:
    (1) The day on which he or she ceases to be a family member;
    (2) The day the enrollee ceases to be enrolled, unless the family 
member is entitled, as a survivor annuitant, to continued enrollment, or 
is entitled to continued coverage under the enrollment of another.
    (d) Cancellation or suspension. (1)(i) An employee who participates 
in health insurance premium conversion as provided in part 892 of this 
chapter may cancel his or her enrollment only during an open season or 
because of and consistent with a qualifying life event defined in Sec. 
892.101 of this chapter.
    (ii) Subject to the provisions of paragraph (d)(iii) of this 
section, an enrollee who does not participate in premium conversion may 
cancel his or her enrollment at any time by filing an appropriate 
request with the employing office. The cancellation is effective at the 
end of the last day of the pay period in which the employing office 
receives the appropriate request canceling the enrollment.
    (iii) An employee who is subject to a court or administrative order 
as discussed in Sec. 890.301(g)(3), or an annuitant who was subject to 
such a court or administrative order at the time of his or her 
retirement, may not cancel or suspend his or her enrollment as long as 
the court or administrative order is still in effect and the enrollee 
has at least one child identified in the order who is still eligible 
under the FEHB Program, unless the employee or annuitant provides 
documentation to the agency that he or she has other coverage for the 
child or children.
    (2) An annuitant or survivor annuitant may suspend enrollment in 
FEHB for the purpose of enrolling in a Medicare-sponsored plan under 
sections 1833, 1876, or 1851 of the Social Security Act, or to enroll in 
the Medicaid program or a similar State-sponsored program of medical 
assistance for the needy, or to use Peace Corps or CHAMPVA or TRICARE 
(including coverage provided by the Uniformed Services Family Health 
Plan) or TRICARE-for-Life instead of FEHB coverage. To suspend FEHB 
coverage, documentation of eligibility for coverage under the non-FEHB 
program must be submitted to the retirement system. If the documentation 
is received within the period beginning 31 days before and ending 31 
days after the effective date of the enrollment in the Medicare-
sponsored plan, or the Medicaid or similar program, or within 31 days 
before or after the day designated by the annuitant or survivor 
annuitant as the day he or she wants to suspend FEHB coverage to use 
Peace Corps or CHAMPVA or TRICARE (including the Uniformed Services 
Family Health Plan) or TRICARE-for-Life instead of FEHB coverage, then 
suspension will be effective at the end of the day before the effective 
date of the enrollment or the end of the day before the day designated. 
Otherwise, the suspension is effective the first day of the first pay 
period that begins after the date the retirement system receives the 
documentation.
    (3) The enrollee and covered family members are not entitled to the 
temporary extension of coverage for conversion or to convert to an 
individual contract for health benefits.
    (e) Temporary continuation of coverage. Employees and family members 
are entitled to temporary continuation of

[[Page 461]]

coverage only as provided under subpart K of this part.

[33 FR 12510, Sept. 4, 1968, as amended at 47 FR 30962, July 16, 1982; 
52 FR 39496, Oct. 22, 1987, and 53 FR 32368, Aug. 25, 1988; 53 FR 32369, 
Aug. 25, 1988; 54 FR 52338, Dec. 21, 1989; 55 FR 996, Jan. 11, 1990; 55 
FR 3564, Feb. 2, 1990; 55 FR 22891, June 5, 1990; 56 FR 25996, June 6, 
1991; 57 FR 48162, Oct. 22, 1992; 58 FR 47825, Sept. 13, 1993; 60 FR 
45658, Sept. 1, 1995; 62 FR 38437, July 18, 1997; 62 FR 49557, Sept. 22, 
1997; 64 FR 31487, June 11, 1999; 65 FR 44646, July 19, 2000; 66 FR 
49086, Sept. 26, 2001; 67 FR 41306, June 18, 2002; 68 FR 56524, Oct. 1, 
2003; 69 FR 56928, Sept. 23, 2004; 70 FR 71749, Nov. 30, 2005]



Sec. 890.305  Reinstatement of enrollment after military service.

    (a) The enrollment of an employee or annuitant whose enrollment was 
terminated under Sec. 890.304(a)(1)(vi), (vii), or (viii) or Sec. 
890.304(b)(4)(iii) is automatically reinstated on the day the employee 
is restored to a civilian position under the provisions of part 353 of 
this chapter, or similar authority, or on the day the annuitant is 
separated from the uniformed services, as the case may be.
    (b) An employee whose employing office terminates his or her 
enrollment because his or her order to enter on duty in a uniformed 
service is for a period longer than 30 days, and who retires on an 
immediate annuity from his or her Federal civilian position while on 
such duty, may reinstate his or her enrollment by asking to do so within 
60 days after retirement. In the absence of such a request, the 
retirement system automatically reinstates the enrollment on the day the 
person separates from the uniformed service. For the retirement system 
to reinstate the enrollment, the individual must have been covered under 
this part since his or her first opportunity or for the 5 years of 
civilian service (excluding the period of uniformed service) immediately 
preceding the civilian retirement, whichever is shorter.

[43 FR 52460, Nov. 13, 1978, as amended at 59 FR 60296, Nov. 23, 1994; 
60 FR 45658, Sept. 1, 1995; 64 FR 31488, June 11, 1999]



Sec. 890.306  When can annuitants or survivor annuitants change 
enrollment or reenroll and what are the effective dates?

    (a) Requirements to continue coverage. (1) To be eligible to 
continue coverage in a plan under this part, a former employee in 
receipt of an annuity must meet the statutory requirements under 5 
U.S.C. 8905(b) of having retired on an immediate annuity and having been 
covered by a plan under this part for the 5 years of service immediately 
before retirement, or if less than 5 years, for all service since his or 
her first opportunity to enroll, unless OPM waives the requirement under 
Sec. 890.108.
    (2) To be eligible to continue coverage in a plan under this part, a 
survivor annuitant must be covered as a family member when the employee 
or annuitant dies.
    (b) Effective date--generally. Except as otherwise provided, an 
annuitant's change of enrollment takes effect on the first day of the 
first pay period that begins after the date the employing office 
receives an appropriate request to change the enrollment.
    (c) Belated enrollment. When an employing office determines that an 
annuitant was unable, for cause beyond his or her control, to continue 
coverage by enrolling in his or her own name or change the enrollment 
within the time limits prescribed by this section, the annuitant may do 
so within 60 days after the employing office advises the annuitant of 
its determination.
    (d) Enrollment by proxy. Subject to the discretion of the employing 
office, an annuitant's representative, having written authorization to 
do so, may continue the annuitant's coverage by enrolling in the 
annuitant's own name, or change the enrollment for the annuitant.
    (e) Enrollment change to self only. (1) With one exception, an 
annuitant may change the enrollment from self and family to self only at 
any time. Exception: An annuitant who, as an employee, was subject to a 
court or administrative order as discussed in Sec. 890.301(g)(3) at the 
time he or she retired may not change to self only after retirement as 
long as the court or administrative order is still in effect and the 
annuitant has at least one child

[[Page 462]]

identified in the order who is still eligible under the FEHB Program, 
unless the annuitant provides documentation to the retirement system 
that he or she has other coverage for the child or children.
    (2) A change of enrollment to self only takes effect on the first 
day of the first pay period that begins after the date the employing 
office receives an appropriate request to change the enrollment, except 
that at the request of the annuitant and upon a showing satisfactory to 
the employing office that there was no family member eligible for 
coverage under the family enrollment, the employing office may make the 
change effective on the first day of the pay period following the one in 
which there was no family member.
    (f) Open season. (1) During an open season as provided by Sec. 
890.301(f)--
    (i) With one exception, an enrolled annuitant may change the 
enrollment from self only to self and family, may change from one plan 
or option to another, or may make any combination of these changes. 
Exception: An annuitant who, as an employee, was subject to a court or 
administrative order as discussed in Sec. 890.301(g)(3) at the time he 
or she retired may not cancel or suspend his or her enrollment, change 
to self only, or change to a comprehensive medical plan that does not 
serve the area where his or her children live after retirement as long 
as the court or administrative order is still in effect and the 
annuitant has at least one child identified in the order who is still 
eligible under the FEHB Program, unless the annuitant provides 
documentation to the retirement system that he or she has other coverage 
for the child or children.
    (ii) An annuitant or survivor annuitant who suspended enrollment 
under this part to enroll in a Medicare-sponsored plan under sections 
1833, 1876, or 1851 of the Social Security Act, or to enroll in a 
Medicaid or similar State-sponsored program of medical assistance for 
the needy, or to use Peace Corps or CHAMPVA or TRICARE (including the 
Uniformed Services Family Health Plan) or TRICARE-for-Life coverage 
instead of FEHB coverage, may reenroll.
    (2) An open season reenrollment or change of enrollment takes effect 
on the first day of the first pay period that begins in January of the 
next following year.
    (3) When a belated open season reenrollment or change of enrollment 
is accepted by the employing office under paragraph (c) of this section, 
it takes effect as required by paragraph (f)(2) of this section.
    (g) Change in family status. (1) An enrolled former employee in 
receipt of an annuity may change the enrollment from self only to self 
and family, from one plan or option to another, or make any combination 
of these changes when the annuitant's family status changes, including a 
change in martial status or any other change in family status. In the 
case of an enrolled survivor annuitant, a change in family status based 
on additional family members occurs only if the additional family 
members are family members of the deceased employee or annuitant. The 
annuitant must change the enrollment within the period beginning 31 days 
before the date of the change in family status, and ending 60 days after 
the date of the change in family status.
    (2) A change of enrollment made in conjunction with the birth of a 
child, or the addition of a child as a new family member in some other 
manner, takes effect on the first day of the pay period in which the 
child is born or becomes an eligible family member.
    (h) Reenrollment of annuitants or survivor annuitants who suspended 
enrollment to enroll in a Medicare-sponsored plan, or a Medicaid or 
similar State-sponsored program; or to use Peace Corps or CHAMPVA or 
TRICARE (including the Uniformed Services Family Health Plan) or 
TRICARE-for-Life coverage instead of FEHB coverage.
    (1) An annuitant or survivor annuitant who had been enrolled (or was 
eligible to enroll) for coverage under this part and suspended the 
enrollment for the purpose of enrolling in a Medicare sponsored plan 
under sections 1833, 1876, or 1851 of the Social Security Act, or to 
enroll in the Medicaid program or a similar State-sponsored program of 
medical assistance for the needy, or to use Peace Corps or CHAMPVA or 
TRICARE (including the Uniformed

[[Page 463]]

Services Family Health Plan) or TRICARE-for-Life coverage instead of the 
FEHB Program (as provided by Sec. 890.304(d)), and who subsequently 
involuntarily loses coverage under one of these programs, may 
immediately reenroll in any available FEHB plan under this part at any 
time beginning 31 days before and ending 60 days after the loss of 
coverage. A reenrollment under this paragraph (h) of this section takes 
effect on the date following the effective date of the loss of coverage 
as shown on the documentation from the non-FEHB coverage. If the request 
to reenroll is not received by the retirement system within the time 
period specified, the annuitant must wait until the next available Open 
Season to reenroll.
    (2) An annuitant or survivor annuitant who suspended enrollment in 
the FEHB Program to enroll in a Medicare sponsored plan or the Medicaid 
or similar State-sponsored program of medical assistance for the needy, 
or to use Peace Corps or CHAMPVA or TRICARE (including the Uniformed 
Services Family Health Plan) or TRICARE-for-Life, but now wants to 
reenroll in the FEHB Program for any reason other than an involuntary 
loss of coverage, may do so during the next available Open Season (as 
provided by paragraph (f) of this section).
    (i) [Reserved]
    (j) Annuitants who apply for postponed minimum retirement age plus 
10 years of service (MRA plus 10) annuity. (1) A former employee who 
meets the requirements for an immediate annuity under 5 U.S.C. 8412(g) 
and for continuation of coverage under 5 U.S.C. 8905(b) at the time of 
separation, and whose enrollment is terminated under Sec. 
890.304(a)(1)(ii) may enroll in a health benefits plan under this part 
within 60 days after OPM mails the former employee a notice of 
eligibility. If such former employee dies before the end of this 60-day 
election period, a survivor who is entitled to a survivor annuity may 
enroll in a health benefits plan under this part within 60 days after 
OPM mails the survivor a notice of eligibility.
    (2) The former employee's enrollment takes effect on the first day 
of the month following the month in which OPM receives the appropriate 
request or on the commencing date of annuity, whichever is later. A 
survivor's enrollment takes effect on the first day of the month 
following the month in which OPM receives the appropriate request.
    (k) Restoration of annuity or compensation payments. (1) A 
disability annuitant who was enrolled in a health benefits plan under 
this part immediately before his or her disability annuity was 
terminated because of restoration to earning capacity or recovery from 
disability, and whose disability annuity is restored under 5 U.S.C. 
8337(e) after December 31, 1983, or 8455(b), may enroll in a health 
benefits plan under this part within 60 days after OPM mails a notice of 
insurance eligibility. The enrollment takes effect on the first day of 
the month after the date OPM receives the appropriate request.
    (2) An annuitant who was enrolled in a health benefits plan under 
this part immediately before his or her compensation was terminated 
because OWCP determined that he or she had recovered from the job-
related injury or disease, and whose compensation is restored due to a 
recurrence of disability, may enroll in a health benefits plan under 
this part within 60 days after OWCP mails a notice of insurance 
eligibility. The enrollment takes effect on the first day of the pay 
period after the date OWCP receives the appropriate request.
    (3) A surviving spouse who was covered by a health benefits 
enrollment under this part immediately before his or her survivor 
annuity was terminated because of remarriage, and whose survivor annuity 
is later restored, may enroll in a health benefits plan under this part 
within 60 days after OPM mails a notice of eligibility. The enrollment 
takes effect on either--
    (i) The first day of the month after the date OPM receives the 
appropriate request; or
    (ii) The date of restoration of the survivor annuity or October 1, 
1976, whichever is later.
    (4) A surviving child who was covered by a health benefits 
enrollment under this part immediately before his or her survivor 
annuity was terminated because he or she ceased being a student,

[[Page 464]]

and whose survivor annuity is later restored, may enroll in a health 
benefits plan under this part within 60 days after OPM mails a notice of 
eligibility. The enrollment takes effect on the first day of the month 
after the date OPM receives the appropriate request or the date of 
restoration of the survivor annuity, whichever is later.
    (5) A surviving child who was covered by a health benefits 
enrollment under this part immediately before his or her survivor 
annuity was terminated because he or she married, and whose survivor 
annuity is later restored because the marriage ended, may enroll in a 
health benefits plan under this part within 60 days after OPM mails a 
notice of eligibility. The enrollment takes effect on the first day of 
the month after the date OPM receives the appropriate request or the 
date of restoration of the survivor annuity, whichever is later.
    (6) A surviving spouse who received a basic employee death benefit 
under 5 U.S.C. 8442(b)(1)(A) and who was covered by a health benefits 
enrollment under this part immediately before remarriage prior to age 
55, may enroll in a health benefits plan under this part upon 
termination of the remarriage. The survivor must provide OPM with a 
certified copy of the notice of death or the court order terminating the 
marriage. The surviving spouse must enroll within 60 days after OPM 
mails a notice of eligibility. The enrollment takes effect on the first 
day of the month after the date OPM receives the appropriate request and 
the notice of death or court order terminating the remarriage.
    (l) Loss of coverage under this part or under another group 
insurance plan. An annuitant who meets the requirements of paragraph (a) 
of this section, and who is not enrolled but is covered by another 
enrollment under this part may continue coverage by enrolling in his or 
her own name when the annuitant loses coverage under the other 
enrollment under this part. An enrolled annuitant may change the 
enrollment from self only to self and family, from one plan or option to 
another, or make any combination of these changes when the annuitant or 
an eligible family member of the annuitant loses coverage under this 
part or under another group health benefits plan. Except as otherwise 
provided, an annuitant must enroll or change the enrollment within the 
period beginning 31 days before the date of loss of coverage and ending 
60 days after the date of loss of coverage. Losses of coverage include, 
but are not limited to--
    (1) Loss of coverage under another FEHB enrollment due to the 
termination, cancellation, or a change to self only, of the covering 
enrollment;
    (2) Loss of coverage under another federally-sponsored health 
benefits program;
    (3) Loss of coverage due to the termination of membership in an 
employee organization sponsoring or underwriting an FEHB plan;
    (4) Loss of coverage due to the discontinuance of an FEHB plan in 
whole or in part. For an annuitant who loses coverage under this 
paragraph (l)(4)--
    (i) If the discontinuance is at the end of a contract year, the 
annuitant must change the enrollment during the open season, unless OPM 
establishes a different time. If the discontinuance is at a time other 
than the end of the contract year, OPM must establish a time and 
effective date for the annuitant to change the enrollment;
    (ii) If a plan discontinues all of its existing options, an 
annuitant who does not change his or her enrollment is deemed to have 
enrolled in the option of the Blue Cross and Blue Shield Service Benefit 
Plan that OPM determines most closely approximates the terminated plan, 
except when the annuity is insufficient to pay the withholdings, then 
paragraph (q) of this section applies.
    (iii) If a plan has two options, and one option of the plan is 
discontinued, an annuitant who does not change the enrollment is 
considered to be enrolled in the remaining option of the plan, except 
when the annuity is insufficient to pay the withholdings, then paragraph 
(q) of this section applies.
    (iv) After an involuntary enrollment under paragraph (l)(4)(ii) or 
(iii) of this section becomes effective, the annuitant may change the 
enrollment to the other option of the Blue Cross and Blue Shield Service 
Benefit Plan or to another health plan of his or her choice

[[Page 465]]

retroactively within 90-days after OPM advises the annuitant of the new 
enrollment;
    (5) Loss of coverage under the Medicaid program or similar State-
sponsored program of medical assistance for the needy.
    (6) Loss of coverage under a non-Federal health plan.
    (m) Move from comprehensive medical plan's area. An annuitant in a 
comprehensive medical plan who moves or becomes employed outside the 
geographic area from which the plan accepts enrollments, or, if already 
outside this area, moves or becomes employed further from this area, may 
change the enrollment upon notifying the employing office of the move or 
change of place of employment. Similarly, an annuitant whose covered 
family member moves outside the geographic area from which the plan 
accepts enrollments, or if already outside this area, moves further from 
this area, may change the enrollment upon notifying the employing office 
of the family member's move. The change of enrollment takes effect on 
the first day of the pay period that begins after the employing office 
receives an appropriate request.
    (n) Overseas post of duty. An annuitant may change the enrollment 
from self only to self and family, from one plan or option to another, 
or make any combination of these changes within 60 days after the 
retirement or death of the employee on whose service title to annuity is 
based, if the employee was stationed at a post of duty outside a State 
of the United States or the District of Columbia at the time of 
retirement or death.
    (o) On return from a uniformed service. An enrolled annuitant who 
enters on duty in a uniformed service for 31 days or more may change the 
enrollment within 60 days after separation from the uniformed service.
    (p) On becoming eligible for Medicare. An annuitant may change the 
enrollment from one plan or option to another at any time beginning on 
the 30th day before becoming eligible for coverage under title XVIII of 
the Social Security Act (Medicare). A change of enrollment based on 
becoming eligible for Medicare may be made only once.
    (q) Annuity insufficient to pay withholdings. (1) If an annuity is 
insufficient to pay the withholdings for the plan that the annuitant is 
enrolled in, the retirement system must provide the annuitant with 
information regarding the available plans and written notification of 
the opportunity to either--
    (i) Pay the premium directly to the retirement system in accordance 
with Sec. 890.502(d); or
    (ii) Enroll in any plan in which the annuitant's share of the 
premium is less than the amount of annuity. If the annuitant elects to 
change to a lower cost enrollment, the change takes effect immediately 
upon loss of coverage under the prior enrollment. The exemptions from 
debt collection procedures that are provided under Sec. 831.1305(d)(2) 
and Sec. 845.205(d)(2) of this chapter apply to elections under this 
paragraph (q)(1)(ii).
    (2) If the annuitant is enrolled in the high option of a plan that 
has two options, and does not change the enrollment to a plan in which 
the annuitant's share of the premium is less than the amount of annuity 
or does not elect to pay premiums directly, the annuitant is deemed to 
have enrolled in the standard option of the same plan, unless the 
annuity is insufficient to pay the withholdings for the standard option.
    (3) An annuitant whose enrollment was terminated because the amount 
of annuity was insufficient to cover the enrollee's share of the premium 
may apply to be reinstated in any available plan or option.
    (4) An annuitant who can show evidence that he or she previously 
changed to a lower cost option, plan, or to a self-only enrollment prior 
to May 29, 1990, because the annuity was insufficient to cover the 
withholdings for the plan in which he or she was enrolled, may apply to 
change the enrollment to any available plan or option in which the 
enrollee's share of the total premium exceeds his or her monthly 
annuity.

[[Page 466]]

    (5) The effective date of the reinstatement of enrollment of an 
annuitant whose enrollment was terminated, or the change of enrollment 
of an annuitant who previously changed enrollment because his or her 
annuity was insufficient to cover the annuitant's share of the total 
premium, and who elects to pay premiums directly to the retirement 
system in accordance with Sec. 890.502(f) is either--
    (i) The first day of the first pay period that begins after the 
appropriate request is received by the retirement system; or,
    (ii) The later of the date the enrollment was terminated or changed, 
or May 29, 1990.
    (6) Retroactive reinstatement or change of enrollment is contingent 
upon payment of appropriate contributions retroactive to the effective 
date of the reinstatement or the change of enrollment. For the purpose 
of this paragraph (q)(6), a previous cancellation of enrollment because 
of insufficient annuity to cover the full amount of the withholdings is 
deemed to be a termination of enrollment.
    (r) Sole survivor. When an employee or annuitant enrolled for self 
and family dies, leaving a survivor annuitant who is entitled to 
continue the enrollment, and it is apparent from available records that 
the survivor annuitant is the sole survivor entitled to continue the 
enrollment, the office of the retirement system which is acting as 
employing office must change the enrollment from self and family to self 
only, effective on the commencing date of the survivor annuity. On 
request of the survivor annuitant made within 31 days after the first 
installment of annuity is paid, the office of the retirement system 
which is acting as employing office must rescind the action retroactive 
to the effective date of the change to self only, with corresponding 
adjustment in withholdings and contributions.
    (s) Election between survivor annuities. A surviving spouse, 
irrespective of whether his or her survivor annuity continued or was 
terminated upon remarriage, who was covered by an enrollment under this 
part immediately before the remarriage, may elect to continue an 
enrollment under this part acquired as a dependent by virtue of the 
remarriage or to enroll in his or her own right (by virtue of 
entitlement to the original survivor annuity) in any plan or option 
under this part within 60 days after the termination of the remarriage 
and entitlement to a survivor annuity.

[62 FR 38437, July 18, 1997, as amended at 66 FR 49086, Sept. 26, 2001; 
67 FR 41306, June 18, 2002; 68 FR 56525, Oct. 1, 2003; 69 FR 31722, June 
7, 2004; 69 FR 56928, Sept. 23, 2004; 70 FR 33798, June 10, 2005; 70 FR 
71749, Nov. 30, 2005]



Sec. 890.307  Waiver or suspension of annuity or compensation.

    (a) Except as provided in paragraphs (b) and (f) of this section, 
when annuity or compensation is entirely waived or suspended, the 
annuitant's enrollment continues for not more than 3 months (not more 
than 12 weeks for annuitants whose compensation under subchapter I of 
chapter 81 of title 5, United States Code, is paid each 4 weeks). If the 
waiver or suspension continues beyond this period, the employing office 
will notify the annuitant in writing that the employing office will 
terminate the enrollment effective at the end of the period, subject to 
the temporary extension of coverage for conversion, unless the annuitant 
elects to make payment of the premium directly to the employing office 
during the period of waiver. If the annuitant elects to have the 
enrollment terminated, the employing office automatically reinstates the 
enrollment on a prospective basis when the annuitant again receives 
payment of annuity or compensation. The employing office will make the 
withholding for the period of waiver or suspension during which 
enrollment was continued (i.e., 3 months or less).
    (b) If the annuitant elects to pay premiums directly, he or she must 
send to the employing office his or her share of the subscription charge 
for the enrollment for every pay period during which the enrollment 
continues, exclusive of the 31-day temporary extension of coverage for 
conversion provided in Sec. 890.401. The annuitant must pay after each 
pay period he or she is covered in accordance with a schedule 
established by the employing office. If the employing office does not 
receive payment by the date due, the employing office

[[Page 467]]

must notify the annuitant in writing that continuation of coverage 
depends upon payment being made within 15 days (45 days for annuitants 
residing overseas) after receipt of the notice. If no further payments 
are made, the employing office terminates the enrollment 60 days after 
the date of the notice (90 days for annuitants residing overseas). The 
employing office automatically reinstates enrollment on a prospective 
basis when payment of annuity or compensation resumes.
    (c) If the annuitant is prevented by circumstances beyond his or her 
control from paying within 15 days after receipt of the notice, he or 
she may request reinstatement of coverage by writing to the employing 
office. The annuitant must file the request within 30 calendar days from 
the date of termination, and must include supporting documentation. The 
employing office will determine if the annuitant is eligible for 
reinstatement of coverage; and, when the determination is affirmative, 
reinstate the coverage of the annuitant retroactive to the date of 
termination. If the determination is negative, the annuitant may request 
a review of the decision as provided in Sec. 890.104.
    (d) Termination of enrollment for failure to pay premiums within the 
time frame established in accordance with paragraph (b) of this section 
is retroactive to the end of the last pay period for which the employing 
office timely received payment.
    (e) The employing office will submit all direct premium payments 
along with its regular health benefits premiums to OPM in accordance 
with procedures established by OPM.
    (f) If suspension of annuity or compensation is because of 
reemployment, the reemploying office must make the withholding currently 
and enrollment continues during reemployment.

[59 FR 60296, Nov. 23, 1994, as amended at 59 FR 67607, Dec. 30, 1994]



Sec. 890.308  Disenrollment.

    (a)(1) Except as otherwise provided in this section, a carrier that 
cannot reconcile its record of an individual's enrollment with agency 
enrollment records or does not receive documentation necessary to 
resolve the discrepancy from the employing office within 31 days of a 
request must provide written notice to the individual that the employing 
office of record does not show him or her as enrolled in the carrier's 
plan and that he or she will be disenrolled 31 calendar days after the 
date of the notice unless the enrollee provides appropriate 
documentation to resolve the discrepancy. Appropriate documentation 
includes, but is not limited to, a copy of the Standard Form 2809 (basic 
enrollment document) (or a letter confirming an electronic transaction), 
the Standard Form 2810 transferring the enrollment into the gaining 
employing office (or the equivalent electronic submission), copies of 
earnings and leave statements or annuity statements showing withholdings 
for the health benefits plan, or a document or other credible 
information from the enrollee's employing office stating that the 
individual is entitled to continued enrollment in the plan and that the 
premiums are being paid. After receiving documentation from the 
enrollee, the carrier must notify both the enrollee and the employing 
office of record of their decision on the information.
    (2) If the carrier does not receive documentation required under 
paragraph (a)(1) of this section within the specified time frame, the 
carrier should disenroll the individual, without further notice.
    (3) The enrollee may request his or her employing office to 
reconsider the carrier's decision to disenroll the individual. The 
request for reconsideration must be made in writing and must include the 
enrollee's name, address, Social Security Number or other personal 
identification number, name of carrier, reason(s) for the request, and, 
if applicable, retirement claim number. The employing office must notify 
the carrier when a request for reconsideration of the decision to 
disenroll the individual is made.
    (4) A request for reconsideration of the carrier's decision must be 
filed within 60 calendar days after the date of the carrier's 
disenrollment notice. The time limit on filing may be extended when the 
individual shows that he or she was not notified of the time limit and 
was not otherwise aware of it, or that he or she was prevented by

[[Page 468]]

circumstances beyond his or her control from making the request within 
the time limit.
    (5) After reconsideration, the employing office must issue a written 
notice of its final decision to the individual and notify the carrier of 
the decision. The notice must fully set forth the findings and 
conclusions on which the decision was based. If upon reconsideration the 
employing office determines the individual is entitled to continued 
enrollment in the plan, the disenrollment under paragraph (a)(2) of this 
section is void and coverage is reinstated retroactively.
    (6) If, at any time after the disenrollment has occurred, the 
employing office or OPM determines that another section of this part 
applies to the individual's enrollment or the carrier discovers or 
receives appropriate documentation showing that another section of this 
part applies to the individual's enrollment, the disenrollment under 
paragraph (a)(2) of this section is void and coverage is reinstated 
retroactively.
    (b) When a carrier receives, from any reliable source, information 
of the death of an enrollee with a self only enrollment, the carrier may 
take action to disenroll the individual on the date set forth in Sec. 
890.304(a)(1)(iv) or Sec. 890.304(b)(4), as appropriate. When the date 
of death is unknown, the carrier may take action to disenroll the 
individual on the date which is the last day of the pay period in which 
information of the death is received. Reliable sources include, but are 
not limited to, claims for hospital or physician costs incurred at time 
of death and correspondence returned from the Postal Service noting that 
the addressee is deceased. If, at any time after the disenrollment has 
occurred, the employing office or OPM determines that another section of 
this part applies to the individual's enrollment or the carrier 
discovers or receives appropriate documentation showing that another 
section of this part applies to the individual's enrollment, the 
disenrollment under this paragraph (b) is void and coverage is 
reinstated retroactively.
    (c)(1) When a child survivor annuitant covered under a self only 
enrollment reaches age 22, the carrier may take action to disenroll the 
individual effective with the date set forth in Sec. 890.304(c)(1) 
unless records with the carrier indicate that the child is incapable of 
self support due to a physical or mental disability. The carrier must 
provide the enrollee with a written notice of disenrollment prescribed 
or approved by OPM prior to the date set forth in Sec. 890.304(c)(1).
    (2) The child survivor annuitant may request the retirement system 
to reconsider the carrier's decision to disenroll the individual. The 
request for reconsideration must be made in writing and include the 
enrollee's name, address, Social Security Number or other identifier, 
name of carrier, reason(s) for the request, and the survivor annuity 
claim number. The retirement system must notify the carrier when a 
request for reconsideration of the carrier's decision to disenroll the 
individual is made.
    (3) A request for reconsideration of the carrier's decision must be 
filed with the retirement system within 60 calendar days from the date 
of the carrier's disenrollment notice. The time limit on filing may be 
extended when the individual shows that he or she was not notified of 
the time limit and was not otherwise aware of it, or that he or she was 
prevented by circumstances beyond his or her control from making the 
request within the time limit.
    (4) After reconsideration, the retirement system must issue a 
written notice of its final decision to the child survivor annuitant and 
notify the carrier of the decision. The notice must fully set forth the 
findings and conclusions on which the decision was based. If upon 
reconsideration the retirement system determines that he or she is 
entitled to continued enrollment in the plan, the disenrollment under 
paragraph (c)(1) of this section is void and coverage is reinstated 
retroactively.
    (5) If, at any time after the disenrollment has occurred, the 
employing office or OPM determines that another provision of this part 
applies to the individual's enrollment or the carrier discovers or 
receives appropriate documentation showing that another section of this 
part applies to the individual's enrollment, the disenrollment under 
paragraph (c)(1) of

[[Page 469]]

this section is void and coverage is reinstated retroactively.
    (d) When an enrollee notifies the carrier that he or she has 
separated from Federal employment and is no longer eligible for 
enrollment, the carrier must disenroll the individual on the last day of 
the pay period in which the separation occurred, if known, otherwise the 
carrier must disenroll the employee on the date the employee provides as 
the date of separation. The carrier must provide the enrollee with a 
written notice of disenrollment prescribed or approved by OPM.

[63 FR 59459, Nov. 4, 1998]



        Subpart D_Temporary Extension of Coverage and Conversion



Sec. 890.401  Temporary extension of coverage and conversion.

    (a) Thirty-one day extension and conversion. (1) An enrollee whose 
enrollment is terminated other than by cancellation of the enrollment or 
discontinuance of the plan, in whole or part, and a covered family 
member whose coverage is terminated other than by cancellation of the 
enrollment or discontinuance of the plan, in whole or in part, is 
entitled to a 31-day extension of coverage for self alone or self and 
family, as the case may be, without contributions by the enrollee or the 
Government, during which period he or she is entitled to exercise the 
right of conversion provided for by this part. The 31-day extension of 
coverage and the right of conversion for any person ends on the 
effective date of a new enrollment under this part covering the person.
    (2) Termination of an enrollment under this subpart for failure to 
pay premiums is considered a cancellation of the enrollment for the 
purposes of this section.
    (b) Continuation of benefits. (1) Any person who has been granted a 
31-day extension of coverage in accordance with paragraph (a) of this 
section and who is confined in a hospital or other institution for care 
or treatment on the 31st day of the temporary extension is entitled to 
continuation of the benefits of the plan during the continuance of the 
confinement but not beyond the 60th day after the end of the temporary 
extension.
    (2) Except when a plan is discontinued in whole or in part or the 
Associate Director for Retirement and Insurance orders an enrollment 
change, a person whose enrollment has been changed from one plan to 
another, or from one option of a plan to the other option of that plan, 
and who is confined to a hospital or other institution for care or 
treatment on the last day of enrollment under the prior plan or option, 
is entitled to continuation of the benefits of the prior plan or option 
during the continuance of the confinement. Continuation of benefits 
shall not extend beyond the 91st day after the last day of enrollment in 
the prior plan or option. The plan or option to which enrollment has 
been changed shall not pay benefits with respect to that person while he 
or she is entitled to any inpatient benefits under the prior plan or 
option. The gaining plan or option shall begin coverage according to the 
limits of its FEHB Program contract on the day after the day all 
inpatient benefits have been exhausted under the prior plan or option or 
the 92nd day after the last day of enrollment in the prior plan or 
option, whichever is earlier. For the purposes of this paragraph, 
``exhausted'' means paid or provided to the maximum benefit available 
under the contract.
    (3) Exception. The limit on the number of confinement days allowed 
to be covered under the continuation of benefits specified by paragraph 
(b)(2) of this subpart does not apply to confinements in a hospital or 
other institution when the charges and benefit payments for the services 
provided are covered by the limit specified in subpart I of this part. 
In these cases, the benefits continue until the end of the confinement.
    (c)(1) The employing agency must notify the enrollee of the 
termination of the enrollment and of the right to convert to an 
individual policy within 60 days after the date the enrollment 
terminates.
    (2) The individual whose enrollment terminates must request 
conversion information from the losing carrier within 31 days of the 
date of the agency notice of the termination of the enrollment and of 
the right to convert.

[[Page 470]]

    (3) When an agency fails to provide the notification required in 
paragraph (c)(1) of this section within 60 days of the date the 
enrollment terminates, or the individual fails for other reasons beyond 
his or her control to request conversion as required in paragraph (c)(2) 
of this section, he or she may request conversion to an individual 
policy by writing directly to the carrier. Such a request must be filed 
within 6 months after the individual became eligible to convert his or 
her group coverage and must be accompanied by verification of 
termination of the enrollment; e.g., an SF 50, showing the individual's 
separation from the service. In addition, the individual must show that 
he or she was not notified of the termination of the enrollment and of 
the right to convert, and was not otherwise aware of it, or that he or 
she was unable, for cause beyond his or her control, to convert. The 
carrier will determine if the individual is eligible to convert; and 
when the determination is affirmative, the individual may convert within 
31 days of the determination. If the determination by the carrier is 
negative, the individual may request a review of the carrier's 
determination from OPM.
    (4) When an individual converts his or her coverage anytime after 
the group coverage has ended, the individual plan coverage is 
retroactive to the day following the day the temporary extension of 
group coverage ended. The individual must pay the premiums due for the 
retroactive period.
    (5) An individual who fails to exercise his or her rights to convert 
to an individual policy within 31 days after receiving notice of the 
right to convert from the carrier is deemed to have declined the right 
to convert unless the carrier, or, upon review, OPM determines the 
failure was for cause beyond his or her control.

[33 FR 12510, Sept. 4, 1968, as amended at 52 FR 10217, Mar. 31, 1987; 
54 FR 52339, Dec. 21, 1989; 55 FR 22891, June 5, 1990; 57 FR 10609, Mar. 
27, 1992; 57 FR 21191, May 19, 1992]



                Subpart E_Contributions and Withholdings



Sec. 890.501  Government contributions.

    (a) The Government contribution toward subscription charges under 
all health benefits plans, for each enrolled employee who is paid 
biweekly, is the amount provided in section 8906 of title 5, United 
States Code, plus 4 percent of that amount.
    (b) In accordance with the provisions of 5 U.S.C. 8906(a) which take 
effect with the contract year that begins in January 1999, OPM will 
determine the amounts representing the weighted average of subscription 
charges in effect for each contract year, for self only enrollments and 
for self and family enrollments, as follows:
    (1) The determination of the weighted average of subscription 
charges will only include those health benefits plans which are 
continuing FEHB Program participation from one contract year to the 
next.
    (i) If OPM and the carrier for a plan that will continue 
participation have closed negotiations on rates for the upcoming 
contract year by September 1 of the current contract year, i.e., the 
determination year, OPM will use the plan's negotiated subscription 
charges for the upcoming contract year in the determination of the 
weighted average of subscription charges.
    (ii) If OPM and the carrier for a plan that applied to continue 
participation have not closed rate negotiations for the upcoming 
contract year by September 1 of the determination year, OPM will make a 
deemed adjustment to such plan's subscription charges for the current 
contract year for purposes of counting eligible enrollees of the plan in 
the determination of weighted average charges for the upcoming contract 
year. The deemed adjustment will equal any increase or decrease OPM 
finds in its determination of the weighted average of subscription 
charges for the upcoming contract year for all plans with which OPM has 
closed rates on September 1 of the determination year.
    (iii) There will be no subsequent adjustment in the weighted average 
charges applicable to the upcoming

[[Page 471]]

contract year to reflect rate negotiations closed after September 1 of 
the determination year.
    (2) Except as otherwise specified in paragraphs (b)(2) (i) and 
(b)(2)(ii) of this section, the weight OPM gives to each subscription 
charge for purposes of determining the weighted average of subscription 
charges for the upcoming contract year will be proportionate to the 
number of individuals who, as of March 31 of the determination year, are 
enrolled in the plan or benefits option to which such charge applies and 
are eligible for a Government health benefits contribution in the 
upcoming contract year.
    (i) When a subscription charge for an upcoming contract year applies 
to a plan that is the result of a merger of two or more plans which 
contract separately with OPM during the determination year, or applies 
to a plan which will cease to offer two benefits options, OPM will 
combine the self only enrollments and the self and family enrollments 
from the merging plans, or from a plan's two benefits options, for 
purposes of weighting subscription charges in effect for the successor 
plan for the upcoming contract year.
    (ii) When a comprehensive medical plan (CMP) varies subscription 
charges for different portions of the plan's service area and the plan's 
contract for the upcoming contract year will reconfigure geographic 
areas associated with subscription charges, so that there will not be a 
direct correlation between enrollment in the determination year and 
rating areas for the upcoming contract year, OPM will estimate what 
portion of the plan's enrollees on March 31 of the determination year 
will be subject to each of the plan's subscription rates for the 
upcoming contract year.
    (3) After OPM weights each subscription charge as provided in 
paragraphs (b)(2), (b)(2)(i), and (b)(2)(ii) of this section, OPM will 
compute the total of subscription charges associated with self only 
enrollments, and the total of subscription charges associated with self 
and family enrollments. OPM will divide each subscription charge total 
by the total number of enrollments such amount represents to obtain the 
program-wide weighted average subscription charges for self only and for 
self and family enrollments, respectively.
    (c) The Government contribution for annuitants and for employees who 
are not paid biweekly is a percentage of that fixed by paragraphs (a) 
and (b) of this section proportionate to the length of the pay period, 
rounding fractions of a cent to the nearest cent.
    (d) The Government contribution for employees whose annual pay is 
paid during a period shorter than 52 workweeks is determined on an 
annual basis and prorated over the number of installments of pay 
regularly paid during the year.
    (e) Except as provided in paragraphs (f) and (g) of this section, 
the employing office must make a contribution for an employee for each 
pay period during which the enrollment continues.
    (f) Temporary employees enrolled under 5 U.S.C. 8906a must pay the 
full subscription charge including the Government contribution. 
Employees with provisional appointments under Sec. 316.403 of this 
chapter are not considered to be enrolled under 5 U.S.C. 8906a for the 
purposes of this paragraph.
    (g) The Government contribution for an employee who enters the 
uniformed services and whose enrollment continues under Sec. 890.303(i) 
ceases after 365 days in nonpay status.

[33 FR 12510, Sept. 4, 1968, as amended at 47 FR 30963, July 16, 1982; 
54 FR 7756, Feb. 23, 1989; 56 FR 10143, Mar. 11, 1991; 60 FR 45658, 
Sept. 1, 1995; 63 FR 45934, Aug. 28, 1998; 64 FR 31488, June 11, 1999]



Sec. 890.502  Employee withholdings and contributions.

    (a) Employee and annuitant withholdings and contributions. (1) 
Except as provided in paragraphs (a)(2) and (g) of this section, an 
employee or annuitant is responsible for payment of the employee or 
annuitant share of the cost of enrollment for every pay period during 
which the enrollment continues. An employee or annuitant incurs an 
indebtedness due the United States in the amount of the proper employee 
or annuitant withholding required for each pay period that health 
benefits withholdings or direct premium payments are not made but during 
which the enrollment continues.

[[Page 472]]

    (2) An individual is not required to pay withholdings for the period 
between the end of the pay period in which he or she separates from 
service and the commencing date of an immediate annuity, if later.
    (3) Temporary employees who are eligible to enroll under 5 U.S.C. 
8906a must pay the full subscription charges including both the employee 
share and the Government contribution. Employees with provisional 
appointments under Sec. 316.403 are not considered eligible for 
coverage under 5 U.S.C. 8906a for the purpose of this paragraph (a)(3).
    (4) The employing office must determine the withholding for 
employees whose annual pay is paid during a period shorter than 52 
workweeks on an annual basis and prorate the withholding over the number 
of installments of pay regularly paid during the year.
    (5) The employing office must make the withholding required from 
enrolled survivor annuitants in the following order. First, withhold 
from the annuity of a surviving spouse, if any. If that annuity is less 
than the withholding required, the employing office must make the 
withholding to the extent necessary from the annuity of the children, if 
any, in the following order. First, withhold from the annuity of the 
youngest child, and if necessary, then from the annuity of the next 
older child, in succession, until the withholding is satisfied.
    (6) Surviving spouses in receipt of a basic employee death benefit 
under 5 U.S.C. 8442(b)(1)(A) and annuitants whose health benefits 
premiums exceed the amount of their annuities may pay their portion of 
the health benefits premium directly to the retirement system acting as 
their employing office in accordance with procedures set out in 
paragraph (d) of this section.
    (b) Procedures when employee enters LWOP status or pay is 
insufficient to cover premium. As soon as the employing office is aware 
of an employee whose premium payments cannot be made because the 
employee will be entering or has entered leave without pay status, (or 
any other type of nonpay status, except periods of nonpay resulting from 
a lapse of appropriations), or the employee's pay is insufficient to 
cover the premiums, the employing office must inform the employee of the 
available health benefits options.
    (1) The employing office must provide the employee written notice of 
the options and consequences as described in paragraphs (b)(2) (i) and 
(ii) of this section. If the employing office cannot give the notice 
required by this paragraph (b)(1) to the employee directly, it must send 
the notice by first class mail. A notice that is mailed is deemed to be 
received 5 days after the date of the notice.
    (2) The employee must elect in writing either to continue health 
benefits coverage or terminate it. Exception: An employee who is subject 
to a court or administrative order as discussed in Sec. 890.301(g)(3) 
may not elect to terminate his or her enrollment as long as the court/
administrative order is still in effect and the employee has at least 
one child identified in the order who is still eligible under the FEHB 
Program, unless the employee provides documentation that he or she has 
other coverage for the child or children. The employee may continue his 
or her health benefits coverage by choosing one of the options listed in 
this paragraph (b)(2) and returning the signed form to the employing 
office within 31 days from the day he or she receives the notice (45 
days for an employee residing overseas). When an employee mails the 
signed form, the date of the postmark is deemed to be the date the 
notice is returned to the employing office. If an employee elects to 
continue coverage, he or she must elect in writing either to--
    (i) Agree to pay the premium directly to the agency on a current 
basis. The employee must agree that if he or she does not pay the 
premiums, upon returning to employment or upon pay becoming sufficient 
to cover the premiums, the employing office will deduct, in addition to 
the current pay period's premiums, an amount equal to the premiums for a 
pay period during which the employee was in LWOP status. The employing 
office will continue using this method to deduct the accrued unpaid 
premiums from salary until the debt is recovered in full. The employee 
must also agree that if he or

[[Page 473]]

she does not return to work or the employing office cannot recover the 
debt in full from salary, the employing office may recover the debt from 
whatever other sources it normally has available for recovery of a debt 
to the United States, or
    (ii) Agree upon returning to employment or upon pay becoming 
sufficient to cover the premiums, the employing office will deduct, in 
addition to the current pay period's premiums, an amount equal to the 
premiums for a pay period during which the employee was in LWOP status. 
The employing office will continue using this method to deduct the 
accrued unpaid premiums from salary until the debt is recovered in full. 
The employee must also agree that if he or she does not return to work 
or the employing office cannot recover the debt in full from salary, the 
employing office may recover the debt from whatever other sources it 
normally has available for recovery of a debt to the United States.
    (3) Except as provided under paragraph (b)(4) of this section, if 
the employee does not return the signed form within 31 days after the 
day he or she receives the notice (45 days for employees residing 
overseas) the employing office terminates the enrollment according to 
paragraph (b)(5) of this section. The employing office must give the 
employee written notification of the termination.
    (4)(i) If the employee is prevented by circumstances beyond his or 
her control from returning a signed form to the employing office within 
the time frame under paragraph (b)(2) of this section, he or she may 
request reinstatement of coverage by writing to the employing office. 
The employee must describe the circumstances that prevented timely 
notice and file the request within 30 calendar days from the date the 
employing office gives the employee notification of the termination. The 
employing office determines if the employee is eligible for 
reinstatement of coverage. If the determination is affirmative, the 
employing office reinstates the coverage of the employee retroactive to 
the date of termination. If the determination is negative, the employee 
may request a review of the decision from the employing agency as 
provided under Sec. 890.104.
    (ii) If the employee is subject to a court or administrative order 
as discussed in Sec. 890.301(g)(3), the coverage may not terminate. If 
the employee does not return the signed form, the coverage will continue 
and the employee will incur a debt to the Government as discussed in 
paragraphs (b)(2)(i) and (b)(2)(ii) of this section.
    (5) Terminations of enrollment under paragraphs (b)(2) and (3) of 
this section are retroactive to the end of the last pay period in which 
the premium was withheld from pay. The employee and covered family 
members, if any, are entitled to the temporary extension of coverage for 
conversion and may convert to an individual contract for health 
benefits. An employee whose coverage is terminated may enroll upon his 
or her return to duty in a pay status in a position in which the 
employee is eligible for coverage under this part.
    (c) Procedures when an agency underwithholds. (1) An agency that 
withholds less than the proper health benefits contributions from an 
individual's pay, annuity, or compensation must submit an amount equal 
to the sum of the uncollected contributions and any applicable agency 
contributions required under section 8906 of title 5, United States 
Code, to OPM for deposit in the Employees Health Benefits Fund.
    (2) The agency must make the deposit to OPM described in paragraph 
(c)(1) of this section as soon as possible, but no later than 60 
calendar days after the date the employing office determines the amount 
of the underdeduction that has occurred, regardless of whether or when 
the agency recovers the underdeduction. A subsequent agency 
determination whether to waive collection of the overpayment of pay 
caused by failure to properly withhold employee health benefits 
contributions shall be made in accordance with 5 U.S.C. 5584 as 
implemented by 4 CFR chapter I, subchapter G, unless the agency involved 
is excluded from application of 5 U.S.C. 5584, in which case any 
applicable authority to waive the collection may be used.
    (d) Direct premium payments for annuitants. (1) If an annuity, 
excluding an

[[Page 474]]

annuity under Subchapter III of Chapter 84 (Thrift Savings Plan), is too 
low to cover the health benefits premium due or if a surviving spouse 
receives a basic employee death benefit, the retirement system must 
provide information to the annuitant or surviving spouse regarding the 
available plans and notify him or her in writing of the opportunity to 
either: enroll in any plan in which the enrollee's share of the premium 
is not in excess of the annuity; or make payment of the premium directly 
to the retirement system.
    (2) The retirement system must establish a method for accepting 
direct payment for health benefits premiums from surviving spouses who 
have received or are currently receiving basic employee death benefits 
as well as from annuitants whose annuities are too low to cover their 
health premiums. The annuitant or surviving spouse must continue to make 
direct payment of the health benefits premium even if the annuity 
increases to the extent that it covers the premium.
    (3) The annuitant or surviving spouse must pay to the retirement 
system his or her share of the premium for the enrollment for every pay 
period during which the enrollment continues, exclusive of the 31-day 
temporary extension of coverage for conversion provided in Sec. 
890.401. The annuitant or surviving spouse must pay after each pay 
period in which he or she is covered in accordance with a schedule 
established by the retirement system. If the retirement system does not 
receive payment by the date due, the retirement system must notify the 
annuitant or surviving spouse in writing that continuation of coverage 
depends upon payment being made within 15 days (45 days for annuitants 
or surviving spouses residing overseas) after receipt of the notice. If 
no subsequent payments are made, the retirement system terminates the 
enrollment 60 days (90 days for annuitants or surviving spouses residing 
overseas) after the date of the notice. An annuitant or surviving spouse 
whose enrollment terminates because of nonpayment of premium may not 
reenroll or reinstate coverage, except as provided in paragraph (d)(4) 
of this section.
    (4) If the annuitant or surviving spouse is prevented by 
circumstances beyond his or her control from paying within 15 days after 
receipt of the notice, he or she may request reinstatement of coverage 
by writing to the retirement system. The annuitant or surviving spouse 
must describe the circumstances that prevented timely notice and file 
the request within 30 calendar days from the date of termination. The 
retirement system determines whether the surviving spouse or annuitant 
is eligible for reinstatement of coverage. If the determination is 
affirmative, the retirement system reinstates the coverage of the 
surviving spouse or annuitant retroactive to the date of termination. If 
the determination is negative, the surviving spouse or annuitant may 
request a review of the decision from the retirement system as provided 
under Sec. 890.104.
    (5) Termination of enrollment for failure to pay premiums within the 
time frame established in accordance with paragraph (d)(3) of this 
section is retroactive to the end of the last pay period for which 
payment has been timely received.
    (6) The retirement system will submit all direct premium payments 
along with its regular health benefits premiums to OPM in accordance 
with procedures established by that office.
    (e) Direct payment of premiums during periods of LWOP status in 
excess of 365 days. (1) An employee who is granted leave without pay 
under subpart L of part 630 of this chapter which exceeds the 365 of 
continued coverage under section 890.303(e) must pay the employee 
contributions directly to the employing office on a current basis.
    (2) Payment must be made after the pay period in which the employee 
is covered in accordance with a schedule established by the employing 
office. If the employing office does not receive the payment by the date 
due, the employing office must notify the employee in writing that 
continuation of coverage depends upon payment being made within 15 days 
(45 days for employees residing overseas) after receipt of the notice. 
If no subsequent payments are made, the employing office terminates the 
enrollment 60 days (90

[[Page 475]]

days for enrollees residing overseas) after the date of the notice.
    (3) If the enrollee was prevented by circumstances beyond his or her 
control from making payment within the timeframe specified in paragraph 
(e)(2) of this section he or she may request reinstatement of the 
coverage by writing to the employing office. The employee must file the 
request within 30 calendar days from the date of termination and must 
include supporting documentation.
    (4) The employing office determines whether the employee is eligible 
for reinstatement of coverage. If the determination is affirmative, the 
employing office reinstates the coverage of the employee retroactive to 
the date of termination. If the determination is negative, the employee 
may request a review of the decision from the employing agency as 
provided under Sec. 890.104.
    (5) An employee whose coverage is terminated under paragraph (e)(2) 
of this section may register to enroll upon his or her return to duty in 
a pay status in a position in which the employee is eligible for 
coverage under this part.
    (f) Uniformed services. (1) Except as provided in paragraph (f)(2) 
of this section, an employee whose coverage continues under Sec. 
890.303(i) is responsible for payment of the employee share of the cost 
of enrollment for every pay period for which the enrollment continues 
for the first 365 days of continued coverage as set forth under 
paragraph (b) of this section. For coverage that continues after 365 
days in nonpay status, the employee must pay, on a current basis, the 
full subscription charge, including both the employee and Government 
shares, plus an additional 2 percent of the full subscription charge.
    (2) Payment of the employee's share of the cost of enrollment is 
waived for the first 365 days of continued coverage in the case of an 
employee whose coverage continues under Sec. 890.303(e) following 
furlough or placement on leave of absence under the provisions of part 
353 of this chapter, or similar authority, or under Sec. 890.303(i) if 
the employee was ordered to active duty before September 1, 1995, under 
section 12301, 12304, 12306, 12307, or 688 of title 10, United States 
Code, in support of Operation Desert Storm.

[33 FR 12510, Sept. 4, 1968, as amended at 47 FR 30963, July 16, 1982; 
49 FR 1047, Jan. 9, 1984; 52 FR 3399, Feb. 4, 1987; 52 FR 39497, Oct. 
22, 1987, and 53 FR 32368, Aug. 25, 1988; 54 FR 7756, Feb. 23, 1989; 55 
FR 39131, Sept. 25, 1990; 56 FR 10143, Mar. 11, 1991; 56 FR 25997, June 
6, 1991; 57 FR 10611, Mar. 27, 1992; 58 FR 39607, July 23, 1993; 60 FR 
45658, Sept. 1, 1995; 61 FR 37808, July 22, 1996; 61 FR 64454, Dec. 5, 
1996; 64 FR 31488, June 11, 1999; 68 FR 56525, Oct. 1, 2003; 69 FR 
56929, Sept. 23, 2004]



Sec. 890.503  Reserves.

    (a) The enrollment charge consists of the rate approved by OPM for 
payment to the plan for each enrollee, plus 4 percent, of which one part 
is for an administrative reserve and 3 parts are for a contingency 
reserve for the plan.
    (b) The administrative reserve is credited with the one one-hundred-
and-fourth of the enrollment charge set aside for the administrative 
reserve. The administrative reserve is available for payment of 
administrative expenses of OPM incurred under this part, and for such 
other purposes as may be authorized by law.
    (c)(1) Contingency reserve. The contingency reserve for each plan is 
credited with--
    (i) The three one-hundred-and-fourths of the enrollment charge set 
aside for the contingency reserve from the enrollment charges for 
employees and annuitants enrolled for that plan;
    (ii) Amounts transferred in accordance with law from other 
contingency reserves and the administrative reserve;
    (iii) Income from investment of the reserve;
    (iv) Its proportionate share of the income from investment of the 
administrative reserve; and
    (v) Any return of reserves of the plan.
    (2) Contingency reserve minimum balance. The preferred minimum 
balance for the contingency reserve for community-rated plans is 1 
month's subscription charges at the average recurring monthly rate paid 
from the Employees Health Benefits Fund for the plan during the most 
recent contract period. The preferred minimum balance for the 
contingency reserve for experience-rated plans is 1\1/2\ times an amount

[[Page 476]]

equal to the sum of an average month's paid claims plus an average 
month's administrative expenses and retentions, as determined under 
paragraph (c)(3) of this section. Amounts in excess of the preferred 
minimum balance for a contingency reserve account may be used with 
respect to the plan from which the reserve derives: To defray increases 
in future rates; to increase plan benefits, or to reduce contributions 
of eligible subscribers and the Government under the program through 
devices such as temporary suspension of, or reduction in, required 
contributions or a refund of contributions to eligible subscribers and 
the Government.
    (3) OPM/carrier reserve transfers. The target level for total 
reserves of an experience-rated plan is 3\1/2\ times an amount equal to 
the sum of an average month's paid claims plus an average month's 
administrative expenses and retentions. Reserves include funds set aside 
for incurred-but-unpaid benefit claims and the ``special'' reserve 
representing the cumulative difference between income to the plan 
(subscription income plus interest on investments) and plan expenses 
(benefit costs plus administrative expenses and retentions). Included as 
carrier reserves is the balance in the letter of credit (LOC) account 
maintained by OPM for the plan. For the purposes of this section, an 
average month's paid claims is one-sixth of the total claims paid during 
the last 6 months of the most recent contract period, and an average 
month's administrative expenses and retentions is one-twelfth of the 
administrative expenses and retentions for the most recent contract 
period.
    (i) When, as of the end of a contract period, the total of all the 
reserves for an experience-rated plan is less than the target level 
described in the first four sentences of paragraph (c)(3) of this 
section, the carrier is entitled to payment from the contingency 
reserve. Such contingency reserve payment shall equal the lesser of: An 
amount equal to the difference between the target level for the plan's 
reserves and the total of the reserves for the plan, or an amount equal 
to the excess, if any, of the contingency reserve over the preferred 
minimum balance. OMP must authorize this payment promptly after 
accepting the accounting statement for the contract period. The 
contingency reserve payment so authorized will be made available to the 
carrier's LOC account.
    (ii) When, as of the end of a contract period, the total of all 
reserves of an experience-rated plan amounts to more than the plan's 
target level, the excess over the plan's target level must be credited 
to the contingency reserve maintained by OPM for the plan. OPM will 
withdraw the excess amount from the plan's LOC account, based on 
reporting in the annual accounting statement for the year, no sooner 
than May 1, of the following year. If the accounting statement is not 
filed by the time limit specified in the plan's contract with OPM, OPM 
will estimate the amount of the excess reserves and may withdraw that 
amount from the plan's LOC account, or begin the process of offsetting 
that amount from subscription payments, no sooner than May 1. The amount 
withdrawn from the plan's LOC account, or offset from subscription 
payments, will be credited to that plan's contingency reserve.
    (4) OPM may, by agreement with the carrier, approve community rating 
for a comprehensive plan. If the contingency reserve of the carrier of a 
community-rated plan exceeds the preferred minimum balance, as described 
in paragraph (c)(2) of this section, the carrier may request OPM to pay 
to the plan a portion of the reserve not greater than the excess of the 
contingency reserve over the preferred minimum balance. The carrier 
shall state the reason for the request. OPM will decide whether to allow 
the request in whole or in part and will advise the plan of its 
decision.
    (5) Special contingency reserve transfers. In addition to those 
amounts, if any, paid under paragraphs (c)(2) through (c)(4) of this 
section, OPM may authorize such other payments from the contingency 
reserve as in the judgment of OPM may be in the best interest of 
employees and annuitants enrolled in the program. A carrier for a plan 
may apply to OPM at any time for a payment from the contingency reserve 
when the carrier has good cause, such as unexpected claims experience

[[Page 477]]

and variations from expected community rates. In the administration of 
this part, OPM will accord a high priority to deciding whether to allow 
requests under this paragraph in whole or in part and will promptly 
advise the carrier of its decision. Amounts paid from the contingency 
reserve under paragraphs (c)(2) through (5) of this section shall be 
reported as subscription income in the year in which paid. By agreement 
with the carrier and where good cause exists, OPM may accept payment 
from carrier reserves for credit to the contingency reserve in an amount 
and under conditions other than those specified in paragraph (c) of this 
section. For carriers funded by LOC, the returned amount will be 
withdrawn from the plan's LOC account.

[33 FR 12510, Sept. 4, 1968, as amended at 37 FR 20668, Oct. 3, 1972; 43 
FR 52460, Nov. 13, 1978; 51 FR 7430, Mar. 4, 1985; 52 FR 3212, Feb. 3, 
1987; 54 FR 52339, Dec. 21, 1989; 55 FR 22891, June 5, 1990; 57 FR 
14324, Apr. 20, 1992]



Sec. 890.504  Disposition of contingency reserves upon reorganization 
or merger of plans.

    Upon reorganization or merger of a plan, OPM must credit to the 
surviving plan the reserves of the reorganized or merged plan. If more 
than one plan survives, the reserves must be divided among the surviving 
plans in proportion to the number of enrollees continuing to subscribe 
to the surviving plans.

[54 FR 52339, Dec. 21, 1989; 55 FR 22891, June 5, 1990]



Sec. 890.505  Recurring premium payments to carriers.

    The procedures for payment of premiums, contingency reserve, and 
interest distribution to FEHB Program carriers shall be those contained 
in 48 CFR subpart 1632.170.

[57 FR 14324, Apr. 20, 1992]



   Subpart F_Transfers From Retired Federal Employees Health Benefits 
                                 Program



Sec. 890.601  Coverage.

    An annuitant (a retired employee or survivor under part 891 of this 
chapter) who is enrolled, or is eligible to enroll, under the Retired 
Federal Employees Health Benefits Program (part 891 of this chapter) is 
eligible to enroll under the Federal Employees Health Benefits Program 
under this part.

[39 FR 20055, June 6, 1974]



Sec. 890.602  Opportunity to change enrollment.

    An annuitant eligible to enroll under Sec. 890.601 may elect to 
enroll on and after August 8, 1978.

[43 FR 35018, Aug. 8, 1978, as amended at 62 FR 38440, July 18, 1997]



Sec. 890.603  Effective date.

    The effective date of an enrollment under Sec. 890.602 is the first 
day of the first pay period after the election is received by the 
retirement system, but not earlier than January 1, 1979.

[43 FR 35018, Aug. 8, 1978; 43 FR 38569, Aug. 29, 1978]



Sec. 890.604  [Reserved]



Sec. 890.605  Persons confined on effective date.

    Benefits may not be limited for persons who, on the effective date 
of an enrollment under Sec. 890.602, are confined in a hospital or 
institution.

[43 FR 35018, Aug. 8, 1978]



            Subpart G_Benefits in Medically Underserved Areas



Sec. 890.701  Definitions.

For purposes of this subpart--
    Health benefits plan means the Government-wide Service Benefit Plan, 
the Government-wide Indemnity Benefit Plan, or an employee organization 
plan, as described under 5 U.S.C. 8903(1), (2), and (3), respectively.
    Medically underserved area includes any of the 50 States of the 
United States where the Office of Personnel Management determines that 
25 percent or more of the residents are located in primary medical care 
manpower shortage areas designated pursuant to section 332 of the Public 
Health Service Act (42 U.S.C. 254e).
    OPM makes its annual determination by comparing the latest 
Department of Health and Human Services state-by-

[[Page 478]]

state population counts on primary medical care manpower shortage areas 
with U.S. Census figures on state resident population. The determination 
will be made prior to the annual FEHB open season and will be for the 
next calendar year. OPM will announce the results of this determination 
before each open season in a public notice in the Federal Register.

[45 FR 48099, July 18, 1980, as amended at 45 FR 81728, Dec. 12, 1980; 
47 FR 17465, Apr. 23, 1982; 48 FR 14563, Apr. 5, 1983; 51 FR 28800, Aug. 
12, 1986; 52 FR 2666, Jan. 26, 1987; 53 FR 860, Jan. 14, 1988; 53 FR 
28366, July 28, 1988; 53 FR 28997, Aug. 2, 1988; 59 FR 60297, Nov. 23, 
1994]



Sec. 890.702  Payment to any licensed practitioner.

    (a) Except as provided in paragraph (b) of this section, if a 
contract between the Office of Personnel Management and a group health 
insurance carrier offering a health benefits plan subject to this 
subpart provides for payment or reimbursement of the cost of health 
services for the care and treatment of a particular health condition 
only if such service is rendered by a certain category of practitioner, 
the plan must also provide benefits, up to the limits of it contract, 
for the same service when rendered and billed for by any other 
individual who is licensed under applicable State law to provide such 
service, if the service is provided to an enrollee of the plan in a 
medically underserved area as defined by this subpart.
    (b) Paragraph (a) of this section applies only to health services 
provided under contracts which became effective after December 31, 1979.

[45 FR 48099, July 18, 1980, as amended at 52 FR 2666, Jan. 26, 1987]



                  Subpart H_Benefits for Former Spouses

    Source: 51 FR 15748, Apr. 28, 1986, unless otherwise noted.



Sec. 890.801  Introduction.

    This subpart sets forth policies and procedures for obtaining health 
benefits coverage that are unique to former spouses of Federal employees 
and retirees.



Sec. 890.802  Definition.

    In this subpart, a Qualifying court order means a court order 
acceptable for processing as defined in Sec. 838.103 of this chapter or 
qualifying court order as defined in Sec. 838.1003 of this chapter.

[57 FR 33599, July 29, 1992]



Sec. 890.803  Who may enroll.

    (a) Except as specified in paragraph (b) of this section, a former 
spouse is eligible to enroll in a health benefits plan under this part 
provided that--
    (1) The former spouse whose marriage to an employee, employee 
annuitant, or a former Central Intelligence Agency (CIA) or Foreign 
Service employee is dissolved has not remarried before age 55; and
    (2) The former spouse was enrolled in a health benefits plan under 
this part as a family member at any time during the 18 months preceding 
the date of the dissolution of marriage; and
    (3)(i) The former spouse currently receives, or has future title to 
receive (A) a portion of annuity payable to the employee upon retirement 
based on a qualifying court order for purposes of 5 U.S.C. 8345(j) or 5 
U.S.C. 8467; (B) survivor annuity benefits based on a qualifying court 
order for purposes of 5 U.S.C. 8341(h) or 5 U.S.C. 8445; or (C) a 
survivor annuity elected by the employee under 5 U.S.C. 8339(j)(3) or 5 
U.S.C. 8417(b), including a former spouse who is designated as an 
insurable interest pursuant to Sec. Sec. 831.613(a) and (b) and 
842.605(a) and (b) of this chapter (or benefits similar to those under 
this paragraph under another retirement system for Government 
employees); or
    (ii) The former spouse was married to an employee who retired before 
May 7, 1985, and (A) the employee annuitant elects to provide a survivor 
annuity to the former spouse under procedures prescribed in Sec. 
831.682 of this title; or (B) the former spouse satisfies all of the 
conditions for a survivor annuity in Sec. 831.683 of this title; or
    (iii) The former spouse was married to an employee who died before 
May 7, 1985, and the employee was eligible for an immediate annuity on 
or before the date of death, and the former spouse

[[Page 479]]

satisfies all of the conditions for a survivor annuity in Sec. 831.683 
of this title, or
    (iv) The former spouse was married to an employee or former employee 
of the Central Intelligence Agency (CIA) for at least 10 years during 
the employee's CIA service, at least 5 years of which both the employee 
and the former spouse spent outside the United States, and the marriage 
was dissolved before May 7, 1985; or,
    (v) The former spouse was married to an employee or former employee 
of the Foreign Service for at least 10 years during the employee's 
government service, and the marriage was dissolved before May 7, 1985.
    (b) Except as contained in paragraphs (a)(3) (iv) and (v) of this 
section, a former spouse of an employee who separates from Federal 
service before becoming eligible for immediate annuity is eligible to 
enroll only if the former spouse's marriage to the employee was 
dissolved before the employee left Federal service.
    (c) If a former spouse cannot apply for benefits on his or her own 
behalf because of a mental or physical disability, application may be 
filed by a court-appointed guardian.

[51 FR 15748, Apr. 28, 1986, as amended at 52 FR 39497, Oct. 22, 1987, 
and 53 FR 32368, Aug. 25, 1988; 53 FR 45070, Nov. 8, 1988; 57 FR 21192, 
May 19, 1992; 58 FR 52882, Oct. 13, 1993; 62 FR 38440, July 18, 1997]



Sec. 890.804  Coverage.

    (a) Type of enrollment. A former spouse who meets the requirements 
of Sec. 890.803 may elect coverage for self alone or for self and 
family. A family enrollment covers only the former spouse and any 
unmarried dependent natural or adopted child of both the former spouse 
and the employee, former employee or employee annuitant, provided such 
child is not otherwise covered by a health plan under this part. An 
unmarried dependent child must be under age 22 or incapable of self-
support because of a mental or physical disability existing before age 
22. No person may be covered by two enrollments.
    (b) Proof of dependency. (1) A child is considered to be dependent 
on the former spouse or the employee, former employee, or employee 
annuitant if he or she is--
    (i) A legitimate child;
    (ii) An adopted child;
    (iii) A recognized natural child who lives with the former spouse or 
the employee, former employee, or employee annuitant in a regular 
parent-child relationship.
    (iv) A recognized natural child for whom a judicial determination of 
support has been obtained; or
    (v) A recognized natural child to whose support the former spouse, 
or the employee, former employee, or employee annuitant makes regular 
and substantial contributions in accordance with Sec. 890.302(b)(2).
    (c) Exclusions from coverage. Coverage as a family member may be 
denied--
    (1) If evidence shows that the former spouse, employee, former 
employee, or annuitant did not recognize the child as his or her own, 
despite a willingness to support the child; or
    (2) If evidence calls the child's paternity or maternity into doubt, 
despite the former spouse's employee's, former employee's, or employee 
annuitant's recognition and support of the child.
    (d) Child incapable of self-support. When a former spouse enrolls 
for a family enrollment which includes a child who has become 22 years 
of age and is incapable of self-support, the employing office shall 
determine such child's eligibility in accordance with Sec. 890.302(d), 
(e), and (f).
    (e) Meaning of unmarried child. A child, under age 22 or incapable 
of self-support, who has never married or whose marriage has been 
annulled, or a child who is divorced or widowed is considered to be 
unmarried.



Sec. 890.805  Application time limitations.

    (a) Except for former spouses meeting the requirements in Sec. 
890.803(a)(3) (iv) and (v) of this part, former spouses must apply for 
health benefits coverage--
    (1) Within 60 days after dissolution of the marriage to the Federal 
employee; or
    (2) Within 60 days after the date of OPM's notice of eligibility to 
enroll based on entitlement to one of the following:

[[Page 480]]

    (i) A former spouse annuity elected under 5 U.S.C. 8339(j)(3), 5 
U.S.C. 8417(b), or 5 CFR 831.682;
    (ii) A former spouse annuity under Sec. 831.683;
    (iii) A former spouse insurable interest annuity under 5 U.S.C. 
8339(k)(1) or 8420(a);
    (iv) A former spouse annuity under 5 U.S.C. 8341(h) or 8445(f);
    (v) An apportionment under 5 U.S.C. 8345(j) or 8467; or
    (3) Within 60 days after the date of the notice of eligibility to 
enroll based on entitlement to a former spouse annuity under another 
retirement system for Government employees.
    (b) Former spouses who meet the requirements in Sec. 
890.803(a)(3)(iv) of this part must apply for health benefits coverage 
by April 1, 1987. Where circumstances warrant, the former spouse may 
request that the filing date be waived. The authority of the Director of 
Central Intelligence to direct OPM to waive the filing date has been 
delegated to CIA's Office of Personnel. Requests for waiver should be 
addressed to the Office of Personnel, Retirement Division, Central 
Intelligence Agency, Washington, DC 20505. OPM will waive the April 1, 
1987, filing date upon notification to do so from the Director of 
Central Intelligence.
    (c) Former spouses who meet the requirements in Sec. 
890.803(a)(3)(v) of this part must apply for health benefits coverage by 
October 7, 1988. Where circumstances warrant, the former spouse may 
request the Secretary of State to waive the filing date. The authority 
of the Secretary of State to waive the filing date has been delegated to 
the Department of State's Retirement Division. Requests for waiver 
should be addressed to the Department of State, Retirement Division, 
Washington, DC 20520. OPM will accept the waiver upon notification to do 
so from the Department of State.

[51 FR 15748, Apr. 28, 1986, as amended at 53 FR 45071, Nov. 8, 1988; 57 
FR 21192, May 19, 1992; 58 FR 52882, Oct. 13, 1993; 62 FR 38440, July 
18, 1997]



Sec. 890.806  When can former spouses change enrollment or reenroll 
and what are the effective dates?

    (a) Initial opportunity to enroll. A former spouse who has met the 
eligibility requirements of Sec. 890.803 and the application time 
limitation requirements of Sec. 890.805 may enroll at any time after 
the employing office establishes that these requirements have been met.
    (b) Effective date--generally. (1) Except as otherwise provided, an 
enrollment takes effect on the first day of the first pay period that 
begins after the date the employing office receives an appropriate 
request and satisfactory proof of eligibility as required by paragraph 
(a) of this section. If a former spouse requests immediate coverage, and 
the employing office receives an appropriate request and satisfactory 
proof of eligibility within 60 days after the date of divorce, the 
enrollment may be made effective on the same day that temporary 
continuation of coverage under subpart K of this part would otherwise 
take effect.
    (2) A change of enrollment takes effect on the first day of the 
first pay period that begins after the date the employing office 
receives the appropriate request.
    (c) Belated enrollment. When an employing office determines that a 
former spouse was unable, for cause beyond his or her control, to enroll 
or change the enrollment within the time limits prescribed by this 
section, the former spouse may do so within 60 days after the employing 
office advises the former spouse of its determination.
    (d) Enrollment by proxy. Subject to the discretion of the employing 
office, a former spouse's representative, having written authorization 
to do so, may enroll or change the enrollment for the former spouse.
    (e) Change to self only. (1) A former spouse may change the 
enrollment from self and family to self only at any time.
    (2) A change of enrollment to self only takes effect on the first 
day of the first pay period that begins after the date the employing 
office receives an appropriate request to change the enrollment, except 
that at the request of the former spouse and upon a showing

[[Page 481]]

satisfactory to the employing office that there was no family member 
eligible for coverage under the family enrollment, the employing office 
may make the change take effect on the first day of the pay period 
following the one in which there was no family member.
    (f) Open season. (1) During an open season as provided by Sec. 
890.301(f)--
    (i) An enrolled former spouse may change the enrollment from self 
only to self and family provided the family member(s) is eligible for 
coverage under Sec. 890.804, from one plan or option to another, or 
make any combination of these changes.
    (ii) A former spouse who suspended the enrollment under this part 
for the purpose of enrolling in a Medicare sponsored plan under sections 
1833, 1876, or 1851 of the Social Security Act, or to enroll in the 
Medicaid program or a similar State-sponsored program of medical 
assistance for the needy, or to use Peace Corps or CHAMPVA or TRICARE 
(including the Uniformed Services Family Health Plan) or TRICARE-for-
Life coverage instead of FEHB coverage, may reenroll.
    (2) An open season reenrollment or change of enrollment takes effect 
on the first day of the first pay period that begins in January of the 
next following year.
    (3) When a belated open season reenrollment or change of enrollment 
is accepted by the employing office under paragraph (c) of this section, 
it takes effect as required by paragraph (f)(2) of this section.
    (g) Change in family status. (1) An enrolled former spouse may 
change the enrollment from self only to self and family, from one plan 
or option to another, or make any combination of these changes within 
the period beginning 31 days before and ending 60 days after the birth 
or acquisition of a child who meets the eligibility requirements of 
Sec. 890.804.
    (2) A change in enrollment under paragraph (g)(1) of this section 
takes effect on the first day of the pay period in which the child is 
born or becomes an eligible family member.
    (h) Reenrollment of former spouses who suspended enrollment to 
enroll in a Medicare sponsored plan, or the Medicaid or similar State-
sponsored program, or to use Peace Corps or CHAMPVA or TRICARE 
(including the Uniformed Services Family Health Plan) or TRICARE-for-
Life coverage instead of FEHB coverage.
    (1) A former spouse who had been enrolled for coverage under this 
part and suspended enrollment for the purpose of enrolling in a Medicare 
sponsored plan under sections 1833, 1876, or 1851 of the Social Security 
Act, or to enroll in Medicaid or similar State-sponsored program of 
medical assistance for the needy, or to use Peace Corps or CHAMPVA or 
TRICARE (including the Uniformed Services Family Health Plan) or 
TRICARE-for-Life coverage instead of FEHB (as provided in Sec. 
890.807(e)), or who meets the eligibility requirements of Sec. 890.803 
and the application time limitation requirements of Sec. 890.805, but 
postponed enrollment in the FEHB Program for the purpose of enrolling in 
one of these non-FEHB programs, and who subsequently involuntarily loses 
coverage under one of these programs, may immediately reenroll in any 
available FEHB plan under this part at any time beginning 31 days before 
and ending 60 days after the loss of coverage. A reenrollment under this 
paragraph (h) of this section takes effect on the date following the 
effective date of the loss of coverage as shown on the documentation 
from the non-FEHB coverage. If the request to reenroll is not received 
by the employing office or retirement system within the time period 
specified, the former spouse must wait until the next available Open 
Season to reenroll.
    (2) A former spouse who suspended enrollment in the FEHB Program to 
enroll in a Medicare sponsored plan, or the Medicaid program or a 
similar State-sponsored program of medical assistance for the needy, or 
to use Peace Corps or CHAMPVA or TRICARE (including the Uniformed 
Services Family Health Plan) or the TRICARE-for-Life program, but now 
wants to reenroll in the FEHB Program for any reason other than an 
involuntary loss of coverage, may do so during the next available Open 
Season (as provided by paragraph (f) of this section).
    (i) [Reserved]

[[Page 482]]

    (j) Loss of coverage under this part or under another group 
insurance plan. An enrolled former spouse may change the enrollment from 
self only to self and family, from one plan or option to another or make 
any combination of these changes when the former spouse or a child who 
meets the eligibility requirements under Sec. 890.804 loses coverage 
under another enrollment under this part or under another group health 
benefits plan. Except as otherwise provided, the former spouse must 
change the enrollment within the period beginning 31 days before the 
date of loss of coverage and ending 60 days after the date of loss of 
coverage, provided he or she continues to meet the eligibility 
requirements under Sec. 890.803. Losses of coverage include but are not 
limited to--
    (1) Loss of coverage under another FEHB enrollment due to the 
termination, cancellation, or a change to self only, of the covering 
enrollment;
    (2) Loss of coverage under another federally-sponsored health 
benefits program;
    (3) Loss of coverage due to the termination of membership in an 
employee organization sponsoring or underwriting an FEHB plan;
    (4) Loss of coverage due to the discontinuance of an FEHB plan in 
whole or in part. For a former spouse who loses coverage under this 
paragraph (j)(4)--
    (i) If the discontinuance is at the end of a contract year, the 
former spouse must change the enrollment during the open season, unless 
OPM establishes a different time. If the discontinuance is at a time 
other than the end of the contract year, OPM must establish a time and 
effective date for the former spouse to change the enrollment;
    (ii) If the whole plan is discontinued, a former spouse who does not 
change the enrollment within the time set is considered to have 
cancelled the plan in which enrolled.
    (iii) If one option of a plan that has two options is discontinued, 
a former spouse who does not change the enrollment is considered to be 
enrolled in the remaining option of the plan.
    (5) Loss of coverage under the Medicaid program or similar State-
sponsored program of Medical assistance for the needy.
    (6) Loss of coverage under a non-Federal health plan.
    (k) Move from comprehensive medical plan's area. A former spouse in 
a comprehensive medical plan who moves or becomes employed outside the 
geographic area from which the plan accepts enrollments, or, if already 
outside this area, moves or becomes employed further from this area, may 
change the enrollment upon notifying the employing office of the move or 
change of place of employment. Similarly, a former spouse whose covered 
family member moves outside the geographic area from which the plan 
accepts enrollments, or if already outside this area, moves further from 
this area, may change the enrollment upon notifying the employing office 
of the family member's move. The change of enrollment takes effect on 
the first day of the pay period that begins after the employing office 
receives an appropriate request.
    (l) On becoming eligible for Medicare. A former spouse may change 
the enrollment from one plan or option to another at any time beginning 
on the 30th day before becoming eligible for coverage under title XVIII 
of the Social Security Act (Medicare). A change of enrollment based on 
becoming eligible for Medicare may be made only once.
    (m) Annuity insufficient to pay withholdings. (1) If the annuity of 
a former spouse is insufficient to pay the full subscription charge for 
the plan in which he or she is enrolled, the retirement system must 
provide the former spouse with information regarding the available plans 
and written notification of the opportunity to either--
    (i) Pay the premium directly to the retirement system in accordance 
with Sec. 890.808(d); or
    (ii) Enroll in any plan with a full premium that is less than the 
amount of annuity. If the former spouse elects to change to a lower cost 
enrollment, the change takes effect immediately upon loss of coverage 
under the prior enrollment.
    (2) If the former spouse is enrolled in the high option of a plan 
that has two options, and does not elect a plan with

[[Page 483]]

a full premium that is less than the annuity or does not elect to pay 
premiums directly, he or she is deemed to have enrolled in the standard 
option of the same plan unless the annuity is insufficient to pay the 
full subscription charge for the standard option.
    (3) A former spouse who is enrolled in a plan with only one option, 
who fails to make the election required by this paragraph (m)(3) will be 
subject to the provisions of Sec. 890.807(c).

[62 FR 38440, July 18, 1997; 62 FR 49557, Sept. 22, 1997, as amended at 
66 FR 49087, Sept. 26, 2001; 67 FR 41307, June 18, 2002; 70 FR 71749, 
Nov. 30, 2005]



Sec. 890.807  When do enrollments terminate, cancel or suspend?

    (a)(1) Except for former spouses meeting the requirements in Sec. 
890.803(a)(3) (iv) and (v) of this part, a former spouse's enrollment 
terminates, subject to the temporary extension of coverage for 
conversion, at midnight of the last day of the pay period in which the 
earliest of the following events occurs:
    (i) Court order ceases to provide entitlement to survivor annuity or 
portion of retirement annuity under a retirement system for Government 
employees.
    (ii) Former spouse remarries before age 55.
    (iii) Former spouse dies.
    (iv) Employee or annuitant on whose service the benefits are based 
dies and no survivor annuity is payable.
    (v) Separated employee on whose service the benefits are based dies 
before the requirements for deferred annuity have been met.
    (vi) Employee on whose service benefits are based leaves Federal 
service before establishing title to an immediate annuity or a deferred 
annuity.
    (vii) Refund of retirement money is paid to the separated employee 
on whose service the health benefits are based.
    (2) OPM may authorize a longer time frame for the temporary 
extension of coverage for conversion than the 31 days provided in Sec. 
890.401(a) if in OPM's judgment the former spouse could not have known 
that (1) the employee on whose service benefits are based left Federal 
service before establishing title to an immediate or deferred annuity; 
or (2) the separated employee on whose service the benefits are based 
died before the requirements for deferred annuity had been met. In such 
cases, the right of conversion may be exercised up to 31 days after the 
employing office's notice of termination. The former spouse must pay the 
full premium (employee's and Government's share) during the extended 
period, exclusive of the 31-day period following the notice.
    (3) Termination of enrollment for failure to pay premiums within the 
time frame established in accordance with Sec. 890.808(d)(1) is 
retroactive to the end of the last pay period for which payment has been 
timely received.
    (4) A former spouse whose enrollment is terminated under this 
paragraph may not reenroll.
    (b) The enrollment of a former spouse who meets the requirements in 
Sec. 890.803(a)(3) (iv) or (v) of this part terminates, subject to the 
temporary extension of coverage for conversion, at midnight of the last 
day of the pay period in which the earliest of the following events 
occurs:
    (1) Former spouse remarries before age 55.
    (2) Former spouse dies.
    (c) Failure to make an election under Sec. 890.806(m). (1) If the 
annuity is insufficient to pay the full subscription charge due for the 
plan in which the former spouse is enrolled, the former spouse may elect 
one of the two opportunities offered under Sec. 890.806(m) (electing a 
plan with a full subscription charge that is less than the annuity; or 
paying premiums directly to the retirement system in accordance with 
Sec. 890.808(d)). Except as provided in paragraph (c)(3) of this 
section the enrollment of a former spouse who fails to make an election 
within the specified time frame will be terminated.
    (2) If the individual was prevented by circumstances beyond his or 
her control from making an election within the time limit after receipt 
of the final notice, he or she may request reinstatement of coverage by 
writing to the retirement system. The retirement system will determine 
if the individual is eligible for reinstatement of coverage; and, when 
the determination is

[[Page 484]]

affirmative, the individual's coverage may be reinstated retroactively 
to the date of termination or prospectively. If the determination is 
negative, the individual may request reconsideration of the decision 
from OPM.
    (3) If the former spouse does not make an election under paragraph 
(c)(1) of this section and is enrolled in the high option of a plan that 
has two options, the former spouse is deemed to have elected enrollment 
in the standard option of the same plan unless the annuity is 
insufficient to pay the full withholdings for the standard option.
    (d) Coverage of members of the family. The coverage of a member of 
the family of a former spouse terminates, subject to the temporary 
extension of coverage for conversion, at midnight of the earlier of the 
following dates:
    (1) The day on which the individual ceases to be an eligible family 
member.
    (2) The day the former spouse ceases to be enrolled, unless the 
family member is entitled as a survivor annuitant to continued 
enrollment or is entitled to continued coverage under the enrollment of 
another.
    (e) Cancellation. (1) A former spouse may cancel his or her 
enrollment at any time by filing an appropriate request with the 
employing office. The cancellation takes effect on the last day of the 
pay period in which the appropriate request cancelling the enrollment is 
received by the employing office.
    (2) A former spouse may suspend enrollment in FEHB for the purpose 
of enrolling in a Medicare sponsored plan under sections 1833, 1876, or 
1851 of the Social Security Act, or to enroll in the Medicaid program or 
a similar State-sponsored program of medical assistance for the needy, 
or to use Peace Corps or CHAMPVA or TRICARE (including the Uniformed 
Services Family Health Plan) or TRICARE-for-Life coverage instead of 
FEHB coverage. To suspend FEHB coverage, documentation of eligibility 
for coverage under the non-FEHB Program must be submitted to the 
employing office or retirement system. If the documentation is received 
within the period beginning 31 days before and ending 31 days after the 
effective date of the enrollment in the Medicare sponsored plan, or the 
Medicaid or similar program, or within 31 days before or after the day 
designated by the former spouse as the day he or she wants to suspend 
FEHB coverage to use Peace Corps or CHAMPVA or TRICARE (including the 
Uniformed Services Family Health Plan) or TRICARE-for-Life coverage 
instead of FEHB coverage, then the suspension will be effective at the 
end of the day before the effective date of the enrollment or the end of 
the day before the day designated. Otherwise, the suspension is 
effective the first day of the first pay period that begins after the 
date the employing office or retirement system receives the 
documentation.
    (3) The former spouse and family members, if any, are not entitled 
to the temporary extension of coverage for conversion or to convert to 
an individual contract for health benefits.
    (4) A former spouse who cancels his or her enrollment for any reason 
may not later reenroll in the FEHB Program.

[51 FR 15748, Apr. 28, 1986, as amended at 52 FR 39497, Oct. 22, 1987, 
and 53 FR 32368, Aug. 25, 1988; 53 FR 45071, Nov. 8, 1988; 56 FR 25997, 
June 6, 1991; 57 FR 48162, Oct. 22, 1992; 62 FR 38441, July 18, 1997; 62 
FR 53223, Oct. 14, 1997; 66 FR 49088, Sept. 26, 2001; 67 FR 41307, June 
18, 2002; 70 FR 71749, Nov. 30, 2005]



Sec. 890.808  Employing office responsibilities.

    (a) Application for benefits. The former spouse's application for 
health benefits may be in the form of a Standard Form 2809, letter, or 
written statement to the employing office. Former spouses applying for 
benefits under Sec. 890.803(a)(3)(iv) of this part must also include 
with their application a request for waiver of the application time 
limitation in accordance with Sec. 890.805(b) of this part. Former 
spouses applying for benefits under Sec. 890.803(a)(3)(v) of this part 
must also include with their application a request for waiver of the 
application time limitation in accordance with Sec. 890.805(c) of this 
part.
    (b) Administration of the enrollment process. (1) The employing 
office will set up a method for accepting applications for enrollment 
informing the

[[Page 485]]

former spouse what documents to submit and where to submit them for an 
eligibility determination, and collecting premium payments. The method 
will include procedures for verifying the eligibility requirements under 
Sec. 890.803(a) (1) and (2) of this part. The employing office must 
obtain OPM, Foreign Service Retirement and Disability System (FSRDS), or 
CIA Retirement and Disability System (CIARDS) documentation that the 
former spouse meets the additional requirement under Sec. 890.803(a)(3) 
(i), (ii), (iii), (iv), or (v) of this part. A request for the 
retirement system's determination whether a court order is a qualifying 
court order for health benefits enrollment under this subpart must be 
accompanied by the documentation specified in Sec. 838.221, Sec. 
838.721, or Sec. 838.1005 of this chapter.
    (2) The employing office will send the former spouse notice, in 
writing, of its decision. When an employing office informs a former 
spouse of his or her eligibility to enroll, it will identify the 
documents on which it based its decision and will include a premium 
payment schedule and statement of the requirements for continued 
enrollment under Sec. 890.803. If the former spouse does not qualify 
for health benefits coverage, the employing office must give the former 
spouse a reconsideration right under Sec. 890.104. Reconsideration 
requests from former spouses applying for benefits under Sec. 
890.803(a)(3)(iv) of this part must be directed to the Office of 
Personnel, Retirement Division, Central Intelligence Agency, Washington, 
DC 20505. Reconsideration requests from former spouses applying for 
benefits under Sec. 890.803(a)(3)(v) of this part must be directed to 
the Department of State, Retirement Division, Washington, DC 20520.
    (3) The agency employing office will maintain a health benefits file 
for the former spouse as a file separate from the personnel records of 
the employee or former employee. The retirement system acting as 
employing office for the former spouse may file the former spouse health 
benefits records in with the annuitant's retirement records.
    (4) The former spouse will be required to certify that he or she 
meets the requirements listed in Sec. 890.803 and that he or she will 
notify the employing office within 31 days of an event that results in 
failure to meet one or more of the requirements.
    (c) Qualifying court order. Subject to a 31-day extension period for 
conversion, the duration of health benefits coverage will coincide with 
any period specified in the qualifying court order providing for an 
annuity. A court order not meeting the requirements under part 838 of 
this chapter will not be used to establish or continue entitlement to a 
former spouse's health benefits coverage.
    (d) Premium payments. (1) The former spouse must remit to the 
employing office the full subscription charge for the enrollment for 
every pay period during which the enrollment continues, exclusive of the 
31-day temporary extension of coverage for conversion provided in 
Sec. Sec. 890.401 and 890.807(a)(2). Payment must be made after the pay 
period in which the former spouse is covered in accordance with a 
schedule established by the employing office (see definition of pay 
period under Sec. 890.101(a)). If the employing office does not receive 
payment by the due date the employing office must notify the former 
spouse in writing that continuation of coverage depends upon payment 
being made within 15 days (45 days for enrollees residing overseas) 
after receipt of the notice. If no subsequent payments are made, the 
employing office terminates the enrollment 60 days (90 days for 
enrollees residing overseas) after the date of the notice. Termination 
for nonpayment of premium is considered a voluntary cancellation under 
Sec. 890.807(d). A former spouse whose enrollment is terminated because 
of nonpayment of premium may not reenroll or reinstate coverage except 
as provided in paragraph (d)(2) of this section.
    (2) If the individual was prevented by circumstances beyond his or 
her control from making payment within 15 days after receipt of the 
notice, he or she may request reinstatement of coverage by writing to 
the employing office. Such a request must be filed within 30 calendar 
days from the date of termination and must be accompanied by 
verification that the individual was

[[Page 486]]

prevented by circumstances beyond his or her control from paying within 
the time limit. The employing office will determine if the individual is 
eligible for reinstatement of coverage; and, when the determination is 
affirmative, the individual's coverage may be reinstated retroactively 
to the date of termination. If the determination is negative, the 
individual may request a review of the decision from the employing 
agency as provided under Sec. 890.104.
    (3) The employing office will submit all premium payments collected 
from former spouses along with its regular health benefits payments to 
OPM in accordance with procedures established by that Office.
    (e) Withholding from annuity. The retirement system acting as 
employing office for a former spouse will establish a method for 
withholding the full subscription charge from the former spouse's 
annuity check. When the annuity is insufficient to cover the full 
subscription charge, the retirement system will follow the procedures 
specified in Sec. 890.806(l).

[51 FR 15748, Apr. 28, 1986, as amended at 52 FR 2506, Jan. 23, 1987; 52 
FR 39497, Oct. 22, 1987, and 53 FR 32368, Aug. 25, 1988; 53 FR 45071, 
Nov. 8, 1988; 56 FR 25997, June 6, 1991; 57 FR 21192, May 19, 1992; 57 
FR 33598-33599, July 29, 1992; 59 FR 60297, Nov. 23, 1994; 59 FR 67607, 
Dec. 30, 1994; 61 FR 37810, July 22, 1996; 62 FR 38442, July 18, 1997]



 Subpart I_Limit on Inpatient Hospital Charges, Physician Charges, and 
                          FEHB Benefit Payments

    Source: 57 FR 10610, Mar. 27, 1992, unless otherwise noted.



Sec. 890.901  Purpose.

    This subpart identifies the individuals whose charges and FEHB 
benefit payments for inpatient hospital services and/or physician 
services may be limited and sets forth the circumstances of the limit.

[60 FR 26668, May 18, 1995]



Sec. 890.902  Definition.

    For purposes of this subpart, Retired enrolled individual means an 
individual who:
    (a)(1) Is covered by a Federal Employees Health Benefits plan 
(including individuals covered under 5 U.S.C. 8905a) described by 5 
U.S.C. 8903(1), (2) and (3), or 5 U.S.C. 8903a and is:
    (i) An annuitant as defined in 5 U.S.C. 8901(3); or
    (ii) A former spouse as defined in 5 U.S.C. 8901(10) or enrolled for 
continued coverage under 5 U.S.C. 8905a(f); or
    (2) Is a family member covered by the family enrollment of an 
annuitant or former spouse as defined in 5 U.S.C. 8901, or a former 
spouse enrolled for continued coverage under 5 U.S.C. 8905a(f); and
    (b) Is not employed in a position which confers FEHB coverage; and
    (c) Is age 65 or older or becomes age 65 while receiving inpatient 
hospital services or physician services; and
    (d) Is not covered by Medicare part A and/or part B.

[57 FR 10610, Mar. 27, 1992, as amended at 60 FR 26668, May 18, 1995]



Sec. 890.903  Covered services.

    (a) The limitation on the charges and FEHB benefit payments for 
inpatient hospital services apply to inpatient hospital services which 
are:
    (1) Covered under both Medicare part A and the retired enrolled 
individual's FEHB plan; and
    (2) Supplied to a retired enrolled individual who does not have 
Medicare part A; and
    (3) Provided by hospital providers who have in force participation 
agreements with the Secretary of Health and Human Services (HHS) 
consistent with sections 1814(a) and 1866 of the Social Security Act, 
and receive Medicare part A payments in accordance with the diagnosis 
related group (DRG) based prospective payment system (PPS).
    (b) The limitation on the charges and FEHB benefit payments for 
physician services apply to physician services, (as defined in section 
1848(j) of the Social Security Act), which are:
    (1) Covered under both Medicare part B and the retired enrolled 
individual's FEHB plan; and

[[Page 487]]

    (2) Supplied to a retired enrolled individual who does not have 
Medicare part B.

[60 FR 26668, May 18, 1995]



Sec. 890.904  Determination of FEHB benefit payment.

    (a) The FEHB plan's benefit payment for inpatient hospital services 
under this subpart is the amount calculated by the FEHB plan, using 
information and instructions provided by the Department of Health and 
Human Services (HHS) and guidelines specified by OPM, as equivalent to 
the Medicare Part A payment under the DRG-based PPS (this is, the amount 
payable before the Medicare deductible, coinsurance and lifetime limits 
are applied), reduced by any FEHB plan deductible, coinsurance, 
copayment, or preadmission certification penalty that is the 
responsibility of the retired enrolled individual.
    (b) The FEHB plan's benefit payment for physician services under 
this subpart is determined by taking the lower of the following amounts:
    (1) The amount determined by the FEHB plan, which is equivalent to 
the Medicare part B payment under the Medicare Participating Physician 
Fee Schedule for Medicare participating physicians and the Medicare 
Nonparticipating Physician Fee Schedule for Medicare nonparticipating 
physicians (the amount payable before the Medicare deductible and 
coinsurance are applied); or
    (2) The actual billed charges; and
    (3) Reducing the lower amount by any FEHB plan deductible, 
coinsurance, or copayment that is the responsibility of the retired 
enrolled individual.

[58 FR 38663, July 20, 1993, as amended at 60 FR 26668, May 18, 1995]



Sec. 890.905  Limits on inpatient hospital and physician charges.

    (a) Hospitals may not collect from FEHB plans and retired enrolled 
individuals for inpatient hospital services more than the amount 
determined to be equivalent to the Medicare part A payment under the 
DRG-based PPS.
    (b) Medicare participating providers may not collect from FEHB plans 
and retired enrolled individuals for physician services more than the 
amount determined to be equivalent to the Medicare part B payment under 
the Medicare Participating Physician Fee Schedule.
    (c) Medicare nonparticipating providers may not collect from FEHB 
plans and retired enrolled individuals for physician services more than 
the amount determined to be equivalent to the Medicare limiting charge 
amount.

[60 FR 26668, May 18, 1995; 60 FR 28019, May 26, 1995]



Sec. 890.906  Retired enrolled individuals coinsurance payments.

    (a) A retired enrolled individual's coinsurance responsibility for 
inpatient hospital services is calculated in accordance with the plan's 
contractual benefit structure and is based on the amount determined to 
be equivalent to the Medicare part A payment under the DRG-based PPS.
    (b) A retired enrolled individual's coinsurance responsibility for 
physician services is calculated in accordance with the plan's 
contractual benefit structure and is based on the lower of the actual 
charges or the amount determined to be equivalent to the Medicare part B 
payment under the Medicare Participating Physician Fee Schedule for 
Medicare participating physicians and the Medicare Nonparticipating 
Physician Fee Schedule for Medicare nonparticipating physicians.

[60 FR 26668, May 18, 1995]



Sec. 890.907  Effective dates.

    (a) The limitation specified in this subpart applies to inpatient 
hospital admissions commencing on or after January 1, 1992.
    (b) The limitation specified in this subpart applies to physician 
services supplied on or after January 1, 1995.

[60 FR 26668, May 18, 1995]



Sec. 890.908  Notification of HHS.

    An FEHB plan, under the oversight of OPM, will notify the Secretary 
of HHS, or the Secretary's designee, if the plan finds that:
    (a) A hospital knowingly and willfully collects, on a repeated 
basis, more

[[Page 488]]

than the amount determined to be equivalent to the Medicare part A 
payment under the DRG-based PPS.
    (b) A Medicare participating physician or supplier knowingly and 
willfully collects, on a repeated basis, more than the amount determined 
to be equivalent to the Medicare part B payment under the Medicare 
Participating Physician Fee Schedule.
    (c) A Medicare nonparticipating physician or supplier knowingly and 
willfully charges, on a repeated basis, more than the amount determined 
to be equivalent to the Medicare limiting charge amount.

[60 FR 26668, May 18, 1995]



Sec. 890.909  End-of-year settlements.

    Neither OPM, nor the FEHB plans, will perform end-of-year 
settlements with, or make retroactive adjustments as a result of 
retroactive changes in the Medicare payment calculation information to, 
hospital providers who have received FEHB benefit payments under this 
subpart.

[57 FR 10610, Mar. 27, 1992. Redesignated at 60 FR 26668, May 18, 1995]



Sec. 890.910  Provider information.

    The hospital provider information used to calculate the amount 
equivalent to the Medicare part A payment will be updated on an annual 
basis.

[57 FR 10610, Mar. 27, 1992. Redesignated at 60 FR 26668, May 18, 1995]



Subpart J_Administrative Sanctions Imposed Against Health Care Providers

    Authority: 5 U.S.C. 8902a.

    Source: 68 FR 5475, Feb. 3, 2003, unless otherwise noted.

                   General Provisions and Definitions



Sec. 890.1001  Scope and purpose.

    (a) Scope. This subpart implements 5 U.S.C. 8902a, as amended by 
Public Law 105-266 (October 19, 1998). It establishes a system of 
administrative sanctions that OPM may, or in some cases, must apply to 
health care providers who have committed certain violations. The 
sanctions include debarment, suspension, civil monetary penalties, and 
financial assessments.
    (b) Purpose. OPM uses the authorities in this subpart to protect the 
health and safety of the persons who obtain their health insurance 
coverage through the FEHBP and to assure the financial and programmatic 
integrity of FEHBP transactions.



Sec. 890.1002  Use of terminology.

    Unless otherwise indicated, within this subpart the words ``health 
care provider,'' ``provider,'' and ``he'' mean a health care provider(s) 
of either gender or as a business entity, in either the singular or 
plural. The acronym ``OPM'' and the pronoun ``it'' connote the U.S. 
Office of Personnel Management.



Sec. 890.1003  Definitions.

    In this subpart:
    Carrier means an entity responsible for operating a health benefits 
plan described by 5 U.S.C. 8903 or 8903a.
    Community means a geographically-defined area in which a provider 
furnishes health care services or supplies and for which he may request 
a limited waiver of debarment in accordance with this subpart. Defined 
service area has the same meaning as community.
    Contest means a health care provider's request for the debarring or 
suspending official to reconsider a proposed sanction or the length or 
amount of a proposed sanction.
    Control interest means that a health care provider:
    (1) Has a direct and/or indirect ownership interest of 5 percent or 
more in an entity;
    (2) Owns a whole or part interest in a mortgage, deed of trust, 
note, or other obligation secured by the entity or the entity's property 
or assets, equating to a direct interest of 5 percent or more of the 
total property or assets of the entity;
    (3) Serves as an officer or director of the entity, if the entity is 
organized as a corporation;
    (4) Is a partner in the entity, if the entity is organized as a 
partnership;
    (5) Serves as a managing employee of the entity, including but not 
limited to employment as a general manager, business manager, 
administrator, or

[[Page 489]]

other position exercising, either directly or through other employees, 
operational or managerial control over the activities of the entity or 
any portion of the entity;
    (6) Exercises substantive control over an entity or a critical 
influence over the activities of the entity or some portion of thereof, 
whether or not employed by the entity; or
    (7) Acts as an agent of the entity.
    Conviction or convicted has the meaning set forth in 5 U.S.C. 
8902a(a)(1)(C).
    Covered individual means an employee, annuitant, family member, or 
former spouse covered by a health benefits plan described by 5 U.S.C. 
8903 or 8903a or an individual eligible to be covered by such a plan 
under 5 U.S.C. 8905(d).
    Days means calendar days, unless specifically indicated otherwise.
    Debarment means a decision by OPM's debarring official to prohibit 
payment of FEHBP funds to a health care provider, based on 5 U.S.C. 
8902a (b), (c), or (d) and this subpart.
    Debarring official means an OPM employee authorized to issue 
debarments and financial sanctions under this subpart.
    FEHBP means the Federal Employees Health Benefits Program.
    Health care services or supplies means health care or services and 
supplies such as diagnosis and treatment; drugs and biologicals; 
supplies, appliances and equipment; and hospitals, clinics, or other 
institutional entities that furnish supplies and services.
    Incarceration means imprisonment, or any type of confinement with or 
without supervised release, including but not limited to home detention, 
community confinement, house arrest, or similar arrangements.
    Limited waiver means an approval by the debarring official of a 
health care provider's request to receive payments of FEHBP funds for 
items or services rendered in a defined geographical area, 
notwithstanding debarment, because the provider is the sole community 
provider or sole source of essential specialized services in a 
community.
    Mandatory debarment means a debarment based on 5 U.S.C. 8902a(b).
    Office or OPM means the United States Office of Personnel Management 
or the component thereof responsible for conducting the administrative 
sanctions program described by this subpart.
    Permissive debarment means a debarment based on 5 U.S.C. 8902a(c) or 
(d).
    Provider or provider of health care services or supplies means a 
physician, hospital, clinic, or other individual or entity that, 
directly or indirectly, furnishes health care services or supplies.
    Reinstatement means a decision by OPM to terminate a health care 
provider's debarment and to restore his eligibility to receive payment 
of FEHBP funds.
    Sanction or administrative sanction means any administrative action 
authorized by 5 U.S.C. 8902a or this subpart, including debarment, 
suspension, civil monetary penalties, and financial assessments.
    Should know or should have known has the meaning set forth in 5 
U.S.C. 8902a(a)(1)(D).
    Sole community provider means a provider who is the only source of 
primary medical care within a defined service area.
    Sole source of essential specialized services in a community means a 
health care provider who is the only source of specialized health care 
items or services in a defined service area and that items or services 
furnished by a non-specialist cannot be substituted without jeopardizing 
the health or safety of covered individuals.
    Suspending official means an OPM employee authorized to issue 
suspensions under 5 U.S.C. 8902a and this subpart.

                          Mandatory Debarments



Sec. 890.1004  Bases for mandatory debarments.

    (a) Debarment required. OPM shall debar a provider who is described 
by any category of offense set forth in 5 U.S.C. 8902a(b).
    (b) Direct involvement with an OPM program unnecessary. The conduct 
underlying the basis for a provider's mandatory debarment need not have 
involved an FEHBP covered individual or transaction, or any other OPM 
program.

[[Page 490]]



Sec. 890.1005  Time limits for OPM to initiate mandatory debarments.

    OPM shall send a provider a written notice of a proposed mandatory 
debarment within 6 years of the event that forms the basis for the 
debarment. If the basis for the proposed debarment is a conviction, the 
notice shall be sent within 6 years of the date of the conviction. If 
the basis is another agency's suspension, debarment, or exclusion, the 
OPM notice shall be sent within 6 years of the effective date of the 
other agency's action.



Sec. 890.1006  Notice of proposed mandatory debarment.

    (a) Written notice. OPM shall inform a provider of his proposed 
debarment by written notice sent not less than 30 days prior to the 
proposed effective date.
    (b) Contents of the notice. The notice shall contain information 
indicating the:
    (1) Effective date of the debarment;
    (2) Minimum length of the debarment;
    (3) Basis for the debarment;
    (4) Provisions of law and regulation authorizing the debarment;
    (5) Effect of the debarment;
    (6) Provider's right to contest the debarment to the debarring 
official;
    (7) Provider's right to request OPM to reduce the length of 
debarment, if it exceeds the minimum period required by law or this 
subpart; and
    (8) Procedures the provider shall be required to follow to apply for 
reinstatement at the end of his period of debarment, and to seek a 
waiver of the debarment on the basis that he is the sole health care 
provider or the sole source of essential specialized services in a 
community.
    (c) Methods of sending notice. OPM shall send the notice of proposed 
debarment and the final decision notice (if a contest is filed) to the 
provider's last known address by first class mail, or, at OPM's option, 
by express delivery service.
    (d) Delivery to attorney, agent, or representatives. (1) If OPM 
proposes to debar an individual health care provider, it may send the 
notice of proposed debarment directly to the provider or to any other 
person designated by the provider to act as a representative in 
debarment proceedings.
    (2) In the case of a health care provider that is an entity, OPM 
shall deem notice sent to any owner, partner, director, officer, 
registered agent for service of process, attorney, or managing employee 
as constituting notice to the entity.
    (e) Presumed timeframes for receipt of notice. OPM computes 
timeframes associated with the delivery notices described in paragraph 
(c) of this section so that:
    (1) When OPM sends notice by a method that provides a confirmation 
of receipt, OPM deems that the provider received the notice at the time 
indicated in the confirmation; and
    (2) When OPM sends notice by a method that does not provide a 
confirmation of receipt, OPM deems that the provider received the notice 
5 business days after it was sent.
    (f) Procedures if notice cannot be delivered. (1) If OPM learns that 
a notice was undeliverable as addressed or routed, OPM shall make 
reasonable efforts to obtain a current and accurate address, and to 
resend the notice to that address, or it shall use alternative methods 
of sending the notice, in accordance with paragraph (c) of this section.
    (2) If a notice cannot be delivered after reasonable followup 
efforts as described in paragraph (f)(1) of this section, OPM shall 
presume that the provider received notice 5 days after the latest date 
on which a notice was sent.
    (g) Use of electronic means to transmit notice. [Reserved]



Sec. 890.1007  Minimum length of mandatory debarments.

    (a) Debarment based on a conviction. The statutory minimum period of 
debarment for a mandatory debarment based on a conviction is 3 years.
    (b) Debarment based on another agency's action. A debarment based on 
another Federal agency's debarment, suspension, or exclusion remains in 
effect until the originating agency terminates its sanction.

[[Page 491]]



Sec. 890.1008  Mandatory debarment for longer than the minimum length.

    (a) Aggravating factors. OPM may debar a provider for longer than 
the 3-year minimum period for mandatory debarments if aggravating 
factors are associated with the basis for the debarment. The factors OPM 
considers to be aggravating are:
    (1) Whether the FEHBP incurred a financial loss as the result of the 
acts underlying the conviction, or similar acts that were not 
adjudicated, and the level of such loss. In determining the amount of 
financial loss, OPM shall not consider any amounts of restitution that a 
provider may have paid;
    (2) Whether the sentence imposed by the court included 
incarceration;
    (3) Whether the underlying offense(s), or similar acts not 
adjudicated, occurred repeatedly over a period of time, and whether 
there is evidence that the offense(s) was planned in advance;
    (4) Whether the provider has a prior record of criminal, civil, or 
administrative adjudication of related offenses or similar acts; or
    (5) Whether the actions underlying the conviction, or similar acts 
that were not adjudicated, adversely affected the physical, mental, or 
financial well-being of one or more covered individuals or other 
persons.
    (b) Mitigating factors. If the aggravating factors justify a 
debarment longer than the 3 year minimum period for mandatory 
debarments, OPM shall also consider whether mitigating factors may 
justify reducing the debarment period to not less than 3 years. The 
factors that OPM considers to be mitigating are:
    (1) Whether the conviction(s) on which the debarment is based 
consist entirely or primarily of misdemeanor offenses;
    (2) Whether court records, including associated sentencing reports, 
contain an official determination that the provider had a physical, 
mental, or emotional condition before or during the commission of the 
offenses underlying the conviction that reduced his level of 
culpability; or
    (3) Whether the provider's cooperation with Federal and/or State 
investigative officials resulted in criminal convictions, civil 
recoveries, or administrative actions against other individuals, or 
served as the basis for identifying program weaknesses. Restitution made 
by the provider for funds wrongfully, improperly, or illegally received 
from Federal or State programs may also be considered as a mitigating 
circumstance.
    (c) Maximum period of debarment. There is no limit on the maximum 
period of a mandatory debarment based on a conviction.



Sec. 890.1009  Contesting proposed mandatory debarments.

    (a) Contesting the debarment. Within 30 days after receiving OPM's 
notice of proposed mandatory debarment, a provider may submit 
information, documents, and written arguments in opposition to the 
proposed debarment. OPM's notice shall contain specific information 
about where and how to submit this material. If a timely contest is not 
filed, the proposed debarment shall become effective as stated in the 
notice, without further action by OPM.
    (b) Requesting a reduction of the debarment period. If OPM proposes 
a mandatory debarment for a period longer than the 3-year minimum 
required by 5 U.S.C. 8902a(g)(3), the provider may request a reduction 
of the debarment period to not less than 3 years, without contesting the 
debarment itself.
    (c) Personal appearance before the debarring official. In addition 
to providing written material, the provider may appear before the 
debarring official personally or through a representative to present 
oral arguments in support of his contest. OPM's notice shall contain 
specific information about arranging an in-person presentation.



Sec. 890.1010  Debarring official's decision of contest.

    (a) Prior adjudication is dispositive. Evidence indicating that a 
provider was formally adjudicated for a violation of any type set forth 
in 5 U.S.C. 8902a(b) fully satisfies the standard of proof for a 
mandatory debarment.
    (b) Debarring official's decision. The debarring official shall 
issue a written decision, based on the entire administrative record, 
within 30 days after the record closes to receipt of information.

[[Page 492]]

The debarring official may extend this decision period for good cause.
    (c) No further administrative proceedings. The debarring official's 
decisions regarding mandatory debarment and the period of debarment are 
final and are not subject to further administrative review.

                          Permissive Debarments



Sec. 890.1011  Bases for permissive debarments.

    (a) Licensure actions. OPM may debar a health care provider to whom 
the provisions of 5 U.S.C. 8902a(c)(1) apply. OPM may take this action 
even if the provider retains current and valid professional licensure in 
another State(s).
    (b) Ownership or control interests. OPM may debar a health care 
provider based on ownership or control of or by a debarred provider, as 
set forth in 5 U.S.C. 8902a(c)(2) and (3).
    (c) False, deceptive, or wrongful claims practices. OPM may debar a 
provider who commits claims-related violations as set forth in 5 U.S.C. 
8902a(c)(4) and (5) and 5 U.S.C. 8902a(d)(1) and (2).
    (d) Failure to furnish required information. OPM may debar a 
provider who knowingly fails to provide information requested by an 
FEHBP carrier or OPM, as set forth in 5 U.S.C. 8902a(d)(3).



Sec. 890.1012  Time limits for OPM to initiate permissive debarments.

    (a) Licensure cases. If the basis for the proposed debarment is a 
licensure action, OPM shall send the provider a notice of proposed 
debarment within 6 years of the effective date of the State licensing 
authority's revocation, suspension, restriction, or nonrenewal action, 
or the date on which the provider surrendered his license to the State 
authority.
    (b) Ownership or control. If the basis for the proposed debarment is 
ownership or control of an entity by a sanctioned person, or ownership 
or control of a sanctioned entity by a person who knew or should have 
known of the basis for the entity's sanction, OPM shall send a notice of 
proposed debarment within 6 years of the effective date of the sanction 
on which the proposed debarment is based.
    (c) False, deceptive, or wrongful claims practices. If the basis for 
the proposed debarment involves a claim filed with a FEHBP carrier, OPM 
shall send the provider a notice of proposed debarment within 6 years of 
the date he presented the claim for payment to the covered person's 
FEHBP carrier.
    (d) Failure to furnish requested information. If the basis for the 
proposed debarment involves a provider's failure to furnish information 
requested by OPM or an FEHBP carrier, OPM shall send the notice of 
proposed debarment within 6 years of the date on which the carrier or 
OPM requested the provider to furnish the information in question.



Sec. 890.1013  Deciding whether to propose a permissive debarment.

    (a) Review factors. The factors OPM shall consider in deciding 
whether to propose a provider's debarment under a permissive debarment 
authority are:
    (1) The nature of any claims involved in the basis for the proposed 
debarment and the circumstances under which they were presented to FEHBP 
carriers;
    (2) The improper conduct involved in the basis for the proposed 
debarment, and the provider's degree of culpability and history of prior 
offenses;
    (3) The extent to which the provider poses or may pose a risk to the 
health and safety of FEHBP-covered individuals or to the integrity of 
FEHBP transactions; and
    (4) Other factors specifically relevant to the provider's debarment 
that shall be considered in the interests of fairness.
    (b) Absence of a factor. The absence of a factor shall be considered 
neutral, and shall have no effect on OPM's decision.
    (c) Specialized review in certain cases. In determining whether to 
propose debarment under 5 U.S.C 8902a(c)(4) for providing items or 
services substantially in excess of the needs of a covered individual or 
for providing items or services that fail to meet professionally-
recognized quality standards, OPM shall obtain the input of trained 
reviewers, based on written medical protocols developed by physicians. 
If OPM cannot reach a decision on this

[[Page 493]]

basis, it shall consult with a physician in an appropriate specialty 
area.



Sec. 890.1014  Notice of proposed permissive debarment.

    Notice of a proposed permissive debarment shall contain the 
information set forth in Sec. 890.1006.



Sec. 890.1015  Minimum and maximum length of permissive debarments.

    (a) No mandatory minimum or upper limit on length of permissive 
debarment. There is neither a mandatory minimum debarment period nor a 
limitation on the maximum length of a debarment under any permissive 
debarment authority.
    (b) Debarring official's process in setting period of permissive 
debarment. The debarring official shall set the period of each debarment 
issued under a permissive debarment authority after considering the 
factors set forth in Sec. 890.1016 and the factors set forth in the 
applicable section from among Sec. Sec. 890.1017 through 890.1021.



Sec. 890.1016  Aggravating and mitigating factors used to determine 
the length of permissive debarments.

    (a) Aggravating factors. The presence of aggravating circumstances 
may support an OPM determination to increase the length of a debarment 
beyond the nominal periods set forth in Sec. Sec. 890.1017 through 
890.1021. The factors that OPM considers as aggravating are:
    (1) Whether the provider's actions underlying the basis for the 
debarment, or similar acts, had an adverse impact on the physical or 
mental health or well-being of one or more FEHBP-covered individuals or 
other persons.
    (2) Whether the provider has a documented history of prior criminal 
wrongdoing; civil violations related to health care items or services; 
improper conduct; or administrative violations addressed by a Federal or 
State agency. OPM may consider matters involving violence, patient 
abuse, drug abuse, or controlled substances convictions or violations to 
be particularly serious.
    (3) Whether the provider's actions underlying the basis for the 
debarment, or similar acts, resulted in financial loss to the FEHBP, 
FEHBP-covered individuals, or other persons. In determining whether, or 
to what extent, a financial loss occurred, OPM shall not consider any 
amounts of restitution that the provider may have paid.
    (4) Whether the provider's false, wrongful, or improper claims to 
FEHBP carriers were numerous, submitted over a prolonged period of time, 
or part of an on-going pattern of wrongful acts.
    (5) Whether the provider was specifically aware of or directly 
responsible for the acts constituting the basis for the debarment.
    (6) Whether the provider attempted to obstruct, hinder, or impede 
official inquiries into the wrongful conduct underlying the debarment.
    (b) Mitigating factors. The presence of mitigating circumstances may 
support an OPM determination to shorten the length of a debarment below 
the nominal periods set forth in Sec. Sec. 890.1017 through 890.1021, 
respectively. The factors that OPM considers as mitigating are:
    (1) Whether the provider's cooperation with Federal, State, or local 
authorities resulted in criminal convictions, civil recoveries, or 
administrative actions against other violators, or served as the basis 
for official determinations of program weaknesses or vulnerabilities. 
Restitution that the provider made for funds wrongfully, improperly, or 
illegally received from Federal or State programs may also be considered 
as a mitigating factor.
    (2) Whether official records of judicial proceedings or the 
proceedings of State licensing authorities contain a formal 
determination that the provider had a physical, mental, or emotional 
condition that reduced his level of culpability before or during the 
period in which he committed the violations in question.
    (c) Absence of factors. The absence of aggravating or mitigating 
factors shall have no effect to either increase or lower the nominal 
period of debarment.



Sec. 890.1017  Determining length of debarment based on revocation 
or suspension of a provider's professional licensure.

    (a) Indefinite term of debarment. Subject to the exceptions set 
forth in paragraph (b) of this section, debarment

[[Page 494]]

under 5 U.S.C. 8902a(c)(1) shall be for an indefinite period coinciding 
with the period during which the provider's license is revoked, 
suspended, restricted, surrendered, or otherwise not in effect in the 
State whose action formed the basis for OPM's debarment.
    (b) Aggravating circumstances. If any of the aggravating 
circumstances set forth in Sec. 890.1016 apply, OPM may debar the 
provider for an additional period beyond the duration of the licensure 
revocation or suspension.



Sec. 890.1018  Determining length of debarment for an entity owned 
or controlled by a sanctioned provider.

    OPM shall determine the length of debarments of entities under 5 
U.S.C. 8902a(c)(2) based on the type of violation committed by the 
person with an ownership or control interest. The types of violations 
actionable under this provision are:
    (a) Owner/controller's debarment. The debarment of an entity based 
on debarment of an individual with an ownership or control interest 
shall be for a period concurrent with the individual's debarment. If any 
aggravating or mitigating circumstances set forth in Sec. 890.1016 
apply solely to the entity and were not considered in setting the period 
of the individual's debarment, OPM may debar the entity for a period 
longer or shorter than the individual's debarment.
    (b) Owner/controller's conviction. The debarment of an entity based 
on the criminal conviction of a person with an ownership or control 
interest for an offense listed in 5 U.S.C. 8902a(b)(1)-(4) shall be for 
a period of not less than 3 years, subject to adjustment for any 
aggravating or mitigating circumstances set forth in Sec. 890.1016 
applying solely to the entity.
    (c) Owner/controller's civil monetary penalty. The debarment of an 
entity based on a civil monetary penalty imposed on a person with an 
ownership or control interest, shall be for a period of not less than 3 
years, subject to adjustment for any aggravating or mitigating 
circumstances set forth in Sec. 890.1016 applying solely to the entity.



Sec. 890.1019  Determining length of debarment based on ownership or 
control of a sanctioned entity.

    OPM shall determine the length of debarments of individual providers 
under 5 U.S.C. 8902a(c)(3) based on the type of violation committed by 
the sanctioned entity owned or controlled by the person with an 
ownership or control interest. The types of violations actionable under 
this provision are:
    (a) Entity's debarment. If a provider's debarment is based on his 
ownership or control of a debarred entity, the debarment shall be 
concurrent with the entity's debarment. If any of the aggravating or 
mitigating circumstances identified in Sec. 890.1016 applies directly 
to the provider that owns or controls the debarred entity and was not 
considered in setting the period of the entity's debarment, OPM may 
debar the provider for a period longer or shorter, respectively, than 
the entity's debarment.
    (b) Entity's conviction. If a provider's debarment is based on the 
criminal conviction of an entity he owns or controls for an offense 
listed in 5 U.S.C. 8902a(b)(1)-(4), OPM shall debar the provider for a 
period of no less than 3 years, subject to adjustment for any 
aggravating or mitigating circumstances identified in Sec. 890.1016 
that apply to the provider as an individual.
    (c) Entity's civil monetary penalty. If a provider's debarment is 
based on a civil monetary penalty imposed on an entity he owns or 
controls, OPM shall debar him for 3 years, subject to adjustment on the 
basis of the aggravating and mitigating circumstances listed in Sec. 
890.1016 that apply to the provider as an individual.



Sec. 890.1020  Determining length of debarment based on false, 
wrongful, or deceptive claims.

    Debarments under 5 U.S.C. 8902a(c)(4) and (5) and 5 U.S.C. 
8902a(d)(1) and (2) shall be for a period of 3 years, subject to 
adjustment based on the aggravating and mitigating factors listed in 
Sec. 890.1016.

[[Page 495]]



Sec. 890.1021  Determining length of debarment based on failure to 
furnish information needed to resolve claims.

    Debarments under 5 U.S.C. 8902a(d)(3) shall be for a period of 3 
years, subject to adjustment based on the aggravating and mitigating 
factors listed in Sec. 890.1016.



Sec. 890.1022  Contesting proposed permissive debarments.

    (a) Right to contest a proposed debarment. A provider proposed for 
debarment under a permissive debarment authority may challenge the 
debarment by filing a written contest with the debarring official during 
the 30-day notice period indicated in the notice of proposed debarment. 
In the absence of a timely contest, the debarment shall become effective 
as stated in the notice, without further action by OPM.
    (b) Challenging the length of a proposed debarment. A provider may 
contest the length of the proposed debarment, while not challenging the 
debarment itself, or may contest both the length of a debarment and the 
debarment itself in the same contest.



Sec. 890.1023  Information considered in deciding a contest.

    (a) Documents and oral and written arguments. A provider may submit 
documents and written arguments in opposition to the proposed debarment 
and/or the length of the proposed debarment, and may appear personally 
or through a representative before the debarring official to provide 
other relevant information.
    (b) Specific factual basis for contesting the proposed debarment. A 
provider's oral and written arguments shall identify the specific facts 
that contradict the basis for the proposed debarment as stated in the 
notice of proposed debarment. A general or unsupported denial of the 
basis for debarment does not raise a genuine dispute over facts material 
to the debarment, and the debarring official shall not give such a 
denial any probative weight.
    (c) Mandatory disclosures. Regardless of the basis for the contest, 
providers are required to disclose certain types of background 
information, in addition to any other information submitted during the 
contest. Failure to provide such information completely and accurately 
may be a basis for OPM to initiate further legal or administrative 
action against the provider. The specific items of information that 
shall be furnished to OPM are:
    (1) Any existing, proposed, or prior exclusion, debarment, penalty, 
or other sanction imposed on the provider by a Federal, State, or local 
government agency, including any administrative agreement that purports 
to affect only a single agency;
    (2) Any criminal or civil legal proceeding not referenced in the 
notice of proposed debarment that arose from facts relevant to the basis 
for debarment stated in the notice; and
    (3) Any entity in which the provider has a control interest, as that 
term is defined in Sec. 890.1003.



Sec. 890.1024  Standard and burden of proof for deciding contests.

    OPM shall demonstrate, by a preponderance of the evidence in the 
administrative record as a whole, that a provider has committed a 
sanctionable violation.



Sec. 890.1025  Cases where additional fact-finding is not required.

    In each contest, the debarring official shall determine whether a 
further fact-finding proceeding is required in addition to presentation 
of arguments, documents, and information. An additional fact-finding 
proceeding is not required when:
    (a) Prior adjudication. The proposed debarment is based on facts 
determined in a prior due process adjudication. Examples of prior due 
process proceedings include, but are not limited to, the adjudication 
procedures associated with:
    (1) Licensure revocation, suspension, restriction, or nonrenewal by 
a State licensing authority;
    (2) Debarment, exclusion, suspension, civil monetary penalties, or 
similar legal or administrative adjudications by Federal, State, or 
local agencies;
    (3) A criminal conviction or civil judgment; or
    (4) An action by a provider that constitutes a waiver of his right 
to a due process adjudication, such as surrender

[[Page 496]]

of professional license during the pendency of a disciplinary hearing, 
entering a guilty plea or confession of judgment in a judicial 
proceeding, or signing a settlement agreement stipulating facts that 
constitute a sanctionable violation.
    (b) Material facts not in dispute. The provider's contest does not 
identify a bona fide dispute concerning facts material to the basis for 
the proposed debarment.



Sec. 890.1026  Procedures if a fact-finding proceeding is not required.

    (a) Debarring official's procedures. If a fact-finding proceeding is 
not required, the debarring official shall issue a final decision of a 
provider's contest within 30 days after the record closes for submitting 
evidence, arguments, and information as part of the contest. The 
debarring official may extend this timeframe for good cause.
    (b) No further administrative review available. There are no further 
OPM administrative proceedings after the presiding official's final 
decision. A provider adversely affected by the decision may appeal under 
5 U.S.C. 8902a(h)(2) to the appropriate U.S. district court.



Sec. 890.1027  Cases where an additional fact-finding proceeding is 
required.

    (a) Criteria for holding fact-finding proceeding. The debarring 
official shall request another OPM official (``presiding official'') to 
hold an additional fact-finding proceeding if:
    (1) Facts material to the proposed debarment have not been 
adjudicated in a prior due process proceeding; and
    (2) These facts are genuinely in dispute, based on the entire 
administrative record available to the debarring official.
    (b) Qualification to serve as presiding official. The presiding 
official is designated by the OPM Director or another OPM official 
authorized by the Director to make such designations. The presiding 
official shall be a senior official who is qualified to conduct informal 
adjudicative proceedings and who has had no previous contact with the 
proposed debarment or the contest.
    (c) Effect on contest. The debarring official shall defer a final 
decision on the contest pending the results of the fact-finding 
proceeding.



Sec. 890.1028  Conducting a fact-finding proceeding.

    (a) Informal proceeding. The presiding official may conduct the 
fact-finding proceedings as informally as practicable, consistent with 
principles of fundamental fairness. Formal rules of evidence or 
procedure do not apply to these proceedings.
    (b) Proceeding limited to disputed material facts. The presiding 
official shall consider only the genuinely disputed facts identified by 
the debarring official as material to the basis for the debarment. 
Matters that have been previously adjudicated or that are not in bona 
fide dispute within the administrative record shall not be considered by 
presiding official.
    (c) Provider's right to present information, evidence, and 
arguments. A provider may appear before the presiding official with 
counsel, submit oral and written arguments and documentary evidence, 
present witnesses on his own behalf, question any witnesses testifying 
in support of the debarment, and challenge the accuracy of any other 
evidence that the agency offers as a basis for the debarment.
    (d) Record of proceedings. The presiding official shall make an 
audio recording of the proceedings and shall provide a copy to the 
provider at no charge. If the provider wishes to have a transcribed 
record, OPM shall arrange for production of one which may be purchased 
at cost.
    (e) Presiding official's findings. The presiding official shall 
resolve all of the disputed facts identified by the debarring official, 
on the basis of a preponderance of the evidence contained within the 
entire administrative record. The presiding official shall issue a 
written report of all findings of fact to the debarring official within 
30 days after the record of the fact-finding proceeding closes.



Sec. 890.1029  Deciding a contest after a fact-finding proceeding.

    (a) Findings shall be accepted. The debarring official shall accept 
the presiding official's findings of fact, unless

[[Page 497]]

they are arbitrary, capricious, or clearly erroneous. If the debarring 
official concludes that the factual findings are not acceptable, they 
may be remanded to the presiding official for additional proceedings in 
accordance with Sec. 890.1028.
    (b) Timeframe for final decision. The debarring official shall issue 
a final written decision on a contest within 30 days after receiving the 
presiding official's findings. The debarring official may extend this 
decision period for good cause.
    (c) Debarring official's final decision. (1) The debarring official 
shall observe the evidentiary standards and burdens of proof stated in 
Sec. 890.1024 in reaching a final decision.
    (2) In any case where a final decision is made to debar a provider, 
the debarring official has the discretion to set the period of 
debarment, subject to the factors identified in Sec. Sec. 890.1016 
through 1021.
    (3) The debarring official has the discretion to decide not to 
impose debarment in any case involving a permissive debarment authority.
    (d) No further administrative proceedings. No further administrative 
proceedings shall be conducted after the debarring official's final 
decision in a contest involving an additional fact-finding hearing. A 
provider adversely affected by the debarring official's final decision 
in a contested case may appeal under 5 U.S.C. 8902a(h)(2) to the 
appropriate U. S. district court.

                               Suspension



Sec. 890.1030  Effect of a suspension.

    (a) Temporary action pending formal proceedings. Suspension is a 
temporary action pending completion of an investigation or ensuing 
criminal, civil, or administrative proceedings.
    (b) Immediate effect. Suspension is effective immediately upon the 
suspending official's decision, without prior notice to the provider.
    (c) Effect equivalent to debarment. The effect of a suspension is 
the same as the effect of a debarment. A suspended provider may not 
receive payment from FEHBP funds for items or services furnished to 
FEHBP-covered persons while suspended.



Sec. 890.1031  Grounds for suspension.

    (a) Basis for suspension. OPM may suspend a provider if:
    (1) OPM obtains reliable evidence indicating that one of the grounds 
for suspension listed in paragraph (b) of this section applies to the 
provider; and
    (2) The suspending official determines under paragraph (c) of this 
section that immediate action to suspend the provider is necessary to 
protect the health and safety of persons covered by FEHBP.
    (b) Grounds for suspension. Evidence constituting grounds for a 
suspension may include, but is not limited to:
    (1) Indictment or conviction of a provider for a criminal offense 
that is a basis for mandatory debarment under this subpart;
    (2) Indictment or conviction of a provider for a criminal offense 
that reflects a risk to the health, safety, or well-being of FEHBP-
covered individuals;
    (3) Other credible evidence indicating, in the judgment of the 
suspending official, that a provider has committed a violation that 
would warrant debarment under this subpart. This may include, but is not 
limited to:
    (i) Civil judgments;
    (ii) Notice that a Federal, State, or local government agency has 
debarred, suspended, or excluded a provider from participating in a 
program or revoked or declined to renew a professional license; or
    (iii) Other official findings by Federal, State, or local bodies 
that determine factual or legal matters.
    (c) Determining need for immediate action. Suspension is intended to 
protect the public interest, including the health and safety of covered 
individuals or the integrity of FEHBP funds. The suspending official has 
wide discretion to decide whether to suspend a provider. A specific 
finding of immediacy or necessity is not required to issue a suspension. 
The suspending official may draw reasonable inferences from the nature 
of the alleged misconduct and from a provider's actual or potential 
transactions with the FEHBP.

[[Page 498]]



Sec. 890.1032  Length of suspension.

    (a) Initial period. The initial term of all suspensions shall be an 
indefinite period not to exceed 12 months.
    (b) Formal legal proceedings not initiated. If formal legal or 
administrative proceedings have not begun against a provider within 12 
months after the effective date of his suspension, the suspending 
official may:
    (1) Terminate the suspension; or
    (2) If requested by the Department of Justice, the cognizant United 
States Attorney's Office, or other responsible Federal, State, or local 
prosecuting official, extend the suspension for an additional period, 
not to exceed 6 months.
    (c) Formal proceedings initiated. If formal criminal, civil, or 
administrative proceedings are initiated against a suspended provider, 
the suspension may continue indefinitely, pending the outcome of those 
proceedings.
    (d) Terminating the suspension. The suspending official may 
terminate a suspension at any time, and shall terminate it after 18 
months, unless formal proceedings have begun within that period.



Sec. 890.1033  Notice of suspension.

    (a) Written notice. OPM shall send written notice of suspension 
according to the procedures and methods described in Sec. 890.1006(c)-
(f).
    (b) Contents of notice. The suspension notice shall contain 
information indicating that:
    (1) The provider has been suspended, effective on the date of the 
notice;
    (2) The initial period of the suspension;
    (3) The basis for the suspension;
    (4) The provisions of law and regulation authorizing the suspension;
    (5) The effect of the suspension; and
    (6) The provider's rights to contest the suspension.



Sec. 890.1034  Counting a period of suspension as part of a subsequent 
debarment.

    The debarring official may consider the provider's contiguous period 
of suspension when determining the length of a debarment.



Sec. 890.1035  Provider contests of suspensions.

    (a) Filing a contest of the suspension. A provider may challenge a 
suspension by filing a contest, in writing, with the suspending official 
not later than 30 days after receiving notice of suspension. The 
suspension shall remain in effect during the contest, unless rescinded 
by the suspending official.
    (b) Informal proceeding. The suspending official shall use informal, 
flexible procedures to conduct the contest. Formal rules of evidence and 
procedure do not apply to this proceeding.



Sec. 890.1036  Information considered in deciding a contest.

    (a) Presenting information and arguments to the suspending official. 
A provider may submit documents and written arguments in opposition to 
the suspension, and may appear personally, or through a representative, 
before the suspending official to provide any other relevant 
information.
    (b) Specific factual basis for contesting the suspension. The 
provider shall identify specific facts that contradict the basis for the 
suspension as stated in the suspension notice. A general denial of the 
basis for suspension does not raise a genuine dispute over facts 
material to the suspension, and the suspending official shall not give 
such a denial any probative weight.
    (c) Mandatory disclosures. Any provider contesting a suspension 
shall disclose the items of information set forth in Sec. 890.1023(c). 
Failure to provide such information completely and accurately may be a 
basis for OPM to initiate further legal or administrative action against 
the provider.



Sec. 890.1037  Cases where additional fact-finding is not required.

    The suspending official may decide a contest without an additional 
fact-finding process if:
    (a) Previously adjudicated facts. The suspension is based on an 
indictment or on facts determined by a prior adjudication in which the 
provider was afforded due process rights. Examples of due process 
proceedings include, but are not limited to, the adjudication procedures 
associated with licensure revocation, suspension, restriction, or

[[Page 499]]

nonrenewal by a State licensing authority; similar administrative 
adjudications by Federal, State, or local agencies; a criminal 
conviction or civil judgment; or an action by the provider that 
constitutes a waiver of his right to a due process adjudication, such as 
surrender of professional licensure during the pendency of a 
disciplinary hearing, entering a guilty plea or confession of judgment 
in a judicial proceeding, or signing a settlement agreement stipulating 
facts that constitute a sanctionable violation. Neither the existence of 
the prior adjudication nor any of the underlying circumstances are 
considered to be subject to genuine factual dispute as part of the 
suspension proceeding.
    (b) Advisory by law enforcement officials. OPM is advised by the 
Department of Justice, the appropriate U.S. Attorney's Office, a State 
attorney general's office, or a State or local prosecutor's office that 
proceedings before a presiding official would prejudice the substantial 
interests of the Government in pending or contemplated legal proceedings 
based on the same facts as the suspension.
    (c) No bona fide dispute of material facts. The information, 
arguments, and documents submitted to the suspending official do not 
establish that there is a bona fide factual dispute regarding facts 
material to the suspension.



Sec. 890.1038  Deciding a contest without additional fact-finding.

    (a) Written decision. The suspending official shall issue a written 
decision on the contest within 30 days after the record closes for 
submitting evidence, arguments, and information. The suspending official 
may extend this timeframe for good cause.
    (b) No further administrative review available. The suspending 
official's decision is final and is not subject to further 
administrative review.



Sec. 890.1039  Cases where additional fact-finding is required.

    (a) Criteria for holding fact-finding proceeding. The debarring 
official shall request another OPM official (``presiding official'') to 
hold an additional fact-finding proceeding if:
    (1) Facts material to the suspension have not been adjudicated in a 
prior due process proceeding; and
    (2) These facts are genuinely in dispute, based on the entire 
administrative record available to the debarring official.
    (b) Qualification to serve as presiding official. The presiding 
official is designated by the OPM Director or another OPM official 
authorized by the Director to make such designations. The presiding 
official shall be a senior official who is qualified to conduct informal 
adjudicative proceedings and who has had no previous contact with the 
suspension or the contest.
    (c) Effect on contest. The suspending official shall defer a final 
decision on the contest pending the results of the fact-finding 
proceeding.



Sec. 890.1040  Conducting a fact-finding proceeding.

    (a) Informal proceeding. The presiding official may conduct the 
fact-finding proceedings as informally as practicable, consistent with 
principles of fundamental fairness. Specific rules of evidence or 
procedure do not apply to these proceedings.
    (b) Proceeding limited to disputed material facts. The presiding 
official shall consider only the genuinely disputed facts identified by 
the suspending official as relevant to the basis for the suspension. 
Matters that have been previously adjudicated or which are not in bona 
fide dispute within the record shall not be considered by the presiding 
official.
    (c) Right to present information, evidence, and arguments. A 
provider may appear before the presiding official with counsel, submit 
oral and written arguments and documentary evidence, present witnesses, 
question any witnesses testifying in support of the suspension, and 
challenge the accuracy of any other evidence that the agency offers as a 
basis for the suspension.
    (d) Record of proceedings. The presiding official shall make an 
audio recording of the proceedings and shall provide a copy to the 
provider at no charge. If the provider wishes to have a transcribed 
record, OPM shall arrange for production of one which may be purchased 
at cost.

[[Page 500]]

    (e) Presiding official's findings. The presiding official shall 
resolve all of the disputed facts identified by the suspending official, 
on the basis of a preponderance of the evidence in the entire 
administrative record. Within 30 days after the record of the proceeding 
closes, the presiding official shall issue a written report of all 
findings of fact to the suspending official.



Sec. 890.1041  Deciding a contest after a fact-finding proceeding.

    (a) Presiding official's findings shall be accepted. The suspending 
official shall accept the presiding official's findings, unless they are 
arbitrary, capricious, or clearly erroneous.
    (b) Suspending official's decision. Within 30 days after receiving 
the presiding official's report, the suspending official shall issue a 
final written decision that either sustains, modifies, or terminates the 
suspension. The suspending official may extend this period for good 
cause.
    (c) Effect on subsequent debarment or suspension proceedings. A 
decision by the suspending official to modify or terminate a suspension 
shall not prevent OPM from subsequently debarring the same provider, or 
any other Federal agency from either suspending or debarring the 
provider, based on the same facts.

                           Effect of Debarment



Sec. 890.1042  Effective dates of debarments.

    (a) Minimum notice period. A debarment shall take effect not sooner 
than 30 days after the date of OPM's notice of proposed debarment, 
unless the debarring official specifically determines that the health or 
safety of covered individuals or the integrity of the FEHBP warrants an 
earlier effective date. In such a situation, the notice shall 
specifically inform the provider that the debarring official decided to 
shorten or eliminate the 30-day notice period.
    (b) Uncontested debarments. If a provider does not file a contest 
within the 30-day notice period, the proposed debarment shall take 
effect on the date stated in the notice of proposed debarment, without 
further procedures, actions, or notice by OPM.
    (c) Contested debarments and requests for reducing the period of 
debarment. If a provider files a contest within the 30-day notice 
period, the proposed debarment shall not go into effect until the 
debarring official issues a final written decision, unless the health or 
safety of covered individuals or the integrity of the FEHBP requires the 
debarment to be effective while the contest is pending.



Sec. 890.1043  Effect of debarment on a provider.

    (a) FEHBP payments prohibited. A debarred provider is not eligible 
to receive payment, directly or indirectly, from FEHBP funds for items 
or services furnished to a covered individual on or after the effective 
date of the debarment. Also, a provider shall not accept an assignment 
of a claim for items or services furnished to a covered individual 
during the period of debarment. These restrictions shall remain in 
effect until the provider is reinstated by OPM.
    (b) Governmentwide effect. Debarment precludes a provider from 
participating in all other Federal agencies' procurement and 
nonprocurement programs and activities, as required by section 2455 of 
the Federal Acquisition Streamlining Act of 1994 (Pub. L. 103--355). 
Other agencies may grant a waiver or exception under their own 
regulations, to permit a provider to participate in their programs, 
notwithstanding the OPM debarment.
    (c) Civil or criminal liability. A provider may be subject to civil 
monetary penalties under this subpart or criminal liability under other 
Federal statutes for knowingly filing claims, causing claims to be 
filed, or accepting payment from FEHBP carriers for items or services 
furnished to a covered individual during a period of debarment .

    Notifying Outside Parties About Debarment and Suspension Actions



Sec. 890.1044  Entities notified of OPM-issued debarments and suspensions.

    When OPM debars or suspends a provider under this subpart, OPM shall 
notify:
    (a) All FEHBP carriers;

[[Page 501]]

    (b) The General Services Administration, for publication in the 
comprehensive Governmentwide list of Federal agency exclusions;
    (c) Other Federal agencies that administer health care or health 
benefits programs; and
    (d) State and local agencies, authorities, boards, or other 
organizations with health care licensing or certification 
responsibilities.



Sec. 890.1045  Informing persons covered by FEHBP about debarment or 
suspension of their provider.

    FEHBP carriers are required to notify covered individuals who have 
obtained items or services from a debarred or suspended provider within 
one year of the date of the debarment or suspension of:
    (a) The existence of the provider's debarment or suspension;
    (b) The minimum period remaining in the provider's period of 
debarment; and
    (c) The requirement that OPM terminate the debarment or suspension 
before FEHBP funds can be paid for items or services the provider 
furnishes to covered individuals.

                 Exceptions to the Effect of Debarments



Sec. 890.1046  Effect of debarment or suspension on payments for services 
furnished in emergency situations.

    A debarred or suspended health care provider may receive FEHBP funds 
paid for items or services furnished on an emergency basis if the FEHBP 
carrier serving the covered individual determines that:
    (a) The provider's treatment was essential to the health and safety 
of the covered individual; and
    (b) No other source of equivalent treatment was reasonably 
available.

[69 FR 9920, Mar. 3, 2004]



Sec. 890.1047  Special rules for institutional providers.

    (a) Covered individual admitted before debarment or suspension. If a 
covered person is admitted as an inpatient before the effective date of 
an institutional provider's debarment or suspension, that provider may 
continue to receive payment of FEHBP funds for inpatient institutional 
services until the covered person is released or transferred, unless the 
debarring or suspending official terminates payments under paragraph (b) 
of this section.
    (b) Health and safety of covered individuals. If the debarring or 
suspending official determines that the health and safety of covered 
persons would be at risk if they remain in a debarred or suspended 
institution, OPM may terminate FEHBP payments at any time.
    (c) Notice of payment limitations. If OPM limits any payment under 
paragraph (b) of this section, it must immediately send written notice 
of its action to the institutional provider.
    (d) Finality of debarring or suspending official's decision. The 
debarring or suspending official's decision to limit or deny payments 
under paragraph (b) of this section is not subject to administrative 
review or reconsideration.

[69 FR 9920, Mar. 3, 2004]



Sec. 890.1048  Waiver of debarment for a provider that is the sole source 
of health care services in a community.

    (a) Application required. A provider may apply for a limited waiver 
of debarment at any time after receiving OPM's notice of proposed 
debarment. Suspended providers are not eligible to request a waiver of 
suspension.
    (b) Criteria for granting waiver. To receive a waiver, a provider 
shall clearly demonstrate that:
    (1) The provider is the sole community provider or the sole source 
of essential specialized services in a community;
    (2) A limited waiver of debarment would be in the best interests of 
covered individuals in the defined service area;
    (3) There are reasonable assurances that the actions which formed 
the basis for the debarment shall not recur; and
    (4) There is no basis under this subpart for continuing the 
debarment.
    (c) Waiver applies only in the defined service area. A limited 
waiver applies only to items or services provided within the defined 
service area where a provider is the sole community provider or sole 
source of essential specialized services.

[[Page 502]]

    (d) Governmentwide effect continues. A limited waiver applies only 
to a provider's FEHBP transactions. Even if OPM waives a debarment for 
FEHBP purposes, the governmentwide effect under section 2455 of the 
Federal Acquisition Streamlining Act of 1994 (Pub. L. 103-355) continues 
for all other Federal agencies' procurement and nonprocurement programs 
and activities.
    (e) Waiver rescinded if circumstances change. OPM shall rescind the 
limited waiver when any of its underlying bases no longer apply. If OPM 
rescinds the limited waiver, the provider's debarment shall resume full 
effect for all FEHBP transactions. Events warranting rescission include, 
but are not limited to:
    (1) The provider ceases to furnish items or services in the defined 
service area;
    (2) Another provider begins to furnish equivalent items or services 
in the defined service area, so that the provider who received a waiver 
is no longer the sole provider or sole source; or
    (3) The actions that formed the basis for the provider's debarment, 
or similar acts, recur.
    (f) Effect on period of debarment. The minimum period of debarment 
is established when the debarment is initially imposed. A subsequent 
decision to grant, deny, or rescind a limited waiver shall not change 
that period.
    (g) Application is necessary for reinstatement. A provider who has 
received a limited waiver shall apply for reinstatement at the end of 
the debarment period, even if a limited waiver is in effect when the 
debarment expires.
    (h) Finality of debarring official's decision. The debarring 
official's decision to grant or deny a limited waiver is final and not 
subject to further administrative review or reconsideration.

              Special Exceptions to Protect Covered Persons



Sec. 890.1049  Claims for non-emergency items or services furnished 
by a debarred or suspended provider.

    (a) Covered individual unaware of debarment or suspension. FEHBP 
funds may be paid for items or services furnished by a debarred or 
suspended provider if, at the time the items or services were furnished, 
the covered individual did not know, and could not reasonably be 
expected to have known, that the provider was debarred or suspended. 
This provision is intended solely to protect the interests of FEHBP-
covered persons who obtain services from a debarred or suspended 
provider in good faith and without knowledge that the provider has been 
sanctioned. It does not authorize debarred or suspended providers to 
submit claims for payment to FEHBP carriers.
    (b) Notice sent by carrier. When paying a claim under the authority 
of paragraph (a) of this section, an FEHBP carrier must send a written 
notice to the covered individual, stating:
    (1) That the provider is debarred or suspended and is prohibited 
from receiving payment of FEHBP funds for items or services furnished 
after the effective date of the debarment or suspension;
    (2) That claims may not be paid for items or services furnished by 
the debarred or suspended provider after the covered individual is 
informed of the debarment or suspension;
    (3) That the current claim is being paid as a legally-authorized 
exception to the effect of the debarment or suspension in order to 
protect covered individuals who obtain items or services without 
knowledge of their provider's debarment or suspension;
    (4) That FEHBP carriers are required to deny payment of any claim 
for items or services rendered by a debarred or suspended provider 15 
days or longer after the date of the notice described in paragraph (b) 
of this section, unless the covered individual had no knowledge of the 
provider's debarment or suspension when the items or services were 
rendered;
    (5) The minimum period remaining in the provider's debarment or 
suspension; and
    (6) That FEHBP funds cannot otherwise be paid to the provider until 
OPM terminates the debarment or suspension.

[69 FR 9920, Mar. 3, 2004]

[[Page 503]]



Sec. 890.1050  Exception to a provider's debarment for an individual 
enrollee.

    (a) Request by a covered individual. Any individual enrolled in 
FEHBP may submit a request through their FEHBP carrier for continued 
payment of items or services furnished by a debarred provider to any 
person covered under the enrollment. Requests shall not be accepted for 
continued payments to suspended providers.
    (b) OPM action on the request. OPM shall consider the recommendation 
of the FEHBP carrier before acting on the request. To be approved, the 
request shall demonstrate that:
    (1) Interrupting an existing, ongoing course of treatment by the 
provider would have a detrimental effect on the covered individual's 
health or safety; or
    (2) The covered individual does not have access to an alternative 
source of the same or equivalent health care items or services within a 
reasonably accessible service area.
    (c) Scope of the exception. An approved exception applies only to 
the covered individual(s) who requested it, or on whose behalf it was 
requested. The governmentwide effect of the provider's debarment under 
section 2455 of the Federal Acquisition Streamlining Act (Pub. L. 103-
355) is not altered by an exception.
    (d) Provider requests not allowed. OPM shall not consider an 
exception request submitted by a provider on behalf of a covered 
individual.
    (e) Debarring official's decision is final. The debarring official's 
decision on an exception request is not subject to further 
administrative review or reconsideration.

                              Reinstatement



Sec. 890.1051  Applying for reinstatement when period of debarment 
expires.

    (a) Application required. Reinstatement is not automatic when the 
minimum period of a provider's debarment expires. The provider shall 
apply in writing to OPM, supplying specific information about the 
reinstatement criteria outlined in paragraph (c) of this section.
    (b) Reinstatement date. A debarred provider may submit a 
reinstatement application not earlier than 60 days before the nominal 
expiration date of the debarment. However, in no case shall OPM 
reinstate a provider before the minimum period of debarment expires.
    (c) Reinstatement criteria. To be approved, the provider's 
reinstatement application shall clearly demonstrate that:
    (1) There are reasonable assurances that the actions resulting in 
the provider's debarment have not recurred and will not recur;
    (2) There is no basis under this subpart for continuing the 
provider's debarment; and
    (3) There is no pending criminal, civil, or administrative action 
that would subject the provider to debarment by OPM.
    (d) Written notice of OPM action. OPM shall inform the provider in 
writing of its decision regarding the reinstatement application.
    (e) Limitation on reapplication. If OPM denies a provider's 
reinstatement application, the provider is not eligible to reapply for 1 
year after the date of the denial.



Sec. 890.1052  Reinstatements without application.

    OPM shall reinstate a provider without a reinstatement application 
if:
    (a) Conviction reversed. The conviction on which the provider's 
debarment was based is reversed or vacated by a final decision of the 
highest appeals court with jurisdiction over the case; and the 
prosecutorial authority with jurisdiction over the case has declined to 
retry it, or the deadline for retrial has expired without action by the 
prosecutor.
    (b) Sanction terminated. A sanction imposed by another Federal 
agency, on which the debarment was based, is terminated by that agency.
    (c) Court order. A Federal court orders OPM to stay, rescind, or 
terminate a provider's debarment.
    (d) Written notice. When reinstating a provider without an 
application, OPM shall send the provider written notice of the basis and 
effective date of his reinstatement.

[[Page 504]]



Sec. 890.1053  Table of procedures and effective dates for reinstatements.

    The procedures and effective dates for reinstatements under this 
subpart are:

------------------------------------------------------------------------
                                   Application
     Basis for debarment            required?          Effective date
------------------------------------------------------------------------
Period of debarment expires.  Yes.................  After debarment
                                                     expires.
Conviction reversed on final  No..................  Retroactive (start
 appeal/no retrial possible.                         of debarment).
Other agency sanction ends..  No..................  Ending date of
                                                     sanction.
Court orders reinstatement..  No..................  Retroactive (start
                                                     of debarment).
------------------------------------------------------------------------



Sec. 890.1054  Agencies and entities to be notified of reinstatements.

    OPM shall inform the FEHBP carriers, Government agencies and other 
organizations that were originally notified of a provider's debarment 
when a provider is reinstated under Sec. 890.1051 or Sec. 890.1052.



Sec. 890.1055  Contesting a denial of reinstatement.

    (a) Obtaining reconsideration of the initial decision. A provider 
may contest OPM's decision to deny a reinstatement application by 
submitting documents and written arguments to the debarring official 
within 30 days of receiving the notice described in Sec. 890.1051(d). 
In addition, the provider may request to appear in person to present 
oral arguments to the debarring official. The provider may be 
accompanied by counsel when making a personal appearance.
    (b) Debarring official's final decision on reinstatement. The 
debarring official shall issue a final written decision, based on the 
entire administrative record, within 30 days after the record closes to 
receipt of information. The debarring official may extend the decision 
period for good cause.
    (c) Finality of debarring official's decision. The debarring 
official's final decision regarding a provider's reinstatement is not 
subject to further administrative review or reconsideration.

           Civil Monetary Penalties and Financial Assessments

    Source: 69 FR 9921, Mar. 3, 2004, unless otherwise noted.



Sec. 890.1060  Purpose and scope of civil monetary penalties and 
assessments.

    (a) Civil monetary penalty. A civil monetary penalty is an amount 
that OPM may impose on a health care provider who commits one of the 
violations listed in Sec. 890.1061. Penalties are intended to protect 
the integrity of FEHBP by deterring repeat violations by the same 
provider and by reducing the likelihood of future violations by other 
providers.
    (b) Assessment. An assessment is an amount that OPM may impose on a 
provider, calculated by reference to the claims involved in the 
underlying violations. Assessments are intended to recognize monetary 
losses, costs, and damages sustained by OPM as the result of a 
provider's violations.
    (c) Definitions. In Sec. Sec. 890.1060 through 890.1072:
    Penalty means civil monetary penalty; and
    Penalties and assessments may connote the singular or plural forms 
of either of those terms, and may represent either the conjunctive or 
disjunctive sense.
    (d) Relationship to debarment and suspension. In addition to 
imposing penalties and assessments, OPM may concurrently debar or 
suspend a provider from participating in the FEHBP on the basis of the 
same violations.
    (e) Relationship to other penalties provided by law. The penalties, 
assessments, debarment, and suspension imposed by OPM are in addition to 
any other penalties that may be prescribed by law or regulation 
administered by an agency of the Federal Government or any State.

[[Page 505]]



Sec. 890.1061  Bases for penalties and assessments.

    (a) Improper claims. OPM may impose penalties and assessments on a 
provider if a claim presented by that provider for payment from FEHBP 
funds meets the criteria set forth in 5 U.S.C. 8902a(d)(1).
    (b) False or misleading statements. OPM may impose penalties and 
assessments on a provider who makes a false statement or 
misrepresentation as set forth in 5 U.S.C. 8902a(d)(2).
    (c) Failing to provide claims-related information. OPM may impose 
penalties and assessments on a provider who knowingly fails to provide 
claims-related information as otherwise required by law.



Sec. 890.1062  Deciding whether to impose penalties and assessments.

    (a) Authority of debarring official. The debarring official has 
discretionary authority to impose penalties and assessments in 
accordance with 5 U.S.C. 8902a and this subpart.
    (b) Factors to be considered. In deciding whether to impose 
penalties and assessments against a provider that has committed one of 
the violations identified in Sec. 890.1061, OPM must consider:
    (1) The number and frequency of the provider's violations;
    (2) The period of time over which the violations were committed;
    (3) The provider's culpability for the specific conduct underlying 
the violations;
    (4) The nature of any claims involved in the violations and the 
circumstances under which the claims were presented to FEHBP carriers;
    (5) The provider's history of prior offenses or improper conduct, 
including any actions that could have constituted a basis for a 
suspension, debarment, penalty, or assessment by any Federal or State 
agency, whether or not any sanction was actually imposed;
    (6) The monetary amount of any damages, losses, and costs, as 
described in Sec. 890.1064(c), attributable to the provider's 
violations; and
    (7) Such other factors as justice may require.
    (c) Additional factors when penalty or assessment is based on 
provisions of Sec. 890.1061(b) or (c). In the case of violations 
involving false or misleading statements or the failure to provide 
claims-related information, OPM must also consider:
    (1) The nature and circumstances of the provider's failure to 
properly report information; and
    (2) The materiality and significance of the false statements or 
misrepresentations the provider made or caused to be made, or the 
information that the provider knowingly did not report.



Sec. 890.1063  Maximum amounts of penalties and assessments.

    OPM may impose penalties and assessments in amounts not to exceed 
those set forth in U.S.C. 8902a(d).



Sec. 890.1064  Determining the amounts of penalties and assessments 
to be imposed on a provider.

    (a) Authority of debarring official. The debarring official has 
discretionary authority to set the amounts of penalties and assessments 
in accordance with law and this subpart.
    (b) Factors considered in determining amounts of penalties and 
assessments. In determining the amounts of penalties and assessments to 
impose on a provider, the debarring official must consider:
    (1) The Government's interests in being fully compensated for all 
damages, losses, and costs associated with the provider's violations, 
including:
    (i) Amounts wrongfully paid from FEHBP funds as the result of the 
provider's violations and interest on those amounts, at rates determined 
by the Department of the Treasury;
    (ii) All costs incurred by OPM in investigating a provider's 
sanctionable misconduct; and
    (iii) All costs incurred in OPM's administrative review of the case, 
including every phase of the administrative sanctions processes 
described by this subpart;
    (2) The Government's interests in deterring future misconduct by 
health care providers;
    (3) The provider's personal financial situation, or, in the case of 
an entity, the entity's financial situation;
    (4) All of the factors set forth in Sec. 890.1062(b) and (c); and

[[Page 506]]

    (5) The presence of aggravating or less serious circumstances, as 
described in paragraphs (c)(1) through (c)(7) of this section.
    (c) Aggravated and less serious circumstances. The presence of 
aggravating circumstances may cause OPM to impose penalties and 
assessments at a higher level within the authorized range, while less 
serious violations may warrant sanctions of relatively lower amounts. 
Paragraphs (c)(1) through (c)(7) of this section provide examples of 
aggravated and less serious violations. These examples are illustrative 
only, and are not intended to represent an exhaustive list of all 
possible types of violations.
    (1) The existence of many separate violations, or of violations 
committed over an extended period of time, constitutes an aggravating 
circumstance. OPM may consider conduct involving a small number of 
violations, committed either infrequently or within a brief period of 
time, to be less serious.
    (2) Violations for which a provider had direct knowledge of the 
material facts (for example, submitting claims that the provider knew to 
contain false, inaccurate, or misleading information), or for which the 
provider did not cooperate with OPM's or an FEHBP carrier's 
investigations, constitute aggravating circumstances. OPM may consider 
violations where the provider did not have direct knowledge of the 
material facts, or in which the provider cooperated with post-violation 
investigative efforts, to be less serious.
    (3) Violations resulting in substantial damages, losses, and costs 
to OPM, the FEHBP, or FEHBP-covered persons constitute aggravating 
circumstances. Violations producing a small or negligible overall 
financial impact may be considered to be less serious.
    (4) A pattern of conduct reflecting numerous improper claims, high-
dollar false claims, or improper claims involving several types of items 
or services constitutes aggravating circumstances. OPM may consider a 
small number of improper claims for relatively low dollar amounts to be 
less serious.
    (5) Every violation involving any harm, or the risk of harm, to the 
health and safety of an FEHBP enrollee, must be considered an 
aggravating circumstance.
    (6) Any prior violation described in Sec. 890.1062(b)(5) 
constitutes an aggravating circumstance. OPM may consider repeated or 
multiple prior violations to represent an especially serious form of 
aggravating circumstances.
    (7) OPM may consider other circumstances or actions to be 
aggravating or less serious within the context of an individual case, as 
the interests of justice require.



Sec. 890.1065  Deciding whether to suspend or debar a provider in a 
case that also involves penalties and assessments.

    In a case where both penalties and assessments and debarment are 
proposed concurrently, OPM must decide the proposed debarment under the 
same criteria and procedures as if it had been proposed separately from 
penalties and assessments.



Sec. 890.1066  Notice of proposed penalties and assessments.

    (a) Written notice. OPM must inform a provider of proposed penalties 
and assessments by written notice, sent via certified mail with return 
receipt requested, to the provider's last known street or post office 
address. OPM may, at its discretion, use an express service that 
furnishes a verification of delivery instead of postal mail.
    (b) Statutory limitations period. OPM must send the notice to the 
provider within 6 years of the date on which the claim underlying the 
proposed penalties and assessments was presented to an FEHBP carrier. If 
the proposed penalties and assessments do not involve a claim presented 
for payment, OPM must send the notice within 6 years of the date of the 
actions on which the proposed penalties and assessments are based.
    (c) Contents of the notice. OPM's notice must contain, at a minimum:
    (1) The statement that OPM proposes to impose penalties and/or 
assessments against the provider;
    (2) Identification of the actions, conduct, and claims that comprise 
the basis for the proposed penalties and assessments;

[[Page 507]]

    (3) The amount of the proposed penalties and assessments, and an 
explanation of how OPM determined those amounts;
    (4) The statutory and regulatory bases for the proposed penalties 
and assessments; and
    (5) Instructions for responding to the notice, including specific 
explanations regarding:
    (i) The provider's right to contest the imposition and/or amounts of 
penalties and assessments before they are formally imposed; and
    (ii) OPM's right, if the provider does not contest the proposed 
penalties and assessments within 30 days of the date he receives the 
notice, to implement them immediately without further administrative 
appeal or recourse.
    (d) Proposing debarment in the same notice. OPM may propose a 
provider's debarment in the same notice that also proposes penalties and 
assessments. In this case, the notice must also provide the elements of 
information required to appear in a notice of proposed debarment under 
Sec. 890.1006(b).
    (e) Procedures if the notice cannot be delivered. OPM must apply the 
provisions of Sec. 890.1006(f) if the notice of proposed penalties and 
assessments cannot be delivered as originally addressed.
    (f) Sending notice by electronic means. [Reserved]



Sec. 890.1067  Provider contests of proposed penalties and assessments.

    (a) Contesting proposed sanctions. A provider may formally contest 
the proposed penalties and assessments by sending a written notice to 
the debarring official within 30 days after receiving the notice 
described in Sec. 890.1066. The debarring official must apply the 
administrative procedures set forth in Sec. Sec. 890.1069 and 890.1070 
to decide the contest.
    (b) Contesting debarments and financial sanctions concurrently. If 
OPM proposes debarment and penalties and assessments in the same notice, 
the provider may contest both the debarment and the financial sanctions 
in the same proceeding. If the provider pursues a combined contest, the 
requirements set forth in Sec. Sec. 890.1022 through 890.1024, as well 
as this section, apply.
    (c) Settling or compromising proposed sanctions. The debarring 
official may settle or compromise proposed sanctions at any time before 
issuing a final decision under Sec. 890.1070.



Sec. 890.1068  Effect of not contesting proposed penalties and 
assessments.

    (a) Proposed sanctions may be implemented immediately. In the 
absence of a timely response by a provider as required in the notice 
described in Sec. 890.1066, the debarring official may issue a final 
decision implementing the proposed financial sanctions immediately, 
without further procedures.
    (b) Debarring official sends notice after implementing sanctions. 
Immediately upon issuing a final decision under paragraph (a), the 
debarring official must send the provider written notice, via certified 
return receipt mail or express delivery service, stating:
    (1) The amount of penalties and assessments imposed;
    (2) The date on which they were imposed; and
    (3) The means by which the provider may pay the penalties and 
assessments.
    (c) No appeal rights. A provider may not pursue a further 
administrative or judicial appeal of the debarring official's final 
decision implementing any sanctions if a timely contest was not filed in 
response to OPM's notice under Sec. 890.1066.



Sec. 890.1069  Information the debarring official must consider in 
deciding a provider's contest of proposed penalties and assessments.

    (a) Documentary material and written arguments. As part of a 
provider's contest, the provider must furnish a written statement of 
reasons why the proposed penalties and assessments should not be imposed 
and/or why the amounts proposed are excessive.
    (b) Mandatory disclosures. In addition to any other information 
submitted during the contest, the provider must inform the debarring 
official in writing of:

[[Page 508]]

    (1) Any existing, proposed, or prior exclusion, debarment, penalty, 
assessment, or other sanction that was imposed by a Federal, State, or 
local government agency, including any administrative agreement that 
purports to affect only a single agency; and
    (2) Any current or prior criminal or civil legal proceeding that was 
based on the same facts as the penalties and assessments proposed by 
OPM.
    (c) In-person appearance. A provider may request a personal 
appearance (in person, by telephone conference, or through a 
representative) to provide testimony and oral arguments to the debarring 
official.



Sec. 890.1070  Deciding contests of proposed penalties and assessments.

    (a) Debarring official reviews entire administrative record. After 
the provider submits the information and evidence authorized or required 
by Sec. 890.1069, the debarring official shall review the entire 
official record to determine if the contest can be decided without 
additional administrative proceedings, or if an evidentiary hearing is 
required to resolve disputed material facts.
    (b) Previously determined facts. Any facts relating to the basis for 
the proposed penalties and assessments that were determined in prior due 
process proceedings are binding on the debarring official in deciding 
the contest. ``Prior due process proceedings'' are those set forth in 
Sec. 890.1025(a)(1) through (4).
    (c) Deciding the contest without further proceedings. To decide the 
contest without further administrative proceedings, the debarring 
official must determine that:
    (1) The preponderance of the evidence in the administrative record 
as a whole demonstrates that the provider committed a sanctionable 
violation described in Sec. 890.1061; and
    (2) The evidentiary record contains no bona fide dispute of any fact 
material to the proposed financial sanction. A ``material fact'' is a 
fact essential to determining whether a provider committed a 
sanctionable violation for which penalties and assessments may be 
imposed.
    (d) Final decision without further proceedings. If the debarring 
official determines that paragraphs (c)(1) and (c)(2) of this section 
both apply, a final decision may be issued, imposing financial sanctions 
in amounts not exceeding those proposed in the notice to the provider 
described in Sec. 890.1066.
    (e) Insufficient evidence. If the debarring official determines that 
a preponderance of the evidence does not demonstrate that the provider 
committed a sanctionable violation described in Sec. 890.1061, the 
notice of proposed sanctions described in Sec. 890.1066 must be 
withdrawn.
    (f) Disputed material facts. If the debarring official determines 
that the administrative record contains a bona fide dispute about any 
fact material to the proposed sanction, he must refer the case for a 
fact-finding hearing to resolve the disputed fact or facts. The 
provisions of Sec. 890.1027(b) and (c), 890.1028, and 890.1029(a) and 
(b) will govern such a hearing.
    (g) Final decision after fact-finding hearing. After receiving the 
report of the fact-finding hearing, the debarring official must apply 
the provisions of paragraphs (c), (d), and (e) of this section to reach 
a final decision on the provider's contest.



Sec. 890.1071  Further appeal rights after final decision to impose 
penalties and assessments.

    If the debarring official's final decision imposes any penalties and 
assessments, the affected provider may appeal it to the appropriate 
United States district court under the provisions of 5 U.S.C. 
8902a(h)(2).



Sec. 890.1072  Collecting penalties and assessments.

    (a) Agreed-upon payment schedule. At the time OPM imposes penalties 
and assessments, or the amounts are settled or compromised, the provider 
must be afforded the opportunity to arrange an agreed-upon payment 
schedule.
    (b) No agreed-upon payment schedule. In the absence of an agreed-
upon payment schedule, OPM must collect penalties and assessments under 
its regular procedures for resolving debts owed to the Employees Health 
Benefits Fund.
    (c) Offsets. As part of its debt collection efforts, OPM may request 
other

[[Page 509]]

Federal agencies to offset the penalties and assessments against amounts 
that the agencies may owe to the provider, including Federal income tax 
refunds.
    (d) Civil lawsuit. If necessary to obtain payment of penalties and 
assessments, the United States may file a civil lawsuit as set forth in 
5 U.S.C. 8902(i).
    (e) Crediting payments. OPM must deposit payments of penalties and 
assessments into the Employees Health Benefits Fund.



              Subpart K_Temporary Continuation of Coverage

    Source: 54 FR 52339, Dec. 21, 1989, unless otherwise noted.



Sec. 890.1101  Purpose.

    This subpart identifies the individuals who may temporarily continue 
coverage after the coverage would otherwise terminate under this part 
and sets forth the circumstances of their enrollment.



Sec. 890.1102  Definitions.

    In this subpart--
    Gross misconduct means a flagrant and extreme transgression of law 
or established rule of action for which an employee is separated and 
concerning which a judicial or administrative finding of gross 
misconduct has been made.
    Qualifying event means any of the following events that qualify an 
individual for temporary continuation of coverage under subpart K of 
this part:
    (1) A separation from Government service.
    (2) A divorce or annulment.
    (3) A change in circumstances that causes an individual to become 
ineligible to be considered an unmarried dependent child under this 
part.



Sec. 890.1103  Eligibility.

    (a) Except as provided by paragraph (b) of this section, individuals 
described by this section are eligible to elect temporary continuation 
of coverage under this subpart. Eligible individuals are as follows:
    (1) Former employees whose coverage ends because of a separation 
from Federal service under any circumstances except an involuntary 
separation for gross misconduct.
    (2) Individuals whose coverage as children under the family 
enrollment of an employee, former employee, or annuitant ends because 
they cease meeting the requirements for being considered unmarried 
dependent children. For the purpose of this section, children who are 
enrolled under this part as survivors of deceased employees or 
annuitants are considered to be children under a family enrollment of an 
employee or annuitant at the time of the qualifying event.
    (3) Former spouses of employees, of former employees having 
continued family coverage under this subpart, or of annuitants, if the 
former spouse would be eligible for continued coverage under subpart H 
of this part except for failure to meet the requirement of Sec. 
890.803(a) (1) or (3) of this part or the documentation requirements of 
Sec. 890.806(a) of this part, including former spouses who lose 
eligibility under subpart H within 36 months after termination of the 
marriage because they ceased meeting the requirement of Sec. 890.803(a) 
(1) or (3) of this part.
    (b) An individual who is otherwise eligible for benefits under this 
part (excluding the temporary extension of coverage and conversion 
privilege set forth in subpart D of this part) is not entitled to 
continued coverage under this subpart.



Sec. 890.1104  Notification by agency.

    (a) In the case of a former employee who is eligible to elect 
temporary continuation of coverage under Sec. 890.1103(a)(1), the 
employing office must notify the former employee concerning his or her 
rights under this subpart no later than 30 days after the end of the 
temporary extension of coverage provided under Sec. 890.401.
    (b)(1) In the case of a child who is eligible to elect temporary 
continuation of coverage under Sec. 890.1103(a)(2), the enrollee may, 
within 60 days after the qualifying event, provide written notice to the 
employing office of the child's change in status and requesting 
information about temporary continuation of coverage. The written notice

[[Page 510]]

must include the child's name and address and the date of the 
terminating event.
    (2) If the notice described in paragraph (b)(1) is received by the 
employing office within 60 days after the date on which the child ceased 
meeting the requirements for being considered an unmarried dependent 
child, the employing office must notify the child of his or her rights 
under this subpart within 14 days after receiving the notice.
    (3) This paragraph does not preclude the employing office from 
notifying the child of his or her rights based on oral or written 
notification by the child, another family member, or any other source 
that the child no longer meets the requirements for being considered an 
unmarried dependent child.
    (c)(1) In the case of a former spouse who is eligible to elect 
temporary continuation of coverage under Sec. 890.1103(a)(3), the 
employee or the former spouse may, within 60 days after the termination 
of the marriage or the loss of coverage under subpart H of this part, 
notify the employing office of the terminating event and request 
information about temporary continuation of coverage. The notice must 
include the name and address of the former spouse and the date of the 
terminating event.
    (2) The employing office must notify the former spouse of his or her 
rights under this subpart within 14 days after receiving the notice 
described in paragraph (c)(1) of this section.
    (d) If the employing office cannot give the notice required by this 
section to the employee, child, or former spouse directly, it must send 
the notice by first class mail. A notice that is mailed is deemed to be 
received 5 days after the date of the notice.

[54 FR 52339, Dec. 21, 1989, as amended at 57 FR 21192, May 19, 1992]



Sec. 890.1105  Initial election of temporary continuation of coverage; 
application time limitations and effective dates.

    (a) The election of temporary continuation of coverage may be in the 
form of a Standard Form 2809, letter, or written statement to the 
employing office.
    (b) Former employees. A former employee's election under this 
subpart must be submitted to the employing office within 60 days after 
the later of--
    (1) The date of separation; or
    (2) The date the former employee received the notice from the 
employing office.
    (c) Children. A child's election under this subpart must be 
submitted to the employing office within 60 days after the later of--
    (1) The date of the qualifying event; or
    (2) If the employee notified the employing office within the 60-day 
time period specified under Sec. 890.1104(b)(1) of this part, the date 
the child received the notice from the employing office. If the employee 
did not notify the employing office within the specified time period, 
the child's opportunity to elect continued coverage ends 60 days after 
the qualifying event.
    (d) Former spouses. (1) A former spouse's election must be received 
by the employing office within 60 days after the later of--
    (i) The date of the qualifying event; or
    (ii) The date coverage under subpart H of this part was lost because 
of remarriage or loss of qualifying court order, if the loss of coverage 
under subpart H occurred before the expiration of the 36-month period 
specified in Sec. 890.1107(c); or
    (iii) If the employee, annuitant, or former spouse notified the 
employing office of the termination of the marriage within the time 
period specified in Sec. 890.1104(c)(1), the date the former spouse 
received the notice from the employing office described in Sec. 
890.1104(c)(2). If the employee, annuitant, or former spouse did not 
notify the employing office within the specified time period, the former 
spouse's opportunity to elect continued coverage ends 60 days after the 
qualifying event.
    (2) The effective date of former spouse coverage is the later of--
    (i) The date determined under paragraph (g) of this section; or
    (ii) The date of the divorce or annulment.
    (e) If an individual who is eligible for temporary continuation of 
coverage

[[Page 511]]

under this section is unable to file an election on his or her own 
behalf because of a mental or physical disability, an election may be 
filed by a court-appointed guardian.
    (f) Belated elections. Except as provided in paragraphs (c)(2) and 
(d)(1)(iii) of this section, when an employing office determines that an 
eligible individual was unable, for cause beyond his or her control, to 
elect temporary continuation of coverage within the time limits 
prescribed by this section, that office must accept the election within 
60 days after it advises the individual of that determination.
    (g) Effective date of coverage. Except as provided in paragraph 
(d)(2)(ii) of this section, the effective date of temporary continuation 
of coverage is the day after other coverage under this part expires, 
including the 31-day temporary extension of coverage under Sec. 
890.401. If an individual elects temporary continuation of coverage 
after the 31-day temporary extension of coverage expires, but before the 
expiration of the applicable election period specified in this section, 
coverage is restored retroactively, with appropriate contributions and 
claims, to the same extent and effect as though no break in coverage 
occurred.

[54 FR 52339, Dec. 21, 1989, as amended at 62 FR 38442, July 18, 1997]



Sec. 890.1106  Coverage.

    (a) Type of enrollment. An individual who enrolls under this subpart 
may elect coverage for self alone or self and family.
    (1) For an enrollee who is eligible for continued coverage under 
Sec. 890.1103(a) (1) or (2), a covered family member is an individual 
whose relationship to the enrollee meets the requirements of 5 U.S.C. 
8901(5) and who meets any applicable requirements of 5 CFR 890.302 of 
this part.
    (2) For a former spouse who is eligible for continued coverage under 
Sec. 890.1103(3) of this part, a covered family member is an individual 
who meets the requirements of Sec. 890.804 of this part.
    (b) Plans and options. An individual who elects to continue coverage 
under this subpart may enroll in a plan or option different from the 
plan or option covering the individual at the time of the qualifying 
event.



Sec. 890.1107  Length of temporary continuation of coverage.

    (a) In the case of a former employee who is eligible for continued 
coverage under Sec. 890.1103(a)(1), the temporary continuation of 
coverage ends on the date that is 18 months after the date of 
separation, unless it is terminated earlier under the provisions of 
Sec. 890.1110.
    (b)(1) Except as provided in paragraph (b)(2) of this section, in 
the case of individuals who are eligible for continued coverage under 
Sec. 890.1103(a)(2) of this part, the temporary continuation of 
coverage ends on the date that is 36 months after the date the 
individual first ceases to meet the requirements for being considered an 
unmarried dependent child, unless it is terminated earlier under the 
provisions of Sec. 890.1110.
    (2) The temporary continuation of coverage ends on the date that is 
36 months after the date of the separation from service on which the 
former employee's continuation of coverage is based, unless it is 
terminated earlier under the provisions of Sec. 890.1110, in the case 
of individuals who--
    (i) Are eligible for continued coverage under Sec. 890.1103(a)(2); 
and
    (ii) As of the day before ceasing to meet the requirements for being 
considered unmarried dependent children, were covered family members of 
a former employee receiving continued coverage under this subpart; and
    (iii) Cease meeting the requirements for being considered unmarried 
dependent children before the end of the 18-month period specified in 
paragraph (a) of this section.
    (c)(1) Except as provided in paragraph (c)(2) of this section, in 
the case of former spouses who are eligible for continued coverage under 
Sec. 890.1103(a)(3), the temporary continuation of coverage ends on the 
date that is 36 months after the former spouse ceased meeting the 
requirements for coverage as a family member, unless it is terminated 
earlier under the provisions of Sec. 890.1110.
    (2) The temporary continuation of coverage ends on the date that is 
36 months after the date of the separation

[[Page 512]]

from service on which the former employee's continuation of coverage is 
based, unless it is terminated earlier under the provisions of Sec. 
890.1110, in the case of a former spouse--
    (i) Who is eligible for continued coverage under Sec. 
890.1103(a)(3); and
    (ii) Whose marriage to the former employee terminates after the 
former employee's separation but before the expiration of the 18-month 
period specified in paragraph (a) of this section.



Sec. 890.1108  Opportunities to change enrollment; effective dates.

    (a) Effective date--generally. Except as otherwise provided, a 
change of enrollment takes effect on the first day of the first pay 
period that begins after the date the employing office receives an 
appropriate request to change the enrollment.
    (b) Belated change of enrollment. When an employing office 
determines that an enrollee was unable, for cause beyond his or her 
control, to change the enrollment within the time limits prescribed by 
this section, the enrollee may do so within 60 days after the employing 
office advises the enrollee of its determination.
    (c) Change of enrollment by proxy. Subject to the discretion of the 
employing office, an enrollee's representative, having written 
authorization to do so, may change the enrollment for the enrollee.
    (d) Change to self only. (1) An enrollee may change the enrollment 
from self and family to self only at any time.
    (2) A change of enrollment to self only takes effect on the first 
day of the first pay period that begins after the date the employing 
office receives an appropriate request to change the enrollment, except 
that at the request of the enrollee and upon a showing satisfactory to 
the employing office that there was no family member eligible for 
coverage under the family enrollment, the employing office may make the 
change effective on the first day of the pay period following the one in 
which there was no family member.
    (e) Open season. (1) During an open season as provided by Sec. 
890.301(f), an enrollee (except for a former spouse who is eligible for 
continued coverage under Sec. 890.1103(a)(3)) may change the enrollment 
from self only to self and family, from one plan or option to another, 
or make any combination of these changes. A former spouse who is 
eligible for continued coverage under Sec. 890.1103(a)(3) may change 
from one plan or option to another, but may not change from self only to 
self and family unless the individual to be covered under the family 
enrollment qualifies as a family member under Sec. 890.1106(a)(2).
    (2) An open season change of enrollment takes effect on the first 
day of the first pay period that begins in January of the next following 
year.
    (3) When a belated open season change of enrollment is accepted by 
the employing office under paragraph (b) of this section, it takes 
effect as required by paragraph (e)(2) of this section.
    (f) Change in family status. (1) Except for a former spouse, an 
enrollee may change the enrollment from self only to self and family, 
from one plan or option to another, or make any combination of these 
changes when the enrollee's family status changes, including a change in 
marital status or any other change in family status. The enrollee must 
change the enrollment within the period beginning 31 days before the 
date of the change in family status, and ending 60 days after the date 
of the change in family status.
    (2) A former spouse who is covered under this section may change the 
enrollment from self only to self and family, from one plan or option to 
another, or make any combination of these changes within the period 
beginning 31 days before and ending 60 days after the birth or 
acquisition of a child who qualifies as a covered family member under 
Sec. 890.1106(a)(2).
    (3) A change of enrollment made in conjunction with the birth of a 
child, or the addition of a child as a new family member in some other 
manner, takes effect on the first day of the pay period in which the 
child is born or becomes an eligible family member.
    (g) Reenrollment of individuals who lose other coverage under this 
part. An individual whose continued coverage under this section 
terminates because of the

[[Page 513]]

provisions of Sec. 890.1110(a)(3) (termination due to other coverage 
under another provision of this part) may reenroll if the coverage that 
terminated the enrollment under this part ends, but not later than the 
expiration of the period described in Sec. 890.1107. Coverage does not 
extend beyond the expiration of the period described in Sec. 890.1107. 
The effective date of the reenrollment is the day following the 
termination of the coverage described in Sec. 890.1110(a)(3).
    (h) Loss of coverage under this part or under another group 
insurance plan. An enrollee may change the enrollment from self only to 
self and family, from one plan or option to another, or make any 
combination of these changes when the enrollee loses coverage under this 
part or a qualified family member of the enrollee loses coverage under 
this part or under another group health benefits plan. Except as 
otherwise provided, an enrollee must change the enrollment within the 
period beginning 31 days before the date of loss of coverage and ending 
60 days after the date of loss of coverage. Losses of coverage include, 
but are not limited to--
    (1) Loss of coverage under another FEHB enrollment due to the 
termination, cancellation, or change to self only, of the covering 
enrollment.
    (2) Loss of coverage under another federally-sponsored health 
benefits program.
    (3) Loss of coverage due to the termination of membership in an 
employee organization sponsoring or underwriting an FEHB plan.
    (4) Loss of coverage due to the discontinuance of an FEHB plan, in 
whole or in part. For an enrollee who loses coverage under this 
paragraph (h)(4)--
    (i) If the discontinuance is at the end of a contract year, the 
enrollee must change the enrollment during the open season, unless OPM 
establishes a different time. If the discontinuance is at a time other 
than the end of the contract year, OPM must establish a time and 
effective date for the enrollee to change the enrollment.
    (ii) If the whole plan is discontinued, an enrollee who does not 
change the enrollment within the time set is considered to have 
cancelled the plan in which enrolled.
    (iii) If a plan has two options, and one option of the plan is 
discontinued, an enrollee who does not change the enrollment is 
considered to be enrolled in the remaining option of the plan.
    (5) Loss of coverage under the Medicaid program or similar State-
sponsored program of medical assistance for the needy.
    (6) Loss of coverage under a non-Federal health plan.
    (i) Move from comprehensive medical plan's area. An enrollee in a 
comprehensive medical plan who moves or becomes employed outside the 
geographic area from which the plan accepts enrollments, or, if already 
outside this area, moves or becomes employed further from this area, may 
change the enrollment upon notifying the employing office of the move or 
change of place of employment. Similarly, an enrollee whose covered 
family member moves outside the geographic area from which the plan 
accepts enrollments, or if already outside this area, moves further from 
this area, may change the enrollment upon notifying the employing office 
of the family member's move. The change of enrollment takes effect on 
the first day of the pay period that begins after the employing office 
receives an appropriate request.
    (j) On becoming eligible for Medicare. An enrollee may change the 
enrollment from one plan or option to another at any time beginning on 
the 30th day before becoming eligible for coverage under title XVIII of 
the Social Security Act (Medicare). A change of enrollment based on 
becoming eligible for Medicare may be made only once.

[62 FR 38442, July 18, 1997]



Sec. 890.1109  Premium payments.

    (a) Except as provided in paragraph (b) of this section, the 
enrollee must pay the full enrollment charge as determined under Sec. 
890.503(a), including both the Government contributions and employee 
withholdings, plus the administrative charge described under Sec. 
890.1113, for every pay period during which the enrollment continues, 
exclusive of the 31-day temporary extension of coverage for conversion 
provided under Sec. 890.401 of this part.

[[Page 514]]

    (b) If the enrollee is not covered under this subpart for the full 
pay period, he or she pays the premium charge for only the days actually 
covered. The daily premium rate is an amount equal to the monthly rate 
(including the administrative charge) multiplied by 12 and divided by 
365.
    (c) The enrollee must make the payment after the pay period during 
which he or she is covered in accordance with a schedule established by 
the employing office. If the employing office does not receive the 
payment by the date due, the employing office must notify the enrollee 
in writing that continuation of coverage depends upon payment being made 
within 15 days (45 days for enrollees residing overseas) after receipt 
of the notice. If no subsequent payments are made, the employing office 
terminates the enrollment 60 days (90 days for enrollees residing 
overseas) after the date of the notice. An enrollee whose coverage 
terminates because of nonpayment may not reenroll or reinstate coverage 
except as provided under paragraph (d) of this section.
    (d)(1) If the enrollee was prevented by circumstances beyond his or 
her control from making payment within the timeframe specified in 
paragraph (c) of this section, he or she may request reinstatement of 
coverage by writing to the employing office. The request must be filed 
within 30 calendar days from the date of termination and must be 
accompanied by verification that the enrollee was prevented by 
circumstances beyond his or her control from paying within the time 
limit.
    (2) The employing office determines whether the individual is 
eligible for reinstatement of coverage. If the determination is 
affirmative, coverage is reinstated retroactively to the date of 
termination. If the determination is negative, the individual may 
request a review of the decision from the employing agency as provided 
under Sec. 890.104.

[54 FR 52339, Dec. 21, 1989, as amended at 59 FR 67607, Dec. 30, 1994; 
61 FR 37810, July 22, 1996]



Sec. 890.1110  Termination of enrollment or coverage.

    (a) General. An enrollment under this subpart terminates at midnight 
of the earlier of the following dates:
    (1) The date the temporary continuation of coverage expires as set 
forth in Sec. 890.1107, subject to the temporary extension of coverage 
for conversion.
    (2) The last day of the pay period in which the enrollee dies.
    (3) The day before the effective date of coverage under another 
provision of this part.
    (4) The date provided under paragraphs (b) or (c) of this section.
    (b) Failure to pay premiums. Termination of enrollment for failure 
to pay premiums within the timeframe established under Sec. 890.1109 of 
this part is retroactive to the end of the last pay period for which 
payment was timely received. The enrollee and covered family members, if 
any, are not entitled to the temporary extension of coverage for 
conversion or to convert to an individual contract for health benefits.
    (c) Cancellation. An enrollee may cancel his or her enrollment as 
provided under Sec. 890.304(d) of this part.
    (d) Family member coverage. The coverage of a family member 
terminates under the conditions set forth in Sec. 890.304(c). Covered 
family members of former employees and former spouses are entitled to 
temporary continuation of coverage only as set forth under Sec. 
890.1103.



Sec. 890.1111  Employing office responsibilities.

    (a) Providing information to employees. Employing offices are 
responsible for providing employees who are eligible to enroll under 
this part with literature developed by OPM that sets forth their rights 
under this subpart. This literature must be distributed to employees 
prior to each open season occurring under Sec. 890.301.
    (b) Administration of the enrollment process. The employing office 
must establish procedures for notifying the former employee, child, or 
former spouse about his or her eligibility to enroll, including what 
documents are needed to determine eligibility, and for accepting 
enrollment registrations.

[[Page 515]]

    (c) Collecting premiums. (1) Collection of the contributions is the 
responsibility of the employing office of the employee or annuitant at 
the time of the qualifying event.
    (2) The employing office must submit all premium payments collected 
from enrollees along with its regular health benefits payments to OPM in 
accordance with procedures established by that Office.
    (d) Health benefits file. The employing office must maintain a 
health benefits file for the enrollee as a file separate from the 
personnel records of the employee or former employee. This file may be 
destroyed 2 years after the end of the calendar year during which the 
18- or 36-month period described in Sec. 890.1107 (a) or (b)(1) 
expires.

[54 FR 52339, Dec. 21, 1989, as amended at 55 FR 22891, June 5, 1990]



Sec. 890.1112  Denial of continuation of coverage due to involuntary 
separation for gross misconduct.

    (a) Notice of denial. (1) When an employing office determines that 
the offense for which an employee is being removed constitutes gross 
misconduct for the purpose of this subpart, the employing office must 
notify the employee in writing of its intention to deny temporary 
continuation of coverage. The notice must set forth the reason for the 
denial and give the employee a reasonable amount of time to respond. The 
notice must be made no later than the date of separation.
    (2) If the employee is being removed under the authority of part 752 
of this chapter (or other law, Executive Order, or regulation that 
prescribes procedures for removing employees because of misconduct), the 
notification requirement of paragraph (a)(1) of this section may be 
combined with the notification requirement of such authority.
    (b) Employee's response. (1) The employee must be allowed a 
reasonable time for response, but not less than 7 days. The employee may 
respond orally or in writing and is entitled to be represented by an 
attorney or other representative.
    (2) The agency must designate an official to hear the employee's 
oral answer who has the authority either to make or recommend a final 
decision on the denial. The right to answer orally does not include the 
right to a formal hearing with examination of witnesses.
    (c) Final decision. If the employee responds to the notice of 
denial, the employing office must issue a final decision in writing that 
fully sets forth its findings and conclusions. The agency's decision is 
not subject to reconsideration by OPM.
    (d) Resignation in lieu of involuntary separation. If an employee 
resigns after receiving the employing office's notification of intent to 
separate the employee involuntarily but before the scheduled separation 
date, his or her separation is considered involuntary for the purpose of 
this subpart.



Sec. 890.1113  The administrative charge.

    (a) OPM has determined that the administrative charge as provided 
under 5 U.S.C. 8905a(d)(1)(A)(ii) is 2 percent of the enrollment charge 
described in Sec. 890.503(a).
    (b) It is OPM's responsibility to establish procedures for receiving 
the administrative payment into the Employees Health Benefits Fund and 
for making this amount available to the employing office.

[54 FR 52339, Dec. 21, 1989, as amended at 55 FR 22891, June 5, 1990]



  Subpart L_Benefits for United States Hostages in Iraq and Kuwait and 
               United States Hostages Captured in Lebanon

    Source: 55 FR 50537, Dec. 7, 1990, unless otherwise noted.



Sec. 890.1201  Purpose.

    This subpart sets forth the circumstances under which individuals 
are covered under this part in accordance with the provisions of section 
599C of Public Law 101-513.



Sec. 890.1202  Definitions.

    In this subpart--
    Covered family members as it applies to individuals covered under 
this subpart has the same meaning as set forth in Sec. 890.101(a). For 
eligible survivors of individuals enrolled under this subpart, a family 
enrollment covers only the survivor or former spouse and unmarried

[[Page 516]]

dependent natural or adopted child of both the survivor or former spouse 
and hostage.
    Hostage and hostage status have the meaning set forth in section 
599C of Public Law 101-513.
    Pay period for individuals enrolled under this subpart means the pay 
period established by the U.S. Department of State for paying 
individuals covered under Public Law 101-513.
    Period of eligibility means the period beginning on the effective 
date set forth in Sec. 890.1204 of this subpart and ending 60 months 
after hostage status ended for hostages in Lebanon and 12 months after 
hostage status ended for hostages in Iraq and Kuwait.

[55 FR 50537, Dec. 7, 1990, as amended at 57 FR 43132, Sept. 18, 1992]



Sec. 890.1203  Coverage.

    (a) An individual is covered under this subpart when the U.S. 
Department of State determines that the individual is eligible for 
coverage under section 599C of Public Law 101-513.
    (b) An individual who is covered under this subpart is covered under 
the Standard Option of the Service Benefit Plan. The individual has a 
self and family enrollment unless the U.S. Department of State 
determines that the individual is unmarried and has no dependent 
children. Unmarried individuals who have no eligible dependent children 
have a self only enrollment.
    (c) Individuals covered under this subpart are deemed ineligible for 
enrollment in any FEHB plan or option other than the Standard Option of 
the Service Benefit Plan.
    (d) Eligible surviving family members of an individual covered under 
this subpart whose hostage status ended because of death or who dies 
during the 60 months or 12 months following the end of hostage status 
are eligible to continue enrollment under this part. The enrollment 
terminates no later than 60 months or 12 months after hostage status 
ended.
    (e) An individual covered by this subpart is not considered an 
employee for the purpose of this part.
    (f) Eligibility for coverage under this subpart shall be subject to 
the availability of funds under section 599C(e) of Public Law 101-513.

[55 FR 50537, Dec. 7, 1990, as amended at 57 FR 43132, Sept. 18, 1992]



Sec. 890.1204  Effective date of coverage.

    Unless the U.S. Department of State determines that a later date is 
appropriate, coverage under Sec. 890.1203(b) is effective on August 2, 
1990, for hostages in Iraq and Kuwait and on the later of the date 
hostage status began or June 1, 1982, for hostages in Lebanon.

[57 FR 43132, Sept. 18, 1992]



Sec. 890.1205  Change in type of enrollment.

    (a) Individuals covered under this subpart or eligible survivors 
enrolled under this subpart may change from self only to self and family 
coverage if they acquire an eligible family member. The change may be 
made at the written request of the enrollee at any time after the family 
member is acquired. A change in enrollment under this paragraph becomes 
effective on the 1st day of the pay period after the pay period during 
which the request is received by the U.S. Department of State, except 
that a change based on the birth or addition of a child as a new family 
member is effective on the 1st day of the pay period during which the 
child is born or otherwise becomes a new family member.
    (b) Individuals covered under this subpart or eligible survivors 
enrolled under this subpart may change from a self and family enrollment 
to a self only when the last eligible family member (other than the 
enrollee) ceases to be a family member. The change may be made at the 
written request of the enrollee at any time after the last family member 
is lost and it becomes effective on the 1st day of the pay period after 
the pay period during which the request is received by the U.S. 
Department of State.
    (c) A family member may file a request to change the type of 
enrollment on behalf of a hostage during the period of hostage status or 
on behalf of an eligible former hostage who cannot file the election on 
his or her own behalf because of a mental or physical disability.

[[Page 517]]



Sec. 890.1206  Cancellation of coverage.

    (a) An individual who is covered under Sec. 890.1203(b) may cancel 
his or her enrollment at any time by written request. The cancellation 
is effective on the 1st day of the pay period after the pay period in 
which it is received by the U.S. Department of State.
    (b) An individual who cancels his or her coverage under this section 
cannot reacquire coverage unless the U.S. Department of State determines 
that it would be against equity and good conscience not to allow the 
individual to be enrolled.
    (c) A cancellation of coverage must be made by the enrolled 
individual and cannot be made by a representative acting on the 
individual's behalf.



Sec. 890.1207  Termination of coverage.

    (a) Coverage of an individual under Sec. 890.1203(b) terminates 60 
months or 12 months after hostage status ended unless the individual 
cancels the coverage earlier.
    (b) Enrollees and family members are eligible for temporary 
extension of coverage for conversion as set forth in subpart D of this 
part unless the covering enrollment is terminated by cancellation.

[55 FR 50537, Dec. 7, 1990, as amended at 57 FR 43132, Sept. 18, 1992]



Sec. 890.1208  Premiums.

    (a) Government and employee contributions (premiums) required under 
Sec. Sec. 890.501 and 890.502 of this part are paid from the 
appropriation provided under section 599C(e) of Public Law 101-513.
    (b) If the individual is not covered under this subpart for the full 
pay period, premiums are paid only for the days he or she is actually 
covered. The daily premium rate is an amount equal to the monthly 
premium rate multiplied by 12 and divided by 365.
    (c) The payments required by this section may be accepted by OPM 
from the State Department appropriation in advance if necessary to fund 
the 12-month period of coverage beginning on the earlier of:
    (1) The day after sanctions or hostilities end; or
    (2) The day after the individual's period of hostage status ends.
    (d) OPM will place any funds received under paragraph (c) of this 
section in an account established for this purpose. OPM will make the 
disbursements specified under 48 CFR subpart 1632.170 from this account 
when the appropriate pay period occurs.

[55 FR 50537, Dec. 7, 1990, as amended at 57 FR 14325, Apr. 20, 1992]



Sec. 890.1209  Responsibilities of the U.S. Department of State.

    (a) The U.S. Department of State functions as the ``employing 
office'' for individuals covered under this subpart.
    (b) The U.S. Department of State must determine the eligibility of 
individuals who qualify under Public Law 101-513 for coverage under this 
part. This determination includes the determination as to whether the 
individual is barred from coverage under chapter 89 of title 5 U.S. Code 
by reason of other health insurance coverage as provided in section 599C 
of Public Law 101-513.
    (c) The U.S. Department of State must determine whether eligible 
individuals are married or single for the purpose of coverage under a 
self only or a self and family enrollment as set forth in Sec. 
890.1203(b). If the marital status of the individual cannot be 
determined, the U.S. Department of State must enroll the individual for 
self and family coverage.



Sec. 890.1210  Reconsideration and appeal rights.

    (a) Under procedures set forth by the U.S. Department of State, an 
individual may request the U.S. Department of State to reconsider an 
initial decision it has made denying coverage or a change in the type of 
enrollment under this subpart.
    (b) Neither the initial decision nor the reconsideration decision of 
the U.S. Department of State is subject to reconsideration by OPM.

[[Page 518]]



   Subpart M_Department of Defense Federal Employees Health Benefits 
                      Program Demonstration Project

    Source: 65 FR 35260, June 2, 2000, unless otherwise noted.



Sec. 890.1301  Purpose.

    The purpose of this subpart is to implement section 721 of the 
National Defense Authorization Act for 1999, Public Law 105-261. This 
section amended chapter 55 of title 10, United States Code, and chapter 
89 of title 5, United States Code, to establish a demonstration project 
under which certain Medicare and other eligible Department of Defense 
(DoD) beneficiaries can enroll in health benefit plans offered under the 
Federal Employees Health Benefits (FEHB) Program in certain geographic 
areas. The legislation was signed into law on October 17, 1998. The 
demonstration project will run for a period of three years. The 
legislation requires the Office of Personnel Management (OPM) and DoD to 
jointly produce and submit two reports to Congress designed to assess 
the viability of expanding access to the FEHB Program to certain 
Medicare and other eligible DoD beneficiaries permanently. OPM is 
authorizing certain differences from regular FEHB Program practices in 
order to ensure the successful implementation of the demonstration 
project. This regulation authorizes those differences.



Sec. 890.1302  Duration.

    The demonstration project will run from January 1, 2000, through 
December 31, 2002.



Sec. 890.1303  Eligibility.

    (a) To enroll in the demonstration project, an individual must live 
within one of the demonstration areas and meet the definition of an 
eligible beneficiary in 10 U.S.C. 1108(b). An eligible beneficiary under 
this subpart is--
    (1) A member or former member of the uniformed services described in 
section 1074(b) of title 10, United States Code, who is entitled to 
hospital insurance benefits under part A of title XVIII of the Social 
Security Act (42 U.S.C. 1395c et seq.);
    (2) An individual who is an unremarried former spouse of a member or 
former member described in section 1072(2)(F) or section 1072(2)(G) of 
title 10, United States Code;
    (3) An individual who is--
    (i) A dependent of a deceased member or former member described in 
section 1076(b) or 1076(a)(2)(B) of title 10, United States Code, or of 
a member who died while on active duty for a period of more than 30 
days; and
    (ii) A ``member of family'' as defined in section 8901(5) of title 
5, United States Code; or
    (4) An individual who is--
    (i) A dependent of a living member or former member described in 
section 1076(b)(1) of title 10, United States Code, who is entitled to 
hospital insurance benefits under part A of title XVIII of the Social 
Security Act, regardless of the member's or former member's eligibility 
for such hospital insurance benefits; and
    (ii) A ``member of family'' as defined in section 8901(5) of title 
5, United States Code.
    (b) An eligible beneficiary may enroll in an FEHB plan under chapter 
89 of title 5, United States Code, for self-only coverage or for self 
and family coverage. A self and family enrollment will include coverage 
of a dependent of the military member or former member who meets the 
definition of a ``member of family'' in section 8901(5) of title 5, 
United States Code. A self and family enrollment will not cover a person 
related to the eligible beneficiary that does not qualify as a ``member 
of family'' (as defined in section 8901(5) of title 5, United States 
Code) of the military member or former member.
    (c) A person eligible for coverage under this subpart shall not be 
required to satisfy any eligibility criteria specified in chapter 89 of 
title 5, United States Code, or in other subparts of this part (except 
as provided in paragraphs (a)(3), (a)(4), and (b) of this section) as a 
condition for enrollment in health benefit plans offered through the 
FEHB Program under the demonstration project.

[[Page 519]]

    (d) When determining whether an individual is a ``member of family'' 
under section 8901(5) of title 5, United States Code, for purposes of 
paragraph (a)(3) and (a)(4) of this section, a DoD member or former 
member described in section 1076(b) or 1076(a)(2)(B) of title 10, United 
States Code, shall be deemed to be an employee under chapter 89 of title 
5, United States Code. The sole purpose for deeming these members or 
former members of the uniformed services employees under chapter 89 of 
title 5, United States Code, is to determine which of their dependents 
can enroll as eligible beneficiaries in the demonstration project.
    (e) A person who is eligible to enroll in the FEHB Program as an 
employee as defined in section 8901(1) of title 5, United States Code, 
is not eligible to enroll in an FEHB plan under the demonstration 
project.



Sec. 890.1304  Enrollment.

    (a) Open Season for eligible beneficiaries will be held concurrent 
with the Open Season for regular FEHB enrollees. Open Seasons will be 
held in the years 1999, 2000 and 2001. Eligible beneficiaries will be 
able to enroll for coverage, change enrollment tiers (e.g., self-only or 
self and family), or change health benefit plans or plan options during 
these periods.
    (b) Enrolled eligible beneficiaries are required to pay associate 
membership dues if they enroll in open employee organization sponsored 
plans that are participating in the demonstration project.
    (c) DoD will deny enrollment of eligible beneficiaries when the 
total number of eligible beneficiaries and family members enrolled in 
the demonstration project reaches 66,000.
    (d) Eligible beneficiaries can enroll only in health plans offered 
by health benefit carriers who are participating in the demonstration 
project.
    (e) Eligible beneficiaries and family members enrolled in the 
demonstration project are not eligible to obtain services from military 
medical treatment facilities or to enroll in a health care plan under 
the TRICARE Program.
    (f) An eligible beneficiary enrolled in an FEHB plan under the 
demonstration project may change health benefits plans and coverage in 
the same manner as any other FEHB Program enrollee, except as provided 
for in this subpart.



Sec. 890.1305  Termination and cancellation.

    (a) If an enrolled eligible beneficiary moves out of a demonstration 
area, the enrollment of the eligible beneficiary and all family members 
will be terminated. If an enrolled eligible beneficiary moves to an area 
located within a demonstration area, he or she will continue to be 
eligible to participate in the demonstration project. If the eligible 
beneficiary was enrolled prior to the move in an HMO that does not serve 
the new demonstration area, the eligible beneficiary will have an 
opportunity to select a new health plan offered by a carrier 
participating in the demonstration project in the new area. If the 
eligible beneficiary was enrolled in a fee-for-service plan prior to the 
move and moves to another area that is within an existing demonstration 
area, the eligible beneficiary can maintain his or her current coverage.
    (b) If an enrolled eligible beneficiary disenrolls, cancels, or 
terminates enrollment for any reason, he or she will not be eligible to 
reenroll in the demonstration project. Once coverage ends, eligible 
beneficiaries and all family members have the right to resume all of the 
benefits to which they are entitled to under title 10 of the United 
States Code. Medicare-covered eligible beneficiaries and their eligible 
family members who had Medigap policies prior to their enrollment in the 
demonstration project are entitled to reinstate that coverage under the 
conditions stated in section 1108(l) of title 10, United States Code.
    (c) Eligible beneficiaries and their family members are eligible for 
Temporary Continuation of Coverage (TCC) under the conditions and for 
the durations described in subpart K or until the end of the 
demonstration project, whichever occurs first. The effective date of TCC 
for eligible beneficiaries or their eligible family members will be the 
day after other coverage under this subpart ends. Eligible beneficiaries 
or their eligible family members selecting TCC must enroll in a health 
plan offered by a carrier participating in the

[[Page 520]]

demonstration project. If an eligible beneficiary or eligible family 
member enrolled in DoD TCC moves from a demonstration project area, 
coverage ends. DoD TCC enrollees will be responsible for paying the 
entire DoD premium rate (OPM's approved net-to-carrier DoD rate plus 4 
percent for contingency and administration reserves) plus 2 percent of 
this premium rate for administration of the program. DoD will make 
arrangements to collect premiums plus the 2 percent administrative 
charge from eligible beneficiaries and forward them to OPM's Employees 
Health Benefits Fund. OPM will establish procedures for receiving the 2 
percent administrative payment into the Employees Health Benefits Fund 
and making this amount available to DoD for administration of the 
program.
    (d) Enrolled eligible beneficiaries are not eligible for the 
temporary extension of coverage and conversion opportunities described 
in subpart D of this part.



Sec. 890.1306  Government premium contributions.

    The Secretary of Defense is responsible for the government 
contribution for enrolled eligible beneficiaries and family members. The 
government contribution toward demonstration project premium rates will 
be determined in accordance with subpart E of this part.



Sec. 890.1307  Data collection.

    Each carrier will compile, maintain, and when requested by OPM or 
DoD, report data on its plan's experience necessary to produce reports 
containing the following information and analysis:
    (a) The number of eligible beneficiaries who elect to participate in 
the demonstration project.
    (b) The number of eligible beneficiaries who elected to participate 
in the demonstration project and did not have Medicare Part B coverage 
before electing to participate.
    (c) The costs of health benefits charges and the costs (direct and 
indirect) of administering the benefits and services provided to 
eligible beneficiaries who elect to participate in the demonstration 
project as compared to similarly situated enrollees in the FEHB Program.
    (d) Prescription drug costs for demonstration project beneficiaries.



Sec. 890.1308  Carrier participation.

    (a) All carriers who participate in the FEHB Program and provide 
benefits to enrollees in the geographic areas selected as demonstration 
project areas must participate in the demonstration project, except as 
provided for in paragraphs (b), (c), and (d) of this section.
    (b) Carriers who have less than 300 FEHB enrollees may, but are not 
required to, participate in the demonstration project.
    (c) Carriers may, but are not required to, participate in the 
demonstration project if their service area overlaps a small portion (as 
determined by OPM) of a demonstration project geographic area.
    (d) Carriers offering fee-for-service plans with enrollment limited 
to specific groups will not participate in the demonstration project.



PART 891_RETIRED FEDERAL EMPLOYEES HEALTH BENEFITS--Table of Contents




             Subpart A_Administration and General Provisions

Sec.
891.101 Relationship to part 890 of this chapter.
891.102 Definitions.
891.103 Eligibility.
891.104 Responsibilities of retirement offices.
891.105 Correction of errors.
891.106 Reconsideration.

                Subpart B_Election and Change of Election

891.201 Election.
891.202 Change of election.

                  Subpart C_Suspension and Termination

891.301 Suspension and termination.

                Subpart D_Contributions and Withholdings

891.401 Government contributions.
891.402 Withholdings.

            Subpart E_Standards for Uniform Plan and Carrier

891.501 Standards for uniform plan.

[[Page 521]]

891.502 Standards for carrier of uniform plan.

    Authority: 80 Stat. 607; 5 U.S.C. 8913.

    Source: 33 FR 12516, Sept. 4, 1968, unless otherwise noted.



             Subpart A_Administration and General Provisions



Sec. 891.101  Relationship to part 890 of this chapter.

    This part does not apply to the Federal Employees Health Benefits 
Program which is governed by part 890 of this chapter. Part 890 of this 
chapter does not apply to the Retired Federal Employees Health Benefits 
Program which is governed by this part.



Sec. 891.102  Definitions.

    In this part:
    (a) Annuity means the periodic payment due a former employee or his/
her survivors by reason of past service, but does not include 
compensation paid under subchapter I of chapter 81 of title 5, United 
States Code.
    (b) Annuity period means the period for which an installment of 
annuity is paid.
    (c) Bureau of Employees' Compensation means the Bureau of Employees' 
Compensation, Department of Labor.
    (d) Carrier means a voluntary association, corporation, partnership, 
or other nongovernmental organization which lawfully offers a health 
benefits plan.
    (e) Compensation means monthly compensation paid under subchapter I 
of chapter 81 of title 5, United States Code, and includes compensation 
payable every 4 weeks.
    (f) Elect means to file with the retirement office under which 
retired or with the Bureau of Employees' Compensation, as the case may 
be, a properly completed form, prescribed by OPM for the purpose, giving 
notice of intention (1) to subscribe to the uniform plan, (2) to receive 
a Government contribution toward the cost of a private health benefits 
plan, or (3) not to participate in the program.
    (g) Employee means an appointive or elective officer or employee in 
or under the executive, judicial, or legislative branch of the United 
States Government, including a Government-owned or controlled 
corporation (but not including any corporation under the supervision of 
the Farm Credit Administration, of which corporation any member of the 
board of directors is elected or appointed by private interests), or of 
the government of the District of Columbia, and includes an Official 
Reporter of Debates of the Senate and a person employed by the Official 
Reporters of Debates of the Senate in connection with the performance of 
their official duties, and an employee of Gallaudet College, but does 
not include (1) a member of a ``uniformed service'' as that term is 
defined in section 1072 of title 10, United States Code, (2) a 
noncitizen employee whose permanent-duty station is located outside a 
State of the United States or the District of Columbia, or (3) an 
employee of the Tennessee Valley Authority.
    (h) Government means the Government of the United States of America 
and the government of the District of Columbia.
    (i) Health benefits plan means an individual or group insurance 
policy or contract, medical or hospital service arrangement, membership 
or subscription contract, or similar agreement provided by a carrier for 
a stated periodic premium or subscription charge for the purpose of 
providing, paying for, or reimbursing expenses for hospital care, 
surgical or medical diagnosis, care, and treatment, drugs and medicines, 
remedial care, or other medical supplies and services, or any 
combination of these.
    (j) Immediate annuity means (1) as applied to a retired employee, an 
annuity which begins to accrue not later than 1 month after the date of 
the separation from the service on which title to the annuity is based; 
and (2) as applied to a survivor, an annuity which begins to accrue not 
later than 1 month (i) after the date of death of the employee or 
annuitant whose service forms the basis for the annuity, or (ii) after 
the birth of a posthumous child of such an employee or annuitant.
    (k) Member of family means a former employee's spouse and any 
unmarried child (1) under 19 years of age (including (i) an adopted 
child, and (ii) a stepchild or recognized natural child who

[[Page 522]]

lives with the former employee in a regular parent-child relationship or 
did so at the time of the former employee's death); or (2) regardless of 
age who is incapable of self-support because of mental or physical 
disability that existed before the child became 19 years of age. As used 
in this paragraph, Former employee means the former employee on whose 
service title to annuity is based.
    (l) Private health benefits plan means a health benefits plan other 
than the uniform plan.
    (m) Retired employee includes (1) a former employee retired under 
subchapter III of chapter 83 of title 5, United States Code, or other 
retirement system for civilian employees of the Government (not 
including the social security system), (2) an employee or former 
employee receiving compensation under subchapter I of chapter 81 of 
title 5, United States Code, and (3) persons who are entitled to annuity 
or compensation as members of the family of a deceased employee or of a 
deceased retired employee qualifying under paragraphs (m) (1) and (2) of 
this section.
    (n) Retirement office means (1) any office responsible for the 
administration of a retirement system for civilian employees of the 
Government; and (2) the Bureau of Employees' Compensation.
    (o) Service means service which is creditable for the purposes of 
subchapter III of chapter 83 of title 5, United States Code.
    (p) Survivor means a person who is entitled to annuity or 
compensation as a member of the family of a deceased employee or 
deceased retired employee.
    (q) Uniform plan means the health benefits plan for which OPM 
contracts pursuant to section 3, 74 Stat. 849.



Sec. 891.103  Eligibility.

    (a) General conditions of eligibility. (1) A retired employee who is 
enrolled or covered by the enrollment of another under part 890 of this 
chapter, or who is covered by the election of another retired employee 
under this part, is ineligible to subscribe to the uniform plan or to 
receive a Government contribution toward the cost of a private health 
benefits plan.
    (2) A retired employee is ineligible to subscribe to the uniform 
plan if his/her annuity or compensation is not sufficient to cover the 
necessary withholding.
    (3) An annuitant who enrolled under Sec. 890.601, and who later 
cancels such enrollment, is ineligible to subscribe to the uniform plan 
or to receive a Government contribution toward the cost of a private 
health benefits plan.
    (b) Retired employees (other than survivors) entitled to annuity. A 
retired employee (other than a survivor) who is entitled to an annuity 
is eligible for the benefits provided by this part if--
    (1) He/She retired before his/her first pay period beginning after 
June 30, 1960;
    (2) He/She retired on immediate annuity;
    (3) He/She had at least 12 years of creditable service, or retired 
under a disability provision of his/her retirement system;
    (4) He/She retired from employment which was not in the Tennessee 
Valley Authority or in a corporation under the supervision of the Farm 
Credit Administration, of which corporation any member of the board of 
directors was elected or appointed by private interests; and
    (5) At the time of retirement, he/she was a citizen, or a noncitizen 
having a permanent-duty station within the several States or the 
District of Columbia on the day before retirement.

For the purpose of this paragraph, an employee is considered to have 
retired before his/her first pay period beginning after June 30, 1960, 
if his/her annuity began to accrue before his/her first pay period after 
June 30, 1960, or if he/she was eligible under paragraph (d) of this 
section until the date his/her annuity began to accrue.
    (c) Survivors entitled to annuity. A survivor who is entitled to 
annuity is eligible for the benefits provided by this part if he/she is:
    (1) In receipt of immediate annuity as the survivor of (i) an 
employee who died before his/her first pay period beginning after June 
30, 1960; or (ii) a retired employee whose annuity began to accrue 
before his/her first pay period beginning after June 30, 1960;

[[Page 523]]

    (2) The survivor of (i) an employee who had at least 5 years' 
creditable service, (ii) a former employee who retired having at least 
12 years' creditable service and received an immediate annuity, or (iii) 
a former employee who retired under a disability provision of his/her 
retirement system; and
    (3) Not receiving annuity as the survivor of a person who at the 
time of the retirement or death, as the case may be, on which annuity is 
based, was an employee of the Tennessee Valley Authority or of any 
corporation under the jurisdiction of the Farm Credit Administration of 
which corporation any member of the board of directors was elected or 
appointed by private interests, or was a noncitizen having a permanent-
duty station outside the several States and the District of Columbia.
    (d) Retired employees (other than survivors) entitled to 
compensation. A retired employee (other than a survivor) who is entitled 
to compensation is eligible for the benefits provided by this part if--
    (1) He/She is receiving monthly compensation for an injury sustained 
or illness contracted before his/her first pay period beginning after 
June 30, 1960;
    (2) He/She is held by the Secretary of Labor to be unable to return 
to duty;
    (3) He/She is receiving compensation based on employment which was 
not in the Tennessee Valley Authority or in a corporation under the 
supervision of the Farm Credit Administration, of which corporation any 
member of the board of directors was elected or appointed by private 
interests; and
    (4) At the time of sustaining the injury or contracting the illness, 
as the case may be, on which compensation is based, he/she was a 
citizen, or a noncitizen having a permanent-duty station within the 
several States or the District of Columbia at that time.
    (e) Family members entitled to compensation. A member of a family 
who is receiving compensation is eligible for the benefits provided by 
this part if he/she is:
    (1) A survivor beneficiary of (i) an employee who completed 5 years 
of service and died as a result of injury or illness which is 
compensable under subchapter I of chapter 81 of title 5, United States 
Code, and which was sustained or contracted before his/her first pay 
period beginning after June 30, 1960, or (ii) a former employee who was 
separated after having completed at least 5 years of service and who 
died while receiving monthly compensation under that subchapter on 
account of injury sustained or illness contracted before his/her first 
pay period beginning after June 30, 1960, and who has been held by the 
Secretary of Labor to have been unable to return to duty; and
    (2) Not receiving compensation as the survivor of a person who at 
the time of sustaining the injury or contracting the illness, as the 
case may be, on which compensation is based, was an employee of the 
Tennessee Valley Authority or of any corporation under the jurisdiction 
of the Farm Credit Administration of which corporation any member of the 
board of directors was elected or appointed by private interests, or was 
a noncitizen having a permanent-duty station outside the several States 
and the District of Columbia.
    (f) Determinations of eligibility. The Associate Director for 
Compensation of OPM, on request, shall determine the eligibility of a 
retired employee, or class of retired employees, to make the elections 
and receive the Government contributions provided for by this part.

[33 FR 12516, Sept. 4 1968, as amended at 43 FR 35018, Aug. 8, 1978]



Sec. 891.104  Responsibilities of retirement offices.

    (a) The Office of Worker's Compensation Program is responsible only 
for retired employees who are receiving compensation from the Office and 
is responsible even though the retired employee has retired under 
another retirement office from which he/she is not currently receiving 
annuity. If the retired employee is currently receiving annuity from 
another retirement office, that retirement office, rather than the 
Office of Worker's Compensation Program, will have the responsibilities 
imposed on retirement offices by this part for that retired employee.
    (b) Retirement offices are responsible, in accordance with 
regulations and instructions issued by OPM, for

[[Page 524]]

withholding from the annuity or compensation of each retired employee 
within the jurisdiction of the retirement office who elects to subscribe 
to the uniform plan his/her share of the cost, for forwarding the amount 
withheld to the Retired Federal Employees Health Benefits Fund, and for 
reporting to OPM amounts required for Government contribution for these 
retired employees.
    (c) Retirement offices are responsible, in accordance with 
regulations and instructions issued by OPM, for reporting to OPM amounts 
required for Government contributions to retired employees within the 
jurisdiction of the retirement office who have elected to receive a 
Government contribution toward the cost of a private health benefits 
plan, and for paying the Government contributions to these retired 
employees.
    (d) Retirement offices are responsible for advising retired 
employees within the jurisdiction of the retirement office of the rights 
and obligations of retired employees under this part.
    (e) When one or more of the family members is a child 19 years of 
age or older who is incapable of self-support because of mental or 
physical disability which existed before the child became 19 years of 
age, the appropriate retirement office shall obtain the necessary 
evidence and make a determination of incapacity.
    (f) Retirement offices are responsible, in accordance with 
regulations and instructions issued by OPM, for verifying continuing 
eligibility of retired employees to receive Government contributions.



Sec. 891.105  Correction of errors.

    OPM may order correction of administrative errors at any time upon a 
showing satisfactory to OPM that it would be against equity and good 
conscience not to do so.

[45 FR 23637, Apr. 8, 1980]



Sec. 891.106  Reconsideration.

    (a) Who may file. A retired employee may request OPM to reconsider 
its initial decision that he/she is not eligible to make an election or 
to receive a Government contribution under the part or that he/she may 
not enroll another individual as a family member.
    (b) Initial OPM decision. An OPM decision shall be considered an 
initial decision as used in Sec. 891.106(a) of this part, when rendered 
by OPM in writing and stating the right to reconsideration. However, a 
decision initially rendered at the highest level of review available 
within OPM will not be subject to reconsideration.
    (c) Reconsideration. A request for reconsideration must be made in 
writing, must include the claimant's name, address, date of birth, claim 
number, if appropriate, and reasons for the request.
    (d) Time limit. A request for reconsideration of an initial OPM 
decision must be filed within 30 calendar days from the date of OPM's 
initial decision. OPM may extend the time limit on filing when the 
individual shows that he/she was not notified of the time limit and was 
not otherwise aware of it, or that he/she was prevented by circumstances 
beyond his/her control from making the request within the time limit.
    (e) Final decision. After reconsideration, OPM shall issue a final 
decision which shall be in writing and shall fully set forth the 
findings and conclusions of OPM.

[45 FR 23637, Apr. 8, 1980]



                Subpart B_Election and Change of Election



Sec. 891.201  Election.

    (a) The original period for election by each eligible retired 
employee was during the months of March and April 1961. Failure to elect 
when eligible to do so is deemed an election not to participate in the 
program unless the failure is determined by the retirement office to be 
for cause beyond the control of the retired employee. In any case in 
which annuity or compensation is being paid to a payee in behalf of a 
retired employee, the payee shall make the election for the retired 
employee.
    (b) (1) A retired employee may elect to participate in the program 
for self alone or for self and family.
    (2) Survivors, if actually or constructively living in the same 
household,

[[Page 525]]

have only one right of election among them. The election shall be made 
by the payee. The fact that one payee is receiving annuity or 
compensation for all members of the family is prima facie evidence that 
they are living in the same household. The existence of more than one 
payee is prima facie evidence that each payee and the survivors in whose 
behalf the payee is receiving annuity or compensation constitute a 
separate household, and each payee may elect for the survivors in whose 
behalf he is receiving annuity or compensation, but where a family is 
receiving annuity or compensation through more than one payee, one 
payee, with the consent of the other payees, may elect for the whole 
family.
    (3) A retired employee may not be covered under more than one 
election.
    (4) A retired employee who is entitled to more than one annuity or 
to compensation and annuity is entitled to only one election.
    (c) Each retired employee who elects to receive a Government 
contribution toward the cost of a private health benefits plan shall 
file with his election a certificate of the carrier, on the form 
prescribed by OPM for the purpose, that he is a subscriber to a health 
benefits plan. OPM, or the appropriate retirement office, at any time 
may require that a retired employee renew the certificate, or may take 
such other action as it considers desirable to verify the continuing 
eligibility of the retired employee to receive a Government 
contribution. The appropriate retirement office may suspend the 
Government contribution when there is a reasonable doubt of the retired 
employee's continuing eligibility to receive the Government 
contribution.
    (d) In the discretion of the retirement office, a representative of 
the retired employee having a written authorization to do so may elect 
for him.
    (e) A person who was not eligible, during the months of March and 
April 1961, to elect to subscribe to the uniform plan or to receive a 
Government contribution toward the cost of a private health benefits 
plan, may apply to the appropriate retirement office when he becomes 
eligible. If the retirement office determines that he is eligible, it 
shall notify the retired employee that he is eligible to make an 
election in accordance with paragraphs (a) to (d) of this section within 
60 days of the date of the notice. If the retirement office determines 
that a retired employee was unable, for cause beyond his control, to 
make an election within the time limits prescribed by this section, it 
shall notify the retired employee that he is eligible to make an 
election in accordance with paragraphs (a) to (d) of this section within 
60 days of the date of the notice. Elections made under this paragraph 
are effective, for a retired employee receiving annuity and a survivor 
receiving compensation, on the first day of the third month following 
the month in which the retirement office receives the election. 
Withholdings and contributions are effective for months beginning on and 
after the first day of the second month following the month in which the 
retirement office receives the election. For any other retired employee 
receiving compensation, changes of election made under this paragraph 
are effective on the first day of the third 4-week period following the 
4-week period in which the Bureau of Employees' Compensation receives 
the election, and withholdings and contributions are effective beginning 
with the second 4-week period following receipt of the election. This 
paragraph does not apply to retired employees who have been, at any 
time, covered by the election of another under this part.
    (f) Retired employees and survivors who, on January 1, 1973, were 
enrolled for either basic coverage only or major medical coverage only 
of the Uniform Plan are, effective January 1, 1973, automatically 
enrolled in basic plus major medical coverage of the Uniform Plan.

[33 FR 12516, Sept. 4, 1968, as amended at 37 FR 20845, Dec. 20, 1972]



Sec. 891.202  Change of election.

    (a) When used in this section, ``month'' includes the 4-week period 
for which a retired employee (other than a survivor) receives 
compensation.
    (b) A retired employee shall change his election in accordance with 
the following table:

[[Page 526]]



                                            Table of Required Changes
----------------------------------------------------------------------------------------------------------------
                                         Type of election to
        Event requiring change            which requirement         Change required         Effective date of
                                               applies                                            change
----------------------------------------------------------------------------------------------------------------
(1) Loss of member of family by death  Election for self and    Change to self alone...  First day of month
 or otherwise, leaving only one         family for uniform or                             following the event
 person covered by the election.        private health                                    requiring change.
                                        benefits plan.                                    Changes in
                                                                                          withholdings and
                                                                                          contributions are
                                                                                          effective for annuity
                                                                                          or compensation
                                                                                          accruing for the month
                                                                                          in which the event
                                                                                          requiring change
                                                                                          occurs.
(2) Termination of subscription to a   Election for self and    ......do...............   Do.
 private health benefits plan for all   family for private
 persons covered by the election but    health benefits plan.
 the retired employee making the
 election \1\.
(3) Termination of subscription to a   Election for self alone  Change to not             Do.
 private health benefits plan for all   or for self and family   participating
 persons covered by the election \1\.   for private health       (optional change may
                                        benefits plan.           be made in accordance
                                                                 with paragraph (c) of
                                                                 this section).
----------------------------------------------------------------------------------------------------------------
\1\ If the termination is immediately succeeded by a similar subscription in another private health benefits
  plan a change of election is not required, but the retired employee shall file a certificate of the new
  carrier that he is a subscriber. A form for the certificate may be obtained from the retirement office.

    (c) An annuitant may change his or her election in accordance with 
the following table by notifying his or her retirement system at any 
time:

                                            Table of Optional Changes
----------------------------------------------------------------------------------------------------------------
                                               Type of election from which
             Change permitted                           changing                    Effective date of change
----------------------------------------------------------------------------------------------------------------
(1) Change to not participating..........  Election for self alone or self     First day of month specified in
                                            and family for uniform or private   notice to retirement system, or
                                            health benefits plan.               first day of month following
                                                                                receipt of notice by retirement
                                                                                system, whichever is later.
                                                                                Changes in withholdings and
                                                                                contributions are effective for
                                                                                annuity or compensation accruing
                                                                                for the month preceding the
                                                                                effective date of the change.
(2) Change to self alone in same plan....  Election for self and family for     Do.
                                            uniform plan or private health
                                            benefits plan.
(3) Change to private health benefits      Election for self alone or self      Do.
 plan for self alone or self and family.    and family for uniform plan.
(4) Change to self and family in same      Election for self alone for         First day of fourth month
 plan.                                      uniform or private health           following the month in which
                                            benefits plan.                      notice is received by retirement
                                                                                system. Changes in withholdings
                                                                                and contributions are effective
                                                                                for annuity or compensation
                                                                                accruing for the third month
                                                                                following month in which notice
                                                                                is received by the retirement
                                                                                system.
(5) Change to self alone or self and       Election not to participate.......   Do.
 family for uniform plan or private
 health benefits plan.
----------------------------------------------------------------------------------------------------------------


[33 FR 12516, Sept. 4, 1968, as amended at 43 FR 35018, Aug. 8, 1978]



                  Subpart C_Suspension and Termination



Sec. 891.301  Suspension and termination.

    (a) When used in this section, ``month'' includes the 4-week period 
for which a retired employee (other than a survivor) receives 
compensation.
    (b) When compensation is entirely suspended or annuity is entirely 
waived or suspended, Government contributions are suspended. If the 
election is to subscribe to the uniform plan, and the annuity or 
compensation

[[Page 527]]

is suspended, or the annuity is waived to the extent that the retired 
employee's share of the cost cannot be withheld, withholdings and 
Government contributions are suspended, but the subscription continues.
    (c) If the waiver or suspension covers 3 months or less, Government 
contributions and withholdings for the period of waiver or suspension 
shall be made when annuity payment is resumed. If the waiver or 
suspension covers more than 3 months, the retired employee's election is 
terminated effective at the end of the third month of waiver or 
suspension. A terminated election is renewed when annuity or 
compensation payment is resumed. When a terminated election is renewed 
pursuant to this paragraph, withholdings and Government contributions 
shall be made for the first 3 months of the waiver or suspension. 
Withholdings and Government contributions shall be made for annuity or 
compensation accruing after the election is renewed.
    (d) If title of a retired employee to annuity or compensation is 
terminated, his eligibility under this part is terminated.
    (e) If the eligibility of a retired employee is terminated and other 
members of the same family continue to be eligible under this part, the 
election of the former retired employee continues for the remainder of 
the family unless and until changed in accordance with Sec. 891.202.



                Subpart D_Contributions and Withholdings



Sec. 891.401  Government contributions.

    (a) For retired employees and survivors receiving an annuity. (1) 
Each month, an amount equal to the current monthly premium paid by an 
individual for supplementary medical insurance under title XVIII of the 
Social Security Act (Medicare) for such month shall be paid by the 
Office of Personnel Management, through the appropriate retirement 
office, to each retired employee or survivor who:
    (i) Is in receipt of annuity for such month;
    (ii) Is eligible for coverage under this part; and
    (iii) Elects to receive a Government contribution toward his or her 
cost of coverage for:
    (A) A private health insurance plan in which he or she is a 
subscriber for self-only; or
    (B) Supplementary medical insurance under Medicare.
    (2) Each month, an amount equal to the current monthly premium paid 
by an individual for supplementary medical insurance under title XVIII 
of the Social Security Act (Medicare) for such month shall be 
contributed, by the Office of Personnel Management, for each retired 
employee or survivor who is in receipt of annuity and who has elected to 
enroll for self-only in the uniform plan.
    (3) Each month, an amount equal to twice the current monthly premium 
paid by an individual for supplementary medical insurance under title 
XVIII of the Social Security Act (Medicare) for such month shall be paid 
by the Office of Personnel Management, through the appropriate 
retirement office, for each retired employee or survivor who:
    (i) Is in receipt of an annuity for such month;
    (ii) Is eligible for coverage under this part; and
    (iii) Elects to receive a Government contribution toward the cost of 
coverage for self and family under:
    (A) A private plan or plans; or
    (B) Supplementary medical insurance under Medicare.
    (4) Each month, an amount equal to twice the current monthly premium 
paid by an individual for supplementary medical insurance under title 
XVIII of the Social Security Act (Medicare) for such month shall be 
contributed, by the Office of Personnel Management, for each retired 
employee or survivor who is in receipt of annuity and who has elected to 
enroll for self and family in the uniform plan.
    (b) For retired employees and survivors receiving compensation. (1) 
For each retired employee or survivor who is in receipt of compensation 
and who meets the requirements of paragraph (a)(1) of this section, 
other than the requirement of being in receipt of an annuity, the Office 
of Personnel Management shall contribute, through the Office of

[[Page 528]]

Workers' Compensation Programs, an amount equal to 93\1/3\ percent of 
the current monthly premium paid by an individual for supplementary 
medical insurance under title XVIII of the Social Security Act 
(Medicare) rounded to the nearest cent, counting one-half cent and over 
as a whole cent, for each 4-week period in which payment of such 
compensation is made.
    (2) For each retired employee or survivor who is in receipt of 
compensation and who has elected to enroll for self-only in the uniform 
plan, the Office of Personnel Management shall contribute, during each 
4-week period in which payment of such compensation is made, an amount 
equal to 93\1/3\ percent of the current monthly premium paid by an 
individual for supplementary medical insurance under title XVIII of the 
Social Security Act (Medicare) rounded to the nearest cent, counting 
one-half cent and over as a whole cent.
    (3) For each retired employee or survivor who is in receipt of 
compensation and who meets the requirements of paragraph (a)(3) of this 
section, other than the requirement of being in receipt of an annuity, 
the Office of Personnel Management shall contribute, through the Office 
of Workers' Compensation Programs, an amount equal to 186\2/3\ percent 
of the current monthly premium paid by an individual for supplementary 
medical insurance under title XVIII of the Social Security Act 
(Medicare) rounded to the nearest cent, counting one-half cent and over 
as a whole cent, for each 4-week period in which payment of such 
compensation is made.
    (4) For each retired employee or survivor who is receiving 
compensation and has elected to enroll for self and family in the 
uniform plan, the Office of Personnel Management shall contribute, 
during each 4-week period in which payment of such compensation is made, 
an amount equal to 186\2/3\ percent of the current monthly premium paid 
by an individual for supplementary insurance under title XVIII of the 
Social Security Act (Medicare) rounded to the nearest cent, counting 
one-half cent and over as a whole cent.
    (5) If the current monthly rate for supplementary medical insurance 
under Medicare changes to a new rate within a 4-week period in which 
compensation is paid, the amount to be contributed for that 4-week 
period will be a prorated amount determined by:
    (i) Multiplying the number of days in the 4-week pay period 
occurring at the former monthly rate (the rate in effect at the 
beginning of the pay period) by the former rate for a 4-week pay period;
    (ii) Multiplying the number of days in the 4-week pay period 
occurring at the new rate (the rate in effect at the end of the 4-week 
pay period) by the new 4-week rate;
    (iii) Adding the products of paragraphs (b)(5) (i) and (ii) of this 
section; and
    (iv) Dividing the sum by 28 and rounding to the nearest cent, 
counting one-half cent and over as a whole cent.
    (c) So that the Government contribution provided under this section 
is paid or contributed in advance, it shall be included in the payment 
of annuity or compensation for the month or pay period immediately 
preceding the month or pay period for which the Government contribution 
is due.
    (d) An election to subscribe to the uniform plan constitutes an 
agreement by the retired employee or survivor that the retirement office 
may withhold from his or her annuity or compensation his or her share of 
the cost of the plan, as provided by this part.
    (e) The Government shall contribute to the Retired Federal Employees 
Health Benefits Fund two percent of the total Government contribution 
authorized by this section for payment of expenses incurred by the 
Office of Personnel Management in administering this part.

[45 FR 30611, May 9, 1980]



Sec. 891.402  Withholdings.

    The appropriate retirement office shall withhold from the annuity or 
compensation of each of its retired employees who has elected to 
subscribe to the uniform plan so much as is necessary to pay his share 
of the cost of his subscription. The withholdings shall be forwarded, in 
accordance with OPM instructions, to the Retired Employees Health 
Benefits Fund.

[[Page 529]]



            Subpart E_Standards for Uniform Plan and Carrier



Sec. 891.501  Standards for uniform plan.

    The uniform plan shall be open to all eligible retired employees and 
members of their families, without regard to race, sex, health status, 
or age. It shall not deny or limit benefits because of any preexisting 
condition. It shall offer basic plus major medical coverage. It shall 
provide a 31-day extension of coverage on termination of subscription 
other than by change of election or termination of the contract. A 
person confined in hospital for care or treatment on the 31st day of the 
extension of coverage shall be entitled to continuation of the benefits 
of the contract during the continuance of the confinement, but not 
beyond the 60th day following the end of the extension of coverage. The 
uniform plan shall be experience-rated.

[33 FR 12516, Sept. 4, 1968, as amended at 43 FR 35018, Aug. 8, 1978]



Sec. 891.502  Standards for carrier of uniform plan.

    In the most recent year for which data are available, the carrier of 
the uniform plan shall have made at least 1 percent of all group health 
insurance benefit payments in the United States. If the carrier is an 
insurance company, it must be licensed to issue group health insurance 
in all the States of the United States and the District of Columbia.



PART 892_FEDERAL FLEXIBLE BENEFITS PLAN: PRE-TAX PAYMENT OF HEALTH 
BENEFITS PREMIUMS--Table of Contents




             Subpart A_Administration and General Provisions

Sec.
892.101 Definitions
892.102 What is premium conversion and how does it work?
892.103 What can I do if I disagree with my agency's decision about my 
          pre-or post-tax election?

                 Subpart B_Eligibility and Participation

892.201 Who is covered by the premium conversion plan?
892.202 Are retirees eligible for the premium conversion plan?
892.203 When will my premium conversion begin?
892.204 How do I waive participation in premium conversion before the 
          benefit first becomes effective?
892.205 May I waive participation in premium conversion after the 
          initial implementation?
892.206 Can I cancel my waiver and participate in premium conversion?
892.207 Can I make changes to my FEHB enrollment while I am 
          participating in premium conversion?
892.208 Can I change my enrollment from self and family to self only at 
          any time?
892.209 Can I cancel FEHB coverage at any time?
892.210 Does premium conversion change the effective date of an FEHB 
          enrollment, change in enrollment, or cancellation of 
          enrollment?
892.211 What options are available to me if I go on a period of leave 
          without pay (LWOP) or other types of non-pay status?

                Subpart C_Contributions and Withholdings

892.301 How do I pay my premium?
892.302 Will the Government contribution continue?
892.303 Can I pay my premiums directly by check under the premium 
          conversion plan?

         Subpart D_Reemployed Annuitants and Survivor Annuitants

892.401 Am I eligible for premium conversion if I retire and then come 
          back to work for the Federal Government?
892.402 I am a survivor annuitant as well as an active Federal employee; 
          am I eligible for premium conversion?

    Authority: 5 U.S.C. 8913; 5 U.S.C. 1103(a)(7); 26 U.S.C. 125.

    Source: 65 FR 44646, July 19, 2000, unless otherwise noted.



             Subpart A_Administration and General Provisions



Sec. 892.101  Definitions.

    Days mean calendar days.
    Dependent means a family member who is both eligible for coverage 
under the FEHB Program and a dependent as defined in section 152 of the 
Internal Revenue Code.
    FEHB Program means the Federal Employees Health Benefits Program 
described in 5 U.S.C. 8901.

[[Page 530]]

    Open Season means the period of time each year as described in Sec. 
890.301(f) of this chapter when all individuals eligible for FEHB 
coverage have the opportunity to enroll or change their enrollment. 
These changes become effective with the first pay period that begins in 
the following year. For additional open seasons authorized by OPM, the 
effective date is specified.
    OPM means the Office of Personnel Management.
    Qualifying life event means an event that may permit changes to your 
FEHB enrollment as well as changes to your premium conversion election 
as described in Treasury regulations at 26 CFR 1.125-4 and includes the 
following:
    (1) Change in family status that results in an increase or decrease 
in the number of eligible family members as follows:
    (i) Marriage, divorce, annulment, legal separation;
    (ii) Birth, adoption, acquiring a foster child that meets the 
definition in Sec. 890.101(a) or a stepchild, issuance of a court order 
requiring an employee to provide coverage for a child;
    (iii) Last dependent child loses coverage, for example, the child 
reaches age 22 or marries, stepchild moves out of employee's home, 
disabled child becomes capable of self support, child acquires other 
coverage by court order; and
    (iv) Death of a spouse or dependent.
    (2) Any change in employment status that could result in entitlement 
to coverage; for example:
    (i) Reemployment after a break in service of more than 3 days;
    (ii) Return to pay status from non-pay status if employee previously 
elected to terminate coverage (if employee did not elect to terminate 
see Sec. 892.101 (5);
    (iii) Return to receiving pay sufficient to cover premium 
withholdings if coverage terminated;
    (iv) Your spouse or dependent changes hours from either full-time to 
part-time status, or the reverse, which significantly affects their 
eligibility for coverage;
    (v) Start or end of a period of unpaid leave of absence (leave 
without pay [LWOP], or other non-pay status) by you or your spouse. A 
period of unpaid leave is a continuous unpaid leave of absence of more 
than one pay period; and
    (vi) Start or end of your spouse's employment that affects you or 
your spouse's eligibility for coverage.
    (3) Any change in employment status that could affect the cost of 
insurance, including:
    (i) Change from temporary appointment with eligibility for coverage 
under 5 U.S.C. 8906a to an appointment that permits receipt of 
government contribution; and
    (ii) Change from full-time to part-time status or the reverse.
    (4) An employee is restored to a civilian position after serving in 
uniformed services as described in Sec. 890.304 (a)(vi)(vii).
    (5) Start of non-pay status and end of non-pay status if employee 
did not terminate coverage (if coverage terminated see Sec. 892.101 
(2)(ii)).
    (6) An employee enrolled in a health maintenance organization (HMO) 
or a covered family member moves or becomes employed outside the 
geographic area from which the carrier accepts enrollments, or if 
already lives or works outside the area, moves further from this area.
    (7) Transfer from a post of duty within the United States to a post 
of duty outside the United States, or the reverse.
    (8) Separation from Federal employment when the employee or 
employee's spouse is pregnant.
    (9) An employee becomes entitled to Medicare. (For change to self 
only, cancellation, or change in premium conversion status see Sec. 
892.101 (11)).
    (10) An employee or eligible family member loses coverage under FEHB 
or another group insurance coverage including the following:
    (i) Loss of coverage due to termination of membership in an employee 
organization sponsoring the FEHB plan;
    (ii) Loss of coverage of employee or eligible family member due to 
discontinuance in whole or part of FEHB plan;
    (iii) Loss of coverage under another Federally-sponsored health 
benefits program, including, TRICARE, Medicare, or Indian Health 
Service;

[[Page 531]]

    (iv) Loss of coverage under Medicaid or similar State-sponsored 
program of medical assistance for the needy; and
    (v) Loss of coverage under a non-Federal health plan, including 
foreign, State or local government, or private sector group health plan 
as described in Sec. 890.301 (i)(6).
    (11) An employee or eligible family member gains coverage under FEHB 
or another group insurance plan, including the following:
    (i) Another Federally-sponsored health benefits program, including, 
TRICARE, Medicare, or Indian Health Service;
    (ii) Medicaid or similar State-sponsored program of medical 
assistance for the needy; and
    (iii) A non-Federal health plan, including foreign, State or local 
government, or private sector group plan.
    (12) A change in an employee's spouse or dependent's coverage 
options, for example:
    (i) Employer starts offering a different type of coverage;
    (ii) Employer stops offering the type of coverage that the 
employee's spouse or dependent has (if no other coverage is available);
    (iii) A health maintenance organization (HMO) adds a geographic 
service area that now makes the employee's spouse eligible to enroll in 
that HMO;
    (iv) Employee's spouse is enrolled in an HMO that removes a 
geographic area that makes the spouse ineligible for coverage under that 
HMO, but other health plans or options are available (if no other 
coverage is available see Sec. 892.101 (10); and
    (v) Change in the cost of coverage.

[65 FR 44646, July 19, 2000, as amended at 68 FR 56527, Oct. 1, 2003]



Sec. 892.102  What is premium conversion and how does it work?

    Premium conversion is a method of reducing your taxable income by 
the amount of your contribution to your FEHB insurance premium. If you 
are a participant in the premium conversion plan, Section 125 of the 
Internal Revenue Code allows you to reduce your salary (through an 
employer allotment) and provide that portion of your salary back to your 
employer. Instead of being paid to you as taxable income, this allotted 
amount is used to purchase your FEHB insurance for you. The effect is 
that your taxable income is reduced. Because taxable income is reduced, 
the amount of tax you pay is reduced. You save on Federal income tax, 
Social Security and Medicare tax and in most States and localities, 
State and local income taxes.



Sec. 892.103  What can I do if I disagree with my agency's decision 
about my pre-or post-tax election?

    You may use the reconsideration procedure set out at Sec. Sec. 
890.104 of this chapter to request an agency to reconsider its initial 
decision affecting your participation in the premium conversion plan.



                 Subpart B_Eligibility and Participation



Sec. 892.201  Who is covered by the premium conversion plan?

    (a) All employees in the Executive Branch of the Federal Government 
who are participating in the FEHB Program (as described in 5 U.S.C. 
8901), and whose pay is issued by an agency of the Executive Branch of 
the Federal Government, are automatically covered by the premium 
conversion plan. Certain reemployed annuitants may be considered 
employees for purposes of premium conversion, as described in subpart D 
of this part.
    (b) Employees of organizations that have established a premium 
conversion plan under separate authority prior to October 2000 may not 
participate in the premium conversion plan described here because they 
are already covered by their employing agency's plan.
    (c) Individuals enrolled in FEHB who are not employees of the 
Executive Branch of the Federal government or are not employees of the 
Federal government, will be covered by the premium conversion plan if 
their employer signs an adoption agreement that is accepted by OPM.
    (d) Individuals enrolled in FEHB who are appointed by an agency in 
the Executive Branch, but whose pay is not issued by that agency, will 
be covered by the premium conversion plan if the

[[Page 532]]

entity that makes their FEHB contribution signs an adoption agreement 
that is accepted by OPM.
    (e) Individuals may waive premium conversion by filing a waiver form 
with their employer in accordance with this part.



Sec. 892.202  Are retirees eligible for the premium conversion plan?

    No, only current employees who are enrolled in the FEHB Program are 
covered by the premium conversion plan. Former employees are not 
eligible. If you are a reemployed annuitant, see subpart D of this part.



Sec. 892.203  When will my premium conversion begin?

    If you are newly employed or newly eligible for FEHB in a covered 
Executive Branch agency (as described in Sec. 892.201(a)), your salary 
reduction (through a Federal allotment) and pre-tax benefit will be 
effective on the 1st day of the first pay period beginning on or after 
your employing agency receives your enrollment.

[68 FR 56528, Oct. 1, 2003]



Sec. 892.204  How do I waive participation in premium conversion before 
the benefit first becomes effective?

    You must file a waiver form by the date set by your employing 
office, but not later than the day before the effective date of 
coverage. The waiver form is available from your employing office.



Sec. 892.205  May I waive participation in premium conversion after 
the initial implementation?

    Yes, but the opportunity to waive premium conversion is limited. You 
may waive premium conversion:
    (a) During the annual FEHB open season. The effective date of the 
waiver will be the first day of the first pay period that begins in the 
following calendar year;
    (b) At the same time as you sign up for FEHB when first hired or 
hired as a reemployed annuitant. Employees who leave Federal service and 
are rehired after a three-day break in service or in a different 
calendar year also may waive;
    (c) In conjunction with a change in FEHB enrollment, on account of 
and consistent with a qualifying life event (see Sec. 892.101); or
    (d) When you have a qualifying life event and the waiver is on 
account of and consistent with that qualifying life event (even if you 
do not change your FEHB enrollment). You have 60 days after the 
qualifying life event to file a waiver with your employer. The waiver is 
effective on the first day of the pay period following the date your 
employer receives the waiver.



Sec. 892.206  Can I cancel my waiver and participate in premium 
conversion?

    Yes, you may cancel a waiver and participate in premium conversion 
if:
    (a) You have a qualifying life event; the change in FEHB coverage is 
consistent with the qualifying life event; and you complete an election 
form to participate in premium conversion within 60 days after the 
qualifying life event; or
    (b) You cancel your waiver during an open season, including an 
extended open season authorized by OPM.



Sec. 892.207  Can I make changes to my FEHB enrollment while I am 
participating in premium conversion?

    (a) Subject to the exceptions described in paragraphs (b) and (c) of 
this section, you can make changes to your FEHB enrollment for the same 
reasons and with the same effective dates listed in Sec. 890.301 of 
this chapter.
    (b) However, if you are participating in premium conversion there 
are two exceptions: you must have a qualifying life event to change from 
self and family enrollment to self only enrollment or to drop FEHB 
coverage entirely. (See Sec. 892.209 and Sec. 892.210.) Your change in 
enrollment must be consistent with and correspond to your qualifying 
life event as described in Sec. 892.101. These limitations apply only 
to changes you may wish to make outside open season.
    (c) If you are subject to a court or administrative order as 
discussed in Sec. 890.301(g)(3) of this chapter, your employing agency 
can limit a change to your enrollment as long as the court or 
administrative order is still in effect and you have at least one child 
identified in the order who is still eligible

[[Page 533]]

under the FEHB Program, unless you provide documentation to your agency 
that you have other coverage for your child or children. See also Sec. 
892.208 and Sec. 892.209.

[69 FR 56929, Sept. 23, 2004]



Sec. 892.208  Can I change my enrollment from self and family to self 
only at any time?

    If you are participating in premium conversion you may change your 
FEHB enrollment from self and family to self only under either of the 
following circumstances:
    (a) During the annual open season. A change to self only made during 
the annual open season takes effect on the 1st day of the first pay 
period that begins in the next year.
    (b) Within 60 days after you have a qualifying life event. A change 
to self only made because of a qualifying life event takes effect on the 
first day of the first pay period that begins after the date your 
employing office receives your appropriate request. Your change in 
enrollment must be consistent with and correspond to your qualifying 
life event. For example, if you get divorced and have no dependent 
children, changing to self only would be consistent with that qualifying 
life event. If both you and your spouse are Federal employees, and your 
youngest dependent turns age 22, changing from a self and family to two 
self only enrollments would be consistent and appropriate for that 
event.
    (c) If you are subject to a court or administrative order as 
discussed in Sec. 890.301(g)(3) of this chapter, you may not change 
your enrollment to self only as long as the court or administrative 
order is still in effect and you have at least one child identified in 
the order who is still eligible under the FEHB Program, unless you 
provide documentation to your agency that you have other coverage for 
your child or children. See also Sec. 892.207 and Sec. 892.209.

[68 FR 56528, Oct. 1, 2003, as amended at 69 FR 56929, Sept. 23, 2004]



Sec. 892.209  Can I cancel FEHB coverage at any time?

    If you are participating in premium conversion you may cancel your 
FEHB coverage:
    (a) During the annual open season. A cancellation made during the 
annual open season is effective at midnight of the day before the first 
day of the first pay period that begins in the next year.
    (b) Within 60 days after you have a qualifying life event. A 
cancellation made because of a qualifying life event takes effect at 
midnight of the last day of the pay period in which your employing 
office receives your appropriate request to cancel your enrollment. Your 
cancellation of coverage must be consistent with and correspond to your 
qualifying life event. For example, if you get married and you gain 
other insurance coverage because your spouse's employer provides health 
insurance for your spouse and you, then canceling FEHB coverage would be 
consistent with that qualifying life event. If you add an eligible 
family member, canceling coverage would generally not be consistent with 
that qualifying life event.
    (c) If you are subject to a court or administrative order as 
discussed in Sec. 890.301(g)(3) of this chapter, you may not cancel 
your coverage as long as the court or administrative order is still in 
effect and you have at least one child identified in the order who is 
still eligible under the FEHB Program, unless you provide documentation 
to your agency that you have other coverage for your child or children.

[65 FR 44646, July 19, 2000, as amended at 68 FR 56525 and 56528, Oct. 
1, 2003; 69 FR 56929, Sept. 23, 2004]



Sec. 892.210  Does premium conversion change the effective date of an 
FEHB enrollment, change in enrollment, or cancellation of enrollment?

    No. If you are participating in premium conversion, the effective 
date of an FEHB enrollment, change in enrollment, or cancellation of 
enrollment is the same effective date as provided in Sec. 890.301 of 
this chapter.

[[Page 534]]



Sec. 892.211  What options are available to me if I go on a period of 
leave without pay (LWOP) or other types of non-pay status?

    (a) Your commencement of a period of LWOP is a qualifying life event 
as described in Sec. 892.101. You may change your premium conversion 
election (waive if you now participate, or participate if you now 
waive).
    (b)(1) You may continue your FEHB coverage by agreeing in advance of 
LWOP to one of the payment options described in paragraph (b)(2), 
(b)(3), or (b)(4) of this section.
    (2) Pre-pay. Prior to commencement of your LWOP you may allot 
through payroll deduction the amount that will be due for your share of 
your FEHB premium during your LWOP period, if your employing agency, at 
its discretion, allows you to do so. Contributions under the pre-pay 
option may be made through premium conversion on a pre-tax basis. 
Alternatively, you may pre-pay premiums for the LWOP period on an after-
tax basis.
    (3) Direct pay. Under the direct pay option, you may pay your share 
of your FEHB premium on the same schedule of payments that would be made 
if you were not on LWOP, as described in Sec. 890.502(b) of this 
chapter. You must make the premium payments directly to your employing 
agency. The payments you make under the direct pay option are not 
subject to premium conversion, and are made on an after-tax basis.
    (4) Catch-up. Under the catch-up option, you must agree in advance 
of the LWOP period that: you will continue FEHB coverage while on LWOP; 
your employer will advance your share of your FEHB premium during your 
LWOP period; and you will repay the advanced amounts when you return 
from LWOP. (Described in Sec. 890.502(b) of this chapter.) Your catch-
up contributions may be made through premium conversion.
    (5) If you remain in FEHB upon your return from LWOP, your catch-up 
premiums and current premiums will be paid at the same time.
    (c) Your return from LWOP constitutes a qualifying life event as 
described in Sec. 892.101. You may change your premium conversion 
election (waive if you now participate, or participate if you now 
waive). The election you choose upon return from LWOP will apply to your 
current as well as your catch-up premiums.

[68 FR 56528, Oct. 1, 2003]



                Subpart C_Contributions and Withholdings



Sec. 892.301  How do I pay my premium?

    As a participant in premium conversion, instead of having your 
premium withheld from after-tax salary, your salary will be reduced 
(through a Federal allotment) by the amount equal to your FEHB premium, 
which you will allot to your agency. The allotment from salary satisfies 
the FEHB premium payment requirement of 5 U.S.C. 8906. Your employer is 
authorized to accept this allotment under Sec. 550.311(a)(8) and Sec. 
550.312 of this chapter or, for employers not subject to those 
regulations, a similar mechanism. Your agency will use the allotment to 
pay your share of your FEHB premium. This will reduce your taxable 
income as described in Sec. 892.102.



Sec. 892.302  Will the Government contribution continue?

    Yes, your employer will still pay the same share of your premium as 
provided in the Federal Employees Health Benefits Act, and Sec. 890.501 
of this chapter. Employee allotments do not count toward the 
Government's statutory maximum contribution.



Sec. 892.303  Can I pay my premiums directly by check under the premium 
conversion plan?

    No, your employer must take your contribution to your FEHB premium 
from your salary to qualify for pre-tax treatment.

[[Page 535]]



         Subpart D_Reemployed Annuitants and Survivor Annuitants



Sec. 892.401  Am I eligible for premium conversion if I retire and 
then come back to work for the Federal Government?

    (a) If you are a retired individual enrolled in FEHB who is 
receiving an annuity and you are reemployed in a position that conveys 
FEHB eligibility and is covered by the premium conversion plan, you are 
automatically covered by premium conversion, unless you waive 
participation as described in Sec. 892.205.
    (b)(1) If you do not waive premium conversion, your FEHB coverage 
will be transferred to your employing agency, and your employing agency 
will assume responsibility for contributing the Government share of your 
FEHB coverage. Your coverage, including what FEHB plans you are eligible 
to enroll in, will be based on your status as an active employee and 
your employing agency will deduct your premiums from your salary.
    (2) If you elect to waive participation in premium conversion, you 
will keep your FEHB coverage as an annuitant, but your contributions 
towards your FEHB premiums will be made on an after-tax basis. Your 
employing agency must receive your waiver no later than 60 days after 
the date you return to Federal employment. A waiver will be effective at 
the beginning of the first pay period after your employer receives it.
    (c) If you did not carry FEHB into retirement and you are reemployed 
as an employee in a position covered by the premium conversion plan, you 
may enroll in the FEHB Program as a new employee as described in Sec. 
890.301 of this chapter. Upon enrolling in FEHB, you are automatically 
covered by the premium conversion plan, unless you waive participation 
as described in Sec. 892.205.
    (d) Your status as an annuitant under the retirement regulations and 
your right to continue FEHB as an annuitant following your period of 
reemployment is unaffected.

[65 FR 44646, July 19, 2000, as amended at 68 FR 56529, Oct. 1, 2003]



Sec. 892.402  I am a survivor annuitant as well as an active Federal 
employee; am I eligible for premium conversion?

    (a) If you are a survivor annuitant enrolled in FEHB who is 
receiving an annuity and you are employed in a position that conveys 
FEHB eligibility and is covered by the premium conversion plan, you are 
eligible to participate in premium conversion.
    (b)(1) If you wish to participate in premium conversion, you must 
notify your employing agency. Your employing agency will transfer in 
your FEHB coverage from the retirement system, and your employing agency 
will assume responsibility for contributing the government share of your 
FEHB coverage. Your coverage, including what FEHB plans you are eligible 
to enroll in, will be based on your status as an active employee and 
your employing agency will deduct your premiums from your salary.
    (2) If you do not notify your employing agency that you wish to 
participate in premium conversion, you will keep your FEHB coverage as a 
survivor annuitant, but your contributions towards your FEHB premiums 
will be made on an after-tax basis. Your status as an annuitant under 
the retirement regulations and your right to continue FEHB as a survivor 
annuitant following your period of employment is unaffected.

[68 FR 56529, Oct. 1, 2003]



PART 900_INTERGOVERNMENTAL PERSONNEL ACT PROGRAMS--Table of Contents




Subparts A-C [Reserved]

Subpart D_Nondiscrimination in Federally Assisted Programs in the Office 
of Personnel Management_Effectuation of Title VI of the Civil Rights Act 
                                 of 1964

Sec.
900.401 Purpose.
900.402 Application of this subpart.
900.403 Definitions.
900.404 Discrimination prohibited.
900.405 Assurances required.
900.406 Compliance information.
900.407 Conduct of investigations.
900.408 Procedure for effecting compliance.
900.409 Hearings.
900.410 Decisions and notices.

[[Page 536]]

900.411 Judicial review.
900.412 Effect on other regulations, forms, and instructions.

Appendix A to Subpart D--Activities to Which This Subpart Applies
Appendix B to Subpart D--Activities to Which This Subpart Applies When a 
          Primary Objective of the Federal Assistance Is To Provide 
          Employment
Appendix C to Subpart D--Application of Subpart D, Part 900, to Programs 
          Receiving Federal Financial Assistance of the Office of 
          Personnel Management

Subpart E [Reserved]

   Subpart F_Standards for a Merit System of Personnel Administration

900.601 Purpose.
900.602 Applicability.
900.603 Standards for a merit system of personnel administration.
900.604 Compliance.
900.605 Establishing a merit requirement.

Appendix A to Subpart F--Standards for a Merit System of Personnel 
          Administration

   Subpart G_Nondiscrimination on the Basis of Handicap in Federally 
         Assisted Programs of the Office of Personnel Management

900.701 Purpose.
900.702 Applicability.
900.703 Definitions.
900.704 Discrimination prohibited.
900.705 Program accessibility.
900.706 Employment practices.
900.707 Certification required.
900.708 Self-evaluation.
900.709 Notice and consultation.
900.710 Procedure for effecting compliance.

    Authority: Sec. 503, Pub. L. 91-648, 84 Stat. 1926 (42 U.S.C. 4763), 
unless otherwise noted.

    Source: 36 FR 15515, Aug. 17, 1971, unless otherwise noted.

Subparts A-C [Reserved]



Subpart D_Nondiscrimination in Federally Assisted Programs in the Office 
of Personnel Management_Effectuation of Title VI of the Civil Rights Act 
                                 of 1964

    Authority: Sec. 602, 78 Stat. 252 (42 U.S.C. 2000d-1).

    Source: 38 FR 17920, July 5, 1973, unless otherwise noted.



Sec. 900.401  Purpose.

    The purpose of this subpart is to effectuate the provisions of title 
VI of the Civil Rights Act of 1964 (hereafter referred to as title VI) 
to the end that a person in the United States shall not, on the ground 
of race, color, or national origin, be excluded from participation in, 
be denied the benefits of, or be otherwise subjected to discrimination 
under a program or activity receiving Federal financial assistance from 
OPM.



Sec. 900.402  Application of this subpart.

    (a) This subpart applies to each program for which Federal financial 
assistance is authorized under a law administered by OPM, including the 
federally assisted programs listed in appendix A to this subpart. It 
also applies to money paid, property transferred, or other Federal 
financial assistance extended under a program after the effective date 
of this subpart pursuant to an application approved before that 
effective date. This subpart does not apply to:
    (1) Federal financial assistance by way of insurance or guaranty 
contracts;
    (2) Money paid, property transferred, or other assistance extended 
under a program before the effective date of this subpart, except when 
the assistance was subject to the title VI regulations of an agency 
whose responsibilities are now exercised by OPM;
    (3) Assistance to any individual who is the ultimate beneficiary 
under a program; or
    (4) Employment practices, under a program, of an employer, 
employment agency, or labor organization, except to the extent described 
in Sec. 900.404(c).

The fact that a program is not listed in appendix A to this subpart does 
not mean, if title VI is otherwise applicable, that the program is not 
covered. Other programs under statutes now in force or hereinafter 
enacted may be added to appendix A to this subpart.
    (b) In a program receiving Federal financial assistance in the form, 
or for the acquisition, of real property or an interest in real 
property, to the extent

[[Page 537]]

that rights to space on, over, or under that property are included as 
part of the program receiving that assistance, the nondiscrimination 
requirement of this subpart extends to a facility located wholly or in 
part in that space.



Sec. 900.403  Definitions.

    Unless the context requires otherwise, in this subpart:
    (a) Applicant means a person who submits an application, request, or 
plan required to be approved by OPM, or by a primary recipient, as a 
condition to eligibility for Federal financial assistance, and 
application means that application, request, or plan.
    (b) Facility includes all or any part of structures, equipment, or 
other real or personal property or interests therein, and the provision 
of facilities includes the construction, expansion, renovation, 
remodeling, alteration, or acquisition of facilities.
    (c) Federal financial assistance includes:
    (1) Grants and loans of Federal funds;
    (2) The grant or donation of Federal property and interests in 
property;
    (3) The detail of Federal personnel;
    (4) The sale and lease of, and the permission to use (on other than 
a casual or transient basis), Federal property or any interest in the 
property without consideration or at a nominal consideration, or at a 
consideration which is reduced for the purpose of assisting the 
recipient, or in recognition of the public interest to be served by the 
sale or lease to the recipient; and
    (5) A Federal agreement, arrangement, or other contract which has as 
one of its purposes the provision of assistance.
    (d) Primary recipient means a recipient that is authorized or 
required to extend Federal financial assistance to another recipient for 
the purpose of carrying out a program.
    (e) Program includes a program, project, or activity for the 
provision of services, financial aid, or other benefits to individuals 
(including education or training or other services whether provided 
through employees of the recipient of Federal financial assistance or 
provided by others through contracts or other arrangements with the 
recipient, and including work opportunities), or for the provision of 
facilities for furnishing services, financial aid, or other benefits to 
individuals. The services, financial aid, or other benefits provided 
under a program receiving Federal financial assistance are deemed to 
include a service, financial aid, or other benefits provided with the 
aid of Federal financial assistance or with the aid of any non-Federal 
funds, property, or other resources required to be expended or made 
available for the program to meet the matching requirements or other 
conditions which must be met in order to receive the Federal financial 
assistance, and to include services, financial aid, or other benefits 
provided in or through a facility provided with the aid of Federal 
financial assistance or non-Federal resources.
    (f) Recipient may mean any State, the District of Columbia, the 
Commonwealth of Puerto Rico, a territory or possession of the United 
States, or any political subdivision thereof, or instrumentality 
thereof, any public or private agency, institution, or organization, or 
other entity, or any individual in any State, the District of Columbia, 
the Commonwealth of Puerto Rico, or territory or possession of the 
United States, to whom Federal financial assistance is extended, 
directly or through another recipient, for any program, including any 
successor, assignee, or transferee thereof, but the term does not 
include any ultimate beneficiary under a program.
    (g) Director means the Director of the Office of Personnel 
Management, or any person to whom he has delegated his authority in the 
matter concerned.



Sec. 900.404  Discrimination prohibited.

    (a) General. A person in the United States shall not, on the ground 
of race, color, or national origin be excluded from participation in, be 
denied the benefits of, or be otherwise subjected to discrimination 
under, a program to which this subpart applies.
    (b) Specific discriminatory actions prohibited. (1) A recipient 
under a program to which this subpart applies may not, directly or 
through contractual or other arrangements, on the ground of race, color, 
or national origin--

[[Page 538]]

    (i) Deny a person a service, financial aid, or other benefit 
provided under the program;
    (ii) Provide a service, financial aid, or other benefit to a person 
which is different, or is provided in a different manner, from that 
provided to others under the program;
    (iii) Subject a person to segregation or separate treatment in any 
matter related to his receipt of a service, financial aid, or other 
benefit under the program;
    (iv) Restrict a person in any way in the enjoyment of an advantage 
or privilege enjoyed by others receiving a service, financial aid, or 
other benefit under the program;
    (v) Treat a person differently from others in determining whether he 
satisfies an admission, enrollment, quota, eligibility, membership, or 
other requirement or condition which persons must meet in order to be 
provided a service, financial aid, or other benefit provided under the 
program; or
    (vi) Deny a person an opportunity to participate in the program 
through the provision of services or otherwise or afford him an 
opportunity to do so which is different from that afforded others under 
the program.
    (2) A recipient, in determining the types of services, financial 
aid, or other benefits, or facilities which will be provided under a 
program or the class of persons to whom, or the situations in which, the 
services, financial aid, other benefits, or facilities will be provided 
under a program, or the class of persons to be afforded an opportunity 
to participate in a program, may not, directly or through contractual or 
other arrangements, utilize criteria or methods of administration which 
have the effect of subjecting persons to discrimination because of their 
race, color, or national origin, or have the effect of defeating or 
substantially impairing accomplishment of the objectives of the program 
with respect to individuals of a particular race, color, or national 
origin.
    (3) As used in this section, the services, financial aid, or other 
benefits provided under a program receiving Federal financial assistance 
include a service, financial aid, or other benefit provided in or 
through a facility provided with the aid of Federal financial 
assistance.
    (4) The enumeration of specific forms of prohibited discrimination 
in this paragraph does not limit the generality of the prohibition in 
paragraph (a) of this section.
    (5) Examples demonstrating the application of the provisions of this 
section to certain programs receiving Federal financial assistance from 
OPM are contained in appendix C of this subpart.
    (6) (i) In administering a program regarding which the recipient had 
previously discriminated against persons on the ground of race, color, 
or national origin, the recipient shall take affirmative action to 
overcome the effects of prior discrimination.
    (ii) Even in the absence of prior discrimination a recipient in 
administering a program shall take affirmative action as required by OPM 
to overcome the effect of conditions which resulted in limiting 
participation by persons of a particular race, color, or national 
origin.
    (iii) Any affirmative action under this paragraph shall be 
consistent with the principles stated in the Intergovernmental Personnel 
Act of 1970, 84 Stat. 1909.
    (c) Employment practices. (1) When a primary objective of a program 
of Federal financial assistance to which this subpart applies is to 
provide employment, a recipient or other party subject to this subpart 
shall not, directly or through contractual or other arrangements, 
subject a person to discrimination on the ground of race, color, or 
national origin in its employment practices under the program (including 
recruitment or recruitment advertising, hiring, firing, upgrading, 
promotion, demotion, transfer, layoff, termination, rates of pay, or 
other forms of compensation or benefits, selection for training or 
apprenticeship, use of facilities, and treatment of employees). A 
recipient shall take affirmative action to insure that applicants are 
employed, and employees are treated during employment, without regard to 
race, color, or national origin. The requirements applicable to 
construction employment under a program are those specified in or 
pursuant to Part

[[Page 539]]

III of Executive Order 11246 or any Executive order which supersedes it.
    (2) Federal financial assistance to programs under laws funded or 
administered by OPM which have as a primary objective the providing of 
employment include those set forth in appendix B to this subpart.
    (3) In regard to Federal financial assistance which does not have 
providing employment as a primary objective, the provisions of paragraph 
(c)(1) of this section apply to the employment practices of the 
recipient if discrimination on the ground of race, color, or national 
origin in the employment practices tends, on the ground of race, color, 
or national origin, to exclude persons from participation in, to deny 
them the benefits of, or to subject them to discrimination under, the 
program receiving Federal financial assistance. The provisions of 
paragraph (c)(1) of this section apply to the extent necessary to assure 
equality of opportunity to and nondiscriminatory treatment of 
beneficiaries.
    (d) In determining the site or location of facilities, a recipient 
or applicant may not make selections with the purpose or effect of 
excluding individuals from, denying them the benefits of, or subjecting 
them to discrimination under, a program to which this subpart applies, 
on the ground of race, color, or national origin; or with the purpose or 
effect of defeating or substantially impairing the accomplishments of 
the objectives of title VI or this subpart.



Sec. 900.405  Assurances required.

    (a) General. (1) An application for Federal financial assistance to 
carry out a program to which this subpart applies, except a program to 
which paragraph (d) of this section applies, and every application for 
Federal financial assistance to provide a facility shall, as a condition 
to its approval and the extension of Federal financial assistance 
pursuant to the application, contain or be accompanied by, assurances 
that the program will be conducted or the facility operated in 
compliance with the requirements imposed by or pursuant to this subpart. 
Every program of Federal financial assistance shall require the 
submission of these assurances. In the case where the Federal financial 
assistance is to provide or is in the form of personal property, or real 
property or interest therein or structures thereon, the assurances shall 
obligate the recipient, or, in the case of a subsequent transfer, the 
transferee, for the period during which the property is used for a 
purpose for which the Federal financial assistance is extended or for 
another purpose involving the provision of similar services or benefits, 
or for as long as the recipient retains ownership or possession of the 
property, whichever is longer. In other cases, the assurances obligate 
the recipient for the period during which the Federal financial 
assistance is extended to the program. In the case where the assistance 
is sought for the construction of a facility or part of a facility, the 
assurances shall extend to the entire facility and to the facilities 
operated in connection therewith. OPM shall specify the form of the 
foregoing assurances for each program, and the extent to which like 
assurances will be required of subgrantees, contractors and 
subcontractors, transferees, successors in interest, and other 
participants in the program. The assurances shall include provisions 
which give the United States the right to seek judicial enforcement.
    (2) When Federal financial assistance is provided in the form of a 
transfer of real property, structures, or improvements thereon, or 
interest therein, from the Federal Government, the instrument effecting 
or recording the transfer shall contain a covenant running with the land 
assuring nondiscrimination for the period during which the real property 
is used for a purpose for which the Federal financial assistance is 
extended or for another purpose involving the provision of similar 
services or benefits. When no transfer of property or interest therein 
from the Federal Government is involved, but property is acquired or 
improved under a program of Federal financial assistance, the recipient 
shall agree to include a covenant in any subsequent transfer of the 
property. When the property is obtained from the Federal Government, the 
covenant may also include a condition coupled with a right to be 
reserved by OPM to revert

[[Page 540]]

title to the property in the event of a breach of the covenant where, in 
the discretion of OPM, such a condition and right of reverter is 
appropriate to the program under which the real property is obtained and 
to the nature of the grant and the grantee. In the event a transferee of 
real property proposes to mortgage or otherwise encumber the real 
property as security for financing construction of new, or improvement 
of existing, facilities on property for the purposes for which the 
property was transferred, OPM may agree, on request of the transferee 
and if necessary to accomplish the financing, and on conditions as he 
deems appropriate, to subordinate a right of reversion to the lien of a 
mortgage or other encumbrance.
    (b) Assurances from government agencies. In the case of an 
application from a department, agency, or office of a State or local 
government for Federal financial assistance for a specified purpose, the 
assurance required by this section shall extend to any other department, 
agency, or office of the same governmental unit if the policies of the 
other department, agency, or office will substantially affect the 
project for which Federal financial assistance is requested. That 
requirement may be waived by the responsible OPM official if the 
applicant establishes, to the satisfaction of the responsible OPM 
official, that the practices in other agencies or parts or programs of 
the governmental unit will in no way affect (1) its practices in the 
program for which Federal financial assistance is sought, or (2) the 
beneficiaries of or participants in or persons affected by the program, 
or (3) full compliance with this subpart as respects the program.
    (c) Assurance from academic and other institutions. (1) In the case 
of an application for Federal financial assistance by an academic 
institution, the assurance required by this section extends to admission 
practices and to all other practices relating to the treatment of 
students.
    (2) The assurance required by an academic institution, detention or 
correctional facility, or any other institution or facility, relating to 
the institution's practices with respect to admission or other treatment 
of individuals as students, patients, wards, inmates, persons subject to 
control, or clients of the institution or facility or to the opportunity 
to participate in the provision of services, disposition, treatment, or 
benefits to these individuals, is applicable to the entire institution 
or facility unless the applicant establishes, to the satisfaction of the 
responsible OPM official, that the practices in designated parts or 
programs of the institution or facility will in no way affect its 
practices in the program of the institution or facility for which 
Federal financial assistance is sought, or the beneficiaries of or 
participants in the program. If the assistance sought is for the 
construction of a facility or part of a facility, the assurance shall 
extend to the entire facility and to facilities operated in connection 
therewith.
    (d) Continuing State programs. Every application by a State or a 
State agency to carry out a program involving continuing Federal 
financial assistance to which this subpart applies (including the 
programs listed in appendix A to this subpart) shall as a condition to 
its approval and the extension of Federal financial assistance pursuant 
to the application (1) contain or be accompanied by a statement that the 
program is (or, in the case of a new program, will be) conducted in 
compliance with the requirements imposed by or pursuant to this subpart, 
and (2) provide or be accompanied by provision for methods of 
administration for the program as are found by OPM to give reasonable 
guarantee that the applicant and all recipients of Federal financial 
assistance under the program will comply with the requirements imposed 
by or pursuant to this subpart.



Sec. 900.406  Compliance information.

    (a) Cooperation and assistance. OPM, to the fullest extent 
practicable, shall seek the cooperation of recipients in obtaining 
compliance with this subpart and shall provide assistance and guidance 
to recipients to help them comply voluntarily with this subpart.
    (b) Compliance reports. Each recipient shall keep records and submit 
to OPM timely, complete, and accurate compliance reports at the times, 
and in the form and containing the information

[[Page 541]]

OPM may determine necessary to enable it to ascertain whether the 
recipient has complied or is complying with this subpart. In the case of 
a program under which a primary recipient extends Federal financial 
assistance to other recipients, the other recipients shall also submit 
compliance reports to the primary recipient as may be necessary to 
enable the primary recipient to carry out its obligations under this 
subpart.
    (c) Access to sources of information. Each recipient shall permit 
access by OPM during normal business hours to its books, records, 
accounts, and other sources of information, and its facilities as may be 
pertinent to ascertain compliance with this subpart. When information 
required of a recipient is in the exclusive possession of another 
agency, institution, or person and this agency, institution, or person 
fails or refuses to furnish this information, the recipient shall so 
certify in its report and shall set forth what efforts it has made to 
obtain the information.
    (d) Information to beneficiaries and participants. Each recipient 
shall make available to participants, beneficiaries, and other 
interested persons the information regarding the provisions of this 
subpart and its applicability to the program under which the recipient 
received Federal financial assistance, and make this information 
available to them in the manner, as OPM finds necessary, to apprise the 
persons of the protections against discrimination assured them by title 
VI and this subpart.



Sec. 900.407  Conduct of investigations.

    (a) Periodic compliance reviews. OPM may from time to time review 
the practices of recipients to determine whether they are complying with 
this subpart.
    (b) Complaints. Any person who believes himself or any specific 
class of persons to be subjected to discrimination prohibited by this 
subpart may by himself or by a representative file with the Director, 
Office of Personnel Management a written complaint. A complaint shall be 
filed not later than 90 days after the date of the alleged 
discrimination, unless the time for filing is extended by OPM.
    (c) Investigations. OPM will make a prompt investigation whenever a 
compliance review, report, complaint, or other information indicates a 
possible failure to comply with this subpart. The investigation will 
include, when appropriate, a review of the pertinent practices and 
policies of the recipient, the circumstances under which the possible 
noncompliance with this subpart occurred, and other factors relevant to 
a determination as to whether the recipient has failed to comply with 
this subpart.
    (d) Resolution of matters. (1) If an investigation pursuant to 
paragraph (c) of this section indicates a failure to comply with this 
subpart, OPM will so inform the recipient and the matter will be 
resolved by voluntary means whenever possible. If it has been determined 
that the matter cannot be resolved by voluntary means, action will be 
taken as provided for in Sec. 900.408.
    (2) If an investigation does not warrant action pursuant to 
paragraph (d)(1) of this section, OPM will so inform, in writing, the 
recipient and the complainant, if any.
    (e) Intimidatory or retaliatory acts prohibited. A recipient or 
other person shall not intimidate, threaten, coerce, or discriminate 
against an individual for the purpose of interfering with a right or 
privilege secured by section 601 of title VI or this subpart, or because 
he has made a complaint, testified, assisted, or participated in any 
manner in an investigation, proceeding, or hearing under this subpart. 
The identity of complainants shall be kept confidential; except to the 
extent necessary to carry out the purposes of this subpart, including 
the conduct of an investigation, hearing, or judicial proceeding arising 
thereunder.



Sec. 900.408  Procedure for effecting compliance.

    (a) General. (1) If there appears to be a failure or threatened 
failure to comply with this subpart, and if the noncompliance or 
threatened noncompliance cannot be corrected by informal means, 
compliance with this subpart may be effected by the suspension or 
termination of or refusal to grant or to continue Federal financial 
assistance or by other means authorized by law.

[[Page 542]]

    (2) Other means may include, but are not limited to, (i) a reference 
to the Department of Justice with a recommendation that appropriate 
proceedings be brought to enforce the rights of the United States under 
a law of the United States (including other titles of the Civil Rights 
Act of 1964), or an assurance or other contractual undertaking, and (ii) 
an applicable proceeding under State or local law.
    (b) Noncompliance with Sec. 900.405. If an applicant fails or 
refuses to furnish an assurance required under Sec. 900.405 or 
otherwise fails or refuses to comply with a requirement imposed by or 
pursuant to that section, Federal financial assistance may be refused in 
accordance with the procedures of paragraph (c) of this section. OPM 
shall not be required to provide assistance in that case during the 
pendency of the administrative proceedings under this paragraph. 
Subject, however, to Sec. 900.412, OPM shall continue assistance during 
the pendency of the proceedings where the assistance is due and payable 
pursuant to an application approved prior to the effective date of this 
subpart.
    (c) Termination of or refusal to grant or to continue Federal 
financial assistance. An order suspending, terminating, or refusing to 
grant or to continue Federal financial assistance shall not become 
effective until--
    (1) OPM has advised the applicant or recipient of his failure to 
comply and has determined that compliance cannot be secured by informal 
voluntary means;
    (2) There has been an express finding on the record, after 
opportunity for hearing, of a failure by the applicant or recipient to 
comply with a requirement imposed by or pursuant to this subpart;
    (3) The action has been approved by the Office of Personnel 
Management pursuant to Sec. 900.410(e); and
    (4) The expiration of 30 days after the Director, Office of 
Personnel Management has filed with the committee of the House and the 
committee of the Senate having legislative jurisdiction over the program 
involved, a full written report of the circumstances and the grounds for 
the action.

An action to suspend or terminate or refuse to grant or to continue 
Federal financial assistance shall be limited to the particular 
political entity, or part thereof, or other applicant or recipient as to 
whom a finding has been made and shall be limited in its effect to the 
particular program, or part thereof, in which the noncompliance has been 
so found.
    (d) Other means authorized by law. An action to effect compliance 
with title VI by other means authorized by law shall not be taken by OPM 
until--
    (1) OPM has determined that compliance cannot be secured by 
voluntary means;
    (2) The recipient or other person has been notified of its failure 
to comply and of the action to be taken to effect compliance; and
    (3) The expiration of at least 10 days from the mailing of a notice 
to the recipient or person. During this period of at least 10 days, 
additional efforts shall be made to persuade the recipient or other 
person to comply with the regulation and to take corrective action as 
may be appropriate.



Sec. 900.409  Hearings.

    (a) Opportunity for hearing. When an opportunity for a hearing is 
required by Sec. 900.408(c), reasonable notice shall be given by 
registered or certified mail, return receipt requested, to the affected 
applicant or recipient. This notice shall advise the applicant or 
recipient of the action proposed to be taken, the specific provision 
under which the proposed action against it is to be taken, and the 
matters of fact or law asserted as the basis for this action, and either 
(1) fix a date not less than 20 days after the date of notice within 
which the applicant or recipient may request of OPM that the matter be 
scheduled for hearing or (2) advise the applicant or recipient that the 
matter in question has been set down for hearing at a stated time and 
place. The time and place so fixed shall be reasonable and subject to 
change for cause. The complainant, if any, shall be advised of the time 
and place of the hearing. An applicant or recipient may waive a hearing 
and submit written information and argument for the record. The failure 
of an applicant or recipient to request a hearing under this paragraph 
or to appear at a hearing for which a date has been set is deemed to

[[Page 543]]

be a waiver of the right to a hearing under section 602 of title VI and 
Sec. 900.408(c) and consent to the making of a decision on the basis of 
the information as is available.
    (b) Time and place of hearing. Hearings shall be held at the offices 
of OPM in Washington, DC, at a time fixed by OPM unless it determines 
that the convenience of the applicant or recipient or of OPM requires 
that another place be selected. Hearings shall be held before the 
Director of Office of Personnel Management, or at his/her discretion, 
before a hearing examiner appointed in accordance with section 3105 of 
title 5, United States Code, or detailed under section 3344 of title 5, 
United States Code.
    (c) Right to counsel. In all proceedings under this section, the 
applicant or recipient and OPM have the right to be represented by 
counsel.
    (d) Procedures, evidence, and record. (1) The hearing, decision, and 
an administrative review thereof shall be conducted in conformity with 
sections 554 through 557 of title 5, United States Code, and in 
accordance with the rules of procedure as are proper (and not 
inconsistent with this section) relating to the conduct of the hearing, 
giving of notices subsequent to those provided for in paragraph (a) of 
this section, taking of testimony, exhibits, arguments and briefs, 
requests for findings, and other related matters. Both OPM and the 
applicant or recipient are entitled to introduce relevant evidence on 
the issues as stated in the notice for hearing or as determined by the 
officer conducting the hearing at the outset of or during the hearing.
    (2) Technical rules of evidence do not apply to hearings conducted 
pursuant to this subpart, but rules or principles designed to assure 
production of the most credible evidence available and to subject 
testimony to test by cross-examination shall be applied where determined 
reasonably necessary by the officer conducting the hearing. The hearing 
officer may exclude irrelevant, immaterial, or unduly repetitious 
evidence. Documents and other evidence offered or taken for the record 
shall be open to examination by the parties and opportunity shall be 
given to refute facts and arguments advanced on either side of the 
issues. A transcript shall be made of the oral evidence except to the 
extent the substance thereof is stipulated for the record. Decisions 
shall be based on the hearing record and written findings shall be made.
    (e) Consolidated or joint hearings. In cases in which the same or 
related facts are asserted to constitute noncompliance with this subpart 
with respect to two or more programs to which this subpart applies, or 
noncompliance with this subpart and the regulations of one or more other 
Federal departments or agencies issued under title VI, OPM may, by 
agreement with the other departments or agencies, when applicable, 
provide for the conduct of consolidated or joint hearings, and for the 
application to these hearings of rules or procedures not inconsistent 
with this subpart. Final decisions in these cases, insofar as this 
regulation is concerned, shall be made in accordance with Sec. 900.410.



Sec. 900.410  Decisions and notices.

    (a) Procedure on decisions by hearing examiner. If the hearing is 
held by a hearing examiner, the hearing examiner shall either make an 
initial decision, if so authorized, or certify the entire record 
including his recommended findings and proposed decision to the Director 
of Office of Personnel Management, for a final decision, and a copy of 
the initial decision or certification shall be mailed to the applicant 
or recipient. When the initial decision is made by the hearing examiner, 
the applicant or recipient may, within 30 days after the mailing of a 
notice of initial decision, file with the Director of Office of 
Personnel Management his exceptions to the initial decision, with his 
reasons therefore. In the absence of exceptions, the Director, Office of 
Personnel Management may, on his/her own motion, within 45 days after 
the initial decision, serve on the applicant or recipient a notice that 
he/she will review the decision. On the filing of the exceptions or of 
notice of review, the Director, Office of Personnel Management shall 
review the initial decision and issue his/her own decision thereon 
including the reasons therefor. In the absence of either exceptions or a 
notice

[[Page 544]]

of review the initial decision, subject to paragraph (e) of this 
section, shall constitute the final decision of OPM.
    (b) Decisions on record or review by the Office of Personnel 
Management. When a record is certified to the Office of Personnel 
Management for decision or the Office of Personnel Management reviews 
the decision of a hearing examiner pursuant to paragraph (a) of this 
section, or when the Office of Personnel Management conducts the 
hearing, the applicant or recipient shall be given reasonable 
opportunity to file with it briefs or other written statements of the 
recipient's contentions, and a written copy of the final decision of the 
Office of Personnel Management will be sent to the applicant or 
recipient and to the complainant, if any.
    (c) Decisions on record where a hearing is waived. When a hearing is 
waived pursuant to Sec. 900.409, a decision shall be made by the Office 
of Personnel Management on the record and a written copy of the decision 
shall be sent to the applicant or recipient, and to the complainant, if 
any.
    (d) Rulings required. Each decision of a hearing examiner or the 
Office of Personnel Management shall set forth a ruling on each finding, 
conclusion, or exception presented, and shall identify the requirement 
or requirements imposed by or pursuant to this subpart with which it is 
found that the applicant or recipient has failed to comply.
    (e) Approval by OPM. A final decision by an official of OPM other 
than by the Director, which provides for the suspension or termination 
of, or the refusal to grant or continue Federal financial assistance, or 
the imposition of any other sanction available under this subpart or 
title VI, shall promptly be transmitted to the Director, Office of 
Personnel Management, who may approve the decision, vacate it, or remit 
or mitigate a sanction imposed.
    (f) Content of orders. The final decision may provide for suspension 
or termination of, or refusal to grant or continue Federal financial 
assistance, in whole or in part, under the program involved, and may 
contain the terms, conditions, and other provisions as are consistent 
with and will effectuate the purposes of title VI and this subpart, 
including provisions designed to assure that Federal financial 
assistance will not thereafter be extended under the programs to the 
applicant or recipient determined by the decision to be in default in 
its performance of an assurance given by it under this subpart, or to 
have otherwise failed to comply with this subpart, unless and until it 
corrects its noncompliance and satisfies OPM that it will fully comply 
with this subpart.
    (g) Post termination proceedings. (1) An applicant or recipient 
adversely affected by an order issued under paragraph (f) of this 
section shall be restored to full eligibility to receive Federal 
financial assistance if it satisfies the terms and conditions of the 
order for eligibility, or if it brings itself into compliance with this 
subpart and provides reasonable assurance that it will fully comply with 
this subpart.
    (2) An applicant or recipient adversely affected by an order entered 
pursuant to paragraph (f) of this section may at any time request the 
Director, Office of Personnel Management to restore fully its 
eligibility to receive Federal financial assistance. A request shall be 
supported by information showing that the applicant or recipient has met 
the requirements of paragraph (g)(1) of this section. If the Director, 
Office of Personnel Management determines that those requirements have 
been satisfied, he/she shall restore the eligibility.
    (3) If OPM denies a request, the applicant or recipient may submit a 
request for hearing in writing, specifying why it believes OPM is in 
error. The applicant or recipient shall be given an expeditious hearing, 
with a decision on the record in accordance with the rules or procedures 
issued by OPM. The applicant or recipient shall be restored to 
eligibility if it proves at the hearing that it satisfied the 
requirements of paragraph (g)(1) of this section. While proceedings 
under this paragraph are pending, the sanctions imposed by the order 
issued under paragraph (f) of this section remain in effect.



Sec. 900.411  Judicial review.

    Action taken pursuant to section 602 of title VI is subject to 
judicial review as provided in section 603 of title VI.

[[Page 545]]



Sec. 900.412  Effect on other regulations, forms, and instructions.

    (a) Effect on other regulations. Regulations, orders, or like 
directions issued before the effective date of this subpart by OPM which 
impose requirements designed to prohibit discrimination against 
individuals on the ground of race, color, or national origin under a 
program to which this subpart applies, and which authorizes the 
suspension or termination of or refusal to grant or to continue Federal 
financial assistance to an applicant for or recipient of assistance 
under a program for failure to comply with the requirements, are 
superseded to the extent that discrimination is prohibited by this 
subpart, except that nothing in this subpart relieves a person of an 
obligation assumed or imposed under a superseded regulation, order, 
instruction, or like direction, before the effective date of this 
subpart. This subpart does not supersede any of the following (including 
future amendments thereof): (1) Executive Order 11246 (3 CFR, 1965 
Supp.) and regulations issued thereunder or (2) any other orders, 
regulations, or instructions, insofar as these orders, regulations, or 
instructions prohibit discrimination on the ground of race, color, or 
national origin in a program or situation to which this subpart is 
inapplicable, or prohibit discrimination on any other ground.
    (b) Forms and instructions. OPM shall issue and promptly make 
available to all interested persons forms and detailed instructions and 
procedures for effectuating this subpart as applied to programs to which 
this subpart applies, and for which it is responsible.
    (c) Supervision and coordination. The Director, Office of Personnel 
Management may from time to time assign to officials of OPM, or to 
officials of other departments or agencies of the Government with the 
consent of the departments or agencies, responsibilities in connection 
with the effectuation of the purposes of title VI and this subpart 
(other than responsibilities for final decision as provided in Sec. 
900.410), including the achievement of effective coordination and 
maximum uniformity within OPM and within the executive branch in the 
application of title VI and this subpart to similar programs and in 
similar situations. An action taken, determination made, or requirement 
imposed by an official of another department or agency acting pursuant 
to an assignment of responsibility under this paragraph shall have the 
same effect as though the action had been taken by OPM.

    Appendix A to Subpart D--Activities to Which This Subpart Applies

    1. Personnel mobility assignments of OPM personnel pursuant to title 
5, U.S.C. chapter 33 and 5 CFR part 334 (36 FR 6488).

[38 FR 17920, July 5, 1973, as amended at 48 FR 6311, Feb. 11, 1983]

Appendix B to Subpart D--Activities to Which This Subpart Applies When a 
  Primary Objective of the Federal Assistance is to Provide Employment

    1. None at this time.

Appendix C to Subpart D of Part 900--Application of Subpart D, Part 900, 
  to Programs Receiving Federal Financial Assistance of the Office of 
                          Personnel Management

    Nondiscrimination in Federally assisted programs or projects:
    Examples. The following examples without being exhaustive illustrate 
the application of the nondiscrimination provisions of the Civil Rights 
Act of 1964 of this subpart in programs receiving financial assistance 
under programs of the Office of Personnel Management.
    (1) Recipients of IPA financial assistance for training programs or 
fellowships may not differentiate between employees who are eligible for 
training or fellowships on the ground of race, color, or national 
origin.
    (2) Recipients of IPA financial assistance for training programs may 
not provide facilities for training with the purpose or effect of 
separating employees on the ground of race, color, or national origin.

Subpart E [Reserved]



   Subpart F_Standards for a Merit System of Personnel Administration

    Authority: 42 U.S.C. 4728, 4763; E.O. 11589, 3 CFR part 557 (1971-
1975 Compilation).

[[Page 546]]


    Source: 48 FR 9210, Mar. 4, 1983, unless otherwise noted.



Sec. 900.601  Purpose.

    (a) The purpose of these regulations is to implement provisions of 
title II of the Intergovernmental Personnel Act of 1970, as amended, 
relating to Federally required merit personnel systems in State and 
local agencies, in a manner that recognizes fully the rights, powers, 
and responsibilities of State and local governments and encourages 
innovation and allows for diversity among State and local governments in 
the design, execution, and management of their systems of personnel 
administration, as provided by that Act.
    (b) Certain Federal grant programs require, as a condition of 
eligibility, that State and local agencies that receive grants establish 
merit personnel systems for their personnel engaged in administration of 
the grant-aided program. These merit personnel systems are in some cases 
required by specific Federal grant statutes and in other cases are 
required by regulations of the Federal grantor agencies. Title II of the 
Act gives the U.S. Office of Personnel Management authority to prescribe 
standards for these Federally required merit personnel systems.



Sec. 900.602  Applicability.

    (a) Sections 900.603-604 apply to those State and local governments 
that are required to operate merit personnel systems as a condition of 
eligibility for Federal assistance or participation in an 
intergovernmental program. Merit personnel systems are required for 
State and local personnel engaged in the administration of assistance 
and other intergovernmental programs, irrespective of the source of 
funds for their salaries, where Federal laws or regulations require the 
establishment and maintenance of such systems. A reasonable number of 
positions, however, may be exempted from merit personnel system 
coverage.
    (b) Section 900.605 applies to Federal agencies that operate Federal 
assistance or intergovernmental programs.



Sec. 900.603  Standards for a merit system of personnel administration.

    The quality of public service can be improved by the development of 
systems of personnel administration consistent with such merit 
principles as--
    (a) Recruiting, selecting, and advancing employees on the basis of 
their relative ability, knowledge, and skills, including open 
consideration of qualified applicants for initial appointment.
    (b) Providing equitable and adequate compensation.
    (c) Training employees, as needed, to assure high quality 
performance.
    (d) Retaining employees on the basis of the adequacy of their 
performance, correcting inadequate performance, and separating employees 
whose inadequate performance cannot be corrected.
    (e) Assuring fair treatment of applicants and employees in all 
aspects of personnel administration without regard to political 
affiliation, race, color, national origin, sex, religious creed, age or 
handicap and with proper regard for their privacy and constitutional 
rights as citizens. This ``fair treatment'' principle includes 
compliance with the Federal equal employment opportunity and 
nondiscrimination laws.
    (f) Assuring that employees are protected against coercion for 
partisan political purposes and are prohibited from using their official 
authority for the purpose of interfering with or affecting the result of 
an election or a nomination for office.



Sec. 900.604  Compliance.

    (a) Certification by Chief Executives. (1) Certification of 
agreement by a chief executive of a State or local jurisdiction to 
maintain a system of personnel administration in conformance with these 
Standards satisfies any applicable Federal merit personnel requirements 
of the Federal assistance or other programs to which personnel standards 
on a merit basis are applicable.
    (2) Chief executives will maintain these certifications and make 
them available to the Office of Personnel Management.
    (3) In the absence of certification by the chief executive, 
compliance with the Standards may be certified by the

[[Page 547]]

heads of those State and local agencies that are required to have merit 
personnel systems as a condition of Federal assistance or other 
intergovernmental programs.
    (b) Resolution of Compliance Issues. (1) Chief executives of State 
and local jurisdictions operating covered programs are responsible for 
supervising compliance by personnel systems in their jurisdictions with 
the Standards. They shall resolve all questions regarding compliance by 
personnel systems in their jurisdictions with the Standards. Findings 
and supporting documentation with regard to specific compliance issues 
shall be maintained by the chief executive, or a personal designee, and 
shall be forwarded, on request, to the Office of Personnel Management.
    (2) The merit principles apply to systems of personnel 
administration. The Intergovernmental Personnel Act does not authorize 
OPM to exercise any authority, direction or control over the selection, 
assignment, advancement, retention, compensation, or other personnel 
action with respect to any individual State or local employee.
    (3) When a chief executive requests the assistance of the Office of 
Personnel Management, the Office will provide consultation and technical 
advice to aid the State or local government in complying with the 
Standards.
    (4) The Office of Personnel Management will advise Federal agencies 
on application of the Standards in resolving compliance issues and will 
recommend actions to carry out the purposes of the Intergovernmental 
Personnel Act. Questions regarding interpretation of the Standards will 
be referred to the Office of Personnel Management.

[48 FR 9210, Mar. 4, 1983; 48 FR 10801, Mar. 15, 1983, as amended at 62 
FR 33971, June 24, 1997; 62 FR 53223, Oct. 14, 1997]



Sec. 900.605  Establishing a merit requirement.

    Federal agencies may adopt regulations that require the 
establishment of a merit personnel system as a condition for receiving 
Federal assistance or otherwise participating in an intergovernmental 
program only with the prior approval of the Office of Personnel 
Management. All existing regulations will be submitted to the Office of 
Personnel Management for review.

  Appendix A to Subpart F of Part 900--Standards for a Merit System of 
                        Personnel Administration

    Part I: The following programs have a statutory requirement for the 
establishment and maintenance of personnel standards on a merit basis.

              Program, Legislation, and Statutory Reference

    Food Stamp, Food Stamp Act of 1977, as amended; 7 U.S.C. 
2020(e)(6)(B).
    Employment Security (Unemployment Insurance and Employment 
Services), Social Security Act (Title III), as amended by the Social 
Security Act Amendments of 1939, Section 301, on August 10, 1939, and 
the Wagner-Peyser Act, as amended by Pub. L. 81-775, section 2, on 
September 8, 1950; 42 U.S.C. 503(a)(1) and 29 U.S.C. 49d(b).
    Grants to States for Old-Age Assistance for the Aged (Title I of the 
Social Security Act); 42 U.S.C. 302(a)(5)(A).\1\
---------------------------------------------------------------------------

    \1\ Public Law 92-603 repealed Titles I, X, XIV and XVI of the 
Social Security Act effective January 1, 1974, except that ``such repeal 
does not apply to Puerto Rico, Guam, and the Virgin Islands.''
---------------------------------------------------------------------------

    Aid to Families with Dependent Children, (Title IV-A of the Social 
Security Act); 42 U.S.C. 602(a)(5). \2\
---------------------------------------------------------------------------

    \2\ Public Law 104-193 repealed the Aid to Families with Dependent 
Children program effective July 1, 1997.
---------------------------------------------------------------------------

    Grants to States for Aid to the Blind, (Title X of the Social 
Security Act); 42 U.S.C. 1202(a)(5)(A).\1\
    Grants to States for Aid to the Permanently and Totally Disabled, 
(Title XIV of the Social Security Act); 42 U.S.C. 1352(a)(5)(A). \1\
    Grants to States for Aid to the Aged, Blind or Disabled. (Title XVI 
of the Social Security Act); 42 U.S.C. 1382(a)(5)(A).\1\
    Medical Assistance (Medicaid), Social Security Act (Title XIX), as 
amended, section 1902 (a)(4)(A); 42 U.S.C. 1396(a)(4)(A).
    State and Community Programs on Aging (Older Americans), Older 
Americans Act of 1965 (Title III), as amended by the Comprehensive Older 
Americans Act Amendments of 1976, section 307 on October 18, 1978; 42 
U.S.C. 3027(a)(4).
    Federal Payments for Foster Care and Adoption Assistance, (Title IV-
E of the Social Security Act); 42 U.S.C. 671(a)(5).
    Part II: The following programs have a regulatory requirement for 
the establishment and maintenance of personnel standards on a merit 
basis.

[[Page 548]]

             Program, Legislation, and Regulatory Reference

    Occupational Safety and Health Standards, Williams-Steiger 
Occupational Safety and Health Act of 1970; Occupational Safety and 
Health State Plans for the Development and Enforcement of State 
Standards; Department of Labor, 29 CFR 1902.3(h).
    Occupational Safety and Health Statistics, Williams-Steiger 
Occupational Safety and Health Act of 1970; BLS Grant Application Kit, 
May 1, 1973, Supplemental Assurance No. 15A.
    Robert T. Stafford Disaster Assistance and Emergency Relief Act (42 
U.S.C. 5196b), as amended; 44 CFR 302.4.

[62 FR 33971, June 24, 1997]



   Subpart G_Nondiscrimination on the Basis of Handicap in Federally 
         Assisted Programs of the Office of Personnel Management

    Authority: 29 U.S.C. 794.

    Source: 45 FR 75569, Nov. 14, 1980, unless otherwise noted.



Sec. 900.701  Purpose.

    The purpose of this part is to effectuate section 504 of the 
Rehabilitation Act of 1973, to eliminate discrimination on the basis of 
handicap in any program or activity receiving Federal financial 
assistance from the Office of Personnel Management (OPM).



Sec. 900.702  Applicability.

    This subpart applies to each activity, program or project receiving 
Federal financial assistance from the Office of Personnel Management 
from the date this subpart is approved. The duration of the 
applicability is the period of time for which the assistance is 
authorized.



Sec. 900.703  Definitions.

    Unless the content requires otherwise, in this subpart:
    (a) Recipient means any State or its political subdivisions, any 
instrumentality of a State or its political subdivisions, any public or 
private agency, institution, organization, or other entity, or any 
person to which Federal financial assistance is extended directly or 
through another recipient, including any successor, assignee, or 
transferee of a recipient, but excluding the ultimate beneficiary of the 
assistance.
    (b) Federal financial assistance means any grant, loan, contract, 
(other than a procurement contract or a contract of insurance or 
guaranty), or any other arrangement by which the agency provides or 
otherwise makes available assistance in the form of:
    (1) Funds;
    (2) Services of Federal personnel; or
    (3) Real and personal property or any interest in or use of such 
property, including:
    (i) Transfers or leases of such property for less than fair market 
value or for reduced consideration; and
    (ii) Proceeds from a subsequent transfer or lease of such property 
if the Federal share of its fair market value is not returned to the 
Federal Government.
    (c) Facility means all or any portion of buildings, structures, 
equipment, roads, walks, parking lots, or other real or personal 
property or interest in such property.
    (d) Handicapped person means any person who has a physical or mental 
impairment that substantially limits one or more major life activities, 
has a record of such an impairment, or is regarded as having such an 
impairment.
    (1) As used in paragraph (d) of this section, the phrase: physical 
or mental impairment means:
    (i) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
Neurological; musculoskeletal; special sense organs; respiratory, 
including speech organs; cardiovascular; reproductive; digestive; 
genitourinary; hemic and lymphatic; skin; and endocrine; or
    (ii) Any mental or psychological disorder, such as mental 
retardation, organic brain syndrome, emotional or mental illness, and 
specific learning disabilities.

The term physical or mental impairment includes, but is not limited to, 
such diseases and conditions as orthopedic, visual, speech, and hearing 
impairments, cerebral palsy, epilepsy, muscular dystrophy, multiple 
sclerosis, cancer, heart disease, diabetes, mental retardation, 
emotional illness, drug addiction and alcoholism.

[[Page 549]]

    (2) Major life activities means functions such as caring for one's 
self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning, and working.
    (3) Has a record of such impairment means has a history of, or has 
been misclassified as having a mental or physical impairment that 
substantially limits one or more major life activities.
    (4) Is regarded as having an impairment means:
    (i) Has a physical or mental impairment that does not substantially 
limit major life activities but is treated by a recipient as 
constituting such a limitation;
    (ii) Has a physical or mental impairment that substantially limits 
major life activities only as a result of the attitudes of others toward 
such impairment; or
    (iii) Has none of the impairments defined in paragraph (d) of this 
section but is treated by a recipient as having such an impairment.
    (e) Qualified handicapped person means:
    (1) With respect to employment, a handicapped person who with 
reasonable accommodation, can perform the essential functions of the job 
in question.
    (2) With respect to other services, a handicapped person who meets 
the essential eligibility requirements for the receipt of such services.
    (f) Ultimate beneficiary means one among a class of persons who are 
entitled to benefit from or otherwise participate in, programs receiving 
Federal financial assistance and to whom the protections of this subpart 
apply.



Sec. 900.704  Discrimination prohibited.

    (a) No qualified handicapped person shall, on the basis of handicap, 
be excluded from participation in, be denied the benefits of, or 
otherwise be subjected to discrimination under any program or activity 
which receives or benefits from Federal financial assistance from the 
Office of Personnel Management.
    (b) (1) A recipient, in providing any aid, benefit, or service, may 
not, directly or through contractual, licensing, or other arrangements, 
on the basis of handicap:
    (i) Deny a qualified handicapped person the opportunity to 
participate in or benefit from the aid, benefit, or service;
    (ii) Afford a qualified handicapped person an opportunity to 
participate in or benefit from the aid, benefit, or service that is not 
equal to that afforded others;
    (iii) Provide a qualified handicapped person with an aid, benefit, 
or service that is not as effective in affording equal opportunity to 
obtain the same result, to gain the same benefit or to reach the same 
level of achievement as that provided to others;
    (iv) Provide different or separate aid, benefits, or services to 
handicapped persons or to any class of handicapped persons than is 
provided to others unless such action is necessary to provide qualified 
handicapped persons with aid, benefits, or services that are as 
effective as those provided to others;
    (v) Aid or perpetuate discrimination against a qualified handicapped 
person by providing significant assistance to an agency, organization or 
person that discriminates on the basis of handicap in providing any aid, 
benefit, or service to beneficiaries of the recipient's program;
    (vi) Deny a qualified person the opportunity to participate as a 
member of planning or advisory boards; or
    (vii) Otherwise limit a qualified handicapped person in the 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving aid, benefit, or service.
    (2) A recipient may not deny a qualified handicapped person the 
opportunity to participate in programs or activities that are not 
separate or different, despite the existence of permissibly separate or 
different programs or activities.
    (3) A recipient may not, directly or through contractual or other 
arrangements, utilize criteria or methods of administration:
    (i) That have the effect of subjecting qualified handicapped persons 
to discrimination on the basis of handicap,
    (ii) That have the purpose or effect of defeating or substantially 
impairing accomplishment of the objectives of

[[Page 550]]

the recipient's program with respect to handicapped persons, or
    (iii) That perpetuate the discrimination of another recipient if 
both recipients are subject to common administrative control or are 
agencies of the same State.
    (4) A recipient may not, in determining the site or location of a 
facility, make selections:
    (i) That have the effect of excluding handicapped persons from, 
denying them the benefits of, or otherwise subjecting them to 
discrimination under any program or activity that receives or benefits 
from Federal financial assistance, or
    (ii) That have the purpose or effect of defeating or substantially 
impairing the accomplishment of the objectives of the program or 
activity with respect to handicapped persons.
    (c) The exclusion of nonhandicapped persons from the benefits of a 
program limited by Federal statute or Executive order to handicapped 
persons or the exclusion of a specific class of handicapped persons from 
a program limited by Federal statute or Executive order to a different 
class of handicapped persons is not prohibited by this part.
    (d) Recipients shall administer programs and activities in the most 
integrated setting appropriate to the needs of qualified handicapped 
persons.
    (e) Recipients shall take appropriate steps to ensure that 
communications with their applicants, employees and beneficiaries are 
available to persons with impaired vision and hearing.



Sec. 900.705  Program accessibility.

    (a) No qualified handicapped person shall, because a recipient's 
facilities are inaccessible to or unusable by handicapped persons, be 
denied the benefits of, be excluded from participation in or otherwise 
be subjected to discrimination under any program or activity to which 
this subpart applies.
    (b) A recipient shall operate each program or activity so that the 
program or activity, when viewed in its entirety, is readily accessible 
to and usable by handicapped persons. This paragraph does not 
necessarily require a recipient to make each of its existing facilities 
or every part of an existing facility accessible to and usable by 
handicapped persons. Where structural changes are necessary to make 
programs or activities in existing facilities accessible, such changes 
shall be made as soon as practicable, but in no event later than three 
years after the effective date of the regulation.
    (c) A recipient may comply with the requirements of paragraph (b) of 
this section through such means as redesign of equipment, reassignment 
of services to accessible buildings, assignment of aides to 
beneficiaries, home visits, alteration of facilities or any other 
methods that result in making its program or activity accessible to 
handicapped persons. A recipient is not required to make structural 
changes in existing facilities where other methods are effective in 
achieving compliance with this section.
    (d) New facilities shall be designed and constructed to be readily 
accessible to and usable by handicapped persons. Alterations to existing 
facilities shall, to the maximum extent feasible, be designed and 
constructed to be readily accessible to and usable by handicapped 
persons.
    (e) In the event that structural changes to facilities are necessary 
to meet the requirements of this section, a recipient shall develop 
within 12 months of the effective date of this subpart a transition plan 
setting forth the steps necessary to complete such changes. The plan 
shall be developed with the assistance of interested persons, including 
handicapped persons or organizations representing handicapped persons.
    (f)(1) Effective as of August 23, 1990. Design, construction, or 
alteration of buildings in conformance with sections 3-8 of the Uniform 
Federal Accessibility Standards (UFAS) (appendix A to 41 CFR subpart 
101-19.6) shall be deemed to comply with the requirements of this 
section with respect to those buildings. Departures from particular 
technical and scoping requirements of UFAS by the use of other methods 
are permitted where substantially equivalent or greater access to and 
usability of the building is provided.

[[Page 551]]

    (2) For purposes of this section, section 4.1.6(1)(g) of UFAS shall 
be interpreted to exempt from the requirements of UFAS only mechanical 
rooms and other spaces that, because of their intended use, will not 
require accessibility to the public or beneficiaries or result in the 
employment or residence therein of persons with physical handicaps.
    (3) This section does not require recipients to make building 
alterations that have little likelihood of being accomplished without 
removing or altering a load-bearing structural member.

[45 FR 75569, Nov. 14, 1980, as amended at 55 FR 29999, July 28, 1990]



Sec. 900.706  Employment practices.

    (a) General. (1) No qualified handicapped person shall, on the basis 
of handicap, be subjected to discrimination in employment under a 
program or activity that receives or benefits from Federal financial 
assistance from OPM.
    (2) A recipient shall make all decisions concerning employment under 
any program or activity to which this subpart applies in a manner which 
ensures that discrimination on the basis of handicap does not occur and 
may not limit, segregate, or classify applicants or employees in any way 
that adversely affects their opportunities or status because of 
handicap.
    (3) The prohibition against discrimination in employment applies to 
the following activities:
    (i) Recruitment, advertising, and the processing of applications for 
employment;
    (ii) Hiring, upgrading, promotion, award of tenure, demotion, 
transfer, layoff, termination, right of return from layoff, and 
rehiring;
    (iii) Rates of pay or any other form of compensation and changes in 
compensation;
    (iv) Job assignments, job classifications, organizational 
structures, position descriptions, lines of progression, and seniority 
lists;
    (v) Leaves of absence, sick leave, or any other leave;
    (vi) Fringe benefits available by virtue of employment, whether or 
not administered by the recipient;
    (vii) Selection and financial support for training, including 
apprenticeship, professional meetings, conferences, and other related 
activities, and selection for leaves of absence to pursue training;
    (viii) Employer sponsored activities, including social or 
recreational programs; and
    (ix) Any other term, condition, or privilege of employment.
    (4) A recipient may not participate in a contractual or other 
relationship that has the effect of subjecting qualified handicapped 
applicants or employees to discrimination prohibited by this subpart. 
The relationships referred to in this paragraph include relationships 
with employment and referral agencies, with labor unions, with 
organizations providing or administering fringe benefits to employees of 
the recipient, and with organizations providing training and 
apprenticeship programs.
    (b) Reasonable accommodation. (1) A recipient shall make reasonable 
accommodation to the known physical or mental limitations of an 
otherwise qualified handicapped applicant or employee under any program 
or activity receiving Federal financial assistance from OPM unless the 
recipient can demonstrate that the accommodation would impose an undue 
hardship on the operation of its program.
    (2) Reasonable accommodation may include, but shall not be limited 
to, making facilities readily accessible to and usable by handicapped 
persons, acquisition or modification of equipment or devices, 
appropriate adjustment or modification of examinations, the provision of 
readers and interpreters, job restructuring and providing part-time or 
modified work schedules and other similar actions.
    (3) In determining pursuant to paragraph (b)(1) of this section 
whether an accommodation would impose an undue hardship on the operation 
of the recipient in question, factors to be considered by OPM include:
    (i) The overall size of the recipient's program with respect to the 
number of employees, number and type of facilities and size of budget;

[[Page 552]]

    (ii) The type of operation, including the composition and structure 
of the work force; and
    (iii) The nature and the cost of the accommodation.
    (c) Employment criteria. (1) A recipient involved in activities 
receiving Federal financial assistance may not make use of any 
employment test or other selection criterion that screens out or tends 
to screen out handicapped persons or any class of handicapped persons in 
any program or activity that receives Federal financial assistance 
unless the test score or other selection criterion, as used by the 
recipient, is shown to be job-related for the position in question and 
alternative job-related tests or criteria that do not screen out as many 
handicapped persons are not shown by the Office of Personnel 
Management's Personnel Research and Development Center to be available.
    (2) A recipient shall select and administer tests concerning 
employment so as to ensure that, when administered under any program or 
activity that receives Federal financial assistance from OPM, to an 
applicant or employee who has a handicap that impairs sensory, manual, 
or speaking skills, the test results accurately reflect the applicant's 
or employee's ability to perform the duties of the type of position in 
question rather than reflecting the applicant's or employee's impaired 
sensory, manual, or speaking skills (except where those skills are the 
factors that the test purports to measure).
    (d) Preemployment inquiries. (1) Except as provided in paragraph 
(d)(2) of this section, a recipient, when considering an applicant for 
employment under any program or activity receiving Federal financial 
assistance from OPM, may not conduct a preemployment medical examination 
and may not make preemployment inquiry of an applicant as to whether the 
applicant is a handicapped person or as to the nature or severity of a 
handicap. A recipient may, however, make preemployment inquiry into an 
applicant's ability to perform job-related functions.
    (2) Nothing in this section shall prohibit an organization from 
conditioning an offer of employment under any program or activity 
receiving Federal financial assistance from OPM on the results of a 
medical examination conducted prior to the employee's entrance on duty: 
Provided, That (i) All entering employees are subjected to such an 
examination regardless of handicap or when a preemployment medical 
questionnaire used for positions which do not routinely require medical 
examination indicates a condition for which further examination is 
required because of the job-related nature of the condition; and
    (ii) The results of such an examination are used in accordance with 
the requirements of this subpart.



Sec. 900.707  Certification required.

    (a) General. Each application to OPM for financial assistance, as a 
condition to its approval and the extension of financial assistance, 
shall contain or be accompanied by, a certification from the applicant 
in a form prescribed by OPM that the program will be conducted in 
compliance with the requirements of this subpart. The assurance shall 
obligate the recipient for the period during which the financial 
assistance is extended to the program.
    (b) Certification from subgrantees. A certification shall be 
required of all subgrantees receiving financial assistance from OPM to 
the effect that all programs or parts thereof carried out by subgrantees 
shall be in compliance with the requirements of this subpart. The 
recipient shall be responsible for securing the certification from 
subgrantees.



Sec. 900.708  Self-evaluation.

    (a) Each recipient shall, within one year of the receipt of 
financial assistance, conduct or have conducted an evaluation of its 
compliance with this subpart with the assistance of interested persons, 
including handicapped persons or organizations representing handicapped 
persons. Each such recipient shall evaluate its current policies and 
practices and their effects, and modify any that do not meet the 
requirements of this part. Each such recipient shall permit the Office 
of Personnel Management, during normal business hours, to examine its 
self-evaluation along with its books, records, accounts, facilities and 
other

[[Page 553]]

sources of information as may be useful to determine whether there has 
been compliance with this subpart. Self-evaluation required under other 
Federal programs may be accepted by OPM if the information pertaining to 
activities receiving financial assistance from OPM is included and the 
records are available to OPM representatives.
    (b) Each recipient shall modify, after consultation with interested 
persons and organizations, including handicapped persons, any policies 
and practices that do not meet the requirements of this subpart; and
    (c) Each recipient shall take, after consultation with interested 
persons, including handicapped persons or organizations representing 
handicapped persons, appropriate remedial steps to eliminate the effects 
of any discrimination that resulted from adherence to these policies and 
practices.



Sec. 900.709  Notice and consultation.

    (a) Programs and activities receiving OPM financial support shall 
take appropriate initial and continuing steps to notify participants, 
beneficiaries, applicants, and employees, including those with impaired 
vision or hearing, that it does not discriminate on the basis of 
handicap in violation of Section 504 and this subpart.
    (b) As appropriate, a recipient shall consult with interested 
persons, including handicapped persons or organizations representing 
handicapped persons, in achieving compliance with this subpart.



Sec. 900.710  Procedure for effecting compliance.

    When the Office of Personnel Management determines that a recipient 
has failed or threatens to fail to comply with this subpart and the 
noncompliance or threatened noncompliance cannot be corrected by 
informal means, OPM may suspend or terminate or refuse to grant or 
continue financial assistance as provided in Sec. 900.408 of title 5 of 
the Code of Federal Regulations.



PART 911_PROCEDURES FOR STATES AND LOCALITIES TO REQUEST INDEMNIFICATION
--Table of Contents




Sec.
911.101 Scope and purpose.
911.102 General definitions.
911.103 Eligibility for indemnification.
911.104 Procedures for requesting an indemnification agreement.
911.105 Terms of indemnification.

    Authority: Title VIII, Access to Criminal History Records for 
National Security Purposes, of the Intelligence Authorization Act for 
Fiscal Year 1986, Pub. L. 99-169, sections 801-803, 99 Stat. 1002, 1008-
1011 (1985) (codified in part at 5 U.S.C. 9101).

    Source: 52 FR 4491, Feb. 12, 1987, unless otherwise noted.



Sec. 911.101  Scope and purpose.

    (a) The Office of Personnel Management (OPM) has the right to 
criminal history record information of State and local criminal justice 
agencies to determine whether a person may--
    (1) Be eligible for access to classified information;
    (2) Be assigned to sensitive national security duties; or
    (3) Continue to be assigned to sensitive national security duties.
    (b) This part sets out the conditions under which OPM may sign an 
agreement to indemnify and hold harmless a State or locality against 
claims for damages, costs, and other monetary loss caused by disclosure 
or use of criminal history record information by OPM.
    (c) The procedures set forth in this part do not apply to situations 
when OPM seeks access to the criminal history records of another Federal 
agency.
    (d) By law these provisions implementing 5 U.S.C. 9101(b)(3) will 
expire December 4, 1988, unless the duration of this section is extended 
or limited by Congress.



Sec. 911.102  General definitions.

    In this part--
    Criminal history record information means information collected by 
criminal justice agencies on individuals consisting of identifiable 
descriptions and notations of arrests, indictments, informations, or 
other formal criminal charges, and any disposition arising

[[Page 554]]

therefrom, sentencing, correction supervision, and release. The term 
does not include identification information such as fingerprint records 
to the extent that such information does not indicate involvement of the 
individual in the criminal justice system. The term does not include 
those records of a State or locality sealed pursuant to law from access 
by State and local criminal justice agencies of that State or locality.
    Criminal justice agency includes Federal, State, and local agencies 
and means (a) courts; or (b) a Government agency or any subunit thereof 
which performs the administration of criminal justice pursuant to a 
statute or Executive order, and which allocates a substantial part of 
its annual budget to the administration of criminal justice.
    Locality means any local government authority or agency or component 
thereof within a State having jurisdiction over matters at a county, 
municipal, or other local government level.
    State means any of the several States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Northern Mariana Islands, Guam, the 
Virgin Islands, American Samoa, the Trust Territory of Pacific Islands, 
and any other territory or possession of the United States.



Sec. 911.103  Eligibility for indemnification.

    As provided for under 5 U.S.C. 9101(b)(3), a State or locality may 
request an indemnification agreement.
    (a) To be eligible for an indemnification agreement, a State or 
locality must have had a law in effect on December 4, 1985, that 
prohibited or had the effect of prohibiting the disclosure of criminal 
history record information to OPM.
    (b) A State or locality is also eligible for an indemnification 
agreement if it meets the conditions of paragraph (a) of this section, 
but nevertheless provided criminal history record information to OPM on 
or before December 4, 1985.



Sec. 911.104  Procedures for requesting an indemnification agreement.

    When requesting an indemnification agreement, the State or locality 
must--
    (a) Certify that on December 4, 1985, the State or locality had in 
effect a law that prohibited or had the effect of prohibiting the 
disclosure of criminal history record information to OPM;
    (b) Attach a copy of the law to the request for an indemnification 
agreement;
    (c) Notify OPM, at the address below, of its eligibility for an 
indemnification agreement.

Office of Personnel Management, Office of Federal Investigations, P.O. 
    Box 886, Washington, DC 20044



Sec. 911.105  Terms of indemnification.

    The terms of the indemnification agreement must conform to the 
following provisions:
    (a) Eligibility. The State or locality must certify that its law 
prohibits or has the effect of prohibiting the disclosure of criminal 
history record information to OPM for the purposes described in Sec. 
911.101(a) and that such law was in effect on December 4, 1985.
    (b) Liability. (1) OPM must agree to indemnify and hold harmless the 
State or locality from any claim for damages, costs, and other monetary 
loss arising from the disclosure or negligent use by OPM of criminal 
history record information obtained from that State or locality pursuant 
to 5 U.S.C. 9101(b). The indemnification will include the officers, 
employees, and agents of the State or locality.
    (2) The indemnification agreement will not extend to any act or 
omission prior to the transmittal of the criminal history record 
information to OPM.
    (3) The indemnification agreement will not extend to any negligent 
acts on the part of the State or locality in compiling, transcribing, or 
failing to delete or purge any of the information transmitted.
    (c) Consent and access requirements. By requesting the release of 
criminal history record information from the State or locality, OPM 
represents that--

[[Page 555]]

    (1) It has obtained the written consent of the individual under 
investigation to request criminal history record information about the 
individual from criminal justice agencies in accordance with 5 U.S.C. 
9101, after advising the individual of the purposes for which the 
information is intended to be used by a Privacy Act of 1974 (5 U.S.C. 
552a), or an equivalent, notice; and
    (2) Upon request, OPM will provide the individual access to criminal 
history record information received from the State or locality, as 
required by 5 U.S.C. 9101(d).
    (d) Purpose requirements. OPM will use the criminal history record 
information only for the purposes stated in Sec. 911.101(a).
    (e) Notice, litigation, and settlement procedures. (1) The State or 
locality must give notice of any claim against it on or before the 10th 
day after the day on which a claim against it is received, or it has 
notice of such a claim.
    (2) The notice must be given to the Attorney General and to the 
United States Attorney of the district embracing the place wherein the 
claim is made.
    (3) The Attorney General will make all determinations regarding the 
settlement or defense of such claims.



PART 919_GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
--Table of Contents




Sec.
919.25 How is this part organized?
919.50 How is this part written?
919.75 Do terms in this part have special meanings?

                            Subpart A_General

919.100 What does this part do?
919.105 Does this part apply to me?
919.110 What is the purpose of the nonprocurement debarment and 
          suspension system?
919.115 How does an exclusion restrict a person's involvement in covered 
          transactions?
919.120 May we grant an exception to let an excluded person participate 
          in a covered transaction?
919.125 Does an exclusion under the nonprocurement system affect a 
          person's eligibility for Federal procurement contracts?
919.130 Does exclusion under the Federal procurement system affect a 
          person's eligibility to participate in nonprocurement 
          transactions?
919.135 May the OPM exclude a person who is not currently participating 
          in a nonprocurement transaction?
919.140 How do I know if a person is excluded?
919.145 Does this part address persons who are disqualified, as well as 
          those who are excluded from nonprocurement transactions?

                     Subpart B_Covered Transactions

919.200 What is a covered transaction?
919.205 Why is it important to know if a particular transaction is a 
          covered transaction?
919.210 Which nonprocurement transactions are covered transactions?
919.215 Which nonprocurement transactions are not covered transactions?
919.220 Are any procurement contracts included as covered transactions?
919.225 How do I know if a transaction in which I may participate is a 
          covered transaction?

    Subpart C_Responsibilities of Participants Regarding Transactions

                    Doing Business With Other Persons

919.300 What must I do before I enter into a covered transaction with 
          another person at the next lower tier?
919.305 May I enter into a covered transaction with an excluded or 
          disqualified person?
919.310 What must I do if a Federal agency excludes a person with whom I 
          am already doing business in a covered transaction?
919.315 May I use the services of an excluded person as a principal 
          under a covered transaction?
919.320 Must I verify that principals of my covered transactions are 
          eligible to participate?
919.325 What happens if I do business with an excluded person in a 
          covered transaction?
919.330 What requirements must I pass down to persons at lower tiers 
          with whom I intend to do business?

            Disclosing Information--Primary Tier Participants

919.335 What information must I provide before entering into a covered 
          transaction with the OPM?
919.340 If I disclose unfavorable information required under Sec. 
          919.335, will I be prevented from participating in the 
          transaction?

[[Page 556]]

919.345 What happens if I fail to disclose the information required 
          under Sec. 919.335?
919.350 What must I do if I learn of the information required under 
          Sec. 919.335 after entering into a covered transaction with 
          the OPM?

             Disclosing information--Lower Tier Participants

919.355 What information must I provide to a higher tier participant 
          before entering into a covered transaction with that 
          participant?
919.360 What happens if I fail to disclose the information required 
          under Sec. 919.355?
919.365 What must I do if I learn of information required under Sec. 
          919.355 after entering into a covered transaction with a 
          higher tier participant?

   Subpart D_Responsibilities of OPM Officials Regarding Transactions

919.400 May I enter into a transaction with an excluded or disqualified 
          person?
919.405 May I enter into a covered transaction with a participant if a 
          principal of the transaction is excluded?
919.410 May I approve a participant's use of the services of an excluded 
          person?
919.415 What must I do if a Federal agency excludes the participant or a 
          principal after I enter into a covered transaction?
919.420 May I approve a transaction with an excluded or disqualified 
          person at a lower tier?
919.425 When do I check to see if a person is excluded or disqualified?
919.430 How do I check to see if a person is excluded or disqualified?
919.435 What must I require of a primary tier participant?
919.440 What method do I use to communicate those requirements to 
          participants?
919.445 What action may I take if a primary tier participant knowingly 
          does business with an excluded or disqualified person?
919.450 What action may I take if a primary tier participant fails to 
          disclose the information required under Sec. 919.335?
919.455 What may I do if a lower tier participant fails to disclose the 
          information required under Sec. 919.355 to the next higher 
          tier?

                 Subpart E_Excluded Parties List System

919.500 What is the purpose of the Excluded Parties List System (EPLS)?
919.505 Who uses the EPLS?
919.510 Who maintains the EPLS?
919.515 What specific information is in the EPLS?
919.520 Who places the information into the EPLS?
919.525 Whom do I ask if I have questions about a person in the EPLS?
919.530 Where can I find the EPLS?

   Subpart F_General Principles Relating to Suspension and Debarment 
                                 Actions

919.600 How do suspension and debarment actions start?
919.605 How does suspension differ from debarment?
919.610 What procedures does the OPM use in suspension and debarment 
          actions?
919.615 How does the OPM notify a person of a suspension and debarment 
          action?
919.620 Do Federal agencies coordinate suspension and debarment actions?
919.625 What is the scope of a suspension or debarment action?
919.630 May the OPM impute the conduct of one person to another?
919.635 May the OPM settle a debarment or suspension action?
919.640 May a settlement include a voluntary exclusion?
919.645 Do other Federal agencies know if the OPM agrees to a voluntary 
          exclusion?

                          Subpart G_Suspension

919.700 When may the suspending official issue a suspension?
919.705 What does the suspending official consider in issuing a 
          suspension?
919.710 When does a suspension take effect?
919.715 What notice does the suspending official give me if I am 
          suspended?
919.720 How may I contest a suspension?
919.725 How much time do I have to contest a suspension?
919.730 What information must I provide to the suspending official if I 
          contest a suspension?
919.735 Under what conditions do I get an additional opportunity to 
          challenge the facts on which the suspension is based?
919.740 Are suspension proceedings formal?
919.745 How is fact-finding conducted?
919.750 What does the suspending official consider in deciding whether 
          to continue or terminate my suspension?
919.755 When will I know whether the suspension is continued or 
          terminated?
919.760 How long may my suspension last?

                           Subpart H_Debarment

919.800 What are the causes for debarment?
919.805 What notice does the debarring official give me if I am proposed 
          for debarment?
919.810 When does a debarment take effect?
919.815 How may I contest a proposed debarment?
919.820 How much time do I have to contest a proposed debarment?

[[Page 557]]

919.825 What information must I provide to the debarring official if I 
          contest a proposed debarment?
919.830 Under what conditions do I get an additional opportunity to 
          challenge the facts on which a proposed debarment is based?
919.835 Are debarment proceedings formal?
919.840 How is fact-finding conducted?
919.845 What does the debarring official consider in deciding whether to 
          debar me?
919.850 What is the standard of proof in a debarment action?
919.855 Who has the burden of proof in a debarment action?
919.860 What factors may influence the debarring official's decision?
919.865 How long may my debarment last?
919.870 When do I know if the debarring official debars me?
919.875 May I ask the debarring official to reconsider a decision to 
          debar me?
919.880 What factors may influence the debarring official during 
          reconsideration?
919.885 May the debarring official extend a debarment?

                          Subpart I_Definitions

919.900 Adequate evidence.
919.905 Affiliate.
919.910 Agency.
919.915 Agent or representative.
919.920 Civil judgment.
919.925 Conviction.
919.930 Debarment.
919.935 Debarring official.
919.940 Disqualified.
919.945 Excluded or exclusion.
919.950 Excluded Parties List System.
919.955 Indictment.
919.960 Ineligible or ineligibility.
919.965 Legal proceedings.
919.970 Nonprocurement transaction.
919.975 Notice.
919.980 Participant.
919.985 Person.
919.990 Preponderance of the evidence.
919.995 Principal.
919.1000 Respondent.
919.1005 State.
919.1010 Suspending official.
919.1015 Suspension.
919.1020 Voluntary exclusion or voluntarily excluded.

Subpart J [Reserved]

Appendix to Part 919--Covered Transactions

    Authority: Sec. 2455, Pub.L. 103-355, 108 Stat. 3327; E.O. 12549, 3 
CFR, 1986 Comp., p.189; E.O. 12689, 3 CFR, 1989 Comp., p.235.

    Source: 68 FR 66544, 66561, Nov. 26, 2003, unless otherwise noted. 
Redesignated at 68 FR 74161, Dec. 23, 2003.



Sec. 919.25  How is this part organized?

    (a) This part is subdivided into ten subparts. Each subpart contains 
information related to a broad topic or specific audience with special 
responsibilities, as shown in the following table:

------------------------------------------------------------------------
                                             You will find provisions
            In subpart . . .                     related to . . .
------------------------------------------------------------------------
A......................................  general information about this
                                          rule.
B......................................  the types of OPM transactions
                                          that are covered by the
                                          Governmentwide nonprocurement
                                          suspension and debarment
                                          system.
C......................................  the responsibilities of persons
                                          who participate in covered
                                          transactions.
D......................................  the responsibilities of OPM
                                          officials who are authorized
                                          to enter into covered
                                          transactions.
E......................................  the responsibilities of Federal
                                          agencies for the Excluded
                                          Parties List System
                                          (Disseminated by the General
                                          Services Administration).
F......................................  the general principles
                                          governing suspension,
                                          debarment, voluntary exclusion
                                          and settlement.
G......................................  suspension actions.
H......................................  debarment actions.
I......................................  definitions of terms used in
                                          this part.
J......................................  [Reserved]
------------------------------------------------------------------------

    (b) The following table shows which subparts may be of special 
interest to you, depending on who you are:

------------------------------------------------------------------------
             If you are . . .                   See subpart(s) . . .
------------------------------------------------------------------------
(1) a participant or principal in a         A, B, C, and I.
 nonprocurement transaction.
(2) a respondent in a suspension action...  A, B, F, G and I.
(3) a respondent in a debarment action....  A, B, F, H and I.
(4) a suspending official.................  A, B, D, E, F, G and I.
(5) a debarring official..................  A, B, D, E, F, H and I.
(6) a (n) OPM official authorized to enter  A, B, D, E and I.
 into a covered transaction.
(7) Reserved..............................  J.
------------------------------------------------------------------------



Sec. 919.50  How is this part written?

    (a) This part uses a ``plain language'' format to make it easier for 
the general public and business community to use. The section headings 
and text, often in the form of questions and answers, must be read 
together.
    (b) Pronouns used within this part, such as ``I'' and ``you,'' 
change from subpart to subpart depending on the audience being 
addressed. The pronoun ``we'' always is the OPM.
    (c) The ``Covered Transactions'' diagram in the appendix to this 
part shows the levels or ``tiers'' at which the OPM enforces an 
exclusion under this part.

[[Page 558]]



Sec. 919.75  Do terms in this part have special meanings?

    This part uses terms throughout the text that have special meaning. 
Those terms are defined in Subpart I of this part. For example, three 
important terms are--
    (a) Exclusion or excluded, which refers only to discretionary 
actions taken by a suspending or debarring official under this part or 
the Federal Acquisition Regulation (48 CFR part 9, subpart 9.4);
    (b) Disqualification or disqualified, which refers to prohibitions 
under specific statutes, executive orders (other than Executive Order 
12549 and Executive Order 12689), or other authorities. 
Disqualifications frequently are not subject to the discretion of an 
agency official, may have a different scope than exclusions, or have 
special conditions that apply to the disqualification; and
    (c) Ineligibility or ineligible, which generally refers to a person 
who is either excluded or disqualified.



                            Subpart A_General



Sec. 919.100  What does this part do?

    This part adopts a governmentwide system of debarment and suspension 
for OPM nonprocurement activities. It also provides for reciprocal 
exclusion of persons who have been excluded under the Federal 
Acquisition Regulation, and provides for the consolidated listing of all 
persons who are excluded, or disqualified by statute, executive order, 
or other legal authority. This part satisfies the requirements in 
section 3 of Executive Order 12549, ``Debarment and Suspension'' (3 CFR 
1986 Comp., p. 189), Executive Order 12689, ``Debarment and Suspension'' 
(3 CFR 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Public 
Law 103-355, 108 Stat. 3327).



Sec. 919.105  Does this part apply to me?

    Portions of this part (see table at Sec. 919.25(b)) apply to you if 
you are a(n)--
    (a) Person who has been, is, or may reasonably be expected to be, a 
participant or principal in a covered transaction;
    (b) Respondent (a person against whom the OPM has initiated a 
debarment or suspension action);
    (c) OPM debarring or suspending official; or
    (d) OPM official who is authorized to enter into covered 
transactions with non-Federal parties.



Sec. 919.110  What is the purpose of the nonprocurement debarment and 
suspension system?

    (a) To protect the public interest, the Federal Government ensures 
the integrity of Federal programs by conducting business only with 
responsible persons.
    (b) A Federal agency uses the nonprocurement debarment and 
suspension system to exclude from Federal programs persons who are not 
presently responsible.
    (c) An exclusion is a serious action that a Federal agency may take 
only to protect the public interest. A Federal agency may not exclude a 
person or commodity for the purposes of punishment.



Sec. 919.115  How does an exclusion restrict a person's involvement 
in covered transactions?

    With the exceptions stated in Sec. Sec. 919.120, 919.315, and 
919.420, a person who is excluded by the OPM or any other Federal agency 
may not:
    (a) Be a participant in a(n) OPM transaction that is a covered 
transaction under subpart B of this part;
    (b) Be a participant in a transaction of any other Federal agency 
that is a covered transaction under that agency's regulation for 
debarment and suspension; or
    (c) Act as a principal of a person participating in one of those 
covered transactions.



Sec. 919.120  May we grant an exception to let an excluded person 
participate in a covered transaction?

    (a) The Debarring Official may grant an exception permitting an 
excluded person to participate in a particular covered transaction. If 
the Debarring Official grants an exception, the exception must be in 
writing and state the reason(s) for deviating from the governmentwide 
policy in Executive Order 12549.

[[Page 559]]

    (b) An exception granted by one agency for an excluded person does 
not extend to the covered transactions of another agency.



Sec. 919.125  Does an exclusion under the nonprocurement system affect 
a person's eligibility for Federal procurement contracts?

    If any Federal agency excludes a person under its nonprocurement 
common rule on or after August 25, 1995, the excluded person is also 
ineligible to participate in Federal procurement transactions under the 
FAR. Therefore, an exclusion under this part has reciprocal effect in 
Federal procurement transactions.



Sec. 919.130  Does exclusion under the Federal procurement system affect 
a person's eligibility to participate in nonprocurement transactions?

    If any Federal agency excludes a person under the FAR on or after 
August 25, 1995, the excluded person is also ineligible to participate 
in nonprocurement covered transactions under this part. Therefore, an 
exclusion under the FAR has reciprocal effect in Federal nonprocurement 
transactions.



Sec. 919.135  May the OPM exclude a person who is not currently 
participating in a nonprocurement transaction?

    Given a cause that justifies an exclusion under this part, we may 
exclude any person who has been involved, is currently involved, or may 
reasonably be expected to be involved in a covered transaction.



Sec. 919.140  How do I know if a person is excluded?

    Check the Excluded Parties List System (EPLS) to determine whether a 
person is excluded. The General Services Administration (GSA) maintains 
the EPLS and makes it available, as detailed in subpart E of this part. 
When a Federal agency takes an action to exclude a person under the 
nonprocurement or procurement debarment and suspension system, the 
agency enters the information about the excluded person into the EPLS.



Sec. 919.145  Does this part address persons who are disqualified, as 
well as those who are excluded from nonprocurement transactions?

    Except if provided for in Subpart J of this part, this part--
    (a) Addresses disqualified persons only to--
    (1) Provide for their inclusion in the EPLS; and
    (2) State responsibilities of Federal agencies and participants to 
check for disqualified persons before entering into covered 
transactions.
    (b) Does not specify the--
    (1) OPM transactions for which a disqualified person is ineligible. 
Those transactions vary on a case-by-case basis, because they depend on 
the language of the specific statute, Executive order, or regulation 
that caused the disqualification;
    (2) Entities to which the disqualification applies; or
    (3) Process that the agency uses to disqualify a person. Unlike 
exclusion, disqualification is frequently not a discretionary action 
that a Federal agency takes.



                     Subpart B_Covered Transactions



Sec. 919.200  What is a covered transaction?

    A covered transaction is a nonprocurement or procurement transaction 
that is subject to the prohibitions of this part. It may be a 
transaction at--
    (a) The primary tier, between a Federal agency and a person (see 
appendix to this part); or
    (b) A lower tier, between a participant in a covered transaction and 
another person.



Sec. 919.205  Why is it important if a particular transaction is a 
covered transaction?

    The importance of a covered transaction depends upon who you are.
    (a) As a participant in the transaction, you have the 
responsibilities laid out in Subpart C of this part. Those include 
responsibilities to the person or Federal agency at the next higher tier 
from whom you received

[[Page 560]]

the transaction, if any. They also include responsibilities if you 
subsequently enter into other covered transactions with persons at the 
next lower tier.
    (b) As a Federal official who enters into a primary tier 
transaction, you have the responsibilities laid out in subpart D of this 
part.
    (c) As an excluded person, you may not be a participant or principal 
in the transaction unless--
    (1) The person who entered into the transaction with you allows you 
to continue your involvement in a transaction that predates your 
exclusion, as permitted under Sec. 919.310 or Sec. 919.415; or
    (2) A(n) OPM official obtains an exception from the Debarring 
Official to allow you to be involved in the transaction, as permitted 
under Sec. 919.120.



Sec. 919.210  Which nonprocurement transactions are covered transactions?

    All nonprocurement transactions, as defined in Sec. 919.970, are 
covered transactions unless listed in Sec. 919.215. (See appendix to 
this part.)



Sec. 919.215  Which nonprocurement transactions are not covered 
transactions?

    The following types of nonprocurement transactions are not covered 
transactions:
    (a) A direct award to--
    (1) A foreign government or foreign governmental entity;
    (2) A public international organization;
    (3) An entity owned (in whole or in part) or controlled by a foreign 
government; or
    (4) Any other entity consisting wholly or partially of one or more 
foreign governments or foreign governmental entities.
    (b) A benefit to an individual as a personal entitlement without 
regard to the individual's present responsibility (but benefits received 
in an individual's business capacity are not excepted). For example, if 
a person receives social security benefits under the Supplemental 
Security Income provisions of the Social Security Act, 42 U.S.C. 1301 et 
seq., those benefits are not covered transactions and, therefore, are 
not affected if the person is excluded.
    (c) Federal employment.
    (d) A transaction that the OPM needs to respond to a national or 
agency-recognized emergency or disaster.
    (e) A permit, license, certificate, or similar instrument issued as 
a means to regulate public health, safety, or the environment, unless 
the OPM specifically designates it to be a covered transaction.
    (f) An incidental benefit that results from ordinary governmental 
operations.
    (g) Any other transaction if the application of an exclusion to the 
transaction is prohibited by law.



Sec. 919.220  Are any procurement contracts included as covered 
transactions?

    (a) Covered transactions under this part--
    (1) Do not include any procurement contracts awarded directly by a 
Federal agency; but
    (2) Do include some procurement contracts awarded by non-Federal 
participants in nonprocurement covered transactions (see appendix to 
this part).
    (b) Specifically, a contract for goods or services is a covered 
transaction if any of the following applies:
    (1) The contract is awarded by a participant in a nonprocurement 
transaction that is covered under Sec. 919.210, and the amount of the 
contract is expected to equal or exceed $25,000.
    (2) The contract requires the consent of a(n) OPM official. In that 
case, the contract, regardless of the amount, always is a covered 
transaction, and it does not matter who awarded it. For example, it 
could be a subcontract awarded by a contractor at a tier below a 
nonprocurement transaction, as shown in the appendix to this part.
    (3) The contract is for federally-required audit services.



Sec. 919.225  How do I know if a transaction in which I may participate 
is a covered transaction?

    As a participant in a transaction, you will know that it is a 
covered transaction because the agency regulations governing the 
transaction, the appropriate agency official, or participant at the next 
higher tier who enters into the transaction with you, will tell

[[Page 561]]

you that you must comply with applicable portions of this part.



    Subpart C_Responsibilities of Participants Regarding Transactions

                    Doing Business With Other Persons



Sec. 919.300  What must I do before I enter into a covered transaction 
with another person at the next lower tier?

    When you enter into a covered transaction with another person at the 
next lower tier, you must verify that the person with whom you intend to 
do business is not excluded or disqualified. You do this by:
    (a) Checking the EPLS; or
    (b) Collecting a certification from that person if allowed by this 
rule; or
    (c) Adding a clause or condition to the covered transaction with 
that person.



Sec. 919.305  May I enter into a covered transaction with an excluded 
or disqualified person?

    (a) You as a participant may not enter into a covered transaction 
with an excluded person, unless the OPM grants an exception under Sec. 
919.120.
    (b) You may not enter into any transaction with a person who is 
disqualified from that transaction, unless you have obtained an 
exception under the disqualifying statute, Executive order, or 
regulation.



Sec. 919.310  What must I do if a Federal agency excludes a person with 
whom I am already doing business in a covered transaction?

    (a) You as a participant may continue covered transactions with an 
excluded person if the transactions were in existence when the agency 
excluded the person. However, you are not required to continue the 
transactions, and you may consider termination. You should make a 
decision about whether to terminate and the type of termination action, 
if any, only after a thorough review to ensure that the action is proper 
and appropriate.
    (b) You may not renew or extend covered transactions (other than no-
cost time extensions) with any excluded person, unless the OPM grants an 
exception under Sec. 919.120.



Sec. 919.315  May I use the services of an excluded person as a principal 
under a covered transaction?

    (a) You as a participant may continue to use the services of an 
excluded person as a principal under a covered transaction if you were 
using the services of that person in the transaction before the person 
was excluded. However, you are not required to continue using that 
person's services as a principal. You should make a decision about 
whether to discontinue that person's services only after a thorough 
review to ensure that the action is proper and appropriate.
    (b) You may not begin to use the services of an excluded person as a 
principal under a covered transaction unless the OPM grants an exception 
under Sec. 919.120.



Sec. 919.320  Must I verify that principals of my covered transactions 
are eligible to participate?

    Yes, you as a participant are responsible for determining whether 
any of your principals of your covered transactions is excluded or 
disqualified from participating in the transaction. You may decide the 
method and frequency by which you do so. You may, but you are not 
required to, check the EPLS.



Sec. 919.325  What happens if I do business with an excluded person in 
a covered transaction?

    If as a participant you knowingly do business with an excluded 
person, we may disallow costs, annul or terminate the transaction, issue 
a stop work order, debar or suspend you, or take other remedies as 
appropriate.



Sec. 919.330  What requirements must I pass down to persons at lower 
tiers with whom I intend to do business?

    Before entering into a covered transaction with a participant at the 
next lower tier, you must require that participant to--
    (a) Comply with this subpart as a condition of participation in the 
transaction. You may do so using any method(s), unless Sec. 919.440 
requires you to use specific methods.

[[Page 562]]

    (b) Pass the requirement to comply with this subpart to each person 
with whom the participant enters into a covered transaction at the next 
lower tier.

            Disclosing Information--Primary Tier Participants



Sec. 919.335  What information must I provide before entering into a 
covered transaction with the OPM?

    Before you enter into a covered transaction at the primary tier, you 
as the participant must notify the OPM office that is entering into the 
transaction with you, if you know that you or any of the principals for 
that covered transaction:
    (a) Are presently excluded or disqualified;
    (b) Have been convicted within the preceding three years of any of 
the offenses listed in Sec. 919.800(a) or had a civil judgment rendered 
against you for one of those offenses within that time period;
    (c) Are presently indicted for or otherwise criminally or civilly 
charged by a governmental entity (Federal, State or local) with 
commission of any of the offenses listed in Sec. 919.800(a); or
    (d) Have had one or more public transactions (Federal, State, or 
local) terminated within the preceding three years for cause or default.



Sec. 919.340  If I disclose unfavorable information required under 
Sec. 919.335, will I be prevented from participating in the transaction?

    As a primary tier participant, your disclosure of unfavorable 
information about yourself or a principal under Sec. 919.335 will not 
necessarily cause us to deny your participation in the covered 
transaction. We will consider the information when we determine whether 
to enter into the covered transaction. We also will consider any 
additional information or explanation that you elect to submit with the 
disclosed information.



Sec. 919.345  What happens if I fail to disclose information required 
under Sec. 919.335?

    If we later determine that you failed to disclose information under 
Sec. 919.335 that you knew at the time you entered into the covered 
transaction, we may--
    (a) Terminate the transaction for material failure to comply with 
the terms and conditions of the transaction; or
    (b) Pursue any other available remedies, including suspension and 
debarment.



Sec. 919.350  What must I do if I learn of information required under 
Sec. 919.335 after entering into a covered transaction with the OPM?

    At any time after you enter into a covered transaction, you must 
give immediate written notice to the OPM office with which you entered 
into the transaction if you learn either that--
    (a) You failed to disclose information earlier, as required by Sec. 
919.335; or
    (b) Due to changed circumstances, you or any of the principals for 
the transaction now meet any of the criteria in Sec. 919.335.

             Disclosing Information--Lower Tier Participants



Sec. 919.355  What information must I provide to a higher tier 
participant before entering into a covered transaction with that 
participant?

    Before you enter into a covered transaction with a person at the 
next higher tier, you as a lower tier participant must notify that 
person if you know that you or any of the principals are presently 
excluded or disqualified.



Sec. 919.360  What happens if I fail to disclose the information 
required under Sec. 919.355?

    If we later determine that you failed to tell the person at the 
higher tier that you were excluded or disqualified at the time you 
entered into the covered transaction with that person, we may pursue any 
available remedies, including suspension and debarment.



Sec. 919.365  What must I do if I learn of information required under 
Sec. 919.355 after entering into a covered transaction with a higher 
tier participant?

    At any time after you enter into a lower tier covered transaction 
with a

[[Page 563]]

person at a higher tier, you must provide immediate written notice to 
that person if you learn either that--
    (a) You failed to disclose information earlier, as required by Sec. 
919.355; or
    (b) Due to changed circumstances, you or any of the principals for 
the transaction now meet any of the criteria in Sec. 919.355.



   Subpart D_Responsibilities of OPM Officials Regarding Transactions



Sec. 919.400  May I enter into a transaction with an excluded or 
disqualified person?

    (a) You as an agency official may not enter into a covered 
transaction with an excluded person unless you obtain an exception under 
Sec. 919.120.
    (b) You may not enter into any transaction with a person who is 
disqualified from that transaction, unless you obtain a waiver or 
exception under the statute, Executive order, or regulation that is the 
basis for the person's disqualification.



Sec. 919.405  May I enter into a covered transaction with a participant 
if a principal of the transaction is excluded?

    As an agency official, you may not enter into a covered transaction 
with a participant if you know that a principal of the transaction is 
excluded, unless you obtain an exception under Sec. 919.120.



Sec. 919.410  May I approve a participant's use of the services of an 
excluded person?

    After entering into a covered transaction with a participant, you as 
an agency official may not approve a participant's use of an excluded 
person as a principal under that transaction, unless you obtain an 
exception under Sec. 919.120.



Sec. 919.415  What must I do if a Federal agency excludes the participant 
or a principal after I enter into a covered transaction?

    (a) You as an agency official may continue covered transactions with 
an excluded person, or under which an excluded person is a principal, if 
the transactions were in existence when the person was excluded. You are 
not required to continue the transactions, however, and you may consider 
termination. You should make a decision about whether to terminate and 
the type of termination action, if any, only after a thorough review to 
ensure that the action is proper.
    (b) You may not renew or extend covered transactions (other than no-
cost time extensions) with any excluded person, or under which an 
excluded person is a principal, unless you obtain an exception under 
Sec. 919.120.



Sec. 919.420  May I approve a transaction with an excluded or 
disqualified person at a lower tier?

    If a transaction at a lower tier is subject to your approval, you as 
an agency official may not approve--
    (a) A covered transaction with a person who is currently excluded, 
unless you obtain an exception under Sec. 919.120; or
    (b) A transaction with a person who is disqualified from that 
transaction, unless you obtain a waiver or exception under the statute, 
Executive order, or regulation that is the basis for the person's 
disqualification.



Sec. 919.425  When do I check to see if a person is excluded or 
disqualified?

    As an agency official, you must check to see if a person is excluded 
or disqualified before you--
    (a) Enter into a primary tier covered transaction;
    (b) Approve a principal in a primary tier covered transaction;
    (c) Approve a lower tier participant if agency approval of the lower 
tier participant is required; or
    (d) Approve a principal in connection with a lower tier transaction 
if agency approval of the principal is required.



Sec. 919.430  How do I check to see if a person is excluded or 
disqualified?

    You check to see if a person is excluded or disqualified in two 
ways:
    (a) You as an agency official must check the EPLS when you take any 
action listed in Sec. 919.425.
    (b) You must review information that a participant gives you, as 
required by

[[Page 564]]

Sec. 919.335, about its status or the status of the principals of a 
transaction.



Sec. 919.435  What must I require of a primary tier participant?

    You as an agency official must require each participant in a primary 
tier covered transaction to--
    (a) Comply with subpart C of this part as a condition of 
participation in the transaction; and
    (b) Communicate the requirement to comply with Subpart C of this 
part to persons at the next lower tier with whom the primary tier 
participant enters into covered transactions.



Sec. 919.440  What method do I use to communicate those requirements 
to participants?

    To communicate the requirement, you must include a term or condition 
in the transaction requiring the participants' compliance with subpart C 
of this part and requiring them to include a similar term or condition 
in lower-tier covered transactions.



Sec. 919.445  What action may I take if a primary tier participant 
knowingly does business with an excluded or disqualified person?

    If a participant knowingly does business with an excluded or 
disqualified person, you as an agency official may refer the matter for 
suspension and debarment consideration. You may also disallow costs, 
annul or terminate the transaction, issue a stop work order, or take any 
other appropriate remedy.



Sec. 919.450  What action may I take if a primary tier participant 
fails to disclose the information required under Sec. 919.335?

    If you as an agency official determine that a participant failed to 
disclose information, as required by Sec. 919.335, at the time it 
entered into a covered transaction with you, you may--
    (a) Terminate the transaction for material failure to comply with 
the terms and conditions of the transaction; or
    (b) Pursue any other available remedies, including suspension and 
debarment.



Sec. 919.455  What may I do if a lower tier participant fails to disclose 
the information required under Sec. 919.355 to the next higher tier?

    If you as an agency official determine that a lower tier participant 
failed to disclose information, as required by Sec. 919.355, at the 
time it entered into a covered transaction with a participant at the 
next higher tier, you may pursue any remedies available to you, 
including the initiation of a suspension or debarment action.



                 Subpart E_Excluded Parties List System



Sec. 919.500  What is the purpose of the Excluded Parties List System 
(EPLS)?

    The EPLS is a widely available source of the most current 
information about persons who are excluded or disqualified from covered 
transactions.



Sec. 919.505  Who uses the EPLS?

    (a) Federal agency officials use the EPLS to determine whether to 
enter into a transaction with a person, as required under Sec. 919.430.
    (b) Participants also may, but are not required to, use the EPLS to 
determine if--
    (1) Principals of their transactions are excluded or disqualified, 
as required under Sec. 919.320; or
    (2) Persons with whom they are entering into covered transactions at 
the next lower tier are excluded or disqualified.
    (c) The EPLS is available to the general public.



Sec. 919.510  Who maintains the EPLS?

    In accordance with the OMB guidelines, the General Services 
Administration (GSA) maintains the EPLS. When a Federal agency takes an 
action to exclude a person under the nonprocurement or procurement 
debarment and suspension system, the agency enters the information about 
the excluded person into the EPLS.



Sec. 919.515  What specific information is in the EPLS?

    (a) At a minimum, the EPLS indicates--

[[Page 565]]

    (1) The full name (where available) and address of each excluded or 
disqualified person, in alphabetical order, with cross references if 
more than one name is involved in a single action;
    (2) The type of action;
    (3) The cause for the action;
    (4) The scope of the action;
    (5) Any termination date for the action;
    (6) The agency and name and telephone number of the agency point of 
contact for the action; and
    (7) The Dun and Bradstreet Number (DUNS), or other similar code 
approved by the GSA, of the excluded or disqualified person, if 
available.
    (b)(1) The database for the EPLS includes a field for the Taxpayer 
Identification Number (TIN) (the social security number (SSN) for an 
individual) of an excluded or disqualified person.
    (2) Agencies disclose the SSN of an individual to verify the 
identity of an individual, only if permitted under the Privacy Act of 
1974 and, if appropriate, the Computer Matching and Privacy Protection 
Act of 1988, as codified in 5 U.S.C. 552(a).



Sec. 919.520  Who places the information into the EPLS?

    Federal officials who take actions to exclude persons under this 
part or officials who are responsible for identifying disqualified 
persons must enter the following information about those persons into 
the EPLS:
    (a) Information required by Sec. 919.515(a);
    (b) The Taxpayer Identification Number (TIN) of the excluded or 
disqualified person, including the social security number (SSN) for an 
individual, if the number is available and may be disclosed under law;
    (c) Information about an excluded or disqualified person, generally 
within five working days, after--
    (1) Taking an exclusion action;
    (2) Modifying or rescinding an exclusion action;
    (3) Finding that a person is disqualified; or
    (4) Finding that there has been a change in the status of a person 
who is listed as disqualified.



Sec. 919.525  Whom do I ask if I have questions about a person in the 
EPLS?

    If you have questions about a person in the EPLS, ask the point of 
contact for the Federal agency that placed the person's name into the 
EPLS. You may find the agency point of contact from the EPLS.



Sec. 919.530  Where can I find the EPLS?

    (a) You may access the EPLS through the Internet, currently at 
http://epls.arnet.gov.
    (b) As of November 26, 2003, you may also subscribe to a printed 
version. However, we anticipate discontinuing the printed version. Until 
it is discontinued, you may obtain the printed version by purchasing a 
yearly subscription from the Superintendent of Documents, U.S. 
Government Printing Office, Washington, DC 20402, or by calling the 
Government Printing Office Inquiry and Order Desk at (202) 783-3238.



   Subpart F_General Principles Relating to Suspension and Debarment 
                                 Actions



Sec. 919.600  How do suspension and debarment actions start?

    When we receive information from any source concerning a cause for 
suspension or debarment, we will promptly report and investigate it. We 
refer the question of whether to suspend or debar you to our suspending 
or debarring official for consideration, if appropriate.



Sec. 919.605  How does suspension differ from debarment?

    Suspension differs from debarment in that--

------------------------------------------------------------------------
      A suspending official . . .           A debarring official . . .
------------------------------------------------------------------------
(a) Imposes suspension as a temporary    Imposes debarment for a
 status of ineligibility for              specified period as a final
 procurement and nonprocurement           determination that a person is
 transactions, pending completion of an   not presently responsible.
 investigation or legal proceedings.

[[Page 566]]

 
(b) Must--.............................  Must conclude, based on a
(1) Have adequate evidence that there     preponderance of the evidence,
 may be a cause for debarment of a        that the person has engaged in
 person; and.                             conduct that warrants
(2) Conclude that immediate action is     debarment.
 necessary to protect the Federal
 interest.
(c) Usually imposes the suspension       Imposes debarment after giving
 first, and then promptly notifies the    the respondent notice of the
 suspended person, giving the person an   action and an opportunity to
 opportunity to contest the suspension    contest the proposed
 and have it lifted.                      debarment.
------------------------------------------------------------------------



Sec. 919.610  What procedures does the OPM use in suspension and 
debarment actions?

    In deciding whether to suspend or debar you, we handle the actions 
as informally as practicable, consistent with principles of fundamental 
fairness.
    (a) For suspension actions, we use the procedures in this subpart 
and subpart G of this part.
    (b) For debarment actions, we use the procedures in this subpart and 
subpart H of this part.



Sec. 919.615  How does the OPM notify a person of a suspension or 
debarment action?

    (a) The suspending or debarring official sends a written notice to 
the last known street address, facsimile number, or e-mail address of--
    (1) You or your identified counsel; or
    (2) Your agent for service of process, or any of your partners, 
officers, directors, owners, or joint venturers.
    (b) The notice is effective if sent to any of these persons.



Sec. 919.620  Do Federal agencies coordinate suspension and debarment 
actions?

    Yes, when more than one Federal agency has an interest in a 
suspension or debarment, the agencies may consider designating one 
agency as the lead agency for making the decision. Agencies are 
encouraged to establish methods and procedures for coordinating their 
suspension and debarment actions.



Sec. 919.625  What is the scope of a suspension or debarment?

    If you are suspended or debarred, the suspension or debarment is 
effective as follows:
    (a) Your suspension or debarment constitutes suspension or debarment 
of all of your divisions and other organizational elements from all 
covered transactions, unless the suspension or debarment decision is 
limited--
    (1) By its terms to one or more specifically identified individuals, 
divisions, or other organizational elements; or
    (2) To specific types of transactions.
    (b) Any affiliate of a participant may be included in a suspension 
or debarment action if the suspending or debarring official--
    (1) Officially names the affiliate in the notice; and
    (2) Gives the affiliate an opportunity to contest the action.



Sec. 919.630  May the OPM impute conduct of one person to another?

    For purposes of actions taken under this rule, we may impute conduct 
as follows:
    (a) Conduct imputed from an individual to an organization. We may 
impute the fraudulent, criminal, or other improper conduct of any 
officer, director, shareholder, partner, employee, or other individual 
associated with an organization, to that organization when the improper 
conduct occurred in connection with the individual's performance of 
duties for or on behalf of that organization, or with the organization's 
knowledge, approval or acquiescence. The organization's acceptance of 
the benefits derived from the conduct is evidence of knowledge, approval 
or acquiescence.
    (b) Conduct imputed from an organization to an individual, or 
between individuals. We may impute the fraudulent, criminal, or other 
improper conduct of any organization to an individual, or from one 
individual to another individual, if the individual to whom the improper 
conduct is imputed either participated in, had knowledge of, or reason 
to know of the improper conduct.

[[Page 567]]

    (c) Conduct imputed from one organization to another organization. 
We may impute the fraudulent, criminal, or other improper conduct of one 
organization to another organization when the improper conduct occurred 
in connection with a partnership, joint venture, joint application, 
association or similar arrangement, or when the organization to whom the 
improper conduct is imputed has the power to direct, manage, control or 
influence the activities of the organization responsible for the 
improper conduct. Acceptance of the benefits derived from the conduct is 
evidence of knowledge, approval or acquiescence.



Sec. 919.635  May the OPM settle a debarment or suspension action?

    Yes, we may settle a debarment or suspension action at any time if 
it is in the best interest of the Federal Government.



Sec. 919.640  May a settlement include a voluntary exclusion?

    Yes, if we enter into a settlement with you in which you agree to be 
excluded, it is called a voluntary exclusion and has governmentwide 
effect.



Sec. 919.645  Do other Federal agencies know if the OPM agrees to a 
voluntary exclusion?

    (a) Yes, we enter information regarding a voluntary exclusion into 
the EPLS.
    (b) Also, any agency or person may contact us to find out the 
details of a voluntary exclusion.



                          Subpart G_Suspension



Sec. 919.700  When may the suspending official issue a suspension?

    Suspension is a serious action. Using the procedures of this subpart 
and subpart F of this part, the suspending official may impose 
suspension only when that official determines that--
    (a) There exists an indictment for, or other adequate evidence to 
suspect, an offense listed under Sec. 919.800(a), or
    (b) There exists adequate evidence to suspect any other cause for 
debarment listed under Sec. 919.800(b) through (d); and
    (c) Immediate action is necessary to protect the public interest.



Sec. 919.705  What does the suspending official consider in issuing 
a suspension?

    (a) In determining the adequacy of the evidence to support the 
suspension, the suspending official considers how much information is 
available, how credible it is given the circumstances, whether or not 
important allegations are corroborated, and what inferences can 
reasonably be drawn as a result. During this assessment, the suspending 
official may examine the basic documents, including grants, cooperative 
agreements, loan authorizations, contracts, and other relevant 
documents.
    (b) An indictment, conviction, civil judgment, or other official 
findings by Federal, State, or local bodies that determine factual and/
or legal matters, constitutes adequate evidence for purposes of 
suspension actions.
    (c) In deciding whether immediate action is needed to protect the 
public interest, the suspending official has wide discretion. For 
example, the suspending official may infer the necessity for immediate 
action to protect the public interest either from the nature of the 
circumstances giving rise to a cause for suspension or from potential 
business relationships or involvement with a program of the Federal 
Government.



Sec. 919.710  When does a suspension take effect?

    A suspension is effective when the suspending official signs the 
decision to suspend.



Sec. 919.715  What notice does the suspending official give me if I 
am suspended?

    After deciding to suspend you, the suspending official promptly 
sends you a Notice of Suspension advising you--
    (a) That you have been suspended;
    (b) That your suspension is based on--
    (1) An indictment;
    (2) A conviction;
    (3) Other adequate evidence that you have committed irregularities 
which seriously reflect on the propriety of further Federal Government 
dealings with you; or

[[Page 568]]

    (4) Conduct of another person that has been imputed to you, or your 
affiliation with a suspended or debarred person;
    (c) Of any other irregularities in terms sufficient to put you on 
notice without disclosing the Federal Government's evidence;
    (d) Of the cause(s) upon which we relied under Sec. 919.700 for 
imposing suspension;
    (e) That your suspension is for a temporary period pending the 
completion of an investigation or resulting legal or debarment 
proceedings;
    (f) Of the applicable provisions of this subpart, Subpart F of this 
part, and any other OPM procedures governing suspension decision making; 
and
    (g) Of the governmentwide effect of your suspension from procurement 
and nonprocurement programs and activities.



Sec. 919.720  How may I contest a suspension?

    If you as a respondent wish to contest a suspension, you or your 
representative must provide the suspending official with information in 
opposition to the suspension. You may do this orally or in writing, but 
any information provided orally that you consider important must also be 
submitted in writing for the official record.



Sec. 919.725  How much time do I have to contest a suspension?

    (a) As a respondent you or your representative must either send, or 
make arrangements to appear and present, the information and argument to 
the suspending official within 30 days after you receive the Notice of 
Suspension.
    (b) We consider the notice to be received by you--
    (1) When delivered, if we mail the notice to the last known street 
address, or five days after we send it if the letter is undeliverable;
    (2) When sent, if we send the notice by facsimile or five days after 
we send it if the facsimile is undeliverable; or
    (3) When delivered, if we send the notice by e-mail or five days 
after we send it if the e-mail is undeliverable.



Sec. 919.730  What information must I provide to the suspending official 
if I contest a suspension?

    (a) In addition to any information and argument in opposition, as a 
respondent your submission to the suspending official must identify--
    (1) Specific facts that contradict the statements contained in the 
Notice of Suspension. A general denial is insufficient to raise a 
genuine dispute over facts material to the suspension;
    (2) All existing, proposed, or prior exclusions under regulations 
implementing E.O. 12549 and all similar actions taken by Federal, state, 
or local agencies, including administrative agreements that affect only 
those agencies;
    (3) All criminal and civil proceedings not included in the Notice of 
Suspension that grew out of facts relevant to the cause(s) stated in the 
notice; and
    (4) All of your affiliates.
    (b) If you fail to disclose this information, or provide false 
information, the OPM may seek further criminal, civil or administrative 
action against you, as appropriate.



Sec. 919.735  Under what conditions do I get an additional opportunity 
to challenge the facts on which the suspension is based?

    (a) You as a respondent will not have an additional opportunity to 
challenge the facts if the suspending official determines that--
    (1) Your suspension is based upon an indictment, conviction, civil 
judgment, or other finding by a Federal, State, or local body for which 
an opportunity to contest the facts was provided;
    (2) Your presentation in opposition contains only general denials to 
information contained in the Notice of Suspension;
    (3) The issues raised in your presentation in opposition to the 
suspension are not factual in nature, or are not material to the 
suspending official's initial decision to suspend, or the official's 
decision whether to continue the suspension; or
    (4) On the basis of advice from the Department of Justice, an office 
of the United States Attorney, a State attorney general's office, or a 
State or local

[[Page 569]]

prosecutor's office, that substantial interests of the government in 
pending or contemplated legal proceedings based on the same facts as the 
suspension would be prejudiced by conducting fact-finding.
    (b) You will have an opportunity to challenge the facts if the 
suspending official determines that--
    (1) The conditions in paragraph (a) of this section do not exist; 
and
    (2) Your presentation in opposition raises a genuine dispute over 
facts material to the suspension.
    (c) If you have an opportunity to challenge disputed material facts 
under this section, the suspending official or designee must conduct 
additional proceedings to resolve those facts.



Sec. 919.740  Are suspension proceedings formal?

    (a) Suspension proceedings are conducted in a fair and informal 
manner. The suspending official may use flexible procedures to allow you 
to present matters in opposition. In so doing, the suspending official 
is not required to follow formal rules of evidence or procedure in 
creating an official record upon which the official will base a final 
suspension decision.
    (b) You as a respondent or your representative must submit any 
documentary evidence you want the suspending official to consider.



Sec. 919.745  How is fact-finding conducted?

    (a) If fact-finding is conducted--
    (1) You may present witnesses and other evidence, and confront any 
witness presented; and
    (2) The fact-finder must prepare written findings of fact for the 
record.
    (b) A transcribed record of fact-finding proceedings must be made, 
unless you as a respondent and the OPM agree to waive it in advance. If 
you want a copy of the transcribed record, you may purchase it.



Sec. 919.750  What does the suspending official consider in deciding 
whether to continue or terminate my suspension?

    (a) The suspending official bases the decision on all information 
contained in the official record. The record includes--
    (1) All information in support of the suspending official's initial 
decision to suspend you;
    (2) Any further information and argument presented in support of, or 
opposition to, the suspension; and
    (3) Any transcribed record of fact-finding proceedings.
    (b) The suspending official may refer disputed material facts to 
another official for findings of fact. The suspending official may 
reject any resulting findings, in whole or in part, only after 
specifically determining them to be arbitrary, capricious, or clearly 
erroneous.



Sec. 919.755  When will I know whether the suspension is continued or 
terminated?

    The suspending official must make a written decision whether to 
continue, modify, or terminate your suspension within 45 days of closing 
the official record. The official record closes upon the suspending 
official's receipt of final submissions, information and findings of 
fact, if any. The suspending official may extend that period for good 
cause.



Sec. 919.760  How long may my suspension last?

    (a) If legal or debarment proceedings are initiated at the time of, 
or during your suspension, the suspension may continue until the 
conclusion of those proceedings. However, if proceedings are not 
initiated, a suspension may not exceed 12 months.
    (b) The suspending official may extend the 12 month limit under 
paragraph (a) of this section for an additional 6 months if an office of 
a U.S. Assistant Attorney General, U.S. Attorney, or other responsible 
prosecuting official requests an extension in writing. In no event may a 
suspension exceed 18 months without initiating proceedings under 
paragraph (a) of this section.
    (c) The suspending official must notify the appropriate officials 
under paragraph (b) of this section of an impending termination of a 
suspension at least 30 days before the 12 month period expires to allow 
the officials an opportunity to request an extension.

[[Page 570]]



                           Subpart H_Debarment



Sec. 919.800  What are the causes for debarment?

    We may debar a person for--
    (a) Conviction of or civil judgment for--
    (1) Commission of fraud or a criminal offense in connection with 
obtaining, attempting to obtain, or performing a public or private 
agreement or transaction;
    (2) Violation of Federal or State antitrust statutes, including 
those proscribing price fixing between competitors, allocation of 
customers between competitors, and bid rigging;
    (3) Commission of embezzlement, theft, forgery, bribery, 
falsification or destruction of records, making false statements, tax 
evasion, receiving stolen property, making false claims, or obstruction 
of justice; or
    (4) Commission of any other offense indicating a lack of business 
integrity or business honesty that seriously and directly affects your 
present responsibility;
    (b) Violation of the terms of a public agreement or transaction so 
serious as to affect the integrity of an agency program, such as--
    (1) A willful failure to perform in accordance with the terms of one 
or more public agreements or transactions;
    (2) A history of failure to perform or of unsatisfactory performance 
of one or more public agreements or transactions; or
    (3) A willful violation of a statutory or regulatory provision or 
requirement applicable to a public agreement or transaction;
    (c) Any of the following causes:
    (1) A nonprocurement debarment by any Federal agency taken before 
October 1, 1988, or a procurement debarment by any Federal agency taken 
pursuant to 48 CFR part 9, subpart 9.4, before August 25, 1995;
    (2) Knowingly doing business with an ineligible person, except as 
permitted under Sec. 919.120;
    (3) Failure to pay a single substantial debt, or a number of 
outstanding debts (including disallowed costs and overpayments, but not 
including sums owed the Federal Government under the Internal Revenue 
Code) owed to any Federal agency or instrumentality, provided the debt 
is uncontested by the debtor or, if contested, provided that the 
debtor's legal and administrative remedies have been exhausted;
    (4) Violation of a material provision of a voluntary exclusion 
agreement entered into under Sec. 919.640 or of any settlement of a 
debarment or suspension action; or
    (5) Violation of the provisions of the Drug-Free Workplace Act of 
1988 (41 U.S.C. 701); or
    (d) Any other cause of so serious or compelling a nature that it 
affects your present responsibility.



Sec. 919.805  What notice does the debarring official give me if I am 
proposed for debarment?

    After consideration of the causes in Sec. 919.800 of this subpart, 
if the debarring official proposes to debar you, the official sends you 
a Notice of Proposed Debarment, pursuant to Sec. 919.615, advising 
you--
    (a) That the debarring official is considering debarring you;
    (b) Of the reasons for proposing to debar you in terms sufficient to 
put you on notice of the conduct or transactions upon which the proposed 
debarment is based;
    (c) Of the cause(s) under Sec. 919.800 upon which the debarring 
official relied for proposing your debarment;
    (d) Of the applicable provisions of this subpart, Subpart F of this 
part, and any other OPM procedures governing debarment; and
    (e) Of the governmentwide effect of a debarment from procurement and 
nonprocurement programs and activities.



Sec. 919.810  When does a debarment take effect?

    A debarment is not effective until the debarring official issues a 
decision. The debarring official does not issue a decision until the 
respondent has had an opportunity to contest the proposed debarment.



Sec. 919.815  How may I contest a proposed debarment?

    If you as a respondent wish to contest a proposed debarment, you or 
your

[[Page 571]]

representative must provide the debarring official with information in 
opposition to the proposed debarment. You may do this orally or in 
writing, but any information provided orally that you consider important 
must also be submitted in writing for the official record.



Sec. 919.820  How much time do I have to contest a proposed debarment?

    (a) As a respondent you or your representative must either send, or 
make arrangements to appear and present, the information and argument to 
the debarring official within 30 days after you receive the Notice of 
Proposed Debarment.
    (b) We consider the Notice of Proposed Debarment to be received by 
you--
    (1) When delivered, if we mail the notice to the last known street 
address, or five days after we send it if the letter is undeliverable;
    (2) When sent, if we send the notice by facsimile or five days after 
we send it if the facsimile is undeliverable; or
    (3) When delivered, if we send the notice by e-mail or five days 
after we send it if the e-mail is undeliverable.



Sec. 919.825  What information must I provide to the debarring official 
if I contest a proposed debarment?

    (a) In addition to any information and argument in opposition, as a 
respondent your submission to the debarring official must identify--
    (1) Specific facts that contradict the statements contained in the 
Notice of Proposed Debarment. Include any information about any of the 
factors listed in Sec. 919.860. A general denial is insufficient to 
raise a genuine dispute over facts material to the debarment;
    (2) All existing, proposed, or prior exclusions under regulations 
implementing E.O. 12549 and all similar actions taken by Federal, State, 
or local agencies, including administrative agreements that affect only 
those agencies;
    (3) All criminal and civil proceedings not included in the Notice of 
Proposed Debarment that grew out of facts relevant to the cause(s) 
stated in the notice; and
    (4) All of your affiliates.
    (b) If you fail to disclose this information, or provide false 
information, the OPM may seek further criminal, civil or administrative 
action against you, as appropriate.



Sec. 919.830  Under what conditions do I get an additional opportunity 
to challenge the facts on which a proposed debarment is based?

    (a) You as a respondent will not have an additional opportunity to 
challenge the facts if the debarring official determines that--
    (1) Your debarment is based upon a conviction or civil judgment;
    (2) Your presentation in opposition contains only general denials to 
information contained in the Notice of Proposed Debarment; or
    (3) The issues raised in your presentation in opposition to the 
proposed debarment are not factual in nature, or are not material to the 
debarring official's decision whether to debar.
    (b) You will have an additional opportunity to challenge the facts 
if the debarring official determines that--
    (1) The conditions in paragraph (a) of this section do not exist; 
and
    (2) Your presentation in opposition raises a genuine dispute over 
facts material to the proposed debarment.
    (c) If you have an opportunity to challenge disputed material facts 
under this section, the debarring official or designee must conduct 
additional proceedings to resolve those facts.



Sec. 919.835  Are debarment proceedings formal?

    (a) Debarment proceedings are conducted in a fair and informal 
manner. The debarring official may use flexible procedures to allow you 
as a respondent to present matters in opposition. In so doing, the 
debarring official is not required to follow formal rules of evidence or 
procedure in creating an official record upon which the official will 
base the decision whether to debar.
    (b) You or your representative must submit any documentary evidence 
you want the debarring official to consider.



Sec. 919.840  How is fact-finding conducted?

    (a) If fact-finding is conducted--

[[Page 572]]

    (1) You may present witnesses and other evidence, and confront any 
witness presented; and
    (2) The fact-finder must prepare written findings of fact for the 
record.
    (b) A transcribed record of fact-finding proceedings must be made, 
unless you as a respondent and the OPM agree to waive it in advance. If 
you want a copy of the transcribed record, you may purchase it.



Sec. 919.845  What does the debarring official consider in deciding 
whether to debar me?

    (a) The debarring official may debar you for any of the causes in 
Sec. 919.800. However, the official need not debar you even if a cause 
for debarment exists. The official may consider the seriousness of your 
acts or omissions and the mitigating or aggravating factors set forth at 
Sec. 919.860.
    (b) The debarring official bases the decision on all information 
contained in the official record. The record includes--
    (1) All information in support of the debarring official's proposed 
debarment;
    (2) Any further information and argument presented in support of, or 
in opposition to, the proposed debarment; and
    (3) Any transcribed record of fact-finding proceedings.
    (c) The debarring official may refer disputed material facts to 
another official for findings of fact. The debarring official may reject 
any resultant findings, in whole or in part, only after specifically 
determining them to be arbitrary, capricious, or clearly erroneous.



Sec. 919.850  What is the standard of proof in a debarment action?

    (a) In any debarment action, we must establish the cause for 
debarment by a preponderance of the evidence.
    (b) If the proposed debarment is based upon a conviction or civil 
judgment, the standard of proof is met.



Sec. 919.855  Who has the burden of proof in a debarment action?

    (a) We have the burden to prove that a cause for debarment exists.
    (b) Once a cause for debarment is established, you as a respondent 
have the burden of demonstrating to the satisfaction of the debarring 
official that you are presently responsible and that debarment is not 
necessary.



Sec. 919.860  What factors may influence the debarring official's 
decision?

    This section lists the mitigating and aggravating factors that the 
debarring official may consider in determining whether to debar you and 
the length of your debarment period. The debarring official may consider 
other factors if appropriate in light of the circumstances of a 
particular case. The existence or nonexistence of any factor, such as 
one of those set forth in this section, is not necessarily determinative 
of your present responsibility. In making a debarment decision, the 
debarring official may consider the following factors:
    (a) The actual or potential harm or impact that results or may 
result from the wrongdoing.
    (b) The frequency of incidents and/or duration of the wrongdoing.
    (c) Whether there is a pattern or prior history of wrongdoing. For 
example, if you have been found by another Federal agency or a State 
agency to have engaged in wrongdoing similar to that found in the 
debarment action, the existence of this fact may be used by the 
debarring official in determining that you have a pattern or prior 
history of wrongdoing.
    (d) Whether you are or have been excluded or disqualified by an 
agency of the Federal Government or have not been allowed to participate 
in State or local contracts or assistance agreements on a basis of 
conduct similar to one or more of the causes for debarment specified in 
this part.
    (e) Whether you have entered into an administrative agreement with a 
Federal agency or a State or local government that is not governmentwide 
but is based on conduct similar to one or more of the causes for 
debarment specified in this part.
    (f) Whether and to what extent you planned, initiated, or carried 
out the wrongdoing.
    (g) Whether you have accepted responsibility for the wrongdoing and

[[Page 573]]

recognize the seriousness of the misconduct that led to the cause for 
debarment.
    (h) Whether you have paid or agreed to pay all criminal, civil and 
administrative liabilities for the improper activity, including any 
investigative or administrative costs incurred by the government, and 
have made or agreed to make full restitution.
    (i) Whether you have cooperated fully with the government agencies 
during the investigation and any court or administrative action. In 
determining the extent of cooperation, the debarring official may 
consider when the cooperation began and whether you disclosed all 
pertinent information known to you.
    (j) Whether the wrongdoing was pervasive within your organization.
    (k) The kind of positions held by the individuals involved in the 
wrongdoing.
    (l) Whether your organization took appropriate corrective action or 
remedial measures, such as establishing ethics training and implementing 
programs to prevent recurrence.
    (m) Whether your principals tolerated the offense.
    (n) Whether you brought the activity cited as a basis for the 
debarment to the attention of the appropriate government agency in a 
timely manner.
    (o) Whether you have fully investigated the circumstances 
surrounding the cause for debarment and, if so, made the result of the 
investigation available to the debarring official.
    (p) Whether you had effective standards of conduct and internal 
control systems in place at the time the questioned conduct occurred.
    (q) Whether you have taken appropriate disciplinary action against 
the individuals responsible for the activity which constitutes the cause 
for debarment.
    (r) Whether you have had adequate time to eliminate the 
circumstances within your organization that led to the cause for the 
debarment.
    (s) Other factors that are appropriate to the circumstances of a 
particular case.



Sec. 919.865  How long may my debarment last?

    (a) If the debarring official decides to debar you, your period of 
debarment will be based on the seriousness of the cause(s) upon which 
your debarment is based. Generally, debarment should not exceed three 
years. However, if circumstances warrant, the debarring official may 
impose a longer period of debarment.
    (b) In determining the period of debarment, the debarring official 
may consider the factors in Sec. 919.860. If a suspension has preceded 
your debarment, the debarring official must consider the time you were 
suspended.
    (c) If the debarment is for a violation of the provisions of the 
Drug-Free Workplace Act of 1988, your period of debarment may not exceed 
five years.



Sec. 919.870  When do I know if the debarring official debars me?

    (a) The debarring official must make a written decision whether to 
debar within 45 days of closing the official record. The official record 
closes upon the debarring official's receipt of final submissions, 
information and findings of fact, if any. The debarring official may 
extend that period for good cause.
    (b) The debarring official sends you written notice, pursuant to 
Sec. 919.615 that the official decided, either--
    (1) Not to debar you; or
    (2) To debar you. In this event, the notice:
    (i) Refers to the Notice of Proposed Debarment;
    (ii) Specifies the reasons for your debarment;
    (iii) States the period of your debarment, including the effective 
dates; and
    (iv) Advises you that your debarment is effective for covered 
transactions and contracts that are subject to the Federal Acquisition 
Regulation (48 CFR chapter 1), throughout the executive branch of the 
Federal Government unless an agency head or an authorized designee 
grants an exception.



Sec. 919.875  May I ask the debarring official to reconsider a decision 
to debar me?

    Yes, as a debarred person you may ask the debarring official to 
reconsider

[[Page 574]]

the debarment decision or to reduce the time period or scope of the 
debarment. However, you must put your request in writing and support it 
with documentation.



Sec. 919.880  What factors may influence the debarring official during 
reconsideration?

    The debarring official may reduce or terminate your debarment based 
on--
    (a) Newly discovered material evidence;
    (b) A reversal of the conviction or civil judgment upon which your 
debarment was based;
    (c) A bona fide change in ownership or management;
    (d) Elimination of other causes for which the debarment was imposed; 
or
    (e) Other reasons the debarring official finds appropriate.



Sec. 919.885  May the debarring official extend a debarment?

    (a) Yes, the debarring official may extend a debarment for an 
additional period, if that official determines that an extension is 
necessary to protect the public interest.
    (b) However, the debarring official may not extend a debarment 
solely on the basis of the facts and circumstances upon which the 
initial debarment action was based.
    (c) If the debarring official decides that a debarment for an 
additional period is necessary, the debarring official must follow the 
applicable procedures in this subpart, and subpart F of this part, to 
extend the debarment.



                          Subpart I_Definitions



Sec. 919.900  Adequate evidence.

    Adequate evidence means information sufficient to support the 
reasonable belief that a particular act or omission has occurred.



Sec. 919.905  Affiliate.

    Persons are affiliates of each other if, directly or indirectly, 
either one controls or has the power to control the other or a third 
person controls or has the power to control both. The ways we use to 
determine control include, but are not limited to--
    (a) Interlocking management or ownership;
    (b) Identity of interests among family members;
    (c) Shared facilities and equipment;
    (d) Common use of employees; or
    (e) A business entity which has been organized following the 
exclusion of a person which has the same or similar management, 
ownership, or principal employees as the excluded person.



Sec. 919.910  Agency.

    Agency means any United States executive department, military 
department, defense agency, or any other agency of the executive branch. 
Other agencies of the Federal government are not considered ``agencies'' 
for the purposes of this part unless they issue regulations adopting the 
governmentwide Debarment and Suspension system under Executive orders 
12549 and 12689.



Sec. 919.915  Agent or representative.

    Agent or representative means any person who acts on behalf of, or 
who is authorized to commit, a participant in a covered transaction.



Sec. 919.920  Civil judgment.

    Civil judgment means the disposition of a civil action by any court 
of competent jurisdiction, whether by verdict, decision, settlement, 
stipulation, other disposition which creates a civil liability for the 
complained of wrongful acts, or a final determination of liability under 
the Program Fraud Civil Remedies Act of 1988 (31 U.S.C. 3801-3812).



Sec. 919.925  Conviction.

    Conviction means--
    (a) A judgment or any other determination of guilt of a criminal 
offense by any court of competent jurisdiction, whether entered upon a 
verdict or plea, including a plea of nolo contendere; or
    (b) Any other resolution that is the functional equivalent of a 
judgment, including probation before judgment and deferred prosecution. 
A disposition without the participation of the court is the functional 
equivalent of a judgment only if it includes an admission of guilt.

[[Page 575]]



Sec. 919.930  Debarment.

    Debarment means an action taken by a debarring official under 
subpart H of this part to exclude a person from participating in covered 
transactions and transactions covered under the Federal Acquisition 
Regulation (48 CFR chapter 1). A person so excluded is debarred.



Sec. 919.935  Debarring official.

    (a) Debarring official means an agency official who is authorized to 
impose debarment. A debarring official is either--
    (1) The agency head; or
    (2) An official designated by the agency head.
    (b) [Reserved]



Sec. 919.940  Disqualified.

    Disqualified means that a person is prohibited from participating in 
specified Federal procurement or nonprocurement transactions as required 
under a statute, Executive order (other than Executive Orders 12549 and 
12689) or other authority. Examples of disqualifications include persons 
prohibited under--
    (a) The Davis-Bacon Act (40 U.S.C. 276(a));
    (b) The equal employment opportunity acts and Executive orders; or
    (c) The Clean Air Act (42 U.S.C. 7606), Clean Water Act (33 U.S.C. 
1368) and Executive Order 11738 (3 CFR, 1973 Comp., p. 799).



Sec. 919.945  Excluded or exclusion.

    Excluded or exclusion means--
    (a) That a person or commodity is prohibited from being a 
participant in covered transactions, whether the person has been 
suspended; debarred; proposed for debarment under 48 CFR part 9, subpart 
9.4; voluntarily excluded; or
    (b) The act of excluding a person.



Sec. 919.950  Excluded Parties List System

    Excluded Parties List System (EPLS) means the list maintained and 
disseminated by the General Services Administration (GSA) containing the 
names and other information about persons who are ineligible. The EPLS 
system includes the printed version entitled, ``List of Parties Excluded 
or Disqualified from Federal Procurement and Nonprocurement Programs,'' 
so long as published.



Sec. 919.955  Indictment.

    Indictment means an indictment for a criminal offense. A 
presentment, information, or other filing by a competent authority 
charging a criminal offense shall be given the same effect as an 
indictment.



Sec. 919.960  Ineligible or ineligibility.

    Ineligible or ineligibility means that a person or commodity is 
prohibited from covered transactions because of an exclusion or 
disqualification.



Sec. 919.965  Legal proceedings.

    Legal proceedings means any criminal proceeding or any civil 
judicial proceeding, including a proceeding under the Program Fraud 
Civil Remedies Act (31 U.S.C. 3801-3812), to which the Federal 
Government or a State or local government or quasi-governmental 
authority is a party. The term also includes appeals from those 
proceedings.



Sec. 919.970  Nonprocurement transaction.

    (a) Nonprocurement transaction means any transaction, regardless of 
type (except procurement contracts), including, but not limited to the 
following:
    (1) Grants.
    (2) Cooperative agreements.
    (3) Scholarships.
    (4) Fellowships.
    (5) Contracts of assistance.
    (6) Loans.
    (7) Loan guarantees.
    (8) Subsidies.
    (9) Insurances.
    (10) Payments for specified uses.
    (11) Donation agreements.
    (b) A nonprocurement transaction at any tier does not require the 
transfer of Federal funds.



Sec. 919.975  Notice.

    Notice means a written communication served in person, sent by 
certified mail or its equivalent, or sent electronically by e-mail or 
facsimile. (See Sec. 919.615.)



Sec. 919.980  Participant.

    Participant means any person who submits a proposal for or who 
enters into a covered transaction, including

[[Page 576]]

an agent or representative of a participant.



Sec. 919.985  Person.

    Person means any individual, corporation, partnership, association, 
unit of government, or legal entity, however organized.



Sec. 919.990  Preponderance of the evidence.

    Preponderance of the evidence means proof by information that, 
compared with information opposing it, leads to the conclusion that the 
fact at issue is more probably true than not.



Sec. 919.995  Principal.

    Principal means--
    (a) An officer, director, owner, partner, principal investigator, or 
other person within a participant with management or supervisory 
responsibilities related to a covered transaction; or
    (b) A consultant or other person, whether or not employed by the 
participant or paid with Federal funds, who--
    (1) Is in a position to handle Federal funds;
    (2) Is in a position to influence or control the use of those funds; 
or,
    (3) Occupies a technical or professional position capable of 
substantially influencing the development or outcome of an activity 
required to perform the covered transaction.



Sec. 919.1000  Respondent.

    Respondent means a person against whom an agency has initiated a 
debarment or suspension action.



Sec. 919.1005  State.

    (a) State means--
    (1) Any of the states of the United States;
    (2) The District of Columbia;
    (3) The Commonwealth of Puerto Rico;
    (4) Any territory or possession of the United States; or
    (5) Any agency or instrumentality of a state.
    (b) For purposes of this part, State does not include institutions 
of higher education, hospitals, or units of local government.



Sec. 919.1010  Suspending official.

    (a) Suspending official means an agency official who is authorized 
to impose suspension. The suspending official is either:
    (1) The agency head; or
    (2) An official designated by the agency head.
    (b) [Reserved]



Sec. 919.1015  Suspension.

    Suspension is an action taken by a suspending official under subpart 
G of this part that immediately prohibits a person from participating in 
covered transactions and transactions covered under the Federal 
Acquisition Regulation (48 CFR chapter 1) for a temporary period, 
pending completion of an agency investigation and any judicial or 
administrative proceedings that may ensue. A person so excluded is 
suspended.



Sec. 919.1020  Voluntary exclusion or voluntarily excluded.

    (a) Voluntary exclusion means a person's agreement to be excluded 
under the terms of a settlement between the person and one or more 
agencies. Voluntary exclusion must have governmentwide effect.
    (b) Voluntarily excluded means the status of a person who has agreed 
to a voluntary exclusion.

Subpart J [Reserved]

[[Page 577]]

               Appendix to Part 919--Covered Transactions
[GRAPHIC] [TIFF OMITTED] TR26NO03.000



PART 930_PROGRAMS FOR SPECIFIC POSITIONS AND EXAMINATIONS (MISCELLANEOUS)
--Table of Contents




                    Subpart A_Motor Vehicle Operators

Sec.
930.101 Purpose.
930.102 Definitions.
930.103 Coverage.
930.104 Objectives.
930.105 Minimum requirements for competitive and excepted service 
          positions.
930.106 Details in the competitive service.
930.107 Waiver of road test.
930.108 Periodic medical evaluation.
930.109 Periodic review and renewal of authorization.
930.110 Identification of authorized operators and incidental operators.
930.111 State license in possession.
930.112 Identification card or document in possession.
930.113 Corrective action.
930.114 Reports required.
930.115 Requests for waiver of requirements.

  Subpart B_Appointment, Pay, and Removal of Administrative Law Judges

                           General Provisions

930.201 Coverage.
930.202 Definitions.
930.203 Examination.
930.203a Appointment.
930.203b Title of administrative law judge.
930.204 Promotion.
930.205 Reassignment.
930.206 Transfer.
930.207 Reinstatement.
930.208 Restoration.
930.209 Detail and assignment to other duties.

[[Page 578]]

930.210 Pay.
930.211 Performance rating.
930.212 Rotation of administrative law judges.
930.213 Use of administrative law judges on detail from other agencies.
930.214 Actions against administrative law judges.
930.215 Reduction in force.
930.216 Temporary reemployment: senior administrative law judges.

Subpart C_Information Security Responsibilities for Employees who Manage 
                   or Use Federal Information Systems

930.301 Information systems security awareness training program.



                    Subpart A_Motor Vehicle Operators

    Authority: 5 U.S.C. 3301, 3320, 7301; 40 U.S.C. 491; E.O. 10577, 3 
CFR, 1954--1958 Comp., p. 218; E.O. 11222, 3 CFR, 1964--1965 Comp., p. 
306. (Separate authority is listed under Sec. 930.107).

    Source: 50 FR 34669, Aug. 27, 1985, unless otherwise noted.



Sec. 930.101  Purpose.

    This subpart governs agencies in authorizing employees to operate 
Government-owned or -leased (acquired for other than short term use for 
which the Government does not have full control and accountability) 
motor vehicles for official purposes within the States of the Union, the 
District of Columbia, Puerto Rico, and the territories and possessions 
of the United States.



Sec. 930.102  Definitions.

    In this subpart:
    Agency means a department, independent establishment, or other unit 
of the executive branch of the Federal Government, including a wholly 
owned Government corporation, in the States of the Union, the District 
of Columbia, Puerto Rico, and the territories and possessions of the 
United States.
    Employee means an employee of an agency in either the competitive or 
excepted service or an enrollee of the Job Corps established by section 
102 of the Economic Opportunity Act of 1964 (42 U.S.C. 2712).
    Identification card means the United States Government Motor Vehicle 
Operator's Identification Card, Optional Form 346, or an agency-issued 
identification card that names the types of Government-owned or -leased 
vehicles the holder is authorized to operate.
    Identification document means an official identification form issued 
by an agency that properly identifies the individual as a Federal 
employee of the agency.
    Incidental operator means an employee, other than one occupying a 
position officially classified as a motor vehicle operator, who is 
required to operate a Government-owned or -leased motor vehicle to 
properly carry out his or her assigned duties.
    Motor vehicle means a vehicle designed and operated principally for 
highway transportation of property or passengers, but does not include a 
vehicle (a) designed or used for military field training, combat, or 
tactical purposes; (b) used principally within the confines of a 
regularly established military post, camp, or depot; or (c) regularly 
used by an agency in the performance of investigative, law enforcement, 
or intelligence duties if the head of the agency determines that 
exclusive control of the vehicle is essential to the effective 
performance of those duties.
    Operator means an employee who is regularly required to operate 
Government-owned or -leased motor vehicles and is occupying a position 
officially classified as motor vehicle operator.
    Road test means OPM's Test No. 544 or similar road tests developed 
by Federal agencies to evaluate the competency of prospective operators.
    State license means a valid driver's license that would be required 
for the operation of similar vehicles for other than official Government 
business by the States, District of Columbia, Puerto Rico, or territory 
or possession of the United States in which the employee is domiciled or 
principally employed.



Sec. 930.103  Coverage.

    This subpart governs agencies in authorizing their employees to 
operate Government-owned or -leased motor vehicles for official purposes 
within the States of the Union, the District of Columbia, Puerto Rico, 
and the territories or possessions of the United

[[Page 579]]

States and establishes minimum procedures to ensure the safe and 
efficient operation of such vehicles.



Sec. 930.104  Objectives.

    This subpart requires that agencies (a) establish an efficient and 
effective system to identify those Federal employees who are qualified 
and authorized to operate Government-owned or -leased motor vehicles 
while on official Government business; and (b) periodically review the 
competence and physical qualifications of these Federal employees to 
operate such vehicles safely.



Sec. 930.105  Minimum requirements for competitive and excepted service 
positions.

    (a) An agency may fill motor vehicle operator positions in the 
competitive or excepted services by any of the methods normally 
authorized for filling positions. Applicants for motor vehicle operator 
positions and incidental operators must meet the following requirements 
for these positions:
    (1) Possess a safe driving record;
    (2) Possess a valid State license;
    (3) Except as provided in Sec. 930.107, pass a road test; and
    (4) Demonstrate that they are medically qualified to operate the 
appropriate motor vehicle safely in accordance with the standards and 
procedures established in this part.
    (b) Agencies may establish additional requirements to assure that 
the objectives of this subpart are met.

[50 FR 34669, Aug. 27, 1985, as amended at 60 FR 3067, Jan. 13, 1995]



Sec. 930.106  Details in the competitive service.

    An agency may detail an employee to an operator position in the 
competitive service for 30 days or less when the employee possesses a 
State license. For details exceeding 30 days, the employee must meet all 
the requirements of Sec. 930.105 and any applicable OPM and agency 
regulations governing such details.

[60 FR 3067, Jan. 13, 1995]



Sec. 930.107  Waiver of road test.

    Under the following conditions, OPM or an agency head or his or her 
designated representative may waive the road test:
    (a) OPM waives the road test requirement for operators of vehicles 
of one ton load capacity or less who possess a current driver's license 
from one of the 50 States, District of Columbia, or Puerto Rico, where 
the employee is domiciled or principally employed, except for operators 
of buses and vehicles used for: (1) Transportation of dangerous 
materials; (2) law enforcement; or (3) emergency services.
    (b) OPM waives the road test for operators, and agencies may waive 
the road test for incidental operators of any class of vehicle, who 
possess a current driver's license for the specific type of vehicle to 
be operated from one of the 50 States, District of Columbia, or Puerto 
Rico, where the employee is domiciled or principally employed.
    (c) An agency head may waive the road test for operators and 
incidental operators not covered by paragraphs (a) and (b) of this 
section, but only when in his or her opinion it is impractical to apply 
it, and then only for an employee whose competence as a driver has been 
established by his or her past driving record.

(5 U.S.C. 1104; Pub. L. 95-454, sec. 3(5))



Sec. 930.108  Periodic medical evaluation.

    At least once every 4 years, each agency will ensure that employees 
who operate Government-owned or leased vehicles are medically able to do 
so without undue risk to themselves or others. When there is a question 
about an employee's ability to operate a motor vehicle safely, the 
employee may be referred for a medical examination in accordance with 
the provisions of part 339 of this chapter.

[60 FR 3067, Jan. 13, 1995]



Sec. 930.109  Periodic review and renewal of authorization.

    (a) At least once every 4 years, each agency will review each 
employee's authorization to operate Government-owned or -leased motor 
vehicles.
    (b) An agency may renew the employee's authorization only after the 
appropriate agency official has determined

[[Page 580]]

that the employee is medically qualified and continues to demonstrate 
competence to operate the type of motor vehicle to which assigned based 
on a continued safe driving record.

[50 FR 34669, Aug. 27, 1985, as amended at 60 FR 3067, Jan. 13, 1995]



Sec. 930.110  Identification of authorized operators and incidental 
operators.

    Agencies must have procedures to identify employees who are 
authorized to operate Government-owned or -leased motor vehicles. Such 
procedures must provide for adequate control of access to vehicles and 
assure that the other requirements of this subpart are met.

[50 FR 34669, Aug. 27, 1985, as amended at 66 FR 66712, Dec. 27, 2001]



Sec. 930.111  State license in possession.

    An operator or incidental operator will have a State license in his 
or her possession at all times while driving a Government-owned or -
leased motor vehicle on a public highway.



Sec. 930.112  Identification card or document in possession.

    The operator or incidental operator will have a valid agency 
identification card or document (e.g., building pass or credential) in 
his or her possession at all times while driving a Government-owned or -
leased motor vehicle.



Sec. 930.113  Corrective action.

    An agency will take adverse, disciplinary, or other appropriate 
action against an operator or an incidental operator in accordance with 
applicable laws and regulations. Agency orders and directives will 
include the following reasons among those constituting sufficient cause 
for such action against an operator or an incidental operator:
    (a) The employee is convicted of operating under the intoxicating 
influence of alcohol, narcotics, or pathogenic drugs.
    (b) The employee is convicted of leaving the scene of an accident 
without making his or her identity known.
    (c) The employee is not qualified to operate a Government-owned or -
leased vehicle safely because of a physical or medical condition. In 
making such a determination, agencies should consult a Federal medical 
officer or other medical authority as appropriate.
    (d) The employee's State license is revoked.
    (e) The employee's State license is suspended. However, the agency 
may continue the employee in his or her position for operation of 
Government-owned or -leased motor vehicles on other than public highways 
for not to exceed 45 days from the date of suspension of the State 
license.



Sec. 930.114  Reports required.

    An agency will submit to OPM, on request (a) a copy of agency orders 
and directives issued in compliance with this subpart; and (b) such 
other reports as OPM may require for adequate administration and 
evaluation of the motor vehicle operator program.



Sec. 930.115  Requests for waiver of requirements.

    Agencies may request authority from OPM to waive requirements in 
this subpart. OPM may grant exceptions or waivers when it finds these 
waivers or exceptions are in the interest of good administration and 
meet the objectives of this program.

[50 FR 34669, Aug. 27, 1985, as amended at 66 FR 66712, Dec. 27, 2001]



  Subpart B_Appointment, Pay, and Removal of Administrative Law Judges

    Authority: 5 U.S.C. 1104(a)(2), 1305, 3105, 3323(b), 3344, 
4301(2)(D), 5372, 7521.

    Source 52 FR 34203, Sept. 10, 1987, unless otherwise noted.

                           General Provisions



Sec. 930.201  Coverage.

    (a) This subpart applies to people appointed under 5 U.S.C. 3105 for 
proceedings required to be conducted in accordance with 5 U.S.C. 556 and 
557, and to administrative law judge positions.
    (b) Except as otherwise provided in this subpart, the rules and 
regulations

[[Page 581]]

applicable to positions in the competitive service apply to 
administrative law judge positions.
    (c) In accordance with 5 U.S.C. 1104(a)(2), OPM shall conduct 
competitive examinations for administrative law judge positions, and 
agencies employing judges shall reimburse OPM for the cost of developing 
and administering such examinations. Each employing agency's share of 
reimbursement shall be based on its relative number of administrative 
law judges as of March 31 of the preceding fiscal year. OPM will work 
with employing agencies to review the examination program for 
effectiveness and efficiency and identify needed improvements, 
consistent with statutory requirements. Subsequently, OPM will annually 
compute the cost of the examination program and notify each agency of 
its share, along with a full accounting of the costs, and payment 
procedures.

[52 FR 34203, Sept. 10, 1987, as amended at 61 FR 39267, July 29, 1996]



Sec. 930.202  Definitions.

    In this subpart--
    (a) Agency has the same meaning as given in 5 U.S.C. 551.
    (b) Detail means the temporary assignment of an employee from one 
position to another position without change in civil service or pay 
status. The assignment to an administrative law judge of a case of the 
level of difficulty that would ordinarily be assigned to an 
administrative law judge of a different grade does not of itself 
constitute a detail within the meaning of this subpart.
    (c) Administrative law judge position means a position in which any 
portion of the duties includes those which require the appointment of an 
administrative law judge under 5 U.S.C. 3105.
    (d) Promotion means a change from a lower to a higher level 
position.
    (e) Reinstatement means reemployment authorized on the basis of the 
appointee's absolute status as administrative law judge after an earlier 
separation from an administrative law judge position.
    (f) Removal means discharge of an administrative law judge from the 
position of administrative law judge or involuntary reassignment, 
demotion, or promotion to a position other than that of administrative 
law judge.

[52 FR 34203, Sept. 10, 1987, as amended at 56 FR 6209, Feb. 14, 1991]



Sec. 930.203  Examination.

    (a) Periodic open competition. Applicants for entrance into the 
competitive service as administrative law judges will be examined 
periodically in open competition as announced by OPM. Applications 
received by OPM during such periods of open competition will be reviewed 
as a group.
    (b) Minimum qualifications. All applicants must demonstrate in their 
written applications and supporting materials that they meet the 
qualifying experience requirements in OPM Examination Announcement No. 
318.
    (c) Supplemental qualifications. Applicants who meet minimum 
qualification requirements will be assigned a score on the supplemental 
qualifications statement described in the examination announcement.
    (d) Participation in examination procedures. Applicants who meet 
minimum qualification requirements and are assigned a score on the 
supplemental qualifications statement become eligible to compete for a 
final rating through participating in three additional examination 
procedures described in the examination announcement:
    (1) A written demonstration;
    (2) A panel interview; and
    (3) A personal reference inquiry.
    (e) Final rating. Applicants who complete the examination procedures 
described in paragraphs (c) and (d) of this section will be assigned a 
final numerical rating based on a weighted sum of the scores for each of 
the four parts, transmuted to a scale of 0 to 100, with 70 required to 
pass. For applicants entitled thereto, the final passing score will be 
augmented by 5 or 10 veteran preference points.
    (f) Preparation of certificates. As agencies request certificates of 
applicants from registers to consider in filling vacant administrative 
law judge positions in various geographic areas, all applicants who are 
eligible and available for those positions will be ranked

[[Page 582]]

to identify the best qualified applicants to be certified. Eligible 
applicants who have completed the final rating process will be ranked on 
the basis of assigned final ratings, augmented by veteran preference 
points if applicable. At least three eligible applicants will be 
certified to the employing agency for consideration for each vacancy.
    (g) Appeal of rating. Applicants who obtain an ineligible rating or 
applicants who are dissatisfied with their final rating may appeal the 
rating to the Administrative Law Judge Rating Appeals Panel, Office of 
Personnel Management, Washington, DC 20415, within 30 days after the 
date of final action by the Office of Administrative Law Judges or such 
later time as may be allowed by the Panel.

[56 FR 6209, Feb. 14, 1991]



Sec. 930.203a  Appointment.

    (a) Prior approval. An agency may make an appointment to an 
administrative law judge position only with the prior approval of OPM, 
except when it makes its selection from a certificate of eligibles 
furnished by OPM. When requesting OPM approval of an appointment to an 
administrative law judge position or the issuance of a certificate of 
eligibles, the requesting agency must demonstrate that its hearing 
workload requires the appointment of an additional administrative law 
judge(s) to get necessary work done. An appointment is subject to 
investigation in accordance with Sec. Sec. 731.201 through 731.303 of 
this chapter and subject to security clearance by the agency.
    (b) Probationary and career-conditional periods. The requirement of 
a probationary and career-conditional period before absolute appointment 
does not apply to an appointment to an administrative law judge 
position.
    (c) Appointment of incumbents of newly classified administrative law 
judge positions. An agency may appoint as an administrative law judge an 
employee who is serving in a position which is classified as an 
administrative law judge position on the basis of legislation, Executive 
order, or decision of a court, if--
    (1) The employee has a competitive status or was serving in an 
excepted position under a permanent appointment;
    (2) The employee was serving in the position on the date of the 
legislation, Executive order, or decision of the court, on which the 
classification of the position is based;
    (3) OPM receives a recommendation for the employee's appointment 
from the agency concerned not later than 6 months after classification 
of the position on the basis of the legislation, Executive order, or 
decision of the court; and
    (4) OPM finds that the employee meets the current examination 
requirements for the position under OPM Examination Announcement No. 
318. In an emergency situation, when the needs of an agency require it, 
OPM may authorize the conditional appointment of an employee to an 
administrative law judge position pending final decision on the 
employee's eligibility for absolute appointment under this paragraph.
    (d) Appointment of legislative and judicial employees. An agency may 
appoint a former employee of the legislative or judicial branch to an 
administrative law judge position if OPM finds that the employee meets 
current examination requirements under OPM Examination Announcement No. 
318 and is otherwise eligible under the provisions of 5 U.S.C. 3304(c).
    (e) Appointment of incumbents of nonadministrative law judge 
positions. Except as provided in paragraphs (c) and (d) of this section, 
an agency may not appoint an employee who is serving in a position other 
than an administrative law judge position to an administrative law judge 
position other than by selection from a certificate of eligibles 
furnished by OPM from the open competitive register.



Sec. 930.203b  Title of administrative law judge.

    The title ``administrative law judge'' is the official class title 
for an administrative law judge position. Each agency will use only this 
official class title for personnel, budget, and fiscal purposes.

[[Page 583]]



Sec. 930.204  Promotion.

    (a) When OPM places an occupied administrative law judge position at 
a higher level, OPM will direct the promotion of the incumbent 
administrative law judge. The promotion will be effective on the date 
named by OPM.
    (b) When OPM places one of an agency's administrative law judge 
positions at a higher level on the basis of the position's managerial 
and administrative nature, an agency may promote one of its 
administrative law judges to such a position, provided the selection 
and/or promotion is in accordance with regular civil service procedures.

[56 FR 6209, Feb. 14, 1991]



Sec. 930.205  Reassignment.

    An agency may reassign an administrative law judge who is serving 
under absolute appointment from one administrative law judge position to 
another administrative law judge position at the same grade in the same 
agency, with the prior approval of OPM on a noncompetitive basis, 
provided the assignment is for bona fide management reasons and in 
accordance with regular civil service procedures and merit system 
principles.



Sec. 930.206  Transfer.

    (a) An agency may transfer an administrative law judge from another 
agency with the prior approval of OPM on a noncompetitive basis in 
accordance with regular civil service procedures, provided the 
administrative law judge meets all current examination requirements for 
appointment as an administrative law judge under OPM Examination 
Announcement No. 318.
    (b) An agency may not transfer a person from one administrative law 
judge position to another administrative law judge position under 
paragraph (a) of this section sooner than 1 year after the person's last 
appointment, unless the gaining and losing agencies agree to the 
transfer.

[56 FR 6209, Feb. 14, 1991]



Sec. 930.207  Reinstatement.

    An agency may reinstate former administrative law judges who have 
served with absolute status under 5 U.S.C. 3105 only after they have 
established their eligibility in accordance with all current examination 
requirements of OPM Examination Announcement No. 318. Reinstatement is 
subject to investigation by, and the prior approval of, OPM.

[56 FR 6209, Feb. 14, 1991]



Sec. 930.208  Restoration.

    Parts 352 and 353 of this chapter governing reemployment rights and 
restoration to duty after military service or recovery from compensable 
injury, also apply to reemployment and restoration to administrative law 
judge positions.



Sec. 930.209  Detail and assignment to other duties.

    (a) An agency may not detail an employee who is not an 
administrative law judge to an administrative law judge position.
    (b) An agency may assign an administrative law judge (by detail or 
otherwise) to perform duties that are not the duties of an 
administrative law judge without prior approval of OPM only when--
    (1) The other duties are not inconsistent with the duties and 
responsibilities of an administrative law judge;
    (2) The assignment is to last no longer than 120 days; and
    (3) The administrative law judge has not had an aggregate of more 
than 120 days of those assignments or details within the preceding 12 
months.
    (c) On a showing by an agency that it is in the public interest to 
do so, OPM may authorize a waiver of paragraphs (b) (2) and (3) of this 
section.
    (d) An agency may detail an administrative law judge from one 
administrative law judge position to another in the same agency, without 
the prior approval of OPM, provided the detail is in accordance with 
regular civil service procedures.



Sec. 930.210  Pay.

    (a) OPM will place each administrative law judges position in one of 
the three grades or levels of basic pay, AL-3, AL-2, or AL-1, of the 
Administrative Law Judge Pay System established under 5 U.S.C. 5372 in 
accordance with this section. AL-3 has six rates of basic pay, A, B, C, 
D, E, and F.

[[Page 584]]

    (1) The rate of basic pay for AL-3, rate A, may not be less than 65 
percent of the rate of basic pay for level IV of the Executive Schedule. 
The rate of basic pay for AL-1 may not exceed the rate for level IV of 
the Executive Schedule.
    (2) The President will determine the appropriate adjustment for each 
rate in the Administrative Law Judge Pay System, subject to paragraph 
(a)(1) of this section. Such adjustments will take effect on the first 
day of the first applicable pay period beginning on or after the first 
day of the month in which adjustments in the General Schedule rates of 
basic pay under 5 U.S.C. 5303 take effect.
    (3) An agency must use the following procedures to convert an 
administrative law judge's annual rate of basic pay to an hourly, daily, 
weekly, or biweekly rate:
    (i) To derive an hourly rate, divide the annual rate of pay by 2,087 
and round to the nearest cent, counting one-half cent and over as the 
next higher cent.
    (ii) To derive a daily rate, multiply the hourly rate by the number 
of daily hours of service required by the administrative appeals judge's 
basic daily tour of duty.
    (iii) To derive a weekly or biweekly rate, multiply the hourly rate 
by 40 or 80, as the case may be.
    (b) An agency may not grant a monetary and honorary award under 5 
U.S.C. 4503 for superior accomplishment by an administrative law judge 
in the performance of adjudicatory functions.
    (c) AL-3 is the basic pay level for administrative law judge 
positions filled through competitive examination under OPM Examination 
Announcement No. 318, as provided in section 930.203 of this part.
    (d) Subject to the approval of OPM, agencies may establish 
administrative law judge positions at pay levels AL-2 and AL-1. 
Administrative law judge positions may be placed at such levels when 
they involve significant administrative and managerial responsibilities.
    (e) Judges must serve at least 1 year in each AL level, in an 
equivalent or higher level in positions in the Federal service, before 
advancing to the next higher level and may advance only one level at a 
time.
    (f) Except as provided in paragraph (g) of this section, upon 
appointment to an administrative law judge position placed in AL-3, an 
administrative law judge shall be paid at the minimum rate A of AL-3, 
and shall be automatically advanced successively to rates B, C, and D of 
that level upon completion of 52 weeks of service in the next lower 
rate, and to rates E and F of that level upon completion of 104 weeks of 
service in the next lower rate. Time in a nonpay status is generally 
creditable service in the computation of a waiting period only in so far 
as it does not exceed 2 weeks per year for each 52 weeks of service. 
However, time in a nonpay status is also fully creditable if absence is 
due to military service, as defined in 5 U.S.C. 8331(13), or due to 
receipt of injury compensation under chapter 81 of title 5, United 
States Code.
    (g) Upon appointment to a position at AL-3, an administrative law 
judge will be paid at the minimum rate A, unless the administrative law 
judge is eligible for a higher rate B, C, D, E, or F because of prior 
service or superior qualifications, as follows--
    (1) An agency may offer an administrative law judge applicant with 
prior Federal service a higher than minimum rate, without obtaining the 
prior approval of OPM in order to pay the rate that is next above the 
applicant's highest previous Federal rate of pay, up to the maximum rate 
F.
    (2) An agency may offer an administrative law judge applicant with 
superior qualifications a higher than minimum rate if it first obtains 
approval from OPM to offer such a higher rate to an applicant who is 
within reach on a certificate of eligible administrative law judge 
applicants in order to pay that rate of pay that is next above the 
applicant's existing pay or earnings up to the maximum rate F. 
``Superior qualifications'' for applicants includes having legal 
practice before the hiring agency, having practice in another forum with 
legal issues of concern to the hiring agency, or having an outstanding 
reputation among others in the field. OPM will approve such payment of 
higher than minimum rates for applicants with superior qualifications

[[Page 585]]

only when it is clearly necessary to meet the needs of the Government.
    (h) Subject to the approval of OPM, and on the appropriate 
recommendation of the employing agency, an agency may on a one-time 
basis, advance an administrative law judge in a position at AL-3 with 
added administrative and managerial duties and responsibilities one rate 
beyond that allowed under current pay rates for AL-3, up to the maximum 
Rate F.
    (i) Upon appointment to an administrative law judge position placed 
at AL-2 or AL-1, administrative law judges will be paid at the 
established rates for those levels.
    (j) In making initial pay adjustments for administrative law judges 
from positions paid under the General Schedule to positions paid under 
the new pay system established under 5 U.S.C. 5372, the rate of basic 
pay for any such judge shall, upon conversion to the new pay system, be 
at least equal to the rate that was payable to that individual 
immediately before such conversion.
    (k) Except as provided in paragraph (l) of this section, on the 
first day of the first applicable pay period beginning on or after 
February 10, 1991, administrative law judges will be converted from the 
General Schedule to AL-3, 2, and 1 as follows:

------------------------------------------------------------------------
             General schedule                            AL
------------------------------------------------------------------------
GS-15, Steps 1-2-3-4......................  AL-3, Rate A.
GS-15, Steps 5-6..........................  AL-3, Rate B.
GS-15, Steps 7-8-9........................  AL-3, Rate C.
GS-15, Step 10............................  AL-3, Rate D.
GS-16, Steps 1-2-3........................  AL-3, Rate C.
GS-16, Steps 4-5-6........................  AL-3, Rate D.
GS-16, Steps 7-8..........................  AL-3, Rate E.
GS-16, Step 9.............................  AL-3, Rate F.
GS-17, Steps 1-5..........................  AL-2.
GS-18.....................................  AL-1.
------------------------------------------------------------------------

    (l) In making the initial conversion from the General Schedule pay 
rates to the new AL pay system for administrative law judges, effective 
on the first day of the first applicable pay period beginning on or 
after February 10, 1991, those GS-15 and GS-16 administrative law judges 
receiving the 8 percent interim geographic adjustments authorized by 
Schedule 9 of Executive Order 12736 of December 12, 1990, will convert 
as follows:

------------------------------------------------------------------------
             General schedule                            AL
------------------------------------------------------------------------
GS-15, Steps 1-2..........................  AL-3, Rate A.
GS-15, Steps 3-4-5........................  AL-3, Rate B.
GS-15, Steps 6-7..........................  AL-3, Rate C.
GS-15, Steps 8-9-10.......................  AL-3, Rate D.
GS-16, Steps 1-2..........................  AL-3, Rate C.
GS-16, Steps 3-4..........................  AL-3, Rate D.
GS-16, Steps 5-6-7........................  AL-3, Rate E.
GS-16, Steps 8-9..........................  AL-3, Rate F.
------------------------------------------------------------------------

    (m) Agencies must document all pay changes made in accordance with 
this section by completing a Standard Form 50, or equivalent, in the 
usual manner and forwarding an extra copy directly to the Office of 
Administrative Law Judges, Career Entry Group, U.S. Office of Personnel 
Management, 1900 E Street, NW., Washington, DC 20415.

[56 FR 6210, Feb. 14, 1991, as amended at 57 FR 1369, Jan. 14, 1992; 66 
FR 63909, Dec. 11, 2001]



Sec. 930.211  Performance rating.

    An agency shall not rate the performance of an administrative law 
judge.



Sec. 930.212  Rotation of administrative law judges.

    Insofar as practicable, an agency shall assign its administrative 
law judges in rotation to cases.



Sec. 930.213  Use of administrative law judges on detail from other 
agencies.

    (a) An agency that is occasionally or temporarily insufficiently 
staffed with administrative law judges may ask OPM to provide for the 
temporary use by the agency of the services of an administrative law 
judge of another agency. The agency request should--
    (1) Identify and describe briefly the nature of the case(s) to be 
heard (including parties and representatives when available);
    (2) Specify the legal authority under which the use of an 
administrative law judge is required; and
    (3) Demonstrate that the agency has no administrative law judge 
available to hear the case(s).
    (b) OPM, with the consent of the agency in which an administrative 
law judge is employed, will select the administrative law judge to be 
used, and will name the date or period for which the administrative law 
judge is to be

[[Page 586]]

made available for detail to the agency in need of his or her services.
    (c) Such details generally will be reimbursable by the agency 
requesting the detail.



Sec. 930.214  Actions against administrative law judges.

    (a) Procedures. An agency may remove, suspend, reduce in grade, 
reduce in pay, or furlough for 30 days or less, an administrative law 
judge only for good cause, established and determined by the Merit 
Systems Protection Board on the record and after opportunity for a 
hearing before the Board as provided in 5 U.S.C. 7521 and Sec. Sec. 
1201.131 through 1201.136 of this title. Procedures for adverse actions 
by agencies under part 752 of this chapter are not applicable to actions 
against administrative law judges.
    (b) Status during removal proceedings. In exceptional cases when 
there are circumstances by reason of which the retention of an 
administrative law judge in his or her position, pending adjudication of 
the existence of good cause for his or her removal, would be detrimental 
to the interests of the Government, the agency may either:
    (1) Assign the administrative law judge to duties not inconsistent 
with his or her normal duties in which these conditions would not exist;
    (2) Place the administrative law judge on leave with his or her 
consent;
    (3) Carry the administrative law judge on appropriate leave (annual 
or sick leave, leave without pay, or absence without leave) if he or she 
is voluntarily absent for reasons not originating with the agency; or
    (4) If none of the alternatives in paragraphs (b) (1), (2) and (3) 
of this section is available, agencies may consider placing the 
administrative law judge in a paid, non-duty or administrative leave 
status.
    (c) Exceptions from procedures. The procedures in this subpart 
governing the removal, suspension, reduction in grade, reduction in pay, 
or furlough of 30 days or less of administrative law judges do not apply 
in making dismissals or taking other actions requested by OPM under 
Sec. Sec. 5.2 and 5.3 of this chapter; nor to dismissals or other 
actions made by agencies in the interest of national security under 5 
U.S.C. 7532; nor to reduction-in-force action taken by agencies under 5 
U.S.C. 3502; nor any action initiated by the Special Counsel of the 
Merit Systems Protection Board under 5 U.S.C. 1206.



Sec. 930.215  Reduction in force.

    (a) Retention preference regulations. Except as modified by this 
section, the reduction-in-force regulations in part 351 of this chapter 
apply to reductions in force of administrative law judges.
    (b) Determination of retention standing. In determining retention 
standing in a reduction in force, each agency will classify its 
administrative law judges in groups and subgroups according to tenure of 
employment, veteran preference, and service date in the manner 
prescribed in part 351 of this chapter. However, as administrative law 
judges are not given performance ratings, the provisions in part 351 of 
this chapter referring to the effect of performance ratings on retention 
standing are not applicable to administrative law judges.
    (c) Placement Assistance. (1) Administrative law judges who are 
reached by an agency reduction in force and who are notified they are to 
be separated are eligible for placement assistance under--
    (i) Agency reemployment priority lists established and maintained by 
agencies under subpart J of part 351 of this chapter for all agency 
tenure group I career employees displaced in a reduction in force;
    (ii) Agency and OPM priority placement programs under subpart C of 
part 330 of this chapter for all agency tenure group I, career employees 
displaced in a reduction in force.
    (2) On request of administrative law judges who are reached by an 
agency in a reduction in force and who are notified they are to be 
separated, furloughed for more than 30 days, or demoted, OPM will place 
their names on OPM's priority referral list for administrative law 
judges displaced in a reduction in force for the grade or level in which 
they last served and for all lower grades or levels.
    (3) An administrative law judge may file a request under paragraph 
(c)(2) of this section, for placement on the OPM

[[Page 587]]

priority referral list, at any time after the receipt of the specific 
reduction-in-force notice, but not later than 90 days after the date of 
separation, furlough for more than 30 days, or demotion. Placement 
assistance through the OPM priority referral list continues for 2 years 
from either the effective date of the reduction-in-force action, or the 
date assistance is requested if a timely request is made. Eligibility of 
the displaced administrative law judge for the OPM priority referral 
list is terminated earlier upon the administrative law judge's written 
request, acceptance of a non-temporary, full-time administrative law 
judge position, or declination of more than one offer of full-time 
employment as an administrative law judge at or above the grade level 
held when reached for reduction in force at geographic locations 
previously indicated as acceptable.
    (4) The displaced administrative law judge will file with the 
request for priority referral by OPM a Standard Form 171, Application 
for Federal Employment, and a copy of the reduction-in-force notice. 
Also, the displaced administrative law judge may ask OPM to limit 
consideration for vacant positions at any grade level for which 
qualified to specific geographic areas.
    (5) When there is no administrative law judge on the agency's 
reemployment priority list, but there is an administrative law judge who 
has been placed on the OPM priority referral list (paragraph (c)(2) of 
this section), the agency may fill a vacant administrative law judge 
position only by selection from the OPM priority referral list, unless 
it obtains the prior approval of OPM for filling the vacant position 
under Sec. 930.203a (a), (c), (d) and (e); Sec. 930.204; Sec. 
930.205, Sec. 930.206; or Sec. 930.207 of this subpart. OPM will grant 
such approval only under the extraordinary circumstance that the 
candidate(s) not on the OPM priority referral list possesses experience 
and qualifications superior to the displaced administrative law judge(s) 
on the list.
    (6) Referral, certification, and selection of administrative law 
judges from OPM's priority referral list are made without regard to 
selective certification or special qualification procedures which may 
have been applied in the original appointment in accordance with OPM 
Examination Announcement No. 318.

[52 FR 32403, Sept. 10, 1987, as amended at 56 FR 6210, Feb. 14, 1991]



Sec. 930.216  Temporary reemployment: senior administrative law judges.

    (a)(1) Subject to the requirements and limitations of this section, 
the following annuitants, as defined by 5 U.S.C. 8331, who are receiving 
an annuity from the Civil Service Retirement and Disability Fund may be 
temporarily reemployed as administrative law judges by an agency that 
has temporary, irregular workload requirements for conducting 
proceedings in accordance with 5 U.S.C. 556 and 557:
    (i) Annuitants who have served with absolute status as 
administrative law judges under 5 U.S.C. 3105; and
    (ii) Annuitants who have met current examination requirements set 
forth in OPM Examination Announcement 318 (including the requirement to 
maintain a current license to practice law under the laws of a state, 
the District of Columbia, the Commonwealth of Puerto Rico, or any 
territorial court established under the Constitution).
    (2) These retired administrative law judges who are so reemployed 
will be known as senior administrative law judges.
    (b) Retired administrative law judges who meet the requirements of 
paragraph (a) of this section and who are available for temporary 
reemployment must notify OPM in writing of their availability, giving 
their full names, addresses, telephone numbers, names of the agencies 
where they served as administrative law judges, and jurisdictions in 
which they are currently licensed to practice law. OPM will maintain a 
master list of such retired administrative law judges for use in 
responding to agency requests for such administrative law judges.
    (c) An agency that wishes to temporarily reemploy administrative law 
judges must submit a written request to OPM. The request will--
    (1) Identify the statutory authority under which the administrative 
law judge is expected to conduct proceedings;

[[Page 588]]

    (2) Demonstrate that the agency is occasionally or temporarily 
understaffed;
    (3) Specify the tour of duty, location, period of time, or 
particular case(s), for the requested reemployment; and
    (4) Describe any special qualifications desired in the retired 
administrative law judge that it wishes to reemploy, such as experience 
in a particular field, agency, or substantive area of law.
    (d) OPM will approve agency requests for temporary reemployment of 
retired administrative law judges for a specified period or periods 
provided--
    (1) The requesting agency fully justifies the need for an 
administrative law judge for formal proceedings and demonstrates that it 
is occasionally or temporarily understaffed; and
    (2) No other administrative law judge with the appropriate 
qualifications is available through OPM under Sec. 930.213 of this 
subpart to perform the occasional or temporary work for which 
reemployment is requested.
    (e) Upon approval of an agency request to reemploy a retired 
administrative law judge, OPM will select from its master list of 
retired administrative law judges, in rotation to the extent 
practicable, those retired judges who it determines meet agency 
requirements. OPM will then provide a list of such individuals to the 
requesting agency and the agency must then select from that list a 
retired administrative law judge for reemployment.
    (f) Reemployment of retired administrative law judges is subject to 
investigation of suitability in accordance with Sec. Sec. 731.201 
through 731.303 of this chapter. It is also subject to conflict of 
interest and security investigation requirements by the appointing 
agency.
    (g) Reemployment as senior administrative law judges will be for 
either a specified period not to exceed 1 year; or such periods as may 
be necessary for the reemployed administrative law judge to conduct and 
complete the hearing of one or more specified cases and issue decisions 
therein. Upon agency request, OPM may either reduce or extend such 
period of reemployment, as necessary, to coincide with changing staffing 
requirements, but not to exceed 1 year.
    (h) An agency may assign its senior administrative law judges to 
either (1) hear one or more specific cases; or (2) hear, in normal 
rotation to the extent practicable, a number of cases on its docket and 
issue decisions therein.
    (i) Hours of duty, administrative support services, and travel 
reimbursement for senior administrative law judges will be determined by 
the employing agency in accordance with the same rules and procedures 
that are generally applicable to employees.
    (j) A senior administrative law judge serves subject to the same 
limitations on performance appraisal and reduction in pay or removal as 
any other administrative law judge employed under this subpart and 5 
U.S.C. 3105. An agency will not rate the performance of a senior 
administrative law judge. Reduction-in-pay or removal actions may not be 
taken against senior administrative law judges during the period of 
reemployment, except for good cause established and determined by the 
Merit Systems Protection Board after opportunity for a hearing on the 
record before the Board as provided in 5 U.S.C. 7521 and Sec. Sec. 
1201.131 through 1201.136 of this title.
    (k) A senior administrative law judge will be paid by the employing 
agency the current rate of pay for the level at which the duties to be 
performed have been placed and at the lowest rate of the level that is 
nearest (when rounded up) to the highest previous grade and step, or 
level and rate, attained as an administrative law judge before 
retirement. An amount equal to the annuity allocable to the period of 
actual employment will be deducted from his or her pay and deposited in 
the Treasury of the United States to the credit of the Civil Service 
Retirement and Disability Fund.

[52 FR 32403, Sept. 10, 1987, as amended at 56 FR 6210, Feb. 14, 1991]



Subpart C_Information Security Responsibilities for Employees who Manage 
                   or Use Federal Information Systems

    Authority: 5 U.S.C. 4118; Pub. L. 107-347, 116 Stat. 2899.

[[Page 589]]


    Source: 69 FR 32836, June 14, 2004, unless otherwise noted.



Sec. 930.301  Information systems security awareness training program.

    Each Executive Agency must develop a plan for Federal information 
systems security awareness and training and
    (a) Identify employees with significant information security 
responsibilities and provide role-specific training in accordance with 
National Institute of Standards and Technology (NIST) standards and 
guidance available on the NIST Web site, http://csrc.nist.gov/
publications/nistpubs/, as follows:
    (1) All users of Federal information systems must be exposed to 
security awareness materials at least annually. Users of Federal 
information systems include employees, contractors, students, guest 
researchers, visitors, and others who may need access to Federal 
information systems and applications.
    (2) Executives must receive training in information security basics 
and policy level training in security planning and management.
    (3) Program and functional managers must receive training in 
information security basics; management and implementation level 
training in security planning and system/application security 
management; and management and implementation level training in system/
application life cycle management, risk management, and contingency 
planning.
    (4) Chief Information Officers (CIOs), IT security program managers, 
auditors, and other security-oriented personnel (e.g., system and 
network administrators, and system/application security officers) must 
receive training in information security basics and broad training in 
security planning, system and application security management, system/
application life cycle management, risk management, and contingency 
planning.
    (5) IT function management and operations personnel must receive 
training in information security basics; management and implementation 
level training in security planning and system/application security 
management; and management and implementation level training in system/
application life cycle management, risk management, and contingency 
planning.
    (b) Provide the Federal information systems security awareness 
material/exposure outlined in NIST guidance on IT security awareness and 
training to all new employees before allowing them access to the 
systems.
    (c) Provide information systems security refresher training for 
agency employees as frequently as determined necessary by the agency, 
based on the sensitivity of the information that the employees use or 
process.
    (d) Provide training whenever there is a significant change in the 
agency information system environment or procedures or when an employee 
enters a new position that requires additional role-specific training.



PART 950_SOLICITATION OF FEDERAL CIVILIAN AND UNIFORMED SERVICE PERSONNEL 
FOR CONTRIBUTIONS TO PRIVATE VOLUNTARY ORGANIZATIONS--Table of Contents




                      Subpart A_General Provisions

Sec.
950.101 Definitions.
950.102 Scope of the Combined Federal Campaign.
950.103 Establishing a local campaign.
950.104 Local Federal Coordinating Committee responsibilities.
950.105 Principal Combined Fund Organization (PCFO) responsibilities.
950.106 PCFO expense recovery.
950.107 Lack of a qualified PCFO.
950.108 Preventing coercive activity.
950.109 Avoidance of conflict of interest.
950.110 Prohibited discrimination.

                    Subpart B_Eligibility Provisions

950.201 National list eligibility.
950.202 National list eligibility requirements.
950.203 Public accountability standards.
950.204 Local list eligibility.
950.205 Appeals.

                          Subpart C_Federations

950.301 National federations eligibility.
950.302 Responsibilities of national federations.
950.303 Local federations eligibility.
950.304 Responsibilities of local federations.

                      Subpart D_Campaign Materials

950.401 Campaign and publicity materials.

[[Page 590]]

950.402 Pledge card.
950.403 Penalties.

                      Subpart E_Undesignated Funds

950.501 Applicability.

                   Subpart F_Miscellaneous Provisions

950.601 Release of contributor names.
950.602 Solicitation methods.
950.603 Sanctions.
950.604 Records retention.
950.605 Sanctions compliance certification.

                     Subpart G_DoD Overseas Campaign

950.701 DoD overseas campaign.

                         Subpart H_CFC Timetable

950.801 Campaign schedule.

                      Subpart I_Payroll Withholding

950.901 Payroll allotment.

    Authority: E.O. 12353 (March 23, 1982), 47 FR 12785 (March 25, 
1982). 3 CFR, 1982 Comp., p. 139. E.O. 12404 (February 10, 1983), 48 FR 
6685 (February 15, 1983), Pub. L. 100-202, and Pub. L. 102-393 (5 U.S.C. 
1101 Note).

    Source: 60 FR 57890, Nov. 24, 1995, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 950.101  Definitions.

    Administrative Expenses, PCFO Expenses, Campaign Expenses, or CFC 
Expenses means all documented expenses identified in the PCFO 
application relating to the conduct of a local CFC and approved by the 
LFCC in accordance with these regulations.
    Campaign Year means the calendar year in which Federal employees are 
solicited for contributions to the Combined Federal Campaign.
    Combined Federal Campaign or Campaign or CFC means the charitable 
fundraising program established and administered by the Director of the 
Office of Personnel Management (OPM) pursuant to Executive Order No. 
12353, as amended by Executive Order No. 12404, and all subsidiary units 
of such program.
    Designated Funds means those contributions which the contributor has 
designated to a specific charitable organization(s), federation(s), or 
general option(s).
    Director means the Director of the Office of Personnel Management or 
his/her designee.
    Domestic Area means the several United States, the District of 
Columbia, the Commonwealth of Puerto Rico, and the United States Virgin 
Islands.
    Employee means any person employed by the Government of the United 
States or any branch, unit, or instrumentality thereof, including 
persons in the civil service, uniformed service, foreign service, and 
the postal service.
    Federation or Federated Group means a group of voluntary charitable 
human health and welfare organizations created to supply common 
fundraising, administrative, and management services to its constituent 
members.
    International General Designation Option means that the donor wishes 
that his or her gift be distributed to all of the international 
organizations listed in the International Section of the campaign 
brochure in the same proportion as all of the international 
organizations received designations in the local CFC. This option will 
have the code IIII.
    International Organization means a charitable organization that 
provides services either exclusively or in a substantial preponderance 
to persons in non-domestic areas.
    Local Federal Coordinating Committee or LFCC means the group of 
Federal officials designated by the Director to conduct the CFC in a 
particular community.
    Organization or Charitable Organization means a private, non-profit, 
philanthropic, human health and welfare organization.
    Overseas Area means the Department of Defense (DoD) Overseas 
Campaign which includes all areas other than those included in the 
domestic area.
    Principal Combined Fund Organization or PCFO means the federated 
group or combination of groups, or a charitable organization selected by 
the LFCC to administer the local campaign under the direction and 
control of the LFCC and the Director.
    Solicitation means any action requesting money, either by cash, 
check or payroll deduction, on behalf of charitable organizations.

[[Page 591]]

    Undesignated Funds means those contributions which the contributor 
has not designated to a specific charitable organization(s), 
federation(s), or the International General Designation Option.



Sec. 950.102  Scope of the Combined Federal Campaign.

    (a) The CFC is the only authorized solicitation of employees in the 
Federal workplace on behalf of charitable organizations. A campaign may 
be conducted during a 6 week period, as determined by the LFCC, from 
September 1 through December 15 at every Federal agency in the campaign 
community in accordance with these regulations. Except as provided in 
this section, no other solicitation on behalf of charitable 
organizations may be conducted in the Federal workplace. Upon written 
request, the Director may grant permission for solicitations of Federal 
employees, outside the CFC, in support of victims in cases of 
emergencies and disasters. Emergencies and disasters are defined as any 
hurricane, tornado storm, flood, high water, wind-driven water, tidal 
wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, 
snowstorm, drought, fire, explosion, or other catastrophe in any part of 
the world. No such permissions will be granted for such solicitations 
during the period September 1 through December 15, except at the 
discretion of the Director upon a showing of extraordinary 
circumstances.
    (b) These regulations do not apply to the collection of gifts-in-
kind, such as food, clothing and toys, or to the solicitation of Federal 
employees outside of the Federal workplace as defined by the applicable 
Agency Head consistent with General Services Administration regulations 
and any other applicable laws or regulations.
    (c) The Director exercises general supervision over all operations 
of the CFC, and takes all necessary steps to ensure the achievement of 
campaign objectives. Any disputes relating to the interpretation or 
implementation of this part may be submitted to the Director for 
resolution. The decisions of the Director are final for administrative 
purposes.
    (d) Heads of departments or agencies may establish policies and 
procedures applicable to solicitations conducted by organizations 
composed of civilian employees or members of the uniformed services 
among their own members for organizational support or for the benefit of 
welfare funds for their members. Such solicitations are not subject to 
these regulations, and therefore do not require permission of the 
Director.

[60 FR 57890, Nov. 24, 1995, as amended at 63 FR 65637, Nov. 30, 1998]



Sec. 950.103  Establishing a local campaign.

    (a) The Director establishes and maintains the official list of 
local campaigns and the geographical area each covers. There is no 
prerequisite regarding the Federal employee population needed to 
establish or maintain a CFC. However, rather than establishing or 
maintaining small campaigns, OPM encourages mergers and expansions of 
campaigns to promote efficiency and economy.
    (b) The Director establishes an LFCC to govern the conduct of the 
local CFC. The LFCC will, whenever possible, be comprised of members of 
local Federal inter-agency organizations, such as Federal Executive 
Boards, Federal Executive Associations, Federal Business Associations 
or, in the absence of such organizations, self-organized associations of 
local Federal officials. These groups will include local Federal agency 
heads or their representatives. It may also include representatives of 
employee unions and other employee groups. Rotation of the LFCC Chair 
position among the LFCC members is encouraged. For continuity, each LFCC 
should appoint a Vice Chair who would be expected to serve at the 
conclusion of the Chair's term.
    (c) The agency head at each Federal installation within a campaign 
area shall:
    (1) Become familiar with all CFC regulations,
    (2) Cooperate with the representatives of the LFCC and PCFO in 
organizing and conducting the campaign,
    (3) Initiate official campaigns within their offices or 
installations and provide support for the campaign, and

[[Page 592]]

    (4) Assure the campaign is conducted in accordance with these 
regulations.
    (d) Once a campaign has been established, agency heads may not 
discontinue solicitation of Federal employees within their organization 
without the written approval of the Director.
    (e) Any change in the geographical boundaries of local campaigns may 
be made only upon the express written permission of the Director.
    (f) Each year the LFCC must establish the 6 week time period to 
solicit employees. Each campaign should not be conducted for more than a 
6 week period. However, in unusual circumstances the LFCC may extend the 
campaign as local conditions require. The solicitation may not begin 
before September 1 and in no event will it extend beyond December 15 of 
each year.
    (g) Current Federal civilian and active duty military employees may 
be solicited for contributions using payroll deduction, checks, money 
orders or cash. Contractor personnel, credit union employees and other 
persons employed on Federal premises, as well as retired Federal 
employees, may make single contributions to the CFC through check or 
money order. These non-Federal employees may not be solicited, but are 
to be provided the opportunity to participate in the CFC.
    (h) A Federal employee whose official duty station is outside the 
geographic boundaries of an established CFC may not be solicited in that 
CFC. A Federal employee may participate in a particular CFC only if that 
employee's official duty station is located within the geographic 
boundaries of that CFC.



Sec. 950.104  Local Federal Coordinating Committee responsibilities.

    (a) All members of the LFCC should develop an understanding of 
campaign regulations and procedures. The LFCC is the central point of 
information regarding the CFC among Federal employees.
    (b) The responsibilities of the LFCC include, but are not limited 
to, the following:
    (1) Maintaining minutes of LFCC meetings and responding promptly to 
any request for information from the Director.
    (2) Naming a campaign chairperson and notifying the Director when 
the chairperson changes.
    (3) Determining the eligibility of local organizations that apply to 
participate in the local campaign. This is the exclusive responsibility 
of the LFCC and may not be delegated to the PCFO.
    (4) Ensuring that the list of charities determined by the Director 
to be nationally eligible to participate in all local campaigns is 
reproduced in the local brochure in accordance with OPM instructions.
    (5) Ensuring that the local brochure and pledge card are produced in 
accordance with these regulations and instructions from the Director.
    (6) Encouraging local Federal agencies to appoint loaned executives 
to assist in the campaign. Federal agency heads are encouraged to grant 
administrative leave to all loaned executives appointed to assist in the 
conduct of the CFC. Federal loaned executives are prohibited from 
working on non-CFC fundraising activities during duty hours.
    (7) Establishing a network of employee keyworkers and volunteers and 
participating in interagency briefing sessions and kick-off meetings.
    (8) Ensuring that, to the extent reasonably possible, every employee 
is given the opportunity to participate in the CFC, and ensuring 
employee designations are honored.
    (9) Ensuring that the PCFO includes in keyworker training 
instructions to encourage employees to designate the charitable 
organizations they wish to receive their donations and specific 
information on how general designation monies are distributed.
    (10) Ensuring that contributions are distributed in accordance with 
the method described in these regulations.
    (11) Ensuring that no employee is coerced in any way to participate 
in the campaign.
    (12) Bringing allegations of coercion to the attention of the 
Director and the employee's agency and providing a mechanism to review 
employee complaints of undue pressure and coercion

[[Page 593]]

in Federal fundraising. Federal agencies shall provide procedures and 
assign responsibility for the investigation of such complaints. 
Personnel offices shall be responsible for informing employees of the 
proper channels for pursuing such complaints.
    (13) Notifying the Director of any significant problems or 
controversies concerning the campaign that the LFCC cannot resolve by 
applying these regulations. The LFCC must abide by the Director's 
decisions on all matters concerning the campaign.
    (14) Ensuring the PCFO does not use the services of consulting 
firms, advertising firms or similar business organizations to perform 
the policy-making or decisionmaking functions in the CFC. A PCFO may, 
however, contract with entities or individuals such as banks, 
accountants, lawyers, and other vendors of goods and/or services to 
assist in accomplishing its administrative tasks.
    (15) Ensuring that the activities and functions required of the PCFO 
are kept separate from any non-CFC operations of the organization. The 
LFCC must verify that the PCFO keeps and maintains CFC financial records 
and interest bearing bank accounts separate from the PCFO's non-CFC 
financial records and bank accounts.
    (16) Monitoring the work of the PCFO, and inspecting closely the 
annual audit required of the PCFO pursuant to Sec. 950.105(d)(9) for 
compliance with these regulations.
    (17) Authorizing to the PCFO reimbursement of only those campaign 
expenses that are legitimate CFC costs and are adequately documented. 
Total reimbursable expenses may not exceed the approved campaign budget 
by more than 10 percent.
    (18) Determining whether each local federation, federation member, 
and unaffiliated organization that applies to participate in the local 
campaign has completed the sanctions compliance certification required 
pursuant to Sec. 950.605. The LFCC must deny participation to any 
federation or organization that has not completed the sanctions 
compliance certification.
    (c) The LFCC must annually solicit applications for the PCFO via 
public notice no later than February 1 of each calendar year. The PCFO 
application period must be open a minimum of 14 calendar days. Cost 
incurred in providing the public notice should be added to the PCFO 
budget for the current campaign year as an administrative cost. The LFCC 
shall select a PCFO to act as its fiscal agent and campaign coordinator 
on the basis of presentations made to the local committee as described 
in Sec. 950.105. The LFCC shall consider the efficiency and 
effectiveness of the campaign as the primary factors in selecting a 
PCFO.

[60 FR 57890, Nov. 24, 1995, as amended at 70 FR 67341, Nov. 7, 2005]



Sec. 950.105  Principal Combined Fund Organization (PCFO) 
responsibilities.

    (a) Only federations, charitable organizations or combinations 
thereof may serve as the PCFO.
    (b) the primary goal of the PCFO is to conduct an effective and 
efficient campaign in a fair and even-handed manner aimed at collecting 
the greatest amount of charitable contributions possible. Therefore, 
PCFO's should afford federated groups and agencies with representatives 
in the local campaign area adequate opportunity to offer suggestions 
relating to the operation of the campaign, printed campaign material, 
and training. If requested in writing to either the LFCC or PCFO, 
federated groups and agencies must be given the opportunity to attend 
all campaign meetings, kick-off events, and training sessions. The PCFO 
must provide representatives of federated groups, agencies and the 
general public the opportunity to review at the PCFO office all reports, 
budgets, audits, training materials, and other records pertaining to the 
CFC.
    (c) Any federation, charitable organization or combinations thereof 
wishing to be selected for the PCFO must submit a timely application in 
accordance with the deadline set by the LFCC, that includes:
    (1) A written campaign plan sufficient in detail to allow the LFCC 
to determine if the applicant could administer an efficient and 
effective CFC. The campaign plan must include a CFC budget that details 
all estimated costs

[[Page 594]]

required to operate the CFC. The budget may not be based on the 
percentage of funds raised in the local campaign.
    (2) A statement signed by the applicant's local director or 
equivalent pledging to:
    (i) administer the CFC fairly and equitably,
    (ii) conduct campaign operations, such as training, kick-off and 
other events, and fiscal operations, such as banking, auditing, 
reporting and distribution separate from the applicant's non-CFC 
operations, and
    (iii) abide by the directions, decisions, and supervision of the 
LFCC and/or Director.
    (3) A statement signed by the applicant's local director or 
equivalent acknowledging the applicant is subject to the provisions of 
Sec. 950.403 and Sec. 950.603.
    (d) The specific responsibilities of the PCFO include but are not 
limited to:
    (1) Honoring employee designations.
    (2) Helping to ensure no employee is coerced in any way regarding 
participation in the campaign and that allegations of coercion are 
brought to the attention of the appropriate Federal officials.
    (3) Training agency loaned executives, coordinators, and keyworkers 
in the methods of non-coercive solicitation. This training must be 
completely separate from training given for other types of charitable 
campaign drives. Additionally, keyworkers should be trained to check to 
ensure the pledge card is legible on each copy, verify arithmetical 
calculations, and ensure the block on the pledge card concerning the 
release of the employee's name and address is completed fully.
    (4) Ensuring that no employee is questioned in any way as to his or 
her designation or its amount except by keyworkers, loaned executives, 
or other non-supervisory Federal personnel.
    (5) Preparing pledge cards and brochures that are consistent with 
these regulations and instructions by the Director.
    (6) Honoring the request of employees who indicate on the pledge 
card that their names not be released to the organization(s) that they 
designate.
    (7) Maintaining a detailed schedule of its actual CFC administrative 
expenses with, to the extent possible, itemized receipts for the 
expenses. The expense schedule must be in a format that can be 
reconciled to the PCFO's budget submitted in accordance with paragraph 
(c)(1) of this section.
    (8) Keeping and maintaining CFC financial records and interest-
bearing bank accounts separate from the PCFO's internal organizational 
financial records and bank accounts. Interest earned on all CFC accounts 
must be distributed in the same manner as undesignated funds pursuant to 
Sec. 950.501. All financial records and bank accounts must be kept in 
accordance with generally accepted accounting principles.
    (9) Submitting to the LFCC an audit of collections and disbursements 
for each campaign managed no later than June 15 of the year in which the 
last disbursement is made. For example, for the 1994 CFC the audit of 
the 1994 campaign must be submitted to the LFCC no later than June 15, 
1996. The audit must be performed by an independent certified public 
accountant in accordance with generally accepted auditing standards and 
OPM guidance.
    (10) Absorbing the cost of any reprinting of campaign materials due 
to its noncompliance with these regulations, embezzlement, or loss of 
funds. A PCFO must also absorb campaign costs exceeding 10 percent of 
the approved budget.
    (11) Designing and implementing CFC awards programs which are 
accessible to all employees and which reflect the Government's 
commitment to non-coercion. Awards to Federal agencies or employees by 
individual federations or organizations for CFC accomplishments is 
prohibited.
    (12) Producing any documents or information requested by the LFCC 
and/or the Director within 10 calendar days of the receipt of that 
request.
    (13) Responding in a timely and appropriate manner to reasonable 
inquiries from participating organizations.
    (e) A federated group(s) or charitable organization may be barred 
from serving as PCFO for 1 year if determined by the Director to have 
violated these regulations. A federated group(s) or charitable 
organization serving as PCFO will be notified of the Director's intent

[[Page 595]]

to bar and have an opportunity to submit written comments prior to its 
becoming effective. The Director's decision as to debarment shall be 
communicated in writing to the LFCC and PCFO, and the LFCC shall not 
consider an application from such group(s) or organization to serve as 
the PCFO during terms of debarment.



Sec. 950.106  PCFO expense recovery.

    (a) The PCFO shall recover from the gross receipts of the campaign 
its expenses, approved by the LFCC, reflecting the actual costs of 
administering the local campaign. The amount recovered for campaign 
expenses shall not exceed 10 percent of the estimated budget submitted 
pursuant to Sec. 950.105(c)(1) unless approved by the Director.
    (b) The PCFO may only recover campaign expenses from receipts 
collected for that campaign year. Expenses incurred preparing for and 
conducting the CFC cannot be recovered from receipts collected in the 
previous year's campaign. The PCFO may absorb the costs associated with 
conducting the campaign from its own funds and be reimbursed, or obtain 
a commercial loan to pay for costs associated with conducting the 
campaign. If the commercial loan option is used, the amount of a 
reasonable rate of interest is an allowable campaign expense, subject to 
the approval of the LFCC when the PCFO budget is submitted.
    (c) The campaign expenses will be shared proportionately by all the 
recipient organizations reflecting their percentage share of gross 
campaign receipts.



Sec. 950.107  Lack of a qualified PCFO.

    There is no authority in statute or regulation for an LFCC or any 
Federal official or employee to assume the duties and responsibilities 
of the PCFO. In the event that there is no qualified PCFO, the LFCC 
Chairman will promptly inform the Director in writing. The Director will 
assist the LFCC in merging the campaign with an adjacent campaign that 
has a qualified PCFO or identifying an eligible organization to function 
as the campaign's PCFO. If the LFCC's of the adjacent campaigns elect 
not to merge and a qualified PCFO cannot be found, the local CFC will be 
canceled. No workplace solicitation of any Federal employee in the 
campaign area is authorized and payroll allotments cannot be accepted 
and honored during the duration of the cancellation of the CFC.



Sec. 950.108  Preventing coercive activity.

    True voluntary giving is fundamental to Federal fundraising 
activities. Actions that do not allow free choices or create the 
appearance employees do not have a free choice to give or not to give, 
or to publicize their gifts or to keep them confidential, are contrary 
to Federal fundraising policy. Activities contrary to the non-coercive 
intent of Federal fundraising policy are not permitted in campaigns. 
They include, but are not limited to:
    (a) Solicitation of employees by their supervisor or by any 
individual in their supervisory chain of command. This does not prohibit 
the head of an agency to perform the usual activities associated with 
the campaign kick-off and to demonstrate his or her support of the CFC 
in employee newsletters or other routine communications with the Federal 
employees.
    (b) Supervisory inquiries about whether an employee chose to 
participate or not to participate or the amount of an employee's 
donation. Supervisors may be given nothing more than summary information 
about the major units that they supervise.
    (c) Setting of 100 percent participation goals.
    (d) Establishing personal dollar goals and quotas.
    (e) Developing and using lists of non-contributors.
    (f) Providing and using contributor lists for purposes other than 
the routine collection and forwarding of contributions and allotments, 
and as allowed under Sec. 950.601.
    (g) Using as a factor in a supervisor's performance appraisal the 
results of the solicitation in the supervisor's unit or organization.

[[Page 596]]



Sec. 950.109  Avoidance of conflict of interest.

    Any Federal employee who serves on the LFCC, on the eligibility 
committee, or as a Federal agency fundraising program coordinator, must 
not participate in any decisions where, because of membership on the 
board or other affiliation with a charitable organization, there could 
be or appear to be a conflict of interest under any statute, regulation, 
Executive order, or applicable agency standards of conduct. Under no 
circumstances may an LFCC member affiliated with an organization 
applying for inclusion on the local list, participate in the eligibility 
determinations.



Sec. 950.110  Prohibited discrimination.

    Discrimination for or against any individual or group on account of 
race, color, religion, sex, national origin, age, handicap, or political 
affiliation is prohibited in all aspects of the management and the 
execution of the CFC. Nothing herein denies eligibility to any 
organization, which is otherwise eligible under this part to participate 
in the CFC, merely because such organization is organized by, on behalf 
of, or to serve persons of a particular race, color, religion, sex, 
national origin, age, or handicap.



                    Subpart B_Eligibility Provisions



Sec. 950.201  National list eligibility.

    (a) The Director shall annually:
    (1) Determine the timetable and other procedures regarding 
application for inclusion on the national list,
    (2) Determine which organizations among those that apply qualify to 
be part of the national list and then provide the national list of 
qualified organizations to all local campaigns.
    (b) The national list shall be reproduced in all local brochures in 
accordance with these regulations. The list will include each 
organization's national list number code. These number codes must be 
faithfully reproduced in the local brochures.
    (c) An organization on the national list may elect to be removed 
from the national list and have its local affiliate or subunit listed on 
the local list of organizations in its stead. For the local affiliate or 
subunit to be listed in lieu of the organization on the national list, 
the following procedures must be followed:
    (1) The organization must send a letter to the local affiliate or 
subunit in that particular CFC waiving its listing on the national list 
so that its eligible local affiliate or subunit on the local list of 
organizations will appear as that organization's sole listing in the CFC 
brochure.
    (2) The local affiliate or subunit will include in its application 
to the LFCC a copy of the letter authorizing the removal of the 
organization from the national list as well as all the required 
materials for completing a local organization application.
    (3) Upon finding the local organization eligible, the waiver letter 
from the organization on the national list authorizes the LFCC to delete 
that organization from the national list.



Sec. 950.202  National list eligibility requirements.

    All organizations seeking national list eligibility must:
    (a) Certify that it provides or conducts real services, benefits, 
assistance, or program activities, in 15 or more different states or a 
foreign country over the 3 year period immediately preceding the start 
of the year involved. This requirement cannot be met on the sole basis 
of services provided through an ``800'' telephone number or by sending 
materials via the U.S. Postal Service or a combination thereof. A 
schedule listing those states (minimum 15) or the foreign countries 
(minimum 1) where the program activities have been provided and a 
detailed description of the activities in each state or foreign country 
must be included with the application. While it is not expected that an 
organization maintain an office in each state or foreign country, a 
clear showing must be made of the actual services, benefits, assistance 
or activities provided in each state or foreign country.
    (b) Certify that it is recognized by the Internal Revenue Service as 
tax-exempt under 26 U.S.C. 501(c)(3) and to which contributions are tax-
deductible pursuant to 26 U.S.C. 170. A copy of the

[[Page 597]]

letter from the Internal Revenue Service granting tax-exempt status 
under the Internal Revenue Code, 26 U.S.C. 501(c)(3), must be included 
with the application.
    (c) Certify that the organization has no expenses connected with 
lobbying and attempts to influence voting or legislation at the local, 
State, or Federal level or alternatively, that those expenses would 
classify the organization as a tax-exempt organization under 26 U.S.C. 
501(h).



Sec. 950.203  Public accountability standards.

    (a) To insure organizations wishing to solicit donations from 
Federal employees in the workplace are portraying accurately their 
programs and benefits, several standards and certifications must be met 
annually by each organization seeking national list eligibility. Each 
organization wishing to participate must:
    (1) Certify that the organization is a human health and welfare 
organization providing services, benefits, or assistance to, or 
conducting activities affecting, human health and welfare. The 
organization's application must provide documentation describing the 
human health and welfare benefits provided by the organization within 
the previous year.
    (2) Certify that it accounts for its funds in accordance with 
generally accepted accounting principles and that an audit of the 
organization's fiscal operations is completed annually by an independent 
certified public accountant in accordance with generally accepted 
auditing standards. Such audit must show expenses by function. A copy of 
the organization's most recent annual audit must be included with the 
application. The audit must cover the fiscal year ending not more than 
18 months prior to the January of the campaign year to which the 
organization is applying. For example, the audit included in the 1994 
application must cover the fiscal period ending on or after June 30, 
1992.
    (3) Provide a completed copy of the organization's IRS Form 990, 
including signature, with the application regardless of whether or not 
the IRS requires the organization to file this form. IRS Forms 990EZ, 
990PF, and comparable forms are not acceptable substitutes. However, 
smaller organizations that file the Form 990EZ may submit the 990EZ with 
pages 1 and 2 of the Form 990 attached. The IRS Form 990 and audit must 
cover the same fiscal period and, if revenue and expenses on the two 
documents differ, these amounts must be reconciled in an accompanying 
signed statement by the certified public accountant who completed the 
audit.
    (4) Provide a computation of the organization's percentage of total 
support and revenue spent on administrative and fundraising. This 
percentage shall be computed from information on the IRS Form 990, 
submitted pursuant to Sec. 950.203(a)(3), by adding the amount spent on 
``management and general'' (line 14) to ``fundraising'' (line 15) and 
then dividing the sum by ``total revenue'' (line 12).
    (i) If an organization's administrative and fundraising expenses 
exceed 25 percent of its total support and revenue, it must certify that 
its actual expenses for administration and fundraising are reasonable 
under all the circumstances presented. It must provide an explanation 
with its application and also include a formal plan to reduce these 
expenses below 25 percent.
    (ii) The Director may reject any application from an organization 
with fundraising and administrative expenses in excess of 25 percent of 
total support and revenue, unless the organization demonstrates to the 
satisfaction of the Director that its actual expenses for those purposes 
and its plan to reduce them are reasonable under the circumstances.
    (5) Certify that the organization is directed by an active and 
responsible governing body whose members have no material conflict of 
interest and, a majority of which serve without compensation.
    (6) Certify that the organization's fundraising practices prohibit 
the sale or lease of its CFC contributor lists.
    (7) Certify that its publicity and promotional activities are based 
upon its actual program and operations, are truthful and non-deceptive, 
and make no exaggerated or misleading claims.

[[Page 598]]

    (8) Certify that contributions are effectively used for the 
announced purposes of the charitable organization.
    (9) Certify under which governmental entity the charitable 
organization is chartered, incorporated or organized (congressionally 
chartered or the state in which it is registered).
    (10) Certify that the organization has received no more than 80 
percent of its total support and revenues from government sources as 
computed by dividing line 1c by line 12 from the IRS Form 990 submitted 
pursuant to Sec. 950.203(a)(3).
    (11) Certify that the organization prepares and makes available to 
the public upon request an annual report that includes a full 
description of the organization's activities and supporting services and 
identifies its directors and chief administrative personnel. A copy of 
the organization's annual report must be included with the application. 
The annual report must cover the fiscal year ending not more than 18 
months prior to January of the campaign year to which the organization 
is applying. A more frequently published document, such as a quarterly 
newsletter, may be used to meet this requirement provided that such 
document is available to the general public upon request and describes 
the organization's activities and supporting services and identifies its 
directors and chief administrative personnel.
    (12) Provide a statement that the certifying official is authorized 
by the organization to certify and affirm all statements required for 
inclusion on the national list.
    (13) Provide a statement in 25 words or less describing the program 
activities of the charitable organization. The 25-word statement need 
not include the organization's name. In addition, organizations must 
provide a telephone number, dedicated solely for the organization's use, 
through which the donors may receive further information about the 
organization. Except as provided in Sec. 950.401(k), this information 
will be included in the campaign brochure along with the organization's 
administrative and fundraising percentage computed pursuant to Sec. 
950.203(a)(3).
    (b) The Director shall review these applications for accuracy, 
completeness, and compliance with these regulations. Failure to supply 
any of this information may be judged a failure to comply with the 
requirements of public accountability, and the charitable organization 
may be ruled ineligible for inclusion on the national list.
    (c) The Director may request such additional information as the 
Director deems necessary to complete these reviews. An organization that 
fails to comply with such requests within 10 calendar days from receipt 
of the request may be judged ineligible.
    (d) The required certifications and documentation must have been 
completed and submitted prior to the application filing deadline. 
Applications received that are incomplete may not be perfected during 
the appeal process described in Sec. 950.205.
    (e) The Director may waive any of these standards and certifications 
upon a showing of extenuating circumstances.

[60 FR 57890, Nov. 24, 1995, as amended at 61 FR 4585, Feb. 7, 1996]



Sec. 950.204  Local list eligibility.

    (a) The LFCC shall establish an annual application process 
consistent with these regulations for organizations that wish to be 
listed in the local brochure.
    (b) The requirements for an organization to be listed in the local 
brochure shall include the following:
    (1) An organization must demonstrate to the satisfaction of the 
LFCC, that it has a substantial local presence in the geographical area 
covered by the local campaign, a substantial local presence in the 
geographical area covered by an adjacent local campaign, or substantial 
statewide presence.
    (i) Substantial local presence is defined as a staffed facility, 
office or portion of a residence dedicated exclusively to that 
organization, available to members of the public seeking its services or 
benefits. The facility must be open at least 15 hours a week and have a 
telephone dedicated exclusively to the organization. The office may be 
staffed by volunteers. Substantial local presence cannot be met on the 
basis of

[[Page 599]]

services provided solely through an ``800'' telephone number or the U.S. 
Postal Service or a combination thereof.
    (ii) Substantial statewide presence is defined as providing or 
conducting real services, benefits, assistance or program activities 
covering 30 percent of a state's geographic boundaries or providing or 
conducting real services, benefits, assistance or program activities 
affecting 30 percent of a state's population. Substantial statewide 
presence cannot be met on the basis of services provided solely through 
an ``800'' telephone number or the U.S. Postal Service or a combination 
thereof.
    (2) An organization seeking local eligibility also must meet all 
requirements for national list eligibility in Sec. 950.202 and Sec. 
950.203, with the following exceptions:
    (i) Local charitable organizations are not required to have provided 
services or benefits in 15 states or a foreign country over the prior 3 
years.
    (ii) Local charitable organizations with annual revenue less than 
$100,000 are not required to be audited in accordance with generally 
accepted auditing standards and, hence, are not required to submit an 
audit report. Annual revenue is determined by line 12 of the IRS Form 
990 covering the organization's most recent fiscal year ending not more 
than 18 months prior to the January of the campaign year to which the 
organization is applying.
    (iii) Organizations seeking local eligibility in Puerto Rico or the 
U.S. Virgin Islands are exempt from the requirements of Sec. 
950.202(b). However, said organizations must include in their 
applications, the appropriate local forms demonstrating their status as 
charitable organizations.
    (c) Family support and youth activities certified by the commander 
of a military installation as meeting the eligibility criteria contained 
in Sec. 950.204(d) may appear on the list of local organizations and be 
supported from CFC funds. Family support and youth activities may 
participate in the CFC as a member of a federation at the discretion of 
the certifying commander.
    (d) A family support and youth activity must:
    (1) Be a nonprofit, tax-exempt organization that provides family 
service programs or youth activity programs to personnel in the Command. 
The activity must not receive a majority of its financial support from 
appropriated funds.
    (2) Have a high degree of integrity and responsibility in the 
conduct of their affairs. Contributions received must be used 
effectively for the announced purposes of the organization.
    (3) Be directed by the base Non-Appropriated Fund Council or an 
active voluntary board of directors which serves without compensation 
and holds regular meetings.
    (4) Conduct its fiscal operations in accordance with a detailed 
annual budget, prepared and approved at the beginning of the fiscal 
year. Any significant variations from the approved budget must have 
prior authorization from the Non-Appropriated Fund Council or the 
directors. The family support and youth activities must have accounting 
procedures acceptable to an installation auditor and the inspector 
general.
    (5) Have a policy and practice of nondiscrimination on the basis of 
race, color, religion, sex or national origin applicable to persons 
served by the organization.
    (6) Prepare an annual report which includes a full description of 
the organization's activities and accomplishments. These reports must be 
made available to the public upon request.
    (e) Local eligibility determinations. Within 15 business days after 
the closing date of the application period, the LFCC shall communicate 
its eligibility decisions via facsimile or U.S. Postal Service. Denial 
of the application by the LFCC must be sent via U.S. Postal Service 
certified or registered mail with a return receipt. Approvals may be 
sent via U.S. Postal Service regular first class mail or facsimile. 
LFCC's may authorize PCFO's to release eligibility determinations to 
applicant organizations via telephone. This has no effect on the 
deadline for LFCC's to receive local appeals. Applicants denied 
eligibility may appeal in accordance with Sec. 950.205.

[[Page 600]]

    (f) No LFCC may print the campaign brochure while there are appeals 
of eligibility decisions from their campaign pending with the Director. 
LFCC's are obligated to check with OPM 21 calendar days after the 
mailing of the local appeal decision as to whether the Director is on 
notice of a pending timely appeal.



Sec. 950.205  Appeals.

    (a) Organizations who apply and are denied eligibility for inclusion 
on the national list will be notified of the Director's decision by 
registered or certified mail of the U.S. Postal Service. Organizations 
may appeal the Director's decision by submitting a written request to 
reconsider the denial to the Director. This request must be received 
within 10 business days from the date of receipt of the Director's 
decision to deny eligibility and shall be limited to those facts 
justifying the reversal of the original decision. Requests for 
reconsideration may not be used to supplement applications that had 
missing or outdated documents, and any such documents submitted with the 
request for reconsideration will not be considered.
    (b) Applicants denied listing in the local brochure must first 
appeal in writing to the LFCC to reconsider its original decision. Such 
an appeal must be received by the LFCC within 7 business days from the 
date of receipt of the initial LFCC decision or 14 calendar days from 
the date the decision was mailed, whichever is earlier. The LFCC must 
consider all timely appeals and notify the appealing organization within 
a reasonable time period. Denial of the appeal by the LFCC must be sent 
via U.S. Postal Service certified or registered mail with a return 
receipt. Approval of local appeals may be sent via U.S. Postal Service 
regular first class mail or facsimile.
    (c) A local applicant which is unsuccessful in its appeal to the 
LFCC may appeal to the Director. All appeals must:
    (1) Be in writing;
    (2) Be received by the Director within 10 business days of the date 
of receipt of the letter from the LFCC denying eligibility on appeal;
    (3) Include a statement explaining the reason(s) why eligibility 
should be granted;
    (4) Include a copy of the letter from the LFCC disapproving the 
original application, a copy of the organization's appeal to the LFCC, 
and a copy of the letter from the LFCC denying the appeal.
    (d) If an organization fails to file a timely application or a 
timely appeal of an adverse eligibility determination in accordance with 
these regulations, such application or appeal to the Director will be 
dismissed as untimely.
    (e) Appeals to the Director may not be used to supplement original 
applications that had missing or outdated documents. Any such 
supplemental documents will not be considered. Such appeals shall be 
limited to those facts justifying the reversal of the original decision.
    (f) The Director's decision is final for administrative purposes.



                          Subpart C_Federations



Sec. 950.301  National federations eligibility.

    (a) The Director may recognize national federations that conform to 
the requirements and are eligible to receive designations. The Director 
may from time to time place a moratorium on the recognition of national 
federations.
    (b) By applying for inclusion in the CFC, federations consent to 
allow the Director complete access to it and its members' CFC books and 
records and to respond to requests for information by the Director.
    (c) An organization may apply to the Director for inclusion as a 
national federation to participate in the CFC if the applicant has, as 
members of its proposed federation, 15 or more charitable organizations 
that meet the eligibility criteria of Sec. 950.202 and Sec. 950.203. 
The initial year an organization applies for federation status, it must 
submit the applications of all its proposed member organizations in 
addition to the federation application. Federations must re-establish 
eligibility each year, however, the applications of its member 
organizations need not accompany the annual federation application once 
an

[[Page 601]]

organization has obtained federation status, unless requested by the 
Director.
    (d) After an organization has been granted federation status, it may 
certify that its member organizations meet all eligibility criteria of 
Sec. 950.202 and Sec. 950.203 to be included on the national list. 
Federation status in a prior campaign is not a guarantee of federation 
status in a subsequent campaign. Failure to meet minimum federation 
eligibility requirements shall not be deemed to be a decertification 
subject to a hearing on the record.
    (e) An applicant for national federation status must annually 
certify and/or demonstrate:
    (1) That all member organizations seeking participation in the CFC 
are qualified for inclusion on the national list. Applicants must 
provide a complete list of those member organizations it certified.
    (2) That its financial records, practices and procedures conform to 
generally accepted accounting principles and that it is annually audited 
by an independent certified public accountant in accordance with 
generally accepted auditing standards. A copy of the audit must be 
included with the application. The audit must verify that the federation 
is honoring designations made to each member organization. The audit 
requirement is waived for newly created federations operating for less 
than a year.
    (3) That it does not employ in its CFC operations the services of 
private consultants, consulting firms, advertising agencies or similar 
business organizations to perform its policy-making or decision-making 
functions in the CFC. It may, however, contract with entities or 
individuals such as banks, accountants, lawyers, and other vendors of 
goods and/or services to assist in accomplishing its administrative 
tasks.
    (f) The Director will notify a federation if it is determined that 
the federation does not meet the eligibility requirements of this 
section. A federation may appeal an adverse eligibility decision in 
accordance with Sec. 950.205.
    (g) The Director may waive any eligibility criteria for federation 
status if it is determined that such a waiver will be in the best 
interest of the CFC.
    (h) Two organizations--American Red Cross and United Service 
Organization--are exempt from the 15-member requirement of Sec. 
950.301(c).



Sec. 950.302  Responsibilities of national federations.

    (a) National federations must ensure that only those member 
organizations that comply with all eligibility requirements included in 
these regulations are certified for participation in the CFC.
    (b) The Director may elect to review, accept or reject the 
certifications of the eligibility of the members of the national 
federations. If the Director requests information supporting a 
certification of national eligibility, that information shall be 
furnished promptly. Failure to furnish such information within 10 
business days of the receipt of the request constitutes grounds for the 
denial of national eligibility of that member.
    (c) The Director may elect to decertify for up to one campaign year 
a federation which makes a false certification, subject to the 
requirement that any federation that the Director proposes to decertify 
shall be offered the opportunity to have a hearing on the record on the 
proposed decertification, followed by a written decision stating the 
grounds for the decertification. False certifications are presumed to be 
deliberate. This presumption may be overcome by evidence presented at 
the hearing.
    (d) The failure of a national federation to respond in a timely 
fashion to a request by the Director for required information or 
cooperation in an investigation or a settlement of disbursements may be 
grounds for decertification, provided that a decision to decertify is 
preceded by a hearing on the record and communicated in writing.
    (e) Each federation, as fiscal agent for its member organizations, 
must ensure that Federal employee designations are honored in that each 
member organization receives its proportionate share of receipts based 
on the results of each individual campaign.

[[Page 602]]



Sec. 950.303  Local federations eligibility.

    (a) LFCC's must approve local federations that conform to the 
requirements.
    (b) By applying for inclusion in the CFC, federations consent to 
allow the LFCC and Director complete access to it and its members' CFC 
books and records and to respond to requests for information by the LFCC 
and the Director.
    (c) An organization may apply to the LFCC for inclusion as a local 
federation if the applicant has as members of its proposed federation, 
15 or more charitable organizations that meet the eligibility criteria 
of Sec. 950.202, Sec. 950.203, and Sec. 950.204. The initial year an 
organization applies for federation status, it must submit to the LFCC 
applications of all its proposed member organizations in addition to the 
federation application. Federations must re-establish eligibility each 
year, however, the applications of its member organizations need not 
accompany the annual federation application once an organization has 
obtained federation status.
    (d) After an organization has been granted federation status, it may 
certify that its member organizations meet all eligibility criteria of 
Sec. Sec. 950.202, 950.203, and 950.204 to be included on the Local 
List. While deference should be given to federation certifications, the 
LFCC, during the review process, may request independent evidence of 
individual member organization's eligibility. Federation status in a 
prior campaign is not a guarantee of federation status in a subsequent 
campaign. Failure to meet minimum federation eligibility requirements 
shall not be deemed to be a decertification subject to a hearing on the 
record.
    (e) An applicant for local federation status must certify and/or 
demonstrate:
    (1) That all member organizations seeking participation in the CFC 
are qualified for inclusion on the Local List and provide a complete 
list of those member organizations it certified.
    (2) That its financial records, practices and procedures conform to 
generally accepted accounting principles and is annually audited by an 
independent certified public accountant in accordance with generally 
accepted auditing standards. A copy of the annual audit must be included 
with the application. The audit must verify that the federation is 
honoring designations made to each member organization. The audit 
requirement is waived for newly created federations operating for less 
than a year.
    (3) That is does not employ, in its CFC operations, the services of 
private consultants, consulting firms, advertising agencies or similar 
business organizations to perform the policy-making or decision-making 
functions in the CFC. It may, however, contract with entities or 
individuals such as banks, accountants, lawyers, and other vendors of 
goods and/or services to assist in accomplishing its administrative 
tasks.
    (f) The LFCC will notify a federation if it is determined that the 
federation does not meet the eligibility requirements of this section. A 
federation may appeal an adverse eligibility decision in accordance with 
Sec. 950.205.
    (g) The Director may waive any eligibility criteria for federation 
status if it is determined that such a waiver will be in the best 
interest of the CFC.



Sec. 950.304  Responsibilities of local federations.

    (a) Local federations must ensure that only those member 
organizations that comply with all eligibility requirements included in 
these regulations are certified for participation in the CFC.
    (b) If the LFCC requests information supporting a certification of 
local eligibility, that information shall be furnished promptly. Failure 
to furnish such information within 10 business days of the receipt of 
the request constitutes grounds for the denial of local eligibility.
    (c) The Director, upon recommendation by the LFCC, may elect to 
decertify a federation which makes a false certification for up to one 
campaign year, subject to the requirement that any federation that the 
Director proposes to decertify shall be offered the opportunity to have 
a hearing on the record on the proposed decertification, followed by a 
written decision stating the grounds for the decertification.

[[Page 603]]

False certifications are presumed to be deliberate. The presumption may 
be overcome by evidence presented at the hearing.
    (d) The failure of a local federation to respond in a timely fashion 
to a request by the Director or the LFCC for required information or 
cooperation in an investigation may be grounds for decertification, 
provided that a decision to decertify is preceded by a hearing on the 
record and communicated in writing.
    (e) Each federation, as fiscal agent for its member organizations, 
must ensure that Federal employee designations are honored in that each 
member organization receives its proportionate share of receipts based 
on the results of each individual campaign.



                      Subpart D_Campaign Materials



Sec. 950.401  Campaign and publicity materials.

    (a) The specific campaign and publicity materials, such as the 
official brochure, will be developed locally, except as specified in 
these regulations. All materials must be reviewed by the LFCC for 
compliance with these regulations and will be printed and supplied by 
the PCFO. All publicity materials must have the approval of the LFCC 
before being used. Federations must notify the PCFO in writing of their 
desire to participate in the development of campaign and publicity 
materials. The PCFO must respond in a timely manner to a federation's 
request to participate in the development of campaign and publicity 
materials. Federations must also respond in a timely fashion in the 
development of campaign and publicity materials.
    (b) During the CFC solicitation period, participating CFC 
organizations may distribute bona fide educational materials describing 
its services or programs. The organization must be granted permission by 
the Federal agency installation head, or designee to distribute the 
material. CFC Coordinators, Keyworkers or members of the LFCC, are not 
authorized to grant permission for the distribution of such materials. 
If one organization is granted permission to distribute educational 
materials, then the Federal agency installation head must allow any 
other requesting CFC organization to distribute educational materials.
    (c) Organizations and federations are encouraged to publicize their 
activities outside Federal facilities and to broadcast messages aimed at 
Federal employees in an attempt to solicit their contributions through 
the media and other outlets.
    (d) Agency Heads are further authorized to permit the distribution 
by organizations of promotional pamphlets to Federal personnel in public 
areas of Federal workplaces in connection with the CFC, provided that 
the manner of distribution accords equal treatment to all charitable 
organizations furnishing such pamphlet for local use, and further 
provided that no such distribution shall utilize Federal personnel on 
official duty or interfere with Federal government activities. LFCC 
members and other campaign personnel are to be particularly aware of the 
prohibition of assisting any charitable organization or federated group 
in distributing any type of literature, especially during the campaign 
period. Nothing in this section shall be construed to require an LFCC to 
distribute or arrange for the distribution of any material other than 
the Campaign brochure and the pledge card.
    (e) The Campaign brochure and pledge card is the official CFC 
information package and shall be made available to all potential 
contributors. All CFC brochures must inform employees of their right to 
make a choice to contribute or not to contribute; to designate or not to 
designate; and to give a confidential gift in a sealed envelope.
    (f) Campaign materials must constitute a simple and attractive 
package that has fundraising appeal and essential working information. 
The package should focus on the CFC without undue use of charitable 
organization symbols and logos or other distractions that compete for 
the donor's attention. Extraneous instructions concerning the routing of 
forms, tallying of contributor's receipt, and similar reports, which are 
primarily for keyworkers must be avoided.
    (g) The following applies specifically to the campaign brochure:

[[Page 604]]

    (1) OPM will include in the annual distribution of the National List 
explicit instructions for the printing of the brochure and language to 
be printed verbatim in the introductory pages. The general information 
provided will include:
    (i) A description of the CFC arrangement and explanation of the 
payroll deduction privilege.
    (ii) a statement that the donor may only designate charitable 
organizations or federations that are listed in the brochure and that 
write-ins are prohibited.
    (iii) instructions as to how an employee may obtain more specific 
information about the programs and the finances of the organizations 
participating in the campaign.
    (iv) A description of employees' rights to pursue complaints of 
undue pressure or coercion in Federal fundraising activities.
    (2) Following the introductory pages, the organization list will 
consist of three parts--the national, the international, and the local. 
The order of these three parts will be annually rotated in accordance 
with OPM instructions. In 1996 the Local part will be first followed by 
the National and finally the International. The national and 
international lists will consist of faithful reproductions of the lists 
of national and international organizations, including federations, 
provided by OPM. The third part, the local list, is determined by the 
LFCC. The order of listing of the federated and unaffiliated 
organizations within the three separate parts will be determined by 
random drawing. The order of organizations within each federation will 
be determined by the federation. The order within the national and local 
unaffiliated groups will be alphabetical. Absent specific instructions 
from OPM to the contrary, each participating organization and federated 
group listing must include a description, not to exceed 25 words, of 
their services and programs, plus a telephone number for the Federal 
donor to request further information about the group's services, 
benefits, and administrative expenses. Each listing will include a 
statement of the percentage of the organization's total receipts and 
revenues that are used for administration and fundraising. Neither the 
percentage of administrative and fundraising expenses, nor the telephone 
number count toward the 25-word statement.
    (3) Each national federation and charitable organization will be 
assigned a code number by OPM. Local federations and local charitable 
organizations will be assigned code numbers by the LFCC. At the 
beginning of each federated group's listing will be the federation's 
name, code number, 25-word statement, percentage of administrative and 
fundraising expenses, and telephone number. The sections of the brochure 
where the unaffiliated agencies are listed will begin with the titles 
National Unaffiliated Organizations, International Unaffiliated 
Organizations and Local Unaffiliated Organizations respectively.
    (h) Omission of an eligible charitable organization from the 
brochure may require that all brochures be reprinted and redistributed. 
Such omissions must be reported to OPM immediately upon discovery. The 
Director or LFCC may direct that the cost of such reprinting and 
redistribution be borne by the PCFO or charged to CFC administrative 
expenses.
    (i) Dual listing. Listing of a national organization, as well as its 
local affiliate organization, is permitted. However, a national 
organization may waive its listing in the national section of the 
brochure in favor of its eligible local affiliate. The local affiliate 
must include in its application the written waiver from its national 
organization.
    (j) Multiple listing. Each national or local organization must 
individually meet all of the eligibility criteria and submit independent 
documentation as required in Sec. 950.202, Sec. 950.203 or Sec. 
950.204. Once an organization is deemed eligible, it is entitled to only 
one listing in the CFC brochure, regardless of the number of federations 
to which that organization belongs.
    (k) The LFCC may omit the 25-word program description from the CFC 
brochure if, in the immediately preceding campaign year, contributions 
received in the local CFC totaled less than $100,000.

[[Page 605]]



Sec. 950.402  Pledge card.

    (a) The Director will make available each campaign year at least one 
model pledge card which shall be reproduced at the local level.
    (b) Campaigns may incorporate additional giving levels to the 
Director's authorized pledge card. Campaigns may also include their 
award recognition program. No further modifications to the pledge card 
are permitted unless approved in advance by the Director.
    (c) An employee may not make a designation to an organization not 
listed in the brochure. In addition, an employee may not make a CFC 
contribution to an organization listed in the brochure of a campaign 
covering a geographic location different from the campaign where the 
employee works. Designations made to organizations not listed in the 
brochure are not invalid, but will be treated as undesignated funds and 
distributed accordingly.
    (d) In the event the PCFO receives a pledge card that has 
designations that add up to less than the total amount pledged, the PCFO 
must honor the total amount pledged and treat the excess amount as 
undesignated funds. In the event that a PCFO receives a pledge card that 
has a total amount pledged that is less than the sum of the individual 
designations, the PCFO must honor the designations by assigning a 
proportionate share of the total gift to each organization designated. 
For example, if an employee indicates a total gift of $100 in the upper 
portion of the pledge card, but designates $25 each to five 
organizations in the lower part of the pledge card, the PCFO must adjust 
each organization's designation to $20.



Sec. 950.403  Penalties.

    A PCFO's failure to comply with these regulations may result in 
either disqualification from future service as PCFO, disqualification as 
a participating federation, or both penalties. These penalties may only 
be imposed after a hearing on the record and communication of the 
Director's decision in writing.



                      Subpart E_Undesignated Funds



Sec. 950.501  Applicability.

    (a) All undesignated funds shall be distributed to all of the 
organizations in the CFC brochure in the same proportion that they 
received designations in the campaign.
    (b) The distribution of undesignated funds described in Sec. 
950.501(a) applies to all domestic area campaigns. It does not apply to 
the DOD Overseas Campaign.
    (c) The Director may alter the distribution of undesignated funds as 
local campaign circumstances may require or to enforce the distribution 
method described herein.

[60 FR 57890, Nov. 24, 1995; 61 FR 4585, Feb. 7, 1996]



                   Subpart F_Miscellaneous Provisions



Sec. 950.601  Release of contributor names.

    (a) The pledge card, designed pursuant to Sec. 950.402, must allow 
an employee to indicate if the employee does not wish his or her name 
and home address forwarded to the charitable organization or 
organizations designated. A PCFO's failure to honor an employee's wish 
may result in the decertification of the PCFO.
    (b) The pledge card will direct an employee to provide his or her 
complete home address on the pledge card should he or she wish his or 
her name and home address released to organizations receiving their 
donations.
    (c) It is the responsibility of the PCFO to forward the names and 
addresses of employees who have indicated that they wish their names be 
forwarded, to the recipient organization directly, if the organization 
is unaffiliated, and to the organization's federation if the 
organization is a member of a federation. The PCFO may not make any 
other use of these employees' names and addresses.
    (d) Organizations must cooperate fully with OPM investigations into 
the care and appropriate use of these lists. Should an organization 
ignore or fail to respond to OPM's requests for cooperation or hamper an 
investigation,

[[Page 606]]

the Director may propose that the organization be suspended or expelled 
from the CFC. The Director will consider any response in issuing a 
decision.



Sec. 950.602  Solicitation methods.

    (a) Employee solicitations shall be conducted during duty hours 
using methods that permit true voluntary giving and shall reserve to the 
individual the option of disclosing any gift or keeping it confidential. 
Campaign kick-offs, victory events, awards, and other non-solicitation 
events to build support for the CFC are encouraged.
    (b) Special CFC fundraising events, such as, raffles, lotteries, 
auctions, bake sales, carnivals, athletic events, or other activities 
not specifically provided for in these regulations are permitted during 
the 6-week campaign period if approved by the appropriate agency head or 
government official, consistent with agency ethics regulations.
    (c) In all approved special fundraising events the donor must have 
the option of designating to a specific participating organization or 
federation or be advised that the donation will be counted as an 
undesignated contribution and distributed according to these 
regulations.



Sec. 950.603  Sanctions.

    (a) Sanctions not specifically provided for elsewhere in these 
regulations, may be imposed on an organization, federation or PCFO for 
violating any provisions, other applicable provisions of law, or any 
directive or instruction from the Director. The Director will determine 
the appropriate sanction, up to and including permanent expulsion from 
the CFC. In determining the appropriate sanction, the Director will 
consider all elements such as previous violations, harm to Federal 
employee confidence in the CFC, and any other relevant factors. The 
Director shall provide written notification to the organization, 
federation or PCFO regarding the alleged violation and the intent to 
impose a sanction. Prior to implementation of sanctions under this 
section, the organization, federation or PCFO shall be provided an 
opportunity to address in writing why the sanction should not be 
imposed. This submission must be received within 10 calendar days from 
the date of receipt of the Director's notification letter.
    (b) At the Director's discretion, PCFO's and Federations may be 
directed to suspend distribution of current and future CFC donations 
from Federal employees to recipient organizations. Federations and 
PCFO's shall immediately place suspended contributions in an interest 
bearing account until directed to do otherwise.



Sec. 950.604  Records retention.

    Federations, PCFO's and other participants in the CFC shall retain 
documents pertinent to the campaign for at least three campaign years. 
Documents requested by OPM must be made available within 10 business 
days of the request.



Sec. 950.605  Sanctions compliance certification.

    Each federation, federation member and unaffiliated organization 
applying for participation in the CFC must, as a condition of 
participation, complete a certification that it is in compliance with 
all statutes, Executive orders, and regulations restricting or 
prohibiting U.S. persons from engaging in transactions and dealings with 
countries, entities or individuals subject to economic sanctions 
administered by the U.S. Department of the Treasury's Office of Foreign 
Assets Control (OFAC). Should any change in circumstances pertaining to 
this certification occur at any time, the organization must notify OPM's 
Office of CFC Operations immediately. OPM will take such steps as it 
deems appropriate under the circumstances, including, but not limited 
to, notifying OFAC and/or other enforcement authorities of such change, 
suspending disbursement of CFC funds not yet disbursed, retracting (to 
the extent practicable) CFC funds already disbursed, and suspending or 
expelling the organization from the CFC.

[70 FR 67341, Nov. 7, 2005]

[[Page 607]]



                     Subpart G_DoD Overseas Campaign



Sec. 950.701  DoD overseas campaign.

    (a) A Combined Federal Campaign is authorized for all Department of 
Defense (DoD) activities in the overseas areas during a 6-week period in 
the fall. Organizations that may participate in the Overseas Campaign 
will consist of organizations determined nationally eligible by OPM.
    (b) The DoD must select an organization or combination of 
organizations to serve as PCFO as it deems in the best interests of the 
overseas campaign.
    (c) Federal civilian agencies with overseas personnel may elect to 
have these employees participate in the DoD campaign or in the National 
Capital Area campaign.
    (d) The overseas campaign brochure shall not include the All 
International Organizations Designation Option-IIII.
    (e) Family support and youth activities established in overseas 
locations may be supported from CFC funds.
    (f) Undesignated funds contributed in the Overseas Campaign equal to 
up to 6 percent of the gross campaign contributions will be allocated to 
the Overseas family support and youth activities. No other funds may be 
used for this purpose. If the undesignated funds exceed 6 percent of the 
gross campaign contributions, this excess shall be distributed to all 
other organizations in the same proportions as designations.
    (g) Overseas family support and youth activities shall not be 
charged any share of campaign costs. All other organizations 
participating in the Overseas Area CFC will be charged for campaign 
costs in the same proportion that they received gross campaign receipts, 
net of that amount of receipts set aside for family support and youth 
activities.
    (h) The overseas campaign brochure must explain the allocation 
policy utilized by each of the military services to allocate funds 
received from the Overseas campaign to their overseas family support and 
youth activities.



                         Subpart H_CFC Timetable



Sec. 950.801  Campaign schedule.

    (a) The Combined Federal Campaign will be conducted according to the 
following timetable.
    (1) During one 30-calendar day period between January and March, as 
determined by the Director, OPM will accept applications from 
organizations seeking to be listed on the national list.
    (2) Within 35 calendar days of the closing of the receipt of 
applications, the Director will issue notices to each national applicant 
organization of the results of the Director's review.
    (3) Local Federal Coordinating Committees must select a PCFO no 
later than March 15.
    (4) The Director will issue a national eligibility list to all local 
campaigns by June 30.
    (5) Local Federal Coordinating Committees must accept applications 
from organizations seeking local eligibility for 30 calendar days as 
determined by the LFCC, and must issue notice of its eligibility 
decisions within 15 business days of the closing date for receipt of 
applications.
    (b) The Director will annually issue a timetable for accepting and 
processing national applications.



                      Subpart I_Payroll Withholding



Sec. 950.901  Payroll allotment.

    The policies and procedures in this section are authorized for 
payroll withholding operations in accordance with the Office of 
Personnel Management Pay Administration regulations in part 550 of this 
Title.
    (a) Applicability. Voluntary payroll allotments will be authorized 
by all Federal departments and agencies for payment of charitable 
contributions to local CFC organizations.
    (b) Allotters. The allotment privilege will be made available to 
Federal personnel as follows:
    (1) Employees whose net pay regularly is sufficient to cover the 
allotment are eligible. An employee serving under an appointment limited 
to 1 year or less may make an allotment to a CFC when an appropriate 
official of the employing Federal agency determines

[[Page 608]]

that the employee will continue employment for a period to justify an 
allotment. This includes military reservists, National Guard, and other 
part-time and intermittent employees who are regularly employed.
    (2) Members of the Uniformed Services are eligible, excluding those 
on only short-term assignment (less than 3 months).
    (c) Authorization. Allotments will be totally voluntary and will be 
based upon contributor's individual authorization.
    (1) The CFC Pledge Card, in conformance with Sec. 950.402, is the 
only form for authorization of the CFC payroll allotment and may be 
printed or purchased from a central source by each PCFO. The pledge 
cards and official brochure will be distributed to employees when 
charitable contributions are solicited.
    (2) The original copy of each pledge card (payroll allotment 
authorization) should be transmitted to the contributor's servicing 
payroll office as promptly as possible, preferably by December 15. 
However, if pledge cards are received after that date they should be 
accepted and processed by the payroll office.
    (d) Duration. Authorization of allotments will be in the form of a 
term allotment. Term authorizations will be in effect for 1 full year--
26, 24, or 12 pay periods depending on the allotter's pay schedule--
starting with the first pay period beginning in January and ending with 
the last pay period that begins in December. Three months of employment 
is considered the minimum amount of time that is reasonable for 
establishing an allotment.
    (e) Amount. Allotters will make a single allotment that is 
apportioned into equal amounts for deductions each pay period during the 
year.
    (1) The minimum amount of the allotment will be determined by the 
LFCC but will not be less than $1 per payday, with no restriction on the 
size of the increment above that minimum.
    (2) No change of amount will be authorized for term allotments.
    (3) No deduction will be made for any period in which the allotter's 
net pay, after all legal and previously authorized deductions, is 
insufficient to cover the CFC allotment. No adjustment will be made in 
subsequent periods to make up for missed deductions.
    (f) Remittance. One check will be sent by the payroll office each 
pay period, in the gross amount of deductions on the basis of current 
authorizations, to the Central Receipt and Accounting Point (CRP) at 
each local CFC location for which the payroll office has received 
allotment authorizations. The Director will provide a list of the 
authorized CRP's to Federal payroll offices.
    (1) The check will be accompanied by a statement identifying the 
agency, the dates of the pay period, and the total number of employee 
deductions.
    (2) There will be no listing of allotters included or of allotter 
discontinuances.
    (g) Discontinuance. Term allotments will be discontinued 
automatically on expiration of the 1 year withholding period, or on the 
death, retirement, or separation of the allotter from the Federal 
service, whichever is earlier.
    (1) An allotter may revoke a term authorization at any time by 
requesting it in writing from the payroll office. Discontinuance will be 
effective the first pay period beginning after receipt of the written 
revocation in the payroll office.
    (2) A discontinued allotment will not be reinstated.
    (h) Transfer. When an allotter moves to another organizational unit 
served by a different payroll office in the same CFC location, whether 
in the same office or a different Department or agency, his or her 
allotment authorization should be transferred to the new payroll office.
    (i) Accounting. Federal payroll offices will oversee the 
establishment of individual allotment accounts, the deductions each pay 
period, and the reconciliation of employee accounts in accordance with 
agency and General Accounting Office requirements. The payroll office 
will accept responsibility for the accuracy of remittances, as supported 
by current allotment authorizations, and internal accounting and 
auditing requirements.
    (1) The PCFO shall notify the federated groups, national agencies, 
and local agencies as soon as practicable after the completion of the 
campaign,

[[Page 609]]

but in no case later than February 15, of the amounts, if any, 
designated to them and their member agencies and of the amounts of the 
undesignated funds, if any, allocated to them.
    (2) The PCFO is responsible for the accuracy of disbursements it 
transmits to recipients. It shall transmit at least monthly for 
campaigns of $500,000 or more or quarterly if less than that amount, 
minus only the approved proportionate share for administrative cost 
reimbursement and the PCFO fee set forth in Sec. 950.106(d). It shall 
remit the contributions to each organization or to the federated group, 
if any, of which the organization is a member. For campaigns with gross 
receipts in excess of $500,000, the PCFO will distribute all CFC 
receipts beginning April 1, and monthly thereafter. For campaigns with 
gross receipts of $500,000 or less, the PCFO will distribute all CFC 
receipts beginning June 1, and quarterly thereafter. At the close of 
each disbursement period, the PCFO's CFC account shall have a balance of 
zero.
    (3) The PCFO may make one-time disbursements to organizations 
receiving minimal donations from Federal employees. The LFCC must 
determine and authorize the amount of these one-time disbursements. The 
PCFO may deduct the proportionate amount of each organization's share of 
the campaign's administrative costs and the average of the previous 3 
years pledge loss from the one-time disbursement. This is the only 
approved application of adjusting for pledge loss.
    (4) Federated and national charitable organizations, or their 
designated agents, will accept responsibility for:
    (i) The accuracy of distribution amount the charitable organizations 
of remittances from the PCFO; and
    (ii) Arrangements for an independent audit conducted by a certified 
public accountant agreed upon by the participating charitable 
organizations.



PART 960_FEDERAL EXECUTIVE BOARDS--Table of Contents




Sec.
960.101 Definitions.
960.102 Authority and status.
960.103 Location.
960.104 Membership.
960.105 Officers and organization.
960.106 OPM leadership.
960.107 Authorized activities.
960.108 Additional rules and directives.

    Authority: Memorandum of the President for Heads of Departments and 
Agencies (November 10, 1961).

    Source: 49 FR 34194, Aug. 29, 1984, unless otherwise noted.



Sec. 960.101  Definitions.

    For purposes of this part:
    (a) The term Director means the Director of the United States Office 
of Personnel Management.
    (b) The term Executive agency means a department, agency, or 
independent establishment in the Executive Branch.
    (c) The term metropolitan area means a geographic zone surrounding a 
major city, as defined and delimited from time to time by the Director.
    (d) The term principal area officer means, with respect to an 
Executive agency, the senior official of the Executive agency who is 
located in a metropolitan area and who has no superior official within 
that metropolitan area other than in the Regional Office of the 
Executive agency. Where an Executive agency maintains facilities of more 
than one bureau or other subdivision within the metropolitan area, and 
where the heads of those facilities are in separate chains of command 
within the Executive agency, then the Executive agency may have more 
than one principal area officer.
    (e) The term principal regional officer means, with respect to an 
Executive agency, the senior official in a Regional Office of the 
Executive agency.
    (f) The term special representative means, with respect to an 
Executive agency, an official who is not subject to the supervision of a 
principal regional officer or a principal area officer and who is 
specifically designated by the head of the Executive agency to serve as 
the personal representative of the head of the Executive agency.



Sec. 960.102  Authority and status.

    Federal Executive Boards are established by direction of the 
President in order to strengthen the management and administration of 
Executive Branch activities in selected centers of

[[Page 610]]

field operations. Federal Executive Boards are organized and function 
under the authority of the Director.



Sec. 960.103  Location.

    Federal Executive Boards have been established and shall continue in 
the following metropolitan areas: Albuquerque-Santa Fe, Atlanta, 
Baltimore, Boston, Buffalo, Chicago, Cincinnati, Cleveland, Dallas-Fort 
Worth, Denver, Detroit, Honolulu, Houston, Kansas City, Los Angeles, 
Miami, Minneapolis-St. Paul, New Orleans, New York, Newark, 
Philadelphia, Pittsburgh, Portland, St. Louis, San Francisco, and 
Seattle. The Director may, from time to time, dissolve, merge, or divide 
any of the foregoing Federal Executive Boards, or establish new Federal 
Executive Boards, as he may deem necessary, proper or convenient.



Sec. 960.104  Membership.

    (a) Presidential Directive. The President has directed the heads of 
agencies to arrange for the leading officials of their respective 
agencies' field activities to participate personally in the work of 
Federal Executive Boards.
    (b) Members. The head of every Executive agency shall designate, by 
title of office, the principal regional officer, if any, and the 
principal area officer or officers, if any, who shall represent the 
agency on each Federal Executive Board; and by name and title of office, 
the special representative, if any, who shall represent the head of the 
agency on each Federal Executive Board. Such designations shall be made 
in writing and transmitted to the Director, and may be transmitted 
through the Chairmen of the Federal Executive Boards. Designations may 
be amended at any time by the head of the Executive agency.
    (c) Alternate Members. Each member of a Federal Executive Board may 
designate an alternate member, who shall attend meetings and otherwise 
serve in the absence of the member. An alternate member shall be the 
deputy or principal assistant to the member or another senior official 
of the member's organization.



Sec. 960.105  Officers and organization.

    (a) By-Laws. A Federal Executive Board shall adopt by-laws or other 
rules for its internal governance, subject to the approval of the 
Director. Such by-laws and other rules may reflect the particular needs, 
resources, and customs of each Federal Executive Board, provided that 
they are not inconsistent with the provisions of this part or with the 
directives of the President or the Director. To the extent that such by-
laws and other rules conflict with these provisions or the directives of 
the President or the Director, such by-laws and other rules shall be 
null and void.
    (b) Chairman. Each Federal Executive Board shall have a Chairman, 
who shall be elected by the members from among their number, and who 
shall serve for a term of office not to exceed one year.
    (c) Staff. As they deem necessary and proper, members shall, from 
time to time, designate personnel from their respective organizations to 
serve as the staff, or otherwise to participate in the activities, of 
the Federal Executive Board. Other personnel may be engaged, by 
appointment, contract, or otherwise, only with the approval of the 
Director.
    (d) Unless otherwise expressly provided by law, by directive of the 
President or the Director, or by the by-laws of the Federal Executive 
Board, every committee, subcommittee council, and other sub-unit of the 
Federal Executive Board, and every affiliation of the Federal Executive 
Board with external organizations, shall expire upon expiration of the 
term of office of the Chairman. Such a committee, subcommittee, council, 
other sub-unit, or affiliation may be reestablished or renewed by 
affirmative action of the Federal Executive Board.
    (e) Board Actions. Actions of a Federal Executive Board shall be 
taken only with the approval of a majority of the members thereof. This 
authority may not be delegated. All activities of a Federal Executive 
Board shall conform to applicable laws and shall reflect prudent uses of 
official time and funds.

[[Page 611]]



Sec. 960.106  OPM leadership.

    (a) Role of the Director. The Director is responsible to the 
President for the organizational and programmatic activities of the 
Federal Executive Boards. The Director shall direct and oversee the 
operations of Federal Executive Boards consistent with law and with the 
directives of the President. He may, from time to time, consult with, 
and require the advice of, the Chairman, members, and staff of the 
Federal Executive Boards.
    (b) Role of the Director's Regional Representatives. The Chairman of 
each Federal Executive Board shall report to the Director through the 
Director's Regional Representative, an official of the Office of 
Personnel Management. The Director's Regional Representatives shall 
oversee the activities of, and periodically visit and meet with, the 
Federal Executive Boards.
    (c) Communications. The Office of Personnel Management shall 
maintain channels of communication from the Director through the 
Director's Regional Representatives to the Chairmen of the Federal 
Executive Boards, and between and among the Federal Executive Boards 
through the Director and the Director's Regional Representatives. Any 
Executive agency may use these channels to communicate with the Director 
and with the Federal Executive Boards. Chairmen of Federal Executive 
Boards may communicate with the Director on recommendations for action 
at the national level, on significant management problems that cannot be 
addressed at the local level, and on other matters of interest to the 
Executive Branch.
    (d) Reports. Each Federal Executive Board shall transmit to the 
Director, over the signature of its Chairman, an annual work plan and an 
annual report to the Director on the significant programs and activities 
of the Federal Executive Board in each fiscal year. Each work plan shall 
set forth the proposed general agenda for the succeeding fiscal year. 
The work plan shall be subject to the approval of the Director. Each 
annual report shall describe and evaluate the preceding fiscal year's 
activities. The work plan for Fiscal Year 1985 shall be submitted on or 
before July 1, 1984, and the annual report for Fiscal Year 1984 shall be 
submitted on or before January 1, 1985. Subsequent annual reports shall 
be submitted on or before January 1 and subsequent annual work plans 
shall be submitted on or before July 1 in every year thereafter. In 
addition, members of Federal Executive Boards shall keep the 
headquarters of their respective Executive agencies informed of their 
activities by timely reports through appropriate agency channels.
    (e) Conferences. The Director may, from time to time, convene 
regional and national conferences of Chairmen and other representatives 
of Federal Executive Boards.



Sec. 960.107  Authorized activities.

    (a) Each Federal Executive Board shall serve as an instrument of 
outreach for the national headquarters of the Executive Branch to 
Executive Branch activities in the metropolitan area. Each Federal 
Executive Board shall consider common management and program problems 
and develop cooperative arrangements that will promote the general 
objectives of the Government and of the several Executive agencies in 
the metropolitan area. Efforts of members, alternates, and staff in 
those areas shall be made with the guidance and approval of the 
Director; within the range of the delegated authority and discretion 
they hold; within the resources available; and consistent with the 
missions of the Executive agencies involved.
    (b) Each Federal Executive Board shall: (1) Provide a forum for the 
exchange of information between Washington and the field and among field 
elements in the metropolitan area about programs and management methods 
and problems; (2) develop local coordinated approaches to the 
development and operation of programs that have common characteristics; 
(3) communicate management initiatives and other concerns from 
Washington to the field to achieve better mutual understanding and 
support; and (4) refer problems that cannot be solved locally to the 
national level.
    (c) Subject to the guidance of the Director, the Federal Executive 
Boards shall be responsible for:

[[Page 612]]

    (1) Presidential initiatives on management reforms; personnel 
initiatives of the Office of Personnel Management; programs led by the 
Office of Management and Budget, such as Reform '88 and the President's 
Council on Integrity and Efficiency; and facilities planning led by the 
General Services Administration;
    (2) The local Combined Federal Campaign, under the direction of the 
Director;
    (3) The sharing of technical knowledge and resources in finance, 
internal auditing, personnel management, automated data processing 
applications, interagency use of computer installations, and similar 
commonly beneficial activities;
    (4) The pooling of resources to provide, as efficiently as possible, 
and at the least possible cost to the taxpayers, common services such as 
employee first-aid, cardiopulmonary resuscitation (``CPR''), CPR 
training, preventative health programs, assistance to the aging, blood 
donor programs, and savings bond drives;
    (5) Encouragement of employee initiative and better performance 
through special recognition and other incentive programs, and provision 
of assistance in the implementation and upgrading of performance 
management systems;
    (6) Emergency operations, such as under hazardous weather 
conditions; responding to blood donation needs; and communicating 
related leave policies;
    (7) Recognition of the service of American Veterans and 
dissemination of information relating to programs and benefits available 
for veterans in the Federal service; and
    (8) Such other programs, projects, and operations as may be set 
forth in the annual work plan approved by the Director.
    (d) The Office of Personnel Management shall advise Federal 
Executive Boards on activities in the areas of performance appraisal and 
incentives, interagency training programs, the educational development 
of Government employees, improvement of labor-management relations, 
equal employment opportunity, the Federal Women's Program, the Federal 
Equal Opportunity Recruitment Program, the Hispanic Employment Program, 
the Veterans Employment Program, and selective placement programs for 
handicapped individuals.
    (e) The Director may, from time to time, direct one or more of the 
Federal Executive Boards to address such specific programs or undertake 
such cooperative activities as he may deem necessary or proper.



Sec. 960.108  Additional rules and directives.

    The Director may, from time to time, issue further rules and 
guidance for, and directives to, the Federal Executive Boards.

[49 FR 34194, Aug. 29, 1984, as amended at 66 FR 66712, Dec. 27, 2001]

                           PART 970 [RESERVED]



PART 990_GENERAL AND MISCELLANEOUS--Table of Contents




Subpart A_Claims and Appeals of Veterans; Recognition of Representatives

Sec.
990.101 Appearance.
990.102 Agents.
990.103 Recognition of service organizations.
990.104 Accredited representatives of service organizations.
990.105 Designation of service organizations as representatives.
990.106 General provisions.

    Authority: 5 U.S.C. 1302, 3315, 7512, 7701.

    Source: 33 FR 12523, Sept. 4, 1968, unless otherwise noted.



Subpart A_Claims and Appeals of Veterans; Recognition of Representatives



Sec. 990.101  Appearance.

    A preference eligible who has filed with OPM a claim or an appeal 
under section 3502, 3503, or 7701 of title 5, United States Code, may 
appear in a proceeding in connection therewith either personally or by a 
representative. The representative may be a person designated by the 
preference eligible, that person being referred to in this part as 
agent; or a service organization designated by the preference eligible 
and approved by OPM.

[[Page 613]]



Sec. 990.102  Agents.

    A competent person of good moral character and of good repute who is 
a citizen of the United States, or who has declared his intention to 
become a citizen of the United States, may be designated as an agent. A 
person (other than a Member of Congress) claiming to act as an agent 
shall submit a written statement from the preference eligible (OPM Form 
307) authorizing him to represent the preference eligible in his claim 
or appeal. A written statement is not required of a Member of Congress 
claiming to act as an agent to represent a preference eligible in his 
claim or appeal.



Sec. 990.103  Recognition of service organizations.

    A service organization approved by OPM may be recognized in the 
presentation of claims or appeals under section 3502, 3503, or 7701 of 
title 5, United States Code, when the proper officers thereof make 
application for recognition, and as a part of the application agree and 
certify that neither the organization nor its representatives will 
charge claimants or appellants a fee or compensation for their services, 
except expenses actually incurred with the consent of the claimant. In 
requesting recognition, the following information shall be supplied:
    (a) Statement outlining the purpose of the organization and need 
thereof, and manner in which the preference eligible will be benefited 
by the recognition.
    (b) Names, titles, and addresses of officers.
    (c) Number of posts or chapters, and States in which located.
    (d) Names, titles, and addresses of full-time paid employees who are 
qualified to act as accredited representatives.
    (e) Copy of constitution or charter and bylaws of the organization.



Sec. 990.104  Accredited representatives of service organizations.

    (a) Each recognized service organization shall file with OPM, on the 
prescribed form (OPM Form 306), the name of any officer whom it desires 
to be recognized as its accredited representative and OPM office or 
offices to which recognition is to be extended in the presentation of 
claims or appeals. In proposing a candidate for recognition as a 
representative, the organization, through its appropriate officer, shall 
certify to the following:
    (1) That the candidate is a citizen of the United States, of good 
character and reputation, is qualified by training or experience to 
assist in the presentation of claims, and is a member or employee of the 
organization.
    (2) That he is not employed in any civil or military department or 
agency of the United States, and is not a retired member of the Regular 
Army, Navy, Air Force, Marine Corps, Coast Guard, or Public Health 
Service.
    (3) Whether the candidate is a preference eligible and, if so, that 
he was honorably discharged from active service.
    (b) A single application (OPM Form 306) shall be filed with the 
central office of OPM for recognition before (1) the central office 
only, (2) two or more regional offices, or (3) the central office and 
one or more regional offices. Application shall be filed with the 
regional office where the candidate is to serve when recognition before 
only one regional office is requested. Application Form 306 shall be 
retained by the approving office of OPM.
    (c) The central office or regional director, as the case may be, is 
responsible for determining the qualifications of a candidate of a 
service organization for recognition. Normally, the candidate of a 
service organization will be approved. However, if there is doubt as to 
the qualifications or suitability of a candidate, appropriate 
investigation may be made to resolve the doubts. If it is determined 
that the candidate is qualified, duplicate copies of a letter of notice 
to that effect shall be issued to the veterans organization concerned, 
with an Identification Card (OPM Form 308) in the candidate's name 
signed by the appropriate official in the central office or the regional 
director. One copy of the letter of approval shall be retained by the 
organization and the other forwarded to the candidate with the 
Identification Card 308 countersigned by the appropriate officer of the 
organization. When approval is made by the central office, a copy of

[[Page 614]]

the letter of approval shall be sent to each regional office before 
which recognition of the candidate is approved. When approval is made by 
a regional office, a copy of the letter of approval shall be sent to the 
central office of OPM. Each regional office shall maintain a record of 
all accredited representatives approved for recognition before that 
regional office. The central office shall maintain a record of all 
accredited representatives approved by all regional directors and the 
central office. If the regional director's determination is adverse, or 
the case is one of doubtful aspect, the entire matter may be referred to 
OPM's central office, at the regional director's option, where it will 
be handled in the same manner as a request for recognition ordinarily 
handled by the central office.
    (d) Recognition may be canceled at the request of the organization. 
The central office or regional director may cancel or suspend a 
recognition for cause. When a regional director cancels or suspends a 
recognition, a report of the facts shall be made to the central office. 
Notice of cancellation or suspension shall be supplied in the same 
manner as a notice of recognition.
    (e) Nominations for accredited representatives of national service 
organizations are acceptable only if approved by the certifying officer, 
national headquarters, of the organization.
    (f) Letters of recognition issued by the central office to national 
and field officers of recognized organizations constitute authorization 
for their recognition in claims or appeals in any regional office within 
their respective assignments. Letters of recognition issued by a 
regional director constitute authorization for the accredited 
representatives to present claims or appeals in any regional office 
within their respective assignments.
    (g) When a representative has been recognized, a card shall be 
prepared in the office which approves the recognition, showing his name, 
address, organization, and date of recognition. Copies of this card 
shall be filed in the central office of OPM, and in the regional office 
by which he is recognized or in which he is authorized to act.



Sec. 990.105  Designation of service organizations as representatives.

    (a) Before a service organization may be recognized in an individual 
claim or appeal, there shall be filed a designation duly executed by the 
claimant or appellant, specifically conferring on the organization the 
authority to represent him in the presentation of his claim or appeal, 
and to receive information in connection therewith. This designation 
shall be on the form prescribed by OPM (OPM Form 307) and shall be 
presented to the office concerned, to be filed in connection with the 
claim or appeal. The designation shall be signed by the claimant or 
appellant.
    (b) On receipt and approval of the designation, the service 
organization named therein shall be recognized as the sole agency for 
the presentation of the claim or appeal covered thereby, and no other 
organization shall be recognized in the presentation of that claim or 
appeal. The designation made by the claimant may be revoked by him at 
any time and a subsequent designation made, naming another organization. 
A subsequently executed designation constitutes a revocation of any 
existing designation. A designation may also be revoked by the 
organization named therein.



Sec. 990.106  General provisions.

    (a) Nothing in this subpart permits the unauthorized practice of law 
in any place or the giving of any service except the authorized 
participation in agency proceedings by agents or accredited 
representatives who have been approved by OPM.
    (b) This subpart does not apply to adjudications of charges of 
political activity on the part of officers or employees in the 
competitive service, or of officers or employees of a State or local 
government, nor to adjudications of the existence of good cause for the 
removal of hearing examiners appointed under section 3105 of title 5 
United States Code.

[[Page 615]]



SUBCHAPTER C_REGULATIONS GOVERNING EMPLOYEES OF THE OFFICE OF PERSONNEL 
                               MANAGEMENT





PART 1001_EMPLOYEE RESPONSIBILITIES AND CONDUCT--Table of Contents




Sec.
1001.101 Cross-reference to financial disclosure requirements and other 
          conduct rules.
1001.102 Privacy Act rules of conduct.

    Authority: 5 U.S.C. 552a, 7301.



Sec. 1001.101  Cross-reference to financial disclosure requirements 
and other conduct rules.

    In addition to the regulations contained in this part, employees of 
the Office of Personnel Management (OPM) should refer to:
    (a) The Standards for Ethical Conduct for Employees of the Executive 
Branch at 5 CFR part 2635;
    (b) The OPM regulations at 5 CFR part 4501, which supplement the 
executive branch-wide standards;
    (c) The Employee Responsibilities and Conduct regulations at 5 CFR 
part 735;
    (d) The executive branch financial disclosure regulations at 5 CFR 
part 2634;
    (e) The executive branch outside employment regulations at 5 CFR 
part 2636; and
    (f) The restrictions upon use of political referrals in employment 
matters at 5 U.S.C. 3303.

[61 FR 36996, July 16, 1996]



Sec. 1001.102  Privacy Act rules of conduct.

    (a) An employee should avoid any action which results in the 
appearance of using public office to collect or gain access to personal 
data about individuals beyond that required by or authorized for the 
performance of assigned duties.
    (b) An employee should not use any personal data about individuals 
for any purpose other than required and authorized in the performance of 
assigned duties; or disclose any such information to other agencies or 
persons not expressly authorized to receive or have access to such 
information, and should make any such authorized disclosures in 
accordance with established regulations and procedures.
    (c) Each employee, and especially an employee who has access to or 
is engaged in any way in the handling of information subject to the 
Privacy Act of 1974, shall acquaint himself or herself with the 
regulations of this subsection as well as the pertinent provisions of 
the Privacy Act relating to the treatment of such information. 
Particular attention is directed to the following provisions of the 
Privacy Act:
    (1) 5 U.S.C. 552a(e)(7)--The prohibition against maintaining any 
information regarding how any individual exercises First Amendment 
rights (including political or religious beliefs, and the freedom of 
speech, press, and assembly) unless expressly authorized by statute or 
the individual.
    (2) 5 U.S.C. 552a(b)--The prohibition against disclosure of certain 
personal data without the prior written consent of the individual, 
except under certain limited conditions.
    (3) 5 U.S.C. 552a(e)(1)--The prohibition against collecting or 
maintaining any personal data about individuals, except as necessary and 
relevant to perform a function of the Office which is authorized by 
statute or Executive order.
    (4) 5 U.S.C. 552a(e)(2)--The requirement to collect information 
which may result in an adverse determination about an individual from 
that individual whenever practicable.
    (5) 5 U.S.C. 552a(e)(3)--The requirement to inform individuals from 
whom information about themselves is solicited of the authority under 
which the solicitation is made and whether the disclosure of the 
information is mandatory, the purposes for which the information will be 
used, the routine uses which may be made of the information, and the 
consequences of failure to provide such information.
    (6) 5 U.S.C. 552a(b) and (e)(10)--The obligation of employees to 
comply with established safeguards and procedures

[[Page 616]]

to protect personal data from anticipated threats or hazards to the 
security or integrity of the data which could result in substantial 
harm, embarrassment, inconvenience, or unfairness to an individual about 
whom information is maintained.
    (7) 5 U.S.C. 552a(c) (1), (2), and (3)--The obligation of employees 
to maintain an accounting of all disclosures of personal information 
from systems of records, except for those disclosures made within the 
Office to persons having an official need to know or to the public under 
the Freedom of Information Act (5 U.S.C. 552).
    (8) 5 U.S.C. 552a(e) (5) and (6)--The obligation of employees to 
assure that any personal information about individuals is as accurate, 
relevant, timely and complete as is reasonably necessary to assure 
fairness to the individual at such time as any such information is 
utilized by the Office in making a determination about the individual or 
when the information is disclosed.
    (9) 5 U.S.C. 552a(d) (1), (2), and (3)--The obligation of employees 
to permit individuals to have access to records pertaining to themselves 
in accordance with established Office procedures and to have an 
opportunity to request that such records be amended.
    (10) 5 U.S.C. 552a(c)(4) and (d)(4)--The obligation to inform prior 
recipients of personal data when a record is amended pursuant to the 
request of an individual or a statement of disagreement has been filed, 
and to advise any subsequent recipients of the disputed information.
    (11) 5 U.S.C. 552a(n)--The prohibition against renting or selling 
lists of names and addresses unless specifically authorized by law.
    (12) 5 U.S.C. 552a(i) (1), (2), and (3)--The criminal penalties to 
which an employee may be subject for failing to comply with certain 
provisions of the Privacy Act of 1974.

[53 FR 13097, Apr. 21, 1988. Redesignated at 61 FR 36996, July 16, 1996]


[[Page 617]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts, and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 619]]



                    Table of CFR Titles and Chapters




                     (Revised as of January 1, 2006)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 100-199)
        II  Office of Management and Budget Circulars and Guidance 
                (200-299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements [Reserved]


                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--99)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Part 2100)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)

[[Page 620]]

        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Part 3201)
     XXIII  Department of Energy (Part 3301)
      XXIV  Federal Energy Regulatory Commission (Part 3401)
       XXV  Department of the Interior (Part 3501)
      XXVI  Department of Defense (Part 3601)
    XXVIII  Department of Justice (Part 3801)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Part 4301)
      XXXV  Office of Personnel Management (Part 4501)
        XL  Interstate Commerce Commission (Part 5001)
       XLI  Commodity Futures Trading Commission (Part 5101)
      XLII  Department of Labor (Part 5201)
     XLIII  National Science Foundation (Part 5301)
       XLV  Department of Health and Human Services (Part 5501)
      XLVI  Postal Rate Commission (Part 5601)
     XLVII  Federal Trade Commission (Part 5701)
    XLVIII  Nuclear Regulatory Commission (Part 5801)
         L  Department of Transportation (Part 6001)
       LII  Export-Import Bank of the United States (Part 6201)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Part 6401)
        LV  National Endowment for the Arts (Part 6501)
       LVI  National Endowment for the Humanities (Part 6601)
      LVII  General Services Administration (Part 6701)
     LVIII  Board of Governors of the Federal Reserve System (Part 
                6801)
       LIX  National Aeronautics and Space Administration (Part 
                6901)
        LX  United States Postal Service (Part 7001)
       LXI  National Labor Relations Board (Part 7101)
      LXII  Equal Employment Opportunity Commission (Part 7201)
     LXIII  Inter-American Foundation (Part 7301)
       LXV  Department of Housing and Urban Development (Part 
                7501)
      LXVI  National Archives and Records Administration (Part 
                7601)
     LXVII  Institute of Museum and Library Services (Part 7701)
      LXIX  Tennessee Valley Authority (Part 7901)
      LXXI  Consumer Product Safety Commission (Part 8101)
    LXXIII  Department of Agriculture (Part 8301)
     LXXIV  Federal Mine Safety and Health Review Commission (Part 
                8401)
     LXXVI  Federal Retirement Thrift Investment Board (Part 8601)

[[Page 621]]

    LXXVII  Office of Management and Budget (Part 8701)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Part 
                9701)
      XCIX  Department of Defense Human Resources Management and 
                Labor Relations Systems (Department of Defense--
                Office of Personnel Management) (Part 9901)

                      Title 6--Homeland Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 0--99)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)

[[Page 622]]

     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  Cooperative State Research, Education, and Extension 
                Service, Department of Agriculture (Parts 3400--
                3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

[[Page 623]]

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1303--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Part 1800)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board, Department of 
                Commerce (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board, 
                Department of Commerce (Parts 500--599)

[[Page 624]]

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--499)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

[[Page 625]]

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  Bureau of Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Bureau of Immigration and Customs Enforcement, 
                Department of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Employment Standards Administration, Department of 
                Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training, Department of Labor 
                (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

[[Page 626]]

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board Regulations (Parts 
                900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)

[[Page 627]]

        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Part 1200)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--899)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)

[[Page 628]]

        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

[[Page 629]]

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Minerals Management Service, Department of the 
                Interior (Parts 200--299)
       III  Board of Surface Mining and Reclamation Appeals, 
                Department of the Interior (Parts 300--399)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)

[[Page 630]]

    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
        XI  National Institute for Literacy (Parts 1100--1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Part 1501)

[[Page 631]]

       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                301--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--99)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Rate Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)

[[Page 632]]

       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System
       201  Federal Information Resources Management Regulation 
                (Parts 201-1--201-99) [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--499)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 200--499)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10010)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

[[Page 633]]

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)

[[Page 634]]

        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Department of Health and Human Services (Parts 300--
                399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  United States Agency for International Development 
                (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees' 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        35  [Reserved]
        44  Federal Emergency Management Agency (Parts 4400--4499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)

[[Page 635]]

        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399)
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  General Services Administration Board of Contract 
                Appeals (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation (Parts 1400--1499)
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)

[[Page 636]]

        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR

[[Page 637]]





           Alphabetical List of Agencies Appearing in the CFR




                     (Revised as of January 1, 2006)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Advanced Research Projects Agency                 32, I
Advisory Council on Historic Preservation         36, VIII
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development, United      22, II
     States
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            5, LXXIII
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Cooperative State Research, Education, and      7, XXXIV
       Extension Service
  Economic Research Service                       7, XXXVII
  Energy, Office of                               7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX

[[Page 638]]

Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Benefits Review Board                             20, VII
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase From People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       45, VII
Civil Rights, Office for                          34, I
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               44, IV
  Census Bureau                                   15, I
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Fishery Conservation and Management             50, VI
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV, VI
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Product Safety Commission                5, LXXI; 16, II
Cooperative State Research, Education, and        7, XXXIV
     Extension Service
Copyright Office                                  37, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    28, VIII
     for the District of Columbia
Customs and Border Protection Bureau              19, I
Defense Acquisition Regulations System            48, 2
Defense Contract Audit Agency                     32, I

[[Page 639]]

Defense Department                                5, XXVI; 32, Subtitle A; 
                                                  40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Acquisition Regulations System          48, 2
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 1
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             5, XXIII; 10, II, III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   5, LIV; 40, I, IV, VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                5, III, LXXVII; 14, VI; 
                                                  48, 99
  National Drug Control Policy, Office of         21, III

[[Page 640]]

  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       11, I
Federal Emergency Management Agency               44, I
  Federal Acquisition Regulation                  48, 44
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority, and General    5, XIV; 22, XIV
     Counsel of the Federal Labor Relations 
     Authority
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Fishery Conservation and Management               50, VI
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105

[[Page 641]]

  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          5, XLV; 45, Subtitle A
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V; 42, I
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  6, I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection Bureau            19, I
  Federal Emergency Management Agency             44, I
  Immigration and Customs Enforcement Bureau      19, IV
  Immigration and Naturalization                  8, I
  Transportation Security Administration          49, XII
Housing and Urban Development, Department of      5, LXV; 24, Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Customs Enforcement Bureau        19, IV
Immigration and Naturalization                    8, I
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V; 42, I
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII

[[Page 642]]

Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  Minerals Management Service                     30, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            43, Subtitle A
  Surface Mining and Reclamation Appeals, Board   30, III
       of
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Fishing and Related Activities      50, III
International Investment, Office of               31, VIII
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                5, XXVIII; 28, I, XI; 40, 
                                                  IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Benefits Review Board                           20, VII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I

[[Page 643]]

  Occupational Safety and Health Administration   29, XVII
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
  Copyright Royalty Board                         37, III
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II
Micronesian Status Negotiations, Office for       32, XXVII
Mine Safety and Health Administration             30, I
Minerals Management Service                       30, II
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
National Aeronautics and Space Administration     5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   45, XII, XXV
National Archives and Records Administration      5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Bureau of Standards                      15, II
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Standards and Technology    15, II
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV, VI
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III
     Administration
National Transportation Safety Board              49, VIII
National Weather Service                          15, IX
Natural Resources Conservation Service            7, VI
Navajo and Hopi Indian Relocation, Office of      25, IV

[[Page 644]]

Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Offices of Independent Counsel                    28, VI
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Rate Commission                            5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Regional Action Planning Commissions              13, V
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                17, II
Selective Service System                          32, XVI
Small Business Administration                     13, I
Smithsonian Institution                           36, V
Social Security Administration                    20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining and Reclamation Appeals, Board of  30, III
Surface Mining Reclamation and Enforcement,       30, VII
   Office of
[[Page 645]]

Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection Bureau            19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Law Enforcement Training Center         31, VII
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  International Investment, Office of             31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 647]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations that were 
made by documents published in the Federal Register since January 1, 
2001, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 2001, see the ``List of CFR Sections 
Affected, 1949-1963, 1964-1972, 1973-1985, and 1986-2000'' published in 
11 separate volumes.

                                  2001

5 CFR
                                                                   66 FR
                                                                    Page
Chapter I
720.306 (b) amended................................................66711
731 Regulation at 65 FR 82243 eff. date delayed.....................7863
731.301 (b) corrected..............................................11100
731.304 Corrected..................................................11100
732.102 (a) amended................................................66711
732.201 (b) amended................................................66711
732.301 (e) amended................................................66711
792.207 Revised......................................................705
792.230 Revised......................................................705
792.234 Revised......................................................705
831 Authority citation revised..............................15608, 38524
831.102 Amended....................................................66711
831.111 (a) and (b)(2) amended.....................................66711
831.205 Added; interim.............................................15608
831.301 (a)(3)(ii) revised; (b)(3) amended; interim................15608
831.303 (d) added; interim.........................................15608
831.613 (d) amended................................................66711
831.902 Amended; interim...........................................38524
831.908 (a) revised; interim.......................................38524
831.910 Revised; interim...........................................38524
831.912 Undesignated center heading and section added; interim.....38524
831.1907 Removed...................................................66711
831.2103 Amended...................................................66711
831.2106 (c) amended...............................................66711
831.2107 (a)(5) amended............................................66711
837.304 (a), (b) and (c) amended...................................66711
839 Added; interim.................................................15609
841 Authority citation revised.....................................15618
841.604 (c) added; interim.........................................15618
841.1008 Removed...................................................66711
842 Authority citation revised.....................................38525
842.802 Amended; interim...........................................38525
842.807 Revised; interim...........................................38525
842.810 Undesignated center heading and section added; interim.....38525
846 Authority citation revised.....................................15618
846.204 (b)(2)(i) revised; (e) added; interim......................15618
890.304 (d)(2) revised; interim....................................49086
890.306 (f)(1)(ii), (iii), (h) and (i) revised; (f)(1)(iv) added; 
        interim....................................................49086
890.806 (f)(1)(ii), (iii), (h) and (i) revised; (f)(1)(iv) added; 
        interim....................................................49087
890.807 (e)(2) and (4) revised; interim............................49088
930.110 Amended....................................................66712
930.115 Amended....................................................66712
930.210 (a) revised; interim.......................................63909
960.108 Amended....................................................66712

                                  2002

5 CFR
                                                                   67 FR
                                                                    Page
Chapter I
890.304 Heading and (d)(2) revised.................................41306
890.306 Heading and (f)(1)(ii) revised.............................41306
890.806 Heading, (f)(1)(ii) and (h) revised; (f)(1)(iii), (iv) and 
        (i) removed................................................41307
890.807 Heading, (e)(2) and (4) revised............................41307

[[Page 648]]

930.210 Regulation at 66 FR 63909 eff. date confirmed..............39249

                                  2003

5 CFR
                                                                   68 FR
                                                                    Page
Chapter I
792.200--792.231 (Subpart B) Revised; interim......................14128
831 Authority citation revised.....................................35271
831.114 Revised; interim...........................................35271
831.305 (d) added; interim..........................................2178
831.704 Revised; interim............................................2178
837.506 Revised; interim............................................2178
842 Authority citation revised.....................................35272
842.213 Revised; interim...........................................35272
842.304 (d) revised; interim........................................2178
843.314 Revised; interim............................................2178
844.106 Revised; interim............................................2178
847 Authority citation revised......................................2179
847.101 (a) revised; interim........................................2179
847.102 (a)(8) and (9) added; (c)(4) revised; interim...............2179
847.103 (b) amended; interim........................................2179
847.104 (c) added; interim..........................................2179
847.105 Revised; interim............................................2179
847.106 (a) revised; interim........................................2179
847.107 (b) revised; interim........................................2179
847.202 Revised; interim............................................2179
847.203 (a) revised; interim........................................2180
847.204 (a) revised; interim........................................2180
847.205 (a) revised; interim........................................2180
847.402 (a)(1) and (b)(1) revised; interim..........................2180
847.421 (a)(2) revised; interim.....................................2180
847.431 (a)(2) revised; interim.....................................2180
847.801--847.809 (Subpart H) added; interim.........................2180
847.901--847.912 (Subpart I) added; interim.........................2181
870 Authority citation revised.....................................59081
870.401 (a), (b)(1) and (d) revised................................59081
870.402 Revised....................................................59081
870.404 (d) revised................................................59082
870.801 (e) revised................................................59082
875 Added; interim..................................................5534
890 Authority citation revised...............................5475, 56524
890.301 (e)(1) and (f)(3) revised; (g)(3) and (4) added; interim 
                                                                   56524
890.304 Heading and (d)(1) revised; interim........................56524
890.306 (e)(1) and (f)(1)(i) revised; interim......................56525
890.502 (b)(2) amended; (b)(4) redesignated as (b)(4)(i); 
        (b)(4)(ii) added; interim..................................56524
890.1001--1055 (Subpart J) Revised..................................5475
892 Authority citation revised.....................................56527
892.101 Amended....................................................56527
892.203 Revised....................................................56528
892.207 Revised; interim...........................................56525
    Revised........................................................56528
892.208 Heading revised; (c) added; interim........................56525
    Revised........................................................56528
892.209 (c) added; interim.........................................56525
    (a) and (b) revised............................................56528
892.211 Revised....................................................56528
892.401 (Subpart D) Subpart heading and (b)(1) revised.............56529
892.402 Added......................................................56529
919 Redesignated from Part 970.....................................74161
970 Revised.................................................66544, 66561
    Redesignated as Part 919.......................................74161
970.440 Added......................................................66562

                                  2004

5 CFR
                                                                   69 FR
                                                                    Page
Title 5 Nomenclature change........................................18803
Chapter I
724 Added; interim..................................................2998
    Comment period extended........................................16769
730 Added; interim.................................................61144
792.200--792.231 Regulation at 68 FR 14128 confirmed................8325
831 Authority citation revised.....................................33278
831.114 Revised....................................................33278
    (k)(2)(iv)(B) amended..........................................50265
841.401--841.413 (Subpart D) Appendix A removed; interim...........69806
842 Authority citation revised..............................33279, 69806
842.213 Revised....................................................33279
    (k)(2)(iv)(B) amended..........................................50265
842.504 (b)(2)(iv)(A) and (B)(2) revised; interim..................69806
843.308 (b)(2)(iii)(B) revised; interim............................69806
843.309 (b)(2) revised; interim....................................69806
843.301--843.314 (Subpart C) Appendix A revised; interim...........69806
    Appendix B removed; interim....................................69806
890 Authority citation revised.....................................56928
890.201 (b)(3) revised; interim....................................31721
    Regulation at 69 FR 31721 confirmed............................78295

[[Page 649]]

890.301 Regulation at 68 FR 56524 confirmed; (e)(1)(ii), (f)(3) 
        and (g)(4)(i) revised......................................56928
890.304 Regulation at 68 FR 56524 confirmed; (d)(1) revised........56929
890.306 (l)(4)(iii) revised; interim...............................31722
    Regulation at 68 FR 56525 confirmed; (e)(1) and (f)(1)(i) 
revised............................................................56928
    Regulation at 69 FR 31722 confirmed............................78295
890.502 Regulation at 68 FR 56525 confirmed; (b)(2) amended; 
        (b)(4)(ii) revised.........................................56929
890.1046 Revised....................................................9920
890.1047 Revised....................................................9920
890.1049 Revised....................................................9920
890.1060--890.1072 Undesignated center heading and sections added 
                                                                    9921
892.207 Regulation at 68 FR 56525 confirmed; revised...............56929
892.208 Regulation at 68 FR 56525 confirmed; (c) added.............56929
892.209 Regulation at 68 FR 56525 confirmed; (c) revised...........56929
930.301 (Subpart C) Revised........................................32836

                                  2005

5 CFR
                                                                   70 FR
                                                                    Page
720.301 Revised; eff. 1-3-06.......................................72068
831 Authority citation revised.....................................42253
831.503 (b)(3)(iv) amended; interim................................31315
831.902 Amended....................................................42253
841 Regulation at 69 FR 69806 confirmed............................48839
842 Authority citation revised.......................32710, 42254, 50952
842.206 (c)(3)(iv) amended; interim................................31315
842.304 (e) added; interim.........................................50953
842.305 (j) added; interim.........................................50953
842.504 Regulation at 69 FR 69806 confirmed........................48839
842.802 Amended; interim...........................................32710
    Amended........................................................42254
842.806 (a) amended; interim.......................................32710
842.811 Added; interim.............................................32710
843 Regulation at 69 FR 69806 confirmed............................48839
    Regulation at 69 FR 69807 confirmed............................48839
843.308 Regulation at 69 FR 69806 confirmed........................48839
843.309 Regulation at 69 FR 69806 confirmed........................48839
875 Regulation at 68 FR 5534 confirmed.............................30606
875.101 Amended....................................................30606
875.104 (c) amended................................................30607
875.201 (a)(1) amended; (a)(3) added...............................30607
875.202 Amended....................................................30607
875.205 (c) added..................................................30607
875.206 Amended; heading, (a) and (c) revised......................30607
875.208 Amended....................................................30607
875.211 Revised....................................................30607
875.402 (c) added..................................................30607
875.403 Amended....................................................30607
875.404 (b)(2) revised.............................................30607
890 Authority citation revised.....................................33797
890.301--890.308 (Subpart C) Amended; interim......................71749
890.306 (l)(4)(ii), (iii), (iv) and (q)(1)(ii) revised.............33798
890.801--890.808 (Subpart H) Amended; interim......................71749
950.104 (b)(18) added..............................................67341
950.605 Added......................................................67341


                                  [all]