[Federal Register Volume 60, Number 86 (Thursday, May 4, 1995)]
[Notices]
[Pages 22091-22093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10920]



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SOCIAL SECURITY ADMINISTRATION

[Social Security Acquiescence Ruling 95-1(6)]


Preslar v. Secretary of Health and Human Services; Definition of 
Highly Marketable Skills for Individuals Close to Retirement Age

AGENCY: Social Security Administration.

ACTION: Notice of Social Security Acquiescence Ruling.

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SUMMARY: In accordance with 20 CFR 422.406(b)(2), the Commissioner of 
Social Security gives notice of Social Security Acquiescence Ruling 95-
1(6).

EFFECTIVE DATE: May 4, 1995.

FOR FURTHER INFORMATION CONTACT:
Gary Sargent, Litigation Staff, Social Security Administration, 6401 
Security Blvd., Baltimore, MD 21235, (410) 965-1695.

SUPPLEMENTARY INFORMATION: Although not required to do so pursuant to 5 
U.S.C. 552(a)(1) and (a)(2), we are publishing this Social Security 
Acquiescence Ruling in accordance with 20 CFR 422.406(b)(2).
    A Social Security Acquiescence Ruling explains how we will apply a 
holding in a decision of a United States Court of Appeals that we 
determine conflicts with our interpretation of a provision of the 
Social Security Act (the Act) or regulations when the Government has 
decided not to seek further review of that decision or is unsuccessful 
on further review.
    We will apply the holding of the Court of Appeals decision as 
explained in this Social Security Acquiescence Ruling to claims at all 
levels of administrative adjudication within the Sixth Circuit. This 
Social Security Acquiescence Ruling will apply to all determinations 
and decisions made on or after May 4, 1995. If we made a determination 
or decision on your application for benefits between January 21, 1994, 
the date of the Court of Appeals' decision and May 4, 1995, the 
effective date of this Social Security Acquiescence Ruling, you may 
request application of the Social Security Acquiescence Ruling to your 
claim if you first demonstrate, pursuant to 20 CFR 404.985(b) or 
416.1485(b), that application of the Ruling could change our prior 
determination or decision.
    If this Social Security Acquiescence Ruling is later rescinded as 
obsolete, we will publish a notice in the Federal Register to that 
effect as provided for in 20 CFR 404.985(e) and 416.1485(e). If we 
decide to relitigate the issue covered by this Social Security 
Acquiescence Ruling as provided for by 20 CFR 404.985(c) and 
416.1485(c), we will publish a notice in the Federal Register stating 
that we will apply our interpretation of the Act or regulations 
involved and explaining why we have decided to relitigate the issue.

(Catalog of Federal Domestic Assistance Programs Nos. 93.802 Social 
Security--Disability Insurance; 93.803 Social Security--Retirement 
Insurance; 93.805 Social Security--Survivors Insurance; 93.806--
Special Benefits for Disabled Coal Miners; 93.807--Supplemental 
Security Income.)

    Dated: November 14, 1994.
Shirley S. Chater,
Commissioner of Social Security.

Acquiescence Ruling 95-1(6)

    Preslar v. Secretary of Health and Human Services, 14 F.3d 1107 
(6th Cir. 1994)--Definition of Highly Marketable Skills for Individuals 
Close to Retirement Age--Titles II and XVI of the Social Security Act.
    Issue: Whether, in order to find that the skills of a claimant who 
is close to retirement age (age 60-64) are ``highly marketable'' within 
the meaning of the Secretary's regulations, the Social Security 
Administration (SSA) must [[Page 22092]] first establish that the 
claimant's skills are sufficiently specialized and coveted by employers 
as to make the claimant's age irrelevant in the hiring process and 
enable the claimant to obtain employment with little difficulty.
    Statute/Regulation/Ruling Citation: Sections 223(d)(2)(A) and 
1614(a)(3)(B) of the Social Security Act (42 U.S.C. 423(d)(2)(A) and 
1382c(a)(3)(B)); 20 CFR 404.1520(f)(1), 404.1563(d), 404.1566(c), 
416.920(f)(1), 416.963(d), 416.966(c); 20 CFR Part 404, Subpart P, 
Appendix 2, sections 201.00(f) and 202.00(f); Social Security Ruling 
82-41.
    Circuit: Sixth (Kentucky, Michigan, Ohio, Tennessee)
    Preslar v. Secretary of Health and Human Services, 14 F.3d 1107 
(6th Cir. 1994).
    Applicability of Ruling: This Ruling applies to determinations or 
decisions at all administrative levels (i.e., initial, reconsideration, 
Administrative Law Judge (ALJ) hearing or Appeals Council).
    Description of Case: In April 1989, the plaintiff, Walter Preslar, 
who was 61 years of age and had an eleventh grade education, applied 
for Social Security disability insurance benefits and Supplemental 
Security Income benefits based on disability. Mr. Preslar alleged that 
he was disabled due to pain resulting from hip and back injuries, 
osteoarthritis and the late effects of musculoskeletal and connective 
tissue injuries. Following denial of his claims at both the initial and 
reconsideration levels of the administrative review process, the 
plaintiff requested and received a hearing before an ALJ. The evidence 
provided at the hearing included the testimony of a vocational expert 
who testified that Mr. Preslar could not perform any of his past 
relevant work, which included food truck driving, custodial work, and 
bartending. The vocational expert also testified, however, that Mr. 
Preslar possessed truck driving skills and that there were a 
significant number of skilled light trucking jobs in the regional 
economy that he could perform with no significant vocational 
adjustment.
    The ALJ found that Mr. Preslar could not perform his past relevant 
work, but that he retained the capacity to do a full range of light 
work with only minor limitations. The ALJ also found, based upon 
testimony by the vocational expert, that Mr. Preslar had ``highly 
marketable work skills,'' including truck driving, the ability to use 
hand and power tools, and the ability to use a cash register. Based on 
these findings, the ALJ concluded that Mr. Preslar was not disabled. 
The Appeals Council denied Mr. Preslar's request for review, and the 
ALJ's decision became the final decision of the Secretary. This 
decision was reviewed by a district court which upheld the Secretary's 
denial of disability benefits, and the plaintiff appealed to the Court 
of Appeals for the Sixth Circuit.
    Holding: The Sixth Circuit reversed the decision of the district 
court. The court of appeals noted that at the fourth and fifth steps of 
the five-step sequential evaluation process for determining disability 
prescribed in the Secretary's regulations, once a claimant establishes 
that he or she can no longer perform his or her past relevant work 
because of a severe impairment (step four), the burden shifts to the 
Secretary to show whether the claimant can perform other work which 
exists in the national economy, considering the claimant's residual 
functional capacity, age, education and work experience (step five). 
The court observed that for purposes of step five, a claimant's age is 
to be evaluated under the four-tiered structure of section 404.1563 of 
the Secretary's regulations.1 Among other things, section 
404.1563(d) provides that if a claimant is of advanced age (55 or 
over), has a severe impairment, and cannot do medium work, such 
claimant may not be able to work unless he or she has skills that can 
be transferred to less demanding jobs which exist in significant 
numbers in the national economy. The court noted that, in addition, 
section 404.1563(d) states that, ``[i]f you are close to retirement age 
(60-64) and have a severe impairment, we will not consider you able to 
adjust to sedentary or light work unless you have skills which are 
highly marketable.''

    \1\ Although the court of appeals only cited the title II 
regulation concerning the evaluation of age, section 404.1563, the 
corresponding title XVI regulation, section 416.963, also was 
relevant in Mr. Preslar's case. These sections, entitled ``Your age 
as a vocational factor,'' are virtually identical. Sections 
404.1563(b)-(d) and 416.963 (b)-(d) specify three age categories: 
``Younger person'' (under age 50); ``Person approaching advanced 
age'' (age 50-54); and ``Person of advanced age'' (age 55 or over). 
The latter includes a subcategory--a person close to retirement age 
(age 60-64).
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    The Sixth Circuit observed that the term ``highly marketable'' 
skills was not expressly defined in the statutes, regulations or case 
law. The court stated, however, that it was evident from the 
regulations that ``highly marketable'' skills denoted something more 
than ``transferable'' skills. Specifically, the court noted that, under 
section 404.1563(d) of the regulations, claimants age 55 or over, 
including those close to retirement age, must possess skills easily 
transferable to other occupations; the ``highly marketable'' 
requirement, on the other hand, only applies to those age 60-64. In 
addition, the court indicated that section 404.1563(a) of the 
regulations also sheds light on how the Secretary is required to 
evaluate a claimant's age, noting that the section states, in part:

    Age refers to how old you are (your chronological age) and the 
extent to which your age affects your ability to adapt to a new work 
situation and to do work in competition with others.

    Although the Sixth Circuit noted that, under section 223(d)(2)(A) 
of the Act (42 U.S.C. 423(d)(2)(A)), vocational factors usually are to 
be viewed in terms of their effect on the ability to perform jobs 
rather than obtain them, the court nevertheless found that section 
404.1563 of the regulations ``recognizes a direct relationship between 
age and the likelihood of employment'' and that, as age increases, the 
four-tiered structure of the regulation places an increasingly heavy 
burden on the Secretary to demonstrate that a claimant is ``easily 
employable.'' The court concluded that the regulations and other 
judicial interpretations of ``highly marketable'' skills imply that 
such skills are those ``which are sufficiently coveted by employers and 
sufficiently specialized or unique so as to offset the disadvantage of 
advancing age'' and enable a claimant to obtain employment with little 
difficulty. The court indicated that the possession of such skills may 
be shown by establishing that a claimant's skills were acquired through 
specialized or extensive education, training or experience and that 
they give the claimant a significant advantage or edge over other, 
younger, potential employees competing for jobs requiring the skills, 
giving consideration to the number of such jobs available and the 
number of individuals competing for such jobs.
    The court applied its interpretation of ``highly marketable'' 
skills to Mr. Preslar's case and concluded that the Secretary had not 
assessed whether Mr. Preslar's skills were in some way specialized or 
coveted by employers; had not determined the amount of training, 
education or experience required of the plaintiff to attain his skills; 
and had not assessed whether the plaintiff enjoyed a competitive edge 
over younger, potential employees with whom he would compete for truck 
driving jobs. Accordingly, the court remanded the case to the Secretary 
for reevaluation of whether the plaintiff possessed ``highly 
marketable'' skills in accordance with the court's interpretation of 
that term in section 404.1563(d) of the regulations. [[Page 22093]] 

Statement as to How Preslar Differs From Social Security Policy

    At step five of the sequential evaluation, SSA considers a 
claimant's chronological age in conjunction with residual functional 
capacity, education and work experience to determine whether a claimant 
can do work other than past relevant work. SSA weighs the effect of 
increasing age by the extent it erodes a claimant's ability to adapt to 
new work situations and to work in competition with others.
    To this end, SSA's regulations provide that in order to find that a 
claimant whose sustained work capability is limited to light work or 
less and who is close to retirement age (60-64) possesses skills that 
can be used in (transferred to) other work, ``there must be very 
little, if any, vocational adjustment required in terms of tools, work 
processes, work settings, or the industry.'' 20 CFR Part 404, Subpart 
P, Appendix 2, section 202.00(f). SSA's regulations provide the same 
rule for a claimant whose sustained work capability is limited to 
sedentary work and who is of advanced age (55 or over). 20 CFR Part 
404, Subpart P, Appendix 2, section 201.00(f). If the claimant's skills 
are transferable to other work under this standard, SSA will consider 
such skills ``highly marketable'' under 20 CFR 404.1563(d) and 
416.963(d).
    SSA's regulations do not require a finding that a claimant's skills 
are specialized and coveted so as to offset the disadvantage that 
advancing age may present in obtaining employment. Instead, SSA's 
regulations require that a claimant (of any age) be found not disabled 
if his or her residual functional capacity and vocational abilities 
enable him or her to work, but he or she remains unemployed because of 
the hiring practices of employers. The evaluation of disability is 
based on the ability to perform jobs in the national economy and not 
the ability to obtain them, 20 CFR 404.1566(c) and 416.966(c).
    The Sixth Circuit's interpretation of ``highly marketable'' imposes 
requirements in contravention of the Secretary's regulations regarding 
the vocational relevance of a claimant's age. Specifically, the court 
has interpreted ``highly marketable'' skills in 20 CFR 404.1563(d) to 
mean those skills which are sufficiently specialized and coveted by 
employers so as to make a claimant's age irrelevant in the hiring 
process and enable the claimant to obtain employment with little 
difficulty.

Explanation of How SSA Will Apply The Preslar Decision Within the 
Circuit

    This ruling applies only where the claimant resides in Kentucky, 
Michigan, Ohio or Tennessee at the time of the determination or 
decision at any level of administrative review, i.e., initial, 
reconsideration, ALJ hearing or Appeals Council review.
    In the case of a claimant whose sustained work capability is 
limited to sedentary or light work as a result of a severe impairment, 
who is closely approaching retirement age (age 60-64), and who has 
skills, an adjudicator will consider the claimant's skills to be 
``highly marketable'' only if the skills are sufficiently specialized 
and coveted by employers as to make the claimant's age irrelevant in 
the hiring process and enable the claimant to obtain employment with 
little difficulty. In determining whether a claimant's skills meet this 
definition of ``highly marketable,'' an adjudicator will consider:
    (1) whether the skills were acquired through specialized or 
extensive education, training or experience; and
    (2) whether the skills give the claimant a competitive edge over 
other, younger, potential employees with whom the claimant would 
compete for jobs requiring those skills, giving consideration to the 
number of such jobs available and the number of individuals competing 
for such jobs.
    SSA intends to clarify the regulations at issue in this case, 20 
CFR 404.1563 and 416.963, through the rule making process and may 
rescind this Ruling once such clarification is made.
[FR Doc. 95-10920 Filed 5-3-95; 8:45 am]
BILLING CODE 4190-29-F