[Federal Register Volume 65, Number 71 (Wednesday, April 12, 2000)]
[Rules and Regulations]
[Pages 19643-19644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-8838]



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 Rules and Regulations
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  Federal Register / Vol. 65, No. 71 / Wednesday, April 12, 2000 / 
Rules and Regulations  

[[Page 19643]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 550 and 553

RIN 3206-AI92


Repeal of Dual Compensation Reductions for Military Retirees

AGENCY: Office of Personnel Management.

ACTION: Interim regulations with request for comments.

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SUMMARY: The Office of Personnel Management (OPM) is issuing interim 
regulations to implement the repeal of reductions in military retired 
or retainer pay required of some military retirees employed in civilian 
positions. Section 651 of the National Defense Authorization Act for 
Fiscal Year 2000 repeals section 5532 of title 5, United States Code, 
effective October 1, 1999. This Act repeals two reductions in military 
retired or retainer pay previously required of some retired members of 
the uniformed services when they became Federal employees.

DATES: These regulations are effective April 12, 2000. Comments must be 
received by June 12, 2000.

ADDRESSES: Send written comments to Mary Lou Lindholm, Associate 
Director for Employment, Office of Personnel Management, Room 6500, 
1900 E Street, NW., Washington, DC 20415-9500.

FOR FURTHER INFORMATION CONTACT: Laurence T. Lorenz on (202) 606-0830, 
FAX (202) 606-0390, or e-mail [email protected].

SUPPLEMENTARY INFORMATION:

Background

    On October 5, 1999, President Clinton signed S. 1059, the National 
Defense Authorization Act for Fiscal Year 2000, Public Law 106-65. 
Section 651 of this Act repeals section 5532 of title 5, United States 
Code, effective retroactively to October 1, 1999. This action ended two 
reductions in retired or retainer pay previously required of retired 
members of a uniformed service who are employed in civilian offices or 
positions of the U.S. Government. This repeal affects positions in the 
legislative, executive, and judicial branches of the Government of the 
United States (including Government corporations, nonappropriated fund 
instrumentalities under the jurisdiction of the armed forces, and the 
U.S. Postal Service).

Two Reductions Ended

    This repeal ends the following two reductions in military retired 
pay that applied to some Federal employees who had retired from a 
uniformed service:
    1. The pay cap that limited the combined total of Federal civilian 
basic pay plus military retired pay to $110,700 (Executive Level V) for 
all Federal employees who retired from a uniformed service; and
    2. The partial reduction in retired pay required of retired 
officers of a regular component of a uniformed service.

As a consequence of the repeal, exceptions and waivers to the 
reductions for military retirees approved by OPM under criteria in 5 
CFR 553, or by agencies under delegated authority, are no longer 
needed.

GPPA Revised

    The Guide to Processing Personnel Actions (GPPA) prior to January 
2, 2000 required sending a copy of the Notification of Personnel Action 
(SF-50) for retired members of a uniformed service to the appropriate 
uniformed service finance center for all covered personnel actions. OPM 
and the Department of Defense agreed that this Act eliminated the 
statutory basis for sending a copy of personnel actions effective on or 
after October 1, 1999. Accordingly, OPM eliminated this requirement in 
GPPA Update 33, dated January 2, 2000. Agencies should not send covered 
personnel actions for military retirees with effective dates on or 
after October 1, 1999.

Service Credit and Preference Limitations Unchanged

    The repeal of 5 U.S.C. 5532 does not repeal two other parts of the 
Dual Compensation Act of 1964. This Act adopted a ``fresh start'' 
policy for military retirees and established limits on service credit 
and veterans' preference to ensure that military retirees did not 
receive unfair advantages in pay and tenure over civilian employees, 
including other veterans. As a result, unlike other former service 
members, retired members of a uniformed service generally cannot count 
their service time as creditable service for retention (RIF), annual 
leave accrual, and retirement purposes (see 5 U.S.C. 3501(a), 3502(a), 
6303(a) and 8411(c)). On the other hand, retirement does not change a 
service member's entitlement to veterans' preference in the employment 
process.

Reductions for Civilian Retirees Unchanged

    This repeal does not affect the reduction in salary required of 
reemployed civilian annuitants under the Civil Service Retirement 
System (CSRS) and Federal Employees' Retirement System (FERS). Agencies 
may continue to request waivers of these reductions when appropriate 
under criteria in 5 CFR 553 and 5 U.S.C. 8344 or 8468.

Employee Questions

    The uniformed services finance centers are responsible for making 
all adjustments in military retired or retainer pay. Employee questions 
regarding restoration of retired pay should be directed to the 
appropriate uniformed service finance center. These finance centers are 
identified in Chapter 8, of the Guide to Processing Personnel Actions, 
page 8-19, issued February 26, 1999 [http://www.opm.gov/feddata/GPPA/Gppa.htm].

Waiver of Notice of Proposed Rulemaking and Delay in Effective Date

    Pursuant to 5 U.S.C. 553(b)(3)(B), I find that good cause exists 
for waiving the general notice of proposed rulemaking because it would 
be contrary to the public interest to delay access to benefits provided 
by law. Also, pursuant to 5 U.S.C. 553(d)(3), I find that good cause 
exists to waive the effective date and make this amendment effective in 
less than 30 days in order to implement immediately statutory language 
in Sec. 651 of the National Defense Authorization Act for Fiscal Year 
2000, Public Law 106-65, that is effective retroactively to October 1, 
1999.

[[Page 19644]]

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities (including 
small businesses, small organizational units, and small governmental 
jurisdictions) because the regulations apply only to appointment 
procedures for certain employees in Federal agencies.

Executive Order 12866, Regulatory Review

    This interim rule has been reviewed by the Office of Management and 
Budget in accordance with Executive Order 12866.

List of Subjects

5 CFR Part 550

    Administrative practice and procedure, Government employees, 
Claims, Wages.

5 CFR Part 553

    Administrative practice and procedure, Government employees, 
Military Personnel, Retirement, Wages.

Office of Personnel Management.

Janice R. Lachance
Director.

    Accordingly, OPM is amending parts 550 and 553 of title 5, Code of 
Federal Regulations, as follows:

PART 550--PAY ADMINISTRATION (GENERAL)

Subpart F--[Removed and Reserved]

    1. The authority citation for subpart F continues to read as 
follows:

    Authority: 5 U.S.C. 5532.


    2. Subpart F consisting of Secs. 550.601, 550.602 and 550.603 is 
removed and reserved.

PART 553--REEMPLOYMENT OF MILITARY AND CIVILIAN RETIREES TO MEET 
EXCEPTIONAL EMPLOYMENT NEEDS

    3. The authority citation for part 553 is revised to read as 
follows:

    Authority: 5 U.S.C. 8344, 8468, Sec. 651, Pub. L. 106-65 (113 
STAT. 664).

    4. Section 553.101 is revised to read as follows:


Sec. 553.101  Applicability.

    This part applies to employment of civilian annuitants who would be 
subject to termination of annuity or annuity offset under 5 U.S.C. 8344 
or 5 U.S.C. 8468. Agencies may request exceptions as provided in 
subpart B of this part from the reemployed annuitant provisions of 5 
U.S.C. 8344 (for Civil Service Retirement System annuitants) or 8468 
(for Federal Employees' Retirement System annuitants), as appropriate.

    5. In Sec. 553.102, paragraph (c) is revised to read as follows:


Sec. 553.102  Definitions.

* * * * *
    (c) Retiree, as used in this part refers to an annuitant as defined 
in paragraph (b) of this section.

    6. In Sec. 553.103, paragraph (b) is revised to read as follows:


Sec. 553.103  General policy.

* * * * *
    (b) Application of exceptions. An exception to the salary offset 
provisions of 5 U.S.C. 8344 or 8468 authorized by OPM or an agency 
under this part applies only to the particular individual for whom it 
was authorized and only while that individual continues to serve in the 
same or a successor position. The exception terminates upon the 
individual's assignment to a different position unless a new exception 
is authorized under the provisions of this part.

    7. In Sec. 553.201, paragraph (c)(2), is revised to read as 
follows:


Sec. 553.201  Requesting OPM approval for reemployment without 
reduction in individual cases.

* * * * *
    (c) *  *  *
    (2) Need for the individual's services. The agency must show either 
that the individual is uniquely qualified for the emergency response 
work to be done or that the number of positions to be filled and/or 
urgency of response justifies making the particular appointment without 
further delay. OPM will not approve reemployment without penalty under 
5 U.S.C. 8344, or 8468 solely to meet normal seasonal workload 
fluctuations.

    8. In Sec. 553.203, paragraph (b) is revised to read as follows:


Sec. 553.203  Status of individuals serving without reduction.

* * * * *
    (b) Retired members of the uniformed services. Except for 
individuals to whom paragraph (a) of this section is applicable, 
retired members of uniformed services are considered employees for the 
purposes of subchapter III of chapter 83 or chapter 84 of title 5, 
United States Code, subject to the same conditions as apply to any 
other employees.

[FR Doc. 00-8838 Filed 4-11-00; 8:45 am]
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