[Federal Register Volume 65, Number 247 (Friday, December 22, 2000)]
[Rules and Regulations]
[Pages 80752-80755]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-32722]


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DEPARTMENT OF THE TREASURY

31 CFR Part 29


Federal Benefit Payments Under Certain District of Columbia 
Retirement Plans

AGENCY: Departmental Offices, Department of the Treasury.

ACTION: Interim rule with request for comments.

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SUMMARY: The Department of the Treasury, Departmental Offices, is 
issuing interim regulations and requesting comments on these 
regulations to implement the provisions of the Balanced Budget Act of 
1997, as amended (Act). The Act assigns the Secretary of the Treasury 
responsibility for payment of benefits under the District of Columbia 
(District) retirement plans for police and firefighters, and teachers 
for benefits based on credit for service accrued as of June 30, 1997, 
and under the District retirement plan for judges. The interim 
regulations establish general rules for claiming Federal Benefit 
Payments and for appeals of administrative decisions affecting Federal 
Benefit Payments.

DATES: Interim rules effective January 22, 2001, except for 
Sec. 29.102(a)(3) which will become effective March 31, 2001; comments 
must be received on or before February 20, 2001.

ADDRESSES: Send comments to Ronald A. Glaser, Director, Office of 
Personnel Policy, Department of the Treasury, Metropolitan Square 
Building, Room 6075, 1500 Pennsylvania Avenue, NW, Washington, DC 
20220. Comments may also be submitted by electronic mail to 
[email protected].

FOR FURTHER INFORMATION CONTACT:  Harold L. Siegelman, (202) 622-1540, 
Department of the Treasury, Metropolitan Square Building, Room 6033, 
1500 Pennsylvania Avenue, NW, Washington, DC 20220.

SUPPLEMENTARY INFORMATION: Title XI of the Balanced Budget Act of 1997, 
Public Law 105-33, 111 Stat. 251, 712-731, 756-759, enacted August 5, 
1997, as amended by the Omnibus Consolidated and Emergency Supplemental 
Appropriations Act for Fiscal Year 1999, Public Law 105-277, 112 Stat. 
2681, 2681-530 through 538, 2681-552, transferred certain unfunded 
pension liabilities from the District government to the Federal 
Government. The Act requires the Federal Government to assume 
responsibility for payment of certain benefits that accrued on or 
before June 30, 1997, under the retirement plans for District teachers 
(Teachers Plan), police and firefighters (Police and Firefighters 
Plan), and for past and future benefits under the retirement plan for 
judges (Judges Plan). The Act also required the District government to 
establish replacement retirement plans that will provide retirement 
benefits for service after June 30, 1997, for current and future 
teachers, police, and firefighters.

1. Requirement To Establish Processes for Benefit Determinations 
and Appeals

(a) Claims for Federal Benefit Payments

    The interim regulations implement sections 11021(1) and (2) of the 
Act and section 11-1570(c)(2)(A) of the D.C. Code, as amended by 
section 11251 of the Act. These statutes provide for, among other 
things, the determination of eligibility for and the amount and form of 
Federal Benefit Payments.

(b) Appeals of Benefit Denials

    The interim regulations also implement section 11022 of the Act, 
which provides for the right to appeal denials of Federal Benefit 
Payments, in whole or in part, under the Teachers Plan and the Police 
and Firefighters Plan. No parallel provision in the Act or the D.C. 
Code exists with respect to appeal rights under the Judges Plan. To 
ensure uniform treatment of participants in the three plans, and in 
accordance with principles of fundamental fairness, the interim 
regulations with respect to appeal procedures shall also apply to the 
Judges Plan.
    The interim regulations are based on the Office of Personnel 
Management (OPM) regulations for Civil Service Retirement with respect 
to similar functions. See 5 CFR 831.109-831.110. In general, the 
Treasury Department intends these regulations to have the same general 
effect as the corresponding OPM regulations.
    Minor changes from the OPM regulations were necessary because of 
differences in the programs being administered. Under sections 8347(d) 
and 8461(e) of title 5 of the United States Code, OPM's retirement 
decisions are subject to administrative review by the Merit Systems 
Protection Board and the judicial review process begins in the United 
States Court of Appeals. Under section 11022 of the Act, a claimant 
whose claim for a Federal Benefit Payment has been denied (in whole or 
part) shall have a reasonable opportunity for a full and fair review of 
the decision denying such claim. The Act also vests the United States 
District Court for the District of Columbia with exclusive jurisdiction 
and venue for civil actions brought by participants or beneficiaries 
pursuant to the Act.

[[Page 80753]]

2. Contracting for Administrative Services

    The Act provides in sections 11035(a) and (b) for the selection of 
a Trustee to administer the Department's responsibilities for the 
District retirement programs under the Act, including determining 
eligibility for and amount of Federal Benefit Payments. Subsection (c) 
of section 11035 authorizes the Trustee to subcontract with the 
District government or any person to provide services to the Trustee in 
connection with the Trustee's performance of its contract with the 
Department. Subsection (d) of section 11035 authorizes the Secretary to 
perform any function of the Trustee if the Secretary determines that, 
in the interest of economy and efficiency, the Secretary rather than 
the Trustee should perform such function. Until such time as the 
Secretary notifies the District that the Trustee has been directed to 
carry out the duties and responsibilities required under the contract 
or determines that the Department shall carry out those functions, 
section 11041(a) of the Act requires the District to continue to 
discharge its duties with respect to making Federal Benefit Payments. 
Because the District is currently making Federal Benefit determinations 
under section 11041(a) of the Act, and it is likely that such 
determinations will be made in the future by the Trustee, a 
subcontractor of the Trustee, or another agent of the Department, the 
regulations use the term ``Benefits Administrator'' throughout this 
subpart to denote the entity making Federal Benefit determinations. It 
should be noted, however, that the Department potentially may be the 
``Benefits Administrator'' for the purpose of this subpart.

3. Development of These Procedures.

    Subpart D establishes procedures for claims processing and appeals. 
All claims for Federal Benefit Payments must be filed in writing with 
the Benefits Administrator. The Benefits Administrator will be 
responsible for processing claims through the reconsideration-decision 
stage. The Department will decide appeals of the Benefits 
Administrator's reconsideration decisions if it receives a timely 
request to do so. Judicial review of the Department's final decision is 
available in the United States District Court for the District of 
Columbia, which has exclusive jurisdiction and venue over such appeals 
under section 11072 of the Act.
    Pursuant to section 553(b)(3)(B) of title 5, United States Code, it 
has been determined that good cause exists for waiving a general notice 
of proposed rulemaking for this rule. Overpayments of Federal Benefit 
Payments must be corrected expeditiously to protect and maintain the 
integrity of the Trust Funds from which Federal Benefit Payments are 
made. Delaying implementation of these regulations could forestall 
efforts to correct overpayments promptly. Moreover, beneficiaries whose 
Federal Benefit Payments have been denied or reduced need the clear 
procedures provided in this rule for seeking review of such decisions. 
Delaying implementation of these provisions would be contrary to the 
public interest.

E.O. 12866, Regulatory Review

    Because this interim rule is not a significant regulatory action 
for purposes E.O. 12866, a regulatory assessment is not required.

Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required, the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do 
not apply. Moreover, the regulation will only affect the determination 
of the Federal portion of retirement benefits to certain former 
employees of the District of Columbia.

List of Subjects in 31 CFR Part 29

    Administrative practice and procedure, Claims, Disability benefits, 
Firefighters, Government employees, Intergovernmental relations, Law 
enforcement officers, Pensions, Retirement, Teachers.

Department of the Treasury.
Lisa G. Ross,
Acting Assistant Secretary of the Treasury.

    Accordingly, the Department of the Treasury is amending part 29 of 
Title 31 of the Code of Federal Regulations, as follows:

PART 29--FEDERAL BENEFIT PAYMENTS UNDER CERTAIN DISTRICT OF 
COLUMBIA RETIREMENT PROGRAMS

    1. The authority citation for part 29 is revised to read as 
follows:

    Authority: Sections 11083 and 11251(a) of Pub. L. 105-33, 111 
Stat. 730 and 756, as amended by Pub. L. 105-277, 112 Stat. 2681-530 
through 538; subpart D also issued under section 11022 of Pub. L. 
105-33, 111 Stat. 730 and 756, as amended by Pub. L. 105-277, 112 
Stat. 2681-530 through 538.

    2. In Sec. 29.102, paragraph (a) is revised as follows:


Sec. 29.102  Related regulations.

    (a) This part contains the following subparts:
    (1) General Provisions (Subpart A);
    (2) Coordination With the District Government (Subpart B);
    (3) Split Benefits (Subpart C); and
    (4) Claims and Appeals Procedures (Subpart D).
* * * * *
    3. In Sec. 29.203, paragraph (b) is revised to read as follows:


Sec. 29.203  Service of Process.

* * * * *
    (b) All other process regarding Federal Benefit Payments (including 
requests for judicial review under Sec. 29.406) must be served upon the 
United States in accordance with applicable law.
* * * * *
    4. Subpart D is added to read as follows:
Subpart D--Claims and Appeals Procedures
Sec.
29.401   Purpose.
29.402   Definitions.
29.403   Applications filed with the Benefits Administrator.
29.404   Initial benefit determinations and reconsideration by the 
Benefits Administrator.
29.405   Appeals to the Department.
29.406   Judicial review.
29.407   Competing claimants.


Sec. 29.401  Purpose.

    (a) This subpart explains--
    (1) The procedures that participants and beneficiaries in the 
Judges Plan, Police and Firefighters Plan, and the Teachers Plan must 
follow in applying for Federal Benefit Payments;
    (2) The procedures for determining an individual's eligibility for 
a Federal Benefit Payment and the amount and form of an individual's 
Federal Benefit Payment as required by section 11021 of the Act and 
section 11-1570 of the D.C. Code;
    (3) The appeal rights available under section 11022(a) of the Act 
to claimants whose claim for Federal Benefit Payments is denied in 
whole or in part; and
    (4) The special rules for processing competing claimant cases.
    (b) This subpart does not apply to processing collection of debts 
due to the United States.


Sec. 29.402  Definitions.

    In this subpart--
    Act means the Balanced Budget Act of 1997, Public Law 105-33, 111 
Stat. 251, 712-731, 756-759, enacted August 5, 1997, as amended by the 
Omnibus Consolidated and Emergency

[[Page 80754]]

Supplemental Appropriations Act for Fiscal Year 1999, Public Law 105-
277, 112 Stat. 2681, 2681-530 through 538, 2681-552.
    Beneficiary means an individual designated by a participant, or by 
the terms of the Judges Plan, Police and Firefighters Plan, or Teachers 
Plan, who is or may become entitled to a benefit under those plans.
    Benefits Administrator means:
    (1) During the interim administration period under section 11041 of 
the Act, the District of Columbia government, or
    (2) After the Secretary notifies the District that the Trustee has 
been directed to carry out the duties and responsibilities required 
under the contract or determines that the Department shall carry out 
those functions, the Department, the Trustee selected by the Department 
under section 11035 of the Act, or any other agent of the Department 
designated to make initial benefit determinations under the Act.
    Claimant means any person seeking a benefit for themselves or 
another under the Judges Plan, Police and Firefighters Plan, or 
Teachers Plan.
    Department means the Secretary of the Treasury or a designee 
authorized to exercise the Secretary's authority with respect to 
Federal Benefit Payments under the Act.
    Participant means an individual who is or may become eligible to 
receive a benefit under the Police and Firefighters Plan or the 
Teachers Plan based on credit for service accrued as of June 30, 1997, 
or under the Judges Plan, or whose beneficiaries may be eligible to 
receive any such benefit.


Sec. 29.403  Applications filed with the Benefits Administrator.

    All claimants for Federal Benefit Payments must file applications 
for benefits (including applications for retirement, refunds of 
contributions, and death benefits) with the Benefits Administrator.


Sec. 29.404  Initial benefit determinations and reconsideration by the 
Benefits Administrator.

    (a) Initial benefit determinations. The Benefits Administrator will 
process applications for Federal Benefit Payments and determine the 
eligibility for and the amount and form of Federal Benefit Payments. 
All initial benefit determination decisions which may reasonably be 
construed as a denial (in whole or part) of a claim for Federal Benefit 
Payments must be in writing, must advise claimants of their right to 
request reconsideration under paragraph (b), of this section and must 
state the time limits applicable to such a request.
    (b) Claimant's right to reconsideration of benefit denials. (1) 
Except as provided in paragraph (b)(2) of this section, claimants who 
disagree with the amount or form of a Federal Benefit Payment 
determination and wish to contest the determination must first request 
the Benefits Administrator to reconsider its determination.
    (2) A decision to collect a debt is not a denial of a benefit claim 
under this section.
    (c) Form and timing of requests for reconsideration. (1) A request 
for reconsideration must be in writing, must include the claimant's 
name, address, date of birth and claim number, if applicable, and must 
state the basis for the request.
    (2) A request for reconsideration must be received by the Benefits 
Administrator within 30 calendar days from the date of the written 
notice of the initial benefit determination.
    (d) Reconsideration decisions. A reconsideration decision by the 
Benefits Administrator denying (in whole or part) a claim for a Federal 
Benefit Payment must--
    (1) Be in writing;
    (2) Provide adequate notice of such denial, setting forth the 
specific reason for the denial in a manner calculated to be understood 
by the average participant; and
    (3) Provide notice of the right to appeal the Benefit 
Administrator's decision to the Department, the address to which such 
an appeal must be submitted, and the time limits applicable to such an 
appeal.
    (e) Appeal of reconsideration decisions. The Department will review 
an appeal of a reconsideration decision under Sec. 29.405.


Sec. 29.405  Appeals to the Department.

    (a) Who may file. Any claimant whose claim for a Federal Benefit 
Payment has been denied (in whole or part) by the Benefits 
Administrator in a reconsideration decision under Sec. 29.404(d) may 
appeal that decision to the Department.
    (b) Form of appeal. An appeal must be in writing, must include the 
claimant's name, address, date of birth and claim number, if 
applicable, and must state the basis for the appeal.
    (c) Time limits on Appeals. (1) An appeal must be received by the 
Department within 30 calendar days from the date of the reconsideration 
decision under Sec. 29.404(d).
    (2) The Department may extend the time limit for filing when the 
claimant 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, or for other good and sufficient reason.
    (d) Final decision. After consideration of the appeal, the 
Department will issue a final decision. The Department's decision must 
be in writing, must fully set forth the Department's findings and 
conclusions on the appeal, and must contain notice of the right to 
judicial review provided in Sec. 29.406. Copies of the final decision 
must be sent to the claimant seeking appeal, to any competing claimants 
(see Sec. 29.407) and to the Benefits Administrator.


Sec. 29.406  Judicial review.

    An individual whose claim for a Federal Benefit Payment has been 
denied (in whole or part) in a final decision by the Department under 
Sec. 29.405 may, within 180 days of the date of the final decision, 
file a civil action in the United States District Court for the 
District of Columbia. Any such civil action must be filed in accordance 
with the rules of that court.


Sec. 29.407  Competing claimants.

    (a) Competing claimants are applicants for survivor benefits based 
on the service of a participant when--
    (1) A benefit is payable based on the service of the participant;
    (2) Two or more claimants have applied for benefits based on the 
service of the participant; and
    (3) A decision in favor of one claimant will adversely affect 
another claimant(s).
    (b)(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 the Benefits Administrator receives an application from a 
competing claimant(s) before any payments are made based upon the 
service of the participant, and an initial determination of benefits in 
favor of one claimant adversely affects another claimant, all known 
claimants concerned will be notified in writing of that decision and 
those adversely affected will be given an opportunity to request 
reconsideration under the procedures and time limitations set forth in 
Sec. 29.404(c). The Benefits Administrator must not execute its 
decision until the time limit for filing a request for reconsideration 
has expired, or, if a reconsideration decision is made, until the time 
limit for filing an appeal to the Department has expired or the 
Department has issued a final decision on a timely appeal, whichever is 
later.

[[Page 80755]]

    (3) When the Benefits Administrator does not receive an application 
from a competing claimant(s) until after another person has begun to 
receive payments based upon the service of the participant, the 
payments will continue until the time limit for filing a request for 
reconsideration has expired, or, if a reconsideration decision is made, 
until the time limit for filing an appeal to the Department has expired 
or the Department has issued a final decision on a timely appeal, 
whichever is later.

[FR Doc. 00-32722 Filed 12-21-00; 8:45 am]
BILLING CODE 4810-25-P