[Federal Register Volume 70, Number 70 (Wednesday, April 13, 2005)]
[Proposed Rules]
[Pages 19366-19369]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-7291]


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DEPARTMENT OF THE TREASURY

31 CFR Part 29

RIN 1505-AB55


Federal Benefit Payments Under Certain District of Columbia 
Retirement Plans

AGENCY: Departmental Offices, Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department of the Treasury proposes to amend its DC 
Pensions rules promulgated pursuant to the Balanced Budget Act of 1997, 
as amended (the Act). The Act was effective on October 1, 1997. The Act 
assigns to the Secretary of the Treasury responsibility for payment of 
benefits based on service accrued as of June 30, 1997, under the 
retirement plans for District of Columbia teachers and police officers 
and firefighters, and payment of benefits under the retirement plan for 
District of Columbia judges regardless of when service accrued. The 
amended regulations will implement the Secretary's authority under the 
Act to ensure the accuracy of payments made to annuitants before the 
effective date of the Act. The amended regulations will also reflect 
changes made in the District of Columbia Retirement Protection

[[Page 19367]]

Improvement Act of 2004 (the 2004 Act). In addition, the amended 
regulations will include several technical changes as specified below.

DATES: Written comments must be received on or before June 13, 2005.

ADDRESSES: Submit comments to the Office of the Assistant General 
Counsel for General Law and Ethics, Attention: DC Pensions Rulemaking 
Project, Room 2209A, Main Treasury Building, Department of the 
Treasury, 1500 Pennsylvania Avenue, NW., Washington, DC 20220. Because 
paper mail in the Washington, DC, area may be subject to delay, it is 
recommended that comments be submitted electronically to: 
[email protected]. All comments should be captioned with ``DC 
Pensions Rulemaking Comments.'' Please include your name, affiliation, 
address, e-mail address, and telephone number in your comment. Comments 
will be available for public inspection by appointment only at the 
Reading Room of the Treasury Library, Room 1318, Main Treasury 
Building, 1500 Pennsylvania Avenue, NW., Washington, DC 20220. To make 
appointments, call (202) 622-0990.

FOR FURTHER INFORMATION CONTACT: Elizabeth Cuffe, Office of the General 
Counsel, MT Room 2209A, Department of the Treasury, 1500 Pennsylvania 
Avenue, NW., Washington, DC 20220 (202-622-1682, not a toll-free call).

SUPPLEMENTARY INFORMATION: Title XI of the Balanced Budget Act of 1997, 
Public Law 105-33, 111 Stat. 251, 712-731, 756-759, as amended (the 
Act), transferred certain pension liabilities from the District of 
Columbia Government to the Federal Government. The Act requires that 
the Secretary of the Treasury (the Secretary) pay certain benefits 
based on service accrued on or before June 30, 1997, under the 
retirement plans for District of Columbia teachers (Teachers Plan) and 
police officers and firefighters (Police and Firefighters Plan), and 
for benefits under the retirement plan for District of Columbia judges 
(Judges Plan) regardless of when service accrued. On December 23, 2004, 
the District of Columbia Retirement Protection Improvement Act of 2004, 
Public Law 108-489, 118 Stat. 3966 (the 2004 Act) was enacted. The 2004 
Act amended the Act, in part, to create a new fund from the two funds 
that had financed the Teachers Plan and the Police and Firefighters 
Plan and to provide the Judges Plan with procedures for resolving 
denied benefit claims.

1. Federal Government's Responsibilities

    The Act provides the Secretary with authority to ensure the 
accuracy of Federal Benefit Payments made before October 1, 1997, under 
the Police and Firefighters Plan and the Teachers Plan. Section 11012 
of the Act requires the Secretary to make benefit payments under the 
Police and Firefighters Plan and Teachers Plan based on service accrued 
on or before June 30, 1997. An annuitant's entitlement to the correct 
payment amount based on that service, but not more than that amount, 
does not expire. Thus, the Secretary's authority to review and ensure 
the accuracy of all payments based on service accrued on or before June 
30, 1997, extends to all such payments whether made before or after the 
October 1, 1997, effective date of the Act.
    In the case of the Judges Plan, section 11251(a) of the Act 
(codified at DC Official Code Sec.  11-1570(c)(2)(A)) vests in the 
Secretary authority over Federal Benefit Payments made under the Judges 
Plan before the October 1, 1997, effective date of the Act. 
Accordingly, the Secretary has authority to ensure the accuracy of 
payments made before October 1, 1997, under the Judges Plan, the Police 
and Firefighters Plan, and the Teachers Plan.
    The proposed amendments to Part 29 reflect the authority of the 
Secretary as provided in the sections of the Act discussed above and 
the manner in which that authority is being administered by the 
Treasury Department.
    The 2004 Act amended the Act to create the District of Columbia 
Teachers, Police Officers, and Firefighters Federal Pension Fund with 
the assets transferred from the District of Columbia Federal Pension 
Liability Trust Fund and the Federal Supplemental District of Columbia 
Pension Fund, which funds were terminated. The 2004 Act also amended 
the Act to provide the Judges Plan with procedures for resolving denied 
benefit claims.

2. Proposed Regulations

    The Secretary has the authority under section 11083 and paragraph 
11251(b) (codified as DC Official Code Sec.  11-1572(a)) of the Act 
``to issue regulations to implement, interpret, administer and carry 
out the purposes of this [Act], and, in the Secretary's discretion, 
those regulations may have retroactive effect.'' The current 
regulations by their terms apply only to Federal Benefit Payments made 
on or after October 1, 1997, the effective date of the Act. See 31 CFR 
29.101(c). Therefore, the Department of the Treasury proposes to amend 
current regulations to implement the Secretary's authority under the 
Act to ensure the accuracy of payments made to annuitants prior to the 
October 1, 1997, effective date of the Act. The Department also 
proposes to amend the current regulations to reflect the changes made 
in the 2004 Act and to make several technical changes as specified 
below.
    The Authority paragraph supplies the reference to the provisions of 
the Act that provide the statutory authority for Part 29. This 
paragraph is amended to simplify the citation.
    Section 29.101(a) provides the statutory basis of the Part 29 
rules. This paragraph is amended to conform to the amended language of 
the Authority provision and the definition of Act in section 29.103(a).
    Section 29.101(c) provides the scope of coverage of the Part 29 
D.C. Pensions regulations. This paragraph is amended to delete the 
current limitation to payments made on or after October 1, 1997, and 
thereby to include payments made before October 1, 1997, under the 
Teachers Plan, the Police and Firefighters Plan, and the Judges Plan.
    Section 29.101(e) is added to specify that the regulations do not 
apply to the District of Columbia replacement plan, which covers 
payments based on service accrued after June 30, 1997, pursuant to 
section 11042 of the Act.
    Section 29.103(a) provides a definition for Act. This definition is 
amended to simplify the definition and to accurately reflect the 
applicable sections of the Act.
    Section 29.103(a) provides a definition for Benefits Administrator. 
This definition is amended to include citations to the District of 
Columbia Retirement Protection Improvement Act of 2004, Public Law 108-
489, 118 Stat. 3966 (the 2004 Act) and to clarify that the interim 
benefits administration period under the Judges Plan is independent of 
the interim District benefits administration period under the Teachers 
Plan and the Police and Firefighters Plan.
    Section 29.103(a) provides a definition for Federal Benefit 
Payment. This definition is amended to include payments made before 
October 1, 1997, under the Teachers Plan, the Police and Firefighters 
Plan, and the Judges Plan and to make clear that, pursuant to section 
11012(b) of the Act, service accrued after June 30, 1997, shall not be 
credited for purposes of determining the amount of any Federal Benefit 
Payment under the Teachers Plan and the Police and Firefighters Plan.

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    Section 29.103(a) also provides a definition for Retirement Funds. 
This definition is amended to include the funds used to make payments 
under the Teachers Plan, the Police and Firefighters Plan, and the 
Judges Plan before October 1, 1997, and to reflect changes to the funds 
made in the 2004 Act.
    Section 29.201(a) is amended to use the word ``Act'' rather than 
the full name of the Act.
    Section 29.401(a)(2) and (3) are amended to include citations to 
the portions of the 2004 Act that provide the Judges Plan with 
procedures for resolving denied benefit claims.
    Section 29.401(c) is added to exclude from the coverage of Subpart 
D claims and appeals that were filed against the District of Columbia 
before the effective date of the Act. This limitation is based on 
section 11723 of the Act, which requires the District of Columbia to 
continue to defend civil actions and proceedings already in process and 
which prohibits claims against the United States for civil actions and 
proceedings already begun against the District of Columbia before the 
effective date of the Act.
    Section 29.402 provides a definition for Act. This definition is 
deleted and the definition in Sec.  29.103(a) will be in effect for all 
of Part 29.
    Section 29.402 provides a definition for Benefits Administrator. 
This definition is deleted and the definition in Sec.  29.103(a) will 
be in effect for all of Part 29.
    Section 29.501(e) is added to exclude from the coverage of Subpart 
E debt collection claims asserted by the District of Columbia before 
the effective date of the Act and requests for waiver of collection 
filed with the District of Columbia before the effective date of the 
Act. This limitation is based on section 11723 of the Act, which 
requires the District of Columbia to continue to defend civil actions 
and proceedings already in process and which prohibits claims against 
the United States for civil actions and proceedings already begun 
against the District of Columbia before the effective date of the Act.

Regulatory Flexibility Act

    It is hereby certified that this proposed regulation, if adopted, 
would not have a significant economic impact on a substantial number of 
small entities. The proposed regulation only affects the determination 
of the Federal portion of retirement benefits to certain former 
employees of the District of Columbia. Accordingly, a regulatory 
flexibility analysis is not required by the Regulatory Flexibility Act 
(5 U.S.C. chapter 6).

Executive Order 12866

    This proposed rule is not a significant regulatory action as 
defined by Executive Order 12866, 58 FR 51735. Therefore, a regulatory 
assessment is not required.

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.

Proposed Regulatory Amendment

    For the reasons discussed in the preamble, we propose to amend 
Title 31, Part 29, 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: Subtitle A, Subchapter B of Chapter 4 of Subtitle C, 
and Chapter 3 of Subtitle H, of Pub. L. 105-33, 111 Stat. 712-731, 
756-759, and 786-787; as amended.

    2. In Sec.  29.101, paragraphs (a) and (c) are revised, and 
paragraph (e) is added, to read as follows:


Sec.  29.101  Purpose and scope.

    (a) This part contains the Department's regulations implementing 
Subtitle A, Subchapter B of Chapter 4 of Subtitle C, and Chapter 3 of 
Subtitle H, of Title XI of the Balanced Budget Act of 1997, Pub. L. 
105-33, 111 Stat. 251, 712-731, 756-759, enacted August 5, 1997, as 
amended.
* * * * *
    (c) This part applies to Federal Benefit Payments.
* * * * *
    (e) This part does not apply to the District of Columbia 
replacement plan, which covers payments based on service accrued after 
June 30, 1997, pursuant to section 11042 of the Act.
    3. In Sec.  29.103, definitions for Act, Benefits Administrator, 
Federal Benefit Payment, and Retirement Funds in paragraph (a) are 
revised to read as follows:


Sec.  29.103  Definitions.

    (a) In this part--
    Act means Subtitle A, Subchapter B of Chapter 4 of Subtitle C, and 
Chapter 3 of Subtitle H, of Title XI of the Balanced Budget Act of 
1997, Pub. L. 105-33, 111 Stat. 251, 712-731, 756-759, as amended.
    Benefits Administrator means:
    (1) For the Teachers Plan and the Police and Firefighters Plan 
under section 11041(a) of the Act:
    (i) During the interim benefits administration period, the District 
of Columbia government; or
    (ii) After the end of the interim benefits administration period:
    (A) The Trustee selected by the Department under sections 11035(a) 
or 11085(a) of the Act;
    (B) The Department, if a determination is made under sections 
11035(d) or 11085(d) of the Act that, in the interest of economy and 
efficiency, the function of the Trustee shall be performed by the 
Department rather than the Trustee; or
    (C) Any other agent of the Department designated to make initial 
benefit determinations and/or to recover or recoup or waive recovery or 
recoupment of overpayments of Federal Benefit Payments, or to recover 
or recoup debts owed to the Federal Government by annuitants; or
    (2) For the Judges Plan under section 11252(b) of the Act:
    (i) During the interim benefits administration period, the District 
of Columbia government; or
    (ii) After the end of the interim benefits administration period 
for the Judges Plan:
    (A) The Trustee selected by the Department under section 11251(a) 
of the Act;
    (B) The Department, if a determination is made under section 
11251(a) of the Act that, in the interest of economy and efficiency, 
the function of the Trustee shall be performed by the Department rather 
than the Trustee; or
    (C) Any other agent of the Department designated to make initial 
benefit determinations and/or to recover or recoup or waive recovery or 
recoupment of overpayments of Federal Benefit Payments, or to recover 
or recoup debts owed to the Federal Government by annuitants.
* * * * *
    Federal Benefit Payment means a payment for which the Department is 
responsible under the Act, to which an individual is entitled under the 
Judges Plan, the Police and Firefighters Plan, or the Teachers Plan, in 
such amount and under such terms and conditions as may apply under such 
plans, including payments made under these plans before, on, or after 
the October 1, 1997, effective date of the Act. Service after June 30, 
1997, shall not be credited for purposes of determining the amount of

[[Page 19369]]

any Federal Benefit Payment under the Teachers Plan and the Police and 
Firefighters Plan.
* * * * *
    Retirement Funds means the District of Columbia Teachers, Police 
Officers, and Firefighters Federal Pension Fund established under 
section 11081 of the Act, the District of Columbia Judicial Retirement 
and Survivors Annuity Fund established under section 11252 of the Act, 
and their predecessor funds.
* * * * *
    4. Section 29.201 is revised to read as follows:


Sec.  29.201  Purpose and scope.

    This subpart contains information concerning the relationship 
between the Department and the District government in the 
administration of the Act and the functions of each in the 
administration of that Act.
    5. In Sec.  29.401, paragraphs (a)(2) and (3) are amended, and 
paragraph (c) is added, to read as follows:


Sec.  29.401  Purpose.

    (a) * * *
    (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 sections 11021 and 11251(a) 
(codified at D.C. Official Code Sec.  11-1570(c)(2)(a)) of the Act;
    (3) The appeal rights available under section 11022(a) of the Act 
and section 3 of the 2004 Act (codified at D.C. Official Code Sec.  11-
1570(c)(3)) to claimants whose claim for Federal Benefit Payments is 
denied in whole or in part; and
* * * * *
    (c) This part does not apply to claims and appeals filed before 
October 1, 1997. Such claims must be pursued with the District of 
Columbia.
    6. In Sec.  29.402, the definitions for Act and Benefits 
Administrator are removed.
    7. In Sec.  29.501, paragraph (e) is added to read as follows:


Sec.  29.501  Purpose; incorporation by reference; scope.

* * * * *
    (e) This part does not apply to debt collection claims asserted and 
requests for waivers of collection initiated before October 1, 1997. 
Such debt collection claims must be pursued by the District of Columbia 
and such requests for waivers of collection must be pursued with the 
District of Columbia.

    Dated: April 6, 2005.
Rochelle F. Granat,
Director, Office of DC Pensions.
[FR Doc. 05-7291 Filed 4-12-05; 8:45 am]
BILLING CODE 4810-25-P