[Federal Register Volume 70, Number 166 (Monday, August 29, 2005)]
[Rules and Regulations]
[Pages 50951-50954]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-17053]



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 Rules and Regulations
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  Federal Register / Vol. 70, No. 166 / Monday, August 29, 2005 / Rules 
and Regulations  

[[Page 50951]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 842

RIN 3206-AK84


Retirement Credit for Certain Government Service Performed Abroad

AGENCY: Office of Personnel Management.

ACTION: Interim rule with request for comment.

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SUMMARY: The Office of Personnel Management (OPM) is issuing interim 
regulations to implement a section of the Foreign Relations 
Authorization Act, Fiscal Year 2003 affecting the Federal Employees 
Retirement System. These regulations describe how individuals who 
performed certain Government service at a United States diplomatic 
mission, consular post, or other Foreign Service post abroad after 
December 31, 1988, and before May 24, 1998, can get retirement credit 
for that service under the Federal Employees' Retirement System.

DATES: This interim rule is effective August 29, 2005. We must receive 
your comments by October 28, 2005.

ADDRESSES: You may submit comments, identified by RIN number 3206-AK84, 
by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. Include RIN number 3206-AK84 in 
the subject line of the message.
     Mail: Mary Ellen Wilson, Manager, Retirement Group, Office 
of Personnel Management; 1900 E Street, NW., Washington, DC 20415-3200.
     FAX: (202) 606-0990.

FOR FURTHER INFORMATION CONTACT: Jim Giuseppe, (202) 606-0299.

SUPPLEMENTARY INFORMATION: Section 321 of Public Law 107-228, 116 Stat. 
1380, the Foreign Relations Authorization Act, Fiscal Year 2003, allows 
retirement credit under the Federal Employees' Retirement System (FERS) 
for certain Government service performed abroad under a temporary 
appointment. Service performed after December 31, 1988, and before May 
24, 1998, under a temporary appointment pursuant to sections 309 and 
311 of the Foreign Service Act of 1980, may now be creditable under 
FERS provided all of the following conditions set out in section 321 
are satisfied.
     The service must have been performed at a United States 
diplomatic mission, consular post (other than a consular agency), or 
other Foreign Service post abroad.
     The individual who performed the service must have 
satisfied all eligibility requirements under regulations of the 
Department of State (as in effect on September 30, 2002) for a family 
member limited non-career appointment at the time the service was 
performed. Individuals not employed by the Department of State while 
performing such service shall be treated as if they were so employed 
for the purposes of this requirement.
     The service would have been creditable under FERS had it 
been performed before 1989 and had the appropriate service credit 
deposit been paid.
     The service cannot otherwise be creditable under FERS or 
any other retirement system for employees of the United States 
Government (disregarding title II of the Social Security Act).
     The service must have totaled 90 days or more.
     The individual who performed the service must file an 
application to pay a deposit for the service no later than 36 months 
after the effective date of these regulations, and pay the deposit. The 
deposit equals the amount of FERS employee deductions that would have 
been withheld from the individual's basic pay had the service been 
subject to FERS deductions, plus interest. If the individual who 
performed the service is deceased, any person who is or would be 
eligible for a survivor annuity under FERS based on the service of the 
individual can apply for the service credit and pay this deposit.
     The department or agency where the individual performed 
the service must pay a deposit for the service. The deposit the 
department or agency owes equals the FERS Government contributions that 
would have been due had the service been subject to FERS, plus 
interest.
    These provisions allowing FERS service credit for certain 
Government service performed abroad differ from other FERS provisions 
that allow service credit for service not subject to FERS retirement 
deductions in three important respects. First, they specify a specific 
location where the service must have been performed--at a United States 
diplomatic mission, consular post, or other Foreign Service post abroad 
as defined under the Foreign Service Act of 1980. Second, they require 
the application of Department of State regulations in determining if 
the service is creditable. And third, they require that Government 
contributions accompany the deposit that individuals have to pay for 
the service. The department or agency where the individual performed 
the service must pay those Government contributions. While individuals 
may have performed this service at any number of departments or 
agencies, including the Departments of Defense, Commerce, and 
Agriculture, and the United States Agency for International 
Development, we believe that most of the individuals affected by this 
legislation worked for the Department of State.
    Because of these unique service credit provisions, we have 
established a process for obtaining service credit for certain 
Government service performed abroad that differs from the normal 
process used for establishing service credit for other types of 
civilian service. Where normally the Office of Personnel Management 
(OPM) determines whether service is creditable for FERS retirement 
purpose, these regulations recognize that the Department of State is in 
a better position than OPM to interpret the Foreign Service Act and the 
Department of State's own regulations to determine if the service is 
creditable. And where normally the individual applying for service 
credit for civilian service applies to OPM and pays a deposit to OPM, 
these regulations require that the individual apply for service credit 
to the department or agency where the individual performed the service 
(the Department of State in most cases) and pay the deposit to that

[[Page 50952]]

department or agency. The department or agency must then submit the 
individual's deposit to OPM, along with the Government contributions, 
so that OPM receives the full payment for the service at the same time.
    When the Department of State or other appropriate department or 
agency responsible for processing the application for service credit 
under these regulations (hereinafter the employing entity) receives an 
application from an individual for certain Government service performed 
abroad, it must determine if the service qualifies for service credit 
under Section 321 of Public Law 107-228. (If the employing entity is 
not the Department of State, it may need to consult with the Department 
of State if there are any questions about whether or not the service is 
creditable.) The employing entity must then compute the amount of the 
deposit the individual owes for the service and notify the individual 
of the amount due. It must also compute the amount of the Government 
contributions it owes for the service; collect the deposit from the 
individual; and immediately forward both the individual's deposit and 
the Government contributions to OPM in a manner prescribed by OPM. If 
the employing entity finds that the service is not creditable under 
Section 321 of Public Law 107-228, it must provide the individual with 
a written decision explaining the reason why the service is not 
creditable and explaining the individual's rights to appeal the 
decision to the Merit Systems Protection Board (MSPB).
    When the employing entity is not the Department of State, the 
Department of State must provide whatever assistance is necessary to 
help the employing entity determine if the service performed abroad is 
creditable under Section 321 of Public Law 107-228. If the employing 
entity no longer exists, the Department of State must assume most of 
the employing entity's duties related to these regulations. The only 
exception is that the Department of State, when performing these duties 
for an employing entity that is no longer in existence, does not have 
to forward the actual Government contributions to OPM. If the 
Department of State finds that the service is not creditable, it must 
provide the individual with a written notice that explains the reason 
why the service is not creditable and explains the individual's rights 
to appeal to the MSPB.
    Individuals eligible to make the deposit must pay the deposit to 
the appropriate employing entity in one lump sum within 180 days of 
being notified of the amount of the deposit. The employing entity must 
then forward the individual's deposit along with the Government deposit 
and all relevant information relating to the period of service to OPM 
in a manner prescribed by OPM. If the individual making the deposit is 
currently receiving a retirement or survivor annuity, OPM will 
recompute the annuity to include credit for the service and pay the 
additional annuity resulting from the service credit retroactive to the 
date the annuity began. If the individual making the deposit is not 
currently receiving a retirement or survivor annuity, OPM will evaluate 
whether or not the individual qualifies to begin receiving an annuity 
with the additional service credit. If an individual becomes eligible 
to receive an annuity with the additional service credit, OPM will send 
the individual the appropriate application for benefits. After the 
individual returns the application, OPM will begin to pay the annuity 
as of the earliest date that the annuity could commence, subject to the 
commencing date provisions in chapter 84 of title 5 United States Code.
    Therefore, OPM is amending 5 CFR part 842, subpart C, the subpart 
concerning credit for service. Specifically, subpart C is amended at 5 
CFR 842.304 and 842.305.
    In Sec.  842.304, paragraph (e) is added outlining the conditions 
for crediting certain Government service performed abroad.
    In Sec.  842.305, paragraph (j) is added outlining how the 
individual and employer deposits for the service should be processed.

Waiver of Notice of Proposed Rulemaking

    Under section 553(b)(3)(B) and (d)(3) of title 5, United States 
Code, I find that good cause exists for waiving the general notice of 
proposed rulemaking and to make these rules effective in less than 30 
days. The processing of deposits for certain Government service 
performed abroad under these regulations will affect only a relatively 
limited number of qualifying individuals' retirement eligibility or 
eligibility for survivor benefits, and the amounts of their retirement 
or survivor benefits. We recognize that notice and comment may be 
waived when the agency for good cause finds that notice and public 
procedure are impracticable, unnecessary, or contrary to the public 
interest. Publication of a general notice of proposed rulemaking in 
this situation would be contrary to the public interest because it 
would unnecessarily and unreasonably delay the availability of the 
potential benefits of Public Law 107-228, and because no individual or 
group will suffer any detriment, financial or otherwise, because of the 
application of this regulation without notice and comment. The 
application of these regulations benefits a specific group of 
individuals by revising an existing regulatory provision that is 
contrary to the benefit enacted by the Congress. The application of 
this regulation before public comment is consistent with the limited 
interest in this matter by the general public and in which the interest 
of the affected public, those seeking FERS retirement credit for 
certain Government service earned while working abroad, would be set 
back by any unnecessary requirement of advance notice.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities because it affects 
only certain Federal employees.

Executive Order 12866, Regulatory Review

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

Lists of Subjects in 5 CFR Part 842

    Air traffic controllers, Alimony, Firefighters, Government 
employees, Law enforcement officers, Pensions, Retirement.

U.S. Office of Personnel Management.
Linda M. Springer,
Director.

0
For the reasons stated in the preamble, the Office of Personnel 
Management amends 5 CFR part 842 as follows:

PART 842--FEDERAL EMPLOYEES RETIREMENT SYSTEM--BASIC ANNUITY

0
1. The authority citation for part 842 is revised to read as follows:

    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

[[Page 50953]]

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 C--Credit for Service

0
2. In Sec.  842.304, add paragraph (e) to read as follows:


Sec.  842.304  Civilian service.

* * * * *
    (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;
    (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.

0
3. In Sec.  842.305, add paragraph (j) to read as follows:


Sec.  842.305  Deposits for civilian service.

* * * * *
    (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.
    (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

[[Page 50954]]

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.

[FR Doc. 05-17053 Filed 8-26-05; 8:45 am]
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