[Federal Register Volume 73, Number 45 (Thursday, March 6, 2008)]
[Proposed Rules]
[Pages 12037-12038]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-4381]


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RAILROAD RETIREMENT BOARD

20 CFR Part 295

RIN 3220-AB61


Payments Pursuant to Court Decree or Court-approved Property 
Settlement

AGENCY: Railroad Retirement Board.

ACTION: Proposed rule.

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SUMMARY: The Railroad Retirement Board (Board) proposes to amend its 
regulations concerning partition of annuities pursuant to a court 
decree or court-approved property settlement in order to incorporate 
provisions of the Pension Protection Act of 2006, to make corrections 
in the existing regulation, and to update the regulation to reflect 
changes in titles within the agency.

DATES: Submit comments on or before May 5, 2008.

ADDRESSES: Address any comments concerning this proposed rule to 
Beatrice Ezerski, Secretary to the Board, Railroad Retirement Board, 
844 N. Rush Street, Chicago, Illinois 60611-2092.

FOR FURTHER INFORMATION CONTACT: Marguerite P. Dadabo, Assistant 
General Counsel, (312) 751-4945, TTD (312) 751-4701.

SUPPLEMENTARY INFORMATION: Retirement and disability annuities under 
the Railroad Retirement Act are composed of independently calculated 
segments known as tiers. The tier I amount combines both railroad and 
non-railroad earnings, and is calculated using social security benefit 
formulas. The tier II amount is calculated under different formulas, 
generally representing railroad earnings alone. In addition, some 
annuitants receive a dual benefit component based on non-railroad wages 
earned through December 1974, or in some cases, through an earlier 
date. Finally, career railroad employees may receive a supplemental 
annuity ranging from $23 to $43 per month.
    Under section 14(b) of the Railroad Retirement Act, the non-tier I 
portion of a railroad retirement annuity may be characterized as 
property subject to partition in a proceeding for divorce, annulment, 
or legal separation. Prior to August 17, 2007, the effective date of 
the Pension Protection Act of 2006, Public Law 109-280, a partition 
payment would terminate upon the death of either the railroad employee 
or the former spouse, which ever occurred first, unless the court order 
provided for termination at an earlier date. Section 1003 of Public Law 
109-280 amended the Railroad Retirement Act to provide that a partition 
payment will only terminate upon the employee's death when the court 
order requires such termination. Consequently, unless the court order 
requires termination of payments upon the employee's death, tier II 
partition payments to divorced spouses may now continue beyond the 
employee's death. While the change in law does not allow for the 
reinstatement of payments terminated prior to August 17, 2007, due to 
the death of the employee prior to that date, the change does mean that 
any divorced spouse who was getting a partition payment as of that date 
may continue to be paid a tier II partition amount.
    The Board proposes to amend Part 295 of its regulations to reflect 
the changes made by Public Law 109-280, to reflect changes in certain 
titles of agency employees, and to correct or clarify certain 
references. Specifically, the Board amends section 295.1, which 
explains the purpose of Part 295, to incorporate a reference to Public 
Law 109-280. Section 295.1(b)(3) is modified to clarify references to 
certain annuity increases under section 3(f) of the Railroad Retirement 
Act.
    Section 295.2 is amended to include a separate new definition of 
former spouse and a revised separate definition of spouse.
    Section 295.4(a) is amended by the addition of a new subparagraph 
(4) to specify that unless a court order expressly provides otherwise, 
a partition order will be applied to any annuity paid to an employee, 
whether the employee has retired based on age or based on disability.
    The phrase ``pertaining to the employee'' is added to the end of 
the second sentence of section 295.4(c) and to the end of the first 
sentence in section 295.4(d)(2) in order to clarify that the Board's 
records concerning the railroad employee will be reviewed to determine 
the most current address for each party to a partition order.
    A new subparagraph (4) is added to section 295.5(f) to reflect the 
amendment made by Public Law 109-280 that allows continued payment of a 
partition tier II to a former spouse if the railroad employee dies on 
or after August 17, 2007. Paragraphs 295.5(a) and 295.5(f) are amended 
to include a reference to the new subparagraph (4).
    A new subparagraph (2) is added to section 295.7(e) to clarify that 
an erroneous payment to the employee may occur if the Board has all 
required documentation and due to clerical oversight fails to withhold 
the amount awarded by a court partition order.
    Finally, references to ``Deputy General Counsel'' and to the 
``Associate Executive Director for Retirement Claims'' throughout Part 
295 are changed to ``General Counsel'' and ``Director of Retirement 
Benefits'' respectively in order to reflect title changes within the 
agency. Several minor corrections of capitalization and grammar are 
also made.
    This proposed rule has been determined to be a significant 
regulatory action, and therefore it has been reviewed by the Office of 
Management and Budget prior to its publication in the Federal Register. 
There are no changes to the information collections associated with 
Part 295.

List of Subjects in 20 CFR Part 295

    Railroad employees, railroad retirement.

    For the reasons set out in the preamble, the Railroad Retirement 
Board proposes to amend title 20, chapter II, subchapter B, part 295 of 
the Code of Federal Regulations as follows:

PART 295--PAYMENTS PURSUANT TO COURT DECREE OR COURT-APPROVED 
PROPERTY SETTLEMENT

    1. The authority citation for part 295 continues to read as 
follows:

    Authority: 45 U.S.C. 231f; 45 U.S.C. 231m.

    2. Section 295.1 is amended by revising paragraph (a), the 
introductory text of paragraph (b), and paragraph (b)(3) to read as 
follows:


Sec.  295.1  Introduction.

    (a) Purpose. This part implements section 419 of Public Law 98-76 
(97 Stat. 438), which amended section 14 of the Railroad Retirement Act 
to provide that, with respect to annuity amounts payable for months 
beginning with September 1983, the Board must comply with a court 
decree of divorce, annulment or legal separation, or with the terms of 
any court-approved property settlement incident to any such decree, 
which characterizes specified benefits as property subject to 
distribution. This part also implements section 1003 of Public Law 109-
280 (120 Stat. 1053), which amended section 5 of the Railroad 
Retirement Act to allow the payment of an employee's tier II benefit 
component awarded to a

[[Page 12038]]

former spouse as part of a property distribution incident to a decree 
of divorce, annulment, or legal separation to continue after the 
employee's death. Garnishment of benefits for alimony or child support 
is dealt with in part 350 of this chapter.
    (b) Benefits subject to this part. Only the following benefits or 
portions of benefits under the Railroad Retirement Act are subject to 
this part:
* * * * *
    (3) Employee annuity increase as provided under section 3(f) of the 
Act; and
* * * * *
    3. Section 295.2 is amended by adding a new definition of ``Former 
spouse'' and by revising the definition of ``spouse'' to read as 
follows:


Sec.  295.2  Definitions.

* * * * *
    Former spouse means the former husband or wife of an employee who, 
on or before the date of a court order, was married to the employee and 
that marriage has ended by final decree of divorce, dissolution, or 
annulment.
* * * * *
    Spouse means the husband or wife of an employee who, on or before 
the date of a court order, was married to the employee and that 
marriage has not ended by final decree of divorce, dissolution, or 
annulment.


Sec.  295.3  [Amended]

    4. Section 295.3, paragraph (d) is amended by replacing all 
references to ``Deputy General Counsel'' with references to ``General 
Counsel''.
    5. Section 295.4 is amended as follows:
    a. By replacing wherever they appear all references to ``Deputy 
General Counsel'' with references to ``General Counsel''
    b. By replacing all references to the ``Associate Executive 
Director for Retirement Claims'' with references to the ``Director of 
Retirement Benefits''
    c. By replacing ``bs'' with ``be'' in the second to last sentence 
of paragraph (b)(2)(ii)
    d. By adding the phrase ``pertaining to the employee'' at the end 
of the second sentence of the introductory paragraph of paragraph (c)
    e. By adding the phrase ``pertaining to the employee'' at the end 
of the first sentence of paragraph (d)(2)
    f. By capitalizing the word ``Board'' at the end of the last 
sentence in paragraph (d)(2)
    g. By capitalizing the word ``Board'' in the last sentence of 
paragraph (d)(4)
    h. By adding the following new paragraph (b)(4) to read as follows:


Sec.  295.4  Review of documentation.

* * * * *
    (b) * * *
    (4) Unless the order expressly provides otherwise, the Board will 
deduct the amount specified by the order from any annuity paid to the 
employee, whether the employee has retired based on age or on 
disability.
* * * * *
    6. Section 295.5 is amended as follows:
    a. By adding in paragraph (a) the phrase ``, except as provided in 
paragraph (f)(4) of this section,'' in the second sentence between the 
words ``and'' and ``shall''
    b. By substituting the word ``on'' for the word ``in'' in paragraph 
(d) in the phrase that reads ``to act in behalf of the spouse or former 
spouse''
    c. By adding the phrase ``Except as provided in paragraph (4) of 
this paragraph'' to the beginning of the first sentence of the 
introduction to paragraph (f)
    d. By substituting references to ``Deputy General Counsel'' with 
references to ``General Counsel'' in paragraph (g) and
    e. By adding a new paragraph (f)(4) to read as follows:


Sec.  295.5  Limitations.

* * * * *
    (f) * * *
    (4) If the employee dies on or after August 17, 2007, a former 
spouse who is receiving a portion of the employee's annuity pursuant to 
a court decree or property settlement compliant with this part may 
continue to receive a portion of the employee's tier II benefit 
component unless the court decree or property settlement requires such 
payment to terminate upon the death of the employee.
* * * * *


Sec.  295.6  [Amended]

    7. Section 295.6 is amended as follows:
    a. In paragraph (b) by substituting ``General Counsel'' for 
``Deputy General Counsel'' and by substituting ``Director of Retirement 
Benefits'' for all references to the ``Associate Executive Director for 
Retirement Claims''
    b. By adding the word ``a'' to the first sentence of paragraph (b) 
before the word ``request''
    c. By adding the word ``a'' to the first sentence of paragraph (c) 
before the word ``signed''.
    8. Section 295.7 is amended by redesignating paragraph (e) as 
paragraph (e)(1) and adding a new paragraph (e)(2) to read as follows:


Sec.  295.7  Miscellaneous.

* * * * *
    (e) * * *
    (2) Where all documentation required by this part is in the Board's 
records pertaining to the employee prior to the time the employee 
annuity is awarded, but where the Board due to clerical oversight fails 
to withhold the amount awarded by the court order, then the Board shall 
begin deduction from the employee annuity with the month the error is 
discovered, and shall pay the amount which should have been withheld 
pursuant to this part to the spouse or former spouse. The amount paid 
to the spouse or former spouse representing months for which the amount 
under the order was not timely withheld shall be an erroneous payment 
to the employee within the meaning of section 10 of the Railroad 
Retirement Act. This section shall not apply where the Board has 
attempted to contact the spouse or former spouse at the time the 
employee annuity is awarded pursuant to section 295.4(d).

    Dated: March 3, 2008.

    By Authority of the Board.
Beatrice Ezerski,
Secretary to the Board.
 [FR Doc. E8-4381 Filed 3-5-08; 8:45 am]
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