[Federal Register Volume 73, Number 157 (Wednesday, August 13, 2008)]
[Rules and Regulations]
[Pages 47044-47046]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-18439]


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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: Final rule.

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SUMMARY: The Railroad Retirement Board (Board) amends 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: This rule will be effective August 13, 2008.

ADDRESSES: Beatrice Ezerski, Secretary to the Board, Railroad 
Retirement Board, 844 N. Rush Street, Chicago, Illinois 60611-2092.

[[Page 47045]]


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, whichever 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 amends 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.
    The Board published the proposed rule on March 6, 2008 (73 FR 
12037) and invited comments by May 5, 2008. No comments were received. 
Accordingly, the proposed rule is being published as a final rule 
without change.
    The proposed rule was determined to be a significant regulatory 
action and was 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.

0
For the reasons set out in the preamble, the Railroad Retirement Board 
amends 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

0
1. The authority citation for part 295 continues to read as follows:

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


0
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 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
* * * * *

0
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

[[Page 47046]]

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]

0
4. Section 295.3, paragraph (d) is amended by removing all references 
to ``Deputy General Counsel'' and adding in their place references to 
``General Counsel''.
0
5. Section 295.4 is amended as follows:
0
a. By removing wherever they appear all references to ``Deputy General 
Counsel'' and adding in their place references to ``General Counsel''.
0
b. By removing all references to the ``Associate Executive Director for 
Retirement Claims'' and adding in their place references to the 
``Director of Retirement Benefits''.
0
c. By removing ``bs'' and adding in its place ``be'' in the second to 
last sentence of paragraph (b)(2)(ii).
0
d. By adding the phrase ``pertaining to the employee'' at the end of 
the second sentence of the introductory paragraph of paragraph (c).
0
e. By adding the phrase ``pertaining to the employee'' at the end of 
the first sentence of paragraph (d)(2).
0
f. By capitalizing the word ``Board'' at the end of the last sentence 
in paragraph (d)(2).
0
g. By capitalizing the word ``Board'' in the last sentence of paragraph 
(d)(4).
0
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.
* * * * *

0
6. Section 295.5 is amended as follows:
0
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''.
0
b. By removing the phrase ``in behalf'' and adding in its place the 
phrase ``on behalf'' in the first sentence of paragraph (d).
0
c. By adding the phrase ``Except as provided in paragraph (f)(4) of 
this section'' to the beginning of the first sentence of the 
introductory text to paragraph (f).
0
d. By removing references to ``Deputy General Counsel'' and adding in 
their place references to ``General Counsel'' in paragraph (g) and
0
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]

0
7. Section 295.6 is amended as follows:
0
a. In paragraph (b) by removing ``Deputy General Counsel'' and adding 
in its place ``General Counsel'', and by removing all references to the 
``Associate Executive Director for Retirement Claims'' and adding in 
their place references to ``Director of Retirement Benefits''.
0
b. By adding the word ``a'' to the first sentence of paragraph (b) 
before the word ``request''.
0
c. By adding the word ``a'' to the first sentence of paragraph (c) 
before the word ``signed''.

0
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 Sec.  295.4(d).

    Dated: August 6, 2008.

    By authority of the Board.
Beatrice Ezerski,
Secretary to the Board.
[FR Doc. E8-18439 Filed 8-12-08; 8:45 am]
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