[Federal Register Volume 77, Number 166 (Monday, August 27, 2012)]
[Notices]
[Pages 51842-51843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-21065]


-----------------------------------------------------------------------

SOCIAL SECURITY ADMINISTRATION

[Docket No. SSA-2012-0046]


Social Security Acquiescence Ruling (AR) 12-X(8); Petersen v. 
Astrue, 633 F.3d 633 (8th Cir. 2011); Whether a National Guard 
Technician Who Worked in Noncovered Employment Is Exempt From the 
Windfall Elimination Provision (WEP)--Title II of the Social Security 
Act

AGENCY: Social Security Administration.

ACTION: Notice of Social Security Acquiescence Ruling.

-----------------------------------------------------------------------

SUMMARY: We are publishing this Social Security Acquiescence Ruling 
(AR) in accordance with 20 CFR 402.35(b)(2).

DATES: Effective Date: August 27, 2012.

FOR FURTHER INFORMATION CONTACT: Robert Crowe, Office of the General 
Counsel, Office of Program Law, Social Security Administration, 6401 
Security Boulevard, Baltimore, MD 21235-6401, (410) 965-3155, or TTY 
410-966-5609, for information about this notice. For information on 
eligibility or filing for benefits, call our national toll-free number, 
1-800-772-1213 or TTY 1-800-325-0778, or visit our Internet site, 
Social Security Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION: An AR explains how we will apply a holding 
in a decision of a United States Court of Appeals that we determine 
conflicts with our interpretation of a provision of the Social Security 
Act (the Act) or regulations when the Government has decided not to 
seek further review of that decision or is unsuccessful on further 
review.
    We will apply the holding of the Court of Appeals' decision as 
explained in this AR to all determinations or decisions at all levels 
of administrative review within the Eighth Circuit. We will apply this 
AR to all determinations or decisions made on or after August 27, 2012. 
If we made a determination or decision to apply the WEP to your 
retirement or disability benefits between February 3, 2011, the date of 
the Court of Appeals' decision, and August 27, 2012, the effective date 
of this AR, you may request that we apply the AR to the prior 
determination or decision. You must show, pursuant to 20 CFR 
404.985(b)(2), that applying the AR could change our prior 
determination or decision in your case.
    In addition, when we received this precedential Court of Appeals' 
decision and determined that an AR might be required, we began to 
identify those persons within the circuit who might be subject to 
readjudication if we subsequently issued an AR. Because we have 
determined that an AR is required and are publishing this AR, we will 
send a notice to those individuals we have identified. In the notice, 
we will provide information about the AR and their right to request 
readjudication under the AR. However, affected individuals do not need 
to receive a notice in order to request that we apply this AR to our 
prior determination or decision, as provided in 20 CFR 404.985(b)(2).
    If we later rescind this AR as obsolete, we will publish a notice 
in the Federal Register to that effect, as provided in 20 CFR 
404.985(e). If we decide to relitigate the issue covered by this AR, as 
provided by 20 CFR 404.985(c), we will publish a notice in the Federal 
Register stating that we will apply our interpretation of the Act or 
regulations involved and explaining why we have decided to relitigate 
the issue.

(Catalog of Federal Domestic Assistance, Program Nos. 96.001 Social 
Security--Disability Insurance; 96.002 Social Security--Retirement 
Insurance; 96.004 Social Security--Survivors Insurance)

    Dated: August 21, 2012.
Michael J. Astrue,
Commissioner of Social Security.

Acquiescence Ruling 12-X(8)

    Petersen v. Astrue, 633 F.3d 633 (8th Cir. 2011): Whether a 
National Guard Technician Who Worked in Noncovered Employment Is Exempt 
From the Windfall Elimination Provision (WEP)--Title II of the Social 
Security Act.
    Issue: Whether a National Guard technician who worked in noncovered 
employment under the Civil Service Retirement System (CSRS) is subject 
to the WEP.
    Statutory and Regulatory Citation: Section 215(a)(7)(A)(III) of the 
Social Security Act, 42 U.S.C. 415(a)(7)(A); 20 CFR 404.213(e)(9).
    Circuit: Eighth (Arkansas, Iowa, Minnesota, Missouri, Nebraska, 
North Dakota, and South Dakota).
    Applicability of Ruling: This ruling applies to determinations or 
decisions, at all levels of administrative review, i.e., initial, 
reconsideration, administrative law judge (ALJ) hearing, and Appeals 
Council.
    Description of Case: Mr. Petersen was a technician with the 
National Guard from 1972 to 2000. The National Guard Technician Act of 
1968, Pub. L. 90-486, codified at 32 U.S.C. 709, made technicians with 
the National Guard civil service employees of the United States 
Government. Some technicians, like Mr. Petersen, have ``dual status'' 
because they are not only civilian employees but also military members 
of the National Guard. Mr. Petersen received a civilian pension from 
the CSRS for his work as a National Guard technician. His work as a 
technician was not covered by Social Security, and Social Security 
taxes were not withheld from his pay. Thus, his CSRS pension is based 
wholly on noncovered civil service work.
    Mr. Petersen applied for Social Security retirement benefits in 
2006. Social Security found that he was entitled to benefits but 
informed Mr. Petersen that his benefit amount would be reduced in 
accordance with the WEP. The agency denied his request for 
reconsideration. He requested a hearing by an ALJ, and the ALJ found 
that Mr. Petersen's benefits should not be reduced because of the WEP. 
The Appeals Council then reviewed the ALJ's decision on its own motion 
and subsequently issued a decision finding that Mr. Petersen's benefits 
were subject to reduction under the WEP. The Appeals Council's decision 
was the agency's final decision.
    Mr. Petersen requested judicial review of the agency's final 
decision in accordance with 42 U.S.C. 405(g). On February 23, 2009, the 
district court issued a decision finding that his benefits were not 
subject to the WEP because 42 U.S.C. 415(a)(7)(A)(III) exempts from the 
WEP those retirement payments based on service as a member of a 
uniformed service. The district court found that Mr. Petersen's 
National Guard technician service qualified him for this exception. The 
Government appealed the district court's decision to the United States 
Court of Appeals for the Eighth Circuit.

Holding

    The Court of Appeals noted that ``dual status'' National Guard 
technicians must maintain military membership in the National Guard and 
are also required to wear their uniform, even when performing civilian 
technician work. The Eighth Circuit held that, as a result of ``these 
unique National Guard technician requirements imposed upon him, 
Petersen performed his work `as a member of' the Nebraska Air National 
Guard.'' Consequently, the Eighth Circuit found that Mr. Petersen 
qualified for the exception to the WEP for work

[[Page 51843]]

performed ``as a member of the uniformed services.''

Statement as to How Petersen Differs From the Agency's Policy

    The WEP is a modified formula for calculating the retirement or 
disability benefits of a person who receives a pension from noncovered 
work (i.e., work that is not defined as employment for Social Security 
purposes and where Social Security taxes were not deducted from the 
employee's pay). The WEP applies to persons who attain age 62 or become 
eligible for disability benefits after 1985 and who first become 
eligible for a monthly payment (such as a civil service pension) after 
1985 ``which is based in whole or in part upon his or her earnings for 
service which did not constitute `employment' as defined in'' 42 U.S.C. 
410. 42 U.S.C. 415(a)(7)(A)(III). The WEP applies to persons with 
noncovered employment in the CSRS which includes the civilian 
employment of a ``dual status'' National Guard technician. A formula is 
used to compute the person's primary insurance amount (PIA), which then 
is used to compute the amount of the person's Social Security benefits. 
42 U.S.C. 415(a)(7)(B); 20 CFR 404.213(c). The formula results in a 
lower Social Security benefit.
    Congress amended the WEP in 1994 in Pub. L. 103-296, the Social 
Security Independence and Program Improvements Act of 1994 (the 
Independence Act). Section 308 of the Independence Act, codified at 42 
U.S.C. 415(a)(7)(A)(III), created a new exemption from the WEP, which 
applies to ``a payment based wholly on service as a member of a 
uniformed service'' as defined in 42 U.S.C. 410(m). We interpret the 
uniformed services exception to the WEP to mean that only monthly 
payments based on military service are exempt from the WEP. Under this 
interpretation, monthly payments that are based on noncovered civilian 
public employment, including that of National Guard technicians who 
work under the CSRS, are not exempt from the WEP. Moreover, the effect 
of the uniformed services exception to the WEP and the regulatory 
provision found at 20 CFR 404.213(e)(9) is to exempt from the WEP only 
military retirement pay based on reserve inactive duty training (IDT). 
Other kinds of military duty, such as active duty, already were not 
subject to the WEP because they have been covered employment since 
1956. The WEP does not apply to noncovered work before 1957.
    The legislative history of the uniformed services exception to the 
WEP explains that the purpose of the exception was to exempt military 
retired pay, based on noncovered IDT military duty, from application of 
the WEP. The exception was not intended to exempt any pension based on 
civilian work from application of the WEP. The Court of Appeals 
declined to consider the legislative history of the uniformed services 
exception because it found there was no ambiguity to the uniformed 
services exception.

Explanation of How SSA Will Apply the Petersen Decision Within the 
Circuit

    Social Security old-age or disability applicants and beneficiaries 
who receive a CSRS pension based on noncovered work as dual status 
National Guard technicians, and who are permanent legal residents of a 
State within the Eighth Circuit, should have their Social Security 
benefits computed using the normal PIA, rather than the WEP PIA 
described in 42 U.S.C. 415(a)(7) of the Act. A decisionmaker should not 
apply this AR to an applicant or beneficiary who is not a permanent 
legal resident of a State within the Eighth Circuit at the time of 
making the determination or decision to apply the WEP. Before we 
determine that the WEP does not apply, we must have evidence that an 
applicant's or beneficiary's CSRS pension is based on service as a dual 
status civilian technician with the National Guard.

[FR Doc. 2012-21065 Filed 8-24-12; 8:45 am]
BILLING CODE 4191-02-P