[Federal Register Volume 85, Number 186 (Thursday, September 24, 2020)]
[Rules and Regulations]
[Pages 60047-60048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18042]



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 Rules and Regulations
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  Federal Register / Vol. 85, No. 186 / Thursday, September 24, 2020 / 
Rules and Regulations  

[[Page 60047]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 870

RIN 3206-AN52


Federal Employees' Group Life Insurance Program: Clarifying 
Annual Rates of Pay and Amending the Employment Status of Judges of the 
United States Court of Appeals for Veterans Claims

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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

SUMMARY: The Office of Personnel Management (OPM) is issuing a final 
rule to amend Federal Employees' Group Life Insurance Program (FEGLI) 
regulations to clarify the definition of annual rates of pay for 
insured employees and to address the status of judges of the United 
States Court of Appeals for Veterans Claims.

DATES: This final rule is effective September 24, 2020.

FOR FURTHER INFORMATION CONTACT: Ronald Brown, Policy Analyst, (202) 
606-0004, or by email to [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The FEGLI Program is administered by the Office of Personnel 
Management (OPM) in accordance with Chapter 87 of Title 5 of the U.S. 
Code and our implementing regulations (title 5, part 87, and title 48, 
part 21, of the Code of Federal Regulations). The FEGLI enabling 
legislation was signed August 17, 1954. Also, Congress enacted Public 
Law 84-356, on August 11, 1955, to provide continuation of life 
insurance during retirement.
    The FEGLI Program covers approximately 4,261,000 employees and 
annuitants enrolled in Basic insurance, including approximately 
1,229,000 employees and annuitants with Option B insurance that has not 
reduced to zero, approximately 1,160,000 employees and annuitants 
enrolled in Option A insurance, and approximately 924,000 employees and 
annuitants enrolled in Option C insurance that has not reduced to zero.
    The FEGLI statute establishes the basic rules for benefits, 
enrollment, and participation, and provides that OPM ``shall specify 
the types of pay included in annual pay.'' See 5 U.S.C. 8704(c). In 
accordance, OPM has promulgated regulations defining the ``basic 
insurance amount'' for all FEGLI Program enrollees. Further, the 
``basic insurance amount'' is defined by law using the term ``annual 
rate of basic pay.'' See 5 U.S.C. 8701(c). For FEGLI Program purposes, 
the basic insurance amount applies to Basic and Option B insurance.
    This final regulation clarifies what is considered annual basic pay 
for FEGLI Program purposes but does not change how the annual rate of 
basic pay is computed, provide additional enrollment or change 
opportunities, or make other changes not in the existing FEGLI Program 
regulations. The final rule makes this clear in the revised sections of 
part 870 by aligning the FEGLI Program and retirement regulations, and, 
in the process, eliminating certain outdated regulatory provisions on 
annual rates of basic pay. This final regulation also includes a change 
enacted under Public Law 114-315 requiring that retired and current 
judges for the United States Court of Appeals for Veterans Claims be 
considered employees for purposes of FEGLI.

Discussion of Changes

    On June 29, 2018, OPM published a proposed regulation (83 FR 30589) 
to clarify that annual basic pay for FEGLI includes any type of pay 
treated as basic pay for purposes of the retirement systems established 
under 5 U.S.C. chapters 83 and 84 consistent with applicable law or OPM 
regulation and to address the status of judges for the United States 
Court of Appeals for Veteran's Claims. OPM received no comments on the 
proposed rule. Accordingly, this final regulation adopts the proposed 
regulation with the changes pertaining to life insurance for Federal 
judges of the United States Court of Appeals for Veterans Claims 
referenced below.
    The final regulation changes existing paragraphs 5 CFR 
870.204(a)(1) and (a)(2) to clarify that basic pay for FEGLI purposes 
includes all payments that are retirement-creditable basic pay under 5 
U.S.C. chapters 83 and 84. The final rule also deletes regulatory 
provisions that listed specific types of pay that are either obsolete 
or creditable as retirement basic pay. This includes revised paragraphs 
on locality pay and special pay supplements. These changes do not 
substantively affect pay that is creditable towards life insurance 
payment, but merely incorporate provisions that were previously 
contained in guidance into regulation through a reference to retirement 
law. This regulation codifies OPM's unwritten policy to consider pay 
that is creditable towards retirement as creditable towards life 
insurance payment.
    The final regulation makes the required update at 5 CFR 870.101 to 
state that the United States Court of Appeals for Veterans Claims is 
now the employing office for judges of the United States Court of 
Appeals for Veterans Claims. This replaces the prior employing office, 
the United States Court of Veterans Appeals.
    Also, the final regulation clarifies existing paragraph 5 CFR 
870.703(e)(1) concerning certain Federal judges by adding the words ``a 
judge who retires under parts (i-vii)'' and striking ``one of the 
following.'' It also adds 5 CFR 870.703(e)(1)(vii) concerning retired 
Federal judges to reflect the statutory change under Public Law 114-
315. The change reflects that 38 U.S.C. 7296 is amended by section 202 
of Public Law 114-315 to state that a judge of the United States Court 
of Appeals for Veterans Claims who is retired is considered an employee 
under the FEGLI Program.

Expected Impact of the Final Rule

    This rule clarifies the definition of annual rates of basic pay for 
the FEGLI Program and does not make substantive changes to its 
computation. It only affects the life insurance of a small number of 
federal employees and annuitants that are or have served as judges for 
the United States Court of Appeals for Veteran's Claims. The Court is 
authorized seven permanent active judges, and two additional judges,

[[Page 60048]]

appointed for 15-year terms as part of a temporary expansion provision.

Regulatory Procedures

    OPM has examined the impact of this rule as required by Executive 
Order 12866 and Executive Order 13563, which directs agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public, 
health, and safety effects, distributive impacts, and equity). This 
rule is not a significant regulatory action under Section 3(f) of 
Executive Order 12866 and was not reviewed by OMB.

Reducing Regulation and Controlling Regulatory Costs

    This final rule is not subject to the requirements of E.O. 13771 
(82 FR 9339, February 2, 2017) because this final rule is not 
significant under Executive Order 12866.

Regulatory Flexibility Act

    The Office of Personnel Management certifies that this regulation 
will not have a significant economic impact on a substantial number of 
small entities because the regulation only affects a small number of 
Federal employees and annuitants.

Federalism

    We have examined this rule in accordance with Executive Order 
13132, Federalism, and have determined that this rule will not have any 
negative impact on the rights, roles and responsibilities of State, 
local, or tribal governments.

Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35)

    The Paperwork Reduction Act of 1995 (44 U.S.C. chapter 3507(d); see 
5 CFR part 1320) requires that the U.S. Office of Management and Budget 
(OMB) approve all collections of information by a Federal agency from 
the public before they can be implemented. Respondents are not required 
to respond to any collection of information unless it displays a 
current valid OMB control number. OPM has determined this rule does not 
impose additional reporting or recordkeeping requirements under the 
Paperwork Reduction Act of 1995 outside of an already approved existing 
collection under OMB Control No: 3206-0230, Life Insurance Election.

List of Subjects in 5 CFR Part 870

    Administrative practice and procedure, Government employees, 
Hostages, Iraq, Kuwait, Lebanon, Life insurance, Retirement.

Office of Personnel Management.
Alexys Stanley,
Regulatory Affairs Analyst.

    For the reasons stated in the preamble, the Office of Personnel 
Management amends 5 CFR part 870 as follows:

PART 870--FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PROGRAM

0
1. The authority citation for part 870 continues to read:

    Authority:  5 U.S.C. 8716; Subpart J also issued under section 
599C of Pub. L. 101-513, 104 Stat. 2064, as amended; Sec. 
870.302(a)(3)(ii) also issued under section 153 of Pub. L. 104-134, 
110 Stat. 1321; Sec. 870.302(a)(3) also issued under sections 
11202(f), 11232(e), and 11246(b) and (c) of Pub. L. 105-33, 111 
Stat. 251, and section 7(e) of Pub. L. 105-274, 112 Stat. 2419; Sec. 
870.302(a)(3) also issued under section 145 of Pub. L. 106-522, 114 
Stat. 2472; Secs. 870.302(b)(8), 870.601(a), and 870.602(b) also 
issued under Pub. L. 110-279, 122 Stat. 2604; Subpart E also issued 
under 5 U.S.C. 8702(c); Sec. 870.601(d)(3) also issued under 5 
U.S.C. 8706(d); Sec. 870.703(e)(1) also issued under section 502 of 
Pub. L. 110-177, 121 Stat. Start Printed Page 773662542; Sec. 
870.705 also issued under 5 U.S.C. 8714b(c) and 8714c(c); Public Law 
104-106, 110 Stat. 521.


0
2. Amend Sec.  870.101 by revising paragraph (4) in the definition of 
Employing Office, to read as follows:


Sec.  870.101  Definitions.

* * * * *
    Employing Office * * *
    (4) The United States Court of Appeals for Veterans Claims is the 
employing office for judges of the United States Court of Appeals for 
Veterans Claims.
* * * * *

0
3. Amend Sec.  870.204 by revising paragraph (a) to read as follows:


Sec.  870.204  Annual rates of pay.

    (a)(1) An employee's annual pay is the annual basic pay of the 
position as fixed by law or regulation, except as otherwise provided by 
specific provision of law or OPM regulation. Annual pay for this 
purpose includes the following:
    (i) Any pay of a type that is treated as basic pay for purposes of 
the retirement systems established under 5 U.S.C. chapters 83 and 84, 
consistent with 5 U.S.C. 8331(3), and pay that is annual pay for 
purposes of the FEGLI Program as provided in Federal law and 
regulation;
    (ii) Any geographic-based pay supplement that is equivalent to a 
locality-based comparability payment under 5 U.S.C. 5304; and
    (iii) Any special pay supplement for a defined subcategory of 
employees that is equivalent to a special rate supplement under 5 
U.S.C. 5305.
    (2) Notwithstanding paragraph (a) (1) of this section, annual basic 
pay does not include the following:
    (i) Bonuses, allowances, overtime pay, military pay, or any other 
pay to a covered civilian employee given in addition to the base pay of 
the position, except as otherwise provided by specific provision of law 
or OPM regulation.
    (ii) Physicians comparability allowances under 5 U.S.C. 5948.
* * * * *

0
4. Amend Sec.  870.703 by revising paragraph (e)(1) introductory text 
and adding paragraph (e)(1)(vii) to read as follows:


Sec.  870.703  Election of Basic insurance.

* * * * *
    (e)(1) For purposes of this part, a judge who retires under 
paragraphs (e)(1)(i) through (vii) of this section is considered to be 
an employee after retirement:
* * * * *
    (vii) 38 U.S.C. 7296;
* * * * *
[FR Doc. 2020-18042 Filed 9-23-20; 8:45 am]
BILLING CODE 6325-38-P