BNUMBER:  B-262112
DATE:  March 6, 1996
TITLE:  Raymond H. Hanrahan (Deceased)

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Matter of:Raymond H. Hanrahan (Deceased)

File:     B-262112

Date:March 6, 1996

DIGEST

1.  A Standard Form 1152 designation of beneficiary executed by an 
employee disposing of his unpaid compensation due at his death was 
received in the agency field office before the date of his death and 
sent to agency headquarters.  The employee died on the same day the 
form was received in agency headquarters, but possibly before it was 
"filed" as specified in subsections 19.1 and 19.3 of title 4, GAO 
Policy and Procedures Manual for Guidance of Federal Agencies.  See 4 
C.F.R.  sec.  33.5 (1995).  Those instructions are directed at agencies and 
do not create a requirement that must be met by an employee in 
addition to that contained in 5 U.S.C.  sec.  5582(b), that the designation 
must be "received" by the agency before his death.  Since the 
completed designation of beneficiary was timely received in the agency 
before he died, it effectively disposes of his unpaid compensation.

2.  An employee designated a nonfamily individual to receive his 
unpaid compensation due at his death.  His former wife and a son 
challenged the validity of that designation following his death, 
contending that he was incompetent to designate because he was heavily 
sedated during the last few weeks before he died.  The former wife 
also claims that their divorce decree grants her at least one--half of 
his unpaid compensation.  However, federal law, not state law, 
controls disposition of unpaid compensation due a federal employee.  
Since the completed designation form was executed by the employee more 
than 2 months before he died and was timely received by the agency as 
required by 5 U.S.C.  sec.  5582(b), the individual designated on that form 
is entitled to be paid the unpaid compensation due.

DECISION

This decision responds to a request from the General Counsel of the 
Federal Bureau of Investigation (FBI), U.S. Department of Justice.[1]  
The issue is whether the Standard Form 1152 (SF 1152), Designation of 
Beneficiary, executed by Mr. Raymond H. Hanrahan validly passed his 
unpaid compensation due at his death to the individual named as his 
beneficiary.  Payment may be made to the designated beneficiary for 
the following reasons.

BACKGROUND

Mr. Raymond H. Hanrahan, a special agent of the FBI stationed in 
Milwaukee, Wisconsin, executed an SF 1152, Designation of Beneficiary 
on November 28, 1994, naming Ms. Barbara Hastings as beneficiary for 
his unpaid compensation.  This form was not forwarded to FBI 
headquarters by the Milwaukee field office until February 1995, where 
it was received by the FBI Employee Benefits Unit for filing on 
February 3, 1995.  The Employee Benefits Unit noted its receipt but 
returned the form to the field office because the form lacked Mr. 
Hanrahan's home address.  The completed form was immediately returned 
to FBI headquarters and received for filing by the Employee Benefits 
Unit on February 8, 1995, the date that Mr. Hanrahan died.[2]

Mr. Hanrahan's former wife and one of his sons have contested the 
payment of any benefits to Ms. Hastings.  They contend that Mr. 
Hanrahan's designations of beneficiary for unpaid compensation and 
life insurance were invalid.  They argue that because he was heavily 
sedated during the last several weeks before he died, he was not 
competent to effect beneficiary designations.  Therefore, Mr. 
Hanrahan's former wife contends that she is entitled to at least 
one-half of his unpaid compensation from his employment with the FBI 
based on the terms of their 1986 Judgement of Divorce and that his 
children are entitled to the insurance proceeds.[3]

In addition, on the issue of the validity of Mr. Hanrahan's 
designation of beneficiary, the FBI asks whether the "filing" of the 
beneficiary designation form is necessary to effect a beneficiary 
change, or whether mere receipt by FBI headquarters or even Mr. 
Hanrahan's local FBI office is sufficient.  The FBI notes that the 
statute governing designations of beneficiary, 5 U.S.C.  sec.  5582 (1994), 
requires that the beneficiary form be "received" in the agency before 
the employee's death, but that the GAO Policy and Procedures Manual 
for Guidance of Federal Agencies does not use the word "received," as 
used in the statute.  Rather, the GAO Manual specifies that the 
completed beneficiary form must be "filed" with the employing 
agency.[4]  The FBI says that the beneficiary form was clearly 
"received" by its field office and headquarters before Mr. Hanrahan 
died on February 8, 1995, but it may not have been "filed" in the FBI 
Employee Benefits Unit for up to 15 minutes following his death.[5]  
The FBI asks whether the two words are to be given different meanings, 
suggesting that if there is a difference, the filing requirement may 
not have been met in Mr. Hanrahan's case.

OPINION

The statute governing settlement of accounts of deceased employees of 
the federal government is contained in 5 U.S.C.  sec.  5582(b) (1994), 
which provides in part:

     "(b) In order to facilitate the settlement of the accounts of 
     deceased employees, money due an employee at the time of his 
     death shall be paid to the person or persons surviving at the 
     date of death, in the following order of precedence, and the 
     payment bars recovery by another person of amounts so paid:

     "First, to the beneficiary or beneficiaries designated by the 
     employee in a writing received in the employing agency before his 
     death. . . ."

The filing requirement referred to by the FBI and contained in section 
19 of title 4 of the GAO Policy and Procedures Manual for the Guidance 
of Federal Agencies is authorized by 5 U.S.C.  sec.  5582 (1994) and 4 
C.F.R.  sec.  33.5 (1995).  Subsection 19.1 provides, in part, that such 
forms are to be "filed in accordance with . . . these procedures," and 
subsection 19.3 provides that the forms are to be "filed with the 
employing agency" and are to be "filed in the particular office which 
authorizes payment of the employee's compensation, or such other 
office as the head of the agency may direct."

Those instructions are directed to agencies, not to employees.  Their 
purpose is to insure that, to the maximum extent possible, all 
employing agencies maintain completed designation of beneficiary forms 
in a specific location after the agency receives them so that they 
easily can be retrieved should the need arise.  It is our view that, 
since the word "filed" is directed at the employing agencies, the GAO 
Manual does not create a requirement that must be met by an employee 
in addition to that contained in 5 U.S.C.  sec.  5582(b) that the written 
designation of beneficiary must be received by the agency before his 
death.

As to what constituted "receipt" by the agency in this case, the FBI 
field office to which Mr. Hanrahan was assigned received his SF 1152 
form designating Ms. Barbara Hastings as his beneficiary well before 
the date of his death.  The field office then sent it to FBI 
headquarters for filing where it was received on February 3, 1994.  
Thus, the written designation of beneficiary was timely received 
before Mr. Hanrahan's death on February 8, 1994.  The return of the 
document to the FBI field office because Mr. Hanrahan's SF 1152 did 
not contain his home address and the possibility that it may not have 
been "filed" in the FBI Employee Benefits Unit before Mr. Hanrahan 
died is of no legal significance.  There is nothing in 5 U.S.C.  sec.  5582 
which requires that the form contain the designating employee's home 
address or that the form must be received in the headquarters of the 
employing agency before the employee dies in order to make it 
effective.  If the agency receives the signed designation of 
beneficiary form before the employee dies, the requirement of the 
statute has been met.

As to the validity of Mr. Hanrahan's SF 1152, we note that the 
document was clear and complete on its face.  It properly identified 
Mr. Hanrahan as the designating employee, it designated Barbara Y. 
Hastings to receive 100 percent of Mr. Hanrahan's unpaid compensation 
due at his death, and Mr. Hanrahan's signature was witnessed by two 
persons.  Since it was executed by him on November 28, 1994, more than 
2 months prior to his death, the allegation that he was not competent 
to designate a beneficiary to receive his unpaid compensation because 
he was heavily sedated during the last several weeks before he died is 
not probative of the validity of the designation he made at the 
earlier time.

We have held that if a deceased federal employee has designated one or 
more beneficiaries to receive his/her unpaid compensation, payment may 
not be authorized to a person other than those specifically 
designated.[6]  In this regard, the beneficiary designated on the SF 
1152 need not be related to the deceased employee in order to be 
entitled to any sums due the deceased employee as compensation from 
the government.[7]  Further, disposition of unpaid compensation or 
other amounts payable under federal law is governed by federal statute 
and regulation, not by the laws or court orders of the state of 
domicile or other jurisdictions, including divorce decrees.  In 
decision Chester F. Dean, B-227728, Mar. 23, 1988, we addressed the 
issue of conflicting claims for unpaid compensation similar to that 
involved in Mr. Hanrahan's case.  The dispute in Dean was between the 
deceased employee's widow, who had filed for divorce and whose claim 
was based on an interim order issued by a state court prohibiting the 
employee from taking any action to alter their existing community 
property rights, and the deceased employee's father, who was named as 
beneficiary for that compensation.  Citing to Ridgeway v. Ridgeway, 
454 U.S. 46 (1981), we held that disposition of unpaid compensation 
due a federal employee is governed exclusively by federal law.  Since 
the employee in that case had designated his father as his beneficiary 
under 5 U.S.C.  sec.  5582, the father, not the widow, was entitled to the 
employee's unpaid compensation.

In the present case, the designation of beneficiary form executed by 
Mr. Hanrahan and dated November 28, 1994, named Ms. Barbara Y. 
Hastings as beneficiary of his unpaid compensation.  Since it was 
received by the FBI prior to his death, Ms. Hastings is entitled to be 
paid the amount found due and the claim of Mr. Hanrahan's former 
spouse is denied.

/s/Seymour Efros
for Robert P. Murphy
General Counsel

1. Howard M. Shapiro, Esquire.

2. Mr. Hanrahan and his former spouse, Ms. Patricia Weber-Hanrahan, 
were divorced in 1986 and he was not married when he died.

3. The GAO does not have jurisdiction over life insurance proceeds.  
Designations of beneficiaries for unpaid compensation under 5 U.S.C.  sec.  
5582, are separate and distinct from designations of beneficiaries for 
Federal Employees Group Life Insurance (FEGLI) purposes under 5 U.S.C.  sec.  
8705 (1994).  See Mary M. Leach, B-178403, June 5, 1973.

4. Subsection 19.3 of title 4, GAO Policy and Procedures Manual for 
Guidance of Federal Agencies.

5. Mr. Hanrahan died at 3:15 p.m., central time.  The clerk 
responsible for filing these forms left work that day at 4:30 p.m., 
eastern time.

6. David H. Lambert, B-244826, Dec. 12, 1991, citing to Chester F. 
Dean, B-227728, Mar. 23, 1988.

7. Joseph J. White, B-182519, Apr. 2, 1975.