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.