AGENCY:

Office of Personnel Management.

ACTION:

Proposed rule.

SUMMARY:

The Office of Personnel Management (OPM) is issuing this proposed rule to implement the provisions of the “Correcting Miscalculations in Veterans' Pensions Act.” This Act provides authority for agencies and OPM to pay, at their discretion, interest on certain deposits (post-1956 military service deposits and service credit deposits for voluntary service with the Peace Corps and Volunteers in Service to America (VISTA)) when additional interest is assessed due to administrative error. Agencies need to establish their own guidelines for waiver, subject to funding limitations that may prevent reimbursement by the agency. These regulations also pertain to payments made by OPM with regard to service credit deposits for volunteer service.

DATES:

We must receive your comments by January 4, 2021.

ADDRESSES:

You may submit comments identified by docket number and/or Regulatory Information Number (RIN) and title, by either of the following methods:

• Electronic: Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

All submissions received must include the agency name and docket number or RIN for this document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing at http://www.regulations.gov as they are received without change, including any personal identifiers or contact information.

FOR FURTHER INFORMATION CONTACT:

Jane Bancroft, (202) 606-0299, Email: Comboxinternet@opm.gov. Include Docket No. or RIN in the subject line of the email.

SUPPLEMENTARY INFORMATION:

Background

Public Law 115-352, 132 Stat. 5067 (2018) (codified at 5 U.S.C. 101), also known as the “Correcting Miscalculations in Veterans' Pensions Act,” was enacted on December 21, 2018. Under this law, if an employing agency makes an administrative error in processing certain annuity deposits for post-1956 military service or certain volunteer service with the Peace Corps or Volunteers in Service to America (VISTA), the employing agency, or OPM in certain situations, may, at its discretion, pay on behalf of the employee any additional interest assessed due to its administrative error.

Agencies are responsible for establishing their own guidelines for what constitutes administrative error and whether a payment is made. OPM has no role or authority in the agency's decision. Also, OPM is responsible for establishing its own guidelines for what constitutes administrative error and whether a payment is made.

Employees covered under the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS) with post-1956 military service may pay a deposit plus interest to their employing agency for post-1956 military service. Payment of the deposit guarantees that the employee and survivors will continue to receive retirement credit for the post-1956 military service, regardless of entitlement to Social Security benefits at age 62. Interest on deposits for post-1956 military service accrues and compounds annually after a 2-year interest-free grace period after the individual first becomes an employee or Member.

Deposits for post-1956 military service are paid to the employing agency. The employing agency is responsible for counseling the employee regarding paying the deposit and the consequences of not paying the deposit, processing the application, calculating the deposit amount, billing the employee, and collecting the payment. Administrative error by the agency may result in an increase in the amount of interest due. If the administrative error results in an increase in interest due, then the employing agency may, at its discretion, pay on behalf of the employee any additional interest assessed due to its administrative error.

After a CSRS or FERS employee's retirement, OPM has a responsibility to ensure that retirement documents are not in conflict regarding payment of the deposit for post-1956 military service. If there is conflict, then it is OPM's responsibility to resolve the deposit status with the agency. If the retiring employee's statements on the application are in conflict with the agency's certification of service or any other documents submitted by the agency regarding payment of the deposit for post-1956 military service, then it is OPM's responsibility to resolve the deposit status with the retiring employee. Administrative error by OPM may result in an increase in the amount of interest due. If additional interest was assessed due to administrative error on OPM's part, then OPM may pay on behalf of the employee any additional interest assessed due to its administrative error.

Full-time volunteer service as a volunteer or volunteer leader with the Peace Corps or VISTA that was performed at any time before separation from federal civilian service is generally creditable under CSRS or FERS with payment of a service credit deposit. Though considered civilian service, the treatment of Peace Corps and VISTA volunteer service is similar to that of military service (see 5 CFR 831, 842.307 and 842.308) in that the credit is tied to eligibility for Social Security benefits. Payment of the deposit guarantees that the employee and survivors will continue to receive retirement credit for the volunteer service, regardless of entitlement to Social Security benefits. Like the calculation of interest for military deposits, the interest on deposits for volunteer service accrues and compounds annually after a 2-year interest-free grace period. For both current and former employees, interest begins to accrue on deposits for volunteer service on October 1, 1995, or 2 years after the date on which the individual first becomes an employee or Member, whichever is later.

Deposits for Peace Corps and VISTA volunteer service are paid directly to OPM. The employing agency is responsible for counseling the employee regarding the deposit, and for verifying the earnings. OPM is responsible for processing the service credit deposit application, calculating the deposit, billing the employee, and collecting the payment.

The decision to pay or not pay interest due to its administrative error on a deposit for post-1956 military service is made by the employing agency or OPM, depending on who is making the administrative error determination. The decision to pay or not pay interest due to its administrative error for a service credit deposit for Peace Corps/VISTA volunteer service is up to the employing agency or OPM, whichever agency is making the decision regarding administrative error. OPM has no role or authority in another agency's decision.

Currently, employees interested in making service credit deposits for Peace Corps or VISTA volunteer service submit the service credit application to the employing agency for development and review. The agency then forwards the application to OPM for processing and billing. The employee pays the service credit deposit amount directly to OPM. This process will not change due to the implementation of Public Law 115-352. Since both the agency and OPM have a role in processing service credit deposits for Peace Corps or VISTA volunteer service, either the employing agency or OPM could make an administrative error. If an administrative error results in an increase in interest due, then the employing agency or OPM, may, at its discretion, pay on behalf of the employee any additional interest assessed due to its administrative error.

Public Law 115-352 specifies that if an employing agency makes an administrative error in processing deposits for post-1956 military service or full-time volunteer service as a volunteer or volunteer leader with the Peace Corps or VISTA that increases the amount of interest owed on the deposit, the employing agency or OPM (as described above) may pay on behalf of the employee any additional interest assessed due to the administrative error. Agencies are responsible for establishing their own guidelines for what constitutes administrative error and whether a payment is made. OPM has no role or authority in the decision.

Public Law 115-352 also provides that, for volunteer service deposits, if the administrative error is committed by OPM, then OPM may pay on behalf of the employee any additional interest assessed due to the administrative error. Any payment of additional interest OPM may make on behalf of the employee is paid from the Civil Service Retirement and Disability Fund.

This proposed rule is necessary to implement the authority so the employing agency or OPM, on behalf of an employee, may make interest payments on interest accrued due to administrative error. Until this legislation, there was no authority to permit payment by an agency or OPM of interest that accrued due to its administrative error. The burden to pay the additional interest was on the employee. This legislation should be an incentive for agencies and OPM to perform better and, therefore, result in fewer findings of administrative error.

Regulatory Impact Analysis

OPM has examined the impact of this proposed 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 proposed rule is not a “significant regulatory action,” under Executive Order 12866.

Reducing Regulation and Controlling Regulatory Costs

This proposed rule is not an Executive Order 13771 regulatory action because this proposed rule is not significant under E.O. 12866.

Regulatory Flexibility Act

The Office of Personnel Management certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities.

Federalism

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

Civil Justice Reform

This regulation meets the applicable standard set forth in Executive Order 12988.

Unfunded Mandates Reform Act of 1995

This proposed rule will not result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

Congressional Review Act

The Congressional Review Act (5 U.S.C. 801 et seq.) requires rules to be submitted to Congress before taking effect. OPM will submit to Congress and the Comptroller General of the United States a report regarding the issuance of this proposed rule before its effective date, as required by 5 U.S.C. 801. This rule is not a major rule as defined by the Congressional Review Act (CRA) (5 U.S.C. 804).

Paperwork Reduction Act

This proposed rule does not impose any new reporting or record-keeping requirements subject to the Paperwork Reduction Act.

List of Subjects

5 CFR Part 831

• Firefighters
• Government employees
• Income taxes
• Intergovernmental relations
• Law enforcement officers
• Pensions
• Reporting and recordkeeping requirements
• Retirement

5 CFR Part 842

• Air traffic controllers
• Alimony
• Firefighters
• Law enforcement officers
• Pensions
• Retirement

For the reasons stated in the preamble, the Office of Personnel Management proposes to amend 5 CFR parts 831 and 842 as follows:

PART 831—RETIREMENT

1. Revise the authority citation for part 831 to read as follows:

Authority: 5 U.S.C. 8347; Sec. 831.102 also issued under 5 U.S.C. 8334; Sec. 831.106 also issued under 5 U.S.C. 552a; Sec. 831.108 also issued under 5 U.S.C. 8336(d)(2); Sec. 831.114 also issued under 5 U.S.C. 8336(d)(2), and Sec. 1313(b)(5) of Pub. L. 107-296, 116 Stat. 2135; Sec. 831.201(b)(1) also issued under 5 U.S.C. 8347(g); Sec. 831.201(b)(6) also issued under 5 U.S.C. 7701(b)(2); Sec. 831.201(g) also issued under Secs. 11202(f), 11232(e), and 11246(b) of Pub. L. 105-33, 111 Stat. 251; Sec. 831.201(g) also issued under Secs. 7(b) and (e) of Pub. L. 105-274, 112 Stat. 2419; Sec. 831.201(i) also issued under Secs. 3 and 7(c) of Pub. L. 105-274, 112 Stat. 2419; Sec. 831.202 also issued under Sec. 111 of Pub. L. 99-500, 100 Stat. 1783, and Sec. 111 of Pub. L. 99-591, 100 Stat. 3341-348, and also Sec. 1 of Pub. L. 110-279, 122 Stat. 2602, as amended by Sec. 1(a) of Pub. L. 116-21, 133 Stat. 903; Sec. 831.204 also issued under Sec. 102(e) of Pub. L. 104-8, 109 Stat. 102, as amended by Sec. 153 of Pub. L. 104-134, 110 Stat. 1321; Sec. 831.205 also issued under Sec. 2207 of Pub. L. 106-265, 114 Stat. 784; Sec. 831.206 also issued under Sec. 1622(b) of Pub. L. 104-106, 110 Stat. 515; Sec. 831.301 also issued under Sec. 2203 of Pub. L. 106-265, 114 Stat. 780; Sec. 831.303 also issued under 5 U.S.C. 8334(d)(2) and Sec. 2203 of Pub. L. 106-235, 114 Stat. 780; Sec. 831.502 also issued under 5 U.S.C. 8337, and under Sec. 1(3), E.O. 11228, 3 CFR 1965-1965 Comp. p. 317; Sec. 831.663 also issued under 5 U.S.C. 8339(j) and (k)(2); Secs. 831.663 and 831.664 also issued under Sec. 11004(c)(2) of Pub. L. 103-66, 107 Stat. 412; Sec. 831.682 also issued under Sec. 201(d) of Pub. L. 99-251, 100 Stat. 23; Sec. 831.912 also issued under Sec. 636 of Appendix C to Pub. L. 106-554, 114 Stat. 2763A-164; Subpart P also issued under Sec. 535(d) of Title V of Division E of Pub. L. 110-161, 121 Stat. 2042; Subpart Q also issued under 5 U.S.C. 8336a; Subpart V also issued under 5 U.S.C. 8343a and Sec. 6001 of Pub. L. 100-203, 101 Stat. 1330-275; Sec. 831.2203 also issued under Sec. 7001(a)(4) of Pub. L. 101-508, 104 Stat. 1388-328; Pub. L. 115-352, 132 Stat. 5067.

Subpart A—Administration and General Provisions

2. Amend § 831.105 by adding paragraph (k) to read as follows:

Subpart U—Deposits for Military Service

3. Amend § 831.2107 by adding paragraph (c) to read as follows:

4. Add Subpart X to part 831 to read as follows:

Subpart X—Peace Corps

5. Add subpart Y to part 831 to read as follows:

Subpart Y—Volunteers in Service to America (VISTA)

PART 842—FEDERAL EMPLOYEES RETIREMENT SYSTEM—BASIC ANNUITY

1. Revise the authority citation for part 842 to read as follows:

Authority: 5 U.S.C. 8461(g); Secs. 842.104 and 842.106 also issued under 5 U.S.C. 8461(n); Sec. 842.104 also issued under Secs. 3 and 7(c) of Pub. L. 105-274, 112 Stat. 2419; Sec. 842.105 also issued under 5 U.S.C. 8402(c)(1) and 7701(b)(2); Sec. 842.106 also issued under Sec. 102(e) of Pub. L. 104-8, 109 Stat. 102, as amended by Sec. 153 of Pub. L. 104-134, 110 Stat. 1321-102; Sec. 842.107 also issued under Secs. 11202(f), 11232(e), and 11246(b) of Pub. L. 105-33, 111 Stat. 251, and Sec. 7(b) of Pub. L. 105-274, 112 Stat. 2419; Sec. 842.108 also issued under Sec. 7(e) of Pub. L. 105-274, 112 Stat. 2419; Sec. 842.109 also issued under Sec. 1622(b) of Pub. L. 104-106, 110 Stat. 515; Sec. 842.110 also issued under Sec. 111 of Pub. L. 99-500, 100 Stat. 1783, and Sec. 111 of Pub. L. 99-591, 100 Stat. 3341-348, and also Sec. 1 of Pub. L. 110-279, 122 Stat. 2602, as amended by Sec. 1(a) of Pub. L. 116-21, 133 Stat. 903; Sec. 842.208 also issued under Sec. 535(d) of Title V of Division E of Pub. L. 110-161, 121 Stat. 2042; Sec. 842.213 also issued under 5 U.S.C. 8414(b)(1)(B) and Sec. 1313(b)(5) of Pub. L. 107-296, 116 Stat. 2135; Secs. 842.304and 842.305 also issued under Sec. 321(f) of Pub. L. 107-228, 116 Stat. 1383, Secs. 842.604 and 842.611 also issued under 5 U.S.C. 8417; Sec. 842.607 also issued under 5 U.S.C. 8416 and 8417; Sec. 842.614 also issued under 5 U.S.C. 8419; Sec. 842.615 also issued under 5 U.S.C. 8418; Sec. 842.703 also issued under Sec. 7001(a)(4) of Pub. L. 101-508, 104 Stat. 1388; Sec. 842.707 also issued under Sec. 6001 of Pub. L. 100-203, 101 Stat. 1300; Sec. 842.708 also issued under Sec. 4005 of Pub. L. 101-239, 103 Stat. 2106 and Sec. 7001 of Pub. L. 101-508, 104 Stat. 1388; Subpart H also issued under 5 U.S.C. 1104; Sec. 842.810 also issued under Sec. 636 of Appendix C to Pub. L. 106-554 at 114 Stat. 2763A-164; Sec. 842.811 also issued under Sec. 226(c)(2) of Pub. Law 108-176, 117 Stat. 2529; Subpart J also issued under Sec. 535(d) of Title V of Division E of Pub. L. 110-161, 121 Stat. 2042; Pub. L. 115-352, 132 Stat. 5067.

Subpart C—Credit

2. Amend § 842.305 by adding paragraph (k) to read as follows:

3. Amend § 842.307 by adding paragraph (e) to read as follows:

4. Add subpart K to part 842 to read as follows:

Subpart K—Peace Corps

5. Add subpart L to part 842 to read as follows:

Subpart L—Volunteers in Service to America (VISTA)