Sixty-Month Period of Employment Requirement for Government Pension Offset Exemption, 34048-34051 [2015-14509]
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Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Rules and Regulations
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553(d) due to the non-substantive nature
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(Federal Domestic Assistance Catalog
Number 11.429 Marine Sanctuary Program)
Dated: June 9, 2015.
W. Russell Callender,
Acting Assistant Administrator for Ocean
Services and Coastal Zone Management.
Accordingly, for the reasons
discussed in the preamble, the National
Oceanic and Atmospheric
Administration amends 15 CFR part 922
as follows:
PART 922—NATIONAL MARINE
SANCTUARY PROGRAM
REGULATIONS
1. The authority citation for part 922
continues to read as follows:
■
Authority: 16 U.S.C. 1431 et seq.
Subpart H—[Amended]
2. Amend Subpart H of Part 922 by
removing ‘‘Farallones National Marine
Sanctuary’’ wherever it appears and
adding in its place ‘‘Greater Farallones
National Marine Sanctuary.’’
■
[Amended]
3. Amend § 922.110 by removing
‘‘Farallones National Marine Sanctuary’’
and adding in its place ‘‘Greater
Farallones National Marine Sanctuary’’
and removing ‘‘FNMS’’ and adding in
its place ‘‘GFNMS.’’
■
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[Amended]
4. Amend § 922.130 by removing
‘‘Gulf of the Farallones National Marine
Sanctuary’’ and adding in its place
‘‘Greater Farallones National Marine
Sanctuary.’’
■
[FR Doc. 2015–14639 Filed 6–12–15; 8:45 am]
BILLING CODE 3510–NK–P
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20 CFR Part 404
RIN 0960–AG50
Sixty-Month Period of Employment
Requirement for Government Pension
Offset Exemption
Social Security Administration
(SSA).
Because notice and opportunity for
comment are not required pursuant to 5
U.S.C. 553 or any other law, the
analytical requirements of the
Regulatory Flexibility Act (5 U.S.C. 601
et seq.) are inapplicable. Therefore, a
regulatory flexibility analysis is not
required and has not been prepared.
§ 922.130
[Docket No. SSA 2007–0040]
AGENCY:
C. Regulatory Flexibility Act
§ 922.110
SOCIAL SECURITY ADMINISTRATION
Jkt 235001
ACTION:
Final rule.
This final rule adopts, with
clarifying changes, the proposed rule we
previously published in the Federal
Register on August 3, 2007. This final
rule revises our Government Pension
Offset (GPO) regulations to reflect
changes to the Social Security Act
(‘‘Act’’) made by section 9007 of the
Omnibus Budget Reconciliation Act of
1987 (OBRA 1987) and section 418 of
the Social Security Protection Act of
2004 (SSPA). These regulations explain
how and when we will reduce the
Social Security spouse’s benefit for
some people who receive Federal, State,
or local government pensions if Social
Security did not cover their government
work.
DATES: This final rule is effective on July
15, 2015.
FOR FURTHER INFORMATION CONTACT:
Sylvia Diaz, Social Insurance Specialist,
Office of Income Security Programs,
Social Security Administration, 6401
Security Boulevard, Baltimore,
Maryland 21235–6401, (410) 965–1981.
For information on eligibility or filing
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
www.socialsecurity.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
Congress enacted the GPO in 1977 to
reduce the Social Security spouse’s
benefit of workers who receive a
government pension based on
noncovered employment. A Social
Security spouse’s old-age benefit is a
benefit that, under certain
circumstances, the spouse, widow(er),
mother, father, divorced spouse, or
surviving divorced spouse of an insured
person is entitled to receive. Congress
created spouse’s benefits to help people
who depend on their working spouses
for financial support, either because
they did not work or did not work long
enough to be entitled to their own
Social Security retirement benefit.
Spouse’s benefits are separate from
the Social Security retirement benefits
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earned based on an individual’s own
earnings record. We base a spouse’s
benefit on the Social Security earnings
record of an individual’s current,
deceased, or former spouse. The GPO
does not apply to Social Security
retirement or disability benefits that we
base on an individual’s own earnings.
Under the Social Security program, an
individual who is entitled to more than
one Social Security benefit at the same
time does not receive the full amount of
each benefit. For example, an individual
who worked and paid Social Security
taxes may be eligible for a retirement
benefit based on his or her own earnings
and may also be eligible for spouse’s
benefits based on another person’s
earnings. In this case, if the spouse’s
benefit is greater than the individual’s
retirement benefit, we will reduce the
spouse’s benefit by the amount of the
individual’s own retirement benefit.
Therefore, the individual’s own
retirement benefit ‘‘offsets’’ the benefit
amount paid as a spouse.
In certain instances, an individual
may earn wages but not pay Social
Security taxes. We call this noncovered
work. This situation exists for some
Federal, State, and local government
employees who contributed to a
government-employee pension plan and
receive a government pension. Since
these individuals did not pay Social
Security taxes on their noncovered
employment, they are not eligible for
Social Security retirement benefits
based on that work. However, they may
be eligible for Social Security spouse’s
benefits.
Congress believed that individuals
who received a government pension
based on their own noncovered work
would receive a ‘‘windfall’’ if they also
received Social Security spouse’s
benefits that their government pension
did not offset.1 To prevent this
‘‘windfall,’’ Congress passed the GPO
provision in 1977.2 The GPO treats
government workers similarly to
individuals who worked in jobs that
Social Security covered by reducing
their Social Security spouse’s benefit
when they receive a government
pension based on their own noncovered
work.
Under the 1977 law, the GPO did not
apply if Social Security covered the
person’s last day of government
employment. The wording of this law
allowed an individual to spend an
entire career in a noncovered job and
avoid the GPO by working in a covered
job for only 1 day. To close this ‘‘last
1 See
S. Rep. No. 95–572, at 28 (1977).
Law 95–216, 91 Stat. 1509 (1977); see 42
U.S.C. 402(k)(5)(A).
2 Public
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day loophole,’’ Congress enacted section
418 of the SSPA, Public Law 108–203,
which amended the GPO provision of
the Act. This amendment, made by
section 418, requires that an
individual’s final 60 months of
government work must be covered by
both Social Security and the pension
plan that provides the government
pension in order to be exempt from the
GPO. This amendment also phased out
the ‘‘last day’’ loophole and provided a
transitional rule that covered people
whose last day of government
employment occurred within 5 years of
the enactment of SSPA.
For workers whose last day of State or
local government employment occurred
between March 2, 2004 and March 1,
2009, we will reduce the 60-month
requirement by the total number of
months that the worker served in
covered employment on or before March
2, 2004. The worker must perform the
remaining month(s) of service needed to
fulfill this 60-month requirement after
March 2, 2004. Therefore, even if a
worker had 60 or more months of
covered government service on or before
March 2, 2004, that worker would still
have to work his or her last month of
covered government service after March
2, 2004.
The last 60-month requirement
established by section 418 of the SSPA
is similar to a requirement established
by section 9007 of the OBRA 1987,
Public Law 100–203. Section 9007
specified that Federal employees who
transfer from the Civil Service
Retirement System to the Federal
Employees Retirement System must
work for at least 60 months, taken
together, in covered employment in
order to avoid application of the GPO.
On August 3, 2007, we published an
NPRM in the Federal Register at 72 FR
43202 proposing to revise our
regulations to reflect the changes to the
GPO made by section 418 of SSPA and
section 9007 of the OBRA 1987. We are
finalizing the changes announced in the
NPRM, with the modifications noted
below.
Changes to Language Proposed in
NPRM
We re-worded and reorganized the
proposed regulatory language to better
explain how we apply the GPO rules.
These changes make the regulations
clearer and easier to understand. The
language changes do not affect the
substance of the regulation as proposed
in our NPRM.
In the NPRM, we proposed replacing
the words ‘‘receiving’’ and ‘‘received’’
with the word ‘‘payable.’’ We decided
against this change. Variations of the
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term ‘‘receive’’ more clearly describe the
fact that a government pension plan
must pay a person a periodic benefit
from for GPO to apply. Additionally,
use of the term ‘‘receive’’ in this section
maintains consistency throughout our
regulations.
We simplified the language in
proposed 404.408a(a)(1), and
redesignated the section as
404.408a(a)(2).We redesignated
proposed 404.408a(a)(1) as (a)(2)
because we are adding a new
404.408a(a)(1). In the proposed rules,
we used the terms ‘‘government
pension’’ and ‘‘noncovered
employment’’ without a definition. We
also referred to an individual’s ‘‘Social
Security benefits as a wife, husband,
widow, widower, mother or father,
divorced or surviving divorced spouse’’
throughout proposed 404.408a(a), as
well as in proposed 404.408a(b) and (d).
To simplify and clarify the rules, we
added a definitional paragraph to
404.408a(a) for these terms. We defined
the terms government pension and
noncovered employment in
404.408a(a)(1)(i) and (a)(1)(ii) and added
404.408a(a)(2)(iii) to define ‘‘spouse’s
benefits,’’ which is a single term used to
represent those beneficiaries affected by
this section: Wives, husbands, widows,
widowers, mothers, fathers, divorced or
surviving divorced spouses. Using a
single term to describe these groups
simplifies our rules and makes them
easier to understand. The addition of
these terms does not change or affect the
categories of beneficiaries affected or
change the substance of the rules we
proposed.
We simplified the language in
proposed 404.408a(a)(3) and moved it to
404.408a(b)(6), except for the final
sentence of (3)(ii).
We revised the final sentence of
proposed 404.408a(a)(3)(ii) and moved
it to 404.408a(a)(2).
We simplified the first sentence of
proposed 404.408a(a)(4) and moved it to
404.408a(b)(6)(ii) to clarify that it
applies to the last 60 months rule.
We simplified the second sentence of
proposed 404.408a(a)(4) and moved it to
404.408a(a)(1)(ii) to clarify that it
applies to all of § 404.408a.
We simplified the language of
proposed 404.408a(d) and added
provisions from proposed paragraph
404.408a(a)(5).
We revised the language of proposed
404.408a(b)(6) and moved it to
404.408a(b)(7).
We simplified formerly proposed
404.408a(a)(2) and moved it to
404.408a(b)(8) as a new exception.
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34049
Public Comment
On August 3, 2007, we published an
NPRM in the Federal Register at 72 FR
43202 and provided the public with a
60-day comment period. We received
one comment. We carefully considered
the concerns expressed in this comment
but did not make any changes to the
final rule as a result of the comment.
Comment: A member of the public
objected to the GPO, stating that
government pensions are already larger
than private pensions. The commenter
opined that people who receive
government pensions should not get
extra payments since they already
receive more than workers who lack
pensions.
Response: We did not adopt this
comment, which reflects a
misunderstanding of the GPO. The GPO
does not increase government pensions
and it does not increase Social Security
benefits. Instead, it reduces the Social
Security spouse’s benefit of workers
who receive a government pension
based on noncovered employment.
Because our current regulations reflect
the purpose of the GPO, people who
receive government pensions are not
receiving extra payments.
Regulatory Procedures
Executive Order 12866 as
Supplemented by Executive Order
13563
We consulted with the Office of
Management and Budget (OMB) and
determined that this final rule does not
meet the criteria for a significant
regulatory action under Executive Order
12866, as supplemented by Executive
Order 13563 and was not subject to
OMB review.
Regulatory Flexibility Act
We certify that this final rule will not
have a significant economic impact on
a substantial number of small entities
because it affects individuals only.
Therefore, the Regulatory Flexibility
Act, as amended, does not require us to
prepare a regulatory flexibility analysis.
Paperwork Reduction Act
This final rule imposes no reporting
or recordkeeping requirements subject
to OMB clearance.
(Catalog of Federal Domestic Assistance
Program Nos. 96.001, Social SecurityDisability Insurance; 96.002, Social SecurityRetirement Insurance; 96.004, Social
Security-Survivors Insurance.)
List of Subjects in 20 CFR Part 404
Administrative practice and
procedure; Blind; Disability benefits;
Old-Age, Survivors and Disability
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Insurance; Reporting and recordkeeping
requirements; Social Security.
Dated: June 5, 2015.
Carolyn W. Colvin,
Acting Commissioner of Social Security.
For the reasons set out in the
preamble, we amend 20 CFR chapter III,
part 404, subpart E as follows:
PART 404—FEDERAL OLD-AGE,
SURVIVORS AND DISABILITY
INSURANCE (1950– )
Subpart E—Deductions; Reductions;
and Nonpayments of Benefits
1. The authority citation for subpart E
of part 404 is revised to read as follows:
■
Authority: Secs. 202, 203, 204(a) and (e),
205(a) and (c), 216(l), 222(c), 223(e), 224, 225,
702(a)(5), and 1129A of the Social Security
Act (42 U.S.C. 402, 403, 404(a) and (e), 405(a)
and (c), 416(l), 422(c), 423(e), 424a, 425,
902(a)(5), and 1320a–8a); 48 U.S.C. 1801.
2. Amend § 404.408a by revising
paragraph (a), adding paragraphs (b)(6)
through (8), and revising paragraph (d)
to read as follows:
■
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§ 404.408a Reduction where spouse is
receiving a government pension.
(a) General—(1) Terms used in this
section. (i) Government pension means
any monthly periodic benefit (or
equivalent) you receive that is based on
your Federal, State, or local government
employment.
(ii) Noncovered employment means
Federal, State, or local government
employment that Social Security did not
cover and for which you did not pay
Social Security taxes. For the purposes
of this section, we consider your
Federal, State, or local government
employment to be noncovered
employment if you pay only Medicare
taxes.
(iii) Spouse’s benefits are Social
Security benefits you receive as a wife,
husband, widow(er), mother, father,
divorced spouse, or surviving divorced
spouse.
(2) When reduction is required. We
will reduce your spouse’s benefit for
each month that you receive a
government pension based on
noncovered employment, unless one of
the exceptions in paragraph (b) of this
section applies. When we consider
whether you receive a government
pension based on noncovered
employment, we consider the entire
month to be a month covered by Social
Security if you worked for a Federal,
State, or local government employer in
a position covered by Social Security for
at least 1 day in that month and there
was no noncovered employment that
month under the same pension plan.
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(b) * * *
(6) If you are receiving a government
pension and the last 60 months of your
government employment were covered
by both Social Security and the pension
plan that provides your government
pension.
(i) If the last day of your government
employment was after June 30, 2004 and
on or before March 2, 2009, we will
apply a transitional rule to reduce the
last 60-month requirement under the
following conditions:
(A) You worked 60 months in Federal,
State, or local government employment
covered by Social Security before March
2, 2004, and you worked at least 1
month of covered government
employment after March 2, 2004, or
(B) You worked fewer than 60 months
in government employment covered by
Social Security on or before March 2,
2004 and you worked the remaining
number of months needed to total 60
months after March 2, 2004. The months
that you worked before or after March
2, 2004 do not have to be consecutive.
(ii) We will always reduce your
monthly spouse’s benefit if you receive
a government pension based on
noncovered employment and you later
go back to work for a Federal, State, or
local government, unless:
(A) Your final 60 months of Federal,
State, or local government employment
were covered by Social Security; and
(B) Both your earlier and later
Federal, State, or local government
employment were under the same
pension plan.
(7) If you are a former Federal
employee and you receive a government
pension based on work that included at
least 60 months in employment covered
by Social Security in the period
beginning January 1, 1988 and ending
with the first month you became
entitled to spouse’s benefits, whether or
not the 60 months are consecutive), and:
(i) You worked in the Civil Service
Retirement System (CSRS), but switched
after 1987 to either the Federal
Employees Retirement System (FERS) or
the Foreign Service Pension System; or
(ii) You worked in the legislative
branch and left CSRS after 1987 or
received a lump sum payment from
CSRS or another retirement system after
1987.
(8) You were a State or local
government employee, or a Federal
employee who worked in the CSRS but
switched to the FERS before 1988, your
last day of service was in covered
employment, and
(i) You filed for spouse’s benefits
before April 1, 2004 and became
entitled to benefits based on that filing,
or
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(ii) Your last day of service was before
July 1, 2004,
*
*
*
*
*
(d) Amount and priority of
reduction—(1) Post-June 1983
government pensions. (i) If you became
eligible for a government pension after
June 1983, and you do not meet one of
the exceptions in paragraph (b) of this
section, we will reduce (to zero, if
necessary) your monthly Social Security
spouse’s benefits by two-thirds of the
amount of your government pension.
(ii) If you earned part of your pension
based on employment other than
Federal, State, or local government
employment, we will only use the part
of your pension earned in government
employment to compute the GPO.
(iii) If the reduction is not a multiple
of 10 cents, we will round it to the next
higher multiple of 10 cents.
(2) Pre-July 1983 government
pensions. (i) If you became eligible for
a government pension before July 1983,
and do not meet one of the exceptions
in paragraph (b) of this section, we will
reduce (to zero, if necessary) your
monthly Social Security spouse’s
benefits as follows:
(A) By the full amount of your
pension for months before December
1984; and
(B) By two-thirds the amount of your
monthly pension for months after
November 1984.
(ii) If the reduction is not a multiple
of 10 cents, we will round it to the next
higher multiple of 10 cents.
(3) Reductions for age and
simultaneous entitlement. We will
reduce your spouse’s benefit, if
necessary, for age and for simultaneous
entitlement to other Social Security
benefits before we reduce it because you
are receiving a government pension. In
addition, this reduction follows the
order of priority stated in § 404.402(b).
(4) Reduction not a multiple of $1.00.
If the monthly benefit payable to you
after the required reduction(s) is not a
multiple of $1.00, we will reduce it to
the next lower multiple of $1.00 as
required by § 404.304(f).
(5) Lump sum payments. If the
government pension is not paid
monthly or is paid in a lump sum, we
will allocate the pension on a basis
equivalent to a monthly benefit and
then reduce the monthly Social Security
benefit accordingly.
(i) We will generally obtain
information about the number of years
covered by a lump-sum payment from
the pension plan.
(ii) If one of the alternatives to a
lump-sum payment is a life annuity,
and we can determine the amount of the
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monthly annuity, we will base the
reduction on that monthly amount.
(iii) If the period or the equivalent
monthly pension benefit is not clear, we
may determine the reduction period and
the equivalent monthly benefit on an
individual basis.
*
*
*
*
*
PART 1—INCOME TAXES
[FR Doc. 2015–14509 Filed 6–12–15; 8:45 am]
■
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
■
Authority: 26 U.S.C. 7805 * * *
§ 1.446–3
[Corrected]
Par. 2. Section 1.446–3 is amended by
removing paragraph (k).
BILLING CODE 4191–02–P
Martin V. Franks,
Chief, Publications and Regulations Branch,
Legal Processing Division, Associate Chief
Counsel (Procedure and Administration).
DEPARTMENT OF THE TREASURY
[FR Doc. 2015–14622 Filed 6–12–15; 8:45 am]
Internal Revenue Service
34051
from members of the public regarding
this system’s exemption from the access
provisions of the Privacy Act. The
Department adjudicated the comments.
Both comments supported the approval
of the regulation.
List of Subjects in 28 CFR Part 16
Administrative practices and
procedures, Courts, Freedom of
information, Privacy, Sunshine Act.
Pursuant to the authority vested in the
Attorney General by 5 U.S.C. 552a and
delegated to me by Attorney General
Order 2940–2008, 28 CFR part 16 is
amended as follows:
BILLING CODE 4830–01–P
PART 16—[AMENDED]
26 CFR Part 1
1. The authority citation for part 16 is
revised to read as follows:
■
DEPARTMENT OF JUSTICE
[TD 9719]
Authority: 5 U.S.C. 301, 552, 552a, 552b(g),
553; 18 U.S.C. 4203(a)(1); 28 U.S.C. 509, 510,
534; 31 U.S.C. 3717, 9701.
28 CFR Part 16
RIN 1545–BM62
[CPCLO Order No. 008–2015]
Notional Principal Contracts; Swaps
With Nonperiodic Payments;
Correction
Privacy Act of 1974; Implementation
Internal Revenue Service (IRS),
Treasury.
ACTION: Correcting amendment.
AGENCY:
This document contains
corrections to final regulations (TD
9719) that were published in the
Federal Register on May 8, 2015 (80 FR
26437). The final regulations amend the
treatment of nonperiodic payments
made or received pursuant to certain
notional principal contracts.
DATES: This correction is effective on
June 15, 2015 and applicable May 8,
2015.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Alexa T. Dubert at (202) 317–6895 (not
a toll free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations (TD 9719) that
are the subject of this correction is
under section 446 of the Internal
Revenue Code.
Need for Correction
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As published, the final regulations
(TD 9719) contain an error that may
prove to be misleading and is in need
of clarification.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Correction of Publication
Accordingly, 26 CFR part 1 is
corrected by making the following
correcting amendment:
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Department of Justice.
ACTION: Final rule.
AGENCY:
The Department of Justice
(DOJ or Department) amends its Privacy
Act regulations for the system of records
entitled ‘‘Giglio Information System,
JUSTICE/DOJ–017.’’ Information in this
system of records has been established
to enable DOJ investigative agencies to
collect and maintain records of potential
impeachment information and to
disclose such information to DOJ
prosecuting offices in order to ensure
that prosecutors receive sufficient
information to meet their obligations
under Giglio v. United States, 405 U.S.
150 (1972), as well as to enable DOJ
prosecuting offices to maintain records
of potential impeachment information
obtained from DOJ investigative
agencies, other federal agencies, and
state, and local agencies and to disclose
such information in accordance with the
Giglio decision.
DATES: Effective Date: June 15, 2015.
FOR FURTHER INFORMATION CONTACT:
Tricia Francis, Executive Office for
United States Attorneys, FOIA/Privacy
Staff, 600 E Street NW., Suite 7300,
Washington, DC 20530, or by facsimile
(202) 252–6047.
SUPPLEMENTARY INFORMATION: The
Department published a notice of
proposed rulemaking (NPRM) in the
Federal Register at 80 FR 15951, Mar.
26, 2015. The Department invited public
comment on the NPRM and the
accompanying system notice (SORN).
The comment period closed on April 27,
2015 for both the NPRM and the SORN.
The Department received two comments
SUMMARY:
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Subpart E—Exemption of Records
Systems Under the Privacy Act
§ 16.81
[AMENDED]
2. Amend § 16.81 by removing and
reserving paragraphs (g) and (h).
■ 3. Add § 16.136 to subpart E to read
as follows:
■
§ 16.136 Exemption of the Department of
Justice, Giglio Information System, Justice/
DOJ–017.
(a) The Department of Justice, Giglio
Information Files (JUSTICE/DOJ–017)
system of records is exempted from
subsections (c)(3) and (4); (d)(1), (2), (3),
and (4); (e)(1), (2), (3), (4)(G), (H), and
(I), (5), and (8); (f); and (g) of the Privacy
Act. These exemptions apply only to the
extent that information in this system is
subject to exemption pursuant to 5
U.S.C. 552a(j) and/or (k).
(b) Exemptions from the particular
subsections are justified for the
following reasons:
(1) From subsection (c)(3) because this
subsection is inapplicable to the extent
that an exemption is being claimed for
subsection (d).
(2) From subsection (c)(4) because this
subsection is inapplicable to the extent
that an exemption is being claimed for
subsection (d).
(3) From subsection (d) because
access to the records contained in this
system may interfere with or impede an
ongoing investigation as it may be
related to allegations against an agent or
witness who is currently being
investigated. Further, other records that
are derivative of the subject’s employing
agency files may be accessed through
the employing agency’s files.
(4) From subsection (e)(1) because it
may not be possible to determine in
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]]>Agencies
[Federal Register Volume 80, Number 114 (Monday, June 15, 2015)]
[Rules and Regulations]
[Pages 34048-34051]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-14509]
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SOCIAL SECURITY ADMINISTRATION
[Docket No. SSA 2007-0040]
20 CFR Part 404
RIN 0960-AG50
Sixty-Month Period of Employment Requirement for Government
Pension Offset Exemption
AGENCY: Social Security Administration (SSA).
ACTION: Final rule.
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SUMMARY: This final rule adopts, with clarifying changes, the proposed
rule we previously published in the Federal Register on August 3, 2007.
This final rule revises our Government Pension Offset (GPO) regulations
to reflect changes to the Social Security Act (``Act'') made by section
9007 of the Omnibus Budget Reconciliation Act of 1987 (OBRA 1987) and
section 418 of the Social Security Protection Act of 2004 (SSPA). These
regulations explain how and when we will reduce the Social Security
spouse's benefit for some people who receive Federal, State, or local
government pensions if Social Security did not cover their government
work.
DATES: This final rule is effective on July 15, 2015.
FOR FURTHER INFORMATION CONTACT: Sylvia Diaz, Social Insurance
Specialist, Office of Income Security Programs, Social Security
Administration, 6401 Security Boulevard, Baltimore, Maryland 21235-
6401, (410) 965-1981. For information on eligibility or filing
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
www.socialsecurity.gov.
SUPPLEMENTARY INFORMATION:
Background
Congress enacted the GPO in 1977 to reduce the Social Security
spouse's benefit of workers who receive a government pension based on
noncovered employment. A Social Security spouse's old-age benefit is a
benefit that, under certain circumstances, the spouse, widow(er),
mother, father, divorced spouse, or surviving divorced spouse of an
insured person is entitled to receive. Congress created spouse's
benefits to help people who depend on their working spouses for
financial support, either because they did not work or did not work
long enough to be entitled to their own Social Security retirement
benefit.
Spouse's benefits are separate from the Social Security retirement
benefits earned based on an individual's own earnings record. We base a
spouse's benefit on the Social Security earnings record of an
individual's current, deceased, or former spouse. The GPO does not
apply to Social Security retirement or disability benefits that we base
on an individual's own earnings.
Under the Social Security program, an individual who is entitled to
more than one Social Security benefit at the same time does not receive
the full amount of each benefit. For example, an individual who worked
and paid Social Security taxes may be eligible for a retirement benefit
based on his or her own earnings and may also be eligible for spouse's
benefits based on another person's earnings. In this case, if the
spouse's benefit is greater than the individual's retirement benefit,
we will reduce the spouse's benefit by the amount of the individual's
own retirement benefit. Therefore, the individual's own retirement
benefit ``offsets'' the benefit amount paid as a spouse.
In certain instances, an individual may earn wages but not pay
Social Security taxes. We call this noncovered work. This situation
exists for some Federal, State, and local government employees who
contributed to a government-employee pension plan and receive a
government pension. Since these individuals did not pay Social Security
taxes on their noncovered employment, they are not eligible for Social
Security retirement benefits based on that work. However, they may be
eligible for Social Security spouse's benefits.
Congress believed that individuals who received a government
pension based on their own noncovered work would receive a ``windfall''
if they also received Social Security spouse's benefits that their
government pension did not offset.\1\ To prevent this ``windfall,''
Congress passed the GPO provision in 1977.\2\ The GPO treats government
workers similarly to individuals who worked in jobs that Social
Security covered by reducing their Social Security spouse's benefit
when they receive a government pension based on their own noncovered
work.
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\1\ See S. Rep. No. 95-572, at 28 (1977).
\2\ Public Law 95-216, 91 Stat. 1509 (1977); see 42 U.S.C.
402(k)(5)(A).
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Under the 1977 law, the GPO did not apply if Social Security
covered the person's last day of government employment. The wording of
this law allowed an individual to spend an entire career in a
noncovered job and avoid the GPO by working in a covered job for only 1
day. To close this ``last
[[Page 34049]]
day loophole,'' Congress enacted section 418 of the SSPA, Public Law
108-203, which amended the GPO provision of the Act. This amendment,
made by section 418, requires that an individual's final 60 months of
government work must be covered by both Social Security and the pension
plan that provides the government pension in order to be exempt from
the GPO. This amendment also phased out the ``last day'' loophole and
provided a transitional rule that covered people whose last day of
government employment occurred within 5 years of the enactment of SSPA.
For workers whose last day of State or local government employment
occurred between March 2, 2004 and March 1, 2009, we will reduce the
60-month requirement by the total number of months that the worker
served in covered employment on or before March 2, 2004. The worker
must perform the remaining month(s) of service needed to fulfill this
60-month requirement after March 2, 2004. Therefore, even if a worker
had 60 or more months of covered government service on or before March
2, 2004, that worker would still have to work his or her last month of
covered government service after March 2, 2004.
The last 60-month requirement established by section 418 of the
SSPA is similar to a requirement established by section 9007 of the
OBRA 1987, Public Law 100-203. Section 9007 specified that Federal
employees who transfer from the Civil Service Retirement System to the
Federal Employees Retirement System must work for at least 60 months,
taken together, in covered employment in order to avoid application of
the GPO.
On August 3, 2007, we published an NPRM in the Federal Register at
72 FR 43202 proposing to revise our regulations to reflect the changes
to the GPO made by section 418 of SSPA and section 9007 of the OBRA
1987. We are finalizing the changes announced in the NPRM, with the
modifications noted below.
Changes to Language Proposed in NPRM
We re-worded and reorganized the proposed regulatory language to
better explain how we apply the GPO rules. These changes make the
regulations clearer and easier to understand. The language changes do
not affect the substance of the regulation as proposed in our NPRM.
In the NPRM, we proposed replacing the words ``receiving'' and
``received'' with the word ``payable.'' We decided against this change.
Variations of the term ``receive'' more clearly describe the fact that
a government pension plan must pay a person a periodic benefit from for
GPO to apply. Additionally, use of the term ``receive'' in this section
maintains consistency throughout our regulations.
We simplified the language in proposed 404.408a(a)(1), and
redesignated the section as 404.408a(a)(2).We redesignated proposed
404.408a(a)(1) as (a)(2) because we are adding a new 404.408a(a)(1). In
the proposed rules, we used the terms ``government pension'' and
``noncovered employment'' without a definition. We also referred to an
individual's ``Social Security benefits as a wife, husband, widow,
widower, mother or father, divorced or surviving divorced spouse''
throughout proposed 404.408a(a), as well as in proposed 404.408a(b) and
(d).
To simplify and clarify the rules, we added a definitional
paragraph to 404.408a(a) for these terms. We defined the terms
government pension and noncovered employment in 404.408a(a)(1)(i) and
(a)(1)(ii) and added 404.408a(a)(2)(iii) to define ``spouse's
benefits,'' which is a single term used to represent those
beneficiaries affected by this section: Wives, husbands, widows,
widowers, mothers, fathers, divorced or surviving divorced spouses.
Using a single term to describe these groups simplifies our rules and
makes them easier to understand. The addition of these terms does not
change or affect the categories of beneficiaries affected or change the
substance of the rules we proposed.
We simplified the language in proposed 404.408a(a)(3) and moved it
to 404.408a(b)(6), except for the final sentence of (3)(ii).
We revised the final sentence of proposed 404.408a(a)(3)(ii) and
moved it to 404.408a(a)(2).
We simplified the first sentence of proposed 404.408a(a)(4) and
moved it to 404.408a(b)(6)(ii) to clarify that it applies to the last
60 months rule.
We simplified the second sentence of proposed 404.408a(a)(4) and
moved it to 404.408a(a)(1)(ii) to clarify that it applies to all of
Sec. 404.408a.
We simplified the language of proposed 404.408a(d) and added
provisions from proposed paragraph 404.408a(a)(5).
We revised the language of proposed 404.408a(b)(6) and moved it to
404.408a(b)(7).
We simplified formerly proposed 404.408a(a)(2) and moved it to
404.408a(b)(8) as a new exception.
Public Comment
On August 3, 2007, we published an NPRM in the Federal Register at
72 FR 43202 and provided the public with a 60-day comment period. We
received one comment. We carefully considered the concerns expressed in
this comment but did not make any changes to the final rule as a result
of the comment.
Comment: A member of the public objected to the GPO, stating that
government pensions are already larger than private pensions. The
commenter opined that people who receive government pensions should not
get extra payments since they already receive more than workers who
lack pensions.
Response: We did not adopt this comment, which reflects a
misunderstanding of the GPO. The GPO does not increase government
pensions and it does not increase Social Security benefits. Instead, it
reduces the Social Security spouse's benefit of workers who receive a
government pension based on noncovered employment. Because our current
regulations reflect the purpose of the GPO, people who receive
government pensions are not receiving extra payments.
Regulatory Procedures
Executive Order 12866 as Supplemented by Executive Order 13563
We consulted with the Office of Management and Budget (OMB) and
determined that this final rule does not meet the criteria for a
significant regulatory action under Executive Order 12866, as
supplemented by Executive Order 13563 and was not subject to OMB
review.
Regulatory Flexibility Act
We certify that this final rule will not have a significant
economic impact on a substantial number of small entities because it
affects individuals only. Therefore, the Regulatory Flexibility Act, as
amended, does not require us to prepare a regulatory flexibility
analysis.
Paperwork Reduction Act
This final rule imposes no reporting or recordkeeping requirements
subject to OMB clearance.
(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.)
List of Subjects in 20 CFR Part 404
Administrative practice and procedure; Blind; Disability benefits;
Old-Age, Survivors and Disability
[[Page 34050]]
Insurance; Reporting and recordkeeping requirements; Social Security.
Dated: June 5, 2015.
Carolyn W. Colvin,
Acting Commissioner of Social Security.
For the reasons set out in the preamble, we amend 20 CFR chapter
III, part 404, subpart E as follows:
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE
(1950- )
Subpart E--Deductions; Reductions; and Nonpayments of Benefits
0
1. The authority citation for subpart E of part 404 is revised to read
as follows:
Authority: Secs. 202, 203, 204(a) and (e), 205(a) and (c),
216(l), 222(c), 223(e), 224, 225, 702(a)(5), and 1129A of the Social
Security Act (42 U.S.C. 402, 403, 404(a) and (e), 405(a) and (c),
416(l), 422(c), 423(e), 424a, 425, 902(a)(5), and 1320a-8a); 48
U.S.C. 1801.
0
2. Amend Sec. 404.408a by revising paragraph (a), adding paragraphs
(b)(6) through (8), and revising paragraph (d) to read as follows:
Sec. 404.408a Reduction where spouse is receiving a government
pension.
(a) General--(1) Terms used in this section. (i) Government pension
means any monthly periodic benefit (or equivalent) you receive that is
based on your Federal, State, or local government employment.
(ii) Noncovered employment means Federal, State, or local
government employment that Social Security did not cover and for which
you did not pay Social Security taxes. For the purposes of this
section, we consider your Federal, State, or local government
employment to be noncovered employment if you pay only Medicare taxes.
(iii) Spouse's benefits are Social Security benefits you receive as
a wife, husband, widow(er), mother, father, divorced spouse, or
surviving divorced spouse.
(2) When reduction is required. We will reduce your spouse's
benefit for each month that you receive a government pension based on
noncovered employment, unless one of the exceptions in paragraph (b) of
this section applies. When we consider whether you receive a government
pension based on noncovered employment, we consider the entire month to
be a month covered by Social Security if you worked for a Federal,
State, or local government employer in a position covered by Social
Security for at least 1 day in that month and there was no noncovered
employment that month under the same pension plan.
(b) * * *
(6) If you are receiving a government pension and the last 60
months of your government employment were covered by both Social
Security and the pension plan that provides your government pension.
(i) If the last day of your government employment was after June
30, 2004 and on or before March 2, 2009, we will apply a transitional
rule to reduce the last 60-month requirement under the following
conditions:
(A) You worked 60 months in Federal, State, or local government
employment covered by Social Security before March 2, 2004, and you
worked at least 1 month of covered government employment after March 2,
2004, or
(B) You worked fewer than 60 months in government employment
covered by Social Security on or before March 2, 2004 and you worked
the remaining number of months needed to total 60 months after March 2,
2004. The months that you worked before or after March 2, 2004 do not
have to be consecutive.
(ii) We will always reduce your monthly spouse's benefit if you
receive a government pension based on noncovered employment and you
later go back to work for a Federal, State, or local government,
unless:
(A) Your final 60 months of Federal, State, or local government
employment were covered by Social Security; and
(B) Both your earlier and later Federal, State, or local government
employment were under the same pension plan.
(7) If you are a former Federal employee and you receive a
government pension based on work that included at least 60 months in
employment covered by Social Security in the period beginning January
1, 1988 and ending with the first month you became entitled to spouse's
benefits, whether or not the 60 months are consecutive), and:
(i) You worked in the Civil Service Retirement System (CSRS), but
switched after 1987 to either the Federal Employees Retirement System
(FERS) or the Foreign Service Pension System; or
(ii) You worked in the legislative branch and left CSRS after 1987
or received a lump sum payment from CSRS or another retirement system
after 1987.
(8) You were a State or local government employee, or a Federal
employee who worked in the CSRS but switched to the FERS before 1988,
your last day of service was in covered employment, and
(i) You filed for spouse's benefits before April 1, 2004 and became
entitled to benefits based on that filing, or
(ii) Your last day of service was before July 1, 2004,
* * * * *
(d) Amount and priority of reduction--(1) Post-June 1983 government
pensions. (i) If you became eligible for a government pension after
June 1983, and you do not meet one of the exceptions in paragraph (b)
of this section, we will reduce (to zero, if necessary) your monthly
Social Security spouse's benefits by two-thirds of the amount of your
government pension.
(ii) If you earned part of your pension based on employment other
than Federal, State, or local government employment, we will only use
the part of your pension earned in government employment to compute the
GPO.
(iii) If the reduction is not a multiple of 10 cents, we will round
it to the next higher multiple of 10 cents.
(2) Pre-July 1983 government pensions. (i) If you became eligible
for a government pension before July 1983, and do not meet one of the
exceptions in paragraph (b) of this section, we will reduce (to zero,
if necessary) your monthly Social Security spouse's benefits as
follows:
(A) By the full amount of your pension for months before December
1984; and
(B) By two-thirds the amount of your monthly pension for months
after November 1984.
(ii) If the reduction is not a multiple of 10 cents, we will round
it to the next higher multiple of 10 cents.
(3) Reductions for age and simultaneous entitlement. We will reduce
your spouse's benefit, if necessary, for age and for simultaneous
entitlement to other Social Security benefits before we reduce it
because you are receiving a government pension. In addition, this
reduction follows the order of priority stated in Sec. 404.402(b).
(4) Reduction not a multiple of $1.00. If the monthly benefit
payable to you after the required reduction(s) is not a multiple of
$1.00, we will reduce it to the next lower multiple of $1.00 as
required by Sec. 404.304(f).
(5) Lump sum payments. If the government pension is not paid
monthly or is paid in a lump sum, we will allocate the pension on a
basis equivalent to a monthly benefit and then reduce the monthly
Social Security benefit accordingly.
(i) We will generally obtain information about the number of years
covered by a lump-sum payment from the pension plan.
(ii) If one of the alternatives to a lump-sum payment is a life
annuity, and we can determine the amount of the
[[Page 34051]]
monthly annuity, we will base the reduction on that monthly amount.
(iii) If the period or the equivalent monthly pension benefit is
not clear, we may determine the reduction period and the equivalent
monthly benefit on an individual basis.
* * * * *
[FR Doc. 2015-14509 Filed 6-12-15; 8:45 am]
BILLING CODE 4191-02-P
