Sixty-Month Period of Employment Requirement for Government Pension Offset Exemption, 43202-43205 [E7-15057]

Download as PDF 43202 Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 / Proposed Rules requirements and has assigned OMB Control Number 2120–0056. Related Information (h) Refer to MCAIEASA Airworthiness Directive 2006–0257, dated August 24, 2006; Airbus Service Bulletin A300–53–6154, including Appendix 01, dated June 20, 2006; and Airbus A300–600 Airworthiness Limitations Items Document AI/SE–M2/ 95A.0502/06, Issue 11, dated April 2006; for related information. Issued in Renton, Washington, on July 25, 2007. Stephen P. Boyd, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. 07–3774 Filed 8–2–07; 8:45 am] BILLING CODE 4910–13–M SOCIAL SECURITY ADMINISTRATION [Docket No. SSA 2007–0040] also deliver them to the Office of Regulations, Social Security Administration, 107 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235–6401, between 8 a.m. and 4:30 p.m. on regular business days. Comments are posted on the Federal eRulemaking Portal, or you may inspect them physically on regular business days by making arrangements with the contact person shown in this preamble. FOR FURTHER INFORMATION CONTACT: Ines Riley, Social Insurance Specialist, Office of Income Security Programs, Social Security Administration, RRCC #126, 6401 Security Boulevard, Baltimore, Maryland 21235–6401, (410) 965–4138. For information on eligibility or filing for 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 http:// www.socialsecurity.gov. 20 CFR Part 404 SUPPLEMENTARY INFORMATION: RIN 0960–AG50 Electronic Version Sixty-Month Period of Employment Requirement for Government Pension Offset Exemption The electronic file of this document is available on the date of publication in the Federal Register at http:// www.gpoaccess.gov/fr/index.html. AGENCY: Social Security Administration (SSA). pwalker on PROD1PC71 with PROPOSALS ACTION: Notice of proposed rulemaking. SUMMARY: To implement section 418 of the Social Security Protection Act of 2004 (SSPA), we propose to revise our regulations to explain that a State or local government worker will be subject to the Government Pension Offset (GPO) provision under title II of the Social Security Act (the Act), if any part of the last 60 months of government service was not covered by Social Security. We also propose to replace the words ‘‘receiving’’ and ‘‘received’’ with the word ‘‘payable’’ when referring to the eligibility to or payout from a government pension. This wording change will make the regulatory and statutory language consistent and help clarify when the GPO is applicable. In addition, we propose to revise our regulations to reflect a separate 60month requirement that was made applicable to Federal employees by a 1987 law. DATES: To be sure that we consider your comments, we must receive them by October 2, 2007. ADDRESSES: You may give us your comments by: Internet through the Federal eRulemaking Portal at http:// www.regulations.gov; e-mail to regulations@ssa.gov; telefax to (410) 966–2830; or letter to the Commissioner of Social Security, P.O. Box 17703, Baltimore, MD 21235–7703. You may VerDate Aug<31>2005 16:21 Aug 02, 2007 Jkt 211001 Background If you receive a pension from a Federal, State or local government that is based on work that was not covered by Social Security, then the GPO may reduce certain kinds of Social Security benefits that you might also be eligible to receive. The GPO applies to Social Security wife’s, husband’s, widow’s, widower’s, mother’s or father’s, and divorced or surviving divorced spouse’s benefits. For the sake of simplicity, these benefits are often referred to as spouse’s benefits, even though other benefits, as described in the previous sentence, are affected. These benefits may be reduced, to zero if necessary, by two-thirds of the amount of your government pension from noncovered work. See section 202(k)(5) of the Act, codified at 42 U.S.C. 402(k)(5). The GPO does not apply to Social Security retirement or disability benefits that you earned through your own covered employment. The GPO was enacted in 1977 to reduce the Social Security spouse’s benefit of workers who have a government pension based on noncovered employment. Congress believed that persons who received a government pension based on their own noncovered work would receive a ‘‘windfall’’ if they also could receive unreduced Social Security spouse’s benefits, regardless of their dependency on the insured spouse. (See S. Rep. No. PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 95–572, 95th Cong., 1st Sess., at 28.) The GPO treats these government workers similar to workers in jobs covered by Social Security. Workers who earn their own Social Security retirement benefit, and who are eligible to receive a spouse’s benefit, have the spouse’s benefit, in effect, offset by their retirement benefit. They receive the larger of the two benefits. They do not receive both their own Social Security retirement benefit and a spouse’s benefit. Therefore, the GPO prevents individuals who receive a government pension based on noncovered earnings from receiving more in combined pension and Social Security spouse’s benefits than individuals who worked in covered employment and also were eligible for spouse’s benefits. The GPO adjusts the spouse’s benefit of a government worker to prevent a ‘‘windfall.’’ (See H. Rep. No. 100–391(I), 100th Cong., 2nd Sess., at 2313–466.) Before enactment of the SSPA, Public Law 108–203, on March 2, 2004, the law allowed an exception to the application of the GPO, referred to as the ‘‘last day’’ exception. Under this exception, State or local government workers could avoid application of the GPO by working 1 day in Social Security covered employment at the end of their career. Section 418 of the SSPA phases out the ‘‘last day’’ exception. Applications for spouse’s benefits filed on or after April 1, 2004 will be subject to the GPO unless the individual’s last 60 months of government employment are covered by Social Security. Therefore, if there is any noncovered government employment during the last 60 months of government service on which a pension is based, the GPO will apply. State or local government workers who filed an application for spouse’s benefits before April 1, 2004, or whose last day of government employment was before July 1, 2004, are exempt from the GPO if they worked in covered employment on the last day of the government service on which their pension is based. The last 60-month requirement established by section 418 of the SSPA is similar to a requirement established by the Omnibus Budget Reconciliation Act of 1987 (OBRA 1987), Public Law 100–203, section 9007. That law specified that Federal employees who transfer from the Civil Service Retirement System to the new Federal Employees Retirement System must work for at least 60 months in the aggregate in covered employment in order to avoid application of the GPO. For workers whose last day of State or local government employment occurs within 5 years after the date of E:\FR\FM\03AUP1.SGM 03AUP1 Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 / Proposed Rules pwalker on PROD1PC71 with PROPOSALS enactment (that is, between March 2, 2004 and March 1, 2009), the 60-month requirement will be reduced (but not to less than 1 month) by the total number of months that the worker served in covered employment on or before March 2, 2004. The remaining month(s) of service needed to fulfill this 60-month requirement must be performed 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. Explanation of Proposed Changes We propose to revise the regulations in 20 CFR 404.408a as described below to reflect the changes enacted under section 418 of the SSPA and section 9007 of OBRA 1987. Section 404.408a(a) When reduction is required. This paragraph describes the conditions under which we will apply the GPO. This paragraph also explains how we will determine what the monthly pension amount is if the pension is not paid monthly or is paid in a lump sum. We propose to revise this paragraph to explain that we will apply the GPO: 1. To the monthly Social Security wife’s, husband’s, widow’s, widower’s, mother’s or father’s, or divorced or surviving divorced spouse’s benefit for each month a monthly pension from the Federal government based on noncovered employment is payable, unless the individual meets one of the exceptions in paragraph (b) of this section; 2. To the monthly Social Security wife’s, husband’s, widow’s, widower’s, mother’s or father’s, or divorced or surviving divorced spouse’s benefit if the State or local government employee’s application for benefits was filed before April 1, 2004, or his or her last day of employment was worked before July 1, 2004, and the last day was not covered by Social Security; and 3. To the monthly Social Security wife’s, husband’s, widow’s, widower’s, mother’s or father’s, or divorced or surviving divorced spouse’s benefit if the State or local government employee’s application for benefits was filed on or after April 1, 2004 and any portion of the last 60 months of government service was not covered by Social Security. However, if the individual files an application for benefits on or after April 1, 2004 and the individual’s last day of service occurs after June 30, 2004 and before March 2, 2009, we propose to reduce the 60month requirement (but not to less than VerDate Aug<31>2005 16:21 Aug 02, 2007 Jkt 211001 1 month) by the total number of months of Social Security covered employment under the State or local retirement system worked on or before March 2, 2004. We also propose to revise this paragraph to explain that, for the purposes of this transitional rule, we will count as a month of employment any month in which the individual worked in covered government employment for at least one day. We also propose to revise this paragraph to explain that if an individual’s Social Security benefit is reduced because of GPO and he or she later returns to work for a government agency, his or her Social Security benefit will continue to be reduced unless he or she works at least 60 months in covered employment for the same employer or in the same pension plan. We are proposing this revision to clarify that a person who worked for one government agency could not return to work for another agency and earn an exemption from the GPO unless the work was covered by the same pension plan. We also propose to revise this paragraph to better explain how we treat government pensions that are not paid monthly or in a lump sum and how this information is obtained. Section 404.408a(b) Exceptions. This paragraph describes the conditions under which the GPO does not apply. We propose to revise this paragraph to include an exception for 60 months or more of Federal government employment covered under Social Security as provided by section 9007 of OBRA 1987. This new exception would follow the existing five exceptions and be designated as paragraph (b)(6). Section 404.408a(d) Amount and priority of reduction. This paragraph describes the amount of the GPO reduction and the order in which the GPO reduction will be made in relation to reductions for age and simultaneous entitlement to other Social Security benefits. We propose to add an explanation that if a person’s pension is based on both government employment and private sector employment, the GPO will apply to the part of the pension based on noncovered governmental work. It will not apply to the part of the pension that is attributable to earnings from a nongovernmental entity. Because the GPO was designed to offset the Social Security spouse’s benefit by the amount of the pension that was based on noncovered government employment, the offset should apply only to the governmental part of the pension. Some individuals work for school systems that have a public pension plan that also credits work for PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 43203 private schools. Thus, a teacher may work for 25 years in a public school and 5 years in a private school and both jobs participate in the same pension plan. However, because the GPO applies only to public employment, the portion of the pension attributable to work in the private sector is not subject to the GPO. In addition, the ‘‘last day’’ GPO exception, as well as the new 60-month exception, applies only to public employment. Therefore, a teacher whose last day of employment, or last 60 months, is with a private school is not exempt from GPO for that part of his or her pension that is based on noncovered government service. Clarity of These Rules Executive Order 12866, as amended, requires each agency to write all rules in plain language. In addition to your substantive comments on these proposed rules, we invite your comments on how to make them easier to understand. For example: • Have we organized the material to suit your needs? • Are the requirements in the rules clearly stated? • Do the rules contain technical language or jargon that isn’t clear? • Would a different format (grouping and order of sections, use of headings, paragraphing) make the rules easier to understand? • Would more (but shorter) sections be better? • Could we improve clarity by adding tables, lists, or diagrams? • What else could we do to make the rules easier to understand? Regulatory Procedures Executive Order 12866, as Amended We have consulted with the Office of Management and Budget (OMB) and determined that these proposed rules meet the requirements for a significant regulatory action under Executive Order 12866, as amended. Thus, they were subject to OMB review. Administrative costs attributable to the publication of this regulation are estimated to be negligible (i.e., less than 25 work years and $2 million). At the time of enactment of the SSPA, we estimated that this change would result in a reduction in the Old-Age, Survivors and Disability Insurance (OASDI) benefits of $5 million over the first 5 years, and $39 million over the first 10 years. We estimate that the effect of this change will be small initially, but will grow during the projection period such that in the 10th year there will be about 1,500 beneficiaries with GPO offset because of this change, with a decrease E:\FR\FM\03AUP1.SGM 03AUP1 43204 Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 / Proposed Rules in benefits during that year of about $10 million. The year-by-year estimates of these benefit payment reductions are presented in the table below. Fiscal year pwalker on PROD1PC71 with PROPOSALS 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Reduction in OASDI benefits (in millions) 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 and 48 U.S.C. 1801. 2. Amend § 404.408a by revising paragraph (a), adding paragraph (b)(6) and revising paragraph (d)(1) to read as (1/) follows: ...................................... ...................................... ...................................... ...................................... ...................................... ...................................... ...................................... ...................................... ...................................... ...................................... (1/) $1 1 2 4 5 7 8 10 § 404.408a Reduction where spouse is receiving a Government pension. (a) When reduction is required. For the purposes of this section, we use the term ‘‘Government pension’’ to mean a monthly pension from a Federal, State, or local government agency for which you were employed in work not covered by Social Security. Totals: (1) Unless you meet one of the 2004–08 ............................ 5 exceptions in paragraph (b) of this 2004–13 ............................ 39 section, your monthly Social Security benefits as a wife, husband, widow, 1/ Reduction in benefit payments of less than widower, mother or father, divorced or $500,000. surviving divorced spouse will be Regulatory Flexibility Act reduced each month that a periodic benefit is payable to you from the We certify that these proposed rules, Federal government for work you when published in final, would not performed that was not covered by have a significant economic impact on Social Security. a substantial number of small entities (2) If you filed an application for because they affect only individuals. Thus, a regulatory flexibility analysis as Social Security benefits as a wife, husband, widow, widower, mother or provided in the Regulatory Flexibility father, divorced or surviving divorced Act, as amended, is not required. spouse before April 1, 2004, or your Paperwork Reduction Act work with a State or local government ended before July 1, 2004, your benefits These proposed regulations would will be reduced each month a periodic impose no reporting or recordkeeping requirements subject to OMB clearance. benefit from a State or local government pension plan is payable to you, if the (Catalog of Federal Domestic Assistance pension is based on work that was not Program Nos. 96.001, Social Security— covered by Social Security on the last Disability Insurance; 96.002, Social day of employment unless you meet one Security—Retirement Insurance; 96.004, of the exceptions in paragraph (b) of this Social Security—Survivors Insurance.) section. List of Subjects in 20 CFR Part 404 (3)(i) If you file an application for Social Security benefits as a wife, Administrative practice and husband, widow, widower, mother or procedure, Blind, Disability benefits, father, divorced or surviving divorced Old-Age, Survivors and Disability Insurance; Reporting and recordkeeping spouse on or after April 1, 2004, and your work with a State or local requirements, Social Security. government ended July 1, 2004 or later, Dated: May 30, 2007. your benefits will be reduced each Michael J. Astrue, month that a periodic benefit is payable Commissioner of Social Security. to you from a State or local government For the reasons set out in the pension plan for which you were preamble, we propose to amend subpart employed in work not covered by Social E of part 404 of chapter III of title 20 of Security during any portion of your last the Code of Federal Regulations as set 60 months of such service that ends forth below: with your last day of employment, unless you meet one of the exceptions PART 404— FEDERAL OLD-AGE, in paragraph (b) of this section. SURVIVORS AND DISABILITY (ii) If the last day of your State or local INSURANCE (1950– ) government service occurs after June 30, 2004 and before March 2, 2009, we may Subpart E—[Amended] reduce the requirement that you must 1. The authority citation for subpart E work your last 60 months in covered of part 404 continues to read as follows: employment. You still must work 60 VerDate Aug<31>2005 16:54 Aug 02, 2007 Jkt 211001 PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 months altogether in covered employment. We will reduce the last 60month requirement (but not to less than 1 month) by the total number of months you performed in Social Security covered employment, under the same State or local retirement system, on or before March 2, 2004. The months do not have to be consecutive. You must work the remaining number of months needed to total 60 months of covered government employment after March 2, 2004. Therefore, even if you have 60 or more months of covered government employment on or before March 2, 2004, you must work your last month of covered government employment after March 2, 2004. We consider employment of at least 1 day in a given month to be a month of employment. (4) If you receive a Government pension based on noncovered employment and later return to work for a government agency, your monthly Social Security benefit as a wife, husband, widow, widower, mother or father, divorced or surviving divorced spouse will always be reduced because of your Government pension, unless the later work is covered by Social Security and you work at least 60 months in covered employment for the same employer or in the same pension plan. For purposes of this section, Federal Government employees performing work that is covered by Medicare, but not otherwise covered by Social Security, are not considered to be performing work covered by Social Security. (5)(i) If the Government pension is not paid monthly or is paid in a lump-sum, we will allocate it on a basis equivalent to a monthly benefit and then reduce the monthly Social Security benefit accordingly. (ii) We will generally obtain information about the number of years covered by a lump-sum payment from the pension plan. (iii) If one of the alternatives to a lump-sum payment is a life annuity, and the amount of the monthly or other periodic payment can be determined, we will base the reduction on that amount. (iv) Where the period or the equivalent monthly pension benefit is not clear, it may be necessary for us to determine the reduction period on an individual basis. (b) * * * (6) If you receive a pension for Federal Government employment and that employment was covered under Social Security for 60 months or more in the aggregate during the period beginning January 1, 1988 and ending with the first month of entitlement to E:\FR\FM\03AUP1.SGM 03AUP1 Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 / Proposed Rules Social Security benefits as a wife, husband, widow, widower, mother or father, divorced or surviving divorced spouse. * * * * * (d) * * * (1)(i) If you became eligible for a Government pension based on noncovered service after June 1983, we will reduce (to zero, if necessary) your monthly Social Security benefits as a wife, husband, widow, widower, mother or father, divorced or surviving divorced spouse by two-thirds the amount of your monthly pension. (ii) If your Government pension is based in part on earnings from a nongovernmental entity, we will base the amount of the reduction on only the portion of the pension that is based on noncovered government service. We will not consider that portion of the pension that is attributable to the nongovernmental earnings in determining the amount of the reduction. (iii) If the reduction is not a multiple of 10 cents, we will round it to the next higher multiple of 10 cents. * * * * * [FR Doc. E7–15057 Filed 8–2–07; 8:45 am] BILLING CODE 4191–02–P DEPARTMENT OF JUSTICE Bureau of Prisons 28 CFR Part 549 [BOP Docket No. 1145] RIN 1120–AB45 Civil Commitment of a Sexually Dangerous Person Bureau of Prisons, Justice. Proposed rule. AGENCY: pwalker on PROD1PC71 with PROPOSALS ACTION: SUMMARY: In this proposed rule, the Bureau of Prisons (Bureau) provides definitions and standards relating to the certification of persons as sexually dangerous for the purpose of civil commitment, as authorized by The Adam Walsh Child Protection and Safety Act of 2006 (Pub. L. 109–248) (Walsh Act), enacted July 27, 2006, which amended title 18 of the United States Code, Chapter 313. DATES: Comments are due by October 2, 2007. ADDRESSES: Submit comments to the Rules Unit, Office of General Counsel, Bureau of Prisons, 320 First Street, NW., Washington, DC 20534. You may view an electronic version of this rule at http://www.regulations.gov. You may VerDate Aug<31>2005 16:21 Aug 02, 2007 Jkt 211001 also comment via the Internet to the Bureau at BOPRULES@BOP.GOV or by using the http://www.regulations.gov comment form for this regulation. When submitting comments electronically you must include the BOP Docket No. in the subject box. FOR FURTHER INFORMATION CONTACT: Sarah Qureshi, Office of General Counsel, Bureau of Prisons, phone (202) 307–2105. SUPPLEMENTARY INFORMATION: Posting of Public Comments Please note that all comments received are considered part of the public record and made available for public inspection online at http:// www.regulations.gov. Such information includes personal identifying information (such as your name, address, etc.) voluntarily submitted by the commenter. If you want to submit personal identifying information (such as your name, address, etc.) as part of your comment, but do not want it to be posted online, you must include the phrase ‘‘PERSONAL IDENTIFYING INFORMATION’’ in the first paragraph of your comment. You must also locate all the personal identifying information you do not want posted online in the first paragraph of your comment and identify what information you want redacted. If you want to submit confidential business information as part of your comment but do not want it to be posted online, you must include the phrase ‘‘CONFIDENTIAL BUSINESS INFORMATION’’ in the first paragraph of your comment. You must also prominently identify confidential business information to be redacted within the comment. If a comment has so much confidential business information that it cannot be effectively redacted, all or part of that comment may not be posted on http:// www.regulations.gov. Personal identifying information identified and located as set forth above will be placed in the agency’s public docket file, but not posted online. Confidential business information identified and located as set forth above will not be placed in the public docket file. If you wish to inspect the agency’s public docket file in person by appointment, please see the FOR FURTHER INFORMATION paragraph. This proposed rule provides definitions and standards for review by the Bureau of persons in its custody for certification to federal district courts as ‘‘sexually dangerous persons,’’ as authorized by title 18 U.S.C. Chapter PO 00000 Frm 00007 Fmt 4702 Sfmt 4702 43205 313. The Adam Walsh Child Protection and Safety Act of 2006 (Pub. L. 109– 248) (Walsh Act), enacted July 27, 2006, amended title 18 of the United States Code, Chapter 313, to add a new section 4248. Section 4248 authorizes the Bureau to certify to federal district courts that certain persons are ‘‘sexually dangerous persons’’ for whom civil commitment is required. Certification stays the release of the person and initiates district court proceedings pursuant to 18 U.S.C. 4248(a), (b), (c), and (d). The filing of the certificate by the Bureau stays the release of the person; however, the final determination that a person is ‘‘a sexually dangerous person’’ subject to civil commitment is made by the court after proceedings held pursuant to 18 U.S.C. 4248(b) and (c), which make applicable the procedures set forth in 18 U.S.C. 4247(b), (c), and (d). As provided in § 4248(b), the court may order that a psychiatric or psychological examination of the person be conducted, and that a psychiatric or psychological report be filed with the court. Pursuant to § 4248(c), a hearing shall be conducted in which the person shall be represented by counsel, and be afforded an opportunity to testify, present evidence, subpoena witnesses on his or her behalf, and confront and cross-examine witnesses who appear at the hearing. If the court finds by clear and convincing evidence that the person is a sexually dangerous person, the court shall commit him/her to the custody of the Attorney General as detailed in § 4248(d). The Walsh Act also amended 18 U.S.C. 4247 to include a definition of ‘‘sexually dangerous person.’’ The amended statute defines ‘‘sexually dangerous person’’ as ‘‘a person who has engaged or attempted to engage in sexually violent conduct or child molestation and who is sexually dangerous to others.’’ The amended statute defines ‘‘sexually dangerous to others’’ to mean that a person ‘‘suffers from a serious mental illness, abnormality, or disorder as a result of which he would have serious difficulty in refraining from sexually violent conduct or child molestation if released.’’ The statute does not define the terms ‘‘sexually violent conduct’’ or ‘‘child molestation’’ and the Bureau proposes these regulations to interpret them. Although the Bureau has, in part, looked to federal criminal statutes for language to assist in defining these terms, we do not rely upon the provisions themselves, case law interpretations of them, or other related statutory history. Rather, the Bureau’s E:\FR\FM\03AUP1.SGM 03AUP1

Agencies

[Federal Register Volume 72, Number 149 (Friday, August 3, 2007)]
[Proposed Rules]
[Pages 43202-43205]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-15057]


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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: Notice of proposed rulemaking.

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

SUMMARY: To implement section 418 of the Social Security Protection Act 
of 2004 (SSPA), we propose to revise our regulations to explain that a 
State or local government worker will be subject to the Government 
Pension Offset (GPO) provision under title II of the Social Security 
Act (the Act), if any part of the last 60 months of government service 
was not covered by Social Security. We also propose to replace the 
words ``receiving'' and ``received'' with the word ``payable'' when 
referring to the eligibility to or payout from a government pension. 
This wording change will make the regulatory and statutory language 
consistent and help clarify when the GPO is applicable. In addition, we 
propose to revise our regulations to reflect a separate 60-month 
requirement that was made applicable to Federal employees by a 1987 
law.

DATES: To be sure that we consider your comments, we must receive them 
by October 2, 2007.

ADDRESSES: You may give us your comments by: Internet through the 
Federal eRulemaking Portal at http://www.regulations.gov; e-mail to 
regulations@ssa.gov; telefax to (410) 966-2830; or letter to the 
Commissioner of Social Security, P.O. Box 17703, Baltimore, MD 21235-
7703. You may also deliver them to the Office of Regulations, Social 
Security Administration, 107 Altmeyer Building, 6401 Security 
Boulevard, Baltimore, MD 21235-6401, between 8 a.m. and 4:30 p.m. on 
regular business days. Comments are posted on the Federal eRulemaking 
Portal, or you may inspect them physically on regular business days by 
making arrangements with the contact person shown in this preamble.

FOR FURTHER INFORMATION CONTACT: Ines Riley, Social Insurance 
Specialist, Office of Income Security Programs, Social Security 
Administration, RRCC 126, 6401 Security Boulevard, Baltimore, 
Maryland 21235-6401, (410) 965-4138. For information on eligibility or 
filing for 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 http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Electronic Version

    The electronic file of this document is available on the date of 
publication in the Federal Register at http://www.gpoaccess.gov/fr/
index.html.

Background

    If you receive a pension from a Federal, State or local government 
that is based on work that was not covered by Social Security, then the 
GPO may reduce certain kinds of Social Security benefits that you might 
also be eligible to receive. The GPO applies to Social Security wife's, 
husband's, widow's, widower's, mother's or father's, and divorced or 
surviving divorced spouse's benefits. For the sake of simplicity, these 
benefits are often referred to as spouse's benefits, even though other 
benefits, as described in the previous sentence, are affected. These 
benefits may be reduced, to zero if necessary, by two-thirds of the 
amount of your government pension from noncovered work. See section 
202(k)(5) of the Act, codified at 42 U.S.C. 402(k)(5). The GPO does not 
apply to Social Security retirement or disability benefits that you 
earned through your own covered employment.
    The GPO was enacted in 1977 to reduce the Social Security spouse's 
benefit of workers who have a government pension based on noncovered 
employment. Congress believed that persons who received a government 
pension based on their own noncovered work would receive a ``windfall'' 
if they also could receive unreduced Social Security spouse's benefits, 
regardless of their dependency on the insured spouse. (See S. Rep. No. 
95-572, 95th Cong., 1st Sess., at 28.) The GPO treats these government 
workers similar to workers in jobs covered by Social Security. Workers 
who earn their own Social Security retirement benefit, and who are 
eligible to receive a spouse's benefit, have the spouse's benefit, in 
effect, offset by their retirement benefit. They receive the larger of 
the two benefits. They do not receive both their own Social Security 
retirement benefit and a spouse's benefit. Therefore, the GPO prevents 
individuals who receive a government pension based on noncovered 
earnings from receiving more in combined pension and Social Security 
spouse's benefits than individuals who worked in covered employment and 
also were eligible for spouse's benefits. The GPO adjusts the spouse's 
benefit of a government worker to prevent a ``windfall.'' (See H. Rep. 
No. 100-391(I), 100th Cong., 2nd Sess., at 2313-466.)
    Before enactment of the SSPA, Public Law 108-203, on March 2, 2004, 
the law allowed an exception to the application of the GPO, referred to 
as the ``last day'' exception. Under this exception, State or local 
government workers could avoid application of the GPO by working 1 day 
in Social Security covered employment at the end of their career.
    Section 418 of the SSPA phases out the ``last day'' exception. 
Applications for spouse's benefits filed on or after April 1, 2004 will 
be subject to the GPO unless the individual's last 60 months of 
government employment are covered by Social Security. Therefore, if 
there is any noncovered government employment during the last 60 months 
of government service on which a pension is based, the GPO will apply. 
State or local government workers who filed an application for spouse's 
benefits before April 1, 2004, or whose last day of government 
employment was before July 1, 2004, are exempt from the GPO if they 
worked in covered employment on the last day of the government service 
on which their pension is based.
    The last 60-month requirement established by section 418 of the 
SSPA is similar to a requirement established by the Omnibus Budget 
Reconciliation Act of 1987 (OBRA 1987), Public Law 100-203, section 
9007. That law specified that Federal employees who transfer from the 
Civil Service Retirement System to the new Federal Employees Retirement 
System must work for at least 60 months in the aggregate in covered 
employment in order to avoid application of the GPO.
    For workers whose last day of State or local government employment 
occurs within 5 years after the date of

[[Page 43203]]

enactment (that is, between March 2, 2004 and March 1, 2009), the 60-
month requirement will be reduced (but not to less than 1 month) by the 
total number of months that the worker served in covered employment on 
or before March 2, 2004. The remaining month(s) of service needed to 
fulfill this 60-month requirement must be performed 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.

Explanation of Proposed Changes

    We propose to revise the regulations in 20 CFR 404.408a as 
described below to reflect the changes enacted under section 418 of the 
SSPA and section 9007 of OBRA 1987.
    Section 404.408a(a) When reduction is required. This paragraph 
describes the conditions under which we will apply the GPO. This 
paragraph also explains how we will determine what the monthly pension 
amount is if the pension is not paid monthly or is paid in a lump sum. 
We propose to revise this paragraph to explain that we will apply the 
GPO:
    1. To the monthly Social Security wife's, husband's, widow's, 
widower's, mother's or father's, or divorced or surviving divorced 
spouse's benefit for each month a monthly pension from the Federal 
government based on noncovered employment is payable, unless the 
individual meets one of the exceptions in paragraph (b) of this 
section;
    2. To the monthly Social Security wife's, husband's, widow's, 
widower's, mother's or father's, or divorced or surviving divorced 
spouse's benefit if the State or local government employee's 
application for benefits was filed before April 1, 2004, or his or her 
last day of employment was worked before July 1, 2004, and the last day 
was not covered by Social Security; and
    3. To the monthly Social Security wife's, husband's, widow's, 
widower's, mother's or father's, or divorced or surviving divorced 
spouse's benefit if the State or local government employee's 
application for benefits was filed on or after April 1, 2004 and any 
portion of the last 60 months of government service was not covered by 
Social Security. However, if the individual files an application for 
benefits on or after April 1, 2004 and the individual's last day of 
service occurs after June 30, 2004 and before March 2, 2009, we propose 
to reduce the 60-month requirement (but not to less than 1 month) by 
the total number of months of Social Security covered employment under 
the State or local retirement system worked on or before March 2, 2004. 
We also propose to revise this paragraph to explain that, for the 
purposes of this transitional rule, we will count as a month of 
employment any month in which the individual worked in covered 
government employment for at least one day.
    We also propose to revise this paragraph to explain that if an 
individual's Social Security benefit is reduced because of GPO and he 
or she later returns to work for a government agency, his or her Social 
Security benefit will continue to be reduced unless he or she works at 
least 60 months in covered employment for the same employer or in the 
same pension plan. We are proposing this revision to clarify that a 
person who worked for one government agency could not return to work 
for another agency and earn an exemption from the GPO unless the work 
was covered by the same pension plan.
    We also propose to revise this paragraph to better explain how we 
treat government pensions that are not paid monthly or in a lump sum 
and how this information is obtained.
    Section 404.408a(b) Exceptions. This paragraph describes the 
conditions under which the GPO does not apply. We propose to revise 
this paragraph to include an exception for 60 months or more of Federal 
government employment covered under Social Security as provided by 
section 9007 of OBRA 1987. This new exception would follow the existing 
five exceptions and be designated as paragraph (b)(6).
    Section 404.408a(d) Amount and priority of reduction. This 
paragraph describes the amount of the GPO reduction and the order in 
which the GPO reduction will be made in relation to reductions for age 
and simultaneous entitlement to other Social Security benefits. We 
propose to add an explanation that if a person's pension is based on 
both government employment and private sector employment, the GPO will 
apply to the part of the pension based on noncovered governmental work. 
It will not apply to the part of the pension that is attributable to 
earnings from a nongovernmental entity. Because the GPO was designed to 
offset the Social Security spouse's benefit by the amount of the 
pension that was based on noncovered government employment, the offset 
should apply only to the governmental part of the pension. Some 
individuals work for school systems that have a public pension plan 
that also credits work for private schools. Thus, a teacher may work 
for 25 years in a public school and 5 years in a private school and 
both jobs participate in the same pension plan. However, because the 
GPO applies only to public employment, the portion of the pension 
attributable to work in the private sector is not subject to the GPO. 
In addition, the ``last day'' GPO exception, as well as the new 60-
month exception, applies only to public employment. Therefore, a 
teacher whose last day of employment, or last 60 months, is with a 
private school is not exempt from GPO for that part of his or her 
pension that is based on noncovered government service.

Clarity of These Rules

    Executive Order 12866, as amended, requires each agency to write 
all rules in plain language. In addition to your substantive comments 
on these proposed rules, we invite your comments on how to make them 
easier to understand. For example:
     Have we organized the material to suit your needs?
     Are the requirements in the rules clearly stated?
     Do the rules contain technical language or jargon that 
isn't clear?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the rules easier to understand?
     Would more (but shorter) sections be better?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     What else could we do to make the rules easier to 
understand?

Regulatory Procedures

Executive Order 12866, as Amended

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these proposed rules meet the requirements for a 
significant regulatory action under Executive Order 12866, as amended. 
Thus, they were subject to OMB review.
    Administrative costs attributable to the publication of this 
regulation are estimated to be negligible (i.e., less than 25 work 
years and $2 million). At the time of enactment of the SSPA, we 
estimated that this change would result in a reduction in the Old-Age, 
Survivors and Disability Insurance (OASDI) benefits of $5 million over 
the first 5 years, and $39 million over the first 10 years. We estimate 
that the effect of this change will be small initially, but will grow 
during the projection period such that in the 10th year there will be 
about 1,500 beneficiaries with GPO offset because of this change, with 
a decrease

[[Page 43204]]

in benefits during that year of about $10 million. The year-by-year 
estimates of these benefit payment reductions are presented in the 
table below.

------------------------------------------------------------------------
                                                           Reduction in
                                                               OASDI
                       Fiscal year                         benefits (in
                                                             millions)
------------------------------------------------------------------------
2004....................................................            (1/)
2005....................................................            (1/)
2006....................................................              $1
2007....................................................               1
2008....................................................               2
2009....................................................               4
2010....................................................               5
2011....................................................               7
2012....................................................               8
2013....................................................              10
                                                         ---------------
 Totals:
  2004-08...............................................               5
                                                         ---------------
  2004-13...............................................             39
------------------------------------------------------------------------
1/ Reduction in benefit payments of less than $500,000.

Regulatory Flexibility Act

    We certify that these proposed rules, when published in final, 
would not have a significant economic impact on a substantial number of 
small entities because they affect only individuals. Thus, a regulatory 
flexibility analysis as provided in the Regulatory Flexibility Act, as 
amended, is not required.

Paperwork Reduction Act

    These proposed regulations would impose 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 Insurance; Reporting and 
recordkeeping requirements, Social Security.

    Dated: May 30, 2007.
Michael J. Astrue,
Commissioner of Social Security.
    For the reasons set out in the preamble, we propose to amend 
subpart E of part 404 of chapter III of title 20 of the Code of Federal 
Regulations as set forth below:

PART 404-- FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE 
(1950- )

Subpart E--[Amended]

    1. The authority citation for subpart E of part 404 continues 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 and 48 
U.S.C. 1801.

    2. Amend Sec.  404.408a by revising paragraph (a), adding paragraph 
(b)(6) and revising paragraph (d)(1) to read as follows:


Sec.  404.408a  Reduction where spouse is receiving a Government 
pension.

    (a) When reduction is required. For the purposes of this section, 
we use the term ``Government pension'' to mean a monthly pension from a 
Federal, State, or local government agency for which you were employed 
in work not covered by Social Security.
    (1) Unless you meet one of the exceptions in paragraph (b) of this 
section, your monthly Social Security benefits as a wife, husband, 
widow, widower, mother or father, divorced or surviving divorced spouse 
will be reduced each month that a periodic benefit is payable to you 
from the Federal government for work you performed that was not covered 
by Social Security.
    (2) If you filed an application for Social Security benefits as a 
wife, husband, widow, widower, mother or father, divorced or surviving 
divorced spouse before April 1, 2004, or your work with a State or 
local government ended before July 1, 2004, your benefits will be 
reduced each month a periodic benefit from a State or local government 
pension plan is payable to you, if the pension is based on work that 
was not covered by Social Security on the last day of employment unless 
you meet one of the exceptions in paragraph (b) of this section.
    (3)(i) If you file an application for Social Security benefits as a 
wife, husband, widow, widower, mother or father, divorced or surviving 
divorced spouse on or after April 1, 2004, and your work with a State 
or local government ended July 1, 2004 or later, your benefits will be 
reduced each month that a periodic benefit is payable to you from a 
State or local government pension plan for which you were employed in 
work not covered by Social Security during any portion of your last 60 
months of such service that ends with your last day of employment, 
unless you meet one of the exceptions in paragraph (b) of this section.
    (ii) If the last day of your State or local government service 
occurs after June 30, 2004 and before March 2, 2009, we may reduce the 
requirement that you must work your last 60 months in covered 
employment. You still must work 60 months altogether in covered 
employment. We will reduce the last 60-month requirement (but not to 
less than 1 month) by the total number of months you performed in 
Social Security covered employment, under the same State or local 
retirement system, on or before March 2, 2004. The months do not have 
to be consecutive. You must work the remaining number of months needed 
to total 60 months of covered government employment after March 2, 
2004. Therefore, even if you have 60 or more months of covered 
government employment on or before March 2, 2004, you must work your 
last month of covered government employment after March 2, 2004. We 
consider employment of at least 1 day in a given month to be a month of 
employment.
    (4) If you receive a Government pension based on noncovered 
employment and later return to work for a government agency, your 
monthly Social Security benefit as a wife, husband, widow, widower, 
mother or father, divorced or surviving divorced spouse will always be 
reduced because of your Government pension, unless the later work is 
covered by Social Security and you work at least 60 months in covered 
employment for the same employer or in the same pension plan. For 
purposes of this section, Federal Government employees performing work 
that is covered by Medicare, but not otherwise covered by Social 
Security, are not considered to be performing work covered by Social 
Security.
    (5)(i) If the Government pension is not paid monthly or is paid in 
a lump-sum, we will allocate it on a basis equivalent to a monthly 
benefit and then reduce the monthly Social Security benefit 
accordingly.
    (ii) We will generally obtain information about the number of years 
covered by a lump-sum payment from the pension plan.
    (iii) If one of the alternatives to a lump-sum payment is a life 
annuity, and the amount of the monthly or other periodic payment can be 
determined, we will base the reduction on that amount.
    (iv) Where the period or the equivalent monthly pension benefit is 
not clear, it may be necessary for us to determine the reduction period 
on an individual basis.
    (b) * * *
    (6) If you receive a pension for Federal Government employment and 
that employment was covered under Social Security for 60 months or more 
in the aggregate during the period beginning January 1, 1988 and ending 
with the first month of entitlement to

[[Page 43205]]

Social Security benefits as a wife, husband, widow, widower, mother or 
father, divorced or surviving divorced spouse.
* * * * *
    (d) * * *
    (1)(i) If you became eligible for a Government pension based on 
noncovered service after June 1983, we will reduce (to zero, if 
necessary) your monthly Social Security benefits as a wife, husband, 
widow, widower, mother or father, divorced or surviving divorced spouse 
by two-thirds the amount of your monthly pension.
    (ii) If your Government pension is based in part on earnings from a 
nongovernmental entity, we will base the amount of the reduction on 
only the portion of the pension that is based on noncovered government 
service. We will not consider that portion of the pension that is 
attributable to the nongovernmental earnings in determining the amount 
of the reduction.
    (iii) If the reduction is not a multiple of 10 cents, we will round 
it to the next higher multiple of 10 cents.
* * * * *
 [FR Doc. E7-15057 Filed 8-2-07; 8:45 am]
BILLING CODE 4191-02-P