Sixty-Month Period of Employment Requirement for Government Pension Offset Exemption, 43202-43205 [E7-15057]
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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 https://
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 https://
www.gpoaccess.gov/fr/.
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 https://
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
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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.
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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
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Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 / Proposed Rules
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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
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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
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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
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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
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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
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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
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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:
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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
https://www.regulations.gov. You may
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Jkt 211001
also comment via the Internet to the
Bureau at BOPRULES@BOP.GOV or by
using the https://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 https://
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 https://
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
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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.
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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 https://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 https://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 https://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
