[Federal Register: June 15, 1998 (Volume 63, Number 114)]
[Rules and Regulations]
[Page 32595-32598]

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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 831 and 842

RIN 3206-AI25


Voluntary Early Retirement Authority

AGENCY: Office of Personnel Management.

ACTION: Interim rule.

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SUMMARY: The Office of Personnel Management is publishing interim
regulations covering Federal employee voluntary early retirements to
implement new procedures affecting the application of voluntary early
retirements. These temporary provisions affect agency requests, OPM
approval, and agency offers of voluntary early retirement as well as
several eligibility requirements for early retirement during a major
reorganization, major reduction in force, or major transfer of
function. The basic age and service requirements for voluntary early
retirement remain unchanged.

DATES: Sections 831.108 and 842.205 are suspended from June 15, 1998
until October 1, 1999. Sections 831.114 and 842.213 are added effective
from June 15, 1998 through September 30, 1999. Comments must be
received by August 14, 1998.

ADDRESSES: Send written comments to Mary Lou Lindholm; Associate
Director for Employment; Office of Personnel Management; Room 6500;
1900 E Street, NW; Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT: Edward P. McHugh or Gregory P. Keller,
202-606-0960, FAX 202-606-2329.

SUPPLEMENTARY INFORMATION: 5 U.S.C. 8336(d)(2) and 8414(b)(1)(B)
provide that OPM may approve voluntary early retirement authority for
agencies undergoing a major reorganization, major reduction in force,
or major transfer of function. 5 U.S.C. 8336(d)(2) authorizes the
voluntary early retirement of employees under the Civil Service
Retirement System (CSRS), while 5 U.S.C. 8414(b)(1)(B) authorizes the
voluntary early retirement of employees under the Federal Employees
Retirement System (FERS).
    Section 7001 of Public Law 105-174, the Supplemental Appropriations
and Rescissions Act, FY 1998, enacted May 1, 1998, provided authority
for OPM and agencies to apply special provisions affecting the manner
in which voluntary early retirements may be administered and approved
for the period from May 1, 1998, through September 30, 1999.
    Under section 7001, an agency may request a determination from the
Office of Personnel Management that the agency or agency component(s)
is undergoing a major reorganization, major reduction in force, or
major transfer of function and that such action will result in the
separation or downgrading of a significant percentage of the employees
in the agency or component(s).
    The law allows OPM to prescribe regulations which permit the
agency, after OPM approval, to determine the scope of voluntary early
retirement offers on the basis of one or more organizational units; one
or more occupational series or levels; one or more geographic
locations; other similar nonpersonal factors; or any appropriate
combination of such factors.
    Additionally, the law imposes several restrictions on eligibility
for voluntary early retirement. Employees who have not been employed
continuously by the agency since at least 31 days prior to the date of
the agency's requests to OPM for early retirement; employees serving
under time-limited appointments; and employees who have been notified
that such employee is to be involuntarily separated for misconduct or
unacceptable performance are ineligible for voluntary early retirements
during the period this law is effective.
    These interim regulations describe agencies' requests to OPM for
approval of a voluntary early retirement authority; the manner in which
agencies may offer voluntary early retirements; the responsibilities of
agencies in managing approved voluntary early retirement authorities;
eligibility of employees for voluntary early retirement; and agencies'
required reports to OPM on use of the authorities.
    Public Law 105-174 provided for the application of voluntary early
retirements under these provisions through September 30, 1999.
Therefore, 5 CFR 831.108 and 842.205 are suspended until October 1,
1999. In lieu of those sections, Secs. 831.114 and 842.213 are added. 5
CFR 831.114 covers voluntary early retirement for CSRS employees, while
the new 5 CFR 842.213 covers voluntary early retirement for FERS
employees. Notwithstanding any future changes in the voluntary early
retirement statutes, Secs. 831.114 and 842.213 will expire September
30, 1999, at which time Secs. 831.108 and 842.205 will be restored.
    The special provisions in Public Law 105-174 do not affect the
existing statutory requirements in 5 U.S.C. 8336(d) or 8414(b)(1) that,
in order to be eligible for voluntary early retirement, an individual
must have completed 25 years of service or have reached age 50 and
completed 20 years of service.

Waiver of Notice of Proposed Rulemaking and Delay in Effective Date

    Pursuant to 5 U.S.C. 553(b)(3)(B), I find that good cause exists
for waiving the general notice of proposed rulemaking because it would
be contrary to the public interest. Also, pursuant to 5 U.S.C.
553(d)(3), I find that good cause exists to make this amendment
effective in less than 30 days. The general notice of proposed
rulemaking and delay in the effective date are being waived because
these regulations allow OPM to immediately implement statutory language
in Public Law 105-174 governing voluntary early retirements which was
effective May 1, 1998, and to give full effect to benefits extended by
that statute.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic
impact on a substantial number of small entities because it only
affects Federal employees.

Executive Order 12866, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget
in accordance with Executive Order 12866.

List of Subjects

5 CFR Part 831

    Administrative practice and procedure, Alimony, Claims, Disability
benefits, Firefighters, Government employees, Income taxes,
Intergovernmental relations, Law enforcement officers, Pensions,
Reporting and recordkeeping requirements, Retirement.

5 CFR Part 842

    Air traffic controllers, Alimony, Firefighters, Government
employees, Law enforcement officers, Pensions, Retirement.

U.S. Office of Personnel Management.
Janice R. Lachance,
Director.
    Accordingly, OPM is amending parts 831 and 842 of title 5, Code of
Federal Regulations, as follows:

[[Page 32596]]

PART 831--RETIREMENT

    1. The authority citation for part 831 continues to read as
follows:

    Authority: 5 U.S.C. 8347; Sec. 831.102 also issued under 5
U.S.C. 8334; Sec. 831.106 also issued under 5 U.S.C. 552a;
Sec. 831.108 also issued under 5 U.S.C. 8336(d)(2); Sec. 831.114
also issued under 5 U.S.C. 8336(d)(2) and section 7001 of Pub. L.
105-174; Sec. 831.201(b)(1) also issued under 5 U.S.C. 8347(g);
Sec. 831.201(b)(6) also issued under 5 U.S.C. 7701(b)(2);
Sec. 831.201(g) also issued under sections 11202(f), 11232(e), and
11246(b) of Pub. L. 105-33, 111 Stat. 251; Sec. 831.204 also issued
under section 102(e) of Pub. L. 104-8, 109 Stat. 102, as amended by
section 153 of Pub. L. 104-134, 110 Stat. 1321; Sec. 831.303 also
issued under 5 U.S.C. 8334(d)(2); Sec. 831.502 also issued under 5
U.S.C. 8337; Sec. 831.502 also issued under section 1(3), E.O.
11228, 3 CFR 1964-1965 Comp.; Sec. 831.663 also issued under 5
U.S.C. 8339(j) and (k)(2); Secs. 831.663 and 831.664 also issued
under section 11004 (c)(2) of Pub. L. 103-66, 107 Stat. 412;
Sec. 831.682 also issued under section 201(d) of Pub. L. 99-251, 100
Stat. 23; subpart S also issued under 5 U.S.C. 8345(k); subpart V
also issued under 5 U.S.C. 8343a and section 6001 of Pub. L. 100-
203, 101 Stat. 1330-275; Sec. 831.2203 also issued under section
7001(a)(4) of Pub. L. 101-508, 104 Stat. 1388-328.

Subpart A--Administration and General Provisions

    2. Section 831.108 is suspended from June 15, 1998 until October 1,
1999.
    3. Section 831.114 is added to subpart A effective from June 15,
1998 through September 30, 1999, to read as follows:

Sec. 831.114  Early retirement--major reorganization, major reduction
in force, or major transfer of function.

    (a) Upon an agency's request, as described in paragraph (c) of this
section, OPM may make a determination as provided in 5 U.S.C.
8336(d)(2), that:
    (1) The agency is undergoing a major reduction in force, major
reorganization, or major transfer of function; and
    (2) A significant percentage of the employees serving in the
employing agency will be involuntarily separated, or subject to a
reduction in basic pay.
    (b)(1) Based on a determination by OPM under paragraph (a) of this
section, OPM will provide to the agency the authority to offer
voluntary early retirements to its employees.
    (2) Under an OPM approved authority, the agency may offer voluntary
early retirements to its employees based on:
    (i) Organizational unit(s);
    (ii) Occupational series or level(s);
    (iii) Geographic area(s);
    (iv) Specific window period(s);
    (v) Any similar nonpersonal and objective factors; or
    (vi) Any combination of factors under this paragraph (b)(2) that
the agency determines to be appropriate and necessary to accomplish the
reductions which formed the basis for OPM's determination under
paragraph (a) of this section.
    (3) An employee who separates from the service voluntarily under
authority of 5 U.S.C. 8336(d)(2) after completing 25 years of service,
or becoming age 50 and completing 20 years of service, is entitled to
an annuity if, on the date of separation, the employee:
    (i) Is serving in a position covered by an offer by the agency as
described in paragraph (b)(2) of this section;
    (ii) Has been employed in the requesting agency at least 31 days
prior to the date the agency requested an OPM determination under
paragraph (a) of this section;
    (iii) Is not serving under a time-limited appointment; and
    (iv) Is not in receipt of a decision of involuntary separation for
misconduct or unacceptable performance.
    (4) OPM may approve an agency's request for voluntary early
retirement authority to cover the entire period of the major reduction
in force, major reorganization, or major transfer of function; or
through September 30, 1999, whichever is less.
    (c)(1) An agency's request for voluntary early retirement must be
signed by the head of the agency or by a specific designee with
delegated authority.
    (2) The agency's request for voluntary early retirement must
contain the following:
    (i) Identification of the agency or organizational unit(s) for
which a determination is requested;
    (ii) Reasons why the voluntary early retirement authority is
needed. This explanation must include a detailed summary of the
agency's personnel and budgetary situation that will result in an
excess of personnel because of a major reduction in force, major
reorganization, or major transfer of function as well as the date on
which the agency expects to involuntarily separate employees as a
result of the major reduction in force, major reorganization, or major
transfer of function;
    (iii) The time period during which voluntary early retirement will
be offered. At the agency's discretion, the agency may request
voluntary early retirement authority to cover the entire period of the
major reduction in force, major reorganization, or major transfer of
function; or through September 30, 1999, whichever is less;
    (iv) The total number of nontemporary employees in the agency;
    (v) The total number of nontemporary employees in the agency who
will be involuntarily separated or downgraded because of reduction in
force or relocation during a major reduction in force, major
reorganization, or major transfer of function;
    (vi) The total number of employees in the agency who are eligible
for voluntary early retirement; and
    (vii) An estimate of the total number of employees in the agency
who are expected to retire early during the period covered by the
request for voluntary early retirement authority.
    (d)(1) The agency may not expand the availability of voluntary
early retirements or offer early retirements to employees who are not
within the authority approved by OPM.
    (2) Except as provided in paragraph (d)(3) of this section, the
agency may limit voluntary early retirement offers during window
periods under paragraph (b)(2)(iv) of this section only by:
    (i) An established opening and closing date which is announced to
employees at the time of the initial offer; or
    (ii) Receipt of a specified number of applications for retirement,
provided that, at the time of the initial offer, the agency notified
employees that the agency retained the right to limit voluntary early
retirements on that basis.
    (3) The agency may subsequently establish a revised closing date,
or a revised number of applications, only when changes in the
conditions that served as the basis for the approval of the voluntary
early retirement authority have occurred. The revised closing date, or
number of applications, may be applicable to the entire authority, or
only to employees in specific organizational unit(s), occupational
series or level(s), or geographic area(s).
    (e) After approval of an authority, the agency is required to
immediately notify OPM of any subsequent changes in the conditions that
served as the basis for the approval of the voluntary early retirement
authority.
    (f) Agencies are required to provide OPM with interim and final
reports on each voluntary early retirement authorization, as covered in
OPM's approval letter to the agency. OPM may suspend an agency's early
retirement authority if the agency is not in compliance with the
reporting requirements or reporting schedule provided to the agency in
the approval letter from OPM.
    (g) Agencies are responsible for ensuring that employees are not
coerced into voluntary early retirement. If an agency finds any
instances of coercion,

[[Page 32597]]

it must take appropriate corrective action.
    (h) OPM may terminate an agency's authority at any time that OPM
determines the agency is no longer undergoing the major reorganization,
major reduction in force, or major transfer of function that formed the
basis for OPM's approval of the authority. OPM may take steps to amend,
limit, or terminate an authority in order to ensure that early
retirement programs are operated in a manner which is consistent with
applicable laws or regulatory requirements.
    (i) Pursuant to section 7001 of Public Law 105-174 (112 Stat. 91),
the provisions of this section are applicable until September 30, 1999.

PART 842--FEDERAL EMPLOYEES RETIREMENT SYSTEM--BASIC ANNUITY

    4. The authority citation for part 842 continues to read as
follows:

    Authority: 5 U.S.C. 8461(g); Secs. 842.104 and 842.106 also
issued under 5 U.S.C. 8461(n); Sec. 842.105 also issued under 5
U.S.C. 8402(c)(1) and 7701(b)(2); Sec. 842.106 also issued under
section 102(e) of Pub. L. 104-8, 109 Stat. 102, as amended by
section 153 of Pub. L. 104-134, 110 Stat. 1321; Sec. 842.107 also
issued under sections 11202(f), 11232(e), and 11246(b) of Pub. L.
105-33, 111 Stat. 251; Sec. 842.205 also issued under 5 U.S.C.
8414(b)(1)(B); Sec. 842.213 also issued under 5 U.S.C. 8414(b)(1)(B)
and section 7001 of Pub. L. 105-174; Secs. 842.604 and 842.611 also
issued under 5 U.S.C. 8417; Sec. 842.607 also issued under 5 U.S.C.
8416 and 8417; Sec. 842.614 also issued under 5 U.S.C. 8419;
Sec. 842.615 also issued under 5 U.S.C. 8418; Sec. 842.703 also
issued under section 7001(a)(4) of Pub. L. 101-508; Sec. 842.707
also issued under section 6001 of Pub. L. 100-203; Sec. 842.708 also
issued under section 4005 of Pub. L. 101-239 and section 7001 of
Pub. L. 101-508; subpart H also issued under 5 U.S.C. 1104.

Subpart B--Eligibility

    5. Section 842.205 is suspended from June 15, 1998 until October 1,
1999.
    6. Section 842.213 is added to subpart B effective from June 15,
1998 through September 30, 1999, to read as follows:

Sec. 842.213  Early retirement--major reorganization, major reduction
in force, or major transfer of function.

    (a) Upon an agency's request, as described in paragraph (c) of this
section, OPM may make a determination as provided in 5 U.S.C.
8414(b)(1)(B), that:
    (1) The agency is undergoing a major reduction in force, major
reorganization, or major transfer of function; and
    (2) A significant percentage of the employees serving in the
employing agency will be involuntarily separated, or subject to a
reduction in basic pay.
    (b)(1) Based on a determination by OPM under paragraph (a) of this
section, OPM will provide to the agency the authority to offer
voluntary early retirements to its employees.
    (2) Under an OPM approved authority, the agency may offer voluntary
early retirements to its employees based on:
    (i) Organizational unit(s);
    (ii) Occupational series or level(s);
    (iii) Geographic area(s);
    (iv) Specific window period(s);
    (v) Any similar nonpersonal and objective factors; or
    (vi) Any combination of factors under this paragraph (b)(2) that
the agency determines to be appropriate and necessary to accomplish the
reductions which formed the basis for OPM's determination under
paragraph (a) of this section.
    (3) An employee who separates from the service voluntarily under
authority of 5 U.S.C. 8414(b)(1)(B) after completing 25 years of
service, or becoming age 50 and completing 20 years of service, is
entitled to an annuity if, on the date of separation, the employee:
    (i) Is serving in a position covered by an offer by the agency as
described in paragraph (b)(2) of this section;
    (ii) Has been employed in the requesting agency at least 31 days
prior to the date the agency requested an OPM determination under
paragraph (a) of this section;
    (iii) Is not serving under a time-limited appointment; and
    (iv) Is not in receipt of a decision of involuntary separation for
misconduct or unacceptable performance.
    (4) OPM may approve an agency's request for voluntary early
retirement authority to cover the entire period of the major reduction
in force, major reorganization, or major transfer of function; or
through September 30, 1999, whichever is less.
    (c)(1) An agency's request for voluntary early retirement must be
signed by the head of the agency or by a specific designee with
delegated authority.
    (2) The agency's request for voluntary early retirement must
contain the following:
    (i) Identification of the agency or organizational unit(s) for
which a determination is requested;
    (ii) Reasons why the voluntary early retirement authority is
needed. This explanation must include a detailed summary of the
agency's personnel and budgetary situation that will result in an
excess of personnel because of a major reduction in force, major
reorganization, or major transfer of function as well as the date on
which the agency expects to involuntarily separate employees as a
result of the major reduction in force, major reorganization, or major
transfer of function;
    (iii) The time period during which voluntary early retirement will
be offered. At the agency's discretion, the agency may request
voluntary early retirement authority to cover the entire period of the
major reduction in force, major reorganization, or major transfer of
function; or through September 30, 1999, whichever is less;
    (iv) The total number of nontemporary employees in the agency;
    (v) The total number of nontemporary employees in the agency who
will be involuntarily separated or downgraded because of reduction in
force or relocation during a major reduction in force, major
reorganization, or major transfer of function;
    (vi) The total number of employees in the agency who are eligible
for voluntary early retirement; and
    (vii) An estimate of the total number of employees in the agency
who are expected to retire early during the period covered by the
request for voluntary early retirement authority.
    (d)(1) The agency may not expand the availability of voluntary
early retirements or offer early retirements to employees who are not
within the authority approved by OPM.
    (2) Except as provided in paragraph (d)(3) of this section, the
agency may limit voluntary early retirement offers during window
periods under paragraph (b)(2)(iv) of this section only by:
    (i) An established opening and closing date which is announced to
employees at the time of the initial offer; or
    (ii) Receipt of a specified number of applications for retirement,
provided that, at the time of the initial offer, the agency notified
employees that the agency retained the right to limit voluntary early
retirements on that basis.
    (3) The agency may subsequently establish a revised closing date,
or a revised number of applications, only when changes in the
conditions that served as the basis for the approval of the voluntary
early retirement authority have occurred. The revised closing date, or
number of applications, may be applicable to the entire authority, or
only to employees in specific organizational unit(s), occupational
series or level(s), or geographic area(s).
    (e) After approval of an authority, the agency is required to
immediately notify OPM of any subsequent changes in the

[[Page 32598]]

conditions that served as the basis for the approval of the voluntary
early retirement authority.
    (f) Agencies are required to provide OPM with interim and final
reports on each voluntary early retirement authorization, as covered in
OPM's approval letter to the agency. OPM may suspend an agency's early
retirement authority if the agency is not in compliance with the
reporting requirements or reporting schedule provided to the agency in
the approval letter from OPM.
    (g) Agencies are responsible for ensuring that employees are not
coerced into voluntary early retirement. If an agency finds any
instances of coercion, it must take appropriate corrective action.
    (h) OPM may terminate an agency's authority at any time that OPM
determines the agency is no longer undergoing the major reorganization,
major reduction in force, or major transfer of function that formed the
basis for OPM's approval of the authority. OPM may take steps to amend,
limit, or terminate an authority in order to ensure that early
retirement programs are operated in a manner which is consistent with
applicable laws or regulatory requirements.
    (i) Pursuant to section 7001 of Public Law 105-174 (112 Stat. 91),
the provisions of this section are applicable until September 30, 1999.

[FR Doc. 98-15656 Filed 6-12-98; 8:45 am]
BILLING CODE 6325-01-P