[Federal Register Volume 62, Number 168 (Friday, August 29, 1997)]
[Rules and Regulations]
[Pages 45712-45714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23080]


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RAILROAD RETIREMENT BOARD

20 CFR Part 261

RIN 3220-AB15


Finality of Decisions Regarding Railroad Retirement Annuities

AGENCY: Railroad Retirement Board.

ACTION: Final rule.

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SUMMARY: The Railroad Retirement Board (Board) hereby adopts 
regulations pertaining to the finality of decisions under the Railroad 
Retirement Act of 1974 (Act).

EFFECTIVE DATE: This rule will be effective September 29, 1997.

ADDRESSES: Secretary to the Board, Railroad Retirement Board, 844 North 
Rush Street, Chicago, Illinois 60611.

FOR FURTHER INFORMATION CONTACT:
Thomas W. Sadler, Senior Attorney, Railroad Retirement Board, 844 North 
Rush Street, Chicago, Illinois 60611, telephone (312) 751-4513, TTD 
(312) 751-4701.

SUPPLEMENTARY INFORMATION: The Board's rules and procedures regarding 
the finality of decisions are presently contained in Board Orders, 
which are not readily available to the public. The Board Order 
regarding finality of decisions provides that finality of certain 
decisions is based on a number of factors; adjudication based on these 
factors is difficult to administer. Also the Board Order does not 
contain any time limits on reopening.
    The regulation addresses the finality of benefit decisions. This 
rule is similar to the regulation of the Social Security Administration 
(SSA) entitled ``Reopening and Revising Determinations and Decisions'' 
(20 CFR 404.987-404.996).
    Section 261.1 describes who may open a final decision issued by the 
agency. Section 261.2 describes when a final decision may be reopened. 
All final decisions, except decisions awarding separation allowance 
lump sum payments, may be reopened within 12 months of the date of 
notice of such decision (see Sec. 261.2(d)); within 4 years of the date 
of notice if new and material evidence is furnished or if there was an 
adjudicative error not consistent with the evidence of record at the 
time of adjudication; or at any time under the conditions set forth in 
Sec. 261.2(c).
    Section 261.3 provides that a change of legal interpretation or 
administrative ruling upon which a decision was based is not a basis 
for reopening.
    Section 261.4 provides that the annuity beginning date will not be 
changed if the annuitant was later found to be engaged in compensated 
service for an employer, as defined in part 202 of the Board's 
regulations, and the annuitant had no basis for knowing that he was 
engaged in such service. This section also provides that the award of 
an annuity would not be withdrawn if based upon incorrect records of 
service where the erroneously credited service months do not exceed 6 
months and the annuitant was not at fault in causing the error.
    Section 261.5 provides that a decision may be reopened after the 1 
year and 4 year time limits set forth in Sec. 261.2 of this part if the 
Board had begun an investigation within those time limits. However, if 
the Board does not diligently pursue the investigation it will not 
reopen the decision if the decision was favorable to the annuitant.
    Sections 261.6-261.8 are procedural and provide that if a decision 
is reopened, the annuitant will be given notice and will have a right 
to reconsideration and/or a hearing. Any hearing shall be conducted in 
accordance with part 260 of the Board's regulations (20 CFR 260).
    Section 261.9 provides that if a decision on a claim is reopened it 
may also cause a reopening of a decision on a previous claim based upon 
the same compensation record, even though the time limits for reopening 
a decision on the first claim have passed.

[[Page 45713]]

    Section 261.10 provides that where new evidence shows that the date 
of birth used in the initial decision was incorrect or where the record 
of compensation has been changed a decision may be revised even beyond 
the time limits of Sec. 261.2 of this part if such reopening is 
favorable to the annuitant, but any increase in benefits payable as the 
result of the reopening shall be paid prospectively only.
    Finally, Sec. 261.11 provides that the three-member Board has the 
discretion to reopen or not to reopen any decision under these 
regulations.
    On December 21, 1995, the Board published this rule as a proposed 
rule (60 FR 66203-66205). The Labor Member of the Board dissented from 
publication of the proposed rule. His reasons for doing so were set 
forth in the supplementary section of the proposed rule (60 FR 66204). 
One comment was received, indicating agreement with the views of the 
Labor Member. The views of the commentor were considered, but a 
majority of the Board does not agree with those views. In addition to 
the comment discussed above, the Board received letters from two 
individuals requesting that final action on this rule be deferred to 
allow rail labor and rail management to reach agreement on the 
substance of the rule. Based upon comments received by rail labor and 
management, to the effect that the Board should consider closely 
paralleling the Social Security Administration's regulations's 
regarding reopening, the Board has added a new paragraph (7) to 
Sec. 261.2(c). This paragraph provides that the Board will reopen an 
unfavorable decision to correct an error made by the Board which should 
have been obvious at the time the initial decision was made. This 
paragraph is identical to 20 CFR 404.988(c)(8) of the regulations of 
the Social Security Administration. Proposed Sec. 261.2(c)(9) was 
modified and Sec. 261.2(c)(10) was removed to make this regulation more 
consistent with Social Security regulations.
    The Board, with the concurrence of the Office of Management and 
Budget, has determined that this is not a significant regulatory action 
under Executive Order 12866; therefore, no regulatory impact analysis 
is required. There are no information collections associated with this 
rule.

List of Subjects in 20 CFR Part 261

    Pensions, Railroad employees, Railroad retirement.

    For the reasons set out in the preamble, chapter II of title 20 of 
the Code of Federal Regulations is amended by adding part 261 to read 
as follows:

PART 261--ADMINISTRATIVE FINALITY

Sec.
261.1  Reopening and revising decisions.
261.2  Conditions for reopening.
261.3  Change of legal interpretation or administrative ruling.
261.4  Decisions which shall not be reopened.
261.5  Late completion of timely investigation.
261.6  Notice of revised decision.
261.7  Effect of revised decision.
261.8  Time and place to request review of a revised decision.
261.9  Finality of findings when later claim is filed on same 
earnings record.
261.10  Increase in future benefits where time period for reopening 
has expired.
261.11  Discretion of the three-member Board to reopen or not to 
reopen a final decision.

    Authority: 45 U.S.C. 231f.


Sec. 261.1  Reopening and revising decisions.

    (a) This part sets forth the Board's rules governing finality of 
decisions. After the expiration of the time limits for review as set 
forth in part 260 of this chapter, decisions of the agency may be 
reopened and revised under the conditions described in this part, by 
the bureau, office, or entity that made the earlier decision or by a 
bureau, office, or other entity at a higher level, which has the claim 
properly before it.
    (b) A final decision as that term is used in this part means any 
decision of the type listed in Sec. 260.1 of this chapter where the 
time limits for review as set forth in part 260 of this chapter or in 
the Railroad Retirement Act have expired.
    (c) Reopening a final decision under this part means a conscious 
determination on the part of the agency to reconsider an otherwise 
final decision for purposes of revising that decision.
    (d) New and material evidence as that phrase is used in this part 
means evidence that may reasonably be expected to affect a final 
decision, which was unavailable to the agency at the time the decision 
was made, and which the claimant could not reasonably have been 
expected to have submitted at that time.


Sec. 261.2  Conditions for reopening.

    A final decision may be reopened:
    (a) Within 12 months of the date of the notice of such decision, 
for any reason;
    (b) Within four years of the date of the notice of such decision, 
if there is new and material evidence or there was adjudicative error 
not consistent with the evidence of record at the time of adjudication; 
or
    (c) At any time if:
    (1) The decision was obtained by fraud or similar fault;
    (2) Another person files a claim on the same record of compensation 
and allowance of the claim adversely affects the first claim;
    (3) A person previously determined to be dead on whose earnings 
record a survivor annuity is based is found to be alive;
    (4) A claim was denied because of the absence of proof of death of 
the employee, and the death is later established:
    (i) By reason of an unexplained absence from his or her residence 
for a period of 7 years; or
    (ii) By location or identification of his or her body;
    (5) The Social Security Administration has awarded duplicate 
benefits on the same record of compensation;
    (6) The decision was that the claimant did not have an insured 
status, and compensation has been credited to the employee's record of 
compensation in accordance with part 211 of this chapter:
    (i) To enter items transferred by the Social Security 
Administration which were credited under the Social Security Act when 
they should have been credited to the employee's railroad retirement 
compensation record; or
    (ii) To correct an error made in the allocation of earnings to an 
individual which, if properly allocated, would have given him or her an 
insured status at the time of the decision and the evidence of these 
earnings was in the possession of the Railroad Retirement Board or the 
Social Security Administration at the time of the decision;
    (7) The decision is wholly or partially unfavorable to a party, but 
only to correct clerical error or an error that appears on the face of 
the evidence that was considered when the determination or decision was 
made;
    (8) The decision found the claimant entitled to an annuity or to a 
lump sum payment based on the earnings record of a deceased person, and 
it is later established that:
    (i) The claimant was convicted of a felony or an act in the nature 
of a felony for intentionally causing that person's death; or
    (ii) If the claimant was subject to the juvenile justice system, he 
or she was found by a court of competent jurisdiction to have 
intentionally caused that person's death by committing an act which, if 
committed by an adult, would have been considered a felony or an act in 
the nature of a felony;

[[Page 45714]]

    (9) The claimant shows that it is to his or her advantage to select 
a later annuity beginning date and refunds, by cash payment or setoff, 
past payments applying to the period prior to the later beginning date, 
subject, however, to the provisions of subpart D of part 217 and 
Sec. 218.9 of this chapter;
    (10) The decision is incorrect because of a failure to apply a 
reduction, or the proper reduction, to the tier I component of an 
annuity, but the Board shall apply the reduction only for the months 
following the month the Board first takes corrective action.
    (d) Revision of the amount or payment of a separation allowance 
lump sum amount pursuant to section 6(e) of the Railroad Retirement Act 
is limited to 60 days from the date of notification of the award of the 
separation allowance lump sum payment.


Sec. 261.3  Change of legal interpretation or administrative ruling.

    A change of legal interpretation or administrative ruling upon 
which a decision is based does not render a decision erroneous and does 
not provide a basis for reopening.


Sec. 261.4  Decisions which shall not be reopened.

    The following decisions shall not be reopened:
    (a) An award of an annuity beginning date to an applicant later 
found to have been in compensated service to an employer under part 202 
of this chapter on that annuity beginning date and who is found not to 
be at fault in causing the erroneous award; provided, however, that 
this exception shall not operate to permit payment of benefits for any 
month in which the claimant is found to be engaged in compensated 
service.
    (b) An award of an annuity based on a subsequently discovered 
erroneous crediting of months of service and compensation to a claimant 
where:
    (1) The loss of such months of service and compensation will cause 
the applicant to lose his or her eligibility for an annuity previously 
awarded;
    (2) The erroneously credited months of service do not exceed six 
months; and
    (3) The annuitant is found not to be at fault in causing the 
erroneous crediting.
    (c) An erroneous award of an annuity where the error is no greater 
than one dollar per month per annuity affected.
    (d) An erroneous award of a lump sum or accrued annuity payment 
where the error is no greater than $25.00.


Sec. 261.5  Late completion of timely investigation.

    (a) A decision may be revised after the applicable time period in 
Sec. 261.2(a) or Sec. 261.2(b) of this part expires if the Railroad 
Retirement Board begins an investigation into whether to revise the 
decision before the applicable time period expires and the agency 
diligently pursues the investigation to the conclusion. The 
investigation may be based on a request by a claimant or on action by 
the Railroad Retirement Board.
    (b) Diligently pursued for purposes of this section means that in 
view of the facts and circumstances of a particular case, the necessary 
action was undertaken and carried out as promptly as the circumstances 
permitted. Diligent pursuit will be presumed to have been met if the 
investigation is concluded and, if necessary, the decision is revised 
within 6 months from the date the investigation began.
    (c) If the investigation is not diligently pursued to its 
conclusion, the decision will be revised if a revision is applicable 
and if it is favorable to the claimant. It will not be revised if it 
would be unfavorable to the claimant.


Sec. 261.6  Notice of revised decision.

    (a) When a decision is revised, notice of the revision will be 
mailed to the parties to the decision at their last known address. The 
notice will state the basis for the revised decision and the effect of 
the revision. The notice will also inform the parties of the right to 
further review.
    (b) If a hearings officer or the three-member Board proposes to 
revise a decision, and the revision would be based only on evidence 
included in the record on which the prior decision was based, all 
parties will be notified in writing of the proposed action. If a 
revised decision is issued by a hearings officer, any party may request 
that it be reviewed by the three-member Board, or the three-member 
Board may review the decision on its own initiative.


Sec. 261.7  Effect of revised decision.

    A revised decision is binding unless:
    (a) The revised decision is reconsidered or appealed in accord with 
part 260 of this chapter;
    (b) The three-member Board reviews the revised decision; or
    (c) The revised decision is further revised consistent with this 
part.


Sec. 261.8  Time and place to request review of a revised decision.

    A party to a revised decision may request, as appropriate, further 
review of the decision in accordance with the rules set forth in part 
260 of this chapter.


Sec. 261.9  Finality of findings when later claim is filed on same 
earnings record.

    If two claims for benefits are filed on the same record of 
compensation, findings of fact made in a decision in the first claim 
may be revised in determining or deciding the second claim, even though 
the time limit for revising the findings made in the first claim has 
passed. However, a finding in connection with a claim that a person was 
fully or currently insured at the time of filing an application, at the 
time of death, or any other pertinent time, may be revised only under 
the conditions stated in Sec. 261.2 of this part.


Sec. 261.10  Increase in future benefits where time period for 
reopening has expired.

    If, after the time period for reopening under Sec. 261.2(b) of this 
part has expired, new evidence is furnished showing a different date of 
birth or new evidence is furnished which would cause a correction in a 
record of compensation as provided for in part 211 of this chapter and, 
as a result of the new evidence, increased benefits would be payable, 
the Board will pay increased benefits, but only for the months 
following the month the new evidence is received.


Sec. 261.11  Discretion of the three-member Board to reopen or not to 
reopen a final decision.

    In any case in which the three-member Board may deem proper, the 
Board may direct that any decision, which is otherwise subject to 
reopening under this part, shall not be reopened or direct that any 
decision, which is otherwise not subject to reopening under this part, 
shall be reopened.

    Dated: August 21, 1997.

    By Authority of the Board.

    For the Board,
Beatrice Ezerski,
Secretary to the Board.
[FR Doc. 97-23080 Filed 8-28-97; 8:45 am]
BILLING CODE 7905-01-P