[Federal Register Volume 63, Number 114 (Monday, June 15, 1998)]
[Rules and Regulations]
[Pages 32595-32598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15656]


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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