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Rules and Regulations Federal Register

50179 

Vol. 73, No. 166 

Tuesday, August 26, 2008 

OFFICE OF PERSONNEL 

MANAGEMENT 

5 CFR Parts 531, 535, and 536 

RIN 3206–AK87 

Critical Position Pay Authority 

AGENCY: U.S. Office of Personnel 

Management. 

ACTION: Final rule. 

SUMMARY: The U.S. Office of Personnel 

Management (OPM) is issuing final 

regulations to govern the use of a critical 

position pay authority that allows 

higher rates of pay for positions that 

require a very high level of expertise in 

a scientific, technical, professional, or 

administrative field and are critical to 

the agency’s mission. By law, agency 

requests for critical position pay 

authority must be approved by OPM in 

consultation with the Office of 

Management and Budget. 

DATES: The regulations are effective on 

September 25, 2008. 

FOR FURTHER INFORMATION CONTACT: Joe 

Ratcliffe, (202) 606–2838; FAX: (202) 

606–4264; or e-mail: pay-performancepolicy@opm.gov. 

SUPPLEMENTARY INFORMATION: On April 

25, 2007, the U.S. Office of Personnel 

Management issued proposed 

regulations (72 FR 20440) to govern the 

use of a critical position pay authority 

that enables the head of a Federal 

agency to request higher rates of pay for 

positions that require a very high level 

of expertise in a scientific, technical, 

professional, or administrative field and 

are critical to an agency’s mission. The 

60-day comment period ended on June 

25, 2007. OPM received comments from 

nine individuals, one employee 

association, and five agencies. The 

comments are addressed in this final 

rule. 

One commenter did not approve of 

the critical pay authority statute and 

recommended the authority not be used. 

OPM disagrees with that assessment and 

believes the Government must use all 

available human resources management 

tools at its disposal to ensure Federal 

agencies are able to recruit and retain 

qualified employees. 

Several commenters asked whether 

specific positions might qualify for a 

critical position pay rate or 

recommended the critical position pay 

authority be used for certain positions. 

Employing agencies will decide 

internally whether to request use of a 

critical position pay authority. While 

OPM encourages use of a critical 

position pay authority wherever it might 

be needed and will consider all agency 

requests for the authority, we cannot 

speculate in advance as to whether 

particular positions might qualify. 

An agency wrote a letter supporting 

the proposed regulations. 

Section 535.106(a) of the proposed 

regulations provided a critical position 

pay rate is not considered a rate of basic 

pay for application of any saved pay or 

pay retention provisions (e.g., 5 U.S.C. 

5363). An employee association and an 

agency expressed concern about an 

employee’s pay if a critical position pay 

authority is terminated. Both the 

employee association and the agency 

recommended revising the regulations 

to allow for pay retention in such cases. 

We disagree. Under 5 U.S.C. 5377(e), a 

critical position pay authority must be 

terminated if conditions no longer 

warrant payment of the critical pay rate. 

Providing an entitlement to a saved rate 

or retained rate based on a critical 

position pay rate would be inconsistent 

with the requirement to terminate the 

authority. To conform with § 535.106(a), 

these final regulations revise 

§ 536.102(b) to clarify that an agency 

may not provide grade or pay retention 

under 5 CFR part 536 to an employee in 

a covered pay system who is reduced in 

pay upon termination of a critical 

position pay authority. However, upon 

termination of critical position pay 

authority the employee’s pay will be set 

under § 535.105(e) at the rate to which 

the employee would be entitled had he 

or she not received critical pay. We also 

note 5 U.S.C. 5377(e)(2) provides that 

termination of a critical position pay 

authority may not take effect until the 

authority has been available for the 

position for at least 1 calendar year, so 

long as the conditions justifying the 

authority are still met. 

An employee association 

recommended that all efforts be made to 

utilize current employees and create 

opportunities within all career paths 

necessary to meet the needs of the 

agency prior to using the critical 

position pay authority. We agree, but no 

changes to the proposed regulations are 

needed. Section 535.104(a) provides 

that an agency may request a critical 

position pay authority only after 

determining that the position in 

question cannot be filled with an 

exceptionally well-qualified individual 

through the use of other available 

human resources flexibilities and pay 

authorities. Section 535.104(d)(11) 

requires an agency applying for a 

critical position pay authority to 

document why it could not, through 

diligent and comprehensive recruitment 

efforts and without using a critical 

position pay authority, fill the position 

within a reasonable period with an 

individual who could perform the 

duties and responsibilities in a manner 

sufficient to fulfill the agency’s mission. 

An employee association 

recommended amending § 535.107 to 

provide for public access to reports to 

Congress on the use of the critical 

position pay authority. OPM provides 

for public access to reports to Congress 

through the OPM Web site. No revision 

to § 535.107 is necessary. 

An agency asked whether the critical 

position pay authority can be applied to 

a group or class of positions. Under 5 

U.S.C. 5377(b)(1), each individual 

position must be analyzed to determine 

eligibility. However, relevant factors 

considered may be similar for a group 

of similar positions. In such cases, OPM 

would assess each position in the group 

against common factors. Once each 

individual position in a group has been 

certified as meeting the section 

5377(b)(1) requirements, approval may 

apply to the group. Each individual 

employee approved for a critical 

position pay rate must be ‘‘exceptionally 

well qualified for the position’’ as 

required by 5 U.S.C. 5377(b)(2). 

An agency commented that the 

proposed regulations did not address 

whether positions with a critical 

position pay authority are affected by 

adjustments to levels I and II of the 

Executive Schedule. We disagree. 

Section 535.105(c) provides that the 


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head of an agency may make subsequent 

adjustments in the rate of pay for a 

position with a critical position pay 

authority each January at the same time 

general pay adjustments are authorized 

for Executive Schedule employees 

under 5 U.S.C. 5318. Also, such 

adjustments may not exceed the new 

rate for Executive Schedule level II or 

other applicable maximum rate 

established for the critical position. We 

added a sentence to § 535.104(c) to 

clarify that the President may establish 

a maximum limitation on a critical rate 

of pay that is approved at a rate above 

level I of the Executive Schedule. 

An agency asked OPM to consider 

whether the proposed regulations could 

allow for more timely and meaningful 

use of a critical position pay authority 

and whether the proposed regulations 

might be revised so that agencies could 

use the authority more quickly to better 

compete with non-Federal employers. It 

is not feasible, given the level of review 

required under 5 U.S.C. 5377, for the 

regulations to provide for immediate 

application of a critical position pay 

authority. However, OPM will work 

with agencies to provide pre-hire 

approval under the critical position pay 

authority. 

Two agencies asked whether the 

documentation requirements might be 

substantially reduced for agencies 

applying for a critical position pay 

authority. Government programs 

involving increased spending are 

appropriately subject to considerable 

public scrutiny. OPM believes the 

documentation requirements in the 

proposed regulations are appropriate. 

An agency said the proposed 

regulations appeared not to preclude 

use of a critical position pay authority 

for excepted service positions, and 

asked whether this was correct. 

Agencies are not restricted from seeking 

use of a critical position pay authority 

for excepted service positions. 

An agency said that some of its staff 

believed the term administrative field in 

§ 535.103(b) should be defined in the 

regulations. OPM believes such a 

definition is unnecessary. In 

considering whether to apply for a 

critical position pay authority, an 

agency is free to decide internally 

whether it believes the position is one 

that requires a very high level of 

expertise in a scientific, technical, 

professional, or administrative field. 

OPM will consider all agency requests 

for a critical position pay authority. 

An agency asked whether a critical 

position pay authority could be 

approved for a particular geographic 

area or across the board for certain types 

of positions rather than for one position 

at a time. By statute, the authority is 

intended to be applied by position and 

not by geographic area. In addition, 

under 5 U.S.C. 5377 only 800 positions 

Governmentwide may be approved for a 

critical position pay authority at any 

given time. An agency asked whether 

the regulations could be revised so that 

heads of agencies could delegate the 

decision of whether to apply for a 

critical position pay authority to 

subordinate positions, such as heads of 

major components. The definition of 

head of an agency in § 535.102 already 

provides for such delegated authority. 

An agency asked OPM to clarify how 

recruitment, relocation, and retention 

incentives are to be calculated in 

conjunction with a critical position pay 

authority, particularly in calculating the 

locality pay portion. Employees 

receiving critical position pay may not 

receive locality pay under 5 U.S.C. 5304 

or similar authority. However, 

employees who are eligible for 

recruitment, relocation, or retention 

incentives under 5 CFR 575 subparts A, 

B, and C will remain eligible for the 

incentives while receiving critical 

position pay, subject to applicable pay 

limitations (e.g., the aggregate limitation 

on pay under 5 U.S.C. 5307). An 

employee’s rate of basic pay is used to 

compute the maximum amount of a 

recruitment or relocation incentive that 

may be paid to an employee. Retention 

incentive lump sum and installment 

payments are computed by multiplying 

the retention incentive percentage rate 

established for the employee by the total 

amount of the basic pay the employee 

earned during the service or installment 

period. A critical position pay rate 

would be the rate of basic pay used for 

these recruitment, relocation, or 

retention incentive calculations. There 

are examples of calculating incentives 

in the fact sheets ‘‘Recruitment and 

Relocation Incentive Payment and 

Termination Calculations’’ and 

‘‘Retention Incentive Payment and 

Termination Calculations’’ on OPM’s 

Web site. 

An agency recommended revising 

§ 535.105 to clarify eligibility for 

premium pay. OPM believes that such 

revision of the regulations is 

unnecessary. However, we note in 

response to the comment that eligibility 

for premium pay under 5 U.S.C. chapter 

55, subchapter V, depends on the 

employee’s pay system (disregarding the 

use of the critical pay authority) and the 

coverage rules in 5 U.S.C. 5541(2) and 

5 CFR 550.101. 

An agency recommended revising 

§ 535.104(d) to specify procedures and 

circumstances for submitting urgent 

requests for a critical position pay 

authority, such as in cases where 

expedited processing of requests for a 

critical position pay authority is in the 

interest of national security or public 

health or safety. OPM believes that 

handling of cases where expedited 

processing might be warranted is an 

administrative matter that need not be 

addressed in the regulations. However, 

if an agency believes expedited 

processing of a request for a critical 

position pay authority is in the interest 

of national security or public health or 

safety or is otherwise warranted, the 

agency should indicate that in its 

request. 

An agency recommended revising 

§ 535.105(e) to address agency flexibility 

to apply highest previous rate rules in 

setting basic pay if a critical position 

pay authority is discontinued for a 

General Schedule (GS) position. We 

agree. Revised § 535.105(e) provides if 

an agency discontinues critical position 

pay for a given GS position (on its own 

initiative or because OPM, in 

consultation with OMB, terminates the 

authority), the employee’s rate of basic 

pay will be set at the rate to which the 

employee would be entitled had he or 

she not received critical pay, as 

determined by the head of the agency, 

unless the employee is eligible for a 

higher payable rate under the GS 

maximum payable rate rule in § 531.221 

and the agency chooses to apply that 

rule. The pay set under the maximum 

payable rate rule may not exceed step 10 

of the GS grade. To conform with the 

revised § 535.105(e), these final 

regulations revise § 531.221(a) to 

provide that the GS maximum payable 

rate rule may be used upon 

‘‘termination of a critical position pay 

authority under 5 CFR part 535’’. These 

final regulations also revise § 531.221(a) 

to provide that when highest previous 

rate is based on a critical position pay 

rate, an agency must follow the rules in 

§ 531.221(d). Section 531.221(d) 

provides the rules for when highest 

previous rate is based on a rate under a 

non-GS pay system. It is appropriate to 

follow the rules in § 531.221(d) even 

though GS employees who receive 

critical position pay will be covered by 

the GS pay plan code because a critical 

pay rate is not considered a GS rate. 

An agency recommended revising 

§ 535.105(e) to require agencies to 

provide documentation to employees 

under a critical position pay authority 

showing the rate of basic pay the 

employee would receive absent the 

critical position pay authorization, since 

the responsibility for subsequent pay 

rate determinations could rest with 

another agency should the employee 

transfer to another agency. The agency 


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said that such documentation might 

appear in the ‘‘remarks’’ section of the 

employee’s SF–50. We think such a 

requirement is not necessary in the 

regulations. 

An agency recommended revising 

§ 535.106 to address daily and biweekly 

aggregate limitations to ensure internal 

pay equity. We are not making such a 

revision because the limitations on 

critical position pay in 5 U.S.C. 5377 are 

on annual rates, not daily or biweekly 

aggregate pay. 

An agency suggested that OPM issue 

guidance that discusses the process of 

reviewing requests for a critical position 

pay authority and provides greater 

detail concerning the review process 

and its standards and timelines. OPM 

believes the regulations provide 

sufficient detail for agencies that might 

consider requesting an authority. The 

broad language used in the regulations 

to describe the types of positions that 

might be considered for a critical 

position pay authority allows for 

flexibility, and it is not practical to 

publish detailed standards that could 

apply effectively in every situation. 

Timing in the review process is an 

administrative matter and may vary by 

request. 

An agency suggested OPM define 

what constitutes ‘‘a very high level of 

expertise.’’ OPM believes it is not 

possible to write a definition of that 

term that would cover all the different 

positions and contexts for which it 

might be appropriate to apply a critical 

position pay authority. This is a matter 

for agency judgment. 

In § 535.107, we removed language 

regarding the use of estimated rates to 

make the regulation conform with the 

language in the statute at 5 U.S.C. 

5377(h)(2). Also, we made certain other 

minor changes in the language of the 

proposed regulations to improve clarity. 

Executive Order 12866, Regulatory 

Review 

The Office of Management and Budget 

has reviewed this rule in accordance 

with Executive Order 12866. 

Regulatory Flexibility Act 

I certify that these regulations will not 

have a significant economic impact on 

a substantial number of small entities 

because they will affect only Federal 

agencies and employees. 

List of Subjects in 5 CFR Parts 531, 535, 

and 536 

Administrative practice and 

procedure; Freedom of information; 

Government employees; Law 

enforcement officers; Reporting and 

recordkeeping requirements; Wages. 

U.S. Office of Personnel Management. 

Michael W. Hager, 

Acting Director. 

■ Accordingly, the U.S. Office of 

Personnel Management amends title 5, 

Code of Federal Regulations, by 

amending part 531, adding a new part 

535, and amending part 536 as follows: 

PART 531—PAY UNDER THE 

GENERAL SCHEDULE 

■ 1. The authority citation for part 531 

continues to read as follows: 

Authority: 5 U.S.C. 5115, 5307, and 5338; 

sec. 4 of Pub. L. 103–89, 107 Stat. 981; and 

E.O. 12748, 56 FR 4521, 3 CFR, 1991 Comp., 

p. 316; Subpart B also issued under 5 U.S.C. 

5303(g), 5305, 5333, 5334(a) and (b), and 

7701(b)(2); Subpart D also issued under 5 

U.S.C. 5335(g) and 7701(b)(2); Subpart E also 

issued under 5 U.S.C. 5336; Subpart F also 

issued under 5 U.S.C. 5304, 5305, and 5338; 

and E.O. 12883, 58 FR 63281, 3 CFR, 1993 

Comp., p. 682 and E.O. 13106, 63 FR 68151, 

3 CFR, 1998 Comp., p. 224. 

Subpart B—Determining Rate of Basic 

Pay 

■ 2. Amend § 531.221 as follows: 

■ a. Revise the first sentence of 

paragraph (a)(1) to read as follows; and 

■ b. Add paragraph (a)(4) to read as 

follows: 

§ 531.221 Maximum payable rate rule. 

(a) General. (1) An agency may apply 

the maximum payable rate rule as 

described in this section to determine 

an employee’s payable rate of basic pay 

under the GS pay system at a rate higher 

than the otherwise applicable rate upon 

reemployment, transfer, reassignment, 

promotion, demotion, change in type of 

appointment, or termination of a critical 

position pay authority under 5 CFR part 

535. * * * 

* * * * * 

(4) In applying this section, an agency 

must follow the rules in paragraph (d) 

of this section when highest previous 

rate is based on a critical position pay 

rate under 5 CFR part 535. 

* * * * * 

■ 3. Add part 535 to read as follows: 

PART 535—CRITICAL POSITION PAY 

AUTHORITY 

Sec. 

535.101 Purpose. 

535.102 Definitions. 

535.103 Authority. 

535.104 Requests for and granting critical 

position pay authority. 

535.105 Setting and adjusting rates of basic 

pay. 

535.106 Treatment as a rate of basic pay. 

535.107 Annual reporting requirements. 

Authority: 5 U.S.C. 5377; E.O. 13415, 71 

FR 70641. 

§ 535.101 Purpose. 

The purpose of this part is to provide 

a regulatory framework for the critical 

position pay authority authorized by 5 

U.S.C. 5377. The Office of Personnel 

Management (OPM), in consultation 

with the Office of Management and 

Budget (OMB), may grant authority to 

the head of an agency to fix the rate of 

basic pay for one or more positions 

under this part. 

§ 535.102 Definitions. 

Agency has the meaning given that 

term in 5 U.S.C. 5102. 

Critical position means a position for 

which OPM has granted authority to the 

head of an agency to exercise the paysetting authority provided in 5 U.S.C. 

5377. 

Critical position pay authority means 

the authority that may be granted to the 

head of an agency by OPM under 5 

U.S.C. 5377 to set the rate of basic pay 

for a given critical position under the 

provisions of that section. 

Critical position pay rate means the 

specific rate of pay established by the 

head of an agency for an employee in a 

critical position based upon the exercise 

of the critical position pay authority. A 

critical position pay rate is a rate of 

basic pay to the extent provided in 

§ 535.106. 

Employee means an employee (as 

defined in 5 U.S.C. 2105) in or under an 

agency. 

Head of an agency means the agency 

head or an official who has been 

delegated the authority to act for the 

agency head in the matter concerned. 

§ 535.103 Authority. 

(a) Subject to a grant of authority from 

OPM in consultation with OMB and all 

other requirements in this part, the head 

of an agency may fix the rate of basic 

pay for a critical position at a rate not 

less than the rate of basic pay that 

would otherwise be payable for the 

position, but not greater than—

(1) The rate payable for level II of the 

Executive Schedule (unless paragraph 

(a)(2) or (a)(3) of this section applies); 

(2) The rate payable for level I of the 

Executive Schedule in exceptional 

circumstances based on information and 

data that justify a rate higher than the 

rate payable for level II of the Executive 

Schedule; or 

(3) A rate in excess of the rate for level 

I of the Executive Schedule that is 

established in rare circumstances with 

the written approval of the President. 

(b) The head of an agency may 

exercise his or her critical position pay 

authority only—

(1) When such a position requires 

expertise of an extremely high level in 


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a scientific, technical, professional, or 

administrative field and is critical to the 

agency’s successful accomplishment of 

an important mission; and 

(2) To the extent necessary to recruit 

or retain an individual exceptionally 

well-qualified for the critical position. 

(c) If critical position pay authority is 

granted for a position, the head of an 

agency may determine whether it is 

appropriate to exercise the authority 

with respect to any proposed appointee 

or incumbent of the position. 

(d) An agency granted critical position 

pay authority may continue to use the 

authority for an authorized position as 

long as needed. OPM will monitor the 

use of critical position pay authorities 

annually, through the agency’s required 

reports under § 535.107, and will 

terminate the authority associated with 

a given position after notifying the 

agency if, in OPM’s judgment in 

consultation with OMB, the authority is 

no longer needed. 

§ 535.104 Requests for and granting 

critical position pay authority. 

(a) An agency may request critical 

position pay authority only after 

determining that the position in 

question cannot be filled with an 

exceptionally well-qualified individual 

through the use of other available 

human resources flexibilities and pay 

authorities. Agency requests must 

include the information in paragraph (d) 

of this section. OPM, in consultation 

with OMB, will review agency requests. 

OPM will advise the requesting agency 

as to whether the request is approved 

and when the agency’s critical position 

pay authority becomes effective. 

(b) A request for critical position pay 

authority (or authorities) must be signed 

by the head of an agency and submitted 

to OPM. Requests covering multiple 

positions must include a list of the 

positions in priority order. The head of 

an agency may request coverage of 

positions of a type not listed in 5 U.S.C. 

5377(a)(2), as authorized by 5 U.S.C. 

5377(i)(2) and Executive Order 13415. 

(c) Requests for critical position pay 

authority to set pay above the rate for 

level II of the Executive Schedule and 

up to the rate for level I of the Executive 

Schedule because of exceptional 

circumstances require information and 

data that justify the higher pay. Requests 

for critical position pay authority to set 

pay above the rate for level I of the 

Executive Schedule due to rare 

circumstances require approval by the 

President. The head of an agency must 

submit such requests to OPM with the 

information required in paragraph (d) of 

this section. If OPM, in consultation 

with OMB, concurs with a request to set 

pay above the rate for level I of the 

Executive Schedule, OPM will seek the 

President’s approval. The President may 

establish a maximum limitation on the 

critical pay rate. 

(d) At a minimum, all requests for 

critical position pay authority must 

include: 

(1) Position title; 

(2) Position appointment authority 

(for Senior Executive Service positions, 

appointment authority for any 

incumbent); 

(3) Pay plan and grade/level; 

(4) Occupational series of the 

position; 

(5) Geographic location of the 

position; 

(6) Current salary of the position or 

incumbent; 

(7) Name of incumbent (or ‘‘Vacant’’); 

(8) Length of time the incumbent has 

been in the position or length of time 

the position has been vacant; 

(9) A written evaluation of the need 

to designate the position as critical. 

Such an evaluation must include—

(i) The kinds of work required by the 

position and the context within which 

it operates; 

(ii) The range of positions and 

qualification requirements that 

characterize the occupational field, 

including those that require extremely 

high levels of expertise; 

(iii) The rates of pay reasonably and 

generally required in the public and 

private sectors for similar positions; and 

(iv) The availability of individuals 

who possess the qualifications to do the 

work required by the position; 

(10) Documentation, with appropriate 

supporting data, of the agency’s 

experience and, as appropriate, the 

experience of other organizations, in 

efforts to recruit or retain exceptionally 

well-qualified individuals for the 

position or for a position sufficiently 

similar with respect to the occupational 

field, required qualifications, and other 

pertinent factors, to provide a reliable 

comparison; 

(11) Assessment of why the agency 

could not, through diligent and 

comprehensive recruitment efforts and 

without using the critical position pay 

authority, fill the position within a 

reasonable period with an individual 

who could perform the duties and 

responsibilities in a manner sufficient to 

fulfill the agency’s mission. This 

assessment must include a justification 

as to why the agency could not, as an 

effective alternative, use other human 

resources flexibilities and pay 

authorities, such as recruitment, 

relocation, and retention incentives 

under 5 CFR part 575; 

(12) An explanation regarding why 

the position should be designated a 

critical position and made eligible for a 

higher rate of pay under this part within 

its organizational context (i.e., relative 

to other positions in the organization) 

and, when applicable, how it compares 

with other critical positions in the 

agency. The agency must include an 

explanation of how it will deal with 

perceived inequities among agency 

employees (e.g., situations in which 

employees in positions designated as 

critical would receive higher rates of 

pay than their peers, supervisors, or 

other employees in positions with 

higher-level duties and responsibilities); 

(13) Documentation of the effect on 

the successful accomplishment of 

important agency missions if the 

position is not designated as a critical 

position, including an explanation and 

justification for OPM and OMB to 

expedite processing in cases where the 

agency believes that urgency warrants 

expedited processing; 

(14) Any additional information the 

agency may deem appropriate to 

demonstrate that higher pay is needed 

to recruit or retain an employee for a 

critical position; 

(15) Unless the position is an 

Executive Schedule position, a copy of 

the position description and 

qualification standard for the critical 

position; and 

(16) The desired rate of basic pay for 

requests to set pay above the rate for 

level II of the Executive Schedule and 

justification to show that such a rate is 

necessary to recruit and retain an 

individual exceptionally well-qualified 

for the critical position. 

§ 535.105 Setting and adjusting rates of 

basic pay. 

(a) The rate of basic pay for a critical 

position may not be less than the rate of 

basic pay, including any locality-based 

comparability payments established 

under 5 U.S.C. 5304 or special rate 

supplement under 5 U.S.C. 5305 (or 

other similar payment or supplement 

under other legal authority) that would 

otherwise be payable for the position. 

(b) If critical position pay authority is 

granted for a position, the head of an 

agency may set pay initially at any 

amount up to the rate of pay for level 

II or level I of the Executive Schedule, 

as applicable, without further approval 

unless a higher maximum rate is 

approved by the President under 

§ 535.104(c). 

(c) The head of an agency may make 

subsequent adjustments in the rate of 

basic pay for a critical position each 

January at the same time general pay 

adjustments are authorized for 

Executive Schedule employees under 

section 5318 of title 5, United States 


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Code. Such adjusted rates may not 

exceed the new rate for Executive 

Schedule level II or other applicable 

maximum established for the critical 

position. However, the employee must 

have at least a rating of Fully Successful 

or equivalent, and subsequent 

adjustments must be based on labor 

market factors, recruitment and 

retention needs, and individual 

accomplishments and contributions to 

an agency’s mission. 

(d) Employees receiving critical 

position pay are not entitled to localitybased comparability payments 

established under 5 U.S.C. 5304, special 

rate supplements under 5 U.S.C. 5305, 

or other similar payments or 

supplements under other legal 

authority. 

(e) If an agency discontinues critical 

position pay for a given position (on its 

own initiative or because OPM, in 

consultation with OMB, terminates the 

authority under § 535.103(d)), the 

employee’s rate of basic pay will be set 

at the rate to which the employee would 

be entitled had he or she not received 

critical pay, as determined by the head 

of the agency, unless the employee is 

eligible for a higher payable rate under 

the General Schedule maximum payable 

rate rule in § 531.221 and the agency 

chooses to apply that rule. 

§ 535.106 Treatment as rate of basic pay. 

A critical position pay rate is 

considered a rate of basic pay for all 

purposes, including any applicable 

premium pay, except—

(a) Application of any saved pay or 

pay retention provisions (e.g., 5 U.S.C. 

5363); or 

(b) Application of any adverse action 

provisions (e.g., 5 U.S.C. 7512). 

§ 535.107 Annual reporting requirements. 

(a) OPM must submit an annual report 

to Congress on the use of the critical 

position pay authority. Agencies must 

submit the following information to 

OPM by January 31 of each year on their 

use of critical position pay authority for 

the previous calendar year: 

(1) The name, title, pay plan, and 

grade/level of each employee receiving 

a higher rate of basic pay under this 

subpart; 

(2) The annual rate or rates of basic 

pay paid in the preceding calendar year 

to each employee in a critical position; 

(3) The beginning and ending dates of 

such rate(s) of basic pay, as applicable; 

(4) The rate or rates of basic pay that 

would have been paid but for the grant 

of critical position pay. This includes 

what the rate or rates of basic pay were, 

or would have been, without critical 

position pay at the time critical position 

pay is initially exercised and any 

subsequent adjustments to basic pay 

that would have been made if critical 

position pay authority had not been 

exercised; and 

(5) Whether the authority is still 

needed for the critical position(s). 

PART 536—GRADE AND PAY 

RETENTION 

■ 4. The authority citation for part 536 

continues to read as follows: 

Authority: 5 U.S.C. 5361–5366; sec. 4 of 

the Performance Management and 

Recognition System Termination Act of 1993, 

Pub. L. 103–89, 107 Stat. 981; § 536.405 also 

issued under 5 U.S.C. 552, Freedom of 

Information Act, Pub. L. 92–502; § 536.308 

also issued under section 301(d)(2) of the 

Federal Workforce Flexibility Act of 2004, 

Pub. L. 108–411, 118 Stat. 2305. 

Subpart A–General Provisions 

■ 5. Amend § 536.102 as follows: 

■ a. Remove ‘‘or’’ at the end of 

paragraph (b)(7); 

■ b. Remove the period at the end of 

paragraph (b)(8) and add ‘‘; or’’ in its 

place; and 

■ c. Add paragraph (b)(9) to read as 

follows: 

§ 536.102 Coverage. 

* * * * * 

(b) * * * 

(9) Is reduced in pay upon 

termination of a critical position pay 

authority under 5 CFR part 535. 

* * * * * 

[FR Doc. E8–19758 Filed 8–25–08; 8:45 am] 

BILLING CODE 6325–39–P 

OFFICE OF PERSONNEL 

MANAGEMENT 

5 CFR Part 894 

RIN 3206–AL03 

Federal Employees Dental and Vision 

Insurance Program 

AGENCY: Office of Personnel 

Management. 

ACTION: Final rule. 

SUMMARY: The Office of Personnel 

Management (OPM) is issuing final 

regulations to administer the Federal 

Employee Dental and Vision Benefits 

Enhancement Act of 2004, signed into 

law December 23, 2004. This law 

establishes dental and vision benefits 

programs for Federal employees, 

annuitants, and their eligible family 

members. 

DATES: September 25, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Nataya Battle, (202) 606–1874, or e-mail 

at nataya.battle@opm.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

On December 23, 2004, Public Law 

108–496, 118 Stat. 4001, was signed into 

law. This law established a dental 

benefits and vision benefits program for 

Federal employees, annuitants, and 

their eligible family members. The first 

effective date of coverage was December 

31, 2006. 

On October 15, 2007, OPM published 

interim regulations in the Federal 

Register (72 FR 58243–58248) to 

administer the Federal Employees 

Dental and Vision Insurance Program 

(FEDVIP). Comments were requested by 

December 15, 2007. OPM received 

comments from an employee union, a 

participating health plan in the FEHB 

Program, and an independent 

organization. 

One comment addressed the role of 

the carriers and the Administrator in the 

handling of the enrollment process. 

OPM contracts with the Administrator 

which has agreed to handle all aspects 

of the enrollment process on behalf of 

the carriers. Therefore the regulations 

have been revised to substitute 

‘‘Administrator’’ for ‘‘carrier’’ wherever 

there is a reference to the enrollment 

process. 

Another comment addressed concerns 

that OPM does not review appeals for 

denial of a claim. The dental and vision 

carriers conduct their own disputed 

claims process and are required to use 

an independent third party to conduct 

a final analysis of any dispute, upon 

appeal. This process was established to 

ensure an independent evaluation is 

conducted, but at minimal cost to 

Program enrollees. 

A comment indicated that it was not 

clear whether enrollment or coverage 

would be denied for preexisting dental 

conditions. Under this Program, neither 

enrollment nor benefits coverage is 

denied due to a preexisting dental 

condition. However, since the dental 

program was established in order to 

provide benefits for dental services for 

teeth and their surrounding tissues, a 

carrier may determine that coverage 

does not extend to replacements for 

teeth missing before the effective date of 

enrollment in the Program. 

Another comment suggested revising 

the language in § 894.601(a) to remove 

the reference to coverage ending at the 

end of the pay period ‘‘in which you 

were last eligible’’ and in § 894.601(b) to 

remove the reference to coverage ending 

at the end of the pay period for which 

the last premium allotment was made; 


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