Source: http://thefederalregister.com/2012/10/19/2012-25562.html
Timestamp: 2018-09-19 13:06:37
Document Index: 322379123

Matched Legal Cases: ['art 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', 'ART 29', 'art 29', 'art 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29']

Federal Register | Federal Benefit Payments Under Certain District of Columbia R
31 CFR Part 29
RIN 1505-AC02
SUMMARY: The Department of the Treasury, Departmental Offices, is issuing final regulations to implement the provisions of Title XI of the Balanced Budget Act of 1997, as amended (the Act) related to the split between Federal and District obligations. Pursuant to the Act, with certain exceptions, Treasury has responsibility for payment of benefits based on service accrued as of June 30, 1997, under the retirement plans for District of Columbia teachers, police officers, and firefighters. Benefits for service after that date, and certain other benefits, are funded by the District of Columbia. These regulations amend earlier regulations which implement the provisions of the Act, establishing the methodology for determining the split between the Federal and District obligations. The effective date was delayed pending completion of Treasury's new automated retirement system, "System to Administer Retirement" (STAR), which replaced the District's legacy automated retirement system. While the new system has been completed, the amended regulations establish additional rules and provide additional examples of benefit calculation scenarios, a need identified during systems development. The amendments have minimal financial impact and were introduced to simplify calculations and maintain consistency with the general principles established in the original regulations.
DATES: This final rule is effective November 19, 2012.
FOR FURTHER INFORMATION CONTACT: Paul Cicchetti, (202) 622-1859, Department of the Treasury, Office of D.C. Pensions, Metropolitan Square Building, Room 6G503, 1500 Pennsylvania Avenue NW., Washington, DC 20220.
From the earliest stages of this effort, Treasury worked with the District to arrive at key decisions for STAR development. Pursuant to Section 11041 of the Act, the District continues as the benefits administrator during the interim administration period, which is ongoing. Originally, OPRS performed the benefits administration function. DCRB assumed responsibility for benefits administration for both District benefit payments and Federal Benefit Payments on September 26, 2005. As benefits administrator, OPRS, and now DCRB, participated with Treasury to: Develop a proposed system that met theprograms' needs; develop the approach for addressing and resolving issues; make decisions about development; test the system being developed; review the status of projects; evaluate readiness and approve plans for implementation.
The initial comment period closed on January 21, 2011. In response to a request to extend the comment period, on February 3, 2011, the Department published in theFederal Registera notice of extension of the comment period until April 21, 2011 (see 76 FR 6112). The Department received comments from the District of Columbia Retirement Board and the D.C. Fire Fighters Association on the proposed regulations. In response, the Department has adopted the proposed rule with some modifications as suggested by the commenters.
Proposed § 29.332 provides the rule for determining when unused sick leave is creditable for the computation of Federal Benefit Payments. Comments objected to § 29.332(b), which provides that for employees separated for retirement after June 30, 1997, no unused sick leave is creditable towards Federal Benefit Payments. One comment argued that the Department's rule regarding unused sick leave ignores its chosen accrual methodology based on the freeze date and the District is forced to bear a financial burden accrued prior to the freeze date, since the allocation of unused sick leave fails to account for accrued service ratios. The suggestion was that allocating unused sick leave based on each annuitant's service ratio was necessary to comply with the intent of the Act. Another comment suggested that an actuarial assumption be used to determine the amount of sick leave accrued prior to June 30, 1997, with the implication being this amount would be creditable towards a Federal Benefit Payment.
Proposed §§ 29.334 and 29.335 provide the rules for determining when purchased service is creditable for the computation of Federal Benefit Payments. One comment objected to the rules that purchases of service must be completed by June 30, 1997, to be creditable towards Federal Benefit Payments. The comment argued that by focusing on the date of the purchase of service transaction, the rules allocate 100% of the benefit cost to the District government regardless of sound accrual or equitable concepts, and ignore the Department's accrual methodology based on the freeze date. Another comment argued that regardless of when payment is made to purchase service, after being hired, employees have an expectation that the prior service will be credited. The suggested change is, in the case where a purchase of service is completed after June 30, 1997, to allocate a portion of the benefit cost of this service to the Department of the Treasury, based on each annuitant's service ratio.
The comment also noted that Treasury is liable for refunds of service deposits made on or before the freeze date, regardless of when the underlying purchase was completed, implying an inconsistency with the proposed regulations. In response to the comment and to make the regulations more clear, the Department has modified the rules in §§ 29.334(c) and 29.335(c) to require a transfer to the District of all installment purchase of service payments received by the Department where the purchase was not completed by the freeze date.
Proposed § 29.343 provides the rule for determining the Federal Benefit Payment when an individual retires on disability. One comment argued that given that the disability plan provisions were legislated by Congress, it is unfair to pass on the liability of all post-freeze date disability retirements to the District.
The Department's response is that this section follows directly from section 11012(c) of the Act, which states that “(t)o the extent that any portion of a benefit payment to which an individual is entitled under a District RetirementProgram is based on a determination of disability made by the District Government or the Trustee after the freeze date, the Federal benefit payment determined with respect to the individual shall be an amount equal to the deferred retirement benefit or normal retirement benefit the individual would receive if the individual left service on the day before the commencement of disability retirement benefits.”
It is hereby certified that this regulation will not have a significant economic impact on a substantial number of small entities. The regulation will only affect the determination of the Federal portion of retirement benefits to certain former employees of the District of Columbia and will not have an effect on small entities. Accordingly, a regulatory flexibility analysis is not required by the Regulatory Flexibility Act (5 U.S.C. 601et seq.).
Administrative practice and procedure, claims, Disability benefits, Firefighters, Government employees, Intergovernmental relations, Law enforcement officers, Pension, Retirement, Teachers.
PART 29—FEDERAL BENEFIT PAYMENTS UNDER CERTAIN DISTRICT OF COLUMBIA RETIREMENT PROGRAMS 1. The authority citation for 31 CFR part 29 is revised to read as follows: Authority:
Subtitle A and Chapter 3 of Subtitle H, of Pub. L. 105-33, 111 Stat. 712-731 and 786-787; as amended.
2. Subpart C is revised to read as follows: Subpart C—Split Benefits Sec. 29.301 Purpose and scope. 29.302 Definitions. General Principles for Determining Service Credit To Calculate Federal Benefit Payments 29.311 Credit only for service performed on or before June 30, 1997. 29.312 All requirements for credit must be satisfied by June 30, 1997. 29.313 Federal Benefit Payments are computed based on retirement eligibility as of the separation date and service creditable as of June 30, 1997. Service Performed After June 30, 1997 29.321 General principle. 29.322 Disability benefits. All Requirements for Credit Must Be Satisfied by June 30, 1997 29.331 General principle. 29.332 Unused sick leave. 29.333 Military service. 29.334 Deposit service. 29.335 Refunded service. Calculation of the Amount of Federal Benefit Payments 29.341 General principle. 29.342 Computed annuity exceeds the statutory maximum. 29.343 Disability benefits. 29.344 Survivor benefits. 29.345 Cost-of-living adjustments. 29.346 Reduction for survivor benefits. Calculation of the Split of Refunds of Employee Contributions and Deposits 29.351 General principle. 29.352 Refunded contributions. 29.353 Refunded deposits. Appendix A to Subpart C of Part 29—Examples Subpart C—Split Benefits
§ 29.301 Purpose and scope.
Deferred retirementmeans retirement under section 4-623 of the D.C. Code (1997) (under the Police and Firefighters Plan) or section 31-1231(a) of the D.C. Code (1997) (under the Teachers Plan).
Deferred retirement agemeans the age at which a deferred annuity begins to accrue, that is, age 55 under the Police and Firefighters Plan and age 62 under the Teachers Plan.
Department serviceordepartmental servicemeans any period of employment in a position covered by the Police and Firefighters Plan or Teachers Plan. Department service or departmental service may include certain periods of military service that interrupt a period of employment under the Police and Firefighters Plan or the Teachers Plan.
Disability retirementmeans retirement under section 4-615 or section 4-616 of the D.C. Code (1997)(under the Police and Firefighters Plan) or section 31-1225 of the D.C. Code (1997) (under the Teachers Plan), regardless of whether the disability was incurred in the line of duty.
Enter on dutymeans commencement of employment in a position covered by the Police and Firefighters Plan or the Teachers Plan.
Excess leave without payorexcess LWOPmeans a period of time in a non-pay status that in any year is greater than the amount creditable as service under § 29.105(d).
Hire datemeans the date the employee entered on duty.
Military servicemeans-
Optional retirementmeans regular longevity retirement under section 4-618 of the D.C. Code (1997) (under the Police and Firefighters Plan) or section 31-1224(a) of the D.C. Code (1997) (under the Teachers Plan).
Other servicemeans any period of creditable service other than departmental service or unused sick leave. Other service includes service that becomes creditable upon payment of a deposit, such as service in another school system (under section 31-1208 of the D.C. Code (1997)) (under the Teachers Plan) or prior governmental service (under the Teachers Plan and the Police and Firefighters Plan); and service that is creditable without payment of a deposit, such as military service occurring prior to employment (under the Teachers Plan and the Police and Firefighters Plan).
Pre-80 hiremeans an individual whose annuity is computed using the formula under the Police and Firefighters Plan applicable to individuals hired before February 15, 1980.
Pre-96 hiremeans an individual whose annuity is computed using the formula under the Teachers Plan applicable to individuals hired before November 1, 1996.
Sick leavemeans unused sick leave, which is creditable in a retirement computation, as calculated under § 29.105(c).
§ 29.311 Credit only for service performed on or before June 30, 1997.
§ 29.312 All requirements for credit must be satisfied by June 30, 1997.
§ 29.313 Federal Benefit Payments are computed based on retirement eligibility as of the separation date and service creditable as of June 30, 1997.
§ 29.321 General principle.
§ 29.322 Disability benefits.
(b) Does not satisfy the age and service requirements for optional retirement, the Federal Benefit Payment begins when the disability retiree reaches deferred retirement age. (See § 29.343.)
§ 29.332 Unused sick leave.
§ 29.333 Military service.
§ 29.334 Deposit service.
(a)Teachers Plan.(1) Periods of civilian service that were not subject to retirement deductions at the time they were performed are creditable for Federal Benefit Payments under the Teachers Plan if the deposit for the service was paid in full to the Teachers Plan as of June 30, 1997.
(b)Police and Firefighters Plan.No credit is allowed for Federal Benefit Payments under the Police and Firefighters Plan for any period of civilian service that was not subject to retirement deductions at the time that the service was performed. (See definition of “governmental service” at D.C. Code section 4-607(15) (1997).)
§ 29.335 Refunded service.
(a) Periods of civilian service that were subject to retirement deductions but for which the deductions were refunded to the employee are creditable for Federal Benefit Payments if theredeposit for the service was paid in full to the District government as of June 30, 1997.
§ 29.341 General principle.
Note to § 29.341:
§ 29.343 Disability benefits.
§ 29.344 Survivor benefits.
§ 29.346 Reduction for survivor benefits.
§ 29.351 General principle.
§ 29.352 Refunded contributions.
§ 29.353 Refunded deposits.
Optional Retirement Examples Example 1: No Unused Sick Leave
Example 1A—Police Optional [Pre-80 hire] Total Annuity Computation Birth date: 09/10/46 Hire date: 10/09/77 Separation date: 10/11/97 Department service: 20/00/03 Other service: 03/04/21 Sick leave: .025 service: 23.333333 .03 service: Average salary: $45,680.80 Total: $26,647.12 Total/month: $2,221.00 Federal Benefit Payment Computation Birth date: 9/10/46 Hire date: 10/09/77 Freeze date: 06/30/97 Department service: 19/08/22 Other service: 03/04/21 Sick leave: .025 service: 23.083333 .03 service: Average salary: $45,680.80 Total: $26,361.61 Total/month: $2,197.00 Total federal/month ÷ total/month: 0.989194
Example 1B—Police Optional [Pre-80 hire] Total Annuity Computation Birth date: 09/10/46 Hire date: 10/13/75 Separation date: 10/11/97 Department service: 21/11/29 Other service: 03/04/21 Sick leave: .025 service: 23.416667 .03 service: 1.916667 Average salary: $45,680.80 Total: $29,368.96 Total/month $2,447.00 Federal Benefit Payment Computation Birth date: 09/10/46 Hire date: 10/13/75 Freeze date: 06/30/97 Department service: 21/08/18 Other service: 03/04/21 Sick leave: .025 service: 23.416667 .03 service: 1.666667 Average salary: $45,680.80 Total: $29,026.36 Total/month: $2,419.00 Total federal/month ÷ total/month: 0.988557 Example 2: Unused Sick Leave Credit
Example 2—Police Optional [Pre-80 hire] Total Annuity Computation Birth date: 05/01/49 Hire date: 07/08/73 Separation date: 03/13/98 Department service: 24/08/06 Other service: 00/06/04 Sick leave: 00/11/11 .025 service: 20.5 .03 service: 5.583333 Average salary: $61,264.24 Total: $41,659.68 Total/month: $3,472.00 Federal Benefit Payment Computation Birth date: 05/01/49 Hire date: 07/08/73 Freeze date: 06/30/97 Department service: 23/11/23 Other service: 00/06/04 Sick leave: .025 service: 20.5 .03 service: 3.916667 Average salary: $61,264.24 Total: $38,596.47 Total/month: $3,216.00 Total federal/month ÷ total/month: 0.926267 Example 3: Calculated Benefit Exceeds Statutory Maximum
Example 3A—Police Optional [Pre-80 hire] Total Annuity Computation Birth date: 06/12/42 Hire date: 03/14/66 Separation date: 03/30/98 Department service: 32/00/17 Other service: Sick leave: .025 service: 20 .03 service: 12 Average salary: $75,328.30 Total: $64,782.34 Total/month: $5,399.00 Maximum: $60,262.64 Maximum/month: $5,022.00 Federal Benefit Payment Computation Birth date: 06/12/42 Hire date: 03/14/66 Freeze date: 03/30/97 Department service: 31/03/17 Other service: Sick leave: .025 service: 20 .03 service: 11.25 Average salary: $75,328.30 Total: $63,087.45 Total/month: $5,257.00 Maximum: $60,262.64 Maximum/month: $5,022.00 Total federal/month ÷ total/month: 1.0
Example 3B—Police Optional [Pre-80 hire] Total Annuity Computation Birth date: 06/12/42 Hire date: 03/14/66 Separation date: 03/30/98 Department service: 32/00/17 Other service: Sick leave: 00/06/00 .025 service: 20 .03 service: 12 Average salary: $75,328.30 Total wo/sl credit: $64,782.34 Total/month: $5,399.00 Max wo/sl credit: $60,262.64 Max w/sl credit: $61,392.57 Monthly benefit: $5,116.00 Federal Benefit Payment Computation Birth date: 06/12/42 Hire date: 03/14/66 Freeze date: 06/30/97 Department service: 31/03/17 Other service: Sick leave: none .025 service: 20 .03 service: 11.25 Average salary: $75,328.30 Total: $63,087.45 Total/month: $5,257.00 Maximum: $60,262.64 Monthly benefit: $5,022.00 Total federal/month ÷ total/month: 0.981626 Example 4: Excess Leave Without Pay
Note:For the Teachers Plan, section 1230(a) of title 31 of the D.C. Code (1997) allows for 6 months leave without pay in any fiscal year. For the Police and Firefighters Plan, section 610(d) of title 4 of the D.C. Code (1997) allows for 6 months leave without pay in any calendar year.
Example 4—Teachers Optional [Pre-96 hire] Total Annuity Computation Birth date: 11/04/33 Hire date: 03/01/71 Separation date: 02/28/98 Department service: 27/00/00 Other service: 06/07/28