Retirement; Alternative Forms of Annuity

SUMMARY: The Office of Personnel Management (OPM) is proposing changes

in our current regulations on alternative forms of annuity to implement

the changes in sections 8343a and 8420a of title 5, United States Code,

made by the Omnibus Budget Reconciliation Act of 1993. These

regulations provide for the termination of the alternative form of

annuity for employees whose annuities commence on or after October 1,

1994, except for employees who have a life-threatening affliction of

other critical medical condition. They would also revise the list of

critical medical conditions considered prima facie evidence of

eligibility. The regulations are necessary to conform the current

regulations with current law.

DATES: Comments must be received on or before January 3, 1995.

ADDRESSES: Send comments to Reginald M. Jones, Jr., Assistant Director

for Retirement Policy Development; Retirement and Insurance Group;

Office of Personnel Management; P.O. Box 57; Washington, DC 20044; or

deliver to OPM, Room 4351, 1900 E Street NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT:Harold L. Siegelman, (202) 606-0299.

SUPPLEMENTARY INFORMATION: Since 1986, some individuals retiring under

the Civil Service Retirement System or the Federal Employees Retirement

System have been eligible to elect an alternative form of annuity. The

alternative form of annuity consisted of a lump-sum payment of the

individual's retirement deductions plus reduced monthly benefits. The

amount of the reduction was determined so that the present value of the

future unreduced annuity would be actuarially equivalent to the present

value of the lump sum plus the future reduced annuity payments.

The Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-66,

amended sections 8343a and 8420a of title 5, United States Code, to

limit eligibility for the alternative form of annuity for individuals

whose annuities commence on or after October 1, 1994, to those with a

``life-threatening affliction or other critical medical condition.''

These regulations would change sections 831.2203(h) and 842.703(d) to

reflect this new statutory eligibility requirement.

Our proposed change in sections 831.2207 and 842.707 refines the

list of medical conditions that constitute prima facie evidence of a

``life-threatening affliction or other critical medical condition.'' We

are removing two conditions from the list (ventricular tachycardia and

ventricular flutter). We are also clarifying the severity required for

four other medical conditions before we will accept those conditions as

prima facie evidence. Of course, this change in no way affects a

claimant's right to show that medical conditions, not on the list, are

qualifying conditions under sections 831.2207(c)(3)(iv) and

842.707(c)(3)(iv) of Title 5, Code of Federal Regulations.

E.O. 12866, Regulatory Review

This rule has been reviewed by the Office of Management and Budget

in accordance with E.O. 12866.

Regulatory Flexibility Act

I certify that this regulation will not have a significant economic

impact on a substantial number of small entities because the regulation

will only affect Federal employees and agencies and retirement payments

to retired Government employees and their survivors.

List of Subjects in 5 CFR Parts 831 and 842

Administrative practice and procedure, Air Traffic Controllers,

Firefighters, Government employees, Law enforcement officers, Pensions,

Reporting and recordkeeping, Retirement.

U.S. Office of Personnel Management.

Lorraine A. Green,

Deputy Director.

Accordingly, OPM proposes to amend 5 CFR parts 831 and 842 as

follows:

PART 831--RETIREMENT

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

follows:

Authority: 5 U.S.C. 8347, * * * subpart V also issued under 5

U.S.C. 8343a and section 6001 of the Omnibus Budget Reconciliation

Act of 1987, Pub. L. 100-203, 101 Stat. 1330-275; Sec. 831.2203 also

issued under section 7001(a)(4) of the Omnibus Budget Reconciliation

Act of 1990, Pub. L. 101-508; 104 Stat. 1388-328.

2. In section 831.2203, paragraphs (h)(1), (h)(1)(i), and

(h)(1)(ii) are redesignated as paragraphs (h)(1)(i), (h)(1)(i)(A), and

(h)(1)(i)(B), respectively, and a new paragraph (h)(1)(ii) is added to

read as follows:

Sec. 831.2203 Eligibility.

* * * * *

(h)(1) * * *

(ii) An individual whose annuity commences on or after October 1,

1994, may elect an alternative form of annuity only if that individual

is an employee or Member who meets the conditions and fulfills the

requirements described in Sec. 831.2207(c) (2) and (3).

* * * * *

3. In section 831.2207, paragraph (c)(3)(ii)(G) is removed and

reserved, paragraph (c)(3)(ii)(V) is removed, and paragraphs (c)(3)(ii)

(B), (H), (K), and (M) are revised to read as follows:

Sec. 831.2207 Partial deferred payment of the lump-sum credit if

annuity commences after January 3, 1988, and before October 1, 1989.

* * * * *

(c) * * *

(3) * * *

(ii) * * *

(B) Aortic stenosis (severe).

* * * * *

(H) Severe cardiomyopathy--Class IV.

* * * * *

(K) Cardiac aneurysm not amenable to surgical treatment.

* * * * *

(M) Severe hepatic failure.

* * * * *

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 7202(m)(2) of the Omnibus Budget Reconciliation Act of 1990,

Pub. L. 101-508 and 5 U.S.C. 8402(c)(1); 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 the Omnibus Budget Reconciliation

Act of 1990, Pub. L. 101-508; Sec. 842.707 also issued under section

6001 of the Omnibus Budget Reconciliation Act of 1987, Pub. L. 100-

203; Sec. 842.708 also issued under section 4005 of the Omnibus

Budget Reconciliation Act of 1989, Pub. L. 101-239 and section 7001

of the Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508;

subpart H also issued under 5 U.S.C. 1104.

5. In section 842.703, paragraphs (d)(1), (d)(1)(i), and (d)(1)(ii)

are redesignated as paragraphs (d)(1)(i), (d)(1)(i)(A), (d)(1)(i)(B),

respectively, and a new paragraph (d)(1)(ii) is added to read as

follows:

Sec. 842.703 Eligibility.

* * * * *

(d)(1) * * *

(ii) An individual whose annuity commences on or after October 1,

1994, may elect an alternative form of annuity only if that individual

is an employee or Member who meets the conditions and fulfills the

requirements described in Sec. 842.707(c) (2) and (3).

* * * * *

6. In section 842.707 paragraph (c)(3)(ii)(G) is removed and

reserved, paragraph (c)(3)(ii)(V) is removed, and paragraphs (c)(3)(ii)

(B), (H), (K), and (M) are revised to read as follows:

Sec. 842.707 Partial deferred payment of the lump-sum credit if

annuity commences after January 3, 1988, and before October 1, 1989.

* * * * *

(c) * * *

(3) * * *

(ii) * * *

(B) Aortic Stenosis (severe).

* * * * *

(H) Severe cardiomyopathy--Class IV.

* * * * *

(K) Cardiac aneurysm not amenable to surgical treatment.

* * * * *

(M) Severe hepatic failure.

* * * * *

Secs. 831.2203, 831.2208, 842.703, 842.708 [Amended]

7. In the list below, for each section and paragraph indicated in

the left two columns, remove the reference indicated in the third

column where it appears in the paragraph, and add the reference

indicated in the fourth column:

----------------------------------------------------------------------------------------------------------------

Section Paragraph Remove Add

----------------------------------------------------------------------------------------------------------------

831.2203............ newly designated 1995............................. 1994

(h)(1)(i).

831.2203............ (h)(2) introductory (h)(1)(ii)....................... (h)(1)(i)(B)

text.

831.2208............ (a) introductory 1995............................. 1994

text.

831.2208............ (b)................. 1995............................. 1994

831.2208............ (c)(2)(ii).......... 831.2203 (h)(1)(i)............... 831.2203 (h)(1)(i)(A)

842.703............. newly designated 1995............................. 1994

(d)(1)(i).

842.703............. (d)(2) introductory (d)(1)(ii)....................... (d)(1)(i)(B)

text.

842.708............. (a) introductory 1995............................. 1994

text.

842.708............. (b)................. 1995............................. 1994

842.708............. (c)(2)(ii).......... 842.703(d)(1)(i)................. 842.703(d)(1)(i)(A)

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[FR Doc. 94-27363 Filed 11-3-94; 8:45 am]

BILLING CODE 6325-01-M