Finality of Decisions Regarding Railroad Retirement Annuities

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]

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