Voluntary Early Retirement Authority

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]

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