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Rule

Payments Pursuant to Court Decree or Court-Approved Property Settlement

Action

Final Rule.

Summary

The Railroad Retirement Board (Board) amends its regulations concerning partition of annuities pursuant to a court decree or court-approved property settlement in order to incorporate provisions of the Pension Protection Act of 2006, to make corrections in the existing regulation, and to update the regulation to reflect changes in titles within the agency.

Unified Agenda

Payments Pursuant to Court Decree or Court-Approved Property Settlement

2 actions from March 6th, 2008 to May 5th, 2008

  • March 6th, 2008
  • May 5th, 2008
    • NPRM Comment Period End
 

Table of Contents Back to Top

DATES: Back to Top

This rule will be effective August 13, 2008.

ADDRESSES: Back to Top

Beatrice Ezerski, Secretary to the Board, Railroad Retirement Board, 844 N. Rush Street, Chicago, Illinois 60611-2092.

FOR FURTHER INFORMATION CONTACT: Back to Top

Marguerite P. Dadabo, Assistant General Counsel, (312) 751-4945, TTD (312) 751-4701.

SUPPLEMENTARY INFORMATION: Back to Top

Retirement and disability annuities under the Railroad Retirement Act are composed of independently calculated segments known as tiers. The tier I amount combines both railroad and non-railroad earnings, and is calculated using social security benefit formulas. The tier II amount is calculated under different formulas, generally representing railroad earnings alone. In addition, some annuitants receive a dual benefit component based on non-railroad wages earned through December 1974, or in some cases, through an earlier date. Finally, career railroad employees may receive a supplemental annuity ranging from $23 to $43 per month.

Under section 14(b) of the Railroad Retirement Act, the non-tier I portion of a railroad retirement annuity may be characterized as property subject to partition in a proceeding for divorce, annulment, or legal separation. Prior to August 17, 2007, the effective date of the Pension Protection Act of 2006, Public Law 109-280, a partition payment would terminate upon the death of either the railroad employee or the former spouse, whichever occurred first, unless the court order provided for termination at an earlier date. Section 1003 of Public Law 109-280 amended the Railroad Retirement Act to provide that a partition payment will only terminate upon the employee's death when the court order requires such termination. Consequently, unless the court order requires termination of payments upon the employee's death, tier II partition payments to divorced spouses may now continue beyond the employee's death. While the change in law does not allow for the reinstatement of payments terminated prior to August 17, 2007, due to the death of the employee prior to that date, the change does mean that any divorced spouse who was getting a partition payment as of that date may continue to be paid a tier II partition amount.

The Board amends Part 295 of its regulations to reflect the changes made by Public Law 109-280, to reflect changes in certain titles of agency employees, and to correct or clarify certain references. Specifically, the Board amends section 295.1, which explains the purpose of Part 295, to incorporate a reference to Public Law 109-280. Section 295.1(b)(3) is modified to clarify references to certain annuity increases under section 3(f) of the Railroad Retirement Act.

Section 295.2 is amended to include a separate new definition of former spouse and a revised separate definition of spouse.

Section 295.4(a) is amended by the addition of a new subparagraph (4) to specify that unless a court order expressly provides otherwise, a partition order will be applied to any annuity paid to an employee, whether the employee has retired based on age or based on disability.

The phrase “pertaining to the employee” is added to the end of the second sentence of section 295.4(c) and to the end of the first sentence in section 295.4(d)(2) in order to clarify that the Board's records concerning the railroad employee will be reviewed to determine the most current address for each party to a partition order.

A new subparagraph (4) is added to section 295.5(f) to reflect the amendment made by Public Law 109-280 that allows continued payment of a partition tier II to a former spouse if the railroad employee dies on or after August 17, 2007. Paragraphs 295.5(a) and 295.5(f) are amended to include a reference to the new subparagraph (4).

A new subparagraph (2) is added to section 295.7(e) to clarify that an erroneous payment to the employee may occur if the Board has all required documentation and due to clerical oversight fails to withhold the amount awarded by a court partition order.

Finally, references to “Deputy General Counsel” and to the “Associate Executive Director for Retirement Claims” throughout Part 295 are changed to “General Counsel” and “Director of Retirement Benefits” respectively in order to reflect title changes within the agency. Several minor corrections of capitalization and grammar are also made.

The Board published the proposed rule on March 6, 2008 (73 FR 12037) and invited comments by May 5, 2008. No comments were received. Accordingly, the proposed rule is being published as a final rule without change.

The proposed rule was determined to be a significant regulatory action and was reviewed by the Office of Management and Budget prior to its publication in the Federal Register. There are no changes to the information collections associated with Part 295.

List of Subjects in 20 CFR Part 295 Back to Top

begin regulatory text

For the reasons set out in the preamble, the Railroad Retirement Board amends title 20, chapter II, subchapter B, part 295 of the Code of Federal Regulations as follows:

PART 295—PAYMENTS PURSUANT TO COURT DECREE OR COURT-APPROVED PROPERTY SETTLEMENT Back to Top

1.The authority citation for part 295 continues to read as follows:

Authority:

45 U.S.C. 231f; 45 U.S.C. 231m.

2.Section 295.1 is amended by revising paragraph (a), the introductory text of paragraph (b), and paragraph (b)(3) to read as follows:

§ 295.1 Introduction.

(a) Purpose. This part implements section 419 of 98 (97 Stat. 438), which amended section 14 of the Railroad Retirement Act to provide that, with respect to annuity amounts payable for months beginning with September 1983, the Board must comply with a court decree of divorce, annulment or legal separation, or with the terms of any court-approved property settlement incident to any such decree, which characterizes specified benefits as property subject to distribution. This part also implements section 1003 of Public Law 109-280 (120 Stat. 1053), which amended section 5 of the Railroad Retirement Act to allow the payment of an employee's tier II benefit component awarded to a former spouse as part of a property distribution incident to a decree of divorce, annulment, or legal separation to continue after the employee's death. Garnishment of benefits for alimony or child support is dealt with in part 350 of this chapter.

(b) Benefits subject to this part. Only the following benefits or portions of benefits under the Railroad Retirement Act are subject to this part:

* * * * *

(3) Employee annuity increase as provided under section 3(f) of the Act; and

* * * * *

3.Section 295.2 is amended by adding a new definition of “Former spouse” and by revising the definition of “spouse” to read as follows:

§ 295.2 Definitions.

* * * * *

Former spouse means the former husband or wife of an employee who, on or before the date of a court order, was married to the employee and that marriage has ended by final decree of divorce, dissolution, or annulment.

* * * * *

Spouse means the husband or wife of an employee who, on or before the date of a court order, was married to the employee and that marriage has not ended by final decree of divorce, dissolution, or annulment.

§ 295.3 [Amended]

4.Section 295.3, paragraph (d) is amended by removing all references to “Deputy General Counsel” and adding in their place references to “General Counsel”.

5.Section 295.4 is amended as follows:

a. By removing wherever they appear all references to “Deputy General Counsel” and adding in their place references to “General Counsel”.

b. By removing all references to the “Associate Executive Director for Retirement Claims” and adding in their place references to the “Director of Retirement Benefits”.

c. By removing “bs” and adding in its place “be” in the second to last sentence of paragraph (b)(2)(ii).

d. By adding the phrase “pertaining to the employee” at the end of the second sentence of the introductory paragraph of paragraph (c).

e. By adding the phrase “pertaining to the employee” at the end of the first sentence of paragraph (d)(2).

f. By capitalizing the word “Board” at the end of the last sentence in paragraph (d)(2).

g. By capitalizing the word “Board” in the last sentence of paragraph (d)(4).

h. By adding the following new paragraph (b)(4) to read as follows:

§ 295.4 Review of documentation.

* * * * *

(b) * * *

(4) Unless the order expressly provides otherwise, the Board will deduct the amount specified by the order from any annuity paid to the employee, whether the employee has retired based on age or on disability.

* * * * *

6.Section 295.5 is amended as follows:

a. By adding in paragraph (a) the phrase “, except as provided in paragraph (f)(4) of this section,” in the second sentence between the words “and” and “shall”.

b. By removing the phrase “in behalf” and adding in its place the phrase “on behalf” in the first sentence of paragraph (d).

c. By adding the phrase “Except as provided in paragraph (f)(4) of this section” to the beginning of the first sentence of the introductory text to paragraph (f).

d. By removing references to “Deputy General Counsel” and adding in their place references to “General Counsel” in paragraph (g) and

e. By adding a new paragraph (f)(4) to read as follows:

§ 295.5 Limitations.

* * * * *

(f) * * *

(4) If the employee dies on or after August 17, 2007, a former spouse who is receiving a portion of the employee's annuity pursuant to a court decree or property settlement compliant with this part may continue to receive a portion of the employee's tier II benefit component unless the court decree or property settlement requires such payment to terminate upon the death of the employee.

* * * * *

§ 295.6 [Amended]

7.Section 295.6 is amended as follows:

a. In paragraph (b) by removing “Deputy General Counsel” and adding in its place “General Counsel”, and by removing all references to the “Associate Executive Director for Retirement Claims” and adding in their place references to “Director of Retirement Benefits”.

b. By adding the word “a” to the first sentence of paragraph (b) before the word “request”.

c. By adding the word “a” to the first sentence of paragraph (c) before the word “signed”.

8.Section 295.7 is amended by redesignating paragraph (e) as paragraph (e)(1) and adding a new paragraph (e)(2) to read as follows:

§ 295.7 Miscellaneous.

* * * * *

(e) * * *

(2) Where all documentation required by this part is in the Board's records pertaining to the employee prior to the time the employee annuity is awarded, but where the Board due to clerical oversight fails to withhold the amount awarded by the court order, then the Board shall begin deduction from the employee annuity with the month the error is discovered, and shall pay the amount which should have been withheld pursuant to this part to the spouse or former spouse. The amount paid to the spouse or former spouse representing months for which the amount under the order was not timely withheld shall be an erroneous payment to the employee within the meaning of section 10 of the Railroad Retirement Act. This section shall not apply where the Board has attempted to contact the spouse or former spouse at the time the employee annuity is awarded pursuant to § 295.4(d).

end regulatory text

Dated: August 6, 2008.

By authority of the Board.

Beatrice Ezerski,

Secretary to the Board.

[FR Doc. E8-18439 Filed 8-12-08; 8:45 am]

BILLING CODE 7905-01-P

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