[Federal Register Volume 60, Number 245 (Thursday, December 21, 1995)]
[Proposed Rules]
[Pages 66203-66205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31059]
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RAILROAD RETIREMENT BOARD
20 CFR Part 261
RIN 3220-AB15
Finality of Decisions Regarding Railroad Retirement Annuities
AGENCY: Railroad Retirement Board.
ACTION: Proposed rule.
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SUMMARY: The Railroad Retirement Board (Board) hereby proposes to adopt
regulations pertaining to the finality of decisions under the Railroad
Retirement Act of 1974 (Act).
DATES: Comments must be received on or before February 20, 1996.
ADDRESSES: Secretary to the Board, Railroad Retirement Board, 844 North
Rush Street, Chicago, Illinois 60611.
FOR FURTHER INFORMATION CONTACT:
Michael C. Litt, General Attorney, Railroad Retirement Board, 844 North
Rush Street, Chicago, Illinois 60611, telephone (312) 751-4929, TDD
(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 proposed regulation addresses the finality of benefit
decisions. This proposed 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).
Proposed Sec. 261.1 describes who may open a final decision issued
by the agency. Proposed Sec. 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; within 3 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
proposed Sec. 261.2(c).
Proposed Sec. 261.3 provides that a change of legal interpretation
or administrative ruling upon which a decision was based is not a basis
for reopening.
Proposed Sec. 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.
Proposed Sec. 261.5 provides that a decision may be reopened after
the 1 year and 3 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.
Proposed Secs. 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 part 260).
Proposed Sec. 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.
Proposed Sec. 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, proposed Sec. 261.11 provides that the three-member Board
has the discretion to reopen or not to reopen any decision under these
regulations.
The Labor Member of the Board dissented from the action of the
majority of the Board approving this proposed rule. The Labor Member's
reasons for dissenting from this action are set out below.
[[Page 66204]]
Views of the Labor Member of the Board
Proposed Sec. 261.2 would allow unlimited retroactivity for
reopening where an overpayment resulted from the Board's failure to
apply a proper reduction to the tier I component of an annuity. This
same section would allow unlimited retroactivity in cases where an
incorrect decision results in entitlement to an annuity where if the
decision were correct there would be no entitlement.
The Labor Member contends that failure to consider these cases
final after a reasonable period of time clearly defeats the purpose of
developing an administrative finality policy. He agrees that, where an
individual through fraudulent or similar means causes an incorrect
benefit to be paid, the Board should promptly take steps to correct the
payment and collect the overpayment. However, in cases where an
overpayment has been made due to an error on the part of the Board or
the beneficiary and there was no intent at deception, he feels that a
reasonable ``statute of limitations'' should be set. He feels a more
reasonable approach would be to borrow a policy from the Social
Security Administration and allow unlimited retroactivity for reopening
decision that were unfavorable to a party, but only to correct clerical
error or error that appears on the face of the evidence that was
considered when the determination or decision was originally made. In
most other cases, reopening should be limited.
The Labor Member points out that in November 1985 the Board
published a proposed rule in the Federal Register dealing with
administrative finality (50 FR 48602, November 26, 1985). Several
months later, the Office of Management and Budget submitted a letter to
the then Chairman of the Board expressing dissatisfaction with the
proposed rule comparing it unfavorably with SSA's.
The Labor Member interprets this as a clear message that the Board
should tailor its administrative finality policy to that of SSA's to
the extent possible.
The Labor Member wants our beneficiaries to have the security of
knowing that benefits that they have come to rely on will not be
suddenly taken away and argues that conforming our administrative
finality regulations to those of SSA's where appropriate, lends itself
to a true administrative finality, while still maintaining the
integrity of the railroad retirement system. He thinks the proposed
rule approved by the majority of the Board fails to do this, and for
this reason he cannot endorse it.
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 proposed to amended as follows:
1. Part 261, Administrative Finality, is added 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 or the notice of such decision,
for any reason;
(b) Within three 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
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 found the claimant entitled to an annuity or to a
lump sum payment based on the earnings record of
[[Page 66205]]
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;
(8) 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;
(9) The decision is incorrect because of a failure to apply a
reduction, or the proper reduction, to the tier I component of an
annuity;
(10) Except as is provided in Sec. 261.4 of this part, the
decision is incorrect for any reason and results in entitlement to an
annuity in a case where if the decision were correct there would be no
entitlement.
(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 fist 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: December 14, 1995.
By authority of the Board.
For the Board
Beatrice Ezerski,
Secretary to the Board.
[FR Doc. 95-31059 Filed 12-20-95; 8:45 am]
BILLING CODE 7905-01-M
