[Federal Register Volume 60, Number 247 (Tuesday, December 26, 1995)]
[Proposed Rules]
[Pages 66770-66771]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31064]
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RAILROAD RETIREMENT BOARD
20 CFR Part 211
RIN 3220-AB10
Finality of Records of Compensation
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 reports of compensation. The
proposed regulations relate to corrections to records of compensation
more than four years after the date on which the compensation was
required to be reported to the Board.
DATES: Comments must be received on or before February 26, 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, TTD
(312) 751-4701.
SUPPLEMENTARY INFORMATION: The Board's rules and procedures regarding
the finality and reports of compensation are presently contained in
Board Orders, which are not readily available to the public.
The proposed rule would amend part 211 of the Board's regulations
(Creditable Railroad Compensation) by adding a new Sec. 211.16 to this
part. Under section 9 of the Railroad Retirement Act, the Board will
not change an employee's record of reported compensation if the change
is requested more than four years after the report of compensation is
required to be filed under Sec. 209.6 of the Board's regulations.
Proposed Sec. 211.16 explains when the Board will change a record of
compensation beyond the four year period; for example, where the record
is incorrect because of clerical error or fraud, where the compensation
was posted to the wrong period or person, or where the compensation was
originally reported to the Social Security Administration but the Board
or a court has determined that it should have been reported to the
Board. Changes to credit compensation and service after the four year
period could be made only where taxes due under the Railroad Retirement
Tax Act have been paid.
The Labor Member of the Board dissented from the action of the
majority of the Board approving the proposed rule. The Labor Member's
reasons for dissenting from this action are set out below.
Views of the Labor Member of the Board
The Labor Member feels that this proposed revision to part 211
presents a major change in the crediting of compensation and service,
in that if the four year time limit for corrections to records of
compensation has passed, no employee may be credited with service
months or compensation unless the employee establishes that all
employment taxes have been paid with respect to this service. The Labor
Member acknowledges that in the current environment where the Internal
Revenue Service has responsibility for assessing and collecting taxes
under the Railroad Retirement Tax Act and the Board has the
responsibility for crediting compensation and service, a lack of
coordination is inevitable. He contends that this should in no way
compel the Board to limit the granting of legitimate railroad
retirement credits, but that the change proposed by the majority of the
Board would do this.
The Labor Member feels that this change could also put an employee
in a ``catch 22'' situation since there could be questions as to the
employee's status under the Social Security Act for the period where
the employer is found to be covered under the Railroad Retirement Act,
but because no railroad retirement taxes had been paid, the employee
would receive no railroad retirement credit. Conceivably, the employee
would receive no credit under either Act. The Labor Member points out
that currently there are many situations where the Board may correct a
compensation record retroactively. There are cases where earnings were
erroneously reported to the Social Security Administration by the
employer and, subsequently, the Board rules that the employer is
covered under the Railroad Retirement Act. The Board may correct a
record of compensation where such correction is determined or approved
by a court having jurisdiction to make such a decision, or as a result
of a settlement entered into by the employer and the Internal Revenue
Service.
The Labor Member does not endorse the change recommended by the
majority of the Board. Instead, he feels that the Board should make a
concerted effort to identify when an employer or employee is, in fact,
covered under the Railroad Retirement Act and attempt to mitigate the
consequences of decisions that retroact over several years. He submits
that we are, in fact, doing this now with the assistance of our
agency's Audit and Compliance Division which
[[Page 66771]]
is successfully dedicating significant resources to this effort.
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 Parts 211
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 be amended as follows:
PART 211--[AMENDED]
1. The authority citation for part 211 continues to read as
follows:
Authority: 45 U.S.C. 231(f).
2. Part 211 is amended by adding a new Sec. 211.16 to read as
follows:
Sec. 211.16 Finaility of records of compensation.
(a) Time limit for corrections to records of compensation. The
Board's record of the compensation reported as paid to an employee for
a given period shall be conclusive as to amount, or if no compensation
was reported for such period, then as to the employee's having received
no compensation for such period, unless the error in the amount of
compensation or the failure to make return of the compensation is
called to the attention of the Board within four years after the date
on which the compensation was required to be reported to the Board as
provided for in Sec. 209.6 of this chapter.
(b) Correction after 4 years. Subject to paragraph (c) of this
section, the Board may correct a report of compensation after the time
limit set forth in paragraph (a) of this section for one of the
following reasons:
(1) Where the compensation was posted as the result of fraud;
(2) Where the compensation was posted for the wrong person or the
wrong period;
(3) Where the earnings were erroneously reported to the Social
Security Administration in the good faith belief by the employer or
employee that such earnings were not covered under the Railroad
Retirement Act and there is a final decision of the Board under part
259 of this chapter that such employer or employee was covered under
the Railroad Retirement Act during the period in which the earnings
were paid;
(4) Where a determination pertaining to the coverage under the
Railroad Retirement Act of an individual, partnership, or company as an
employer, is retroactive; and
(5) Where a record of compensation could not otherwise be corrected
under this part and where in the judgment of the three-member Board
that heads the Railroad Retirement Board failure to make a correction
would be inequitable.
(c) Limitation on crediting service. No employee may be credited
with service months or tier II compensation beyond the four year period
referred to in paragraph (a) of this section unless the employee
establishes to the satisfaction of the Board that all employment taxes
imposed by sections 3201, 3211, and 3221 of title 26 of the Internal
Revenue Code have been paid with respect to the compensation and
service.
Dated: December 15, 1995.
By Authority of the Board.
Beatrice Ezerski,
Secretary to the Board.
[FR Doc. 95-31064 Filed 12-22-95; 8:45 am]
BILLING CODE 7905-01-M
