a complete debt claim and an application for annuity, OPM will offset the annuity, pay the creditor agency, and mail the debtor a copy of the debt claim along with notice of the payment to the creditor agency.

(ii) Beginning deductions. If OPM already established the debtor's annuity payment, deductions will begin with the next available annuity payment. If OPM is in the process of establishing the annuity payments, deductions will not be taken from advance annuity payments, but will begin with the annuity payable on the first day of the month following the last advance payment.

(iii) Updating accrued interest. Once OPM has completed a collection, if there are additional accrued interest charges, the creditor agency must contact OPM regarding any additional amount due within 90 days of the date of the final payment.

(2) Claims held for future recovery. (i) If OPM receives an application for annuity within 1 year of the date the agency's debt claim was received, the debt will be processed as stated in paragraph (c)(1) of this section.

(ii) If OPM receives an application for annuity more than 1 year after the agency's debt claim was submitted, OPM will contact the creditor agency to see if the debt is still outstanding. If the debt is still due, the creditor agency should permit the debtor to offer a satisfactory repayment plan in lieu of offset if the debtor establishes that his or her changed financial circumstances would make the offset unjust. (See 4 CFR 102.4(c).) If the agency decides to pursue the offset, it must submit the requested information and any new instructions about the collection to OPM.

(e) Limitations on OPM review. In no case will OPM review

(1) The merits of a creditor agency's decision regarding reconsideration,

compromise, or waiver; or

(2) The creditor agency's decision that a hearing was not required in any particular proceeding.

§ 845.407 Installment withholdings. (a) When possible, OPM will collect a creditor agency's full claim in one pay

ment from the debtor's refund or annuity.

(b) If collection must be made from an annuity and the debt is large, the creditor must generally accept payment in installments. The responsibility for establishing and notifying the debtor of the amount of the installments belongs to the creditor agency (see §845.405(b)(5)). However, OPM will not make an installment deduction for more than 50 percent of net annuity, unless a higher percentage is needed to satisfy a judgment against a debtor within 3 years or the annuitant has consented to the higher amount in writing. All correspondence concerning installment deductions received by OPM will be referred to the creditor agency for consideration.

§ 845.408 Special processing for fraud claims.

When an agency sends a claim indicating fraud, presentation of a false claim, misrepresentation by the debtor or any other party interested in the claim, or any claim based in whole or part on conduct violating the antitrust laws, to the Department of Justice (Justice) for possible treatment as a fraud claim (4 CFR 101.3), the following special procedures apply.

(a) Agency processing. If the debtor is separated or separates while Justice is reviewing the claim, the paying agency must send the Individual Retirement Record to ОРМ, as required by § 845.405(c)(2). The agency where the claim arose must send OPM notice that a claim is pending with Justice. (See § 845.405(b)(6) for instructions on giving OPM a notice of debt.)

(b) Department of Justice processing. (1) The Attorney General or a designee will decide whether a debt claim sent in by an agency will be reserved for collection by Justice as a fraud claim. Upon receiving a possible fraud claim to be collected by offset from the Fund, the Attorney General or a designee must notify OPM. The notice to OPM must contain the following:

(i) The name, date of birth, and social security number of the debtor;

(ii) The amount of the possible fraud claim, if known;

(iii) The basis of the possible fraud claim; and

(iv) A statement that the claim is being considered as a possible fraud claim, the collection of which is reserved to Justice.

(2) When there is a pending refund application, the Attorney General or designee must file a complaint seeking a judgment on the claim and send a copy of the complaint to OPM; or as provided in 4 CFR 101.3, refer the claim to the agency where the claim arose and submit a copy of the referral to OPM within 180 days of the date of either notice from the agency that a claim is pending with Justice (paragraph (a) of this section) or notice from Justice that it has received a possible fraud claim (paragraph (b)(1) of this section) whichever is earlier. When the claim is referred to the agency where it arose, the agency must begin administrative collection action under 4 CFR 102.4 and send a complete debt claim to OPM as required in §845.405.

(c) OPM processing against refunds. (1) Upon receipt of a notice under paragraph (a) or (b)(1) of this section, whichever is earlier, OPM will withhold the amount of the debt claim, if known; notify the debtor that the amount of the debt will be withheld from the refund for at least 180 days from the date of the notice that initiated OPM processing; and pay the balance to the debtor. If the amount of the debt claim is not known, OPM will notify the debtor that a debt claim may be offset against his or her refund and that OPM will not pay any amount until either the amount of the debt claim is established, or the time limit for filing a complaint in court or submitting the debt claim expires, whichever comes first.

(2) If the Attorney General files a complaint and notifies OPM within the applicable 180-day period, OPM will continue to withhold payment of the lump-sum credit until there is a final judgment.

(3) If the Attorney General refers the claim to the agency where the claim arose (creditor agency) and notifies OPM within the applicable 180-day period, OPM will notify the creditor agency that (i) the procedures in this subpart and 4 CFR 102.4 must be completed; and (ii) a debt claim must be sent to OPM within 120 days of the date

of OPM's notice to the creditor agency. At the request of the creditor agency, one extension of time of not more than 60 days will be granted, as provided by § 845.406(a).

(4) If OPM is not notified that a complaint has been filed or that the claim has been referred to the creditor agency within the applicable 180-day period, OPM will pay the balance of the refund to the debtor.

(d) OPM processing against annuities. If the debtor has filed an annuity claim, OPM will not take action against the annuity. OPM will continue to pay the annuity unless and until there is a final judgment for the United States or submission of a complete debt claim.

(e) OPM collection and payment of the debt. (1) If the United States obtains a judgment against the debtor for the amount of the debt or the creditor agency submits a complete debt claim, OPM will collect and pay the debt to the creditor agency as provided in §§ 845.406 and 845.407.

(2) If the suit or the administrative proceeding results in a judgment for the debtor without establishing a debt to the United States, OPM will pay the balance of the refund to the debtor upon receipt of a certified copy of the judgment or administrative decision.

846.304 Computing FERS annuities for persons with CSRS service.

846.305 General inapplicability of CSRS pro

visions.

Subpart D-Refunds of CSRS Contributions. 846.401 Refunds of excess contributions. 846.402 Refunds of all CSRS contributions.

Subpart E-Cancellation of Designations of Beneficiary

846.501 Cancellation upon transfer to FERS.

AUTHORITY: 5 U.S.C. 8461(g); §846.201(b) also issued under 5 U.S.C. 7701(b)(2); §846.201(d) also issued under section 11246(b) of the National Capital Revitalization and Self-Government Improvement Act of 1997, title XI of Pub. L. 105-33, 111 Stat. 251; §846.202 also issued under section 301(d)(3) of Pub. L. 99– 335; §846.201(b)(ii) also issued under section 153 of Pub. L. 104-134, 110 Stat. 1321.

SOURCE: 52 FR 19235, May 21, 1987, unless otherwise noted.

Subpart A-General Provisions

§ 846.101 Purpose.

This part identifies the employees who may transfer to the Federal Employees Retirement System (FERS), gives the conditions under which they may transfer, and sets forth the method of computing the annuities of employees who transfer to FERS.

§ 846.102 Definitions.

In this part

CSRS means subchapter III of chapter 83 of title 5, United States Code.

CSRS/SS service means service subject to both CSRS deductions (or deductions under another retirement system for Federal employees if such service is creditable under CSRS) and social security deductions as a result of the Social Security Amendments of 1983. For this purpose, the service of an individual is considered CSRS/SS service if the service would have been covered under CSRS except for an for an election under section 208(a)(1)(A) of the Federal Employees Retirement Contribution Temporary Adjustment Act of 1983 to have no CSRS coverage.

Employee means an employee as defined by §842.102 of this chapter.

Employing office means the office of an agency to which jurisdiction and re

sponsibility for retirement matters for an employee have been delegated.

FERS means the Federal Employees Retirement System as described in chapter 84 of title 5, United States Code.

Former spouse means a former spouse as defined in §838.103 or § 838.1003 of this chapter.

Member means a Member of Congress as defined in section 2106 of title 5, United States Code.

OPM means the Office of Personnel Management.

Qualifying court order means a court order acceptable for processing as defined in §838.103 of this chapter or a qualifying court order as defined in § 838.1003 of this chapter.

Social security means coverage under the Old Age, Survivors, and Disability Insurance programs of the Social Security Act.

[52 FR 19235, May 21, 1987, as amended at 57 FR 33599, July 29, 1992]

Subpart B-Elections

§ 846.201_Elections to become subject to FERS.

(a) Employees and Members subject to CSRS on June 30, 1987. An individual who, on June 30, 1987, is employed in the Federal service or is a Member and who is covered by CSRS may elect to become subject to FERS. An election under this paragraph may not be made before July 1, 1987, or after December 31, 1987.

(b)(1) Separated employees who are reemployed. A former employee who, after June 30, 1987, becomes reemployed and subject to CSRS may elect, during the 6-month period beginning on the date he or she becomes subject to CSRS, to become subject to FERS, except that an employee serving under an interim appointment under the authority of §772.102 of this chapter is not eligible to elect to become subject to FERS.

(2) Separated employees who are employed with the District of Columbia Financial Management and Assistance Authority (Authority). A former employee who becomes employed with the Authority and subject to CSRS may elect, during the 6-month period beginning on the date he or she becomes subject to

CSRS, to become subject to FERS, except that an employee serving under an interim appointment under the authority of § 772.102 of this chapter is not eligible to elect to become subject to FERS.

(c) Employees and Members not subject to CSRS. (1) An employee or Member who is excluded from FERS coverage on January 1, 1987, by §842.104 (d) or (f) of this chapter and who, on December 31, 1986, is not subject to CSRS may elect to become subject to FERS. An election under this paragraph (c)(1) may not be made before July 1, 1987, or after December 31, 1987.

(2) An employee who, on June 30, 1987, is not covered by CSRS, but later becomes so covered, may elect to become subject to FERS. An election under this paragraph (c)(2) must be made during the 6-month period beginning on the date he or she becomes subject to CSRS.

(3) An employee who would be subject to CSRS except for the exclusions in § 831.201 of this chapter, but is not excluded from FERS by 5 U.S.C. 8401 nor by §842.105 of this chapter, is deemed eligible to make an election of FERS coverage under this section. An election under this paragraph (c)(3) must be made during the period beginning July 1, 1987, and ending December 31, 1987, or, if later, during the 6-month period beginning on the date the employment described in this paragraph (c)(3) begins.

(d) Exceptions. (1) An individual who is an employee of the government of the District of Columbia may not elect to become subject to FERS except an individual so employed who is covered by CSRS and eligible for FERS coverage by operation of section 11246, of Pub. L. 105–33, 111 Stat. 251.

(2) A Member who has irrevocably elected, by written notice to the official by whom the Member is paid, not to participate in FERS may not elect to become subject to FERS during the same continuous period of service.

(3) An employee or reemployed annuitant whose appointment is excluded from FERS coverage by law or regulation may not become subject to FERS by reason of an election under this section except as specified in paragraph

(c) of this section or as otherwise provided by law.

(4) An election under this section may not be made by an individual who is ineligible for social security coverage.

(e) Effective date. An election made under this section is effective with the first pay period beginning after the date the election is properly filed with the employing office.

(f) Irrevocability. An election made under this section is irrevocable.

[52 FR 19235, May 21, 1987, as amended at 57 FR 3714, Jan. 31, 1992; 61 FR 58459, Nov. 15, 1996; 62 FR 50997, Sept. 30, 1997]

making an

§ 846.202 Condition for making election.

(a) An election under §846.102 of this part may not become effective unless the election is made with the written consent of any former spouse(s) entitled to benefits under subpart F of part 831 of this chapter or part 838 of this chapter. As provided in section 301(d)(2)(A) of the FERS Act of 1986, this section applies only if OPM has been duly notified concerning any qualifying court order and has received the documentation required in §838.211, § 838.721, or §838.1005 of this chapter. This section does not apply with respect to a former spouse who has ceased to be so entitled because of remarrying before age 55.

(b) OPM may waive the requirement of paragraph (a) of this section upon a showing that the former spouse's whereabouts cannot be determined. A request for waiver on this basis must be accompanied by

(1) A judicial or administrative determination that the former spouse's whereabouts cannot be determined; or

(2)(i) Affidavits by the employee or Member and two other persons, at least one of whom is not related to the employee or Member, attesting to the inability to locate the former spouse and stating the efforts made to locate the spouse; and

(ii) Documentary corroboration such as newspaper reports about the former spouse's disappearance.

(c) OPM may waive the requirement of paragraph (a) of this section based on exceptional circumstances if the

employee or Member presents a judicial determination regarding the former spouse that would warrant waiver of the consent requirement based on exceptional circumstances.

(d)(1) OPM shall, upon application of an individual, grant an extension for such individual to make an election under §846.201 of this part, if the individual

(i) Files an application for the extension with OPM before the end of the period during which the individual would otherwise be eligible to make the election; and

(ii) Demonstrates to OPM's satisfaction that the extension is needed to secure the modification of a decree of divorce or annulment (or court ordered or court-approved property settlement incident to any such decree) on file at OPM in order to satisfy the consent requirement under paragraph (a) of this section.

(2) The application for extension is deemed to be filed with OPM on the date it is received in the employing office.

(3) An extension granted under this paragraph expires 6 months after the date it was granted. OPM may grant one further extension upon application by the individual seeking to make an election of FERS coverage.

(e) An electing individual who has a former spouse who may be entitled to benefits as described in paragraph (a) of this section must submit with the election either

(1) The consent of the former spouse in a form prescribed by OPM,

(2) A request for an extension as described in paragraph (f) of this section,

(3) A request for a waiver of the consent requirement and the documentation to support the request as described in paragraph (d) or (e) of this section,

or

(4) A request for a determination as to whether a qualifying court order as described in paragraph (a) of this section is on file with OPM.

(f) The request for waiver or extension described in paragraphs (b), (c), and (d) of this section must be in a form prescribed by OPM. The employing office must forward the request to OPM promptly.

(g) If OPM does not have a copy of a qualifying court order in its possession, OPM's notice to the agency that it has no qualifying court order is deemed to complete the individual's election of FERS, which becomes effective with the first pay period after the employing office receives OPM's notification.

(h) If OPM has a copy of a qualifying court order, OPM will notify both the individual and the employing agency of its determination regarding a request for extension.

(i) If OPM has a copy of a qualifying court order in its possession and grants a waiver of the requirement of paragraph (a) of this section, OPM will notify both the individual and the employing office of its decision. OPM's notice to the employing office is deemed to complete the individual's election, which becomes effective with the first pay period after the employing office receives OPM's notice that the waiver is granted.

[52 FR 19235, May 21, 1987, as amended at 57 FR 33599, July 29, 1992]

§ 846.203 Agency responsibilities.

(a) Employing offices must distribute the election forms provided by OPM to each eligible individual, including all individuals in a nonduty status.

(b) An employing office must obtain documentation of the individual's receipt of the election form specified in paragraph (a) of this section and retain the documentation permanently in the individual's official personnel folder (or the equivalent). Acceptable documentation includes

(1) A statement of receipt signed by the individual, or

(2) A signed postal return receipt showing that the election form was received at the individual's address.

§ 846.204 Belated elections and correction of administrative errors.

(a) Belated elections. On determination by an employing office that the FERS transfer handbook issued by OPM was not available to an individual in a timely manner or an individual was unable, for cause beyond his or her control, to elect FERS coverage within the prescribed time limit, the employing office may, within 6 months after