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Proposed Rules
Federal Register Vol. 86, No. 43
Monday, March 8, 2021

This section of the FEDERAL REGISTER
contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules.

OFFICE OF PERSONNEL
MANAGEMENT
5 CFR Part 849
RIN 3206AO08

Representative Payees Under the Civil Service Retirement System and Federal Employees Retirement System Office of Personnel Management.
ACTION: Proposed rule.
AGENCY:

The Office of Personnel Management OPM is issuing a proposed rule to promulgate regulations which administer the representative payee program authorized by statute.
This proposed rule is necessary to ensure proper procedures for annuity payments due minors or individuals who are mentally incompetent or under other legal disability and are unable to manage their respective payments.
DATES: Send comments on or before May 7, 2021.
ADDRESSES: You may submit comments identified by docket number and/or Regulatory Information Number RIN
and title, by the following method:
Federal eRulemaking Portal: http
www.regulations.gov. Follow the instructions for submitting comments.
All submissions received must include the agency name and docket number or RIN for this document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing at http
www.regulations.gov as they are received without change, including any personal identifiers or contact information.
FOR FURTHER INFORMATION CONTACT:
Michael Shipley, 202 6060299.
SUPPLEMENTARY INFORMATION: Under the Civil Service Retirement System CSRS, the provisions of Public Law 89554, Sept. 6, 1966, 80 Stat. 582 authorized the United States Civil Service Commission, precursor to the United
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States Office of Personnel Management OPM, to make payments due a minor or an individual mentally incompetent, or under other legal disability, to a person who is constituted guardian or other fiduciary by the law of the State of residence of the claimant or any person, who in the judgment of the Commission, is responsible for the care of the claimant. Similarly, the Federal Employees Retirement System FERS
Act of 1986, Public Law 99335, Title I, section 101a, June 6, 1986, 100 Stat.
575, authorized OPM to make the same payments under FERS. According to these statutes, OPM has historically authorized these payments to individuals, and in some instances, organizations on behalf of the annuitant as representative payees.
On March 18, 2020, Congress enacted Public Law 116126, 134 Stat. 174177
2020, the Representative Payee Fraud Prevention Act of 2019 the Act, which made numerous changes to existing statutes regarding representative payees.
First the Act officially defined the term representative payee under both CSRS
and FERS as the person including an organization designated . . . to receive payment on behalf of a minor or an individual mentally incompetent or under other legal disability at 5 U.S.C.
833133 and 5 U.S.C. 840139, respectively. Ensuring that organization was added to the definition recognizes that other entities, such as agencies, institutions, nursing homes, et al., may serve as representative payees.
Congress also enacted 5 U.S.C. 8345a and 8466a to address the embezzlement or conversion of payments. Congress made it unlawful for a representative payee to use the funds received as a representative payee for any use other than the use and benefit of the individual on whose behalf the payments were received. OPM was given the authority to revoke certification as a representative payee, if we determine that a representative payee has embezzled or converted the annuity payments, and to certify payments to another representative payee or directly to the annuitant.
Congress set forth the penalty for misuse of benefits by a representative payee, under title 18 U.S.C., as a fine, imprisonment for not more than 5 years, or both.
Furthermore, in selecting a representative payee, OPM was granted
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authority to defer or suspend the annuity payment until a representative payee is located, if we determine that paying the annuitant directly would cause substantial harm to the annuitant.
Substantial harm exists if both of the following conditions exist:
1 Direct payment of benefits can be expected to cause serious physical or mental injury to the individual; and 2 The potential effect of the injury outweighs the effect of having no income to meet the basic needs of the individual.
We have included this language concerning substantial harm to the proposed regulations.
Finally, the Act created limitations on who can be appointed as a representative payee. Individuals that have been convicted of a violation of: 1
5 U.S.C. 8345a or 8466a; 2 section 208
or 1632 of the Social Security Act 42
U.S.C. 408, 1383a; or 3 section 6101
of title 38, are barred from serving as a representative payee.
OPM is promulgating the proposed regulations to fully implement and administer the representative payee program for CSRS and FERS. The regulations are required to prevent misuse and fraud by representative payees.
Regulatory Impact Analysis OPM has examined the impact of this proposed rule as required by Executive Order 12866 and Executive Order 13563, which directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits including potential economic, environmental, public, health, and safety effects, distributive impacts, and equity. A regulatory impact analysis must be prepared for major rules with economically significant effects of $100
million or more in any one year. This rule was not designated as a significant regulatory action, under Executive Order 12866.
Regulatory Flexibility Act The Office of Personnel Management certifies that this rule will not have a significant economic impact on a substantial number of small entities.
Federalism We have examined this rule in accordance with Executive Order 13132,
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