[Federal Register Volume 78, Number 43 (Tuesday, March 5, 2013)]
[Proposed Rules]
[Pages 14233-14236]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-04965]

Proposed Rules
                                                Federal Register

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.


Federal Register / Vol. 78, No. 43 / Tuesday, March 5, 2013 / 
Proposed Rules

[[Page 14233]]


5 CFR Part 850

RIN 3206-AM45

Electronic Retirement Processing

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.


SUMMARY: Pursuant to the President's January 18, 2011, Executive Order 
13563--Improving Regulation and Regulatory Review, published in the 
Federal Register, the Office of Personnel Management (OPM) undertook a 
review of our regulations, to streamline and revise this part so that 
it better serves OPM's ongoing modernization of the processing of 
benefits under the Civil Service Retirement System (CSRS), the Federal 
Employees' Retirement System (FERS), the Federal Employees' Group Life 
Insurance (FEGLI), the Federal Employees Health Benefits (FEHB), and 
the Retired Federal Employee Health Benefits (RFEHB) Programs. OPM 
proposes these amendments to ensure the rule reflects the electronic 
recordkeeping and automated retirement processing improvements being 
deployed by OPM, agencies, and Shared Service Centers under OPM's Human 
Resources Line of Business. These amendments are also being proposed to 
provide OPM with the flexibility to implement further improvements in 
automated retirement processing, recordkeeping, and electronic 
submission of forms and retirement applications as OPM's technological 
initiatives reach completion.

DATES: We must receive your comments by May 6, 2013.

ADDRESSES: You may submit comments, identified by docket number and/or 
RIN number 3206-AM54, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: combox@opm.gov. Include RIN number 3206-AM45 in the 
subject line of the message.
     Mail: John Panagakos, Retirement Policy, Retirement 
Services, Office of Personnel Management, 1900 E. Street NW., 
Washington, DC 20415-3200.

FOR FURTHER INFORMATION CONTACT: Roxann Johnson or Kristine Prentice, 
(202) 606-0299.

SUPPLEMENTARY INFORMATION: OPM proposes to amend part 850 of title 5, 
Code of Federal Regulations, by updating the regulations previously 
published at 72 FR 73573 (December 28, 2007). OPM is proceeding with 
its efforts to modernize its retirement processing systems and, 
therefore, is proposing these changes so that part 850 better reflects 
the automated systems OPM has developed and to afford flexibility in 
developing and adopting automated technologies that improve the quality 
and timeliness of retirement, health, and life insurance benefits 
    To assist in meeting the ongoing objective to modernize the 
processing of employee and retirement benefits, we have removed 
references to OPM's ``Retirement Systems Modernization'' (RSM) 
initiative so that part 850 reflects OPM's current efforts in 
modernizing these systems. For that reason, OPM proposes renaming part 
850 ``Electronic Retirement Processing.'' This proposed rule would also 
amend Sec. Sec.  850.101 and 850.102 by removing specific references to 
RSM and the electronic retirement and insurance processing system so 
that these subsections better reflect OPM's current modernization 
efforts and objectives. The proposed rule adds language in Sec.  
850.101(a) to clarify that automated technologies implemented to 
improve the quality and timeliness of retirement, health, and life 
insurance benefits processing must be accessible to people with 
disabilities as required by section 508 of the Rehabilitation Act, 29 
U.S.C. 794(d).
    The proposed rule would add definitions within Sec.  850.103 that 
describe specific databases, electronic records, and processes OPM has 
developed, utilized, or is in the process of implementing since part 
850 was first issued in 2007. Specifically, we have included 
definitions of OPM's Electronic Document Management System, the 
Electronic Official Personnel Record Folder, the Electronic Individual 
Retirement Record, the Electronic Retirement Record, and the Retirement 
Data Repository.
    The proposed rule also revises language at Sec.  850.106(a)(4) to 
clarify that when there are regulatory requirements under CSRS, FERS, 
FEGLI, FEHB or RFEHB that require a signature be notarized, the 
notarization requirement may be satisfied if the notary public or other 
official's signature is attached to, or logically associated with, all 
records necessary to meet the prescribed regulations. Additionally, we 
have added language in the proposed rule to clarify that a person 
making an electronic signature must be in the physical presence of a 
notary or other official. However, the proposed rule would allow the 
Director to issue directives allowing for virtual presence if the 
procedures used by the notary or official (such as audio-video 
conferencing) have safeguards equivalent to the physical presence of 
the person signing.
    We also propose removing the references to notice requirements 
under Sec. Sec.  850.201(c) and 850.203(b). These requirements were 
included in part 850 to accommodate specific processes designed for the 
previous RSM effort. However, upon review, OPM has determined that 
under future retirement processes, OPM's standard informational 
material provided to annuitants and OPM's annual notices, which include 
information to annuitants regarding their post-retirement survivor 
election rights and annuity Cost-of-Living Adjustments, provide 
sufficient information to annuitants to satisfy the purpose of the 
notice requirements under Sec. Sec.  850.201(c) and 850.203(b).
    The proposed rule would also add specific references at Sec.  
850.301 to the Electronic Individual Retirement Record. These 
electronic record equivalents for the hardcopy based Individual 
Retirement Record (SF 2806 or SF 3100) are, or will be, provided to OPM 
by agencies and Shared Service Centers through the electronic data 
feeds for storage in OPM's Retirement Data Repository databases. 
Section 850.301 would also be amended to add a reference to OPM's 
Electronic Document Management System, which is a database of 
electronic images of hardcopy documents imaged and stored during OPM's 
RSM initiative.

[[Page 14234]]

Additionally, we propose removing subsection (c) from section 850.301, 
which requires OPM to retain documents in accordance with requirements 
under title 44, United States Code, after they have been imaged or 
converted to electronic records. Because title 44, United States Code, 
provides the requirements federal agencies must follow in retaining 
documents after they have been converted to electronic records, the 
additional requirements noted under Sec.  850.301(c) regarding 
retention are unnecessary.
    Finally, OPM has received many requests from agencies to allow them 
the ability to submit electronically notices of law enforcement 
officer, firefighter, or nuclear materials retirement coverage required 
by Sec. Sec.  831.811(a), 831.911(a), 842.808(a), or 842.910(a). To 
accommodate these requests, we have included instructions under Sec.  
850.401 on how to submit these notices electronically and propose 
amending this section to require agencies and other entities to use 
this method when submitting future notices.

Executive Order 13563 and Executive Order 12866

    The Office of Management and Budget has reviewed this rule in 
accordance with E.O. 13563 and E.O. 12866.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities because the purpose of 
this regulation is to assist in facilitating OPM's ongoing 
modernization of the processing of benefits under CSRS, FERS, FEGLI, 

List of Subjects in 5 CFR Parts 850

    Administrative practice and procedure, Air traffic controllers, 
Alimony, Claims, Disability benefits, Firefighters, Government 
employees, Income taxes, Intergovernmental relations, Law enforcement 
officers, Pensions, Reporting and recordkeeping requirements, 

Office of Personnel Management.
John Berry,

    For the reasons discussed in the preamble, the Office of Personnel 
Management is proposing to amend 5 CFR parts 850 as follows:


1. The authority citation for part 850 continues to read as follows:

    Authority:  5 U.S.C. 8347; 5 U.S.C. 8461; 5 U.S.C. 8716; 5 
U.S.C. 8913; sec. 9 of Pub. L. 86-724, 74 Stat. 849, 851-52 
(September 8, 1960) as amended by sec. 102 of Reorganization Plan 
No. 2 of 1978, 92 Stat. 3781, 3783 (February 23, 1978).

2. The heading for part 850 is revised as above to read as follows:
3. Revise Sec.  850.101 to read as follows:

Sec.  850.101  Purpose and scope.

    (a) The purpose of this part is to enable changes to OPM's 
retirement and insurance processing systems to improve the quality and 
timeliness of services to employees and annuitants covered by CSRS and 
FERS by using contemporary, automated business processes and supporting 
accessible technologies. By utilizing these automated processes, OPM 
will employ more efficient and effective business systems to respond to 
increased customer demand for higher levels of customer service and 
online self-service tools.
    (b) The provisions of this part authorize exceptions from 
regulatory provisions that would otherwise apply to CSRS and FERS 
annuities and FEGLI, FEHB, and RFEHB benefits processed by or at the 
direction of OPM. Those regulatory provisions that would otherwise 
apply were established for a hardcopy based retirement and insurance 
benefits processing system that may eventually be phased out but which 
will continue to operate concurrently with OPM's modernization efforts. 
During the phased transition to electronic retirement and insurance 
processing, certain regulations that were not designed with information 
technology needs in mind, and which are incompatible with electronic 
business processes, must be set aside with respect to electronic 
retirement and insurance processing. The regulations set forth in this 
part make the transition to electronic processing possible.
    (c) The provisions of this part do not affect retirement and 
insurance eligibility and annuity computation provisions. The 
provisions for capturing retirement and insurance data in an electronic 
format, however, may support, in some instances, more precise 
calculations of annuity and insurance benefits than were possible using 
hardcopy records.
4. Revise Sec.  850.103 to read as follows:

Sec.  850.103  Definitions.

    In this part--
    Agency means an Executive agency as defined in section 105 of title 
5, United States Code; a legislative branch agency; a judicial branch 
agency; the U.S. Postal Service; the Postal Regulatory Commission; and 
the District of Columbia government.
    Biometrics means the technology that converts a unique 
characteristic of an individual into a digital form, which is then 
interpreted by a computer and compared with a digital exemplar copy of 
the characteristic stored in the computer. Among the unique 
characteristics of an individual that can be converted into a digital 
form are voice patterns, fingerprints, and the blood vessel patterns 
present on the retina of one or both eyes.
    Cryptographic control method means an approach to authenticating 
identity or the authenticity of an electronic document through the use 
of a cipher (i.e., a pair of algorithms) which performs encryption and 
    CSRS means the Civil Service Retirement System established under 
subchapter III of chapter 83 of title 5, United States Code.
    Digital signature means an electronic signature generated by means 
of an algorithm that ensures that the identity of the signatory and the 
integrity of the data can be verified. A value, referred to as the 
``private key,'' is generated to produce the signature and another 
value, known as the ``public key,'' which is linked to but is not the 
same as the private key, is used to verify the signature.
    Digitized signature means a graphical image of a handwritten 
signature usually created using a special computer input device (such 
as a digital pen and pad), which contains unique biometric data 
associated with the creation of each stroke of the signature (such as 
duration of stroke or pen pressure). A digitized signature can be 
verified by a comparison with the characteristics and biometric data of 
a known or exemplar signature image.
    Director means the Director of the Office of Personnel Management.
    Electronic communication means any information conveyed through 
electronic means and includes electronic forms, applications, 
elections, and requests submitted by email or any other electronic 
    Electronic Document Management System (EDMS) means the electronic 
system of images of hardcopy individual retirement records (SF 2806 and 
SF 3100) and other retirement-related documents.
    Electronic Official Personnel Record Folder (eOPF) means an 
electronic version of the hardcopy Official Personnel Folder (OPF), 
providing Web-enabled access for federal employees and HR staff to view 
eOPF documents.

[[Page 14235]]

    Electronic Individual Retirement Record (eIRR) means a web-based 
database that contains certified electronic closeout and fully paid 
post-56 military service deposit Individual Retirement Records (IRRs), 
also known as Standard Form (SF) 2806 and SF 3100. The eIRR is stored 
in the Electronic Individual Retirement Record records storage database 
(formerly known as the Individual Retirement Record Closeout Data 
Capture or ICDC records storage database).
    Employee means an individual, other than a Member of Congress, who 
is covered by CSRS or FERS.
    Enterprise Human Resources Integration (EHRI) Data System means the 
comprehensive electronic retirement record-keeping system that supports 
OPM's retirement processing across the Federal Government.
    Electronic Retirement Record (ERR) means the certified electronic 
retirement record submitted to OPM as a retirement data feed in 
accordance with the Guide to Retirement Data Reporting. The ERR is 
submitted to OPM whenever an Agency would otherwise submit a hardcopy 
    FEGLI means the Federal Employees' Group Life Insurance Program 
established under chapter 87 of title 5, United States Code.
    FEHB means the Federal Employees Health Benefits Program 
established under chapter 89 of title 5, United States Code.
    FERS means the Federal Employees' Retirement System established 
under chapter 84 of title 5, United States Code.
    Member means a Member of Congress as defined by section 2106 of 
title 5, United States Code, who is covered by CSRS or FERS.
    Non-cryptographic method is an approach to authenticating identity 
that relies solely on an identification and authentication mechanism 
that must be linked to a specific software platform for each 
    Personal identification number (PIN) or password means a non-
cryptographic method of authenticating the identity of a user of an 
electronic application, involving the use of an identifier known only 
to the user and to the electronic system, which checks the identifier 
against data in a database to authenticate the user's identity.
    Public/private key (asymmetric) cryptography is a method of 
creating a unique mark, known as a digital signature, on an electronic 
document or file. This method involves the use of two computer-
generated, mathematically-linked keys: A private signing key that is 
kept private and a public validation key that is available to the 
    Retirement Data Repository means a secure centralized data 
warehouse that stores electronic retirement data of employees covered 
under the Civil Service Retirement System or the Federal Employees 
Retirement System compiled from multiple sources including agencies and 
Shared Service Centers.
    RFEHB means the Retired Federal Employees Health Benefits Program 
established under Public Law 86-724, 74 Stat. 849, 851-52 (September 8, 
1960), as amended.
    Shared Service Centers means processing centers delivering a broad 
array of administrative services to multiple agencies.
    Shared symmetric key cryptography means a method of authentication 
in which a single key is used to sign and verify an electronic 
document. The single key (also known as a ``private key'') is known 
only by the user and the recipient or recipients of the electronic 
    Smart card means a plastic card, typically the size of a credit 
card, containing an embedded integrated circuit or ``chip'' that can 
generate, store, or process data. A smart card can be used to 
facilitate various authentication technologies that may be embedded on 
the same card.
5. Amend Sec.  850.106 by revising paragraph (a)(4) to read as follows:

Sec.  850.106  Electronic signatures.

    (a) * * *
    (4)(i) In general, any regulatory requirement under CSRS, FERS, 
FEGLI, FEHB or RFEHB that a signature be notarized, certified, or 
otherwise witnessed, by a notary public or other official authorized to 
administer oaths may be satisfied by the electronic signature of the 
person authorized to perform those acts when such electronic signature 
is attached to or logically associated with all other information and 
records required to be included by the applicable regulation.
    (ii) Except as provided in paragraph (iii), a person signing a 
consent or election for the purpose of electronic notarization under 
paragraph (i) must be in the physical presence of the notary public or 
an official authorized to administer oaths.
    (iii) The Director may provide in directives issued under Sec.  
850.104 that alternative procedures utilized by a notary public or 
other official authorized to administer oaths (such as audio-video 
conference technology) will be deemed to satisfy the physical presence 
requirement for a notarized, certified, or witnessed election or 
consent, but only if those procedures with respect to the electronic 
system provide the same safeguards as are provided by physical 
* * * * *
6. Revise Sec.  850.201 to read as follows:

Sec.  850.201  Applications for benefits.

    (a) Hardcopy applications and related submissions that are 
otherwise required to be made to an individual's employing agency 
(other than by statute) may instead be submitted electronically in such 
form as the Director prescribes under Sec.  850.104.
    (b) Data provided under subpart C of this part are the basis for 
adjudicating claims for CSRS and FERS retirement benefits, and will 
support the administration of FEGLI, FEHB and RFEHB coverage for 
annuitants, under this part.

Sec.  850.202  [Amended]

7. Amend Sec.  850.202 by removing paragraphs (b)(1) and (b)(2).
8. Revise Sec.  850.203 to read as follows:

Sec.  850.203  Other elections.

    Any other election may be effected in such form as the Director 
prescribes under Sec.  850.104. Such elections include but are not 
limited to elections of coverage under CSRS, FERS, FEGLI, FEHB, or 
RFEHB by individuals entitled to elect such coverage; applications for 
service credit and applications to make deposit; and elections 
regarding the withholding of State income tax from annuity payments.
9. Revise Sec.  850.301 to read as follows:

Sec.  850.301  Electronic records; other acceptable records.

    (a) Acceptable electronic records for retirement and insurance 
processing by OPM include--
    (1) Electronic employee data, including an eIRR or an ERR, 
submitted by an agency, agency payroll office, or Shared Service 
Center, or other entity and stored within the EHRI Retirement Data 
Repository, the eIRR records storage database, or other OPM database.
    (2) Electronic Official Personnel Folder (eOPF) data; and
    (3) Documents, including hardcopy versions of the Individual 
Retirement Record (SF 2806 or SF 3100), or data or images obtained from 
such documents, including images stored in EDMS, that are converted to 
an electronic or digital form by means of image scanning or other forms 
of electronic or digital conversion.
    (b) Documents that are not converted to an electronic or digital 
form will

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continue to be acceptable records for processing by the retirement and 
insurance processing system.
10. Revise Sec.  850.401 to read as follows:

Sec.  850.401  Electronic notice of coverage determination.

    An agency or other entity that submits electronic employee records 
directly or through a Shared Service Center must include in the notice 
of law enforcement officer, firefighter, or nuclear materials 
retirement coverage, required by Sec. Sec.  831.811(a), 831.911(a), 
842.808(a), or 842.910(a) of this chapter, the position description 
number, or other unique alphanumeric identifier, in the notice for the 
position for which law enforcement officer, firefighter, or nuclear 
materials courier retirement coverage has been approved. Agencies or 
other entities must submit position descriptions to OPM in a PDF 
document to combox address: combox@opm.gov.
[FR Doc. 2013-04965 Filed 3-4-13; 8:45 am]