[Federal Register: July 22, 2010 (Volume 75, Number 140)]
[Proposed Rules]
[Page 42662-42672]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22jy10-22]
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PENSION BENEFIT GUARANTY CORPORATION
29 CFR Parts 4003 and 4903
Debt Collection
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would revise the Pension Benefit Guaranty
Corporation's regulation on debt collection to conform to the Debt
Collection Improvement Act of 1996, the Federal Claims Collection
Standards and other legal requirements applicable to the collection of
non-tax debts owed to PBGC. This proposed rule would add salary offset
and administrative wage garnishment to the collection methods allowed
under the current regulation and make other changes to strengthen
PBGC's debt collection program.
DATES: Comments must be received by September 20, 2010.
ADDRESSES: Comments may be submitted by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the Web site instructions for submitting comments.
E-mail: reg.comments@pbgc.gov.
Fax: 202-326-4224.
Mail or Hand Delivery: Legislative and Regulatory
Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW.,
Washington, DC 20005-4026.
Comments received, including personal information provided, will be
posted to http://www.pbgc.gov. Copies of comments may also be obtained
by writing to Disclosure Division, Office of General Counsel, Pension
Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-
4026, or calling 202-326-4040 during normal business hours. (TTY and
TDD users may call the Federal relay service toll-free at 1-800-877-
8339 and ask to be connected to 202-326-4040.)
FOR FURTHER INFORMATION CONTACT: Margaret E. Drake, Attorney, Office of
the General Counsel, Pension Benefit Guaranty Corporation, 1200 K
Street, NW., Washington, DC 20005-4026; 202-326-4400 (extension 3228).
(For TTY/TDD users, call the Federal relay service toll-free at 1-800-
877-8339 and ask to be connected to 202-326-4400 (extension 3228)).
SUPPLEMENTARY INFORMATION: This proposed rule will revise and replace
the PBGC's debt collection regulations found at 29 CFR part 4903 to
conform to the Debt Collection Improvement Act of 1996 (DCIA), Public
Law 104-134, 110 Stat. 1321, 1358 (April 26, 1996), the revised Federal
Claims Collection Standards, 31 CFR chapter IX (parts 900 through 904),
and other laws applicable to the collection of non-tax debt owed to the
Government.
Background
In 1994, PBGC adopted a regulation on debt collection to provide
procedures to implement administrative offset, as authorized by the
Federal Claims Collection Act of 1966, as amended by the Debt
Collection Act of 1982 (31 U.S.C. 3701, et seq.), and in accordance
with regulations issued by the Department of Justice and the General
Accountability Office. In 1995, PBGC adopted a regulation on debt
collection to provide procedures to implement tax refund offset, as
required for participation in the Federal tax refund offset program
authorized by 31 U.S.C. 3720A and in accordance with regulations issued
by the Treasury Department. Together, these regulations comprise PBGC's
current debt collection regulation (29 CFR part 4903) providing
procedures for debt collection through administrative offset and tax
refund offset. Administrative offset allows PBGC to request that debts
owed to PBGC by a debtor (e.g., in connection with government
contractual obligations) be offset by amounts another Federal agency
may owe to the debtor. Likewise, other Federal agencies may request the
collection of debts owed to them be offset by amounts PBGC may owe the
debtor. Tax refund offset allows PBGC to request that debts owed to
PBGC by a debtor be offset by amounts the Government may owe to the
debtor. The Debt Collection Improvement Act of 1996 (DCIA)
fundamentally changed the manner in which the Federal Government is
required to manage the collection of its delinquent debts. Under DCIA,
Congress directed that the management of
[[Page 42663]]
delinquent obligations is to be centralized at the Treasury Department
in order to increase the efficiency of the Government's collection
efforts.
Pursuant to 31 U.S.C. 3716, to utilize the administrative offset
tools under DCIA, Federal agencies had to ``adopt, without change,
regulations on collecting by administrative offset promulgated by the
Department of Justice, the Government Accountability Office, or the
Department of the Treasury,'' or promulgate their own regulations
consistent with the regulations issued by the Department of Justice,
the General Accountability Office, or the Department of the Treasury.
On November 20, 2000, the Department of Justice and the Department of
the Treasury revised the FCCS. 65 FR 70390 (Nov. 20, 2000).
Overview of Proposed Regulatory Changes
This proposed regulation would revise the procedures for the
collection of non-tax debts owed to PBGC through administrative offset
and tax refund offset. It would adopt the FCCS and supplement it by
prescribing procedures consistent with the FCCS, as necessary and
appropriate for PBGC operations. The proposed regulation would also
provide for the collection of debts via salary offset and the use of
administrative wage garnishment. Salary offset is the collection of
debt owed by a Federal employee by withholding up to 15 percent of the
employee's disposable pay. The procedures for salary offset are
governed by 5 U.S.C. 5514, and Office of Personnel Management (OPM)
regulations (5 CFR part 550, subpart k). OPM regulations provide for
salary offset through the Treasury Offset Program.\1\ Administrative
wage garnishment is the collection of a debt owed by a former Federal
employee by ordering a non-Federal employer to withhold funds from a
debtor's wages. The procedures for administrative wage garnishment are
governed by 31 U.S.C. 3720D and 31 CFR 285.11.
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\1\ PBGC has an internal directive which provides procedures to
recover debts owed to PBGC from the current pay account of an
employee, and to process requests received from another Federal
agency from the current pay account of a PBGC employee to recover
debts owed to the agency.
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As with the PBGC's current debt collection regulation, the proposed
regulation would apply to collection of debts to PBGC by employers
(e.g., unpaid premium, penalty and interest under part 4007,
information penalties under part 4071, and employer liability under
part 4062) and to the recovery of benefit overpayments to participants
in cases where PBGC does not recoup the overpayment under part 4022
(e.g., where a participant is not entitled to future annuity benefits
as of the plan's termination date). The proposed regulation would also
apply to debts owed to the United States by current and former PBGC
employees.
The proposed regulation would not apply to the collection of tax
debts, which is governed by the Internal Revenue Code of 1986 (26
U.S.C. 1 et seq.) and regulations, policies, and procedures issued by
the Internal Revenue Service.
Under the proposed regulation, benefits paid by PBGC generally
would not be offset, in accordance with the anti-alienation provisions
under 29 U.S.C. 1056(d) and 26 U.S.C. 401(a)(13). However, benefits
paid by PBGC could be offset under certain limited exceptions from
those provisions (e.g., in certain fiduciary breach situations).
Nothing in the proposed regulation would preclude the use of
collection procedures not contained in the regulation. For example,
PBGC would be able to collect unused travel advances through setoff of
an employee's pay under 5 U.S.C. 5705. Moreover, certain PBGC efforts
to obtain payment of debts arising out of activities under ERISA are
authorized by and subject to requirements prescribed under other
Federal statutes. Whether, and to what extent, such requirements apply
to the collection of a debt by PBGC, PBGC's activities will be
consistent with such requirements, as well as with any other applicable
requirements (see e.g., parts 4000, 4003, 4007, and 4062). PBGC would
be able to use multiple collection methods at the same time to collect
a debt, as permitted by law. Nothing in this regulation requires PBGC
to duplicate notices or administrative proceedings required by
contract, this part, or other laws or regulations.
PBGC maintains a system of records to collect debts owed to PBGC by
various individuals, PBGC-13, Debt Collection. See 65 FR 25397 (May 1,
2000).
Subpart A--4903.1 to 4903.4
Subpart A of this proposed regulation addresses the general
provisions applicable to the collection of non-tax debts owed to PBGC.
Proposed Sec. 4903.5 includes procedures for the collection of debts
owed to PBGC, other than those subject to recoupment.
Under proposed Sec. 4903.2, PBGC would not be required to
duplicate notices or administrative proceedings provided by contract,
this proposed regulation, or other laws or regulations. PBGC would not
be required to provide a debtor with two hearings on the same issue
simply because PBGC used two different collection tools, each of which
requires that the debtor be provided with a hearing. For example, if
PBGC has provided a debtor with notice of unpaid premium under part
4007, it need not provide additional notice to the debtor before using
this regulation to collect the debt owed to PBGC.
Proposed Sec. 4903.4 states that PBGC's rules under part 4000
regarding permissible methods of filing with PBGC, determining dates of
filing and computation of time apply for purposes of this regulation.
Subpart B--4903.5 to 4903.20
Subpart B of this proposed regulation describes the procedures to
be followed by PBGC when collecting debts owed to it. Among other
things, subpart B outlines the due process procedures PBGC would be
required to follow when using offset (administrative, tax refund, and
salary) to collect a debt owed to it, when garnishing a debtor's non-
Federal wages, or before reporting a debt owed to it to a credit
bureau. Specifically, PBGC would be required to provide debtors with
notice of the amount and type of the debt, the intended collection
action to be taken, how a debtor may pay the debt or make alternate
payment arrangements, how a debtor could review documents related to
the debt, and the consequences to the debtor if the debt is not repaid.
Subpart B also describes how a debtor may request a hearing to contest
the noticed debt.
Subpart B also explains the circumstances under which PBGC could
waive interest, penalties, and administrative costs. Such waivers are
permitted only to the extent permitted by law. For example, part 4007
of this chapter does not permit waivers of interest charges on late
premium payments. PBGC may provide additional guidance on how interest,
penalties, and administrative costs are assessed on particular types of
debts.
Subpart B would update PBGC procedures to reflect changes required
by DCIA. For example, DCIA centralized the use of offset by requiring
agencies to refer debts delinquent for more than 180 days to the
Financial Management Service (FMS) of the Treasury Department for
offset. See 31 U.S.C. 3716(c)(6). FMS is required to offset payments to
persons who owe delinquent debts to the Government. The proposed
regulation would revise PBGC's regulations to comply with DCIA
requirements for all types of offsets. This proposed regulation would
also incorporate procedures for several
[[Page 42664]]
collection remedies authorized by DCIA, such as administrative wage
garnishment.
Subpart C--4903.21 to 4903.22
Subpart C of this proposed regulation describes the procedures to
be followed when a Federal agency, other than PBGC, wishes to use the
offset process to collect a debt from a non-tax payment issued by PBGC
as a payment agency. Subpart C governs the process for offsets that
occur on a case-by-case basis to collect debts from payments made by
PBGC to its employees, its vendors, and others whom PBGC is required or
authorized to pay. While centralized offset through the Treasury Offset
Program is the Government's primary offset collection tool, this
proposed regulation provides the procedures to be used when centralized
offset is not otherwise available or appropriate. An agency's use of
the non-centralized administrative offset process shall not provide
grounds to invalidate any offset on the basis that centralized offset
was not used.
Compliance With Rulemaking Guidelines
Executive Order 12866
PBGC has determined, in consultation with the Office of Management
and Budget, that this rule is not a ``significant regulatory action''
under Executive Order 12866.
Regulatory Flexibility Act
PBGC certifies under section 605(b) of the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.) that the amendments in this proposed
regulation would not have a significant economic impact on a
substantial number of small entities. Accordingly, as provided in
section 605 of the Regulatory Flexibility Act, sections 603 and 604 do
not apply.
List of Subjects
29 CFR Part 4003
Administrative practice and procedure, Organization and functions
(Government agencies, Pension insurance, Pensions).
29 CFR Part 4903
Claims.
For the reasons given above, PBGC proposes to amend 29 CFR parts
4003 and 4903 as follows:
PART 4003--RULES FOR ADMINISTRATIVE REVIEW OF AGENCY DECISIONS
1. The authority citation for part 4003 continues to read as
follows:
Authority: 29 U.S.C. 1302(b)(3)
Sec. 4003.32 [Amended]
2. Amend Sec. 4003.32 by removing ``Sec. 4903.33 of this chapter,
by a date 60 days (or more) thereafter'' and replacing it with ``part
4903 of this chapter, by the date''.
Sec. 4003.32 [Amended]
3. Amend Sec. 4003.52 by removing ``Sec. 4903.33 of this chapter,
by a date 60 days (or more) thereafter'' and replacing it with ``part
4903 of this chapter, by the date''.
4. Part 4903 is revised to read as follows:
PART 4903--DEBT COLLECTION
Subpart A--General Provisions
Sec.
4903.1 What definitions apply to this part?
4903.2 What do these regulations cover?
4903.3 Do these regulations adopt the Federal Claims Collection
Standards (FCCS)?
4903.4 What rules apply for purposes of filing with PBGC,
determining dates of filings, and computation of time?
Subpart B--Procedures To Collect Debts Owed to PBGC
4903.5 What notice will PBGC send to a debtor when collecting a debt
owed to PBGC?
4903.6 How will PBGC add interest, penalty charges, and
administrative costs to a debt owed to PBGC?
4903.7 When will PBGC allow a debtor to pay a debt owed to PBGC in
installments instead of a lump sum?
4903.8 When will PBGC compromise a debt owed to PBGC?
4903.9 When will PBGC suspend or terminate debt collection on a debt
owed to PBGC?
4903.10 When will PBGC transfer a debt owed to PBGC to the Treasury
Department's Financial Management Service for collection?
4903.11 How will PBGC use administrative offset (offset of non-tax
Federal payments) to collect a debt owed to PBGC?
4903.12 How will PBGC use tax refund offset to collect a debt owed
to PBGC?
4903.13 How will PBGC offset a Federal employee's salary to collect
a debt owed to PBGC?
4903.14 How will PBGC use administrative wage garnishment to collect
a debt owed to PBGC from a debtor's wages?
4903.15 How will PBGC report to credit bureaus debts owed to PBGC?
4903.16 How will PBGC refer to private collection agencies debts
owed to PBGC?
4903.17 When will PBGC refer to the Department of Justice debts owed
to PBGC?
4903.18 Will a debtor who owes a debt to PBGC or another Federal
agency, and persons controlled by or controlling such debtors, be
ineligible for Federal loan assistance, grants, cooperative
agreements, or other sources of Federal funds?
4903.19 How does a debtor request a special review based on a change
in circumstances such as a catastrophic illness, divorce, death, or
disability?
4903.20 Will PBGC issue a refund if money is erroneously collected
on a debt owed to PBGC?
Subpart C--Procedures for Offset of PBGC Payments To Collect Debts Owed
to Other Federal Agencies
4903.21 How do other Federal agencies use the offset process to
collect debts from payments issued by PBGC?
4903.22 What does PBGC do upon receipt of a request to offset the
salary of a PBGC employee to collect a debt owed by the employee to
another Federal agency?
Authority: 5 U.S.C. 5514; 29 U.S.C. 1302(b); 31 U.S.C. 3701-
3719, 3720A; 5 CFR part 550, subpart K; 31 CFR part 285; 31 CFR
parts 900-904.
Subpart A--General Provisions
Sec. 4903.1 What definitions apply to this part?
The following terms are defined in Sec. 4001.2 of this chapter:
Code, PBGC, and Person. In addition, for purposes of this part:
Administrative offset or offset means withholding funds payable by
the United States (including funds payable by the United States on
behalf of a state government) to, or held by the United States for, a
person to satisfy a debt owed by the person. The term ``administrative
offset'' can include, but is not limited to, the offset of Federal
salary, vendor, retirement, and Social Security benefit payments. The
terms ``centralized administrative offset'' and ``centralized offset''
refer to the process by which the Treasury Department's Financial
Management Service offsets Federal payments through the Treasury Offset
Program.
Administrative wage garnishment means the process by which a
Federal agency orders a non-Federal employer to withhold amounts from a
debtor's wages to satisfy a debt, as authorized by 31 U.S.C. 3720D, 31
CFR 285.11, and this part.
Agency or Federal agency means an executive department or agency; a
military department; the United States Postal Service; the Postal
Regulatory Commission; any nonappropriated fund instrumentality
described in 5 U.S.C. 2105(c); the United States Senate; the United
States House of Representatives; any court, court administrative
office, or instrumentality in the judicial or legislative branches of
the Government; or a Government corporation.
Creditor agency means any Federal agency that is owed a debt.
[[Page 42665]]
Debt means any amount of money, funds or property that has been
determined by an appropriate official of the Federal Government to be
owed to the United States government, including government-owned
corporations, by a person. As used in this part, the term ``debt'' can
include a debt owed to PBGC, but does not include debts arising under
the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.).
Debtor means a person who owes a debt to the United States.
Delinquent debt means a debt that has not been paid by the date
specified in the agency's initial written demand for payment or
applicable agreement or instrument (including a post-delinquency
payment agreement) unless other satisfactory payment arrangements have
been made.
Disposable pay has the same meaning as that term is defined in 5
CFR 550.1103.
Employee or Federal employee means a current employee of PBGC or
other Federal agency, including a current member of the uniformed
services, including the Army, Navy, Air Force, Marine Corps, Coast
Guard, Commissioned Corps of the National Oceanic and Atmospheric
Administration, Commissioned Corps of the Public Health Service, the
National Guard, and the reserve forces of the uniformed services.
FCCS means the Federal Claims Collection Standards, 31 CFR parts
900-904.
Financial Management Service (FMS) means the Treasury Department
bureau that is responsible for the centralized collection of delinquent
debts through the offset of Federal payments and other means.
Payment agency or Federal payment agency means any Federal agency
that transmits payment requests in the form of certified payment
vouchers, or other similar forms, to a disbursing official for
disbursement. The payment agency may be the agency that employs the
debtor. In some cases, PBGC may be both the creditor agency and payment
agency.
Salary offset means a type of administrative offset to collect a
debt under Section 5514 of Title 5 of the United States Code and 5 CFR
part 550, subpart K by deduction(s) at one or more officially
established pay intervals from the current pay account of an employee
with or without his or her consent.
Tax debt means a debt arising under the Code.
Tax refund offset means the reduction by the IRS of a tax
overpayment payable to a taxpayer by the amount of past-due, legally
enforceable debt owed by that taxpayer to a Federal agency pursuant to
Treasury regulations.
Sec. 4903.2 What do these regulations cover?
(a) Scope. This part provides procedures for the collection of
debts owed to PBGC, other than those subject to recoupment (29 CFR
4022, subpart E). This part also provides procedures for collection of
other debts owed to the United States when a request for offset of a
payment, for which PBGC is the payment agency, is received by PBGC from
another agency (for example, when a PBGC employee owes a student loan
debt to the United States Department of Education).
(b) Applicability.
(1) This part applies to PBGC when collecting a debt owed to PBGC;
to persons who owe debts to PBGC; to persons controlled by or
controlling persons who owe debts to a Federal agency, and to Federal
agencies requesting offset of a payment issued by PBGC as a payment
agency (including salary payments to PBGC employees).
(2) This part does not apply to debts owed to PBGC being collected
through recoupment under subpart E of part 4022 of this chapter.
Benefits paid by PBGC generally will not be offset, subject to limited
exceptions (e.g., in certain fiduciary breach situations).
(3) This part does not apply to tax debts, to any debt based in
whole or in part on conduct in violation of the antitrust laws, nor to
any debt for which there is an indication of fraud or
misrepresentation, as described in Sec. 900.3 of the FCCS, unless the
debt is returned by the Department of Justice to PBGC for handling.
(4) Nothing in this part precludes the use of other statutory or
regulatory authority to collect or dispose of any debt. See, for
example, 5 U.S.C. 5705, Advancements and Deductions, which authorizes
PBGC to recover travel advances by offset of up to 100 percent of a
Federal employee's accrued pay. See, also, 5 U.S.C. 4108, governing the
collection of training expenses.
(5) To the extent that provisions of laws, other regulations, and
PBGC enforcement policies differ from the provisions of this part,
those provisions of law, other regulations, and PBGC enforcement
policies apply to the remission or mitigation of fines, penalties, and
forfeitures, and to debts arising under ERISA, rather than the
provisions of this part.
(c) Additional policies and procedures. PBGC may, but is not
required to, promulgate additional policies and procedures consistent
with this part, the FCCS, and other applicable law, policies, and
procedures.
(1) PBGC does not intend this regulation to prohibit PBGC from
demanding the return of specific property or the payment of its value.
(2) The failure of PBGC to comply with any provision in this
regulation will not serve as a defense to the existence of the debt.
(d) Duplication not required. Nothing in this part requires PBGC to
duplicate notices or administrative proceedings required by contract,
this part, or other laws or regulations.
(e) Use of multiple collection remedies allowed. PBGC and other
Federal agencies may simultaneously use multiple collection remedies to
collect a debt, except as prohibited by law. This part is intended to
promote aggressive debt collection, using for each debt all available
and appropriate collection remedies. To provide PBGC with flexibility
in determining which remedies will be most efficient in collecting the
particular debt, these remedies are not listed in any prescribed order.
Sec. 4903.3 Do these regulations adopt the Federal Claims Collection
Standards (FCCS)?
This part adopts and incorporates all provisions of FCCS. This part
also supplements the FCCS by prescribing procedures consistent with
FCCS, as necessary and appropriate for PBGC operations.
Sec. 4903.4 What rules apply for purposes of filing with PBGC,
determining dates of filings, and computation of time?
(a) How and where to file. PBGC applies the rules in subpart A of
part 4000 of this chapter to determine permissible methods of filing
with PBGC under this part. See Sec. 4000.4 of this chapter for
information on where to file.
(b) Date of Filing. PBGC applies the rules in subpart C of part
4000 of this chapter to determine the date that a submission under this
part was filed with PBGC.
(c) Computation of Time. PBGC applies the rules of subpart D of
part 4000 of this chapter to compute any time period under this part.
Subpart B--Procedures to Collect Debts Owed to PBGC
Sec. 4903.5 What notice will PBGC send to a debtor when collecting a
debt owed to PBGC?
(a) Notice requirements. PBGC will collect debts owed to PBGC. PBGC
will promptly send at least one written notice to a debtor informing
the debtor of the consequences of failing to pay or otherwise resolve a
debt owed to PBGC.
[[Page 42666]]
The notice(s) will be sent to the debtor at the most current address of
the debtor in PBGC's records. Generally, before starting the collection
actions described in Sec. Sec. 4903.6 and 4903.10 through 4903.18 of
this part, PBGC will send no more than two written notices to the
debtor. The notice will explain why the debt is owed to PBGC, the
amount of the debt, how a debtor may pay the debt or make alternate
repayment arrangements, how a debtor may review non-privileged
documents related to the debt, how a debtor may dispute the debt, the
collection remedies available to PBGC if the debtor refuses or
otherwise fails to pay the debt, and other consequences to the debtor
if the debt is not paid. Except as otherwise provided in paragraph (b)
of this section, the written notice(s) will explain to the debtor:
(1) The nature and amount of the debt, and the facts giving rise to
the debt;
(2) How interest, penalties, and administrative costs are added to
the debt, the date by which payment must be made to avoid such charges,
and that such assessments must be made unless excused in accordance
with 31 CFR 901.9 (see Sec. 4903.6 of this part);
(3) The date by which payment should be made to avoid the enforced
collection actions described in paragraph (a)(6) of this section;
(4) PBGC's willingness to discuss alternative payment arrangements
and how the debtor may enter into a written agreement to repay the debt
under terms acceptable to PBGC (see Sec. 4903.7 of this part);
(5) The name, address, and telephone number of a contact person or
office within PBGC;
(6) PBGC's intention to enforce collection by taking one or more of
the following actions if the debtor fails to pay or otherwise resolve
the debt:
(i) Offset. Offset the debtor's receipt of Federal payments,
including income tax refunds, salary, certain benefit payments (such as
Social Security), Federal retirement (i.e., CSRS or FERS), vendor,
travel reimbursements and advances, and other Federal payments (see
Sec. Sec. 4903.11 through 4903.13 of this part);
(ii) Private collection agency. Refer the debt to a private
collection agency (see Sec. 4903.16 of this part);
(iii) Credit bureau reporting. Report the debt to a credit bureau
(see Sec. 4903.15 of this part);
(iv) Administrative wage garnishment. Garnish the debtor's wages
through administrative wage garnishment (see Sec. 4903.14 of this
part);
(v) Litigation. Whether PBGC will initiate litigation under 29
U.S.C. 1302 to collect the debt or refer the debt to the Department of
Justice to initiate litigation to collect the debt (see Sec. 4903.17
of this part);
(vi) Treasury Department's Financial Management Service. Refer the
debt to the Financial Management Service for collection (see Sec.
4903.10 of this part);
(7) That debts over 180 days delinquent must be referred to the
Financial Management Service for the collection actions described in
paragraph (a)(6) of this section (see Sec. 4903.10 of this part);
(8) How the debtor may inspect and copy non-privileged records
related to the debt;
(9) How the debtor may request a review of PBGC's determination
that the debtor owes a debt to PBGC and present evidence that the debt
is not delinquent or legally enforceable (see Sec. Sec. 4903.11(c) and
4903.12(c) of this part);
(10) How a debtor who is an individual may request a hearing if
PBGC intends to garnish the debtor's private sector (i.e., non-Federal)
wages (see Sec. 4903.14(a) of this part), including:
(i) The method and time period for requesting a hearing;
(ii) That a request for a hearing, timely filed on or before the
15th business day following the date of the mailing of the notice, will
stay the commencement of administrative wage garnishment, but not other
collection procedures; and
(iii) The name and address of the office to which the request for a
hearing should be sent.
(11) How a debtor who is an individual and a Federal employee
subject to Federal salary offset may request a hearing (see Sec.
4903.13(e) of this part), including:
(i) The method and time period for requesting a hearing;
(ii) That a request for a hearing, timely filed on or before the
15th day following receipt of the notice, will stay the commencement of
salary offset, but not other collection procedures;
(iii) The name and address of the office to which the request for a
hearing should be sent;
(iv) That PBGC will refer the debt to the debtor's employing agency
or to the Financial Management Service to implement salary offset,
unless the employee files a timely request for a hearing;
(v) That a final decision on the hearing, if requested, will be
issued at the earliest practicable date, but not later than 60 days
after the filing of the request for a hearing, unless the employee
requests and the hearing official grants a delay in the proceedings;
(vi) That any knowingly false or frivolous statements,
representations, or evidence may subject the Federal employee to
penalties under the False Claims Act (31 U.S.C. 3729-3731) or other
applicable statutory authority, and criminal penalties under 18 U.S.C.
286, 287, 1001, and 1002, or other applicable statutory authority;
(vii) That unless prohibited by contract or statute, amounts paid
on or deducted for the debt which are later waived or found not owed to
the United States will be promptly refunded to the employee; and
(viii) That proceedings with respect to such debt are governed by 5
U.S.C. 5514 and 31 U.S.C. 3716.
(12) How the debtor may request a waiver of the debt, if
applicable. See, for example, Sec. 4903.6 and Sec. 4903.13(f) of this
part.
(13) How the debtor's spouse may claim his or her share of a joint
income tax refund by filing Form 8379 with the Internal Revenue Service
(see http://www.irs.gov);
(14) How the debtor may exercise other rights and remedies, if any,
available to the debtor under statutory or regulatory authority under
which the debt arose.
(15) That certain debtors and, if applicable, persons controlled by
or controlling such debtors, may be ineligible for Federal Government
loans, guaranties and insurance, grants, cooperative agreements or
other Federal funds (see 28 U.S.C. 3201(e); 31 U.S.C. 3720B, 31 CFR
285.13, and Sec. 4903.18(a) of this part); and
(16) That the debtor should advise PBGC of a bankruptcy proceeding
of the debtor or another person liable for the debt being collected.
(b) Exceptions to notice requirements. PBGC may omit from a notice
to a debtor one or more of the provisions contained in paragraphs
(a)(6) through (a)(16) of this section if PBGC, in consultation with
its legal counsel, determines that any provision is not legally
required given the collection remedies to be applied to a particular
debt.
(c) Respond to debtors; comply with FCCS. PBGC should respond
promptly to communications from debtors and comply with other FCCS
provisions applicable to the administrative collection of debts. See 31
CFR part 901.
Sec. 4903.6 How will PBGC add interest, penalty charges, and
administrative costs to a debt owed to PBGC?
(a) Assessment and notice. PBGC will assess interest, penalties and
administrative costs on PBGC debts in accordance with the provisions of
31 U.S.C. 3717, 31 CFR 901.9 and other applicable requirements.
Administrative
[[Page 42667]]
costs, including the costs of processing and handling a delinquent
debt, will be determined by PBGC. PBGC will explain in the notice to
the debtor how interest, penalties, costs, and other charges are
assessed, unless the requirements are included in a contract or other
legally binding agreement.
(b) Waiver of interest, penalties, and administrative costs. Unless
otherwise required by law, regulation, or contract, PBGC will not
charge interest if the amount due on the debt is paid within 30 days of
the date from which the interest accrues. See 31 U.S.C. 3717(d). To the
extent permitted by law, PBGC may waive interest, penalties, and
administrative costs, or any portion thereof, in appropriate
circumstances consistent with the FCCS.
(c) Accrual during suspension of debt collection. In most cases,
interest, penalties and administrative costs will continue to accrue
during any period when collection has been suspended for any reason
(for example, when the debtor has requested a hearing). PBGC may
suspend accrual of any or all of these charges in appropriate
circumstances consistent with the FCCS.
Sec. 4903.7 When will PBGC allow a debtor to pay a debt owed to PBGC
in installments instead of a lump sum?
If a debtor is financially unable to pay the debt in a lump sum,
PBGC may accept payment of a debt in regular installments, in
accordance with the provisions of 31 CFR 901.8.
Sec. 4903.8 When will PBGC compromise a debt owed to PBGC?
If PBGC cannot collect the full amount of a debt owed to PBGC, PBGC
may compromise the debt in accordance with the provisions of 31 CFR
part 902.
Sec. 4903.9 When will PBGC suspend or terminate debt collection on a
debt owed to PBGC?
If, after pursuing all appropriate means of collection, PBGC
determines that a debt owed to PBGC is uncollectible, PBGC may suspend
or terminate debt collection activity in accordance with the provisions
of 31 CFR part 903. Termination of debt collection activity by PBGC
does not discharge the indebtedness.
Sec. 4903.10 When will PBGC transfer a debt owed to PBGC to the
Treasury Department's Financial Management Service for collection?
(a) PBGC will transfer a debt owed to PBGC that is more than 180
days delinquent to the Financial Management Service for debt collection
services, a process known as ``cross-servicing.'' See 31 U.S.C. 3711(g)
and 31 CFR 285.12. PBGC may transfer debts owed to PBGC that are
delinquent 180 days or less to the Financial Management Service in
accordance with the procedures described in 31 CFR 285.12. The
Financial Management Service takes appropriate action to collect or
compromise the transferred PBGC debt, or to suspend or terminate
collection action thereon, in accordance with the statutory and
regulatory requirements and authorities applicable to the debt owed to
PBGC and the collection action to be taken. See 31 CFR 285.12(b) and
285.12(c)(2). Appropriate action can include, but is not limited to,
contact with the debtor, referral of the debt owed to PBGC to the
Treasury Offset Program, private collection agencies, or the Department
of Justice; reporting of the debt to credit bureaus, and/or
administrative wage garnishment.
(b) At least 60 days prior to transferring a debt owed to PBGC to
the Financial Management Service, PBGC will send notice to the debtor
as required by Sec. 4903.5 of this part. PBGC will certify to the
Financial Management Service that the debt is valid, delinquent,
legally enforceable, and that there are no legal bars to collection. In
addition, PBGC will certify its compliance with all applicable due
process and other requirements as described in this part and other
Federal laws. See 31 CFR 285.12(i) regarding the certification
requirement.
(c) As part of its debt collection process, the Financial
Management Service uses the Treasury Offset Program to collect debts
owed to PBGC by administrative and tax refund offset. See 31 CFR
285.12(g). Under the Treasury Offset Program, before a Federal payment
is disbursed, the Financial Management Service compares the name and
taxpayer identification number (TIN) of the payee with the names and
TINs of debtors that have been submitted by Federal agencies and states
to the Treasury Offset Program database. If there is a match, the
Financial Management Service (or, in some cases, another Federal
disbursing agency) offsets all or a portion of the Federal payment,
disburses any remaining payment to the payee, and pays the offset
amount to the creditor agency. Federal payments eligible for offset
include, but are not limited to, income tax refunds, salary, travel
advances and reimbursements, retirement and vendor payments, and Social
Security and other benefit payments.
Sec. 4903.11 How will PBGC use administrative offset (offset of non-
tax Federal payments) to collect a debt owed to PBGC?
(a) Centralized administrative offset through the Treasury Offset
Program.
(1) In most cases, the Financial Management Service uses the
Treasury Offset Program to collect debts owed to PBGC by the offset of
Federal payments. See Sec. 4903.10(c) of this part. If not already
transferred to the Financial Management Service under Sec. 4903.10 of
this part, PBGC will refer debt over 180 days delinquent to the
Treasury Offset Program for collection by centralized administrative
offset. See 31 U.S.C. 3716(c)(6); 31 CFR part 285, subpart A; and 31
CFR 901.3(b). PBGC may refer to the Treasury Offset Program for offset
any debt owed to PBGC that has been delinquent for 180 days or less.
(2) At least 60 days prior to referring a debt owed to PBGC to the
Treasury Offset Program, in accordance with paragraph (a)(1) of this
section, PBGC will send notice to the debtor in accordance with the
requirements of Sec. 4903.5 of this part. PBGC will certify to the
Financial Management Service, that the debt is valid, delinquent, and
legally enforceable, and that there are no legal bars to collection by
offset. In addition, PBGC will certify its compliance with the
requirements in this part.
(b) Non-centralized administrative offset for debts owed to PBGC.
(1) When centralized administrative offset through the Treasury
Offset Program is not available or appropriate, PBGC may collect past-
due, legally enforceable debts owed to PBGC through non-centralized
administrative offset. See 31 CFR 901.3(c). In these cases, PBGC may
offset a payment internally or make an offset request directly to a
Federal payment agency.
(2) At least 30 days prior to offsetting a payment internally or
requesting a Federal payment agency to offset a payment, PBGC will send
notice to the debtor in accordance with the requirements of Sec.
4903.5 of this part. When referring a debt owed to PBGC for offset
under this paragraph (b), PBGC will certify that the debt is valid,
delinquent, and legally enforceable, and that there are no legal bars
to collection by offset. In addition, PBGC will certify its compliance
with these regulations concerning administrative offset. See 31 CFR
901.3(c)(2)(ii).
(c) Administrative review. The notice described in Sec. 4903.5 of
this part will explain to the debtor how to request an administrative
review of PBGC's determination that the debtor owes a debt to PBGC and
how to present
[[Page 42668]]
evidence that the debt is not delinquent or legally enforceable. In
addition to challenging the existence and amount of the debt owed to
PBGC, the debtor may seek a review of the terms of repayment. In most
cases, PBGC will provide administrative review based upon the written
record, including documentation provided by the debtor. PBGC may
provide the debtor with a reasonable opportunity for an oral hearing
when the debtor requests reconsideration of the debt owed to PBGC, and
PBGC determines that the question of the indebtedness cannot be
resolved by review of the documentary evidence. Unless otherwise
required by law, an oral hearing under this section is not required to
be a formal evidentiary hearing. PBGC will carefully document all
significant matters discussed at the hearing. PBGC may suspend
collection through administrative offset and/or other collection
actions pending the resolution of a debtor's dispute.
(d) Procedures for expedited offset. Under the circumstances
described in 31 CFR 901.3(b)(4)(iii), PBGC may offset against a payment
to be made to the debtor prior to sending a notice to the debtor, as
described in Sec. 4903.5 of this part, or completing the procedures
described in paragraph (b)(2) and (c) of this section. PBGC will give
the debtor notice and an opportunity for review as soon as practicable
and promptly refund any money ultimately found not to have been owed to
the Government.
Sec. 4903.12 How will PBGC use tax refund offset to collect a debt
owed to PBGC?
(a) Tax refund offset. In most cases, the Financial Management
Service uses the Treasury Offset Program to collect debts owed to PBGC
by the offset of tax refunds and other Federal payments. See Sec.
4903.10(c) of this part. If not already transferred to the Financial
Management Service under Sec. 4903.10 of this part, PBGC will refer to
the Treasury Offset Program any past-due, legally enforceable debt for
collection by tax refund offset. See 26 U.S.C. 6402(d), 31 U.S.C. 3720A
and 31 CFR Sec. 285.2.
(b) Notice. At least 60 days prior to referring a debt owed to the
Treasury Offset Program, PBGC will send notice to the debtor in
accordance with the requirements of Sec. 4903.5 of this part. PBGC
will certify to the Financial Management Service's Treasury Offset
Program that the debt is past due and legally enforceable in the amount
submitted, and that the PBGC has made reasonable efforts to obtain
payment of the debt as described in 31 CFR 285.2(d). In addition, PBGC
will certify its compliance with all applicable due process and other
requirements described in this part and other Federal laws. See 31
U.S.C. 3720A(b) and 31 CFR 285.2.
(c) Administrative review. The notice described in Sec. 4903.5 of
this part will provide the debtor with at least 60 days prior to the
initiation of tax refund offset to request an administrative review as
described in Sec. 4903.11(c) of this part. PBGC may suspend collection
through tax refund offset and/or other collection actions pending the
resolution of the debtor's dispute.
Sec. 4903.13 How will PBGC offset a Federal employee's salary to
collect a debt owed to PBGC?
(a) Federal salary offset.
(1) Salary offset is used to collect debts owed to the United
States or PBGC by Federal employees. If a Federal employee owes PBGC a
debt, PBGC may offset the employee's Federal salary to collect the debt
in the manner described in this section. For information on how a
Federal agency other than PBGC may collect debt from the salary of a
PBGC employee, see Sec. Sec. 4903.21 and 4903.22, subpart C, of this
part.
(2) Nothing in this part requires PBGC to collect a debt in
accordance with the provisions of this section if Federal law allows
other means to collect. See, for example, 5 U.S.C. 5705 (travel
advances not used for allowable travel expenses are recoverable from
the employee or his estate by setoff against accrued pay and other
means) and 5 U.S.C. 4108 (recovery of training expenses).
(3) PBGC may use the administrative wage garnishment procedure
described in Sec. 4903.14 of this part to collect from an individual's
non-Federal wages a debt owed to PBGC.
(b) Centralized salary offset through the Treasury Offset Program.
As described in Sec. 4903.10(a) of this part, PBGC will refer debts
owed to PBGC to the Financial Management Service for collection by
administrative offset, including salary offset, through the Treasury
Offset Program. When possible, PBGC will attempt salary offset through
the Treasury Offset Program before applying the procedures in paragraph
(c) of this section. See 5 CFR 550.1108 and 550.1109.
(c) Non-centralized salary offset for debts owed to PBGC. When
centralized salary offset through the Treasury Offset Program is not
available or appropriate, PBGC may collect delinquent debts owed to
PBGC through non-centralized salary offset. See 5 CFR 550.1109. In
these cases, PBGC may offset a payment internally or make a request
directly to a Federal payment agency to offset a salary payment to
collect a delinquent debt owed to PBGC by a Federal employee. Thirty
(30) days prior to offsetting internally or requesting a Federal agency
to offset a salary payment, PBGC will send notice to the debtor in
accordance with the requirements of Sec. 4903.5 of this part. When
referring a debt owed to PBGC for offset, PBGC will certify to the
payment agency that the debt is valid, delinquent and legally
enforceable in the amount stated, and there are no legal bars to
collection by salary offset. In addition, PBGC will certify that all
due process and other prerequisites to salary offset have been met. See
5 U.S.C. 5514, 31 U.S.C. 3716(a), and this section for a description of
the due process and other prerequisites for salary offset.
(d) When prior notice not required. PBGC is not required to provide
prior notice to an employee when the following adjustments are made by
PBGC to a PBGC employee's pay:
(1) Any adjustment to pay arising out of any employee's election of
coverage or a change in coverage under a Federal benefits program
requiring periodic deductions from pay if the amount to be recovered
was accumulated over 4 pay periods or less;
(2) A routine intra-agency adjustment of pay that is made to
correct an overpayment of pay attributable to clerical or
administrative errors or delays in processing pay documents, if the
overpayment occurred within the 4 pay periods preceding the adjustment,
and, at the time of such adjustment, or as soon thereafter as
practicable, the individual is provided written notice of the nature
and the amount of the adjustment and the point of contact for
contesting such adjustment; or
(3) Any adjustment to collect a debt amounting to $50 or less, if,
at the time of such adjustment, or as soon thereafter as practicable,
the individual is provided written notice of the nature and the amount
of the adjustment and a point of contact for contesting such
adjustment.
(e) Administrative review--(1) Request for administrative review. A
Federal employee who has received a notice that his or her debt will be
collected by means of salary offset may request administrative review
concerning the existence or amount of the debt owed to PBGC. The
Federal employee also may request administrative review concerning the
amount proposed to be deducted from the employee's pay each pay period.
The employee must send any request for administrative review in writing
to the office designated in the notice described in Sec. 4903.5. See
Sec. 4903.5(a)(11). The request must be received by the
[[Page 42669]]
designated office on or before the 15th day following the employee's
receipt of the notice. The employee must sign the request and specify
whether an oral hearing is requested. If an oral hearing is requested,
the employee must explain why the matter cannot be resolved by review
of the documentary evidence alone. All travel expenses incurred by the
Federal employee in connection with an in-person hearing will be borne
by the employee. See 31 CFR 901.3(a)(7).
(2) Failure to submit timely request for administrative review. If
the employee fails to submit a request for administrative review within
the time period described in paragraph (e)(1) of this section, salary
offset may be initiated. However, PBGC may accept a late request for
administrative review if the employee can show that the late request
was the result of circumstances beyond the employee's control or
because of a failure to receive actual notice of the filing deadline.
(3) Reviewing official. PBGC must obtain the services of a
reviewing official who is not under the supervision or control of the
Director of the PBGC. PBGC may enter into interagency support
agreements with other agencies to provide reviewing officials.
(4) Notice of administrative review. After the employee requests
administrative review, the designated reviewing official will inform
the employee of the form of the review to be provided. For oral
hearings, the notice will set forth the date, time and location of the
hearing. For determinations based on review of written records, the
notice will notify the employee of the date by which he or she should
submit written arguments to the designated reviewing official. The
reviewing official will give the employee reasonable time to submit
documentation in support of the employee's position. The reviewing
official will schedule a new hearing date if requested by both parties.
The reviewing official will give both parties reasonable notice of the
time and place of a rescheduled hearing.
(5) Oral hearing. The reviewing official will conduct an oral
hearing if the official determines that the matter cannot be resolved
by review of documentary evidence alone. The hearing need not take the
form of an evidentiary hearing, but may be conducted in a manner
determined by the reviewing official, including but not limited to:
(i) Informal conferences (in person or electronically) with the
reviewing official, in which the employee and agency representative
will be given a reasonable opportunity to present evidence, witnesses
and argument;
(ii) Informal meetings with an interview of the employee by the
reviewing official; or
(iii) Formal written submissions, with an opportunity for oral
presentation.
(6) Determination based on review of written record. If the
reviewing official determines that an oral hearing is not necessary,
the official will make the determination based upon a review of the
available written record, including any documentation submitted by the
employee in support of his or her position. See 31 CFR 901.3(a)(7).
(7) Failure to appear or submit documentary evidence. In the
absence of good cause shown (for example, excused illness), if the
employee fails to appear at an oral hearing or fails to submit
documentary evidence as required for administrative review, the
employee will have waived the right to administrative review, and
salary offset may be initiated. Further, the employee will have been
deemed to admit the existence and amount of the debt owed to PBGC as
described in the notice of intent to offset. If PBGC's representative
fails to appear at an oral hearing, the reviewing official will proceed
with the hearing as scheduled, and make his or her determination based
upon the oral testimony presented and the documentary evidence
submitted by both parties.
(8) Burden of proof. PBGC will have the initial burden to prove the
existence and amount of the debt owed to PBGC. Thereafter, if the
employee disputes the existence or amount of the debt, the employee
must prove by a preponderance of the evidence that no such debt exists
or that the amount of the debt is incorrect. In addition, the employee
may present evidence that the proposed terms of the repayment schedule
are unlawful, would cause a financial hardship to the employee, or that
collection of the debt may not be pursued due to operation of law.
(9) Record. The reviewing official will maintain a summary record
of any hearing provided by this Part. Witnesses will testify under oath
or affirmation in oral hearings. See 31 CFR 901.3(a)(7).
(10) Date of decision. The reviewing official will issue a written
opinion stating the official's decision, based upon documentary
evidence and information developed during the administrative review, as
soon as practicable after the review, but not later than 60 days after
the date on which the request for review was received by PBGC. If the
employee (or the parties jointly) requests a delay in the proceedings,
the deadline for the decision may be postponed by the number of days by
which the review was postponed. When a decision is not timely rendered,
PBGC will waive interest and penalties applied to the debt owed to PBGC
for the period beginning with the date the decision is due and ending
on the date the decision is issued.
(11) Content of decision. The written decision will include:
(i) A statement of the facts presented to support the origin,
nature, and amount of the debt owed to PBGC;
(ii) The reviewing official's findings, analysis, and conclusions;
and
(iii) The terms of any repayment schedules, if applicable.
(12) Final agency action. The reviewing official's decision will be
final.
(f) Waiver not precluded. Nothing in this part precludes an
employee from requesting waiver of an overpayment under 5 U.S.C. 5584
or 8346(b), 32 U.S.C. 716, or other statutory authority. PBGC may grant
such waivers when it would be against equity and good conscience or not
in the United States' best interest to collect such debts, in
accordance with those authorities, 5 CFR 550.1102(b)(2).
(g) Salary offset process--(1) Determination of disposable pay.
PBGC will implement salary offset when requested to do so by PBGC, as
described in paragraph (c) of this section, or another agency, as
described in Sec. 4903.21 of this part. If the debtor is not employed
by PBGC, the agency employing the debtor will determine the amount of
the employee's disposable pay and will implement salary offset upon
request.
(2) When salary offset begins. Deductions will begin within three
official pay periods following receipt of the creditor agency's request
for offset or after a decision has been issued following a request for
a hearing.
(3) Amount of salary offset. The amount to be offset from each
salary payment will be up to 15 percent of a debtor's disposable pay,
subject to the requirements of 15 U.S.C. 1673, as follows:
(i) If the amount of the debt is equal to or less than 15 percent
of the disposable pay, such debt generally will be collected in a lump
sum payment;
(ii) Installment deductions will be made over a period of no
greater than the anticipated period of employment. An installment
deduction will not exceed 15 percent of the disposable pay from which
the deduction is made unless the employee has agreed in writing to the
deduction of a greater
[[Page 42670]]
amount, or the creditor agency has determined that smaller deductions
are appropriate based on the employee's ability to pay.
(4) Final salary payment. After the employee has separated either
voluntarily or involuntarily from the payment agency, the payment
agency may make a lump sum deduction exceeding 15 percent of disposable
pay from any final salary or other payments pursuant to 31 U.S.C. 3716
in order to satisfy a debt owed to PBGC.
(h) Payment agency's responsibilities.
(1) As required by 5 CFR 550.1109, if the employee separates from
the payment agency from which PBGC has requested salary offset, the
payment agency must certify the total amount of its collection and
notify PBGC and the employee of the amounts collected. If the payment
agency knows that the employee is entitled to payments from the Civil
Service Retirement Fund and Disability Fund, the Federal Employee
Retirement System, or other similar payments, it must provide written
notification to the agency responsible for making such payments that
the debtor owes a debt to PBGC, the amount of the debt, and that PBGC
has complied with the provisions of this section. PBGC must submit a
properly certified claim to the agency responsible for making such
payments before the collection can be made.
(2) If the employee is already separated from employment and all
payments due from his or her former payment agency have been made, PBGC
may request that money due and payable to the employee from the Civil
Service Retirement Fund and Disability Fund, the Federal Employee
Retirement System, or other similar funds, be administratively offset
to collect the debt. Generally, PBGC will collect such monies through
the Treasury Offset Program as described in Sec. 4903.10(c) of this
part.
(3) When an employee transfers to another agency, PBGC should
resume collection with the employee's new payment agency in order to
continue salary offset.
Sec. 4903.14 How will PBGC use administrative wage garnishment to
collect a debt owed to PBGC from a debtor's wages?
(a) PBGC is authorized to collect debts owed to PBGC from an
individual debtor's wages by means of administrative wage garnishment
in accordance with the requirements of 31 U.S.C. 3720D and 31 CFR
285.11. This part adopts and incorporates all of the provisions of 31
CFR Sec. 285.11 concerning administrative wage garnishment, including
the hearing procedures described in 31 CFR 285.11(f). PBGC may use
administrative wage garnishment to collect a delinquent debt unless the
debtor is making timely payments under an agreement to pay the debt in
installments (see Sec. 4903.7 of this part). Thirty (30) days prior to
initiating an administrative wage garnishment, PBGC will send notice to
the debtor in accordance with the requirements of Sec. 4903.5 of this
part, including the requirements of Sec. 4903.5(a)(10) of this part.
For debts referred to the Financial Management Service under Sec.
4903.10 of this part, PBGC may authorize the Financial Management
Service to send a notice informing the debtor that administrative wage
garnishment will be initiated and how the debtor may request a hearing
as described in Sec. 4903.5(a)(10) of this part. If a debtor makes a
timely request for a hearing, administrative wage garnishment will not
begin until a hearing is held and a decision is sent to the debtor.
PBGC will determine whether the matter requires an oral hearing or if a
determination based upon review of the written record is sufficient.
PBGC will provide the debtor with a reasonable opportunity for an oral
hearing when it determines that the issues in dispute cannot be
resolved by a review of the documentary evidence. See 31 CFR
285.11(f)(1)-(4). Even if a debtor's hearing request is not timely,
PBGC may suspend collection by administrative wage garnishment in
accordance with the provisions of 31 CFR 285.11(f)(5). All travel
expenses incurred by the debtor in connection with an in-person hearing
will be borne by the debtor.
(b) This section does not apply to Federal salary offset, the
process by which PBGC collects debts owed to PBGC from the salaries of
Federal employees (see Sec. 4903.13 of this part).
Sec. 4903.15 How will PBGC report debts owed to PBGC to credit
bureaus?
PBGC will report delinquent debts owed to PBGC to credit bureaus in
accordance with the provisions of 31 U.S.C. 3711(e), 31 CFR 901.4, and
the Office of Management and Budget Circular A-129, ``Policies for
Federal Credit Programs and Non-tax Receivables.'' At least 60 days
prior to reporting a delinquent debt to a consumer reporting agency,
PBGC will send notice to the debtor in accordance with the requirements
of Sec. 4903.5 of this part. PBGC may authorize the Financial
Management Service to report to credit bureaus those delinquent debts
owed to the PBGC that have been transferred to the Financial Management
Service under Sec. 4903.10 of this part.
Sec. 4903.16 How will PBGC refer debts owed to PBGC to private
collection agencies?
PBGC will transfer delinquent debts owed to PBGC to the Financial
Management Service to obtain debt collection services provided by
private collection agencies. See Sec. 4903.10 of this part.
Sec. 4903.17 When will PBGC refer debts owed to PBGC to the
Department of Justice?
PBGC may initiate litigation pursuant to 29 U.S.C. 1302 with
delinquent debts on which aggressive collection activity has been taken
in accordance with this part and that should not be compromised, and on
which collection activity should not be suspended or terminated.
Alternatively, PBGC may refer debts owed to PBGC having a principal
balance over $100,000, or such higher amount as authorized by the
Attorney General, to the Department of Justice for approval of any
compromise of a debt or suspension or termination of collection
activity. See Sec. Sec. 4903.8 and 4903.9 of this part; 31 CFR 902.1,
903.1, and part 904. PBGC may authorize the Financial Management
Service to refer to the Department of Justice for litigation those
delinquent debts that have been transferred to the Financial Management
Service under Sec. 4903.10 of this part.
Sec. 4903.18 Will a debtor who owes a debt to PBGC or another Federal
agency, and persons controlled by or controlling such debtors, be
ineligible for Federal loan assistance, grants, cooperative agreements,
or other sources of Federal funds?
(a) Delinquent debtors are ineligible for and barred from obtaining
Federal loans or loan insurance or guaranties. As required by 31 U.S.C.
3720B and 31 CFR 901.6, PBGC will not extend financial assistance in
the form of a loan, loan guarantee, or loan insurance to any person
delinquent on a debt owed to a Federal agency. PBGC may issue standards
under which it may determine that persons controlled by or controlling
such delinquent debtors are similarly ineligible in accordance with 31
CFR 285.13(c)(2). This prohibition does not apply to disaster loans.
PBGC may extend credit after the delinquency has been resolved. See 31
CFR 285.13.
(b) This section does not apply to loans provided to multi-employer
pension plans pursuant to 29 U.S.C. 1431, 29 CFR 4261.1 and 4281.47.
(c) A debtor who has a judgment lien against the debtor's property
for a debt to the United States is not eligible to
[[Page 42671]]
receive grants, loans or funds directly or indirectly from the United
States until the judgment is paid in full or otherwise satisfied. This
prohibition does not apply to funds to which the debtor is entitled as
beneficiary. PBGC may promulgate regulations to allow for waivers of
this ineligibility. See 28 U.S.C. 3201(e).
Sec. 4903.19 How does a debtor request a special review based on a
change in circumstances such as catastrophic illness, divorce, death,
or disability?
(a) Material change in circumstances. A debtor who owes a debt to
PBGC may, at any time, request a special review by PBGC of the amount
of any offset, administrative wage garnishment, or voluntary payment,
based on materially changed circumstances beyond the control of the
debtor such as, but not limited to, catastrophic illness, divorce,
death, or disability.
(b) Inability to pay. For purposes of this section, in determining
whether an involuntary or voluntary payment would prevent the debtor
from meeting essential subsistence expenses (e.g., costs incurred for
food, housing, clothing, transportation, and medical care), the debtor
must submit a detailed statement and supporting documents for the
debtor, his or her spouse, and dependents, indicating:
(1) Income from all sources;
(2) Assets;
(3) Liabilities;
(4) Number of dependents;
(5) Expenses for food, housing, clothing, and transportation;
(6) Medical expenses;
(7) Exceptional expenses, if any; and
(8) Any additional materials and information that PBGC may request
relating to ability or inability to pay the amount(s) currently
required.
(c) Alternative payment arrangement. If the debtor requests a
special review under this section, the debtor must submit an
alternative proposed payment schedule and a statement to PBGC, with
supporting documents, showing why the current offset, garnishment or
repayment schedule imposes an extreme financial hardship on the debtor.
PBGC will evaluate the statement and documentation and determine
whether the current offset, garnishment, or repayment schedule imposes
extreme financial hardship on the debtor. PBGC will notify the debtor
in writing of such determination, including, if appropriate, a revised
offset, garnishment, or payment schedule. If the special review results
in a revised offset, garnishment, or repayment schedule, PBGC will
notify the appropriate Federal agency or other persons about the new
terms.
Sec. 4903.20 Will PBGC issue a refund if money is erroneously
collected on a debt?
PBGC will promptly refund to a debtor any amount collected on a
debt owed to PBGC when the debt is waived or otherwise found not to be
owed to the United States, or as otherwise required by law.
Subpart C--Procedures for Offset of PBGC Payments To Collect Debts
Owed to Other Federal Agencies
Sec. 4903.21 How do other Federal agencies use the offset process to
collect debts from payments issued by PBGC?
(a) Offset of PBGC payments to collect debts owed to other Federal
agencies. (1) In most cases, Federal agencies submit debts to the
Treasury Offset Program to collect delinquent debts from payments
issued by PBGC and other Federal agencies, a process known as
``centralized offset.'' When centralized offset is not available or
appropriate, any Federal agency may ask PBGC (when acting as a
``payment agency'') to collect a debt owed to such agency by offsetting
funds payable to a debtor by PBGC, including salary payments issued to
PBGC employees. This section and Sec. 4903.21 of this subpart C apply
when a Federal agency asks PBGC to offset a payment issued by PBGC to a
person who owes a debt to the United States.
(2) This subpart C does not apply to debts owed to PBGC. See
Sec. Sec. 4903.11 through 4903.13 of this part for offset procedures
applicable to debts owed to PBGC .
(3) This subpart C does not apply to the collection of non-PBGC
debts through tax refund offset. See 31 CFR Sec. 285.2 for tax refund
offset procedures.
(4) Benefits paid by PBGC generally will not be offset, subject to
limited exceptions (e.g., in certain fiduciary breach situations).
(b) Administrative offset (including salary offset); certification.
PBGC will initiate a requested offset only upon receipt of written
certification from the creditor agency that the debtor owes the past-
due, legally enforceable debt in the amount stated, and that the
creditor agency has fully complied with all applicable due process and
other requirements contained in 31 U.S.C. 3716, 5 U.S.C. 5514, and the
creditor agency's regulations, as applicable. Offsets will continue
until the debt is paid in full or otherwise resolved to the
satisfaction of the creditor agency.
(c) Where a creditor agency makes requests for offset. Requests for
offset under this section must be sent to PBGC, ATTN: Chief Financial
Officer, 1200 K Street, NW., Washington, DC 20005.
(d) Incomplete certification. PBGC will return an incomplete debt
certification to the creditor agency with notice that the creditor
agency must comply with paragraph (b) of this section before action
will be taken to collect a debt from a payment issued by PBGC.
(e) Review. PBGC is not authorized to review the merits of the
creditor agency's determination with respect to the amount or validity
of the debt certified by the creditor agency.
(f) When PBGC will not comply with offset request. PBGC will comply
with the offset request of another agency unless PBGC determines, in
consultation with that agency, that the offset would not be in the best
interests of the United States, or would otherwise be contrary to law.
(g) Multiple debts. When two or more creditor agencies are seeking
offsets from payments made to the same person, or when two or more
debts are owed to a single creditor agency, PBGC may determine the
order in which the debts will be collected or whether one or more debts
should be collected by offset simultaneously.
(h) Priority of debts owed to PBGC. For purposes of this section,
debts owed to PBGC generally take precedence over debts owed to other
agencies. PBGC may determine whether to pay debts owed to other
agencies before paying a debt owed to PBGC. PBGC will determine the
order in which the debts will be collected based on the best interests
of the United States.
Sec. 4903.22 What does PBGC do upon receipt of a request to offset
the salary of a PBGC employee to collect a debt owed by the employee to
another Federal agency?
(a) Notice to a PBGC employee. When PBGC receives proper
certification of a debt owed by one of its employees, PBGC will send a
written notice to the employee indicating that a certified debt claim
has been received from the creditor agency, the amount of the debt
claimed to be owed by the creditor agency, the date deductions from
salary will begin, and the amount of such deductions. PBGC will begin
deductions from the employee's pay at the next officially established
pay interval.
(b) Amount of deductions from a PBGC employee's salary. The amount
deducted under Sec. 4903.21(b) of this part will be the lesser of the
amount of the debt certified by the creditor agency or an amount up to
15 percent of the debtor's disposable pay so long as that amount does
not exceed limitations imposed by 15 U.S.C. 1673. Deductions will
continue until PBGC knows that the debt is paid in full or until
otherwise
[[Page 42672]]
instructed by the creditor agency. Alternatively, the amount offset may
be an amount agreed upon, in writing, by the debtor and the creditor
agency. See Sec. 4903.13(g) (salary offset process).
(c) When the debtor is no longer employed by PBGC--(1) Offset of
final and subsequent payments. If a PBGC employee retires or resigns or
if his or her employment ends before collection of the debt is
complete, PBGC will continue to offset, under 31 U.S.C. 3716, up to 100
percent of an employee's subsequent payments until the debt is paid or
otherwise resolved. Such payments include a debtor's final salary
payment, lump-sum leave payment, and other payments payable to the
debtor by PBGC. See 31 U.S.C. 3716 and 5 CFR 550.1104(l) and
550.1104(m).
(2) Notice to the creditor agency. If the employee is separated
from PBGC before the debt is paid in full, PBGC will certify to the
creditor agency the total amount of its collection. If PBGC knows that
the employee is entitled to payments from the Civil Service Retirement
and Disability Fund, Federal Employee Retirement System, or other
similar payments, PBGC will provide written notice to the agency making
such payments that the debtor owes a debt (including the amount) and
that the provisions of 5 CFR 550.1109 have been fully complied with.
The creditor agency is responsible for submitting a certified claim to
the agency responsible for making such payments before collection may
begin. Generally, creditor agencies will collect such monies through
the Treasury Offset Program as described in Sec. 4903.10(c) of this
part.
(3) Notice to the debtor. PBGC will provide to the debtor a copy of
any notices sent to the creditor agency under paragraph (c)(2) of this
section.
(d) When the debtor transfers to another Federal agency--(1) Notice
to the creditor agency. If the debtor transfers to another Federal
agency before the debt is paid in full, PBGC will notify the creditor
agency and will certify the total amount of its collection on the debt.
PBGC will provide a copy of the certification to the creditor agency.
The creditor agency is responsible for submitting a certified claim to
the debtor's new employing agency before collection may begin.
(2) Notice to the debtor. PBGC will provide to the debtor a copy of
any notices and certifications sent to the creditor agency under
paragraph (d)(1) of this section.
(e) Request for hearing official. PBGC will provide a hearing
official upon the creditor agency's request with respect to a PBGC
employee. See 5 CFR 550.1107(a).
Issued in Washington, DC, July 19, 2010.
Vincent K. Snowbarger,
Acting Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2010-18008 Filed 7-21-10; 8:45 am]
BILLING CODE 7709-01-P