Background: Benefits Administration Letters (BAL's) 96-104 and 97-102 provided EFT Letters and Election/Certification forms to be distributed to annuity applicants not already signed up for EFT with permanent payment addresses in the United States and Canada. Those letters were based upon interim regulations which anticipated requiring all Federal payments after January 1, 1999, to be made by Electronic Funds Transfer (EFT). Those same interim regulations required annuitants to certify they did not have an account at a financial institution in order to be paid by check if first eligible for payment on or after July 26, 1996.

Final Regulations: Treasury's final regulations significantly modified EFT requirements as they had been established under the interim regulations. As of September 25, 1998, the requirement to certify to not having an account with a financial institution was eliminated. Also, annuitants now have sole discretion to decide whether they qualify for a hardship waiver to the requirement they be paid by EFT.

Purpose: This is to remind agencies that EFT information should still be distributed to each new retirement or survivor annuity applicant, whose permanent payment address is in the United States or Canada, who is not already signed up to receive his or her annuity payment by EFT.

New Letters: The original EFT letter (distributed in BAL 96-104) has been turned into a form, RI 38-128 (Attachment 1). The latest version of RI 38-128 (January 1999) should now be distributed to annuity applicants not already signed up for EFT whose permanent addresses for receiving payments are in the United States, in place of the original EFT letter. Attachment 2 provides updated language for the letter (distributed in BAL 97-102) to individuals who receive their annuity payments in Canada. RI 16-26, Direct Deposit Sign-Up (Canada), and the supplemental forms RI 26A and RI 16-26B, are unchanged from the versions enclosed with BAL 97-102, and should continue to be included as Attachments to the letter in Attachment 2 of this BAL.

Other Countries: Annuity applicants whose permanent payment addresses are outside the United States and Canada still should not receive either letter. At this time, residents of other countries may only be paid by EFT if they establish a permanent payment address in the United States or Canada.

Sidney M. Conlely Assistant Director for Retirement Programs

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