Number: |
03-106 |
Date: July 30, 2003 |
Subject: |
Federal Physicians Comparability Allowance Amendments of 2000 |
The purpose of this Benefits Administration Letter (BAL) is to provide you with circumstances under which physicians comparability allowance (PCA) should be included as basic pay, for retirement average salary computations under the Civil Service Retirement System (CSRS) and the Federal Employees’ Retirement System (FERS). These changes became effective on December 28, 2000.
BACKGROUND: The Federal Physicians Comparability Allowance Act of 1978 provided that certain federally employed physicians as defined in 5 U.S.C. 5948(g) may be authorized the payment of an allowance in return for a specified period of service. Until enactment of Public Law 106-571, the “Federal Physicians Comparability Allowance Amendments of 2000” on December 28, 2000, the allowance was not creditable as basic pay and thus not used in annuity computations of average salary. As of the first payroll period on or after December 28, 2000, deductions began to be taken from the PCA and a phase-in period for average salary credit of the allowance began.
PCA received on or after December 28, 2000, is considered basic pay for:
While retirement deductions on the full amount of the PCA began on December 28, 2000, use of PCA in the retirement computation is based upon the provision under which title to an annuity is based, and the individual’s service history.
Disability and death-in-service cases. If an individual retires on disability or dies in service, full credit for PCA received on or after December 28, 2000, will be included in computation of the average salary, regardless of the individual’s service history.
All other forms of annuity entitlement. In all cases where annuity title is not based on disability or death in service, eligibility for use of PCA in the computation of average salary is based upon the individual’s service history, using a two-part test.
First, the individual must have at least 15 years of service as a Government physician. For purposes of the 15-year requirement, the service as Government physician may have been performed at any time (before, on, or after December 28, 2000). If this requirement is not met, then none of the PCA may be used in computation of the average salary, regardless of how much service as a Government physician was performed on or after December 28, 2000 (except in a disability or death-in-service case).
Second, if an individual has at least 15 years of service as a Government physician, PCA payments attributable to service performed on or after December 28, 2000, will be included as basic pay for computation of average salary on a phased-in basis. This will be based on the total amount of service performed as a Government physician on or after December 28, 2000, as indicated below:
For the purpose of determining eligibility under the phase-in provision, all service performed on or after December 28, 2000, as a Government physician will be creditable even if the individual was not receiving PCA for a portion of that period.
While December 27, 2008, is the earliest date on which an individual can complete the 8 year requirement, not every Government physician who retires on or after that date will have completed the phased in requirement for 100% credit. The percentage allowable will be based on the physician’s specific service history.
Definition of service as a Government physician. ''Government physician'' means any individual employed as a physician or dentist who is paid under -
No part of the PCA is included as basic pay for FEGLI purposes. Thus, for an individual receiving PCA at the time of death or retirement that may be used for computation of average salary, the final salary for FEGLI will be lower than the final salary for retirement purposes.
The employing agency must complete the certification form RI 20-122 in the attachment when a physician retires regardless of the type of retirement. The certification form should also be completed on all physician death-in-service cases. RI 20-122 can be accessed through the Website: www.opm.gov.
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Sincerely, Raymond J. Kirk |
Download this Letter as a PDF File [49 KB] |