Office of Merit Systems Oversight and Effectiveness
Matter of: [claimant]
Date: February 20, 2001
File Number: 002978
OPM Contact: Jo-Ann Chabot
A federal agency requested that the Office of Personnel
Management (OPM) determine the appropriate payee to receive the
unpaid compensation of a deceased agency employee. The agency wants
to know whether the deceased employees unpaid compensation may be
distributed according to a designation of beneficiary signed by the
employees cousin, pursuant to his appointment as the decedents
attorney-in-fact. For the reasons stated below, we conclude that
the designation of beneficiary in this case is not valid and that
the decedents surviving spouse should receive his unpaid
compensation.
The agency reported that it received two claims for the
decedents unpaid compensation. The decedents widow filed a claim on
behalf of herself and her children. She also submitted a certified
copy of Letters of Administration, dated July 2, 1998, and
showing her appointment as the General Personal Representative of
the decedents estate. The decedents cousin, acting as the Trustee
of a trust established in the decedents name (the Trust), filed a
claim on behalf of the Trust. He submitted a certified copy of
Letters Testamentary, dated November 4, 1998, and showing his
appointment as successor Personal Representative of the decedents
estate.
The agency reports that the following events occurred on June
23, 1998:
- The decedent personally completed and signed two designations
of beneficiary, naming his cousin on each designation as his
beneficiary for payment of the proceeds from two special employee
funds.
- The decedent also signed a durable power of attorney appointing
his cousin as his attorney-in-fact.
- The decedents cousin, pursuant to his appointment as the
decedents attorney-in-fact, executed a designation of beneficiary
form (Standard Form [SF] 1152) for payment of the decedents unpaid
compensation and identified the Trust as beneficiary. An employee
of the decedents employing agency and another individual signed the
SF 1152 as witnesses.
- The agency employee who had witnessed the execution of the SF
1152 took the signed form to an agency field office and sent it by
facsimile machine to agency headquarters, where it was received the
same day.
The agency reports that the decedent passed away on June 24,
1998. It also notes that the original SF 1152 was identical to the
facsimile and was received at agency headquarters on June 30, 1998.
The decedents widow indicated on her claim that the decedent had
named her as the beneficiary for payment of his unpaid
compensation. However, the agency reports that the SF 1152 of June
23, 1998, which identifies the Trust as the beneficiary, is the
only designation in its files. The agency reports that,
according to its records, the decedent had not previously
designated a beneficiary for his unpaid compensation. Although the
agency invited each claimant to submit to OPM their views
concerning these matters, OPM has not received any correspondence
from either claimant.
Disposition of unpaid compensation payable under federal law is
governed exclusively by federal statute and regulation, and not by
the laws and courts of the state of domicile or other jurisdiction.
Raymond H. Hanrahan (Deceased), B-262112 (March 6, 1996);
Cornell D. Cooper (Deceased) and Dorothy P. Fouts
(Deceased), B-254921 (March 11, 1994); Richard A.
Davenport (Deceased); David H. Lambert (Deceased),
B-244826 (December 12, 1991); Chester F. Dean (Deceased),
B-227728 (March 23, 1988). Section 5582 of title 5, United States
Code, and OPM regulations thereunder, at 5 CFR Part 178, govern
settlement of the accounts of deceased employees of the federal
government. They specify requirements for designating beneficiaries
and a statutory order of precedence for disposition of a deceased
employees unpaid compensation. Section 5582 provides in part:
- The employing agency shall notify each employee of his right to
designate a beneficiary or beneficiaries to receive money due, and
of the disposition of money due if a beneficiary is not designated.
An employee may change or revoke a designation at any time under
regulations promulgated . . . by the Director of the Office of
Personnel Management or his designee . . .
-
In order to facilitate the settlement of the accounts of
deceased employees, money due an employee at the time of his death
shall be paid to the person or persons surviving at the date of
death, in the following order of precedence, and the payment bars
recovery by another person of amounts so paid:
First, to the beneficiary or beneficiaries designated by the
employee in a writing received in the employing agency before his
death.
Section 5582 thereafter identifies the following individuals in
order of precedence: the employees widow or widower, child or
children and descendants of deceased children by representation,
parents or the survivor of them, the duly appointed legal
representative of the employees estate, and finally, the person or
persons entitled under the laws of the employees domicile at the
time of his death.
OPM regulations, at 5 CFR 178.203(a) and 178.204, track 5 U.S.C.
5582. Moreover, 5 CFR 178.203(d) states the requirements for
executing and filing a designation of beneficiary form, specifying
that:
The Standard Form 1152 must be executed in duplicate by the
employee and filed with the employing agency where the proper
officer will sign it and insert the date of receipt in the space
provided on each part, file the original, and return the duplicate
to the employee.
Interpretation of a statute begins with "the language of the
statute itself" and, "[a]bsent a clearly expressed legislative
intention to the contrary, that language must ordinarily be
regarded as conclusive." Kaiser Aluminum & Chemical Corp.
v. Bonjorno, 494 U.S. 827, 835, 110 S. Ct. 1570, 1575 (1990),
citing Consumer Product Safety Commission v. GTE Sylvania,
Inc., 447 U.S. 102, 108, 100 S. Ct. 2051, 2056 (1980). It is
clear from the language in 5 U.S.C. 5582(b) that Congress intended
to establish a simple and straightforward method for distributing a
deceased employees unpaid compensation. According to the statute,
and corresponding regulations (5 CFR 178.203(a) and 178.204),
employees must designate their beneficiaries in a writing received
in the employing agency before the employees death. Thus, the
statute authorizes employees to designate beneficiaries for their
unpaid compensation, does not provide for an individual other than
the employee to designate his or her beneficiaries, and provides
for distribution according to a specified order of precedence in
the absence of such a designation. Moreover, 5 CFR 178.203(d)
specifies that employees must execute, or sign, the designation
form (SF 1152).
The pertinent legislative history shows that Congress enacted
the provision that became 5 U.S.C. 5582 to "simplify and improve
the method of settling and adjusting the accounts of deceased
civilian employees." S. Rep. No. 1933 (1950), reprinted in
1950 U.S.C.C.S. 2866. Congress noted that S. 3652, the bill that
became 5 U.S.C. 5582,
authorizes civilian officers and employees to designate a
beneficiary or beneficiaries to receive all amounts due from the
Government on account of their employment at the time of death,
except amounts payable under their retirement act or amounts the
disposition of which is otherwise expressly prescribed by Federal
law. In the event no beneficiary is designated, the bill authorizes
payment of amounts due to be made to the officers or employees
surviving spouse; . . . Id., at 2867.
The legislative history does not show that Congress authorized,
or intended to authorize, any individual other than the employee to
designate a beneficiary for his or her unpaid compensation.
In settling claims for deceased employees unpaid compensation,
the General Accounting Office (GAO) construed the statute and
accompanying regulations narrowly. In Cornell D. Cooper
(Deceased) and Dorothy P. Fouts (Deceased), B-254921 (March
11, 1994), an employee personally filled out the SF 1152,
designated his grandmother as the beneficiary to receive his unpaid
compensation, and secured two witnesses who signed the SF 1152.
However, the employee did not sign or date the form. Id.
Noting that its regulation required the employee to execute, i.e.,
sign, the SF 1152, the GAO concluded that the designation was not
legally valid and the unpaid compensation should be given to the
person or persons in the next highest order of precedence under the
statute. Id. In
another decision, the GAO concluded that the statute required
unpaid compensation to be distributed according to the previously
executed SF 1152 in the employing agencys files, when the employees
newly executed SF 1152, changing the beneficiary, was not received
in agency before employees death. Katharina Walters,
B-157353 (August 12, 1965). The GAO noted in reaching this
conclusion that it did not have the authority to waive any of the
statutory provisions governing the disposition of a deceased
employees unpaid compensation. Id.
The statute and regulations require that the employee designate
the beneficiary or beneficiaries for his or her unpaid
compensation, and do not permit other individuals to perform this
function. Therefore, the designation of beneficiary that the
decedents cousin executed as the decedents attorney-in-fact is not
valid. The decedents unpaid compensation should be paid to the next
person in the statutory order of precedence the decedents surviving
spouse.
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