PART 4903—DEBT COLLECTION 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. Source: 75 FR 68205, Nov. 5, 2010, unless otherwise noted. Subpart A—General Provisions § 4903.1 What definitions apply to this part? The following terms are defined in § 4001.2 of this chapter: Code, PBGC, and Person. In addition, for purposes of this part: Administrative offset or offset Administrative wage garnishment Agency or Federal agency Creditor agency Debt et seq. Debtor Delinquent debt Disposable pay Employee Federal employee FCCS Financial Management Service (FMS) Payment agency Federal payment agency Salary offset Tax debt Tax refund offset § 4903.2 What do these regulations cover? (a) Scope. (b) Applicability. (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 § 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, See, also, (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. (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. (e) Use of multiple collection remedies allowed. § 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. § 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. See (b) Date of filing. (c) 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? (a) Notice requirements. (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 § 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 (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. i.e., see (ii) Private collection agency. see (iii) Credit bureau reporting. see (iv) Administrative wage garnishment. see (v) Litigation. see (vi) Treasury Department's Financial Management Service. see (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 (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 (10) How a debtor who is an individual may request a hearing if PBGC intends to garnish the debtor's private sector ( i.e., (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 (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, (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 (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. (c) Respond to debtors; comply with FCCS. See § 4903.6 How will PBGC add interest, penalty charges, and administrative costs to a debt owed to PBGC? (a) Assessment and notice. (b) Waiver of interest, penalties, and administrative costs. See (c) Accrual during suspension of debt collection. § 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. § 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. § 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. § 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 (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 § 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 § 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. See See (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 § 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. (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 § 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 (c) Administrative review. (d) Procedures for expedited offset. § 4903.12 How will PBGC use tax refund offset to collect a debt owed to PBGC? (a) Tax refund offset. See See (b) Notice. See (c) Administrative review. § 4903.13 How will PBGC offset a Federal employee's salary to collect a debt owed to PBGC? (a) Federal salary offset. (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, (3) PBGC may use the administrative wage garnishment procedure described in § 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. See (c) Non-centralized salary offset for debts owed to PBGC. See (d) When prior notice not required. (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 Request for administrative review. See See (2) Failure to submit timely request for administrative review. (3) Reviewing official. (4) Notice of administrative review. (5) Oral hearing. (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. See (7) Failure to appear or submit documentary evidence. (8) Burden of proof. (9) Record. (10) Date of decision. (11) Content of decision. (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. (f) Waiver not precluded. (g) Salary offset process Determination of disposable pay. (2) When salary offset begins. (3) Amount of salary offset. (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 amount, or the creditor agency has determined that smaller deductions are appropriate based on the employee's ability to pay. (4) Final salary payment. (h) Payment agency's responsibilities. (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 § 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. § 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 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 See (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 § 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 § 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 § 4903.10 of this part. § 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 § 4903.10 of this part. § 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 §§ 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 § 4903.10 of this part. § 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 (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 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 § 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. (b) Inability to pay. (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. § 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 § 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. (2) This subpart C does not apply to debts owed to PBGC. See (3) This subpart C does not apply to the collection of non-PBGC debts through tax refund offset. See 31 CFR 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. (c) Where a creditor agency makes requests for offset. (d) Incomplete certification. (e) Review. (f) When PBGC will not comply with offset request. (g) Multiple debts. (h) Priority of debts owed to PBGC. [75 FR 68205, Nov. 5, 2010, as amended at 87 FR 57825, Sept. 22, 2022] § 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. (b) Amount of deductions from a PBGC employee's salary. See (c) When the debtor is no longer employed by PBGC Offset of final and subsequent payments. See (2) Notice to the creditor agency. (3) Notice to the debtor. (d) When the debtor transfers to another Federal agency Notice to the creditor agency. (2) Notice to the debtor. (e) Request for hearing official. See