Previously, if an agency had miscalculated the interest on that deposit, it had no other option but to put the employee on the hook for that difference, meaning that a fed could end up owing thousands of dollars down the road through no fault of their own.
The Correcting Miscalculations in Veterans' Pensions Act, signed into law in late 2018, provided the legal basis for agencies to pay the miscalculated amount, and the proposed OPM rule creates the necessary framework for implementing that new policy.
The rule change also applies to Peace Corps and VISTA volunteers who credit their service and experience an administrative error in their payment calculations.
“[The Correcting Miscalculations in Veterans' Pensions Act] specifies that if an employing agency makes an administrative error in processing deposits for post-1956 military service or full-time volunteer service as a volunteer or volunteer leader with the Peace Corps or VISTA that increases the amount of interest owed on the deposit, the employing agency or OPM may pay on behalf of the employee any additional interest assessed due to the administrative error,” the rule states.
“Agencies are responsible for establishing their own guidelines for what constitutes administrative error and whether a payment is made. OPM has no role or authority in the decision.”
Comments on the proposed rule are due via the eRulemaking Portal by Jan. 4.