ConferencePresentation 2013 DoYouKnowWhereYourAuthorityIs 1

8/16/2019 ConferencePresentation 2013 DoYouKnowWhereYourAuthorityIs 1

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Slide 1

63rd Annual NCSSSA Conference

July 2013

Philadelphia, Pennsylvania

It’s 2013. Do You Know Where

Your Authority Is?

The Moderator’s introduction is interrupted by the sound of a siren:

TWO AGENTS burst into the room and rush to the front.

MARK: Stay right where you are! Don’t anybody leave this room!

FRED: I’m Special Agent Sanchez and that is Chief Inspector Brown. We’ve been called herebecause there have been reports that some States have not taken the necessary steps to legallychange their State laws and Section 218 Agreements to permit the Social Security coverage of policeofficer and firefighter positions already covered under a retirement system.

MARK: Yeah. And some of those states thought that just because Congress gave them authority tocover those police officer and firefighter positions beginning August 16, 1994 with the passage ofPublic Law 103-296, they could go out and start holding referendums, executing modifications and

covering police officers and firefighters. WRONG! WRONG! WRONG!

FRED: Although Congress may give a State authority to extend Social Security coverage under theState’s Section 218 Agreement to police officer and firefighter positions already covered under aretirement system, the State still has to go through a two-stage process before referendums can beheld.


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Slide 2

Social Security

Adm in is trat ion Some Background

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Police and Firefighters

MARK: Stage Number 1 – The State (in this case it falls to you State Administrators) must firstreview state statutes and the enabling act to see if there is any language that prohibits police officerand firefighters positions already covered under a retirement system from subsequently getting Socia

Security coverage under the State’s Section 218 Agreement. If there is such language, then it musbe removed, which almost always requires action by the state legislature. That’s the hard, time-consuming part.

FRED: Once that legislation has been passed, or if the State is lucky enough not to have theprohibitive language in state statutes or the enabling act, then the State goes to Stage 2 – changingthe language in the 218 Agreement to permit coverage of police officer and firefighter positionsalready covered by a retirement system. All States that permitted Social Security coverage oretirement system positions either in their original Section 218 Agreement or by a subsequentmodification to the Agreement all put in the following phrase “except a policeman’s or fireman’sposition.”

MARK: That means that before 218 coverage can be extended to police officers and firefightersalready under a retirement system, the restrictive language must be removed from the 218

Agreement via a modification. Otherwise, your State’s Section 218 Agreement still forbids suchcoverage.


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Slide 3

Social Security



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FRED: Thus, if that language has not been removed, you can’t extend Section 218 Social Securitycoverage or Medicare-only coverage to those police officer and firefighter positions already coveredby a retirement system. If any modifications have been processed for these positions without having

made the necessary changes to the State’s Section 218 Agreement, the legitimacy of those coveragemodifications are now in jeopardy.

MARK: There are some States that did the necessary changes to their 218 Agreements, and thereare some States that didn’t do the necessary changes, but did police officer and firefightermodifications anyway that are now out risk, and then there is a majority of States (mostly the statesnot listed in SL 30001.345E2) we don’t know whether they ever went through the necessary changesor whether they may have erroneously processed modifications covering police officer and firefighterpositions.

FRED: As the first-line authority, it is the State Administrator’s responsibility to know what the State’s

Section 218 Agreement permits, and what it does not permit. And which modifications madesignificant changes to the Section 218 Agreement. If you don’t know, what your State’s situation isyou need to go back and review your State’s Section 218 Agreement and modifications, the enablingact and state statutes before extending coverage to police officers and firefighters already covered bya retirement system.


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Slide 4

Social Security



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MARK: Also, the SSA regional office specialists and ROGC should keep in mind the police officer andfirefighter coverage situation in a particular State when reviewing its mods involving police officer and firefightepositions already covered under a retirement system.

FRED: Do you know where your State’s Section 218 Agreement stands on police officers andfirefighters?

MARK: While you ponder what your situation is and what problems that could possibly be facing youremember this; when you are dealing with coverage of police officer and/or firefighter positions or withany police officer and firefighter related issues, you should start with SL 30001.345.


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Slide 5

Social Security

Adm in is trat ion

There are two ways to cover services performed in policeand firefighter positions:

• as part of an absolute coverage group; or

• as a part of a retirement system coverage

group.

Such system may cover positions of police officers only,or firefighters only, or both, and other positions.

Providing Social Security Coverage forPolice Officer and Firefighter Positions

20 C.F.R. 404.1212(b)

POMS SL 30001.345(B)

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FRED: Now, there are two ways that police officer and firefighter positions can be covered for SociaSecurity. (1) They can be covered as part of an absolute coverage group, or (2) they can be coveredas part of a retirement system coverage group.


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Slide 6

Social Security

Adm in is trat ion

If police officer and/or firefighter positions were not

covered by a retirement system at the time an entityobtained Social Security coverage under the State’sSection 218 Agreement for all positions not covered by aretirement system, the police officer and firefighter positions are covered as part of the absolute coveragegroup.

Coverage obtained under a Section 218 Agreement as anabsolute coverage group position continues even if these positions later come under a retirement system.

Coverage of Positions Not

under a Retirement System

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POMS SL 30001.345(C)

POMS SL 30001.380(A)

MARK: From the very beginning of Section 218 coverage, police officer and firefighter positionscould always be covered for Social Security as part of a governmental entity’s absolute coveragegroup, if they were not already covered under a retirement system on the applicable/designated date

of the governmental entity’s Section 218 coverage modification. It can be done in every State, andpolice officer and firefighter positions all over the country have been covered for Social Security asabsolute coverage group positions. Those folks are fine and we have no beef with them. In fact, theyremain covered for Social Security as absolute coverage positions even if they are later broughtunder a retirement system

FRED: However, Section 218 coverage for police officer and firefighter positions that are alreadycovered under a retirement system has followed a more, complex tortuous route. And as some ofyou may learn today, the situation may not yet be resolved in your own State. And you may possiblyhave a clean-up job on your hands.


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Slide 7

Social Security

Adm in is trat ion

Police Officer and FirefighterPositions Under a Retirement System

Time for a history lesson:

• When Congress was working out the 1954Amendments to permit coverage ofretirement system positions, police andfirefighter organizations and pension planslobbied against extending Social Securitycoverage to police officer and firefighter positions already covered under aretirement plan or system.

• Congress acquiesced and so the 1954Amendments gave the States authority tocover under Section 218 State and Local

employees already under a retirement planor system except “a policeman’s orfireman’s position.”

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MARK: To better understand your present situation, let’s have a little history lesson on the evolutionof Section 218 coverage for police officer and firefighter positions already under a retirement systemWhen Congress was considering passage of the 1954 Social Security Amendments, the

Amendments that permitted Section 218 coverage of those State and local government positionsalready covered under a retirement system, organizations representing policemen and firefightingforces requested that due to the nature of their work, the special provisions of their retirementsystems and the fact that retirement age for them was lower than other employee positions, it wouldbe unwise to coordinate State retirement systems for police officers and firefighters with the SociaSecurity system.

FRED: Thus, every State that amended its Section 218 agreement to permit coverage of positionsalready under a retirement system included this language “except…a policeman’s or fireman’sposition” in its amending modification. And since that language is a part of the state’s Section 218

Agreement, the State cannot legally extend Section 218 coverage (either Social Security or Medicare-

only coverage) to those police officer and firefighter positions already covered by a retirement systemwithout first removing that language from the Section 218 Agreement


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Slide 9

Social Security

Adm in is trat ion

• From January 2, 1968 through August 15, 1994, any State that had notalready received authorization from Congress, could obtain authorizationto extend Section 218 Social Security coverage to firefighter positionsalready under a retirement system. This was accomplished by theGovernor (or a State official designated by the Governor) certifying toSSA that extending Social Security coverage would improve the overall benefit protection of these employees.

• The firefighter positions had to be treated as a separate retirement systemfor purposes of the referendum and coverage.

• Only a majority vote referendum could be held.

• The modification had to be accompanied by certification of referendumresults as well as certification by the Governor (or designee) that thisaction would improve the overall benefit protection of the group.

FirefightersBeginning January 2, 1968

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POMS SL 30001.345(E)(3)

MARK: (After reading the slide’s text, says) At this point I have seen only one such certification and itwas from the Governor of Missouri concerning the firefighters in one fire department in Missouri. have no idea if there are any other certifications out there, however, you state administrators need to

know if there are any in your Section 218 files and which modifications they are associated with.


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Slide 10

Social Security

Adm in is trat ion

President Clinton signing theSocial Security Independence

and Program Improvements Actof 1994 on August 15, 1994.

SSA History Archives.

August 16, 1994

The Social Security Independence and Program Improvements Act of1994 (Public Law 103-296) amended Section 218 of the Social

Security Act to give all states the option of extending Social Securityand Medicare coverage to police officers and firefighters who participate in a public retirement system.

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FRED: Prior to August 16, 1994, only 23 States were authorized to extend Social Security coverageto police officer and firefighter positions covered under a retirement system, and as we have alreadyseen , even some of those have not yet completed the necessary steps to revise their Section 218

Agreements, to permit the Social Security coverage to those positions.

The Social Security Independence and Program Improvements Act of 1994 (aka Public Law 103-296)not only established SSA as an independent agency, effective March 31, 1995, but it also amendedSection 218 of the Social Security Act to give all states the option of extending Social Security andMedicare coverage to police officers and firefighters who participate in a public retirement system.

See Federal-State Reference Guide (IRS Publication 963) p. 5-13, and 30001.345


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Slide 11

Social Security

Adm in is trat ion

As with other retirement system employees, there must beauthority to provide coverage under State law and theFederal-State agreement.

–See Federal-State Reference Guide (IRS Publication 963) p. 5-15.

– 20 C.F.R. § 404.1212

There Must be Authority to CoverPolice and Firefighters

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POMS SL 30001.345(E)(1), 3rd paragraph

FRED: However, please keep this in mind and imprint it on your brain, because some of yourpredecessors did not: Although with P.L. 103-296 Congress gave all states the authority to extendSection 218 Social Security coverage to police officer and firefighter positions already under a

retirement system, before the State can go out and start holding referendums and processingmodifications, there must be authority to provide coverage under both State law and the Federal-State agreement. That’s currently in the SLCH in SL 30001.345E1, 3

rd paragraph and was in the

1995 edition of the SLCH as well.

Unfortunately, both at the state level and at SSA, it was incorrectly assumed by many people that P.L.103-296 automatically permitted the states to bypass the authorization process; thus, there may be anumber of modifications that were approved and executed in error, which now need to be legitimatedby the State going through the formal authorization process. Even in those States that have not yedone any modifications to cover under Section 218 police officer and firefighter positions under aretirement system, they must still go through the authorization process before extending Section 218

coverage to such coverage groups.


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Slide 12

Social Security

Adm in is trat ion

As with other retirement systememployees, there must be authority to provide coverage:


– 20 C.F.R. § 404.1212

There Must Be Authority under theState’s Enabling Legislation

under State law.

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POMS SL 30001.345(E)(1)

MARK: Before you can even begin dreaming about holding referendums, you have to go through aprocess of establishing that authority. First, you must review State statutes and the State’s enablingact to see if there exists any language that forbids Section 218 coverage for police officer and

firefighter positions already under a retirement system. If there is any such language, it must beremoved and State law changed to give authority to extend Section 218 coverage to police officersand firefighters already under a retirement system. This will usually require State legislature action tomake the necessary revisions, and as Amy Bland of the Boston ROGC has said, “That’s the hardpart.” Rita Foltman, the State Administrator in Idaho has recently gone through the process ofgetting her State Statutes revised. Rita, would you please talk about your experience?


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Slide 13

Social Security

Adm in is trat ion Idaho

ICA 59-1101(2) (2013) (Title 59, Chapter 11, Section 1101)

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Rita speaks extemporaneously about her experience changing State law.


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Slide 14

Social Security

Adm in is trat ion

Each State’s original Section 218 Agreement incorporates the basic provisions, definitions and conditions for coverage underthe agreement.


– 20 C.F.R. § 404.1212

There Must Be Authority under theState’s Section 218 Agreement

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POMS SL 30001.303

FRED: Once the necessary changes have been made to your State statutes and enabling act or iyour investigation revealed that your state never included any language forbidding Section 218coverage of police officer and firefighter positions already under a retirement system, you can then goon to stage 2 – amending your State’s Section 218 Agreement. This part of the process can be quitetedious, because in order to properly prepare a modification that amends existing Section 218

language regarding Social Security coverage of employee positions already under a retirementsystem you have to know what the current Section 218 Agreement says regarding coverage ofretirement system positions. This usually means laying down side-by-side copies of (1) the originaSection 218 Agreement, (2) the modification that amended the Section 218 Agreement to permiSection 218 coverage of employee positions already under a retirement system, and (3) themodification template you are preparing to give authority to cover under Section 218 police officer andfirefighter positions already covered by a retirement system.

MARK: You do this so that you can see precisely where in the Section 218 Agreement the languagemust be changed and how it must be changed so that the resulting amending modification made fromthe template can accurately extend coverage authority. There will be an effective date on the

amending modification. That effective date will be the date that Congress gave your state authority toextend Section 218 coverage to police officer and firefighter positions under a retirement system. Inthe case of those States that got authority under P.L. 103-296, it will be August 16, 1994. In the caseof Idaho, Rita will be putting on an effective date of October 30, 1972. There is already precedencefor this, Virginia Mod 169 executed on February 25, 1971 with an effective date of September 131960 when Congress gave that State the authority. Also, this then protects any modifications that theState and SSA may have approved in error.


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Slide 15

Social Security

Adm in is trat ion Missouri’s Section 218 Agreement


– 20 C.F.R. § 404.1212 14

MARK: After learning that Missouri had not taken the appropriate action to change its Section 218 Agreement to permit Section 218 coverage of police officer and firefighter positions already under aretirement system, Vandee DeVore went through the two-stage process to enable the State to extend

Section 218 coverage to police officer and firefighter positions under a retirement system. Vandeewas lucky because Missouri had no language either in State statutes or the enabling act forbiddingsuch coverage; thus, she did not have to go through the legislative route like Rita had to. Howevershe had to still do an amending modification to the Section 218 Agreement.

Vandee talks extemporaneously.

FRED: The Section 218 Agreements for all but three or four states were executed prior to the 1954 Amendments. They all honed pretty much to the established SLCH template, thus they tend toexhibit similar form and language as seen here in Missouri’s Section 218. A coverage group is oneas defined in Section 218b5. The “Services Covered” section is in Part B of the Agreement; in other

states, a numeric ordering was done instead and thus in your State the “Services Covered” sectionmay be in Part 2 or Part II. Note, under “Services Covered” it says except: “in a position coveredunder a retirement system.” Once Missouri was granted authority by Congress to cover retiremensystem positions, this language had to be changed before MO. could hold referendums. And thatleads us to Mod 64, the retirement system mod.


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Slide 16

Social Security

Adm in is trat ion


– 20 C.F.R. § 404.1212

Missouri Modification #64

Services of police officers and

firefighters under a retirement system

would be excluded from Section 218

coverage except in the situation in

(b)(ii).

These two paragraphspermitted Section 218coverage of non-policeofficer and firefighter

positions under aretirement system by

basically saying that theywould still be excluded

from Social Securitycoverage unless they

obtained coverage as aseparate 218d4(retirement system)coverage group.

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MARK: Of course, the object of the retirement system coverage Mod 64 was to change the Section218 Agreement’s then existing language, which limited Section 218 coverage to absolute coveragegroups (Section 218(b)(5)), and change it permit Section 218 coverage of non-police officer and non-

firefighter employee positions already covered under a retirement system. This was done by

• Changing the definition of a “coverage group” in Part (A)(5) of the Agreement to now also include“a coverage group as defined by Section 218(d)(4)” and

• By changing paragraph 1 of the agreement with new subparagraphs 1(b) and (b) (i) to permicoverage of non-police officer and non-firefighter positions already under a retirement system(follow the green arrows)

Always keep in mind that the “Services Covered’ part of the Section 218 Agreement actuallydocumented the services not covered by the Agreement.

However, police officer and firefighters already under a retirement system would not be coveredunder the Agreement based on the provisions of the 1954 Social Security Amendments. This wasdone by creating subparagraph 1(a), which mentions them by name and does not referencesubparagraph (b)(1).

Through Missouri Mod 64, the Agreement language was changed to permit extension of Section 218coverage to State and local employee positions already covered under a retirement system except “apoliceman’s or fireman’s position.”


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Slide 17

Social Security

Adm in is trat ion


– 20 C.F.R. § 404.1212

Missouri Modification #453

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FRED: As a result of Public Law 103-296, Missouri and the rest of the States that had not alreadyobtained Congressional authority obtained that authority beginning August 16, 1994. Howeverbefore Missouri could hold referendums and extend Section 218 coverage to police officer and

firefighter positions already covered by a retirement system, language forbidding such coverage hadto be removed from the Missouri Section 218 Agreement. Vandee used the 1957 modificationtemplate for making such revisions, the template that had always been used to accomplish the task.The 1957 template creates a modification that basically explains what the coverage situation of policeofficer and firefighter positions was before authority was given and what it would be on and afterauthority is given. And thus, modification 453 was born.

This was done by revising Part (B), paragraph (1)(a) of the Agreement, a paragraph which wasoriginally created by Mod 64, and now letting paragraph(1)(a) describe the before August 16, 1994coverage situation for police officer and firefighter positions under a retirement system. Next, theformat of the template created a new paragraph (1)(b) to describe the authority the State now has

beginning August 16, 1994 to cover under the Section 218 Agreement police officer and firefighterpositions already under a retirement system. The old paragraph (1)(b), created by Mod 64 still existsand is in effect; it’s just been re-lettered as paragraph (1)(c), which Vandee duly noted in the body ofthe modification. Also, to make things crystal clear to anybody reading the modification in the futureshe included a plain-language paragraph explaining the intent of the modification.


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Slide 18

Social Security

Adm in is trat ion


– 20 C.F.R. § 404.1212

Model Modification Template

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MARK: The Kansas City ROGC reviewed Modification 453 and approved it, and the modificationwas executed earlier this year. The first of its kind since Mod 550 in 1978. However, John Fox and

Ann Reeg of the Kansas City ROGC felt that the 1957 template was not straightforward enough, andperpetuated the old style legal format of wrapping an exception within an exception, which in turn

leads to difficulties in interpretation and understanding. So they began working on language for a newtemplate that would replace the 1957 version. So, John could you tell us something about it?

JOHN: The revised template is a joint effort—I drafted it with my supervisor, Ann Reeg, and wereceived lots of input from Mark Brown. We think it’s a big improvement over the older police-and-firefighter template for reasons that I’ll discuss in a minute. However, keep in mind that it’s just amodel, and needs to be tailored to each state.

There are two issues that complicate police officer and firefighter position issues. First, a state’s 218agreement must describe the entire history of Social Security coverage. Your State’s agreement setsout a default rule that all positions are covered by Social Security. However, it also lists exceptions,

and these exceptions have changed over time—

� in 1951, employees under retirement systems;� in 1954, coverage for positions under retirement systems, but not police officer and

firefighter positions; [continued on next notes page]� on August 16, 1994 (or earlier), police officer and firefighter positions under retirement systems.


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Slide 20

Social Security

Adm in is trat ion


– 20 C.F.R. § 404.1212

Model Modification Template

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I won’t go over everything in the revised template, but I’ll touch on a few of the changes

[1] sets out the default rule for coverage. This language is already in your state’s agreement, but

we’ve placed it in the template for context. As long as this language is here, it’s clear that the itemsthat follow must be worded as exceptions.

[2] is the police officer and firefighter exception. The important part is what you don’t see. There’s noparagraph that permits coverage for police officer and firefighter positions after August 16, 1994. Thismakes sense if you think about, because after August 16, 1994, police officer and firefighter positionsare treated like any other position.

[7] is a footnote. This doesn’t have any legal effect, but it’s another tool that we use to clarify what’sgoing on.

So, to wrap things up, just keep in mind that you don’t have to figure this stuff out on your own. Talk toyour regional office on the front-end, and the agency will work with you to hammer out themodification language before you go through the process of executing the formal document.


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Slide 21

Social Security

Administ rat ion Your Presenters

Mark W. Brown

Office of Income Security Programs (OISP)/

Office of Earnings and Information Exchange (OEIE)

Social Security Administration

Tel: (410) 965-5781

E-mail: [email protected]

Fred C. Sanchez

Branch Chief (Supervisory Counsel)

Office of the Regional Chief Counsel – Region V


Tel: (877) 800-7578, Ext. 19157


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John P. Fox

Assistant Regional Counsel

Office of the Regional Chief Counsel – Region VII


Tel: (816) 936-5783


ConferencePresentation 2013 DoYouKnowWhereYourAuthorityIs 1

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