20 CFR 404.1201
A question has been raised as to the status for social security coverage purposes of employees who may be temporarily assigned between the Federal Government, and State and local governments and institutions of higher education, under Title IV of the Intergovernmental Personnel Act of 1970, P.L. 91-648. Title IV of this Act, entitled "Mobility of Federal, State, and Local Employees," added a subchapter VI ("Assignments To and From States") to Chapter 33 ("Examination, Selection, and Placement") of Title 5 ("Government Organization and Employees") of the United States Code.
Among the categories of employees who may be affected are those Federal employees who, under 5 U.S.C. 3373, may be assigned, either on detail or on leave without pay, to a State or local government or to an institution of higher education, for a period generally not to exceed two years. Subsection (a) of 5 U.S.C. 3373 provides that an employee on such detail or leave without pay, remains an employee of his Federal agency; if on leave without pay, express provision is made in 5 U.S.C. 3373(c)(3)(B) to continue his coverage, if any, under the applicable Federal employees' retirement system during the period of his assignment.
Another category of employees involved under P.L. 91-648 are State and local employees assigned to the Federal Government. Under the statute, such an employee may be given a non-competitive temporary Federal appointment or be deemed on detail to a Federal agency.
If given such a Federal appointment, 5 U.S.C. 3374(b) provides that the employee is entitled to pay in accordance with the Classification Act and the General Schedule or other application law; and is considered an employee of the Federal agency for all purposes except the Federal Civil Service Retirement Act or other applicable retirement system; the Federal Employee Group Life Insurance Act; and the Federal Employees Health Benefits Act (unless his appointment results in loss of coverage acquired in a group health benefits plan the premium of which has been paid in whole or in part by a State or local government contribution). Further, under 5 U.S.C. 3374(e), if a State or local government fails to continue its contribution as the employer to a state or local retirement plan or a life insurance or health benefit plan for a State or local government employee who is given a Federal appointment, the Federal agency is authorized to make the State or local government employer's contribution during the period of such assignment.
If deemed on detail to a Federal agency, however, a State or local government employee is not entitled to pay from the Federal agency, and is deemed an employee of the Federal agency only for the purpose of certain Federal employee laws, such as those relating to conflict of interest, political activity, failure to account for public money, disclosure of confidential information, lobbying with appropriated funds, and tort claims.
In continuing a Federal employee's coverage under the applicable Federal employees' retirement system when he is assigned to a State or local government (whether on detail or on leave without pay), and in precluding coverage of a State or local government employee assigned to a Federal agency (whether on detail or under a temporary appointment) under a Federal employees' retirement system, it appears to have been the intent of Congress to simplify intergovernmental assignments by providing for continuance of the appointee's pre-appointment retirement coverage, even to the extent of authorizing Federal agencies to assure the continuation of a Federally-appointed State or local government employee's coverage under his State or local retirement system, by paying the State or local government's employer contributions to his account, when necessary.
Accordingly, where a Federal employee is assigned to a State or local government or to an institution of higher education for a period generally not to exceed two years under 5 U.S.C. 3373, he may retain his coverage under the applicable Federal employees' retirement system during his assignment to such government or institution, and where a State or local government employee is similarly assigned to a Federal agency under 5 U.S.C. 3374, he would generally retain his State and local retirement system coverage during his Federal assignment. Therefore, a State or local government employee whose position is covered for Federal social security purposes under a Section 218 agreement (under title II of the Social Security Act) could retain such coverage during his assignment to a Federal agency under 5 U.S.C. 3374.
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