TN 18 (11-08)

GN 02408.645 Debiting the FI’s Account for EFT Reclamations

Effective January 2, 2008, the Department of the Treasury (DT) imposed a three (3) year time limit for Federal agencies to submit final debits (i.e., ACH reclaims) of a Financial Institution's (FI) Federal Reserve account via the FMS-135, Request for Debit. An ACH reclaim represents a debit against an FI for certain liability on payments disbursed after the death of a beneficiary. Agencies have three years from the date of the FMS-133, Notice of Reclamation to submit ACH reclaims via the FMS-135 to DT's Philadelphia, Kansas City and San Francisco Regional Financial Centers. Items older than three years are rejected and not processed.

A. Process when determining the amount to be debited

DT determines the amount to be debited from the FI's reserve account at the Federal Reserve Bank (FRB).

1. FI has returned full amount of incorrect payments

When the FI has returned the full amount of the incorrect payments issued after death, DT closes the case and does not instruct FRB to debit any funds from the FI’s reserve account.

2. FI has limited its liability

When the FI has limited its liability but has not returned the full amount of all outstanding payments, DT does the following:

  • Totals the amount already paid by the FI or survivors;

  • Title II only – Passes to SSA the name and address of the last withdrawers, so we can attempt to collect as much as possible of the outstanding total;

  • Adds the amount SSA has collected from the withdrawers to the total amount returned by the FI;

  • Subtracts the combined total from the amount of the FI’s liability; and

  • Computes the remainder as the amount to be debited.

3. FI has not limited its liability

When the FI has neither returned all incorrect payments nor limited its liability, the amount to be debited from the FI’s reserve account at FRB is the outstanding total as shown on the Notice of Reclamation.

B. Process when FRB debits the FI’s account

After determining the amount to be debited, DT sends a Request for Debit (FMS-135) to the FI’s servicing Federal Reserve Bank (FRB). FRB does the following:

  • Takes the money from the FI’s reserve account (or its correspondent’s reserve account) at FRB;

  • Notifies the FI of the action; and

  • Returns the reclaimed funds to DT.

C. Process when DT returns the funds to SSA

DT returns the funds to SSA, unless they receive a protest from the FI that needs investigation. DT forwards the FMS-135 to SSA for action.

1. Title II

The funds are automatically posted to the Payment History Update System (PHUS) and reduce the Special Payment Amount (SPA) on the PHUS and the Master Beneficiary Record (MBR). If posting does not take place, a reject goes to the PC. The PC must then resolve the reject and key the return using the SSA-4208. For SSA-4208 processing instructions, see GN 02408.626C and SM 00609.865.

2. Title XVI

The funds are automatically posted. DT sends the Division of Benefit Certification and Accounting (DBCA) an FMS-135 to notify SSA of the reclamation. If the funds have not posted, DBCA codes a 3969 and gives it to ODIO for input. The information posts to the SSR OPRR field as a refund or an S posts to Payflag 3 for the check in PMTH.

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GN 02408.645 - Debiting the FI's Account for EFT Reclamations - 12/04/2013
Batch run: 12/04/2013