(a) General. An absolute coverage group is a permanent grouping of employees, e.g., all the employees of a city or town. It is a coverage group for coverage and reporting purposes. When used for coverage purposes, the term refers to groups of employees whose positions are not under a retirement system. An absolute coverage group may include positions which were formerly under a retirement system and, at the State’s option, employees who are in positions under a retirement system but who are ineligible (see § 404.1208) to become members of that system.

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(b) What an absolute coverage group consists of. An absolute coverage group consists of one of the following employee groups:

(1) State employees performing services in connection with the State’s governmental functions;

(2) State employees performing services in connection with a single proprietary function of the State;

(3) Employees of a State’s political subdivision performing services in connection with that subdivision’s governmental functions;

(4) Employees of a State’s political subdivision performing services in connection with a single proprietary function of the subdivision;

(5) Civilian employees of a State’s National Guard units; and

(6) Individuals employed under an agreement between a State and the U.S. Department of Agriculture as agricultural products inspectors.

(c) Designated coverage groups. A State may provide coverage for designated (i.e., selected) absolute coverage groups of the State or a political subdivision. When coverage is extended to these designated groups, the State must specifically identify each group as a designated absolute coverage group and furnish the effective date of coverage and any optional exclusion(s) for each group. Where a State has provided coverage to designated absolute coverage groups, the State may, by modifying its agreement, extend that coverage to any absolute coverage group in the State.