Uniformed Services Accounts; Death Benefits; Court Orders and Legal Processes Affecting Thrift Savings Plan Accounts; Thrift Savings Plan, 63061-63063 [E9-28752]
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63061
Rules and Regulations
Federal Register
Vol. 74, No. 230
Wednesday, December 2, 2009
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
FEDERAL RETIREMENT THRIFT
INVESTMENT BOARD
5 CFR Parts 1604, 1651, 1653, and 1690
Uniformed Services Accounts; Death
Benefits; Court Orders and Legal
Processes Affecting Thrift Savings
Plan Accounts; Thrift Savings Plan
erowe on DSK5CLS3C1PROD with RULES
AGENCY: Federal Retirement Thrift
Investment Board.
ACTION: Final rule.
SUMMARY: The Federal Retirement Thrift
Investment Board (Agency) is amending
its regulations regarding uniformed
services accounts to conform with
mandatory tax provisions as well as
current recordkeeping practices and
allow only for pro rata court-ordered
payments.
The Agency amends its regulations
regarding death benefits to provide for
a clear process by which children of
participants can establish parentage.
The Agency amends its court order
regulations so that when a court order
directs that a payment includes
earnings, the Agency is able to make a
payment which calculates the payee’s
award amount based on the current
price of the shares he/she was awarded.
The Agency amends its court order
regulations to remove a provision which
permits courts to direct payment from
only the tax-exempt balance of a
uniformed services account.
The Agency amends its regulations at
part 1690, subpart B, to add a regulation
outlining the circumstances under
which a TSP account may be frozen.
DATES: This final rule is effective
December 2, 2009.
FOR FURTHER INFORMATION CONTACT: Tim
Carey at 202–942–1666 or Laurissa
Stokes at 202–942–1645.
SUPPLEMENTARY INFORMATION: The
Agency administers the TSP, which was
established by the Federal Employees’
Retirement System Act of 1986
VerDate Nov<24>2008
12:48 Dec 01, 2009
Jkt 220001
(FERSA), Public Law 99–335, 100 Stat.
514. The TSP provisions of FERSA are
codified, as amended, largely at 5 U.S.C.
8351 and 8401–79. The TSP is a taxdeferred retirement savings plan for
Federal civilian employees and
members of the uniformed services. The
TSP is similar to cash or deferred
arrangements established for privatesector employees under section 401(k)
of the Internal Revenue Code (26 U.S.C.
401(k)).
On October 22, 2009, the Agency
published a proposed rule with request
for comments in the Federal Register
(74 FR 54491). The Agency received one
comment on the proposed rule and that
comment supported the Agency’s
proposed change to its method of
calculating court order awards.
Therefore, the Agency is publishing the
proposed rule as final without change.
Uniformed Services Accounts
The Agency amends its regulations
regarding uniformed services accounts,
and, specifically, its provisions relating
to the division of a uniformed services
account pursuant to a court order or
legal process. The amendment removes
a provision suggesting that courts could
direct the Plan to make a court-ordered
payment other than one that is pro rata
from both taxable and tax-exempt
contributions.
Uniformed services accounts are
unique in that some or all of a
uniformed services member’s
contributions may derive from taxexempt income as a result of the combat
zone tax exclusion. In 2001, the Agency
issued final regulations regarding the
uniformed services’ participation in the
TSP. Among many changes, the Agency
determined that ‘‘the TSP can honor a
court order or legal process that
apportions combat zone (tax-exempt)
contributions between the participant
and the payee,’’ and, therefore, the final
version of 5 CFR 1604.9(b) regarding
court-ordered payments from a
uniformed services member’s account
stated that payment will be made pro
rata from all sources ‘‘unless the court
order or legal process directs
otherwise.’’ (66 FR 50716, October 4,
2001).
The Agency recently analyzed its
authority and record keeping capability
to issue payments from, as the
regulation suggests, only one source of
contributions in a uniformed services
participant’s account. The Agency has
PO 00000
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Fmt 4700
Sfmt 4700
concluded that the Internal Revenue
Code (I.R.C.) permits only pro rata
payments from both taxable and taxexempt funds, and that a court cannot
direct the Plan to make a payment from,
for example, only tax-exempt funds.
Specifically, I.R.C. sections 72 and
402(e)(1)(A) preclude an allocation of
basis pursuant to a court order if such
allocation is other than pro rata. In
particular, for purposes of determining
tax liability, a spousal alternate payee is
treated the same as the participant and,
therefore, a distribution to a spouse or
former spouse made pursuant to a court
order must be made pro rata from
taxable and tax-exempt amounts in a
uniformed services account. 26 U.S.C.
402(e)(1)(A). Therefore, the Agency’s
regulation permitting courts to order a
payment other than pro rata is not
permitted by the I.R.C. and is amended.
Additionally, the Agency’s record
keeping system cannot issue a payment
from only one source of funds because
it is programmed to make all payments
from uniformed services accounts on a
pro rata basis from taxable and taxexempt balances. Therefore, changing
this regulation to remove the language
which suggests a court could direct the
Agency to issue a payment other than
one which is pro rata is not only
technically correct but also reflects
current record keeping processes.
Death Benefits
The Agency amends its regulations
regarding death benefits, and, in
particular, its regulation regarding
payment to a participant’s child or
children. Specifically, the amendment
clarifies the documentation children
should submit in the event that the
identity of their father or mother is in
dispute or unclear.
As familial matters, including
guidelines related to parentage, are
rooted in state, not Federal, law, the
Agency cannot adjudicate or otherwise
determine matters of paternity or
maternity. In support of their contention
that they are the proper beneficiary of
their parent’s account, children of
deceased participants often submit
insufficient or otherwise unclear
documentation (e.g., copies of obituaries
and personal mementos). A lack of
guidance regarding which documents to
submit in support of parentage adds
unnecessary time and inconvenience to
the processing of death benefit
determinations.
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02DER1
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Federal Register / Vol. 74, No. 230 / Wednesday, December 2, 2009 / Rules and Regulations
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The Agency, therefore, augments its
death benefits regulations to describe
the documentation it requires in support
of a purported child’s claim that a
participant was his or her parent.
Specifically, the Agency requests that
affected children submit a court order or
administrative finding or
documentation which would establish
parentage in the state in which the
participant resided prior to his death.
Court Orders and Legal Processes
Affecting Thrift Savings Plan Accounts
The Agency amends its court order
regulations to allow for court-awarded
payments which account for investment
earnings and losses as well as to reflect
the previously-discussed requirement
that all payments from participants’
accounts be paid pro rata.
Currently, in order for the Agency to
take into account investment losses, a
court order has to divide the account as
of the date of distribution or identify a
fixed amount that the parties agreed
upon. Further, per the Agency’s
regulations, if a court order specifies
that earnings are to be awarded and no
specific rate is provided, even when an
account experiences investment losses,
the Agency awards earnings using its
Government Securities Investment (G)
Fund rate. 5 CFR 1653.4(f)(3).
The Agency, which receives many
court orders directing that payments
reflect earnings and losses until the date
of distribution, amends its regulations
so that the division of an account factors
in the current price of those shares
included in a payee’s award amount.
In particular, if earnings, defined to
include losses, are requested and a rate
is not specified, the Agency will
determine the amount to be awarded by
determining the payee’s award amount
(e.g., the percentage or fraction of the
participant’s account), and, based on the
participant’s investment allocation as of
the effective date of the court order, the
number and composition of shares that
the payee’s award amount would have
purchased as of the effective date.
(Determining the shares as of the
effective date of the court order, and not
a later date, preserves the court’s intent
and protects the payee from investment
decisions made by the participant after
the effective date of the court order.)
The Agency will then multiply the price
per share as of the payment date, which
is generally two business days prior to
the date of the award’s disbursement, by
the number and composition of shares
comprising the payee’s award amount as
of the court order’s effective date.
The Agency believes that this
calculation will result in more equitable
awards as well as more efficient court
VerDate Nov<24>2008
12:48 Dec 01, 2009
Jkt 220001
order processing as parties are not
required to return to court for additional
or clarifying language.
As previously discussed, the Agency
also amends its court order and legal
process regulations in order to conform
with the I.R.C. and current record
keeping procedures. In particular, the
Agency removes language from
§ 1653.5(d) which states that a court
may specify a particular payment from
the tax-exempt balance of a uniformed
services account. Please see the
SUPPLEMENTARY INFORMATION discussion
regarding Uniformed Services Accounts
for an overview as to why the Agency
is removing such language.
Submission to Congress and the
General Accounting Office
Pursuant to 5 U.S.C. 810(a)(1)(A), the
Agency submitted a report containing
this rule and other required information
to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller
General of the United States before
publication of this rule in the Federal
Register. This rule is not a major rule as
defined at 5 U.S.C. 804(2).
Thrift Savings Plan
5 CFR Part 1651
Claims, Government employees,
Pensions, Retirement.
The Agency adds a regulation
outlining the circumstances under
which a participant’s account may be
frozen and when access to the Agency’s
Web site and ThriftLine may be blocked.
Though uncommon, freezes (or
administrative holds) prevent a
participant from withdrawing funds,
including loans, from his or her
account, and, therefore, the Agency is
providing regulatory notice to its
participants regarding the circumstances
under which such a hold may occur and
also the consequences of such a hold.
Regulatory Flexibility Act
I certify that this regulation will not
have a significant economic impact on
a substantial number of small entities.
This regulation will affect Federal
employees and members of the
uniformed services who participate in
the Thrift Savings Plan, which is a
Federal defined contribution retirement
savings plan created under the Federal
Employees’ Retirement System Act of
1986 (FERSA), Public Law 99–335, 100
Stat. 514, and administered by the
Agency.
List of Subjects
5 CFR Part 1604
Military personnel, Pensions,
Retirement.
5 CFR Part 1653
Alimony, Child support, Claims,
Government employees, Pensions,
Retirement.
5 CFR Part 1690
Government employees, Pensions,
Retirement.
Gregory T. Long,
Executive Director, Federal Retirement Thrift
Investment Board.
For the reasons stated in the preamble,
the Agency amends 5 CFR chapter VI as
follows:
■
PART 1604—UNIFORMED SERVICES
ACCOUNTS
1. The authority citation for part 1604
continues to read as follows:
■
Authority: 5 U.S.C. 8440e, 8474(b)(5) and
(c)(1).
2. Amend § 1604.9 to revise paragraph
(b) to read as follows:
■
§ 1604.9
Court orders and legal processes.
I certify that these regulations do not
require additional reporting under the
criteria of the Paperwork Reduction Act.
*
*
*
*
(b) Combat zone contributions. If a
service member account contains
combat zone contributions, the payment
will be made pro rata from all sources.
*
*
*
*
*
Unfunded Mandates Reform Act of
1995
PART 1651—DEATH BENEFITS
Paperwork Reduction Act
Pursuant to the Unfunded Mandates
Reform Act of 1995, 2 U.S.C. 602, 632,
653, 1501–1571, the effects of this
regulation on state, local, and tribal
governments and the private sector have
been assessed. This regulation will not
compel the expenditure in any one year
of $100 million or more by state, local,
and tribal governments, in the aggregate,
or by the private sector. Therefore, a
statement under section 1532 is not
required.
PO 00000
Frm 00002
Fmt 4700
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*
3. The authority citation for part 1651
continues to read as follows:
■
Authority: 5 U.S.C. 8424(d), 8432(j),
8433(e), 8435(c)(2), 8474(b)(5) and 8474(c)(1).
4. Amend § 1651.1 to add the
definition of ‘‘Administrative finding’’,
in alphabetical order, in paragraph (b) to
read as follows:
■
§ 1651.1
*
Definitions.
*
*
(b) * * *
E:\FR\FM\02DER1.SGM
02DER1
*
*
Federal Register / Vol. 74, No. 230 / Wednesday, December 2, 2009 / Rules and Regulations
Administrative finding means an
evidence-based determination reached
by a hearing, inquiry, investigation, or
trial before an administrative agency of
competent jurisdiction in any State,
territory or possession of the United
States.
*
*
*
*
*
■ 5. Amend § 1651.6 to add a paragraph
(d) to read as follows:
the effective date of the court order, the
number and composition of shares that
the amount in paragraph (f)(3)(i) of this
section would have purchased as of the
effective date; and
(iii) Multiplying the price per share as
of the payment date by the number and
composition of shares calculated in
paragraph (f)(3)(ii) of this section.
*
*
*
*
*
§ 1651.6
§ 1653.5
Child or children.
*
*
*
*
*
(d) Parentage disputes. If the identity
of the father or mother of a child is in
dispute or otherwise unclear (e.g., only
one parent is listed on a birth
certificate), the purported child must
submit to the TSP either:
(1) A court order or other
administrative finding establishing
parentage; or
(2) Documentation sufficient for
establishing parentage under the law of
the state in which the participant was
domiciled at the time of death.
PART 1653—COURT ORDERS AND
LEGAL PROCESSES AFFECTING
THRIFT SAVINGS PLAN ACCOUNTS
6. The authority citation for part 1653
continues to read as follows:
■
Authority: 5 U.S.C. 8435, 8436(b), 8437(e),
8439(a)(3), 8467, 8474(b)(5) and 8474(c)(1).
7. Amend § 1653.1 to add the
definitions of ‘‘Payment date’’ and ‘‘TSP
investment earnings or earnings’’, in
alphabetical order, in paragraph (b) to
read as follows:
■
§ 1653.1
Definitions.
*
*
*
*
*
(b) * * *
*
*
*
*
*
Payment date refers to the date on
which earnings are determined and is
generally two business days prior to the
date of an award’s disbursement.
*
*
*
*
*
TSP investment earnings or earnings
means both positive and negative fund
performance attributable to differences
in TSP fund share prices.
■ 8. Amend § 1653.4 to revise paragraph
(f)(3) and remove paragraph (f)(4) to
read as follows:
§ 1653.4
Calculating entitlements.
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*
*
*
*
*
(f) * * *
(3) If earnings are awarded and the
rate is not specified, the Agency will
calculate the amount to be awarded by:
(i) Determining the payee’s award
amount (e.g., the percentage or fraction
of the participant’s account);
(ii) Determining, based on the
participant’s investment allocation as of
VerDate Nov<24>2008
12:48 Dec 01, 2009
Jkt 220001
PART 1690—THRIFT SAVINGS PLAN
10. The authority citation for part
1690 continues to read as follows:
■
Authority: 5 U.S.C. 8474.
11. Add § 1690.15 to read as follows:
§ 1690.15 Freezing an account—
administrative holds.
(a) The TSP may freeze (e.g., place an
administrative hold on) a participant’s
account for any of the following reasons:
(1) Pursuant to a qualifying retirement
benefits court order as set forth in part
1653 of this chapter;
(2) Pursuant to a request from the
Department of Justice under the
Mandatory Victims Restitution Act;
(3) Upon the death of a participant;
(4) Upon suspicion or knowledge of
fraudulent account activity or identity
theft;
(5) In response to litigation pertaining
to an account;
(6) For operational reasons (e.g. to
correct a processing error or to stop
payment on a check when account
funds are insufficient);
(7) Pursuant to a written request from
a participant; and
(8) For any other reason the TSP
deems prudent.
(b) An account freeze (i.e.,
administrative hold) prohibits a
participant from withdrawing funds,
including loans, from his or her
account. The participant continues to
have the capability to conduct all other
transactions including making
contributions, changing contribution
allocations, and making interfund
transfers.
(c) The Agency will notify the
participant that his or her account has
been frozen unless it determines it
prudent to not notify the participant
that his of her account has been frozen.
(d) A participant may block on-line
and ThriftLine access to his or her
account by writing to the TSP or by
submitting a request at https://
www.tsp.gov.
(e) A participant may remove a
participant-initiated freeze
PO 00000
Frm 00003
Fmt 4700
(administrative hold) by submitting a
notarized request to the TSP.
[FR Doc. E9–28752 Filed 12–1–09; 8:45 am]
BILLING CODE 6760–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Amended]
9. Amend § 1653.5 by removing the
last sentence of paragraph (d).
■
■
63063
Sfmt 4700
[Docket No. FAA–2009–0915; Directorate
Identifier 2009–NM–224–AD; Amendment
39–16049; AD 2009–21–10]
RIN 2120–AA64
Airworthiness Directives; AVOX
Systems and B/E Aerospace Oxygen
Cylinder Assemblies, as Installed on
Various Transport Airplanes
AGENCY: Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule; request for
comments.
SUMMARY: We are adopting a new
airworthiness directive (AD) for certain
AVOX Systems and B/E Aerospace
oxygen cylinder assemblies, as installed
on various transport airplanes. This AD
requires removing certain oxygen
cylinder assemblies from the airplane.
This AD was prompted by the reported
rupture of a high-pressure gaseous
oxygen cylinder, which had insufficient
strength characteristics due to improper
heat treatment. We are issuing this AD
to prevent an oxygen cylinder from
rupturing, which, depending on the
location, could result in structural
damage and rapid decompression of the
airplane, damage to adjacent essential
flight equipment, deprivation of the
necessary oxygen supply for the
flightcrew, and injury to cabin
occupants or maintenance or other
support personnel.
DATES: This AD is effective December
17, 2009.
We must receive comments on this
AD by January 19, 2010.
ADDRESSES: You may send comments by
any of the following methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: 202–493–2251.
• Mail: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue, SE.,
Washington, DC 20590.
• Hand Delivery: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue, SE.,
E:\FR\FM\02DER1.SGM
02DER1
]]>Agencies
[Federal Register Volume 74, Number 230 (Wednesday, December 2, 2009)]
[Rules and Regulations]
[Pages 63061-63063]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-28752]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 74, No. 230 / Wednesday, December 2, 2009 /
Rules and Regulations
[[Page 63061]]
FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
5 CFR Parts 1604, 1651, 1653, and 1690
Uniformed Services Accounts; Death Benefits; Court Orders and
Legal Processes Affecting Thrift Savings Plan Accounts; Thrift Savings
Plan
AGENCY: Federal Retirement Thrift Investment Board.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Retirement Thrift Investment Board (Agency) is
amending its regulations regarding uniformed services accounts to
conform with mandatory tax provisions as well as current recordkeeping
practices and allow only for pro rata court-ordered payments.
The Agency amends its regulations regarding death benefits to
provide for a clear process by which children of participants can
establish parentage.
The Agency amends its court order regulations so that when a court
order directs that a payment includes earnings, the Agency is able to
make a payment which calculates the payee's award amount based on the
current price of the shares he/she was awarded.
The Agency amends its court order regulations to remove a provision
which permits courts to direct payment from only the tax-exempt balance
of a uniformed services account.
The Agency amends its regulations at part 1690, subpart B, to add a
regulation outlining the circumstances under which a TSP account may be
frozen.
DATES: This final rule is effective December 2, 2009.
FOR FURTHER INFORMATION CONTACT: Tim Carey at 202-942-1666 or Laurissa
Stokes at 202-942-1645.
SUPPLEMENTARY INFORMATION: The Agency administers the TSP, which was
established by the Federal Employees' Retirement System Act of 1986
(FERSA), Public Law 99-335, 100 Stat. 514. The TSP provisions of FERSA
are codified, as amended, largely at 5 U.S.C. 8351 and 8401-79. The TSP
is a tax-deferred retirement savings plan for Federal civilian
employees and members of the uniformed services. The TSP is similar to
cash or deferred arrangements established for private-sector employees
under section 401(k) of the Internal Revenue Code (26 U.S.C. 401(k)).
On October 22, 2009, the Agency published a proposed rule with
request for comments in the Federal Register (74 FR 54491). The Agency
received one comment on the proposed rule and that comment supported
the Agency's proposed change to its method of calculating court order
awards. Therefore, the Agency is publishing the proposed rule as final
without change.
Uniformed Services Accounts
The Agency amends its regulations regarding uniformed services
accounts, and, specifically, its provisions relating to the division of
a uniformed services account pursuant to a court order or legal
process. The amendment removes a provision suggesting that courts could
direct the Plan to make a court-ordered payment other than one that is
pro rata from both taxable and tax-exempt contributions.
Uniformed services accounts are unique in that some or all of a
uniformed services member's contributions may derive from tax-exempt
income as a result of the combat zone tax exclusion. In 2001, the
Agency issued final regulations regarding the uniformed services'
participation in the TSP. Among many changes, the Agency determined
that ``the TSP can honor a court order or legal process that apportions
combat zone (tax-exempt) contributions between the participant and the
payee,'' and, therefore, the final version of 5 CFR 1604.9(b) regarding
court-ordered payments from a uniformed services member's account
stated that payment will be made pro rata from all sources ``unless the
court order or legal process directs otherwise.'' (66 FR 50716, October
4, 2001).
The Agency recently analyzed its authority and record keeping
capability to issue payments from, as the regulation suggests, only one
source of contributions in a uniformed services participant's account.
The Agency has concluded that the Internal Revenue Code (I.R.C.)
permits only pro rata payments from both taxable and tax-exempt funds,
and that a court cannot direct the Plan to make a payment from, for
example, only tax-exempt funds.
Specifically, I.R.C. sections 72 and 402(e)(1)(A) preclude an
allocation of basis pursuant to a court order if such allocation is
other than pro rata. In particular, for purposes of determining tax
liability, a spousal alternate payee is treated the same as the
participant and, therefore, a distribution to a spouse or former spouse
made pursuant to a court order must be made pro rata from taxable and
tax-exempt amounts in a uniformed services account. 26 U.S.C.
402(e)(1)(A). Therefore, the Agency's regulation permitting courts to
order a payment other than pro rata is not permitted by the I.R.C. and
is amended.
Additionally, the Agency's record keeping system cannot issue a
payment from only one source of funds because it is programmed to make
all payments from uniformed services accounts on a pro rata basis from
taxable and tax-exempt balances. Therefore, changing this regulation to
remove the language which suggests a court could direct the Agency to
issue a payment other than one which is pro rata is not only
technically correct but also reflects current record keeping processes.
Death Benefits
The Agency amends its regulations regarding death benefits, and, in
particular, its regulation regarding payment to a participant's child
or children. Specifically, the amendment clarifies the documentation
children should submit in the event that the identity of their father
or mother is in dispute or unclear.
As familial matters, including guidelines related to parentage, are
rooted in state, not Federal, law, the Agency cannot adjudicate or
otherwise determine matters of paternity or maternity. In support of
their contention that they are the proper beneficiary of their parent's
account, children of deceased participants often submit insufficient or
otherwise unclear documentation (e.g., copies of obituaries and
personal mementos). A lack of guidance regarding which documents to
submit in support of parentage adds unnecessary time and inconvenience
to the processing of death benefit determinations.
[[Page 63062]]
The Agency, therefore, augments its death benefits regulations to
describe the documentation it requires in support of a purported
child's claim that a participant was his or her parent. Specifically,
the Agency requests that affected children submit a court order or
administrative finding or documentation which would establish parentage
in the state in which the participant resided prior to his death.
Court Orders and Legal Processes Affecting Thrift Savings Plan Accounts
The Agency amends its court order regulations to allow for court-
awarded payments which account for investment earnings and losses as
well as to reflect the previously-discussed requirement that all
payments from participants' accounts be paid pro rata.
Currently, in order for the Agency to take into account investment
losses, a court order has to divide the account as of the date of
distribution or identify a fixed amount that the parties agreed upon.
Further, per the Agency's regulations, if a court order specifies that
earnings are to be awarded and no specific rate is provided, even when
an account experiences investment losses, the Agency awards earnings
using its Government Securities Investment (G) Fund rate. 5 CFR
1653.4(f)(3).
The Agency, which receives many court orders directing that
payments reflect earnings and losses until the date of distribution,
amends its regulations so that the division of an account factors in
the current price of those shares included in a payee's award amount.
In particular, if earnings, defined to include losses, are
requested and a rate is not specified, the Agency will determine the
amount to be awarded by determining the payee's award amount (e.g., the
percentage or fraction of the participant's account), and, based on the
participant's investment allocation as of the effective date of the
court order, the number and composition of shares that the payee's
award amount would have purchased as of the effective date.
(Determining the shares as of the effective date of the court order,
and not a later date, preserves the court's intent and protects the
payee from investment decisions made by the participant after the
effective date of the court order.) The Agency will then multiply the
price per share as of the payment date, which is generally two business
days prior to the date of the award's disbursement, by the number and
composition of shares comprising the payee's award amount as of the
court order's effective date.
The Agency believes that this calculation will result in more
equitable awards as well as more efficient court order processing as
parties are not required to return to court for additional or
clarifying language.
As previously discussed, the Agency also amends its court order and
legal process regulations in order to conform with the I.R.C. and
current record keeping procedures. In particular, the Agency removes
language from Sec. 1653.5(d) which states that a court may specify a
particular payment from the tax-exempt balance of a uniformed services
account. Please see the Supplementary Information discussion regarding
Uniformed Services Accounts for an overview as to why the Agency is
removing such language.
Thrift Savings Plan
The Agency adds a regulation outlining the circumstances under
which a participant's account may be frozen and when access to the
Agency's Web site and ThriftLine may be blocked. Though uncommon,
freezes (or administrative holds) prevent a participant from
withdrawing funds, including loans, from his or her account, and,
therefore, the Agency is providing regulatory notice to its
participants regarding the circumstances under which such a hold may
occur and also the consequences of such a hold.
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities. This regulation will
affect Federal employees and members of the uniformed services who
participate in the Thrift Savings Plan, which is a Federal defined
contribution retirement savings plan created under the Federal
Employees' Retirement System Act of 1986 (FERSA), Public Law 99-335,
100 Stat. 514, and administered by the Agency.
Paperwork Reduction Act
I certify that these regulations do not require additional
reporting under the criteria of the Paperwork Reduction Act.
Unfunded Mandates Reform Act of 1995
Pursuant to the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 602,
632, 653, 1501-1571, the effects of this regulation on state, local,
and tribal governments and the private sector have been assessed. This
regulation will not compel the expenditure in any one year of $100
million or more by state, local, and tribal governments, in the
aggregate, or by the private sector. Therefore, a statement under
section 1532 is not required.
Submission to Congress and the General Accounting Office
Pursuant to 5 U.S.C. 810(a)(1)(A), the Agency submitted a report
containing this rule and other required information to the U.S. Senate,
the U.S. House of Representatives, and the Comptroller General of the
United States before publication of this rule in the Federal Register.
This rule is not a major rule as defined at 5 U.S.C. 804(2).
List of Subjects
5 CFR Part 1604
Military personnel, Pensions, Retirement.
5 CFR Part 1651
Claims, Government employees, Pensions, Retirement.
5 CFR Part 1653
Alimony, Child support, Claims, Government employees, Pensions,
Retirement.
5 CFR Part 1690
Government employees, Pensions, Retirement.
Gregory T. Long,
Executive Director, Federal Retirement Thrift Investment Board.
0
For the reasons stated in the preamble, the Agency amends 5 CFR chapter
VI as follows:
PART 1604--UNIFORMED SERVICES ACCOUNTS
0
1. The authority citation for part 1604 continues to read as follows:
Authority: 5 U.S.C. 8440e, 8474(b)(5) and (c)(1).
0
2. Amend Sec. 1604.9 to revise paragraph (b) to read as follows:
Sec. 1604.9 Court orders and legal processes.
* * * * *
(b) Combat zone contributions. If a service member account contains
combat zone contributions, the payment will be made pro rata from all
sources.
* * * * *
PART 1651--DEATH BENEFITS
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3. The authority citation for part 1651 continues to read as follows:
Authority: 5 U.S.C. 8424(d), 8432(j), 8433(e), 8435(c)(2),
8474(b)(5) and 8474(c)(1).
0
4. Amend Sec. 1651.1 to add the definition of ``Administrative
finding'', in alphabetical order, in paragraph (b) to read as follows:
Sec. 1651.1 Definitions.
* * * * *
(b) * * *
[[Page 63063]]
Administrative finding means an evidence-based determination
reached by a hearing, inquiry, investigation, or trial before an
administrative agency of competent jurisdiction in any State, territory
or possession of the United States.
* * * * *
0
5. Amend Sec. 1651.6 to add a paragraph (d) to read as follows:
Sec. 1651.6 Child or children.
* * * * *
(d) Parentage disputes. If the identity of the father or mother of
a child is in dispute or otherwise unclear (e.g., only one parent is
listed on a birth certificate), the purported child must submit to the
TSP either:
(1) A court order or other administrative finding establishing
parentage; or
(2) Documentation sufficient for establishing parentage under the
law of the state in which the participant was domiciled at the time of
death.
PART 1653--COURT ORDERS AND LEGAL PROCESSES AFFECTING THRIFT
SAVINGS PLAN ACCOUNTS
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6. The authority citation for part 1653 continues to read as follows:
Authority: 5 U.S.C. 8435, 8436(b), 8437(e), 8439(a)(3), 8467,
8474(b)(5) and 8474(c)(1).
0
7. Amend Sec. 1653.1 to add the definitions of ``Payment date'' and
``TSP investment earnings or earnings'', in alphabetical order, in
paragraph (b) to read as follows:
Sec. 1653.1 Definitions.
* * * * *
(b) * * *
* * * * *
Payment date refers to the date on which earnings are determined
and is generally two business days prior to the date of an award's
disbursement.
* * * * *
TSP investment earnings or earnings means both positive and
negative fund performance attributable to differences in TSP fund share
prices.
0
8. Amend Sec. 1653.4 to revise paragraph (f)(3) and remove paragraph
(f)(4) to read as follows:
Sec. 1653.4 Calculating entitlements.
* * * * *
(f) * * *
(3) If earnings are awarded and the rate is not specified, the
Agency will calculate the amount to be awarded by:
(i) Determining the payee's award amount (e.g., the percentage or
fraction of the participant's account);
(ii) Determining, based on the participant's investment allocation
as of the effective date of the court order, the number and composition
of shares that the amount in paragraph (f)(3)(i) of this section would
have purchased as of the effective date; and
(iii) Multiplying the price per share as of the payment date by the
number and composition of shares calculated in paragraph (f)(3)(ii) of
this section.
* * * * *
Sec. 1653.5 [Amended]
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9. Amend Sec. 1653.5 by removing the last sentence of paragraph (d).
PART 1690--THRIFT SAVINGS PLAN
0
10. The authority citation for part 1690 continues to read as follows:
Authority: 5 U.S.C. 8474.
0
11. Add Sec. 1690.15 to read as follows:
Sec. 1690.15 Freezing an account--administrative holds.
(a) The TSP may freeze (e.g., place an administrative hold on) a
participant's account for any of the following reasons:
(1) Pursuant to a qualifying retirement benefits court order as set
forth in part 1653 of this chapter;
(2) Pursuant to a request from the Department of Justice under the
Mandatory Victims Restitution Act;
(3) Upon the death of a participant;
(4) Upon suspicion or knowledge of fraudulent account activity or
identity theft;
(5) In response to litigation pertaining to an account;
(6) For operational reasons (e.g. to correct a processing error or
to stop payment on a check when account funds are insufficient);
(7) Pursuant to a written request from a participant; and
(8) For any other reason the TSP deems prudent.
(b) An account freeze (i.e., administrative hold) prohibits a
participant from withdrawing funds, including loans, from his or her
account. The participant continues to have the capability to conduct
all other transactions including making contributions, changing
contribution allocations, and making interfund transfers.
(c) The Agency will notify the participant that his or her account
has been frozen unless it determines it prudent to not notify the
participant that his of her account has been frozen.
(d) A participant may block on-line and ThriftLine access to his or
her account by writing to the TSP or by submitting a request at https://www.tsp.gov.
(e) A participant may remove a participant-initiated freeze
(administrative hold) by submitting a notarized request to the TSP.
[FR Doc. E9-28752 Filed 12-1-09; 8:45 am]
BILLING CODE 6760-01-P
