Uniformed Services Accounts and Death Benefits, 44065-44066 [2010-18436]
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44065
Rules and Regulations
Federal Register
Vol. 75, No. 144
Wednesday, July 28, 2010
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 and 1651
Uniformed Services Accounts and
Death Benefits
Federal Retirement Thrift
Investment Board.
ACTION: Final rule.
AGENCY:
The Federal Retirement Thrift
Investment Board (Agency) is making
several changes to its death benefits
regulations. In particular, it is
expanding the requirements necessary
in order for a designation of beneficiary
form to be valid. This change will also
allow participants holding both a
uniformed services and civilian account
to submit a single designation of
beneficiary form which can be used to
designate beneficiaries for both
accounts. The Agency is also amending
its death benefit regulations to allow
participants to designate a custodian
under the Uniform Transfers to Minors
Act as a beneficiary, permit the Agency
to defer to state law when a potential
beneficiary is implicated in the death of
a participant and is subsequently found
not guilty by reason of insanity, and
require a notary to witness disclaimers
of death benefits.
DATES: This rule is effective August 1,
2010.
FOR FURTHER INFORMATION CONTACT:
Megan G. Grumbine at (202) 942–1644
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 taxdeferred retirement savings plan for
Federal civilian employees and
members of the uniformed services. The
sroberts on DSKD5P82C1PROD with RULES
SUMMARY:
VerDate Mar<15>2010
16:21 Jul 27, 2010
Jkt 220001
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 June 18, 2010, the Agency
published a proposed rule with request
for comments in the Federal Register
(75 FR 34654, June 18, 2010). The
Agency received comments from one
Federal employees’ union, two
participants, and three other parties.
The Federal employees’ union
endorsed the proposed changes. The
union expressed concern that the
complexity of the Form TSP–3,
Beneficiary Designation, and the
multiplicity of its requirements will
cause a large number of forms to be
rejected as invalid. The union, however,
noted with approval that the Agency
stated in its proposed regulation that
Agency staff will act quickly to review
beneficiary designation forms and to
alert participants of the need to correct
any omissions or errors. The Agency
intends to keep this commitment by
assigning sufficient staff to this task.
The Federal employees’ union also
specifically noted its approval of the
Agency’s proposal to permit a
participant to designate a custodian
under the Uniform Transfers to Minors
Act (UTMA) as the beneficiary of his or
her TSP account. With respect to the
requirement that the UTMA
custodianship be established under the
laws of the District of Columbia, the
union asked the TSP to provide
guidance to assure compliance with
District of Columbia laws. Finally, the
union suggested that the Form TSP–3
instructions be revised to explain the
designation of a custodian under the
UTMA and include an example to
illustrate this fact pattern.
The Agency considered including an
explanation of the designation of a
custodian under the UTMA in the
instructions to the Form TSP–3. But due
to the complex financial and tax
consequences of designating a custodian
under the UTMA, the Agency wishes to
discourage participants from making
this decision without first obtaining
expert advice. Moreover, the process of
designating a custodian under UTMA
requires a lengthy explanation, which
the Agency believes would make the
Form TSP–3 overly complex. Therefore,
in response to this comment, the
Agency created a special form for
PO 00000
Frm 00001
Fmt 4700
Sfmt 4700
designating an UTMA custodian. This
form will be made available on the TSP
website and will include instructions to
ensure that the designation is valid
under the District of Columbia Uniform
Transfers to Minors Act.
One participant commented simply to
express his support for the proposed
changes. Another participant
commented to express frustration with
unspecified aspects of the current rules
for designating beneficiaries, as well as
his hope that the revised rules will be
less frustrating.
One commenter objected to the
requirement to link the contingent
beneficiary to a primary beneficiary
because he believes the requirement is
not clear. In response to this comment,
the Agency is clarifying the language
proposed for 5 CFR 1651.3(c)(7). The
language in the proposed rule required
a participant to ‘‘Match each contingent
beneficiary to a primary beneficiary.’’
This final rule replaces that language
with the following: ‘‘For each contingent
beneficiary, identify the primary
beneficiary whose share the contingent
beneficiary is to receive in the event the
primary beneficiary dies before payment
is made.’’
One commenter suggested that the
proposed rule be changed to allow
participants to designate one or more
charities as a primary or contingent
beneficiary. The Agency’s regulations
currently allow participants to designate
one or more charities as a primary or
contingent beneficiary. 5 CFR 1651.3(b).
This proposed rule does not affect the
participant’s ability to designate a
charity as a beneficiary.
Two of the commenters also objected
to including the beneficiary’s date of
birth or social security number on the
Form TSP–3. The proposed rule does
not specifically require the participant
to include the beneficiary’s date of birth
or social security number on the Form
TSP–3. It does, however, require the
participant to designate each primary
and each contingent beneficiary in a
manner so that the Agency can identify
the individual or entity. The preamble
to the proposed rule gave the date of
birth or social security number as
examples of information that would
allow the TSP to identify the
participant’s beneficiary. The TSP needs
sufficient information to identify the
participant’s beneficiary to ensure
accurate processing and payment and to
E:\FR\FM\28JYR1.SGM
28JYR1
44066
Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Rules and Regulations
reduce the processing time and
resources necessary to identify
beneficiaries.
One commenter requested
clarification on whether the TSP will
accept the designation of a testamentary
trust. This commenter also requested
that the TSP permit a per stirpital
designation. These comments are
outside the scope of the proposed rule
under consideration.
The Agency appreciates the
opportunity to review and respond to
comments from participants who take
an active interest in the TSP and offer
suggestions. The comment process
allowed the Agency to address any
potential misunderstandings about the
proposed changes, to consider
unanticipated legal or policy
impediments to the proposed changes,
and to hear suggestions about how
better to implement the proposed
changes. Although the comments
caused the Executive Director to make
only one change to the text of the
proposed rule, he did carefully consider
each comment and addressed some of
the concerns through other Agency
guidance. Therefore, the Agency is
publishing the proposed rule as final
with a modification to the language
proposed for 5 CFR 1651.3(c)(7).
Regulatory Flexibility Act
I certify that these regulations will not
have a significant economic impact on
a substantial number of small entities.
They will affect only employees of the
Federal Government.
Paperwork Reduction Act
I certify that these regulations do not
require additional reporting under the
criteria of the Paperwork Reduction Act.
sroberts on DSKD5P82C1PROD with RULES
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 § 1532 is not required.
Submission to Congress and the
Government Accountability 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
VerDate Mar<15>2010
16:21 Jul 27, 2010
Jkt 220001
Register. This rule is not a major rule as
defined at 5 U.S.C. 814(2).
List of Subjects
5 CFR Part 1604
Military personnel, Pensions,
Retirement.
5 CFR Part 1651
Claims, Government employees,
Pensions, Retirement.
Gregory T. Long,
Executive Director, Federal Retirement Thrift
Investment Board.
For the reasons set forth 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).
§ 1604.8
[Amended]
2. Amend § 1604.8, by removing the
second sentence of paragraph (a).
■
PART 1651—DEATH BENEFITS
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).
by the participant, and witnessed in the
same manner (by the same witnesses) as
the form itself and must follow the
format of the TSP designation of
beneficiary form;
(iii) A witness must be age 21 or
older; and
(iv) A witness designated as a
beneficiary will not be entitled to
receive a death benefit payment; if a
witness is the only named beneficiary,
the designation of the beneficiary is
invalid. If more than one beneficiary is
named, the share of the witness
beneficiary will be allocated among the
remaining beneficiaries pro rata.
(4) Designate primary beneficiary
shares which when summed equal
100%;
(5) Contain no substantive alterations
(e.g., struck-through shares or scratchedout names of beneficiaries);
(6) Designate each primary and each
contingent beneficiary in such a manner
so that the Agency can identify the
individual or entity; and
(7) For each contingent beneficiary,
identify the primary beneficiary whose
share the contingent beneficiary is to
receive in the event the primary
beneficiary dies before payment is
made.
*
*
*
*
*
4. Amend § 1651.3, by adding a fourth
sentence to paragraph (b), and revising
paragraph (c) to read as follows:
■
§ 1651.3
§ 1651.12
■
Designation of beneficiary.
*
*
*
*
*
(b)* * * A participant may designate
a custodian under the Uniform
Transfers to Minors Act provided that
the custodianship is established under
the laws of the District of Columbia and
that the participant designates the
custodianship using the Agency’s
designation of custodian form.
(c) Validity requirements. To be valid
and accepted by the TSP record keeper,
a TSP designation of beneficiary form
must:
(1) Be received by the TSP record
keeper on or before the date of the
participant’s death;
(2) Identify the participant in such a
manner so that the Agency can locate
his or her TSP account;
(3) Be signed and properly dated by
the participant and signed and properly
dated by two witnesses;
(i) The participant must either sign
the form in the presence of the
witnesses or acknowledge his or her
signature on the form to the witnesses;
(ii) All submitted and attached pages
must be signed by the participant, dated
PO 00000
Frm 00002
Fmt 4700
Sfmt 9990
5. Amend § 1651.12, by revising the
second sentence to read as follows:
Homicide.
* * * If the beneficiary is implicated
in the death of the participant and the
beneficiary would be precluded from
inheriting under state law, the
beneficiary will not be entitled to
receive any portion of the participant’s
account. * * *
6. Amend § 1651.17, by revising
paragraph (b)(2) to read as follows:
■
§ 1651.17
Disclaimer of benefits.
*
*
*
*
*
(b) * * *
(2) Signed or acknowledged, in the
presence of a notary, by the person (or
legal representative) disclaiming the
benefit; and
*
*
*
*
*
[FR Doc. 2010–18436 Filed 7–27–10; 8:45 am]
BILLING CODE 6760–01–P
E:\FR\FM\28JYR1.SGM
28JYR1
Agencies
[Federal Register Volume 75, Number 144 (Wednesday, July 28, 2010)]
[Rules and Regulations]
[Pages 44065-44066]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-18436]
========================================================================
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. 75, No. 144 / Wednesday, July 28, 2010 /
Rules and Regulations
[[Page 44065]]
-----------------------------------------------------------------------
FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
5 CFR Parts 1604 and 1651
Uniformed Services Accounts and Death Benefits
AGENCY: Federal Retirement Thrift Investment Board.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Retirement Thrift Investment Board (Agency) is
making several changes to its death benefits regulations. In
particular, it is expanding the requirements necessary in order for a
designation of beneficiary form to be valid. This change will also
allow participants holding both a uniformed services and civilian
account to submit a single designation of beneficiary form which can be
used to designate beneficiaries for both accounts. The Agency is also
amending its death benefit regulations to allow participants to
designate a custodian under the Uniform Transfers to Minors Act as a
beneficiary, permit the Agency to defer to state law when a potential
beneficiary is implicated in the death of a participant and is
subsequently found not guilty by reason of insanity, and require a
notary to witness disclaimers of death benefits.
DATES: This rule is effective August 1, 2010.
FOR FURTHER INFORMATION CONTACT: Megan G. Grumbine at (202) 942-1644 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 June 18, 2010, the Agency published a proposed rule with request
for comments in the Federal Register (75 FR 34654, June 18, 2010). The
Agency received comments from one Federal employees' union, two
participants, and three other parties.
The Federal employees' union endorsed the proposed changes. The
union expressed concern that the complexity of the Form TSP-3,
Beneficiary Designation, and the multiplicity of its requirements will
cause a large number of forms to be rejected as invalid. The union,
however, noted with approval that the Agency stated in its proposed
regulation that Agency staff will act quickly to review beneficiary
designation forms and to alert participants of the need to correct any
omissions or errors. The Agency intends to keep this commitment by
assigning sufficient staff to this task.
The Federal employees' union also specifically noted its approval
of the Agency's proposal to permit a participant to designate a
custodian under the Uniform Transfers to Minors Act (UTMA) as the
beneficiary of his or her TSP account. With respect to the requirement
that the UTMA custodianship be established under the laws of the
District of Columbia, the union asked the TSP to provide guidance to
assure compliance with District of Columbia laws. Finally, the union
suggested that the Form TSP-3 instructions be revised to explain the
designation of a custodian under the UTMA and include an example to
illustrate this fact pattern.
The Agency considered including an explanation of the designation
of a custodian under the UTMA in the instructions to the Form TSP-3.
But due to the complex financial and tax consequences of designating a
custodian under the UTMA, the Agency wishes to discourage participants
from making this decision without first obtaining expert advice.
Moreover, the process of designating a custodian under UTMA requires a
lengthy explanation, which the Agency believes would make the Form TSP-
3 overly complex. Therefore, in response to this comment, the Agency
created a special form for designating an UTMA custodian. This form
will be made available on the TSP website and will include instructions
to ensure that the designation is valid under the District of Columbia
Uniform Transfers to Minors Act.
One participant commented simply to express his support for the
proposed changes. Another participant commented to express frustration
with unspecified aspects of the current rules for designating
beneficiaries, as well as his hope that the revised rules will be less
frustrating.
One commenter objected to the requirement to link the contingent
beneficiary to a primary beneficiary because he believes the
requirement is not clear. In response to this comment, the Agency is
clarifying the language proposed for 5 CFR 1651.3(c)(7). The language
in the proposed rule required a participant to ``Match each contingent
beneficiary to a primary beneficiary.'' This final rule replaces that
language with the following: ``For each contingent beneficiary,
identify the primary beneficiary whose share the contingent beneficiary
is to receive in the event the primary beneficiary dies before payment
is made.''
One commenter suggested that the proposed rule be changed to allow
participants to designate one or more charities as a primary or
contingent beneficiary. The Agency's regulations currently allow
participants to designate one or more charities as a primary or
contingent beneficiary. 5 CFR 1651.3(b). This proposed rule does not
affect the participant's ability to designate a charity as a
beneficiary.
Two of the commenters also objected to including the beneficiary's
date of birth or social security number on the Form TSP-3. The proposed
rule does not specifically require the participant to include the
beneficiary's date of birth or social security number on the Form TSP-
3. It does, however, require the participant to designate each primary
and each contingent beneficiary in a manner so that the Agency can
identify the individual or entity. The preamble to the proposed rule
gave the date of birth or social security number as examples of
information that would allow the TSP to identify the participant's
beneficiary. The TSP needs sufficient information to identify the
participant's beneficiary to ensure accurate processing and payment and
to
[[Page 44066]]
reduce the processing time and resources necessary to identify
beneficiaries.
One commenter requested clarification on whether the TSP will
accept the designation of a testamentary trust. This commenter also
requested that the TSP permit a per stirpital designation. These
comments are outside the scope of the proposed rule under
consideration.
The Agency appreciates the opportunity to review and respond to
comments from participants who take an active interest in the TSP and
offer suggestions. The comment process allowed the Agency to address
any potential misunderstandings about the proposed changes, to consider
unanticipated legal or policy impediments to the proposed changes, and
to hear suggestions about how better to implement the proposed changes.
Although the comments caused the Executive Director to make only one
change to the text of the proposed rule, he did carefully consider each
comment and addressed some of the concerns through other Agency
guidance. Therefore, the Agency is publishing the proposed rule as
final with a modification to the language proposed for 5 CFR
1651.3(c)(7).
Regulatory Flexibility Act
I certify that these regulations will not have a significant
economic impact on a substantial number of small entities. They will
affect only employees of the Federal Government.
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 Sec.
1532 is not required.
Submission to Congress and the Government Accountability 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. 814(2).
List of Subjects
5 CFR Part 1604
Military personnel, Pensions, Retirement.
5 CFR Part 1651
Claims, Government employees, Pensions, Retirement.
Gregory T. Long,
Executive Director, Federal Retirement Thrift Investment Board.
0
For the reasons set forth 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).
Sec. 1604.8 [Amended]
0
2. Amend Sec. 1604.8, by removing the second sentence of paragraph
(a).
PART 1651--DEATH BENEFITS
0
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. 1651.3, by adding a fourth sentence to paragraph (b),
and revising paragraph (c) to read as follows:
Sec. 1651.3 Designation of beneficiary.
* * * * *
(b)* * * A participant may designate a custodian under the Uniform
Transfers to Minors Act provided that the custodianship is established
under the laws of the District of Columbia and that the participant
designates the custodianship using the Agency's designation of
custodian form.
(c) Validity requirements. To be valid and accepted by the TSP
record keeper, a TSP designation of beneficiary form must:
(1) Be received by the TSP record keeper on or before the date of
the participant's death;
(2) Identify the participant in such a manner so that the Agency
can locate his or her TSP account;
(3) Be signed and properly dated by the participant and signed and
properly dated by two witnesses;
(i) The participant must either sign the form in the presence of
the witnesses or acknowledge his or her signature on the form to the
witnesses;
(ii) All submitted and attached pages must be signed by the
participant, dated by the participant, and witnessed in the same manner
(by the same witnesses) as the form itself and must follow the format
of the TSP designation of beneficiary form;
(iii) A witness must be age 21 or older; and
(iv) A witness designated as a beneficiary will not be entitled to
receive a death benefit payment; if a witness is the only named
beneficiary, the designation of the beneficiary is invalid. If more
than one beneficiary is named, the share of the witness beneficiary
will be allocated among the remaining beneficiaries pro rata.
(4) Designate primary beneficiary shares which when summed equal
100%;
(5) Contain no substantive alterations (e.g., struck-through shares
or scratched-out names of beneficiaries);
(6) Designate each primary and each contingent beneficiary in such
a manner so that the Agency can identify the individual or entity; and
(7) For each contingent beneficiary, identify the primary
beneficiary whose share the contingent beneficiary is to receive in the
event the primary beneficiary dies before payment is made.
* * * * *
0
5. Amend Sec. 1651.12, by revising the second sentence to read as
follows:
Sec. 1651.12 Homicide.
* * * If the beneficiary is implicated in the death of the
participant and the beneficiary would be precluded from inheriting
under state law, the beneficiary will not be entitled to receive any
portion of the participant's account. * * *
0
6. Amend Sec. 1651.17, by revising paragraph (b)(2) to read as
follows:
Sec. 1651.17 Disclaimer of benefits.
* * * * *
(b) * * *
(2) Signed or acknowledged, in the presence of a notary, by the
person (or legal representative) disclaiming the benefit; and
* * * * *
[FR Doc. 2010-18436 Filed 7-27-10; 8:45 am]
BILLING CODE 6760-01-P