Employee Contribution Elections and Contribution Allocations; Uniformed Services Accounts; Death Benefits; Thrift Savings Plan, 69026-69030 [2010-28320]

Download as PDF 69026 Proposed Rules Federal Register Vol. 75, No. 217 Wednesday, November 10, 2010 This section of the FEDERAL REGISTER contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules. FEDERAL RETIREMENT THRIFT INVESTMENT BOARD 5 CFR Parts 1600, 1604, 1651, and 1690 Employee Contribution Elections and Contribution Allocations; Uniformed Services Accounts; Death Benefits; Thrift Savings Plan Federal Retirement Thrift Investment Board. ACTION: Proposed rule with request for comments. AGENCY: The Federal Retirement Thrift Investment Board (Agency) proposes to amend its regulations to establish procedures to maintain beneficiary participant accounts for spouse beneficiaries in accordance with the Thrift Savings Plan Enhancement Act of 2009. DATES: Comments must be received on or before December 10, 2010. ADDRESSES: You may submit comments using one of the following methods: • Federal Rulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. • Mail: Office of General Counsel, Attn: Thomas Emswiler, Federal Retirement Thrift Investment Board, 1250 H Street, NW., Washington, DC 20005. • Hand Delivery/Courier: The address for sending comments by hand delivery or courier is the same as that for submitting comments by mail. • Facsimile: Comments may be submitted by facsimile at (202) 942– 1676. The most helpful comments explain the reason for any recommended change and include data, information, and the authority that supports the recommended change. We will post all substantive comments (including any personal information provided) without change (with the exception of redaction of SSNs, profanities, et cetera) on http://www.regulations.gov. FOR FURTHER INFORMATION CONTACT: Laurissa Stokes at 202–942–1645. erowe on DSK5CLS3C1PROD with PROPOSALS-1 SUMMARY: VerDate Mar<15>2010 15:01 Nov 09, 2010 Jkt 223001 The Agency administers the Thrift Savings Plan (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)). SUPPLEMENTARY INFORMATION: Congressional Authorization for Beneficiary Participant Accounts Currently, a spouse beneficiary of a TSP participant must either transfer his or her TSP death benefit payment to another eligible employer plan or individual retirement account (IRA), or receive the payment immediately. On June 22, 2009, the President signed the Thrift Savings Plan Enhancement Act of 2009 (‘‘the Act’’), Public Law 111–31 (Division B, Title I), 123 Stat. 1776, 1853. The Act authorized the Agency to allow a spouse of a deceased participant to retain a lump sum death benefit payment in the TSP, subject to certain restrictions on contributions, loans, and withdrawal elections. This proposed rule would conform the Agency’s regulations to the Act and would set forth the rules and limitations applicable to beneficiary participant accounts. Establishing a Beneficiary Participant Account The Agency will automatically establish a beneficiary participant account upon identifying a deceased participant’s spouse as a sole or partial beneficiary eligible for a lump sum death benefit payment. Consistent with its treatment of accounts of participants who have separated from Federal service, the Agency will not maintain a beneficiary participant account if the amount of the deceased participant’s vested account balance to which the spouse is entitled is less than $200. The Agency also will not transfer this de minimus amount to another eligible plan or pay it by electronic funds transfer. Instead the TSP will make an immediate distribution to the spouse. A civilian beneficiary participant account is a beneficiary participant PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 account that is established with a death benefit payment from a civilian TSP participant account to which contributions were made by or on behalf of a civilian employee (i.e. a civilian TSP participant account). A uniformed services beneficiary participant account is a beneficiary participant account that is established with a death benefit payment from a TSP participant account to which contributions were made by or on behalf of a member of the uniformed services (i.e. a uniformed services TSP participant account). Consistent with its treatment of accounts of participants who have both a civilian account and a uniformed services account, the TSP will maintain civilian beneficiary participant accounts separate from uniformed services beneficiary participant accounts. Beneficiary participants who acquire both a uniformed services participant account and a civilian beneficiary participant account will receive two separate TSP account numbers; one for the civilian beneficiary participant account and one for the uniformed services beneficiary participant account. Initial Account Balance Allocation Upon notice of a participant’s death, the Agency currently transfers all funds in a deceased participant’s account to the Government Securities Investment (G) Fund. This practice protects the account balance from risk of incurring losses between the time the Agency receives notice of the participant’s death and the time the Agency makes a distribution to a beneficiary. The Agency will continue this practice even when it appears that the beneficiary is the participant’s spouse. Therefore, funds in a beneficiary participant account will initially be allocated entirely to the G Fund regardless of the allocation of the participant’s account balance at the time of his or her death. Once a beneficiary participant account is established, the spouse beneficiary may redistribute the beneficiary participant account balance among the TSP investment funds by making an interfund transfer. Withdrawal Options A spouse beneficiary will be afforded the same withdrawal options with respect to his or her beneficiary participant account that the participant would have had with respect to his or her TSP account if the participant was E:\FR\FM\10NOP1.SGM 10NOP1 Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Proposed Rules living and separated from service. Accordingly, a spouse beneficiary may elect to withdraw all or a portion of his or her beneficiary participant account as a partial payment or as a full withdrawal, that is in a single payment, a series of monthly payments, a life annuity, or any combination of these options. The spouse beneficiary cannot request loans, age-based withdrawals, or financial hardship withdrawals. Required Minimum Distributions The Internal Revenue Code requires spouse beneficiaries to receive a portion of their beneficiary participant account on or before the later of—(1) The end of the calendar year immediately following the calendar year in which the participant died; or (2) The end of the calendar year in which the employee would have attained age 701⁄2. The Agency will ensure that the annual total payments satisfy any applicable minimum distribution requirement of the Internal Revenue Code by making a supplemental payment, if necessary. The Agency will calculate minimum distributions based on the beneficiary participant account balance and the beneficiary participant’s age, using the IRS Single Life Table, Treas. Reg. § 1.401(a)(9)–9, Q&A 1. erowe on DSK5CLS3C1PROD with PROPOSALS-1 Spousal Rights After Remarriage Sections 8351 and 8435, Title 5 of the United States Code give certain rights to the spouses of participants. These spousal rights are not applicable to the spouse of a beneficiary participant. Thus, if a beneficiary participant remarries, his or her new spouse will not have the right to consent, notice, or any particular form of distribution (e.g. joint and survivor annuity) with respect to withdrawals from the beneficiary participant account. Contributions, Transfers, and Rollovers to Beneficiary Participant Accounts The Thrift Savings Plan Enhancement Act of 2009 prohibits a spouse beneficiary from making contributions or ‘‘transfers’’ (trustee-to-trustee transfers or rollovers) to a beneficiary participant account. Accordingly, the Agency will not accept a contribution allocation request from a spouse beneficiary and a spouse beneficiary may not transfer or roll over any distributions from an IRA or an eligible employer plan into a beneficiary participant account. A beneficiary participant may acquire multiple civilian beneficiary participant accounts and/or multiple uniformed services beneficiary participants if he or she remarries a Federal employee who then dies having designated him or her as a beneficiary. Beneficiary participant VerDate Mar<15>2010 15:01 Nov 09, 2010 Jkt 223001 69027 accounts cannot be combined since combining accounts requires a transfer from one beneficiary participant account to another. Combining a Uniformed Services Beneficiary Participant Account and a Civilian Beneficiary Participant Account Not Permitted Transfers and Rollovers From Beneficiary Participant Accounts The Agency’s regulations currently provide that a participant may combine his or her uniformed services account with a civilian account through a ‘‘transfer.’’ See 5 CFR 1604.5(b). Even in the absence of this regulatory language, combining accounts would, as practical matter, require that one account be transferred to the other. Because the Thrift Savings Plan Enhancement Act prohibits contributions or transfers to a beneficiary participant account, a spouse beneficiary cannot combine his or her uniformed services beneficiary participant account with his or her civilian beneficiary participant account. A spouse beneficiary may transfer or roll over all or a portion of an eligible rollover distribution (within the meaning of Internal Revenue Code § 402(c)(4)) to a traditional IRA, Roth IRA, or eligible employer plan. A spouse beneficiary who is a current or former Federal employee may also transfer or roll over all or a portion of an eligible rollover distribution from a civilian beneficiary participant account into his or her own civilian or uniformed services TSP participant account. A spouse beneficiary who is a current or former Federal employee may, likewise, transfer or roll over all or a portion of an eligible rollover distribution from a uniformed services beneficiary participant account into a civilian or uniformed services TSP participant account. However, a transfer of a uniformed services beneficiary participant account to a civilian TSP participant account cannot include taxexempt money attributable to the combat zone exclusion. Any tax-exempt money must remain in the uniformed services beneficiary account unless it is transferred or rolled over to an IRA or it is transferred directly to a uniformed services TSP participant account or other eligible employer plan that accepts tax-exempt money. Section 1600.31 of the Agency’s regulations currently prohibits participants from requesting incoming transfers or rollovers if they are receiving monthly payments from their TSP accounts. For this reason, a spouse beneficiary who is a current or former Federal employee would not be permitted to transfer an eligible rollover distribution from a beneficiary participant account to his or her own TSP participant account if he or she is receiving monthly payments from that account. The Agency proposes to remove this limitation on incoming transfers and rollovers. Thus, a spouse beneficiary would be permitted to transfer or roll over all or a portion of an eligible rollover distribution from his or her beneficiary participant account to his or her own TSP participant account even if he or she is receiving monthly payments. PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 Death of a Beneficiary Participant The balance of a beneficiary participant account must be disbursed upon the death of the beneficiary participant. A beneficiary participant may designate a beneficiary for his or her beneficiary participant account. If the beneficiary participant does not designate a beneficiary for his or her beneficiary participant account, the account will be disbursed in accordance with the order of precedence set forth at 5 CFR 1651(a)(2) through (6). No individual who is entitled to a death benefit from a beneficiary participant account shall be eligible to keep his or her benefit in the TSP. A recipient of a death benefit payment from a beneficiary participant account cannot transfer the payment to an IRA or eligible retirement plan (including the TSP). The Internal Revenue Code permits death benefit distributions to be rolled over only when the distribution is ‘‘paid to the spouse of the employee’’ or the ‘‘designated beneficiary (as defined by section 401(a)(9)(E)) of the employee.’’ 26 U.S.C. 402(c)(9) (emphasis added); 26 U.S.C. 402(c)(11) (emphasis added). Because a beneficiary participant is not the employee, the TSP must pay the recipient of the death benefit payment directly and the payment will be fully taxable to that individual in the year of distribution. 26 U.S.C. 402(a). 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 E:\FR\FM\10NOP1.SGM 10NOP1 69028 Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Proposed Rules Employees’ Retirement System Act of 1986 (FERSA), Public Law 99–335, 100 Stat. 514, and which is administered by the Agency. It will also affect their spouse beneficiaries. Paperwork Reduction Act I certify that these regulations do not require additional reporting under the criteria of the Paperwork Reduction Act. plan or a rollover contribution, within the meaning of I.R.C. section 408(d)(3) (26 U.S.C. 408(d)(3)), from a traditional IRA may cause to be transferred (or transfer) that distribution into his or her TSP account. * * * * * PART 1604—UNIFORMED SERVICES ACCOUNTS Unfunded Mandates Reform Act of 1995 3. The authority citation for part 1604 continues to read as follows: 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. Authority: 5 U.S.C. 8440e, 8474(b)(5) and (c)(1). 4. Revise § 1604.8 to read as follows: § 1604.8 Death benefits. List of Subjects The account balance of a deceased service member will be paid as described at 5 CFR part 1651. If a service member account contains combat zone contributions, the death benefit payment will be made pro rata from all sources. 5 CFR Part 1600 PART 1651—DEATH BENEFITS Government employees, Pensions, Retirement. 5. Revise the authority citation for part 1651 to read as follows: 5 CFR Part 1604 Authority: 5 U.S.C. 8424(d), 8432(j), 8433(e), 8435(c)(2), 8474(b)(5), 8474(c)(1), and Sec. 109, Pub. L. 111–31,123 Stat. 1176 (5 U.S.C. 8433(e)). Military personnel, Pensions, Retirement. 5 CFR Part 1651 6. Amend § 1651.5 by revising paragraph (a) to read as follows: Claims, Government employees, Pensions, Retirement. § 1651.5 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 proposes to amend 5 CFR chapter VI as follows: PART 1600—EMPLOYEE CONTRIBUTION ELECTIONS AND CONTRIBUTION ALLOCATIONS 1. The authority citation for part 1600 continues to read as follows: erowe on DSK5CLS3C1PROD with PROPOSALS-1 Authority: 5 U.S.C. 8351, 8432(a), 8432(b), 8432(c), 8432(j), 8474(b)(5) and (c)(1), Thrift Savings Plan Enhancement Act of 2009, section 102. 2. Amend § 1600.31, by revising paragraph (a) to read as follows: § 1600.31 Accounts eligible for transfer. (a) A participant who has an open TSP account and is entitled to receive (or receives) an eligible rollover distribution, within the meaning of I.R.C. section 402(c)(4) (26 U.S.C. 402(c)(4)), from an eligible employer VerDate Mar<15>2010 15:01 Nov 09, 2010 Jkt 223001 Spouse of participant. (a) For purposes of payment under § 1651.2(a)(2) of this chapter and establishment of beneficiary participant accounts under § 1651.19 of this chapter, the spouse of the participant is the person to whom the participant was married on the date of death. A person is considered to be married even if the parties are separated, unless a court decree of divorce or annulment has been entered. State law of the participant’s domicile will be used to determine whether the participant was married at the time of death. * * * * * 7. Amend § 1651.14 by revising paragraph (c) to read as follows: § 1651.14 How payment is made. * * * * * (c) Payment to the participant’s spouse. The Agency will automatically establish a beneficiary participant account (described in § 1651.19) for any spouse beneficiary. The Agency will not maintain a beneficiary participant account if the balance is less than $200 on the date the beneficiary participant account is established. The Agency also will not transfer this amount to another eligible plan or pay it by electronic PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 funds transfer. Instead the spouse will receive an immediate distribution in the form of a check. * * * * * 8. Add § 1651.19 to read as follows: § 1651.19 Beneficiary participant accounts. A beneficiary participant account may be established only for a spouse of a deceased participant who is a sole or partial beneficiary of the deceased participant’s TSP account. Beneficiary participant accounts are subject to the following rules and procedures: (a) Initial investment allocation. Each beneficiary participant account will be initially allocated 100 percent to the Government Securities Investment (G) Fund regardless of the allocation of the deceased participant’s account balance at the time of his or her death. A beneficiary participant may redistribute his or her beneficiary participant account balance among the TSP investment funds by making an interfund transfer request described in part 1601, subpart C, of this chapter. (b) Contributions. A beneficiary participant may not make contributions or transfers to his or her beneficiary participant account. The TSP will not accept a contribution allocation request described in part 1601, subpart B of this chapter for a beneficiary participant account. (c) Required minimum distributions. (1) A beneficiary participant must begin receiving annual distributions from his or her beneficiary participant account balance on or before the later of— (i) The end of the calendar year immediately following the calendar year in which the participant died; or (ii) The end of the calendar year in which the participant would have attained age 701⁄2. (2) The TSP will ensure that the amount of the beneficiary participant’s annual distributions that occur after the required minimum distribution date satisfy the applicable minimum distribution requirements of the Internal Revenue Code. The TSP will calculate minimum distributions based on the beneficiary participant account balance and the beneficiary participant’s age, using the IRS Single Life Table, 26 CFR 1.401(a)(9)–9, Q&A–1. (d) Withdrawal elections. A beneficiary participant may elect to withdraw all or a portion of his or her beneficiary participant account as a partial payment or as a full withdrawal, that is in a single payment, a series of monthly payments, a life annuity, or any combination of these options. The provisions of §§ 1650.12, 1650.13, and 1650.14 shall apply as if all references E:\FR\FM\10NOP1.SGM 10NOP1 erowe on DSK5CLS3C1PROD with PROPOSALS-1 Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Proposed Rules to a participant are references to a beneficiary participant and all references to an account balance are references to a beneficiary participant account balance. (e) Ineligibility for certain withdrawals. A beneficiary participant is ineligible to request the following types of withdrawals from his or her beneficiary participant account: Agebased withdrawals described in § 1650.31 of this chapter, financial hardship withdrawals described in § 1650.32 of this chapter, or loans described in part 1655 of this chapter. A beneficiary participant will not be ineligible for a partial withdrawal because the deceased participant previously elected an age-based withdrawal. (f) Spousal rights. The spousal rights described in 5 U.S.C. 8351, 5 U.S.C. 8435, or § 1650.61 of this chapter do not apply to beneficiary participant accounts. (g) Transfers. A beneficiary participant may request that the TSP transfer all or a portion of an eligible rollover distribution (within the meaning of I.R.C. section 402(c)(4)) from his or her beneficiary participant account to traditional IRA, Roth IRA or eligible employer plan (including a civilian or uniformed services TSP account other than a beneficiary participant account). In order to request such a transfer, the beneficiary participant must use the transfer form provided by the TSP. (h) Periodic statements. The TSP will furnish beneficiary participants with periodic statements in a manner consistent with part 1640 of this chapter. (i) Privacy Act. Part 1630 of this chapter shall apply with respect to a beneficiary participant as if the beneficiary participant is a TSP participant. (j) Error correction. If, because of an error committed by the Board or the TSP record keeper, a beneficiary participant’s account is not credited or charged with the investment gains or losses the account would have received had the error not occurred, the account will be credited subject to and in accordance with the rules and procedures set forth in § 1605.21. A beneficiary participant may submit a claim for correction of Board or TSP record keeper error pursuant to the procedures described in § 1605.22. (k) Court orders. Court orders relating to a civilian beneficiary participant account or uniformed services beneficiary participant account shall be processed pursuant to the procedures set forth in part 1653 of this chapter as VerDate Mar<15>2010 15:01 Nov 09, 2010 Jkt 223001 if all references to a TSP participant are references to a beneficiary participant and all references to a TSP account or account balance are references to a beneficiary participant account or beneficiary participant account balance. Notwithstanding any provision of part 1653, a payee of a court-ordered distribution from a beneficiary participant account cannot request a transfer of the court-ordered distribution to an eligible employer plan or IRA. (l) Death of beneficiary participant. To the extent it is not inconsistent with this section, a beneficiary participant account shall be disbursed upon the death of the beneficiary participant in accordance with part 1651 as if any reference to a participant is a reference to a beneficiary participant. For example, a beneficiary participant may designate a beneficiary for his or her beneficiary participant account in accordance with §§ 1651.3 and 1651.4 of this chapter. No individual who is entitled to a death benefit from a beneficiary participant account shall be eligible to keep the death benefit in the TSP or request that the TSP transfer all or a portion of the death benefit to an IRA or eligible employer plan. (m) Uniformed services beneficiary participant accounts. Uniformed services beneficiary participant accounts are subject to the following additional rules and procedures: (1) Uniformed services beneficiary participant accounts are established and maintained separately from civilian beneficiary participant accounts. Beneficiary participants who have a uniformed services beneficiary participant account and a civilian beneficiary participant account will be issued two separate TSP account numbers. A beneficiary participant must file separate interfund transfers and/or withdrawal requests for each account and submit separate beneficiary designation forms for each account; (2) A uniformed services beneficiary participant account and a civilian beneficiary participant account cannot be combined; (3) If a uniformed services beneficiary participant account contains combat zone contributions, any payments or withdrawals from the account will be distributed pro rata from all sources; (4) A beneficiary participant may transfer or roll over all or any portion of an eligible rollover distribution (within the meaning of I.R.C. section 402(c)(4)) from a uniformed services beneficiary participant account into a civilian or uniformed services TSP participant account. However, taxexempt money attributable to combat zone contributions cannot be transferred PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 69029 from a uniformed services beneficiary participant account to a civilian TSP participant account. (n) Multiple beneficiary accounts. Each beneficiary participant account is maintained separately from all other beneficiary participant accounts. If an individual has multiple beneficiary participant accounts, each of the individual’s beneficiary participant accounts will have a unique account number. A beneficiary participant must file separate interfund transfers and/or withdrawal requests and submit separate beneficiary designation forms for each beneficiary participant account that the TSP maintains for him or her. A beneficiary participant account cannot be combined with another beneficiary participant account. PART 1690—THRIFT SAVINGS PLAN 9. The authority citation for part 1690 continues to read as follows: Authority: 5 U.S.C. 8474. 10. Amend § 1690.1, by adding the definitions of ‘‘Beneficiary participant’’, ‘‘Beneficiary participant account’’, ‘‘Civilian beneficiary participant account’’, and ‘‘Uniformed services beneficiary participant account’’, and by revising the definition of ‘‘Plan participant’’ and ‘‘Spouse’’ in alphabetical order to read as follows: § 1690.1 Definitions. * * * * * Beneficiary participant means a spouse beneficiary for whom the TSP maintains a beneficiary participant account pursuant to 5 U.S.C. 8433(e) and in accordance with 5 CFR 1651.19. Beneficiary participant account means an account maintained pursuant to 5 U.S.C. 8433(e) and in accordance with 5 CFR 1651.19. The term includes both civilian beneficiary participant accounts and uniformed services beneficiary participant accounts. * * * * * Civilian beneficiary participant account means a beneficiary participant account that is established with a death benefit payment from a TSP account to which contributions were made by or on behalf of a civilian employee. * * * * * Plan participant or participant means any person with an account (other than a beneficiary participant account) in the Thrift Savings Plan or who would have an account (other than a beneficiary account) but for an employing agency error. * * * * * Spouse means the person to whom a TSP participant is married on the date E:\FR\FM\10NOP1.SGM 10NOP1 69030 Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Proposed Rules he or she signs a form on which the TSP requests spousal information, including a spouse from whom the participant is legally separated, and a person with whom the participant is living in a relationship that constitutes a common law marriage in the jurisdiction in which they live. Where a participant is seeking to reclaim an account that has been forfeited pursuant to 5 CFR 1650.16, spouse also means the person to whom the participant was married on the withdrawal deadline. For purposes of 5 CFR 1651.5 and 5 CFR 1651.19, spouse also means the person to whom the participant was married on the date of the participant’s death. * * * * * Uniformed services beneficiary participant account means a beneficiary participant account that is established with a death benefit payment from a TSP account to which contributions were made by or on behalf of a member of the uniformed services. * * * * * [FR Doc. 2010–28320 Filed 11–9–10; 8:45 am] BILLING CODE 6760–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA–2010–1109; Directorate Identifier 2010–NM–155–AD] RIN 2120–AA64 Airworthiness Directives; Bombardier, Inc. Model CL–600–2C10 (Regional Jet Series 700, 701, & 702) Airplanes, Model CL–600–2D15 (Regional Jet Series 705) Airplanes, and Model CL– 600–2D24 (Regional Jet Series 900) Airplanes Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). AGENCY: We propose to adopt a new airworthiness directive (AD) for the products listed above. This proposed AD results from mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: erowe on DSK5CLS3C1PROD with PROPOSALS-1 SUMMARY: Rudder Travel Limiter (RTL) return spring, part number (P/N) E0650–069–2750S, failed prior to completion of the required endurance test. In addition, the replacement RTL return spring, P/N 670–93465–1 * * * was found to be susceptible to chafing on the VerDate Mar<15>2010 15:01 Nov 09, 2010 Jkt 223001 primary actuator, which could also result in eventual dormant spring failure. There are two return springs in the RTL and if both springs failed, a subsequent mechanical disconnect of the RTL components would result in an unannunciated failure of the RTL. This, in turn, would permit an increase of rudder authority beyond normal structural limits and, in the event of a strong rudder input, controllability of the aeroplane could be affected. * * * * * The proposed AD would require actions that are intended to address the unsafe condition described in the MCAI. DATES: We must receive comments on this proposed AD by December 27, 2010. You may send comments by any of the following methods: • Federal eRulemaking Portal: Go to http://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 W12–40, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. For service information identified in this proposed AD, contact Bombardier, ˆ Inc., 400 Cote-Vertu Road West, Dorval, ´ Quebec H4S 1Y9, Canada; telephone 514–855–5000; fax 514–855–7401; e-mail thd.crj@aero.bombardier.com; Internet http://www.bombardier.com. You may review copies of the referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington. For information on the availability of this material at the FAA, call 425–227–1221. ADDRESSES: Examining the AD Docket You may examine the AD docket on the Internet at http:// www.regulations.gov; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647–5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Cesar Gomez, Aerospace Engineer, PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 Airframe and Mechanical Systems Branch, ANE–171, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, Suite 410, Westbury, New York 11590; telephone (516) 228– 7318; fax (516) 794–5531. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include ‘‘Docket No. FAA–2010–1109; Directorate Identifier 2010–NM–155–AD’’ at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments. We will post all comments we receive, without change, to http:// www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD. Discussion Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF–2010–18, dated June 16, 2010 (referred to after this as ‘‘the MCAI’’), to correct an unsafe condition for the specified products. The MCAI states: Rudder Travel Limiter (RTL) return spring, part number (P/N) E0650–069–2750S, failed prior to completion of the required endurance test. In addition, the replacement RTL return spring, P/N 670–93465–1 (see Note) was found to be susceptible to chafing on the primary actuator, which could also result in eventual dormant spring failure. There are two return springs in the RTL and if both springs failed, a subsequent mechanical disconnect of the RTL components would result in an unannunciated failure of the RTL. This, in turn, would permit an increase of rudder authority beyond normal structural limits and, in the event of a strong rudder input, controllability of the aeroplane could be affected. Note: RTL return springs, P/N 670–93465– 1, were installed in production aeroplanes serial number 10266 (CL–600–2C10) and 15182 (CL–600–2D24) respectively and were introduced in-service by [Bombardier] Service Bulletin (SB) 670BA–27–047. SB 670BA–27–047 has since been superseded by [Bombardier] SB 670BA–27–055. This directive mandates repetitive [detailed] inspection of the RTL [for broken] return springs and [damage through the casing, or chafing of the casing of the] primary actuator, with replacement of parts as necessary. E:\FR\FM\10NOP1.SGM 10NOP1

Agencies

[Federal Register Volume 75, Number 217 (Wednesday, November 10, 2010)]
[Proposed Rules]
[Pages 69026-69030]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-28320]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / 
Proposed Rules

[[Page 69026]]



FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

5 CFR Parts 1600, 1604, 1651, and 1690


Employee Contribution Elections and Contribution Allocations; 
Uniformed Services Accounts; Death Benefits; Thrift Savings Plan

AGENCY: Federal Retirement Thrift Investment Board.

ACTION: Proposed rule with request for comments.

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SUMMARY: The Federal Retirement Thrift Investment Board (Agency) 
proposes to amend its regulations to establish procedures to maintain 
beneficiary participant accounts for spouse beneficiaries in accordance 
with the Thrift Savings Plan Enhancement Act of 2009.

DATES: Comments must be received on or before December 10, 2010.

ADDRESSES: You may submit comments using one of the following methods:
     Federal Rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Office of General Counsel, Attn: Thomas Emswiler, 
Federal Retirement Thrift Investment Board, 1250 H Street, NW., 
Washington, DC 20005.
     Hand Delivery/Courier: The address for sending comments by 
hand delivery or courier is the same as that for submitting comments by 
mail.
     Facsimile: Comments may be submitted by facsimile at (202) 
942-1676.
    The most helpful comments explain the reason for any recommended 
change and include data, information, and the authority that supports 
the recommended change. We will post all substantive comments 
(including any personal information provided) without change (with the 
exception of redaction of SSNs, profanities, et cetera) on http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Laurissa Stokes at 202-942-1645.

SUPPLEMENTARY INFORMATION: The Agency administers the Thrift Savings 
Plan (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)).

Congressional Authorization for Beneficiary Participant Accounts

    Currently, a spouse beneficiary of a TSP participant must either 
transfer his or her TSP death benefit payment to another eligible 
employer plan or individual retirement account (IRA), or receive the 
payment immediately. On June 22, 2009, the President signed the Thrift 
Savings Plan Enhancement Act of 2009 (``the Act''), Public Law 111-31 
(Division B, Title I), 123 Stat. 1776, 1853. The Act authorized the 
Agency to allow a spouse of a deceased participant to retain a lump sum 
death benefit payment in the TSP, subject to certain restrictions on 
contributions, loans, and withdrawal elections. This proposed rule 
would conform the Agency's regulations to the Act and would set forth 
the rules and limitations applicable to beneficiary participant 
accounts.

Establishing a Beneficiary Participant Account

    The Agency will automatically establish a beneficiary participant 
account upon identifying a deceased participant's spouse as a sole or 
partial beneficiary eligible for a lump sum death benefit payment. 
Consistent with its treatment of accounts of participants who have 
separated from Federal service, the Agency will not maintain a 
beneficiary participant account if the amount of the deceased 
participant's vested account balance to which the spouse is entitled is 
less than $200. The Agency also will not transfer this de minimus 
amount to another eligible plan or pay it by electronic funds transfer. 
Instead the TSP will make an immediate distribution to the spouse.
    A civilian beneficiary participant account is a beneficiary 
participant account that is established with a death benefit payment 
from a civilian TSP participant account to which contributions were 
made by or on behalf of a civilian employee (i.e. a civilian TSP 
participant account). A uniformed services beneficiary participant 
account is a beneficiary participant account that is established with a 
death benefit payment from a TSP participant account to which 
contributions were made by or on behalf of a member of the uniformed 
services (i.e. a uniformed services TSP participant account).
    Consistent with its treatment of accounts of participants who have 
both a civilian account and a uniformed services account, the TSP will 
maintain civilian beneficiary participant accounts separate from 
uniformed services beneficiary participant accounts. Beneficiary 
participants who acquire both a uniformed services participant account 
and a civilian beneficiary participant account will receive two 
separate TSP account numbers; one for the civilian beneficiary 
participant account and one for the uniformed services beneficiary 
participant account.

Initial Account Balance Allocation

    Upon notice of a participant's death, the Agency currently 
transfers all funds in a deceased participant's account to the 
Government Securities Investment (G) Fund. This practice protects the 
account balance from risk of incurring losses between the time the 
Agency receives notice of the participant's death and the time the 
Agency makes a distribution to a beneficiary. The Agency will continue 
this practice even when it appears that the beneficiary is the 
participant's spouse. Therefore, funds in a beneficiary participant 
account will initially be allocated entirely to the G Fund regardless 
of the allocation of the participant's account balance at the time of 
his or her death. Once a beneficiary participant account is 
established, the spouse beneficiary may redistribute the beneficiary 
participant account balance among the TSP investment funds by making an 
interfund transfer.

Withdrawal Options

    A spouse beneficiary will be afforded the same withdrawal options 
with respect to his or her beneficiary participant account that the 
participant would have had with respect to his or her TSP account if 
the participant was

[[Page 69027]]

living and separated from service. Accordingly, a spouse beneficiary 
may elect to withdraw all or a portion of his or her beneficiary 
participant account as a partial payment or as a full withdrawal, that 
is in a single payment, a series of monthly payments, a life annuity, 
or any combination of these options. The spouse beneficiary cannot 
request loans, age-based withdrawals, or financial hardship 
withdrawals.

Required Minimum Distributions

    The Internal Revenue Code requires spouse beneficiaries to receive 
a portion of their beneficiary participant account on or before the 
later of--(1) The end of the calendar year immediately following the 
calendar year in which the participant died; or (2) The end of the 
calendar year in which the employee would have attained age 70\1/2\. 
The Agency will ensure that the annual total payments satisfy any 
applicable minimum distribution requirement of the Internal Revenue 
Code by making a supplemental payment, if necessary. The Agency will 
calculate minimum distributions based on the beneficiary participant 
account balance and the beneficiary participant's age, using the IRS 
Single Life Table, Treas. Reg. Sec.  1.401(a)(9)-9, Q&A 1.

Spousal Rights After Remarriage

    Sections 8351 and 8435, Title 5 of the United States Code give 
certain rights to the spouses of participants. These spousal rights are 
not applicable to the spouse of a beneficiary participant. Thus, if a 
beneficiary participant remarries, his or her new spouse will not have 
the right to consent, notice, or any particular form of distribution 
(e.g. joint and survivor annuity) with respect to withdrawals from the 
beneficiary participant account.

Contributions, Transfers, and Rollovers to Beneficiary Participant 
Accounts

    The Thrift Savings Plan Enhancement Act of 2009 prohibits a spouse 
beneficiary from making contributions or ``transfers'' (trustee-to-
trustee transfers or rollovers) to a beneficiary participant account. 
Accordingly, the Agency will not accept a contribution allocation 
request from a spouse beneficiary and a spouse beneficiary may not 
transfer or roll over any distributions from an IRA or an eligible 
employer plan into a beneficiary participant account.
    A beneficiary participant may acquire multiple civilian beneficiary 
participant accounts and/or multiple uniformed services beneficiary 
participants if he or she remarries a Federal employee who then dies 
having designated him or her as a beneficiary. Beneficiary participant 
accounts cannot be combined since combining accounts requires a 
transfer from one beneficiary participant account to another.

Transfers and Rollovers From Beneficiary Participant Accounts

    A spouse beneficiary may transfer or roll over all or a portion of 
an eligible rollover distribution (within the meaning of Internal 
Revenue Code Sec.  402(c)(4)) to a traditional IRA, Roth IRA, or 
eligible employer plan. A spouse beneficiary who is a current or former 
Federal employee may also transfer or roll over all or a portion of an 
eligible rollover distribution from a civilian beneficiary participant 
account into his or her own civilian or uniformed services TSP 
participant account.
    A spouse beneficiary who is a current or former Federal employee 
may, likewise, transfer or roll over all or a portion of an eligible 
rollover distribution from a uniformed services beneficiary participant 
account into a civilian or uniformed services TSP participant account. 
However, a transfer of a uniformed services beneficiary participant 
account to a civilian TSP participant account cannot include tax-exempt 
money attributable to the combat zone exclusion. Any tax-exempt money 
must remain in the uniformed services beneficiary account unless it is 
transferred or rolled over to an IRA or it is transferred directly to a 
uniformed services TSP participant account or other eligible employer 
plan that accepts tax-exempt money.
    Section 1600.31 of the Agency's regulations currently prohibits 
participants from requesting incoming transfers or rollovers if they 
are receiving monthly payments from their TSP accounts. For this 
reason, a spouse beneficiary who is a current or former Federal 
employee would not be permitted to transfer an eligible rollover 
distribution from a beneficiary participant account to his or her own 
TSP participant account if he or she is receiving monthly payments from 
that account. The Agency proposes to remove this limitation on incoming 
transfers and rollovers. Thus, a spouse beneficiary would be permitted 
to transfer or roll over all or a portion of an eligible rollover 
distribution from his or her beneficiary participant account to his or 
her own TSP participant account even if he or she is receiving monthly 
payments.

Combining a Uniformed Services Beneficiary Participant Account and a 
Civilian Beneficiary Participant Account Not Permitted

    The Agency's regulations currently provide that a participant may 
combine his or her uniformed services account with a civilian account 
through a ``transfer.'' See 5 CFR 1604.5(b). Even in the absence of 
this regulatory language, combining accounts would, as practical 
matter, require that one account be transferred to the other. Because 
the Thrift Savings Plan Enhancement Act prohibits contributions or 
transfers to a beneficiary participant account, a spouse beneficiary 
cannot combine his or her uniformed services beneficiary participant 
account with his or her civilian beneficiary participant account.

Death of a Beneficiary Participant

    The balance of a beneficiary participant account must be disbursed 
upon the death of the beneficiary participant. A beneficiary 
participant may designate a beneficiary for his or her beneficiary 
participant account. If the beneficiary participant does not designate 
a beneficiary for his or her beneficiary participant account, the 
account will be disbursed in accordance with the order of precedence 
set forth at 5 CFR 1651(a)(2) through (6). No individual who is 
entitled to a death benefit from a beneficiary participant account 
shall be eligible to keep his or her benefit in the TSP.
    A recipient of a death benefit payment from a beneficiary 
participant account cannot transfer the payment to an IRA or eligible 
retirement plan (including the TSP). The Internal Revenue Code permits 
death benefit distributions to be rolled over only when the 
distribution is ``paid to the spouse of the employee'' or the 
``designated beneficiary (as defined by section 401(a)(9)(E)) of the 
employee.'' 26 U.S.C. 402(c)(9) (emphasis added); 26 U.S.C. 402(c)(11) 
(emphasis added). Because a beneficiary participant is not the 
employee, the TSP must pay the recipient of the death benefit payment 
directly and the payment will be fully taxable to that individual in 
the year of distribution. 26 U.S.C. 402(a).

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

[[Page 69028]]

Employees' Retirement System Act of 1986 (FERSA), Public Law 99-335, 
100 Stat. 514, and which is administered by the Agency. It will also 
affect their spouse beneficiaries.

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.

List of Subjects

5 CFR Part 1600

    Government employees, Pensions, Retirement.

5 CFR Part 1604

    Military personnel, Pensions, Retirement.

5 CFR Part 1651

    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 proposes to 
amend 5 CFR chapter VI as follows:

PART 1600--EMPLOYEE CONTRIBUTION ELECTIONS AND CONTRIBUTION 
ALLOCATIONS

    1. The authority citation for part 1600 continues to read as 
follows:

    Authority:  5 U.S.C. 8351, 8432(a), 8432(b), 8432(c), 8432(j), 
8474(b)(5) and (c)(1), Thrift Savings Plan Enhancement Act of 2009, 
section 102.

    2. Amend Sec.  1600.31, by revising paragraph (a) to read as 
follows:


Sec.  1600.31  Accounts eligible for transfer.

    (a) A participant who has an open TSP account and is entitled to 
receive (or receives) an eligible rollover distribution, within the 
meaning of I.R.C. section 402(c)(4) (26 U.S.C. 402(c)(4)), from an 
eligible employer plan or a rollover contribution, within the meaning 
of I.R.C. section 408(d)(3) (26 U.S.C. 408(d)(3)), from a traditional 
IRA may cause to be transferred (or transfer) that distribution into 
his or her TSP account.
* * * * *

PART 1604--UNIFORMED SERVICES ACCOUNTS

    3. The authority citation for part 1604 continues to read as 
follows:

    Authority:  5 U.S.C. 8440e, 8474(b)(5) and (c)(1).

    4. Revise Sec.  1604.8 to read as follows:


Sec.  1604.8  Death benefits.

    The account balance of a deceased service member will be paid as 
described at 5 CFR part 1651. If a service member account contains 
combat zone contributions, the death benefit payment will be made pro 
rata from all sources.

PART 1651--DEATH BENEFITS

    5. Revise the authority citation for part 1651 to read as follows:

    Authority:  5 U.S.C. 8424(d), 8432(j), 8433(e), 8435(c)(2), 
8474(b)(5), 8474(c)(1), and Sec. 109, Pub. L. 111-31,123 Stat. 1176 
(5 U.S.C. 8433(e)).

    6. Amend Sec.  1651.5 by revising paragraph (a) to read as follows:


Sec.  1651.5  Spouse of participant.

    (a) For purposes of payment under Sec.  1651.2(a)(2) of this 
chapter and establishment of beneficiary participant accounts under 
Sec.  1651.19 of this chapter, the spouse of the participant is the 
person to whom the participant was married on the date of death. A 
person is considered to be married even if the parties are separated, 
unless a court decree of divorce or annulment has been entered. State 
law of the participant's domicile will be used to determine whether the 
participant was married at the time of death.
* * * * *
    7. Amend Sec.  1651.14 by revising paragraph (c) to read as 
follows:


Sec.  1651.14  How payment is made.

* * * * *
    (c) Payment to the participant's spouse. The Agency will 
automatically establish a beneficiary participant account (described in 
Sec.  1651.19) for any spouse beneficiary. The Agency will not maintain 
a beneficiary participant account if the balance is less than $200 on 
the date the beneficiary participant account is established. The Agency 
also will not transfer this amount to another eligible plan or pay it 
by electronic funds transfer. Instead the spouse will receive an 
immediate distribution in the form of a check.
* * * * *
    8. Add Sec.  1651.19 to read as follows:
    Sec.  1651.19 Beneficiary participant accounts.
    A beneficiary participant account may be established only for a 
spouse of a deceased participant who is a sole or partial beneficiary 
of the deceased participant's TSP account. Beneficiary participant 
accounts are subject to the following rules and procedures:
    (a) Initial investment allocation. Each beneficiary participant 
account will be initially allocated 100 percent to the Government 
Securities Investment (G) Fund regardless of the allocation of the 
deceased participant's account balance at the time of his or her death. 
A beneficiary participant may redistribute his or her beneficiary 
participant account balance among the TSP investment funds by making an 
interfund transfer request described in part 1601, subpart C, of this 
chapter.
    (b) Contributions. A beneficiary participant may not make 
contributions or transfers to his or her beneficiary participant 
account. The TSP will not accept a contribution allocation request 
described in part 1601, subpart B of this chapter for a beneficiary 
participant account.
    (c) Required minimum distributions. (1) A beneficiary participant 
must begin receiving annual distributions from his or her beneficiary 
participant account balance on or before the later of--
    (i) The end of the calendar year immediately following the calendar 
year in which the participant died; or
    (ii) The end of the calendar year in which the participant would 
have attained age 70\1/2\.
    (2) The TSP will ensure that the amount of the beneficiary 
participant's annual distributions that occur after the required 
minimum distribution date satisfy the applicable minimum distribution 
requirements of the Internal Revenue Code. The TSP will calculate 
minimum distributions based on the beneficiary participant account 
balance and the beneficiary participant's age, using the IRS Single 
Life Table, 26 CFR 1.401(a)(9)-9, Q&A-1.
    (d) Withdrawal elections. A beneficiary participant may elect to 
withdraw all or a portion of his or her beneficiary participant account 
as a partial payment or as a full withdrawal, that is in a single 
payment, a series of monthly payments, a life annuity, or any 
combination of these options. The provisions of Sec. Sec.  1650.12, 
1650.13, and 1650.14 shall apply as if all references

[[Page 69029]]

to a participant are references to a beneficiary participant and all 
references to an account balance are references to a beneficiary 
participant account balance.
    (e) Ineligibility for certain withdrawals. A beneficiary 
participant is ineligible to request the following types of withdrawals 
from his or her beneficiary participant account: Age-based withdrawals 
described in Sec.  1650.31 of this chapter, financial hardship 
withdrawals described in Sec.  1650.32 of this chapter, or loans 
described in part 1655 of this chapter. A beneficiary participant will 
not be ineligible for a partial withdrawal because the deceased 
participant previously elected an age-based withdrawal.
    (f) Spousal rights. The spousal rights described in 5 U.S.C. 8351, 
5 U.S.C. 8435, or Sec.  1650.61 of this chapter do not apply to 
beneficiary participant accounts.
    (g) Transfers. A beneficiary participant may request that the TSP 
transfer all or a portion of an eligible rollover distribution (within 
the meaning of I.R.C. section 402(c)(4)) from his or her beneficiary 
participant account to traditional IRA, Roth IRA or eligible employer 
plan (including a civilian or uniformed services TSP account other than 
a beneficiary participant account). In order to request such a 
transfer, the beneficiary participant must use the transfer form 
provided by the TSP.
    (h) Periodic statements. The TSP will furnish beneficiary 
participants with periodic statements in a manner consistent with part 
1640 of this chapter.
    (i) Privacy Act. Part 1630 of this chapter shall apply with respect 
to a beneficiary participant as if the beneficiary participant is a TSP 
participant.
    (j) Error correction. If, because of an error committed by the 
Board or the TSP record keeper, a beneficiary participant's account is 
not credited or charged with the investment gains or losses the account 
would have received had the error not occurred, the account will be 
credited subject to and in accordance with the rules and procedures set 
forth in Sec.  1605.21. A beneficiary participant may submit a claim 
for correction of Board or TSP record keeper error pursuant to the 
procedures described in Sec.  1605.22.
    (k) Court orders. Court orders relating to a civilian beneficiary 
participant account or uniformed services beneficiary participant 
account shall be processed pursuant to the procedures set forth in part 
1653 of this chapter as if all references to a TSP participant are 
references to a beneficiary participant and all references to a TSP 
account or account balance are references to a beneficiary participant 
account or beneficiary participant account balance. Notwithstanding any 
provision of part 1653, a payee of a court-ordered distribution from a 
beneficiary participant account cannot request a transfer of the court-
ordered distribution to an eligible employer plan or IRA.
    (l) Death of beneficiary participant. To the extent it is not 
inconsistent with this section, a beneficiary participant account shall 
be disbursed upon the death of the beneficiary participant in 
accordance with part 1651 as if any reference to a participant is a 
reference to a beneficiary participant. For example, a beneficiary 
participant may designate a beneficiary for his or her beneficiary 
participant account in accordance with Sec. Sec.  1651.3 and 1651.4 of 
this chapter. No individual who is entitled to a death benefit from a 
beneficiary participant account shall be eligible to keep the death 
benefit in the TSP or request that the TSP transfer all or a portion of 
the death benefit to an IRA or eligible employer plan.
    (m) Uniformed services beneficiary participant accounts. Uniformed 
services beneficiary participant accounts are subject to the following 
additional rules and procedures:
    (1) Uniformed services beneficiary participant accounts are 
established and maintained separately from civilian beneficiary 
participant accounts. Beneficiary participants who have a uniformed 
services beneficiary participant account and a civilian beneficiary 
participant account will be issued two separate TSP account numbers. A 
beneficiary participant must file separate interfund transfers and/or 
withdrawal requests for each account and submit separate beneficiary 
designation forms for each account;
    (2) A uniformed services beneficiary participant account and a 
civilian beneficiary participant account cannot be combined;
    (3) If a uniformed services beneficiary participant account 
contains combat zone contributions, any payments or withdrawals from 
the account will be distributed pro rata from all sources;
    (4) A beneficiary participant may transfer or roll over all or any 
portion of an eligible rollover distribution (within the meaning of 
I.R.C. section 402(c)(4)) from a uniformed services beneficiary 
participant account into a civilian or uniformed services TSP 
participant account. However, tax-exempt money attributable to combat 
zone contributions cannot be transferred from a uniformed services 
beneficiary participant account to a civilian TSP participant account.
    (n) Multiple beneficiary accounts. Each beneficiary participant 
account is maintained separately from all other beneficiary participant 
accounts. If an individual has multiple beneficiary participant 
accounts, each of the individual's beneficiary participant accounts 
will have a unique account number. A beneficiary participant must file 
separate interfund transfers and/or withdrawal requests and submit 
separate beneficiary designation forms for each beneficiary participant 
account that the TSP maintains for him or her. A beneficiary 
participant account cannot be combined with another beneficiary 
participant account.

PART 1690--THRIFT SAVINGS PLAN

    9. The authority citation for part 1690 continues to read as 
follows:

    Authority:  5 U.S.C. 8474.

    10. Amend Sec.  1690.1, by adding the definitions of ``Beneficiary 
participant'', ``Beneficiary participant account'', ``Civilian 
beneficiary participant account'', and ``Uniformed services beneficiary 
participant account'', and by revising the definition of ``Plan 
participant'' and ``Spouse'' in alphabetical order to read as follows:


Sec.  1690.1  Definitions.

* * * * *
    Beneficiary participant means a spouse beneficiary for whom the TSP 
maintains a beneficiary participant account pursuant to 5 U.S.C. 
8433(e) and in accordance with 5 CFR 1651.19.
    Beneficiary participant account means an account maintained 
pursuant to 5 U.S.C. 8433(e) and in accordance with 5 CFR 1651.19. The 
term includes both civilian beneficiary participant accounts and 
uniformed services beneficiary participant accounts.
* * * * *
    Civilian beneficiary participant account means a beneficiary 
participant account that is established with a death benefit payment 
from a TSP account to which contributions were made by or on behalf of 
a civilian employee.
* * * * *
    Plan participant or participant means any person with an account 
(other than a beneficiary participant account) in the Thrift Savings 
Plan or who would have an account (other than a beneficiary account) 
but for an employing agency error.
* * * * *
    Spouse means the person to whom a TSP participant is married on the 
date

[[Page 69030]]

he or she signs a form on which the TSP requests spousal information, 
including a spouse from whom the participant is legally separated, and 
a person with whom the participant is living in a relationship that 
constitutes a common law marriage in the jurisdiction in which they 
live. Where a participant is seeking to reclaim an account that has 
been forfeited pursuant to 5 CFR 1650.16, spouse also means the person 
to whom the participant was married on the withdrawal deadline. For 
purposes of 5 CFR 1651.5 and 5 CFR 1651.19, spouse also means the 
person to whom the participant was married on the date of the 
participant's death.
* * * * *
    Uniformed services beneficiary participant account means a 
beneficiary participant account that is established with a death 
benefit payment from a TSP account to which contributions were made by 
or on behalf of a member of the uniformed services.
* * * * *
[FR Doc. 2010-28320 Filed 11-9-10; 8:45 am]
BILLING CODE 6760-01-P