[Federal Register: August 10, 2007 (Volume 72, Number 154)]
[Proposed Rules]
[Page 44982-44984]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10au07-14]
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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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[[Page 44982]]
FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
5 CFR Parts 1600, 1605, 1631, 1651, 1655 and 1690
Employee Contribution Election and Contribution Allocations;
Correction of Administrative Errors; Availability of Records; Death
Benefits; Loan Program; Thrift Savings Plan
AGENCY: Federal Retirement Thrift Investment Board.
ACTION: Proposed rules with request for comments.
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SUMMARY: The Federal Retirement Thrift Investment Board (Agency)
proposes to amend its regulations to reflect the requirements stated in
the Treasury Regulations interpreting I.R.C. 401(a)(31) to provide
additional means to verify that an amount is eligible for rollover to
the TSP.
The Agency proposes to amend its regulations to clarify that the
procedures applicable to an employee who was misclassified as either
CSRS or FERS also apply to an employee who elects retroactive non-
appropriated fund (NAF) retirement coverage.
The Agency proposes to add a rule regarding the production and
authentication of records. The Agency would authenticate records in a
manner consistent with Federal law and regulations.
The Agency proposes to amend its death benefit payment regulations
in order to allow a non-spouse beneficiary to transfer a death benefit
payment to an inherited IRA as authorized by the Pension Protection
Act.
The Agency proposes to amend its loan regulations to reflect the
changes brought by the Bankruptcy Abuse and Consumer Protection Act of
2005. Specifically, the amendments would reflect that a bankruptcy
court now lacks jurisdiction over a TSP loan.
The Agency proposes to amend its regulations to clarify its power
of attorney regulations by eliminating examples of general and special
powers of attorney, some of which would no longer be acceptable to the
Agency, and directing participants to a sample form at http://www.tsp.gov
.
DATES: Comments must be received on or before September 10, 2007.
ADDRESSES: Comments may be sent to Thomas K. Emswiler, General Counsel,
Federal Retirement Thrift Investment Board, 1250 H Street, NW.,
Washington, DC 20005. The Agency's Fax number is (202) 942-1676.
FOR FURTHER INFORMATION CONTACT: Megan Graziano on (202) 942-1644.
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)).
Employee Contribution Election and Contribution Allocations
The Agency proposes to amend its regulations regarding eligible
rollover distributions to the TSP. In particular, since Treasury
regulations only require that the Agency receive sufficient evidence to
reasonably conclude that a contribution is a valid rollover
contribution, the Agency no longer requires a plan administrator or
trustee to certify such distributions.
Further, when a participant completes a rollover, IRS rules require
that the rollover be completed within 60 days of the date the
participant received the distribution. Therefore, Agency practice is to
have the participant certify the date the distribution was received.
Agency regulations, however, require the financial institution to
certify the date of the distribution. This date is irrelevant to a
rollover that is completed by a participant.
In addition, the Agency can conduct additional verification in the
event that the date certified varies significantly from the date on the
check. Therefore, the Agency proposes to amend its regulations to
delete the requirement that a financial institution certify the date of
distribution.
Correction of Administrative Errors
The Agency proposes to amend its regulations to clarify that the
procedures applicable to a participant misclassified as either FERS or
CSRS and the retirement coverage is corrected to FICA only, also apply
to an employee who elects retroactive NAF coverage. These procedures
will ensure that the employee either is refunded all contributions made
by the employee or maintains ownership of all contributions that the
TSP's record keeping system is unable to refund to the employee and
that will continue to inure to the employee's benefit. The agency
contributions that forfeit to the TSP will benefit all TSP participants
because they will be used to offset the TSP's administrative expenses.
Availability of Records
The Agency proposes to add a section to its regulations regarding
production and disclosure of records, and specifically, in relation to
certification and authentication of records. The Agency frequently
receives subpoenas directing it to authenticate Agency documents for
use in state court proceedings. Often, these subpoenas request that
such documents be authenticated in accordance with state court
procedures and receive notarization. The Agency lacks the expertise to
comply with the procedures of the individual 50 states and attempting
to do so would result in a misallocation of TSP resources. Furthermore,
it is not necessary for the Agency to comply with state court
procedures in order for Agency documents to be admissible in a state
court proceeding.
Section 1733(b) of title 28, United States Code, provides that
``[p]roperly authenticated copies or transcripts of any books, records,
papers or documents of any department or agency of the United States
shall be admitted in evidence equally with the originals thereof.'' In
order to properly authenticate Agency documents, the records custodian
or other qualified individual shall attach a written declaration that
complies with current Federal Rules of Evidence. Documents so
authenticated shall be admitted in evidence equally with the originals
thereof. See 28 U.S.C. 1733(b).
[[Page 44983]]
Therefore, this regulation prescribes procedures for the Agency to
authenticate documents so that the documents will be admissible in all
state court proceedings. These procedures shall be the exclusive means
of authenticating Agency documents.
Death Benefits
The Agency proposes to amend its regulations to reflect changes in
its death benefit payment process brought by the Pension Protection Act
(PPA) of 2006. The PPA allows non-spouse beneficiaries to transfer all
or part of their benefits payable from a qualified retirement plan or
government plan to an inherited IRA. As a result, the Agency proposes
to amend its regulations to allow a non-spouse beneficiary to transfer
all or part of his or her death benefit payment from the TSP to an
inherited IRA.
Loan Program
The Agency proposes to amend its regulations to reflect changes in
bankruptcy law. Due to the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005 (Pub. L. 109-8), a bankruptcy court lacks
jurisdiction over a TSP loan under both chapter 7 and chapter 13
procedures. To reflect this change, language mentioning the possibility
of a bankruptcy court stopping TSP loan payments under a chapter 13
bankruptcy procedure would be removed.
Thrift Savings Plan
The Agency proposes to amend its regulations to simplify the
regulations' description of acceptable general and special powers of
attorney. By eliminating the noncomprehensive list of examples provided
in the regulations, the agency hopes participants will use the
regulations' thorough definitions as well as overview material and
sample forms provided at http://www.tsp.gov to secure a proper power of
attorney.
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 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. 814(2).
List of Subjects
5 CFR Parts 1600, 1690
Government employees, Pensions, Retirement.
5 CFR Parts 1605, 1651
Claims, Government employees, Pensions, Retirement.
5 CFR Part 1631
Courts, Freedom of information, Government employees.
5 CFR Part 1655
Credit, Government employees, Pensions, Retirement.
Thomas K. Emswiler,
General Counsel, Federal Retirement Thrift Investment Board.
For the reasons set forth in the preamble, the Agency proposes to
amend 5 CFR chapter VI as follows:
PART 1600--EMPLOYEE CONTRIBUTION ELECTIONS AND CONTRIBUTION
1. The authority citation for part 1600 continues to read as
follows:
Authority: 5 U.S.C. 8351, 8432(a), 8432(b)(1)(A), 8432(j),
8474(b)(5) and (c)(1).
2. Amend Sec. 1600.32 by removing the second sentence of paragraph
(a) and adding two sentences in its place, and revising paragraph
(b)(2) to read as follows:
Sec. 1600.32 Methods for transferring eligible rollover distribution
to TSP.
* * * * *
(a) * * * The administrator or trustee must either complete the
appropriate section of the form and forward the completed form and the
distribution to the TSP record keeper or the Agency must receive
sufficient evidence from which to reasonably conclude that a
contribution is a valid rollover contribution. By way of example,
sufficient evidence to conclude a contribution is a valid rollover
contribution includes a copy of the plan's determination letter, a
letter or other statement from the plan indicating that it is an
eligible retirement plan, a check indicating that the contribution is a
direct rollover or a tax notice from the plan to the participant
indicating that the participant could receive a rollover from the plan.
(b) * * *
(2) The administrator or trustee must either complete the
appropriate section of the form and forward the completed form and the
distribution to the TSP record keeper or the Agency must receive
sufficient evidence from which to reasonably conclude that a
contribution is a valid rollover contribution. By way of example,
sufficient evidence to conclude a contribution is a valid rollover
contribution includes a copy of the plan's determination letter, a
letter or other statement from the plan indicating that it is an
eligible retirement plan, a check indicating that the contribution is a
direct rollover or a tax notice from the plan to the participant
indicating that the participant could receive a rollover from the plan.
* * * * *
PART 1605--CORRECTION OF ADMINISTRATIVE ERRORS
3. The authority citation for part 1605 is revised to read as
follows:
Authority: 5 U.S.C. 8351, 8432a, and 8474(b)(5)(5) and (c)(1).
Subpart B also issued under section 1043(b) of Pub. Law 104-106, 110
Stat. 186 and sec. 7202(m)(2) of Pub. Law 101-508, 104 Stat. 1388.
4. Section 1605.14 is amended by revising the third sentence of
paragraph (a)(1), revising paragraph (c)(2) and adding paragraph (e) to
read as follows:
Sec. 1605.14 Misclassified retirement system coverage.
(a) * * *
(1) * * * If the participant requests a refund of employee
contributions, the employing agency must submit a negative adjustment
record to remove these funds under the procedure described in Sec.
1605.12.
(c) * * *
(2) Employer contributions in the account are subject to the rules
in paragraph (a)(2) of this section.
* * * * *
(e) The provisions of paragraph (c) of this section shall apply to
any TSP contributions relating to a period for which an employee elects
retroactive
[[Page 44984]]
Nonappropriated Fund retirement coverage.
PART 1631--AVAILABILITY OF RECORDS
5. The authority citation for part 1631 continues to read as
follows:
Authority: 5 U.S.C. 552.
6. Add Sec. 1631.34 to read as follows:
Sec. 1631.34 Certification and authentication of records.
(a) Upon request, the records custodian or other qualified
individual shall authenticate copies of books, records, papers,
writings, and documents by attaching a written declaration that
complies with current Federal Rules of Evidence. No seal or
notarization shall be required. Copies of any books, records, papers,
or other documents in the Federal Retirement Thrift Investment Board
shall be admitted in evidence equally with the originals thereof when
authenticated in this manner.
(b) Fees for copying and certification are set forth in 5 CFR
1630.16.
PART 1651--DEATH BENEFITS
7. 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).
8. In Sec. 1651.14, redesignate paragraphs (g) and (h) as
paragraphs (h) and (i), and add new paragraph (g) to read as follows:
Sec. 1651.14 How payment is made.
* * * * *
(g) Payment to inherited IRA on behalf of a non-spouse beneficiary.
If payment is to an inherited IRA on behalf of a non-spouse
beneficiary, the check will be made payable to the account. Information
pertaining to the inherited IRA must be submitted by the IRA trustee.
* * * * *
PART 1655--LOAN PROGRAM
9. The authority citation for part 1655 continues to read as
follows:
Authority: 5 U.S.C. 8433(g), 8439(a)(3) and 8474.
Sec. 1655.14 [Amended]
10. In Sec. 1655.14, the third sentence of paragraph (a) is
removed.
Sec. 1655.15 [Amended]
11. In Sec. 1655.15 ``or'' is added to the end of paragraph
(a)(5), a period replaces the semicolon at the end of paragraph (a)(6),
``or'' is removed from the end of paragraph (a)(6), and paragraph
(a)(7) is removed.
PART 1690--THRIFT SAVINGS PLANS
12. The authority citation for part 1690 continues to read as
follows:
Authority: 5 U.S.C. 8474.
13. Amend Sec. 1690.12 by revising the second sentence in
paragraph (b) and the third sentence in paragraph (c) to read as
follows:
Sec. 1690.12 Power of attorney.
* * * * *
(b) * * * Additional information regarding general powers of
attorney can be accessed at http://www.tsp.gov.
(c) * * * Additional information regarding special powers of
attorney, as well as a sample form, can be accessed at http://www.tsp.gov
.
[FR Doc. E7-15635 Filed 8-9-07; 8:45 am]
BILLING CODE 6760-01-P