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Employee Contribution Election and Contribution Allocations; Correction of Administrative Errors; Availability of Records; Death Benefits; Loan Program; Thrift Savings Plan

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

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AGENCY:

Federal Retirement Thrift Investment Board

ACTION:

Final rule.

SUMMARY:

The Federal Retirement Thrift Investment Board (Agency) is amending the Thrift Savings Plan (TSP) regulations to provide additional means to verify that an amount is eligible for rollover to the TSP as authorized by the Treasury Regulations interpreting I.R.C. 401(a)(31), to provide that the procedures applicable to an employee who was misclassified as either CSRS or FERS and the retirement system is corrected to FICA also apply to an employee who elects retroactive non-appropriated fund retirement coverage, and to provide that it will authenticate records in a manner consistent with Federal law and regulations. The Agency is also amending the TSP regulations to provide that it will allow a non-spouse beneficiary to transfer a death benefit payment to an inherited IRA as authorized by the Pension Protection Act of 2006, to provide that a bankruptcy court now lacks jurisdiction over a TSP loan as provided in the Bankruptcy Abuse and Consumer Protection Act of 2005, and to eliminate examples of general and special powers of attorney (some of which are no longer acceptable to the Agency) and, instead, direct participants to a sample form at the TSP Web site.

DATES:

Effective September 19, 2007.

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FOR FURTHER INFORMATION CONTACT:

Megan Graziano on (202) 942-1644.

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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 August 10, 2007, the Agency published proposed rules with request for comments in the Federal Register (72 FR 44982). The Agency received one comment which stated that the Agency should accept any power of attorney that is properly executed and verifiable and that the Agency should not encourage the use of general powers of attorney. The Agency agrees and believes that this is consistent with the intent of the proposed rule. The remainder of this comment dealt with matters outside the scope of the proposed rule change. Therefore, the Executive Director is publishing the proposed rules as final without change.

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 § 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).

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List of Subjects

, 1690

, 1651

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Gregory T. Long,

Executive Director, Federal Retirement Thrift Investment Board.

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For the reasons set forth in the preamble, the Agency is amending 5 CFR chapter VI as follows:

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PART 1600—EMPLOYEE CONTRIBUTION ELECTIONS AND CONTRIBUTION

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

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Authority: 5 U.S.C. 8351, 8432(a), 8432(b)(1)(A), 8432(j), 8474(b)(5) and (c)(1).

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2. Amend § 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:

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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 Start Printed Page 53414which 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.

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PART 1605—CORRECTION OF ADMINISTRATIVE ERRORS

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3. The authority citation for part 1605 is revised to read as follows:

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Authority: 5 U.S.C. 8351, 8432a, and 8474(b)(5)(5) and (c)(1). Subpart B also issued under section 1043(b) of Public Law 104-106, 110 Stat. 186 and sec. 7202(m)(2) of Public Law 101-508, 104 Stat. 1388.

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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:

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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 § 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 Nonappropriated Fund retirement coverage.

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PART 1631—AVAILABILITY OF RECORDS

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5. The authority citation for part 1631 continues to read as follows:

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Authority: 5 U.S.C. 552.

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6. Add § 1631.34 to read as follows:

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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.

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PART 1651—DEATH BENEFITS

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7. The authority citation for part 1651 continues to read as follows:

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Authority: 5 U.S.C. 8424] (d), 8432(j), 8433(e), 8435(c)(2), 8474(b)(5) and 8474 (c)(1).

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8. In § 1651.14, redesignate paragraphs (g) and (h) as paragraphs (h) and (i), and add new paragraph (g) to read as follows:

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How payment is made.
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(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.

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PART 1655—LOAN PROGRAM

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9. The authority citation for part 1655 continues to read as follows:

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Authority: 5 U.S.C. 8433(g), 8439(a)(3) and 8474.

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[Amended]
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10. In § 1655.14, the third sentence of paragraph (a) is removed.

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[Amended]
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11. In § 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.

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PART 1690—THRIFT SAVINGS PLANS

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

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Authority: 5 U.S.C. 8474.

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13. Amend § 1690.12 by revising the second sentence in paragraph (b) and the third sentence in paragraph (c) to read as follows:

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Power of attorney.
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(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.

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[FR Doc. E7-18463 Filed 9-18-07; 8:45 am]

BILLING CODE 6760-01-P