[Federal Register: August 9, 2006 (Volume 71, Number 153)]
[Proposed Rules]
[Page 45437-45438]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09au06-30]
========================================================================
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.
========================================================================
[[Page 45437]]
FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
5 CFR Part 1653
Court Orders and Legal Processes Affecting Thrift Savings Plan
Accounts
AGENCY: Federal Retirement Thrift Investment Board.
ACTION: Proposed rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: The Executive Director of the Federal Retirement Thrift
Investment Board (Agency) proposes to amend the Thrift Savings Plan's
(TSP's) regulations to improve processing of court orders that seek to
divide a TSP account pursuant to a divorce. The proposed change would
limit the types of court orders the Agency would accept to either one
that requires payment of a specific dollar amount or that requires
payment of a stated percentage or fraction of the account. The change
would no longer allow formula court orders.
DATES: Comments must be received on or before September 8, 2006.
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) 942-1659.
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)).
The Executive Director proposes to amend the Agency's regulations
to limit acceptable court orders that divide a TSP account to those
that either require payment of a specific dollar amount or that require
payment of a stated percentage or fraction of the account.
Currently, the Agency will also accept a court order that requires
payment of an amount determined by a formula that yields a
mathematically possible result. All variables in the formula must have
values that are readily ascertainable.
Formula-based court order are overly complex and often are not
acceptable by the Agency or, if acceptable, would result in payments
that were not anticipated by either party to the order. As a
consequence, the parties must return to court and obtain an amended
order. Additionally, the formula court order requires the Agency to
interpret the order and results in considerable administrative expense.
These expenses are borne by all TSP participants.
The proposed regulation will make it easier for the parties in a
divorce to ensure that the Agency will divide a TSP account in
accordance with their wishes. The proposed regulation simplifies the
types of court orders the Agency will accept. The proposed regulation
contains model paragraphs that attorneys can use to ensure that, in
drafting orders, the language they select will both produce the
intended result and meet the Agency's processing requirements.
Consequently, in order to ensure accuracy of court order payments
and to ensure that the administrative expenses of the court order
program are reasonable for a retirement savings plan, the Executive
Director proposes to amend Agency regulations to limit the types of
court orders the Agency will accept to those that either require
payment of a specific dollar amount or that require payment of a stated
percentage or fraction of the account.
Regulatory Flexibility Act
I certify that these regulations will not have a significant
economic impact on a substantial number of small entities. They will
affect only employees of the Federal Government.
Paperwork Reduction Act
I certify that these regulations do not require additional
reporting under the criteria of the Paperwork Reduction Act.
Unfunded Mandates Reform Act of 1995
Pursuant to the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 602,
632, 653, 1501-1571, the effects of this regulation on state, local,
and tribal governments and the private sector have been assessed. This
regulation will not compel the expenditure in any one year of $100
million or more by state, local, and tribal governments, in the
aggregate, or by the private sector. Therefore, a statement under Sec.
1532 is not required.
Submission to Congress and the Government Accountability Office
Pursuant to 5 U.S.C. 801(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. section 804(2).
List of Subjects in 5 CFR Part 1653
Court Orders and Legal Processes Affecting Thrift Savings Plan
Accounts.
Gary A. Amelio,
Executive Director, 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 1653--COURT ORDERS AND LEGAL PROCESSES AFFECTING THRIFT
SAVINGS PLAN ACCOUNTS
1. The authority citation for part 1653 continues to read as
follows:
Authority: 5 U.S.C. 8435, 8436(d), 8437(e), 8439(a)(3),
8474(b)(5), and 8474(c)(1).
2. Amend Sec. 1653.2 by revising paragraphs (a)(3)(iii) and
(a)(3)(iv) to read as follows:
Sec. 1653.2 Qualifying retirement benefits court order.
(a) * * *
(3) * * *
(i) * * *
(ii) * * *
(iii) A survivor annuity as provided in 5 U.S.C. 8435(d).
(iv) The following examples would qualify to require payment from
the TSP, although ambiguous or conflicting language used elsewhere
could cause the order to be rejected.
[[Page 45438]]
Example (1). ORDERED: [payee's name, Social Security number (SSN),
and address] is awarded $------ from the [civilian or uniformed
services] Thrift Savings Plan account of [participant's name, SSN, and
address].
Example (2). ORDERED: [payee's name, SSN, and address] is awarded
------% of the [civilian and/or uniformed services] Thrift Savings Plan
account[s] of [participant's name, SSN, and address] as of [date].
Example (3). ORDERED: [payee's name, SSN, and address] is awarded
[fraction] of the [civilian and/or uniformed services] Thrift Savings
Plan account[s] of [participant's name, SSN, and address] as of [date].
Note: The following optional language can be used in conjunction
with any of the above examples. FURTHER ORDERED: Earnings will be
paid on the amount of the entitlement under this ORDER until payment
is made.
* * * * *
[FR Doc. E6-12895 Filed 8-8-06; 8:45 am]
BILLING CODE 6760-01-P