[Federal Register Volume 64, Number 54 (Monday, March 22, 1999)]
[Proposed Rules]
[Pages 13725-13726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6757]
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Proposed Rules
Federal Register
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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. 64, No. 54 / Monday, March 22, 1999 /
Proposed Rules
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FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
5 CFR Part 1650
Methods of Withdrawing Funds From the Thrift Savings Plan
AGENCY: Federal Retirement Thrift Investment Board.
ACTION: Proposed rule with request for comments.
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SUMMARY: The Executive Director of the Federal Retirement Thrift
Investment Board (Board) is publishing a proposed amendment to the
Board's withdrawal regulations. Under the proposed amendment, if a
participant does not withdraw his or her Thrift Savings Plan (TSP)
account in a timely manner, the account will be forfeited. The account
will be restored if the participant complies with the withdrawal
requirements.
DATES: Comments must be received on or before May 21, 1999.
ADDRESSES: Comments may be sent to Patrick J. Forrest, Federal
Retirement Thrift Investment Board, 1250 H Street, N.W., Washington,
D.C. 20005.
FOR FURTHER INFORMATION CONTACT: Patrick J. Forrest, (202) 942-1662.
SUPPLEMENTARY INFORMATION: The Board administers the TSP, which was
established by the Federal Employees' Retirement System Act of 1986
(FERSA), Pub. L. 99-335, 100 Stat. 514. The provisions governing the
TSP are codified primarily in subchapters III and VII of Chapter 84 of
Title 5, United States Code (1994). The TSP is a tax-deferred
retirement savings plan for Federal employees which is similar to cash
or deferred arrangements established under section 401(k) of the
Internal Revenue Code. Sums in a participant's TSP account are held in
trust for the participant. 5 U.S.C. 8437(g).
The deadline for a participant to withdraw or begin withdrawing his
or her account is governed by 5 U.S.C. 8433. Under section 8433(f),
this deadline is April 1 of the year following the later of the year in
which the participant turns age 70\1/2\ or the year in which the
participant separates from Government employment.
Final regulations governing the deadline for withdrawing a TSP
account were published in the Federal Register on September 18, 1997
(62 FR 49113). These regulations do not address the action the Board
will take if a participant fails to comply with the withdrawal
deadline.
Under the proposed amendment, whenever a participant does not
comply with the withdrawal deadline, the Board will transfer all of the
funds in his or her account to the Government Securities Investment
Fund (G Fund) that are not already invested in that Fund. The
participant will be sent a notice of this action and informed that the
account will be declared abandoned and forfeited unless the participant
takes the appropriate withdrawal action within 90 days of the date of
notice. Forfeiture is necessary because participants who have not taken
timely action to withdraw their accounts are no longer eligible to have
a TSP account.
If, at a later time, a participant reclaims the TSP account and a
proper withdrawal election has been received, the Board will restore
the funds to the account and authorize the withdrawal. The amount the
participant may withdraw is the amount of funds in the account at the
time the Board declared it to be abandoned and forfeited. No earnings
will be paid on these funds during the forfeiture period.
If the participant reclaims the account balance, but decides not to
take a lump sum or monthly payments withdrawal, the Board will purchase
an annuity for the participant after it has received the necessary
information from him or her. The option of electing an annuity is not
available for TSP accounts of $3,500 or less. Those accounts will be
paid in accordance with Sec. 1650.22.
Regulatory Flexibility Act
I certify that this amendment will not have a significant economic
impact on a substantial number of small entities. It will affect only
TSP participants and beneficiaries.
Paperwork Reduction Act
I certify that these regulations do not require additional
reporting under the criteria of the Paperwork Reduction Act of 1980.
Unfunded Mandates Reform Act of 1995
Pursuant to the Unfunded Mandates Reform Act of 1995, section 201,
Pub. L. 104-4, 109 Stat. 48, 64, the effect of these regulations on
State, local, and tribal governments, and on the private sector has
been assessed. This regulation will not compel the expenditure in any
one year of $100 million or more by any State, local, and tribal
governments in the aggregate, or by the private sector. Therefore, a
statement under section 202, 109 Stat. 48, 64-65, is not required.
List of Subjects in 5 CFR Part 1650
Employee benefit plans, Government employees, Pensions, Retirement.
Dated: March 12, 1999.
Roger W. Mehle,
Executive Director, Federal Retirement Thrift Investment Board.
For the reasons set forth in the preamble, part 1650 of chapter VI
of title 5 of the Code of Federal Regulations is amended as follows:
PART 1650--METHODS OF WITHDRAWING FUNDS FROM THE THRIFT SAVINGS
PLAN
1. The authority citation for part 1650 continues to read as
follows:
Authority: 5 U.S.C. 8351, 8433, 8434, 8435, 8474(b)(5), and
8474(c)(1).
2. Section 1650.15 is amended by adding new paragraphs (c) and (d)
to read as follows:
Sec. 1650.15 Required withdrawal date.
* * * * *
(c) In the event that a participant does not withdraw his or her
account or begin receiving payments in accordance with paragraph (a) of
this section, the Board will transfer all of the funds in the
participant's account not already invested in the Government Securities
Investment Fund (G Fund) to that Fund. A notice of this action will be
sent to the participant with a warning that his or her account will be
declared abandoned and forfeited unless the participant comes into
compliance with paragraph (a) of this section within 90 days of the
date of the notice.
(d) If the participant does not take the appropriate withdrawal
action within
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the 90 day period provided in paragraph (c) of this section, the Board
will purchase an annuity for the participant after the following steps
have been taken:
(1) The account has been declared abandoned and the funds in the
account have been forfeited;
(2) A notice of this action has been sent to the participant;
(3) The participant reclaims the account balance that was
abandoned, but decides against a withdrawal pursuant to Secs. 1650.10
or 1650.11; and (4) The participant provides the information that the
Board needs to purchase an annuity pursuant to Sec. 1650.12.
[FR Doc. 99-6757 Filed 3-19-99; 8:45 am]
BILLING CODE 6760-01-P
