[Federal Register Volume 61, Number 83 (Monday, April 29, 1996)]
[Rules and Regulations]
[Page 18912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10366]
[[Page 18911]]
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Part V
Federal Retirement Thrift Investment Board
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5 CFR Part 1653
Domestic Relations Orders Affecting Thrift Savings Plan Accounts; Final
Rule
Federal Register / Vol. 61, No. 83 / Monday, April 29, 1996 / Rules
and Regulations
[[Page 18912]]
FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
5 CFR Part 1653
Domestic Relations Orders Affecting Thrift Savings Plan Accounts
AGENCY: Federal Retirement Thrift Investment Board.
ACTION: Final rule.
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Summary: The Executive Director of the Federal Retirement Thrift
Investment Board (Board) is amending the Board's regulations governing
payments from the Thrift Savings Plan (TSP) pursuant to retirement
benefits court orders and in response to legal process for the
enforcement of a participant's legal obligations to provide child
support or make alimony payments. This final rule amends Board
regulations to provide for elimination of the mandatory 30-day tax
notification period.
EFFECTIVE DATE: These final rules are effective April 29, 1996.
FOR FURTHER INFORMATION CONTACT: Thomas L. Gray, Assistant General
Counsel for Administration. (202) 942-1662. FAX (202) 942-1676.
SUPPLEMENTARY INFORMATION: The Board administers the Thrift Savings
Plan (TSP) pursuant to the Federal Employees' Retirement System Act of
1986, Pub. L. 99-335, 100 Stat. 514 (codified primarily at 5 U.S.C.
8401-8479 (1994)).
Under 5 U.S.C. 8467(a) and 8435(c), a court decree of divorce,
annulment, or legal separation, or a court order or court-approved
property settlement agreement incident to such a court decree can award
benefits from a TSP participant's account to someone other than the
participant, such as the participant's spouse or former spouse. The
Board refers to these court orders as retirement benefits court orders,
and final regulations governing them were published by the Board at 60
FR 13604 (1995) (to be codified at 5 CFR part 1653, subpart A).
Under 8437(e)(3), sums in the TSP also are subject to legal process
for the enforcement of a participant's or beneficiary's past-due legal
obligations to provide child support or make alimony payments. The
final regulations governing such legal process were published at 60 FR
66061 (1995) (to be codified at 5 CFR part 1653, subpart B). This final
rule amends both the final rule governing retirement benefits court
orders and the final rule governing legal process.
Existing regulations at section 1653.5, Procedures for payment
pursuant to retirement benefits court orders, and section 1653.25,
Payment pursuant to qualifying legal process, provide that payment will
be made no sooner than 30 days after the Board's decision has been
issued and the appropriate tax withholding notification has been
provided. This minimum waiting period is provided because under
Internal Revenue Code provisions the payee will often have the right to
elect to transfer the payment to an Individual Retirement Account (IRA)
or other eligible retirement plan, or to make a tax withholding
election. The existing regulations do not permit the taxpayer to
shorten this period. This rule change allows the taxpayer to waive this
period and receive a TSP payment sooner. Accordingly, following the
Board's decision, the payee will be provided Form TSP-13-S, Notice of
Pending Court-Order Thrift Savings Plan Payment and Tax Withholding
Information. The taxpayer may waive the notice period by submitting the
waiver statement on that form or by submitting a letter containing an
explicit waiver statement.
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 internal Board procedures for payments pursuant to court
orders and in response to legal process and provide an opportunity to
waive the tax notification period, and thus, shorten the period for
receipt of these payments.
Paperwork Reduction Act
I certify that these regulations do not require additional
reporting under the criteria of the Paperwork Reduction Act of 1980.
Waiver of Notice of Proposed Rulemaking and 30-Day Delay of
Effective Date
Under 5 U.S.C. 553(b)(3)(B) and (d)(3), I find that good cause
exists for waiving the general notice of proposed rulemaking and for
making these regulations effective in less than 30 days. The purpose of
these changes is to provide an opportunity to shorten the time for
payments pursuant to domestic relations court orders. The Board
believes this opportunity should be made available without delay.
Unfunded Mandates Reform Act of 1995
Pursuant to the Unfunded Mandates Reform Act of 1995, Pub. L. No.
104-4, section 201, 109 Stat. 48, 64, the effect of this regulation 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, or 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 1653
Employee benefit plans, Government employees, Retirement, Pensions.
Federal Retirement Thrift Investment Board.
Roger W. Mehle,
Executive Director.
For the reasons set out in the preamble, 5 CFR part 1653 is to be
amended as set forth below:
PART 1653--DOMESTIC RELATIONS ORDERS AFFECTING THRIFT SAVINGS PLAN
ACCOUNTS
1. The authority citation for part 1653 continues to read as
follows:
Authority: 5 U.S.C. 8435, 8436(b), 8437(e)(3), 8467, 8474(b)(5)
and 8474(c)(1).
2. Section 1653.5 is amended by revising paragraph (a) to read as
follows:
Sec. 1653.5 Procedures for payment pursuant to retirement benefits
court orders.
(a) If a qualifying court order creates an entitlement to a portion
of a TSP account under this part, payment will be made after the
Board's decision has been issued and the 30-day tax withholding
notification period has ended. The taxpayer may receive the payment
sooner by waiving the tax notification period.
* * * * *
3. Section 1653.25 is amended by revising paragraph (a) to read as
follows:
Sec. 1653.25 Payment pursuant to qualifying legal process.
(a) Payment will be made pursuant to qualifying legal process after
the Board's decision has been issued and the 30-day tax withholding
notification period has ended. The taxpayer may receive the payment
sooner by waiving the tax notification period.
* * * * *
[FR Doc. 96-10366 Filed 4-26-96; 8:45 am]
BILLING CODE 6760-01-P
