[Federal Register Volume 63, Number 104 (Monday, June 1, 1998)]
[Proposed Rules]
[Pages 29674-29675]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14360]
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FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
5 CFR Part 1655
Thrift Savings Plan Loans
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 revision to
regulations concerning Thrift Savings Plan (TSP) loans. The amendment
will affect participants who are alleged to have submitted false
information in support of their request for a TSP loan. The amendment
establishes a process for investigating written allegations of such
fraudulent activity. When the Board finds that the evidence suggests
the participant provided false information to the TSP during the loan
process, the Board will refer the case to the appropriate authorities
for criminal prosecution and, in the appropriate case, administrative
action.
DATES: Comments must be submitted on or before July 1, 1998.
ADDRESSES: Comments may be sent to Elizabeth S. Woodruff, Federal
Retirement Thrift Investment Board, 1250 H Street, N.W., Washington,
D.C. 20005.
FOR FURTHER INFORMATION CONTACT: Elizabeth S. Woodruff, (202) 942-1661.
SUPPLEMENTARY INFORMATION: A final rule governing TSP loans was
published in the Federal Register on April 14, 1997 (62 FR 18019). That
rule revised interim regulations that were published in the Federal
Register on November 18, 1996 (61 FR 58754). Current regulations
require participants who are applying for a loan from their TSP
accounts to provide certain information and certify the truth of the
information on the application. The terms and conditions of a TSP loan
are then reflected in a Loan Agreement/Promissory Note which the
participant signs, thereby certifying, under penalty of perjury, the
truth of all statements made and documentation provided with this
signed document.
Before the TSP will permit a loan to a TSP participant, the
participant must indicate his or her marital status on the Loan
Application and, if married, the spouse's name. In the case of a
married Federal Employees' Retirement System (FERS) participant, the
participant must obtain the signature of his/her spouse on the Loan
Agreement/ Promissory Note to show that the spouse has consented to the
loan. In the case of a married Civil Service Retirement System (CSRS)
participant, the consent of the spouse is not required; however, the
TSP must send a notice to the spouse. The CSRS participant is therefore
required to provide the spouse's address on the loan application. These
consent and notice requirements can be waived upon application to the
TSP pursuant to 5 CFR 1655.18.
This regulation adds paragraph (f) to Sec. 1655.18 to provide that,
if the Board receives a written allegation from the spouse stating that
a participant misrepresented his/her marital status or the address of
the spouse of a CSRS participant, or that the participant submitted a
Loan Agreement/Promissory Note with a forged signature of the spouse of
a FERS participant, the Board will submit the questioned document to
the spouse and request that the allegation of fraud or forgery be
affirmed. If the allegation is affirmed and the loan has been
disbursed, the Board will give the participant an opportunity to repay
the loan within a 60-day period. This will permit the participant to
return the account to the status quo, thus restoring the spouse's
interest in the account.
The notice will also advise that if the participant does not repay
the loan in full within the 60 days provided, the Board will conduct an
investigation into the allegation. The Board will not give this
repayment opportunity to a participant who has received a final divorce
from his/her spouse before the funds are received by the TSP. In such a
case, the Board will immediately begin its investigation.
Where the Board finds evidence to suggest that the participant
misrepresented his/her marital status or spouse's address or that the
signature of the spouse was forged, the Board will refer the case to
the Department of Justice for criminal prosecution and, where the
participant is still employed, to the Inspector General or other appro-
priate authority in the participant's employing agency for
administrative action. The Board will also freeze the participant's
account and will not permit a withdrawal or another loan until the loan
is repaid, the Board receives assurance from the spouse in writing that
the notice or consent requirements have been met, the participant is
divorced, or the Board's investigation does not yield persuasive
evidence to support the allegation.
Regulatory Flexibility Act
I certify that this amendment will not have a significant economic
impact on a substantial number of small entities because the
regulations will only affect TSP participants.
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,
Public Law 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 1655
Credit, Government employees, Pensions, Retirement.
Roger W. Mehle,
Executive Director, Federal Retirement Thrift Investment Board.
For the reasons set forth in the preamble, part 1655 of chapter VI
of title 5 of the Code of Federal Regulations is amended as follows:
[[Page 29675]]
PART 1655--LOAN PROGRAM
1. The authority citation for part 1655 continues to read as
follows:
Authority: 5 U.S.C. 8433(g) and 8474.
2. Section 1655.18 is amended by adding paragraph (f) as follows:
Sec. 1655.18 Spousal rights.
* * * * *
(f)(1) By signing the Loan Application and the Loan Agreement/
Promissory Note, the participant represents that all information
provided to the TSP during the loan process is true and correct,
including statements concerning the participant's marital status and
spouse's address at the time the application is filed and documentation
that the current spouse has consented to the loan.
(2) If the Board receives a written allegation from the spouse that
the participant may have misrepresented his/her marital status or the
spouse's address (in the case of a CSRS participant), or that the
signature of the spouse of a FERS participant was forged, the Board
will submit the questioned document to the spouse and request that he
or she state in writing that the information is false or that the
spouse's signature has been forged. In the event of an alleged forgery,
the Board will also request the spouse to provide at least three
signature samples.
(3) If the spouse affirms the allegation in accordance with the
procedure set forth in paragraph (f)(2) of this section and the loan
has been disbursed, the Board will give the participant an opportunity
to repay, within 60 days, the unpaid loan principal, plus unpaid
interest. If the loan is repaid, the Board will not investigate the
spouse's allegation.
(4) Paragraph (f)(3) of this section will not apply where the
participant has received a final divorce decree before the funds are
received by the Thrift Savings Plan.
(5) If the unpaid loan principal, plus unpaid interest, is not
repaid to the Plan in full within the time period provided in paragraph
(f)(3) of this section, the Board will conduct an investigation into
the allegation. If the participant has received a final divorce decree
before the funds are received by the Thrift Savings Plan, the Board
will begin its investigation immediately.
(6) If, during its investigation, the Board finds evidence to
suggest that the participant misrepresented his/her marital status or
spouse's address (in the case of a CSRS participant), or submitted the
Loan Agreement/Promissory Note with a forged signature, the Board will
refer the case to the Department of Justice for criminal prosecution
and, if the participant is still employed, to the Inspector General or
other appropriate authority in the participant's employing agency for
administrative action.
(7) Upon receipt of an allegation described in paragraph (f)(2) of
this section, the participant's account will be frozen and no
withdrawal or loan will be permitted until after:
(i) Thirty days have elapsed since the participant's spouse was
sent a copy of the questioned document and no written affirmation of
the alleged false information or forgery (together with signature
samples in the case of an alleged forgery) has been received by the
Board;
(ii) The loan is repaid pursuant to paragraph (f)(3) of this
section;
(iii) The Executive Director concludes that the Board's
investigation did not yield persuasive evidence that supports the
spouse's allegation;
(iv) The Executive Director has been assured in writing by the
spouse that any future request for a loan or withdrawal comports with
the applicable requirement of notice or consent; or
(v) The participant is divorced.
[FR Doc. 98-14360 Filed 5-29-98; 8:45 am]
BILLING CODE 6760-01-U
