[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