[Federal Register Volume 67, Number 96 (Friday, May 17, 2002)]
[Proposed Rules]
[Pages 35051-35055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-12344]


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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. 67, No. 96/Friday, May 17, 2002/Proposed 
Rules  

[[Page 35051]]



FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

5 CFR Parts 1605, 1620, 1651, and 1655


Correction of Administrative Errors; Expanded and Continuing 
Eligibility; Death Benefits; Loan Program

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) proposes to revise the Board's Uniformed 
Services Employment and Reemployment Rights (USERRA) regulations 
regarding Thrift Savings Plan (TSP) contributions and loan payments, 
and to update the definitions used in those regulations. The Executive 
Director also proposes to amend the Board's death benefit regulations 
to allow the spouse of a deceased participant to transfer a TSP death 
benefit payment to an eligible retirement plan or to the spouse's 
existing TSP account. Finally, the Executive Director proposes to amend 
the Board's loan regulations to explain that the Soldier's and Sailors' 
Civil Relief Act of 1940 allows a participant returning to civilian 
service from active duty military service to reduce to 6 percent the 
interest rate owed on a TSP loan for the period of missed TSP loan 
payments due to military leave.

DATES: Comments must be received on or before June 17, 2002.

ADDRESSES: Comments may be sent to Patrick J. Forrest, Federal 
Retirement Thrift Investment Board, 1250 H Street, NW., Washington, DC 
20005. The Board's Fax number is (202) 942-1676.

FOR FURTHER INFORMATION CONTACT: Patrick J. Forrest on (202) 942-1661.

SUPPLEMENTARY INFORMATION: The Board 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 
have been 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 which is similar to 
cash or deferred arrangements established under section 401(k) of the 
Internal Revenue Code (26 U.S.C. 401(k)).

Contributions

    Section 4(a)(1) of the Uniformed Services Employment and 
Reemployment Rights Act of 1994 (USERRA), codified at 5 U.S.C. 
8351(b)(8) and 8432b, describes the rights to TSP benefits afforded to 
civilian TSP participants who are reemployed in civilian service or 
restored from a nonpay status to pay status following a release from 
military service, discharge from hospitalization related to that 
service, or other similar event. On June 9, 1999, the Board published a 
final rule in the Federal Register (64 FR 31052) to explain how TSP 
participants can obtain the benefits of USERRA. The rule is codified at 
5 CFR part 1620, subpart E; this proposed rule amends the final rule.
    Current Sec. 1620.42 explains that a participant can make up TSP 
contributions missed due to military service if he or she is reemployed 
or restored to pay status in the civilian service under USERRA. It 
provides that a participant can file a contribution election 
immediately when he or she returns to civilian service under USERRA, 
and does not have to wait for an Open Season to begin making current 
TSP contributions. Section 1620.42 does not place a time limit on 
making an immediate contribution election under USERRA. Under 5 CFR 
1600.12(a)(1) and 1604.3(b), new civilian employees and service members 
can file a TSP contribution election any time within the first 60 days 
of their hiring or appointment, without waiting for a TSP Open Season. 
Experience has shown this to be an adequate time for making a 
contribution election. Therefore, the Executive Director proposes to 
amend Sec. 1620.42 to adopt a 60-day time limit for the filing of 
contribution elections under USERRA.
    The regulation at 5 CFR 1605.31, published by the Board in the 
Federal Register on August 22, 2001 (66 FR 44276), explains how to 
compute USERRA makeup contributions. It does not explain how a 
participant's right to make up contributions under USERRA is affected 
by contributions the participant made to a uniformed services TSP 
account under 5 U.S.C. 8440e during his or her period of military 
service. The Executive Director proposes to revise Sec. 1605.31(c) to 
explain that the amount of employee makeup contributions must be 
reduced by the amount the participant contributed to his or her 
uniformed services TSP account. In addition, proposed Sec. 1605.31(c) 
explains that a FERS participant who made contributions from basic pay 
to a uniformed services account during a period of military service 
will immediately upon return to civilian service or pay status receive 
agency matching makeup contributions to his or her civilian account for 
those uniformed services contributions. Finally, proposed 
Sec. 1605.31(c) explains that a participant who makes up missed 
employee contributions will receive attributable agency matching 
contributions to the extent he or she did not receive matching 
contributions on employee contributions made to a uniformed services 
account.

Loans and Withdrawals

    The repayment of a TSP loan is governed by FERSA, the Internal 
Revenue Code, and by the regulations issued by the Internal Revenue 
Service (IRS) and the Board. Section 414(u) of the Internal Revenue 
Code (26 U.S.C. 414(u)) establishes the Federal income tax rules 
relating to USERRA. Under section 414(u)(4) and the IRS regulations 
interpreting that provision (26 CFR 1.72(p)-1, Q&A-9), a retirement 
plan may suspend a participant's obligation to make loan payments 
during a period of military service.
    Under the Board's current regulations, the TSP will declare a loan 
to be a taxable distribution if a participant separates from service 
without repaying the loan or is in nonpay status for more than one 
year. 5 CFR 1655.13(a)(1), (a)(2). A participant may be eligible to 
have the taxable distribution reversed if he or she is reemployed or 
restored to pay status under USERRA. 5 CFR 1620.45(b). If the 
participant is eligible to have the distribution reversed, the TSP will 
reinstate the loan so that the participant can resume loan payments, 
subject to limitations on the term of a

[[Page 35052]]

TSP loan, or give the participant an opportunity to repay the loan in 
full. If reinstated, a general purpose TSP loan must be repaid within 
five years of disbursement; a residential TSP loan must be repaid 
within 18 years of disbursement.
    The Executive Director proposes to amend Sec. 1620.45 to provide 
for the suspension of loan payments for a participant who enters nonpay 
status to perform military service beyond one year, thereby avoiding a 
taxable distribution. Interest will accrue on the loan during the 
period that payments are suspended. When the participant returns to pay 
status, the loan payments will resume and the period of military 
service will be added to the loan repayment period. Therefore, the 
participant or the employing agency must notify the TSP record keeper 
of the beginning and ending dates of military service.
    Under the proposed amendment, the TSP will continue to close a loan 
account and declare a taxable distribution if a participant separates 
from government employment and does not repay the loan, or if the 
participant is in nonpay status for more than one year and the TSP does 
not receive documentation that the nonpay status is due to military 
service. However, if the participant in fact separated or entered 
nonpay status to perform military service, he or she can later request 
that the loan be reinstated when the participant is reemployed or 
returns to pay status under USERRA.
    Current Sec. 1620.45(c) allows a participant who is reemployed 
pursuant to USERRA one year to decide whether to reinstate a loan or to 
return a mandatory withdrawal that was paid out when the participant 
separated from civilian service. In analogous situations, where 
participants are separated from Federal service and later reinstated, 
TSP regulations give participants 90 days to decide whether to 
reinstate a loan or return a withdrawal. See 5 CFR 1605.13(d) and (e). 
In the interest of conformity, the Executive Director proposes to amend 
Sec. 1620.45 to provide a 90-day period for the same decisions by 
members of the uniformed services.
    The Executive Director also proposes an amendment to the Board's 
loan regulations which is unrelated to USERRA. The TSP's loan 
regulations were first published in the Federal Register on January 10, 
1990, and amended on November 18, 1996, and August 26, 1998 (55 FR 978, 
61 FR 58754, 63 FR 45391, respectively). Those regulations are codified 
at 5 CFR part 1655. Current Sec. 1655.7 states that the interest rate 
for a TSP loan is established at the time the loan is approved and 
remains constant for the life of the loan. However, under the Soldiers' 
and Sailors' Civil Relief Act of 1940, 50 U.S.C. app. 526, when a 
person enters active duty military service, no obligation or liability 
incurred before entry into active duty military service may continue to 
bear an interest rate in excess of 6 percent per annum. The Board 
interprets the term ``obligation'' to apply to a TSP loan because a 
participant is required by statute and regulation to repay a TSP loan 
with interest, even though the repayment is to his or her own account. 
Therefore, the Executive Director is proposing to amend Sec. 1655.7 to 
provide that a participant who returns to civilian service from active 
duty military service may request that the interest rate on his or her 
TSP loan be reduced to 6 percent for the period the participant was in 
active duty military service. The proposed amendment also explains the 
process for requesting this benefit.

USERRA Definitions

    The Executive Director also proposes to revise the definition 
section of the USERRA regulation, 5 CFR 1620.41. Specifically, the 
definitions ``basic pay'' and ``leave without pay'' are deleted because 
they are not used in the regulatory text. In addition, the definitions 
``current contributions'' and ``reemployed or reemployment'' are 
simplified; the definition ``separation or separated'' is rewritten as 
``separate from civilian service'' to conform to the usage in the 
proposed rule; and the definitions ``retroactive period,'' 
``retroactive period beginning date,'' and ``retroactive period ending 
date'' are updated and condensed into one definition to reflect a 
recent amendment to FERSA allowing employees who are reemployed or 
returned to pay status immediately to begin making TSP contributions.

Death Benefits

    FERSA provides that a deceased participant's TSP account will be 
paid to his or her beneficiary or beneficiaries. 5 U.S.C. 8433(e) and 
8424(d). The Board's regulations governing the payment of a TSP death 
benefit were published in the Federal Register on June 13, 1997 (62 FR 
32426) and are codified at 5 CFR part 1651.
    Current Sec. 1651.14(c) states that a deceased participant's spouse 
may transfer a TSP death benefit payment to an individual retirement 
account (IRA), but not to another eligible retirement plan. That 
provision is based on section 402(c)(9) of the Internal Revenue Code 
(26 U.S.C. 402(c)(9)), in effect before January 1, 2002. However, the 
Internal Revenue Code was amended effective January 1, 2002, to provide 
that a death benefit may be transferred to any eligible retirement plan 
described at 26 U.S.C. 402(c)(8). See The Economic Growth and Tax 
Relief Reconciliation Act (EGTRRA) of 2001, Public Law 107-16, sec. 
641(d), 115 Stat. 38, at 120. The Executive Director is proposing to 
adopt this policy for the TSP by amending Sec. 1651.14(c).
    Since the TSP itself is an eligible retirement plan, the Executive 
Director also proposes to permit the spouse of a deceased TSP 
participant to transfer a TSP death benefit payment from the deceased 
participant's account to the spouse's TSP account (if he or she has 
one). Proposed Sec. 1651.14(c) explains how such a transfer can be 
requested.
    Finally, the proposed rule amends Sec. 1651.2, 1651.5, and 1651.14 
to substitute the word ``spouse'' for the words ``widow'' and 
``widower.'' This change conforms the terms used in the death benefit 
regulations to those used in TSP publications.

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 of 1980.

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.

List of Subjects

5 CFR Part 1605

    Claims, Employment benefit plans, Government employees, Military 
personnel, Pensions, Retirement.

5 CFR Part 1620

    District of Columbia, Employment benefit plans, Government 
employees, Military personnel, Pensions, Retirement.

[[Page 35053]]

5 CFR Part 1651

    Employment benefit plans, Government employees, Pensions, 
Retirement.

5 CFR Part 1655

    Employment benefit plans, Government employees, Military personnel, 
Pensions, Retirement.

Roger W. Mehle,
Executive Director, Federal Retirement Thrift Investment Board.
    For the reasons set forth in the preamble, the Board proposes to 
amend 5 CFR chapter VI as follows:

PART 1605--CORRECTION OF ADMINISTRATIVE ERRORS

    1. The authority citation for part 1605 is revised to read as 
follows:

    Authority: 5 U.S.C. 8351, 8432a, and 8474(b)(5) and (c)(1).

    Section 1605.14 also issued under Title II, Pub. L. 106-265, 114 
Stat. 770.
    Subpart D also issued under 5 U.S.C. 8432b(b)(4) and (i); Div. 
A, Title VI, sec. 661(b), Pub. L. 106-65, 114 Stat. 1654.

Subpart D--Miscellaneous Provisions

    2. Section 1605.31 is revised to read as follows:


Sec. 1605.31  Contributions missed as a result of military service.

    (a) Applicability. This section applies to employees who meet the 
conditions specified at 5 CFR 1620.40 and who are eligible to make up 
employee contributions or to receive employing agency contributions 
missed as a result of military service.
    (b) Missed employee contributions. An employee who separates or 
enters nonpay status to perform military service may be eligible to 
make up TSP contributions when he or she is reemployed or restored to 
pay status in the civilian service. Eligibility for making up missed 
employee contributions will be determined in accordance with the rules 
specified at 5 CFR part 1620, subpart E. Missed employee contributions 
must be made up in accordance with the rules set out in Sec. 1605.11(c) 
and the following procedures:
    (1) The employing agency will use the contribution election on file 
for the employee at the time he or she separated or was placed in 
nonpay status. If an employee terminated TSP contributions within two 
months before entry into military service, he or she may make a 
retroactive election to resume contributions for the first open season 
following the termination. The employee may also make retroactive 
contribution elections for any open season that occurred during the 
period of military service, as described at 5 CFR 1620.42.
    (2) The pay used to determine the amount of contributions eligible 
for makeup is the pay the employee would have earned had he or she 
remained continuously employed in the position held immediately before 
the separation or placement in nonpay status.
    (3) If the employee contributed to a uniformed services TSP account 
during the period of military service, the amount of employee 
contributions available for makeup will be reduced by the total amount 
of employee contributions made to the uniformed services TSP account. 
(This includes contributions from basic pay, incentive pay, and special 
pay, including bonus pay.)
    (c) Missed agency contributions. A FERS employee who separates or 
enters nonpay status to perform military service is eligible to receive 
agency makeup contributions when he or she is reemployed or restored to 
pay status in the civilian service, as follows:
    (1) The employee is entitled to receive the agency automatic (1%) 
contributions that he or she would have received had the employee 
remained in civilian service or pay status. Within 60 days of the 
employee's reemployment or restoration to pay status, the employing 
agency must calculate the agency automatic (1%) makeup contributions 
and report those contributions to the record keeper. After the 
contribution has been reported, the agency must submit lost earnings 
records for the contribution.
    (2) An employee who contributed to a uniformed services TSP account 
during the period of military service is also immediately entitled to 
receive agency matching makeup contributions to his or her civilian 
account for the employee contributions to the uniformed services 
account that were deducted from his or her basic pay, subject to any 
reduction in matching contributions required by paragraph (c)(4) of 
this section. However, an employee is not entitled to receive agency 
matching makeup contributions on contributions that were deducted from 
his or her incentive pay or special pay, including bonus pay, while 
performing military service.
    (3) An employee who makes up missed contributions is entitled to 
receive attributable agency matching makeup contributions (unless the 
employee has already received the maximum amount of matching 
contributions, as described in paragraphs (c)(2) and (c)(4) of this 
section).
    (4) If the employee received uniformed services matching 
contributions, the agency matching makeup contributions will be reduced 
by the amount of the uniformed services matching contributions.
    (d) Lost earnings. The employing agency will submit lost earnings 
records pursuant to 5 CFR part 1606 for missed agency contributions 
received by the employee under paragraph (c) of this section. The 
employee will elect to have the lost earnings calculated using either 
the rates of return based on the contributions allocation(s) on file 
for the participant during the period of military service or using the 
rates of return for the G Fund; the participant must make this election 
at the same time his or her makeup schedule is established pursuant to 
Sec. 1606.11(c).

PART 1620--EXPANDED AND CONTINUING ELIGIBILITY

    3. The authority citation for part 1620 continues to read as 
follows:

    Authority: 5 U.S.C. 8474(b)(5) and (c)(1).

    Subpart C also issued under 5 U.S.C. 8440a(b)(7), 8440b(b)(8), 
and 8440c(b)(8).
    Subpart D also issued under Pub. L. 104-106, sec. 1043(b), 110 
Stat. 186, 434-5; and Pub. L. 101-508, sec. 7202(m)(2), 104 Stat. 
1388.
    Subpart E also issued under 5 U.S.C. 8432b(i) and Div. A, Title 
VI, sec. 661(b), Pub. L. 106-65, 114 Stat. 1654.

Subpart E--Uniformed Services Employment and Reemployment Rights 
Act (USERRA)--Covered Military Service

    4. Section 1620.41 is revised to read as follows:


Sec. 1620.41  Definitions.

    As used in this subpart:
    Current contributions means contributions that must be made for the 
current pay date which is reported on the journal voucher that 
accompanies the payroll submission.
    Nonpay status means an employer-approved temporary absence from 
duty.
    Reemployed or returned to pay status means reemployed in or 
returned to a pay status, pursuant to 38 U.S.C. chapter 43, to a 
position that is subject to 5 U.S.C. 8351 or chapter 84.
    Retroactive period means the period for which an employee can make 
up missed employee contributions and receive retroactive agency 
contributions. It begins the day after the employee separates or enters 
nonpay status to perform military service and ends when the employee is 
reemployed or returned to pay status.

[[Page 35054]]

    Separate from civilian service means to cease employment with the 
Federal Government, the U.S. Postal Service, or with any other employer 
from a position that is deemed to be civilian Government employment for 
purposes of participating in the TSP, for 31 or more full calendar 
days.
    5. Section 1620.42 is revised to read as follows:


Sec. 1620.42  Processing TSP contribution elections.

    (a) Time for filing election. Upon reemployment or return to pay 
status, an employee has 60 days to submit contribution elections to 
make current contributions and to make up missed contributions. An 
employee's right to make a retroactive TSP contribution election will 
expire if the election is not made within 60 days of the participant's 
reemployment or return to pay status. After the 60-day contribution 
election period expires, the employee must wait for an open season to 
submit a contribution election to make current contributions.
    (b) Current contributions. An election to make current 
contributions will be effective as soon as administratively feasible, 
but no later than the first day of the first full pay period after it 
is received by the employing agency.
    (c) Makeup contributions. An election to make up contributions will 
be processed as follows:
    (1) If the employee had a valid contribution election on file when 
he or she separated or entered nonpay status to perform military 
service, that election form will be reinstated for purposes of makeup 
contributions, unless the employee submits new contribution elections 
effective for any missed open season.
    (2) An employee who terminated contributions within two months of 
entering military service will be eligible to make a retroactive 
contribution election for the first open season that occurs after the 
effective date that the contributions were terminated. This election 
may be made even if the termination was made outside an open season.
    6. Section 1620.44 is amended by revising the last sentence to read 
as follows:


Sec. 1620.44  Restoring forfeited agency automatic (1%) contributions.

    * * * The employing agency will follow the procedure described in 
Sec. 1620.46(e) to have those funds restored.
    7. Section 1620.45 is revised to read as follows:


Sec. 1620.45  Suspending TSP loans, restoring post-employment 
withdrawals, and reversing taxable distributions.

    (a) Suspending TSP loans during nonpay status. If the TSP is 
notified that an employee entered into a nonpay status to perform 
military service, any outstanding TSP loan from a civilian TSP account 
will be suspended, that is, it will not be declared a taxable 
distribution while the employee is performing military service.
    (1) Interest will accrue on the loan balance during the period of 
suspension. When the employee returns to civilian pay status, the 
employing agency will resume the deduction of loan payments from the 
participant's basic pay and the TSP will reamortize the loan (which 
will include interest accrued during the period of military service). 
The loan repayment term will be extended by the employee's period of 
military service. Consequently, when the employee returns to pay 
status, the TSP record keeper must receive documentation to show the 
beginning and ending dates of military service.
    (2) If the TSP does not receive documentation that the employee 
entered into nonpay status to perform military service and the period 
of missed loan repayments extends beyond one year, the loan will be 
closed and the outstanding loan balance (including accrued interest) 
will be declared a taxable distribution. However, the taxable 
distribution can be reversed in accordance with paragraph (c) of this 
section.
    (b) Restoring post-employment withdrawals. An employee who 
separates from civilian service to perform military service and who 
receives an automatic cashout of his or her account may return to the 
TSP an amount equal to the amount of the payment. The employee must 
notify the TSP record keeper of his or her intent to return the 
withdrawn funds within 90 days of the date the employee returns to 
civilian service or pay status; if the employee is eligible to return a 
withdrawal, the TSP record keeper will then inform the employee of the 
actions that must be taken to return the funds.
    (c) Reversing taxable distributions. An employee may request that a 
taxable loan distribution be reversed if the taxable distribution 
resulted from the employee's separation or placement in nonpay status 
to perform military service. The TSP will reverse the taxable 
distribution under the process described as follows:
    (1) An employee who received a post-employment withdrawal when he 
or she separated to perform military service can have a taxable 
distribution reversed only if the withdrawn amount is returned as 
described in paragraph (b) of this section;
    (2) A taxable loan distribution can be reversed either by 
reinstating the loan or by repaying it in full. The TSP loan can be 
reinstated only if the employee agrees to repay the loan within the 
original loan repayment term plus the length of military service, and 
if, after reinstatement of the loan, the employee will have no more 
than two outstanding loans, only one of which is a residential loan; 
and
    (3) The employee must notify the TSP record keeper of his or her 
intent to reverse a taxable loan distribution within 90 days of the 
date the employee returns to civilian service or pay status; if the 
employee is eligible to reverse a taxable loan distribution, the TSP 
record keeper will then inform the employee of the actions that must be 
taken to reverse the distribution.
    (d) Earnings. Employees will not receive retroactive earnings on 
amounts returned to their accounts under this section.

PART 1651--DEATH BENEFITS

    8. The authority citation for part 1651 is revised to read as 
follows:

    Authority: 5 U.S.C. 8424(d), 8432(j), 8433(e), 8435(c)(2), 
8474(b)(5) and 8474(c)(1).

    9. Section 1651.1 is amended by adding a new definition, in 
alphabetical order, to read as follows:


Sec. 1651.1  Definitions.

* * * * *
    Eligible retirement plan means an individual retirement account 
described in I.R.C. section 408(a) (26 U.S.C. 408(a)); an individual 
retirement annuity described in I.R.C. section 408(b) (26 U.S.C. 
408(b)) (other than an endowment contract); a qualified trust; an 
annuity plan described in I.R.C. section 403(a) (26 U.S.C. 403(a)); an 
annuity contract described in I.R.C. section 403(b) (26 U.S.C. 403(b)); 
and an eligible deferred compensation plan described in I.R.C. section 
457(b) (26 U.S.C. 457(b)) which is maintained by an eligible employer 
described in I.R.C. section 457(e)(1)(A) (26 U.S.C. 457(e)(1)(A)).
* * * * *
    10. Section 1651.2 is amended by revising paragraph (a)(2) to read 
as follows:


Sec. 1651.2  Entitlement to benefits.

    (a) * * *
    (2) If there is no designated beneficiary, to the spouse of the 
participant in accordance with Sec. 1651.5;
* * * * *

[[Page 35055]]

    11. Section 1651.5 is amended by revising the section heading and 
the first sentence to read as follows:


Sec. 1651.5  Spouse of the participant.

    For purposes of payment under Sec. 1651.2(a)(2), the spouse of the 
participant is the person to whom the participant was married on the 
date of death. * * *
    12. Section 1651.14 is amended by revising paragraph (c) to read as 
follows:


Sec. 1651.14  How payment is made.

* * * * *
    (c) Payment to the participant's spouse. The spouse of the 
participant may request that the TSP transfer all or a portion of the 
payment to an eligible retirement plan (including the spouse's TSP 
account, if he or she already has one). A transfer to a spouse's TSP 
account is permitted only if the spouse is not receiving monthly 
payments from the account. In order to request such a transfer, a 
spouse must file Form TSP-13-S, Spouse's Election to Transfer to IRA or 
Other Eligible Retirement Plan, with the TSP record keeper.
* * * * *

PART 1655--LOAN PROGRAM

    13. The authority citation for part 1655 is revised to read as 
follows:

    Authority: 5 U.S.C. 8433(g) and 8474; 50 U.S.C. App. 526.

    14. Section 1655.7 is amended by revising paragraph (c) to read as 
follows:


Sec. 1655.7  Interest rate.

* * * * *
    (c) The interest rate calculated under this section remains fixed 
until the loan is repaid, unless the participant informs the TSP record 
keeper that he or she entered into active duty military service and 
requests that the interest rate on a loan issued before entry into 
active duty military service be reduced to an annual rate of 6 percent 
for the period of such service. The participant must provide the record 
keeper with the beginning and ending dates of active duty military 
service.

[FR Doc. 02-12344 Filed 5-16-02; 8:45 am]
BILLING CODE 6760-01-P