[Federal Register Volume 71, Number 153 (Wednesday, August 9, 2006)]
[Proposed Rules]
[Pages 45437-45438]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-12895]


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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. 71, No. 153 / Wednesday, August 9, 2006 / 
Proposed Rules  

[[Page 45437]]



FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

5 CFR Part 1653


Court Orders and Legal Processes Affecting Thrift Savings Plan 
Accounts

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 (Agency) proposes to amend the Thrift Savings Plan's 
(TSP's) regulations to improve processing of court orders that seek to 
divide a TSP account pursuant to a divorce. The proposed change would 
limit the types of court orders the Agency would accept to either one 
that requires payment of a specific dollar amount or that requires 
payment of a stated percentage or fraction of the account. The change 
would no longer allow formula court orders.

DATES: Comments must be received on or before September 8, 2006.

ADDRESSES: Comments may be sent to Thomas K. Emswiler, General Counsel, 
Federal Retirement Thrift Investment Board, 1250 H Street, NW., 
Washington, DC 20005. The Agency's fax number is (202) 942-1676.

FOR FURTHER INFORMATION CONTACT: Megan Graziano on (202) 942-1659.

SUPPLEMENTARY INFORMATION: The Agency 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 
are 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. The TSP is similar to 
cash or deferred arrangements established for private-sector employees 
under section 401(k) of the Internal Revenue Code (26 U.S.C. 401(k)).
    The Executive Director proposes to amend the Agency's regulations 
to limit acceptable court orders that divide a TSP account to those 
that either require payment of a specific dollar amount or that require 
payment of a stated percentage or fraction of the account.
    Currently, the Agency will also accept a court order that requires 
payment of an amount determined by a formula that yields a 
mathematically possible result. All variables in the formula must have 
values that are readily ascertainable.
    Formula-based court order are overly complex and often are not 
acceptable by the Agency or, if acceptable, would result in payments 
that were not anticipated by either party to the order. As a 
consequence, the parties must return to court and obtain an amended 
order. Additionally, the formula court order requires the Agency to 
interpret the order and results in considerable administrative expense. 
These expenses are borne by all TSP participants.
    The proposed regulation will make it easier for the parties in a 
divorce to ensure that the Agency will divide a TSP account in 
accordance with their wishes. The proposed regulation simplifies the 
types of court orders the Agency will accept. The proposed regulation 
contains model paragraphs that attorneys can use to ensure that, in 
drafting orders, the language they select will both produce the 
intended result and meet the Agency's processing requirements.
    Consequently, in order to ensure accuracy of court order payments 
and to ensure that the administrative expenses of the court order 
program are reasonable for a retirement savings plan, the Executive 
Director proposes to amend Agency regulations to limit the types of 
court orders the Agency will accept to those that either require 
payment of a specific dollar amount or that require payment of a stated 
percentage or fraction of the account.

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.

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.

Submission to Congress and the Government Accountability Office

    Pursuant to 5 U.S.C. 801(a)(1)(A), the Agency submitted a report 
containing this rule and other required information to the U.S. Senate, 
the U.S. House of Representatives, and the Comptroller General of the 
United States before publication of this rule in the Federal Register. 
This rule is not a major rule as defined at 5 U.S.C. section 804(2).

List of Subjects in 5 CFR Part 1653

    Court Orders and Legal Processes Affecting Thrift Savings Plan 
Accounts.

Gary A. Amelio,
Executive Director, Federal Retirement Thrift Investment Board.

    For the reasons set forth in the preamble, the Agency proposes to 
amend 5 CFR chapter VI as follows:

PART 1653--COURT ORDERS AND LEGAL PROCESSES AFFECTING THRIFT 
SAVINGS PLAN ACCOUNTS

    1. The authority citation for part 1653 continues to read as 
follows:

    Authority: 5 U.S.C. 8435, 8436(d), 8437(e), 8439(a)(3), 
8474(b)(5), and 8474(c)(1).

    2. Amend Sec.  1653.2 by revising paragraphs (a)(3)(iii) and 
(a)(3)(iv) to read as follows:


Sec.  1653.2  Qualifying retirement benefits court order.

    (a) * * *
    (3) * * *
    (i) * * *
    (ii) * * *
    (iii) A survivor annuity as provided in 5 U.S.C. 8435(d).
    (iv) The following examples would qualify to require payment from 
the TSP, although ambiguous or conflicting language used elsewhere 
could cause the order to be rejected.

[[Page 45438]]

    Example (1). ORDERED: [payee's name, Social Security number (SSN), 
and address] is awarded $------ from the [civilian or uniformed 
services] Thrift Savings Plan account of [participant's name, SSN, and 
address].
    Example (2). ORDERED: [payee's name, SSN, and address] is awarded 
------% of the [civilian and/or uniformed services] Thrift Savings Plan 
account[s] of [participant's name, SSN, and address] as of [date].
    Example (3). ORDERED: [payee's name, SSN, and address] is awarded 
[fraction] of the [civilian and/or uniformed services] Thrift Savings 
Plan account[s] of [participant's name, SSN, and address] as of [date].

    Note: The following optional language can be used in conjunction 
with any of the above examples. FURTHER ORDERED: Earnings will be 
paid on the amount of the entitlement under this ORDER until payment 
is made.

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[FR Doc. E6-12895 Filed 8-8-06; 8:45 am]
BILLING CODE 6760-01-P