[Federal Register Volume 74, Number 117 (Friday, June 19, 2009)]
[Rules and Regulations]
[Pages 29111-29112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-14478]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
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Federal Register / Vol. 74, No. 117 / Friday, June 19, 2009 / Rules
and Regulations
[[Page 29111]]
FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
5 CFR Part 1600
Employee Contribution Elections and Contribution Allocations
AGENCY: Federal Retirement Thrift Investment Board.
ACTION: Interim final rule with request for comments.
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SUMMARY: The Federal Retirement Thrift Investment Board (FRTIB) is
amending its regulation pertaining to the timing of agency
contributions to reflect changes the FRTIB anticipates will be made by
the Thrift Savings Plan Enhancement Act of 2009 (Act). The Act provides
that Agency Automatic (1%) Contributions and Agency Matching
Contributions shall commence immediately. The regulatory amendment is
necessary because FRTIB regulations follow current law, which provides
that Agency Automatic (1%) Contributions and Agency Matching
Contributions shall not commence until the equivalent of the second
open season that begins after the employee commenced employment. The
FRTIB is setting a August 1, 2009 effective date for this regulation to
allow employing agencies sufficient time to make the necessary computer
programming changes to implement it.
DATES: Effective Date: This interim final rule takes effect either June
19, 2009 or later, if the President has not signed the Act into law on
that date. If you want to know the effective date of this rule, call or
write the FRTIB's contact person. The FRTIB will publish a document
announcing the effective date in the Federal Register.
Comment Date: Comments on this interim final rule must be received
on or before July 20, 2009.
ADDRESSES: You may submit comments using one of the following methods:
Federal Rulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Office of General Counsel, Attn: Laurissa Stokes,
Federal Retirement Thrift Investment Board, 1250 H Street, NW.,
Washington, DC 20005.
Hand Delivery/Courier: The address for sending comments by
hand delivery or courier is the same as that for submitting comments by
mail.
Facsimile: Comments may be submitted by facsimile at (202)
942-1676.
This is an interim final rule with a request for public comment.
The most helpful comments explain the reason for any recommended change
and include data, information, and the authority that supports the
recommended change. We will post all substantive comments (including
any personal information provided) without change (with the exception
of redaction of SSNs, profanities, et cetera) on http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Laurissa Stokes at (202) 942-1645.
SUPPLEMENTARY INFORMATION: The Agency administers the Thrift Savings
Plan (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)).
Employee Contribution Elections and Contribution Allocations
The FRTIB is amending its regulations pertaining to the timing of
agency contributions. H.R. 1256, which includes the Thrift Savings Plan
Enhancement Act of 2009 (Act), passed the United States Senate on June
11, 2009, and passed the United States House of Representatives on June
12, 2009. The White House has indicated that the President will sign
the Act into law.
Among other things, the Act would provide for immediate Agency
Automatic (1%) and Matching Contributions.
Under the law in force prior to the Thrift Savings Plan Open
Elections Act of 2004, newly hired Federal employees and members of the
uniformed services had a 60-day period in which they could begin making
TSP contributions. If they failed to do so, they were required to wait
until an open season period to begin making contributions. Open seasons
ran each year from April 15 to June 30 and from October 15 to December
31. In addition, TSP participants could only change their contributions
during an open season. Agency Automatic (1%) Contributions and Agency
Matching Contributions would begin for newly eligible employees during
the second open season after which an employee was first eligible to
participate in the TSP.
The Thrift Savings Plan Open Elections Act (bill) eliminated the
statutory provisions relating to open seasons. It thereby allowed
Federal employees and members of the uniformed services to begin or
alter their contributions at any time. The bill did not, however,
change when agency contributions would begin for newly eligible
employees. As a consequence, agency contributions would still not start
until the second open season that began after the employee commenced
employment.
However, since the bill eliminated the statutory provisions
relating to open seasons, it was necessary for the FRTIB to promulgate
a regulation explaining when Agency Automatic (1%) and Matching
Contributions would commence. Its regulation is codified at 5 CFR
1600.13. Since the Act provides for immediate Agency Automatic (1%) and
Matching Contributions, it is necessary that the Agency immediately
promulgate an interim final rule that is consistent with the Act.
Pursuant to his authority to prescribe such regulations as may be
necessary for the administration of the Thrift Savings Plan, (5 U.S.C.
8474(b)(5)), to include section 8432 (id.) and as may be necessary to
carry out his responsibilities as Executive Director (5 U.S.C.
8474(b)(5)), the Executive Director has given employing agencies until
the first full pay period in August 2009 to implement this regulation.
He selected the first full pay period in August 2009 implementation
date after
[[Page 29112]]
consulting with employing agencies and determining that this would give
agencies sufficient time to modify their personnel and payroll systems
to provide for immediate agency contributions. That is, in order to
efficiently administer the Thrift Savings Plan and to carry out his
responsibilities as Executive Director, he determined it necessary to
give employing agencies sufficient time to modify their computer
systems to carry out the requirements of this regulation and the law
that was passed by the House less than eighteen hours after it was
passed by the Senate. This flexibility will also benefit those
participants whose employing agencies are capable of implementing
sooner. That is, their employing agencies may begin making
contributions on behalf of these employees as soon as practicable.
Providing implementing flexibility is consistent with the grant of
authority given to the Executive Director by the Thrift Savings Plan
Enhancement Act of 2009. Section 102 of the Act provides for
``Automatic Enrollments and Immediate Employing Agency Contributions.''
Immediate Employing Agency Contributions was meant as an enhancement to
automatic enrollment. For example, it envisions a 3 percent default
contribution rate in order to provide participants with a dollar for
dollar match on their contributions. It specifies that the default
contribution rate may not exceed 5 percent, which would provide
participants with the greatest matching contributions allowed by law.
Section 102 gives the Executive Director the authority to promulgate
regulations pertaining to automatic enrollment. The Executive Director
relies on this authority as well as the authorities specified above in
promulgating this regulation.
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 and members of the
uniformed services.
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
section 1532 is not required.
Submission to Congress and the General Accounting Office
Pursuant to 5 U.S.C. 810(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. 814(2).
List of Subjects in 5 CFR Part 1600
Government employees, Pensions, Retirement.
Gregory T. Long,
Executive Director, Federal Retirement Thrift Investment Board.
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For the reasons stated in the preamble, the Federal Retirement Thrift
Investment Board amends part 1600 of title 5 of the Code of Federal
Regulations as follows:
PART 1600--EMPLOYEE CONTRIBUTION ELECTIONS AND CONTRIBUTION
ALLOCATIONS
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1. The authority citation for part 1600 is revised to read as follows:
Authority: 5 U.S.C. 8351, 8432(a), 8432(b), 8432(c), 8432(j),
8474(b)(5) and (c)(1), Thrift Savings Plan Enhancement Act of 2009,
section 102.
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2. Revise Sec. 1600.13 to read as follows:
Sec. 1600.13 Timing of agency contributions.
An employee appointed or reappointed to a position covered by FERS
is immediately eligible to receive agency contributions. In order to
enable agencies to modify their personnel and payroll systems, agencies
must implement this regulation as soon as practicable, but in no case
later than the first full pay period in August 2009. Effective with the
first full pay period of August 2009, all eligible employees must
receive immediate agency contributions.
[FR Doc. E9-14478 Filed 6-18-09; 8:45 am]
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