[Federal Register Volume 75, Number 230 (Wednesday, December 1, 2010)]
[Rules and Regulations]
[Pages 74607-74608]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-29886]



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 Rules and Regulations
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  Federal Register / Vol. 75, No. 230 / Wednesday, December 1, 2010 / 
Rules and Regulations  

[[Page 74607]]



FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

5 CFR Part 1605


Correction of Administrative Errors

AGENCY: Federal Retirement Thrift Investment Board.

ACTION: Final rule.

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SUMMARY: The Federal Retirement Thrift Investment Board (Agency) is 
amending its regulations to provide a constructed share price for 
retired Lifecycle funds. The Agency will use the constructed share 
price to make error corrections after December 31st of the target year.

DATES: This final rule is effective January 1, 2011.

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)).
    On October 14, 2010, the Agency published a proposed rule with 
request for comments in the Federal Register (75 FR 63106). The Agency 
received no comments on its proposed regulation. Therefore, the Agency 
is publishing the proposed rule as final without modification.

Constructed Share Price

    The Agency currently offers five Lifecycle funds: L Income, L 2010, 
L 2020, L 2030, and L 2040. The Agency will retire the L 2010 Fund when 
it reaches its target date of December 31, 2010. Upon retiring the L 
2010 Fund, the Agency will transfer all money invested in the L 2010 
Fund to the L Income Fund. Participants will no longer be able to make 
contributions to the L 2010 Fund after December 31, 2010. In effect, 
the L 2010 Fund will no longer exist.
    The Agency anticipates receiving late and makeup contributions that 
would have been invested in the L 2010 Fund had they been made on time. 
Likewise, the Agency anticipates needing to remove funds erroneously 
contributed to the L 2010 Fund prior to its retirement date. The Agency 
uses the current share price of the applicable investment fund when 
calculating the value of late contributions, makeup contributions, and 
negative adjustments. Because the L 2010 Fund will no longer exist, the 
Agency must construct an appropriate ``current'' share price in order 
to make error corrections involving the L 2010 Fund after December 31, 
2010.
    The Agency proposes to calculate the constructed share price for 
the L 2010 Fund as follows: The constructed share price is the L 2010 
Fund share price on December 31, 2010, multiplied by the current L 
Income Fund share price, divided by the L Income Fund share price on 
December 31, 2010. This calculation reflects the impact of merging 
assets of the L 2010 Fund into the L Income Fund on December 31, 2010. 
The Agency will apply this calculation to retired Lifecycle funds in 
the future by substituting the specific Lifecycle fund and target 
retirement date as follows: The constructed share price is the retired 
Lifecycle fund share price on December 31 of the retirement year, 
multiplied by the current L Income Fund share price, divided by the L 
Income Fund share price on December 31 of the retirement year.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities. This regulation will 
affect Federal employees and members of the uniformed services who 
participate in the Thrift Savings Plan, which is a Federal defined 
contribution retirement savings plan created under the Federal 
Employees' Retirement System Act of 1986 (FERSA), Public Law 99-335, 
100 Stat. 514, and which is administered by the Agency.

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.A01DE0.

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. 804(2).

List of Subjects in 5 CFR Part 1605

    Claims, Government employees, Pensions, Retirement.

Gregory T. Long,
Executive Director, Federal Retirement Thrift Investment Board.

0
For the reasons set forth in the preamble, the Agency amends 5 CFR 
chapter VI as follows:

PART 1605--CORRECTION OF ADMINISTRATIVE ERRORS

0
1. The authority citation for part 1605 continues to read as follows:

    Authority:  5 U.S.C. 8351, 8432a, and 8474(b)(5) and (c)(1). 
Subpart B also issued under section 1043(b) of Pub. L. 104-106, 110 
Stat. 186 and sec. 7202(m)(2) of Pub. L. 101-508, 104 Stat. 1388.


0
2. Amend Sec.  1605.2, by revising paragraph (b)(1)(iii) and adding 
paragraph (b)(1)(iv) to read as follows:


Sec.  1605.2  Calculating, posting, and charging breakage.

* * * * *

[[Page 74608]]

    (b) * * *
    (1) * * *
    (iii) Determine the dollar value on the posting date of the number 
of shares the participant would have received had the contributions or 
loan payments been made on time. If the contributions or loan payments 
would have been invested in a Lifecycle fund that is retired on the 
posting date, the constructed share price shall equal the retired 
Lifecycle fund share price on December 31 of the retirement year, 
multiplied by the current L Income Fund share price, divided by the L 
Income Fund share price on December 31 of the retirement year. The 
dollar value shall be the number of shares the participant would have 
received had the contributions or loan payments been made on time 
multiplied by the constructed share price.
    (iv) The difference between the dollar value of the contribution or 
loan payment on the posting date and the dollar value of the 
contribution or loan payment on the ``as of'' date is the breakage.

* * * * *

0
3. Amend Sec.  1605.12, by revising paragraph (c)(2)(ii) to read as 
follows:


Sec.  1605.12  Removal of erroneous contributions.

* * * * *
    (c) * * *
    (2) * * *
    (ii) Multiply the price per share on the date the adjustment is 
posted by the number of shares calculated in paragraph (c)(2)(i) of 
this section. If the contribution was erroneously contributed to a 
Lifecycle fund that is retired on the date the adjustment is posted, 
the price per share shall equal the retired Lifecycle fund share price 
on December 31 of the retirement year, multiplied by current L Income 
Fund share price, divided by the L Income Fund share price on December 
31 of the retirement year.
* * * * *
[FR Doc. 2010-29886 Filed 11-30-10; 8:45 am]
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