[Federal Register Volume 79, Number 240 (Monday, December 15, 2014)]
[Rules and Regulations]
[Pages 74023-74025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-29334]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 347

RIN 1530-AA08


Regulations Governing Retirement Savings Bonds

AGENCY: Bureau of the Fiscal Service, Fiscal Service, Treasury.

ACTION: Final rule.

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SUMMARY: The United States Department of the Treasury, Bureau of the 
Fiscal Service, offers a new nonmarketable, electronic retirement 
savings bond for Treasury's new retirement savings program. The bonds 
will be issued to a designated custodian for Roth individual retirement 
accounts established under Treasury's program. This new savings bond is 
only available to participants in the retirement savings program and 
will protect the principal contributed while earning interest at a rate 
previously available only to federal employees invested in the 
Government Securities Investment Fund (G Fund) of their Thrift Savings 
Plan.

DATES: This final rule is effective December 15, 2014.

ADDRESSES: You can download this Final Rule at the following Internet 
addresses: http://www.gpo.gov; or http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: 
    Technical information: Kimberly Reese, Program Manager, 304-480-
7929 or [email protected].
    Legal information: David T. Copenhaver, Deputy Chief Counsel, 304-
480-8692 or [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    The Secretary of the Treasury is authorized under Chapter 31 of 
Title 31, United States Code, to issue United States obligations and 
offer them for sale under such terms and conditions as the Secretary 
may prescribe. On January 29, 2014, the President of the United States 
issued a Presidential Memorandum directing the Secretary to develop a 
new retirement savings security focused on reaching new and small-
dollar savers. In response, the Secretary is offering electronic 
retirement savings bonds for Treasury's retirement savings program.
    This new retirement savings program allows individuals to establish 
Roth individual retirement accounts (Roth IRAs) with Treasury's 
designated custodian. These accounts will allow savers to begin 
investing for retirement with no start-up costs and no fees. 
Participants in the program can continue to make periodic electronic 
contributions in any amount to their account.
    Amounts contributed by participants in the program will be invested 
exclusively in Treasury's new retirement savings bonds. The designated 
custodian for the program will purchase and hold these new bonds for 
the benefit of the participants. This new savings bond is only 
available to participants in Treasury's new retirement savings program 
and will protect the principal contributed while earning interest at a 
rate previously available only to federal employees invested in the 
Government Securities Investment Fund (G Fund) of their Thrift Savings 
Plan.
    Individuals can continue to participate in the program until their 
account balance reaches $15,000 or until they have participated in the 
program for 30 years, whichever occurs first. At any time, participants 
can transfer their balance to a commercial financial services provider 
to take advantage of the broad array of retirement products available 
in the marketplace. Because the accounts offered through the program 
are Roth IRAs, participants also have the flexibility to withdraw their 
contributions at any time without a penalty. Participants can keep 
their account and can continue investing in the retirement savings bond 
even if they change jobs.
    With the retirement savings bond and Treasury's retirement savings 
program, American families can begin to build for their retirement. 
Treasury's program serves as a stepping stone to the broader array of 
retirement products available in today's marketplace. This rule 
establishes the terms and conditions of the retirement savings bonds.

II. Procedural Requirements

A. Administrative Procedure Act (APA)

    Because this rule relates to United States securities, which are 
contracts between Treasury and the owner of the security, this rule 
falls within the contract exception to the APA at 5 U.S.C. 553(a)(2). 
As a result, the notice, public comment, and delayed effective date 
provisions of the APA are inapplicable to this rule.

B. Congressional Review Act (CRA)

    This rule is not a major rule pursuant to the CRA, 5 U.S.C. 801 et 
seq. It is not expected to lead to any of the results listed in 5 
U.S.C. 804(2). This rule may take immediate effect after we submit a 
copy of it to Congress and the Comptroller General.

C. Paperwork Reduction Act (PRA)

    There is no new collection of information contained in this final 
rule that would be subject to the PRA, 44 U.S.C. 3501 et seq. Under the 
PRA, an agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
OMB control number.

[[Page 74024]]

D. Regulatory Flexibility Act

    The provisions of the Regulatory Flexibility Act, 5 U.S.C. 601 et 
seq., do not apply to this rule because, pursuant to 5 U.S.C. 
553(a)(2), it is not required to be issued with notice and opportunity 
for public comment.

E. Executive Order 12866

    This rule is not a significant regulatory action pursuant to 
Executive Order 12866.

List of Subjects in 31 CFR Part 347

    Government securities, Savings bonds.

    Accordingly, for the reasons set out in the preamble, amend 31 CFR 
Chapter II, Subchapter A, by adding part 347 to read as follows:

PART 347--REGULATIONS GOVERNING RETIREMENT SAVINGS BONDS

Subpart A--General Information
Sec.
347.0 Offering of securities.
347.1 Applicability.
347.2 Official agencies.
347.3 Definitions.
Subpart B--Registration
347.10 Authorized form of registration.
347.11 Crediting of retirement savings bonds.
Subpart C--Limitations on Additions
347.20 Annual additions to a retirement savings bond.
347.21 Individual additions to a retirement savings bond.
Subpart D--General Provisions for Payment
347.30 Payment (redemption).
Subpart E--Interest
347.40 Computation of interest.
347.41 Maturity.
Subpart F--Miscellaneous
347.50 Waiver of regulations.
347.51 Additional requirements; bond of indemnity.
347.52 Supplements, amendments, or revisions.

    Authority:  5 U.S.C. 301; 12 U.S.C. 90; 31 U.S.C. 3105.

Subpart A--General Information


Sec.  347.0  Offering of securities.

    The Secretary of the Treasury, under the authority of Title 31, 
Chapter 31, offers retirement savings bonds to the designated Roth IRA 
custodian for Treasury's retirement savings program. The bonds will be 
issued to and held by the designated custodian, on behalf of 
participants in Treasury's program. The current offer is effective on 
the publication date of this rule. This offering will continue until 
terminated by the Secretary. Treasury's Fiscal Assistant Secretary is 
authorized to act on behalf of the Secretary on all matters contained 
in these regulations.


Sec.  347.1  Applicability.

    The regulations in this part apply to retirement savings bonds 
issued to the designated Roth IRA custodian for Treasury's retirement 
savings program on behalf of program participants.


Sec.  347.2  Official agencies.

    (a) The Bureau of the Fiscal Service of the Department of the 
Treasury is responsible for administering Treasury's retirement savings 
program and issuing the retirement savings bonds to the designated Roth 
IRA custodian.
    (b) Communications concerning transactions related to an 
Individual's Roth IRA should be addressed to the designated Roth IRA 
custodian.


Sec.  347.3  Definitions.

    (a) Retirement savings bond, as used in this part, means an 
interest bearing electronic United States savings bond issued to the 
designated Roth IRA custodian.
    (b) Designated Roth IRA custodian, designated custodian, or 
custodian means the entity designated by the Bureau of the Fiscal 
Service to act as the custodian for Roth IRA accounts opened on behalf 
of program participants in Treasury's retirement savings program.
    (c) Individual means a person eligible to contribute to a Roth IRA 
under 26 U.S.C. 408A.
    (d) Program participant means an individual who has established a 
Roth IRA with the designated Roth IRA custodian.
    (e) Roth IRA means an individual retirement account defined under 
26 U.S.C. 408A.
    (f) Treasury means the United States Department of the Treasury.
    (g) Secretary means the Secretary of the Treasury.

Subpart B--Registration


Sec.  347.10  Authorized form of registration.

    (a) Retirement savings bonds are issued to the designated Roth IRA 
custodian for Treasury's retirement savings program. No other 
registrations are permitted.
    (b) In the event Treasury designates a successor designated Roth 
IRA custodian, retirement savings bonds held by the predecessor 
custodian will be reissued to the successor custodian.


Sec.  347.11  Crediting of retirement savings bonds.

    Each retirement savings bond issued to the designated Roth IRA 
custodian must be credited to a single individual retirement account 
established through Treasury's retirement savings program with the 
custodian.

Subpart C--Limitations on Additions


Sec.  347.20  Annual additions to a retirement savings bond.

    The amount that may be initially contributed or added to a 
retirement savings bond in a calendar year by the designated Roth IRA 
custodian on behalf of any program participant is limited to the annual 
Roth IRA contribution limits provided in 26 CFR 1.408A-3. The total 
value of a retirement savings bond that may be held by the designated 
Roth IRA custodian on behalf of any program participant shall not 
exceed $15,000.00.


Sec.  347.21  Individual additions to a retirement savings bond.

    The Commissioner of the Fiscal Service, as designee of the 
Secretary of the Treasury, is authorized to establish minimum amounts 
for initial and additional contributions to a retirement savings bond.

Subpart D--General Provisions for Payment


Sec.  347.30  Payment (redemption).

    Payment of retirement savings bonds will be made to the designated 
Roth IRA custodian upon the custodian's submission of a request for 
redemption to the Bureau of the Fiscal Service. The custodian shall 
request the redemption of all retirement savings bonds at their 
respective maturity. The custodian shall request the partial redemption 
of bonds held on behalf of program participants upon the request of an 
individual entitled to amounts in the Roth IRA. Retirement savings bond 
redemptions will be rounded to the nearest one cent.

Subpart E--Interest


Sec.  347.40  Computation of interest.

    Retirement savings bonds earn interest at the same annual 
percentage rate as securities issued to the Government Securities 
Investment Fund (G Fund) in the Thrift Savings Plan for federal 
employees. The Secretary of the Treasury calculates the G Fund interest 
rate pursuant to 5 U.S.C. 8438(e)(2). The retirement savings bond 
interest rate compounds daily at 1/360 of the annual percentage rate. 
Retirement savings bonds will cease to bear interest on the date of 
their maturity.


Sec.  347.41  Maturity.

    The maturity date for retirement savings bonds is indeterminate and 
may

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be different for each bond issued, but shall not exceed the sum of an 
original maturity period of 20 years and an extended maturity period of 
10 years. The retirement savings bond purchased by the designated Roth 
IRA custodian on behalf of a program participant will mature at the 
earlier of 30 years from the date the bond is first issued to the 
custodian on behalf of the program participant or when the total value 
of the bond held on behalf of the program participant reaches 
$15,000.00. The designated Roth IRA custodian will submit a request for 
redemption of retirement savings bonds upon maturity.

Subpart F--Miscellaneous


Sec.  347.50  Waiver of regulations.

    The Commissioner of the Fiscal Service, as designee of the 
Secretary of the Treasury, may waive or modify any provision or 
provisions of the regulations in this part. He or she may do so in any 
particular case or class of cases for the convenience of the United 
States or in order to relieve any person or persons of unnecessary 
hardship:
    (a) If such action would not be inconsistent with law or equity;
    (b) If it does not impair any material existing rights; and
    (c) If he or she is satisfied that such action would not subject 
the United States to any substantial expense or liability.


Sec.  347.51  Additional requirements; bond of indemnity.

    The Commissioner of the Fiscal Service, as designee of the 
Secretary of the Treasury, may require:
    (a) Such additional evidence to support a requested action as he or 
she may consider necessary or advisable; or
    (b) A bond of indemnity, with or without surety, in any case in 
which he or she may consider such a bond necessary for the protection 
of the interests of the United States.


Sec.  347.52  Supplements, amendments, or revisions.

    The Secretary of the Treasury may at any time, or from time to 
time, prescribe additional, supplemental, amendatory, or revised rules 
and regulations governing United States retirement savings bonds.

    Dated: December 9, 2014.
David A. Lebryk,
Fiscal Assistant Secretary.
[FR Doc. 2014-29334 Filed 12-12-14; 8:45 am]
BILLING CODE 4810-AS-P