[Federal Register Volume 85, Number 180 (Wednesday, September 16, 2020)]
[Rules and Regulations]
[Pages 57665-57666]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17811]



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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 
 under 50 titles pursuant to 44 U.S.C. 1510.
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  Federal Register / Vol. 85, No. 180 / Wednesday, September 16, 2020 / 
Rules and Regulations  

[[Page 57665]]



FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

5 CFR Parts 1600 and 1650


Automatic Enrollment Program

AGENCY: Federal Retirement Thrift Investment Board.

ACTION: Final rule.

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SUMMARY: The Federal Retirement Thrift Investment Board (``FRTIB'') is 
amending its regulations to increase the automatic enrollment 
percentage from 3 percent to 5 percent of basic pay for all 
participants who are automatically enrolled in the Thrift Savings Plan 
(TSP) on or after October 1, 2020 and for Blended Retirement Service 
(BRS) participants who are automatically re-enrolled in the TSP on or 
after January 1, 2021. In addition, the FRTIB is making a non-
substantive clarification regarding installment payments calculated 
based on life expectancy.

DATES: The change to the automatic enrollment percentage is effective 
October 1, 2020, for participants who are automatically enrolled in the 
TSP on or after that date, and January 1, 2021, for BRS participants 
who are automatically re-enrolled in the TSP on or after that date. The 
clarification regarding installment payments calculated based on life 
expectancy is effective immediately.

FOR FURTHER INFORMATION CONTACT: Austen Townsend, (202) 864-8647.

SUPPLEMENTARY INFORMATION: The FRTIB 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 February 18, 2020, pursuant to its authority under the Thrift 
Savings Plan Enhancement Act of 2009 and National Defense Authorization 
Act for Fiscal Year 2016,\1\ the FRTIB published a proposed rule with 
request for comments in the Federal Register (85 FR 8767) to increase 
the automatic enrollment rate and the automatic re-enrollment rate to 5 
percent, effective October 1, 2020 and January 1, 2021, respectively. 
In addition, the FRTIB proposed to amend its rule regarding installment 
payments calculated based on life expectancy to clarify that, for each 
year following the year in which the installment payments begin, the 
installment payment amount for the year will be calculated on the first 
installment payment date of that year.
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    \1\ The Thrift Savings Plan Enhancement Act of 2009 authorized 
the FRTIB to add an automatic enrollment program for all Federal 
employees eligible to participate in the TSP. The National Defense 
Authorization Act for Fiscal Year 2016 extended the automatic 
enrollment program, with an additional automatic re-enrollment 
feature, to certain members of the uniformed services. Under the 
automatic enrollment program, the Executive Director has the 
statutory authority to select a default contribution rate for 
automatically enrolled participants that is no less than 2 percent 
and no more than 5 percent of basic pay.
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    The FRTIB received three comments on the proposed rule. Two 
comments expressed strong support for the automatic enrollment and re-
enrollment rate change noting, in particular, the importance of 
ensuring that a participant receives the full amount of Agency/Service 
Matching Contributions he or she is entitled to. The third comment did 
not address the substance of the regulation. Therefore, the FRTIB is 
publishing the proposed rule as final without change.
    As noted in the preamble to the proposed rule, participants who are 
automatically enrolled in the TSP as of September 30, 2020 will not be 
affected by the automatic enrollment rate increase. However, BRS 
participants who are automatically enrolled in the TSP as of September 
30, 2020 and subsequently terminate their TSP contributions will be 
affected by the automatic re-enrollment rate increase unless they elect 
to resume TSP contributions by the last full pay period of the year. 
All participants may elect to change their contribution rates at any 
time by contacting their respective agencies.

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, members of the uniformed services who 
participate in the TSP, and beneficiary participants.

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, and 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 2 U.S.C. 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. 804(2).

List of Subjects

5 CFR part 1600

    Government employees, Pensions, Retirement.

5 CFR part 1650

    Alimony, Claims, Government employees, Pensions, Retirement.

Ravindra Deo,
Executive Director, Federal Retirement Thrift Investment Board.

    For the reasons stated in the preamble, the FRTIB amends 5 CFR 
Chapter VI as follows:

[[Page 57666]]

PART 1600--EMPLOYEE CONTRIBUTION ELECTIONS, CONTRIBUTION 
ALLOCATIONS, AND AUTOMATIC ENROLLMENT PROGRAM

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

    Authority:  5 U.S.C. 8351, 8432(a), 8432(b), 8432(c), 8432(j), 
8432d, 8474(b)(5) and (c)(1), and 8440e.


Sec.  1600.34   [Amended]

0
2. In Sec.  1600.34, amend paragraphs (a), (b), and (c) by removing the 
term ``3%'' and adding the term ``5%'' in its place.


Sec.  1600.37   [Amended]

0
3. In Sec.  1600.37, amend paragraph (a) by removing the term ``3 
percent'' and adding the term ``5 percent'' in its place.

PART 1650--METHODS OF WITHDRAWING FUNDS FROM THE THRIFT SAVINGS 
PLAN

0
4. The authority citation continues to read as follows:

    Authority: 5 U.S.C. 8351, 8432d, 8433, 8434, 8435, 8474(b)(5) 
and 8474(c)(1).


0
5. Amend Sec.  1650.13 by revising paragraph (a)(2) to read as follows:


Sec.  1650.13   Installment payments.

    (a) * * *
    (2) An installment payment amount calculated based on life 
expectancy. Payments based on life expectancy are determined using the 
factors set forth in the Internal Revenue Service life expectancy 
tables codified at 26 CFR 1.401(a)(9)-9, Q&A 1 and 2. The installment 
payment amount is calculated by dividing the account balance by the 
factor from the IRS life expectancy tables based upon the participant's 
age as of his or her birthday in the year payments are to begin. This 
amount is then divided by the number of installment payments to be made 
per calendar year to yield the installment payment amount. In 
subsequent years, the installment payment amount is recalculated on the 
first installment payment date of the year by dividing the prior 
December 31 account balance by the factor in the IRS life expectancy 
tables based upon the participant's age as of his or her birthday in 
the year payments will be made. There is no minimum amount for an 
installment payment calculated based on this method.
* * * * *
[FR Doc. 2020-17811 Filed 9-15-20; 8:45 am]
BILLING CODE 6760-01-P