[Federal Register Volume 85, Number 191 (Thursday, October 1, 2020)]
[Rules and Regulations]
[Pages 61805-61806]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20762]



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 Rules and Regulations
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 This section of the FEDERAL REGISTER contains regulatory documents 
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 to and codified in the Code of Federal Regulations, which is published 
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  Federal Register / Vol. 85, No. 191 / Thursday, October 1, 2020 / 
Rules and Regulations  

[[Page 61805]]



FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

5 CFR Part 1650


Hardship Withdrawals for Expenses Related to Natural Disasters

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 allow participants to take hardship 
withdrawals for expenses related to natural disasters.

DATES: This rule is effective October 1, 2020.

FOR FURTHER INFORMATION CONTACT: Jessica Bradford, (202) 864-8699.

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 14, 2020, the FRTIB published a proposed rule with 
request for comments in the Federal Register (85 FR 8482), and for 
reasons described below, is publishing the proposed rule as final 
without change.
    The proposed rule amended 5 CFR 1650.32(b) to add to its list of 
authorized hardship expenses, the expenses and losses (including loss 
of income) resulting from a natural disaster as declared by the Federal 
Emergency Management Agency (``FEMA'') and designated for individual 
assistance in order to allow TSP participants to make financial 
hardship withdrawals for such natural disaster expenses and losses. The 
FRTIB received six comments. Three of the comments expressed approval 
of the proposed regulation and recommended no changes.
    One commenter encouraged the FRTIB to expand other parts of the 
FRTIB's hardship withdrawal program, such as permitting withdrawal of 
the full balance subject to certain minimum account values and 
increasing the current six-month wait period to 12 months between 
financial hardship requests. The proposed regulation sought comments 
exclusively on adding natural disaster expenses and losses to the TSP's 
hardship withdrawal conditions, and, therefore, the FRTIB cannot 
further expand the withdrawal program beyond that purpose in the final 
regulation.
    Another commenter asked whether a TSP participant may make a 
withdrawal under the natural disaster condition for expenses related to 
a family member's death resulting from the natural disaster. The final 
regulation does not limit the expense to a specific type, such as 
property expenses or medical expenses. Rather, the regulation requires 
that the expense be ``incurred by the participant on account of a 
disaster declared by the [FEMA]'' and that the participant's principal 
residence or principal place of employment at the time of the disaster 
be located in an area designated by the FEMA for individual assistance 
with respect to the disaster. Any expense that meets these requirements 
would be eligible for a hardship withdrawal.
    For example, provided the participant's principal residence at the 
time of the disaster was located in an area declared by the FEMA for 
individual assistance, if a TSP participant's dependent or spouse died 
as a result of a natural disaster, and, as a result, the participant 
incurred funeral expenses relating to that dependent or spouse, then 
the expense would be eligible for a hardship withdrawal under 
1650.32(b)(5).
    Another commenter urged the FRTIB to treat pandemics such as COVID-
19 as natural disasters under this regulation. Guided by legislation, 
the FRTIB has implemented other withdrawal options designed to afford 
relief for adverse financial consequences due to COVID-19. For more 
information about those options, please visit www.tsp.gov/covid-19/.

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 Thrift Savings Plan, and their beneficiaries. The 
TSP is a Federal defined contribution retirement savings plan created 
FERSA and is administered by the Agency.

Paperwork Reduction Act

    I certify that these regulations do not require additional 
reporting under 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 1532 
is not required.

List of Subjects in 5 CFR Part 1650

    Taxes, 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:

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

0
1. The authority citation for part 1650 continues to read as follows:

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


0
2. Amend Sec.  1650.32 by revising paragraph (b) introductory text and 
adding paragraph (b)(5) to read as follows:


Sec.  1650.32   Financial hardship withdrawals.

* * * * *
    (b) To be eligible for a financial hardship withdrawal, a 
participant must

[[Page 61806]]

have a financial need that results from at least one of the following 
five conditions:
* * * * *
    (5) The participant has incurred expenses and losses (including 
loss of income) on account of a disaster declared by the Federal 
Emergency Management Agency (FEMA) under the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act, Public Law 100-707, 
provided that the participant's principal residence or principal place 
of employment at the time of the disaster was located in an area 
designated by the FEMA for individual assistance with respect to the 
disaster.
* * * * *
[FR Doc. 2020-20762 Filed 9-30-20; 8:45 am]
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