[Federal Register Volume 88, Number 209 (Tuesday, October 31, 2023)]
[Rules and Regulations]
[Pages 74329-74330]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-24004]
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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.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 88, No. 209 / Tuesday, October 31, 2023 /
Rules and Regulations
[[Page 74329]]
FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
5 CFR Part 1650
Elimination of Mandatory Roth Distributions
AGENCY: Federal Retirement Thrift Investment Board.
ACTION: Direct final rule.
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SUMMARY: This direct final rule makes technical conforming revisions
necessary to implement statutory amendments made by the SECURE 2.0 Act
of 2022. Specifically, it eliminates the requirement to take mandatory
Roth distributions.
DATES: This rule is effective on January 1, 2024, unless significant
adverse comment is received by December 15, 2023.
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: Dharmesh Vashee,
Federal Retirement Thrift Investment Board, 77 K Street NE, Suite 1000,
Washington, DC 20002.
FOR FURTHER INFORMATION CONTACT: For press inquiries: contact Kim
Weaver at (202) 942-1641. For information about commenting on this
rule: contact Magali Matarazzi at (202) 805-2823.
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)).
Background
The Internal Revenue Code requires TSP participants to receive a
portion of their TSP account (``required minimum distribution'')
beginning when they reach a specific age and are separated from
service. Currently, a participant's entire TSP account--both
traditional and Roth--is subject to the required minimum distribution
rules of the Internal Revenue Code. If a separated participant does not
withdraw from his or her account an amount sufficient to satisfy his or
her required minimum distribution for the year, FRTIB regulations
provide that the TSP record keeper will automatically distribute the
necessary amount pro rata from the participant's traditional balance
and the participant's Roth balance.
Section 325 of the SECURE 2.0 Act of 2022, which was included in
Division T of the Consolidation Appropriation Act, 2023 (Pub. L. 117-
328), amended the Internal Revenue Code to eliminate the requirement to
take mandatory Roth distributions. To conform FRTIB regulations to this
statutory amendment, this rule will delete the provision of FRTIB
regulations that says the TSP record keeper will distribute required
minimum distributions pro rata from traditional balances and Roth
balances.
Direct Final Rulemaking
A direct final rule is a final rule that does not go through
proposed rulemaking first. We use direct final rulemaking when we
expect that the rule will generate no significant adverse comments. We
are issuing a direct final rule because we expect this regulatory
change to be entirely non-controversial. This rule does not involve any
statutory interpretation or create any new regulatory law. We believe
this rule does no more than conform FRTIB regulations to the Internal
Revenue Code as amended by the SECURE Act of 2022. However, to be
certain that we are correct, we set the comment period to end before
the effective date. If we receive a significant adverse comment, we
will withdraw the direct final rule before it becomes effective.
For purposes of this rulemaking, a significant adverse comment is
one that explains (1) why the rule is inappropriate, including
challenges to the rule's underlying premise or approach; or (2) why the
rule will be ineffective or unacceptable without a change. In
determining whether a significant adverse comment necessitates
withdrawal of this direct final rule, the FRTIB will consider whether
the comment raises an issue serious enough to warrant a substantive
response had it been submitted in a standard notice-and-comment
process. A comment that objects to the underlying statutory amendments
to which FRTIB regulations must conform will be considered out of
scope. A comment recommending an addition to the rule will not be
considered significant and adverse unless the comment explains how this
direct final rule would be ineffective or unacceptable without the
addition.
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 only participants and beneficiaries of 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
FRTIB.
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 FRTIB 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
[[Page 74330]]
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 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:
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).
Sec. 1650.16 [Amended]
0
2. Amend Sec. 1650.16 by removing paragraph (d).
[FR Doc. 2023-24004 Filed 10-30-23; 8:45 am]
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