[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.
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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]
BILLING CODE 6760-01-P