69–006

106TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 106–87

ROLLOVER DISTRIBUTIONS TO ACCOUNTS IN THE THRIFT

SAVINGS PLAN

APRIL 13, 1999.—Committed to the Committee of the Whole House on the State of

the Union and ordered to be printed

Mr. BURTON of Indiana, from the Committee on Government

Reform, submitted the following

REPORT

[To accompany H.R. 208]

[Including cost estimate of the Congressional Budget Office]

The Committee on Government Reform, to whom was referred

the bill (H.R. 208) to amend title 5, United States Code, to allow

for the contribution of certain rollover distributions to accounts in

the Thrift Savings Plan, to eliminate certain waiting-period requirements for participating in the Thrift Savings Plan, and for

other purposes, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended

do pass.

CONTENTS

Page

I. Summary of Legislation ................................................................................ 3

II. Background and Need for the Legislation ................................................... 3

III. Legislative Hearings and Committee Actions ............................................. 4

IV. Committee Hearings and Written Testimony ............................................. 4

V. Explanation of the Bill .................................................................................. 5

VI. Compliance with Rule XIII ........................................................................... 5

VII. Budget Analysis and Projections .................................................................. 5

VIII. Cost Estimate of the Congressional Budget Office ..................................... 6

IX. Specific Constitutional Authority for this Legislation ................................ 8

X. Committee Recommendation ........................................................................ 8

XI. Congressional Accountability Act; Public Law 104–1 ................................. 8

XII. Unfunded Mandates Reform Act; Public Law 104–4, Sect. 423 ................ 8

XIII. Federal Advisory Committee Act (5 U.S.C. App.) Section 5(b) .................. 9

XIV. Changes in Existing Law .............................................................................. 9

The amendment is as follows:

Strike out all after the enacting clause and insert in lieu thereof

the following:
2

SECTION 1. ELIGIBLE ROLLOVER DISTRIBUTIONS.

(a) IN GENERAL.—Section 8432 of title 5, United States Code, is amended by adding at the end the following:

‘‘(j)(1) For the purpose of this subsection—

‘‘(A) the term ‘eligible rollover distribution’ has the meaning given such term

by section 402(c)(4) of the Internal Revenue Code of 1986; and

‘‘(B) the term ‘qualified trust’ has the meaning given such term by section

402(c)(8) of the Internal Revenue Code of 1986.

‘‘(2) An employee or Member may contribute to the Thrift Savings Fund an eligible rollover distribution from a qualified trust. A contribution made under this subsection shall be made in the form described in section 401(a)(31) of the Internal Revenue Code of 1986. In the case of an eligible rollover distribution, the maximum

amount transferred to the Thrift Savings Fund shall not exceed the amount which

would otherwise have been included in the employee’s or Member’s gross income for

Federal income tax purposes.

‘‘(3) The Executive Director shall prescribe regulations to carry out this subsection.’’.

(b) EFFECTIVE DATE.—The amendment made by this section shall take effect on

October 1, 2000, or such earlier date as the Executive Director (as defined by section

8401 of title 5, United States Code) may by regulation prescribe, but not before September 1, 2000.

SEC. 2. IMMEDIATE PARTICIPATION IN THE THRIFT SAVINGS PLAN.

(a) ELIMINATION OF CERTAIN WAITING PERIODS FOR PURPOSES OF EMPLOYEE CONTRIBUTIONS.—Paragraph (4) of section 8432(b) of title 5, United States Code, is

amended to read as follows:

‘‘(4) The Executive Director shall prescribe such regulations as may be necessary

to carry out the following:

‘‘(A) Notwithstanding subparagraph (A) of paragraph (2), an employee or

Member described in such subparagraph shall be afforded a reasonable opportunity to first make an election under this subsection beginning on the date of

commencing service or, if that is not administratively feasible, beginning on the

earliest date thereafter that such an election becomes administratively feasible,

as determined by the Executive Director.

‘‘(B) An employee or Member described in subparagraph (B) of paragraph (2)

shall be afforded a reasonable opportunity to first make an election under this

subsection (based on the appointment or election described in such subparagraph) beginning on the date of commencing service pursuant to such appointment or election or, if that is not administratively feasible, beginning on the

earliest date thereafter that such an election becomes administratively feasible,

as determined by the Executive Director.

‘‘(C) Notwithstanding the preceding provisions of this paragraph, contributions under paragraphs (1) and (2) of subsection (c) shall not be payable with

respect to any pay period before the earliest pay period for which such contributions would otherwise be allowable under this subsection if this paragraph had

not been enacted.

‘‘(D) Sections 8351(a)(2), 8440a(a)(2), 8440b(a)(2), 8440c(a)(2), and 8440d(a)(2)

shall be applied in a manner consistent with the purposes of subparagraphs (A)

and (B), to the extent those subparagraphs can be applied with respect thereto.

‘‘(E) Nothing in this paragraph shall affect paragraph (3).’’.

(b) TECHNICAL AND CONFORMING AMENDMENTS.—(1) Section 8432(a) of title 5,

United States Code, is amended—

(A) in the first sentence by striking ‘‘(b)(1)’’ and inserting ‘‘(b)’’; and

(B) by amending the second sentence to read as follows: ‘‘Contributions under

this subsection pursuant to such an election shall, with respect to each pay period for which such election remains in effect, be made in accordance with a program of regular contributions provided in regulations prescribed by the Executive Director.’’.

(2) Section 8432(b)(1)(B) of title 5, United States Code, is amended by inserting

‘‘(or any election allowable by virtue of paragraph (4))’’ after ‘‘subparagraph (A)’’.

(3) Section 8432(b)(3) of title 5, United States Code, is amended by striking ‘‘Notwithstanding paragraph (2)(A), an’’ and inserting ‘‘An’’.

(4) Section 8439(a)(1) of title 5, United States Code, is amended by inserting ‘‘who

makes contributions or’’ after ‘‘for each individual’’ and by striking ‘‘section

8432(c)(1)’’ and inserting ‘‘section 8432’’.

(5) Section 8439(c)(2) of title 5, United States Code, is amended by adding at the

end the following: ‘‘Nothing in this paragraph shall be considered to limit the dissemination of information only to the times required under the preceding sentence.’’.
3

(6) Sections 8440a(a)(2) and 8440d(a)(2) of title 5, United States Code, are amended by striking all after ‘‘subject to’’ and inserting ‘‘this chapter.’’.

(c) EFFECTIVE DATE.—

(1) IN GENERAL.—The amendments made by this section shall take effect on

October 1, 2000, or such earlier date as the Executive Director (as defined by

section 8401 of title 5, United States Code) may by regulation prescribe, but not

before September 1, 2000.

(2) SAVINGS PROVISION.—Notwithstanding any other provision of this section,

until the amendments made by this section take effect, title 5, United States

Code, shall be applied as if this section had not been enacted.

SEC. 3. ADDITIONAL GOVERNMENT CONTRIBUTIONS FOR RETIREMENT.

(a) FEDERAL EMPLOYEES’ RETIREMENT SYSTEM.—Section 8423(a) of title 5, United

States Code, is amended by adding at the end the following:

‘‘(5) Notwithstanding any other provision of this chapter, effective with respect to

contributions for pay periods beginning on or after October 1, 2000, the normal-cost

percentage used for purposes of any computation under this subsection shall be

equal to—

‘‘(A) the percentage that would otherwise apply if this paragraph had not

been enacted, plus

‘‘(B) .01 of 1 percentage point.’’.

(b) SUPPLEMENTAL LIABILITY.—For purposes of applying section 8423(b) of title 5,

United States Code, and section 857(b) of the Foreign Service Act of 1980 (22 U.S.C.

4071f(b)), all amounts shall be determined as if this section had never been enacted.

(c) LIMITATION ON SOURCE OF ADDITIONAL CONTRIBUTIONS.—Notwithstanding section 8423(a)(3) of title 5, United States Code, or any other provision of law, the additional Government contributions required to be made by reason of the amendment

made by subsection (a) shall be made out of any amounts available to the employing

agency involved, other than any appropriation, fund, or other amounts available for

the payment of employee salaries or benefits.

(d) CONFORMING AMENDMENT.—Section 307 of the Federal Employees’ Retirement

System Act of 1986 (Public Law 99–335; 5 U.S.C. 8401 note) is amended by inserting ‘‘, including the additional amount required under section 8423(a)(5)(B) of such

title 5,’’ after ‘‘Federal Employees’ Retirement System’’.

I. SHORT SUMMARY OF LEGISLATION

This bill authorizes Federal employees to begin participation in

the Thrift Savings Plan immediately upon being hired rather than

waiting six months to a year as is required by current law. This

legislation also authorizes new Federal hires to contribute eligible

rollover distributions from qualified trusts, including private sector

401(k) accounts, to the Thrift Savings Fund.

II. BACKGROUND AND NEED FOR THE LEGISLATION

H.R. 208 would bolster a critical component of Federal employee

retirement benefits, the Thrift Savings Plan. The Thrift Savings

Plan (TSP) is a retirement saving and investment plan for Federal

and postal employees. The TSP is a critical part of the Federal employee benefits package, and particularly important for those employees hired in the last decade who, under the Federal Employees

Retirement System (FERS), receive smaller defined benefits and

need to invest greater amounts in order to enhance their retirement income. H.R. 208 improves the current TSP in two distinct

ways. First, it permits newly hired Federal employees to begin

making tax-advantaged contributions toward their own retirement

earlier than allowed under current law. Under current law, new

hires must wait until the second open season after they begin

working for the government. Many new employees have to wait as

long as a year. Second, employees are allowed to contribute ‘‘roll-
4

1 American Savings Education Council, www.asec.org/perssav.htm#def.

2 Joseph M. Anderson, The Wealth of U.S. Families in 1995 (Capital Research Associates

1998), p. 3. Net financial assets are gross financial assets minus unsecured debt.

over’’ distributions from certain qualified trusts, such as 401(k)

plans. These contributions are not permitted under current law.

Too few Americans adequately save for their retirement. Data

published on the Internet by the American Savings Education

Council show that since 1992, personal savings as a percentage of

disposable personal income has dropped steadily from 5.7% to 0.5%

in 1998.1 Half of all families headed by someone between 55 and

64 years old possess less than $5,000 in net financial assets.2 With

the retirement of America’s baby-boomers approaching, and in light

of all the uncertainties surrounding Social Security, Congress

should encourage everyone, including Federal employees, to assume more responsibility for their own retirement.

H.R. 208 provides a partial solution. Employees will be able to

make contributions as much as one year earlier than they otherwise would have. Agencies will not make government contributions

during this period. Nevertheless, the opportunity to participate in

this tax-deferred savings program for this additional period should

be particularly helpful to employees who are beginning their careers. Because of the effects of compounding, even modest contributions in the early years of a savings plan can yield substantial benefits over time. According to the Congressional Research Service,

employees will add almost $19,000 more to their TSP accounts

after a 30 year career for each $1,000 they contribute during their

first year, assuming a 10% rate of return. That is an excellent incentive to save. H.R. 208 will also make it more convenient for employees to manage their retirement investments by permitting

them to roll the amounts in their private 401(k) plans and other

qualified trusts into the TSP.

III. LEGISLATIVE HEARINGS AND COMMITTEE ACTIONS

The Committee held no legislative hearings on H.R. 208. Rep.

Constance A. Morella introduced H.R. 208 on January 6, 1999. The

bill was referred to the Committee on Government Reform on January 6, 1999, and, on January 25, 1999, to the Subcommittee on

the Civil Service. On February 25, 1999, the Subcommittee considered the bill, and forwarded the bill to the Committee on Government Reform by voice vote. The Committee on Government Reform

considered the bill on March 17, 1999. Mrs. Morella offered an

amendment in the nature of a substitute, which offset the loss of

tax revenues that accompanies earlier participation in the TSP by

increasing agency contributions to the Civil Service Retirement and

Disability Fund. The Committee adopted the amendment in the nature of a substitute by voice vote and, also by voice vote, ordered

the bill, as amended, to be reported to the House.

IV. COMMITTEE HEARINGS AND WRITTEN TESTIMONY

The Committee did not hold any hearings related to this legislation.
5

V. EXPLANATION OF THE BILL AS REPORTED: SECTION-BY-SECTION

SECTION 1. ELIGIBLE ROLLOVER DISTRIBUTIONS

This section amends 5 U.S.C. 8432 to permit employees and

Members to transfer to the TSP his or her account balance from

a plan qualified under section 401(a) or 408(b) of the Internal Revenue Code or an Individual Retirement Arrangement (IRA) qualified

under sections 408(a) or 408(b) to the TSP. Such transfers are not

permitted under current law.

SECTION 2. IMMEDIATE PARTICIPATION IN THE THRIFT SAVINGS PLAN

This section amends 5 U.S.C. 8432(b) to eliminate statutorily required waiting periods before employees and Members may contribute to the TSP. Under this section, such individuals shall be eligible to contribute on the day they began service or, if that is not

administratively feasible, on the earliest date thereafter that the

Executive Director determines to be feasible. This section takes effect 6 months after the date of enactment or on such earlier date

as the Executive Director of the Federal Retirement Thrift Investment Board may prescribe by regulation.

SECTION 3. ADDITIONAL GOVERNMENT CONTRIBUTIONS FOR

RETIREMENT

This section amends 5 U.S.C. 8432(a) to require agencies to contribute an additional one one-hundredth of one percent of FERS

payroll to the Civil Service Retirement and Disability Fund. These

additional contributions will not reduce the amount of supplemental contributions required under section 8423(b) of title 5,

United States Code or section 857(b) of the Foreign Service Act of

1980 (22 U.S.C. § 4071f(b)). Agencies may not take the additional

contributions required under this section from accounts used to pay

employee salaries or benefits.

VI. COMPLIANCE WITH RULE XIII

Pursuant to rule XIII, clause 3(c)(1) of the Rules of the House of

Representatives, under the authority of rule X, clause 2(b)(1) and

clause 3(e), the results and findings from Committee oversight activities are incorporated in the bill and this report.

VII. BUDGET ANALYSIS AND PROJECTIONS

The budget analysis and projections required by section 308(a) of

the Congressional Budget Act of 1974 are contained in the estimate

of the Congressional Budget Office.
6

VIII. COST ESTIMATE OF THE CONGRESSIONAL BUDGET OFFICE

U.S. CONGRESS,

CONGRESSIONAL BUDGET OFFICE,

Washington, DC, March 26, 1999.

Hon. DAN BURTON,

Chairman, Committee on Government Reform,

U.S. House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 208, a bill amending the

Thrift Savings Plan for federal employees.

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contact is Eric Rollins.

Sincerely,

STEVEN M. LIEBERMAN,

(For Dan L. Crippen, Director).

Enclosure.

H.R. 208—To amend title 5, United States Code, to allow for the

contribution of certain rollover distributions to accounts in the

Thrift Savings Plan, to eliminate certain waiting-period requirements for participating in the Thrift Savings Plan, and for

other purposes

Summary: H.R. 208 would make two changes to the Thrift Savings Plan (TSP), the defined contribution component of the federal

government’s major civilian retirement programs. The bill would

let newly hired federal employees make contributions to the TSP

sooner than allowed under current law and let federal employees

transfer balances from other tax-deferred savings plans to their

TSP accounts. The bill would also raise the amount that federal

agencies contribute to the Civil Service trust fund for employees

covered by the Federal Employees’ Retirement System (FERS) by

1⁄100 of a percentage point. All changes would become effective on

October 1, 2000.

CBO estimates that H.R. 208 would increase discretionary

spending by $35 million over the 2000–2004 period because of higher agency contributions to the Civil Service Retirement Trust Fund.

The bill would have no net impact on direct spending and revenues

over the same period. The receipt of the additional retirement contributions would lower direct spending by $35 million, and the bill’s

TSP-related provisions would decrease revenues by $35 million

over the 2000–2004 period. Because this bill would affect direct

spending and receipts, pay-as-you-go procedures would apply.

H.R. 208 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would

not have a significant effect on the budgets of state, local, or tribal

governments.

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 208 is shown in the following table.
7

By fiscal years, in millions of dollars—

2000 2001 2002 2003 2004

SPENDING SUBJECT TO APPROPRIATION

Agency retirement contributions ............................................................................. 0 8 8 9 10

CHANGES IN DIRECT SPENDING

Agency retirement contributions ............................................................................. 0 ¥8 ¥8 ¥9 ¥10

CHANGES IN REVENUES

Estimated revenues ................................................................................................. 0 ¥8 ¥9 ¥9 ¥9

TOTAL COST OF H.R. 208

Direct spending and revenues ................................................................................ 0 0 1 0 ¥1

All spending and revenues ..................................................................................... 0 8 9 9 9

Note:—The Joint Committee on Taxation prepared the estimates of the changes in revenues.

The costs of this legislation fall within budget function 950 (Undistributed Offsetting Receipts).

Basis of Estimate

Raise Agency Retirement Contributions Under FERS

Under FERS, total employee and agency retirement contributions

equal the normal cost of providing retirement benefits. The current

normal cost for most FERS employees is 11.5 percent of basic pay.

Employees typically contribute 0.8 percent of their basic pay, and

agencies pay the remaining 10.7 percent. H.R. 208 would add 1⁄100

of a percentage point to the amount that agencies contribute. For

most FERS employees, agency contributions would rise to 10.71

percent of basic pay.

This provision would increase agency retirement contributions

under FERS by $35 million over the 2000–2004 period. This increase in agency contributions would be reflected in the budget

both as additional agency outlays and as an increase in offsetting

receipts to the Civil Service Retirement Trust Fund.

Allow New Hires to Participate in TSP Sooner

Newly hired Federal employees must now wait two open seasons

(6 to 12 months) before they can begin making contributions to the

TSP. H.R. 208 would allow new hires to begin making TSP contributions immediately, although government contributions would

still not begin until the second open season.

The Joint Committee on Taxation (JCT) estimates that the Federal Government would forgo tax revenues of about $35 million

over the 2000–2004 period as a result of this provision. Based on

recent experience, JCT assumed that between 90,000 and 95,000

eligible new employees would be hired each year, and that most of

these new hires would participate in the TSP. Under the bill, employees would contribute more money to their TSP accounts than

under current law. This increase in contributions would decrease

federal income tax revenues because TSP contributions are not

taxed until withdrawn from the plan.

Allow Rollovers from Other Tax-Deferred Savings Plans

H.R. 208 would allow employees to transfer funds from certain

tax-deferred savings plans, such as a 401(k) plan from a previous
8

job, to their TSP accounts. JCT estimates that this provision would

not have a significant budgetary impact.

Pay-as-you-go considerations: The provisions of H.R. 208 would

affect direct spending and revenues and therefore be subject to payas-you-go procedures. The pay-as-you-go effects of the bill are

shown in the following table. For the purposes of enforcing pay-asyou-go procedures, only the effects in the current year, the budget

year, and the succeeding four years are counted.

By fiscal years, in millions of dollars—

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Changes in outlays ........ 0 0 ¥8 ¥8 ¥9 ¥10 ¥10 ¥11 ¥12 ¥13 ¥13

Changes in receipts ....... 0 0 ¥8 ¥9 ¥9 ¥9 ¥9 ¥10 ¥10 ¥10 ¥11

Intergovernmental and private-sector impact: H.R. 208 contains

no intergovernmental or private-sector mandates as defined in the

Unfunded Mandates Reform Act and would not have a significant

effect on the budgets of state, local, or tribal governments.

Estimate prepared by: Federal Costs: Eric Rollins. Impact on

State, Local, and Tribal Governments: Leo Lex. Impact on the Private Sector: John Harris.

Estimate approved by: Paul N. Van de Water, Assistant Director

for Budget Analysis.

IX. SPECIFIC CONSTITUTIONAL AUTHORITY FOR THIS LEGISLATION

Clauses 1 and 18 of Article I, Sec. 8 of the Constitution grant

Congress the power to enact this law.

X. COMMITTEE RECOMMENDATION

On March 17, 1999, a quorum being present, the Committee ordered the bill favorably reported.

Committee on Government Reform—106th Congress. Record Vote

Date: March 17, 1999. Amendment Offered by: Hon. Constance

A. Morella. Adopted by voice vote. Final Passage of H.R. 208. Offered by: Hon. Constance A. Morella. Adopted by voice vote.

XI. CONGRESSIONAL ACCOUNTABILITY ACT; PUBLIC LAW 104–1;

SECTION 102(B)(3)

H.R. 208 affects employees of the legislative branch who participate in the Thrift Savings Plan.

XII. UNFUNDED MANDATES REFORM ACT; PUBLIC LAW 104–4;

SECTION 423

H.R. 208 does not impose any Federal mandates on state, local,

or tribal governments, or the private sector, and it does not preempt any state or local law.
9

XIII. FEDERAL ADVISORY COMMITTEE ACT (5 U.S.C. APP.) SECTION

5(b)

The Committee finds that H.R. 208 does not establish or authorize establishment of an advisory committee within the definition of

5 U.S.C. App., Section 5(b).

XIV. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the

House of Representatives, changes in existing law made by the bill,

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic,

existing law in which no change is proposed is shown in roman):

TITLE 5, UNITED STATES CODE

* * * * * * *

PART III—EMPLOYEES

* * * * * * *

Subpart G—Insurance and Annuities

* * * * * * *

CHAPTER 84—FEDERAL EMPLOYEES’ RETIREMENT

SYSTEM

* * * * * * *

SUBCHAPTER II—BASIC ANNUITY

* * * * * * *

§ 8423. Government contributions

(a)(1) * * *

* * * * * * *

(5) Notwithstanding any other provision of this chapter, effective

with respect to contributions for pay periods beginning on or after

October 1, 2000, the normal-cost percentage used for purposes of any

computation under this subsection shall be equal to—

(A) the percentage that would otherwise apply if this paragraph had not been enacted, plus

(B) .01 of 1 percentage point.

* * * * * * *

SUBCHAPTER III—THRIFT SAVINGS PLAN

* * * * * * *

§ 8432. Contributions

(a) An employee or Member may contribute to the Thrift Savings

Fund in any pay period, pursuant to an election under subsection

(b)ø(1)¿, an amount not to exceed 10 percent of such individual’s
10

basic pay for such period. øContributions made under this subsection during any 6-month period for which an election period is

provided under subsection (b)(1) shall be made each pay period

during such 6-month period pursuant to a program of regular contributions provided in regulations prescribed by the Executive Director.¿ Contributions under this subsection pursuant to such an

election shall, with respect to each pay period for which such election remains in effect, be made in accordance with a program of

regular contributions provided in regulations prescribed by the Executive Director.

(b)(1)(A) * * *

(B) The amount to be contributed pursuant to an election under

subparagraph (A) (or any election allowable by virtue of paragraph

(4)) shall be the percentage of basic pay or amount designated by

the employee or Member.

* * * * * * *

(3) øNotwithstanding paragraph (2)(A), an¿ An employee or

Member who elects to become subject to this chapter under section

301 of the Federal Employees’ Retirement System Act of 1986 may

make the first election for the purpose of subsection (a) during the

period prescribed for such purpose by the Executive Director. The

period prescribed by the Executive Director shall commence on the

date on which the employee or Member makes the election to become subject to this chapter.

ø(4)(A) Notwithstanding paragraph (2)(A), an employee or Member who is an employee or Member on January 1, 1987, and continues as an employee or Member without a break in service through

April 1, 1987, may make the first election for the purpose of subsection (a) during the election period prescribed for such purpose

by the Executive Director. The Executive Director shall prescribe

an election period for such purpose which shall commence on April

1, 1987. An election by such an employee or Member during that

election period shall be effective on the first day of the employee’s

or Member’s first pay period which begins after the date on which

the employee or Member makes that election.

ø(B) Notwithstanding subsection (a), the maximum amount that

an employee or Member may contribute during any pay period

which begins on or after April 1, 1987, and before October 1, 1987,

pursuant to an election made during the election period provided

under subparagraph (A) is the amount equal to 15 percent of such

individual’s basic pay for such period.¿

(4) The Executive Director shall prescribe such regulations as may

be necessary to carry out the following:

(A) Notwithstanding subparagraph (A) of paragraph (2), an

employee or Member described in such subparagraph shall be

afforded a reasonable opportunity to first make an election

under this subsection beginning on the date of commencing

service or, if that is not administratively feasible, beginning on

the earliest date thereafter that such an election becomes administratively feasible, as determined by the Executive Director.

(B) An employee or Member described in subparagraph (B) of

paragraph (2) shall be afforded a reasonable opportunity to

first make an election under this subsection (based on the appointment or election described in such subparagraph) begin-
11

ning on the date of commencing service pursuant to such appointment or election or, if that is not administratively feasible,

beginning on the earliest date thereafter that such an election

becomes administratively feasible, as determined by the Executive Director.

(C) Notwithstanding the preceding provisions of this paragraph, contributions under paragraphs (1) and (2) of subsection

(c) shall not be payable with respect to any pay period before

the earliest pay period for which such contributions would otherwise be allowable under this subsection if this paragraph had

not been enacted.

(D) Sections 8351(a)(2), 8440a(a)(2), 8440b(a)(2), 8440c(a)(2),

and 8440d(a)(2) shall be applied in a manner consistent with

the purposes of subparagraphs (A) and (B), to the extent those

subparagraphs can be applied with respect thereto.

(E) Nothing in this paragraph shall affect paragraph (3).

* * * * * * *

(j)(1) For the purpose of this subsection—

(A) the term ‘‘eligible rollover distribution’’ has the meaning

given such term by section 402(c)(4) of the Internal Revenue

Code of 1986; and

(B) the term ‘‘qualified trust’’ has the meaning given such

term by section 402(c)(8) of the Internal Revenue Code of 1986.

(2) An employee or Member may contribute to the Thrift Savings

Fund an eligible rollover distribution from a qualified trust. A contribution made under this subsection shall be made in the form described in section 401(a)(31) of the Internal Revenue Code of 1986.

In the case of an eligible rollover distribution, the maximum

amount transferred to the Thrift Savings Fund shall not exceed the

amount which would otherwise have been included in the employee’s

or Member’s gross income for Federal income tax purposes.

(3) The Executive Director shall prescribe regulations to carry out

this subsection.

* * * * * * *

§ 8439. Accounting and information

(a)(1) The Executive Director shall establish and maintain an account for each individual who makes contributions or for whom contributions are made under øsection 8432(c)(1)¿ section 8432 of this

title or who makes contributions to the Thrift Savings Fund under

section 8351 of this title.

* * * * * * *

(c)(1) * * *

(2) Information under this subsection shall be provided at least

30 calendar days before the beginning of each election period under

section 8432(b)(1)(A) of this title, and in a manner designed to facilitate informed decisionmaking with respect to elections under

sections 8432 and 8438 of this title. Nothing in this paragraph

shall be considered to limit the dissemination of information only

to the times required under the preceding sentence.

* * * * * * *
12

§ 8440a. Justices and judges

(a)(1) * * *

(2) An election may be made under paragraph (1) only during a

period provided under section 8432(b) for individuals subject to

øchapter 84 of this title: Provided, however, That a justice or judge

may make the first such election within 60 days of the effective

date of this section.¿ this chapter.

* * * * * * *

§ 8440d. Judges of the United States Court of Appeals for

Veterans Claims

(a)(1) * * *

(2) An election may be made under paragraph (1) only during a

period provided under section 8432(b) of this title for individuals

subject to øchapter 84 of this title.¿ this chapter.

* * * * * * *

SECTION 307 OF THE FEDERAL EMPLOYEES’

RETIREMENT SYSTEM ACT OF 1986

SEC. 307. USE OF ‘‘NORMAL-COST PERCENTAGE’’.

Notwithstanding any other provision of law, the normal-cost percentage (as defined by section 8401(23) of title 5, United States

Code, as added by this Act) of the Federal Employees’ Retirement

System, including the additional amount required under section

8423(a)(5)(B) of such title 5, shall be used to value the cost of the

System for all purposes in which the cost of the System is required

to be determined by the Federal Government, including any comparisons between the cost of performing commercial activities

under contract with commercial sources and the cost of performing

those activities using Government facilities and personnel.

Æ