[Federal Register Volume 71, Number 182 (Wednesday, September 20, 2006)]
[Rules and Regulations]
[Pages 54893-54894]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-7925]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 71, No. 182 / Wednesday, September 20, 2006 / 
Rules and Regulations

[[Page 54893]]



FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

5 CFR Part 1653


Court Orders and Legal Processes Affecting Thrift Savings Plan 
Accounts

AGENCY: Federal Retirement Thrift Investment Board

ACTION: Final rule.

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SUMMARY: The Executive Director, Federal Retirement Thrift Investment 
Board (Agency) is adopting as final, the Agency's proposed rule 
amending the Thrift Savings Plan's (TSP's) regulations to improve 
processing of court orders that seek to divide a TSP account pursuant 
to a divorce. The final rule limits the types of court orders the 
Agency will accept to either one that requires payment of a specific 
dollar amount or that requires payment of a stated percentage or 
fraction of the account. The Agency will no longer accept formula court 
orders.

EFFECTIVE DATE: This final rule is effective January 1, 2007.

FOR FURTHER INFORMATION CONTACT: Merritt Willing on (202) 942-1660.

SUPPLEMENTARY INFORMATION: The Agency administers the 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. sections 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 August 9, 2006, the Agency published a proposed rule with 
request for comments in the Federal Register (71 FR 45437). The Agency 
received no comments on the proposed rule.
    The rule limits acceptable court orders that divide a TSP account 
to those that either require payment of a specific dollar amount or 
that require payment of a stated percentage or fraction of the account. 
The Agency will no longer accept formula-based court orders because 
they are overly complex and often are not acceptable by the Agency or, 
if acceptable, would result in payments that were not anticipated by 
either party to the order. As a consequence, the parties must return to 
court and obtain an amended order. Additionally, the formula court 
order requires the Agency to interpret the order and results in 
considerable administrative expense. These expenses are borne by all 
TSP participants.
    The rule will make it easier for the parties in a divorce to ensure 
that the Agency will divide a TSP account in accordance with their 
wishes. The rule simplifies the types of court orders the Agency will 
accept. The rule also contains model paragraphs that attorneys can use 
to ensure that, in drafting orders, the language they select will both 
produce the intended result and meet the Agency's processing 
requirements.
    The rule will ensure accuracy of court order payments and will 
ensure that the administrative expenses of the court order program are 
reasonable for a retirement savings plan.

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities. They will 
affect only employees of the Federal Government.

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. 
sections 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 Sec.  1532 is not required.

Submission to Congress and the Government Accountability Office

    Pursuant to 5 U.S.C. 801(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 in 5 CFR Part 1653

    Alimony, Child support, Claims, Government employees, Pensions, 
Retirement.

Gary A. Amelio,
Executive Director, Federal Retirement Thrift Investment Board.

0
For the reasons set forth in the preamble, the Agency amends 5 CFR 
chapter VI as follows:

PART 1653--COURT ORDERS AND LEGAL PROCESSES AFFECTING THRIFT 
SAVINGS PLAN ACCOUNTS

0
1. The authority citation for part 1653 continues to read as follows:

    Authority: 5 U.S.C. 8435, 8436(d), 8437(e), 8439(a)(3), 
8474(b)(5), and 8474(c)(1).


0
2. Amend Sec.  1653.2 by revising paragraphs (a)(3)(ii), (iii), and 
(iv) to read as follows:


Sec.  1653.2  Qualifying retirement benefits court order.

    (a) * * *
    (3) * * *
    (i) * * *
    (ii) A stated percentage or fraction of the account; or
    (iii) A survivor annuity as provided in 5 U.S.C. 8435(d).
    (iv) The following examples would qualify to require payment from 
the TSP, although ambiguous or conflicting language used elsewhere 
could cause the order to be rejected.

    Example (1). ORDERED: [payee's name, Social Security number 
(SSN), and address] is awarded $------ from the [civilian or 
uniformed services] Thrift Savings Plan account of [participant's 
name, SSN, and address].
    Example (2). ORDERED: [payee's name, SSN, and address] is 
awarded ------% of the [civilian and/or uniformed services] Thrift 
Savings Plan account[s] of [participant's name, SSN, and address] as 
of [date].

[[Page 54894]]

    Example (3). ORDERED: [payee's name, SSN, and address] is 
awarded [fraction] of the [civilian and/or uniformed services] 
Thrift Savings Plan account[s] of [participant's name, SSN, and 
address] as of [date].

    Note: The following optional language can be used in conjunction 
with any of the above examples. FURTHER ORDERED: Earnings will be 
paid on the amount of the entitlement under this ORDER until payment 
is made.

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[FR Doc. 06-7925 Filed 9-19-06; 8:45 am]
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