II

103D CONGRESS

1ST SESSION S. 1624

To standardize withdrawal options for Thrift Savings Plan participants, and

for other purposes.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 4 (legislative day, NOVEMBER 2), 1993

Mr. STEVENS (for himself and Mr. PRYOR) introduced the following bill; which

was read twice and referred to the Committee on Governmental Affairs

A BILL

To standardize withdrawal options for Thrift Savings Plan

participants, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. STANDARDIZATION OF WITHDRAWAL OPTIONS

4 FOR THRIFT SAVINGS PLAN PARTICIPANTS.

5 (a) PARTICIPATION IN THE THRIFT SAVINGS

6 PLAN.—Section 8351(b) of title 5, United States Code,

7 is amended—

8 (1) by amending paragraph (4) to read as fol9 lows:
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1 ‘‘(4) Section 8433(b) of this title applies to any

2 employee or Member who elects to make contribu3 tions to the Thrift Savings Fund under subsection

4 (a) of this section and separates from Government

5 employment.’’;

6 (2) by striking out paragraphs (5), (6), and (8);

7 (3) by redesignating paragraphs (7), (9), and

8 (10) as paragraphs (5), (6), and (7), respectively;

9 (4) in paragraph (5)(C) (as redesignated under

10 paragraph (3) of this subsection) by striking out ‘‘or

11 former spouse’’ in both places it appears;

12 (5) by amending paragraph (6) (as redesig13 nated under paragraph (3) of this subsection) to

14 read as follows:

15 ‘‘(6) Notwithstanding paragraph (4), if an em16 ployee or Member separates from Government em17 ployment and such employee’s or Member’s non18 forfeitable account balance is $3,500 or less, the Ex19 ecutive Director shall pay the nonforfeitable account

20 balance to the participant in a single payment unless

21 the employee or Member elects, at such time and

22 otherwise in such manner as the Executive Director

23 prescribes, one of the options available under sub24 section (b).’’; and
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1 (6) in paragraph (7) (as redesignated under

2 paragraph (3) of this subsection) by striking out

3 ‘‘nonforfeiture’’ and inserting in lieu thereof ‘‘non4 forfeitable’’.

5 (b) BENEFITS AND ELECTION OF BENEFITS.—Sec6 tion 8433 of title 5, United States Code, is amended—

7 (1) in subsection (b) by striking out the matter

8 before paragraph (1) and inserting in lieu thereof

9 ‘‘Subject to section 8435 of this title, any employee

10 or Member who separates from Government employ11 ment entitled to an annuity under subchapter II of

12 this chapter or any employee or Member who sepa13 rates from Government employment is entitled and

14 may elect—’’;

15 (2) by striking out subsections (c) and (d) and

16 redesignating subsections (e), (f), (g), (h), and (i) as

17 subsections (c), (d), (e), (f), and (g), respectively;

18 (3) in subsection (c)(1) (as redesignated under

19 paragraph (2) of this subsection) by striking out ‘‘or

20 (c)(4) or required under subsection (d) directly to an

21 eligible retirement plan or plans) (as defined in sec22 tion 402(a)(5)(E) of the Internal Revenue Code of

23 1954)’’ and inserting in lieu thereof ‘‘directly to an

24 eligible retirement plan or plans (as defined in sec-
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1 tion 402(c)(8) of the Internal Revenue Code of

2 1986)’’;

3 (4) in subsection (d)(2) (as redesignated under

4 paragraph (2) of this subsection) by striking out ‘‘or

5 (c)(2)’’; and

6 (5) in subsection (f) (as redesignated under

7 paragraph (2) of this subsection)—

8 (A) by striking out paragraph (1) and re9 designating paragraphs (2) and (3) as para10 graphs (1) and (2), respectively; and

11 (B) in paragraph (1) (as redesignated

12 under subparagraph (A) of this paragraph)—

13 (i) by striking out ‘‘Notwithstanding

14 subsections (b) and (c), if an employee or

15 Member separates from Government em16 ployment under circumstances making

17 such an employee or Member eligible to

18 make an election under either of those sub19 sections, and such employee’s or Mem20 ber’s’’ and inserting in lieu thereof ‘‘Not21 withstanding subsection (b), if an employee

22 or Member separates from Government

23 employment, and such employee’s or Mem24 ber’s’’; and
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1 (ii) by striking out ‘‘or (c), as applica2 ble’’; and

3 (C) in paragraph (2) (as redesignated

4 under subparagraph (A) of this paragraph) by

5 striking out ‘‘paragraphs (1) and (2)’’ and in6 serting in lieu thereof ‘‘paragraph (1)’’.

7 (c) ANNUITIES: METHODS OF PAYMENT; ELECTION;

8 PURCHASE.—Section 8434(c) of title 5, United States

9 Code, is amended to read as follows:

10 ‘‘(c) Notwithstanding an elimination of a method of

11 payment by the Board an employee, Member, former em12 ployee, or former Member may elect the eliminated method

13 if the elimination of such method became effective less

14 than 5 years before the date on which annuity com15 mences.’’.

16 (d) PROTECTIONS FOR SPOUSES AND FORMER

17 SPOUSES.—Section 8435 of title 5, United States Code,

18 is amended—

19 (1) in subsection (a)(1)(A) by striking out

20 ‘‘subsection (b)(3), (b)(4), (c)(3), or (c)(4) of section

21 8433 of this title or change an election previously

22 made under subsection (b)(1), (b)(2), (c)(1), or

23 (c)(2)’’ and inserting in lieu thereof ‘‘subsection

24 (b)(3) or (b)(4) of section 8433 of this title or
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1 change an election previously made under subsection

2 (b)(1) or (b)(2)’’;

3 (2) by striking out subsection (b);

4 (3) by redesignating subsections (c), (d), (e),

5 (f), (g), (h), and (i) as subsections (b), (c), (d), (e),

6 (f), (g), and (h), respectively;

7 (4) in subsection (b) (as redesignated under

8 paragraph (3) of this subsection) by amending para9 graph (2) to read as follows:

10 ‘‘(2) Paragraph (1) shall not apply, if—

11 ‘‘(A) a joint waiver of such method is

12 made, in writing, by the employee or Member

13 and the spouse; or

14 ‘‘(B) the employee or Member waives such

15 method, in writing, after establishing to the sat16 isfaction of the Executive Director that cir17 cumstances described under subsection (a)(2)

18 (A) or (B) make the requirement of a joint

19 waiver inappropriate.’’; and

20 (5) in subsection (c)(1) (as redesignated under

21 paragraph (3) of this subsection) by striking out

22 ‘‘and a transfer may not be made under section

23 8433(d) of this title’’.

24 (e) JUSTICES AND JUDGES.—Section 8440a(b) of

25 title 5, United States Code, is amended—
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1 (1) in paragraph (5) by striking out ‘‘Section

2 8433(d)’’ and inserting in lieu thereof ‘‘Section

3 8433(b)’’; and

4 (2) by striking out paragraphs (7) and (8) and

5 inserting in lieu thereof the following:

6 ‘‘(7) Notwithstanding paragraphs (4) and (5),

7 if any justice or judge retires under subsection (a)

8 or (b) of section 371 or section 372(a) of title 28,

9 or resigns without having met the age and service

10 requirements set forth under section 371(c) of title

11 28, and such justice’s or judge’s nonforfeitable ac12 count balance is $3,500 or less, the Executive Direc13 tor shall pay the nonforfeitable account balance to

14 the participant in a single payment unless the justice

15 or judge elects, at such time and otherwise in such

16 manner as the Executive Director prescribes, one of

17 the options available under section 8433(b).’’.

18 (f) BANKRUPTCY JUDGES AND MAGISTRATES.—Sec19 tion 8440b of title 5, United States Code, is amended—

20 (1) in subsection (b)(4) by amending subpara21 graph (B) to read as follows:

22 ‘‘(B) Section 8433(b) of this title applies

23 to any bankruptcy judge or magistrate who

24 elects to make contributions to the Thrift Sav25 ings Fund under subsection (a) of this section
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1 and who retires before attaining age 65 but is

2 entitled, upon attaining age 65, to an annuity

3 under section 377 of title 28 or section 2(c) of

4 the Retirement and Survivors Annuities for

5 Bankruptcy Judges and Magistrates Act of

6 1988.’’;

7 (2) in subsection (b)(4)(C) by striking out

8 ‘‘Section 8433(d)’’ and inserting in lieu thereof

9 ‘‘Section 8433(b)’’;

10 (3) in subsection (b)(5) by striking out ‘‘retire11 ment under section 377 of title 28 is’’ and inserting

12 in lieu thereof ‘‘any of the actions described under

13 paragraph (4) (A), (B), or (C) shall be considered’’;

14 (4) in subsection (b) by striking out paragraph

15 (8) and redesignating paragraph (9) as paragraph

16 (8); and

17 (5) in paragraph (8) of subsection (b) (as re18 designated under paragraph (4) of this sub19 section)—

20 (A) by striking out ‘‘Notwithstanding sub21 paragraphs (A) and (B) of paragraph (4), if

22 any bankruptcy judge or magistrate retires

23 under circumstances making such bankruptcy

24 judge or magistrate eligible to make an election

25 under subsection (b) or (c)’’ and inserting in
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1 lieu thereof ‘‘Notwithstanding paragraph (4), if

2 any bankruptcy judge or magistrate retires

3 under circumstances making such bankruptcy

4 judge or magistrate eligible to make an election

5 under subsection (b)’’; and

6 (B) by striking out ‘‘and (c), as applica7 ble’’.

8 (g) CLAIMS COURT JUDGES.—Section 8440c of title

9 5, United States Code, is amended—

10 (1) in subsection (b)(4)(B) by striking out

11 ‘‘Section 8433(d)’’ and inserting in lieu thereof

12 ‘‘Section 8433(b)’’;

13 (2) in subsection (b)(5) by striking out ‘‘retire14 ment under section 178 of title 28, is’’ and inserting

15 in lieu thereof ‘‘any of the actions described in para16 graph (4) (A) or (B) shall be considered’’;

17 (3) in subsection (b) by striking out paragraph

18 (8) and redesignating paragraph (9) as paragraph

19 (8); and

20 (4) in paragraph (8) (as redesignated under

21 paragraph (3) of this subsection) by striking out

22 ‘‘Notwithstanding paragraph (4)(A)’’ and inserting

23 in lieu thereof ‘‘Notwithstanding paragraph (4)’’.

24 (h) JUDGES OF THE UNITED STATES COURT OF

25 VETERANS APPEALS.—Section 8440d(b)(5) of title 5,
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1 United States Code, is amended by striking out ‘‘A trans2 fer shall be made as provided under section 8433(d) of

3 this title’’ and inserting in lieu thereof ‘‘Section 8433(b)

4 of this title applies’’.

5 (i) TECHNICAL AND CONFORMING AMENDMENTS.—

6 Chapters 83 and 84 of title 5, United States Code, are

7 amended—

8 (1) in section 8351(b)(5)(B) (as redesignated

9 under subsection (a)(3) of this section) by striking

10 out ‘‘section 8433(i)’’ and inserting in lieu thereof

11 ‘‘section 8433(g)’’;

12 (2) in section 8351(b)(5)(D) (as redesignated

13 under subsection (a)(3) of this section) by striking

14 out ‘‘section 8433(i)’’ and inserting in lieu thereof

15 ‘‘section 8433(g)’’;

16 (3) in section 8433(b)(4) by striking out ‘‘sub17 section (e)’’ and inserting in lieu thereof ‘‘subsection

18 (c)’’;

19 (4) in section 8433(d)(1) (as redesignated

20 under subsection (b)(2) of this section) by striking

21 out ‘‘(d) of section 8435’’ and inserting in lieu

22 thereof ‘‘(c) of section 8435’’;

23 (5) in section 8433(d)(2) (as redesignated

24 under subsection (b)(2) of this section) by striking
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1 out ‘‘section 8435(d)’’ and inserting in lieu thereof

2 ‘‘section 8435(c)’’;

3 (6) in section 8433(e) (as redesignated under

4 subsection (b)(2) of this section) by striking out

5 ‘‘section 8435(d)(2)’’ and inserting in lieu thereof

6 ‘‘section 8435(c)(2)’’;

7 (7) in section 8433(g)(5) (as redesignated

8 under subsection (b)(2) of this section) by striking

9 out ‘‘section 8435(f)’’ and inserting in lieu thereof

10 ‘‘section 8435(e)’’;

11 (8) in section 8434(b) by striking out ‘‘section

12 8435(c)’’ and inserting in lieu thereof ‘‘section

13 8435(b)’’;

14 (9) in section 8435(a)(1)(B) by striking out

15 ‘‘subsection (c)’’ and inserting in lieu thereof ‘‘sub16 section (b)’’;

17 (10) in section 8435(d)(1)(B) (as redesignated

18 under subsection (d)(3) of this section) by striking

19 out ‘‘subsection (d)(2)’’ and inserting in lieu thereof

20 ‘‘subsection (c)(2)’’;

21 (11) in section 8435(d)(3)(A) (as redesignated

22 under subsection (d)(3) of this section) by striking

23 out ‘‘subsection (c)(1)’’ and inserting in lieu thereof

24 ‘‘subsection (b)(1)’’;
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1 (12) in section 8435(d)(6) (as redesignated

2 under subsection (d)(3) of this section) by striking

3 out ‘‘or (c)(2)’’ and inserting in lieu thereof ‘‘or

4 (b)(2)’’;

5 (13) in section 8435(e)(1)(A) (as redesignated

6 under subsection (d)(3) of this section) by striking

7 out ‘‘section 8433(i)’’ and inserting in lieu thereof

8 ‘‘section 8433(g)’’;

9 (14) in section 8435(e)(2) (as redesignated

10 under subsection (d)(3) of this section) by striking

11 out ‘‘section 8433(i) of this title shall not be ap12 proved if approval would have the result described in

13 subsection (d)(1)’’ and inserting in lieu thereof ‘‘sec14 tion 8433(g) of this title shall not be approved if ap15 proval would have the result described under sub16 section (c)(1)’’;

17 (15) in section 8435(g) (as redesignated under

18 subsection (d)(3) of this section) by striking out

19 ‘‘section 8433(i)’’ and inserting in lieu thereof ‘‘sec20 tion 8433(g)’’;

21 (16) in section 8437(c)(5) by striking out ‘‘sec22 tion 8433(i)’’ and inserting in lieu thereof ‘‘section

23 8433(g)’’; and
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1 (17) in section 8440a(b)(6) by striking out

2 ‘‘section 8351(b)(7)’’ and inserting in lieu thereof

3 ‘‘section 8351(b)(5)’’.

4 (j) INTERIM PROVISION.—Section 8433(d) of title 5,

5 United States Code, is amended by striking out ‘‘shall

6 transfer the amount of the balance’’ and inserting in lieu

7 thereof ‘‘may transfer the amount of the balance’’.

8 (k) EFFECTIVE DATES.—(1) Except as provided in

9 paragraph (2), the provisions of this section shall take ef10 fect 1 year after the date of enactment of this Act or upon

11 such other date as the Executive Director of the Federal

12 Retirement Thrift Investment Board shall provide in regu13 lation.

14 (2) The provisions of subsection (j) of this section

15 shall take effect upon the date of the enactment of this

16 Act.

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