18912 Federal Register / Vol. 61, No. 83 / Monday, April 29, 1996 / Rules and Regulations

FEDERAL RETIREMENT THRIFT

INVESTMENT BOARD

5 CFR Part 1653

Domestic Relations Orders Affecting

Thrift Savings Plan Accounts

AGENCY: Federal Retirement Thrift

Investment Board.

ACTION: Final rule.

SUMMARY: The Executive Director of the

Federal Retirement Thrift Investment

Board (Board) is amending the Board’s

regulations governing payments from

the Thrift Savings Plan (TSP) pursuant

to retirement benefits court orders and

in response to legal process for the

enforcement of a participant’s legal

obligations to provide child support or

make alimony payments. This final rule

amends Board regulations to provide for

elimination of the mandatory 30-day tax

notification period.

EFFECTIVE DATE: These final rules are

effective April 29, 1996.

FOR FURTHER INFORMATION CONTACT:

Thomas L. Gray, Assistant General

Counsel for Administration. (202) 942–

1662. FAX (202) 942–1676.

SUPPLEMENTARY INFORMATION: The Board

administers the Thrift Savings Plan

(TSP) pursuant to the Federal

Employees’ Retirement System Act of

1986, Pub. L. 99–335, 100 Stat. 514

(codified primarily at 5 U.S.C. 8401–

8479 (1994)).

Under 5 U.S.C. 8467(a) and 8435(c), a

court decree of divorce, annulment, or

legal separation, or a court order or

court-approved property settlement

agreement incident to such a court

decree can award benefits from a TSP

participant’s account to someone other

than the participant, such as the

participant’s spouse or former spouse.

The Board refers to these court orders as

retirement benefits court orders, and

final regulations governing them were

published by the Board at 60 FR 13604

(1995) (to be codified at 5 CFR part

1653, subpart A).

Under 8437(e)(3), sums in the TSP

also are subject to legal process for the

enforcement of a participant’s or

beneficiary’s past-due legal obligations

to provide child support or make

alimony payments. The final regulations

governing such legal process were

published at 60 FR 66061 (1995) (to be

codified at 5 CFR part 1653, subpart B).

This final rule amends both the final

rule governing retirement benefits court

orders and the final rule governing legal

process.

Existing regulations at section 1653.5,

Procedures for payment pursuant to

retirement benefits court orders, and

section 1653.25, Payment pursuant to

qualifying legal process, provide that

payment will be made no sooner than

30 days after the Board’s decision has

been issued and the appropriate tax

withholding notification has been

provided. This minimum waiting period

is provided because under Internal

Revenue Code provisions the payee will

often have the right to elect to transfer

the payment to an Individual

Retirement Account (IRA) or other

eligible retirement plan, or to make a tax

withholding election. The existing

regulations do not permit the taxpayer

to shorten this period. This rule change

allows the taxpayer to waive this period

and receive a TSP payment sooner.

Accordingly, following the Board’s

decision, the payee will be provided

Form TSP–13–S, Notice of Pending

Court-Order Thrift Savings Plan

Payment and Tax Withholding

Information. The taxpayer may waive

the notice period by submitting the

waiver statement on that form or by

submitting a letter containing an

explicit waiver statement.

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 internal Board

procedures for payments pursuant to

court orders and in response to legal

process and provide an opportunity to

waive the tax notification period, and

thus, shorten the period for receipt of

these payments.

Paperwork Reduction Act

I certify that these regulations do not

require additional reporting under the

criteria of the Paperwork Reduction Act

of 1980.

Waiver of Notice of Proposed

Rulemaking and 30-Day Delay of

Effective Date

Under 5 U.S.C. 553(b)(3)(B) and (d)(3),

I find that good cause exists for waiving

the general notice of proposed

rulemaking and for making these

regulations effective in less than 30

days. The purpose of these changes is to

provide an opportunity to shorten the

time for payments pursuant to domestic

relations court orders. The Board

believes this opportunity should be

made available without delay.

Unfunded Mandates Reform Act of

1995

Pursuant to the Unfunded Mandates

Reform Act of 1995, Pub. L. No. 104–4,

section 201, 109 Stat. 48, 64, the effect

of this regulation on State, local, and

tribal governments and on the private

sector has been assessed. This

regulation will not compel the

expenditure in any one year of $100

million or more by any State, local, or

tribal governments in the aggregate or by

the private sector. Therefore, a

statement under section 202, 109 Stat.

48, 64–65, is not required.

List of Subjects in 5 CFR Part 1653

Employee benefit plans, Government

employees, Retirement, Pensions.

Federal Retirement Thrift Investment Board.

Roger W. Mehle,

Executive Director.

For the reasons set out in the

preamble, 5 CFR part 1653 is to be

amended as set forth below:

PART 1653—DOMESTIC RELATIONS

ORDERS AFFECTING THRIFT

SAVINGS PLAN ACCOUNTS

1. The authority citation for part 1653

continues to read as follows:

Authority: 5 U.S.C. 8435, 8436(b),

8437(e)(3), 8467, 8474(b)(5) and 8474(c)(1).

2. Section 1653.5 is amended by

revising paragraph (a) to read as follows:

§ 1653.5 Procedures for payment pursuant

to retirement benefits court orders.

(a) If a qualifying court order creates

an entitlement to a portion of a TSP

account under this part, payment will

be made after the Board’s decision has

been issued and the 30-day tax

withholding notification period has

ended. The taxpayer may receive the

payment sooner by waiving the tax

notification period.

* * * * *

3. Section 1653.25 is amended by

revising paragraph (a) to read as follows:

§ 1653.25 Payment pursuant to qualifying

legal process.

(a) Payment will be made pursuant to

qualifying legal process after the Board’s

decision has been issued and the 30-day

tax withholding notification period has

ended. The taxpayer may receive the

payment sooner by waiving the tax

notification period.

* * * * *

[FR Doc. 96–10366 Filed 4–26–96; 8:45 am]

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