This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

54491 

Vol. 74, No. 203 

Thursday, October 22, 2009 

FEDERAL RETIREMENT THRIFT 

INVESTMENT BOARD 

5 CFR Parts 1604, 1651, 1653, and 1690 

Uniformed Services Accounts; Death 

Benefits; Court Orders and Legal 

Processes Affecting Thrift Savings 

Plan Accounts; Thrift Savings Plan 

AGENCY: Federal Retirement Thrift 

Investment Board. 

ACTION: Proposed rules with request for 

comments. 

SUMMARY: The Federal Retirement Thrift 

Investment Board (Agency) proposes to 

amend its regulations regarding 

uniformed services accounts to conform 

with mandatory tax provisions as well 

as current record keeping practices and 

allow only for pro rata court-ordered 

payments. 

The Agency proposes to amend its 

regulations regarding death benefits to 

provide for a clear process by which 

children of participants can establish 

parentage. 

The Agency proposes to amend its 

court order regulations so that when a 

court order directs that payment is to 

include earnings, the Agency is able to 

make a payment which calculates the 

payee’s award amount based on the 

current price of the shares he/she was 

awarded. 

The Agency also proposes to amend 

its court order regulations to remove a 

provision which permits courts to direct 

payment from only the tax-exempt 

balance of a uniformed services account. 

The Agency proposes to amend its 

regulations at part 1690, subpart B, to 

add a regulation outlining the 

circumstances under which a TSP 

account may be frozen. 

DATES: Comments must be received on 

or before November 23, 2009. 

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: Thomas Emswiler, Federal 

Retirement Thrift Investment Board, 

1250 H Street, NW., Washington, DC 

20005. 

• Hand Delivery/Courier: The address 

for sending comments by hand delivery 

or courier is the same as that for 

submitting comments by mail. 

• Facsimile: Comments may be 

submitted by facsimile at (202) 942– 

1676. 

The most helpful comments explain 

the reason for any recommended change 

and include data, information, and the 

authority that supports the 

recommended change. We will post all 

substantive comments (including any 

personal information provided) without 

change (with the exception of redaction 

of SSNs, profanities, et cetera) on 

http://www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: Tim 

Carey at 202–942–1666 or Laurissa 

Stokes at 202–942–1645. 

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. 

8351 and 8401–79. The TSP is a taxdeferred retirement savings plan for 

Federal civilian employees and 

members of the uniformed services. The 

TSP is similar to cash or deferred 

arrangements established for privatesector employees under section 401(k) 

of the Internal Revenue Code (26 U.S.C. 

401(k)). 

Uniformed Services Accounts 

The Agency proposes to amend its 

regulations regarding uniformed 

services accounts, and, specifically, its 

provisions relating to the division of a 

uniformed services account pursuant to 

a court order or legal process. The 

Agency seeks to remove a provision 

suggesting that courts could direct the 

Plan to make a court-ordered payment 

other than one that is pro rata from both 

taxable and tax-exempt contributions. 

Uniformed services accounts are 

unique in that some or all of a 

uniformed services member’s 

contributions may derive from taxexempt income as a result of the combat 

zone tax exclusion. In 2001, the Agency 

issued final regulations regarding the 

uniformed services’ participation in the 

TSP. Among many changes, the Agency 

determined that ‘‘the TSP can honor a 

court order or legal process that 

apportions combat zone (tax-exempt) 

contributions between the participant 

and the payee,’’ and, therefore, the final 

version of 5 CFR 1604.9(b) regarding 

court-ordered payments from a 

uniformed services member’s account 

stated that payment will be made pro 

rata from all sources ‘‘unless the court 

order or legal process directs 

otherwise.’’ (66 FR 50716, October 4, 

2001). 

The Agency recently analyzed its 

authority and record keeping capability 

to issue payments from, as the 

regulation suggests, only one source of 

contributions in a uniformed services 

participant’s account. The Agency has 

concluded that the Internal Revenue 

Code (I.R.C.) permits only pro rata 

payments from both taxable and taxexempt funds, and that a court cannot 

direct the Plan to make a payment from, 

for example, only tax-exempt funds. 

Specifically, I.R.C. sections 72 and 

402(e)(1)(A) preclude an allocation of 

basis pursuant to a court order if such 

allocation is other than pro rata. In 

particular, for purposes of determining 

tax liability, a spousal alternate payee is 

treated the same as the participant and, 

therefore, a distribution to a spouse or 

former spouse made pursuant to a court 

order must be made pro rata from 

taxable and tax-exempt amounts in a 

uniformed services account. 26 U.S.C. 

402(e)(1)(A). Therefore, the Agency’s 

regulation permitting courts to order a 

payment other than pro rata is not 

permitted by the I.R.C. and must be 

changed. 

Additionally, the Agency’s record 

keeping system cannot issue a payment 

from only one source of funds because 

it is programmed to make all payments 

from uniformed services accounts on a 

pro rata basis from taxable and taxexempt balances. Therefore, changing 

this regulation to remove the language 

which suggests a court could direct the 

Agency to issue a payment other than 

one which is pro rata is not only 

technically correct but also reflects 

current record keeping processes. 

Death Benefits 

The Agency proposes to amend its 

regulations regarding death benefits, 

and, in particular, its regulation 

regarding payment to a participant’s 

child or children. Specifically, the 

Agency seeks to clarify the 

documentation children should submit 


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54492 Federal Register / Vol. 74, No. 203 / Thursday, October 22, 2009 / Proposed Rules 

in the event that the identity of their 

father or mother is in dispute or unclear. 

As familial matters, including 

guidelines related to parentage, are 

rooted in state, not Federal, law, the 

Agency cannot adjudicate or otherwise 

determine matters of paternity or 

maternity. In support of their contention 

that they are the proper beneficiary of 

their parent’s account, children of 

deceased participants often submit 

insufficient or otherwise unclear 

documentation (e.g., copies of obituaries 

and personal mementos). A lack of 

guidance regarding which documents to 

submit in support of parentage adds 

unnecessary time and inconvenience to 

the processing of death benefit 

determinations. 

The Agency, therefore, proposes to 

augment its death benefits regulations to 

describe the documentation it requires 

in support of a purported child’s claim 

that a participant was his or her parent. 

Specifically, the Agency requests that 

affected children submit a court order or 

administrative finding or 

documentation which would establish 

parentage in the state in which the 

participant resided prior to his death. 

Court Orders and Legal Processes 

Affecting Thrift Savings Plan Accounts 

The Agency is proposing to change its 

court order regulations to allow for 

court-awarded payments which account 

for investment earnings and losses as 

well as to reflect the previouslydiscussed requirement that all payments 

from participants’ accounts be paid pro 

rata. 

Currently, in order for the Agency to 

take into account investment losses, a 

court order has to divide the account as 

of the date of distribution or identify a 

fixed amount that the parties agreed 

upon. Further, per the Agency’s 

regulations, if a court order specifies 

that earnings are to be awarded and no 

specific rate is provided, even when an 

account experiences investment losses, 

the Agency awards earnings using its 

Government Securities Investment (G) 

Fund rate. 5 CFR 1653.4(f)(3). 

The Agency, which receives many 

court orders directing that payments 

reflect earnings and losses until the date 

of distribution, proposes to change its 

regulations so that the division of an 

account factors in the current price of 

those shares included in a payee’s 

award amount. 

In particular, if earnings, defined to 

include losses, are requested and a rate 

is not specified, the Agency proposes to 

determine the amount to be awarded by 

determining the payee’s award amount 

(e.g., the percentage or fraction of the 

participant’s account), and, based on the 

participant’s investment allocation as of 

the effective date of the court order, the 

number and composition of shares that 

the payee’s award amount would have 

purchased as of the effective date. 

(Determining the shares as of the 

effective date of the court order, and not 

a later date, preserves the court’s intent 

and protects the payee from investment 

decisions made by the participant after 

the effective date of the court order.) 

The Agency will then multiply the price 

per share as of the payment date, which 

is generally two business days prior to 

the date of the award’s disbursement, by 

the number and composition of shares 

comprising the payee’s award amount as 

of the court order’s effective date. 

The Agency believes that this 

calculation will result in more equitable 

awards as well as more efficient court 

order processing as parties are not 

required to return to court for additional 

or clarifying language. 

As previously discussed, the Agency 

also proposes to amend its court order 

and legal process regulations in order to 

conform with the I.R.C. and current 

record keeping procedures. In 

particular, the Agency seeks to remove 

language from § 1653.5(d) which states 

that a court may specify a particular 

payment from the tax-exempt balance of 

a uniformed services account. Please see 

the Supplemental Information 

discussion regarding Uniformed 

Services Accounts for an overview as to 

why the Agency is proposing to remove 

such language. 

Thrift Savings Plan 

The Agency wishes to add a 

regulation outlining the circumstances 

under which a participant’s account 

may be frozen and when access to the 

Agency’s web site and ThriftLine may 

be blocked. Though uncommon, freezes 

(or administrative holds) prevent a 

participant from withdrawing funds, 

including loans, from his or her 

account, and, therefore, the Agency 

seeks to place its participants on notice 

regarding the circumstances under 

which such a hold may occur and also 

the consequences of such a hold. 

Regulatory Flexibility Act 

I certify that this regulation will not 

have a significant economic impact on 

a substantial number of small entities. 

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 

Government Accountability Office 

Pursuant to 5 U.S.C. 810(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 

5 CFR Part 1604 

Military personnel, Pensions, 

Retirement. 

5 CFR Part 1651 

Claims, Government employees, 

Pensions, Retirement. 

5 CFR Part 1653 

Alimony, Child support, Claims, 

Government employees, Pensions, 

Retirement. 

5 CFR Part 1690 

Government employees, Pensions, 

Retirement. 

Gregory T. Long, 

Executive Director, Federal Retirement Thrift 

Investment Board. 

For the reasons stated in the 

preamble, the Agency proposes to 

amend 5 CFR chapter VI as follows: 

PART 1604—UNIFORMED SERVICES 

ACCOUNTS 

1. The authority citation for part 1604 

continues to read as follows: 

Authority: 5 U.S.C. 8440e, 8474(b)(5) and 

(c)(1). 

2. Amend § 1604.9 to revise paragraph 

(b) to read as follows: 

§ 1604.9 Court orders and legal processes. 

* * * * * 

(b) Combat zone contributions. If a 

service member account contains 

combat zone contributions, the payment 

will be made pro rata from all sources. 

* * * * * 


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Federal Register / Vol. 74, No. 203 / Thursday, October 22, 2009 / Proposed Rules 54493 

PART 1651—DEATH BENEFITS 

3. The authority citation for part 1651 

continues to read as follows: 

Authority: 5 U.S.C. 8424(d), 8432(j), 

8433(e), 8435(c)(2), 8474(b)(5) and 8474(c)(1). 

4. Amend § 1651.1 to add the 

definition of ‘‘Administrative finding’’, 

in alphabetical order, in paragraph (b) to 

read as follows: 

§ 1651.1 Definitions. 

* * * * * 

(b) * * * 

Administrative finding means an 

evidence-based determination reached 

by a hearing, inquiry, investigation, or 

trial before an administrative agency of 

competent jurisdiction in any State, 

territory or possession of the United 

States. 

* * * * * 

5. Amend § 1651.6 to add a paragraph 

(d) to read as follows: 

§ 1651.6 Child or children. 

* * * * * 

(d) Parentage disputes. If the identity 

of the father or mother of a child is in 

dispute or otherwise unclear (e.g., only 

one parent is listed on a birth 

certificate), the purported child must 

submit to the TSP either: 

(1) A court order or other 

administrative finding establishing 

parentage; or 

(2) Documentation sufficient for 

establishing parentage under the law of 

the state in which the participant was 

domiciled at the time of death. 

PART 1653—COURT ORDERS AND 

LEGAL PROCESSES AFFECTING 

THRIFT SAVINGS PLAN ACCOUNTS 

6. The authority citation for part 1653 

continues to read as follows: 

Authority: 5 U.S.C. 8435, 8436(b), 8437(e), 

8439(a)(3), 8467, 8474(b)(5) and 8474(c)(1). 

7. Amend § 1653.1 to add the 

definitions of ‘‘Payment date’’ and ‘‘TSP 

investment earnings or earnings’’, in 

alphabetical order in paragraph (b) to 

read as follows: 

§ 1653.1 Definitions. 

* * * * * 

(b) * * * 

* * * * * 

Payment date refers to the date on 

which earnings are determined and is 

generally two business days prior to the 

date of an award’s disbursement. 

* * * * * 

TSP investment earnings or earnings 

means both positive and negative fund 

performance attributable to differences 

in TSP fund share prices. 

* * * * * 

8. Amend § 1653.4 to revise paragraph 

(f)(3) and remove paragraph (f)(4) to 

read as follows: 

§ 1653.4 Calculating entitlements. 

* * * * * 

(f) * * * 

(3) If earnings are awarded and the 

rate is not specified, the Agency will 

calculate the amount to be awarded by: 

(i) Determining the payee’s award 

amount (e.g., the percentage or fraction 

of the participant’s account); 

(ii) Determining, based on the 

participant’s investment allocation as of 

the effective date of the court order, the 

number and composition of shares that 

the amount in paragraph (f)(3)(i) of this 

section would have purchased as of the 

effective date; and 

(iii) Multiplying the price per share as 

of the payment date by the number and 

composition of shares calculated in 

paragraph (f)(3)(ii) of this section. 

* * * * * 

§ 1653.5 [Amended] 

9. Amend § 1653.5 by removing the 

last sentence of paragraph (d). 

PART 1690—THRIFT SAVINGS PLAN 

10. The authority citation for part 

1690 continues to read as follows: 

Authority: 5 U.S.C. 8474. 

10. Add § 1690.15 to read as follows: 

§ 1690.15 Freezing an account— 

administrative holds. 

(a) The TSP may freeze (e.g., place an 

administrative hold on) a participant’s 

account for any of the following reasons: 

(1) Pursuant to a qualifying retirement 

benefits court order as set forth in part 

1653 of this chapter; 

(2) Pursuant to a request from the 

Department of Justice under the 

Mandatory Victims Restitution Act; 

(3) Upon the death of a participant; 

(4) Upon suspicion or knowledge of 

fraudulent account activity or identity 

theft; 

(5) In response to litigation pertaining 

to an account; 

(6) For operational reasons (e.g., to 

correct a processing error or to stop 

payment on a check when account 

funds are insufficient); 

(7) Pursuant to a written request from 

a participant; and 

(8) For any other reason the TSP 

deems prudent. 

(b) An account freeze (i.e., 

administrative hold) prohibits a 

participant from withdrawing funds, 

including loans, from his or her 

account. The participant continues to 

have the capability to conduct all other 

transactions including making 

contributions, changing contribution 

allocations, and making interfund 

transfers. 

(c) The Agency will notify the 

participant that his or her account has 

been frozen unless it determines it 

prudent to not notify the participant 

that his of her account has been frozen. 

(d) A participant may block on-line 

and ThriftLine access to his or her 

account by writing to the TSP or by 

submitting a request at http:// 

www.tsp.gov. 

(e) A participant may remove a 

participant-initiated freeze 

(administrative hold) by submitting a 

notarized request to the TSP. 

[FR Doc. E9–25426 Filed 10–21–09; 8:45 am] 

BILLING CODE 6760–01–P 

DEPARTMENT OF AGRICULTURE 

Food Safety and Inspection Service 

9 CFR Parts 321, 332, and 381 

[Docket No. FSIS–2008–0039] 

RIN 0583–AD37 

Cooperative Inspection Programs: 

Interstate Shipment of Meat and 

Poultry Products 

AGENCY: Food Safety and Inspection 

Service, USDA. 

ACTION: Notice of public meetings. 

SUMMARY: The Food Safety and 

Inspection Service (FSIS) is announcing 

that it will hold two public meetings on 

proposed regulations that it recently 

published to implement a new 

voluntary cooperative program under 

which State-inspected establishments 

with 25 or fewer employees will be 

eligible to ship meat and poultry 

products in interstate commerce (74 FR 

47648, September 16, 2009). To provide 

stakeholders with ready access to the 

public meetings, FSIS will conduct 

these meetings by teleconference. This 

notice provides information on the 

public meetings. 

DATES: The teleconferences will be held 

on October 27, 2009, from 12:30 p.m. to 

4:30 p.m. EST, and on November 5, 

2009, from 12:30 p.m. to 4:30 p.m. EST. 

ADDRESSES: 

Registration: Pre-registration for these 

meetings is required. To pre-register, 

access the FSIS Web site, at http:// 

www.fsis.usda.gov/News/ 

Meetings_&_Events/. Call-in information 

will be provided via e-mail to preregistered participants. We are also 

asking that anyone interested in making 

a public comment during the 


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