80 FR 49173 - Default Investment Fund Errors
FEDERAL RETIREMENT THRIFT INVESTMENT BOARD Federal Register Volume 80, Issue 158 (August 17, 2015)
Federal Register Volume 80, Issue 158 (August 17, 2015)
| Page Range | 49173-49175 | |
| FR Document | 2015-20273 |
[Federal Register Volume 80, Number 158 (Monday, August 17, 2015)] [Proposed Rules] [Pages 49173-49175] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-20273] ======================================================================= ----------------------------------------------------------------------- FEDERAL RETIREMENT THRIFT INVESTMENT BOARD 5 CFR Part 1605 Default Investment Fund Errors AGENCY: Federal Retirement Thrift Investment Board ACTION: Proposed rule with request for comments. ----------------------------------------------------------------------- SUMMARY: The Federal Retirement Thrift Investment Board (Agency) proposes to amend its regulations to codify procedures for correcting certain default investment fund errors. DATES: Submit comments on or before September 16, 2015. ADDRESSES: You may submit comments using one of the following methods:Federal Rulemaking Portal: http://www.regulations.gov at Docket ID number FRTIB-2015-0003. Follow the instructions for submitting comments. Mail: Office of General Counsel, Attn: James Petrick, Federal Retirement Thrift Investment Board, 77 K Street NE., Suite 1000, Washington, DC 20002. 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. FOR FURTHER INFORMATION CONTACT: Austen Townsend at (202) 864-8647. SUPPLEMENTARY INFORMATION: The Agency administers the Thrift Savings Plan (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 tax-deferred retirement savings plan for Federal civilian employees, members of the uniformed services, and spouse beneficiaries. 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 December 18, 2014, the President signed the Smart Savings Act (``the Act''), Public Law 113-255 (128 Stat. 2920). The Act directed the Agency to invest any sums available for investment in the TSP for which an election has not been made in an age-appropriate target date asset allocation investment fund. On July 13, 2015, the Agency published a proposed rule to change the TSP's default investment fund from the TSP's Government Securities Investment Fund to the age- appropriate TSP Lifecycle Fund (L Fund) for civilian employees. 80 FR 39974. This proposed regulation would update the TSP's existing error correction rules to address the correction of default investment fund errors caused by erroneous dates of birth. Default Investment Fund Errors Erroneous dates of birth can result from participant error, employing agency error, Agency error, or record-keeper error. A participant's date of birth is used to determine his or her age- appropriate L Fund. An erroneous date of birth might therefore cause a participant's TSP account to be invested in an L Fund that is different from the L Fund his or her account would have been invested in had the participant's correct date of birth been used. This proposed regulation provides that the Agency will pay breakage when an erroneous date of birth caused by Agency or record-keeper error results in default investment in the wrong L Fund. In addition, the Agency will charge employing agencies breakage when an erroneous date of birth caused by employing agency error results in default investment in the wrong L Fund. To initiate a breakage calculation for an employee, the employing agency must notify the TSP that the participant is entitled to breakage. A date of birth change received from an employing agency will not trigger corrective action other than to update the date of birth. Consistent with the existing error correction procedures at 5 CFR 1605.22 for contribution allocation and interfund transfer errors, the participant [[Page 49174]] must file a breakage claim within 30 days of either the date the TSP provides the participant with a notice reflecting the error or the date the TSP makes available on its Web site a participant statement reflecting the error, whichever is earlier. Regulatory Flexibility Act I certify that this regulation will not have a significant economic impact on a substantial number of small entities. This regulation will affect Federal civilian employees and spouse beneficiaries who participate in the Thrift Savings Plan, which is a Federal defined contribution retirement savings plan created under the Federal Employees' Retirement System Act of 1986 (FERSA), Public Law 99-335, 100 Stat. 514, and which is administered by the Agency. 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. List of Subjects in 5 CFR Part 1605 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 1605-CORRECTION OF ADMINISTRATIVE ERRORS 0 1. The authority citation for part 1605 continues to read as follows: Authority: 5 U.S.C. 8351, 8432(a), 8432(d), 8474(b)(5) and (c)(1). Subpart B also issued under section 1043(b) of Public Law 104-106, 110 Stat. 186 and Sec. 7202(m)(2) of Public Law 101-508, 104 Stat. 1388. 0 2. Amend Sec. 1605.2 by revising the heading and paragraphs (b)(1)(i) and (c) to read as follows: Sec. 1605.2 Calculating, posting, and charging breakage on late contributions and loan payments. * * * * * (b) * * * (1) * * * (i) Use the participant's contribution allocation on file for the ``as of'' date to determine how the funds would have been invested. If there is no contribution allocation on file, or one cannot be derived based on the investment of contributions, the TSP will consider the funds to have been invested in the default investment fund in effect for the participant on the ``as of'' date. * * * * * (c) Posting contributions and loan payments. Makeup and late contributions, late loan payments, and breakage, will be posted to the participant's account according to his or her contribution allocation on file for the posting date. If there is no contribution allocation on file for the posting date, they will be posted to the default investment fund in effect for the participant. * * * * * 0 3. Add Sec. 1605.3 to read as follows: Sec. 1605.3 Calculating, posting, and charging breakage on errors involving investment in the wrong fund. (a) The TSP will calculate and post breakage on date of birth errors that result in default investment in the wrong L Fund, contribution allocation errors, and interfund transfer errors. (b) The TSP will charge the employing agency for positive breakage on incorrect dates of birth caused by employing agency error that result in default investment in the wrong L Fund. A date of birth change received from an employing agency will not trigger corrective action other than to update the date of birth. To initiate a breakage calculation for an employee, the employing agency must notify the TSP that the participant is entitled to breakage. 0 4. Amend Sec. 1605.13 by revising paragraph (a)(3) to read as follows: Sec. 1605.13 Back pay awards and other retroactive pay adjustments. (a) * * * (3) All contributions made under this paragraph (a) and associated breakage will be invested according to the participant's contribution allocation on the posting date. Breakage will be calculated using the share prices for the default investment fund in effect for the participant in accordance with Sec. 1605.2 unless otherwise required by the employing agency or the court or other tribunal with jurisdiction over the back pay case. * * * * * 0 5. Amend Sec. 1605.16, by re-designating the text of paragraph (a) as paragraph (a)(1), adding paragraph (a)(2), re-designating the text of paragraph (b) as paragraph (b)(1), and adding paragraphs (b)(2) and (b)(3) to read as follows: Sec. 1605.16 Claims for correction of employing agency errors; time limitations. (a) Agency's discovery of error. (1) Upon discovery of an error made within the past six months involving the correct or timely remittance of payments to the TSP (other than a retirement system misclassification error, as covered in paragraph (c) of this section), an employing agency must promptly correct the error on its own initiative. If the error was made more than six months before it was discovered, the agency may exercise sound discretion in deciding whether to correct it, but, in any event, the agency must act promptly in doing so. (2) For errors involving incorrect dates of birth caused by employing agency error that result in default investment in the wrong L Fund, the employing agency must promptly notify the TSP that the participant is entitled to breakage if the error is discovered within 30 days of either the date the TSP provides the participant with a notice reflecting the error or the date the TSP makes available on its Web site a participant statement reflecting the error, whichever is earlier. If it is discovered after that time, the employing agency may use its sound discretion in deciding whether to pay breakage, but, in any event, must act promptly in doing so. (b) Participant's discovery of error. (1) If an agency fails to discover an error of which a participant has knowledge involving the correct or timely remittance of a payment to the TSP (other than a retirement system misclassification error as covered by paragraph (c) of this section), the participant may file a claim with his or her employing agency to have the error corrected without a time limit. The agency must promptly correct any such error for which the participant files a claim within six months of its occurrence; if the participant files a claim to correct any such error after that time, the agency may do so at its sound discretion. (2) For errors involving incorrect dates of birth that result in default investment in the wrong L Fund of which a participant or beneficiary has knowledge, he or she may file a claim for breakage with the employing agency [[Page 49175]] no later than 30 days after either the date the TSP provides the participant with a notice reflecting the error or the date the TSP makes available on its Web site a participant statement reflecting the error, whichever is earlier. The employing agency must promptly notify the TSP that the participant is entitled to breakage. (3) If a participant or beneficiary fails to file a claim for breakage for errors involving incorrect dates of birth in a timely manner, the employing agency may nevertheless, in its sound discretion, pay breakage on any such error that is brought to its attention. * * * * * 0 6. Amend Sec. 1605.22, by revising paragraphs (b)(2), (c)(2), and (c)(3) to read as follows: Sec. 1605.22 Claims for correction of Board or TSP record keeper errors; time limitations. * * * * * (b) * * * (1) * * * (2) For errors involving an investment in the wrong fund caused by Board or TSP record keeper error, the Board or the TSP record keeper must promptly pay breakage if it is discovered within 30 days of the issuance of the most recent TSP participant (or loan) statement, transaction confirmation, or other notice that reflected the error, whichever is earlier. If it is discovered after that time, the Board or TSP record keeper may use its sound discretion in deciding whether to pay breakage, but, in any event, must act promptly in doing so. (c) * * * (1) * * * (2) For errors involving an investment in the wrong fund of which a participant or beneficiary has knowledge, he or she may file a claim for breakage with the Board or TSP record keeper no later than 30 days after the TSP provides the participant with a transaction confirmation or other notice reflecting the error, or makes available on its Web site a participant statement reflecting the error, whichever is earlier. The Board or TSP record keeper must promptly pay breakage for such errors. (3) If a participant or beneficiary fails to file a claim for breakage concerning an error involving an investment in the wrong fund in a timely manner, the Board or TSP record keeper may nevertheless, in its sound discretion, pay breakage for any such error that is brought to its attention. * * * * * 0 7. Amend Sec. 1605.31 by revising paragraph (d) to read as follows: Sec. 1605.31 Contributions missed as a result of military service. * * * * * (d) Breakage. The employee is entitled to breakage on agency contributions made under paragraph (c) of this section. The employee will elect to have the calculation based on either the contribution allocation(s) on file for the participant during the period of military service or the default investment fund in effect for the participant; the participant must make this election at the same time his or her makeup schedule is established pursuant to Sec. 1605.11(c). [FR Doc. 2015-20273 Filed 8-14-15; 8:45 am] BILLING CODE 6760-01-P
![49173
Proposed Rules Federal Register
Vol. 80, No. 158
Monday, August 17, 2015
This section of the FEDERAL REGISTER and fully operational before being made civilian employees, members of the
contains notices to the public of the proposed available to charities and donors. uniformed services, and spouse
issuance of rules and regulations. The beneficiaries. The TSP is similar to cash
U.S. Office of Personnel Management.
purpose of these notices is to give interested or deferred arrangements established for
persons an opportunity to participate in the Beth F. Cobert,
private-sector employees under section
rule making prior to the adoption of the final Acting Director.
401(k) of the Internal Revenue Code (26
rules. [FR Doc. 2015–20238 Filed 8–14–15; 8:45 am] U.S.C. 401(k)).
BILLING CODE 6325–58–P On December 18, 2014, the President
OFFICE OF PERSONNEL signed the Smart Savings Act (‘‘the
MANAGEMENT Act’’), Public Law 113–255 (128 Stat.
FEDERAL RETIREMENT THRIFT 2920). The Act directed the Agency to
5 CFR Part 950 INVESTMENT BOARD invest any sums available for
investment in the TSP for which an
RIN 3206–AM68 5 CFR Part 1605 election has not been made in an age-
appropriate target date asset allocation
Solicitation of Federal Civilian and Default Investment Fund Errors investment fund. On July 13, 2015, the
Uniformed Service Personnel for AGENCY: Federal Retirement Thrift Agency published a proposed rule to
Contributions to Private Voluntary Investment Board change the TSP’s default investment
Organizations; Delay of Effective Date ACTION: Proposed rule with request for fund from the TSP’s Government
and Addition of Comment Period comments. Securities Investment Fund to the age-
appropriate TSP Lifecycle Fund (L
AGENCY: Office of Personnel Fund) for civilian employees. 80 FR
SUMMARY: The Federal Retirement Thrift
Management. 39974. This proposed regulation would
Investment Board (Agency) proposes to
ACTION: Proposed rule with request for amend its regulations to codify update the TSP’s existing error
comments. procedures for correcting certain default correction rules to address the
investment fund errors. correction of default investment fund
SUMMARY: The U.S. Office of Personnel
DATES: Submit comments on or before errors caused by erroneous dates of
Management (OPM) is issuing a
September 16, 2015. birth.
proposed rule to delay the effective date
that appeared in the final rule published ADDRESSES: You may submit comments Default Investment Fund Errors
in the Federal Register on April 17, using one of the following methods: Erroneous dates of birth can result
2014 titled ‘‘Solicitation of Federal • Federal Rulemaking Portal: http://
from participant error, employing
Civilian and Uniformed Service www.regulations.gov at Docket ID
agency error, Agency error, or record-
Personnel for Contributions to Private number FRTIB–2015–0003. Follow the
keeper error. A participant’s date of
Voluntary Organizations’’ to January 1, instructions for submitting comments.
birth is used to determine his or her age-
2017. OPM is requesting comments on • Mail: Office of General Counsel,
appropriate L Fund. An erroneous date
the proposed rule. Attn: James Petrick, Federal Retirement
of birth might therefore cause a
Thrift Investment Board, 77 K Street
DATES: OPM must receive comments on participant’s TSP account to be invested
NE., Suite 1000, Washington, DC 20002.
or before September 16, 2015. in an L Fund that is different from the
• Hand Delivery/Courier: The address
ADDRESSES: You may submit comments, L Fund his or her account would have
for sending comments by hand delivery
identified by RIN number ‘‘3206– been invested in had the participant’s
or courier is the same as that for
AM68’’, using the Federal eRulemaking correct date of birth been used. This
submitting comments by mail.
Portal: www.regulations.gov. Follow the • Facsimile: Comments may be proposed regulation provides that the
instructions for submitting comments. submitted by facsimile at (202) 942– Agency will pay breakage when an
erroneous date of birth caused by
FOR FURTHER INFORMATION CONTACT: 1676.
The most helpful comments explain Agency or record-keeper error results in
Mary Capule by telephone at (202) 606–
the reason for any recommended change default investment in the wrong L Fund.
2564; by FAX at (202) 606–5056; or by In addition, the Agency will charge
email at cfc@opm.gov. and include data, information, and the
employing agencies breakage when an
SUPPLEMENTARY INFORMATION: OPM authority that supports the
erroneous date of birth caused by
proposes to delay the effective date of recommended change.
employing agency error results in
the final rule entitled ‘‘Solicitation of FOR FURTHER INFORMATION CONTACT: default investment in the wrong L Fund.
Federal Civilian and Uniformed Service Austen Townsend at (202) 864–8647. To initiate a breakage calculation for an
Personnel for Contributions to Private SUPPLEMENTARY INFORMATION: The employee, the employing agency must
Voluntary Organizations’’ (FR Doc. Agency administers the Thrift Savings
mstockstill on DSK4VPTVN1PROD with PROPOSALS
notify the TSP that the participant is
2014–08574, in the Federal Register of Plan (TSP), which was established by entitled to breakage. A date of birth
April 17, 2014 (79 FR 21581)), to the Federal Employees’ Retirement change received from an employing
January 1, 2017. The new effective date System Act of 1986 (FERSA), Public agency will not trigger corrective action
for the CFC regulations would ensure Law 99–335, 100 Stat. 514. The TSP other than to update the date of birth.
that the tools needed to put these provisions of FERSA are codified, as Consistent with the existing error
reforms in place—including the pivotal amended, largely at 5 U.S.C. 8351 and correction procedures at 5 CFR 1605.22
online charity application and donor 8401–79. The TSP is a tax-deferred for contribution allocation and
pledging systems—are thoroughly tested retirement savings plan for Federal interfund transfer errors, the participant
VerDate Sep<11>2014 16:52 Aug 14, 2015 Jkt 235001 PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 E:\FR\FM\17AUP1.SGM 17AUP1](https://thefederalregister.org/doc/80_FR_49331/page/1.svg)
![Federal Register / Vol. 80, No. 158 / Monday, August 17, 2015 / Proposed Rules 49175
no later than 30 days after either the § 1605.31 Contributions missed as a result as well as information pertaining to the
date the TSP provides the participant of military service. carrier, broker, importer, and other
with a notice reflecting the error or the * * * * * persons associated with the manifest,
date the TSP makes available on its Web (d) Breakage. The employee is import, or commercial entry
site a participant statement reflecting entitled to breakage on agency transactions for the goods. In this
the error, whichever is earlier. The contributions made under paragraph (c) proposed rulemaking, the Department
employing agency must promptly notify of this section. The employee will elect proposes to exempt portions of the
the TSP that the participant is entitled to have the calculation based on either system of records from one or more
to breakage. the contribution allocation(s) on file for provisions of the Privacy Act because of
(3) If a participant or beneficiary fails the participant during the period of criminal, civil, and administrative
to file a claim for breakage for errors military service or the default enforcement requirements.
involving incorrect dates of birth in a investment fund in effect for the DATES: Comments must be received on
timely manner, the employing agency participant; the participant must make or before September 16, 2015.
may nevertheless, in its sound this election at the same time his or her ADDRESSES: You may submit comments,
discretion, pay breakage on any such makeup schedule is established identified by docket number DHS–
error that is brought to its attention. pursuant to § 1605.11(c). 2015–0046, by one of the following
* * * * * [FR Doc. 2015–20273 Filed 8–14–15; 8:45 am] methods:
■ 6. Amend § 1605.22, by revising BILLING CODE 6760–01–P • Federal e-Rulemaking Portal:
paragraphs (b)(2), (c)(2), and (c)(3) to http://www.regulations.gov. Follow the
read as follows: instructions for submitting comments.
DEPARTMENT OF HOMELAND • Fax: 202–343–4010.
§ 1605.22 Claims for correction of Board • Mail: Karen L. Neuman, Chief
or TSP record keeper errors; time SECURITY
Privacy Officer, Privacy Office,
limitations.
Office of the Secretary Department of Homeland Security,
* * * * * Washington, DC 20528.
(b) * * * Instructions: All submissions received
6 CFR Part 5
(1) * * * must include the agency name and
(2) For errors involving an investment [Docket No. DHS–2015–0046] docket number for this notice. All
in the wrong fund caused by Board or comments received will be posted
TSP record keeper error, the Board or Privacy Act of 1974: Implementation of without change to http://
the TSP record keeper must promptly Exemptions; Department of Homeland www.regulations.gov, including any
pay breakage if it is discovered within Security DHS/CBP–001, Import personal information provided.
30 days of the issuance of the most Information System, System of Docket: For access to the docket to
recent TSP participant (or loan) Records, System of Records read background documents or
statement, transaction confirmation, or AGENCY: Privacy Office, Department of comments received, go to http://
other notice that reflected the error, Homeland Security. www.regulations.gov.
whichever is earlier. If it is discovered FOR FURTHER INFORMATION CONTACT: For
ACTION: Notice of proposed rulemaking.
after that time, the Board or TSP record general questions, please contact: John
keeper may use its sound discretion in SUMMARY: The Department of Homeland Connors (202) 344–1610, CBP Privacy
deciding whether to pay breakage, but, Security is giving concurrent notice for Officer, Office of the Commissioner,
in any event, must act promptly in the newly established ‘‘Department of U.S. Customs and Border Protection,
doing so. Homeland Security/CBP–001, Import Washington, DC 20229. For privacy
(c) * * * Information System, System of Records’’ questions, please contact: Karen L.
(1) * * * and this proposed rulemaking. In Neuman, (202) 343–1717, Chief Privacy
(2) For errors involving an investment accordance with the Privacy Act of Officer, Privacy Office, Department of
in the wrong fund of which a 1974, the Department of Homeland Homeland Security, Washington, DC
participant or beneficiary has Security concurrently proposes to 20528–0655.
knowledge, he or she may file a claim consolidate, update, and rename two SUPPLEMENTARY INFORMATION:
for breakage with the Board or TSP current Department of Homeland
record keeper no later than 30 days after Security systems of records titled, I. Background
the TSP provides the participant with a ‘‘Department of Homeland Security/U.S. In accordance with the Privacy Act of
transaction confirmation or other notice Customs and Border Protection, DHS/ 1974, 5 U.S.C. 552a, the Department of
reflecting the error, or makes available CBP–001 Automated Commercial Homeland Security (DHS), U.S. Customs
on its Web site a participant statement Environment/International Trade Data and Border Protection (CBP) proposes to
reflecting the error, whichever is earlier. System System of Records’’ and consolidate, update, and rename as one
The Board or TSP record keeper must ‘‘Department of Homeland Security/U.S. system of records notice (SORN) the
promptly pay breakage for such errors. Customs and Border Protection, DHS/ information currently contained in two
(3) If a participant or beneficiary fails CBP–015 Automated Commercial DHS SORNs titled, ‘‘DHS/CBP–001
to file a claim for breakage concerning System System of Records’’ as one new Automated Commercial Environment/
an error involving an investment in the system of records. The consolidated International Trade Data System (ACE/
mstockstill on DSK4VPTVN1PROD with PROPOSALS
wrong fund in a timely manner, the system of records notice will be titled, ITDS) System of Records’’ (71 FR 3109,
Board or TSP record keeper may ‘‘Department of Homeland Security/U.S. January 19, 2006) and ‘‘DHS/CBP–015
nevertheless, in its sound discretion, Customs and Border Protection, DHS/ Automated Commercial System (ACS)
pay breakage for any such error that is CBP–001 Import Information System System of Records’’ (73 FR 77759,
brought to its attention. System of Records.’’ This system of December 19, 2008) . This new SORN,
* * * * * records will continue to collect and entitled ‘‘DHS/CBP–001 Import
■ 7. Amend § 1605.31 by revising maintain records on all commercial Information System (IIS),’’ will inform
paragraph (d) to read as follows: goods imported into the United States, the public about changes to the
VerDate Sep<11>2014 16:52 Aug 14, 2015 Jkt 235001 PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 E:\FR\FM\17AUP1.SGM 17AUP1](https://thefederalregister.org/doc/80_FR_49331/page/3.svg)
Document Created: 2015-12-15 11:07:12
Document Modified: 2015-12-15 11:07:12
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Proposed rule with request for comments. | |
| Dates | Submit comments on or before September 16, 2015. | |
| Contact | Austen Townsend at (202) 864-8647. | |
| FR Citation | 80 FR 49173 | |
| CFR Associated | Government Employees; Pensions and Retirement |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR