80 FR 57069 - Default Investment Fund Errors

FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

Federal Register Volume 80, Issue 183 (September 22, 2015)

Page Range		57069-57070
FR Document		2015-24093
The Federal Retirement Thrift Investment Board (Agency) is amending its regulations to codify procedures for correcting certain default investment fund errors.
Federal Register, Volume 80 Issue 183 (Tuesday, September 22, 2015)
[Federal Register Volume 80, Number 183 (Tuesday, September 22, 2015)]
[Rules and Regulations]
[Pages 57069-57070]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-24093]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

========================================================================


Federal Register / Vol. 80, No. 183 / Tuesday, September 22, 2015 / 
Rules and Regulations

[[Page 57069]]



FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

5 CFR Part 1605


Default Investment Fund Errors

AGENCY: Federal Retirement Thrift Investment Board.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Retirement Thrift Investment Board (Agency) is 
amending its regulations to codify procedures for correcting certain 
default investment fund errors.

DATES: This rule is effective September 22, 2015.

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 August 17, 2015, the Agency published a proposed rule with 
request for comments in the Federal Register (80 FR 49173, August 17, 
2015). The Agency received no comments and, therefore, is publishing 
the proposed rule as final without change.

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.

Submission to Congress and the General Accounting 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. 
The rule is not a major rule as defined in 5 U.S.C. 804(2).

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 amends 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 section 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 subpart A 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) * * *

[[Page 57070]]

    (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 revising paragraphs (a) and (b) 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 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) and (c)(2) and (3) 
to read as follows:


Sec.  1605.22  Claims for correction of Board or TSP record keeper 
errors; time limitations.

* * * * *
    (b) * * *
    (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) * * *
    (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. 2015-24093 Filed 9-21-15; 8:45 am]
BILLING CODE 6760-01-P
57069

Rules and Regulations Federal Register
Vol. 80, No. 183

Tuesday, September 22, 2015

This section of the FEDERAL REGISTER beneficiaries who participate in the ■ 2. Amend § 1605.2 by revising the
contains regulatory documents having general Thrift Savings Plan, which is a Federal section heading and paragraphs (b)(1)(i)
applicability and legal effect, most of which defined contribution retirement savings and (c) to read as follows:
are keyed to and codified in the Code of plan created under the Federal
Federal Regulations, which is published under Employees’ Retirement System Act of § 1605.2 Calculating, posting, and
50 titles pursuant to 44 U.S.C. 1510. charging breakage on late contributions
1986 (FERSA), Public Law 99–335, 100 and loan payments.
The Code of Federal Regulations is sold by Stat. 514, and which is administered by
the Agency. * * * * *
the Superintendent of Documents. Prices of
(b) * * *
new books are listed in the first FEDERAL
Paperwork Reduction Act (1) * * *
REGISTER issue of each week.
(i) Use the participant’s contribution
I certify that these regulations do not allocation on file for the ‘‘as of’’ date to
require additional reporting under the determine how the funds would have
FEDERAL RETIREMENT THRIFT criteria of the Paperwork Reduction Act.
INVESTMENT BOARD been invested. If there is no contribution
Unfunded Mandates Reform Act of allocation on file, or one cannot be
5 CFR Part 1605 1995 derived based on the investment of
contributions, the TSP will consider the
Default Investment Fund Errors Pursuant to the Unfunded Mandates funds to have been invested in the
Reform Act of 1995, 2 U.S.C. 602, 632, default investment fund in effect for the
AGENCY: Federal Retirement Thrift 653, 1501–1571, the effects of this participant on the ‘‘as of’’ date.
Investment Board. regulation on state, local, and tribal
* * * * *
ACTION: Final rule. governments and the private sector have (c) Posting contributions and loan
been assessed. This regulation will not payments. Makeup and late
SUMMARY: The Federal Retirement Thrift compel the expenditure in any one year
Investment Board (Agency) is amending contributions, late loan payments, and
of $100 million or more by state, local, breakage, will be posted to the
its regulations to codify procedures for and tribal governments, in the aggregate,
correcting certain default investment participant’s account according to his or
or by the private sector. Therefore, a her contribution allocation on file for
fund errors. statement under section 1532 is not
DATES: This rule is effective September
the posting date. If there is no
required. contribution allocation on file for the
22, 2015.
Submission to Congress and the posting date, they will be posted to the
FOR FURTHER INFORMATION CONTACT:
General Accounting Office default investment fund in effect for the
Austen Townsend at (202) 864–8647. participant.
SUPPLEMENTARY INFORMATION: The Pursuant to 5 U.S.C. 810(a)(1)(A), the
* * * * *
Agency administers the Thrift Savings Agency submitted a report containing
this rule and other required information ■ 3. Add § 1605.3 to subpart A to read
Plan (TSP), which was established by
the Federal Employees’ Retirement to the U.S. Senate, the U.S. House of as follows:
System Act of 1986 (FERSA), Public Representatives, and the Comptroller § 1605.3 Calculating, posting, and
Law 99–335, 100 Stat. 514. The TSP General of the United States before charging breakage on errors involving
provisions of FERSA are codified, as publication of this rule in the Federal investment in the wrong fund.
amended, largely at 5 U.S.C. 8351 and Register. The rule is not a major rule as (a) The TSP will calculate and post
8401–79. The TSP is a tax-deferred defined in 5 U.S.C. 804(2). breakage on date of birth errors that
retirement savings plan for Federal List of Subjects in 5 CFR Part 1605 result in default investment in the
civilian employees, members of the wrong L Fund, contribution allocation
uniformed services, and spouse Government employees, Pensions, errors, and interfund transfer errors.
beneficiaries. The TSP is similar to cash Retirement. (b) The TSP will charge the
or deferred arrangements established for employing agency for positive breakage
Gregory T. Long,
private-sector employees under section on incorrect dates of birth caused by
401(k) of the Internal Revenue Code (26 Executive Director, Federal Retirement Thrift
employing agency error that result in
Investment Board.
U.S.C. 401(k)). default investment in the wrong L Fund.
On August 17, 2015, the Agency For the reasons stated in the A date of birth change received from an
published a proposed rule with request preamble, the Agency amends 5 CFR employing agency will not trigger
for comments in the Federal Register chapter VI as follows: corrective action other than to update
(80 FR 49173, August 17, 2015). The the date of birth. To initiate a breakage
Agency received no comments and, PART 1605—CORRECTION OF calculation for an employee, the
therefore, is publishing the proposed ADMINISTRATIVE ERRORS employing agency must notify the TSP
rule as final without change. that the participant is entitled to
■ 1. The authority citation for part 1605 breakage.
Lhorne on DSK5TPTVN1PROD with RULES

Regulatory Flexibility Act
continues to read as follows: ■ 4. Amend § 1605.13 by revising
I certify that this regulation will not Authority: 5 U.S.C. 8351, 8432(a), 8432(d), paragraph (a)(3) to read as follows:
have a significant economic impact on 8474(b)(5) and (c)(1). Subpart B also issued
a substantial number of small entities. under section 1043(b) of Public Law 104– § 1605.13 Back pay awards and other
This regulation will affect Federal 106, 110 Stat. 186 and § 7202(m)(2) of Public retroactive pay adjustments.
civilian employees and spouse Law 101–508, 104 Stat. 1388. (a) * * *

VerDate Sep<11>2014 13:50 Sep 21, 2015 Jkt 235001 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 E:\FR\FM\22SER1.SGM 22SER1
Document Created: 2015-12-15 09:35:13
Document Modified: 2015-12-15 09:35:13
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		Rules and Regulations
Action		Final rule.
Dates		This rule is effective September 22, 2015.
Contact		Austen Townsend at (202) 864-8647.
FR Citation		80 FR 57069
CFR Associated		Government Employees; Pensions and Retirement