82_FR_6256 82 FR 6244 - Regulations Governing Retirement Savings Bonds

82 FR 6244 - Regulations Governing Retirement Savings Bonds

DEPARTMENT OF THE TREASURY
Fiscal Service

Federal Register Volume 82, Issue 12 (January 19, 2017)

Page Range6244-6248
FR Document2017-01038

Currently, the Bureau of the Fiscal Service (Fiscal Service) of the United States Department of the Treasury (Treasury), issues nonmarketable, electronic retirement savings bonds to an individual retirement account (IRA) custodian designated by Fiscal Service to act as a custodian for Roth IRAs under Treasury's myRA[supreg] program. In this Final Rule, Treasury offers nonmarketable, electronic retirement savings bonds for certain retirement savings programs established by states or certain of their political subdivisions (states). The bonds will be issued to a trustee or custodian (custodian) of a Roth IRA or traditional IRA designated by a state under its retirement savings program (whether or not the program provides for automatic enrollment). Interest will be earned at a rate available to federal employees invested in the Government Securities Investment Fund (G Fund) of the federal Thrift Savings Plan. This offering does not affect the terms of retirement savings bonds issued to the custodian of Treasury's retirement savings program, myRA[supreg], which are held in participants' Roth IRAs. More information on myRA[supreg] is available at www.myra.gov.

Federal Register, Volume 82 Issue 12 (Thursday, January 19, 2017)
[Federal Register Volume 82, Number 12 (Thursday, January 19, 2017)]
[Rules and Regulations]
[Pages 6244-6248]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-01038]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 347

RIN 1530-AA13


Regulations Governing Retirement Savings Bonds

AGENCY: Bureau of the Fiscal Service, Fiscal Service, Treasury.

ACTION: Final rule.

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SUMMARY: Currently, the Bureau of the Fiscal Service (Fiscal Service) 
of the United States Department of the Treasury (Treasury), issues 
nonmarketable, electronic retirement savings bonds to an individual 
retirement account (IRA) custodian designated by Fiscal Service to act 
as a custodian for Roth IRAs under Treasury's myRA[supreg] program. In 
this Final Rule, Treasury offers nonmarketable, electronic retirement 
savings bonds for certain retirement savings programs established by 
states or certain of their political subdivisions (states). The bonds 
will be issued to a trustee or custodian (custodian) of a Roth IRA or 
traditional IRA designated by a state under its retirement savings 
program (whether or not the program provides for automatic enrollment). 
Interest will be earned at a rate available to federal employees 
invested in the Government Securities Investment Fund (G Fund) of the 
federal Thrift Savings Plan.
    This offering does not affect the terms of retirement savings bonds 
issued to the custodian of Treasury's retirement savings program, 
myRA[supreg], which are held in participants' Roth IRAs. More 
information on myRA[supreg] is available at www.myra.gov.

DATES: This Final Rule is effective January 19, 2017.

FOR FURTHER INFORMATION CONTACT: 
    Technical information: Gregory Till, myRA Bureau Director, at (202) 
622-6970 or [email protected].
    Legal information: Elizabeth Spears, Senior Counsel, at (304) 480-
8647 or [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    Approximately one third of private-sector employees in the United 
States lack access to a retirement savings plan through their 
employers.\1\ To fill this gap, several states are establishing or 
considering establishing programs that will encourage employees to save 
for their retirement, including through individual retirement accounts 
into which employees are automatically enrolled and through other 
approaches (collectively referred to here as Auto-IRAs, whether or not 
they use automatic enrollment).\2\ Under an Auto-IRA program, employee 
contributions are deposited into an IRA and invested in accordance with 
the design of the Auto-IRA program and the wishes of the participant. 
Generally, it is expected that an Auto-IRA program will offer a safe 
and low-cost investment option as an alternative to a risk-bearing 
diversified investment, such as a target date fund. In order to assist 
states in offering savers the option of a principal-protected 
investment, Fiscal Service will offer retirement savings bonds to state 
Auto-IRA programs. Fiscal Service reserves the right, however, to 
decline to issue retirement savings bonds to state Auto-IRA programs on 
a case-by-case basis, based on considerations such as the structure and 
reasonableness of associated fees, plans to control fees and expenses, 
whether participants have reasonable access to their funds, and 
oversight of providers designated to operate state Auto-IRA programs.
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    \1\ National Compensation Survey, Bureau of Labor Statistics 
(July 2016), Employee Benefits in the United States--March 2016 
(http://www.bls.gov/news.release/pdf/ebs2.pdf). These data show that 
66 percent of 114 million private-sector workers have access to a 
retirement plan through their employers. By extension, approximately 
34 percent of the 114 million private-sector workers (39 million) do 
not have access to a retirement plan through work.
    \2\ The Department of Labor has published regulations relating 
to state payroll deduction savings programs. 81 FR 59464 (Aug. 30, 
2016) and 81 FR 92639 (Dec. 20, 2016).
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II. Section-by-Section Analysis

Subpart A--General Information

    Section 347.0 Offering of securities. This section is amended to 
offer retirement savings bonds to Auto-IRA custodians for certain state 
retirement savings programs.
    Section 347.1 Applicability. This section is amended to include the 
Auto-IRA custodians for state retirement savings programs under this 
part.
    Section 347.2 Official agencies. This section clarifies that Fiscal 
Service is responsible for issuing retirement savings bonds to the 
Auto-IRA custodians and that states are responsible for administering 
their own Auto-IRA retirement savings programs.
    Section 347.3 Definitions. Several new definitions, including 
``Auto-IRA,'' ``state Auto-IRA program,'' ``IRA,'' ``Custodian,'' 
``State,'' and ``Auto-IRA custodian'' have been added for ease of 
reference in Subpart C--Auto-IRA Programs and minor changes have been 
made to some existing definitions.

Subpart B--Treasury's Retirement Savings Program

    Miscellaneous changes have been made to the sections pertaining to 
retirement savings bonds issued to the custodian of Treasury's 
retirement savings program, myRA[supreg], which are held in 
participants' Roth IRAs. These changes, which were made to accommodate 
revised definitions and other minor or technical revisions, do not 
affect the terms of these bonds. See, e.g., Sec. Sec.  347.10 through 
347.16.

Subpart C--Auto-IRA Programs

    Section 347.30 Plan requirements for State Auto-IRA programs. 
Subsection (a) of this new section specifies that retirement savings 
bonds will be issued to Auto-IRA custodians for certain state Auto-IRA 
programs, and that no other registrations under Subpart C are 
permitted. As defined in Sec.  347.3, an Auto-IRA custodian is ``an 
entity designated by a state (including, for the purpose of these 
regulations, certain political subdivisions of states) to act as the 
trustee or custodian for Auto-IRAs, in the form of Roth IRAs or 
traditional IRAs, for or opened on behalf of participants in a state 
Auto-IRA program.'' Subsection (b) lists topics

[[Page 6245]]

that must be addressed by documentation that programs are required to 
provide and certify to Fiscal Service annually. The documentation must 
address: (1) Administration of retirement savings bonds, (2) account 
monitoring, (3) ability to transfer proceeds, (4) IRA withdrawals, (5) 
consumer protection, (6) state Auto-IRA program costs of 
administration, (7) oversight of Auto-IRA custodian, (8) pooling 
prohibitions, (9) default investments, and (10) consumer education. The 
Commissioner of the Fiscal Service may use the documentation, among 
other purposes, in exercising any of the rights reserved under Sec.  
347.37, which includes the right to require information addressing 
additional topics. Subsection (c) provides for a successor Auto-IRA 
custodian, if needed.
    Section 347.31 Crediting of retirement savings bond. This new 
section requires each bond issued to an Auto-IRA custodian to be 
credited to an individual's IRA under a state Auto-IRA program.
    Section 347.32 Annual additions to retirement savings bond. This 
new section provides that the initial contribution and additions to a 
bond on behalf of a participant are subject to the annual contribution 
limits provided under the Internal Revenue Code and regulations, and 
that the total value of a retirement savings bond held by an Auto-IRA 
custodian in an IRA on behalf of any participant cannot exceed 
$15,000.00.
    Section 347.33 Individual additions to retirement savings bond. 
This new section authorizes Fiscal Service to establish minimum amounts 
for initial and additional contributions to a retirement savings bond.
    Section 347.34 Payment (redemption). Under this new section, an 
Auto-IRA custodian is responsible for making certain certifications as 
a condition of the issuance and redemption of a retirement savings 
bond. Subsection (a) explains how the Auto-IRA custodian will request 
that Fiscal Service make payment on matured retirement savings bonds as 
well as those that have been fully or partially redeemed. Under 
subsection (b), Fiscal Service will make payment on any bonds that it 
calls for redemption without the Auto-IRA custodian having to make a 
request. Under Sec.  347.37(4), the Commissioner of the Fiscal Service 
may exercise discretion to call the bonds for redemption. This might 
occur for a variety of reasons, including, for example, in the event 
that a state Auto-IRA program changed significantly such that ongoing 
use of retirement savings bonds is no longer consistent with these 
regulations, or in the event that a state Auto-IRA program might have 
failed to comply with program instructions identified by Fiscal Service 
or might have failed to provide or comply with documentation required 
pursuant to Sec.  347.30. Subsection (b) clarifies how bonds called for 
redemption will be paid, which is in the same manner as bonds submitted 
for redemption under subsection (a).
    Section 347.35 Computation of interest. This new section provides 
that the interest rate on the retirement savings bonds will track the 
annual percentage rate on securities in the Government Securities 
Investment Fund (G Fund) in the Thrift Savings Plan for federal 
employees and that interest will cease at maturity or call.
    Section 347.36 Maturity. This new section provides that the 
maturity dates for the retirement savings bonds may differ for each 
bond. The longest possible maturity is 30 years (an original maturity 
period of 20 years and an extended maturity period of 10 years). A bond 
will mature at the earlier of 30 years from the date the bond is first 
issued to the Auto-IRA custodian on behalf of the participant or when 
its value reaches $15,000.00.
    Section 347.37 Reservation of rights. Under this new section, the 
Commissioner of the Fiscal Service reserves certain rights, including: 
(1) The right to require a senior official to certify program 
information to Fiscal Service before the retirement savings bonds are 
issued to an Auto-IRA custodian; (2) the right to refuse to issue 
retirement savings bonds to an Auto-IRA custodian in any particular 
case or class of cases; (3) the right to suspend or cease offering 
retirement savings bonds to an Auto-IRA custodian; (4) the right to 
call for redemption of any outstanding retirement savings bond (this 
might occur for a variety of reasons, including, for example, if a 
state Auto-IRA program has changed significantly such that ongoing use 
of retirement savings bonds is no longer consistent with these 
regulations, or if a state has failed to provide or comply with 
documentation required pursuant to Sec.  347.30); or (5) the right to 
determine any appropriate remedy under this subpart.

Subpart D--Miscellaneous Provisions for Retirement Savings Bonds

    Subpart D contains miscellaneous provisions (Sec. Sec.  347.40 
through 347.42) that apply to retirement savings bonds issued to the 
custodians, on behalf of participants, in Treasury's and the states' 
programs.

III. Procedural Requirements

A. Administrative Procedure Act

    Because this rule relates to United States securities, which are 
contracts between Treasury and the owners of the securities, this rule 
falls within the contract exception to the Administrative Procedures 
Act (APA) at 5 U.S.C. 553(a)(2). As a result, the notice, public 
comment, and delayed effective date provisions of the APA are 
inapplicable to this rule.

B. Congressional Review Act

    This rule is not a major rule pursuant to the Congressional Review 
Act (CRA), 5 U.S.C. 801 et seq.

C. Paperwork Reduction Act

    This final rule contains a new collection of information that is 
subject to the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. 
Under the PRA, an agency may not conduct or sponsor, and a person is 
not required to respond to, a collection of information unless it 
displays a valid OMB control number. The collection of information 
contained in this final rulemaking has been submitted to the Office of 
Management and Budget for review in accordance with the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507(d)).

D. Regulatory Flexibility Act

    The provisions of the Regulatory Flexibility Act, 5 U.S.C. 601 et 
seq., do not apply to this rule because, pursuant to 5 U.S.C. 
553(a)(2), it is not required to be issued with notice and opportunity 
for public comment.

E. Executive Order 12866

    This rule is not a significant regulatory action pursuant to 
Executive Order 12866.

List of Subjects in 31 CFR Part 347

    Government securities, Savings bonds.

    For the reasons set forth in the preamble, we amend 31 CFR part 347 
as follows:

PART 347--REGULATIONS GOVERNING RETIREMENT SAVINGS BONDS

0
1. The authority citation for part 347 continues to read as follows:

    Authority: 5 U.S.C. 301; 12 U.S.C. 90; 31 U.S.C. 3105.


0
2. Revise Sec.  347.0 to read as follows:

[[Page 6246]]

Sec.  347.0  Offering of securities.

    The Secretary of the Treasury (the Secretary), under the authority 
of Title 31, Chapter 31, offers retirement savings bonds to the IRA 
custodian for Treasury's retirement savings program and to the Auto-IRA 
custodians for certain state Auto-IRA programs. The nonmarketable bonds 
are issued to and held by the custodians, on behalf of participants, in 
Treasury's program and state programs. This offering will continue 
until terminated by the Secretary or the Secretary's designee. 
Treasury's Fiscal Assistant Secretary is authorized to act on behalf of 
the Secretary on all matters contained in these regulations. The 
Commissioner of the Fiscal Service, as designee of the Secretary, is 
delegated the responsibility to administer this part through the Bureau 
of the Fiscal Service (Fiscal Service).

0
3. Revise Sec.  347.1 to read as follows:


Sec.  347.1  Applicability.

    The regulations in this part apply to retirement savings bonds 
issued, on behalf of participants, to the IRA custodian for Treasury's 
retirement savings program and to the Auto-IRA custodians for state 
Auto-IRA programs.

0
4. Revise Sec.  347.2 to read as follows:


Sec.  347.2  Official agencies.

    (a) Fiscal Service is responsible for administering Treasury's 
retirement savings program and for issuing the retirement savings bonds 
to the IRA custodian for Treasury's retirement savings program and to 
the Auto-IRA custodians for certain state Auto-IRA programs. The states 
are responsible for administering their Auto-IRA retirement savings 
programs, including the designation of Auto-IRA custodians to perform 
all operational responsibilities associated with the retirement savings 
bonds issued by Fiscal Service.
    (b) Communications concerning transactions relating to an 
individual's IRA should be addressed to the appropriate custodian.

0
5. In Sec.  347.3:
0
a. Redesignate paragraphs (a) through (g) as paragraphs (g) through 
(m);
0
b. Add new paragraphs (a) through (f); and
0
c. Revise newly redesignated paragraphs (g) through (j).
    The additions and revisions read as follows:


Sec.  347.3  Definitions.

    (a) Auto-IRA means an individual retirement account for or opened 
on behalf of a participant in a state retirement savings program 
(whether or not the program provides for automatic enrollment).
    (b) State Auto-IRA program means a state Auto-IRA retirement 
savings program.
    (c) IRA means an individual retirement account.
    (d) Custodian means a trustee or custodian of a Roth IRA or 
traditional IRA.
    (e) State means any of the 50 states, the District of Columbia, 
Guam, the Commonwealth of Puerto Rico, the Virgin Islands, American 
Samoa, the Commonwealth of the Northern Mariana Islands, or certain of 
their political subdivisions.
    (f) Auto-IRA custodian means an entity designated by a state 
(including, for the purpose of these regulations, political 
subdivisions of states) to act as the trustee or custodian for Auto-
IRAs, in the form of Roth IRAs or traditional IRAs, for or opened on 
behalf of participants in a state Auto-IRA program.
    (g) Retirement savings bond, as used in this part, means an 
interest-bearing electronic United States savings bond issued to an 
Auto-IRA or IRA custodian.
    (h) IRA custodian means an entity designated by Fiscal Service to 
act as a custodian for Roth IRAs opened by or on behalf of participants 
in Treasury's retirement savings program.
    (i) Individual means a person eligible to have an IRA in Treasury's 
retirement savings program or in a state Auto-IRA program.
    (j) Participant means an individual who has an IRA in Treasury's 
retirement savings program or in a state Auto-IRA program.
* * * * *

0
6. Revise the heading of subpart B to read as follows:

Subpart B--Treasury's Retirement Savings Program

0
7. Revise Sec. Sec.  347.10 and 347.11 to read as follows:


Sec.  347.10  Authorized form of registration.

    (a) Retirement savings bonds are issued to the IRA custodian for 
Treasury's retirement savings program. No other registrations under 
this subpart are permitted.
    (b) In the event Fiscal Service designates a successor IRA 
custodian, Fiscal Service may reissue retirement savings bonds held by 
the predecessor custodian to the successor custodian.


Sec.  347.11  Crediting of retirement savings bond.

    Each retirement savings bond issued to the IRA custodian must be 
credited to a single Roth IRA established through Treasury's retirement 
savings program with the custodian.

0
8. Remove the headings for subparts C, D, and E and transfer Sec. Sec.  
347.20, 347.21, 347.30, 347.40, and 347.41 to subpart B, and 
redesignate them as Sec. Sec.  347.12 through 347.16, respectively.

0
9. Revise newly redesignated Sec. Sec.  347.12 through 347.16 to read 
as follows:


Sec.  347.12  Annual additions to retirement savings bond.

    The amount that initially may be contributed or added to a 
retirement savings bond in a calendar year by the IRA custodian on 
behalf of any participant is limited by the applicable annual 
contribution limits provided under the Internal Revenue Code and 
regulations. The total value of a retirement savings bond that may be 
held by the IRA custodian in an IRA on behalf of any participant shall 
not exceed $15,000.


Sec.  347.13  Individual additions to retirement savings bond.

    Fiscal Service is authorized to establish minimum amounts for 
initial and additional contributions to a retirement savings bond under 
this subpart.


Sec.  347.14  Payment (redemption).

    Payment of retirement savings bonds will be made to the IRA 
custodian upon the custodian's submission of a request for redemption 
to Fiscal Service. The custodian shall request the redemption of all 
retirement savings bonds at their respective maturity. The custodian 
shall request the full or partial redemption of a bond held on behalf 
of a participant upon the request of the participant or other 
authorized person entitled to amounts in the IRA. Retirement savings 
bond redemptions will be rounded to the nearest one cent.


Sec.  347.15  Computation of interest.

    Retirement savings bonds under this subpart earn interest at the 
same annual percentage rate as securities issued to the Government 
Securities Investment Fund (G Fund) in the Thrift Savings Plan for 
federal employees. The Secretary calculates the G Fund interest rate 
pursuant to 5 U.S.C. 8438(e)(2). The retirement savings bond interest 
rate compounds daily at 1/360 of the annual percentage rate. Retirement 
savings bonds will cease to accrue interest on the date of their 
maturity.


Sec.  347.16  Maturity.

    The maturity date for retirement savings bonds is indeterminate and 
may

[[Page 6247]]

be different for each bond issued, but shall not exceed the sum of an 
original maturity period of 20 years and an extended maturity period of 
10 years. A retirement savings bond purchased by the IRA custodian on 
behalf of a participant will mature at the earlier of 30 years from the 
date the bond is first issued to the custodian on behalf of the 
participant or when its value reaches $15,000.

0
10. Add a new subpart C to read as follows:
Subpart C--Auto-IRA Programs
Sec.
347.30 Plan requirements for State Auto-IRA programs.
347.31 Crediting of retirement savings bond.
347.32 Annual additions to retirement savings bond.
347.33 Individual additions to retirement savings bond.
347.34 Payment (redemption).
347.35 Computation of interest.
347.36 Maturity.
347.37 Reservation of rights.

Subpart C--Auto-IRA Programs


Sec.  347.30  Plan requirements for State Auto-IRA programs.

    (a) Authorized form of registration. Retirement savings bonds are 
issued to Auto-IRA custodians for state Auto-IRA programs. No other 
registrations under this subpart are permitted.
    (b) Documentation. A state Auto-IRA program must provide 
documentation to Fiscal Service annually, in a form and manner 
acceptable to Fiscal Service, addressing the following topics:
    (1) Administration--servicing of the retirement savings bonds, such 
as account maintenance, recordkeeping, and establishment of procedures 
for automatic payroll direct deposit contributions (or other funding 
means permitted under state Auto-IRA programs);
    (2) Account monitoring--tracking and, when applicable, redeeming 
and reallocating retirement savings bond holdings (which may include 
investment diversification strategies) no later than when a retirement 
savings bond that may be held by the Auto-IRA custodian on behalf of a 
participant in a state Auto-IRA program reaches the $15,000 maximum 
dollar threshold or 30 years, whichever occurs first;
    (3) Ability to transfer--addressing how the state Auto-IRA program 
enables participants, at their discretion, to redeem their retirement 
savings bonds prior to maturity and transfer their retirement savings 
bond proceeds to another investment available in the State Auto-IRA 
program or to another provider, without imposing unreasonable 
restrictions on voluntary investment diversification (which might occur 
through a transfer within or outside of a state Auto-IRA program);
    (4) Withdrawals--addressing how the state Auto-IRA program enables 
participants, at their discretion, to make reasonable withdrawals from 
their Auto-IRAs;
    (5) Consumer protection--addressing consumer protections in the 
program, including disclosures provided to participants;
    (6) Costs of administration--describing any fees or other costs or 
expenses passed on to or otherwise borne by participants under the 
state Auto-IRA program (e.g., no more than reasonable administrative, 
custodial, asset management, or other fees, costs, or expenses);
    (7) Oversight--addressing state Auto-IRA program oversight of Auto-
IRA custodians and describing any protections in place for 
participants' funds invested in retirement savings bonds, including 
information relating to the protection of participants' funds in the 
event that the Auto-IRA custodian files for bankruptcy or otherwise 
experiences financial stress;
    (8) Pooling--prohibiting the inclusion of retirement savings bonds 
as a component of another investment or asset category (such as a 
mutual fund or target-date fund);
    (9) Default investment--obtaining, if applicable, Fiscal Service's 
further consent before any use of retirement savings bonds as a 
default, sole, or mandatory investment, even if temporary;
    (10) Consumer education--describing plans to provide financial 
education to participants; and
    (11) Certification--requiring a statement signed by an authorized 
senior official certifying that the documentation provided to Fiscal 
Service is accurate and complete, and that procedures are in place to 
timely notify Fiscal Service of any material changes in the future.
    (c) Successor custodian. In the event a state Auto-IRA program 
designates a successor Auto-IRA custodian, that program may request 
that Fiscal Service reissue the retirement savings bonds held by the 
predecessor custodian to the successor custodian.


Sec.  347.31  Crediting of retirement savings bond.

    Each retirement savings bond issued to an Auto-IRA custodian must 
be credited to an IRA under the state Auto-IRA program with the 
custodian.


Sec.  347.32  Annual additions to retirement savings bond.

    The amount that initially may be contributed or added to a 
retirement savings bond in a calendar year by an Auto-IRA custodian on 
behalf of any participant is limited by the applicable annual 
contribution limits provided under the Internal Revenue Code and 
regulations. The total value of a retirement savings bond that may be 
held by an Auto-IRA custodian in an IRA on behalf of any participant 
shall not exceed $15,000 for each state Auto-IRA program.


Sec.  347.33  Individual additions to retirement savings bond.

    Fiscal Service is authorized to establish minimum amounts for 
initial and additional contributions to a retirement savings bond under 
this subpart.


Sec.  347.34  Payment (redemption).

    The issuance and redemption of a retirement savings bond is 
conditioned on an Auto-IRA custodian certifying compliance with these 
regulations and with any additional program instructions identified by 
Fiscal Service that pertain to that bond.
    (a) Payment upon maturity. Payment of retirement savings bonds will 
be made to an Auto-IRA custodian upon the custodian's submission of a 
request for redemption to Fiscal Service. The custodian shall request 
the redemption of all retirement savings bonds at their respective 
maturity. The custodian shall request the full or partial redemption of 
a bond held on behalf of a participant upon the request of the 
participant or other authorized person entitled to amounts in the IRA. 
Retirement savings bond redemptions will be rounded to the nearest one 
cent.
    (b) Payment upon call. Final interest on any called bonds will be 
paid with the principal (amount contributed minus withdrawals taken) at 
redemption and rounded to the nearest one cent.


Sec.  347.35  Computation of interest.

    Retirement savings bonds under this subpart earn interest at the 
same annual percentage rate as securities issued to the Government 
Securities Investment Fund (G Fund) in the Thrift Savings Plan for 
federal employees. The Secretary calculates the G Fund interest rate 
pursuant to 5 U.S.C. 8438(e)(2). The retirement savings bond interest 
rate compounds daily at 1/360 of the annual percentage rate. Retirement 
savings bonds will cease to accrue interest on the date of their 
maturity or call.

[[Page 6248]]

Sec.  347.36  Maturity.

    The maturity date for retirement savings bonds is indeterminate and 
may be different for each bond issued, but shall not exceed the sum of 
an original maturity period of 20 years and an extended maturity period 
of 10 years. A retirement savings bond purchased by the Auto-IRA 
custodian on behalf of a participant will mature at the earlier of 30 
years from the date the bond is first issued to the custodian on behalf 
of the participant or when its value reaches $15,000.


Sec.  347.37  Reservation of rights.

    The Commissioner of the Fiscal Service may decide, in his or her 
sole discretion, to take any of the following actions with respect to 
the retirement savings bonds offered under this subpart. Such actions 
are final. Specifically, the Commissioner reserves the right under this 
subpart:
    (a) As a condition of Fiscal Service's issuance of retirement 
savings bonds to an Auto-IRA custodian under a state Auto-IRA program, 
to require a state Auto-IRA program to provide information to Fiscal 
Service concerning the state Auto-IRA program and retirement savings 
bonds offered under this subpart, including a certification by a senior 
official to the completeness and accuracy of the information requested;
    (b) To refuse to issue retirement savings bonds to an Auto-IRA 
custodian in any particular case or class of cases;
    (c) To suspend or cease offering retirement savings bonds to an 
Auto-IRA custodian;
    (d) To call for redemption of any outstanding retirement savings 
bond; or
    (e) To determine any appropriate remedy under this subpart.

0
11. Redesignate subpart F (consisting of Sec. Sec.  347.50, 347.51, and 
347.52) as subpart D (consisting of Sec. Sec.  347.40 through 347.42) 
and revise newly redesignated subpart D to read as follows:
Subpart D--Miscellaneous Provisions for Retirement Savings Bonds
Sec.
347.40 Waiver of regulations.
347.41 Additional requirements; bond of indemnity.
347.42 Supplements, amendments, or revisions.

Subpart D--Miscellaneous Provisions for Retirement Savings Bonds


Sec.  347.40  Waiver of regulations.

    The Commissioner of the Fiscal Service may waive or modify any 
provision or provisions of the regulations in this part. He or she may 
do so in any particular case or class of cases for the convenience of 
the United States or in order to relieve any person or persons of 
unnecessary hardship:
    (a) If such action would not be inconsistent with law or equity;
    (b) If it does not impair any material existing rights; and
    (c) If he or she is satisfied that such action would not subject 
the United States to any substantial expense or liability.


Sec.  347.41  Additional requirements; bond of indemnity.

    The Commissioner of the Fiscal Service may require:
    (a) Such additional evidence to support a requested action as he or 
she may consider necessary or advisable; or
    (b) A bond of indemnity, with or without surety, in any case in 
which he or she may consider such a bond necessary for the protection 
of the interests of the United States.


Sec.  347.42  Supplements, amendments, or revisions.

    The Secretary may at any time, or from time to time, prescribe 
additional, supplemental, amendatory, or revised rules and regulations 
governing retirement savings bonds.

David A. Lebryk,
Fiscal Assistant Secretary.
[FR Doc. 2017-01038 Filed 1-18-17; 8:45 am]
BILLING CODE 4810-AS-P



                                                  6244             Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Rules and Regulations

                                                                       For plans with a valuation                                                                Deferred annuities
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                                                                                 date                                                                                (percent)
                                                     Rate set                                              annuity rate
                                                                                                             (percent)
                                                                      On or after           Before                                 i1                   i2                i3           n1                n2


                                                              *                     *                       *                       *                        *                     *                 *
                                                        280             2–1–17             3–1–17               1.25              4.00                4.00              4.00           7                 8



                                                    Issued in Washington, DC.                               Technical information: Gregory Till,                   II. Section-by-Section Analysis
                                                  Deborah Chase Murphy,                                   myRA Bureau Director, at (202) 622–
                                                                                                                                                                   Subpart A—General Information
                                                  Assistant General Counsel for Regulatory                6970 or Gregory.Till@treasury.gov.
                                                  Affairs, Pension Benefit Guaranty                         Legal information: Elizabeth Spears,                      Section 347.0 Offering of securities.
                                                  Corporation.                                            Senior Counsel, at (304) 480–8647 or                     This section is amended to offer
                                                  [FR Doc. 2017–00461 Filed 1–18–17; 8:45 am]             Lisa.Spears@fiscal.treasury.gov.                         retirement savings bonds to Auto-IRA
                                                  BILLING CODE 7709–02–P                                  SUPPLEMENTARY INFORMATION:
                                                                                                                                                                   custodians for certain state retirement
                                                                                                                                                                   savings programs.
                                                                                                          I. Background                                               Section 347.1 Applicability. This
                                                                                                             Approximately one third of private-                   section is amended to include the Auto-
                                                  DEPARTMENT OF THE TREASURY
                                                                                                          sector employees in the United States                    IRA custodians for state retirement
                                                  Fiscal Service                                                                                                   savings programs under this part.
                                                                                                          lack access to a retirement savings plan
                                                                                                                                                                      Section 347.2 Official agencies. This
                                                                                                          through their employers.1 To fill this
                                                  31 CFR Part 347                                                                                                  section clarifies that Fiscal Service is
                                                                                                          gap, several states are establishing or                  responsible for issuing retirement
                                                  RIN 1530–AA13                                           considering establishing programs that                   savings bonds to the Auto-IRA
                                                                                                          will encourage employees to save for                     custodians and that states are
                                                  Regulations Governing Retirement                        their retirement, including through                      responsible for administering their own
                                                  Savings Bonds                                           individual retirement accounts into                      Auto-IRA retirement savings programs.
                                                                                                          which employees are automatically                           Section 347.3 Definitions. Several
                                                  AGENCY:  Bureau of the Fiscal Service,                  enrolled and through other approaches
                                                  Fiscal Service, Treasury.                                                                                        new definitions, including ‘‘Auto-IRA,’’
                                                                                                          (collectively referred to here as Auto-                  ‘‘state Auto-IRA program,’’ ‘‘IRA,’’
                                                  ACTION: Final rule.                                     IRAs, whether or not they use automatic                  ‘‘Custodian,’’ ‘‘State,’’ and ‘‘Auto-IRA
                                                  SUMMARY:   Currently, the Bureau of the                 enrollment).2 Under an Auto-IRA                          custodian’’ have been added for ease of
                                                  Fiscal Service (Fiscal Service) of the                  program, employee contributions are                      reference in Subpart C—Auto-IRA
                                                  United States Department of the                         deposited into an IRA and invested in                    Programs and minor changes have been
                                                  Treasury (Treasury), issues                             accordance with the design of the Auto-                  made to some existing definitions.
                                                  nonmarketable, electronic retirement                    IRA program and the wishes of the
                                                                                                          participant. Generally, it is expected                   Subpart B—Treasury’s Retirement
                                                  savings bonds to an individual                                                                                   Savings Program
                                                  retirement account (IRA) custodian                      that an Auto-IRA program will offer a
                                                  designated by Fiscal Service to act as a                safe and low-cost investment option as                     Miscellaneous changes have been
                                                  custodian for Roth IRAs under                           an alternative to a risk-bearing                         made to the sections pertaining to
                                                  Treasury’s myRA® program. In this                       diversified investment, such as a target                 retirement savings bonds issued to the
                                                  Final Rule, Treasury offers                             date fund. In order to assist states in                  custodian of Treasury’s retirement
                                                  nonmarketable, electronic retirement                    offering savers the option of a principal-               savings program, myRA®, which are
                                                  savings bonds for certain retirement                    protected investment, Fiscal Service                     held in participants’ Roth IRAs. These
                                                  savings programs established by states                  will offer retirement savings bonds to                   changes, which were made to
                                                  or certain of their political subdivisions              state Auto-IRA programs. Fiscal Service                  accommodate revised definitions and
                                                  (states). The bonds will be issued to a                 reserves the right, however, to decline to               other minor or technical revisions, do
                                                  trustee or custodian (custodian) of a                   issue retirement savings bonds to state                  not affect the terms of these bonds. See,
                                                  Roth IRA or traditional IRA designated                  Auto-IRA programs on a case-by-case                      e.g., §§ 347.10 through 347.16.
                                                  by a state under its retirement savings                 basis, based on considerations such as                   Subpart C—Auto-IRA Programs
                                                  program (whether or not the program                     the structure and reasonableness of
                                                                                                          associated fees, plans to control fees and                  Section 347.30 Plan requirements
                                                  provides for automatic enrollment).                                                                              for State Auto-IRA programs.
                                                  Interest will be earned at a rate available             expenses, whether participants have
                                                                                                          reasonable access to their funds, and                    Subsection (a) of this new section
                                                  to federal employees invested in the                                                                             specifies that retirement savings bonds
                                                  Government Securities Investment Fund                   oversight of providers designated to
                                                                                                          operate state Auto-IRA programs.                         will be issued to Auto-IRA custodians
                                                  (G Fund) of the federal Thrift Savings                                                                           for certain state Auto-IRA programs, and
                                                  Plan.                                                                                                            that no other registrations under
                                                                                                            1 National Compensation Survey, Bureau of Labor
                                                     This offering does not affect the terms                                                                       Subpart C are permitted. As defined in
                                                                                                          Statistics (July 2016), Employee Benefits in the
                                                  of retirement savings bonds issued to                   United States—March 2016 (http://www.bls.gov/            § 347.3, an Auto-IRA custodian is ‘‘an
                                                  the custodian of Treasury’s retirement
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                                                                                                          news.release/pdf/ebs2.pdf). These data show that 66      entity designated by a state (including,
                                                  savings program, myRA®, which are                       percent of 114 million private-sector workers have
                                                                                                                                                                   for the purpose of these regulations,
                                                  held in participants’ Roth IRAs. More                   access to a retirement plan through their employers.
                                                                                                          By extension, approximately 34 percent of the 114        certain political subdivisions of states)
                                                  information on myRA® is available at                    million private-sector workers (39 million) do not       to act as the trustee or custodian for
                                                  www.myra.gov.                                           have access to a retirement plan through work.           Auto-IRAs, in the form of Roth IRAs or
                                                                                                            2 The Department of Labor has published
                                                  DATES: This Final Rule is effective                                                                              traditional IRAs, for or opened on behalf
                                                                                                          regulations relating to state payroll deduction
                                                  January 19, 2017.                                       savings programs. 81 FR 59464 (Aug. 30, 2016) and        of participants in a state Auto-IRA
                                                  FOR FURTHER INFORMATION CONTACT:                        81 FR 92639 (Dec. 20, 2016).                             program.’’ Subsection (b) lists topics


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                                                                   Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Rules and Regulations                                              6245

                                                  that must be addressed by                               that ongoing use of retirement savings                 participants, in Treasury’s and the
                                                  documentation that programs are                         bonds is no longer consistent with these               states’ programs.
                                                  required to provide and certify to Fiscal               regulations, or in the event that a state
                                                                                                                                                                 III. Procedural Requirements
                                                  Service annually. The documentation                     Auto-IRA program might have failed to
                                                  must address: (1) Administration of                     comply with program instructions                       A. Administrative Procedure Act
                                                  retirement savings bonds, (2) account                   identified by Fiscal Service or might
                                                  monitoring, (3) ability to transfer                     have failed to provide or comply with                    Because this rule relates to United
                                                  proceeds, (4) IRA withdrawals, (5)                      documentation required pursuant to                     States securities, which are contracts
                                                  consumer protection, (6) state Auto-IRA                 § 347.30. Subsection (b) clarifies how                 between Treasury and the owners of the
                                                  program costs of administration, (7)                    bonds called for redemption will be                    securities, this rule falls within the
                                                  oversight of Auto-IRA custodian, (8)                    paid, which is in the same manner as                   contract exception to the Administrative
                                                  pooling prohibitions, (9) default                       bonds submitted for redemption under                   Procedures Act (APA) at 5 U.S.C.
                                                  investments, and (10) consumer                          subsection (a).                                        553(a)(2). As a result, the notice, public
                                                  education. The Commissioner of the                                                                             comment, and delayed effective date
                                                                                                             Section 347.35 Computation of
                                                  Fiscal Service may use the                                                                                     provisions of the APA are inapplicable
                                                                                                          interest. This new section provides that
                                                  documentation, among other purposes,                                                                           to this rule.
                                                                                                          the interest rate on the retirement
                                                  in exercising any of the rights reserved                savings bonds will track the annual                    B. Congressional Review Act
                                                  under § 347.37, which includes the right                percentage rate on securities in the
                                                  to require information addressing                       Government Securities Investment Fund                    This rule is not a major rule pursuant
                                                  additional topics. Subsection (c)                       (G Fund) in the Thrift Savings Plan for                to the Congressional Review Act (CRA),
                                                  provides for a successor Auto-IRA                       federal employees and that interest will               5 U.S.C. 801 et seq.
                                                  custodian, if needed.                                   cease at maturity or call.                             C. Paperwork Reduction Act
                                                     Section 347.31 Crediting of                             Section 347.36 Maturity. This new
                                                  retirement savings bond. This new                                                                                This final rule contains a new
                                                                                                          section provides that the maturity dates
                                                  section requires each bond issued to an                                                                        collection of information that is subject
                                                                                                          for the retirement savings bonds may
                                                  Auto-IRA custodian to be credited to an                                                                        to the Paperwork Reduction Act (PRA),
                                                                                                          differ for each bond. The longest
                                                  individual’s IRA under a state Auto-IRA                                                                        44 U.S.C. 3501 et seq. Under the PRA,
                                                                                                          possible maturity is 30 years (an original
                                                  program.                                                                                                       an agency may not conduct or sponsor,
                                                     Section 347.32 Annual additions to                   maturity period of 20 years and an
                                                                                                          extended maturity period of 10 years). A               and a person is not required to respond
                                                  retirement savings bond. This new                                                                              to, a collection of information unless it
                                                  section provides that the initial                       bond will mature at the earlier of 30
                                                                                                          years from the date the bond is first                  displays a valid OMB control number.
                                                  contribution and additions to a bond on                                                                        The collection of information contained
                                                  behalf of a participant are subject to the              issued to the Auto-IRA custodian on
                                                                                                          behalf of the participant or when its                  in this final rulemaking has been
                                                  annual contribution limits provided                                                                            submitted to the Office of Management
                                                  under the Internal Revenue Code and                     value reaches $15,000.00.
                                                                                                             Section 347.37 Reservation of rights.               and Budget for review in accordance
                                                  regulations, and that the total value of                                                                       with the Paperwork Reduction Act of
                                                  a retirement savings bond held by an                    Under this new section, the
                                                                                                          Commissioner of the Fiscal Service                     1995 (44 U.S.C. 3507(d)).
                                                  Auto-IRA custodian in an IRA on behalf
                                                  of any participant cannot exceed                        reserves certain rights, including: (1)                D. Regulatory Flexibility Act
                                                  $15,000.00.                                             The right to require a senior official to
                                                     Section 347.33 Individual additions                  certify program information to Fiscal                    The provisions of the Regulatory
                                                  to retirement savings bond. This new                    Service before the retirement savings                  Flexibility Act, 5 U.S.C. 601 et seq., do
                                                  section authorizes Fiscal Service to                    bonds are issued to an Auto-IRA                        not apply to this rule because, pursuant
                                                  establish minimum amounts for initial                   custodian; (2) the right to refuse to issue            to 5 U.S.C. 553(a)(2), it is not required
                                                  and additional contributions to a                       retirement savings bonds to an Auto-                   to be issued with notice and
                                                  retirement savings bond.                                IRA custodian in any particular case or                opportunity for public comment.
                                                     Section 347.34 Payment                               class of cases; (3) the right to suspend               E. Executive Order 12866
                                                  (redemption). Under this new section,                   or cease offering retirement savings
                                                  an Auto-IRA custodian is responsible                    bonds to an Auto-IRA custodian; (4) the                  This rule is not a significant
                                                  for making certain certifications as a                  right to call for redemption of any                    regulatory action pursuant to Executive
                                                  condition of the issuance and                           outstanding retirement savings bond                    Order 12866.
                                                  redemption of a retirement savings                      (this might occur for a variety of                     List of Subjects in 31 CFR Part 347
                                                  bond. Subsection (a) explains how the                   reasons, including, for example, if a
                                                  Auto-IRA custodian will request that                    state Auto-IRA program has changed                       Government securities, Savings
                                                  Fiscal Service make payment on                          significantly such that ongoing use of                 bonds.
                                                  matured retirement savings bonds as                     retirement savings bonds is no longer                    For the reasons set forth in the
                                                  well as those that have been fully or                   consistent with these regulations, or if a             preamble, we amend 31 CFR part 347 as
                                                  partially redeemed. Under subsection                    state has failed to provide or comply                  follows:
                                                  (b), Fiscal Service will make payment                   with documentation required pursuant
                                                  on any bonds that it calls for                          to § 347.30); or (5) the right to determine            PART 347—REGULATIONS
                                                  redemption without the Auto-IRA                         any appropriate remedy under this                      GOVERNING RETIREMENT SAVINGS
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                                                  custodian having to make a request.                     subpart.                                               BONDS
                                                  Under § 347.37(4), the Commissioner of
                                                                                                          Subpart D—Miscellaneous Provisions
                                                  the Fiscal Service may exercise                                                                                ■ 1. The authority citation for part 347
                                                                                                          for Retirement Savings Bonds
                                                  discretion to call the bonds for                                                                               continues to read as follows:
                                                  redemption. This might occur for a                         Subpart D contains miscellaneous
                                                                                                                                                                   Authority: 5 U.S.C. 301; 12 U.S.C. 90; 31
                                                  variety of reasons, including, for                      provisions (§§ 347.40 through 347.42)                  U.S.C. 3105.
                                                  example, in the event that a state Auto-                that apply to retirement savings bonds
                                                  IRA program changed significantly such                  issued to the custodians, on behalf of                 ■   2. Revise § 347.0 to read as follows:


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                                                  6246             Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Rules and Regulations

                                                  § 347.0   Offering of securities.                       not the program provides for automatic                 to a single Roth IRA established through
                                                    The Secretary of the Treasury (the                    enrollment).                                           Treasury’s retirement savings program
                                                  Secretary), under the authority of Title                   (b) State Auto-IRA program means a                  with the custodian.
                                                  31, Chapter 31, offers retirement savings               state Auto-IRA retirement savings                      ■ 8. Remove the headings for subparts
                                                  bonds to the IRA custodian for                          program.                                               C, D, and E and transfer §§ 347.20,
                                                  Treasury’s retirement savings program                      (c) IRA means an individual                         347.21, 347.30, 347.40, and 347.41 to
                                                  and to the Auto-IRA custodians for                      retirement account.                                    subpart B, and redesignate them as
                                                  certain state Auto-IRA programs. The                       (d) Custodian means a trustee or                    §§ 347.12 through 347.16, respectively.
                                                  nonmarketable bonds are issued to and                   custodian of a Roth IRA or traditional
                                                                                                                                                                 ■ 9. Revise newly redesignated
                                                  held by the custodians, on behalf of                    IRA.
                                                                                                                                                                 §§ 347.12 through 347.16 to read as
                                                  participants, in Treasury’s program and                    (e) State means any of the 50 states,
                                                                                                                                                                 follows:
                                                  state programs. This offering will                      the District of Columbia, Guam, the
                                                  continue until terminated by the                        Commonwealth of Puerto Rico, the                       § 347.12 Annual additions to retirement
                                                  Secretary or the Secretary’s designee.                  Virgin Islands, American Samoa, the                    savings bond.
                                                  Treasury’s Fiscal Assistant Secretary is                Commonwealth of the Northern Mariana                     The amount that initially may be
                                                  authorized to act on behalf of the                      Islands, or certain of their political                 contributed or added to a retirement
                                                  Secretary on all matters contained in                   subdivisions.                                          savings bond in a calendar year by the
                                                  these regulations. The Commissioner of                     (f) Auto-IRA custodian means an                     IRA custodian on behalf of any
                                                  the Fiscal Service, as designee of the                  entity designated by a state (including,               participant is limited by the applicable
                                                  Secretary, is delegated the responsibility              for the purpose of these regulations,                  annual contribution limits provided
                                                  to administer this part through the                     political subdivisions of states) to act as            under the Internal Revenue Code and
                                                  Bureau of the Fiscal Service (Fiscal                    the trustee or custodian for Auto-IRAs,                regulations. The total value of a
                                                  Service).                                               in the form of Roth IRAs or traditional                retirement savings bond that may be
                                                  ■ 3. Revise § 347.1 to read as follows:
                                                                                                          IRAs, for or opened on behalf of                       held by the IRA custodian in an IRA on
                                                                                                          participants in a state Auto-IRA                       behalf of any participant shall not
                                                  § 347.1   Applicability.                                program.                                               exceed $15,000.
                                                    The regulations in this part apply to                    (g) Retirement savings bond, as used
                                                                                                          in this part, means an interest-bearing                § 347.13 Individual additions to retirement
                                                  retirement savings bonds issued, on
                                                                                                          electronic United States savings bond                  savings bond.
                                                  behalf of participants, to the IRA
                                                  custodian for Treasury’s retirement                     issued to an Auto-IRA or IRA custodian.                  Fiscal Service is authorized to
                                                  savings program and to the Auto-IRA                        (h) IRA custodian means an entity                   establish minimum amounts for initial
                                                  custodians for state Auto-IRA programs.                 designated by Fiscal Service to act as a               and additional contributions to a
                                                                                                          custodian for Roth IRAs opened by or                   retirement savings bond under this
                                                  ■ 4. Revise § 347.2 to read as follows:
                                                                                                          on behalf of participants in Treasury’s                subpart.
                                                  § 347.2   Official agencies.                            retirement savings program.
                                                                                                                                                                 § 347.14   Payment (redemption).
                                                     (a) Fiscal Service is responsible for                   (i) Individual means a person eligible
                                                                                                          to have an IRA in Treasury’s retirement                  Payment of retirement savings bonds
                                                  administering Treasury’s retirement
                                                                                                          savings program or in a state Auto-IRA                 will be made to the IRA custodian upon
                                                  savings program and for issuing the
                                                                                                          program.                                               the custodian’s submission of a request
                                                  retirement savings bonds to the IRA
                                                                                                             (j) Participant means an individual                 for redemption to Fiscal Service. The
                                                  custodian for Treasury’s retirement
                                                                                                          who has an IRA in Treasury’s retirement                custodian shall request the redemption
                                                  savings program and to the Auto-IRA
                                                                                                          savings program or in a state Auto-IRA                 of all retirement savings bonds at their
                                                  custodians for certain state Auto-IRA
                                                                                                          program.                                               respective maturity. The custodian shall
                                                  programs. The states are responsible for
                                                                                                          *       *    *     *    *                              request the full or partial redemption of
                                                  administering their Auto-IRA retirement
                                                                                                                                                                 a bond held on behalf of a participant
                                                  savings programs, including the                         ■ 6. Revise the heading of subpart B to
                                                                                                                                                                 upon the request of the participant or
                                                  designation of Auto-IRA custodians to                   read as follows:                                       other authorized person entitled to
                                                  perform all operational responsibilities
                                                                                                          Subpart B—Treasury’s Retirement                        amounts in the IRA. Retirement savings
                                                  associated with the retirement savings
                                                                                                          Savings Program                                        bond redemptions will be rounded to
                                                  bonds issued by Fiscal Service.
                                                                                                                                                                 the nearest one cent.
                                                     (b) Communications concerning
                                                  transactions relating to an individual’s                ■ 7. Revise §§ 347.10 and 347.11 to read               § 347.15   Computation of interest.
                                                  IRA should be addressed to the                          as follows:
                                                                                                                                                                   Retirement savings bonds under this
                                                  appropriate custodian.                                  § 347.10    Authorized form of registration.           subpart earn interest at the same annual
                                                  ■ 5. In § 347.3:                                           (a) Retirement savings bonds are                    percentage rate as securities issued to
                                                  ■ a. Redesignate paragraphs (a) through                 issued to the IRA custodian for                        the Government Securities Investment
                                                  (g) as paragraphs (g) through (m);                      Treasury’s retirement savings program.                 Fund (G Fund) in the Thrift Savings
                                                  ■ b. Add new paragraphs (a) through (f);                No other registrations under this subpart              Plan for federal employees. The
                                                  and                                                     are permitted.                                         Secretary calculates the G Fund interest
                                                  ■ c. Revise newly redesignated                             (b) In the event Fiscal Service                     rate pursuant to 5 U.S.C. 8438(e)(2). The
                                                  paragraphs (g) through (j).                             designates a successor IRA custodian,                  retirement savings bond interest rate
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                                                     The additions and revisions read as                  Fiscal Service may reissue retirement                  compounds daily at 1/360 of the annual
                                                  follows:                                                savings bonds held by the predecessor                  percentage rate. Retirement savings
                                                                                                          custodian to the successor custodian.                  bonds will cease to accrue interest on
                                                  § 347.3   Definitions.                                                                                         the date of their maturity.
                                                    (a) Auto-IRA means an individual                      § 347.11    Crediting of retirement savings
                                                  retirement account for or opened on                     bond.                                                  § 347.16   Maturity.
                                                  behalf of a participant in a state                        Each retirement savings bond issued                    The maturity date for retirement
                                                  retirement savings program (whether or                  to the IRA custodian must be credited                  savings bonds is indeterminate and may


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                                                                   Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Rules and Regulations                                             6247

                                                  be different for each bond issued, but                  unreasonable restrictions on voluntary                 § 347.32 Annual additions to retirement
                                                  shall not exceed the sum of an original                 investment diversification (which might                savings bond.
                                                  maturity period of 20 years and an                      occur through a transfer within or                       The amount that initially may be
                                                  extended maturity period of 10 years. A                 outside of a state Auto-IRA program);                  contributed or added to a retirement
                                                  retirement savings bond purchased by                       (4) Withdrawals—addressing how the                  savings bond in a calendar year by an
                                                  the IRA custodian on behalf of a                        state Auto-IRA program enables                         Auto-IRA custodian on behalf of any
                                                  participant will mature at the earlier of               participants, at their discretion, to make             participant is limited by the applicable
                                                  30 years from the date the bond is first                reasonable withdrawals from their Auto-                annual contribution limits provided
                                                  issued to the custodian on behalf of the                IRAs;                                                  under the Internal Revenue Code and
                                                  participant or when its value reaches                      (5) Consumer protection—addressing                  regulations. The total value of a
                                                  $15,000.                                                consumer protections in the program,                   retirement savings bond that may be
                                                  ■ 10. Add a new subpart C to read as                    including disclosures provided to                      held by an Auto-IRA custodian in an
                                                  follows:                                                participants;                                          IRA on behalf of any participant shall
                                                  Subpart C—Auto-IRA Programs                                (6) Costs of administration—                        not exceed $15,000 for each state Auto-
                                                  Sec.                                                    describing any fees or other costs or                  IRA program.
                                                  347.30 Plan requirements for State Auto-                expenses passed on to or otherwise                     § 347.33 Individual additions to retirement
                                                       IRA programs.                                      borne by participants under the state                  savings bond.
                                                  347.31 Crediting of retirement savings                  Auto-IRA program (e.g., no more than
                                                       bond.                                              reasonable administrative, custodial,                    Fiscal Service is authorized to
                                                  347.32 Annual additions to retirement
                                                                                                          asset management, or other fees, costs,                establish minimum amounts for initial
                                                       savings bond.                                                                                             and additional contributions to a
                                                  347.33 Individual additions to retirement               or expenses);
                                                                                                                                                                 retirement savings bond under this
                                                       savings bond.                                         (7) Oversight—addressing state Auto-                subpart.
                                                  347.34 Payment (redemption).                            IRA program oversight of Auto-IRA
                                                  347.35 Computation of interest.                         custodians and describing any                          § 347.34   Payment (redemption).
                                                  347.36 Maturity.                                        protections in place for participants’
                                                  347.37 Reservation of rights.                                                                                    The issuance and redemption of a
                                                                                                          funds invested in retirement savings                   retirement savings bond is conditioned
                                                  Subpart C—Auto-IRA Programs                             bonds, including information relating to               on an Auto-IRA custodian certifying
                                                                                                          the protection of participants’ funds in               compliance with these regulations and
                                                  § 347.30 Plan requirements for State Auto-              the event that the Auto-IRA custodian                  with any additional program
                                                  IRA programs.                                           files for bankruptcy or otherwise                      instructions identified by Fiscal Service
                                                     (a) Authorized form of registration.                 experiences financial stress;                          that pertain to that bond.
                                                  Retirement savings bonds are issued to                     (8) Pooling—prohibiting the inclusion
                                                  Auto-IRA custodians for state Auto-IRA                                                                           (a) Payment upon maturity. Payment
                                                                                                          of retirement savings bonds as a                       of retirement savings bonds will be
                                                  programs. No other registrations under                  component of another investment or
                                                  this subpart are permitted.                                                                                    made to an Auto-IRA custodian upon
                                                                                                          asset category (such as a mutual fund or               the custodian’s submission of a request
                                                     (b) Documentation. A state Auto-IRA                  target-date fund);
                                                  program must provide documentation to                                                                          for redemption to Fiscal Service. The
                                                                                                             (9) Default investment—obtaining, if                custodian shall request the redemption
                                                  Fiscal Service annually, in a form and
                                                                                                          applicable, Fiscal Service’s further                   of all retirement savings bonds at their
                                                  manner acceptable to Fiscal Service,
                                                                                                          consent before any use of retirement                   respective maturity. The custodian shall
                                                  addressing the following topics:
                                                                                                          savings bonds as a default, sole, or                   request the full or partial redemption of
                                                     (1) Administration—servicing of the
                                                                                                          mandatory investment, even if                          a bond held on behalf of a participant
                                                  retirement savings bonds, such as
                                                                                                          temporary;                                             upon the request of the participant or
                                                  account maintenance, recordkeeping,
                                                  and establishment of procedures for                        (10) Consumer education—describing                  other authorized person entitled to
                                                  automatic payroll direct deposit                        plans to provide financial education to                amounts in the IRA. Retirement savings
                                                  contributions (or other funding means                   participants; and                                      bond redemptions will be rounded to
                                                  permitted under state Auto-IRA                             (11) Certification—requiring a                      the nearest one cent.
                                                  programs);                                              statement signed by an authorized                        (b) Payment upon call. Final interest
                                                     (2) Account monitoring—tracking                      senior official certifying that the                    on any called bonds will be paid with
                                                  and, when applicable, redeeming and                     documentation provided to Fiscal                       the principal (amount contributed
                                                  reallocating retirement savings bond                    Service is accurate and complete, and                  minus withdrawals taken) at
                                                  holdings (which may include                             that procedures are in place to timely                 redemption and rounded to the nearest
                                                  investment diversification strategies) no               notify Fiscal Service of any material                  one cent.
                                                  later than when a retirement savings                    changes in the future.
                                                                                                                                                                 § 347.35   Computation of interest.
                                                  bond that may be held by the Auto-IRA                      (c) Successor custodian. In the event
                                                  custodian on behalf of a participant in                 a state Auto-IRA program designates a                    Retirement savings bonds under this
                                                  a state Auto-IRA program reaches the                    successor Auto-IRA custodian, that                     subpart earn interest at the same annual
                                                  $15,000 maximum dollar threshold or                     program may request that Fiscal Service                percentage rate as securities issued to
                                                  30 years, whichever occurs first;                       reissue the retirement savings bonds                   the Government Securities Investment
                                                     (3) Ability to transfer—addressing                   held by the predecessor custodian to the               Fund (G Fund) in the Thrift Savings
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                                                  how the state Auto-IRA program enables                  successor custodian.                                   Plan for federal employees. The
                                                  participants, at their discretion, to                                                                          Secretary calculates the G Fund interest
                                                  redeem their retirement savings bonds                   § 347.31    Crediting of retirement savings            rate pursuant to 5 U.S.C. 8438(e)(2). The
                                                  prior to maturity and transfer their                    bond.                                                  retirement savings bond interest rate
                                                  retirement savings bond proceeds to                       Each retirement savings bond issued                  compounds daily at 1/360 of the annual
                                                  another investment available in the                     to an Auto-IRA custodian must be                       percentage rate. Retirement savings
                                                  State Auto-IRA program or to another                    credited to an IRA under the state Auto-               bonds will cease to accrue interest on
                                                  provider, without imposing                              IRA program with the custodian.                        the date of their maturity or call.


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                                                  6248             Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Rules and Regulations

                                                  § 347.36   Maturity.                                    cases for the convenience of the United                was effective for 2016 and for each year
                                                     The maturity date for retirement                     States or in order to relieve any person               thereafter.
                                                  savings bonds is indeterminate and may                  or persons of unnecessary hardship:                    DATES: This rule is effective January 19,
                                                  be different for each bond issued, but                     (a) If such action would not be                     2017 and is applicable beginning on
                                                  shall not exceed the sum of an original                 inconsistent with law or equity;                       January 13, 2017.
                                                  maturity period of 20 years and an                         (b) If it does not impair any material              FOR FURTHER INFORMATION CONTACT:
                                                  extended maturity period of 10 years. A                 existing rights; and                                   Brian Banal, 703–571–1652.
                                                  retirement savings bond purchased by                       (c) If he or she is satisfied that such
                                                                                                                                                                 SUPPLEMENTARY INFORMATION:
                                                  the Auto-IRA custodian on behalf of a                   action would not subject the United
                                                  participant will mature at the earlier of               States to any substantial expense or                   Background Information
                                                  30 years from the date the bond is first                liability.                                                The Federal Civil Penalties Inflation
                                                  issued to the custodian on behalf of the                                                                       Adjustment Act of 1990, Public Law
                                                                                                          § 347.41 Additional requirements; bond of
                                                  participant or when its value reaches                   indemnity.                                             101–410, 104 Stat. 890 (28 U.S.C. 2461,
                                                  $15,000.                                                                                                       note), as amended by the Debt
                                                                                                            The Commissioner of the Fiscal
                                                  § 347.37   Reservation of rights.                       Service may require:                                   Collection Improvement Act of 1996,
                                                                                                            (a) Such additional evidence to                      Public Law 104–134, April 26, 1996,
                                                     The Commissioner of the Fiscal
                                                                                                          support a requested action as he or she                and further amended by the Federal
                                                  Service may decide, in his or her sole
                                                                                                          may consider necessary or advisable; or                Civil Penalties Inflation Adjustment Act
                                                  discretion, to take any of the following
                                                                                                            (b) A bond of indemnity, with or                     Improvements Act of 2015 (the 2015
                                                  actions with respect to the retirement
                                                                                                          without surety, in any case in which he                Act), Public Law 114–74, November 2,
                                                  savings bonds offered under this
                                                                                                          or she may consider such a bond                        2015, required agencies to annually
                                                  subpart. Such actions are final.
                                                                                                          necessary for the protection of the                    adjust the level of CMPs for inflation to
                                                  Specifically, the Commissioner reserves
                                                                                                          interests of the United States.                        improve their effectiveness and
                                                  the right under this subpart:
                                                                                                                                                                 maintain their deterrent effect. The 2015
                                                     (a) As a condition of Fiscal Service’s
                                                                                                          § 347.42 Supplements, amendments, or                   Act required that not later than July 1,
                                                  issuance of retirement savings bonds to                 revisions.                                             2016, and not later than January 15 of
                                                  an Auto-IRA custodian under a state
                                                                                                             The Secretary may at any time, or                   every year thereafter, the head of each
                                                  Auto-IRA program, to require a state
                                                                                                          from time to time, prescribe additional,               agency must adjust each CMP within its
                                                  Auto-IRA program to provide
                                                                                                          supplemental, amendatory, or revised                   jurisdiction by the inflation adjustment
                                                  information to Fiscal Service concerning
                                                                                                          rules and regulations governing                        described in the 2015 Act. The inflation
                                                  the state Auto-IRA program and
                                                                                                          retirement savings bonds.                              adjustment is determined by increasing
                                                  retirement savings bonds offered under
                                                                                                                                                                 the maximum CMP or the range of
                                                  this subpart, including a certification by              David A. Lebryk,
                                                                                                                                                                 minimum and maximum CMPs, as
                                                  a senior official to the completeness and               Fiscal Assistant Secretary.                            applicable, for each CMP by the cost-of-
                                                  accuracy of the information requested;                  [FR Doc. 2017–01038 Filed 1–18–17; 8:45 am]
                                                     (b) To refuse to issue retirement                                                                           living adjustment, rounded to the
                                                  savings bonds to an Auto-IRA custodian
                                                                                                          BILLING CODE 4810–AS–P                                 nearest multiple of $1. The cost-of-
                                                  in any particular case or class of cases;                                                                      living adjustment is the percentage (if
                                                     (c) To suspend or cease offering                                                                            any) for each CMP by which the
                                                  retirement savings bonds to an Auto-                    DEPARTMENT OF DEFENSE                                  Consumer Price Index (CPI) for the
                                                  IRA custodian;                                                                                                 month of October preceding the date of
                                                                                                          Office of the Secretary                                the adjustment (January 15), exceeds the
                                                     (d) To call for redemption of any
                                                  outstanding retirement savings bond; or                                                                        CPI for the month of October in the
                                                                                                          32 CFR Part 269                                        previous calendar year.
                                                     (e) To determine any appropriate
                                                  remedy under this subpart.                              [Docket ID: DOD–2016–OS–0045]                             The initial catch up adjustments for
                                                                                                                                                                 inflation to the Department of Defense’s
                                                  ■ 11. Redesignate subpart F (consisting                 RIN 0790–ZA12                                          CMPs were published as an interim
                                                  of §§ 347.50, 347.51, and 347.52) as
                                                                                                                                                                 final rule in the Federal Register on
                                                  subpart D (consisting of §§ 347.40                      Civil Monetary Penalty Inflation
                                                                                                                                                                 May 26, 2016 (81 FR 33389–33391) and
                                                  through 347.42) and revise newly                        Adjustment
                                                                                                                                                                 became effective on that date. The
                                                  redesignated subpart D to read as
                                                                                                          AGENCY:  Under Secretary of Defense                    interim final rule was published as a
                                                  follows:
                                                                                                          (Comptroller), Department of Defense.                  final rule without change on September
                                                  Subpart D—Miscellaneous Provisions for                                                                         12, 2016 (81 FR 62629–62631), effective
                                                                                                          ACTION: Final rule.
                                                  Retirement Savings Bonds                                                                                       that date. The revised methodology for
                                                  Sec.                                                    SUMMARY:   This final rule is being issued             agencies for 2017 and each year
                                                  347.40 Waiver of regulations.                           to adjust for inflation each civil                     thereafter provides for the improvement
                                                  347.41 Additional requirements; bond of                 monetary penalty (CMP) provided by                     of the effectiveness of CMPs and to
                                                       indemnity.                                         law within the jurisdiction of the United              maintain their deterrent effect. Effective
                                                  347.42 Supplements, amendments, or
                                                                                                          States Department of Defense                           2017, agencies’ annual adjustments for
                                                       revisions.
                                                                                                          (Department of Defense). The Federal                   inflation to CMPs shall take effect not
                                                  Subpart D—Miscellaneous Provisions                      Civil Penalties Inflation Adjustment Act               later than January 15. The Department
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                                                  for Retirement Savings Bonds                            of 1990, as amended by the Debt                        of Defense is adjusting the level of all
                                                                                                          Collection Improvement Act of 1996                     civil monetary penalties under its
                                                  § 347.40   Waiver of regulations.                       and the Federal Civil Penalties Inflation              jurisdiction by the Office of
                                                    The Commissioner of the Fiscal                        Adjustment Act Improvements Act of                     Management and Budget (OMB)
                                                  Service may waive or modify any                         2015 (the 2015 Act), requires the head                 directed cost-of-living adjustment
                                                  provision or provisions of the                          of each agency to adjust for inflation its             multiplier for 2017 of 1.01636
                                                  regulations in this part. He or she may                 CMP levels in effect as of November 2,                 prescribed in OMB Memorandum M–
                                                  do so in any particular case or class of                2015, under a revised methodology that                 17–11, ‘‘Implementation of the 2017


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Document Created: 2018-02-01 15:15:27
Document Modified: 2018-02-01 15:15:27
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesThis Final Rule is effective January 19, 2017.
ContactTechnical information: Gregory Till, myRA Bureau Director, at (202) 622-6970 or [email protected]
FR Citation82 FR 6244 
RIN Number1530-AA13
CFR AssociatedGovernment Securities and Savings Bonds

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