[Federal Register Volume 85, Number 191 (Thursday, October 1, 2020)]
[Rules and Regulations]
[Pages 61805-61806]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20762]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 85, No. 191 / Thursday, October 1, 2020 /
Rules and Regulations
[[Page 61805]]
FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
5 CFR Part 1650
Hardship Withdrawals for Expenses Related to Natural Disasters
AGENCY: Federal Retirement Thrift Investment Board.
ACTION: Final rule.
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SUMMARY: The Federal Retirement Thrift Investment Board (``FRTIB'') is
amending its regulations to allow participants to take hardship
withdrawals for expenses related to natural disasters.
DATES: This rule is effective October 1, 2020.
FOR FURTHER INFORMATION CONTACT: Jessica Bradford, (202) 864-8699.
SUPPLEMENTARY INFORMATION: The FRTIB administers the Thrift Savings
Plan (TSP), which was established by the Federal Employees' Retirement
System Act of 1986 (FERSA), Public Law 99-335, 100 Stat. 514. The TSP
provisions of FERSA are codified, as amended, largely at 5 U.S.C. 8351
and 8401-79. The TSP is a tax-deferred retirement savings plan for
federal civilian employees and members of the uniformed services. The
TSP is similar to cash or deferred arrangements established for
private-sector employees under section 401(k) of the Internal Revenue
Code (26 U.S.C. 401(k)).
On February 14, 2020, the FRTIB published a proposed rule with
request for comments in the Federal Register (85 FR 8482), and for
reasons described below, is publishing the proposed rule as final
without change.
The proposed rule amended 5 CFR 1650.32(b) to add to its list of
authorized hardship expenses, the expenses and losses (including loss
of income) resulting from a natural disaster as declared by the Federal
Emergency Management Agency (``FEMA'') and designated for individual
assistance in order to allow TSP participants to make financial
hardship withdrawals for such natural disaster expenses and losses. The
FRTIB received six comments. Three of the comments expressed approval
of the proposed regulation and recommended no changes.
One commenter encouraged the FRTIB to expand other parts of the
FRTIB's hardship withdrawal program, such as permitting withdrawal of
the full balance subject to certain minimum account values and
increasing the current six-month wait period to 12 months between
financial hardship requests. The proposed regulation sought comments
exclusively on adding natural disaster expenses and losses to the TSP's
hardship withdrawal conditions, and, therefore, the FRTIB cannot
further expand the withdrawal program beyond that purpose in the final
regulation.
Another commenter asked whether a TSP participant may make a
withdrawal under the natural disaster condition for expenses related to
a family member's death resulting from the natural disaster. The final
regulation does not limit the expense to a specific type, such as
property expenses or medical expenses. Rather, the regulation requires
that the expense be ``incurred by the participant on account of a
disaster declared by the [FEMA]'' and that the participant's principal
residence or principal place of employment at the time of the disaster
be located in an area designated by the FEMA for individual assistance
with respect to the disaster. Any expense that meets these requirements
would be eligible for a hardship withdrawal.
For example, provided the participant's principal residence at the
time of the disaster was located in an area declared by the FEMA for
individual assistance, if a TSP participant's dependent or spouse died
as a result of a natural disaster, and, as a result, the participant
incurred funeral expenses relating to that dependent or spouse, then
the expense would be eligible for a hardship withdrawal under
1650.32(b)(5).
Another commenter urged the FRTIB to treat pandemics such as COVID-
19 as natural disasters under this regulation. Guided by legislation,
the FRTIB has implemented other withdrawal options designed to afford
relief for adverse financial consequences due to COVID-19. For more
information about those options, please visit www.tsp.gov/covid-19/.
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities. This regulation will
affect Federal employees, members of the uniformed services who
participate in the Thrift Savings Plan, and their beneficiaries. The
TSP is a Federal defined contribution retirement savings plan created
FERSA and is administered by the Agency.
Paperwork Reduction Act
I certify that these regulations do not require additional
reporting under the Paperwork Reduction Act.
Unfunded Mandates Reform Act of 1995
Pursuant to the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 602,
632, 653, 1501-1571, the effects of this regulation on state, local,
and tribal governments and the private sector have been assessed. This
regulation will not compel the expenditure in any one year of $100
million or more by state, local, and tribal governments, in the
aggregate, or by the private sector. Therefore, a statement under 1532
is not required.
List of Subjects in 5 CFR Part 1650
Taxes, Claims, Government employees, Pensions, Retirement.
Ravindra Deo,
Executive Director, Federal Retirement Thrift Investment Board.
For the reasons stated in the preamble, the FRTIB amends 5 CFR
chapter VI as follows:
PART 1650--METHODS OF WITHDRAWING FUNDS FROM THE THRIFT SAVINGS
PLAN
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1. The authority citation for part 1650 continues to read as follows:
Authority: 5 U.S.C. 8351, 8432d, 8433, 8434, 8435, 8474(b)(5)
and 8474(c)(1).
0
2. Amend Sec. 1650.32 by revising paragraph (b) introductory text and
adding paragraph (b)(5) to read as follows:
Sec. 1650.32 Financial hardship withdrawals.
* * * * *
(b) To be eligible for a financial hardship withdrawal, a
participant must
[[Page 61806]]
have a financial need that results from at least one of the following
five conditions:
* * * * *
(5) The participant has incurred expenses and losses (including
loss of income) on account of a disaster declared by the Federal
Emergency Management Agency (FEMA) under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act, Public Law 100-707,
provided that the participant's principal residence or principal place
of employment at the time of the disaster was located in an area
designated by the FEMA for individual assistance with respect to the
disaster.
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[FR Doc. 2020-20762 Filed 9-30-20; 8:45 am]
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