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the losing Federal Government employing agency to the TSP recordkeeper as having transferred to a NAF instrumentality of the DOD or Coast Guard rather than as having separated from Government service. If the employee subsequently elects not to be covered by CSRS or FERS, the NAF instrumentality must submit an Employee Data Record to report the employee as having separated from Federal Government service as of the date of the move.

$1620.98 Notices.

All NAF instrumentalities employing any individuals covered by $1620.90 must notify affected employees of the application of the regulations in this subpart as soon as practicable.

§ 1620.99 Other regulations.

NAF instrumentalities and individuals covered by §1620.90 are governed by the regulations in this chapter, to the extent that the regulations in this chapter are not inconsistent with this subpart.

Subpart H-Military Service

SOURCE: 60 FR 19990, Apr. 21, 1995, unless otherwise noted.

§1620.100 Scope.

(a) General. To be covered by this subpart, an employee must have:

(1) Been separated from Federal civilian service or entered leave-withoutpay status in order to perform military service;

(2) Been reemployed; and

(3) Become eligible to seek reemployment by virtue of a release from milifrom tary service, discharge hospitalization, or other similar event that occurred on or after August 2, 1990.

(b) Other rules. Except as provided in this part, the rules governing contributions to the TSP set forth in 5 CFR part 1600 will apply to persons reemployed under this subpart.

§ 1620.101 Definitions.

As used in this subpart:

(a) Basic pay has one of two meanings:

(1) For the portion of the retroactive period when an employee did not receive a Federal civilian salary, the rate of basic pay is that which would have been payable to the employee if the employee had remained continuously employed in the position which he or she last held before separating (or entering leave-without-pay status) to perform military service;

(2) For the portion of the retroactive period that occurs after the employee is reemployed, his or her actual basic pay will be used to calculate contributions.

(b) Current contributions means those contributions that are made prospectively for any pay period after the employee has been reemployed.

(c) Employee means any Federal employee whose release from military service, discharge from hospitalization, or other similar event making the individual eligible to seek restoration or reemployment under 38 U.S.C. chapter 43 occurs on or after August 2, 1990.

(d) Leave-without-pay means a temporary nonpay status and absence from duty (including military furlough) to perform military service.

(e) Recordkeeper means the organization designated by the Federal Retirement Thrift Investment Board as the Thrift Savings Plan's recordkeeper.

(f) Reemployed or reemployment means reemployed in (or restored to) a position pursuant to 38 U.S.C. chapter 43, which is subject to 5 U.S.C. chapter 84 or which entitles the employee to contribute to the Thrift Savings Plan pursuant to 5 U.S.C. 8351.

(g) Retroactive period means the period for which an employee is entitled to make up missed Employee Contributions and to receive retroactive Agency Automatic and (1%) Contributions Agency Matching Contributions.

(1) Beginning of retroactive period. For an employee who was eligible to make contributions when military service began, the retroactive period begins on the date following the effective date of separation or, in the case of leave-without-pay, the date the employee enters leave-without-pay status. For an employee who was not eligible to make contributions when military service began, the retroactive period begins on the first day of the first pay period in

the election period during which the employee would have been eligible to make contributions had the employee remained in Federal civilian service.

(2) End of retroactive period. The retroactive period ends on the earlier of the following two dates: the date before the first day of the first election period during which a contribution election could have been made effective after reemployment, or the last day of the pay period before the pay period during which routine current contributions are begun after the employee is reemployed (or restored). If an employee who was making contributions when he or she separated elects not to make routine current contributions, the ending date of the retroactive period is the last day of the pay period during which the employee elects to terminate contributions.

(h) Separation or separated means the period an employee was separated from Federal civilian service (or entered a leave-without-pay status) in order to perform military service.

§ 1620.102 Processing elections.

contribution

(a) Current contribution elections. Immediately upon reemployment, an employee's agency will give an eligible employee the opportunity to submit a contribution election form (Form TSP1) to make current contributions. The effective date of the current Form TSP-1 will be the first day of the first full pay period in the most recent TSP election period. If the employee is reemployed during a TSP Open Season but before the election period, he or she can also submit an election form that will become effective the first day of the first full pay period in the following election period.

(b) Retroactive contribution elections. (1) An employee has the following options for making retroactive contributions:

(i) If the employee had a valid contribution election form (Form TSP-1) on file when he or she separated, that election form will be reinstated for purposes of retroactive contributions upon the employee's reemployment, unless a new contribution election form is submitted to terminate all retroactive contributions or those con

tributions that would have been made from the date of separation through the end of the Open Season that occurred immediately after the separation.

(ii) Instead of making the contributions for the retroactive period under the reinstated contribution election form, the employee may submit a new election form for any Open Season that occurred during the retroactive period. However, the allocation election on each Form TSP-1 for the retroactive period must be the same as the allocation election on the current Form TSP-1.

(2) An employee who terminated contributions within two months before entering military service will be eligible to make a retroactive contribution election effective for the first Open Season that occurs after the effective date that the contributions were terminated. This election may be made even if the termination was made outside of an Open Season.

(3) Employees may not make any retroactive contributions that will cause them to exceed the Internal Revenue Service's elective deferral limit. If an employee's current contributions, when added to the make-up contributions, will exceed the annual elective deferral limit, the employing agency must suspend the make-up contributions in accordance with 5 CFR 1605.2(b)(2)(ii).

§ 1620.103 Processing lost earnings.

(a) Agency Automatic (1%) Contributions. Subject to the de minimis rules in 5 CFR part 1606, employing agencies are required to pay lost earnings on the Agency Automatic (1%) Contributions that are made for the retroactive period.

(b) Agency Matching Contributions. Subject to the de minimis rules in 5 CFR part 1606, employing agencies are required to pay lost earnings for the agency contributions that match make-up Employee Contributions.

(c) Make-up Employee Contributions. Employing agencies may not pay lost earnings for make-up Employee Contributions associated with the retroactive period.

(d) Lost earnings calculation. Lost earnings will be calculated on all retroactive agency contributions using the rates of return for the Government Securities Investment Fund (G Fund), unless the employee submitted one or more interfund transfer requests during the period of separation. In the case of interfund transfer requests, the earnings will be calculated using the G Fund rates of return until the first interfund transfer was processed. The contribution that is subject to lost earnings will be moved to the investment fund(s) the employee requested and lost earnings will be calculated based on the earnings for that fund(s). The amount of lost earnings calculated will be posted to the investment fund(s) to which the contribution was moved. If there were no interfund transfers processed during the lost earnings calculation period, the amount of lost earnings calculated will be posted to the employee's G Fund account.

§ 1620.104 Agency payments to recordkeeper; agency ultimately chargeable.

(a) Agency making payments to recordkeeper. The current employing agency will always be the agency responsible for making payments to the recordkeeper for all contributions (both employee and agency) and lost earnings, regardless of whether some of that expense is ultimately chargeable to a prior employing agency.

(b) Agency ultimately chargeable with expense. The agency ultimately chargeable with the expense of agency contributions and lost earnings attributable to the retroactive period is ordinarily the agency that reemployed the employee. However, if an employee changed agencies during the period between the date of reemployment and October 13, 1994, the employing agency as of October 13, 1994, is the agency ultimately chargeable with the expense.

(c) Reimbursement by agency ultimately chargeable with expense. If the agency that made the payments to the recordkeeper for agency contributions and lost earnings is not the agency ultimately chargeable with that expense, the agency that made the payments to the recordkeeper may, but is not re

quired to, obtain reimbursement from the agency ultimately chargeable with the expense.

§ 1620.105 Restoring forfeited Agency Automatic (1%) Contributions.

If an employee's Agency Automatic (1%) Contributions were forfeited because the employee was not vested when he or she separated to perform military service, the employee must notify the employing agency that a forfeiture occurred. Employing agencies will submit a written request to the recordkeeper to restore any Agency Automatic (1%) Contributions that were forfeited from an employee's account because he or she was not vested at the time the employee separated to perform military service.

§ 1620.106 Returning withdrawals.

(a) General. Employees who are subject to the TSP automatic cashout provisions (employees whose account balances were $3,500 or less) and employees who separated without eligibility for retirement benefits and prior to March 1995 withdrew amounts greater than $3,500, may elect to have the separation for military service treated as if it had never occurred. These employees will be allowed to return amounts to the Thrift Savings Plan that represent the full amount of the withdrawal. Eligible employees must notify the recordkeeper by April 21, 1996, or one year from the date of reemployment, whichever is later, of their intent to return the withdrawn funds.

(b) Documentation. An eligible employee who elects to return the full amount of a withdrawal under this section must provide documentation of reemployment to the recordkeeper. The recordkeeper will notify the employee of the amount of funds to be returned and the deadline for making that payment. The employee must provide the funds in a single payment to the recordkeeper within 90 days after the recordkeeper sends the employee the notice advising of the amount and procedures for returning the funds.

(c) Earnings. Employees will not receive retroactive earnings on any amounts withdrawn that they later return to their accounts.

(d) Tarable distribution reversed. Employees who return withdrawn funds under this section may be eligible to have a taxable distribution associated with a loan reversed. At the time the recordkeeper notifies the employee of the amount required to return the withdrawn funds, it will notify the employee whether he or she is eligible to have a taxable distribution reversed.

§ 1620.107 Agency responsibilities.

(a) General. Each employing agency must establish procedures for implementing these regulations. These procedures must at a minimum, require agency personnel to identify and notify eligible employees concerning their options under these regulations and tell them the time period within which those options must be exercised. For employees who are reemployed on or after August 2, 1990, and before April 21, 1995, the agency must perform these functions by June 20, 1995. For employees who are reemployed on or after April 21, 1995, employing agencies must perform these functions within 60 days of the employee's reemployment. An employee must submit a written request to the employing agency to make up Employee Contributions for the retroactive period on or before April 21, 1996, or one year from the date the employee was reemployed, whichever is later, or forfeit the right to make up these contributions.

(b) Agency records; procedure for reimbursement. The agency that is making the payments to the recordkeeper for all contributions (both employee and agency) and lost earnings will obtain from prior employing agencies whatever information is necessary in order to make accurate payments. If a prior employing agency is ultimately chargeable under §1620.104(b) for all or part of the expense of agency contributions and lost earnings, the agency making the payments to the recordkeeper will determine the procedure to follow in order to collect amounts owed to it by the agency ultimately chargeable with the expense.

(c) Payment schedule; matching contributions report. Agencies will, with the employee's consent, prepare a payment schedule for making retroactive Employee Contributions. In addition, the

employing agencies will calculate the Agency Matching Contributions that will be reported for investment to the recordkeeper in equal installments for each pay period covered by the payment schedule. The employing agency may impose limits on the maximum amount of time during which an employee may make up the missed contributions. This maximum amount of time may be no less than two times and no more than four times the number of pay periods that were covered by the period of missed contributions. An employee may decide to terminate the make-up contributions; however, such a decision is irrevocable.

(d) Agency Automatic (1%) Contributions. Employing agencies must calculate the Agency Automatic (1%) Contributions for all reemployed FERS employees, report these contributions to the recordkeeper, and submit lost earnings records to cover the retroactive period by June 20, 1995, or 60 days from the date of reemployment, whichever is later.

(e) Forfeiture restoration. When notified by an employee that a forfeiture of the Agency Automatic (1%) Contributions occurred after the employee separated to perform military service, the employing agency must submit a written request to the recordkeeper to restore these funds.

(f) Thrift Savings Plan Service Computation Date. The agencies must review the Thrift Savings Plan Service Computation Date for all reemployed Federal Employees' Retirement System employees for purposes of crediting military service performed during the separation period. If the period of military service has not been credited, the agency must submit a corrected Thrift Savings Plan Service Computation Date to the recordkeeper.

Subpart 1-Certain Employees of

the District of Columbia Financial Responsibility and Management Assistance Authority

SOURCE: 61 FR 2873, Jan. 29, 1996, unless otherwise noted.

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1620.110 Scope.

The District of Columbia Financial Responsibility and Management Assistance Authority (Authority) was established by the District of Columbia Financial Responsibility and Management Assistance Act of 1995, Pub. L. 104-8, 109 Stat. 97, which was amended by the Omnibus Consolidated Rescissions and Appropriations Act of 1996, section 153, Pub. L. 104-134, 110 Stat. 1321. Although the Authority is an agency of the District of Columbia Government, certain of its employees may elect Federal Employees' Retirement System (FERS) or Civil Service Retirement System (CSRS) coverage. This subpart governs participation in the Thrift Savings Plan (TSP) by employees of the Authority who elect to be covered by FERS or CSRS.

[61 FR 55202, Oct. 25, 1996]

$1620.111

Definitions.

As used in this subpart:

Authority means the District of Columbia Financial Responsibility and Management Authority.

Basic pay means basic pay as defined in 5 U.S.C. 8331(3), and it is the rate of pay used in computing any amount the individual is otherwise required to contribute to the Civil Service Retirement and Disability Fund as a condition for participating in the Civil Service Retirement System or the Federal Employees' Retirement System, as the case may be.

CSRS means the Civil Service Retirement System established by subchapter III of chapter 83 of title 5, United States Code, or any equivalent Government retirement plan.

Election period means the last calendar month of an open season and is the period in which an election to make or change contributions during that open season can first become effective.

FERS means the Federal Employees' Retirement System established by chapter 84 of title 5, United States Code, and any equivalent retirement system.

Open season means the period during which employees may make an election with respect to their contributions to the Thrift Savings Plan.

Recordkeeper means the organization under contract to the Board to perform recordkeeping services. This currently is the National Finance Center, United States Department of Agriculture, P.O. Box 61500, New Orleans, Louisiana 70161-1500.

Retirement election means an election by an eligible employee of the Authority to remain covered by either CSRS or FERS.

Thrift Savings Plan (TSP) election means a request by an eligible employee to start contributing to the TSP, to terminate contributions to the TSP, to change the amount of contributions made to the TSP each pay period (including a request to terminate contributions), or to change the allocation of TSP contributions among the TSP investment funds, as described at 5 CFR 1600.4. A TSP election must be made on Form TSP-1, Thrift Savings Plan Election Form.

[61 FR 2873, Jan. 29, 1996, as amended at 61 FR 55202, Oct. 25, 1996]

§ 1620.112 Eligibility requirements.

To be eligible to participate in the TSP, an employee of the Authority must be covered by FERS or CSRS pursuant to the District of Columbia Financial Responsibility and Management Assistance Act of 1995, as amended.

[61 FR 55202, Oct. 25, 1996]

§ 1620.113 Notice to an employee of his or her right to participate in the TSP.

The Authority must notify an employee of his or her right to participate in the TSP at the time the employee is required to be notified of his or her right to elect to be covered under FERS or CSRS.

§ 1620.114 Employee contributions.

(a) An employee of the Authority who is separated from Federal service for less than 31 full calendar days before commencing employment with the Authority and who is covered by FERS or CSRS will be eligible to contribute to the TSP as though he or she had transferred to the Authority from the losing Federal agency, i.e., as though

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