CFR Subpart A

CFR Subpart A
in effect

5 C.F.R. § 1605.1 Definitions.

(a) Definitions generally applicable to the Thrift Savings Plan are set forth at 5 CFR 1690.1. (b) As used in this part: “As of” date means the date on which a TSP contribution or other transaction entailing acquisition of investment fund shares should have taken place. Employing agencies use this date on payment records to report makeup or late contributions or late loan payments. Attributable pay date means: (i) The pay date of a contribution that is being redesignated from traditional to Roth, or vice versa; (ii) In the case of the uniformed services, the pay date of a contribution that is being recharacterized from tax-deferred to tax-exempt, or vice versa; or (iii) The pay date of an erroneous contribution for which a negative adjustment is being made. However, if the erroneous contribution for which a negative adjustment is being made was a makeup or late contribution, the attributable pay date is the “as of” date of the erroneous makeup or late contribution. Breakage means the loss incurred or the gain realized on makeup or late contributions. BRS participant means any member of the Uniformed Services described in 5 U.S.C. 8440e(e)(1). Earnings means both positive and negative fund performance attributable to differences in TSP core fund share prices. Error means any act or omission by the Board, the TSP record keeper, or the participant's employing agency that is not in accordance with applicable statutes, regulations, or administrative procedures that are made available to employing agencies and/or TSP participants. It does not mean an act or omission caused by events that are beyond the control of the Board, the TSP record keeper, or the participant's employing agency. FERCCA correction means the correction of a retirement coverage error pursuant to the Federal Erroneous Retirement Coverage Corrections Act, title II, Public Law 106-265, 114 Stat. 770. Late contributions means: (i) Employee contributions that were timely deducted from a participant's basic pay but were not timely reported to the TSP record keeper for investment; (ii) Employee contributions that were timely reported to the TSP record keeper but were not timely posted to the participant's account by the TSP record keeper because the payment record on which they were submitted contained errors; (iii) Agency matching contributions attributable to employee contributions referred to in paragraph (i) or (ii) of this definition; and (iv) Delayed agency automatic (1%) contributions. Makeup contributions are employee contributions that should have been deducted from a participant's basic pay or employer contributions that should have been charged to an employing agency on an earlier date, but were not deducted or charged and, consequently, are being deducted or charged currently. Negative adjustment means the removal of money from a participant's TSP account by an employing agency. Negative adjustment record means a data record submitted by an employing agency to remove from a participant's TSP account money that the agency had previously submitted in error. Non-BRS participant means any member of the Uniformed Services not described in 5 U.S.C. 8440e(e)(1). Pay date means the date established by an employing agency for paying its employees or service members. Payment record means a data record submitted by an employing agency to report contributions or loan payments to a participant's TSP account. Recharacterization means the process of changing a contribution that the employing agency erroneously submitted as a tax-deferred contribution to a tax-exempt contribution (or vice versa). Recharacterization is a method of error correction only. It applies only to the traditional balance of a uniformed services account. Recharacterization record means a data record submitted by an employing agency to recharacterize a tax-deferred contribution that the employing agency erroneously submitted as a tax-exempt contribution (or vice versa). Redesignation means the process of moving a contribution (and its associated positive earnings) from a participant's traditional balance to the participant's Roth balance or vice versa in order to correct an employing agency error that caused the contribution to be submitted to the wrong balance. Redesignation is a method of error correction only. A participant cannot request the redesignation of contributions unless the employing agency made an error in the submission of the contributions. Redesignation record means a data record submitted by an employing agency to redesignate a contribution that the employing agency erroneously submitted to the wrong balance (traditional or Roth).

5 C.F.R. § 1605.2 Calculating, posting, and charging breakage on late contributions and loan payments.

(a) General criteria. The TSP will calculate breakage on late contributions, makeup agency contributions, and loan payments as described by § 1605.15(b). This breakage calculation is subject to the criteria in paragraphs (a)(1) and (2) of this section: (1) The TSP record keeper will not calculate breakage if contributions or loan payments are posted within 30 days of the “as of” date, or if the total amount on a late payment record or the total agency contributions on a current payment record is less than $1.00; and (2) The TSP record keeper will not take the participant's fund reallocations and fund transfers into account when determining breakage. (b) Calculating breakage. The TSP record keeper will calculate breakage for all contributions or loan payment corrections as follows: (1) Use the participant's investment election on file for the “as of” date to determine how the funds would have been invested, going back to the earliest daily share prices available. If there is no investment election on file, or one cannot be derived based on the investment of contributions, the TSP record keeper will consider the funds to have been invested in the default investment fund in effect for the participant on the “as of” date; (2) Determine the number of shares of the applicable investment funds the participant would have received had the contributions or loan payments been made on time. If the “as of” date is before TSP account balances were converted to shares, this determination will be the number of shares the participant would have received on the conversion date, and will include the daily earnings the participant would have received had the contributions or loan payments been made on the “as of” date; (3) Determine the dollar value on the posting date of the number of shares the participant would have received had the contributions or loan payments been made on time. If the contributions or loan payments would have been invested in a Lifecycle fund that is retired on the posting date, the share price of the L Income Fund will be used. The dollar value shall be the number of shares the participant would have received had the contributions or loan payments been made on time multiplied by the share price; and (4) The difference between the dollar value of the contribution or loan payment on the posting date and the dollar value of the contribution or loan payment on the “as of” date is the breakage. (c) Posting contributions and loan payments. Makeup and late contributions, late loan payments, and breakage, will be posted to the participant's account according to his or her investment election on file for the posting date. If there is no investment election on file for the posting date, they will be posted to the default investment fund in effect for the participant. (d) Charging breakage. If the dollar amount posted to the participant's account is greater than the dollar amount of the makeup or late contribution or late loan payment, the TSP record keeper will charge the agency the additional amount. If the dollar amount posted to the participant's account is less than the dollar amount of the makeup or late contribution, or late loan payment, the difference between the amount of the contribution and the amount posted will be forfeited to the TSP. (e) Posting of multiple contributions. If the TSP record keeper posts multiple makeup or late contributions or late loan payments with different “as of” dates for a participant on the same business day, the amount of breakage charged to the employing agency or forfeited to the TSP will be determined separately for each transaction, without netting any gains or losses attributable to different “as of” dates. In addition, gains and losses from different sources of contributions or different TSP core funds will not be netted against each other. Instead, breakage will be determined separately for each as-of date, TSP core fund, and source of contributions.

5 C.F.R. § 1605.3 Calculating, posting, and charging breakage on errors involving investment in the wrong fund.

(a) The TSP record keeper will calculate and post breakage on date of birth errors that result in default investment in the wrong L Fund, investment election errors, and fund reallocation and fund transfer errors. (b) The TSP record keeper will charge the employing agency for positive breakage on incorrect dates of birth caused by employing agency error that result in default investment in the wrong L Fund. A date of birth change received from an employing agency will not trigger corrective action other than to update the date of birth. To initiate a breakage calculation for an employee, the employing agency must notify the TSP record keeper that the participant is entitled to breakage. (c) If a uniformed services participant's retirement system is misclassified and the error results in default investment in the wrong fund, when the error is corrected pursuant to § 1605.14(f)-(g), the TSP record keeper will charge the employing agency for any positive breakage that results from the incorrect default investment. The retirement misclassification correction received from an employing agency will not trigger corrective action other than to update the participant's retirement system coverage. To initiate a breakage calculation for the uniformed service member, the employing agency must notify the TSP record keeper that the participant is entitled to breakage.

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