CFR Subpart D

CFR Subpart D
in effect

5 C.F.R. § 1653.31 Definitions.

(a) Definitions generally applicable to the Thrift Savings Plan are set forth at 5 CFR 1690.1. (b) As used in this subpart: Criminal restitution order means a complete copy of a judgment in a criminal case issued by a federal court ordering restitution for a crime under 18 U.S.C. 3663A. Enforcement letter means a letter received from the Department of Justice requesting a payment from a participant's TSP account to enforce a criminal restitution order.

5 C.F.R. § 1653.32 Qualifying Federal tax levy.

(a) The TSP record keeper will only honor the terms of a tax levy that is qualifying under paragraph (b) of this section. (b) A tax levy must meet each of the following requirements to be considered qualifying: (1) The Internal Revenue Service issued the levy. (2) The levy includes a signature certifying that it attaches to a retirement plan. (3) The levy requires the TSP to pay a stated dollar amount from a TSP participant's account. (4) The levy is dated no earlier than thirty (30) days before receipt. (5) The levy is issued in the name of the participant only. (6) The levy expressly refers to the “Thrift Savings Plan” or describes the TSP in such a way that it cannot be confused with other Federal Government retirement benefits or non-Federal retirement benefits. (c) The following levies will not be considered qualifying: (1) A levy relating to a TSP account with a zero dollar account balance; (2) A levy relating to a TSP account that contains only nonvested money, unless the money will become vested within 30 days of the date the TSP receives the order if the participant were to remain in Government service; (3) A levy requiring the TSP to make a payment at a specified date in the future; (4) A levy that does not contain a signature certifying that it applies to retirement plans; (5) A levy requiring a series of payments; (6) A levy that designates the specific TSP core fund, source of contributions, or balance from which the payment or portions of the payment shall be made.

5 C.F.R. § 1653.33 Qualifying criminal restitution order.

(a) The TSP record keeper will only honor the terms of a criminal restitution order that is qualifying under paragraph (b) of this section. (b) A criminal restitution order must meet each of the following requirements to be considered qualifying: (1) The restitution must be ordered in the sentencing of the participant as required by 18 U.S.C. 3663A and 18 U.S.C. 3664. (2) The criminal restitution order must require the participant to pay a stated dollar amount as restitution. (3) The criminal restitution order must be accompanied by an enforcement letter that states the restitution is ordered under 18 U.S.C. 3663A. The enforcement letter must expressly refer to the “Thrift Savings Plan” or describe the TSP in such a way that it cannot be confused with other Federal Government retirement benefits or non-Federal retirement benefits. (c) The following orders will not be considered qualifying: (1) A criminal restitution order relating to a TSP account with a zero dollar account balance; (2) A criminal restitution order relating to a TSP account that contains only nonvested money, unless the money will become vested within 30 days of the date the TSP record keeper receives the order if the participant were to remain in Government service; (3) A criminal restitution order accompanied by an enforcement letter that requires the TSP to make a payment in the future; (4) A forfeiture order related to a monetary garnishment of funds; (5) A criminal restitution order accompanied by an enforcement letter that requires TSP to make a series of payments; (6) A criminal restitution order accompanied by an enforcement letter that designates the specific TSP core fund, source of contributions, or balance from which the payment or portions of the payment shall be made.

5 C.F.R. § 1653.34 Processing Federal tax levies and criminal restitution orders.

(a) The payment of tax levies and criminal restitution orders from the TSP is governed solely by the Federal Employees' Retirement Systems Act, 5 U.S.C. chapter 84, and by the terms of this subpart. Although the TSP record keeper will honor tax levies or criminal restitution orders properly issued, those entities have no jurisdiction over the TSP and the TSP cannot be made a party to the underlying proceedings. (b) The TSP record keeper will review a tax levy or criminal restitution order to determine whether it is enforceable against the TSP record keeper only after it has received a complete copy of the document. Receipt by an employing agency or any other agency of the Government does not constitute receipt by the TSP record keeper. Tax levies and criminal restitution orders should be submitted to the TSP record keeper at the current address as provided at https://www.tsp.gov. Receipt by the TSP record keeper is considered receipt by the TSP. To be complete, a tax levy or criminal restitution order must meet all the requirements of § 1653.32 or § 1653.33; it must also provide (or be accompanied by a document or enforcement letter that provides): (1) The participant's TSP account number or Social Security number (SSN); and (2) The name and mailing address of the payee. (c) As soon as practicable after the TSP record keeper receives a document that purports to be a qualifying tax levy or criminal restitution order, the participant's account will be frozen. After the participant's account is frozen, no TSP withdrawal or loan disbursements will be allowed until the account is unfrozen. All other account activity will be permitted, including contributions, loan repayments, adjustments, investment elections, fund reallocations, and fund transfers. Once a disbursement from the account is made in accordance with the restitution order or levy, the hold will be removed from the participant's account. (d) As soon as practicable after receipt of a complete copy of a tax levy or criminal restitution order, the TSP record keeper will review it to determine whether it is qualifying as described in § 1653.32 or § 1653.33. The TSP record keeper will mail a decision letter to all parties containing the following information: (1) A determination regarding whether the restitution order or levy is qualifying; (2) A statement of the applicable statutes and regulations; (3) An explanation of the effect the restitution order or levy has on the participant's TSP account; and (4) If the qualifying restitution order or levy requires payment, the letter will provide: (i) An explanation of how the payment will be calculated and an estimated amount of payment; (ii) The anticipated date of payment.

5 C.F.R. § 1653.35 Calculating entitlement.

A tax levy or criminal restitution order can only require the payment of a stated dollar amount from the TSP. The payee's entitlement will be the lesser of: (a) The dollar amount stated in the tax levy or enforcement letter; or (b) The vested account balance on the date of disbursement, minus any outstanding loan balance.

5 C.F.R. § 1653.36 Payment.

(a) Payment pursuant to a qualifying tax levy or criminal restitution order will be made 30 days after the decision letter. (b) In no case will payment exceed the participant's calculated entitlement. (c) The entire amount of a criminal restitution order or tax levy entitlement must be disbursed at one time. A series of payments will not be made. A payment pursuant to a criminal restitution order or tax levy extinguishes all rights to any further payment under that order or tax levy, even if the entire amount of the entitlement cannot be paid. Any further award must be contained in a separate criminal restitution order or tax levy. (d) If a participant has funds in more than one type of account, payment will be made from each account in the following order, until the amount required by the tax levy or stated in the enforcement letter is reached: (1) Civilian account; (2) Uniformed services account; (3) Beneficiary participant account. (e) Payment will be made pro rata from the participant's traditional and Roth balances. The distribution from the traditional balance will be further pro rated between the tax-deferred balance and tax-exempt balance. The payment from the Roth balance will be further pro rated between contributions in the Roth balance and earnings in the Roth balance. In addition, all payments will be distributed pro rata from all TSP core funds in which the participant's account is invested. All pro rated amounts will be based on the balances in each fund or source of contributions on the day the disbursement is made. (f) The payment is taxable to the participant and is subject to Federal income tax withholding. The tax withholding will be taken from the payee's entitlement and the gross amount of the payment (i.e., the net payment distributed to the payee plus the amount withheld from the payment for taxes) will be reported to the IRS as income to the participant. (g) A properly paid tax levy or restitution order cannot be returned to the TSP. (h) The TSP will not hold a payment pending appeal of a criminal restitution order or the underlying conviction. The TSP will treat the criminal restitution order as a final judgment pursuant to 18 U.S.C. 3664(o) and process payment as provided by this subpart.

Starting a business? Corpus forms LLCs in all 50 states and DC.