CFR Subpart A

CFR Subpart A
in effect

5 C.F.R. § 1653.1 Definitions.

(a) Definitions generally applicable to the Thrift Savings Plan are set forth at 5 CFR 1690.1. (b) As used in this subpart: Court means any court of any State, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, or the Virgin Islands, and any Indian court as defined by 25 U.S.C. 1301(3). Effective date of a court order means the date it was entered by the clerk of the court or, if the order does not show a date entered, the date it was filed by the clerk of the court or, if the order does not contain a date entered or a date filed, the date it was signed by the judge. Payment date refers to the date on which earnings are determined and is generally two business days prior to the date of an award's disbursement. Retirement benefits court order or order means a court decree of divorce, annulment or legal separation, or a court order or court-approved property settlement agreement incident to such a decree. Orders may be issued at any stage of a divorce, annulment, or legal separation proceeding. TSP investment earnings or earnings means both positive and negative fund performance attributable to differences in TSP core fund share prices.

5 C.F.R. § 1653.2 Qualifying retirement benefits court orders.

(a) To be qualifying, and thus enforceable against the TSP, a retirement benefits court order must meet the following requirements: (1) The order must expressly relate to the Thrift Savings Plan account of a TSP participant. This means that: (i) The order 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; (ii) The order must be written in terms appropriate to a defined contribution plan rather than a defined benefit plan. For example, it should generally refer to the participant's TSP account or TSP account balance rather than a benefit formula or the participant's eventual benefits; and (iii) If the participant has a civilian TSP account and a uniformed services TSP account, the order must expressly identify the account to which it relates. (2) The order must either require the TSP to freeze the participant's account to preserve the status quo pending final resolution of the parties' rights to the participant's TSP account, or to make a payment from the participant's account to a permissible payee. (3) If the order requires a payment from the participant's account, the award must be for: (i) A specific dollar amount; (ii) A stated percentage of the account; or (iii) A survivor annuity as provided in 5 U.S.C. 8435(d). (iv) The following examples would qualify to require payment from the TSP, although ambiguous or conflicting language used elsewhere could cause the order to be rejected. (A) Example 1. ORDERED: [payee's name, Social Security number (SSN), and address] is awarded $____ from the [civilian or uniformed services] Thrift Savings Plan account of [participant's name, account number or SSN, and address]. (B) Example 2. ORDERED: [payee's name, SSN, and address] is awarded ____ % of the [civilian and/or uniformed services] Thrift Savings Plan account[s] of [participant's name, account number or SSN, and address] as of [date]. (4) A court order can require a payment only to a spouse, former spouse, child or dependent of a participant. (b) The following retirement benefits court orders are not qualifying and thus are not enforceable against the TSP: (1) An order relating to a TSP account that has been closed; (2) An order relating to a TSP account that contains only nonvested money; (3) An order requiring the return to the TSP of money that was properly paid pursuant to an earlier court order; (4) An order requiring the TSP to make a payment in the future, unless the present value of the payee's entitlement can be calculated, in which case the TSP will make the payment currently; (5) An order that does not specify the account to which the order applies, if the participant has both a civilian TSP account and a uniformed services TSP account; (6) An order that requires the TSP to calculate the payee's entitlement or earnings in a manner that is inconsistent with § 1653.4 of this part; and (7) An order that designates the TSP core fund, source of contributions, or balance (e.g., traditional, Roth, or tax-exempt) from which the payment or portions of the payment shall be made.

5 C.F.R. § 1653.3 Processing retirement benefits court orders.

(a) The payment of a retirement benefits court order from the TSP is governed solely by FERSA and by the terms of this subpart. The TSP record keeper will honor retirement benefits court orders properly issued and certified by a court (as defined in § 1653.1). However, those courts have no jurisdiction over the TSP and the TSP cannot be made a party to the underlying domestic relations proceedings. (b) The TSP record keeper will review a retirement benefits court order to determine whether it is enforceable against the TSP only after the TSP record keeper 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. Retirement benefits court 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 court order must be written in English or be accompanied by a certified English translation and contain all pages and attachments; it must also provide (or be accompanied by a document that provides): (1) The participant's account number or Social Security number (SSN); (2) The name and last known mailing address of each payee covered by the order; and (3) The payee's SSN and state of legal residence if he or she is the current or former spouse of the participant. (c) As soon as practicable after the TSP record keeper receives a document that purports to be a qualifying retirement benefits court order, whether or not complete, the participant's account will be frozen. After the account is frozen, no withdrawals or loan disbursements (other than a required minimum distribution pursuant to section 401(a)(9) of the Internal Revenue Code, 26 U.S.C. 401(a)(9)) will be allowed until the account is unfrozen. All other account activity will be permitted. (d) The following documents do not purport to be qualifying retirement benefits court orders, and accounts of participants to whom such orders relate will not be frozen: (1) A court order relating to a TSP account that has been closed; (2) A court order dated before June 6, 1986; (3) A court order that does not award all or any part of the TSP account to someone other than the participant; and (4) A court order that does not mention retirement benefits. (e) After the participant's account is frozen, the TSP record keeper will review the document further to determine if it is complete; if the document is not complete, it will be rejected, the account will be unfrozen, all parties will be notified, and no further action will be taken with respect to the document. (f) The TSP record keeper will review a complete copy of an order to determine whether it is a qualifying retirement benefits court order as described in § 1653.2. The TSP record keeper will mail a decision letter to all parties containing the following information: (1) A determination regarding whether the court order is qualifying; (2) A statement of the applicable statutes and regulations; (3) An explanation of the effect the court order has on the participant's TSP account; and (4) If the qualifying order 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; (iii) Tax and withholding information to the person responsible for paying Federal income tax on the payment; (iv) Information on how to roll over the payment to an eligible employer plan within the meaning of section 402(c) of the Internal Revenue Code (26 U.S.C. 402(c)), traditional IRA, or Roth IRA (if the payee is the current or former spouse of the participant); and (v) Information on how to receive the payment through an electronic funds transfer (EFT). (g)[Reserved] (h) An account frozen under this section will be unfrozen as follows: (1) If the account was frozen in response to an order issued to preserve the status quo pending final resolution of the parties' rights to the participant's TSP account, the account will be unfrozen if the TSP record keeper receives a court order that vacates or supersedes the previous order (unless the order vacating or superseding the order itself qualifies to place a freeze on the account). A court order that purports to require a payment from the TSP supersedes an order issued to preserve the status quo, even if it does not qualify to require a payment from the TSP; (2) If the account was frozen in response to an order purporting to require a payment from the TSP, the freeze will be lifted: (i) Once payment is made, if the court order is qualifying; or (ii) Eighteen (18) months after the date of the decision letter if the court order is not qualifying. The 18-month period will be terminated, and the account will be unfrozen, if both parties submit to the TSP record keeper a written request for such a termination. (i) The TSP record keeper will hold in abeyance the processing of a court-ordered payment if the TSP record keeper is notified in writing that the underlying court order has been appealed, and that the effect of the filing of the appeal is to stay the enforceability of the order. (1) In the notification, the TSP record keeper must be provided with proper documentation of the appeal and citations to legal authority, which address the effect of the appeal on the enforceability of the underlying court order. (i) If the TSP record keeper receives proper documentation and citations to legal authority which demonstrate that the underlying court order is not enforceable, the TSP record keeper will inform the parties that the payment will not occur until resolution of the appeal, and the account will remain frozen for loans and withdrawals. (ii) In the absence of proper documentation and citations to legal authority, the TSP record keeper will presume that the provisions relating to the TSP in the court order remain valid and will proceed with the payment process. (2) The TSP record keeper must be notified in writing of the disposition of the appeal before the freeze will be removed from the participant's account or a payment will be made. The notification must include a complete copy of an order from the appellate court explaining the effect of the appeal on the participant's account. (j) Multiple qualifying court orders relating to the same TSP account and received by the TSP record keeper will be processed as follows: (1) If the orders make awards to the same payee or payees and do not indicate that the awards are cumulative, the TSP record keeper will only honor the order bearing the latest effective date. (2) If the orders relate to different former spouses of the participant and award survivor annuities, the TSP record keeper will honor them in the order of their effective dates. (3) If the orders relate to different payees and award fixed dollar amounts, percentages of an account, or portions of an account calculated by the application of formulae, the orders will be honored: (i) In the order of their receipt by the TSP record keeper, if received by the TSP record keeper on different days; or (ii) In the order of their effective dates, if received by the TSP record keeper on the same day. (4) In all other cases, the TSP record keeper will honor multiple qualifying court orders relating to the same TSP account in the order of their receipt by the TSP record keeper.

5 C.F.R. § 1653.4 Calculating entitlements.

(a) For purposes of computing the amount of a payee's entitlement under this section, a participant's TSP account balance will include any loan balance outstanding as of the date used for calculating the payee's entitlement, unless the court order provides otherwise. (b) If the court order awards a percentage of an account as of a specific date, the payee's entitlement will be calculated based on the account balance as of that date. If the date specified in the order is not a business day, the TSP record keeper will use the participant's account balance as of the last preceding business day. (c) If the court order awards a percentage of an account but does not contain a specific date as of which to apply that percentage, the TSP record keeper will use the liquidation date. (d) If the court order awards a specific dollar amount, the payee's entitlement will be the lesser of: (1) The dollar amount stated in the court order; or (2) The vested account balance on the date of disbursement. (e) If a court order describes a payee's entitlement in terms of a fixed dollar amount and a percentage or fraction of the account, the TSP will pay the fixed dollar amount, even if the percentage or fraction, when applied to the account balance, would yield a different result. (f) The payee's entitlement will be credited with TSP investment earnings as described: (1) The entitlement calculated under this section will not be credited with TSP investment earnings unless the court order specifically provides otherwise. The court order may not specify a rate for earnings. (2) If earnings are awarded and a rate is specified, the rate must be expressed as an annual percentage rate or as a per diem dollar amount added to the payee's entitlement. (3) If earnings are awarded, the TSP record keeper will calculate the amount to be awarded by: (i) Determining the payee's award amount (e.g., the percentage of the participant's account); (ii) Determining, based on the participant's investment allocation as of the date used to calculate the entitlement, the number and composition of shares that the payee's award amount would have purchased as of the date used to calculate the entitlement. (iii) Multiplying the price per share as of the payment date by the number and composition of shares calculated in paragraph (f)(3)(ii) of this section. (g) The TSP record keeper will estimate the amount of a payee's entitlement when it prepares the decision letter and will recalculate the entitlement at the time of payment. The recalculation may differ from the initial estimation because: (1) The estimation of the payee's entitlement includes both vested and nonvested amounts in the participant's account. If, at the time of payment, the nonvested portion of the account has not become vested, the recalculated entitlement will apply only to the participant's vested account balance; (2) After the estimate of the payee's entitlement is prepared, the TSP record keeper may process account transactions that have an effective date on or before the date used to compute the payee's entitlement. Those transactions will be included when the payee's entitlement is recalculated at the time of payment; and (3) The amount available for payment from the account may be reduced due to changes in share price (i.e., investment losses).

5 C.F.R. § 1653.5 Payment.

(a) Payment date. Payment pursuant to a qualifying retirement benefits court order will generally be made: (1) As soon as administratively practicable after the date of the decision letter when the payee is the current or former spouse of the participant, but in no event earlier than 30 days after the date of the decision letter. (2) As soon as administratively practicable after the date of the decision letter when the payee is someone other than the current or former spouse of the participant. (b) In no case will payment exceed the participant's vested account balance, minus any outstanding loan balance. (c) The entire amount of a court order payee's entitlement must be disbursed at one time. A series of payments will not be made, even if the court order provides for such a method of payment. A payment pursuant to a court order extinguishes all rights to any further payment under that order, even if the entire amount of the entitlement cannot be paid. Any further award must be contained in a separate court order. (d) 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. The TSP record keeper will not honor provisions of a court order that require payment to be made from a specific TSP core fund, source of contributions, or balance. (e) Payment will be made only to the person or persons specified in the court order. However, if the court order specifies a third-party mailing address for the payment, the TSP record keeper will mail to the address specified any portion of the payment that is not rolled over to a traditional IRA, Roth IRA, or eligible employer plan within the meaning of section 402(c) of the Internal Revenue Code (26 U.S.C. 402(c)). (f) Payment will not be made jointly to two or more persons. If the court order requires payments to more than one person, the order must separately indicate the amount to be paid to each. (g) If there are insufficient funds to pay each court order payee, payment will be made as follows: (1) If the order specifies an order of precedence for the payments, the TSP record keeper will honor it. (2) If the order does not specify an order of precedence for the payments, the TSP record keeper will pay a current or former spouse first and a dependent second. (h) If the payee dies before a payment is disbursed, payment will be made to the estate of the payee, unless otherwise specified by the court order. A distribution to the estate of a deceased court order payee will be reported as income to the decedent's estate. If the participant dies before payment is made, the order will be honored so long as it is submitted to the TSP record keeper before the TSP account has been closed. (i) If the parties to a divorce or annulment have remarried each other, or a legal separation is terminated, a new court order will be required to prevent payment pursuant to a previously submitted qualifying retirement benefits court order. (j) Payment to a person (including the estate of the payee) pursuant to a qualifying retirement benefits court order made in accordance with this subpart bars recovery by any other person claiming entitlement to the payment. (k) If a court ordered payment is returned as undeliverable, the TSP record keeper will attempt to locate the payee by writing to the address provided on the court order. If the payee does not respond within 90 days, the funds will be forfeited to the TSP. The payee can claim the forfeited funds, although they will not be credited with TSP investment fund returns. (m) A payee who is a current or former spouse of the participant may elect to roll over a court-ordered payment to a traditional IRA, eligible employer plan within the meaning of section 402(c) of the Internal Revenue Code (26 U.S.C. 402(c)), or Roth IRA. Any election permitted by this paragraph (m) must be made pursuant to the rules described in 5 CFR 1650.25. (n) If a court order payee who is the current or former spouse of the participant has their own TSP account (other than a beneficiary participant account), the payee can request that the TSP record keeper roll over the court-ordered payment to the payee's TSP account in accordance with the rules described in 5 CFR 1650.25. However, any pro rata share attributable to tax-exempt contributions cannot be rolled over; instead, it will be paid directly to the payee.

5 C.F.R. § 1653.6 Fees.

The TSP record keeper will charge a participant a $600.00 court order processing fee as follows: (a) Upon receipt of a complete court order document (whether draft or final) and prior to reviewing the order to determine whether it is a qualifying retirement benefits court order, the fee will be deducted from his or her TSP account balance on a pro rata basis from the participant's traditional and Roth balances. The portion of the fee deducted from the traditional balance will be further pro rated between the tax-deferred balance and tax-exempt balance. The portion of the fee deducted from the Roth balance will be further pro rated between contributions in the Roth balance and earnings in the Roth balance. In addition, the entire fee 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 fee is deducted; (b) The fee will be charged only once per court order. However, it will not be refunded in the event that the court order is never determined to be a qualifying retirement benefits court order; and (c)(1) If the court order: (i) Is determined to be a qualifying retirement benefits court order; and (ii) Explicitly requires the fee to be split between the participant and the payee; (2) The TSP record keeper will deduct the payee's portion of the fee from his or her payment and credit that amount back to the participant's TSP account balance.

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