[Code of Federal Regulations]
[Title 5, Volume 3]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR1606.5]

[Page 200-202]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
         CHAPTER VI--FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
 
PART 1606--LOST EARNINGS ATTRIBUTABLE TO EMPLOYING AGENCY ERRORS--Table of Contents
 
     Subpart B--Lost Earnings Attributable to Delayed or Erroneous 
                              Contributions
 
Sec. 1606.5  Failure to timely make or deduct TSP contributions when participant received pay.


    (a) If a participant receives pay, but as the result of an employing 
agency error all or any part of the Agency

[[Page 201]]

Automatic (1%) Contributions associated with that pay to which the 
participant is entitled are not timely received by the TSP recordkeeper, 
then the belated contributions shall be subject to lost earnings. In 
such cases:
    (1) The employing agency must, for each pay period involved, submit 
to the TSP recordkeeper a lost earnings record indicating the pay date 
for which the belated contribution would have been made had the error 
not occurred, the investment fund to which the belated contribution 
would have been deposited had the error not occurred, the amount of the 
belated contribution, and the pay date for which the belated 
contribution was actually made. If the belated contribution was actually 
deposited to an investment fund different from the investment fund to 
which it would have been deposited had the contribution been timely 
submitted, then the employing agency must submit an additional lost 
earnings record indicating the amount of the belated contribution, the 
pay date for which it was actually made, the investment fund to which it 
would have been deposited had the error not occurred, and the investment 
fund to which it was actually deposited;
    (2) The TSP recordkeeper shall compute the amount of lost earnings 
associated with each lost earnings record submitted by the employing 
agency pursuant to paragraph (a)(1) of this section, and shall also 
determine the investment fund or funds in which the belated 
contributions and associated earnings would currently be invested had 
the error not occurred. In performing the computation of lost earnings 
and determining the appropriate investment fund or funds, the TSP 
recordkeeper must take into consideration any interfund transfers made 
effective on or after the pay date for which the belated contribution 
would have been made if the error had not occurred, and which were made 
effective prior to the end of the month preceding the month during which 
the lost earnings record is processed. With respect to the period prior 
to December 31, 1990, the TSP recordkeeper shall also take into account 
the investment restrictions that were effective under 5 U.S.C. 8438 
prior to the effective date of section 3 of the TSPTAA.
    (3) Where the lost earnings computed in accordance with paragraph 
(a)(2) of this section are positive, the TSP recordkeeper shall charge 
the amount of lost earnings computed to the appropriate employing agency 
and shall credit that amount to the TSP account of the participant 
involved. If the lost earnings computed are negative, the amount 
computed will be removed from the participant's account and used to 
offset TSP administrative expenses;
    (4) The TSP recordkeeper shall adjust the participant's account to 
reflect the investment funds in which the belated contributions and 
associated earnings would currently be invested if the error had not 
occurred, as determined in accordance with paragraph (a)(2) of this 
section.
    (b) If a participant receives pay from which Employee Contributions 
were properly deducted, but as the result of an employing agency error 
all or any part of the associated Agency Matching Contributions to which 
the participant is entitled were not timely received by the TSP 
recordkeeper, then the belated contributions will be subject to lost 
earnings. In such cases, the procedures described in paragraphs (a)(1) 
through (a)(4) of this section will apply to the belated Agency Matching 
Contributions.
    (c) If a participant receives pay from which Employee Contributions 
were properly deducted, but as the result of an employing agency error 
all or any part of those Employee Contributions were not timely received 
by the TSP recordkeeper, the belated contributions will be subject to 
lost earnings. In such cases, the procedures described in paragraphs 
(a)(1) through (a)(4) of this section will apply to the belated Employee 
Contributions.
    (d) If a participant receives pay from which Employee Contributions 
should have been deducted, but as the result of employing agency error 
all or any part of those deductions were not made, then even if the 
participant makes up those Employee Contributions pursuant to part 1605, 
the belated Employee Contributions shall not be subject to

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lost earnings. However, where the participant does make up the Employee 
Contributions pursuant to part 1605, the Agency Matching Contributions 
associated with those belated Employee Contributions (which must be made 
in accordance with part 1605) will be subject to lost earnings. With 
respect to such belated Agency Matching Contributions the procedures 
described in paragraphs (a)(1) through (a)(4) of this section shall 
apply.