[Code of Federal Regulations]
[Title 5, Volume 3]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR1605.14]

[Page 213-214]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
         CHAPTER VI--FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
 
PART 1605_CORRECTION OF ADMINISTRATIVE ERRORS--Table of Contents
 
                    Subpart B_Employing Agency Errors
 
Sec. 1605.14  Misclassified retirement system coverage.

    (a) If a CSRS participant is misclassified by an employing agency as 
a FERS participant, when the misclassification is corrected:
    (1) Employee contributions that exceed the applicable contribution 
percentage for the pay period(s) involved may remain in the 
participant's account. The participant may request the return of excess 
employee contributions made on or after January 1, 2000; those 
contributed before January 1, 2000, must remain in the participant's 
account. If the participant requests a refund of employee contributions, 
the employing agency must submit a negative adjustment record to remove 
these funds under the procedure described in Sec. 1605.12.
    (2) The TSP will forfeit all agency contributions that were made to 
a CSRS participant's account. An employing agency may submit a negative 
adjustment record to request the return of an erroneous contribution 
that has been in the participant's account for less than one year.

[[Page 214]]

    (b) If a FERS participant is misclassified by an employing agency as 
a CSRS participant, when the misclassification is corrected:
    (1) The participant may not elect to have the contributions made 
while classified as CSRS removed from his or her account;
    (2) The participant may, under the rules of Sec. 1605.11, elect to 
make up contributions that he or she would have been eligible to make as 
a FERS participant during the period of misclassification;
    (3) The employing agency must, under the rules of Sec. 1605.11, 
make agency automatic (1%) contributions and agency matching 
contributions on employee contributions that were made while the 
participant was misclassified;
    (4) If the retirement coverage correction is a FERCCA correction, 
the employing agency must submit makeup employee contributions on late 
payment records. The participant is entitled to breakage on 
contributions from all three sources. Breakage will be calculated 
pursuant to Sec. 1605.2. If the retirement coverage correction is not a 
FERCCA correction, the employing agency must submit makeup employee 
contributions on current payment records; in such cases, the employee is 
not entitled to breakage. Agency makeup contributions may be submitted 
on either current or late payment records; and
    (5) If employee contributions were made up before the Office of 
Personnel Management implemented its regulations on FERCCA correction, 
and the correction is considered to be a FERCCA correction, an amount to 
replicate TSP lost earnings will be calculated by the Office of 
Personnel Management pursuant to its regulations and provided to the 
employing agency for transmission to the TSP record keeper.
    (c) If a participant was misclassified as either FERS or CSRS and 
the retirement coverage is corrected to FICA only, the participant is no 
longer eligible to participate in the TSP.
    (1) Employee contributions in the account are subject to the rules 
in paragraph (a)(1) of this section.
    (2) Employer contributions in the account are subject to the rules 
in paragraph (a)(2) of this section.
    (3) The TSP will consider a participant to be separated from Federal 
service for all TSP purposes and the employing agency must submit an 
employee data record to reflect separation from Federal service. If the 
participant has an outstanding loan, it will be subject to the 
provisions of 5 CFR 1655.13. The participant may make a TSP post-
employment withdrawal election pursuant to 5 CFR part 1650, subpart B, 
and the withdrawal will be subject to the provisions of 5 CFR 
1650.60(b).
    (d) If a FERS or CSRS participant is misclassified by an employing 
agency as FICA only, when the misclassification is corrected the 
participant may, pursuant to Sec. 1605.11 of this part, elect to make 
up contributions that he or she would have been eligible to make as a 
FERS or CSRS participant during the period of misclassification. If the 
participant makes up employee contributions, the rules in paragraph 
(b)(5) of this section apply. If the participant is corrected to FERS, 
the rules in paragraphs (b)(3) and (b)(4) of this section also apply.
    (e) The provisions of paragraph (c) of this section shall apply to 
any TSP contributions relating to a period for which an employee elects 
retroactive Nonappropriated Fund retirement coverage.

[66 FR 44277, Aug. 22, 2001, as amended at 68 FR 35500, June 13, 2003; 
68 FR 74451, Dec. 23, 2003; 70 FR 32212, June 1, 2005; 72 FR 53414, 
Sept. 19, 2007]