5 U.S.C. § 8434 — Annuities: methods of payment; election;

Page 1155 TITLE 5—GOVERNMENT ORGANIZATION AND EMPLOYEES § 8434 vidual eligible to seek restoration or reemployment under chapter 43 of Title 38, Veterans’ Benefits, occurs on or after Aug. 2, 1990, with special rules for applying amendment to employees restored or reemployed be- fore effective date, see section 4(e), (f) of Pub. L. 103–353, set out as an Effective Date note under section 8432b of this title. Amendment by section 5(e)(4) of Pub. L. 103–353 effec- tive with respect to reemployments initiated on or after the first day after the 60-day period beginning Oct. 13, 1994, with transition rules, see section 8 of Pub. L. 103–353, set out as an Effective Date note under sec- tion 4301 of Title 38. Amendment by Pub. L. 103–226 effective Mar. 10, 1995, see section 9(j) of Pub. L. 103–226, set out as a note under section 8351 of this title. EFFECTIVE DATE OF 1992 AMENDMENT Amendment by Pub. L. 102–484 applicable with re- spect to separations occurring after Dec. 31, 1993, or such earlier date as Executive Director (appointed under section 8474 of this title) may by regulation pre- scribe, see section 4437(d) of Pub. L. 102–484, set out as a note under section 8351 of this title. EFFECTIVE DATE OF 1990 AMENDMENT Pub. L. 101–335, § 5(d), July 17, 1990, 104 Stat. 322, pro- vided that: ‘‘The amendments made by this section [amending this section and sections 8434, and 8435 of this title] shall be effective as of April 1, 1987.’’ Amendment by section 6(a)(2) of Pub. L. 101–335 effec- tive as of second election period described in section 8432(b) of this title beginning after July 17, 1990, or such earlier date as Executive Director may by regulation prescribe, and applicable with respect to separations occurring before, on, or after that effective date, see section 6(c) of Pub. L. 101–335, set out as a note under section 8351 of this title. REGULATIONS Pub. L. 115–84, § 2(f), Nov. 17, 2017, 131 Stat. 1273, pro- vided that: ‘‘As soon as is practicable, as determined by the Executive Director of the Federal Retirement Thrift Investment Board, but not later than 2 years after the date of enactment of this Act [Nov. 17, 2017], the Executive Director shall prescribe such regulations as are necessary to carry out the amendments made by this section [amending this section and section 8432b of this title].’’ [Regulations referred to by section 2(f) of Pub. L. 115–84, set out above, effective Sept. 15, 2019; see section 2(g) of Pub. L. 115–84, set out as an Effective Date of 2017 Amendment note under section 8432b of this title.] Pub. L. 101–335, § 6(b)(4), July 17, 1990, 104 Stat. 324, provided that: ‘‘The Executive Director (as appointed under section 8474(a) of title 5, United States Code) shall prescribe regulations under which the purposes of the amendments made by this section [amending this section and sections 8351, 8401, 8435, 8440a, and 8440b of this title] shall be carried out with respect to any indi- viduals participating in the Thrift Savings Plan who would not otherwise be affected by this section.’’ INVALIDITY OF CERTAIN PRIOR ELECTIONS Pub. L. 104–208, div. A, title I, § 101(f) [title VI, § 659 [title II, § 203(b)]], Sept. 30, 1996, 110 Stat. 3009–314, 3009–376, provided that: ‘‘Any election made under sec- tion 8433(b)(2) of title 5, United States Code (as in effect before the effective date of this title [Sept. 30, 1996]), with respect to an annuity which has not commenced before the implementation date of this title as provided by regulation by the Executive Director in accordance with section 207 of this title [5 U.S.C. 5545a note], shall be invalid.’’ § 8434. Annuities: methods of payment; election; purchase (a)(1) The Board shall prescribe methods of payment of annuities under this subchapter. (2) The methods of payment prescribed under paragraph (1) shall include, but not be limited to— (A) a method which provides for the pay- ment of a monthly annuity only to an annu- itant during the life of the annuitant; (B) a method which provides for the pay- ment of a monthly annuity to an annuitant for the joint lives of the annuitant and the spouse of the annuitant and an appropriate monthly annuity to the one of them who sur- vives the other of them for the life of the sur- vivor; (C) a method described in subparagraph (A) which provides for automatic adjustments in the amount of the annuity payable so long as the amount of the annuity payable in any one year shall not be less than the amount payable in the previous year; (D) a method described in subparagraph (B) which provides for automatic adjustments in the amount of the annuity payable so long as the amount of the annuity payable in any one year shall not be less than the amount payable in the previous year; and (E) a method which provides for the pay- ment of a monthly annuity— (i) to the annuitant for the joint lives of the annuitant and an individual who is des- ignated by the annuitant under regulations prescribed by the Executive Director and (I) is a former spouse of the annuitant, or (II) has an insurable interest in the annuitant; and (ii) to the one of them who survives the other of them for the life of the survivor. (b) Subject to section 8435(b) of this title, under such regulations as the Executive Direc- tor shall prescribe, an employee, Member, former employee, or former Member who elects under section 8433 of this title to receive an an- nuity under this subchapter shall elect, on or be- fore the date on which an annuity contract is purchased to provide for that annuity, one of the methods of payment prescribed under subsection (a). (c) Notwithstanding the elimination of a method of payment by the Board, an employee, Member, former employee, or former Member may elect the eliminated method if the elimi- nation of such method becomes effective less than 5 years before the date on which that indi- vidual’s annuity commences. (d)(1) Not earlier than 90 days (or such shorter period as the Executive Director may by regula- tion prescribe) before an annuity is to com- mence under this subchapter, the Executive Di- rector shall expend the balance in the annu- itant’s account to purchase an annuity contract from any entity which, in the normal course of its business, sells and provides annuities. (2) The Executive Director shall assure, by contract entered into with each entity from which an annuity contract is purchased under paragraph (1), that the annuity shall be provided in accordance with the provisions of this sub- chapter and subchapter VII of this chapter. (3) An annuity contract purchased under para- graph (1) shall include such terms and condi- tions as the Executive Director requires for the protection of the annuitant. Page 1156 TITLE 5—GOVERNMENT ORGANIZATION AND EMPLOYEES § 8435 (4) The Executive Director shall require, from each entity from which an annuity contract is purchased under paragraph (1), a bond or proof of financial responsibility sufficient to protect the annuitant. (e)(1) No tax, fee, or other monetary payment may be imposed or collected by any State, the District of Columbia, or the Commonwealth of Puerto Rico, or by any political subdivision or other governmental authority thereof, on, or with respect to, any amount paid to purchase an annuity contract under this section. (2) Paragraph (1) shall not be construed to ex- empt any company or other entity issuing an annuity contract under this section from the imposition, payment, or collection of a tax, fee, or other monetary payment on the net income or profit accruing to or realized by that entity from the sale of an annuity contract under this section if that tax, fee, or payment is applicable to a broad range of business activity. (Added Pub. L. 99–335, title I, § 101(a), June 6, 1986, 100 Stat. 546; amended Pub. L. 100–238, title I, § 129, Jan. 8, 1988, 101 Stat. 1759; Pub. L. 101–335, §§ 4(a), 5(b), July 17, 1990, 104 Stat. 321; Pub. L. 103–226, § 9(c), (i)(8), Mar. 30, 1994, 108 Stat. 120, 122.) Editorial Notes AMENDMENTS 1994—Subsec. (b). Pub. L. 103–226, § 9(i)(8), substituted ‘‘section 8435(b)’’ for ‘‘section 8435(c)’’. Subsec. (c). Pub. L. 103–226, § 9(c), amended subsec. (c) generally. Prior to amendment, subsec. (c) read as fol- lows: ‘‘Notwithstanding an elimination of a method of payment by the Board— ‘‘(1) an employee, Member, former employee, or former Member who is entitled under section 8412 of this title to an immediate annuity not reduced under section 8415(f) of this title may elect the eliminated method if the elimination of such method became ef- fective less than 5 years before the date on which the annuity commences; and ‘‘(2) any other employee, Member, former employee, or former Member may elect such method of payment for amounts contributed by or on behalf of the em- ployee, Member, former employee, or former Member under section 8432 of this title before such effective date and for earnings attributable to such amounts.’’ 1990—Subsec. (b). Pub. L. 101–335, § 5(b)(1), substituted ‘‘an annuity contract is purchased to provide for that annuity,’’ for ‘‘the annuity commences,’’. Subsec. (d)(1). Pub. L. 101–335, § 5(b)(2), substituted ‘‘Not earlier than 90 days (or such shorter period as the Executive Director may by regulation prescribe) before an annuity’’ for ‘‘At the time an annuity’’. Subsec. (e). Pub. L. 101–335, § 4(a), added subsec. (e). 1988—Subsec. (a)(2)(C), (D). Pub. L. 100–238 amended subpars. (C) and (D) generally. Prior to amendment, subpars. (C) and (D) read as follows: ‘‘(C) a method described in subparagraph (A) which provides annual increases in the amount of the annuity payable; ‘‘(D) a method described in subparagraph (B) which provides annual increases in the amount of the annuity payable; and’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–226 effective Mar. 10, 1995, see section 9(j) of Pub. L. 103–226, set out as a note under section 8351 of this title. EFFECTIVE DATE OF 1990 AMENDMENT Pub. L. 101–335, § 4(b), July 17, 1990, 104 Stat. 321, pro- vided that: ‘‘The amendment made by subsection (a) [amending this section] shall take effect 30 days after the date of enactment of this Act [July 17, 1990].’’ Amendment by section 5(b) of Pub. L. 101–335 effec- tive Apr. 1, 1987, see section 5(d) of Pub. L. 101–335, set out as a note under section 8433 of this title. § 8435. Protections for spouses and former spouses (a)(1)(A) A married employee or Member (or former employee or Member) may withdraw all or part of a Thrift Savings Fund account under subsection (b)(2), (3), or (4) of section 8433 of this title or change a withdrawal election only if the employee or Member (or former employee or Member) satisfies the requirements of subpara- graph (B). A married employee or Member (or former employee or Member) may make a with- drawal from a Thrift Savings Fund account under subsection (c)(1) of section 8433 of this title only if the employee or Member (or former employee or Member) satisfies the requirements of subparagraph (B). (B) An employee or Member (or former em- ployee or Member) may make an election or change referred to in subparagraph (A) if the employee or Member and the employee’s or Member’s spouse (or the former employee or Member and the former employee’s or Member’s spouse) jointly waive, by written election, any right which the spouse may have to a survivor annuity with respect to such employee or Mem- ber (or former employee or Member) under sec- tion 8434 of this title or subsection (b). (2) Paragraph (1) shall not apply to an election or change of election by an employee or Member (or former employee or Member) who establishes to the satisfaction of the Executive Director (at the time of the election or change and in accord- ance with regulations prescribed by the Execu- tive Director)— (A) that the spouse’s whereabouts cannot be determined; or (B) that, due to exceptional circumstances, requiring the spouse’s waiver would otherwise be inappropriate. (b)(1) Notwithstanding any election under sub- section (b) of section 8434 of this title, the meth- od described in subsection (a)(2)(B) of such sec- tion (or, if more than one form of such method is available, the form which the Board deter- mines to be the one which provides for a sur- viving spouse a survivor annuity most closely approximating the annuity of a surviving spouse under section 8442 of this title) shall be deemed the applicable method under such subsection (b) in the case of an employee, Member, former em- ployee, or former Member who is married on the date on which an annuity contract is purchased to provide for the employee’s, Member’s, former employee’s, or former Member’s annuity under this subchapter. (2) Paragraph (1) shall not apply if— (A) a joint waiver of such method is made, in writing, by the employee or Member and the spouse; or (B) the employee or Member waives such method, in writing, after establishing to the satisfaction of the Executive Director that cir- cumstances described under subsection (a)(2)(A) or (B) make the requirement of a joint waiver inappropriate.