5 C.F.R. § 1605.14 Misclassified retirement system coverage.
Title 5 - Administrative Personnel
(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 records to remove these funds, under the procedure described in §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. (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 §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 §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 §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 paragraphs (a)(2) and (a)(3) 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 §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. [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]
Title 5: Administrative Personnel
PART 1605—CORRECTION OF ADMINISTRATIVE ERRORS
Subpart B—Employing Agency Errors
§ 1605.14 Misclassified retirement system coverage.
