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This is historical material, "frozen in time."
The web site is no longer updated and links to external web sites and some internal pages will not work.
This is historical material, "frozen in time."
The web site is no longer updated and links to external web sites and some internal pages will not work.
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OMB COST ESTIMATE
FOR PAY-AS-YOU-GO CALCULATIONS
LAW NUMBER: P.L.106-361 (H.R. 208)
BILL TITLE: Federal Employee Thrift Savings Plan
Amendments
BILL PURPOSE: (1) Eliminates the waiting period
for Federal employees to contribute
to the Thrift Savings Plan (TSP); (2) allows Federal employees to contribute eligible
rollover distributions from qualified trusts to the TSP; and (3) requires spousal consent
for certain lump-sum retirement credit payments.
OMB ESTIMATE: P.L. 106-361 allows
newly hired Federal employees to contribute to
the TSP immediately, rather than waiting until the second open season as required under
current law. Because taxes on the TSP contributions are deferred, OMB estimates
forgone tax revenues of $14 million over the 2001-2005 period. The bill also allows
Federal employees to rollover distributions from qualified trusts to TSP. OMB estimates
that the tax revenue effect of this provision would be negligible.
P.L. 106-361 also authorizes OPM to withhold payment of retirement lump-sum credit
payments to certain former Federal employees involved in divorce proceedings.
Retirement credit payments, which are refunds of employee retirement contributions,
terminate any right to an annuity based on the service covered by the refund. Under
current law, a former employee can circumvent a court's intent to award an annuity to an
ex-spouse by taking a lump-sum refund. This bill would close that loophole by requiring
spousal consent before OPM could pay a refund in situations where a court has awarded,
or wants to preserve its ability to award, an annuity to the prospective former spouse.
OMB estimates that the new authority will lower refund payments by $6 million each
year.
(Fiscal years; in millions of
dollars)
2000
2001
2002
2003
2004
2005
Net costs...............
0
-6
-5
-5
-1
1
CBO ESTIMATE:
(Fiscal years; in millions of dollars)
2000
2001
2002
2003
2004
2005
Net costs...............
0
3
7
7
8
9
EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:
The difference between OMB and CBO estimates is due to differing assumptions about
immediate participation in TSP and the incidence of withheld refunds because of the
spousal consent provision.
CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATION
ENACTED TO DATE:
(Fiscal years; in millions of dollars)
2000
2001
2002
2003
2004
2005
Outlay effect..............
34
366
1,162
1,292
1,815
1,757
Receipt effect............
-8
-620
-699
-747
-786
-775
Net costs....................
42
986
1,861
2,039
2,601
2,532
NOTE: The cumulative effect of direct
spending and revenue legislation enacted to date is
currently estimated to result in an end-of-session sequester. The Administration looks forward to
working with the Congress to ensure that an unintended sequester does not occur.
