Full text of District Notices (Federal Reserve Bank of Dallas) : Retirement Plan Bond

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FEDERAL RESERVE BANK OF DALLAS
F IS C A L A G E N T O F T H E U N IT E D S T A T E S

Dallas, Texas, January 18, 1963

RETIREMENT PLAN BOND

To All Banking Institutions and Others Concerned
in the Eleventh Federal Reserve District:
On January 10, the Secretary of the Treasury announced the offering of United States
Retirement Plan Bonds under the Self-Employed Individuals Tax Retirement Act of 1962. A
press release announcing the offering is enclosed. Accompanying the announcement is the
following material relating to the issuance, servicing and redemption of Retirement Plan Bonds:
Circular letter addressed to the principal executive officers of banks and
other financial institutions by the Secretary of the Treasury.
Summary of terms and conditions on United States Retirement Plan Bond.
Digest of questions and answers on United States Retirement Plan Bond.
Treasury Department Circular No. 1-63 which contains the general regula
tions governing Retirement Plan Bonds.
Application forms.
The Treasury Department has indicated that bankers may wish to advise their customers
to proceed with great care in formulating their retirement plans and in making investments
under such plans. If there is reasonable doubt on the part of applicants as to either theneligibility to purchase Retirement Plan Bonds or the nature of their retirement plans, they
should wait until the definitive regulations are published by the Internal Revenue Service.
Applications for Retirement Plan Bonds will be received at this bank and its branches at
El Paso, Houston and San Antonio; however, all transactions involving issue, reissue and redemp
tion of the bonds will be processed only at the Dallas office.
Yours very truly,
Watrous H. Irons
President

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

THE

SECRETA RY

THE

TREASU RY

WASHINGTON

January 18, 1963
TO THE PRINCIPAL EXECUTIVE OFFICERS OF BANKS
AND OTHER FINANCIAL INSTITUTIONS

On January 10, 1963, the Treasury announced the offering
of a new Retirement Plan Bond to be issued in accordance with
the provisions of the Self-Employed Individuals Tax Retirement
Act of 1962.
In connection with the processing of applications for the
purchase and redemption of these bonds, we are turning to the
banking community, which has served the Treasury so well in
the past, to again request their services in the national in
terest.
Retirement Plan Bonds will be issued and redeemed only
at Federal Reserve Banks or Branches, or by the Office of the
Treasurer of the United States. However, we are requesting
banks and other financial institutions to handle applications
for the issue and redemption of these bonds, as they do for
Series H Savings Bonds, for transmittal to the issuing agents.
As in the case of Series H Savings Bonds, the Treasury will
accept payment for the bonds through credits to Treasury Tax
and Loan Accounts.
We do not contemplate that initially the amounts involved
in the sale of Retirement Plan Bonds will be large, nor do we
expect that most banks will have a great many inquiries. It
is important, however, that everyone eligible for the benefits
of the Self-Employed Individuals Tax Retirement Act of 1962
and who desires to use Retirement Plan Bonds should have
readily available to him the facilities for putting this form
of retirement plan into operation. It is only through the
cooperation of the thousands of banks and other financial in
stitutions throughout the country that this will be possible.
It is with a feeling of gratitude for the many services which
the banks have rendered to the Treasury Department over the
years that we are asking the banking community to perform
still another service in the public interest.

We are mindful of the burden which will be placed upon
bankers in coping with the questions of their customers with
respect to the many complicated features of the Act under
which the Retirement Plan Bonds are being issued. Some of
these questions cannot be answered conclusively until the
Internal Revenue Service publishes its complete regulations
on the 1962 Act. These regulations are now in the process of
formulation and will be published as promptly as possible.
In the meantime, we recognize that bankers will be expected
to be responsive to their customers' questions. In order to
give you as complete information as is possible at this time,
I have attached for your reference a copy of the press re
lease announcing the offering of the Retirement Plan Bonds,
a copy of the regulations under which the bonds are being
issued and a set of questions and answers pertaining to the
bonds.
In the light of the many complexities involved, some of
which will not be resolved until the regulations are issued
by the Internal Revenue Service, bankers might want to advise
their customers to proceed with great care in setting up
their retirement plans and in making investments under such
plans. If your customers are confident of their eligibility
under the Act and confident that their investment plans will
meet the requirements of the Act, there is no reason why they
should not proceed. If, on the other hand, there is any
reasonable doubt either as to the eligibility of your customers
or the nature of their retirement plans, you might want to
advise your customers to wait until the definitive regulations
are published by the Internal Revenue Service. In any event,
the full 1963 tax benefits will be available to your customers
as long as their retirement plans are put into effect by the
end of calendar year 1963.
Sincerely yours,

Secretary of the Treasury
Attachments

January 10, 1963
SUMMARY OF TERMS AND CONDITIONS
ON
UNITED STATES RETIREMENT PLAN BOND
(For detailed information on the terms and conditions,
Treasury Department Circular, Public Debt, Series
No. 1-63 should be consulted)

Effective date:

January 1, 1963

Issuing and Paying
Agencies

Federal Reserve Banks and branches
or the Office of the Treasurer of
the United States.

Denominations:

$50, $100, $500, $1,000

Issue date:

First day of month in which
payment is received by an issuing
agent.

Maturity date:

Interest ceases 5 years after
death of the individual in whose
name bond is purchased.

Interest:

Interest accrues through increase
in redemption value at beginning
of each half-year period providing
an investment yield of 3.75 per
cent, compounded semi-annually.

Redeemability:

Not redeemable except in case of
death or disability, until owner
attains age 59-1/2 years.

Partial Redemption:

If face value is greater than $50,
and only in amounts corresponding
to authorized denominations.

Reissue:

Bonds will be reissued to add,
eliminate, or substitute a
beneficiary.

Safety:

Bonds will be reissued if lost,
stolen, or destroyed.

Taxation:

Bonds are subject to estate,
inheritance or other excise taxes,
whether Federal or State.

Income tax privileges:

Certain deduction for all or part
of purchase price of bonds for the
taxable year of purchase.

Income Tax Liability:

When self-employed person redeems
bonds, liability accrues for
interest earned on bond and for
amount of deduction taken for the
year of purchase.
When employee redeems bonds, liability
accrues for interest on bonds and
for any amount contributed toward
purchase price by employer.

Registration - Eligible
Subscribers:

May be registered only in name of
employee or self-employed person
for whom purchased, in single
ownership and beneficiary forms.

Redeemability prior
to maturity at option
of Treasury:

None

Nontransferance:

Bonds cannot be transferred, sold,
or used as collateral.

Annual Limitation:

Purchases in any one year up to
$5,000 in the name of one owner.

Digest of Questions and Answers on
United States Retirement Plan Bond
1. Q. What is a Retirement Plan Bond?

A. A bond offered by the Treasury, pursuant to Public Law 87-792,
approved October 10, 1962, for purchase under the new bond purchase
plans authorized by the Act or by pension or profit-sharing trusts
qualifying for special tax treatment under the Internal Revenue Code.
2. Q. Who may have a Bond Purchase Plan?

A. Generally everyone can who is self-employed and has earnings from
services which he renders. This includes lawyers, doctors, dentists,
engineers, architects, and other professional persons, practicing
individually or in partnership, and any persons who are sole owners
of an unincorporated business. In addition, any corporation may
establish a bond purchase plan for its employees.
3. Q. Must a bond purchase plan be in the form of a written plan?

A. Yes.
U. Q. Must a purchaser submit a copy of his plan in order to buy these bonds?
A. No. However, the application form requires the purchaser to certify
that the bonds are being purchased for a bond purchase plan or a
pension or profit-sharing plan. The latter plans are generally estab
lished by larger companies and involve a trustee who administers
the plan.
$. Q. If a self-employed individual sets up a retirement plan for himself,
must he provide retirement benefits for any of his employees?

A. If he is a sole proprietor or a partner with more than a 10 percent
interest, he must provide retirement benefits under a plan for all
full time employees with at least three years of service.
6. Q. How much must a self-employed individual contribute for his employees
under a bond purchase plan?

A. He must make contributions for his employees which bear the same
ratio to their salary or wages as his contributions for himself bear
to his earnings.
7. Q. How much may a self-employed individual deduct for income tax pur
poses for Retirement Plan Bonds he purchases under a bond purchase
plan?

A. He may deduct one-half of the purchase price of the bonds he buys
for himself, but with a maximum annual deduction of 5% of his earned
income or $1,2£0, whichever is less. Also, he may generally deduct
the full amount of the purchase price of the bonds which he buys
for his employees.

2
8. Q« When will Retirement Plan Bonds be available for issuance?
A. Sometime during the latter part of January.
9. Q. What is the issue price of a bond?
A. Bonds are issued at par in denominations of $50, $100, $500 and $1,000.
10. Q. What rate of interest is paid on the bonds?
A. 3-3/t$ per annum, compounded semiannually.
11. Q. How is interest paid on the bonds?
A. Interest accrues through increase in redemption value at the end of
each six-month period after issue date.
12. Q. From what date will the bonds earn interest?
A. From the first day of the month in which payment for the bonds is
received by a Federal Reserve Bank or Branch or the Office of the
Treasurer of the United States.
13. Q. What agencies will issue the bonds?
A. Federal Reserve Banks and Branches and the Office of the Treasurer of
the United States, Washington 25» D. C.
14. Q. Will banks and other financial institutions participate in the
issuance of the bonds?
A. They are not authorized to issue the bonds but they may transmit
applications therefor to the Federal Reserve Bank of their District.
15. Q. How may the bonds be inscribed?
A. Only in the names of individuals in single ownership or beneficiary
form. A bond must be registered in the name of the particular
employee or self-employed individual for whom it is purchased.
16. Q. Can a beneficiary on a bond be changed without his consent?
A. Yes.
17. Q. Is there any limit on the amount of bends that may be purchased?
A. Yes; purchases in any one calendar year are limited to $5,000 in
the name of any one owner.
18. Q. When will the bonds mature?
A. The maturity date is indeterminate, but the accrual of interest
ceases five years after the date of the death of the owner.

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19. Q. When can the bonds be redeemed?
A„ Not until the owner attains age 59-1/2 years, except in cases of
death or disability.
20. Q, What is disability?
A. Disability to such an extent that the owner is unable to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected
to result in death or to be of long continued and indefinite
duration.
21. Q. Are the bonds transferable?
A. No; they cannot be transferred, sold or used as collateral.
22. Q. May the bonds be purchased by an individual over the age of
59-1/2 years?
A. Yes.
23. Q. May trusts purchase the bonds?
A. Yes; but the bonds mu3t be inscribed in the names of individuals.
24. Q. If an individual not qualified to do so mistakenly purchases a
bond, will the purchase price of the bond be refunded to him
before he attains age 59-1/2 years?
A. Yes.
25. Q. Will a prospective bond owner have to furnish proof of date of birth
at the time an application for the issuance of a bond is submitted?
A. No; the date of birth shown in the application will be recorded on
the bond and the owner may be required to prove his birth date at
the time the bond is redeemed.
26. Q. What will be the value of a $100 bond twenty years after its issue date?
A. $210.23.
27. Q. Will the bonds be replaced if lost, stolen, destroyed or mutilated?
A. Yes, tfpon giving satisfactory proof thereof.
28. Q. Are the bonds subject to the Federal income tax?
A. Yes; when a self-employed individual redeems a bond, he must include
in his income tax return for the year in which the bond is redeemed
the entire interest earned on the bond and the amount taken as a
deduction on his Federal income tax return concerned for year bond
was purchased.

When an employee redeems a bond, he must include in his income
tax return the entire interest earned on the bond and the amount
contributed by his employer towards purchase of the bond.
29.

Q. To what other taxes are the bonds subject?
A, The bonds are subject to estate, inheritance, or other excise
taxes, whether Federal or State, but they are not subject to
other State taxes.

30.

Q. Will the interest earned on the bonds be accorded capital gains
treatment at the time the bonds are redeemed?
A. No; they will be accorded ordinary income tax treatment.

31.

Q. If a bond owner dies without having designated a beneficiary on
his bonds or providing for their disposition in a will, to whom
will the bonds be paid?
A. To a designated list of survivors in the order in which they are
listed in the Treasury's regulations governing the bonds.

U. S. Treasury Department
Washington
January 1963

U N IT E D S T A T E S T R E A S U R Y

DEPARTM ENT

REGULATIONS
GOVERNING

UNITED STATES

RETIREMENT PLAN
BONDS
Department Circular
Public D ebt Series— No. 1-63

January 10, 1963

U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1963

TABLE OF CONTENTS
Page

Sec.

341.0
341.1
341.2
341.3
341.4
341.5
341.6
341.7
341.8
341.9
341.10
341.11
341.12
341.13
341.14
341.15

Offering of bonds_______________________________________________________
Description of bonds____________________________________________________
Registration____________________________________________________________
Purchase of bonds______________________________________________________
Proof of purchase_______________________________________________________
Limitation on holdings__________________________________________________
Nontransferability______________________________________________________
Judicial proceedings_____________________________________________________
Payment or redemption during lifetime of owner_________________________
Payment or redemption after death of owner_____________________________
Reissue_________________________________________________________________
Use of power of attorney___________________________
Lost, stolen, or destroyed bonds_________________________________________
Taxation_______________________________________________________________
Certifying officers_______________________________________________________
General provisions______________________________________________________
(ill)

672000°—63

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REGULATIONS GOVERNING UNITED STATES RETIREMENT PLAN BONDS
the bond the issue date (which shall be the first
day of the month and year in which payment of
the purchase price is received by an authorized
issuing agent), and will imprint the agent’s
validating stamp in the lower right-hand portion.
The issue date, as distinguished from the date in
the agent’s validating stamp, will determine the
date from which interest will begin to accrue on
the bond. A Retirement Plan Bond shall be
valid only if an authorized issuing agent receives
payment therefor, duly inscribes, dates, stamps,
and delivers it.
S ec. 341.2. Registration. — (a) General. — The
registration of Retirement Plan Bonds is limited
to the names of natural persons in their own right,
whether adults or minors, in either single owner
ship or beneficiary form. A bond registered in
beneficiary form will be inscribed substantially as
follows (for example): “ John A. D oe payable on
death to (or P.O.D.) Richard B. R oe.” N o more
than one beneficiary may be designated on a bond.

Department Circular
TR E A SU R Y DEPARTM ENT,
Public D ebt S e r ie s -N o. 1-63 O F F I C E O F T H E S E C R E T A R Y ,

Bureau^ofthe*Public Debt Washington, January 10,1963.
S ec . 341.0. Offering oj bonds.— The Secretary of
the Treasury, under the authority of the Second
Liberty Bond Act, as amended, and pursuant to
the Self-Employed Individuals Tax Retirement
A ct of 1962, offers for sale, effective as of January 1,
1963, bonds of the United States, designated as
United States Retirement Plan Bonds. The bonds
will be available for investment only to (1) bond
purchase plans and (2) pension and profit-sharing
plans, as described in Sections 405 and 401, respec
tively, of the Internal Revenue Code of 1954.
This offering of bonds will continue until termi
nated by the Secretary of the Treasury.
S ec . 341.1. Description o j bonds.— (a) Invest
ment yield {interest).— United States Retirement
Plan Bonds, hereinafter sometimes referred to as
Retirement Plan Bonds, will be issued at par.
The investment yield (interest) on the bonds will
be 3% percent per annum, compounded semi
annually, as set forth in the table of redemption
values appended to this circular. Such interest
will be paid only upon redemption of the bonds.
The accrual of interest will continue until the
bonds have been redeemed or have reached ma
turity, whichever is earlier, in accordance with
these regulations.
(b) Term.— The maturity date of any bond
issued under this circular shall be indeterminate,
but unless sooner redeemed in accordance with
these regulations, its investment yield will cease
on the interest accrual date coinciding with, or,
where no such coincidence occurs, the interest
accrual date next preceding, the first day of the
sixtieth (60th) month following the date of death
of the person in whose name it is registered.
(c) Denominations— issue date. — Retirement
Plan Bonds will be available only in registered
form and in denominations of $50, $100, $500,
and $1,000. At the time of issue, the issuing
agent will enter in the upper right-hand portion of

(b)
Inscription.— The inscription on the face
of each bond will show the name, address, date of
birth, and the social security account number of
the registered owner, as well as information as to
whether he is a self-employed individual or an
employee, and the amount he contributed (if
any) out of his own funds toward the purchase
price of the bond. In the case of any self-employed
individual (who is treated as an employee for the
purpose of Sections 405 and 401 of the Internal
Revenue Code of 1954), this amount would be that
portion of the purchase price he contributed (if
any) as an employee and which he will not take
into account in determining the amount deductible
for Federal income tax purposes. The name of the
beneficiary, if one is to be designated, will also be
shown in the inscription.
Sec. 341.3. Purchase oj bonds.— (a) Agencies.—
Retirement Plan Bonds may be purchased overthe-counter or by mail from Federal Reserve
Banks and Branches and the Office of the Treas
urer of the United States, Washington 25, D .C .
(l)

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Customers of commercial banks and trust com
panies may be able to arrange for the purchase of
the bonds through such institutions, but only the
Federal Reserve Banks and Branches and the
Treasurer’s Office are authorized to act as official
agencies, and the date of receipt of the applica
tion and payment by an official agency will gov
ern the dating of the bonds issued.
(b) Applications.— Applications for the pur
chase of Retirement Plan Bonds should be made
on Form PD 3550, accompanied by a remittance
to cover the purchase price. Personal checks will
be accepted, subject to collection. Checks, or
other forms of exchange, should be drawn to the
Federal Reserve Bank or Treasurer of the United
States, as the case may be. Checks payable by
endorsement are not acceptable.
(c) Delivery.— Delivery of bonds will be made
in person, or by mail at the risk and expense of the
United States at the address given by the pur
chaser, but only within the United States, its
territories and possessions, the Commonwealth of
Puerto Rico, and the Canal Zone. No mail
deliveries elsewhere will be made. If the registered
owner temporarily resides abroad, the bonds will
be delivered to such address in the United States
as the pin-chaser directs.
S ec. 341.4. Proof of purchase.— At the time a
Retirement Plan Bond is issued, the issuing agent
will furnish therewith to the purchaser, and in
cases where the purchaser is different from the
person in whose name the bond is inscribed, to the
registered owner as well, proof of the purchase on
Form PD 3550. The form will show the names
and addresses of the purchaser and of the regis
tered owner, the latter’s date of birth, social
security account number and his classification
(i.e., self-employed individual or employee), the
number of bonds issued, a description thereof by
issue date, serial numbers, denominations, and
registration, together with information as to the
amount of his contributions (if any) toward the
purchase price of the bonds.
S ec. 341.5. Limitation on holdings.— The limit
on the amount of any Retirement Plan Bonds
issued during any one calendar year that may be
purchased in the name of any one person as
registered owner is $5,000 (face value).
Sec . 341.6. Nontransferability.— United States
Retirement Plan Bonds are not transferable, and
may not be sold, discounted or pledged as collateral

for a loan or as security for the performance of
an obligation, or for any other purpose.
S ec. 341.7. Judicial proceedings.— No judicial
determination will be recognized which would give
effect to an attempted voluntary transfer inter
vivos of a Retirement Plan Bond. Otherwise, a
claim against a registered owner will be recognized
when established by valid judicial proceedings,
but in no case will payment be made to the pur
chaser at a sale under a levy or to the officer
authorized to levy upon the property of the owner
under appropriate process to satisfy a money
judgment unless or until the bond has become
eligible for redemption pursuant to these regula
tions. Neither the Treasury Department nor any
of its agencies will accept notices of adverse claims
or of pending judicial proceedings or undertake to
protect the interests of litigants who do not have
possession of the bond.
S ec. 341.8. Payment or redemption during life
time of owner.— (a) At age 59% or thereafter.— A
Retirement Plan Bond will be redeemable at its
current redemption value upon the request of the
registered owner (or a person recognized as en
titled to act on his behalf), provided he is 59%
years of age or older. The owner’s age will be
determined from the date of birth shown on the
face of the bond, provided, however, that the
Secretary of the Treasury reserves the right in
any case or class of cases to require proof, in the
form of a duly certified copy of his birth certifi
cate, that the owner has attained the age of 59%
years. If such evidence is unavailable, one of
the following documents may be furnished in lieu
thereof:
(1) Church records of birth or baptism
(2) Hospital birth record or certificate
(3) Physician’s or midwife’s birth record
(4) Certification of Bible or other family record
(5) Military, naturalization or immigration
records
(6) Other evidence of probative value
Similar documentary evidence will also be required
to support any claim made by an owner that the
date of birth shown on his bond is incorrect.
(b) Prior to age 59% years.— A Retirement
Plan Bond will be paid at its then current redemp
tion value upon a registered owner’s request (or
by a person recognized as entitled to act on his
behalf) prior to his attainment of age 59% years
upon submission of a physician’s statement or

3
any similar evidence showing that the owner has
become disabled to such an extent that he is
unable to engage in any substantial, gainful
activity by reason of any medically determinable
physical or mental impairment which can be
expected to result in death or to be of longcontinued and indefinite duration. The following
are examples of impairments which would ordi
narily be considered as preventing substantial,
gainful activity:
(1) Loss of use of two limbs.
(2) Certain progressive diseases winch have
resulted in the physical loss or atrophy of a
limb, such as diabetes, multiple sclerosis, or
Buerger’s disease.
(3) Diseases of the heart, lungs, or blood
vessels which have resulted in major loss of
heart or lung reserve as evidenced by X-ray,
electrocardiogram, or other objective findings,
so that despite medical treatment breathless
ness, pain, or fatigue is produced on slight
exertion, such as walking several blocks, using
public transportation, or doing small chores.
(4) Cancer which is inoperable and progres
sive.
(5) Damage to the brain or brain abnormality
which has resulted in severe loss of judgment,
intellect, orientation, or memory.
(6) Mental diseases (e.g., psychosis or severe
psychoneurosis) requiring continued institu
tionalization or constant supervision of the
individual.
(7) Loss or diminution of vision to the
extent that the affected individual has a central
visual acuity of no better than 20/200 in the
better eye after best correction, or has a limi
tation in the fields of vision such that the
widest diameter of the visual fields subtends
an angle no greater than 20 degrees.
(8) Permanent and total loss of speech.
(9) Total deafness uncorrectible by a hearing
aid.
In any case coming under the provisions of this
paragraph, the evidence referred to above must
be submitted to the Bureau of the Public Debt,
Division of Loans and Currency, Washington 25,
D.C., for approval before any bonds may be paid.
If, after review of the evidence, the Secretary of
the Treasury is satisfied that the owner’s disability
has been established, a letter will be furnished
authorizing payment of his Retirement Plan

Bonds. This letter must be presented each time
any of the owner’s bonds are submitted for pay
ment to a Federal Reserve Bank or Branch or to
the Office of the Treasurer of the United States.
(c) Requests for payment.— (1) By owner.—
When redemption of any Retirement Plan Bond is
desired by the registered owner under (a) above,
it should be presented, with the request for pay
ment on the back of the bond signed and duly
certified, to a Federal Reserve Bank or Branch or
to the Office of the Treasurer of the United States,
Washington 25, D.C. If payment is requested
under (b) above, the letter described therein
should accompany the bond.
(2)
By person other than owner.— When redemp
tion of any Retirement Plan Bond is desired by
the legal guardian, committee, conservator, or
similar representative of the owner’s estate under
(a) above, it should be presented, with the request
signed as described below, to a Federal Reserve
Bank or Branch or to the Office of the Treasurer of
the United States. If payment is requested
under (b) above, the letter described therein
should accompany the bond.1 The request for
payment, in either case, should be signed by the
representative in his fiduciary capacity before an
authorized certifying officer, and must be sup
ported by a certificate or a certified copy of the
letters of the appointment from the court making
the appointment, under seal, or other proof of
qualification if the appointment was not made by
a court. Except in the case of corporate fidu
ciaries, such evidence should state that the ap
pointment is in full force and should be dated not
more than one year prior to the presentation of
the bond for payment.
(d) Partial redemption.— A Retirement Plan
Bond in a denomination greater than $50 (face
value) which is otherwise eligible for redemption
may be redeemed in part, at current redemption
value, upon the request of the registered owner
(or a person recognized as entitled to act on his
behalf), but only in amounts corresponding to
authorized denominations. In any case in which
1 In any case in which a legal representative has not
been appointed for the estate of a registered owner who has
attained the age of 59)4 years, or who has become disabled,
a person seeking payment of a bond on the owner’s behalf
should furnish a complete statement of the circumstances
to the Bureau of the Public Debt, Division of Loans and
Currency, Washington 25, D.C. Appropriate instruc
tions will then be furnished.

4
partial redemption is desired, before the request
for payment is signed, the phrase “ to the extent of
$ --------- (face value) and reissue of the remainder”
should be appended to the request. Upon partial
redemption of the bond, the remainder will be re
issued as of the original issue date. No partial re
demption of a bond will be made after the death
of the owner in whose name it is registered.
S ec. 341.9. Payment or redemption after death of
owner.— (a) Order of precedence where owner not
survived by beneficiary.— If the registered owner of
a Retirement Plan Bond dies before it has been
presented and surrendered for payment, and there
is no beneficiary shown thereon, or if the desig
nated beneficiary predeceased the owner, the bond
shall be paid in the following order of precedence:
(1) T o the duly appointed executor or admin
istrator of the estate of the owner, who should
sign the request for payment on the back of the
bond in his representative capacity before an
authorized certifying officer, such request to be
supported b y a court certificate or a certified
copy of his letters of appointment, under seal of
the court, which should show that the appoint
ment is in full force and effect, and be dated
within six months of its presentation;
(2) If no legal representative of the deceased
registered owner’s estate has been or will be
appointed, to the widow or widower of the
owner;
(3) If none of the above, to the child or
children of the owner and the descendants of
deceased children b y representation;
(4) If none of the above, to the parents of
the owner, or the survivor of them;
(5) If none of the above, to other next-of-kin
of the owner, as determined by the laws of the
domicile of such owner at the time of his death.
In any case coming under the provisions of this
paragraph, a duly certified copy of the registered
owner’s death certificate will ordinarily be re
quired. Proof of death of the beneficiary, if any,
will be required where he predeceased the owner.
Payment of bonds under (1) will be made b y a
Federal Reserve Bank or Branch or by the Office
of the Treasurer of the United States, Washing
ton 25, D .C . Payment of bonds under (2) to
(5) will be made upon receipt of applications
on Form PD 3565, together with the bonds and
supporting evidence, b y the Bureau of the Pub
lic Debt, Division of Loans and Currency, Wash
ington 25, D.C.

(b) Order of precedence where beneficiary sur
vived owner.— If the registered owner of a Retire
ment Plan Bond dies before it has been presented
and surrendered for payment, and the beneficiary
shown thereon survived the owner, the bond shall
be paid in the following order of precedence:
(1) T o the designated beneficiary upon his
presentation and surrender of the bond with the
request for payment signed and duly certified,
such payment to be made to the exclusion of
any other person who may have been named
beneficiary by the registered owner in a bond
purchase plan, or under a pension or profitsharing plan;
(2) If the designated beneficiary survived the
registered owner but failed to present the bond
for payment during his own lifetime, payment
will be made in the order of precedence specified
in (1) to (5) of paragraph (a) above to the legal
representative, surviving spouse, children, par
ents, or next-of-kin of such beneficiary, and in
the manner provided therein.
In any case coming under the provisions of this
paragraph, a duly certified copy of the registered
owner’s death certificate will ordinarily be re
quired. Proof of death of the beneficiary will also
be required where he survived the owner but failed
to present the bond for payment during his own
lifetime. Payment of a bond to a designated bene
ficiary will be made b y a Federal Reserve Bank or
Branch or by the Treasurer of the United States,
Washington 25, D.C.
(c) Ownership o f redemption proceeds.— The
orders of precedence set forth in (a) and (b) above,
except in cases where redemption is made for the
account of a registered owner, are for the Depart
ment’s convenience in discharging its obligation
on a Retirement Plan Bond. The discharge of
the obligation in accordance therewith shall be
final so far as the Department is concerned, but
those provisions do not otherwise purport to
determine ownership of the redemption proceeds
of a bond.
S ec. 341.10. Reissue.— (a) Addition or change
of beneficiary.— A Retirement Plan Bond will be
reissued to add a beneficiary in the case of a
single ownership bond, or to eliminate or substi
tute a beneficiary in the case of a bond registered
in beneficiary form upon the owner’s request on
Form PD 3564. No consent will be required to
support any reissue transaction from a beneficiary

5
whose name is to be removed from the registration
of a Retirement Plan Bond. If the registered
owner dies after the bond has been presented and
surrendered for reissue, upon receipt of notice
thereof by the agency to which the request for
reissue was submitted, such request shall be treated
as ineffective, provided the notice of death
is received by the Federal Reserve Bank or
Branch or the Office of the Treasurer of the
United States, Washington 25, D.C., to which
the request was sent, in sufficient time to withhold
delivery, by mail or otherwise, of the reissued
bond.
(b) Error in issue— change of name.— Reissue
of a Retirement Plan Bond will be made where an
error in issue has occurred, as well as in cases
where the owner’s name has been changed by
marriage, divorce, annulment, order of court, or
in any other legal manner, upon appropriate
request, supported by satisfactory evidence. In
formation as to the procedure to be followed in
securing such reissue may be obtained from a
Federal Reserve Bank or the Office of the Treas
urer of the United States, Washington 25, D.C.
S ec. 341.11. Use of power of attorney.— No des
ignation of an attorney, agent, or other represent
ative to request payment or reissue on behalf of
the owner, beneficiary, or other person entitled
under Section 341.9, other than as provided in
these regulations, will be recognized.
S ec. 341.12. Lost, stolen, or destroyed bonds.— If
a Retirement Plan Bond is lost, stolen, or de
stroyed, a substitute may be issued upon identi
fication of the bond and proof of its loss, theft, or
destruction. A description of the bond by de
nomination, serial number, issue date and regis
tration should be furnished at the time the report
of loss, theft, or destruction is made. Such
reports should be sent to the Bureau of the Public
Debt, Division of Loans and Currency, Washing
ton 25, D .C. Full instructions for obtaining sub
stitute bonds will then be given.
S ec. 341.13. Taxation.— The tax treatment pro
vided under Section 405 of the Internal Revenue
Code of 1954 shall apply to all Retirement Plan
Bonds. The bonds are subject to estate, inherit
ance, or other excise taxes, whether Federal or
State, but are exempt from all taxation now or
hereafter imposed on the principal or interest
thereof by any State, municipality, or any local
taxing authority. Inquiries concerning the appli

cation of any Federal tax to these bonds should
be directed to the District Director of Internal
Revenue of the taxpayer’s district or to the
Internal Revenue Service, Washington 25, D.C.
S ec. 341.14. Certifying officers.— Officers au
thorized to certify requests for payment or for
any other transaction involving Retirement Plan
Bonds include:
(a) Post offices.— Any postmaster, acting post
master, or inspector-in-cliarge, or other post
office official or clerk designated for that purpose.
A post office official or clerk, other than a post
master, acting postmaster, or inspector-in-charge,
should certify in the name of the postmaster or
acting postmaster, followed by his own signature
and official title. Signatures of these officers
should be authenticated by a legible imprint of
the post office dating stamp.
(b) Banks and trust companies.— Any officer of
a Federal Reserve Bank or Branch, or of a bank
or trust company chartered under the laws of the
United States or those of any State, Common
wealth, or Territory of the United States, as well
as any employees of such bank or trust company
expressly authorized to act for that purpose, who
should sign over the title “ Designated Employee.”
Certifications by any of these officers or designated
employees should be authenticated by either a
legible imprint of the corporate seal, or, where the
institution is an authorized issuing agent for
United States Savings Bonds, Series E, by a
legible imprint of its dating stamp.
(c) Issuing agents of Series E savings bonds.—
Any officer of a corporation or any other orga
nization which is an authorized issuing agent for
United States Savings Bonds, Series E. All
certifications by such officers must be authen
ticated by a legible imprint of the issuing agent’s
dating stamp.
(d) Foreign countries.— In a foreign country
requests may be signed in the presence of and be
certified by any United States diplomatic or con
sular representative, or the manager or other
officer of a foreign branch of a bank or trust com
pany incorporated in the United States whose
signature is attested by an imprint of the corporate
seal or is certified to the Treasury Department. If
such an officer is not available, requests may be
signed in the presence of and be certified by a
notary or other officer authorized to administer
oaths, but his official character and jurisdiction

6
tary of the Treasury may require such additional
should be certified by a United States diplomatic
evidence as may in his judgment be necessary, and
or consular officer under seal of bis office.
(e)
Special provisions.— The Commissioner of may require a bond of indemnity, with or without
surety, where he may consider such bond necessary
the Public Debt, the Chief of the Division of Loans
for the protection of the United States.
and Currency, or any Federal Reserve Bank or
(d) Waiver of requirements.— The Secretary of
Branch is authorized to make special provision for
the Treasury reserves the right, in his discretion,
certification in any particular case or class of cases
to waive or modify any provision or provisions of
where none of the officers authorized above is
this circular in any particular case or class of cases
readily accessible.
for the convenience of the United States, or in
S ec. 341.15. General provisions.— (a) Regula
order to relieve any person or persons of unneces
tions.— All Retirement Plan Bonds shall be subject
sary hardship, if such action is not inconsistent
to the general regulations prescribed by the Secre
with law, does not impair any existing rights, and
tary with respect to United States securities, which
he is satisfied that such action would not subject
are set forth in Treasury Department Circular
the United States to any substantial expense or
No. 300, current revision, to the extent applicable.
liability.
Copies of the general regulations may be obtained
(e) Fiscal agents.— Federal Reserve Banks and
upon request from any Federal Reserve Bank or
Branches, as fiscal agents of the United States,
Branch or the Office of the Treasurer of the
are authorized to perform such services as may be
United States.
requested of them b y the Secretary of the Treasury
(b) Reservation as to issue of bonds.— The Secre
in connection with the issue, delivery, redemption,
tary of the Treasury reserves the right to reject
reissue, and payment of Retirement Plan Bonds.
any application for the purchase of Retirement
(f) Reservation as to terms of circular.— The Sec
Plan Bonds, in whole or in part, and to refuse to
retary of the Treasury may at any time, or from
issue or permit to be issued any such bonds in any
time to time, supplement or amend the terms of
case or any class or classes of cases if he deems
this
circular, or any amendments or supplements
such action to be in the public interest, and his
thereto.
action in any such respect shall be final.
D o u g l a s D il l o n ,
(c) Additional requirements.— In any case or any
Secretary of the Treasury.
class of cases arising under this circular the Secre

7
TABLE OF REDEM PTION VALUES PROVIDING AN INVESTM ENT YIELD
OF
PERCENT PER ANNUM FOR BONDS BEARING
ISSUE DATES BEGINNING JANUARY 1, 1963

Table shows how the Retirement Plan Bonds bearing issue dates beginning
January 1, 1963, by denomination, increase in redemption value during succes
sive half-year periods following issue. The redemption values have been
determined to provide an investment yield of 3.75 percent1 per annum, com
pounded semiannually, on the purchase price from issue date to the beginning
of each half-year period. The period to maturity is indeterminate in accordance
with the provisions of Sec. 341.1(b) of this circular.2
Issue Price
Period after issue date

First Yi year__ __________________
^ to 1 year______ _
_____ ____
1 to 1)4 years_______
_
_____
2 to 2Yi years____________________
3 to 3J4 years____
___________
3)4 to 4 years____________________
4 to 4 y% years. ___________
4)4 to 5 years
____ _______ _
5)4 to 6 y e a r s ._________________
6 to 6)4 years_________ _ ___
7 to 7% years_________________
to 8 years _________ _____
8 to 8)4 years. . .
__ ______ __
8)4 to 9 years____________________
9 to 9)4 years_____________
__
9}^ to 10 years____________ __

10)4 to 11 years_________________
11 to 11)4 years___________ ______
11)4 to 12 y e a rs__________
___
12 to 12)4 years__________________
12^> to 13 years___ _______ ______
13 to 13)4 years. _
__
13H to 14 years_______ _________
14 to 14)4 years_______ _
_____
14)4 to 15 years__
. __
15 to 15)4 years__________________
15)4 to 16 years_______ _________
16 to 16)4 years___
__________
16)4 to 17 years__________________
_ _ __ ____
17 to 17% years____
17U to 18 years__________________
18 to 18)4 years_______________ _
18^ to 19 years___________ ______
19 to 19J4 years__________________
19Vi to 20 years___ _________
20 to 20J^ years 2________________

$50.00

$100.00

$500.00

$1,000.00

Redemption values during each half-year period
(Values increase on first day of period shown)
$50. 00
50. 94
51. 89
52. 87
53. 86
54. 87
55. 90
56. 94
58. 01
59. 10
60. 21
61. 34
62. 49
63. 66
64. 85
66. 07
67. 31
68. 57
69. 85
71. 16
72. 50
73. 86
75. 24
76. 65
78. 09
79. 55
81. 05
82. 56
84. 11
85. 69
87. 30
88. 93
90. 60
92. 30
94. 03
95. 79
97. 59
99. 42
101. 28
103. 18
105. 12

$100. 00
101. 88
103. 79
105. 73
107. 71
109. 73
111. 79
113. 89
116. 02
118. 20
120. 41
122. 67
124. 97
127. 31
129. 70
132. 13
134. 61
137. 14
139. 71
142. 33
144. 99
147. 71
150. 48
153. 30
156. 18
159. 11
162. 09
165. 13
168. 23
171. 38
174. 59
177. 87
181. 20
184. 60
188. 06
191. 59
195. 18
198. 84
202. 57
206. 37
210. 23

$500. 00
509. 38
518. 93
528. 66
538. 57
548. 67
558. 95
569. 43
580. 11
590. 99
602. 07
613. 36
624. 86
636. 57
648. 51
660. 67
673. 06
685. 68
698. 53
711. 63
724. 97
738. 57
752. 42
766. 52
780. 90
795. 54
810. 45
825. 65
841. 13
856. 90
872. 97
889. 34
906. 01
923. 00
940. 31
957. 94
975. 90
994. 20
1, 012. 84
1, 031. 83
1, 051. 17

$1, 000. 00
i; 018. 75
1, 037. 85
1, 057. 31
1, 077. 14
1, 097. 33
1, 117. 91
1, 138. 87
1, 160. 22
1, 181. 98
1, 204. 14
1, 226. 72
1, 249. 72
1, 273. 15
1, 297. 02
1, 321. 34
i; 346. 11
1, 371. 35
1, 397. 07
1, 423. 26
1, 449. 95
1, 477. 13
1, 504. 83
1, 533. 05
1, 561. 79
1, 591. 07
1, 620. 91
1, 651. 30
1, 682. 26
1, 713. 80
1, 745. 94
1, 778. 67
1, 812. 02
1, 846. 00
1, 880. 61
1, 915. 87
1, 951. 80
1, 988. 39
2, 025. 67
2, 063. 66
2, 102. 35

1 Based on redemption values of $1,000 bond.
* A t a future date prior to January 1, 1983 (20 years after issue date of the first bonds) this table v ill be extended to
show redemption values for periods of holding of 20/2 years and beyond.

TREASURY DEPARTMENT
WASHINGTON. D .C .
January 10, 1963
FOR IMMEDIATE RELEASE

NEW TREASURY RETIREMENT PLAN BOND OFFERED
The Secretary of the Treasury today announced the offering
of United States Retirement Plan Bonds under the Self-Employed
Individuals Tax Retirement Act of 1962.
Applications for the bonds will be available at banks and
other financial institutions during the week of January 21.
Bonds bought during January will bear interest from January 1, 1963.
Like Series H Savings Bonds, the new bonds may be purchased
at any Federal Reserve Bank or branch, or direct from the Office
of the Treasurer of the United States, the only authorized
issuing agents. Banks and other financial institutions will
take applications for issue and redemption of these bonds, as
they do for Series H Savings Bonds, for transmittal to the
issuing agents. Like Savings Bonds, the bonds will bear
interest from the first of the month in which the authorized
issuing agent receives payment for them.
The bonds will be sold at par in denominations of $50, $100,
$500,and $1,000, and will provide an investment yield of 3—3/A
percent a year, compounded semi-annually. Interest, together
with the principal, will be paid only upon redemption. The bonds
will increase in redemption value at the end of each half-year
period following their issue date. In accordance with the law
and regulations contained in the attached Department Circular
Number 1-63, the bonds cannot be redeemed until their owners
reach 59-1/2 years of age, except upon the owner's death or
disability, Interest on the bonds stops five years after the
death of the person in whose name it is registered.
The Retirement Bonds may only be registered in the names of
natural persons in single ownership or beneficiary form. They
may be purchased only in connection with bond purchase plans and
pension and profit sharing plans as described in the 1962 Act.

D-719

The new retirement bonds must be registered in the name of the
self-employed person or the employee for whom they are bought.
Bond purchase plans using the new retirement plan bonds and
meeting the requirements of the new law will enjoy income tax
advantages similar to those granted to pension and profit
sharing plans. Self-employed persons can deduct from income
subject to tax up to $1250 annually for contributions to their
own retirement. When a self-employed person redeems his bond
he becomes liable, for income tax purposes, for the interest
earned on the bond, and for the amount of the deduction when
the bond was purchased. When an employee redeems his bonds he
is subject to tax for the interest on the bonds and any amount
contributed by his employer.
Because the bonds represent a form of savings and have some
features comparable to Series E and H Savings Bonds, their sales
will be reflected in Savings Bonds reports. No yearly sales
goal will be set for these bonds; nor will they be promoted within
the framework of special Savings Bond campaigns. However, since
Savings Bonds representatives work closely with banks and other
financial institutions in promoting and servicing the Savings
Bonds program, their assistance in this new area should
materially aid in the understanding of the terms and conditions
of the Retirement Bonds.

0O0

D-719

Full text of District Notices (Federal Reserve Bank of Dallas) : Retirement Plan Bond

FRASER