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The number of couples getting divorced each year is quite high, and dividing up assets can be tricky. If you’re a current federal worker or a retiree who is getting divorced, it’s important to understand how the court will affect your TSP.
- Also Read: Three Critical Facts About Divorce and Federal Pensions You Can’t Ignore
- Also Read: Surprising Federal Employee Perks That Could Make a Big Difference in Your Long-Term Retirement Plans
- Also Read: 4 Questions to Ask About Potential Hiring Freezes and Workforce Reductions Affecting Federal Employees
[/vc_column_text][vc_custom_heading text=”The Qualified Domestic Relations Order may also serve as the RBCO.” font_container=”tag:h2|font_size:20px|text_align:left|color:%23363636″ google_fonts=”font_family:Raleway%3A100%2C200%2C300%2Cregular%2C500%2C600%2C700%2C800%2C900|font_style:500%20bold%20regular%3A500%3Anormal” css=”.vc_custom_1532015472738{margin-bottom: 20px !important;}”][vc_column_text]The TSP has a Court Orders and Powers of Attorney booklet that you can find on the TSP website under “Forms and Publications.” It’s a 31-page booklet with a plethora of useful information, layman language and a checklist to help you and your attorney to create legal-looking documents. You can also find RBCO requirements in the booklet.
Once you have a court order in place, the TSP account will be frozen, and you won’t be able to get a loan or make withdrawals until the divorce is finalized. If there is an outstanding loan on the TSP account, the remaining loan balance is added into the account balance to determine how much the spouse is permitted to have unless the court order deems it can be excluded. The court order will provide the award in either percentage or award amounts. The TSP cannot be made to pay more than the current account balance.
The TSP goes along with the FERS annuity and CSRS, which means there are different rules for each one. You can learn more about these rules by going to the Handbook for Attorneys on the Office of Personnel Management website. If you’re getting divorced, it’s imperative that your divorce lawyer has a good understanding of the rules regarding federal benefits. It may not be enough to have a standard QDRO unless specific criteria are met. If there are no attorneys who understand the federal rules regarding your TRP and other federal benefits, give them the handbooks to read and familiarize themselves with.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”28354″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row][vc_row][vc_column width=”2/3″ el_class=”section section1″][vc_column_text]
Linda Jensen is the principal and owner of Asset Care & Preservation Services with offices in Olympia, WA. Linda began her career with Prudential Preferred in 1994 where she was an agency leader. She earned the credentials of a financial planner and has been in practice as an investment and insurance professional since that time. Linda started her own company in 1997.
Articles from Linda Jensen:
Linda Jensen | How to make the most out of your TSP Plan
Linda Jensen | Top Four Tips for IUL Shopping[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”28249″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row]
