TSP Still Open, Sends Reminder on Loans, Contributions, and Withdrawals

[vc_row][vc_column width=”2/3″ el_class=”section section1″][vc_column_text]Following the partial government shutdown, it was unclear if TSP would continue being operational or it would shut down too. It has finally spoken out and confirmed that things have not changed on their side. They are still open, but they no longer get appropriated funds. Instead, they operate on the money collected from the investors. They are now calling out regarding loans and other policies such as withdrawals and contributions for workers that were scheduled to take holiday leave.

In its statement, TSP announced that those employees in the non-pay status would not make any investments to their accounts since it would mean a deduction from their pay. Therefore, those that had been in the non-pay status for over a full pay period would not contribute to their TSP accounts during the holiday season.

• Also Read: Divorce and Federal Benefits: How Splitting Assets Can Reshape Your Retirement Plans
• Also Read: Postal Employees, Here’s How Your Retirement Plan Is Changing—What You Need to Do Now
• Also Read: Thinking About Your TSP? Here’s What Federal Workers Can Do to Grow Their Nest Egg Fast

The FERS coverage would continue on any employee who earned on every pay period. The coverage is calculated depending on the workers’ basic pay earned on every pay period, and the contributions made depend on the worker’s personal investment. In this case, if an employee is not earning basic pay during a specific period, she would not receive any kind of service or agency contribution for the pay period.

Good news for the account holders in non-pay status too! They can now reallocate money in their different investment funds, and they can also alter allocations of their ongoing investment. However, they can only change the allocations of investments after restarting their personal investments.

The account holders in the non-pay status have a chance to request loans, but only if the period does not exceed 30 days. They also need to fulfill some requirements to get the loan, such as agreeing to start repaying the loan through deductions on their payrolls 60 days after getting the loan.

Any worker who believes that their leave period will not exceed 30 days can comfortably sign up for the loan as it only means that they will be in a position to start repayment within the agreed period. Those with an existing loan can suspend their payments, but they need to acquire the non-pap status documentation from TSP.

What about withdrawals? Those aged 59 ½ and above can request withdrawals during the non-pay status. One can also request an in-service withdrawal if they are having financial difficulties, but there has to be proof of the hardship when applying.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”28390″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row]