The TSP has sent out a reminder that it remains open despite the partial government shutdown—it does not draw appropriated funds but rather operates on the fees it charges investors—meanwhile drawing attention to its policies regarding loans, withdrawals and contributions for employees on unpaid furlough.
Those in non-pay status cannot have investments made into their accounts since those must be made from deductions from pay. “Therefore, if you are in nonpay status for one or more full pay periods, you will not be contributing to your TSP account during that time,” it says.
For FERS employees, the agency automatic 1 percent of salary contribution is “calculated based on basic pay earned during each pay period” and matching contributions are based on the employee’s personal investment. “Consequently, if you are not earning basic pay for a particular pay period, you will not receive either type of agency/service contribution for that pay period.”
Account holders in non-pay status can shift money among the investment funds and also can change allocations of ongoing investments, although the latter change would not apply until personal investments restart.
It says that while in non-pay status, an account holder can request a loan if that period is expected to last 30 days or less, adding that the loan agreement includes a promise to begin repaying it through payroll deduction 60 days later. “If you reasonably believe your furlough will last 30 days or less, you can truthfully sign the loan agreement because you reasonably believe that your loan payments will start within the required period and that you will be able to repay your loan,” it says.
Those who already have a loan outstanding can suspend payments so long as the agency provides documentation of the non-pay status.
In-service withdrawals can be requested during non-pay status, either age-based (after age 59 ½) or financial hardship-based (standard rules requiring proof of a hardship continue to apply).
