Issue Briefs

Following is a summary of new features of the TSP effective in June after it transitions to a new record-keeping system.


Account access and security

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After the transition in June, all TSP participants will need to set up a new login for the new My Account. This one-time setup process will give you step-by-step prompts to make it simple for you to verify your identity, create a username and password, update your contact information, and set up your account security. Once you log in to My Account, you’ll notice a fresh design, new tools, and enhanced features to help you manage your account:

– The user-friendly, customizable homepage will give you quick access to the information you want to see first.

– If you have both a civilian and a uniformed services account, you’ll be able to see all the information for both accounts in one place, including your overall total balance.

– You’ll be able to use the official TSP Mobile App (coming in June) to access your account on the go.

– When you access My Account from your mobile device, you’ll have the option to use your device’s identification software, such as fingerprint access and facial recognition, to add an extra level of security.

– If you’re looking for personalized support, you’ll be able to use our virtual assistant, called AVA, to ask account-specific questions and connect directly to a ThriftLine Representative during business hours for a live chat session.

– You’ll receive messages, documents, and statements about your account in your Secure Participant Mailbox.

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Using the account lock feature in My Account, you’ll be able to help prevent fraud by voluntarily placing a secure hold that disallows transactions that remove money from your account.

Investments

The low-cost TSP funds you know and love will stay the same, and your TSP savings will remain invested in the funds you’ve chosen, unless you request a change. We’re also adding a new investment option through the TSP mutual fund window, personalized support for rollovers to your TSP account, and a new way to move money within your TSP account.

Mutual fund window

The mutual fund window is designed for TSP participants who are interested in greater investment flexibility. If your account meets certain eligibility criteria, you can choose to access a selection of more than 5,000 mutual funds. As with most mutual funds, this flexibility comes with fees:

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$55 annual fee to ensure that use of the mutual fund window does not indirectly increase TSP administrative expenses for TSP participants who choose not to use the mutual fund window.
$95 annual maintenance fee
$28.75 per trade fee
Other fees and expenses specific to chosen mutual funds

If you choose to invest through the mutual fund window, your initial investment must be at least $10,000, and you may not invest more than 25% of your total account in the mutual fund window.

For more information about the mutual fund window before it becomes available in June, sign up to receive details by email.

Personalized support to move money from other plans to the TSP

With a new feature coming this June, you’ll be able to receive personalized support to move money from IRAs, SIMPLE IRAs, and eligible employer plans.

Rollover contributions to your TSP account allow you to consolidate your retirement savings in one place. This makes it easier to evaluate whether you are on target to reach your retirement goals, and to make sure the right asset allocation to meet these goals is applied to all your savings. Also, because of the TSP’s low costs, your savings can grow faster than in a more expensive plan.

Moving money within your TSP account

Currently, there are two ways to determine the investment mix in your TSP account. With new features available to you in June, you’ll be able to make three types of investment transactions:

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– Your investment election (previously “contribution allocation”) will specify how you want to invest new money coming into your TSP account, such as from contributions, loan payments, and rollovers. Changing your investment election doesn’t affect money already in your account. Your investment election remains in effect until you submit a new one.

Note: As a new feature, any change to your investment election will ordinarily post to your account immediately and be effective the next business day. There will no longer be a noon cutoff for these transactions.

– A reallocation (previously “interfund transfer”) will move the money already in your account among TSP investment funds. When you make a reallocation, you choose the percentage you want invested in each TSP fund.

– As a new option, a fund transfer will move money from one or more specific funds to another specific fund or funds without affecting the rest of your account. You can determine a dollar amount or percentage you want to transfer. Fund transfers are also how you move money to and from the mutual fund window.
Reminder: If you request to change how you invest money already in your account—through a reallocation or fund transfer—before noon eastern time on any business day, your request will ordinarily post that business day. A request made at or after noon eastern time on any business day will ordinarily post on the next business day.

Reallocations and fund transfers are limited. Each calendar month, you can use your first two reallocations or fund transfers to redistribute money in your account among any of the TSP funds. After the first two of either transaction type, you can only move money into the G Fund.

Withdrawals and distributions

With the changes coming in June, the process to request a withdrawal or distribution will be more efficient and save time:

– As with other transactions, we’re introducing the ability to use electronic signatures and submit many requests entirely online.

– You’ll have the option to receive your money as direct deposit to your bank account or by check. The default payment option will be to receive a check by mail.

– If you request a distribution in installments, you can choose a start date for installments within six months of your request. After the start date, subsequent installments go out on the fifteenth (or next business day) of the month they’re due.

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– You can choose to receive automatic required minimum distributions (RMDs) electronically by including direct deposit information in My Account, even if you don’t make a specific distribution request to receive your RMD amount.

And there are some other changes to withdrawals and distributions you need to know:

– If you make a distribution request for installments from your traditional or Roth balance and want to roll over the money to an IRA or eligible account, you’ll be able to roll over the entire portion of the installment or specify a dollar amount for a partial rollover. If you want to specify a dollar amount for the rollover, you’ll need to make that request through the ThriftLine.

– If you request a financial hardship withdrawal and have sufficient funds available, you’ll be able to increase your withdrawal to 125% of the financial need to cover tax withholding.\

– If you begin receiving installments based on life expectancy before you reach RMD age (currently 72), we calculate your payment amount using the Single Life Expectancy Table. When you reach the RMD age, you’ll have the option each January to request that we begin using the Uniform Lifetime Table instead. If you do make this choice, you won’t be able to switch back. If you begin receiving life expectancy installments after you’ve reached the RMD age, we must use the Uniform Lifetime Table.

Expanded support options

Beginning in June, you’ll have more ways to get your questions answered with our expanded support options:

– You’ll have 24/7 access to support using a virtual assistant, called AVA, on our website and in the TSP Mobile App (coming in June). AVA will offer a secure way to ask questions about your account and will even connect you to a live ThriftLine representative through chat during business hours, when necessary.

– As before, you’ll be able to call the ThriftLine to speak with a representative when you need personal support by phone.

– The Secure Participant Mailbox in My Account is where you’ll receive messages, documents, and statements about your account.

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– You’ll still be able to choose how you receive your statements: in My Account or by mail. The default delivery for quarterly statements will be My Account. The default delivery for annual statements will be mail.

– You’ll be able to add an alternate mailing address to your profile in My Account to receive mailed correspondence.

– You’ll be able to opt in to receive text messages when transaction confirmations and statements are available in My Account.

Efficient online transactions

To save you time and reduce paperwork, we’re introducing new ways to complete most transactions and requests entirely online:

– In the new My Account, you’ll be able to request transactions, upload forms and documents, and sign your name electronically.

– With account access at your fingertips in the TSP Mobile App (coming in June), you’ll be able to scan and deposit checks for loan payments and rollovers.

– We’ll send you account-specific communications like statements, notices, and transaction confirmations through your Secure Participant Mailbox in My Account.

Beneficiary information

You’ll be able to submit beneficiary information entirely online through a new tool in My Account or by calling the ThriftLine. There are some changes to how designating beneficiaries will work:

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– You’ll be prompted to confirm beneficiary information annually to make sure that it’s up to date.

– The online tool for submitting beneficiary information through My Account will allow you to designate equal distribution to beneficiaries easily without having to list specific percentages, unless you choose to.

– Contingent beneficiaries will no longer need to be linked to primary beneficiaries. Contingent beneficiaries will only receive payment if all primary beneficiaries are deceased.
If you want to cancel a previous beneficiary designation, you’ll need to submit a new one. You won’t be able to choose the default statutory order of precedence once you’ve made a beneficiary designation.

– Non-spouse beneficiaries will be able to initiate payment online and select how they want to receive payment.

Loans

General purpose and primary residence loans continue to be available to you with some changes:

– You’ll be able to have two outstanding TSP loans, but only one primary residence loan, per account. That means you can have two general loans for each account, or one general loan and one primary residence loan.

– The loan fee for a primary residence loan will be $100. The loan fee for a general purpose loan will still be $50.

– The loan repayment period for a primary residence loan will be 61 – 180 months.

– You’ll be able to use direct debit for non-payroll loan payments.

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– If you leave federal service with an outstanding loan, you’ll be able to continue making loan payments by check, money order, or direct debit. You will not be able to apply for a new loan after you leave federal service.

– You’ll be able to request a loan even if you have a taxed loan, but a taxed loan that you haven’t paid off counts as an outstanding loan toward the limit of two per account.

– You will not be able to voluntarily reamortize—change the term and payment amount of—your loan. Your loan payment amount will only change if there’s a change in your payroll schedule or following the suspension of loan payments during a period of nonpay status.

Always remember to consider carefully the potential effect that a TSP loan may have on your retirement income.

Legal processing

With some changes, we continue to support third parties in communications and transactions on behalf of a participant or beneficiary, such as power of attorney (POA), conservatorship, or guardianship.

There will be a processing fee of $600 for Retirement Benefit Court Orders (RBCOs) and Child Support Court Orders (CSCOs). We’ll deduct this fee from the TSP account when we receive a court order form.

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2022 Federal Employees Handbook