Retirement & Financial Planning Report

As part of its widened withdrawal policies effective Sunday (September 15) the TSP is tweaking its policies regarding the rights of account holders’ spouses.

Spousal rights apply to total post-employment withdrawals when the married participant’s vested TSP account balance exceeds $3,500, to partial post-employment withdrawals without regard to the amount of the participant’s account balance, and to any change in the amount or frequency of an existing installment payment series, including a change from payments calculated based on life expectancy to payments based on a fixed dollar amount.

Note: The TSP determines marital status by how that status is listed on the participant’s federal income tax form. In determining who is a spouse, it follows the law of the state in which the participant was living at the time of death; therefore, it recognizes common law marriages in those states that recognize such marriages.

FERS — The spouse of a FERS participant has a right to a joint and survivor annuity with a 50 percent survivor benefit, level payments, and no cash refund based on the participant’s entire account balance when the participant elects a total post-employment withdrawal. The participant may make a different total withdrawal election only if his or her spouse consents to that election and waives the right to this annuity by signing the appropriate statement accompanying Form TSP-99, Withdrawal Request for Separated and Beneficiary Participants, in paper or online versions.

A participant’s spouse must consent to any partial withdrawal election (other than an election to purchase an annuity as described above) and waive his or her right to this annuity with respect the amount withdrawn, regardless of the account balance, on Form TSP-77, Request for Partial Withdrawal When Separated in paper or online versions.

A spouse further must consent to any change in an existing installment payment series and waive his or her right to the annuity described above with respect to the applicable amount, regardless of the account balance, on Form TSP-95, Changes to Installment Payments. Spousal consent is not required to stop installment payments.

The spouse’s consent and waiver is irrevocable for the applicable withdrawal or installment payment change once the TSP record keeper has received it.

CSRS — The spouse of a CSRS participant is entitled to notice when the participant applies for a post-employment withdrawal or makes a change to an existing installment payment series. The participant must provide the TSP record keeper with the spouse’s correct address. The TSP record keeper will send the required notice by first class mail to the spouse at the most recent address provided by the participant.