TSP

Opinion | Commentary
The author chose not to have a withholding amount corrected, anticipating further mistakes. Image: Ovidiu Dugulan/Shutterstock.com

There are approximately six million Thrift Saving Plan (TSP) participants who are federal employees, active military, and federal retirees.

Recently, I wrote about the TSP website and its unresolved issues.  Soon after, I heard from several TSP participants, and they were experiencing monthly withdrawal issues that were in clear violation of the TSP policy which is a 25-dollar minimum monthly withdrawal.  The TSP informed one member that they needed to make a withdrawal of approximately 7,100-dollar per month and the 2nd person was told that they needed to make a withdrawal of approximately 9,300-dollar per month.  Both individuals wanted to make much smaller withdrawals per month.

This month, I received my monthly withdrawal, and I noticed an additional 146-dollar Federal Tax Withholding.  The TSP website did not have any information for this change and the TSP representative told me that there was a system wide change with the Federal withholding requirements and the system defaulted everyone’s tax status as a single person.  My friend who is a TSP member had the same issue and his federal withholding increased 85 dollars.  But he is already single, so what caused his problem?  He did not know the answer and he requested a correction – however I chose not to have it corrected because I don’t have the confidence that it would be done correctly.

Also troubling is that the TSP may begin taking action for those individuals who have not made their Required Minimum Distributions, by making those distributions on behalf of the participant and mailing a check to the address on file.

This is 2023 and the TSP should not be mailing out any checks.  Many TSP members have quite large account balances, sometimes upwards of $1 million dollars, and RMD balances can be tens of thousands of dollars.   The TSP needs to have every participating member setup a direct deposit account for withdrawals.  People have multiple homes, and they are on extended vacations.  The worst thing is to have a RMD check sitting in a mailbox subject to mail theft and the TSP member is not aware that it was mailed to them.

I am a 35-year participant of the TSP.  I have no plans on leaving the TSP.  Time will tell how many participants will leave the TSP because of the many problems associated with the new TSP system.  I am hoping that these issues will be addressed soon.


Abraham Grungold is a retired federal employee with 36 years of federal service, and through his company AG Financial Services he helps federal employees with their TSP and federal retirement planning and decisions. Mr. Grungold has written over 40 articles regarding the TSP and FERS retirement and been a guest on several podcasts with the Federal News Radio and Government Executive Magazine. 

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