Your Thrift Savings Plan account can be garnished for alimony or child support. The Thrift Board refers to a document requiring garnishment as a “legal process.”
The TSP will only review a complete copy of a legal process. The copy must have all pages, all attachments and must contain certain information.
That information consists of:
· The participant’s TSP account number or Social Security number;
· The name and mailing address of each payee;
· The Social Security number of any spouse/former spouse payee;
· In the event the legal process is written in a language other than English, a certified translation of the entire legal process.
Much like court orders dealing with divorce (which were addressed in an earlier article), the legal process:
· Must be issued by a U. S. court or agency of competent jurisdiction;
· It must expressly relate to the Thrift Savings Plan. In fact, the name “Thrift Savings Plan” must be contained in the legal process;
· It must either expressly require the payment of a stated dollar amount or require the participants TSP account to be frozen pending the receipt of an order to pay a stated dollar amount. The TSP will not honor anything that awards a percentage or fraction of the account. Neither will the TSP honor any legal process that requires a series of payments.
After reviewing the legal process, if it is found to be complete and qualifying under TSP rules, the TSP sends a letter notifying the participant (and other interested parties) of its decision. The letter describes the effect the legal process will have on the account. The letter will also explain how the payment will be calculated and when it will be made. In the event the legal process is not qualifying, the TSP will state the reason for finding it not to be qualifying.
If the legal process names a spouse or former spouse as the payee, tax reporting and withholding information will be provided to that payee.
Be aware that the rules regarding divorce, alimony, child support and garnishment are different for the TSP than from IRAs or other plans. In addition, the rules about dividing a federal pension as a result of divorce are different than those that apply to private pensions. If you end up heading towards divorce, make sure that you have an attorney or adviser who is familiar with the rules that cover federal retirement and the Thrift Savings Plan.