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Plan News was updated on May 28, 2020.

Update on CARES Act temporary loan and withdrawal options — (May 14, 2020)

The CARES Act allows us to offer temporary loan and withdrawal options to TSP participants affected by COVID-19. The loan options described below will be available no later than June 22, 2020, and that the withdrawal option described here will be available in mid-July 2020. Both the loan and withdrawal options are available to you only if you can certify that you meet one or more of the following criteria:

  • You have been diagnosed with the virus SARS–CoV–2 or with coronavirus disease 2019 (COVID–19) by a test approved by the Centers for Disease Control and Prevention.
  • Your spouse or dependent (as defined in section 152 of the Internal Revenue Code of 1986) has been diagnosed with such virus or disease by such a test.
  • You are experiencing adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury (or the Secretary's delegate).

Increased maximum loan amount
The maximum loan amount is increased from $50,000 to $100,000, and the portion of your available balance you can borrow is raised from 50% to 100%. The deadline for applying for a loan with this increased maximum will be in September 2020. We will announce the exact cutoff date soon.

Temporary suspension of loan payments
You may suspend your obligation to make payments on your TSP loan or loans for the rest of calendar year 2020. This applies to existing loans and loans taken in the remainder of 2020. We will make a new form available for you to request this suspension. [Editor’s note: As a result of new information on the implementation of the CARES Act, the conditions of loan payment suspension have been changed since this post first appeared.]

CARES Act Withdrawal
You may make a one-time withdrawal of up to $100,000 from a civilian or uniformed services account. For those still in federal service, the usual requirements that you be at least 59 ½ years old or certify that you meet specific financial hardship criteria are waived. Though you may request that we withhold money from your withdrawal for federal income tax, we will not automatically do that. This withdrawal will be eligible for the favorable tax treatment described here, with all of the same options and restrictions. The deadline for applying for this withdrawal will be in December 2020. We will announce the exact cutoff date soon.

Board defers action on I Fund transition — (May 13, 2020) Due to a meaningfully different economic environment related in large part to the impact of the global COVID-19 pandemic, as well as the nomination of three new Federal Retirement Thrift Investment Board Members, pending further study, the Board is delaying the implementation of the I Fund benchmark change to the MSCI ACWI ex-U.S. Investible Market index from the MSCI EAFE index.

Withdrawals for Participants Affected by COVID-19 — (May 12, 2020) The CARES Act creates special rules for most types of TSP withdrawals made by participants affected by COVID-19. We’re working on a new, temporary withdrawal option that waives the usual in-service withdrawal requirements and allows all COVID-affected participants to waive tax withholding. We will provide details about that soon. But many TSP participants who are affected by COVID-19 can take advantage of the withdrawal provisions of the CARES ACT using withdrawal types for which they’re already eligible. If you’re a current civilian federal employee or member of the uniformed services and eligible under the existing rules, such withdrawals include hardship withdrawals and age-based in-service “59½” withdrawals. If you’re separated from federal service or a beneficiary participant, they include single payments and some installment payments. This article explains the favorable tax treatment that you may be eligible for right now without waiting for the new withdrawal option to be available.

Definitions and Eligibility

This article uses the terms coronavirus-related distribution and qualified individual.

A coronavirus-related distribution, as defined by the Internal Revenue Service (IRS), is “a distribution (withdrawal) that is made from an eligible retirement plan to a qualified individual from January 1, 2020, to December 30, 2020, up to an aggregate limit of $100,000 from all plans and IRAs.” That means $100,000 is the maximum amount across all your retirement plans combined that you can apply these tax advantages to.

You’re a qualified individual if you meet at least one of the following criteria listed in the CARES Act:

  • You have been diagnosed with the virus SARS–CoV–2 or with coronavirus disease 2019 (COVID–19) by a test approved by the Centers for Disease Control and Prevention.
  • Your spouse or dependent (as defined in section 152 of the Internal Revenue Code of 1986) has been diagnosed with such virus or disease by such a test.
  • You are experiencing adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury (or the Secretary's delegate).

You must be a qualified individual receiving a coronavirus-related distribution to take advantage of the favorable tax treatment described below. You must also designate your withdrawal(s) as a coronavirus-related distribution when you file your taxes. To do that, you’ll file Form 8915-E, which the IRS is expected to make available before the end of 2020.

Early Withdrawal Penalty Waived

If you designate your withdrawal(s) as a coronavirus-related distribution when you file your taxes, the IRS will waive the 10% additional tax on early distributions.

When You Must Pay Tax on the Income from Your Withdrawal

The taxable income from withdrawals made by qualified individuals may be spread “ratably” over a three-year period, starting with the year in which you receive your distribution. For example, if you receive a $9,000 coronavirus-related distribution in 2020, you could report $3,000 in income on your federal income tax return for each of 2020, 2021, and 2022. This is optional; you can also choose to include all of the income in the year of the withdrawal.

Repaying Withdrawals

If you are a qualified individual, you may repay all or part of the amount of a coronavirus-related distribution to an eligible retirement plan, provided that you complete the repayment within three years after the date that you received the distribution. If you repay a coronavirus-related distribution, the distribution will be treated as though it were repaid in a direct plan-to-plan transfer so that you do not owe federal income tax on the distribution. The law allows you to repay coronavirus-related distributions to the plan from which you received it or to another eligible retirement plan.

Update on CARES Act temporary loan and withdrawal options — (May 6, 2020) The CARES Act allows us to offer temporary loan and withdrawal options to TSP participants affected by COVID-19. We are working as quickly as possible to add these options to our system so you can count on efficient processing of these requests. You can check this webpage for updates about these options and when they will be available to you. We will post the next update by May 15, 2020.

Payments you make to the TSP by check may take longer to process — (April 30, 2020) Because of public health precautions being taken at our processing facilities, payments made by check will most likely take longer to appear in your TSP account. These include payments to make up missed loan payments, submit additional loan payments, or to roll over payments from IRAs or other employer plans. We appreciate your patience.

Rollover Period Extended to July 15 — (April 28, 2020) If you received any withdrawal between February 1 and May 15 that is eligible for rollover, then the IRS has extended your 60-day rollover deadline to July 15th. If you received an RMD (or an installment payment that included an RMD) between February 1 and May 15, then you can roll those amounts over—to an IRA or eligible employer plan or back into your TSP account—provided that you do so by July 15th. Use Form TSP‑60.

First quarter participant statements are online and in the mail — (April 15, 2020) Your first quarter 2020 participant statement, covering the period from January 1 through March 31, 2020, is now available in My Account. To receive email updates when new participant statements are available, sign up at “Email Updates” (under Quick Links) on the home page.

Temporary changes to required minimum distributions — (April 13, 2020) As authorized by the recently enacted CARES Act, we’re making temporary changes related to required minimum distributions (RMDs).

  • You do not need to make any withdrawals from your TSP account in 2020 to satisfy an RMD, regardless of your age or employment status.
  • We will not send any automatic RMD payments for 2020.
  • If you make a withdrawal, we will withhold for federal taxes at the rate appropriate for the type of withdrawal you make, without regard to RMD rules that would otherwise apply. You can transfer or roll over to an IRA or eligible employer plan any otherwise eligible withdrawals you make.

Learn more about temporary changes to RMDs.

President signs CARES Act — (March 27, 2020) President Trump has signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law. This law seeks to address the economic impacts of the coronavirus (COVID-19), and it includes provisions concerning retirement plans. We will update you as specific details become available.

TSP operations continue normally — (March 13, 2020) As the coronavirus situation evolves worldwide, we’re working hard to make sure that TSP operations continue normally, and that we’re able to continue to serve you.

  • We continue to process forms and requests.
  • TSP representatives are available to answer your questions.
  • You can access your account online through My Account.

This is a changing situation, and we will communicate with you as soon as possible if anything affects our operations. In the meantime, here are some tips for you to consider.

Make sure you can access your TSP account online and by phone. For online access, you need your account number (or user ID), your password, and access to your validated email or cell phone. If you haven't already, add and validate a personal email or cell phone to your TSP account so you can log in securely from your personal devices with two-step authentication. If you're having trouble logging in, read our tips and troubleshooting information. For access by calling the ThriftLine, you’ll need your account number and PIN.

Avoid longer wait times on the ThriftLine by calling during off-peak hours. Your wait might be longer if you call during peak hours, such as in the morning. If you need to reach a TSP representative by phone, try calling in the afternoon, Tuesday through Friday, to reduce your chances of a long wait. As an alternative, you can use the secure messaging service online after you log into My Account.

TSP Life Annuity COLA Changes to Flat 2% in March — (February 24, 2020) The cost of living adjustment (COLA) applied to TSP life annuities with the increasing payments feature will become a flat 2% beginning with annuities purchased on or after March 2, 2020. Annual adjustments for TSP annuities purchased before then will continue to vary between 0% and 3% depending on the Consumer Price Index. Annual adjustments for all TSP annuities take place on the anniversary of the first payment. TSP life annuities are purchased from the TSP’s outside vendor, using money from your TSP account. The information provided here is not related to the “basic annuity” or “pension” that is part of retirement coverage under FERS or CSRS, or the military retired pay that members of the uniformed services receive.

IRS Form 1099-R — (January 29, 2020) The TSP has mailed IRS Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to participants who received a withdrawal up to December 27, 2019, and/or a taxable distribution of a loan up to December 31, 2019. Withdrawals processed on December 30 and 31 are taxable income for 2020. If you have not received Form 1099-R by mid-February, you can print a copy from My Account. Corrected Forms 1099-R will be issued late February/early March. If you are expecting a corrected Form 1099-R, you may wish to wait to file your taxes until you receive the form.

President signs SECURE Act — (December 26, 2019) President Trump has signed the Setting Every Community Up for Retirement Enhancement (SECURE) Act into law. We’re currently looking into how the SECURE Act might affect the TSP. We will update you as more details are finalized.

Two-step authentication enabled for logging into My Account — (December 23, 2019) All TSP participants now must have validated contact information and use two-step authentication to log into My Account.

Two-step authentication helps protect your account against fraud. This login process is more secure because it means that online access to your account requires something you know (your account number or username and password) and something you have (the one-time code you receive in your email or on your phone). Someone who tries to log into your account fraudulently won’t be able to gain access without the code.

If you’re having trouble logging in, you can read our tips and troubleshooting guide.

Board and ETAC Chairmen say “Let’s Keep a Fair Playing Field for TSP Investors” — (November 25, 2019) In a letter published today, Federal Retirement Thrift Investment Board Chairman Michael Kennedy and Employee Thrift Advisory Council (ETAC) Chairman Clifford Dailing explain why the Board’s 2017 decision to transition to a new benchmark for the I Fund continues to be the right call. Read more here.

Investment benchmark update — (November 13, 2019) At its November meeting, Members of the Federal Retirement Thrift Investment Board affirmed the 2017 decision to move to a new index for the International Fund (I Fund) for the Thrift Savings Plan. In coming to this decision, the Board noted that moving to the broader I Fund benchmark is in the best interest of participants and beneficiaries, a current best practice in the investment industry, and is widely recognized as a smart strategy in today’s market. The ten largest U.S. companies’ 401(k) plans all invest in emerging markets, as do the ten largest federal contractor plans and the six largest target date fund providers. In addition, the 20 largest defined benefit plans—all of which are for state government workers—invest in emerging markets. TSP participants can decide which TSP funds they want to invest in.

New TSP Podcast — (September 26, 2019) We’re happy to announce our new podcast, The Real TSP! Hosted by TSP educators, each episode provides an in-depth look into your retirement investment plan and answers questions you care about the most. Whether you’re brand new to the government, well into your retirement years, or serving our country in the U.S. or abroad, this podcast has something for you. Find our podcasts at youtube.com/tsp4gov.

New withdrawal options now available — (September 15, 2019) We’re pleased to announce that all participants now have more options when seeking to withdraw retirement savings from their TSP accounts.

For a detailed summary of the new withdrawal options, read our updated fact sheet, Questions and Answers about Changes to TSP Withdrawal Options.

For information about in-service withdrawal options, visit the “In-Service Withdrawals” section of tsp.gov and download our updated booklet, In-Service Withdrawals.

For information about post-separation withdrawals, visit the “Withdrawals After Leaving Federal Service” section of tsp.gov and download our updated booklet Withdrawing from Your TSP Account.

To initiate a withdrawal request, you’ll use enhanced online tools in My Account. After you log in, select the “Withdrawals and Changes to Installment Payments” link from the Online Transactions menu.