A distribution of Roth funds from an eligible employer plan may be rolled into the TSP by direct rollover only. 8351, 8432(a), 8432(b), 8432(c), 8432(j), 8432d, 8474(b)(5) and (c)(1), and 8440e. 8432(c)(1) and (c)(3). Backlog This subpart applies to investment elections made under subpart B of this part, fund reallocations and fund transfers made under subpart C of this part, and fund transfers made under subpart F of this part. The 18-month period will be terminated, and the account will be unfrozen, if both parties submit to the TSP record keeper a written request for such a termination. The proposed amendment to 1653.3(a) reflects this change. Terminology Changes. Thrift Savings Plan Proposed 1653.16 reflects these changes. An official website of the United States government. (c) A hold has been placed on the account pursuant to 5 CFR 1653.3(c). The proposed amendment to 1690.12(a) reflects this change. (c) If a fund reallocation is found to be invalid pursuant to 1601.34, the purported fund reallocation will not be made. Inflation Specifically, TSP participants will no longer have to ask the transferring financial institution to complete the TSP's paper form. (v) Information on how to receive the payment through an electronic funds transfer (EFT). The authority citation for part 1650 continues to read as follows: Authority: Will. This section does not address excess contributions resulting from a FERCCA correction; those contributions are addressed in 1605.14. For information about how to comment on this proposed rule: Currently, when a beneficiary participant account is established, the entire account balance is invested in the age-appropriate L Fund based on the beneficiary participant's date of birth. However, an employee is not entitled to receive makeup agency matching makeup contributions on contributions that were deducted from his or her incentive pay or special pay, including bonus pay, while performing military service. The TSP or its record keeper will furnish the information described in this part to participants by making it available on the TSP website. Once loan payments begin, the employing agency cannot terminate the payroll deductions at the employee's request, unless the TSP or its record keeper instructs it to do so. (b) The participant's primary residence is his or her principal residence. (b) If a participant's account balance is less than $5.00 when he or she separates from Government service, the balance will automatically be forfeited to the TSP. b. (c) For loan requests not completed on the TSP website, the TSP record keeper must receive the completed loan agreement (including any required supporting documentation) before the expiration date stated on the loan agreement or the agreement will not be processed. Eliminating the linkage requirement will greatly reduce errors for TSP participants wishing to designate contingent beneficiaries. Child Support Court Orders (CSCOs). There is no minimum amount for an installment payment calculated based on this method. 20. The loan, even though repaid, will also be taken into account in determining the maximum amount available for future loans, in accordance with 1655.6(b). The most powerful element in investing is time. Consistent with the approach taken by many private sector plans, the new TSP record keeper will honor a power of attorney if it is valid under the laws of the state in which the participant lives. Amend 1620.42, in paragraph (c)(1), by removing the word form. means any contributions made under 5 U.S.C. However, the TSP record keeper will not roll over portions of the participant's traditional balance to two different institutions or portions of the participant's Roth balance to two different institutions. To request an age-based withdrawal, a participant must initiate a request in form and manner prescribed by the TSP record keeper. The maximum investment cant be more than 25% of your total TSP account balance. The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees and members of the uniformed services, including the Ready Reserve. (f) The documentation provided under this section must meet the requirements set forth by the TSP record keeper. Start Printed Page 11522 (ii) A statement that the entire amount of the direct rollover is a qualified Roth distribution (as defined by Internal Revenue Code section 402A(d)(2)). What Is A TSP Loan? | Bankrate the Federal Register. It consolidates and supersedes several bulletins detailing various death benefits topics, including the statutory order of precedence, Beneficiary Participant Accounts for spousal beneficiaries, payment options for non-spousal beneficiaries, Form TSP-3, I am hoping that these issues will be addressed soon. If no beneficiaries of the account are located, Amend 1600.13 by removing and reserving paragraph (b). (1) Subject to paragraph (a)(3) of this section, if, because of an error committed by the Board or the TSP record keeper, a participant's account is not credited or charged with the investment gains or losses the account would have received had the error not occurred, the account will be credited accordingly. Currently, if a TSP withdrawal is returned as undeliverable and the TSP record keeper is not able to locate the participant within 60 days, the returned funds are forfeited to the TSP and may be reclaimed (without earnings) by the participant at any time. Negative adjustment records must be submitted by employing agencies in accordance with this part and any other procedures provided by the Board and/or the TSP record keeper. In paragraph (b) introductory text, remove Agency Automatic (1%) Contributions and add in its place agency automatic (1%) contributions and remove Agency Matching Contributions and add in its place agency matching contributions; c. In paragraph (b)(2), remove TSP and add in its place TSP record keeper; d. In paragraph (c)(1), remove agency and add in its place employing agency; e. In paragraph (c)(4), remove the last two sentences. means generally the cessation of employment with the Federal Government. Financial Hardship (3) Agency automatic (1%) contributions and agency matching contributions cannot be redesignated as Roth contributions or recharacterized as tax-exempt contributions. Paying Off High-Interest Debt. (4) The TSP record keeper will disburse required minimum distributions described in paragraph (c)(3) of this section pro rata from the beneficiary participant's traditional balance and the beneficiary participant's Roth balance. (b) Statement whether the participant has a beneficiary designation on file with the TSP record keeper. 98. Thrift Savings Plan (d) If a participant dies and a loan offset occurs in accordance with paragraph (b) of this section, the TSP record keeper will notify the participant's estate of the amount and date of the distribution. (d) : [payee's name, SSN, and address] is awarded __% of the [civilian and/or uniformed services] Thrift Savings Plan account[s] of [participant's name, account number or SSN, and address] as of [date]. Currently, a participant who wishes to make extra loan payments to restore their account more quickly, or to make up for missed payments, must do so by check or money order. Telework However, the TSP record keeper will not accept a rollover by the participant of Roth funds distributed from an eligible employer plan. Amend 1655.18 by revising paragraph (d) to read as follows: (d) The definition of discretionary income is increasing from 175% to 225% of the federal policy level, making less of borrowers' income considerable for repayment purposes. 115. Thrift Savings Plan However, tax-exempt money attributable to combat zone contributions cannot be rolled over from a uniformed services beneficiary participant account to a civilian TSP participant account. It was established by Congress in the Federal Employees Retirement System Act of 1986 and offers the same types of savings and tax benefits that many private Method of correction. It was viewed 22 times while on Public Inspection. New Loan Delivery Rules Supporting the Duty to Serve Credit Fee Cap. Consequently, funds disbursed cannot be returned to the TSP. If a death benefit payment is returned as undeliverable, the TSP record keeper will attempt to contact the beneficiary. Chapter 3 The VA Loan Guaranty. (d) The following documents do not purport to be qualifying retirement benefits court orders, and accounts of participants to whom such orders relate will not be frozen: (1) A court order relating to a TSP account that has been closed; (2) A court order dated before June 6, 1986; (3) A court order that does not award all or any part of the TSP account to someone other than the participant; and. (d) The following documents will not be treated as purporting to be a qualifying legal processes, and accounts of participants to whom such orders relate will not be frozen: (1) A document that does not indicate on its face (or accompany a document that establishes) that it has been issued by a competent authority; (2) A legal process relating to a TSP account that has been closed; and. The first group of eligible borrowers were informed by ED on July 14, 2023, that they have loans that qualified for forgiveness, says the Education Department in an update on its website. (b) If the TSP record keeper processes a TSP withdrawal request before being notified that a participant is deceased, the funds cannot be returned to the TSP. [FR Doc. Post-transition, a TSP participant must be separated from government service for at least 60 calendar days before they are eligible for a post-employment distribution. The maximum repayment period a participant may request for a residential loan is 180 months years of scheduled payments. If the participant dies before payment is made, the order will be honored so long as it is submitted to the TSP record Executive Director, Federal Retirement Thrift Investment Board. b. establishing the XML-based Federal Register as an ACFR-sanctioned (2) Upon receipt of a properly submitted recharacterization record or recharacterization request, the TSP record keeper will update the tax characterization of the erroneously characterized contribution. The Federal Retirement Thrift Investment Board (FRTIB) is proposing to update its regulations to reflect new processes and terminology associated with the Thrift Savings Plan's upcoming transition to a new record keeping system. January 2 Because Monday, January 2 is a federal holiday, the TSP will be closed. Amend 1605.14 by revising paragraphs (a)(2), (b)(4), (c)(3), (f)(3), and (g)(2) to read as follows: (2) All agency contributions that were made to a CSRS participant's account will be forfeited. (e) The documentation required for a loan under this section is as follows: (1) For all purchases, except for construction, a signed sale/purchase contract/settlement offer or agreement or addendum; or, (2) For construction, a signed builder's agreement/contract; and. All pro rated amounts will be based on the balances in each TSP core fund or source of contributions on the day the disbursement is made. TSP Loan or Hardship Withdrawal 3. The TSP record keeper will not accept an investment election request described in part 1601, subpart B, of this chapter for a beneficiary participant account. The proposed amendments to 1655.10 and 1655.12 reflect these changes. (3) If a participant does not repay a taxed loan: (i) His or her account balance will be permanently reduced; and. Direct rollover. A beneficiary participant may move a portion of his or her beneficiary account balance from the TSP core funds to the mutual fund window by making a fund transfer request described in part 1601, subpart F. (b) A residential loan will not be made for a lease-to-buy option, unless the option to buy is being exercised and the documentation states that the funds are being used to purchase the primary residence. For construction, a signed builder's agreement will be sufficient. (n) If a court order payee who is the current or former spouse of the participant has their own TSP account (other than a beneficiary participant account), the payee can request that the TSP record keeper roll over the court-ordered payment to the payee's TSP account in accordance with the rules described in 5 CFR 1650.25. With the exception of CA SBLCs, SBLCs may only make 7(a) loans. Negative statements, such as, I have not seen nor heard from him, or I have not had contact with her, are not sufficient. If you're not already enrolled in REPAYE, you can sign up for the SAVE plan at StudentAid.gov/IDR. It adds: 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. rendition of the daily Federal Register on FederalRegister.gov does not (c) The terms transfer and trustee-to-trustee transfer will be replaced with the term rollover.. However, if the court order specifies a third-party mailing address for the payment, the TSP record keeper will mail to the address specified any portion of the payment that is not rolled over to a traditional IRA, Roth IRA, or eligible employer plan within the meaning of section 402(c) of the Internal Revenue Code (26 U.S.C.
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