- Vesting Requirements
- Spouses' Rights
- Required Minimum Distributions (RMDs)
- Court Orders
- Participants with Civilian and Uniformed Services Accounts
Vesting Requirements
Vesting requirements only apply to FERS participants.
If you are a FERS participant, you must work for the Federal Government for a certain number of years in order to be entitled to (or "vested in") the Agency Automatic (1%) Contributions in your account and the earnings on them.
If you have not met the vesting requirement by the time you leave Federal service, any Agency Automatic (1%) Contributions and the earnings on them will be removed from your account and forfeited to the TSP.
For more information about vesting, visit A Few Words about Vesting.
Spouses' Rights
If you are married, the law grants your spouse certain rights regarding your TSP account as described in the Federal Employees' Retirement System Act of 1986. These rights vary depending on:
- Your retirement system (FERS, CSRS, or uniformed services), and
- Whether you choose a partial withdrawal or a full withdrawal of your account.
Partial Withdrawals
If you are a married FERS or uniformed services participant and you are making a partial withdrawal, your spouse must give written consent on your withdrawal form regardless of your account balance or the amount of your withdrawal. Your spouse's signature must be notarized.
If you are a married CSRS participant and you are making a partial withdrawal, the TSP must notify your spouse in writing regardless of your account balance or the amount of your withdrawal.
Full Withdrawals
If you are a married FERS or uniformed services participant with a total TSP account balance of more than $3,500 and you are making a full withdrawal, your spouse is entitled by law to a joint life annuity with:
- A 50% survivor benefit,
- Level payments, and
- The no cash refund feature.
If you choose any other withdrawal option or combination of options whereby your entire account balance is not used to purchase this particular type of annuity, your spouse must sign the statement on your withdrawal form that waives his or her right to that annuity. Your spouse's signature must be notarized.
If you are a married CSRS participant with a total TSP account balance of more than $3,500 and you are making a full withdrawal, the TSP must notify your spouse in writing of your withdrawal election.
Combined Civilian and Uniformed Services Accounts
If you are a married CSRS participant combining a civilian and a uniformed services account, your spouse's rights will change when your accounts are combined.
- If you move your civilian account into your uniformed services account, your spouse gains additional rights because he or she must sign a waiver of consent when you want to withdraw your account.
- If you move your uniformed services account into your civilian account, your spouse's rights will be reduced to receiving notification of your withdrawal.
If you are a FERS participant or a member of the uniformed services and you are combining your accounts, your spouse's rights will not change since they are the same for FERS and uniformed services participants.
Required Minimum Distributions (RMDs)
The Internal Revenue Code (IRC) requires that you receive a portion of your TSP account beginning in the calendar year when you become age 70½ and are separated from service. The portion that you are required to take is called a Required Minimum Distribution (RMD).
The TSP calculates RMDs based on your account balance and your age, using the IRS Uniform Lifetime Table. For detailed information and the tax rules regarding RMDs, see the TSP tax notice “Important Tax Information About Your TSP Withdrawal and Required Minimum Distributions”.
Minimum Distribution Requirements
If you do not withdraw your account balance or begin receiving payments from your account in the year you turn 70½, the TSP is required to make the required distribution to you by April 1 of the following year.
If you separate from Federal service after age 70½, your account will immediately be subject to the IRS minimum distribution requirements.
If you are already receiving a series of monthly payments from your TSP account when you turn 70½, your monthly payments will be used to satisfy the IRS minimum distributions requirement. If the total amount of your monthly payments does not satisfy the requirement, the TSP will issue a supplemental payment for the remaining amount in December.
Minimum Distribution Payment Transfers
Your required minimum distribution payment cannot be transferred or rolled over into another IRA or eligible employer plan. If you withdraw your account in a single payment or monthly payments in a year during which the RMD applies, you cannot transfer the entire payment(s) to your IRA or eligible employer plan. Instead, before transferring any money, the TSP will calculate your RMD amount and mail it directly to you (or, if applicable, to the savings or checking account designated to receive your direct deposit).
Court Orders
The TSP must honor a valid court order that:
- Awards all or part of a TSP account to a current or former spouse (including a separated spouse), and/or
- Enforces obligations to pay child support or alimony or to satisfy judgments for child abuse.
With the exception of a required minimum distribution (RMD), your withdrawal request will not be accepted until any court order that applies to your TSP account is settled.
Participants with Civilian and Uniformed Services Accounts
If you have two separate TSP accounts — a Federal civilian account and a uniformed services account — you may withdraw only the TSP account related to the type of employment from which you are separating.
Once you have separated, you will have the option of combining your two accounts into one; however, you can only combine the account related to your separation into your other TSP account. Also, if you have a loan in the account you are moving, you must close it before you can combine your accounts.
To combine your TSP accounts, use Form TSP-65, Request to Combine Uniformed Services and Civilian TSP Accounts. Money that you transfer will be deposited as employee contributions into the traditional or Roth balance of the combined account based on the way it was identified in the original account.
