New Flexible Rules for TSP Withdrawals Stirs Things UpawsDONOTREMOVE
TSP management, who are in charge of handling the 401(k)-style retirement savings program of the federal government employees remarked that the provision of expanded withdrawal options to employees had made a great shift in how retirees and federal employees have been using their retirement accounts.
The TSP Modernization Act had been put in by the TSP last month, which allows multiple post-separation partial withdrawals to all employees who are participants. Federal employees 59½ years or older can make 4 in-services withdrawals during a year. Participants can choose whether these withdrawals are to be from their traditional accounts, Roth accounts, or from accounts.
Beneficiaries who have begun receiving their monthly payments are now allowed to change the frequency and amount of their monthly installments at their choosing. Also, a few withdrawals can be done on the internet. Other withdrawels can be made via the TSP website. Participants still have to print and sign forms which need to be submitted when the process is completed.
The FRTIB, which is responsible for the dispersing of the TSP, met on Monday for their monthly meeting where the Director of Participant Services, Tee Ramos, said that since these changes were started, lump sum full account withdrawals had gone down by half compared to the month before.
There was a 47% decrease in the number of cases where people were withdrawing their complete amount from their TSP. This was also the main reason behind the provision of these flexibilities. People were given choices which guaranteed that they didn’t have to withdraw the entire amount all at one time.
Other withdrawals, where rules have also been loosened, saw a major increase during the month in which these new rules were put in, when compared to the last month. Ramos said that age-based withdrawals had gone up by 254% whereas partial withdrawals had gone up 333%.
Additional Withdrawals Project manager Tanner Nohe stated that these numbers were not so encouraging compared to the same time period during 2018. When taken against the same period during 2018, there was a 414% increase in partial withdrawals whereas age-based withdrawals saw an increase of 372%.
Nohe said that a lot of participants had asked for second in-service withdrawals since this wasn’t previously been allowed.
The OPMHHSD mailed a notice to all federal employees on Tuesday, telling them of the problems caused by flu season and asked them to receive flu vaccines.
Alex Azar, the HHS Secretary, sent a memo sent to federal employees, and Dale Cabaniss, the OPM Director, encouraged federal workers to get vaccinations in order to keep the public and coworkers from its dangers.
He also said that getting a vaccination could slow down the transmission of flu, which might protect co-workers, family members and others.
Flu vaccines are available to all federal workers by the FEHBP. It is usually available at no cost. Federal agencies are known for hosting flu vaccine drives for employees at their work.