General Practice, Solo & Small Firm DivisionMagazine

Volume 17, Number 5
July/August 2000

Letter to Client from Thrift Savings Plan

Dear Mr. Doe:

This letter conveys my decision regarding whether payment will be issued from your Thrift Savings Plan (TSP) account under the above-referenced court order. When the TSP received the court order, your TSP account was frozen for loans and withdrawals.

The court order was evaluated according to the requirements at 5 U.S.C. §§ 8435(c)(1) and (2) and 8467, and the regulations at 5 C.F.R. Part 1653, subpart A.

I have determined that the court order is qualifying and that it awards $XX from your TSP account to Jane Doe. The payee's entitlement under the order was calculated as follows. The order awards $XX as of 11/23/98 (see paragraph 11 of the Order). TSP accounts are valued once a month as of the last day of the month. Payment of the amount awarded is subject to sufficient funds being in the account at the monthly valuation date preceding the date cited in the order. In this case that date is 10/31/98. For your information, your account balance was sufficient to satisfy the entire award. In accordance with the order, earnings will be paid based on TSP investment fund returns beginning with November 1998 through the month prior to payment. Adjustments and late contributions relating to a date prior to November 1, 1998, and processed prior to the date of payment can affect the account balance and thus the payment. Please note that the TSP does not segregate or separately invest the amount awarded pending payment.

Following this decision, tax information will be sent to the payee, who should allow up to 45 days for receipt of this information. Payment cannot be made earlier than the monthly processing cycle following the expiration of a 30-day period for consideration of the tax information, unless the payee waives this waiting period. Information regarding the waiver is provided with the tax information.

In accordance with TSP regulations, a single payment will be made to the payee after the tax withholding notification period (5 C.F.R. § 1653.5). The TSP will never pay more than the valued account balance at the time of payment, excluding any outstanding loan amount. If the payee is your former or separated spouse, the payee can ask the TSP to transfer all or any portion of the payment to an Individual Retirement Arrangement or other eligible retirement plan. Information about requesting a transfer will be included with the tax notice.

This decision letter applies only to your TSP account and not to your other government pension benefits, such as the Federal Employees Retirement System (FERS) Basic Annuity and the Civil Service Retirement System (CSRS) annuity. You may obtain information about these retirement benefits by writing to the following address: Office of Personnel Management, Court Order Section, P.O. Box 17, Washington, DC 20044.

My decision constitutes a final administrative action by the TSP. After the award has been paid, the freeze on your TSP account will be lifted in accordance with TSP regulations (5 C.F.R. § 1653.3(j)(3)). If you have any questions, please contact this office at (504) 255-3970 or (504) 255-3990.

Sincerely, REGINALD G. HARGETT, Chief,
Thrift Savings Plan Operations Branch

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