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By Barbara O’Neill, Ph.D., CFP®

OneOp recently held a webinar about dozens of changes in the Thrift Savings Plan (TSP). These changes became effective on June 1, 2022. Below is a summary of important TSP changes by category:

Account Access Security

  • The former Secure Message Center was replaced by a Secure Participant Mailbox where participants can receive account-specific messages such as transaction confirmations, documents, and statements.
  • There is a one-time process to set up new login credentials for the My Account feature to receive communications in the Secure Participant Mailbox.
  • Users can customize their My Account dashboard and use the Retirement Income Modeler tool to project their future retirement income.

Enhanced Personalized Participant Support

  • There is a new TSP virtual assistant called AVA that can answer general questions.
  • The TSP mobile app includes many of the same capabilities as the enhanced My Account interface. Users can check their TSP balance, track fund performance, request fund reallocations and transfers, and chat with AVA.
  • Specialized agents are available when rolling over money from an IRA or other eligible retirement plan.

New Investment Options

  • Investment election is the new name for the former term, contribution allocation. It specifies how participants want to invest new money into their TSP account and is only done in whole percentages.
  • Fund reallocation is the new name for interfund transfer. It is the redistribution of participants’ entire balance with new percentages in TSP funds that are already in their account, also in whole percentages.
  • Fund transfer is a new feature for participants to move money from one or more TSP funds to another TSP fund or funds without affecting the rest of the account or to and from the new Mutual Fund Window.
  • The Mutual Fund Window (MFW) allows TSP participants to buy, sell, and exchange thousands of mutual fund options. They may not invest more than 25% of their TSP balance in the MFW at any time and fees apply, including a $55 annual administrative fee, $95 annual maintenance fee, and $28.75 per trade fee.

Money-Out (Withdrawal) Changes

  • TSP loan processing fees for a primary residence increased to $100 and participants can have two loans outstanding at one time: two general purpose loans or a general purpose loan and a primary residence loan.
  • A TSP participant who has both a TSP account through a civilian job and a military service TSP account could have two loans for each account.
  • Separated participants can keep an outstanding loan after separation. However, they must begin payments by the deadline set by the TSP. The loan will foreclose if no payments are made in 90 days.
  • Older participants can pre-authorize and receive automatic direct deposits of required minimum distributions.

Beneficiary Designation Changes

  • There is no more TSP-3 form. Instead, plan participants can submit beneficiary information online via My Account.
  • All primary beneficiaries must be deceased for a contingent beneficiary to receive any money from an account.

For additional information about TSP policies, review the publication Summary of the Thrift Savings Plan.

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