Spousal rights apply to total post-employment withdrawals when the married participant’s vested TSP account balance exceeds $3,500, to partial post-employment withdrawals without regard to the amount of the participant’s account balance, and to any change in the amount or frequency of an existing installment payment series, including a change from payments calculated based on life expectancy to payments based on a fixed dollar amount.
The TSP determines marital status by how that status is listed on the participant’s federal income tax form. In determining who is a spouse, it follows the law of the state in which the participant was living at the time of death; therefore, it recognizes common law marriages in those states that recognize such marriages.
CSRS—The spouse of a CSRS participant is entitled to notice when the participant applies for a post-employment withdrawal or makes a change to an existing installment payment series. The participant must provide the TSP record keeper with the spouse’s correct address. The TSP record keeper will send the required notice by first class mail to the spouse at the most recent address provided by the participant.
FERS—The spouse of a FERS participant has a right to a joint and survivor annuity with a 50 percent survivor benefit, level payments, and no cash refund based on the participant’s entire account balance when the participant elects a total post-employment withdrawal. The participant may make a different total withdrawal election only if his or her spouse consents to that election and waives the right to this annuity by signing the appropriate statement accompanying Form TSP-99, available only online at www.tsp.gov/forms. A participant’s spouse must consent to any partial withdrawal election (other than an election to purchase an annuity as described above) and waive his or her right to this annuity with respect the amount withdrawn, regardless of the account balance.
A spouse further must consent to any change in an existing installment payment series and waive his or her right to the annuity described above with respect to the applicable amount, regardless of the account balance, on Form TSP-95, available only at that site. Spousal consent is not required to stop installment payments.
The spouse’s consent and waiver is irrevocable for the applicable withdrawal or installment payment change once the TSP record keeper has received it.
Waivers of the above requirements are allowed only in rare circumstances by filing Form TSP-16, Exception to Spousal Requirements, available at that site.
To designate a beneficiary for your TSP account balance, you must file a Form TSP-3 with the Thrift Savings Plan. If you don’t, your account will be distributed according to the standard order of precedence below:
- your spouse;
- your child or children in equal shares, with the share of any deceased child distributed among the descendants of that child;
- your parents in equal shares or the entire amount to the surviving parent;
- the duly appointed executor or administrator of your estate; then
- your next of kin under the laws of the place you were living at the time of your death.
On the death of a TSP participant, a spouse who had been designated as the beneficiary of the account may keep the account open. Spousal beneficiaries have the same rights to transfer money among the TSP funds and the same withdrawal options, beneficiary designation rights and required distribution obligations as other account owners. Further, if the beneficiary has a TSP account of his or her own, the account of the deceased person can be transferred into that account, although a transfer cannot be made from a personal account to an inherited account. Nor can a spouse beneficiary make new investments in an inherited account.
Non-spouse beneficiaries must close the inherited account, either by taking a withdrawal or having the money transferred to another tax-favored retirement savings plan.