The TSP can accept transfers of eligible rollover distributions from qualified retirement plans, or their designated financial institutions, and from conduit individual retirement accounts that were set up to accept such distributions. This means that TSP investors who had tax-favored savings plans from previous employers became eligible for the first time to transfer such money into the TSP; previously, TSP transfers in weren’t allowed, although transfers out were allowed when a participant left government employment and joined another employer with a tax-favored retirement savings plan.
All TSP participants who have an open account can transfer money into the TSP. This includes participants who are separated from federal service. However, a separated participant who is receiving monthly payments from his or her TSP account cannot transfer money into it. The form to use is Form TSP-60, Request for a Transfer into the TSP.
For TSP purposes, an “eligible rollover distribution” consists entirely of before-tax money that is distributed from a “qualified” retirement plan (see below for definition) or a conduit IRA.
Examples of eligible rollover distributions may include:
- a lump-sum distribution after terminating employment;
- an age-based in-service withdrawal;
- a final single payment after a series of monthly payments; or
- payments made to a spouse or former spouse under a qualified domestic relations order.
Death benefit payments made to spouses from qualified plans cannot be transferred into the TSP.
Check Eligibility Before Attempting TSP Transfers
A TSP participant who would like to transfer money into the TSP should check with a representative of his or her former plan or IRA to ensure that the distribution is considered an eligible rollover distribution. Before the TSP accepts a transfer into a participant’s account, the administrator of the qualified retirement plan or the trustee or custodian of the conduit IRA must certify that the distribution is an eligible rollover distribution. See Roth Balances, above, for special considerations regarding transfers of Roth balances.