Improving the TSP [for current participants]

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Earl Lemongrab
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Re: Improving the TSP [for current participants]

Post by Earl Lemongrab » Sat Jun 08, 2019 3:57 pm

ChrisC wrote:
Sat Jun 08, 2019 1:36 pm
I think there is a Federal law mandating spousal sign off of retirement distributions, which, as I recall, occurred in the aftermath of egregious cases of military and civilian spouses being left penniless when the serviceman or Federal employee did not provide for a spousal annuity in retirement or left the spouse off as a retirement beneficiary. I recall these were well publicized cases in the late 70’s championed by Congresswoman Schroeder of CO. The law does not apply to private retirement plans.
I don't know about the particular statute, but the same applies to 401(k)s.
Spousal consent rules with respect to qualified plans stem from the Retirement Equity Act of 1984 (REA). As a general rule, married participants must receive the written consent of their spouse prior to taking distribution from a qualified plan in a form other than a qualified joint and survivor annuity (QJSA).
http://www.401khelpcenter.com/faq/faq_3 ... PwgjExFzw0

bayview
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Re: Improving the TSP [for current participants]

Post by bayview » Sat Jun 08, 2019 8:38 pm

Blues wrote:
Sat Jun 08, 2019 2:16 pm
Biggest reason for me to keep funds in the TSP other than access to the "G" fund is that I will not be taxed by my state of residence when I begin RMDs several years down the road. Those two factors make staying put an easy decision.
Hi, Blues, are you in NC? I have read varying interpretations of whether NC can tax withdrawals from the G fund, as it is 100% Treasuries.

Or are you covered by the Bailey Act? I’m not.
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Blues
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Re: Improving the TSP [for current participants]

Post by Blues » Sat Jun 08, 2019 10:52 pm

bayview wrote:
Sat Jun 08, 2019 8:38 pm
Blues wrote:
Sat Jun 08, 2019 2:16 pm
Biggest reason for me to keep funds in the TSP other than access to the "G" fund is that I will not be taxed by my state of residence when I begin RMDs several years down the road. Those two factors make staying put an easy decision.
Hi, Blues, are you in NC? I have read varying interpretations of whether NC can tax withdrawals from the G fund, as it is 100% Treasuries.

Or are you covered by the Bailey Act? I’m not.
Yes to both. NC and covered by Bailey.
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Re: Improving the TSP [for current participants]

Post by rkhusky » Mon Jun 10, 2019 11:04 am

SquawkIdent wrote:
Sat Jun 08, 2019 1:30 pm
Except for your G fund allocation, I see no reason to keep the other money in the TSP after retirement as long as you are over 59 1/2. By then the underage penalties are removed as well as the 72T hoops. Then you are free to move to an IRA and do as you like with YOUR money. :sharebeer
If you retire the year you turn 55 or later, you can withdraw from TSP without penalty. No need to wait until 59.5.

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Re: Improving the TSP [for current participants]

Post by SquawkIdent » Mon Jun 10, 2019 11:40 am

rkhusky wrote:
Mon Jun 10, 2019 11:04 am
SquawkIdent wrote:
Sat Jun 08, 2019 1:30 pm
Except for your G fund allocation, I see no reason to keep the other money in the TSP after retirement as long as you are over 59 1/2. By then the underage penalties are removed as well as the 72T hoops. Then you are free to move to an IRA and do as you like with YOUR money. :sharebeer
If you retire the year you turn 55 or later, you can withdraw from TSP without penalty. No need to wait until 59.5.
True but if you transfer the funds to an IRA you will need to wait until 59 1/2 or pay penalty or go the 72T route.

So you can either wait until 59 1/2 and transfer everything to an IRA or transfer most of it and only leave what you will need between retirement and 59 1/2.

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MichDad
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Re: Improving the TSP [for current participants]

Post by MichDad » Mon Jun 24, 2019 5:04 pm

Let me begin by reminding people that the proposed rule on Additional Withdrawal Options for the Thrift Savings Plan has been published and interested parties (such as TSP participants and beneficiaries) can submit comments on the proposed rule. Comments must be submitted on or before August 9, 2019. Here's a link to the proposed rule:

https://www.govinfo.gov/content/pkg/FR- ... dium=email

Next, this quote is from the recently posted (April 2019) minutes of the Federal Retirement Thrift Investment Board:

"Mr. Tanner Nohe, Supervisory Project Manager, provided an update on the
Additional Withdrawals Project. See "Additional Withdrawals Project" (attached). Mr.
Nohe explained that phase 1 of the project, Installment Maintenance/Withdrawal
Deadline, has completed systems testing and has moved into user acceptance testing.
With respect to phase 2, post-separation withdrawals, development is 99 percent
complete and will wrap up in the coming days, but systems testing is just beginning and
is only 6 percent complete. Regarding phase 3, in-service withdrawals, development is
about 4 7 percent complete, and testing is not yet underway. Development of phase 3
should be completed by the end of June 2019, at which point testing will begin.
Mr. Nohe explained that there is only one high-probability, high-impact
project risk, and that is the development of web wizards. However, the overall timeline
remains unchanged. The next major milestone for the project will be proposed
regulations. Draft regulations are currently circulating internally within the Agency. It is
anticipated that proposed regulations will be published in the Federal Register in June
2019."

Here's a link to the April minutes that contained the above quote:

https://www.frtib.gov/MeetingMinutes/2019/2019Apr.pdf

Here's a link to the FRTIB staff's April PowerPoint presentation on the Additional Withdrawal Options project:

https://www.frtib.gov/pdf/minutes/2019/ ... r-Att9.pdf

The PowerPoint presentation still lists September 15, 2019 as the date the Additional Withdrawal Options will be available to TSP participants.

MichDad

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TimeRunner
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Re: Improving the TSP [for current participants]

Post by TimeRunner » Mon Jun 24, 2019 7:12 pm

I filed a comment (anonymously since any contact info provided is part of the public record). There's less than a handful of comments that have been filed so far.
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MichDad
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Re: Improving the TSP [for current participants]

Post by MichDad » Tue Jul 02, 2019 3:55 am

The Federal Retirement Thrift Investment Board's May 2019 meeting minutes are now available. Here's the link:

https://www.frtib.gov/MeetingMinutes/2019/2019May.pdf

Of primary interest, the Additional Withdrawal Options project remains on track to go live on September 15, 2019. Here's a link to an important PowerPoint presentation on that project:

https://www.frtib.gov/pdf/minutes/2019/ ... y-Att6.pdf

Some Bogleheads have raised concerns about the burdensome requirement that spouses might be required to provide notarized consent every time the TSP participant makes changes to the types and amounts of distributions. It turns out those concerns are well founded. You can see what the proposed forms look like on pages 17 and 36 of the PowerPoint presentation. The spousal consent form makes it clear that it applies to "this withdrawal" and there is no option offered on that form for the spouse to provide a general indefinite revocable consent to future withdrawals.

Personally, I find the spousal consent requirement very burdensome. I dislike the need for spousal consent in the first place but recognize that some may differ with my view. In any event, and at a minimum, the spousal consent form should provide the option for the spouse to grant to the TSP participant withdrawal consent into the future with the right to withdraw that consent at any time. The idea that TSP participants need to seek consent from their spouses every time they seek a different withdrawal is burdensome and terrible.

In addition, the TSP should offer an in-plan Roth conversion option as is offered by many private 401(k) plans. The rules should be amended to permit this. TSP administrators have previously informed me that offering an in-plan Roth conversion option does not require new legislation. The FRTIB has the existing authority to do this but chooses not to.

We have until August 9, 2019 to submit comments to the FRTIB on the proposed rule. I hope many here will submit comments. Here's a link to the Federal Register notice for the proposed rule, which provides instructions on how to submit comments:

https://www.govinfo.gov/content/pkg/FR- ... dium=email

Thank you for your interest.

MichDad

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tadamsmar
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Re: Improving the TSP [for current participants]

Post by tadamsmar » Tue Jul 02, 2019 8:48 am

Spousal rights are written into law:
If you are married, the law grants your spouse certain rights regarding your TSP account as described in the Federal Employees' Retirement System Act of 1986.
https://www.tsp.gov/PlanParticipation/L ... ouseRights

I don't know how much flexibility the FRTIB has on spousal consent if that aspect of the law has not changed.

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Re: Improving the TSP [for current participants]

Post by mrc » Tue Jul 02, 2019 10:48 am

tadamsmar wrote:
Tue Jul 02, 2019 8:48 am
Spousal rights are written into law:
If you are married, the law grants your spouse certain rights regarding your TSP account as described in the Federal Employees' Retirement System Act of 1986.
https://www.tsp.gov/PlanParticipation/L ... ouseRights

I don't know how much flexibility the FRTIB has on spousal consent if that aspect of the law has not changed.
That "Spouses' Rights" section describes an implementation of spousal consent/notification. And not necessarily something codified in the 1986 Act.

Notice the rules are a bit different for CSRS compared to FERS: "notification" vs notarized consent.
If you are a married FERS or uniformed services participant and you are making a partial withdrawal, your spouse must give written consent on your withdrawal form regardless of your account balance or the amount of your withdrawal. Your spouse's signature must be notarized.

If you are a married CSRS participant and you are making a partial withdrawal, the TSP must notify your spouse in writing regardless of your account balance or the amount of your withdrawal.
The TSP clearly isn't used to handling changes to withdrawals.
Last edited by mrc on Tue Jul 02, 2019 10:49 am, edited 1 time in total.
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autolycus
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Re: Improving the TSP [for current participants]

Post by autolycus » Tue Jul 02, 2019 10:49 am

Unfortunately, spousal consent does still seem to be a statutory issue for the TSP. See https://www.law.cornell.edu/uscode/text/5/8435

However, I do think there might be some wiggle room for a single waiver of the spousal annuity covering all future withdrawals.

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MichDad
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Re: Improving the TSP [for current participants]

Post by MichDad » Tue Jul 30, 2019 6:07 pm

I'm posting this reminder that the public has until August 9, 2019 to submit comments to the Federal Retirement Thrift Investment Board on its proposed rule on Additional Withdrawal Options. I hope many here will submit comments. This is a good opportunity to express your views, if any, about allowing (or not) in-plan Roth conversions to the Thrift Savings Plan as is already permitted by many 401(k) plans. Also, some have expressed a desire to modify the proposed rule to allow spouses to grant TSP participants long term (indefinite) permission to make TSP withdrawals and not require spousal consent after each withdrawal or after some short period, like 90 days. Under this concept, the spouse could withdraw, in writing, his or her consent to withdrawals any time. Here's a link to the Federal Register notice for the proposed rule, which provides instructions on how to submit comments:

https://www.federalregister.gov/documen ... al-options

Thank you for your interest.

MichDad

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Re: Improving the TSP [for current participants]

Post by mrc » Wed Aug 07, 2019 10:59 am

The FRTIB posted minutes for the June 2019 meeting.

Section 4 Enterprise Risk Management Update (pp3-4) ticks off a disturbingly long list of "high" level risks:

Information Security
Disaster Recovery
Business Continuity
Insider Threat Management
TSP Fraud

are all rated "high risk.

Oh, and the Additional Withdrawals Project appears to be on track, with PDF of status report.
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TimeRunner
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Re: Improving the TSP [for current participants]

Post by TimeRunner » Wed Aug 07, 2019 1:01 pm

Also, the timing of solicitation of Federal Register comments (due 8/9/19) compared to the actual implementation date means there's very little hope that any revisions based on public input (such as the ideas discussed in this thread) would be made prior to or immediately after implementation, IMO. Withdrawal changes mean using the TSP-95 form, wet spousal signature, notary process, and postal mail. So much easier to transfer out non-G fund assets to Fido, Schwab, Vanguard, etc and trim TSP involvement. There was no indication in the meeting minutes that the FRTIB was interested in any public input.
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MichDad
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Re: Improving the TSP [for current participants]

Post by MichDad » Thu Aug 08, 2019 11:39 am

TimeRunner wrote:
Wed Aug 07, 2019 1:01 pm
Also, the timing of solicitation of Federal Register comments (due 8/9/19) compared to the actual implementation date means there's very little hope that any revisions based on public input (such as the ideas discussed in this thread) would be made prior to or immediately after implementation, IMO. Withdrawal changes mean using the TSP-95 form, wet spousal signature, notary process, and postal mail. So much easier to transfer out non-G fund assets to Fido, Schwab, Vanguard, etc and trim TSP involvement. There was no indication in the meeting minutes that the FRTIB was interested in any public input.
In fact, the FRTIB has rejected specific requests to post on the TSP website the proposed rule on Additional Withdrawal Options along with instructions on how TSP participants can submit public comments. That doesn’t bode well for transparency and openness and a serious effort to listen to concerns and suggestions presented by TSP participants.

Public comments are due tomorrow, Friday, August 9th.

MichDad

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MichDad
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Re: Improving the TSP [for current participants]

Post by MichDad » Wed Sep 04, 2019 12:12 pm

The Federal Retirement Thrift Investment Board has just published its final rule on Additional Withdrawal Options. It received only eighteen comments from the public and rejected all suggested changes to the proposed rule. It has adopted the proposed rule as written and the new withdrawal options will commence on September 15th.

I’m writing this message on my iPhone while out of the country so I can’t copy the link to the Federal Register that contains the FRTIB’s response to the comments. Perhaps someone else on this forum can do this for all to see.

To put it mildly, I’m disappointed with the FRTIB.

MichDad

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TimeRunner
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Re: Improving the TSP [for current participants]

Post by TimeRunner » Wed Sep 04, 2019 12:29 pm

Here's the link: https://www.federalregister.gov/d/2019-19029

For the issue I raised regarding possibly providing a spousal waiver form, the response was:

"Two commentators expressed concern about the amount of paperwork required by the spousal consent rules applicable to married Federal Employees' Retirement System (FERS) and uniformed services participants, particularly with respect to changes to installment payments. Spousal consent is statutorily required by 5 U.S.C. 8435(a)(1)(B) any time a married FERS or uniformed services participant (1) elects a TSP withdrawal in any form other than a joint life annuity with a 50 percent survivor benefit, level payments, and no cash refund; or (2) changes a withdrawal election, which includes a change to the amount or frequency of previously elected installment payments. Allowing a participant to make changes to the amount or frequency of his or her installment payments without spousal consent would undermine the protection the spousal consent rule is designed to provide by allowing a participant to effectively drain his or her account balance via a small number of large installment payments without his or her spouse's knowledge."

...which does not address the idea of a spousal waiver, but only repeats the requirements that I didn't challenge and didn't speak to the option I proposed.

I think the FRTIB just gifted the financial advisor community a point that they will hammer on to TSP folks to "help them" move their funds from the TSP to TIRA/Roth IRAs, so they won't have to put up with these restrictions. Instead of retaining participants, they've just given them a juicy reason to leave. Sigh.
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MichDad
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Re: Improving the TSP [for current participants]

Post by MichDad » Wed Sep 04, 2019 12:58 pm

I too saw that the FRTIB didn’t respond directly to the issues I raised. For example, they ignored my comment that they should allow spouses to sign general consents and not require multiple consents.

They also completely ignored one of my principal comments.

Again, I was more than disappointed.

MichDad

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Re: Improving the TSP [for current participants]

Post by Engineer250 » Wed Sep 04, 2019 1:01 pm

Anyone have any plans for when the withdrawal options change in just a couple weeks?

I have a logistics question. I am no longer with the feds but still “young”. My plan is to pull out all my Roth TSP money and roll it into my Vanguard Roth IRA, to make it easier to invest my Roth money differently from pre-tax money (and take advantage of the G Fund as I get older). My question is, should I:

A. Roll the money into my existing Roth IRA and just keep track of how much the rollover was and the time for future reference (simplicity of one account).
-OR-
B. Have a separate rollover Roth account to keep the money separate (multiple accounts but keeps like money with like).
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Re: Improving the TSP [for current participants]

Post by motorcyclesarecool » Wed Sep 04, 2019 1:11 pm

“Irreversible financial pitfall” of allowing in-plan Roth conversion? That seems simultaneously blind and paternalistic. Having an “advisor” help you get your money out of the retrograde, restrictive TSP would be a true financial pitfall.

Oh well, we live to fight another day.

Are the actual comments readily available online? I thought they would be.
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Re: Improving the TSP [for current participants]

Post by delamer » Wed Sep 04, 2019 1:44 pm

Regarding the spousal consent requirement, it seems that the option of having a spouse provide a blanket waiver (that could be rescinded) would a good option.

But it appears to me that the TSP is requiring a notarized signature from the plan participant for any changes/withdrawals.

Is that correct?

If so, it doesn’t seem unduly burdensome in most cases to also require a notarized signature from the spouse. Although, I can see that there might be specific circumstances when it could be an issue (like an ill or housebound spouse).

stan1
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Re: Improving the TSP [for current participants]

Post by stan1 » Wed Sep 04, 2019 1:52 pm

Yep, in most cases reluctantly I'm still of the opinion it is best bet to move out of TSP to an IRA at retirement unless you live in a state that taxes TSP withdrawals favorably or need extra protection from lawsuits for some reason. G Fund alone does not outweigh the TSP negatives.

Edited to add: You may want to leave a little in the TSP so that you can move money back in if you find a reason to do so.
Last edited by stan1 on Wed Sep 04, 2019 3:05 pm, edited 1 time in total.

mrc
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Re: Improving the TSP [for current participants]

Post by mrc » Wed Sep 04, 2019 2:14 pm

stan1 wrote:
Wed Sep 04, 2019 1:52 pm
Yep, in most cases reluctantly I'm still of the opinion it is best bet to move out of TSP to an IRA at retirement unless you live in a state that taxes TSP withdrawals favorably or need extra protection from lawsuits for some reason. G Fund alone does not outweigh the TSP negatives.
That is what my souse did, after leaving federal service about 10 months ago. We feel even more confident we made the right decision now that the withdrawal changes are solid and do not match the flexibility and convenience of other custodians.

DW could transfer the funds into a former employer's 403b, which is protected from some access that IRAs are not. Our state doesn't treat TSP differently from other retirement plans. That 403b has access to Vanguard institutional index funds, which currently have lower ERs than TSP.

DW turned 68 the month after she separated, and looking ahead, we didn't want to do major RMDs with two custodians. We'll set up an auto RMD with TSP when the time comes, but the amount will be trivial. We plan to do two Roth conversion which will go much more smoothly with her 403b custodian.

DW left about $3K in the G fund, and sometimes I wonder why. The door is still open to move back, but I can't see why one want to.
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Fed Register - TSP withdrawal options

Post by Alan S. » Wed Sep 04, 2019 4:15 pm

[Thread merged into here, see below. --admin LadyGeek]

Link to official expanded TSP withdrawal options effective 9/15/2019:

https://www.federalregister.gov/documen ... al-options

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Re: Improving the TSP [for current participants]

Post by MnD » Fri Sep 06, 2019 8:23 am

MichDad wrote:
Wed Sep 04, 2019 12:58 pm
I too saw that the FRTIB didn’t respond directly to the issues I raised. For example, they ignored my comment that they should allow spouses to sign general consents and not require multiple consents.

They also completely ignored one of my principal comments.

Again, I was more than disappointed.

MichDad
Given the timeline of effective date for changes versus the comment period dates, I think it's highly unlikely any of the comments would have altered the changes made in this release. TSP moves very slowly on changes but they do seem to move in the right direction. Several here did the right thing on the comments and previous communications no doubt influenced the very positive changes that are being made.
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Re: Improving the TSP [for current participants]

Post by MnD » Fri Sep 06, 2019 8:32 am

mrc wrote:
Wed Sep 04, 2019 2:14 pm
DW left about $3K in the G fund, and sometimes I wonder why. The door is still open to move back, but I can't see why one want to.
In a 1966-1982 retiree scenario, real returns on equity and bond holdings were hammered by rising interest rates and anemic equity returns, resulting in substantial portfolio portfolio depletion and outright failure for even tried and true conservative SWR's. Bonds were not safe and increasing bond holdings simply accelerated portfolio loss and failure. No-one has a crystal ball but the current landscape of ultra-low current yields, slow growth and rising indebtedness for government and corporations could auger something similiar. In that situation, TSP G fund could be a portfolio-saver given no interest risk yet immediate response to yield increases.

A time when the TSP G fund looks the least appealing (like now) with low intermediate term yields and no yield premium for duration (a ~50 BP discount actually) is probably not the time to be irrevocably bailing out of it.
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Re: Fed Register - TSP withdrawal options

Post by David Jay » Fri Sep 06, 2019 3:56 pm

I want to bump this for visibility, there has been quite a few threads that have mentioned the new regs...
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Re: Fed Register - TSP withdrawal options

Post by marana » Sat Sep 07, 2019 8:51 am

Thanks for the link. It will be useful as Sep. 15 is just around the corner.

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Re: Fed Register - TSP withdrawal options

Post by stan1 » Sat Sep 07, 2019 8:55 am

There is an ongoing discussion here on TSP changes:
viewtopic.php?f=2&t=140180&start=300

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Re: Improving the TSP [for current participants]

Post by LadyGeek » Sat Sep 07, 2019 9:20 am

^^^ I merged Alan S.' thread into the on-going discussion.
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Re: Improving the TSP [for current participants]

Post by mouth » Sat Sep 07, 2019 12:11 pm

TimeRunner wrote:
Wed Sep 04, 2019 12:29 pm
I think the FRTIB just gifted the financial advisor community a point that they will hammer on to TSP folks to "help them" move their funds from the TSP to TIRA/Roth IRAs, so they won't have to put up with these restrictions. Instead of retaining participants, they've just given them a juicy reason to leave. Sigh.
Did they really give a [new] reason? or fail to eliminate one of many existing while eliminating a few of the bigger ones? I mean sure spousal approval wasn't as much of an issue before, but only because there were so few chances to bump up against it given how few withdrawal options we had before. I'd say this recent set of changes is still a net good even if they aren't nearly as good as they could have been.

I suppose anyone that plans to make changes frequently will become fast friends with a notary or find the nearest UPS Store as they have notary services [shrug].

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MichDad
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Re: Improving the TSP [for current participants]

Post by MichDad » Sat Sep 07, 2019 12:44 pm

Re: Multiple spousal approvals before a notary — what a royal pain. This, plus the inability to make in-plan Roth conversions, plus offers by several low cost brokerage firms to pay me thousands of dollars to move funds to them are the reasons why I’ll move all but my G Fund holdings out of the TSP next month.

Another thing, those brokerage firms have much better customer service than the TSP.

MichDad

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Re: Improving the TSP [for current participants]

Post by delamer » Sat Sep 07, 2019 1:24 pm

MichDad wrote:
Sat Sep 07, 2019 12:44 pm
Re: Multiple spousal approvals before a notary — what a royal pain. This, plus the inability to make in-plan Roth conversions, plus offers by several low cost brokerage firms to pay me thousands of dollars to move funds to them are the reasons why I’ll move all but my G Fund holdings out of the TSP next month.

Another thing, those brokerage firms have much better customer service than the TSP.

MichDad
I agree that allowing for one blanket spouse approval that is notarized (and can be revoked at any time) is a good idea.

But I just don’t see that requiring it for each withdrawal is a big burden, especially since the participant’s signature needs to be notarized anyway.

It isn’t as if you need a spouse’s signature in order to change your allocation or rebalance.

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TimeRunner
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Re: Improving the TSP [for current participants]

Post by TimeRunner » Sat Sep 07, 2019 3:18 pm

delamer wrote:
Sat Sep 07, 2019 1:24 pm
But I just don’t see that requiring it for each withdrawal is a big burden, especially since the participant’s signature needs to be notarized anyway.

It isn’t as if you need a spouse’s signature in order to change your allocation or rebalance.
But one of the big selling points of this 'modernization' was giving participants the ability to easily change withdrawal amounts and options. To me, easy doesn't mean having to drag my spouse to the UPS store and pay $20 (2 x $10 in my location) to obtain notary signatures and then mail the form to the TSP for processing a week or two later. Big burden, no. Not easy, not convenient, not modern, not customer-centric? Yes.
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SquawkIdent
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Re: Improving the TSP [for current participants]

Post by SquawkIdent » Sat Sep 07, 2019 3:37 pm

MichDad wrote:
Sat Sep 07, 2019 12:44 pm
Re: Multiple spousal approvals before a notary — what a royal pain. This, plus the inability to make in-plan Roth conversions, plus offers by several low cost brokerage firms to pay me thousands of dollars to move funds to them are the reasons why I’ll move all but my G Fund holdings out of the TSP next month.

Another thing, those brokerage firms have much better customer service than the TSP.

MichDad
+1

If it doesn’t provide what you need, it’s time to move on. Even if they changed things you don’t like it would take 2 years to adopt them. Life’s too short for that, it’s a shame but it’s reality.

delamer
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Re: Improving the TSP [for current participants]

Post by delamer » Sat Sep 07, 2019 6:03 pm

TimeRunner wrote:
Sat Sep 07, 2019 3:18 pm
delamer wrote:
Sat Sep 07, 2019 1:24 pm
But I just don’t see that requiring it for each withdrawal is a big burden, especially since the participant’s signature needs to be notarized anyway.

It isn’t as if you need a spouse’s signature in order to change your allocation or rebalance.
But one of the big selling points of this 'modernization' was giving participants the ability to easily change withdrawal amounts and options. To me, easy doesn't mean having to drag my spouse to the UPS store and pay $20 (2 x $10 in my location) to obtain notary signatures and then mail the form to the TSP for processing a week or two later. Big burden, no. Not easy, not convenient, not modern, not customer-centric? Yes.
I don’t know that making changes easier was the goal, so much as increasing the options.

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TimeRunner
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Re: Improving the TSP [for current participants]

Post by TimeRunner » Sat Sep 07, 2019 6:25 pm

delamer wrote:
Sat Sep 07, 2019 6:03 pm
I don’t know that making changes easier was the goal, so much as increasing the options.
Actually I agree with you - easy was never mentioned. It seems the concept of "modernization", a word TSP used to describe these changes, included flexibility but otherwise maintained paper-based wet-signature processes as being modern. Easier withdrawal wasn't a criteria considered in much depth, because seriously a spousal waiver and e-sig for participant is not one of my more Einsteinian thoughts. :) So it goes.
One cannot enlighten the unconscious.

delamer
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Re: Improving the TSP [for current participants]

Post by delamer » Sat Sep 07, 2019 6:49 pm

TimeRunner wrote:
Sat Sep 07, 2019 6:25 pm
delamer wrote:
Sat Sep 07, 2019 6:03 pm
I don’t know that making changes easier was the goal, so much as increasing the options.
Actually I agree with you - easy was never mentioned. It seems the concept of "modernization", a word TSP used to describe these changes, included flexibility but otherwise maintained paper-based wet-signature processes as being modern. Easier withdrawal wasn't a criteria considered in much depth, because seriously a spousal waiver and e-sig for participant is not one of my more Einsteinian thoughts. :) So it goes.
And I’d agree with you that “modernization” wasn’t the best choice.

Maybe it should have been “flexibility.”

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Jerry55
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Re: Improving the TSP [for current participants]

Post by Jerry55 » Sat Sep 07, 2019 8:03 pm

TimeRunner wrote:
Sat Sep 07, 2019 3:18 pm
To me, easy doesn't mean having to drag my spouse to the UPS store and pay $20 (2 x $10 in my location) to obtain notary signatures and then mail the form......
I'm just curious....most, if not all banks provide notary services for free for their clients. Mine does. Is that not possible where you are ???
Retired CSRS on 12/19/2012 @ age 57 w/39 years | Good Bye Tension, Hello Pension !!!

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Re: Improving the TSP [for current participants]

Post by LadyGeek » Sat Sep 07, 2019 8:20 pm

Are you sure an actual notary signature is needed and not a medallion signature?

See: Medallion Signature Guarantees: Preventing the Unauthorized Transfer of Securities | Investor.gov

Banks do medallion signatures (and notary signatures).
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TimeRunner
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Re: Improving the TSP [for current participants]

Post by TimeRunner » Sat Sep 07, 2019 9:24 pm

Based on previous TSP withdrawal form, NOTARY signatures of both participant and spouse are required if married. I do not have a local bank, but we could drive to Fidelity office about 25 minutes away and get it done for free. Still a small but irritating PITA.

Doesn't matter much in the big picture. Like MichDad, I'll just move all non-G fund TSP allocation to Fido TIRA and Roth, and do one withdrawal/year from TSP out of the G.

I'm glad TSP has now modernized to around 2009. :wink:
One cannot enlighten the unconscious.

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SquawkIdent
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Re: Improving the TSP [for current participants]

Post by SquawkIdent » Sat Sep 07, 2019 9:40 pm

TimeRunner wrote:
Sat Sep 07, 2019 9:24 pm
Based on previous TSP withdrawal form, NOTARY signatures of both participant and spouse are required if married. I do not have a local bank, but we could drive to Fidelity office about 25 minutes away and get it done for free. Still a small but irritating PITA.

Doesn't matter much in the big picture. Like MichDad, I'll just move all non-G fund TSP allocation to Fido TIRA and Roth, and do one withdrawal/year from TSP out of the G.

I'm glad TSP has now modernized to around 2009. :wink:
+1

That just happened... :sharebeer

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MichDad
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Re: Improving the TSP [for current participants]

Post by MichDad » Sun Sep 08, 2019 2:40 am

LadyGeek wrote:
Sat Sep 07, 2019 8:20 pm
Are you sure an actual notary signature is needed and not a medallion signature?

See: Medallion Signature Guarantees: Preventing the Unauthorized Transfer of Securities | Investor.gov

Banks do medallion signatures (and notary signatures).
The new rule specifically mentions the need for spousal consent to be notarized. There’s no mention of Medallion Signature Guarantees. In a previous message on this thread, I linked to the mock-up forms. Those forms required notarization of spousal signatures. Imagine situations where one spouse is living or working far from the other. Getting these new forms notarized can be admistratively burdensome.

MichDad

antiqueman
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Re: Improving the TSP [for current participants]

Post by antiqueman » Sun Sep 08, 2019 10:34 am

For those who are planning on moving assets from TSP are you still leaving your money in the G fund. My wife has only G fund and she is considering moving her money to an IRA given the rule on that a non spouse beneficiary would have to take all the money in one year, no conversion to Roth in G fund and a need to have any with drawl changes notarized. She could move it all except a small amount required to keep her options open to move money back in the G fund in the future if she desired to do so.


Thoughts?

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MichDad
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Re: Improving the TSP [for current participants]

Post by MichDad » Sun Sep 08, 2019 11:06 am

There are several good threads on this site that discuss the benefits of the G Fund. It’s my sense that most Bogleheads with access to the G Fund think very highly of it. Many, including me, use it as their only bond fund in their retirement portfolio.

I have more than enough in my G Fund account to fund my and my wife’s retirement until we’re both receiving our maximum Social Security benefits at age 70.

At a minimum, I recommend that your wife not close her TSP account. To keep the account open, she must maintain a minimum of $200.00. If she’s approaching that minimum, I recommend that it all be in the G Fund so there will be no chance that the account value can drop below $200.00.

MichDad

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Re: Improving the TSP [for current participants]

Post by Info_Hound » Sun Sep 08, 2019 11:18 am

antiqueman wrote:
Sun Sep 08, 2019 10:34 am
For those who are planning on moving assets from TSP are you still leaving your money in the G fund. My wife has only G fund and she is considering moving her money to an IRA given the rule on that a non spouse beneficiary would have to take all the money in one year, no conversion to Roth in G fund and a need to have any with drawl changes notarized. She could move it all except a small amount required to keep her options open to move money back in the G fund in the future if she desired to do so.


Thoughts?
I hold a survivor beneficiary TSP account. My designated beneficiary is non-spousal, my daughter. My plan is to keep my remaining TSP funds (have already withdrawn a large amount and placed them in a Fido IRA years ago) in the TSP until I am required to begin RMD withdrawals at 78 from the TSP. I currently use the G fund as ballast for my bond allocation. Your wife is correct regarding the non-spousal rules. I too plan to eventually move all of the funds out of the TSP in order to avoid this problem for my beneficiary. However I am taking advantage of another rule that is unique to the TSP for my own benefit.

There is fine print that is specific to the TSP about the age a survivor beneficiary will be required to take RMDs that is not the usual 70.5 years. By doing this I have reduced the amount of my RMDs subject to distribution (Fido account only) at age 70.5 years. However all funds (Fido & TSP) will be subject to RMDs beginning at age 78. At that point there is no advantage in keeping funds in the TSP and plan to move them to Fido for ease of access while I am here and later for my beneficiary. If my health makes a turn, I will move all of my TSP funds into my Fido accounts earlier. Last time I checked the survivor beneficiary accounts could not move money into their TSP account, so I see no advantage in keeping a pittance in the TSP account since the only action available is withdrawal vs. adding money.

The large sum I had previously withdrawn from the TSP has been the subject of ROTH conversions for a number of years. I have come close to moving almost all of the initial withdrawal (from TSP-->IRA-->ROTH), a couple of more conversions and it will be complete. I have found ROTHs are the best way to pass on retirement funds to a non-spousal beneficiary for many reasons that work for us.

Just wanted to provide some food for thought, TSP has a specific set of rules for survivor beneficiary accounts that are not as well known as the 'standard' rules for the original TSP account holder.

HeelaMonster
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Re: Improving the TSP [for current participants]

Post by HeelaMonster » Sun Sep 08, 2019 12:24 pm

TimeRunner wrote:
Wed Aug 07, 2019 1:01 pm
So much easier to transfer out non-G fund assets to Fido, Schwab, Vanguard, etc and trim TSP involvement.
MichDad wrote:
Sat Sep 07, 2019 12:44 pm
This, plus the inability to make in-plan Roth conversions, plus offers by several low cost brokerage firms to pay me thousands of dollars to move funds to them are the reasons why I’ll move all but my G Fund holdings out of the TSP next month.
Could someone speak a little more to this specific point... why the distinction between non-G fund and G fund holdings? Is the issue that G fund assets are harder to move, have more restrictions, etc.... or simply that you want to keep some money in G fund because you like it?

Thus far I have only been contributing and moving funds into TSP (from pre-federal employment), but soon approaching the time when I will be withdrawing. I still think it's a great setup, but am coming late to the realization that they make it much easier to move in than to take things inthe other direction! Thanks for the good discussion, and the efforts to influence options.

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Re: Improving the TSP [for current participants]

Post by stan1 » Sun Sep 08, 2019 1:46 pm

Could someone speak a little more to this specific point... why the distinction between non-G fund and G fund holdings? Is the issue that G fund assets are harder to move, have more restrictions, etc.... or simply that you want to keep some money in G fund because you like it?
The latter (people want to hold G Fund). You just do an interfund transfer to move money between funds in the TSP. Equivalents to C, S, I, and F Funds are available at Vanguard, Fidelity, Schwab, and iShares. G Fund is only available in TSP.

HeelaMonster
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Re: Improving the TSP [for current participants]

Post by HeelaMonster » Sun Sep 08, 2019 4:19 pm

stan1 wrote:
Sun Sep 08, 2019 1:46 pm
Could someone speak a little more to this specific point... why the distinction between non-G fund and G fund holdings? Is the issue that G fund assets are harder to move, have more restrictions, etc.... or simply that you want to keep some money in G fund because you like it?
The latter (people want to hold G Fund). You just do an interfund transfer to move money between funds in the TSP. Equivalents to C, S, I, and F Funds are available at Vanguard, Fidelity, Schwab, and iShares. G Fund is only available in TSP.
Thanks, stan. I figured that was the case, but the wording of certain comments made me wonder if I was missing something, in terms of mechanisms or logistics. My lifecycle funds have dialed down to where I now have 75% in G fund... so didn't want to miss out on anything big!

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Jerry55
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Re: Improving the TSP [for current participants]

Post by Jerry55 » Sun Sep 08, 2019 5:25 pm

HeelaMonster wrote:
Sun Sep 08, 2019 4:19 pm
My lifecycle funds have dialed down to where I now have 75% in G fund... so didn't want to miss out on anything big!
A Big Plus to the G fund is that it basically pays Medium term Bond rates like Treasuries, with no risk of "Technical Loss", and adjusts rates monthly, unlike Bond Funds where one can actually "Lose Money" per se. I may move funds into my Vanguard account, however, I see no reason to do so as of yet, as I'm still 6+ years away from RMD's.
Retired CSRS on 12/19/2012 @ age 57 w/39 years | Good Bye Tension, Hello Pension !!!

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