TOPICS
TOPICS
Hurricane may delay married TSP participants' loans, withdrawals
Hurricane Katrina has delayed withdrawals and loans for many married TSP participants, among others, because of damage to the National Finance Center in New Orleans.
In a large number of cases, such requests are required to go through the NFC for processing by paper. Many married TSP participants need their spouse's signature to process a loan or withdrawal. Rollovers from IRAs also require paper processing, and therefore have been halted.
TSP spokesman Tom Trabucco said that the agency worked "with NFC and the Postal Service to have mail for the NFC forwarded for processing" to another location. Paper forms can now be sent to the New Orleans address listed, and will be forwarded to an "alternative processing site," according to the TSP Web site. As a result, TSP said "there may be a delay in processing."
The Web site did not say how paper forms that were sent to the NFC before the mail forwarding process was set up will be handled. Trabucco said he did not have a recommendation on whether to re-send forms because he did not have all the information about how far back mail would be forwarded from.
Officials from the Agriculture Department, which runs the NFC, do not have a target date for re-opening the finance center.
Loans and withdrawal requests that require signatures or other additional documentation "can be initiated online, but cannot be submitted and processed online," according to the TSP Web site.
Loans and withdrawals for married participants in the Federal Employee Retirement System require a spouse's consent, indicated by signature, and therefore cannot be completed online.
Loans and withdrawals for married participants in the Civil Service Retirement System, which does not rely on TSP contributions as heavily as FERS, do not require spousal consent. The law, however, does require spousal notification, so CSRS employees cannot complete loan requests online if they are not aware of the location of their spouse for such notification.
Employees in both systems can circumvent the spousal requirements if they already have a hard-copy "Exception to Spousal Requirement" form signed by the spouse or documentation that the whereabouts of the spouse are unknown. Also, if an account balance is less than $3,500, married employees may take out loans or complete withdrawals without a spouse's signature or notification.
In addition to the spousal requirements, withdrawal requests cannot be completed online if:
- You are no longer a federal employee and you are requesting a joint life annuity, which is an annuity that is paid to you and another beneficiary while you are both alive. When either of you dies, an annuity will be paid to the survivor for the rest of his or her life.
- You are currently employed and are requesting a financial hardship withdrawal.
- You would like to transfer all or a portion of your account to a traditional IRA or eligible employer plan.
For some employees, there is not a lot of time to wait for the paper processes to be restored.
Scott Hollis is an employee in the Agriculture Department's National Agricultural Statistics Service who is building a new house with his wife. He said he needs a loan from his TSP savings to cover some of his building costs until a home equity loan kicks in, in about three to four weeks. He is having difficulty processing his loan in the wake of the hurricane, because his paperwork is required to be routed through the NFC.
Rollovers from private IRA or 401(k) funds into the TSP cannot be completed online because they require authorization from the administrator of an employee's former IRA in the form of a hard signature. Participants who get their IRA or 401(k) plans to make a distribution directly to them, as opposed to a direct transfer into the TSP, must deposit all or part of that distribution into the TSP within 60 days. TSP administrators did not say whether or not they would extend that deadline in wake of the storm.
Additionally, requests for annuities for eligible employees separating from federal service must be sent through paper forms.
Interfund transfers to change contribution allocations between the six existing TSP funds, personal identification number (PIN) requests and address changes all can be completed online. The TSP's Cumberland, Md., call center has been handling the volume of calls usually routed through the NFC; Thursday, a new call center in Clintwood, Va., is opening up, unrelated to the hurricane, and will take over the NFC's previous call duties.
COMMENTS
- I think TSPer has a very good point to say there should have been a good backup so retirees would not have to go without checks. Not even a government agency can justify that regardless of the degree of disaster. Will someone tell me why the Dept of Agriculture has a retirement savings and payment operation for the government? Don't we spend enough on Agricultural subsidies to farmers? taxpayer Posted September 7, 2005 8:12 AM
- For those who think only the coastline is vulnerable. Have you ever dealt with a tornado? Don't think they don't exist. Natural disasters exist EVERYWHERE. Never put all of your resources in one place. ALWAYS have a backup. Sadly, our decisionmakers haven't learned that yet. IT Specialist Field trains you the hard way after many years. If just with those who are in the decisionmaking arena could realize reality. GovExec.com reader Posted September 2, 2005 11:34 PM
- The Thrift Investment Board has already gone to a private company in Cumberland, Md., and another in Virginia. So ya'll (oops sorry -'you guys') you got what you wanted - non-Federal employees answering complex retirement plan questions, with access to your social security numbers. I guess the TSP Service Office suddenly was not good after 18 years. Riiiiite. We all know what it was about. Greed. People have the absolute and unmitigated GALL to say that Louisiana has had corrupt politics. Um, ok. You have the incredible nerve to say that the processor should be in an area not subject to disasters. Huhhhhh? The National Finance Center has been around for almost 35 years!! The last hurricane to make a driect hit on N.O. was Betsy in 1965 !! And er, last time I checked, Virginia and Maryland get hit by hurricanes too !!!!!!!!!!!!!!!!! Not to mention other natural phenomenon that DON'T HAPPEN IN NEW ORLEANS, such as: blizzards, earthquakes, tornadoes, and flooding! Also, Mr. Hastert from Illinois is the 'stupid' one. Bulldoze New Orleans???!!! No Federal disaster relief for New Orleans????!! I'd bet my left butt cheek he'd change his mind if CHICAGO or ST LOUIS, or PHILADELPHIA were under water, had thousands dead, and had the poor and indigent from inner city housing forced to slowly die like animals !!!! I'll bet he's never set one toenail in New Orleans. It happens to be the largest and most important port in North America, that's all. Grains, produce, coffee, metal for autos, and just about anything else you can think of HAS to come up the Mississippi River to the Heartland and rest of this country. Comprende ???? GovExec.com reader Posted September 2, 2005 12:38 PM
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