Feds Won’t be Able To Escape Their TSP Debt, Even By Leaving Government

Andrey_Popov/Shutterstock.com

The agency that runs the Thrift Savings Plan will soon have the authority to collect its debts even after a delinquent federal employee leaves public service for private-sector employment.

A final rule issued by the Federal Retirement Thrift Investment Board will allow the agency -- starting May 27 -- to require private-sector employers to deduct up to 15 percent of an employee’s paycheck to pay back debts owed to the agency. The wage garnishment can continue until the debt is paid back in full.

The rule, which actually codifies a law passed in 1996, requires FRTIB to provide the employee 30 days’ notice before arranging for paycheck deductions. The employee is entitled to then set up a payment plan or call for a hearing to challenge the debt.

When employees are fired from federal service, FRTIB must wait until they maintain a job for 12 consecutive months before garnishing wages. The rule prohibits the employees’ new bosses from taking any disciplinary action against their worker for having the debt.

The rule does not apply to debt from employees who have taken out loans against their TSP accounts. Rather, it applies to debt from over-payments that TSP accidentally gave participants. 

The rule will not be subject to public comment, as regulations typically are, as it parallels the authority given to other agencies. 

CORRECTION: This rule will not affect TSP loans. Instead, the plan's governing agency can garnish wages for accidental overpayments.

(Image via Andrey_Popov/Shutterstock.com)

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.