Losing Money in the TSP Wasn't My Fault

By on July 27, 2015 in Q&A with 12 Comments

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Q: I retired on 11/30/2013. I was a FERS retiree. I applied for a Full TSP withdrawal in December 2014. The TSP sent a letter dated 12/23/2014, and I received it on 12/29/2014, saying I was unable to take a full withdrawal because my records showed I was still an employee. I had already taken an age 59 1/2 withdrawal.

I called my agency to find out what happened. My agency coded my retirement as a “T” in the system which meant terminate, which was correct, but the TSP folks have me in their system as an “A” which means an active employee (still working). I found out that HR retired me on 11/30 on my SF50 but did not finish their processing everything until 1/2014, so their was a delay in my accrued leave and my 1st check.

My question: as of 12/12 when I got my letter of denial on my full withdrawal my TSP balance was $144,804.48 as of this date my balance is $143,699.61 and HR and TSP are working on the problem now, which is still not solved. Who takes the loss in funds due to the personnel error? It wasn’t my fault.

A: I had never run into a situation like yours, so I ran it by two of my most experienced instructors. One of them has been doing retirement seminars since the 60’s and the other is recently retired. Neither of them had ever come across anything like this either. The information in the next paragraph is not to be viewed as dispositive, however, it is a position that you should take in dealing with the TSP. This is from the instructor who retired most recently and has the most experience in dealing with TSP issues.

Since the error was not in the withdrawal application itself, you should advocate that the TSP process the withdrawal with an “as of” date of the original application.

John Grobe’s latest book, The Answer Book on Your Federal Employee Benefits, has just been released by LRP Publications. The book is written in an easy to understand question and answer format and covers all areas of federal benefits from the perspective of an employee at various stages of their career. Order your copy at shoplrp.com.

© 2016 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

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About the Author

John Grobe is President of Federal Career Experts, a consulting firm that specializes in federal retirement and career transition issues. He is also affiliated with TSP Safety Net. John retired from federal service after 25 years of progressively more responsible human resources positions. He is the author of Understanding the Federal Retirement Systems and Career Transition: A Guide for Federal Employees, both published by the Federal Management Institute. Federal Career Experts provides pre-retirement seminars for a wide variety of federal agencies.

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