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TSP offers COVID-related loan options

In compliance with the CARES Act, the Thrift Savings Plan is now offering temporary loan options for TSP participants affected by COVID-19, with the maximum loan amount increased from $50,000 to $100,000. The portion of a federal employee’s available balance that can be borrowed has been raised from 50% to 100%.

To be eligible for these loan options, federal employees, spouse or dependents must have been diagnosed with the virus SARS-CoV-2 or coronavirus disease by a test approved by the Centers for Disease Control and Prevention, or else show that they are experiencing adverse financial consequences as a result of reduced work hours, the closing of a business owned or operated by the individual or the lack of available child care.

Additionally, TSP participants can suspend their obligation to make payments on their TSP loans for the rest of calendar year 2020. Those considering getting another loan in 2020 in addition to placing their current loan on suspension must request the loan first so that the suspension can be applied to both loans.

The deadline for applying is Sept. 18, 2020. More information is available here.

TSP also made several other announcements:

  • Payments made to TSP by check may take longer to process.
  • The rollover period for withdrawals has been extended to July 15.
  • The requirement for notarized signatures on withdrawal or loan forms has been temporarily suspended.
  • Required minimum distributions rules have been temporarily changed.
  • With the postal service temporarily suspending service to some nations, mail to those living in those countries will be undeliverable.

Additionally, TSP advised participants to make sure they have online access to My Account so they can conduct online transactions and send secure messages.

More details on these changes is available here.

 

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