For those who work for the federal government, the term Thrift Savings Plan (or TSP) is likely very familiar. The TSP acts as a retirement savings plan for all federal civilian employees and even some in the military. A TSP is what’s known as a defined contribution plan and functions similar to a 401(k) plan.
Those who either have a TSP of their own or are married to a spouse who works for the government might wonder how the retirement vehicles are handled during a divorce. It’s important to know from the start that a TSP is capable of division in a divorce. It can even be garnished to fulfill the holder’s past-due alimony or child support obligations.
The spouse of the person with a TSP can receive some general information about the retirement account, but not many critical details. Upon written request, the government will provide a spouse or a spouse’s attorney quest with the account balance, any loan balances and statements. However, the TSP administrator will not reveal personal identifying information connected with the account.
A TSP can be split by providing the administrator with a court order that complies with federal regulations. The TSP provides a sample of such an order that contains all the necessary language, a step that makes drafting the order easier. Once the administrator receives a valid order they will pay out the amount contained in the order to the designated party.
If you are married to someone with a TSP, it might be beneficial to have your attorney freeze the account with a court order. Such a step will ensure that your spouse cannot withdraw money from the account or make any loans against its value, thus reducing your share of the TSP.