TSP Transition Period: Access to TSP Accounts Will Be Down for Weeks

Starting May 16th, TSP online tools and access will start shutting off as switch is made to more modern system.

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The Thrift Savings Plan (TSP) will be experiencing a series of enhancements this upcoming summer- from a new mobile app to enhanced web security to a mutual fund window that will expand the plan’s investment opportunities. For the changes to be implemented, however, there will first be a blackout period that will restrict access to TSP accounts, including more than two weeks where withdrawals will be suspended and at least one week in which no investment transactions- including interfund transfers- will be possible. Contributions from paychecks, periodic withdrawals, and the investments themselves won’t be affected, but account owners will not be able to adjust their investments, edit their account or payment information, or touch their retirement money until the transition is complete the “first week of June.”

Deadlines

The main two dates to remember regarding this transition are May 16^th and May 26^th. May 16^th is the last day to submit a withdrawal, rollover, or transfer request (including Roth transfers). The 26^th will be the last day to complete investment transactions. For messages and correspondence, May 16^th is the last day to make account-specific inquiries and the following day, the 17^th, is the last day to submit written correspondence. From the 17^th to the 26^th, messages will be ‘read-only’ so TSP account holders won’t be able to respond to any messages until after the transition is complete. After the 26^th, messages, along with all of “My Account” and “Thriftline” on TSP.gov, will be unavailable until the new system is in place. For those who don’t, or for whatever reason can’t, use the online tools, the last day to submit paper forms is May 16^th. However, the last day to request paper documents is April 29^th with one exception, the TSP-20 (paper loan application) has to be requested by April 8^th and submitted by April 21^st.

Here is a list of everything that will be impacted on both the 16^th and 26^th of May (if a time is not specified, then the cutoff will be 11:59 PM Eastern time):

TSP Transition

The transitionary period will end “in the first week of June,” or at least that is when TSP “expects” to have everything completed. Hopefully this means by June 7^th, at the latest, everything should be accessible on the new TSP online platform. This means there could be 22 days where federal employees and retirees won’t be able to touch the funds in their TSP, and 12 days where they won’t be able to adjust their TSP investment allocations. The TSP does correctly point out that TSP account owners shouldn’t “make adjustments to their long-term strategy only after careful consideration,” but to restrict access in this manner, for this relatively long timeframe, is unheard of in comparable retirement plans in the private sector. Should the transition go smoothly, and the market doesn’t experience sharp increases or drops during the blackout period, most TSP accounts should be fine by maintaining their long-term strategy, but it is easy to imagine how this could become a headache for the TSP as approximately 3000 TSP investors are known as “frequent traders,” making at least one fund transfer per month, and that’s when the markets are considerably calm.

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Until Next Time,

The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers  and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **

TSP Accounts Will Be Down