avings

lan

hrift

Court

Orders

January 2011

and

Powers of

Attorney
Table of Contents

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Understanding the TSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Dividing a TSP Account in an Action for

. . Divorce, Annulment, or Legal Separation. . . . . . . . . . . . . 3

Garnishing a TSP Account for a Participant’s

. . Alimony or Child Support Debt. . . . . . . . . . . . . . . . . . . . . 8

How the Amount of an Entitlement Is Calculated. . . . . . . . . 11

Method, Timing, and Tax Treatment of Payments . . . . . . . . . 13

Special Rules for Uniformed Services Accounts. . . . . . . . . . . 17

Special Rules for Beneficiary Participant Accounts. . . . . . . . 18

Tips for Avoiding the Delay or Denial of Awards. . . . . . . . . . . 19

Giving a Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Court Appointments of Guardians or Conservators. . . . . . . . 22

Sample Language for a Qualifying

. . Retirement Benefits Court Order. . . . . . . . . . . . . . . . . . . 23

Sample Language for a Qualifying Legal Process. . . . . . . . . . 25

Sample Language for Granting a Power of Attorney . . . . . . . 26
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Understanding the TSP

The Thrift Savings Plan (TSP) is a retirement savings and investment

plan for Federal civilian employees and members of the uniformed

services. It is a defined contribution plan that offers the same types of

savings and tax benefits that many private corporations offer their employees under “401(k)” plans.

For most civilian Federal employees hired after 1983, the TSP is one

part of a three-part retirement system that also includes Social Security

and the Federal Employees’ Retirement System (FERS) Basic Annuity.

For civilian employees hired before 1984 who did not switch to FERS, the

TSP supplements the Civil Service Retirement System (CSRS) annuity.

The FERS and CSRS annuity programs are administered by the Office of

Personnel Management (OPM).Court orders related to these benefits

should be directed to OPM.

For members of the uniformed services, the TSP supplements military

retired pay.

The TSP maintains separate accounts for civilian, uniformed services, 

and beneficiary participants. Thus, if a participant has more than one

type of TSP account, court orders and legal processes must identify each

Introduction

This booklet explains how a TSP account can be divided in an action for

divorce, annulment, or legal separation, or garnished to satisfy a participant’s past-due alimony or child support obligations. It also identifies the types of information the TSP expects to find in documents that

grant a power of attorney (POA) — or in a guardianship or conservatorship order — that empowers someone other than a TSP participant to

transact business with the TSP.

Please note that the TSP will not review drafts of legal documents.

Pages 23-26 of this booklet provide sample language for use in drafting

court orders and legal processes, and a copy of the TSP Special Power

of Attorney form. Using the sample language will help to expedite the

TSP’s processing of these documents.

Points of contact are provided on the inside back cover.
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account separately, even if more than one account is addressed in a single

court order or legal process. The terms “civilian,” “uniformed services,”

and/or “beneficiary participant” must be used to identify the appropriate

account. If a participant has multiple beneficiary participant accounts, the

court order or legal process must specify the last 4 digits of the appropriate

account number(s). Pages 17 and 18 explain the special rules that apply to

uniformed services accounts and beneficiary participant accounts.

Beneficiary participant accounts are established for the spouse beneficiaries of deceased TSP participants. Court orders may be processed

against beneficiary participant accounts, though special rules apply.

Court-ordered payments made from a beneficiary participant account

may not be transferred or rolled over. Consequently, if a beneficiary participant remarries, his or her new spouse will not be able to transfer or

roll over any court-ordered payments made from the beneficiary participant’s account, and the payment will be fully taxable in the year issued.

Certain TSP account information is available to spouses. To assist

a spouse in developing a valid court order and protecting his or her

rights, the TSP will provide the spouse (and the spouse’s attorney),

upon written request, with TSP account information, such as:

• the participant’s (or beneficiary participant's) account balance;

• the participant’s outstanding loan balance, if any; and

• annual or quarterly statements.

However, the TSP will not provide personal information, such as the

participant’s address, date of birth, or Social Security number (SSN).

Requests for account information must be in writing and directed to 

the TSP Legal Processing Unit. (See the inside back cover for the address

or you can also fax the request to 1-866-817-5023.) Requests should:

• provide the participant’s (or beneficiary participant's) name and

TSP account number (or SSN);

• identify the individual requesting the information and describe

his or her relationship to the participant;

• describe the information needed; and

• state the purpose for which the information is being requested.

The participant’s (or beneficiary participant's) spouse and his or her attorney may obtain an account balance and TSP transaction history by submitting a written request. (See 5 U.S.C. § 552a.) A subpoena is not required. Id.
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Dividing a TSP Account in an Action for 

Divorce, Annulment, or Legal Separation

A TSP account can be divided by means of:

• a court decree of divorce, annulment, or legal separation; or

• a court order or court-approved property settlement agreement

incident to such a decree.

A court order may be issued at any stage of a divorce, annulment, or legal separation proceeding. The TSP calls such a document a “retirement

benefits court order” (court order).

	 To be honored by the TSP, a court order must meet the

requirements found in 5 United States Code (U.S.C.) §§

8435(c) and 8467, and 5 Code of Federal Regulations

(C.F.R.) part 1653, subpart A.

Note: The participant is the Federal civilian employee, uniformed services member, or beneficiary participant who owns the TSP account that

is subject to division. The payee is the individual or organization who

is the intended recipient of the court-ordered disbursement.

The TSP will review only a complete copy of a court order. To be

complete, a court order must contain all pages and attachments. It also

must provide (or be accompanied by a document that provides):

• the participant’s TSP account number or Social Security number(SSN);

• the name and mailing address of each payee;

• if the current or former spouse of the participant is a payee, the

SSN of the spouse-payee. (If the court order requires the payment to be mailed in care of a third party, it must also provide

the state of legal residence of the spouse-payee); and

• if the court order is written in a language other than English, a

certified English language translation of the entire court order.

The rules for Qualified Domestic Relations Orders (QDROs) that apply to private sector retirement plans do not apply to the TSP. The TSP
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is not covered by the Employee Retirement Income Security Act of 1974

(ERISA), which governs private sector plans. Therefore, a QDRO, the court

order that is used to divide a private sector plan, may not be valid with respect to the TSP. The TSP will evaluate such an order under its own rules.

A qualifying retirement benefits court order for the TSP must meet 

four basic requirements set forth in 5 C.F.R. § 1653.2:

• It must be issued by a court in any of the 50 United States, the

District of Columbia, the Commonwealth of Puerto Rico, Guam,

the Northern Mariana Islands, or the Virgin Islands, or by any

Indian court as defined by 25 U.S.C. § 1301(3).

• It must expressly relate to the TSP. This means that it must specifically contain the name “Thrift Savings Plan.” Terms such as

“all retirement benefits,” “Government benefits,” “Federal retirement benefits,” “Thrift Savings,” or “Thrift Savings Account” are

not adequate.

• If the court order requires a payment from a TSP account, it

must clearly describe the payee’s entitlement. It can only award

a specified dollar amount or a fraction or a percentage of the

participant’s account as of a specific past or current date.

• A court order can require a payment only to the participant’s

current or former spouse or to the participant’s dependents.

Furthermore, the TSP will not honor a court order asking for a

single payment to be made jointly (for example, $10,000 to be

divided among the former spouse and dependents). The court

order must separately specify the dollar amount, percentage, or

fraction of the award made to each person.

The TSP will not honor a court order that requires payment in the 

future. (This practice is more generally associated with court orders affecting defined benefits or pension accounts.)

A court order can be used to prevent a participant from withdrawing 

his or her TSP account during a divorce action. As soon as possible

after receiving a court order that is issued in an action for divorce, annulment, or legal separation, the TSP will “freeze” a participant’s account if:

• the court order names the “Thrift Savings Plan” and provides

that the participant may not obtain a TSP loan or withdrawal; or

• the court order purports to divide a participant’s TSP account.
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Once an account is frozen, no new loans or withdrawals are permitted from the account until the action is resolved. All other account

activity will be permitted, including investment decisions and payments

on existing loans.

	 The TSP will not freeze an account in response to anything

other than the court orders we have described here.

The TSP processes a court order in four steps:

Step 1. As soon as possible after the TSP receives a document that

purports to be a qualifying retirement benefits court order, the participant's account will be frozen.

Step 2. The TSP will then evaluate whether the court order is complete.

If the court order is not complete, the TSP will request that the parties

submit a complete copy of the order. If a complete copy is not received

within 30 days of the date of that notification, the participant’s TSP account will be unfrozen, and no further action based on that court order

will be taken.

Step 3. When the TSP receives a complete court order, the TSP will

freeze (or retain the freeze on) the participant’s account and evaluate

the court order to determine whether it is a qualifying retirement benefits court order and how the account should be divided.

Step 4. The TSP will mail a decision letter to the participant and provide a copy to all of the other parties having a legal interest in the action. The decision letter will describe the effect the order will have on

the participant’s account and will state when the freeze will be removed

from the account. If the court order is not qualifying, the decision letter will explain why. If the order requires a payment, the letter will also

explain how the payment amount will be calculated and when the payment will be made.

The party who must pay Federal income tax on the distribution will 

receive tax reporting and withholding information from the TSP. If

the payee is the current or former spouse of the participant, the payee

will also receive information about the option to transfer the payment

to a traditional IRA, an eligible employer plan, or a Roth IRA. The transfer option does not apply to court-ordered payments made from beneficiary participant accounts.
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The freeze will be removed from the participant’s TSP account as follows:

• If the account was frozen upon receipt of an incomplete court order, the freeze will be removed if a complete copy of the order

is not received within 30 days of the TSP’s written request for a

complete copy.

• If the account was frozen in response to a court order issued to

preserve the status quo (i.e., a freeze order), the freeze will be

removed when the TSP receives a court order that removes the

freeze, or when the TSP receives a court order that purports to

require a payment from the TSP, as described below.

• If the account was frozen in response to an order that purports to

require a payment from the TSP, or in response to a freeze order,

the freeze will be removed as follows:

– If the court order requires a payment from the TSP, the freeze

will be removed after the payment is made.

– If the court order is not qualifying, the account will remain

frozen for 45 days from the date on which the TSP informs

the parties in writing that the order does not qualify. The

freeze will be removed sooner if the TSP receives a written

agreement — signed by both of the parties involved in the

divorce proceeding — that it may be removed.

For death benefit purposes, your designated beneficiary will receive 

your account even if you divorce. If you filed Form TSP-3, Designation

of Beneficiary, the law requires us to pay your designated beneficiary under all circumstances. If you designated your spouse as your beneficiary,

your TSP account must be paid to the spouse designated on the TSP's

Designation of Beneficiary form, even if you are separated or divorced from that

spouse or have remarried. This is true even if the spouse you designated gave

up all rights to your TSP account. Consequently, if you are going through

a divorce and have designated the spouse you are divorcing as your TSP

beneficiary, you may want to file a new Designation of Beneficiary form

that cancels or changes your current beneficiary designation. See Ridgway v. Ridgway, 454 U.S. 46 (1981). (A spouse was designated by name

on a Federal designation of beneficiary form. The participant did not

change the election following a subsequent divorce, and the ex-spouse

was entitled to all of the proceeds.) See also Brewer v. Zawrotny, 978 F.2d

1204 (10th Cir. 1992), cert. denied 507 U.S. 974 (1993). (Oklahoma statute stated that, by operation of law, divorce causes an ex-spouse to
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lose all entitlement to life insurance proceeds. Court of Appeals held

Oklahoma statute ineffective to change ex-spouse designation for a

Federal benefit.)

If you have not filed a Designation of Beneficiary form, we are required

to pay your TSP death benefit in accordance with the following order of

precedence:

1. To your widow or widower.

2. If none, to your child or children equally, and descendants of

deceased children by representation.

3. If none, to your parents equally or to the surviving parent.

4. If none, to the appointed executor or administrator of your

estate.

5. If none, to your next of kin who is entitled to your estate under the

laws of the state in which you resided at the time of your death.

Under this order of precedence, even if you are separated from your

spouse, as long as you are married, your spouse will be paid your TSP

account upon your death. Once you are divorced, your former spouse

will no longer receive your account under this order of precedence. If

you want to designate someone other than your spouse to receive your

TSP account upon your death, you must file the Designation of Beneficiary form with the Thrift Savings Plan.

For more information about the TSP Designation of Beneficiary form

and death benefits, please read the booklet Death Benefits: Information for

Participants and Beneficiaries or Your TSP Account: A Guide for Beneficiary Participants.
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Garnishing a TSP Account

for a Participant’s Alimony

or Child Support Debt

A TSP account can be garnished with a writ, order, summons, or

other similar document in the nature of a garnishment that is brought

to enforce a participant’s child support or alimony obligation. The TSP

calls such a document a “legal process.” 

	 To be honored by the TSP, a legal process must meet the

requirements found at 5 U.S.C. § 8437(e)(3) and 5 C.F.R.

part 1653, subpart B.

The TSP will only review a complete copy of a legal process. To be

complete, it must contain all pages and attachments and provide (or be

accompanied by a document that provides):

• the participant’s TSP account number or Social Security number

(SSN);

• the name and mailing address of each payee;

• if the current or former spouse of the participant is a payee, the

SSN of the spouse-payee. (If the court order requires the payment to be mailed in care of a third party, it must also provide

the state of legal residence of the spouse-payee); and

• if the legal process is written in a language other than English, a

certified English language translation of the entire legal process.

A legal process must meet three requirements:

According to 5 C.F.R. § 1653.12:

• It must be issued by a court or administrative agency of competent jurisdiction in any of the 50 United States, the District of

Columbia, or a territory or possession of the United States, by a

court in a foreign country with which the United States has entered into an agreement to honor such processes, or by an official, pursuant to an order of such a court or administrative agency

of competent jurisdiction or pursuant to State or local law.
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• It must expressly relate to the TSP. This means that it must

specifically contain the name “Thrift Savings Plan.” Terms such

as “all retirement benefits,” “Government benefits,” “Federal retirement benefits,” “Thrift Savings,” or “Thrift Savings Account”

are not adequate.

• It must either expressly require the payment of a stated dollar

amount from the participant’s TSP account to satisfy his or her

child support or alimony debt, or it must require the TSP to freeze

the participant’s account pending receipt of an order to make

such a payment from the account. The TSP will not honor a legal

process that awards a percentage or fraction of an account.

A participant who is liable for alimony or child support can be 

prevented from withdrawing his or her TSP account. The participant’s account will be frozen as soon as possible after the TSP

receives a legal process that:

• expressly names the “Thrift Savings Plan,” and

• either requires a payment from the TSP to satisfy a child support or

alimony debt or requires the TSP to withhold a portion of the participant’s account in anticipation of an order to make such a payment.

The TSP takes action on a legal process in four steps:

Step 1. As soon as possible after the TSP receives a document that purports to be a qualifying legal process, the participant’s account will be

“frozen.”

Step 2. The TSP will then evaluate whether the legal process is complete. If it is not complete, the TSP will remove the freeze if a complete

copy is not received within 30 days of the TSP’s written request for one.

Step 3. When the TSP receives a complete legal process, the TSP will

evaluate it to determine whether it is a qualifying legal process.

Step 4. The TSP will mail a decision letter to the participant and provide a copy to all other parties having an interest in the action. The

decision letter will describe the effect the legal process will have on the

participant’s account and state when the freeze will be removed from

the account. If the legal process is not qualifying, the decision letter will

explain why. If the legal process is qualifying and requires a payment

from the TSP, the letter will also explain how the payment amount will

be calculated and when the payment will be made.
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The party who must pay Federal income tax on the distribution will 

receive tax reporting and withholding information. If the payee is the

current or former spouse of the participant, the payee will also receive

information about the option to transfer the payment to a traditional

IRA, an eligible employer plan, or a Roth IRA. Note: The transfer option

does not apply to court-ordered payments made from beneficiary participant accounts.

	 If an order names a spouse or former spouse as a payee, any

portion of the award distributed as a cash payment will be

treated as taxable income to the payee. If the intent of the

parties is to award a payment for child support arrears that is

taxable to the participant, the payee must be identified in the

court order as the dependent child or as a state child support

enforcement agency.

The freeze will be removed as explained below.

If the participant’s account was frozen upon the TSP’s receipt of a complete document purporting to be a qualifying legal process:

• If the legal process requires a payment from the TSP, the freeze

will be removed after the payment is made.

• If the legal process does not qualify to require a payment from the

TSP, the freeze will be removed as soon as possible after the 

TSP informs the parties in writing that the document is not a

qualifying legal process.

Some states allow a two-step garnishment process. The first step consists of an order to withhold, which freezes the debtor’s assets. The second step consists of an order to deliver, which requires the recipient to

pay a specified amount of the debtor’s assets to a third party.

If the account was frozen upon receipt of an order to withhold, the

freeze will be removed:

• upon receipt of an order removing the freeze;

• after payment pursuant to a qualifying order to deliver; or

• as soon as possible after the TSP informs the parties in writing

that the document is not a qualifying legal process.
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How the Amount of an 

Entitlement Is Calculated 

For a retirement benefits court order:

If a court order awards a percentage or fraction of a TSP account as of a

specific day, the payee’s entitlement is determined based on that day’s

account balance.

If a court order awards a percentage or fraction of a TSP account and

does not specify a date for calculating the award, the payee’s entitlement

is determined based on the effective date of the order.

If a court order awards a fixed dollar amount, the payee’s entitlement is

that dollar amount.

If a court order describes a payee’s entitlement as a fixed dollar amount

and as a percentage or fraction of the account, the payee’s entitlement

is the specified dollar amount, even if the percentage or fraction, when

applied against the account balance, yields a different amount.

A court order cannot require the TSP to pay more than the participant’s vested account balance. Therefore, if the payee’s entitlement

exceeds the participant’s vested account balance when the TSP pays the

award, the TSP will only pay the vested account balance.

For a legal process:

Because a legal process can only award a specific dollar amount, the

payee’s entitlement is determined based on the participant’s vested account balance at the time of payment. That is, the TSP will pay the lesser

of the specified dollar amount or the participant’s vested account balance.

Effect of a Loan

A TSP loan may or may not affect an account balance for purposes 

of calculating a court-ordered award. For purposes of computing

a payee’s entitlement, the dollar amount of an outstanding TSP loan

is included in the account balance, unless the court order specifically

provides otherwise. Therefore, a court order need not mention a TSP
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loan unless the outstanding loan amount should be excluded from the

award calculation.

For example: Assuming a participant has a $10,000 account balance

and also has a $5,000 outstanding loan, his or her account balance for

the purpose of computing a court order payee’s entitlement would be

$15,000. This is because funds borrowed by a participant are not considered to be withdrawn from his or her account and are expected to be

paid back to the account by the participant.

Interest and Earnings

For the purpose of a retirement benefits court order, the term “earnings” includes earnings and losses.

Neither interest nor earnings will be paid on the amount of the entitlement unless the court order specifically provides for them. In these

cases, the TSP will calculate earnings based on the type of TSP funds

the participant was invested in, the number of shares the participant

had in each fund, and the share price of those TSP funds up to two days

prior to disbursement. Note: Interfund transfers are not considered

during this calculation.

A court order that requires interest or earnings be computed at a rate

other than the formula described above can only require the payment

of a stated annual percentage rate or the addition of a per diem dollar

amount to the payee’s entitlement. The order cannot reference a TSP

fund as an interest or earnings rate.
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Method, Timing, and Tax Treatment

of Payments

Method of Payment

TSP payments are made by United States Treasury check directly to

the payee or by direct deposit via electronic funds transfer (EFT) to the

payee’s financial institution. (However, EFT cannot be used to transfer a

payment or a portion of a payment to an IRA or eligible employer plan.)

	 The TSP will make only one disbursement per payee under

a court order or legal process. The TSP will not make a series

of payments even if the order or process requires it, or even if

the participant’s account balance is insufficient at the time of

payment for the TSP to satisfy the payee’s entire entitlement.

The TSP will honor a second order, however.

The payment will be made pro rata from all TSP investments in 

which the participant is invested:

• based on the balance in each fund on the date payment is made; and

• from all contribution sources (i.e., from employee contributions

and employing agency or service contributions, if applicable).

All or part of a payment to a current or former spouse under a court

order or legal process may be transferred to a traditional IRA, an eligible

employer plan, or a Roth IRA.* Note: The transfer option does not apply

to court-ordered payments made from beneficiary participant accounts. 

Current or former spouses asking the TSP to transfer the payment to an

IRA, an eligible employer plan, or a Roth IRA must use the proper TSP

*   The terms “traditional IRA,” “eligible employer plan,” and “Roth IRA” are defined in the TSP

tax notice “Tax Treatment of Thrift Savings Plan Payments Made Under Qualifying Orders,”

which explains the Federal income tax treatment of court-ordered awards. The tax notice,

which also describes certain rules and restrictions associated with transferring funds to a

Roth IRA, will be provided to the payee with the TSP decision letter. It is also available from

the TSP website at www.tsp.gov, from the participant’s personnel or payroll office, or from

the TSP. (Before transferring a payment to a Roth IRA, the participant may also want to seek

the counsel of a tax advisor.)
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forms to request such a transfer. These forms are provided to the participant’s current or former spouse with the TSP decision letter. The 

TSP will not accept transfer forms developed by financial institutions.

However, the financial institution to which the payment is being transferred must complete the relevant section of the appropriate TSP form.

The TSP will not honor payment information, financial institution information, or payment elections submitted in the form of a cover letter or

embedded within a court order document. The information may only be

submitted using the proper TSP form.

The TSP will not honor forms received on or after the payment date

(see “Timing” below). Failure to submit forms on time may result in tax

withholding, and the TSP will not reverse properly disbursed payments.

The TSP is an eligible employer plan. Therefore, if the current or former

spouse of the participant has a TSP account, he or she can transfer all

or part of the payment to that account. This transfer is not automatic.

The current or former spouse must complete and submit the proper TSP

form to transfer or roll over the disbursement into his or her TSP account.

Note: The transfer option does not apply to court-ordered payments

made from beneficiary participant accounts.

Sometimes a court order may instruct the TSP to mail a payment to a 

third-party addressee, such as the payee’s attorney. However, in such

cases, the current or former spouse of a participant still has the right to

ask the TSP to transfer a payment to a traditional IRA, an eligible employer plan, or a Roth IRA. Therefore, even if a court order requires the TSP to

mail a current or former spouse’s payment to a third-party addressee, the

TSP will honor the spouse’s request to transfer the payment.

	 A payment that is properly made cannot be returned to the

TSP. (See 5 C.F.R. § 1653.5(l).)

Timing

The TSP will generally disburse a payment 60 days after it issues the

decision letter that describes the effect the court order or legal process

will have on the participant’s account. If the payee is the current or former spouse of the participant, the payee can ask to have the payment

disbursed sooner by:

• waiving the tax notification period;
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• making a Federal income tax withholding election; or

• in the case of a payment to a spouse or former spouse that is not

coming from a beneficiary participant account, requesting that

the TSP transfer the payment to a traditional IRA, an eligible employer plan, or a Roth IRA.

If the payee is someone other than the current or former spouse of the

participant or if the payment is coming from a beneficiary participant

account, the participant can request payment sooner than 60 days by

waiving the tax notification period or making a withholding election.

However, in no case will payment be made earlier than 31 days after the

date of the TSP decision letter.

Disputing a Payment

A decision letter by the TSP regarding a court order is considered a final

administrative action by the TSP. Court-ordered payments made in accordance with TSP rules cannot be reversed.

The only way to cancel or suspend a pending court-ordered payment is to obtain a valid new or amended court order, motion, or 

restraining order specifically addressing the relevant case. A party

disputing any portion of the decision letter should contact the TSP immediately and submit a signed letter of dispute containing a current

phone number and mailing address. The letter of dispute must be received no later than 25 days from the date of the decision letter.

Upon receipt of a letter of dispute, the TSP will hold the payment until

the scheduled payment date. If a valid new or amended court order,

motion, or restraining order has not been received by the payment

date, the TSP will disburse the payment, which cannot be reversed.

Tax Treatment

If a payment is made to the current or former spouse of the participant, the payment is reported to the Internal Revenue Service (IRS)

as gross income for the recipient spouse for the tax year in which the

payment is made (unless the funds are transferred to a traditional IRA,

an eligible employer plan, or Roth IRA). This is the case even if the payment is intended to satisfy child or spousal support arrears. Note: The

transfer option does not apply to court-ordered payments made from

beneficiary participant accounts.
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If the payment is made to someone other than the current or former spouse of the participant (e.g., a child or a support enforcement agency), the payment is reported to the IRS as gross income for

the participant for the tax year in which the payment is made.

A payment in response to a retirement benefits court order or legal 

process is not subject to an early withdrawal penalty tax. Such distributions are exempt from the early withdrawal penalty tax under the

Internal Revenue Code.
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Special Rules for Uniformed

Services Accounts

When a participant has more than one type of account (e.g., civilian, 

uniformed services, and/or beneficiary participant), a single court order or legal process can affect all of the accounts. However, each account

must be expressly identified in the court order or legal process.

	 The court order or legal process must specify separately how

the payment should be taken from each account.

When an account contains contributions from pay subject to the 

combat zone tax exclusion:

Such pay is exempt from Federal income taxes. Therefore, TSP contributions from such pay are also exempt from Federal income taxes when

they are subsequently distributed from a TSP account pursuant to a

qualifying court order or legal process.

When a TSP payment includes both taxable and tax-exempt money: 

The TSP will make the payments on a pro rata basis from both taxable

and tax-exempt balances.

If the payment is eligible for transfer and the payee wishes to transfer or roll over a payment that includes tax-exempt funds:

If the award contains a tax-exempt balance (i.e., contributions from

combat zone pay), the tax-exempt portion may be transferred to a traditional IRA, certain eligible employer plans, or a Roth IRA, but only if the

IRA or plan accepts tax-exempt funds.

If the current or former spouse elects to transfer only part of the payment into an IRA or eligible employer plan, the taxable portion of the 

payment will be transferred to the IRA or plan first.

Amounts that are not transferred will be paid directly to the individual

receiving the payment.
- 18 -

If a payee wishes to transfer or roll over a payment into his or her 

own pre-existing TSP account, any tax-exempt balances coming from 

any TSP account may not be transferred into a civilian TSP account.

Court-ordered payments from beneficiary participant accounts cannot

be transferred or rolled over. For more detailed information regarding

the transfer or rollover of payments that include tax-exempt funds, see

the TSP tax notice “Tax Treatment of Thrift Savings Plan Payments Made

Under Qualifying Orders.” The tax notice will be provided to the payee

with the TSP decision letter. It is also available from the TSP website at

www.tsp.gov, from the participant’s personnel or payroll office, or from

the TSP.

Special Rules for Beneficiary

Participant Accounts

Beneficiary participant accounts are established for the spouse beneficiaries of deceased TSP participants. Court orders may be processed

against beneficiary participant accounts, though special rules apply.

Court-ordered payments made from a beneficiary participant account

may not be transferred or rolled over. Consequently, if a beneficiary participant remarries, his or her new spouse will not be able to transfer or

roll over any court-ordered payments made from the beneficiary participant’s account. The payment will be fully taxable for the year it is made.

When a beneficiary participant’s account contains tax-exempt 

money, the money remains tax-exempt when it is distributed from a

beneficiary participant’s account pursuant to a qualifying court order or

legal process.

When a participant has more than one type of account (e.g., civilian, uniformed services, and/or beneficiary participant), a single

court order or legal process can affect all of the accounts. However,

each account must be expressly identified in the court order or legal

process. If a participant has more than one beneficiary participant account, the court order or legal process must specify the last 4 digits of

the appropriate account number(s).
- 19 -

Tips for Avoiding the Delay or Denial

of Awards

Common errors or omissions can sometimes result in the delay or denial

of a court-ordered award. To avoid them, use the checklist below.

 Be sure to provide the signature of the appropriate judicial 

official. The TSP will not review draft court orders or legal processes, and it will treat any order or process submitted without

the appropriate judicial signature as a draft.

 Be sure to include the payee’s current address and, if the 

payee is a spouse or former spouse, his or her Social Security number (SSN). If the payee’s information is not provided

within the court order or legal process, it may only be submitted

by the payee or either party’s attorney of record.

 Be sure to include the participant’s TSP account number or 

SSN and current address. Without this information, a court

order or legal process will be incomplete and cause delays in

processing.

 Be sure the court order or legal process refers expressly to the 

“Thrift Savings Plan” by name. No variations will be accepted.

Otherwise, the court order or legal process will be deemed invalid.

 Be sure the dollar amount of the award (or percentage or 

fraction, if a retirement benefits court order) is clearly stated.

 Be sure the court order or legal process does not ask for 

future payments. The award must be a one-time payment that

can be paid out immediately.

 If the participant has more than one type of TSP account, be 

sure the court order or legal process identifies the account 

from which the award is to be paid using the terms “civilian,” 

“uniformed services,” and/or “beneficiary participant.” Otherwise, the court order or legal process will be deemed invalid.

 If eligible, be sure the spouse-payee submits forms for transferring a payment to an IRA, eligible employer plan, or Roth 

IRA in a timely manner. Failure to do so will result in the issuance of a check, and the mandatory 20% tax withholding will apply. The TSP will not reverse a properly disbursed payment.
- 20 -

Giving a Power of Attorney

A TSP participant or payee may use a power of attorney (POA) to authorize another person to act on his or her behalf. For example, a participant who has to go overseas for an extended period of time may want

to designate someone to conduct business with the TSP on his or her

behalf while out of the country. The TSP participant or payee who gives

the power of attorney is called the “principal,” and the individual who

is authorized to act on behalf of the principal is called the “agent” or

“attorney-in-fact.”

A POA may be general or specific.

• A general POA gives the agent unlimited power to conduct business with the TSP. For example, the agent could make a withdrawal, take a TSP loan, or change a beneficiary designation.

• A specific (or special) POA limits — and clearly states — what

the agent can do on behalf of the principal. For example, it

might state that the agent can obtain information about the

participant’s TSP account or borrow or withdraw funds from that

account.

The sample Power of Attorney document on page 26 (also available

from the TSP website at www.tsp.gov) has lines to initial by hand in

order to identify what the agent can do when granted special power of

attorney. If all three lines are initialed, the document gives the agent

unlimited authority to conduct business with the TSP. We encourage

participants to use this POA document for their TSP accounts.

	 A valid POA must be signed by the appropriate participant

or payee, dated, and notarized. It must not have expired, and

must contain language that authorizes the agent to transact

the participant’s or payee’s business with the TSP.

When signing a document on behalf of the principal, the agent should

sign his or her own name, followed by “POA for” and the principal's name.

When calling the TSP on behalf of the principal, the agent will be asked

for information regarding the approved POA.
- 21 -

Springing POA

A POA that becomes effective only after a specific event has occurred is

called a “springing POA.” A springing POA must be submitted with evidence that the event it describes has already occurred.

For example, for a springing POA, the TSP participant might sign a

statement saying “This POA is effective when I become incapacitated or

disabled as documented by a physician.” In such a case, acceptable evidence would be a letter from the participant’s physician clearly stating

that the participant has become “incapacitated” or “disabled.”
- 22 -

Court Appointments of Guardians 

or Conservators

A court order that authorizes an individual to act on behalf of an incapacitated or incompetent person is known as a guardianship order or a

conservatorship order. For the purposes of the TSP, the incapacitated or incompetent person is the participant or a payee. That person is also referred

to as the “principal.” The person appointed by the court to act on the principal’s behalf is called a “guardian” or “conservator.”

	 Once a guardianship or conservatorship order is approved,

the TSP will not accept any documents the participant (or

payee) signed after the date of the court order.

A guardianship or conservatorship order must be issued by a court in

one of the 50 United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, or the

Virgin Islands, or by any Indian court (as defined by 25 U.S.C. 1301(3)).

A judge or other judicial official designated by the relevant jurisdiction

must sign the order. Further, before the TSP may honor a guardianship

or conservatorship order, you must demonstrate that all preconditions

in the order have been satisfied. For example, if the order states that it

is not effective until letters of guardianship have been issued, you must

submit the letters with the order. (See 5 C.F.R. § 1690.13(a)(3).) If the

guardianship or conservatorship was created in a jurisdiction that issues letters of guardianship or letters of conservatorship, then both the

letters and the underlying order must be submitted for review.

Like a POA, a guardianship or conservatorship order can grant an individual either general or specific power. For example, a guardianship or

conservatorship order granting general power might broadly appoint the

guardian or conservator to handle the principal’s “estate” or “personal

property” or to conduct business transactions on the principal’s behalf.

However, a guardianship or conservatorship granting specific power would

limit the guardian’s or conservator’s power — for example, by appointing

the guardian or conservator only to obtain information about the participant’s TSP account or to borrow or withdraw funds from that account.

Because guardianship and conservatorship orders vary widely from jurisdiction to jurisdiction, we are not including samples of them in this booklet.
- 23 -

*If the participant has more than one type of TSP account, the court order must expressly identify the

account(s) to which it relates. If the participant has multiple beneficiary participant accounts, the court

order must specify the last 4 digits of the appropriate account number(s).

Sample Language for a Qualifying 

Retirement Benefits Court Order

(Note: A retirement benefits court order must meet the requirements found at

5 U.S.C. §§ 8435(c) and 8467, and 5 C.F.R. part 1653, subpart A. The Thrift

Savings Plan will honor any court order or court-approved property settlement agreement that meets these requirements. Use of the format below is not required.)

[court name]

In re the Marriage of: )

      )

Petitioner	 )

and      )

Respondent 	 	 )

RETIREMENT BENEFITS COURT ORDER

THIS MATTER having come before the court on motion, and the court,

after reviewing the motion and being otherwise fully advised of the matter:

(Note: Any ONE of the following examples would qualify to require payment from the TSP,

although ambiguous or conflicting language used elsewhere could cause the order to be rejected.)

ORDERED: [payee’s name, Social Security number (SSN), and address] 

is awarded $____ from the [civilian, uniformed services, and/or beneficiary

participant] Thrift Savings Plan account(s)* of [participant’s name, SSN, and

address].

-ORORDERED: [payee’s name, SSN, and address] is awarded ____% of the

[civilian, uniformed services, and/or beneficiary participant] Thrift Savings

Plan account(s)* of [participant’s name, SSN, and address] as of [date].

-OR-
- 24 -

ORDERED: [payee’s name, SSN, and address] is awarded [fraction] of

the [civilian, uniformed services, and/or beneficiary participant] Thrift Savings

Plan account(s)* of [participant’s name, SSN, and address] as of [date].

(Note: The following optional language can be used in conjunction with any of the aforementioned examples.)

FURTHER ORDERED: Earnings will be paid on the amount of the

entitlement under this ORDER until payment is made.

Dated:

    BY THE COURT:

      ____________________________________

      Judge’s Signature

*If the participant has more than one type of TSP account, the court order must expressly identify the

account(s) to which it relates. If the participant has multiple beneficiary participant accounts, the court

order must specify the last 4 digits of the appropriate account number(s).
- 25 -

Sample Language for a 

Qualifying Legal Process

(Note: A legal process (an alimony and/or child support garnishment order) must meet the

requirements of 5 U.S.C. § 8437(e)(3) and 5 C.F.R. part 1653, subpart B. The Thrift Savings Plan will honor any legal process that meets these requirements. Use of the format

below is not required.)

[court name]

Petitioner	 )

vs.     )

Respondent	 )

ORDER FOR GARNISHMENT OF A TSP ACCOUNT

WHEREAS by order of this court [participant’s name, Social Security

number (SSN), and address] was required to pay alimony and/or child support

to [payee’s name, SSN, address, and relationship to participant];

AND WHEREAS [participant’s name] has failed to meet this obligation

and is currently $________ in arrears;

IT IS THEREFORE ORDERED that the Thrift Savings Plan (TSP) pay

to [payee’s name] $________ from the [civilian, uniformed services, and/or

beneficiary participant] TSP account(s)* of [participant’s name] to satisfy the

obligation.

IT IS FURTHER ORDERED that the earnings will be paid on the

amount of the entitlement under this ORDER until payment is made. (Note:

This paragraph is optional.)

Dated: 

    BY THE COURT:

      ____________________________________

      Judge’s Signature

*If the participant has more than one type of TSP account, the legal process must expressly identify the

account(s) to which it relates. If the participant has multiple beneficiary participant accounts, the legal

process must specify the last 4 digits of the appropriate account number(s).
- 26 -

Sample Language for Granting

a Power of Attorney

OC 01-10 (1/2011)

SPECIAL POWER OF ATTORNEY

The purpose of this document is to designate a person as your agent to act on your behalf with the Thrift Savings 

Plan (TSP). You may revoke this power of attorney in writing if you wish.

If there is anything about this power of attorney that you do not understand, you should ask a lawyer to explain 

it to you. To make this document offi cial, you must sign it — or acknowledge having signed it — in the presence 

of a notary public.

Mail or fax the form to: TSP Legal Processing Unit, P.O. Box 4390, Fairfax, VA 22038-4390. 

Fax number: (703) 592-0151.

First name Middle initial Last name City State

First name Middle initial Last name City State

Participant’s fi rst name Middle initial Last name

Month/day/year

Month/day/year

Jurisdiction (County) (State) Notary public’s signature

SEAL 

Month/day/year

Month/day/year

First name Middle initial Last name

,

,

* This document will be fi led with the Federal Retirement Thrift Investment Board (FRTIB) in Washington, D.C. The FRTIB is an agency in the United States 

Government established by 5 U.S.C. § 8472.

(Please hand write your initials on the line in 

front of the power you are granting.) {

Statement of Notary Public

A notary public must complete this section; no other acknowledgment is acceptable.* Please type or print.

This document granting a power of attorney was signed, or acknowledged to have been signed, before me

on by

who is personally known to me or has properly identifi ed himself/herself to me.

 My commission expires: 

Assignment of the Power of Attorney

A TSP participant, his or her spouse, or his or her payee may complete this section. Please type or print.

I, of do hereby appoint

 of my true and lawful agent to:

 obtain information about this TSP account.

 borrow or withdraw funds from this TSP account.

 take any other action(s) relating to this TSP account.

This power of attorney relates to the TSP account of 

whose Social Security number is – – . 

This power of attorney will not be affected if I subsequently become disabled, incapacitated, or incompetent. It is 

effective immediately, and, unless revoked or terminated by me earlier in writing, will expire on 

 . (If no date applies, write ‘‘indefi nite.’’) 

 

Signature of person giving power of attorney: Date:

This form is available from the TSP website, at www.tsp.gov, in Forms &

Publications under Legal Documents.
Points of Contact

Court orders, legal processes, powers of attorney, and guardianship or

conservatorship appointments relating to the Thrift Savings Plan (TSP)

must be submitted to:

   TSP Legal Processing Unit

P.O. Box 4390

Fairfax, VA 22038-4390

Fax: 1-703-592-0151

Overnight address:

ATTN: TSP Legal Processing Unit

   12210 Fairfax Town Center

Unit 906

   Fairfax, VA 22033

Telephone Number: 1-877-968-3778 (toll free); for callers outside the 

      U.S. and Canada, 404-233-4400 (not toll free)

    TDD: 1-877-847-4385 (toll free)

Court orders relating to the civilian retirement benefits administered by

the Office of Personnel Management (OPM) must be submitted to:

   U.S. Office of Personnel Management

   Court Ordered Benefits Branch

   P.O. Box 17

   Washington, DC 20044
Federal Retirement Thrift Investment Board

TSPBK11 (Revised 1/2011)

 FPI-PET PREVIOUS EDITIONS OBSOLETE