Information from the Thrift Board on TSP and the Shutdown

The Federal Retirement Thrift Investment Board has issued more guidance on how the shutdown may affect your TSP loans.

Thrift Savings Plan logoWe know that some members have been getting conflicting information about the TSP loan situation during the shutdown. Yesterday, the Federal Retirement Thrift Investment Board issued an update on the status of missing loan payments for employees impacted by the government shutdown. As you may know, the TSP allows for the suspension of loan payments when in a nonpay status to prevent your loan from going into default. However, the TSP requires employees to submit documentation from their agency. According to yesterday’s update, the TSP does not need documentation of an employee’s furlough at this time. Furthermore, the TSP noted that if your loan payments were up-to-date prior to the furlough, missing one or two payments will not cause your loan to be in default. When retroactive pay is approved, all missed loan payments will be submitted and posted to your loan.

Seal of the Internal Revenue ServiceHowever, please keep in mind that the IRS requires the Thrift Board to report any loans that are in arrears by two-and-a-half payments at the end of every quarter. Should that happen, you would receive a letter from the Board at the end of the quarter (in this case March 31st) stating that you must pay the missed payments by June of this year. If you do not pay, your loan is considered an early withdrawal and you will pay a fine of 10% interest. This is an IRS regulation, not a Thrift Board regulation.

Money in walletIf you need a loan, you can get a general-purpose loan from the TSP even in non-pay status, as long as the non-pay status will be no longer than 30 days. The loan must be repaid with interest (set at the G Fund rate, currently 2.25%) into your own TSP account.

As this shutdown continues, we will provide additional updates as they become available. For more information regarding the TSP, you can call the ThriftLine at 1-877-968-3778 and speak to a Participant Service Representative or visit

Author: chapterpresident

I have worked in the FDA since 1990 in a variety of positions. I currently serve as chapter president of NTEU Chapter 254, representing FDA employees in Arkansas, Colorado, Iowa, Kansas, Missouri, Nebraska, New Mexico, Oklahoma, Texas, and Utah.

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