President Trump has signed into law the TSP Modernization Act of 2017, the Bill will allow multiple age-based in-service withdrawals and multiple post-separation withdrawals in the TSP and to create more flexibility in the option to choose "substantially equal" withdrawals--by allowing annual or quarterly withdrawals in addition to monthly, changes in amounts at any time rather than just once a year, and the purchase of an annuity after receiving such payments, in addition to taking a lump-sum payment.
The law eliminates the statutory prohibition on multiple post-separation withdrawals and multiple age-based withdrawals while a participant is still working. It also removes the restriction that participants cannot take partial post-separation withdrawals if they’ve already taken an age-based in-service withdrawal. Though it has no effect on required minimum distributions mandated by the Internal Revenue Code, the law also allows separated participants who are over age 70½ to remain in the TSP, eliminating the requirement to make a withdrawal election on an entire account balance. Participants will also be able to stop monthly payments, change payment frequency, or elect to purchase an annuity while receiving monthly payments.
RETIREMENT, PROMOTION AND APPOINTMENTS IN NPMHU Contract Administration Department
