What happens to your Thrift Savings Plan (TSP) during a divorce? Your account can be split through a court-issued divorce decree, annulment, or legal separation, or via a court order or approved property settlement linked to one of these actions.
The TSP labels such paperwork a “retirement benefits court order,” or RBCO, and we’ll stick with that abbreviation here. Don’t assume the TSP will honor a “qualified domestic relations order” (QDRO) straight out of the gate, those apply to private-sector plans under the Employee Retirement Income Security Act of 1974 (ERISA). The TSP, like other federal plans such as FERS and CSRS, operates under Title V of the U.S. Code. A QDRO might be submitted, but the TSP will scrutinize it against its own rules and reject it if it doesn’t measure up.
An RBCO needs to hit four marks to pass muster:
- It must originate from a U.S. court—think any of the 50 states, D.C., Puerto Rico, Guam, the Northern Mariana Islands, or the U.S. Virgin Islands.
- It has to name the “Thrift Savings Plan” explicitly. Broad phrases like “federal retirement benefits” or even “Thrift Savings Account” won’t cut it. Multiple accounts (civilian, military, beneficiary) require individual identification.
- Payments must be nailed down to a specific dollar amount or percentage of the account, tied to a past or present date – no future projections allowed.
- Only a current or ex-spouse or dependents can receive the payout.
Funds are pulled proportionally from all TSP investments, hitting the core funds (C, S, I, F, G) first before touching the Mutual Fund Window. An RBCO can also freeze withdrawals from your TSP amid divorce proceedings.
For child support or alimony, the TSP can be garnished, what they call a “legal process,” via a court writ or summons, as long as it aligns with 5 U.S.C. 8437(e)(3) and 5 C.F.R. Part 1653, Subpart B.
It’s important to understand that your TSP death benefits go to whoever’s listed on your TSP-3 form, divorce or not. If your ex is still named, they’ll get it, regardless of your intentions or their divorce waiver. No form? It follows the federal default order. Outstanding TSP loans count toward the balance for court awards unless the RBCO says otherwise.
For additional information, check out the TSP’s Court Orders and Powers of Attorney booklet on their site’s forms section.
