Federal employees could keep their deceased spouse's Thrift Savings Plan accounts open under a new proposal offered by the Federal Retirement Thrift Investment Board last week.

Under current law, the surviving spouse of a deceased federal employee must withdraw the full amount in their Thrift Savings funds within 60 days of the employee's death.  

The proposal would allow the survivor to keep their deceased spouse's TSP account active until age 70-1/2,  and be able to perform interfund transfers and select from the available withdrawal options (such as full withdrawal, monthly payments, an annuity, or partial withdrawals).  The proposal would not allow a survivor to take out TSP loans.

The Board stated the proposal would require Congressional approval, and, if passed, would not likely be available until 2010.