The Federal Retirement Thrift Investment Board (Board) has revised the

instructions on Form TSP-3, Designation of Beneficiary. The significant changes

to this form are:

• updated information in the instructions and updates in the examples used to

  assist participants in correctly completing the beneficiary form prior to

  sending it to the TSP record keeper.

• the instructions provided at the top of Form TSP-3 were revised to

  explicitly inform participants not to submit this form to their agencies.

Also, in addition to telling participants that the TSP will not accept Form

TSP-3 received after their dates of death, the TSP has expanded the instructions

for participants, encouraging them to make the appropriate beneficiary

changes or to cancel a prior designation if their life situations change. If

these forms are not kept up-to-date, the death benefit payments may not be made

according to the participant's current wishes.

My Federal Retirement readers are also encouraged to read this

article:  How

(and Why) You Should Review and Update Your Beneficiary Designations

More details of the announcement from the Board

on these changes is below, along with a downloadable sample of the new TSP-3

form.

I.  Purpose of Form TSP-3

A. Form TSP-3 provides active and separated participants the

ability to designate a beneficiary or beneficiaries to receive their TSP

accounts after their deaths. If the TSP record keeper has a valid Form TSP-3 on

file on or before the date of the participant's death the TSP will use the form

to identify the participant's beneficiaries and disburse the death benefit

payments from his or her TSP ac¬count. Participants are not required to complete

Form TSP-3. If a valid form (signed, witnessed, and received by the TSP) is not

on file on or before the date of death of the participant, the TSP will disburse

the account according to the statutory order of precedence found at 5 USC §

8424(d):

(1) To the participant's widow or widower;

(2) If none, to the participant's child or children equally, and

descendants of deceased children by representation;

(3) If none, to the participant's parents equally or to the surviving

parent; (4). If none, to the appointed executor or administrator of the

participant's estate;

(5) If none, to the participant's next of kin entitled to his or her estate

under the laws of the state in which the participant resided at the time of his

or her death.

B. Since September 1995, the TSP has required that, in order

to be considered, all completed Forms TSP-3 must be received by the TSP record

keeper on or before the date of the participant's death. This includes those

Forms TSP-3 which agen¬cies were instructed to purge and mail to the TSP record

keeper for processing. The TSP reminds agency representatives that it will NOT

honor a Form TSP-3 received after the participant's date of death, even if it

was trans¬mitted from the agency. The participant must submit Form TSP-3

directly to the TSP record keeper, and agencies must ensure that all Forms

TSP-3, includ¬ing those that were previously filed in the OPF, are purged and

forwarded to the TSP record keeper.

II. Agency Responsibilities

A. Agencies must provide Form TSP-3 upon a

participant's request. Agencies that enclose Form TSP-3 in the in-processing

packets of new employees who do not have a TSP account established are advised

to inform the employee who wishes to complete a designation of beneficiary form

that he or she should mail or fax Form TSP-3 to the TSP record keeper after the

first TSP contribu¬tion is deducted from his or her pay. If the TSP record

keeper receives a bene¬ficiary form from an employee who does not yet have a TSP

account, the form will be returned to the employee.
Although agencies are

required to provide Form TSP-3 upon request, the agency must not accept the

completed form from the participant. Instead, it must direct the participant to

mail, or preferably fax, the completed form to the TSP record keeper for

processing.

B. The Federal Retirement Thrift Investment Board again

reminds agencies that, to comply with 5 CFR §1651.3 (c) (1), they must purge

Forms TSP-3 that re¬main in the OPF or within the personnel or payroll office

files and transmit them to the TSP as soon as possible. Agencies need not mail

these forms; they can transmit them via fax to the TSP record keeper. The fax

number agencies and participants may use is provided below. If Form TSP-3 is

faxed, the agency does not have to mail the original beneficiary form to the TSP

record keeper. If an agency is mailing to the TSP record keeper Forms TSP-3

which it has discovered or purged from the OPF, it should mail them to the

address shown below and not the address shown on the form:

Thrift Savings Plan
P.O. Box 385021
Birmingham, AL

35238
Fax: 1-866-817-5023

C. Agency representatives should refer questions from

potential beneficiaries or family members of a deceased participant to the

address above or to the TSP assistance lines:

1-TSP-YOU-FRST (1-877-968-3778)
1-TSP-THRIFT5

(1-877-847-4385)
(for hearing-impaired participants

III.   Participant Responsibilities

A. The participant is responsible for ensuring that his

or her Form TSP-3 is completed correctly and that it accurately reflects the

beneficiaries he or she wishes to designate. The participant is also responsible

for transmitting Form TSP-3 to the TSP record keeper for processing. The

participant has the option of mailing Form TSP-3 to the address above, or faxing

it to the fax number above. This information is also provided in the

instructions on Form TSP-3.

In addition to telling participants that the TSP will not accept Form TSP-3

received after their dates of death, the TSP has expanded the instructions for

participants, encouraging them to make the appropriate beneficiary changes or to

cancel a prior designation if their life situations change. If these forms are

not kept up-to-date, the death benefit payments may not be made according to the

participant's current wishes. For example, if the participant is married at the

time of his or her death but has a valid Form TSP-3 on file designat¬ing someone

other than his or her spouse, the TSP will pay the death benefit based on the

Form TSP-3 on file. This means that if the beneficiary designated on the Form

TSP-3 is a former spouse, the TSP will pay the former spouse -- even if the

former spouse relinquished rights to the participant's retirement or TSP account

in a settlement or divorce decree.

B. If the participant also has a uniformed services TSP

account, he or she must file Form TSP-U-3 to designate a beneficiary to receive

death benefits from that ac¬count upon his or her death. The TSP will not use

Form TSP-3 for a uniformed services account. If there is no Form TSP-U-3 on file

for the participant's uniformed services account, the death benefit payment

will be made according to the statutory order of precedence.

C. If an employee does not yet have a TSP account when a

Form TSP-3 is re¬ceived for processing, the TSP record keeper will return the

form to the em¬ployee with instructions to submit it once the TSP account has

been estab¬lished.

IV.   TSP Responsibilities

A. The TSP record keeper is the sole receipt and

processing point for all Forms TSP-3. When Form TSP-3 is processed, the TSP

record keeper will mail a let¬ter to the participant confirming that it has been

received and processed. Al¬though the participant is responsible for the

accuracy of the information pro¬vided on the beneficiary form, the TSP record

keeper will review the form to identify any errors which could invalidate or

complicate the execution of the form (e.g., scratched out names of beneficiaries

or percentages for primary (or contingent) beneficiaries that do not add up to

100%). The TSP record keeper will contact the participant either by phone or by

mail to notify him or her of the errors and to request the submission of a

correctly completed Form TSP-3.

B. In addition to sending a confirmation letter listing

the designated beneficiaries, the TSP shows on the quarterly TSP participant

statement whether a Form TSP-3 is on file and, if so, when it was signed. The

Annual TSP participant statement mailed in February of each year also provides

this information and includes the names of all primary beneficiaries and the

percentages of the death benefit to which each is entitled.

C. Upon notification of the death of a participant

(generally through the receipt of a Form TSP-17, Information Regarding Deceased

Participant, and the par¬ticipant's death certificate), the TSP will examine the

copies of all Forms TSP-3 on file to determine which of the Forms TSP-3 received

is the most recent cor¬rectly completed form on file. This is the form that will

be used to identify the beneficiaries to be notified regarding the death benefit

payment. If the TSP does not have a valid Form TSP-3 on file, the TSP will

disburse the participant's TSP account according to the statutory order of

precedence. If the participant has a uniformed services TSP account, the TSP

will also process a death benefit pay¬ment from that account according to a

valid Form TSP-U-3 on file or the statu¬tory order of precedence.

V.  Obtaining Forms TSP-3

Agencies may obtain the most recent version of Form TSP-3 by

downloading it from the TSP Web site at href="http://www.tsp.gov">www.tsp.gov, or by requesting printed copies from

agency central distribution points using its own agency procedures for

requesting TSP forms and publications. style="BACKGROUND-COLOR: #ffff00">

style="BACKGROUND-COLOR: #ffffff">To download a

SAMPLE copy of the recently revised Form

TSP-3,  href="http://www.myfederalretirement.com/public/TSP-3-new-sample-021809.pdf"

target=_blank>click here