The Thrift Savings Plan (TSP) this morning released the following details on the temporary changes to required minimum distributions (RMDs):
- TSP Issues Expanded FAQs on Suspension of Required Minimum Distributions (RMDs)
- How Waiver of RMD Payments Affects Federal Employees, Retirees in 2020 Under CARES Act, by Ed Zurndorfer
The COVID-19 pandemic caused a steep and sudden decline in the stock markets and put a severe strain on many household budgets. As authorized by the recently enacted CARES Act, we’re making temporary changes related to required minimum distributions (RMDs) to give your account balance time to recover.
The actions we’re announcing here have the following effects:
– You do not need to make any withdrawals from your TSP account in 2020 to satisfy an RMD, regardless of your age or employment status.
– We will not send any automatic RMD payments for 2020.
– If you make a withdrawal, we will withhold for federal taxes at the rate appropriate for the type of withdrawal you make, without regard to RMD rules that would otherwise apply. You can transfer or roll over to an IRA or eligible employer plan any otherwise eligible withdrawals you make. (See the TSP tax notice Important Tax Information About Payments From Your TSP Account PDF file for more information about eligible rollover distributions.)
For additional questions regarding how the CARES Act affects the TSP, please contact the Thrift Savings Plan directly here: https://www.tsp.gov/ParticipantSupport/Content/contact/index.html or the ThriftLine at 1-877-968-3778.