How do the new TSP Beneficiary rules differ from the old TSP Beneficiary rules?

For FERS the main difference in the new TSP (Thrift Savings Plan) beneficiary rules compared to the old TSP rules is the handling of contingent beneficiaries.

Under the new rules, all primary beneficiaries must be deceased before contingent beneficiaries can receive any funds. Previously, participants could link contingent beneficiaries to specific primary beneficiaries. The TSP continues to honor the old rules (pre-June 1, 2022) for beneficiary designations made before that date.

Old Rules:
Participants could designate primary and contingent beneficiaries.
Contingent beneficiaries were often linked to specific primary beneficiaries. If a primary beneficiary was alive, the contingent beneficiary would not inherit.

New Rules:
All primary beneficiaries must be deceased for contingent beneficiaries to inherit.

The TSP will continue to pay out to contingent beneficiaries according to the rules in place before June 1, 2022, if the beneficiary designation was made before that date.

The TSP will pay out to any contingent beneficiaries if all primary beneficiaries are deceased, regardless of whether they were linked to a specific primary beneficiary under the old rules, as long as the designation was made after June 1, 2022.

Participants can still name up to 20 total beneficiaries (primary and contingent).

It's crucial to review your TSP beneficiary designations, especially if you made changes before June 1, 2022, to ensure your wishes are carried out.

Visit TSP.gov for more information on beneficiaries: https://www.tsp.gov/tsp-basics/designating-beneficiaries/

Click here to set up a free FERS benefits analysis to estimate your Thrift Savings Plan upon retirement!