Federal workers in non-pay status are also barred from taking out loans on their TSP accounts, as the payments on those loans must also come from payroll deductions. Employees who have already taken out TSP loans can suspend payments on them, however, for up to one year while on non-pay status. The payments would not be suspended automatically and employees would have to ask their agencies to send relevant information and forms to TSP.
Furloughed employees could receive some financial relief by withdrawing funds from their TSP accounts. The plan allows federal workers experiencing “financial hardship” -- meaning negative monthly cash flow or an extraordinary new expense, such as medical or legal bills -- to take money from their retirement account. The withdrawal must be at least $1,000 but is limited to the “amount of your financial need.” When employees make a financial hardship withdrawal, they are banned from contributing to their accounts -- and will also lose agency matching contributions -- for six months.
Employees applying for a hardship withdrawal do not need to provide any documentation, but must “certify, under penalty of perjury, [they] have a genuine financial hardship,” according to Kim Weaver, a TSP spokeswoman.
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