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Thrift Savings Plan and Divorce

Towson Divorce Lawyers: Thrift Savings Plan and DivorceGoing through a divorce can be a gruesome and tireless process, with asset distribution and disbursement being one of the prime contributors. For federal employees, asset distribution can prove to be an even greater challenge as it will impact their Thrift Savings Plan (TSP), a government issued retirement savings program. It is important for federal employees to understand how their assets can be divided to protect themselves, should a separation ever arise.

TSP Account Distribution

When it comes to TSP account distribution, either the spouses must­­­­ agree on how to distribute the funds, or the court will dictate the division for them. A court decree stemming from an annulment, legal separation or divorce, or property settlement is required for disbursement of a TSP. This decree is called a Retirement Benefits Court Order (RBCO). Occasionally, a Qualified Domestic Relations Order (QDRO) can be used in lieu of a RBCO. It is essential to have a legal representative with vast knowledge on this subject matter to ensure fair asset distribution in court.

Federal retirement packages can include the Civil Service Retirement System, Federal Employees Retirement System annuity, and other retirement benefits aside from TSP accounts. It is important to note that each of these assets is divided under separate jurisdictions and the rules vary for each. Helpful information regarding the plan differences can be found in the Handbook for Attorneys on the Office of Personnel Management (OPO) website. There is also a Court Orders and Powers of Attorney booklet offered on the Thrift Savings Plan website. This guidebook contains useful information for drafting a legitimate RBCO to be approved by the Office of Personnel Management. It also highlights the specific criteria needed for RBCO approval.


During the divorce process, all RBCO benefits may be frozen until the divorce is finalized and all agreements are in place. This prevents withdrawals and loans from being taken out of the account during proceedings which might otherwise be given to the other spouse. The court decree will mandate a specific date upon which to base the value of the TSP for division, based on a dollar amount or percentage. Per the court’s decision, the funds will then be transferred to an employer retirement plan, Roth IRA, or traditional IRA in the other spouse’s name.

Certain stipulations apply towards calculating a TSP value and distributing the asset fairly. For example, if a loan has been taken out against the TSP, the outstanding loan balance is included in the overall TSP value for the spousal award. Similarly, a TSP account can be garnished for child support arrears or to fulfill alimony obligations. In this instance, the TSP would also be frozen and the garnished value would be sent to the other spouse’s retirement plan. In most instances, the decree will state the specific guidelines upon which to base distribution for these instances.

Towson Divorce Lawyers at Huesman, Jones & Miles, LLC Understand Asset Distribution

If you are going through a divorce and are worried about your spouse taking your hard-earned dollars, call the Towson divorce lawyers at Huesman, Jones & Miles, LLC today. Call our office locations in Hunt Valley or Towson, Maryland for a consultation at 443-589-0150 or send us an online inquiry. We will handle your case, ensuring a smooth transition into a new life, to help you sleep at night.

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