Changes

At retirement an employee can no longer take out loans.  If the balance is under $200 it is automatically cashed out but can be rolled over into a different plan.<ref>Balances of under $5 are forfeited to the TSP, but employees can later reclaim them.</ref>  The employee can choose from any combination of the following options with regards to the balance:

At retirement an employee can no longer take out loans.  If the balance is under $200 it is automatically cashed out but can be rolled over into a different plan.<ref>Balances of under $5 are forfeited to the TSP, but employees can later reclaim them.</ref>  The employee can choose from any combination of the following options with regards to the balance:

*Leave the balance, or part of it, in the account (at age 70 1/2 the balance must either be withdrawn entirely or an annuity purchased, if neither is done the account is forfeited but can be reclaimed; however no earnings are paid during the abandonment period)

*Leave the balance, or part of it, in the account (at age 70 1/2 the balance must either be withdrawn entirely or an annuity purchased, if neither is done the account is forfeited but can be reclaimed; however no earnings are paid during the abandonment period)

*Withdraw the balance, or part of it, either via rollover or cash out, or via monthly payments by purchasing an annuity or a specified amount (based on either an amount stipulated by the employee or using IRS life expectancy tables), but the amount can only be changed annually<ref>Current legislation has this changing to monthly, quarterly, or annual payments, and allowing the amount to be changed as frequently as desired, but implementing regulations have not been established.</ref>

*Withdraw the balance, or part of it, either via rollover or cash out, or via monthly payments by purchasing an annuity or a specified amount (based on either an amount stipulated by the employee or using IRS life expectancy tables), but the amount can only be changed annually and the payments cannot be discontinued<ref>Current legislation has this changing to monthly, quarterly, or annual payments, and allowing the amount to be changed as frequently as desired including discontinuing them, but implementing regulations have not been established.</ref>

If a participant dies, then any unpaid balance is paid to the beneficiary(ies) designated.  If the participant did not designate any beneficiary(ies), then the "statutory order of precedence"<ref>The order of precedence is also used for payment of insurance benefits under the [[FEGLI]], unused portions of a [[Federal Employees Retirement System]] (FERS) annuity, and unpaid compensation.</ref> is used, as follows:

If a participant dies, then any unpaid balance is paid to the beneficiary(ies) designated.  If the participant did not designate any beneficiary(ies), then the "statutory order of precedence"<ref>The order of precedence is also used for payment of insurance benefits under the [[FEGLI]], unused portions of a [[Federal Employees Retirement System]] (FERS) annuity, and unpaid compensation.</ref> is used, as follows: