Changes

*S (Small Capitalization Stock) Fund -- invests in the BlackRock Extended Market Index Fund, which attempts to track the Dow Jones U.S. Completion TSM index.

*S (Small Capitalization Stock) Fund -- invests in the BlackRock Extended Market Index Fund, which attempts to track the Dow Jones U.S. Completion TSM index.

*I (International Stock) Fund -- invests in the BlackRock EAFE Index Fund, which attempts to track the net version of the MSCI EAFE index.

*I (International Stock) Fund -- invests in the BlackRock EAFE Index Fund, which attempts to track the net version of the MSCI EAFE index.

*L (Lifecycle) Funds -- invests in a specified mix of the five traditional funds.  Those funds with target years in the distant future have higher percentages of investments in the C, I, and S Funds, and as the target year approaches the percentages shift to predominantly in the G and F Funds.  Every ten years, in years ending in zero, the fund for that target year is merged into the L Income fund, and a new fund established.<ref>Current legislation has this changing, beginning in 2020, to every five years, consistent with target date funds offered in the private sector, but implementing regulations have not been established.  The expected date of changes such as this, and others mentioned below, is September 2019; the law requires implementation by November 1, 2019.</ref>  Unless a new employee chooses differently, s/he will automatically have all contributions established in an L fund based on an expected retirement date of 62<ref>Members of the uniformed services have their contributions automatically placed in the G Fund unless chosen differently.</ref>.

*L (Lifecycle) Funds -- invests in a specified mix of the five traditional funds.  Those funds with target years in the distant future have higher percentages of investments in the C, I, and S Funds, and as the target year approaches the percentages shift to predominantly in the G and F Funds.  Every ten years, in years ending in zero, the fund for that target year is merged into the L Income fund, and a new fund established.<ref>Current legislation has this changing, beginning in 2020, to every five years, consistent with target date funds offered in the private sector, but implementing regulations have not been established.  The expected date of changes such as this is September 2019; the law requires implementation by November 1, 2019.</ref>  Unless a new employee chooses differently, s/he will automatically have all contributions established in an L fund based on an expected retirement date of 62<ref>Members of the uniformed services have their contributions automatically placed in the G Fund unless chosen differently.</ref>.

**L Income -- individuals currently receiving monthly payments (but a current employee may invest in this fund)

**L Income -- individuals currently receiving monthly payments (but a current employee may invest in this fund)

**L2020 -- individuals with retirement dates between 2015 and 2024

**L2020 -- individuals with retirement dates between 2015 and 2024

An employee also may make withdrawals against his/her balance.  These withdrawals are permanent reductions in the balance, and are subject to tax and early withdrawal penalties if applicable:

An employee also may make withdrawals against his/her balance.  These withdrawals are permanent reductions in the balance, and are subject to tax and early withdrawal penalties if applicable:

*Age-based withdrawal: an employee age 59 1/2 or older may take out one withdrawal during employment, but afterwards can only withdraw the total amount of his/her balance.<ref>Current legislation has this changing to four withdrawals per year, and removing the requirement to later remove the total balance at retirement if done, but implementing regulations have not been established.</ref>

*Age-based withdrawal: an employee age 59 1/2 or older may take out one withdrawal during employment, but afterwards can only withdraw the total amount of his/her balance.<ref>Current legislation has this changing to four withdrawals per year, and removing the requirement to later remove the total balance at retirement if done, effective September 15, 2019.</ref>

*Hardship withdrawal: an employee may take out a withdrawal for one of four reasons (negative cash flow, medical expenses, personal casualty loss, or legal expenses for a marital separation or divorce).  In addition to tax penalties and loss of potential future earnings, for the next six months an employee may not contribute or receive matching contributions (except for automatic ones), and afterwards is not automatically re-enrolled in TSP but must complete the paperwork to do so.

*Hardship withdrawal: an employee may take out a withdrawal for one of four reasons (negative cash flow, medical expenses, personal casualty loss, or legal expenses for a marital separation or divorce).  In addition to tax penalties and loss of potential future earnings, for the next six months an employee may not contribute or receive matching contributions (except for automatic ones), and afterwards is not automatically re-enrolled in TSP but must complete the paperwork to do so.

At retirement an employee can no longer take out loans nor can future contributions be made.  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 nor can future contributions be made.  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)<ref>Effective September 15, 2019, the requirement to close the account upon reaching age 70 1/2 will cease; however, required minimum distributions under IRS Code are still required.</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>

*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, effective September 15, 2019.</ref>

If a participant dies, then any unpaid balance is paid to the beneficiary(ies) designated.<ref>However, if the beneficiary(ies) caused the death of the account holder, they are not paid, but are treated as having predeceased the account holder.</ref>  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.<ref>However, if the beneficiary(ies) caused the death of the account holder, they are not paid, but are treated as having predeceased the account holder.</ref>  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: