TSP 90 Form
Assuming an account balance of $200 or more, the spouse beneficiary of a deceased TSP participant can automatically have a TSP Beneficiary Participant Account (BPA) established in your name. The TSP should at this time send you a letter that provides detailed information about the account and your rights regarding investments and withdrawals.
When a BPA is established, the entire account balance would be invested solely in the G Fund. You can’t make contributions to it in the same way as your deceased (federal employee) spouse did. You also cannot perform a TSP rollover or transfer funds into the BPA from an IRA or an eligible employer plan.
What you can do is move account funds out of the G Fund and into the other individual Funds or the L Funds. You could also initiate a TSP withdrawal in much the same way as your federal employee spouse would have done.
Options for TSP Beneficiary Participant Account
The good news is that the early withdrawal penalty does not apply to immediate withdrawals from a BPA account, regardless of your age. You must complete and submit Form TSP-90. You can choose a full or partial withdrawal, and you can decide how you want it – single payment, monthly TSP payments, TSP Lifetime Annuity, or a combination of two or more of these options.
All withdrawals typically come proportionally from the traditional (non-Roth) and Roth balances in the account. Withdrawals will be subject to federal income tax withholding. The exception is for earnings on Roth contributions, which can be paid tax-free if five years have passed after January 1 of the year the deceased participant made the first Roth contribution.
You may also rollover or transfer all or part of your BPA into an IRA or an eligible employer plan. Your rollover may also be a tax-exempt move that allows the contributions and earnings to grow tax-deferred in the IRA or eligible employer plan.