It’s not difficult to imagine that federal employees with investments in the Thrift Savings Plan (TSP) funds might need to take a TSP Withdrawal during a federal shutdown, especially if these employees happen to be furloughed for a couple of weeks or more.
However, if you’re planning to make a TSP withdrawal, or apply for a TSP loan during this period, there are a few things you should look at first. First, will the TSP be working during a government shutdown? Yes, because neither the TSP nor the Federal Retirement Thrift Investment Board (FRTIB) is funded through annual appropriations that need congressional approval.
All TSP activities, including TSP Withdrawals (investments, updates of your TSP account balance, TSP withdrawals, and processing of TSP loan applications) will continue as usual during the shutdown.
TSP Withdrawals, TSP Loans, and Government Shutdown Furloughs
Furloughs, in this case, are meant to indicate federal employees furloughed because of the government shutdown. Your contributions will stop since you aren’t getting paid. Those who are under FERS would also not receive agency contributions during this time.
Does this mean you are in a non-pay status and as such ineligible for a TSP Withdrawal or TSP Loan? Not necessarily, because the TSP’s Executive Director has determined that shutdowns are rare occurrences and are typical of short duration, so a break in pay due to a Government shutdown does not typically disqualify one from loan eligibility.
All that needs to happen is that you commence payment by payroll deduction within the required 60 days of the loan issue date. If the shutdown extends beyond this (highly unlikely), then you would be responsible for making the loan payment yourself.