Q23. What happens to my contributions?
A23. Because you are not paid during a furlough, your TSP contributions will stop, and, if you are a Federal
Employee Retirement System employee, you will not receive agency contributions during this time.
Q24. Can I take a TSP loan while I’m furloughed?
A24. Yes. By law, a TSP participant may take a TSP loan any time before separation. 5 U.S.C. 8433(g)(1).
The TSP has adopted an administrative rule that provides that TSP participants must be in a pay status in order
to take a TSP loan. 5 C.F.R. 1655.2(b). The TSP adopted this rule because it generally requires TSP
participants to agree to repay their loans through payroll deduction. 5 C.F.R. 1655.12(b). The first payment is
due on or before the 60th day following the loan issue date. 5 C.F.R. 1655.14(c).
Since shutdowns are rare occurrences and are typically of short duration, the TSP’s Executive Director has
determined that it is in the best interest of TSP participants to interpret the requirement that participants be in a
pay status to mean that a break in pay due to a Government shutdown does not disqualify one from TSP loan
eligibility. A short-term break in pay status would still allow participants to commence payment by payroll
deduction within the required 60 days of the loan issue date. If a shutdown were to extend beyond 60 days,
participants would still be responsible for making loan payments (see next question).
Q25. What impact does the furlough have on an employee’s loan payments?
A25. If you have an outstanding loan and you are furloughed, your loan payments will stop because they are
deducted from your pay. Loans are not considered in default until the participant has missed more than 2½
payments. If you miss a loan payment (or two) as a result of the furlough, you always have the option to make
direct payments to the TSP using the Loan Payment Coupon available in the Forms & Publications section on
the TSP Web site. Otherwise, your loan term will be extended or, if you have requested the maximum loan
term, you may have a balloon payment at the end of the loan term. If you miss more than 2½ payments, TSP
will notify you by mail that you must mail in a personal check for the “cure” amount to get your loan back on
track.
Q26. Are agencies required to send in a Form TSP-41 notifying the TSP when employees have been
furloughed?
A26. Your agency should not send a Form TSP-41 to the TSP during a Federal Government shutdown. A
shutdown is a rare occurrence and is typically of short duration. The Form TSP-41 is intended for participants
who are being placed on extended leave without pay, e.g., due to illness, military furlough, maternity leave, etc.
It is not practical for the agencies to complete and submit Forms TSP-41 for all of their furloughed employees
who have TSP loans (both at the beginning of the furlough and at the end), and it is not practical for the TSP to
process these forms.
Q27. Can the Government take money from the TSP to resolve the financial situation?
A27. No, the money in the TSP is held in trust for its participants. Neither Congress nor the Administration
can take money from an employee’s TSP account.
Q28. To what extent does non-pay status affect Thrift Savings Plan (TSP) coverage?
A28. Deductions will cease for periods of non-pay status where there is insufficient funds to cover the Thrift
Savings Plan (TSP) premium(s). Employees cannot contribute to their TSP account while on furlough.
Employees should refer to the TSP Fact Sheet – Effect of Non-pay Status on TSP Participation. The fact sheet
can be found at http://www.tsp.gov/forms/oc95-4w.pdf.