Missing Beneficiaries

[DSW5775]

Is there anything that can be done about missing beneficiary designations? I’m handling the estate of a deceased TSP account holder and TSP claims she had no beneficiaries. We have a 2021 year end statement showing beneficiaries. They will not accept this and claim the system change in 2022 required participants to fill out new beneficiary forms. This is unacceptable. There will be huge tax consequences and delays. The deceased participant’s beneficiary designations should be honored since there is proof and the deletion of data (apparently) when systems were changed is due to the ineptitude of TSP. Beneficiary data should have transferred.

 

[nasa1974]

Is there anything that can be done about missing beneficiary designations? I’m handling the estate of a deceased TSP account holder and TSP claims she had no beneficiaries. We have a 2021 year end statement showing beneficiaries. They will not accept this and claim the system change in 2022 required participants to fill out new beneficiary forms. This is unacceptable. There will be huge tax consequences and delays. The deceased participant’s beneficiary designations should be honored since there is proof and the deletion of data (apparently) when systems were changed is due to the ineptitude of TSP. Beneficiary data should have transferred.

Not sure how you are trying to pass along the TSP fund, but here is the link about beneficiaries from TSP.

Designating Beneficiaries | The Thrift Savings Plan (TSP)

Good luck.

 

[DSW5775]

Not sure how you are trying to pass along the TSP fund, but here is the link about beneficiaries from TSP.

Designating Beneficiaries | The Thrift Savings Plan (TSP)

Good luck.

The account holder is deceased. She properly designated beneficiaries years ago. A 2021 statement shows that. TSP is saying that there are no beneficiary designations. Somehow TSP deleted her beneficiaries. The TSP funds will pass through a trust estate, resulting in a huge tax burden. This is unacceptable when there were beneficiaries designated and TSP’s actions, when changing systems, lost them.

 

[nasa1974]

The account holder is deceased. She properly designated beneficiaries years ago. A 2021 statement shows that. TSP is saying that there are no beneficiary designations. Somehow TSP deleted her beneficiaries. The TSP funds will pass through a trust estate, resulting in a huge tax burden. This is unacceptable when there were beneficiaries designated and TSP’s actions, when changing systems, lost them.

Unfortunately, it appears you may need to get some lawyers involved. Probably also getting in touch with your Senate and Congressional representatives. There have been TSP members complaining about how the new and improved system is working.

 

[evilanne]

I would definitely contact OPM with this issue and see if they have a copy of the designation of beneficiaries in the official retirement package. I know you had to get 2 witnesses to sign.

 

[ddorrer]

There is no formal oversight of the Board. No IG to file a complaint, no formal process to file a complaint. etc. If you call in, the highest level of customer service is the Call Center supervisor. It took my wife nearly two months to correct their mistake and end up abandoning the request. In short, both of us are feds. Im over 59.5 and she is not. While completing our taxes, we found that our AGI was over the maximum allowed for TSP Roth contributions. We were told by our tax professional to ask for a TSP refund before filing our taxes and all should wash out. I was able to over the phone and had my check within a week. Since my wife was under 59.5, they where going to penalize her and charge a IRS tax on the withdrawal even though the contribution wasnt permitted to begin with. TSP is inept. A simple refund of the 2022 contributions as an overpayment would have fixed the problem. Instead we were fined by the IRS.

 

[DSW5775]

I would definitely contact OPM with this issue and see if they have a copy of the designation of beneficiaries in the official retirement package. I know you had to get 2 witnesses to sign.

OPM package the decedent had did not include TSP-3. Only record we have are Annual Statements. As suggested in another post, we have contacted every relevant congressman and Board member. FEDweek has a good article published on July 21, 2022, discussing the problems with beneficiaries.

 

[nasa1974]

We had a system that worked, although a little outdated, and just needed some fine tuning. Now we have a new system that's totally difunctional. The criminal part is someone made a lot of money from this monstrosity.

 

[evilanne]

There is no formal oversight of the Board. No IG to file a complaint, no formal process to file a complaint. etc. If you call in, the highest level of customer service is the Call Center supervisor. It took my wife nearly two months to correct their mistake and end up abandoning the request. In short, both of us are feds. Im over 59.5 and she is not. While completing our taxes, we found that our AGI was over the maximum allowed for TSP Roth contributions. We were told by our tax professional to ask for a TSP refund before filing our taxes and all should wash out. I was able to over the phone and had my check within a week. Since my wife was under 59.5, they where going to penalize her and charge a IRS tax on the withdrawal even though the contribution wasn't permitted to begin with. TSP is inept. A simple refund of the 2022 contributions as an overpayment would have fixed the problem. Instead we were fined by the IRS.

I'm confused, I can see how your AGI would limit the amount permitted for contributing to a Roth IRA, but the limits for Roth or Traditional TSP or 401Ks is the same and payroll won't let you go over that threshold in my experience unless you change jobs & have different payroll offices I don't see how you would have any excess contributions. I would question your tax professional's advice.
https://www.myfederalretirement.com/tsp-limits/
https://www.investopedia.com/ask/answers/102714/what-are-roth-401k-contibution-limits.asp
When you withdraw excess contributions, you should get a 1099-R https://www.irs.gov/instructions/i1099r with code 8—Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2023 orP—Excess contributions plus earnings/excess deferrals taxable in 2022 and the withdrawal should include any earnings associated with the contributions, which is considered taxable income and 10% penalty would apply only to the earnings withdrawn. Given recent experience with TSP, they do not know how to properly code 1099-Rs and if you made the withdrawal this year, you won't get that 1099-R until next January.