Involuntary Closure of TSP Account

[donzoh1]

I retired from government service in 2015. At that time, I rolled about 80 percent of my TSP funds into a Vanguard account because I believed Vanguard had more investment options. All of the funds were Pre-Tax...not Roth. Meanwhile, I took some distributions from TSP and migrated funds between the two accounts/brokerages in order to continue to take TSP distributions when TSP funds were reduced. If TSP funds ran out (which they did at one point in 2010) I just moved funds from Vanguard. My understanding is that Kansas does not tax Civil Service Annuities and also does not tax retirement accounts/payments if they were a civil service benefit. I consider TSP a civil service retirement benefit and some of the funds from that are government contributions.

Fast forward to 2023. Funds again ran out in TSP. I tried to roll funds from Vanguard as before and eventually was informed that my TSP account had been closed! They issued me a check for the funds most recently sent from Vanguard (which I have since rolled back to Vanguard). I've called TSP several times and have been told that they now will close any TSP account if the balance falls below $200. Do not pass Go. They will send you the account balance, if any. They will NOT warn you regarding the low balance. You are saying "Goodbye to TSP if you let your balance fall below $200.

[Scarfinger]

Thanks for the heads up.