Anew rule proposed on April 18 could change how Thrift Savings Plan-based loans are repaid under reamortization terms.
The Federal Retirement Thrift Investment Board, which governs the federal government’s 401(k)-style retirement plan, detailed its plan to amend a loan reamorization rule in the Federal Register. The board proposed a combination of accrued interest with the outstanding principal when reamortizing a loan made out of the TSP.
Currently, any active TSP participant that takes a loan out of their retirement plan account must start repayments with interest within 60 days of the loan’s disbursement. Those repayments can be deducted from their paycheck.
