FERS vs. CSRS: the TSP and rights of the Spouse

Like every other retirement plan, TSP has provided rights to the spouses of every employee and retiree. However, the rights vary since it depends on whether the spouse is covered in CSRS and FERS. Both of them have different ways of dealing with employees and retirees. If you are under FERS, unless the spouse has renounced the title for receiving a particular type of allowance, that can be joint life with 50% benefit to the survivor and no additional features. Although many options are offered in the ongoing TSP annuity, this choice for the spouse for non-payment could be more attractive. It does not mean other options are intriguing. They have some additional features that are rigid. TSP annuities could be more popular among employees. Therefore, these choices are least preferred. Thus, many spouses are abandoning their titles as a right to the annuity.

Furthermore, if you are a FERS employee, you might have to discuss the TSP withdrawal choice with your spouse to have their informed consent. Once your spouse gets to know the substitute, there are higher chances that they will choose the latter and give their consent. As a spouse, you can have a legally married same-sex spouse to have all the federal benefits. 

If you are an employee or a retiree under CSRS, your spouse will have fewer benefits than FERS. It is required by the TSP to notify the spouses about the choice an employee has set. The letter that would be given to the spouse by TSP states that they will have no access to the TSP account. It is issued right after the employee/retiree makes their first withdrawal from the account. 

Why is there a Difference in the ways of Treating the Spouses?

There is not a major difference, but a minor one. Both FERS and CSRS deal with the rights of spouses. There can be many reasons for it. Some of here are enlisted here. 

There might be a chance that when these rules were set, the federal employees represented us in Congress under the CSRS. They might not want their spouses to interfere in the TSP account matters. Therefore, they have only given spouses the protection they need for hiring in the future under the FERS. A skeptical person would not easily consider this as the main reason. 

Moreover, after considering this and assessing the substitutions, the ones representing us have understood that the TSP was a greater part for FERS who want to retire. Thus, it is a much greater part of the survivor’s income. On the other hand, many CSRS employees would retire with a tiny account balance. Hence, they offered protection to the spouses of the FERS employees or retirees. Those with a positive view of human nature would subscribe to this opportunity for their benefit.

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