Direct rollover to “new” TSP

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rick51
Posts: 196
Joined: Mon Sep 14, 2009 7:33 pm
Location: Maryland

Direct rollover to “new” TSP

Post by rick51 »

Anybody have any experience doing a directly rollover from an IRA to the TSP since the TSP implemented its recent system changes. It looks like they tried to make an indirect rollover easier, but i’m not sure how the new system handles a direct rollover.
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SquawkIdent
Posts: 929
Joined: Tue Dec 23, 2008 6:14 pm
Location: Planet Earth

Re: Direct rollover to “new” TSP

Post by SquawkIdent »

Yes, I have. It’s coming up on a 2 month ordeal. But I’m pretty sure I see the light at the end of the tunnel. I’m just not sure if I’m close to the finish line or a train is going to run over me. Pre “improvement” I did 2 of these direct rollovers and they were completed in 2-3 weeks.

Seriously, it’s been very difficult to get this done. Lost check and paperwork. Waiting on hold with the TSP for hours (it’s better now), etc.

Do a search for threads about this.

The only reason I’m doing this is for the G Fund.

Buyer beware…
chemocean
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Joined: Mon Dec 19, 2016 8:45 pm

Re: Direct rollover to “new” TSP

Post by chemocean »

I just tried to initiate the opposite: take money out of TSP and put into a Vanguard traditional IRA. Even though I made several direct rollover withdrawals to vanguard in the past, I needed to establish Vanguard as a payee in the new system and find the Vanguard check sending address on their url (El Paso). When I got vanguard info added in the TSP website , the TSP website said I had to wait 7 days for them to verify the Vanguard address (and maybe my Vanguard Traditional Brokerage IRA account).
Topic Author
rick51
Posts: 196
Joined: Mon Sep 14, 2009 7:33 pm
Location: Maryland

Re: Direct rollover to “new” TSP

Post by rick51 »

Well that’s not very encouraging, but thank you for the feedback.
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calmaniac
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Re: Direct rollover to “new” TSP

Post by calmaniac »

I did a direct rollover of my IRA to my TSP last year using form TSP-60 and it was completed in ≈10-14 days from receipt. Very smooth.

Form TSP-60 appears to now be obsolete and the rollover into TSP must be done via the TSP web site web or TSP smart phone app.

I am planning to move a 401k from old job to TSP in the coming months. On TSP web site “Roll Over In” section it notes "Your rollover check must be mailed or scanned via the Mobile app".

Even if you mail a check, the transfer is done via electronic fund transfer. From TSP: "Notice to Customers Presenting Checks. When you provide a check as payment, you authorize us either to use information from your check to make a one-time electronic fund transfer from your account or to process the payment as a check transaction."

Although the Mobile app gets awful reviews, my best guess is that uploading the check may be a smoother way to go than mailing a hard copy check to TSP. (Maybe I should call them and ask what they suggest...)

Last point: For a direct rollover the check must be made out to "Thrift Savings Plan FBO insert your name" or similar. Check out “Roll Over In” section on TSP website.
"Pretired", working 20 h/wk. AA 75/25: 30% TSM, 19% value (VFVA/AVUV), 18% Int'l LC, 8% emerging, 25% GFund/VBTLX. Military pension ≈60% of expenses. Pension+SS@age 70 ≈100% of expenses.
Weathering
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Joined: Sun Oct 15, 2017 4:20 pm

Re: Direct rollover to “new” TSP

Post by Weathering »

Quick question because I'm going to be doing this too.
So, The TSP account owner tells Vanguard how to make out the check ("Thrift Savings a plan FBO account owners name), then Vanguard sends the IRA withdrawal check to the account owner who deposits into (rolls it into) the TSP? I want to make sure I understand the flow of the check because I was thinking it would go directly from Vanguard to the TSP.

Vanguard would later send an IRA withdrawal tax form with the box checked for rolling the withdrawal into another retirement account. Is that correct?
Alan S.
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Location: Prescott, AZ

Re: Direct rollover to “new” TSP

Post by Alan S. »

Weathering wrote: Fri Aug 12, 2022 11:22 pm Quick question because I'm going to be doing this too.
So, The TSP account owner tells Vanguard how to make out the check ("Thrift Savings a plan FBO account owners name), then Vanguard sends the IRA withdrawal check to the account owner who deposits into (rolls it into) the TSP? I want to make sure I understand the flow of the check because I was thinking it would go directly from Vanguard to the TSP.

Vanguard would later send an IRA withdrawal tax form with the box checked for rolling the withdrawal into another retirement account. Is that correct?
Whether the check is sent directly to the TSP or to you to forward to the TSP, due to the payee format ("TSP fbo you") this should be reported by VG as a direct rollover on your 1099R. The recipient should be reported as you with your SSN shown, and the code in Box 7 should be "G" for direct rollover.

Scanning the check into the TSP phone app should have the same result as mailing it. This should save more mailing time, but you need to monitor TSP deposit into the account. VG will debit your IRA upon issuing the check that is mailed to you.

If you have IRA basis shown on line 14 of your most recent Form 8606, be sure that any basis remains behind in your IRA and is not included in the direct rollover amount. You are not allowed to roll IRA basis into an employer plan. The TSP may ask you to certify that your rollover does not contain any basis.
tyhughes
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Joined: Wed Aug 07, 2013 6:30 am

Re: Direct rollover to “new” TSP

Post by tyhughes »

In April, I did a partial direct rollover of my traditional IRA at Vanguard to my thrift savings plan (TSP) account. Dealing with Vanguard on this transaction was disappointing.

I used Vanguard's online form to do a direct rollover from my Vanguard IRA to my TSP account. My goal was to replace the short-term bond funds in my IRA with the TSP G fund. I also uploaded a very clear letter of instruction and a completed form TSP-60.

TSP requires the transferring custodian to either complete Section III of the TSP-60 form, provide a letter of determination or a letter on its letterhead confirming that the funds are being transferred from a qualified plan. TSP requires that information before they can deposit a rollover check.

Two weeks after I initiated the direct rollover, TSP notified me that it had received a check from Vanguard but could not deposit the funds because Vanguard did not send the TSP-60 certification or any confirmation that the funds had come from a qualified plan. (This was after I had called Vanguard to follow up on the rollover and the Vanguard person assured me that they would send the necessary TSP-60 information to TSP.)

I then made several calls to Vanguard. I was transferred to numerous individuals — first onboarding IRAs, then investments, then retirement, then back to IRA onboarding — none of them could help. I contacted my old Flagship account rep by email but he did not respond. I also contacted the Vanguard Head of Executive Response for the Retail Group in Charlotte, NC by email, but he did not respond or help. I kept calling and eventually was connected to a person in Vanguard retirement who understood the problem and promised to send the completed TSP-60 form to TSP.

Approximately one month after I initiated the direct rollover, I received a confirmation from TSP that the funds were credited to my TSP account. It should not have taken that long or been so difficult to complete this routine direct rollover transaction.

After all this, my Vanguard account on the website reports the direct rollover as a distribution in the RMD section. It is technically a distribution but not an RMD. I am hoping (but have no confidence) that the 1099-R at the end of the year will be correctly coded.

Lessons Learned:

The only advice I have for the OP is do a custodian to custodian transfer, i.e., let Vanguard send the check directly to TSP. I believe rollover funds have to be deposited within 60 days. The timing problem is that TSP won't deposit any rollover check until it receives confirmation that the funds came from a qualified plan.

You may have a better experience than me. If you decide to do the rollover, you may have to stay on Vanguard's case until someone completes Section III of the TSP-60 or provides some other confirmation that the rollover funds are coming from a qualified plan.

Observations from this Experience:

1. Flash to bang time for the direct rollover was about a month. I received no interest on the transferred funds for the majority of this period.

2. The current customer support at Vanguard is terrible. I have been a Vanguard customer for several decades. There is no way to escalate a problem. In contrast, the TSP folks were very helpful (but this was before the cutover to the new TSP site when it was easy to get through by phone).

3. The elimination of the Flagship personal reps was an incredibly stupid decision by Vanguard management. Today, no one at Vanguard takes ownership of a customer problem, and no one follows up. It is matrix-type support at its worst.

4. The Vanguard AI bot that tries to determine where to route your call has a limited vocabulary and is easily confused. If you can't describe what you need in one or two words, you will likely be routed to multiple people (with attendant hold times for each call transfer) before you can find someone who can help.

5. Trying to communicate with Vanguard by email sometime feels like putting a note in a bottle and throwing it the ocean hoping that when it washes ashore someone from Vanguard will find it and respond.

6. On a positive note, there is usually someone at Vanguard who can solve your problem; it just takes time and persistence to find that person. My Flagship rep, when I had one, was excellent. And, I like and hold a number of Vanguard funds and ETFs.
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