TSP: ability to re-amortize loan removed with new website

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Topic Author
motorcyclesarecool
Posts: 956
Joined: Sun Dec 14, 2014 6:39 am

TSP: ability to re-amortize loan removed with new website

Post by motorcyclesarecool »

I took out a TSP residential loan to buy our home in 2018. Since then, I had repeatedly used the TSP website to increase my loan payments if I was anticipating a bonus or other windfall, and after that I re-amortized the loan to lower my payments. At the time that the website changed over, I had increased my payments due to a windfall, intending to re-amortize before too long. When the new website came online I was able to access it without excess trouble. When I went to re-amortize my loan, there was no such option. I called the thrift line, and after an hour on hold, the very kind and professional agent informed me that voluntary reamortization is no longer available even over the phone, as the website cannot handle it. I asked what scenario would trigger an involuntary reamortization, and she said if I spent time out of a pay status and didn’t make payments, then at the end, they would reamortize my payments to match the new loan parameters.

With all the new features they were hyping about the “upgraded” website, I missed all mentions of this significant downgrade in functionality.

I reached out to the OPM Ombudsman’s office, as well as constituent services, but haven’t heard back. Is there any further action I can take? I can’t be the only person in this situation.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.
Topic Author
motorcyclesarecool
Posts: 956
Joined: Sun Dec 14, 2014 6:39 am

Re: TSP: ability to re-amortize loan removed with new website

Post by motorcyclesarecool »

Bumping post…

I’ve now heard back from my senator’s office. We had a chat, then the next day someone from the TSP called me but was not empowered to fix things. I tried to explain that they have a fiduciary responsibility to act in my interest and they unilaterally changed the terms of my loan without informing me ahead of time, but it was like talking to a brick wall.

I don’t know if there would be enough money at stake to try litigation, even though it would be a potentially huge class action. I’d welcome any thoughts.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.
Topic Author
motorcyclesarecool
Posts: 956
Joined: Sun Dec 14, 2014 6:39 am

Re: TSP: ability to re-amortize loan removed with new website

Post by motorcyclesarecool »

Update: the same TSP rep from what is likely their congressional liaison unit called back today. She made no promises but gave me the opportunity to request that my TSP loan be “reconsidered”. If granted, they will do a final, one-time reamortization. Pure speculation: I’ll bet they want their congressional inquiries closed out by end of FY22.

I’ll report back when I hear more.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.
deserat
Posts: 168
Joined: Fri Dec 27, 2019 4:08 am

Re: TSP: ability to re-amortize loan removed with new website

Post by deserat »

Gotta love the federal government sometimes. I hate that I have to do a Congressional to get their attention and do what they are required to do, but having done one now for an issue between federal agencies I am not afraid to use it. Thanks for posting your issue; it's a reminder to read the fine print for what it and isn't there with any change.
Punch
Posts: 1
Joined: Fri Oct 14, 2022 8:56 pm

Re: TSP: ability to re-amortize loan removed with new website

Post by Punch »

Anyone mention CFR § 1655.16? I'm not a JAG though have the same issue WRT reamortizing my TSP loan. Paras (a) thru (e) are all affected by the recent TSP upgrade though para (e) is what all TSP loan holders should be able to do.
https://www.govinfo.gov/content/pkg/CFR ... 655-17.pdf
§ 1655.16 Reamortization.
(a) A participant may request reamortization of a loan at any time to change the amount of the payments, unless the loan is in a default status.
(b) Upon reamortization, the outstanding principal balance remains the same. Any accrued interest is paid off first before payments are applied to principal and current interest.
(c) The interest rate on a reamortized loan will be the same as the interest rate on the original loan.
(d) A participant may request reamortization by using the TSP Web site or by contacting a TSPSO participant service representative.
(e) When a participant’s pay cycle changes for any reason, he or she should request a reamortization to adjust the scheduled payment to an equivalent amount in the new pay cycle. If the new pay cycle results in fewer payments per year and the participant does not reamortize the loan, the loan may be declared a taxable distribution pursuant to §1655.15(a)(3).

Notice para (a) states "may request reamortization of a loan at any time to change the amount of the payments" which was possible PRIOR to the TSP update.

Perhaps CFR § 1655.16 somehow needs to be relayed to the current managers of TSP (seems another example of government awarding a contract to the lowest bidder).
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