TSP savers withdrew $2.9 billion under CARES Act
By
Natalie Alms
By the end of the program, almost 120,000 Thrift Savings Plan participants used CARES Act withdrawals.
Thrift Savings Plan participants used special withdrawal options passed into law in the first pandemic relief package at relatively steady rates in the final months of last year before the program ended in December.
The Coronavirus Aid, Relief and Economic Security (CARES) Act, passed last March, provided TSP participants to make a one-time withdrawals of up to $100,000 without meeting age or the usual financial hardship qualifications.
Instead, participants had to meet one out of several pandemic-related qualifications, such as being diagnosed with COVID-19 or experiencing financial hardship because of the participant or their family being quarantined, laid off or unable to work due to child care requirements.
The program ended on December 31, 2020, but data discussed in the monthly meeting of the Federal Retirement Thrift Investment Board on Tuesday showed how feds and uniformed service members made use of the CARES Act provisions.
Since that special withdrawal option opened up in July, 119,720 people participated in CARES withdrawals for a total of $2.9 billion. The monthly volume of withdrawals peaked in August at 28,404 withdrawals.
By October, it was down to 16,488, but it stayed relatively steady until the end of the year. In November, there were 15,514 withdrawals and in December, there were 14,054.
"Activity remained fairly steady through until the end," said Tee Ramos, the director of participant services for FRTIB. "The program was fairly well utilized and appreciated by our participants, and I would say it was a success."
The number of hardship withdrawals and loans under the usual standards and rules was actually 18% lower in 2020 than in 2019. That change was "likely driven by use of the CARES act withdrawals and loans," Ramos said.
The calendar year ended with plan assets at $709.6 billion and 6.2 million participants and beneficiaries. That's compared to about $632 billion for 5.9 million participants and beneficiaries at the end of 2019. FRTIB officials cited changes like automatic enrollment and a uniformed services initiative for the increase, as well as a rising stock market.