TSP Divorce Award Payment Errors

On www.federalnewsradio.com – https://federalnewsnetwork.com/commentary/2025/03/are-your-tsp-divorce-payouts-accurate/

UPDATE: On or about October 10, 2025, the TSP began sending out emails notifying participants that an additional payment had been made to their former spouse as a result of a recalculation using the correct CFR rules as the article below discusses. Some folks only became aware when they logged into their account and saw the reduced account balance. The TSP is advising folks that a letter was mailed out on October 15, 2025, to affected participants, better explaining the calculation of the payment. The letter contains no additional information than the email provided.

On November 26, 2025, at 5pm (of course), the TSP sent out a second round of second-payment notifications to affected TSP participants. I have received several such emails from affected participants. These appear to be the same sort of payments, based upon the TSP using the wrong method to determine earnings on the former spouse’s award, but in this round of emails, the rate of return goes out to six decimal places instead of two. Why?

On or about December 16, 2025, another round of adjustments may have been processed. One of my clients has been trying to obtain justice from the TSP for over two years, knowing that his former spouse was overpaid. I re-calculated the award two years ago and confirmed that it was in error and in excess of the correct amount. This client was repreatedly told and berated by the TSP staff that he was wrong and they were right. This went back and forth for over two years. Guess what, on December 16, 2025, my client was refunded $67,204. You can’t believe anything that you are told by the TSP. Where do you think that $67,204 got funded from? Do you really think the TSP can pull that back from the former spouse? Of course not – they have no way to do that. I’d guess that just adds more to the TSP’s expense ratio.

So far, about 25 people have sent their TSP payment notification emails to me, and these 25 adjustments total about $3MM.

One thing I can tell you for sure is that the TSP could care less about you and about this issue. Go ahead, look at the FRTIB meeting minutes here. You will not see a single mention of this material issue where the TSP’s court order processor, Broadridge Processing, incorrectly paid millions of dollars in awards to former spouses.

If you have an issue where the TSP has incorrectly overpaid your former spouse, reach out to:

James Kaplan – Director of External Affairs – FRTIB

james.kaplan@frtib.gov

I’m not doxing this guy, but it is his JOB to help and not to hinder. I had a client reach out on to Mr. Kaplan on 12/3/2025 and his sole assistance was to tell my client, “You should contact the TSP ThriftLine at 1-877-968-3778 with questions about your TSP account.” Of course, when my client called the ThriftLine, he was told that there was nothing the TSP could do and that it was a civil matter between he and his former spouse. Complete BULLSHIT. The ThriftLine isn’t even the right number to call. He should have referred my client to Broadridge Processing, 844-973-0142. In the 25 years I have been involved in federal retirement, I have never seen an agency treat its participants so poorly. The TSP is making OPM look good! The TSP’s strategy is deny, deny, deny and deny. If you are persistent enough, you may get through the “denial wall.” You should not have to have your Senator or Representative get your money refunded. The TSP needs to “own’ it’s mistakes and make immediate payment to these participants whose former spouse’s were overpaid with the second award payments.

This is the same BS that I encountered in 2024 when I had two clients that together, had $250k overpaid to their former spouses (scroll down for those details). They tried and tried and tried to get someone to listen to them at the TSP. I then tried to assist them through the previous Director of External Affairs, and she encountered the deny, deny, deny and deny response from Broadridge Processing. It wasn’t until I sent her a formal report with exact numbers that the TSP finally took action and refunded each of these participants about $125k each. So, don’t believe the “30-day civil matter” comment from the ThriftLine because that’s BULLSHIT too. The TSP can fix all of these overpayments if they want to. As part of that action, I sent each FRTIB Board Member and the General Counsel the same letter about this issue. Each letter was sent in it’s own Priority Mail envelope. Anyone care to guess the number of responses I received? ZERO. I’m telling you, the TSP does not care. Unlike OPM, the TSP does not have an Inspector General, so your only recourse is your elected federal officials. I called Broadridge Processing to try and inform them about two identical errors on these second payments, which fell upon deaf ears. I hung up and said, “If you don’t care, I don’t care.” You just can’t get through to anyone knowledgeable. On 12/4/2025, one of my clients finally convinced the TSP to review his case. As you can see from the image of the email below, the TSP treats themselves like the victim and the Participant has to prove identity and provide documents. The below looks more like a FOIA request email. What a joke.

If there are any attorneys out there contemplating a class-action matter, I’m ready to assist you.

I picked the four most egregious-looking payments and asked the participant for the needed court order and TSP statement to allow me to calculate the award under the “old” CFR. Regrettably, for these folks, all four were spot-on. I saw cases where the initial payment was $115k and the second, recent payment was $200k. It’s crazy how big these second payments can be, given the recent stock market performance.

Outside of those, I also had a participant that had an initial payment made to his former spouse and about 4 months after the initial payment, a second, smaller payment was made. The second smaller payment was to correct the error of using the wrong CFR earnings rule. In this participant’s case, the TSP was in error with the recent additional payment because in their redetermination, the TSP failed to include the second payment in the analysis. In this case, the participant tried reaching out to the TSP and hit a brick wall, so he/she is now seeking redress from his/her elected officials.

On 10/29/2025, I examined a case where the former spouse was paid $568K in March 2024, and an additional $113K on 10/10/2025 pursuant to a letter from the TSP. In this case, I determined that the TSP was IN ERROR and the $113k paid to the former spouse was paid in error. This person is now seeking redress from his/her elected officials, as the TSP is a brick wall. The TSP is making OPM look good!

On 11/02/2025, I examined a case where the TSP paid the former spouse $29,122.13 and should have paid out $10,430.57, an overpayment of $18,691.56. This particular case was different in that a payment was, in fact, due to the former spouse, but was calculated incorrectly. This person is now seeking redress from his/her elected officials, as the TSP is a brick wall.

On 12/2/2025, I examined a case where the TSP’s initial payment to the former spouse was $100k too high, and they also miscalculated the second payment. Want to read how egregious the TSP error was – read my report here. Unbelievable, right? Obvious $100k error, and no one at the TSP will take this seriously. This person is now seeking redress from his/her elected officials, as the TSP is a brick wall.

On 1/8/2026, I examined a case and determined the TSP had overpaid the former spouse by $50k.

So……that makes five out of seven cases examined, payments made by the TSP in error. Believe me, as a 35-year CPA, I get numbers, and the TSP was flat-assed wrong on five of the six cases. How many more of these payments were made in error? These three cases total $320K. How will the TSP get those funds back from the former spouses? That money has left the TSP, so they can’t claw it back. It’s very likely that it will be a “write off” and increase expenses at the TSP.

On 2/10/2026, I was notified by a client that the funds that the TSP retuned to him as a result of the recalculation were included in his 2025 annual account statement as “earnings” rather than an adjustment, so that practce inflated the annual rate of return on his account to 33%, despite being 100% invsted in the G Fund. Way to go, TSP! Just when I thought OPM’s Court Ordered Benefits Branch was the worst federal agency/department……..

For everyone that had an additional payment made to their former spouse under this October 10 and November 26 initiative, the TSP may or may not be correct in making an additional payment.

If you believe that the TSP has made a mistake, I can redetermine the award following the “old” CFR, and if the TSP is incorrect, prepare a signed letterhead report. My fee will vary based upon the findings, but will range from $300 – $750. I will bill you at the conclusion of my work.

To have me redetermine the award, send the following to divorce@fersguide.com:

The RBCO that was sent to the TSP
All communications with the TSP
TSP quarterly statement that covers the “as of” date in the RBCO (I can’t do anything without the statement – just call the TSP)
If possible, the TSP statement that shows the original disbursement amount and date

As much as this sucks, the TSP is duty bound to follow the CFR rules in effect at the time the RBCO was served. Some participants received a refund and some had an additional payment disbursed. Just depends what you were invested in on the “as of” date and what investment choices you made after that. If the TSP had paid the correct amount to the former spouse initially, you’d have the same TSP balance that you have now. My issue isn’t with accurate second payments, my issue lies with INCORRECT second payments.

The TSP has since changed the CFR, and effective 3/24/2025, the TSP has been following the new method that takes the participant’s investment experience into account between the “as of” date and the valuation date.

As is say in my book to the TSP, “Go ahead, sue me – it’s all true.”

Watch my website for a new page soon on why anyone retired and over age 59 1/2 should leave the TSP.

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As a federal employee or annuitant, you may have been through a divorce where your former spouse was awarded a portion of your Thrift Savings Plan (TSP) account balance. Those awards are perfected through the service of a Retirement Benefits Court Order (RBCO) on the TSP. On 5/26/2022, the new TSP plan administrator took over, Accenture Federal Services (AFS). This article deals with award-processing mistakes under AFS.

During the ten years prior to the AFS contract, I drafted or reviewed hundreds of RBCOs. I can’t recall a single instance during that time where a former spouse’s TSP award was miscalculated by the TSP when the National Finance Center operated the TSP’s RBCO processing section.

In December 2023, I was contacted by M.G. who advised that he believed that the award of a portion of his TSP to his former spouse was too large, based upon his review of the TSP “Confirmation of RBCO Asset Transfer” form dated 11/15/2023. I examined the underlying RBCO and TSP records and determined that his former spouse was overpaid by approximately $127,469. I submitted M.G.’s fact set to a Federal Retirement Thrift Investment Board (FRTIB) executive for further investigation.

In March 2024, M.G. received a two-page letter from the TSP, ostensibly to detail how the TSP arrived at the award amount. I have read that letter and all it does is state the amount of the award without any supporting calculations. M.G. ultimately received a credit of $127,469 to his account. At no time did M.G. ever receive an accounting of how the award to his former spouse was calculated. Through M.G.’s discussion with TSP representatives, M.G. learned that in determining the earnings on his former spouse’s award, the TSP considered InterFund Transfers (IFTs) that he executed after the “as of” date of the award.

While waiting for word on the outcome of the recalculation of M.G.’s RBCO, I was contacted by J.D., who also believed that his former spouse’s award was also miscalculated by the TSP. After reviewing the documents in his case, I estimated that the TSP overpaid J.D.’s former spouse by $127,626.

I submitted J.D.’s case to the same FRTIB executive that I regularly interact with, and who always supports TSP participants. If it weren’t for this FRTIB executive’s actions to investigate the issue, I believe that M.G and J.D. would still be waiting for answers.

On 1/10/2025, J.D. received a letter from the TSP, curiously dated 12/10/2024, responding to J.D.’s initial query. The TSP letter states, “The TSP has been reviewing the process for calculating earnings and losses in connection with court orders and has determined that the court order payment was not calculated in accordance with 5 CFR Part 1653.”

The letter goes on to state that if the award stated in the 7/12/2024 RBCO been calculated correctly, the award would have been $524,569.13, which is $126,455.22 lower than the original TSP award computation of $651,114.35, and, of course, the TSP letter states “We apologize for the inconvenience.” As of press time, unlike M.G., J.D. is still waiting for his TSP account to be credited for the admitted overpayment to his former spouse.

For months, J.D. received the same email from the TSP stating, “The TSP is reviewing the process for calculating earnings and losses in connection with court orders. Therefore, all requests for court order calculations are currently on hold. Once we have completed our review, we will respond to your request.” A couple of months after my submissions to the FRTIB, in written letters to M.G. and J.D. the TSP admitted failure in their method of calculation of these awards.

The method that the TSP is required to use when determining earnings “as of” a stated date on an award is defined at 5 CFR 1653.4 “Calculating entitlements.” Specifically, 5 CFR 1653.4(f) requires the TSP to 1) Determine the amount of the award without earnings, 2) Determine the investment fund mix of the participant’s account on the “as of” date and use the award amount to “purchase” shares in the same allocation as the participant’s account, and 3) Re-value those shares on the liquidation date. IFTs are not to be considered in the calculation of earnings on an award of apportion of a participant’s account to a former spouse.

In just these two cases, we’re looking at over a quarter-million dollars of payments made in error. This is a systemwide issue, meaning that it’s my belief that all the awards of this type (with earnings), served on the TSP after 5/26/2022, were incorrectly determined by the TSP’s RBCO administrator, AFS, through their agreement with Broadridge Processing to process RBCOs.

It’s simply unconscionable that TSP representatives in these cases tried to convince both M.G. and J.D. that the TSP was correct in their award calculation and that M.G. and J.D. were incorrect. Both M.G. and J.D. interacted frustratingly with the TSP, incurring delay after delay and repeatedly told that they were incorrect in their determination of the award amount.

As a CPA, I am aware that material events should be reported because the TSP is a public entity. I have reviewed the FRTIB meeting minutes up to, and including, the 12/19/2024 meeting (the latest minutes published at press time), and observed no mention of this issue.

The GAO issued a report to Congress in August 2024, entitled “Thrift Savings Plan – Investment Board Needs to Greatly Improve Acquisition Management and Contractor Oversight.”

Page 33 of the GAO report stated this concerning the processing of RBCOs:

“In addition, participants with a court order to obtain retirement benefits, reported that they received a benefit amount that was not calculated correctly. This occurred because, as previously discussed, the standard process used by AFS for calculating the award amounts was inconsistent with federal regulations, which the contractor is required by the contract to follow in automating TSP services. As previously discussed, FRTIB planned to propose changing its regulations to align with AFS’s commercial approach to calculating these benefits and expected a proposed rule to be completed by the end of September 2024.”

It’s concerning that the FRTIB is planning to change the CFR to match AFS’ procedures for determining awards rather than making AFS conform to 5 CFR 1653. I assume that AFS’ earnings determination routines for other Broadridge clients consider post-valuation investment changes. I believe that 5 CFR 1653.4(f) protects former spouses from any trade activity that their former spouse (the participant) may engage in after the divorce. If the FRTIB were to change the language in 5 CFR 1653.4(f) to consider IFTs after the “as of” date, a spiteful participant could execute an IFT to move all of their funds to the G Fund or a low-earning fund. 5 CFR 1653.4(f) protects a former spouse from such actions.

I don’t know how the TSP plans to handle these earnings calculation errors prospectively. The TSP may be re-processing all the RBCOs served since 5/26/2022 that were “with earnings” and making adjustments, following 5 CFR Part 1653, without the need for the participant to contact the TSP. I never leave anything up to chance – if you are potentially affected by this TSP systemic processing error, I encourage you to calculate the awarded earnings on your own or consult a professional to make the proper calculation under the CFR and compare that calculated award to what was ultimately disbursed by the TSP to your former spouse.

If the award to your former spouse did not include earnings and losses, then you have nothing to worry about – your award should have been processed correctly by the TSP.

This issue begs the questions – “How will the TSP account for the overpayments?” Will they write them off? – The TSP’s expense ratios for the S Fund and C Fund are already at least double the expense ratios of similar funds at Schwab or Fidelity. Writing the overpayments off as an expense will cause those expense ratios to rise even higher. Will the TSP seek repayment from the former spouse that was overpaid? How will that be accomplished? It’s not like the TSP can claw back the overpaid funds because the payment has already been disbursed. What about a former spouse that used the TSP award to purchase a home – will the TSP foreclose to recover the overpayment or file a lien? Trust me folks, this is a big issue, and all TSP participants will pay for it, one way or another. Certainly, there may be cases where a former spouse was underpaid – how will those be handled?

If you would like to contact the author to report your RBCO experience with the TSP, he can be reached at divorce@fersguide.com.