
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 5USC8433]

 
             TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES
 
                           PART III--EMPLOYEES
 
                   Subpart G--Insurance and Annuities
 
            CHAPTER 84--FEDERAL EMPLOYEES' RETIREMENT SYSTEM
 
                   SUBCHAPTER III--THRIFT SAVINGS PLAN
 
Sec. 8433. Benefits and election of benefits

    (a) An employee or Member who separates from Government employment 
is entitled to the amount of the balance in the employee's or Member's 
account (except for the portion of such amount forfeited under section 
8432(g) of this title, if any) as provided in this section.
    (b) Subject to section 8435 of this title, any employee or Member 
who separates from Government employment is entitled and may elect to 
withdraw from the Thrift Savings Fund the balance of the employee's or 
Member's account as--
        (1) an annuity;
        (2) a single payment;
        (3) 2 or more substantially equal payments to be made not less 
    frequently than annually; or
        (4) any combination of payments as provided under paragraphs (1) 
    through (3) as the Executive Director may prescribe by regulation.

    (c)(1) In addition to the right provided under subsection (b) to 
withdraw the balance of the account, an employee or Member who separates 
from Government service and who has not made a withdrawal under 
subsection (h)(1)(A) may make one withdrawal of any amount as a single 
payment in accordance with subsection (b)(2) from the employee's or 
Member's account.
    (2) An employee or Member may request that the amount withdrawn from 
the Thrift Savings Fund in accordance with subsection (b)(2) be 
transferred to an eligible retirement plan.
    (3) The Executive Director shall make each transfer elected under 
paragraph (2) directly to an eligible retirement plan or plans (as 
defined in section 402(c)(8) of the Internal Revenue Code of 1986) 
identified by the employee, Member, former employee, or former Member 
for whom the transfer is made.
    (4) A transfer may not be made for an employee, Member, former 
employee, or former Member under paragraph (2) until the Executive 
Director receives from that individual the information required by the 
Executive Director specifically to identify the eligible retirement plan 
or plans to which the transfer is to be made.
    (d)(1) Subject to paragraph (3) \1\ and subsections (a) and (c) of 
section 8435 of this title, an employee or Member may change an election 
previously made under this subchapter.
---------------------------------------------------------------------------
    \1\ So in original. Probably should be paragraph ``(2)''.
---------------------------------------------------------------------------
    (2) A former employee or Member may not change an election under 
this section on or after the date on which a payment is made in 
accordance with such election or, in the case of an election to receive 
an annuity, the date on which an annuity contract is purchased to 
provide for the annuity elected by the former employee or Member.
    (e) If an employee or Member (or former employee or Member) dies 
without having made an election under this section or after having 
elected an annuity under this section but before making an election 
under section 8434 of this title, an amount equal to the value of that 
individual's account (as of death) shall, subject to any decree, order, 
or agreement referred to in section 8435(c)(2) of this title be paid in 
a manner consistent with section 8424(d) of this title.
    (f)(1) Notwithstanding subsection (b), if an employee or Member 
separates from Government employment, and such employee's or Member's 
nonforfeitable account balance is less than an amount that the Executive 
Director prescribes by regulation, the Executive Director shall pay the 
nonforfeitable account balance to the participant in a single payment, 
unless an election under section 8432b(h)(2) is made to treat such 
separation for purposes of this paragraph as if it had never occurred.
    (2) Unless otherwise elected under this section, and subject to 
paragraph (1), benefits under this subchapter shall be paid as an 
annuity commencing for an employee, Member, former employee, or former 
Member on April 1 of the year following the latest of the year in 
which--
        (A) the employee, Member, former employee, or former Member 
    becomes 70\1/2\ years of age; or
        (B) the employee, Member, former employee, or former Member 
    separates from Government employment.

    (g)(1) At any time before separation, an employee or Member may 
apply to the Board for permission to borrow from the employee's or 
Member's account an amount not exceeding the value of that portion of 
such account which is attributable to contributions made by the employee 
or Member under section 8432(a) of this title. Before a loan is issued, 
the Executive Director shall provide in writing the employee or Member 
with appropriate information concerning the cost of the loan relative to 
other sources of financing, as well as the lifetime cost of the loan, 
including the difference in interest rates between the funds offered by 
the Thrift Savings Fund, and any other effect of such loan on the 
employee's or Member's final account balance.
    (2) Loans under this subsection shall be available to all employees 
and Members on a reasonably equivalent basis, and shall be subject to 
such other conditions as the Board may by regulation prescribe. The 
restrictions of section 8477(c)(1) of this title shall not apply to 
loans made under this subsection.
    (3) A loan may not be made under this subsection to the extent that 
the loan would be treated as a taxable distribution under section 72(p) 
of the Internal Revenue Code of 1986.
    (4) A loan may not be made under this subsection unless the 
requirements of section 8435(e) of this title are satisfied.
    (h)(1) An employee or Member may apply, before separation, to the 
Board for permission to withdraw an amount from the employee's or 
Member's account based upon--
        (A) the employee or Member having attained age 59\1/2\; or
        (B) financial hardship.

    (2) A withdrawal under paragraph (1)(A) shall be available to each 
eligible participant one time only.
    (3) A withdrawal under paragraph (1)(B) shall be available only for 
an amount not exceeding the value of that portion of such account which 
is attributable to contributions made by the employee or Member under 
section 8432(a) of this title.
    (4) Withdrawals under paragraph (1) shall be subject to such other 
conditions as the Executive Director may prescribe by regulation.
    (5) A withdrawal may not be made under this subsection unless the 
requirements of section 8435(e) of this title are satisfied.

(Added Pub. L. 99-335, title I, Sec. 101(a), June 6, 1986, 100 Stat. 
544; amended Pub. L. 100-238, title I, Sec. 132, Jan. 8, 1988, 101 Stat. 
1760; Pub. L. 101-335, Secs. 5(a), 6(a)(2), July 17, 1990, 104 Stat. 
321, 322; Pub. L. 102-484, div. D, title XLIV, Sec. 4437(a), Oct. 23, 
1992, 106 Stat. 2724; Pub. L. 103-226, Sec. 9(b), (i)(3)-(7), Mar. 30, 
1994, 108 Stat. 119, 121, 122; Pub. L. 103-353, Secs. 4(b), 5(e)(4), 
Oct. 13, 1994, 108 Stat. 3172, 3174; Pub. L. 104-208, div. A, title I, 
Sec. 101(f) [title VI, Sec. 659 [title II, Sec. 203(a)]], Sept. 30, 
1996, 110 Stat. 3009-314, 3009-372, 3009-374; Pub. L. 106-65, div. A, 
title VI, Sec. 661(a)(4), Oct. 5, 1999, 113 Stat. 672.)

               Amendment of Subsections (g)(1) and (h)(3)

        Pub. L. 106-65, div. A, title VI, Secs. 661(a)(4), 663, Oct. 5, 
    1999, 113 Stat. 672, 673, as amended by Pub. L. 106-398, Sec. 1 
    [[div. A], title VI, Sec. 661(a)], Oct. 30, 2000, 114 Stat. 1654, 
    1654A-167, provided that effective 180 days after Oct. 30, 2000, 
    unless postponed, subsections (g)(1) and (h)(3) of this section are 
    amended by striking ``under section 8432(a) of this title''.

                       References in Text

    Sections 72(p) and 402(c)(8) of the Internal Revenue Code of 1986, 
referred to in subsecs. (c)(3) and (g)(3), are classified to sections 
72(p) and 402(c)(8), respectively, of Title 26, Internal Revenue Code.


                               Amendments

    1996--Subsec. (b). Pub. L. 104-208, Sec. 101(f) [title VI, Sec. 659 
[title II, Sec. 203(a)(1)]], added subsec. (b) and struck out former 
subsec. (b) which read as follows: ``Subject to section 8435 of this 
title, any employee or Member who separates from Government employment 
is entitled and may elect--
        ``(1) to receive an immediate annuity from the Thrift Savings 
    Fund;
        ``(2) to defer the commencement of the payment of an annuity 
    from the Thrift Savings Fund until such date as the employee or 
    Member specifies, but not later than April 1 of the year following 
    the year in which the employee or Member becomes 70\1/2\ years of 
    age;
        ``(3) to withdraw the amount of the balance in the employee's or 
    Member's account in the Thrift Savings Fund in one or more 
    substantially equal payments to be made not less frequently than 
    annually and to commence before April 1 of the year following the 
    year in which the employee or Member becomes 70\1/2\ years of age; 
    or
        ``(4) to transfer the amount of the balance in the employee's or 
    Member's account to an eligible retirement plan as provided in 
    subsection (c).''
    Subsec. (c). Pub. L. 104-208, Sec. 101(f) [title VI, Sec. 659 [title 
II, Sec. 203(a)(1)]], added subsec. (c) and struck out former subsec. 
(c) which read as follows:
    ``(1) The Executive Director shall make each transfer elected under 
subsection (b)(4) directly to an eligible retirement plan or plans (as 
defined in section 402(c)(8) of the Internal Revenue Code of 1986) 
identified by the employee, Member, former employee, or former Member 
for whom the transfer is made.
    ``(2) A transfer may not be made for an employee, Member, former 
employee, or former Member under paragraph (1) until the Executive 
Director receives from that individual the information required by the 
Executive Director specifically to identify the eligible retirement plan 
or plans to which the transfer is to be made.''
    Subsec. (d)(1). Pub. L. 104-208, Sec. 101(f) [title VI, Sec. 659 
[title II, Sec. 203(a)(2)(A)]], substituted ``(3)'' for ``(3)(A)'' after 
``Subject to paragraph''.
    Subsec. (d)(2). Pub. L. 104-208, Sec. 101(f) [title VI, Sec. 659 
[title II, Sec. 203(a)(2)(C)]], struck out subpar. (A) designation 
before ``A former employee'' and struck out subpar. (B) which read as 
follows: ``A modification of a date may not be made under paragraph (2) 
on or after the date on which an annuity contract is purchased to 
provide for the annuity involved, and may not specify a date for the 
commencement of an annuity earlier than 90 days after the date on which 
the modification is submitted to the Executive Director (or such period 
shorter than 90 days as the Executive Director may by regulation 
prescribe).''
    Pub. L. 104-208, Sec. 101(f) [title VI, Sec. 659 [title II, 
Sec. 203(a)(2)(B)]], redesignated par. (3) as (2) and struck out former 
par. (2) which read as follows: ``Subject to paragraph (3)(B) and 
section 8435(c) of this title, a former employee or Member who has made 
an election pursuant to subsection (b)(2) may modify the date specified 
in such election or in a previous modification under this paragraph.''
    Subsec. (d)(3). Pub. L. 104-208, Sec. 101(f) [title VI, Sec. 659 
[title II, Sec. 203(a)(2)(B)]], redesignated par. (3) as (2).
    Subsec. (f)(1). Pub. L. 104-208, Sec. 101(f) [title VI, Sec. 659 
[title II, Sec. 203(a)(3)]], substituted ``less than an amount that the 
Executive Director prescribes by regulation'' for ``$3,500 or less'' and 
substituted a comma for ``unless the employee or Member elects, at such 
time and otherwise in such manner as the Executive Director prescribes, 
one of the options available under subsection (b), or''.
    Subsec. (f)(2). Pub. L. 104-208, Sec. 101(f) [title VI, Sec. 659 
[title II, Sec. 203(a)(4)]], in introductory provisions substituted 
``April 1'' for ``February 1'', in subpar. (A) substituted ``70\1/2\'' 
for ``65'' and inserted ``or'' after semicolon, redesignated subpar. (C) 
as (B), and struck out former subpar. (B) which read as follows: 
``occurs the tenth anniversary of the year in which the employee, 
Member, former employee, or former Member became subject to this 
subchapter; or''.
    Subsec. (g)(1). Pub. L. 104-208, Sec. 101(f) [title VI, Sec. 659 
[title II, Sec. 203(a)(5)(A)]], struck out ``after December 31, 1987, 
and'' after ``At any time'', and inserted at end ``Before a loan is 
issued, the Executive Director shall provide in writing the employee or 
Member with appropriate information concerning the cost of the loan 
relative to other sources of financing, as well as the lifetime cost of 
the loan, including the difference in interest rates between the funds 
offered by the Thrift Savings Fund, and any other effect of such loan on 
the employee's or Member's final account balance.''
    Subsec. (g)(2) to (5). Pub. L. 104-208, Sec. 101(f) [title VI, 
Sec. 659 [title II, Sec. 203(a)(5)(B)]], redesignated pars. (3) to (5) 
as (2) to (4), respectively, and struck out former par. (2) which read 
as follows: ``An application under this subsection may be approved only 
for--
        ``(A) the purchase of a primary residence;
        ``(B) educational expenses;
        ``(C) medical expenses; or
        ``(D) financial hardship.''
    Subsec. (h). Pub. L. 104-208, Sec. 101(f) [title VI, Sec. 659 [title 
II, Sec. 203(a)(6)]], added subsec. (h).
    1994--Subsec. (b). Pub. L. 103-226, Sec. 9(b)(1), amended 
introductory provisions generally, substituting ``Subject to section 
8435 of this title, any employee or Member who separates from Government 
employment is entitled and may elect--'' for ``Subject to section 8435 
of this title, any employee or Member who separates from Government 
employment entitled to an immediate annuity under subchapter II of this 
chapter, any employee or Member who separates from Government employment 
entitled to benefits under subchapter I of chapter 81 of this title, any 
employee who separates from Government employment pursuant to 
regulations under section 3502(a) of this title or procedures under 
section 3595(a) of this title in a reduction in force, and any employee 
or Member who is entitled to receive disability benefits under 
subchapter V of this chapter is entitled and may elect--''.
    Subsec. (b)(4). Pub. L. 103-226, Sec. 9(i)(3), substituted 
``subsection (c)'' for ``subsection (e)''.
    Subsec. (c). Pub. L. 103-226, Sec. 9(b)(2), redesignated subsec. (e) 
as (c) and struck out former subsec. (c) which related to permissible 
elections by employees separating from Government who are entitled to a 
deferred annuity.
    Subsec. (c)(1). Pub. L. 103-226, Sec. 9(b)(3), substituted 
``directly to an eligible retirement plan or plans (as defined in 
section 402(c)(8) of the Internal Revenue Code of 1986)'' for ``or 
(c)(4) or required under subsection (d) directly to an eligible 
retirement plan or plans (as defined in section 402(a)(5)(E) of the 
Internal Revenue Code of 1954)''.
    Subsec. (d). Pub. L. 103-353, Sec. 4(b)(1), inserted before period 
at end ``, unless an election under section 8432b(h)(2) is made to treat 
such separation for purposes of this subsection as if it had never 
occurred''.
    Pub. L. 103-226, Sec. 9(b)(2), redesignated subsec. (f) as (d) and 
struck out former subsec. (d) which read as follows: ``Subject to 
section 8435 of this title, any employee or Member who separates from 
Government employment before becoming entitled to a deferred annuity 
under subchapter II of this chapter shall transfer the amount of the 
balance in the employee's or Member's account to an eligible retirement 
plan as provided in subsection (e), unless an election under section 
8432b(h)(2) is made to treat such separation for purposes of this 
subsection as if it had never occurred.''
    Subsec. (d)(1). Pub. L. 103-226, Sec. 9(i)(4), substituted ``(c) of 
section 8435'' for ``(d) of section 8435''.
    Subsec. (d)(2). Pub. L. 103-226, Sec. 9(b)(4), (i)(5), substituted 
``section 8435(c)'' for ``section 8435(d)'' and struck out ``or (c)(2)'' 
after ``subsection (b)(2)''.
    Subsec. (e). Pub. L. 103-226, Sec. 9(b)(2), (i)(6), redesignated 
subsec. (g) as (e) and substituted ``section 8435(c)(2)'' for ``section 
8435(d)(2)''. Former subsec. (e) redesignated (c).
    Subsec. (f). Pub. L. 103-226, Sec. 9(b)(2), redesignated subsec. (h) 
as (f). Former subsec. (f) redesignated (d).
    Subsec. (f)(1). Pub. L. 103-226, Sec. 9(b)(5)(A), (B), redesignated 
par. (2) as (1), substituted ``Notwithstanding subsection (b), if an 
employee or Member separates from Government employment, and such 
employee's or Member's'' for ``Notwithstanding subsections (b) and (c), 
if an employee or Member separates from Government employment under 
circumstances making such employee or Member eligible to make an 
election under either of those subsections, and such employee's or 
Member's'', struck out ``or (c), as applicable'' before period at end, 
and struck out former par. (1) which read as follows: ``Notwithstanding 
subsection (d), if an employee or Member separates from Government 
employment before becoming entitled to a deferred annuity under 
subchapter II, and such employee's or Member's nonforfeitable account 
balance is $3,500 or less, the Executive Director shall pay the 
nonforfeitable account balance to the participant in a single payment 
unless the employee or Member elects, at such time and otherwise in such 
manner as the Executive Director prescribes, to have the nonforfeitable 
account balance transferred to an eligible retirement plan as provided 
in subsection (e), or unless an election under section 8432b(h)(2) is 
made to treat such separation for purposes of this paragraph as if it 
had never occurred.''
    Subsec. (f)(2). Pub. L. 103-226, Sec. 9(b)(5)(A), (C), redesignated 
par. (3) as (2) and substituted ``paragraph (1)'' for ``paragraphs (1) 
and (2)'' before ``, benefits under this chapter''. Former par. (2) 
redesignated (1).
    Subsec. (f)(3). Pub. L. 103-226, Sec. 9(b)(5)(A), redesignated par. 
(3) as (2).
    Subsec. (g). Pub. L. 103-226, Sec. 9(b)(2), redesignated subsec. (i) 
as (g). Former subsec. (g) redesignated (e).
    Subsec. (g)(5). Pub. L. 103-226, Sec. 9(i)(7), substituted ``section 
8435(e)'' for ``section 8435(f)''.
    Subsec. (h). Pub. L. 103-226, Sec. 9(b)(2), redesignated subsec. (h) 
as (f).
    Subsec. (h)(1), (2). Pub. L. 103-353, Sec. 4(b)(2), inserted before 
period at end ``, or unless an election under section 8432b(h)(2) is 
made to treat such separation for purposes of this paragraph as if it 
had never occurred''.
    Subsec. (i). Pub. L. 103-226, Sec. 9(b)(2), redesignated subsec. (i) 
as (g).
    Subsec. (i)(4). Pub. L. 103-353, Sec. 5(e)(4), substituted 
``Internal Revenue Code of 1986'' for ``Internal Revenue Code of 1954''.
    1992--Subsec. (b). Pub. L. 102-484 inserted ``any employee who 
separates from Government employment pursuant to regulations under 
section 3502(a) of this title or procedures under section 3595(a) of 
this title in a reduction in force,'' after ``chapter 81 of this 
title,''.
    1990--Subsec. (f)(3)(A). Pub. L. 101-335, Sec. 5(a)(1), substituted 
``an annuity contract is purchased to provide for the annuity elected by 
the former employee or Member'' for ``an annuity elected by the former 
employee or Member commences''.
    Subsec. (f)(3)(B). Pub. L. 101-335, Sec. 5(a)(2), amended subpar. 
(B) generally. Prior to amendment, subpar. (B) read as follows: ``A 
modification of a date may not be made under paragraph (2) on or after 
such date and may not specify a date for the commencement of an annuity 
earlier than 1 month after the date on which the modification is 
submitted to the Executive Director.''
    Subsec. (h). Pub. L. 101-335, Sec. 6(a)(2), amended subsec. (h) 
generally. Prior to amendment, subsec. (h) read as follows: ``Unless 
otherwise elected under this section, benefits under this subchapter 
shall be paid as an annuity commencing for an employee, Member, former 
employee, or former Member on February 1 of the year following the 
latest of the year in which--
        ``(1) the employee, Member, former employee, or former Member 
    becomes 65 years of age;
        ``(2) occurs the tenth anniversary of the year in which the 
    employee, Member, former employee, or former Member became subject 
    to this subchapter; or
        ``(3) the employee, Member, former employee, or former Member 
    separates from Government employment.''
    1988--Subsec. (i)(3). Pub. L. 100-238 amended par. (3) generally. 
Prior to amendment, par. (3) read as follows: ``Loans under this 
subsection shall be subject to such conditions as the Board may 
prescribe consistent with section 408(b)(1) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1108(b)(1)). The conditions shall 
be included in regulations issued by the Executive Director.''


                    Effective Date of 1999 Amendment

    Amendment by Pub. L. 106-65 effective 180 days after Oct. 30, 2000, 
unless postponed, see section 663 of Pub. L. 106-65, as amended, set out 
as an Effective Date note under section 8440e of this title.


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-208 effective Sept. 30, 1996, and 
withdrawals and elections as provided under such amendment to be made at 
earliest practicable date as determined by Executive Director in 
regulations, see section 101(f) [title VI, Sec. 659 [title II, 
Sec. 207]] of Pub. L. 104-208, set out as a note under section 5545a of 
this title.


                    Effective Date of 1994 Amendments

    Amendment by section 4(b) of Pub. L. 103-353 effective Oct. 13, 
1994, and applicable to any employee whose release from military 
service, discharge from hospitalization, or other similar event making 
the individual eligible to seek restoration or reemployment under 
chapter 43 of Title 38, Veterans' Benefits, occurs on or after Aug. 2, 
1990, with special rules for applying amendment to employees restored or 
reemployed before effective date, see section 4(e), (f) of Pub. L. 103-
353, set out as an Effective Date note under section 8432b of this 
title.
    Amendment by section 5(e)(4) of Pub. L. 103-353 effective with 
respect to reemployments initiated on or after the first day after the 
60-day period beginning Oct. 13, 1994, with transition rules, see 
section 8 of Pub. L. 103-353, set out as an Effective Date note under 
section 4301 of Title 38.
    Amendment by Pub. L. 103-226 effective Mar. 10, 1995, see section 
9(j) of Pub. L. 103-226, set out as a note under section 8351 of this 
title.


                    Effective Date of 1992 Amendment

    Amendment by Pub. L. 102-484 applicable with respect to separations 
occurring after Dec. 31, 1993, or such earlier date as Executive 
Director (appointed under section 8474 of this title) may by regulation 
prescribe, see section 4437(d) of Pub. L. 102-484, set out as a note 
under section 8351 of this title.


                    Effective Date of 1990 Amendment

    Section 5(d) of Pub. L. 101-335 provided that: ``The amendments made 
by this section [amending this section and sections 8434, and 8435 of 
this title] shall be effective as of April 1, 1987.''
    Amendment by section 6(a)(2) of Pub. L. 101-335 effective as of 
second election period described in section 8432(b) of this title 
beginning after July 17, 1990, or such earlier date as Executive 
Director may by regulation prescribe, and applicable with respect to 
separations occurring before, on, or after that effective date, see 
section 6(c) of Pub. L. 101-335, set out as a note under section 8351 of 
this title.


                               Regulations

    Section 6(b)(4) of Pub. L. 101-335 provided that: ``The Executive 
Director (as appointed under section 8474(a) of title 5, United States 
Code) shall prescribe regulations under which the purposes of the 
amendments made by this section [amending this section and sections 
8351, 8401, 8435, 8440a, and 8440b of this title] shall be carried out 
with respect to any individuals participating in the Thrift Savings Plan 
who would not otherwise be affected by this section.''


                  Invalidity of Certain Prior Elections

    Section 101(f) [title VI, Sec. 659 [title II, Sec. 203(b)]] of Pub. 
L. 104-208 provided that: ``Any election made under section 8433(b)(2) 
of title 5, United States Code (as in effect before the effective date 
of this title [Sept. 30, 1996]), with respect to an annuity which has 
not commenced before the implementation date of this title as provided 
by regulation by the Executive Director in accordance with section 207 
of this title [5 U.S.C. 5545a note], shall be invalid.''

                  Section Referred to in Other Sections

    This section is referred to in sections 8351, 8434, 8432b, 8435, 
8436, 8437, 8440a, 8440b, 8440c, 8440d of this title; title 22 section 
4071j; title 50 section 2154.
