TSP Death Claim: Surviving Spouse Options, Form TSP-17, and Rollover Rules

When a federal retiree dies, their Thrift Savings Plan balance does not transfer to OPM or disappear into the estate by default. The TSP follows its own beneficiary rules, distributes funds through its own process, and gives surviving spouses options that no other beneficiary gets. If you are the surviving spouse, you have choices that directly affect how much you keep and how much goes to taxes.

Reporting the Death to TSP

The TSP's Life Events Hub at tsp.gov is the primary reporting channel. Create an account as a survivor, submit the death certificate, and track the claim online. Alternatively, submit paper Form TSP-17 (Information Relating to Deceased Participant) by mail.

TSP processes death claims independently from OPM. Filing your survivor annuity application with OPM does not notify TSP — you must report the death to both agencies separately.

The TSP distributes the account balance according to the beneficiary designation on file (Form TSP-3). If the retiree never filed a TSP-3, the statutory order of precedence applies: surviving spouse first, then children, then parents, then the estate.

The Beneficiary Participant Account

This is the option unique to surviving spouses. Instead of taking a lump-sum payout, you can have the TSP balance transferred into a Beneficiary Participant Account (BPA) in your own name.

A BPA works like a regular TSP account:

• You choose how to invest across TSP funds (G, F, C, S, I, and L funds)
• The money retains its tax-deferred status (traditional balance) or tax-free status (Roth balance)
• You can make withdrawals at any time — partial, full, or as monthly installments
• You can roll the balance into your own IRA or an eligible employer plan at any time

A BPA is not mandatory. If you prefer, you can take a direct lump-sum payment or roll the balance into an IRA immediately. But the BPA gives you the most flexibility to manage distributions and taxes at your own pace.

Required Minimum Distributions: BPA holders must take RMDs based on IRS life expectancy tables. If the deceased was already 73 or older, verify that the current-year RMD was satisfied before the death — if not, you may need to take it to avoid a penalty.

Non-Spouse Beneficiaries

Adult children, parents, and other non-spouse beneficiaries cannot open a BPA. The TSP offers two options:

• Lump-sum payment — a check or direct deposit, generally with 10% federal tax withholding on the taxable portion unless you use Form W-4R to choose otherwise
• Direct transfer to an Inherited IRA — preserves tax deferral but requires full distribution within 10 years under the SECURE Act's 10-year rule (for most non-spouse individual beneficiaries)

If TSP pays a minor child, the payment is made in the child's name. A parent or guardian may direct where it is sent; a court-appointed guardian must provide documentation of the appointment.

Tax Rules on TSP Death Distributions

Traditional (pre-tax) TSP balance: Distributions are taxed as ordinary income in the year received. A lump-sum payout could push you into a higher bracket. Spreading distributions over time through a BPA or an IRA rollover gives you more control over the tax impact.

Roth TSP balance: If the retiree's Roth contributions were in the TSP for at least five years (counting from January 1 of the year the first Roth contribution was made), the entire Roth distribution — contributions and earnings — is tax-free. If the five-year period is not met, only the contributions come out tax-free; the earnings are taxable.

Mandatory withholding: For a surviving spouse who takes a lump-sum payment instead of a direct rollover, TSP generally withholds 20% federal income tax on the taxable portion. For a non-spouse beneficiary who takes a lump-sum payment, TSP generally withholds 10%, unless the beneficiary uses Form W-4R to choose otherwise. For periodic payments, you can adjust withholding using Form W-4P. State tax withholding varies — some states have mandatory withholding on retirement distributions, others do not.

Rollover option: A direct rollover of an eligible payment to an IRA or eligible employer plan avoids withholding. If a surviving spouse takes an eligible lump-sum distribution and rolls it over within 60 days, they must replace the withheld amount from other funds to roll over the full taxable payment. A non-spouse beneficiary should use a direct transfer to an inherited IRA to defer tax.

What to Do First

Contact TSP through the Life Events Hub at tsp.gov or by calling the ThriftLine at 1-877-968-3778. Have the deceased's TSP account number or Social Security number ready. If you are also filing for a survivor annuity, FEGLI, and Social Security benefits, the Federal Retiree Death Benefits Guide sequences all of these claims so you handle each one at the right time.

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