The Federal Retirement Thrift Investment Board (FRTIB) has finalized a rule, without changes, that updates how they calculate the earnings and losses for court-ordered payments involving Thrift Savings Plan (TSP) participants. This rule affects payments to spouses, former spouses, children, or dependents when a court order is issued. The new methodology aligns with industry standards, calculating earnings through an internal rate of return that considers how cash flows like contributions or loans affect investment performance. This ensures that the final payout is based on both the award amount and the actual investment earnings from the relevant period.
Simple Explanation
The Federal Retirement Thrift Investment Board made a new rule about how they figure out how much money people get when a court tells them to give money to someone like a spouse or child. They will now use a special way to calculate this that takes into account how much money goes in and out, so it's fair and matches what really happened with the money in that time.