JuParticipantStatus: PhysicianPosts: 2Joined: 09/21/2018
Thrift Savings Plan (TSP) isn’t ERISA protected. I have accounts at Fidelity and other brokerages that are ERISA protected. How important is ERISA protection? I’d like to consolidate all my accounts at TSP, but don’t know whether to do so because TSP isn’t ERISA protected. Thank you!July 14, 2019 at 1:47 pm MST #230399PedsModeratorStatus: PhysicianPosts: 4405Joined: 01/08/2016
I would not worry about the creditors of the us govt.
This should not be a factor in your decision.
Never fully close your tsp either.jacoavluModeratorStatus: Physician, Small Business OwnerPosts: 2374Joined: 03/01/2018
it’s not about creditors of the US gov
it’s about asset protection against a potential creditor of the OP and whether assets moved into the TSP would be less protected than in their present location
That said I don’t know the answer to the OPs question other than to say asset protection doesn’t matter, until it does
The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVAPedsModeratorStatus: PhysicianPosts: 4405Joined: 01/08/2016July 14, 2019 at 2:02 pm MST #230405Kon LitovskyParticipantStatus: Financial AdvisorPosts: 920Joined: 01/09/2016Thrift Savings Plan (TSP) isn’t ERISA protectedClick to expand…
Your brokerage accounts are NOT under ERISA, unless they are part of a group retirement plan. Individual 401k plans fall under state law, so it can be worse than ERISA protection, though in some states the laws are better than in other states. IRAs are also under state law (limited protection, usually around $1M, but need to read the fine print), and you might have an FDIC insured account such as money market savings (also not ERISA).
It is true that TSP was established under Federal Employees’ Retirement Security Act of 1986, not ERISA, and there. I found this document that actually explains some of the legal procedures as they relate to the TSP plan:
Definitely worth a read for anyone with this type of plan.
Kon Litovsky, Principal, Litovsky Asset Management | [email protected]
-401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees