TSP After the Shutdown: What Feds Need to Know Right Now

November 20, 2025

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Jim Kaplan, Director of External Affairs at the Thrift Savings Plan (TSP), joins Fed Gov Today to walk federal employees through what’s happening inside their retirement accounts now that the government shutdown has ended. Speaking with host Francis Rose, Kaplan explains the surge in TSP loan activity, how repayment works, and what participants should expect as agencies send restored pay and contributions.

Kaplan says loan volume noticeably increases during October, even in a typical year, but this shutdown drives even more federal workers to borrow from their accounts as a financial cushion. He emphasizes that TSP loans function differently from traditional loans because participants are borrowing from themselves and repaying the loan with interest equivalent to their own G Fund earnings. As a result, there is no penalty for paying the loan back early. “If you find you have the resources, pay your loan as soon as you like,” Kaplan says. Whether someone keeps the loan or pays it down immediately, the money continues growing as part of their retirement savings.

For those who choose to keep their loans active, TSP automatically adjusts repayment schedules to ensure participants stay within legal IRS limits. General purpose loans can last up to five years, while residential loans can run up to 15. If someone misses a few payments during the shutdown, TSP simply adds those payments to the end of the loan term—unless the loan is already approaching the maximum time. In that case, Kaplan explains, the system re-amortizes the remaining balance across the existing payment schedule to keep the loan compliant. In either scenario, participants don’t need to take action; TSP handles the adjustments.

Call volume on the ThriftLine rises during and after the shutdown, but Kaplan says service levels remain strong, with satisfaction holding in the 90-percent range and wait times staying low. Callers mainly want clarity on processes: how fast loan adjustments occur, what repayment options exist, how much repayments cost, and what happens to contributions that didn’t show up during the shutdown. Kaplan encourages participants to use the resources at TSP.gov, where the agency outlines all loan policies, limits and repayment rules.

A major focus for TSP is processing large contributions from federal agencies as they work to restore pay and benefits. When employees finally receive their back pay, agencies send the appropriate TSP contributions and matching funds based on the total amount issued. For example, a 5 percent contribution normally taken from a $1,000 paycheck becomes 5 percent of a new $3,000 lump-sum paycheck. Kaplan has been meeting with payroll officers across government to help ensure files are sent promptly and accurately, and he notes that deposits are already flowing into TSP accounts. If contributions don’t appear in a participant’s account right away, Kaplan recommends contacting the agency’s payroll office, since TSP can only post funds once received.

Kaplan also touches on required minimum distributions for retirees. Unlike many other retirement plans, TSP automatically issues the necessary distribution at year’s end if participants haven’t withdrawn enough throughout the year. This automation helps older participants stay compliant without unnecessary paperwork.