§ 1620.106 - Returning withdrawals.

(a) General. Employees who are subject to the TSP automatic cashout provisions (employees whose account balances were $3,500 or less) and employees who separated without eligibility for retirement benefits and prior to March 1995 withdrew amounts greater than $3,500, may elect to have the separation for military service treated as if it had never occurred. These employees will be allowed to return amounts to the Thrift Savings Plan that represent the full amount of the withdrawal. Eligible employees must notify the recordkeeper by April 21, 1996, or one year from the date of reemployment, whichever is later, of their intent to return the withdrawn funds.

(b) Documentation. An eligible employee who elects to return the full amount of a withdrawal under this section must provide documentation of reemployment to the recordkeeper. The recordkeeper will notify the employee of the amount of funds to be returned and the deadline for making that payment. The employee must provide the funds in a single payment to the recordkeeper within 90 days after the recordkeeper sends the employee the notice advising of the amount and procedures for returning the funds.

(c) Earnings. Employees will not receive retroactive earnings on any amounts withdrawn that they later return to their accounts.

(d) Taxable distribution reversed. Employees who return withdrawn funds under this section may be eligible to have a taxable distribution associated with a loan reversed. At the time the recordkeeper notifies the employee of the amount required to return the withdrawn funds, it will notify the employee whether he or she is eligible to have a taxable distribution reversed.