5 C.F.R. § 1605.13

Back pay awards and other retroactive pay adjustments

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(a) Participant not employed. The following rules apply to participants who receive a back pay award or other retroactive pay adjustment for a period during which the participant was separated from Government service or was not appointed to a position that is covered by FERS, CSRS, or an equivalent system under which TSP participation is authorized:

(1) If the participant is reinstated or retroactively appointed to a position that is covered by FERS, CSRS, or an equivalent system under which TSP participation is authorized, immediately upon reinstatement or retroactive appointment the employing agency must give the participant the opportunity to submit a contribution election to make current contributions. The contribution election will be effective as soon as administratively feasible, but no later than the first day of the first full pay period after it is received.

(2) The employing agency must give a reinstated or retroactively appointed participant the following options for electing makeup contributions:

(i) The reinstated or retroactively appointed participant may submit a new contribution election for purposes of makeup contributions if he or she would have been eligible to make such an election but for the erroneous separation or erroneous failure to appoint; or

(ii) If a reinstated participant had a contribution election on file when he or she separated, the contribution election the participant had on file when he or she separated may be reinstated for purposes of makeup contributions.

(3) All contributions made under this paragraph (a) and associated breakage will be invested according to the participant's investment election on the posting date. Breakage will be calculated using the share prices for the default investment fund in effect for the participant in accordance with § 1605.2 unless otherwise required by the employing agency or the court or other tribunal with jurisdiction over the back pay case.

(b) Participant employed. The following rules apply to participants who receive a back pay award or other retroactive pay adjustment for a period during which the participant was employed in a position that is covered by FERS, CSRS, or an equivalent system under which TSP participation is authorized:

(1) The participant will be entitled to make up contributions for the period covered by the back pay award or retroactive pay adjustment only if for that period—

(i) The participant had designated a percentage of basic pay to be contributed to the TSP; or

(ii) The participant had designated a dollar amount of contributions each pay period which equaled the applicable ceiling (FERS or CSRS) on contributions per pay period, and which, therefore, was limited as a result of the reduction in pay that is made up by the back pay award or other retroactive pay adjustment;

(2) The employing agency must compute the amount of additional employee contributions, agency matching contributions, and agency automatic (1%) contributions that would have been contributed to the participant's account had the reduction in pay leading to the back pay award or other retroactive pay adjustment not occurred; and

(3) All contributions under this paragraph (b) and associated breakage will be posted to the participant's account based on the participant's investment election on the posting date. Breakage will be calculated in accordance with § 1605.2.

(c) Contributions to be deducted before payment or other retroactive pay adjustment. Employee makeup contributions required under paragraphs (a) and (b) of this section:

(1) Must be computed before the back pay award or other retroactive pay adjustment is paid, deducted from the back pay or other retroactive pay adjustment, and submitted to the TSP record keeper;

(2) Must not cause the participant to exceed the annual contribution limit(s) contained in sections 402(g), 415(c), or 414(v) of the I.R.C. (26 U.S.C. 402(g), 415(c), 414(v)) for the year(s) with respect to which the contributions are being made, taking into consideration the TSP contributions already made in (or with respect to) that year; and

(3) Must be accompanied by attributable agency matching contributions. In any event, regardless of whether a participant elects to make up employee contributions, the employing agency must make all appropriate agency automatic (1%) contributions associated with the back pay award or other retroactive pay adjustment.

(d) Prior withdrawal of TSP account. If a participant has received a post-employment distribution in any form other than an annuity, and the separation from Government service upon which the post-employment distribution was based is reversed, resulting in reinstatement of the participant without a break in service, the participant will have the option to restore the amount distributed to his or her TSP account. The right to restore the distributed funds will expire if the participant does not notify the TSP record keeper within 90 days of reinstatement. If the participant returns the funds that were distributed, the number of shares purchased will be determined by using the share price of the applicable investment fund on the posting date. Restored funds will not incur breakage.

(e) Reinstating a loan. Participants who are covered by paragraph (d) of this section and who elect to return funds that were distributed may also elect to reinstate a loan which was previously declared to be a loan foreclosure.

[66 FR 44277, Aug. 22, 2001, as amended at 68 FR 35500, June 13, 2003; 68 FR 74451, Dec. 23, 2003; 70 FR 32211, June 1, 2005; 76 FR 78094, Dec. 16, 2011; 80 FR 57069, Sept. 22, 2015; 85 FR 72914, Nov. 16, 2020; 87 FR 31677, May 24, 2022]

Notes of Decisions

Cited in 21 cases (11 in the last 5 years), 2007–2025 · leading case: Ryan v. Comm'r, 2011 T.C. Memo. 139 (Tax Ct. 2011).

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Ryan v. Comm'r, 2011 T.C. Memo. 139 (Tax Ct. 2011). · cites it 6× “If an agency reinstates a wrongfully terminated participant, the participant must notify the TSP within 90 days of reinstatement to restore any previously withdrawn amount to the TSP account. 5 C.F.R. sec. 1605.13(d) (2008) .”

Agee v. United States, 77 Fed. Cl. 84 (Fed. Cl. 2007). “FERS-eovered firefighters, therefore are entitled to receive make-up contributions from the Government, and firefighters under both retirement systems are *92 entitled to voluntary make-up contributions pursuant to 5 C.F.R. § 1605.13 (b). As noted above, this Court is barred…”

Wilkes v. Dep't of Vets. Affairs, 644 F. App'x 1015 (Fed. Cir. 2016). · cites it 2× “5 C.F.R. § 1605.13 (a)(3). WILKES v. DEP’T OF VETERANS AFFAIRS 5 at 29.”

Felicia A. Bills v. Dep't of the Air Force, 2015 MSPB 2 (MSPB 2015). · cites it 3× “See 5 C.F.R. § 1605.13 (c). Therefore, we find that the agency is now in full compliance with the Board’s order concerning the appellant’s TSP contributions.”

Jennifer J. Chen v. United States Postal Serv. (MSPB 2016). · cites it 3× “5 ¶9 Here, the agency has submitted evidence that it satisfied its obligation under 5 C.F.R. § 1605.13 (c)(1) by forwarding its TSP adjustments to the TSP record keeper.”

Margaret Thomas-Jordan v. Dep't of the Army (MSPB 2023). · cites it 3× “5 C.F.R. § 1605.13 (a)(2). The regulations also provide the employee’s makeup contributions must be accompanied by attributable agency matching contributions and that, even if the reinstated employee does not elect to make up her employee contributions, the employing agency must…”

Jorge Guzman v. Dep't of Homeland Sec. (MSPB 2025). · cites it 3× “Third, regarding the appellant’s request to restore distributed funds, the agency explained that under 5 C.F.R. § 1605.13 (d), the right to restore distributed funds expired if the appellant failed to notify the TSP record keeper within 90 days of reinstatement.”

Justin Grimsrud v. Dep't of Transp. (MSPB 2016). · cites it 2× “5 C.F.R. § 1605.13 (c). As discussed in the Board’s May 15, 2015 Order, the agency did not withhold the appellant’s TSP contributions from his back pay due to an administrative error.”

Hilaire v. United States (Fed. Cir. 2022). · cites it 2× “5 C.F.R. § 1605.13 (b)(1) (“The participant will be entitled to make up contributions for the period covered by the back pay award or retroactive pay adjustment only if for that period .”

Jesse Halterman v. Dep't of Homeland Sec. (MSPB 2022). · cites it 2× “Pursuant to FRTIB regulation 5 C.F.R. § 1605.13 , a TSP participant who receives back pay is entitled to “breakage,” or the loss or gain that he would have incurred or realized on his shares had his separation not occurred.”

Richard Erickson v. United States Postal Serv. (MSPB 2025). · cites it 2× “5 C.F.R. § 1605.13 (a)(2). The regulations also provide that the employee’s makeup contributions must be computed before the back pay award is paid, deducted from the back pay, and submitted to the TSP record keeper; must not cause the participant to exceed the annual…”

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