Any thoughts on the following situation would be appreciated…

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I really need some advice on a direct rollover for a non-spouse beneficiary gone wrong at TD Ameritrade with the Thrift Savings Plan.

The client’s mother passed away this April at age 71, leaving a Thrift Savings Plan to go to her children. We completed their required form TSP-81 and then forwarded it on to TD Ameritrade for them to complete the custodian part and to deliver to the TSP plan.

There was a 50 day window for the transfer per TSP’s policies, and if they don’t receive the transfer form within that time they will send the client a check. The short of it is that TD Ameritrade says they faxed the form (the TSP plan will accept faxes), and TSP says they never received it. TSP sent my client a check with 10% withheld for taxes, and he hasn’t cashed it yet, since we’re hoping to fix this problem.

More detail: We did appeal with the TSP customer service department. TDA said they spoke to a TSP rep who acknowledged receipt of the form, so we were able to talk a supervisor into auditing the transaction. But they sent a letter to my client saying that they did not receive the transfer form within their time limit and they did not receive any type of communication instructing us to provide the client with an extension.

They also explained in the letter that their regulations do not allow a property paid death benefit payment to be returned to the TSP. They feel the payment was properly issued, so it cannot be returned.
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Thanks in advance for any thoughts you can provide.

Mark Wilson