Federal retirement accounts must now pay interest on court-ordered payouts

The US government will now calculate earnings and losses on retirement account money that is legally owed to spouses, former spouses, children, or dependents. This means that if a court orders a payment from a federal employee's Thrift Savings Plan, that money will earn or lose interest until it is paid out.

Before this rule, money held in a federal employee's retirement account that was owed to a former spouse or child would sit idle, not earning any interest, until it was paid out. This meant the recipient would lose out on potential investment gains. Now, that money will continue to be invested, reflecting the market's performance, which can significantly increase the final payment amount over time.