The Thrift Savings Plan (TSP) is a voluntary retirement savings and investment plan for federal employees.
Effective July 1, 2005 contribution elections will be processed under the new rules - that is, the elections must be made effective no later than the first full pay period after they are filed. Participants must continue to file contribution elections with their agencies or services, and the agencies and services must continue to implement the elections by deducting contributions from participants' pay and reporting these amounts to TSP each pay period.
The law does not affect the waiting period new employees who are covered by the Federal Employees' Retirement System must serve before they become eligible for agency contributions to their accounts. In addition, the law does not affect contribution allocations or interfund transfers, which can be made at any time by using this TSP Website or the ThriftLine 1-877-968-3778 or by submitting a TSP-50 Investment Allocation form to TSP.
The Thrift Savings Plan (TSP) offers two types of investment options: Lifecycle Funds and Individual TSP funds. Ideally, you will choose either the Lifecycle Fund that is appropriate for your time horizon (that is, when you will begin to use the money), or individual TSP funds that will support your personal investment strategy. However, you may invest in any fund or combination of funds.
- L 2040, for time horizons of 2035 and later
- L 2030, for time horizons of 2025 through 2034
- L 2020, for time horizons of 2015 through 2024
- L 2010, for time horizons of 2008 though 2014
- L Income, for participants who are now withdrawing or planning to withdraw before 2008.
The Five Investment Funds
- The G Fund, Government Securities Investment Fund: this is a short-term, risk-free investment.
- The F Fund, Fixed Income Index Investment Fund: invested in a bond index fund that tracks the Lehman Brothers US. Aggregate (LBA) bond index.
- The C Fund, Common Stock Index Investment Fund: invested in a stock index fund that tracks the Standard & Poor's (S&P) 500 stock index (comprised of large companies).
- The S Fund, Small Capitalization Stock Index Investment Fund: invested in a stock index fund that tracks the Wilshire 4500 stock index (comprised of small and medium companies).
- The I Fund, The International Stock Index Investment Fund: invested in a stock index fund that tracks the Morgan Stanley Capital International EAFE (Europe, Australia, Far East) stock index (comprises stock in 21 countries).
Maximum Contributions and IRS Annual Limit
Federal Employee's Retirement System (FERS) employees are eligible to contribute up to the IRS annual limit (currently $15,500). Upon completing the mandatory waiting period (for new FERS employees), you will automatically receive the applicable Agency Automatic (1 percent) and Matching Contributions into your TSP account. You will receive the Agency Automatic (1 percent) contribution whether or not you are contributing your own money into the TSP. In addition, if you are contributing your own money, your agency will make Matching Contributions (up to 4 percent) into your account. The Matching Contributions apply to the first 5 percent of pay that you contribute each pay period. Your contributions are matched dollar-for-dollar for the first 3 percent of pay you contribute and 50 cents on the dollar for the next 2 percent of pay.
Civil Service Retirement System (CSRS) employees also are eligible to contribute up to the IRS annual limit. CSRS employees are not entitled to the Agency Automatic (1 percent) contribution OR to the Matching Contributions.
Note to Employees with TSP Loans
It is your responsibility to ensure that information regarding any and all TSP Loan payments is provided to your new agency. It is extremely important to provide this information to the Office of the Chief Human Capital Officer upon arrival for work to prevent any interruption of loan repayment.
Catch-Up contributions are supplemental, tax-deferred employee contributions that are in addition to regular contributions. TSP participants age 50 or older who are currently employed and in pay status and contributing the maximum TSP contribution percentage allowed by their retirement coverage or an amount that will cause them to reach the IRS limit by the end of the year may participate. The TSP Catch-Up limit is $5,000.
Additional Information on TSP:
The Federal Retirement Thrift Investment Board administers the TFP and the Department of Agriculture's National Finance Center (NFC) serves as the TSP record keeper. NFC is responsible for maintaining accounts and mailing out semiannual statements to the participants. In addition, NFC also processes contribution allocations, loans, withdrawals, interfund transfers, and beneficiary designations. You can access the TSP website 24 hours a day for general account information, to request interfund transfers and contribution allocations, to check the status of your loan request, and for up-to-date TSP materials and information. This information also is available by calling the automated ThriftLine (1-877-968-3778). You will need your TSP account number and TSP Personnel Identification Number (PIN) to access either site. (TSP no longer use social security numbers)