TSP Contribution Types
What are the different TSP contribution programs available? Read on for an overview of each.
Regular Employee Contributions are payroll deductions that come out of your basic pay before taxes are withheld. Each pay period, your agency or service will deduct your contribution to the TSP from your pay in the amount you choose (or the automatic enrollment amount of 3%). Your agency or service will continue to do so until you make a new TSP election to change the amount of your contribution or stop it, or until you reach the Internal Revenue Code (IRC) contribution limit.
are payroll deductions that participants who are age 50 or older may be eligible to make in addition to regular employee contributions. These deductions are voluntary and are also taken from before-tax basic pay. To be eligible to make catch-up contributions, you must already be contributing the maximum allowed amount of regular employee contributions. In the year in which you turn 50, you can begin making catch-up contributions at any time. Each pay period, your agency or service will make your contribution to the TSP from your pay in the amount you choose. Your catch-up contributions will stop automatically when you meet the applicable IRC limit or at the end of the calendar year, whichever comes first. You must make a new election for each calendar year.
If you are a member of the uniformed services, you can also contribute from 1 to 100 percent of any incentive pay, special pay, or bonus pay — as long as you elect to contribute from basic pay. However, you cannot contribute from resources such as housing or subsistence allowances. Your total contributions from all types of pay must not exceed the Internal Revenue Code (IRC) section 415(c) limit. You can elect to contribute from incentive pay, special pay, or bonus pay, even if you are not currently receiving them. These contributions will be deducted when you receive any of these types of pay. If you are receiving tax-exempt pay (i.e., pay that is subject to the combat zone tax exclusion), your contributions from that pay will also be tax-exempt.
Note: You cannot make catch-up contributions from tax-exempt pay, incentive pay, special pay, or bonus pay.
Contribution elections. To begin, change, or stop your employee contributions, you must make a TSP contribution election through your agency or service. You should ask your personnel or benefits office whether your agency or service handles TSP enrollments electronically through automated systems such as Employee Express, EBIS, myPay, PostalEASE, or the NFC PPS, or via paper forms.
If you need to submit a paper request, use Form TSP-l, Election Form, for regular employee contributions and Form TSP-1-C, Catch-Up Contribution Election, for catch-up contributions. (Members of the uniformed services should use Form TSP-U-1 and Form TSPU- 1-C.) You can obtain copies of these forms from the TSP website or from your agency or service. Return your completed forms to your agency or service, not to the TSP.
Whether you submit your contribution election electronically or use a paper form, the election should be effective no later than the first full pay period after your agency or service receives it.
Agency Automatic (1%) Contributions
If you are a FERS employee, beginning the first time you are paid, your agency will contribute an amount equal to 1% of your basic pay each pay period to your account. These contributions are called Agency Automatic (1%) Contributions.
Agency Automatic (1%) Contributions are not taken out of your pay, nor do they increase the dollar amount of your pay for income tax or Social Security purposes.
Vesting. Agency Automatic (1%) Contributions are subject to “vesting.” You become “vested” in (that is, entitled to keep) these contributions and any earnings they accrue only after you have completed a time-in-service requirement — which is 3 years for most FERS employees and 2 years for FERS employees in Congressional and certain noncareer positions. All Federal civilian service counts toward vesting — not just service while you are a TSP participant.
The date your vesting period begins is determined by your TSP Service Computation Date (TSP-SCD), which your agency reports to the TSP record keeper. If you are a FERS participant, your Service Computation Date is shown along with the required vesting information on your quarterly and annual TSP participant statements. The date will never be earlier than January 1, 1984.
If you leave Government service before satisfying the vesting requirement, you must forfeit Agency Automatic (1%) Contributions and their earnings to the TSP. If you die before separating from service, you are automatically considered vested in all of the money in your account.
Note: You are immediately vested in your own contributions and in any earnings they accrue. If you are receiving Agency Matching Contributions, you are also immediately vested in those contributions and any earnings they accrue.
Agency Matching Contributions
If you are a FERS participant, you receive Agency Matching Contributions on the
first 5% of pay that you contribute each pay period. The first 3% of pay that you
contribute will be matched dollar-fordollar; the next 2% will be matched at
50 cents per dollar. Contributions above 5% will not be matched. If you stop making
regular employee contributions, your matching contributions will also stop.
Like Agency Automatic (1%) Contributions, Agency Matching Contributions are not taken out of your pay. They also do not increase the dollar amount of your pay for income tax or Social Security purposes.
Combined with the Agency Automatic
(1%) Contributions, they can help add as
much as 5% of basic pay to your TSP account.
• CSRS participants do not receive matching contributions.
• There are no matching contributions for catch-up contributions.
Currently, members of the uniformed services do not receive matching contributions. However, the law that extended participation in the TSP to members of the uniformed services allows the secretary of each individual service to designate particular critical specialties as eligible for matching contributions under certain circumstances.
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