THRIFT SAVINGS PLAN

The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees, offering the same type of savings and tax benefits offered under 401(k) plans. The contribution limit for 2007 is $15,500 - this limit increases each year based on the IRS Elective Deferral limit. Click here for links to more information on TSP.

Investment of TSP contributions
Selecting the funds you wish to invest your TSP contributions in and the percentage you wish to go into each is called making a "Contribution Allocation". You'll use the TSP website or the TSP Thriftline at 1-877-968-3778 to make your contribution allocation among the investment funds. You can change your contribution allocation as often as you like. If you're a new participant, however, your contributions are placed in the Government Securities Investment (G) fund until you receive your TSP PIN and submit your contribution allocation. You will receive a TSP PIN by mail within 7-10 days of the date TSP receives your first contribution through payroll deduction. If you're a rehired employee and you already have an established TSP account, your contributions will be invested based on your most recent contribution allocation.

TSP Catch-up Contributions
TSP participants who are age 50 or older or who are turning age 50 this calendar year may be eligible to make tax deferred "catch-up" contributions from their basic pay to their TSP accounts. These contributions are a supplement to the participant's regular employee contributions and do not count against the Internal Revenue Code's elective deferral limit. However, the catch-up contributions have their own annual limit and eligibility criteria - for 2006/2007 the limit is $5,000. If you will not be contributing the IRS maximum in regular contributions, there is no need to elect TSP catch-up.

New FERS employees
Newly hired FERS employees who elect to contribute to TSP are also eligible for agency contributions after completing a waiting period (see chart below). Upon completion of the waiting period, an agency automatic 1% contribution and agency matching contributions up to 4% are payable. The agency automatic 1% contribution is equal to 1% of your basic pay and is paid whether or not you contribute your own money. Agency matching contributions apply to the first 5% you contribute as follows: your contributions are matched dollar-for-dollar for the first 3%, and 50 cents on the dollar for the next 2%. Contributions you make above 5% of your pay will not be matched, but you will still benefit from before-tax savings and tax-deferred earnings on these contributions. By contributing at least 5% of your basic pay, you double your investment instantly. Don't miss out on free money! Contributing early gives the money in your account more time to increase in value through the compounding of earnings. Read more about getting the most out of your TSP account by clicking here.

Rehired employees with a break in service of 31 or more days
If you are FERS and you were previously eligible to receive agency contributions, the agency automatic 1% contribution will begin immediately upon rehire and the agency matching contributions when you begin contributing your own money. If you were not previously eligible to receive agency contributions, the agency automatic 1% contribution will begin when the waiting period has been met, as per the chart above, as will the agency matching contributions if contributing your own money.

Rehired employees with a break in service of less than 31 days
If you were previously contributing to TSP, your contributions will automatically resume based on the last valid contribution election on file. If you were not previously contributing, you may elect to begin TSP contributions at any time. If you are FERS, your agency contributions will resume upon rehire if you were previously eligible for them. It is your responsibility to check your Leave and Earnings Statement to ensure your T contributions have resumed. If they have not, contact The Benefits Line immediately.

Transferring employees
If you are contributing to TSP when you transfer, your contributions will continue. It is your responsibility to check your Leave and Earnings Statements received for pay periods after the transfer effective date to ensure that your TSP and TSP Catch-up contributions, as well as any loan payments, have continued. If they have not, contact The Benefits Line immediately.