TSP stands for the Thrift Savings Plan. The TSP is an important benefit designed to help you save for your future. The TSP is comparable to a private-sector tax-deferred 401(k) plan. You can participate in the TSP if you are covered by FERS, CSRS, or CSRS Offset.
The TSP offers all participants:
- Tax deferral on contributions
- A choice of 5 investment funds
- A loan program
- In-service withdrawals for financial hardship or after age 59
- A choice of post-separation withdrawal options
- The ability to transfer money from other eligible retirement savings plans into your TSP account
The TSP is especially important for FERS employees because it is one of three parts of your retirement coverage. Beginning July 1, 2001, FERS employees can contribute as much as 11% of basic pay each pay period, up to the IRS annual limit. As a FERS employee, you can receive 2 types of agency contributions to your TSP account, which together can equal as much as 5 percent of your basic pay.
- Agency Automatic (1%) Contributions. When you become eligible, your agency automatically deposits into your TSP account an amount equal to 1% of your basic pay each pay period, even if you do not contribute your own money. After 3 years of Federal civilian service (or 2 years in some cases), you are vested in these contributions and their earnings.
- Agency Matching Contributions. When you become eligible, your agency will match the first 3% of basic pay you contribute each pay period dollar for dollar. Each dollar of the next 2% of basic pay will be matched 50 cents on the dollar. You are immediately vested in the matching contributions.
CSRS employees do not receive any Government contributions in their TSP accounts. However, CSRS employees can still take advantage of the TSP to provide a source of retirement income in addition to your CSRS retirement benefit. Beginning July 1, 2001, CSRS employees can contribute up to 6% of basic pay each pay period.
If you are a FERS employee, you also get:
- Agency Automatic (1%) Contributions to your TSP account, whether or not you contribute your own money
- Agency Matching Contributions on your own contributions (on up to 5% of your basic pay each pay period)
What TSP benefits apply to both FERS and CERS employees?
- Tax Savings
- Loans
- Portable Benefits
- Choice of Investment Funds
