Types of Contributions

  • Employee Contributions
  • Agency/Service Automatic (1%) Contributions
  • Agency/Service Matching Contributions

Employee Contributions

There are two types of employee contributions:

  • Regular employee contributions (including automatic enrollment contributions)
  • Catch-up contributions (for participants age 50 or older)

Regular Employee Contributions

You can begin making regular employee contributions at any time. These are payroll deductions that are made from your basic pay. Each pay period, your agency or service will deduct your contribution to the TSP from your pay in the amount or percentage that you indicated when you submitted your contribution election information.

Your agency or service will continue to deduct your contribution until you:

  • Make a new election changing the amount, or
  • Elect to stop your contributions, or
  • Reach the IRS contribution limit, or
  • Take a financial hardship withdrawal.

For more information, visit Contribution Limits.

Catch-Up Contributions

You can begin making catch-up contributions at any time beginning in the year you turn 50. Catch-up contributions are also deducted from your pay. To be eligible to make catch-up contributions, you must expect to contribute the maximum amount allowed of regular employee contributions for the year to the TSP or to an equivalent tax-deferred employer plan, such as a private sector 401(k) or nonprofit 403(b) employer plan.

Your catch-up contributions will stop automatically when you reach the catch-up contribution limit or at the end of the calendar year, whichever comes first.

You must make a new catch-up contribution election each calendar year.Be aware that if you are a FERS or BRS participant, you will not receive matching contributions on any catch-up contributions that you contribute to the TSP.

For more information, visit Contribution Limits.

A Note for Members of the Uniformed Services

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 also elect to contribute from your basic pay.
  • 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 do receive any of these types of pay.
  • You cannot contribute from sources such as housing or subsistence allowances.
  • 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. You may also contribute more of your pay to the TSP during the year.
  • Be aware that if you do contribute tax-exempt pay, your total contributions from all types of pay must not exceed the Internal Revenue Code (I.R.C.) section 415(c) annual addition limit for the year. This limit does not include catch-up contributions you may make during the year.
  • You cannot make catch-up contributions from incentive pay, special pay, or bonus pay. You are allowed to use tax-exempt pay to make Roth catch-up contributions but not to make traditional catch-up contributions.

For more information, visit Contribution Limits.

Agency/Service Automatic (1%) Contributions

If you are a FERS or BRS employee, your agency or service will contribute an amount equal to 1% of your basic pay each pay date to your TSP account. These are called Agency/Service Automatic (1%) Contributions. You do not need to be making employee contributions to receive them.

Agency/Service Automatic (1%) Contributions are not taken out of your pay and they do not decrease the dollar amount of your pay for income tax purposes.

A Few Words about Vesting

Agency/Service Automatic (1%) Contributions are subject to vesting rules. You are vested in (entitled to keep) all of your Agency/Service Automatic (1%) Contributions, as well as any earnings that they accrue, after a certain period of Federal service.

Most FERS participants are vested in these automatic contributions after completing 3 years of service. BRS members and FERS employees in congressional and certain noncareer positions become vested after 2 years of service.

If you leave Government service before satisfying the vesting requirement, the Agency/Service Automatic (1%) Contributions and their earnings will be forfeited to the TSP. If you die before separating from service, you are automatically considered vested in all the money in your account.

Agency/Service Matching Contributions

If you are a FERS or BRS participant, when eligible, you will receive Agency/Service Matching Contributions from your agency or service based on your regular employee contributions. Matching Contributions are not subject to vesting requirements.

As a FERS or BRS participant, you receive matching contributions on the first 5% of pay that you contribute each pay period. As the table below shows, the first 3% of pay that you contribute will be matched dollar-for-dollar; the next 2% will be matched at 50 cents on the dollar. Contributions above 5% of your pay will not be matched. If you stop making regular employee contributions, your matching contributions will also stop.

Agency Contributions to Your Account

Like Agency/Service Automatic (1%) Contributions, matching contributions are not taken out of your pay. They also do not decrease the dollar amount of your pay for income tax purposes. Combined with the Agency/Service Automatic (1%) Contribution, they can add as much as 5% of basic pay per pay period to your TSP account.

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