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May Human Resources Advisor Volume 2, Issue 5

Thrift Saving Plan (TSP)

General Overview

Implemented by Congress in the Federal Employee's Retirement System Act of 1986, the Thrift Savings Plan (TSP) is a tax deferred retirement savings and investment plan for Federal employees covered by the Civilian Service Retirement System (CSRS) or Federal Employees Retirement System (FERS) and members of the Uniformed Services. Managed by the Federal Retirement Thrift Investment Board, the program is governed under 5 Code of Federal Regulations (5 CFR), Parts 1600-1699, and offers Federal employees the same type of savings and tax benefits that many private corporations offer their employees under '401(k)' plans.

The TSP is a defined contribution plan, which means the retirement income you receive from your TSP account will depend on how much you (and your agency, if you are a FERS employee) have contributed to your account and the earnings on those contributions. This is different from the CSRS/FERS defined benefit programs, as benefits received from your CSRS or FERS annuity are based on years of service and salary earned. By contributing to the TSP, you defer paying taxes on the money you contribute until you withdraw the funds from your TSP account. In addition, over the years, the money in your account will accrue earnings, which are also tax-deferred. Deferring the payment of taxes means that more money stays in your account working for you. The longer your money is invested, the greater will be the benefit of tax-deferred earnings.

Participation

Participation in the TSP is voluntary and contributions are separate from contributions to your CSRS/FERS annuity. If you are hired under an appointment covered by CSRS/FERS, you are immediately eligible to participate in the TSP. As a new or rehired employee you have 60 days from the effective date of your appointment to elect to participate in the TSP.

To learn more about the Thrift Savings Plan (TSP) go to the TSP web-site at www.tsp.gov. To make a TSP election contact your local Human Resources Representative or the Defense Logistics Agency (DLA) Benefits Branch at or call the DLA Benefits Team directly at 1-866-378-1171 (toll-free) (614) 692-0233 (direct dial).  You may also visit the DLA HR website at www.hr.dla.mil.