Changes

The '''Thrift Savings Plan (TSP)''' is a defined contribution [[pension]] plan for United States government civilian employees and members of the uniformed services.  It was started in 1987 as a major component of the [[Federal Employees Retirement System]] (FERS), the overhauled retirement system for new civilian employees.  It is managed by an independent agency, the '''Federal Retirement Thrift Investment Board'''.

The '''Thrift Savings Plan (TSP)''' is a defined contribution [[pension]] plan for United States government civilian employees and members of the uniformed services.  It was started in 1987 as a major component of the [[Federal Employees Retirement System]] (FERS), the overhauled retirement system for new civilian employees.  It is managed by an independent agency, the '''Federal Retirement Thrift Investment Board'''.

As of December 31, 2018, TSP has approximately 5.5 million participants (of which approximately 3.3 million are actively participating through payroll deductions), and more than $558 billion in assets under management<ref>https://www.frtib.gov/ReadingRoom/FinStmts/TSP-FS-Dec2018.pdf</ref>; it purports to be the largest defined contribution plan in the world.

As of December 31, 2018, TSP has approximately 5.5 million participants (of which approximately 3.3 million are actively participating through payroll deductions), and more than $558 billion in assets under management;<ref>https://www.frtib.gov/ReadingRoom/FinStmts/TSP-FS-Dec2018.pdf</ref> it purports to be the largest defined contribution plan in the world.

All employees and uniformed members may enroll and withdraw from the TSP at any time, as often as desired.  However, only civilian employees under FERS and new uniformed service enlistees under the Blended Retirement System (BRS) are eligible for matching contributions.<ref>A prior law allowed the Department of Defense to designate any military position as eligible for matching contributions; none was so designated.  A small pilot program, operated by the Army during the later 1980's, allowed for matching contributions for enlistees.  The program has since ended and as of December 31, 2018 only five Soldiers are still serving and receiving matching contributions under that law.  The BRS requires the enlistee to serve for two years before receiving matching contributions.</ref>

All employees and uniformed members may enroll and withdraw from the TSP at any time, as often as desired.  However, only civilian employees under FERS and new uniformed service enlistees under the Blended Retirement System (BRS) are eligible for matching contributions.<ref>A prior law allowed the Department of Defense to designate any military position as eligible for matching contributions; none was so designated.  A small pilot program, operated by the Army during the later 1980's, allowed for matching contributions for enlistees.  The program has since ended and as of December 31, 2018 only five Soldiers are still serving and receiving matching contributions under that law.  The BRS requires the enlistee to serve for two years before receiving matching contributions.</ref>

The TSP offers ten fund options, five of which operate like traditional index [[mutual fund]]s and five are "Lifecycle" (target-date) funds:

The TSP offers ten fund options, five of which operate like traditional index [[mutual fund]]s and five are "Lifecycle" (target-date) funds:

*G (Government) Fund -- invests in special government securities not offered to the general public; the return is specified by law as the weighted average yield of Government securities having at least four years until maturity.  This is the only fund where a positive return on investment (though not necessarily enough to keep up with inflation) is guaranteed as the securities are guaranteed by the "full faith and credit" of the US Government (all other funds require the employee to affirmatively acknowledge the potential risk of loss in the investment).<ref>From time to time G Fund securities issuance is suspended when the overall Federal debt ceiling is reached; in those cases, amounts are credited to the account as if activity was continuing; once the debt ceiling is lifted all amounts due plus accrued interest are paid.</ref>

*G (Government) Fund—invests in special government securities not offered to the general public; the return is specified by law as the weighted average yield of Government securities having at least four years until maturity.  This is the only fund where a positive return on investment (though not necessarily enough to keep up with inflation) is guaranteed as the securities are guaranteed by the "full faith and credit" of the US Government (all other funds require the employee to affirmatively acknowledge the potential risk of loss in the investment).<ref>From time to time G Fund securities issuance is suspended when the overall Federal debt ceiling is reached; in those cases, amounts are credited to the account as if activity was continuing; once the debt ceiling is lifted all amounts due plus accrued interest are paid.</ref>

*C (Common Stock) Fund -- invests in the BlackRock Equity Index Fund, which attempts to match the total return version of the S&P 500.

*C (Common Stock) Fund—invests in the BlackRock Equity Index Fund, which attempts to match the total return version of the S&P 500.

*F (Fixed Income) Fund -- invests in the BlackRock U.S. Debt Index Fund, which attempts to track the Barclays Capital Aggregate Bond Index.

*F (Fixed Income) Fund—invests in the BlackRock U.S. Debt Index Fund, which attempts to track the Barclays Capital Aggregate Bond Index.

*S (Small Capitalization Stock) Fund -- invests in the BlackRock Extended Market Index Fund, which attempts to track the Dow Jones U.S. Completion TSM index.

*S (Small Capitalization Stock) Fund—invests in the BlackRock Extended Market Index Fund, which attempts to track the Dow Jones U.S. Completion TSM index.

*I (International Stock) Fund -- invests in the BlackRock EAFE Index Fund, which attempts to track the net version of the MSCI EAFE index.

*I (International Stock) Fund—invests in the BlackRock EAFE Index Fund, which attempts to track the net version of the MSCI EAFE index.

*L (Lifecycle) Funds -- invests in a specified mix of the five traditional funds.  Those funds with target years in the distant future have higher percentages of investments in the C, I, and S Funds, and as the target year approaches the percentages shift to predominantly in the G and F Funds.  Every ten years, in years ending in zero, the fund for that target year is merged into the L Income fund, and a new fund established.<ref>Current legislation has this changing, beginning in 2020, to every five years, consistent with target date funds offered in the private sector, but implementing regulations have not been established.  The expected date of changes such as this is September 2019; the law requires implementation by November 1, 2019.</ref>  Unless a new employee chooses differently, s/he will automatically have all contributions established in an L fund based on an expected retirement date of 62<ref>Members of the uniformed services have their contributions automatically placed in the G Fund unless chosen differently.</ref>.

*L (Lifecycle) Funds—invests in a specified mix of the five traditional funds.  Those funds with target years in the distant future have higher percentages of investments in the C, I, and S Funds, and as the target year approaches the percentages shift to predominantly in the G and F Funds.  Every ten years, in years ending in zero, the fund for that target year is merged into the L Income fund, and a new fund established.<ref>Current legislation has this changing, beginning in 2020, to every five years, consistent with target date funds offered in the private sector, but implementing regulations have not been established.  The expected date of changes such as this is September 2019; the law requires implementation by November 1, 2019.</ref>  Unless a new employee chooses differently, s/he will automatically have all contributions established in an L fund based on an expected retirement date of 62.<ref>Members of the uniformed services have their contributions automatically placed in the G Fund unless chosen differently.</ref>

**L Income -- individuals currently receiving monthly payments (but a current employee may invest in this fund)

**L Income—individuals currently receiving monthly payments (but a current employee may invest in this fund)

**L2020 -- individuals with retirement dates between 2015 and 2024

**L2020—individuals with retirement dates between 2015 and 2024

**L2030 -- individuals with retirement dates between 2025 and 2034

**L2030—individuals with retirement dates between 2025 and 2034

**L2040 -- individuals with retirement dates between 2035 and 2044

**L2040—individuals with retirement dates between 2035 and 2044

**L2050 -- individuals with retirement dates in 2045 or thereafter

**L2050—individuals with retirement dates in 2045 or thereafter

Employees may move their existing and future contributions (each are handled separately) between funds.  In any calendar month the contributions may be moved as twice to whatever fund(s) are desired, but after that all movements are to the G Fund only.

Employees may move their existing and future contributions (each are handled separately) between funds.  In any calendar month the contributions may be moved as twice to whatever fund(s) are desired, but after that all movements are to the G Fund only.

An employee also may make withdrawals against his/her balance.  These withdrawals are permanent reductions in the balance, and are subject to tax and early withdrawal penalties if applicable:

An employee also may make withdrawals against his/her balance.  These withdrawals are permanent reductions in the balance, and are subject to tax and early withdrawal penalties if applicable:

*Age-based withdrawal: an employee age 59 1/2 or older may take out one withdrawal during employment, but afterwards can only withdraw the total amount of his/her balance.<ref>Current legislation has this changing to four withdrawals per year, and removing the requirement to later remove the total balance at retirement if done, effective September 15, 2019.</ref>

*Age-based withdrawal: an employee age 59 1/2 or older may take out one withdrawal during employment, but afterwards can only withdraw the total amount of his/her balance.<ref>Current legislation has this changing to four withdrawals per year, and removing the requirement to later remove the total balance at retirement if done, effective September 15, 2019.</ref>

*Hardship withdrawal: an employee may take out a withdrawal for one of four reasons (negative cash flow, medical expenses, personal casualty loss, or legal expenses for a marital separation or divorce).  In addition to tax penalties and loss of potential future earnings, for the next six months an employee may not contribute or receive matching contributions (except for automatic ones)<ref>Effective September 15, 2019, the waiting period will no longer be in effect, and all persons who were subject to a waiting period will have it cease automatically.</ref>, and afterwards is not automatically re-enrolled in TSP but must complete the paperwork to do so.

*Hardship withdrawal: an employee may take out a withdrawal for one of four reasons (negative cash flow, medical expenses, personal casualty loss, or legal expenses for a marital separation or divorce).  In addition to tax penalties and loss of potential future earnings, for the next six months an employee may not contribute or receive matching contributions (except for automatic ones),<ref>Effective September 15, 2019, the waiting period will no longer be in effect, and all persons who were subject to a waiting period will have it cease automatically.</ref> and afterwards is not automatically re-enrolled in TSP but must complete the paperwork to do so.

At retirement an employee can no longer take out loans nor can future contributions be made.  If the balance is under $200 it is automatically cashed out but can be rolled over into a different plan.<ref>Balances of under $5 are forfeited to the TSP, but employees can later reclaim them.</ref>  The employee can choose from any combination of the following options with regards to the balance:

At retirement an employee can no longer take out loans nor can future contributions be made.  If the balance is under $200 it is automatically cashed out but can be rolled over into a different plan.<ref>Balances of under $5 are forfeited to the TSP, but employees can later reclaim them.</ref>  The employee can choose from any combination of the following options with regards to the balance:

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==External Links==

==External links==

*[https://www.tsp.gov/index.html Thrift Savings Plan]

*[https://www.tsp.gov/index.html Thrift Savings Plan]

*[https://www.frtib.gov/ Federal Retirement Thrift Investment Board]

*[https://www.frtib.gov/ Federal Retirement Thrift Investment Board]