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]] (FRTIB)'''.

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]] (FRTIB)'''.

As of December 31, 2023, TSP has approximately 7 million participants (of which approximately 4.1 million are actively participating through payroll deductions), and more than $845.4 billion in assets under management;<ref>https://www.frtib.gov/ReadingRoom/FinStmts/TSP-FS-Dec2020.pdf</ref> it purports to be the largest defined contribution plan in the world.

As of December 31, 2024, TSP has approximately 7.2 million participants (of which approximately 4.2 million are actively participating through payroll deductions), and more than $963.3 billion in assets under management;<ref>https://www.frtib.gov/pdf/reading-room/FinStmts/TSP-FS-Dec2024.pdf.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>

New and rehired FERS employees are automatically enrolled upon hire and have 5% of their pay automatically deducted (which not coincidentally is the minimum an employee can have withheld and still receive the maximum matching funds), unless they choose to opt-out.<ref>Employees hired prior to that date, for the most part, have 3% of their pay automatically deducted unless choosing to opt-out; the original rule was that an employee was not automatically enrolled and had to opt-in, which did not change upon implementation of automatic enrollment rules.</ref>  Employees are automatically established a TSP account with 1% of their pay deposited (even if not participating, this does not stop), and are additionally matched at dollar-for-dollar up to the first 3% of pay, then at $0.50/$1 for the next 2% (thus, at 5% of pay, with automatic and matching contributions an additional 5% is deposited).  Employees may contribute above that (in terms of whole percentages or whole dollar amounts only) up to IRS limitations, but those contributions are not matched.  Also, "catch-up" contributions are allowed for employees age 50 or older<ref>Under IRS rules, an employee needs only to turn 50 sometime during the year to begin catch-up contributions, so an employee with a December 31 birthday can begin contributing on January 1 of the year s/he turns 50.</ref> up to IRS limitations (whole dollars only), but those contributions are also not matched.

New and rehired FERS employees are automatically enrolled upon hire and have 5% of their pay automatically deducted (which not coincidentally is the minimum an employee can have withheld and still receive the maximum matching funds), unless they choose to opt-out or have a lesser percentage/amount withheld.<ref>Employees hired prior to that date, for the most part, have 3% of their pay automatically deducted unless choosing to opt-out; the original rule was that an employee was not automatically enrolled and had to opt-in, which did not change upon implementation of automatic enrollment rules.</ref>  Employees are automatically established a TSP account with 1% of their pay deposited (even if not participating, this does not stop), and are additionally matched at dollar-for-dollar up to the first 3% of pay, then at $0.50/$1 for the next 2% (thus, at 5% of pay, with automatic and matching contributions an additional 5% is deposited).  Employees may contribute above that (in terms of whole percentages or whole dollar amounts only) up to IRS limitations, but those contributions are not matched.  Also, "catch-up" contributions are allowed for employees age 50 or older<ref>Under IRS rules, an employee needs only to turn 50 sometime during the year to begin catch-up contributions, so an employee with a December 31 birthday can begin contributing on January 1 of the year s/he turns 50.</ref> up to IRS limitations (whole dollars only), but those contributions are also not matched.

Employees are automatically vested for their contributions and agency matching contributions, and associated earnings on those, from day one, but are not vested in agency automatic contributions and associated earnings on those until three years after employment (two years for members of the uniformed services and some categories of civilian employees); if the employee leaves those contributions are forfeited<ref>If an employee dies while employed, the matching contributions and associated earnings are "deemed" to be vested at death and can be withdrawn by his/her beneficiaries/heirs.</ref> (and used to pay administrative fees, which makes the TSP among the lowest-cost plans available).  An employee having forfeited funds, if s/he returns to civil service, cannot reclaim those funds.

Employees are automatically vested for their contributions and agency matching contributions, and associated earnings on those, from day one, but are not vested in agency automatic contributions and associated earnings on those until three years after employment (two years for members of the uniformed services and some categories of civilian employees); if the employee leaves those contributions are forfeited<ref>If an employee dies while employed, the matching contributions and associated earnings are "deemed" to be vested at death and can be withdrawn by his/her beneficiaries/heirs.</ref> (and used to pay administrative fees, which makes the TSP among the lowest-cost plans available).  An employee having forfeited funds, if s/he returns to civil service, cannot reclaim those funds.