The Thrift Savings Plan (TSP) is a retirement saving and investment plan for federal employees and members of uniformed services, including the Ready Reserve.
Purpose and History
Congress established the TSP under the Federal Employees’ Retirement System Act of 1986. It offers the same types of savings and tax benefits many private sector employers offer in their 401k plans.
The TSP is known as a defined-contribution plan, which means the retirement income you receive from your TSP account depends on how much you (and your employing agency, if applicable) deposit into your account during your working years. If covered under FERS, the TSP is one part of the three-part retirement package. If covered under CSRS or a uniformed service, your TSP supplements your annuity or military retired pay.
The Federal Retirement Thrift Investment Board (FRTIB) administers the TSP. The Thrift Savings Fund hold the assets of the TSP. Law requires an annual audit of these funds. Law requires the FRTIB, an independent government agency, to manage the TSP solely in the interest of the participants and beneficiaries.
Eligibility to Participate
The following groups of people are eligible to participate in TSP contribution:
- FERS employees hired on or after January 1, 1984
- CSRS employees hired before January 1, 1984, and didn’t convert to FERS
- Any member of the uniformed services (active or Ready Reserve)
- Civilian in certain other categories of government services
In addition to the above eligibility requirements, an employee must be:
- Actively employed by the federal government as a civilian or member of uniformed services
- In pay status, able to contribute
- Working full-time or part-time
Your agency or service is responsible for determining your retirement coverage and reporting the amount of contributions to your account each pay period. While employed, your agency if your primary TSP contact. After separation, the TSP becomes your point of contact.
If rehired under either CSRS or FERS, two factors determine your participation; the length of your break in service, and whether you were a TSP participant prior to the break.
If your break in service lasts more than 31 calendar days, regardless of whether you were enrolled prior to the break, you are automatically enrolled in a TSP, unless you elect to contribute immediately upon rehire. You may change, or stop contributions at any time after rehire. In addition, your agency automatic contribution of one percent and any matching contributions would begin immediately.
If your break in service was less than 31 calendar days and you were previously contributing to the TSP, all contributions will resume upon rehire. You may begin contributing at any time, even if you weren’t before the break. You must inform your employing agency of any outstanding TSP loans so payments can resume.