Thrift Savings Plan (TSP)
The Thrift Savings Plan (TSP) is a program created to help federal employees save for retirement with an investment arm through payroll deduction. The Thrift Savings Plan is a defined contribution plan, a key part of the Federal Employees Retirement System (FERS). As of 2010, employees are automatically enrolled in the Thrift Savings Plan with 3% of their basic pay going into the Traditional Thrift Savings Plan. The agency contributes an automatic 1% with a 3% matching contribution. Employees who are automatically enrolled in the Thrift Savings Plan can choose to withdraw from participation.
When the automatic inclusion into the Thrift Savings Plan was implemented, those funds were deposited into the G Fund. The TSP G Fund represents government securities in the diversified portfolio of the Thrift Savings Plan. The G Fund is the only fund that is internally managed by the Thrift Savings Board. The G Fund never loses money. After being automatically enrolled in their TSP.gov account, participants may contact their agency representatives to choose to allocate their funds at their discretion among the TSP L Fund (age-based combinations of other TSP Funds), the C, S, F and I Funds. These funds are contracted out and managed by Black Rock Institutional Trust Company.
The Thrift Savings Plan is, of course, operated through payroll deductions meaning you can no longer make contributions when are not an active employee either full or part-time and in a pay status. As a retiree, with an established TSP.gov account, you can participate in the Thrift Savings Plan interfund transfer feature.
The Thrift Savings Plan also accepts funds from other eligible plans. The Traditional Thrift Savings Plan accepts transfer and rollovers from Traditional IRAs and Simple IRAs. The Roth TSP accepts transfers from the Roth 401(k), 403(b), and the 457(b). The Thrift Savings Plan does not accept transfers and rollovers from Roth IRAs.
The Thrift Savings Plan is managed by the Federal Retirement Thrift Investment Board (FRTIB) made up of 5 board members appointed by the President of the United States and an Executive Director. The FRTIB also has an Advisory Council, the Employee Thrift Advisors Council (ETAC) made up of employee organizations, unions and the uniformed services.
The Thrift Savings Plan, although a part of the FERS retirement plan, it also is a vehicle that can be used by CSRS employees to plan for retirement. There are no matching contributions made to the Thrift Savings Plan for CSRS employees.
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