If You Are Covered By FERS, Or CRS Offset, CSRS, You Are Eligible For A TSP Plan

Category: Finance, Financial Planning.

What is a thrift savings plan? The TSP falls under the category of what is known more broadly as a type of defined contribution plan, and is administrated and regulated by the Federal Thrift Investment Board.

A thrift savings plan or TSP is a retirement plan for civilians who are employed by the United States government and are members of the Uniformed Services of the United States. TSP plans are similar to 401k plans, since the retirement funds in the account depends on how much has been contributed both by the employee and their employer during their working years, as well as the earnings of these contributions. If you are covered by FERS, or CRS offset, CSRS, you are eligible for a TSP plan. Which employees are eligible? All participants are eligible to receive tax deferral on contributions, in service withdrawals for financial hardship beginning on or after age 59, a choice of five investment funds, the ability to transfer monies from other eligible retirement savings account plans into a TSP account, a loan program and a choice of post separation withdrawal options. Employees who are under the CSRS or civil service retirement system are eligible for a TSP plan, but are not eligible for matching contributions. For certain FERS civilian employees, with a TSP plan, the government also makes automatic matching contributions.

Typically, the matching contributions, in this case are one percent independent of employee contributions, and then. 05 percent for each one percent contributed by an employee thereafter. In the case of FERS employees, the TSP is one of three parts of total retirement coverage, and FERS employees have the option of receiving two different types of agency contributions to their TSP accounts, can equal as, which together much as fiver percent of basic pay. Military members and those serving in the armed forces, are not eligible, generally for these matching contributions. These are known as agency automatic and agency matching contributions respectfully. With an agency matching contribution, once an employee becomes eligble, the agency will match the first three percent of basic pay, with the next subsequent two percent of basic pay matched fifty cents on the dollar. With an agency automatic contribution, once an employee is eligible, their agency automatically makes deposits into their TSP account, regardless of employee contribution amount, up to one, as stated above percent of basic pay, up to the IRS allowed annual limit.