Other TSP Information |
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Are there tax
limits on the amount I can contribute to the TSP?
Yes. The IRS sets annual limits on the amounts that a participant can contribute to retirement plans such as the TSP. For tax-deferred contributions, the IRS imposes an annual elective deferral limit. It is adjusted by law each year to take into account increases in the cost of living. The elective deferral limit does not affect most uniformed services participants because, through November 2004, their contributions to the TSP are limited to 9 percent of their basic pay each pay period — an amount that is generally less than the IRS elective deferral limit. (For 2004, this Section 402(g) limit is $13,000.) However, participants who are also making contributions from incentive, special, or bonus pay must be aware of these limits because they can contribute all or any portion of these payments to the TSP (as long as they are also contributing from basic pay). The TSP will not accept contributions that exceed this limit, unless you are over age 50, in which case your contributions cannot exceed the sum of the Internal Revenue Code elective deferral limit plus the "catch-up" contribution limit for that year.
If you are a member of the Ready Reserve and also contribute to a Federal civil service TSP account or to another qualified plan, the total tax-deferred contributions you make to all TSP plans cannot exceed the elective deferral limit. If you contribute to a civilian and uniformed services TSP account in a single calendar year, the TSP will refund to you any excess contributions to your TSP account.
For detailed information on how to spread out your contributions over the entire year, see the TSP Fact Sheet, Annual Limit on Elective Deferrals on this Web site or obtain a copy from your service. You can also use the elective deferral calculator on this Web site.
In addition to the elective deferral limit, for participants who are age 50 or older there is an IRS limit on the amount of catch-up contributions that a participant can make. These contributions are in addition to regular (including incentive, special and bonus pay) tax-deferred contributions, and thus have their own limits that are in addition to the annual elective deferral limit. As with regular tax-deferred contributions, the combined total of catch-up contributions to all eligible plans cannot exceed the annual catch-up contribution limit.
See the chart below for the IRS and TSP limits on regular tax-deferred contributions from basic, incentive, special and bonus pay and catch-up contributions from basic pay:
| Year | TSP Limits | IRS Limits | ||||
| FERS | CSRS | Uniformed Services | Regular Contributions* | Catch-Up Contributions | Total Contributions | |
| 2004 | 14% | 9% | 9% | $13,000 | $3,000 | $16,000 |
| 2005 | 15% | 10% | 10% | $14,000 | $4,000 |
$18,000 |
| 2006 and thereafter | Limits eliminated | $15,000 | $5,000** | $20,000 | ||
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*For
uniformed services participants, this includes incentive pay and special
pay, including bonus pay. |
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The IRS also imposes a limit on the total amount of all contributions a participant can contribute for a year. This IRS Section 4l5 limit applies to all contributions (i.e., tax-deferred and tax-exempt) made to a participant's TSP account. For 2004, the total amount a participant can contribute is $41,000 or 100% of compensation, whichever is the lesser amount. Participants who expect to contribute larger amounts of special, incentive, or bonus pay need to pay particular attention to this limit.
What happens if I exceed the
applicable limits?
If you contribute to the TSP and another tax-deferred plan during the year, your combined contributions to all tax-deferred plans cannot exceed the IRS limit as it applies to your particular combination of plans. (The maximum amount that you can contribute to the TSP and other plans — for example, 401(k), 403(b), and 457 plans — varies.) If you have questions about your situation, you should consult your tax advisor or the IRS.
If you exceed the applicable annual limits because you contributed to more than one plan, you can request a refund of the excess amount from one or more of the plans. To request a refund of excess contributions to the TSP, contact the TSP Service Office to obtain an application for a refund. The TSP Service Office must receive your completed application by February 20 of the year after the excess contributions were made. If you do not ask for the excess amount, you will pay taxes on it twice: once for the year in which you contributed it to the TSP, and again when you withdraw it.
If you contribute to two TSP accounts (civilian and uniformed services) during the year, your combined contributions to both plans cannot exceed the IRS limit. If you exceed the elective deferral limit because you made excess contributions to two TSP accounts, the TSP will notify you that the excess money will be returned to you from your uniformed services account (unless you specify otherwise) in order to reduce the effect on matching contributions.
Does my participation in
the TSP affect my IRA?
Participation in the TSP does not affect your ability to contribute to an IRA. However, because you are covered by a Government retirement plan (i.e., the uniformed services retirement system), your ability to make tax-deductible contributions to an IRA depends upon your income and that of your spouse.
You can transfer or roll over amounts from an eligible retirement plan (which includes a traditional IRA and an eligible employer plan) into the TSP; that money will not be subject to the IRS elective deferral limit. When you separate, you can transfer or roll over your TSP account to an IRA without regard to the annual limits that the IRS imposes on contributions to IRAs. For more information, read the fact sheet "The Thrift Savings Plan and IRAs."
How do other legal
requirements affect my TSP account?
A TSP account can be divided by a court in an action for divorce, annulment, or legal separation. It also can be garnished to pay a participant's past due child support or alimony obligations, or to satisfy a judgment related to child abuse. However, a TSP account is immune from the claims of third parties, such as creditors in a bankruptcy action. (Although a TSP account is not affected by bankruptcy proceedings, TSP loan payments must stop when a participant files a chapter 13 bankruptcy petition requiring termination of these payments.) For more information, see the booklet "Information About Court Orders" and the fact sheet "Bankruptcy Information."
How do I get written
verification of my account balance?
Occasionally, participants need verification of their current account balances when, for example, they are applying for mortgages or commercial loans. If your most recent participant statement, this Web site, or the ThriftLine will not meet your need for this information, your financial institution should send a request (along with your signed disclosure statement) to the TSP Service Office. The request should include your Social Security number and your date of birth.
Your TSP PIN is a 4-digit Personal Identification Number which is normally mailed to you by the TSP after your first contribution is posted to your account. Your TSP PIN is not the same as your PIN for other uniformed services systems (e.g., myPay). For assistance with those non-TSP PINs, you must contact your service.
You will need your TSP PIN to access your uniformed services account balance and execute transactions on this Web site and the ThriftLine.
If you lose your PIN you can request a new one on this Web site or the ThriftLine. Your new PIN will be mailed to you and you will not be able to access your account until you receive it. You can also change your PIN to a 4-digit PIN of your choice in the Account Access section. Your new customized PIN is effective immediately.
How can I use the TSP Web
site?
This Web site is the most efficient way to get current information about the TSP, monthly and historical rates of return and daily and historical share prices for the five TSP investment funds, the current loan interest rate and annuity interest rate index, and copies of TSP materials. You can use the interactive calculators to project the growth of your account using different assumptions of salary, number of years until withdrawal, and rates of return, to estimate monthly withdrawal payments and to estimate annuity payments from different types of TSP annuities. You can also use the loan calculator to estimate loan payments based on the amount you want to borrow from your TSP account, the current loan interest rate, and other factors. Higher paid employees can use the elective deferral calculator to determine a dollar amount they can contribute each pay period to maximize contributions. If you have lost or forgotten your TSP PIN, you can use this Web site to request that a new one be mailed to you.
If you are a participant in the TSP, you can use the secure area of this Web site (Account Access) to obtain information about your account or to execute certain transactions. (You will need your Social Security number and your TSP PIN. In addition, your browser must be equipped with Secure Sockets Layer (SSL) and have 128-bit encryption.) You can find out your account balance, change the allocation of your future payroll contributions among the five TSP funds, and request an interfund transfer. You can find out the amount available for you to borrow and begin, and in some cases, complete a loan request; you can also reamortize a loan. In addition, you can find out your outstanding loan balance and prepayment information. If you are separated from service, you can update your name and address. You can initiate, and in some cases, complete, requests for in-service withdrawals and post-employment withdrawals using fillable forms on this Web site. You can also change your existing PIN to a PIN of your choice and see your participant statement on-line.
For more information, see the fact sheet "Using the TSP Web Site and the ThriftLine."
The ThriftLine is the automated telephone service for the TSP, which is generally available 24 hours a day, 7 days a week, from a touch-tone telephone. The ThriftLine number is 1-TSP-YOU-FRST (1-877-968-3778). You can use the ThriftLine to find out plan news, daily and historical share prices, the monthly rates of return for the TSP investment funds, the most recent 12-month rates of return, the current loan interest rate, and the current annuity interest rate index. If you have lost or forgotten your PIN, you can use the ThriftLine to request that a new one be mailed to you. You can also request that certain TSP materials be mailed to you.
If you are a participant in the TSP, you can use the ThriftLine to obtain information about your account or to execute certain transactions. (You will need your Social Security number and your TSP PIN.) You can find out your account balance and the amount available for you to borrow, change your existing PIN to a PIN of your choice, and request a contribution allocation or an interfund transfer. You can also find out the status of your loan or withdrawal request.