Retirement & Benefits

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Thrift Savings Plan

Thrift Savings Plan
Annual Limit on Elective Deferrals
(Affects on Thrift Savings Plan)

Employees covered under the Federal Employees Retirement System (FERS) may contribute up to 14% of their basic pay each pay period (employees covered by CSRS may contribute up to 9%) to the Thrift Savings Plan (TSP) up to the Internal Revenue Service's Elective Deferral Limit. The term "elective deferral" refers to the employee contributions only, which is made on a tax-deferred basis. The limit for the 2004 tax year is $13,000. This means FERS employees participating in TSP, and whose basic pay will exceed $92,800, could lose out on matching contributions from the Agency if this limit is reached before the end of the year. The deferral limit will increase each year by $1,000 until the year 2006, when it reaches $15,000. After 2006, the increase will be indexed to the annual cost-of-living adjustment referred to in the tax code.

To find out how this limit may affect your contributions, read the TSP Fact Sheet "Annual Limit on Elective Deferrals" which can be found at: http://www.tsp.gov/forms/ocfs91-13.pdf

You may change your contributions only during a TSP Open Season.

If you have any questions, you may contact your servicing Benefits Specialist of the Human Resources Division by calling (301)504-1526.