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Thrift Savings Plan (TSP) & TSP Catch-Up
The Thrift Savings Plan (TSP) is a retirement savings and investment plan for
Federal employees. Congress established the TSP in the Federal Employees'
Retirement System Act of 1986. The purpose of the TSP is to provide retirement income.
The TSP offers Federal employees the same type of savings and tax benefits that many
private corporations offer their employees under "401(k)" plans.
In the civilian component of the TSP, employees covered by the Federal Employees'
Retirement System (FERS) and the Civil Service Retirement System (CSRS) can contribute to
the TSP. The TSP is
a defined contribution plan. The retirement income that you receive from your TSP account
will depend on how much you (and your agency, if you are a FERS employee) have contributed
to your account during your working years and the earnings on those contributions.
The contributions that you make to your TSP account are voluntary and are separate from
your contributions to your FERS Basic Annuity or CSRS annuity.
Employees in the FERS retirement system will (when eligible) automatically receive the Agency Automatic
(1% of basic pay) Contribution. The Agency Automatic Contribution is made whether or not the
employee is contributing his/her own money into TSP. In addition, if the employee is contributing his/her own money, DOE will make Matching
Contributions (up to 4% of basic pay) into the employee's account. The Matching
Contributions apply to the first 5% of pay that an employee puts into TSP. Contributions
are matched dollar-for-dollar for the first 3% of pay and $0.50 cents on the dollar for
the next 2% of pay.
TSP Catch-Up
Federal employees
who will be
age 50 or older
during 2007,
and are already
contributing
the maximum amount of regular TSP contributions ($15,500)
are eligible
to make additional
contributions
to their TSP
accounts. In
2007, eligible participants
may invest
up to $5,000 in catch-up contributions. Future year limits
years
will be indexed
to inflation.
Catch-up contributions will be taken as a payroll deduction from basic pay each pay period.
Contributions will be invested in the TSP funds according to the most recent contribution allocation.
Employees may start, change, stop, or restart catch-up contributions at any time. Contributions will
automatically stop when the maximum dollar limit allowed for catch-up contributions for the year is
reached. Employees must make a new election each calendar year if catch-up contributions are to continue.
The Department does not match catch-up contributions.
Submission of Catch Up Contribution Elections is via the Employee
Self Service (ESS) website. The first day to make elections for the 2007 TSP Catch-up year in Sunday, December 10, 2006.
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