As a new Government employee, you have the opportunity to save for your retirement through the Thrift Savings Plan (TSP). The TSP is similar to a 401(k) plan in the private sector. It is in addition to the FERS Basic Annuity or CSRS annuity (administered by the Office of Personnel Management), which you receive when you retire from Federal civilian service, or the retired pay you receive when you retire from the uniformed services.
Participating in the TSP is easy. As soon as the TSP receives a contribution, a TSP account is established in your name and you become a TSP participant.
Use Form TSP-1, Election Form (TSP-U-1, uniformed services), to sign up to contribute to the TSP. You can also use your agency's or service's electronic version of the form, such as Employee Express, EBIS, LiteBlue, or myPay.
Establishing an account
If you are a FERS participant and were hired after July 31, 2010:
- Your agency automatically enrolled you in the TSP and 3% of your basic pay is deducted from your paycheck each pay period and deposited in the traditional balance of your TSP account.
- You began receiving automatic agency contributions equal to 1% of your pay from your agency — beginning with your first pay period.
- You began receiving agency matching contributions equal to 3% of your pay from your agency — beginning with your first pay period.
If you are a FERS participant and were hired before August 1, 2010:
- The TSP would have begun receiving automatic contributions equal to 1% of your pay from your agency — beginning with your first pay period.
- If you contribute your own money, your agency will send matching contributions to the TSP (on up to 5% of your contributions per pay period).
If you are a rehired CSRS employee:
- You may be automatically enrolled in the TSP and 3% of your basic pay is deducted from your paycheck each pay period and deposited into the traditional balance of your account. See the rehire rules to determine whether this program applies to you.
If you are a member of the uniformed services:
- To establish an account, you must elect to contribute your own money to the TSP.
What to expect from the TSP
Once your account is established, the TSP will send you:
- A "Welcome Package" with your account number and other information and instructions;
- A Web password, for accessing your account on the TSP website;
- A Personal Identification Number (PIN) for accessing your account on the ThriftLine, the TSP's automated telephone system.
Your agency or service will provide the TSP with your current address. So be sure it has your correct mailing address.
Once your account is established
If you are a civilian and you were enrolled on or after September 5, 2015, then unless you choose another investment option, all contributions received by the TSP will be deposited into the Lifecycle (L) Fund targeted most closely to the year you turn 62.*
If you are a member of the uniformed services or you are a civilian who enrolled before September 5, 2015, then until you choose another investment option, all contributions to your account will be deposited into the Government Securities Investment (G) Fund.
If you are rehired after a break in Federal service, a number of factors affect how new contributions to your account will be invested. Refer to the “Welcome Letter” you receive from us after you are rehired for more information. It is especially important for you to review your statements to ensure your money is being invested according to your wishes.
If you would like new money coming into your account to be invested differently, you can make a contribution allocation.
Before making your investment election, you should consider your investment strategy and the TSP investment options that are available to you. You should also think about your tax strategy to determine whether you want to make traditional contributions, Roth contributions, or both. Once you have made your decision:
- Complete a contribution allocation to tell the TSP how to invest all money going into your account in the future.
- Complete an interfund transfer to tell the TSP how the money that is already in your account should be invested.
- Make your contribution allocation or interfund transfer request after your account is established (i.e., after you receive your Welcome Package).
- Designate a beneficiary or beneficiaries to receive your account in the event of your death, if you wish. If you do not name beneficiaries, your account would be distributed according to the order of precedence required by law.
You may wish to consolidate your investments by moving money into the TSP from other eligible employer plans or Individual Retirement Accounts (IRAs). The TSP offers low administrative costs, a range of investment options, and a choice of traditional (pre-tax) and Roth (after-tax) contributions.