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The Thrift Savings Plan
The Thrift Savings Plan (TSP) is the government's version of the popular 401(k) plan. Contributions are made from pre-tax dollars and investment earnings are tax deferred until withdrawn.
FERS employees are allowed to invest up to a threshold set annually by the IRS ($15,500 in 2008). Your agency will automatically contribute an amount equal to 1 percent of your basic pay each pay period and matches your contributions according to the following schedule:
| 0% |
1% |
0% |
1% |
| 1% |
1% |
1% |
3% |
| 2% |
1% |
2% |
5% |
| 3% |
1% |
3% |
7% |
| 4% |
1% |
3.5% |
8.5% |
| 5% |
1% |
4% |
10% |
| NOTE: Amounts that you contribute over 5% are not matched. |
There is a one year waiting period before newly hired FERS employees receive agency contributions. At any time you can begin investments, change the amount of investment, or change the allocation of how much money you have going into each of the TSP's investment funds. You also can move your account balances among the funds, whenever you choose, through inter-fund transfers.
Investment Choices
Currently, the TSP has six funds available:
- G Fund (Government Securities Investment Fund)
Consists of short-term U.S. Treasury securities specially issued to the TSP. Payment of principal and interest is guaranteed by the U.S. government.
- C Fund (Common Stock Index Fund)
The objective of the C Fund is to match the performance of the Standard and Poor's 500 (S&P 500) Index, a broad market index made up of stocks of 500 large to medium-sized U.S. companies.
- F Fund (Fixed Income Index Investment Fund)
The objective of the F Fund is to match the performance of the Lehman Brothers U.S. Aggregate (LBA) Index, a broad index representing the U.S. bond market.
- S Fund (Small Capitalization Stock Index Investment Fund)
The objective of the S Fund is to match the performance of the Dow Jones Wilshire 4500 Completion (DJW 4500) Index, a broad market index made up of stocks of U.S. companies not included in the S&P 500 Index.
- I Fund (International Stock Index Investment Fund)
The I Fund offers the opportunity to earn a potentially high investment return over the long term by investing in the stocks of companies in developed countries outside the United States.
- L Fund (Lifecycle Fund)
Diversified among the G, F, C, S, & I Funds using professionally determined investment mixes tailored to different time horizons.
For additional information, go to www.tsp.gov.
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