General TSP Rules and Procedures

Chapter 6: Section 1

Investments, Matches, and Limits

The Thrift Savings Plan (TSP) is a defined contribution style retirement savings plan open to federal employees who are covered by the Federal Employees Retirement System, the Civil Service Retirement System or another federal retirement program. They may invest on a pay-period basis either in percentage-of-salary amounts or whole dollar amounts, up to an annual dollar maximum—called the elective deferral limit—set by the IRS for tax-advantaged retirement savings plans ($18,000 in 2016). Those who are age 50 or older in a calendar year may invest additional amounts per year as described in Catch-Up Contributions, below.

Investments may be made through either or both of the two types of investing offered. Traditional investments are made with pre-tax money, but that money along with its associated earnings is taxable on withdrawal. Roth investments are made with after-tax money that is tax-free on withdrawal, and the associated earnings also are tax-free on withdrawal if certain conditions are met, as described in Roth Balances, below. For those making both types of investments, the combined total must be within annual dollar limits.

Employees covered by the CSRS system have accounts only if they choose to open one and they get no government contributions. For FERS-covered employees, the employing agency establishes TSP account and makes an automatic contribution equal to 1 percent of salary, whether or not the employees invest their own money. For FERS employees who do invest their own money, investments are matched dollar for dollar for the first 3 percent of pay invested per pay period, and then 50 cents on the dollar for the next 2 percent of pay invested per pay period. Thus the maximum government contribution for FERS employees is equal to 5 percent of salary.

The FERS employer matching contribution is determined by the participant’s total investment, into a traditional balance, a Roth balance or both. All government contributions are invested through the traditional design regardless of whether the participant personally invests through the Roth design.

Automatic contributions of 1 percent of salary begin immediately upon hiring, and matching contributions begin as soon as employees start making investments from their own money.

If you invest on a percentage of salary basis, your investments will increase automatically when you receive a pay increase (as will agency contributions, if you are under FERS).

Newly hired employees begin with a default personal investment rate immediately upon hiring of 3 percent. However, they may choose a different investment level or opt out, with the option to begin making personal investments later. Those choosing to opt out have 90 days from starting on the job to request a refund of money they did not wish to have withheld, by filing Form TSP-25, Automatic Enrollment Refund Request. No notice to or consent by a spouse is required. Those refund payments reflect any gains or losses through the date of the distribution and are taxable but not subject to an early withdrawal penalty tax. Automatic agency contributions remain in the account but matching contributions associated with the mandatory employee investment are forfeited. Beyond the 90-day period, the participant may make a withdrawal only under standard withdrawal rules as described in Sections 3 and 4 in this chapter.

Automatic investments are put in the government securities G Fund unless the individual chooses a different allocation (note: under P.L. 113-255 of 2014, the default fund will be the lifecycle fund appropriate for the person’s age for those hired after implementing rules are finalized, projected to be before October 2015). See Section 2 in this chapter for information about the investment funds. Those investments go into a traditional balance unless the employee elects to have them made into a Roth balance.

The employee automatic investment policy does not affect those hired before August 1, 2010 (unless they have a break in service of more than 30 days and then return to federal employment); if they are not investing their own money, they must opt in. For those under FERS, matching contributions are not made until they begin making personal investments, although they receive the 1 percent agency automatic contribution in any case.

FERS employees must take the elective deferral limit into account when planning their investments. Once the dollar cap is reached for a year, employee investments are shut off—as are the agency matching (although not automatic) contributions. Thus, to receive the maximum agency matching contributions, FERS employees need to make sure they are able to continue investing at least 5 percent of salary through every pay period of the calendar year. The key dates for this purpose are the dates of pay distributions, not the ending dates of pay cycles.

That consideration does not apply to CSRS employees because they receive no government contributions.

Investments in a TSP account generally can come only from payroll deductions; therefore, money in an IRA generally cannot be rolled over to a TSP account. The exception is that transfers are allowed into the TSP from 401(k) and similar plans of prior employers, and from conduit IRAs holding proceeds of such plans (including either traditional or Roth balances), as described below in Transfers into the TSP. Such transfers do not count against the annual dollar investment limit, nor do government contributions for FERS investors or “catch-up” investments (see Catch-Up Contributions, below).

For employees on leave without pay during a pay period, including those furloughed due to lack of available agency funding, biweekly withholdings will remain the same if they are investing on a dollar amount basis (assuming their pay for that pay period is sufficient to make that investment); for FERS employees, agency matching contributions also will remain the same but the automatic 1 percent of salary contribution will be based on the reduced salary for that pay period. For those investing on a percentage of salary basis, the investment will be based on the applicable percentage of the reduced salary, and agency automatic and matching contributions for FERS employees also will be reduced accordingly. Employees can change the form of their investing at any time. See Section 3 of this chapter for policies on loans and in-service withdrawals.


Lump-sum investments—other than transfers and rollovers—are not permitted. That means that TSP investments cannot be deducted from payments that are not considered part of basic pay, such as voluntary separation incentive payments (buyouts), bonuses, or payments for the value of unused annual leave at separation for retirement or other reasons.

If investments are made on behalf of a participant in excess of the annual dollar limit, the TSP refunds the excess and any associated earnings to the participant early in the succeeding calendar year. Any excess taxable investment must be reported as income earned for the calendar year in which the investment was made to the TSP. The associated taxable earnings must be reported as income for the year they are disbursed to the participant.

Employees participating in the TSP remain eligible to invest in an IRA (except that anyone eligible for the TSP is ineligible for a “myRA,” a form of IRA available to workers not covered by an employer-sponsored retirement program). However, CSRS and FERS are considered to be retirement plans for the limits on tax deductibility of IRA investments by higher-income people enrolled in retirement plans. Also, depending on your filing status and your adjusted gross income, you may be eligible for a retirement savings contributions credit, also called a saver’s credit, on your tax return. Check with a tax adviser.

TSP accounts are exempt from many forms of garnishment and similar orders. However, exceptions at 5 CFR 1653 make accounts subject to alimony and child support orders (see Chapter 7, Section 5) and to federal tax levies and certain court orders for restitution.

Phased Retirement—Phased retirees (see Phased Retirement in Chapter 3, Section 1) do not separate from service and are active employees, not retirees, for purposes of TSP policies where there is a distinction between the two. Thus, phased retirees can continue to invest in the TSP from their part-time salaries (but not from their annuities) and may take out loans and in-service withdrawals under rules applying to active employees. They are not eligible for the post-separation withdrawal options available to retirees and are not subject to minimum distribution requirements. See the pertinent sections of this chapter for details on those policies.

On entering phased retirement, an employee investing on the basis of a percentage of pay may wish to change to dollar amount investing or increase the percentage designation, since otherwise the amount invested biweekly would be cut in half on switching to half-time employment, with a potential reduction in matching contributions for those under FERS.

Another consideration is that agencies follow an order of precedence for other mandatory deductions before TSP investments are withheld from salary. If an employee is investing on a dollar amount basis and the amount elected is greater than the available pay after other mandatory deductions have been subtracted, no employee investment will be made for the pay period, and if covered by FERS, no agency matching contribution would be made. If an employee is investing based on a percentage of basic pay and if that percentage turns out to be an amount greater than the available pay after other deductions, the employee investment would be the amount of pay available after other deductions.

Starting, Changing, Reallocating, and Stopping Investments

Eligible employees not already enrolled may join the program by filing a Form TSP-1, Election Form, with their employing agency personnel or benefits office (many agencies provide this service electronically; check with the human resources and/or finance offices). This can be done at any time with the exception that there is a six-month waiting period before an employee may restart investments after taking out a financial hardship in-service withdrawal. The TSP offers the choice of investing by percentage of salary or by dollar amount per pay period. All investments will be automatically invested in the government securities G Fund unless and until the investor chooses a different allocation and acknowledges the investment risk of doing so.

All investments will be made into a traditional balance unless the participant elects to direct some or all of the investment into a Roth balance.

Participants may change the amounts of their ongoing investments or the allotments between traditional and Roth investing at any time by filing a new Form TSP-1 or its electronic equivalent.

Investors may reallocate ongoing investments among the available TSP funds by using the ThriftLine phone system (from the United States and Canada toll-free (877) 968-3778, TDD (877) 847-4385, other callers (404) 233-4400), or at In some cases, automated systems operated by employing agencies also can be used. For those with both traditional and Roth balances, an allocation applies equally to both.

There is no limit on the number of reallocation requests allowed for ongoing investments.

Employees may stop investing in the TSP at any time by filing a new Form TSP-1 or its electronic equivalent, with no restriction on when they may restart investing, other than being subject to the six-month waiting period after in-service financial hardship withdrawals, if applicable. For FERS employees, agency matching contributions also stop when personal investments stop, although the automatic 1 percent of salary contributions continue.

While retirees and other separated participants may leave their accounts open and continue to transfer money among the investment funds, they may not make further investments (or take out loans). See Section 5 of this chapter for information about required minimum withdrawals based on age.

Interfund Transfers

In addition to reallocating ongoing investments, investors may transfer money already in their accounts among the investment funds. This applies both to actively employed investors and those retired or otherwise separated who keep their accounts open.

Rules at 5 CFR 1601.32 limit the number of times per month that an investor may use interfund transfers. After an investor has made two interfund transfers in a month, the participant may make additional interfund transfers only to move money into the government securities G Fund until the first day of the next calendar month. The dates used for this purpose are the processing dates of the transactions, not the request dates. If a first or second interfund transfer in a month moves money only into the G Fund, it still counts as one of the two unrestricted transfers for that month.

Investors may make interfund transfers by using the ThriftLine phone system (from the United States and Canada toll-free (877) 968-3778, TDD (877) 847-4385, other callers (404) 233-4400), or at Transfer requests must be received by the TSP by noon Eastern Time in order to be effective at the end of that day and at the day’s closing prices for the investment funds. Otherwise, the transaction will occur at the end of the following business day at that day’s closing prices.

You can specify the percentage of your total account balance that you want to have invested in each fund after the transfer is completed. Percentages can be stated in 1 percent increments and must add up to 100 percent.

Investors who have not previously invested outside the G Fund must sign a statement acknowledging risk before moving money into any of the other funds. For those with both traditional and Roth balances, an interfund transfer applies to both.

Valuation of Accounts

At the end of each business day, the TSP conducts a valuation of accounts. Accountings include any new investments made by actively employed investors, any government contributions for FERS investors, any loan or withdrawal activity, interfund transfers, and the changes in the value of the funds themselves due to investment earnings or losses. Balances are shown as shares and share prices as well as in dollar amounts. Traditional and Roth balances are accounted for separately.

Vesting Requirements

If you are a FERS participant, you must work for the federal government for a certain number of years to be entitled to (or “vested” in) the agency’s automatic 1 percent contributions in your account and the earnings on those contributions. You are immediately vested in your own investments (including any “catch-up contributions” as described below) and any agency matching contributions, and any earnings they accrue.

Most FERS employees become vested in the automatic contributions and the earnings on them after three years of federal civilian service. FERS employees in congressional and certain non-career positions become vested after two years. If you leave government service before meeting the vesting requirement for your automatic contributions, those contributions and their earnings will be removed from your account and forfeited to the TSP. If you die before separating from service, you automatically become vested in all the money in your TSP account.

CSRS participants receive no agency contributions, so they always are vested in all the money in their accounts.

Tax Status of Investments

Roth Balances—See Roth Balances, below.

Traditional Balances—An employee’s own investments in the TSP reduce the worker’s taxable current income. In effect, an employee’s investments reduce the individual’s gross salary for federal income tax purposes. For example, if employees who have a $60,000 salary invest 5 percent of their pay ($3,000) in the TSP, their gross income is reduced to $57,000 for federal income tax purposes. Most state and local governments apply the same rule. Check with your state and local government taxing authorities.

However, Social Security taxes, for FERS employees, CSRS Offset employees and others subject to Social Security taxes, are applied to an employee’s total salary. Thus, in this case Social Security tax would be applied to the $60,000 base salary.

All agency contributions on behalf of FERS employees are made through the traditional design regardless of whether the employee invests through the Roth option; both those contributions and their earnings are sheltered from taxes until withdrawn.

Upon withdrawal, the amount paid to an employee is subject to different tax rules depending upon how the account is withdrawn. You must treat taxable amounts paid to you from your TSP account as taxable income for federal income tax purposes in the year in which such payments are made. TSP annuity purchases and direct transfers by the TSP to other eligible plans are not payments made directly to you and are not subject to these rules. See Taxation of Withdrawals in Section 4 of this chapter.

The tax law contains complex rules for the payment of federal income tax and tax withholding on payments from plans such as the TSP. See Section 7 in this chapter for tax-related TSP forms and publications.

Roth Balances

Public Law 111-31 of 2009 required the TSP to offer a Roth investment option, in which investments are made with after-tax dollars and withdrawals of those investments are tax-free—as are withdrawals of their associated earnings if certain conditions are met, as described below. The TSP started accepting Roth investments in May 2012.

Participants may designate ongoing investments toward a traditional (tax-free on investment, taxable on withdrawal; see above) balance, a Roth balance or both, up to the annual dollar limit—counting both types of investing combined—as described in Investments, Matches, and Limits, above. Similarly, “catch-up contributions” for investors age 50 or older during the year of investment may be made into one or both types of balances—subject, combined, to the separate dollar limit for those types of investments as described in Catch-Up Contributions, below.

The TSP keeps traditional and Roth balances separate and does not allow the conversion of one type of balance to the other. The TSP (and similar retirement savings programs) has authority under P.L. 112-240 to allow conversion of traditional balances to Roth status, although taxes would be due on the amount converted, as happens with a traditional-to-Roth IRA conversion. The TSP continued to study through 2014 whether to allow that option and if so, the conditions that would be imposed. Putting in place such a change would be a long-term project since it would involve both policy and administrative changes.

All agency contributions on behalf of employees covered by the Federal Employees Retirement System are made into traditional balances regardless of how the employee designates personal investments. For purposes of determining agency matching contributions, the employee’s traditional and Roth investments, for those making both types, are combined.

Newly hired employees who are automatically enrolled with default investments have those investments made into traditional balances unless they elect Roth investments.

The TSP accepts transfers of Roth balances from eligible retirement savings programs of prior employers, as described in Transfers into the TSP, below. However, the TSP will not accept rollovers of Roth distributions that have already been paid to the individual—that is, it will accept only a direct account-to-account transfer. Nor will it accept transfers or rollovers from Roth individual retirement accounts.

The TSP allows a separating participant to transfer an account to another eligible employer plan or to an individual retirement account, as described in Transferring Your TSP Account in Section 4 of this chapter. For investors with both traditional and Roth balances, a separate election must be made for each.

For participants investing in both traditional and Roth balances, allocations of ongoing investments among the TSP’s funds apply to both. Similarly, interfund transfers of money already in the TSP apply to both. Loans are drawn from each type of balance on a prorated basis and are repaid to each based on that ratio. (Note: If a taxable distribution is declared—for example, if you fail to repay your loan in accordance with your loan agreement or do not repay your loan when you separate from service—you will owe taxes on the portion of the loan from the traditional balance, but not on the portion from Roth investments. Associated Roth earnings are tax-free if the distribution was declared due to separation from service, and the earnings are “qualified” as described below. Also see Loans in Section 3 of this chapter.)

In-service withdrawals also are paid out on a prorated basis, for investors with both traditional and Roth balances. You will owe federal income taxes on the portion of your withdrawal that comes out of your traditional balance, except that for an age-based in-service withdrawal, those taxes can be deferred by transferring the money into an IRA, as described in In-Service Withdrawals in Section 3 of this chapter. You will not pay federal income taxes on the portion of an in-service withdrawal that comes from your Roth investments; you will pay taxes on their associated earnings if they are not “qualified” as described below. For hardship-based withdrawals, the six-month waiting period before new investments can be made applies to both types of balance.

Post-separation withdrawals also are made on a prorated basis. A participant who has a Roth balance and a traditional balance who purchases an annuity must buy two separate contracts of the same type, one with the traditional balance and one with the Roth balance.

Roth investments are tax-free on withdrawal since they already have been taxed (note: Roth investments also can be made with tax-free combat zone pay into a uniformed services TSP account by an employee on active military duty).

Roth balance investment earnings are “qualified” and thus tax-free on withdrawal if: five years have passed since January 1 of the year in which the investor made the first Roth TSP investment; and the participant has reached age 59 1/2, died, or become permanently disabled. For this purpose, the definition of permanent disability is that used in Section 72(m)(7) of the Internal Revenue Code: the individual must be “unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration.” The individual must provide proof of such disability to the IRS.

Separated participants are subject to required minimum withdrawals of both traditional and Roth balances as described in Section 5 of this chapter.

Making Roth TSP investments may affect your eligibility for a Roth IRA. That’s because Roth investments are not deducted from your adjusted gross income as are traditional pre-tax investments, potentially putting you above the taxable income limits for making Roth IRA investments. If you are eligible to invest in a Roth IRA, making Roth TSP investments won’t lessen the amount that you can invest in that IRA.

Calculators at address various aspects of traditional versus Roth investments and withdrawals.

Catch-Up Contributions

Public Law 107-304 permits eligible TSP participants to make additional investments from their basic pay to their TSP accounts for each year in which they are age 50 or older. These investments, which the TSP calls catch-up contributions, are a supplement to the participant’s regular employee investments and do not count against the Internal Revenue Code’s elective deferral limit. However, catch-ups have their own annual limits and eligibility criteria.

A participant is eligible to make catch-up contributions if all of the following conditions are met:

• He or she is in pay status. Because these investments are made by payroll deductions, participants must be currently employed and receiving pay. They cannot be retired or otherwise separated from service or in non-pay status such as on leave without pay.
• He or she is investing a biweekly amount which will result in his or her reaching the elective deferral limit by the end of the relevant year.|
• He or she is at least 50 years old by the end of that year.
• He or she is not in the six-month non-investment period following the receipt of a financial hardship in-service withdrawal.

The maximum amount is $6,000 in 2015. Agencies are responsible for ensuring that they do not submit catch-up contributions for their participants which exceed the yearly catch-up limit. The TSP will reject any amounts that exceed the yearly limit.

Like regular investments, catch-up contributions are made on a traditional pretax basis unless the participant chooses to make some or all of them on an after-tax Roth basis (see Roth Balances, above). The catch-up dollar limit applies to the combined amount of regular and Roth investments, for those making both types of investments. There are no agency contributions associated with catch-up contributions.

Elections for catch-up contributions are separate from the participant’s election for regular employee investments. The participant can make a catch-up contribution election at any time beginning in or after the year in which he or she turns age 50 by filing Form TSP-1-C, Catch-Up Contribution Election, or its electronic equivalent.

Catch-Up contribution elections are made in terms of a requested whole dollar amount deducted from the participant’s basic pay each pay period until the earliest of the following occurs:

• the annual catch-up limit is reached;
• the calendar year ends; or
• the participant elects to stop the investment.

The participant can elect any whole dollar amount up to the yearly limit. However, catch-up contributions for one year don’t continue into the following year (except in cases of error correction). The participant must make a new election each year.

More than one election may be made in any given year so long as the annual catch-up limit is not exceeded. Participants can make catch-up contribution elections at any time during the year. Elections are effective no later than the first full pay period following the agency’s receipt of the election. The election terminates with the last pay date of the year to which it applies.

If a participant enters non-pay status during the year, the catch-up contributions (like regular investments) will stop. When the participant returns to pay status, he or she cannot make up the missed payments, but can submit a new election increasing the catch-up contribution amount and make the maximum catch-up contribution allowed by law for that year.

If a participant is currently investing in both civilian and uniformed services TSP accounts, he or she can make separate catch-up contributions to each account so long as the total for both accounts combined does not exceed the annual catch-up limit. Catch-Up contributions into a uniformed services account cannot be made from combat zone, incentive or special pay.

Participants may stop or restart their catch-up contributions at any time without penalty. The termination of catch-up contributions does not affect the participant’s regular investments.

If a participant stops his or her regular employee investments, the catch-up contributions also stop. If the participant receives a financial hardship in-service withdrawal, his or her catch-up contributions stop along with any regular employee investments.

Catch-Up contributions are invested in the participant’s account based on the current investment allocation.

Transfers into the TSP

Transfers are allowed into the TSP from 401(k) and similar plans of prior employers. The policy further allows transfers from “conduit” individual retirement accounts established to hold money from such accounts after leaving non-federal employment, but does not allow transfers into the TSP from other types of IRAs.

A TSP participant who would like to transfer money into the TSP should check with a representative of his or her former plan or IRA to ensure that the distribution is considered an eligible rollover distribution. For purposes of these transactions, there is a distinction between a transfer and a rollover. A transfer occurs when the participant instructs the qualified retirement plan or conduit IRA to send all or part of his or her eligible distribution directly to the TSP instead of issuing it to the participant. A rollover occurs when the qualified retirement plan or IRA makes a distribution to the participant (after withholding the mandatory 20 percent federal income tax) and the participant deposits all or any part of the gross amount of the distribution into the TSP within 60 days after receiving it.

The TSP can accept a transfer from:

• A qualified retirement plan. This is either a qualified trust described in Section 401(a) of the Internal Revenue Code (IRC) which is tax exempt under IRC 501(a) or an IRC 403(a) annuity plan. A qualified retirement plan generally includes defined contribution plans such as money purchase plans, profit sharing plans, employee stock ownership plans, stock bonus plans and other plans that have provisions for cash or deferred arrangements under section 401(k) of the IRC and may include a distribution from a qualified benefit plan.
• A conduit IRA. This is an individual retirement account described in IRC 408(a) or an individual retirement annuity described in IRC 408(b) that contains only funds transferred or rolled over from a qualified retirement plan and earnings on those amounts. Thus, it cannot contain funds invested in it directly by the participant. Consequently, an IRA will not qualify as a conduit IRA if the participant has mixed regular investments or funds from other sources with the rollover distribution from the retirement plan.

The TSP can accept a rollover from the participant only of a traditional balance. A rollover can only be accepted within 60 calendar days of the date the participant received the eligible rollover distribution from a qualified plan or conduit IRA. The rollover must be in guaranteed funds made payable to the TSP.

Money rolled over or transferred into the TSP is allocated according to the participant’s most current investment allocation. It becomes part of the TSP employee investments and will be subject to the same plan rules as all other employee investments into the account. The money does not count against the annual dollar cap on regular employee investments.

The TSP will accept into the Roth balance of your TSP account transfers of qualified and nonqualified Roth distributions from Roth 401(k)s, Roth 403(b)s, and Roth 457(b)s. If you don’t already have a Roth balance in your TSP account, the transfer will create one.

The TSP will not accept into your Roth balance rollovers of Roth distributions that have already been paid to you, or transfers or rollovers from Roth IRAs.

Military Reserve TSP Accounts

Members of the Ready Reserve or National Guard of the Army, Navy, Air Force, Marine Corps, Coast Guard, Public Health Service, and the National Oceanic and Atmospheric Administration in any military pay status (as well as regular active duty members of those services) can invest in the TSP. Such accounts must be established by submitting a separate election to their military service.

Federal and postal employees who are Reservists can have both a civilian TSP account and a uniformed services TSP account. When civilian federal employees enter military active duty, they cannot make any investments into their civilian TSP accounts while on leave without pay or separated from the civilian position. As active duty service members, though, they can invest in a military TSP account.

As with federal employee TSP accounts, investments in uniformed services accounts may be made into traditional balances, Roth balances or a combination of both. There is a special advantage to investing any tax-free combat zone pay in a Roth balance, since that money—and its associated earnings, if they are “qualified” as described in Roth Balances, above—will not be taxed either on investment or withdrawal.

If you had a loan from a federal employee TSP account that was closed as a taxable distribution because you separated or were placed in non-pay status to perform military service, you may be eligible to have the taxable distribution reversed after you return to civilian service or pay status. If you also received an automatic cashout of your TSP account when you separated, you must return the cashout to be eligible for a reversal of the taxable distribution of your loan. (However, if you voluntarily withdrew your TSP account when you separated, you are not eligible to have the taxable distribution of your loan reversed.) To reverse the taxable distribution, you may either repay the full amount of the taxable distribution or you may reinstate a loan payment schedule if the reinstatement is permitted within the established limits of the loan program. The maximum time frame for repayment of your loan will be extended by your period of military service. To exercise this opportunity, you must notify the TSP within 90 days of the date of your return to civilian service or pay status.

Those with two accounts have their accounts treated separately for some purposes but collectively for others. For example, to move money between funds, investors must submit two interfund transfer requests, one for each account. However, the accounts are combined for the tax code limit on annual investments (see Investments, Matches, and Limits, above) and in determining the amount the participant is eligible to borrow from the TSP.

Members of the uniformed services have access to the TSP loan program. However, Reservists who drill only monthly should think seriously before taking a loan from their military accounts because they may be unable to repay the loan in the time frame required by law. Employees are prohibited from repaying a uniformed services TSP loan from civilian pay, or vice versa.

Only pay for active military service can be invested in a military TSP account. Reservists may be able to invest all or any whole percentage of any special or incentive pay (including re-enlistment or other bonuses) received, up to the tax code dollar limit. To invest from military special pay, incentive pay, or bonuses, the participant must be investing from military basic pay.

Investments from tax-exempt pay such as combat zone pay are not subject to the elective deferral limit, although they are subject to a separate limit ($53,000 in 2015). Any earnings attributable to those investments will be taxable upon withdrawal unless the investment was made in a Roth balance and the investments met the standards for earnings to become qualified for tax-free withdrawal.

On separation from either the uniformed service or federal civilian service, the investor may combine the accounts.

Catch-Up Contributions for Reservists

Employees who perform uniformed service and then later are restored to their civilian positions may make up any investments to a civilian Thrift Savings Plan account they missed because of the military service. The amount is determined by using the TSP election in effect immediately before entry into military service, unless the employee submitted a new Form TSP-1 or equivalent to terminate the investments or made a new election during military service. The amount of money they can retroactively invest in their civilian accounts will be offset by any investments they made to a uniformed services TSP account while on active duty.

Both makeup and current investments are invested in the manner specified on the current Form TSP-1 or equivalent. All makeups must be deducted from future pay.

Those in the FERS will receive retroactive agency matching contributions as they make up their employee investments; they receive agency automatic (1 percent of salary) contributions regardless of whether they make up employee investments. Retroactive earnings are credited on retroactive agency contributions but not on makeup employee investments.

Also see the TSP fact sheet TSP Benefits that Apply to Military Members Who Return to Federal Civilian Service, available through the points of contact in Section 7 of this chapter.

Account Information

There are several ways to access information regarding a TSP account. The TSP ThriftLine (from the United States and Canada toll-free (877) 968-3778, TDD (877) 847-4385; other callers (404) 233-4400) is an automated telephone service available at all times; callers may opt out of the automated system to speak to a customer service representative during business hours. The TSP Web site ( also offers account holders information of a general and specific nature. For certain services, callers or visitors must have their personal identification number (PIN) and Social Security number. (Note: A feature in the My Account section of the site allows participants to set up access to their accounts through many smartphone operating systems; the TSP warns that using applications from outside parties could jeopardize account security. It warns of similar risks in visiting Web sites other than its own that use variant domain names or spelling.)

On both the ThriftLine and Web site you may: make an interfund transfer, change or request personal identification number, check on status of loan or withdrawal request, determine current account balance and amount available for loan, allocate future investments, check the status of an outstanding loan, and obtain a loan prepayment amount.

The TSP also issues quarterly account statements for the periods ending March 31, June 30, September 30, and December 31 containing a detailed summary of the activity in the account, including any loan activity, as well as an annual statement early in each calendar year.

For current employees, the primary contact for TSP information is the agency personnel office. However, the TSP Service Office handles questions about loans, investment allocations, interfund transfers, designations of beneficiaries, and withdrawals for all participants.

The Service Office is the primary contact for participants who have left federal service. It can answer questions about accounts and send TSP withdrawal materials to supplement the withdrawal package provided by agencies upon separation from federal service. Submit withdrawal forms directly to the Service Office.

The Service Office’s hours of operation are 7 a.m. to 9 p.m. Eastern Time on business days. Phone the ThriftLine numbers above, fax (866) 817-5023, or write to Thrift Savings Plan Service Office, P.O. Box 385021, Birmingham, AL 35238.

See Section 7 in this chapter for points of contact for other TSP services.

Federal Retirement Thrift Investment Board

The TSP is managed by an independent federal agency—the Federal Retirement Thrift Investment Board. The Board consists of five members who serve in a part-time capacity. They are nominated by the President and confirmed by the Senate. The agency is administered by a full-time executive director appointed by the Board.

Board operations are funded first by forfeiture of the agency’s automatic 1 percent account contributions by FERS employees who separate before they are vested in those contributions. If these forfeitures are not sufficient to pay the Board’s expenses, then the Board pays its remaining administrative expenses from earnings on all participant and agency contributions.

Federal Retirement Thrift Investment Board

The TSP is managed by an independent federal agency—the Federal Retirement Thrift Investment Board. The Board consists of five members who serve in a part-time capacity. They are nominated by the President and confirmed by the Senate. The agency is administered by a full-time executive director appointed by the Board.

Board operations are funded first by forfeiture of the agency’s automatic 1 percent account contributions by FERS employees who separate before they are vested in those contributions. If these forfeitures are not sufficient to pay the Board’s expenses, then the Board pays its remaining administrative expenses from earnings on all participant and agency contributions.

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