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Thrift Savings Plan (TSP)

In 1986, Congress established the Thrift Savings Plan (TSP) to provide retirement income. In terms of tax benefits and savings, it is similar to the 401(k) plans offered by private corporations, and the income it generates is dependent upon the amount of money you contribute to the account during your working years. This article will give you an overview of the TSP, and is not intended to provide financial advice.

About the TSP

Whether a service member is covered by the Federal Employees’ Retirement System (FERS) or the Civil Service retirement System (CSRS), the TRS is part of both systems. The TSP is one part of the FERS package; it is a supplement to the CSRS retirement pay.

Military personnel can consult their benefits office to find out which retirement system will provide coverage.

The Federal Retirement Thrift Investment Board (FRTIB or “Board”) is the administering agency of the TRS. It is an independent government agency managed by five presidentially-appointed board members and an executive director. An advisory committee made up of representatives of unions, the uniformed services, and employee organizations called the Employee Thrift Advisory Council offers advice to the Board and Executive Director on governance and policies. Financial Statements are required by law to have an annual audit.

The service member’s agency determines his or her retirement coverage and advises the FRTIB record keeper of contributions for each pay period. Contributed assets are held in trust. The service member’s agency serves as point of contact for any administrative needs such as change of address, change of beneficiary, or any other personal information that might impact the TSP. After the service member separates from Federal service, the TSP is primary point of contact.


A service member is eligible to participate in the TSP if:

  • They were hired as a Federal Employees' Retirement System (FERS) employee on or after January 1, 1984, or
  • The service member was hired as a Civil Service Retirement System (CSRS) employee before January 1, 1984 and did not convert to FERS) or
  • They are member of the uniformed services (active duty or Ready Reserve), or
  • They are a civilian in other categories of government service

In addition to being covered by an eligible retirement system, to qualify, a service member must also be:

  • In Pay Status and actively employed by the Federal Government as either a civilian employee or as a member of the uniformed services,
  • Working full- or part-time.

Fund Features

Within the first 60 days of joining the service, a service member may begin contributing to your TSP, and they may start, stop or change amounts of their TSP contributions at any time while serving.

Any percentage of a service member’s basic pay may be contributed as long as the annual total does not exceed the Internal Revenue Code limitation of $16,500. Contributions from any incentive or special pay are allowed if the service member also contributes to the TSP from basic pay. Incentive or special pay contributions must also not exceed the limits set by the Internal Revenue Code.

Additional TSP Benefits:

  • TSP contributions are made pre-tax.
  • TSP earnings are tax - deferred.
  • TSP investments can be diversified across five different funds, which allows the service member to optimize their allocations as they see fit. The funds are: the Government Securities Investment (G) Fund, the Fixed Income Index Investment (F) Fund, the Common Stock Index Investment (C) Fund, the Small Capitalization Stock Index Investment (S) Fund, the International Stock Index Investment (I) Fund, and the new Lifecycle (L) Fund.
  • Some retirement savings plans can rollover into the TSP. Similarly, the TSP can be transferred to an eligible retirement plan upon separation from Federal service.
  • Some agencies allow members in critical specialties matching contributions. Conditions apply. Consult your benefits office for details.

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