Elective Deferrals and TSP

TSP and Elective Deferrals

Thrift Savings Plan (TSP) Elective Deferrals are payroll deductions federal and postal employees ask their employer to withhold in order to make contributions to employer-sponsored retirement plan – the TSP.

Tax

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deferred contribution payments to traditional TSP and after-tax contributions to Roth TSP are classified as elective deferrals.  These contributions cannot exceed the Internal Revenue Code’s (IRC) annul contribution limit for 2013 and 2014 of $17,500.  The limit still applies whether contributions are combined (tax-deferred traditional or Roth after-tax contributions) or are a single elective deferral.

TSP catch-up contributions are not impacted by the IRC limit.  Additionally, the agency’s automatic 1% and matching contributions are not classified as elective deferrals because they are not a part of an employee’s pay or salary.

Make certain you have a good understanding of the provisions and guidelines governing elective deferrals.  If in doubt do not hesitate to contact the TSP representative in your Human Resources Office.  You may also wish to speak with your chosen financial professional for some ideas about how to best fund your TSP.

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