House votes to lift TSP contribution cap

klunney@govexec.com

Federal employees with six-figure salaries would be able to contribute more money to their Thrift Savings Plan accounts under a bill passed by the House last week.

The bill, H.R. 1102, lifts the IRS cap on 401K contributions and Individual Retirement Accounts from $10,500 to $15,000 over five years, meaning some federal employees could contribute up to $15,000 to their Thrift Savings Plan accounts.

According to Tom Trabucco, director of external affairs for the Federal Retirement Thrift Investment Board, only employees participating in the Federal Employees Retirement System (FERS) making more than $105,000 a year would benefit from the bill as it stands. FERS employees may only contribute up to 10 percent of their annual income-up to the IRS limit-to their TSP accounts.

Employees in the Civil Service Retirement System can contribute 5 percent.

Carol Bonosaro, president of the Senior Executives Association, said raising the limit could have a limited effect on senior executives. For example, she said many SESers have children in college, and may not have any money left over for contributions after paying tuition.

A separate bill sponsored by Rep. Connie Morella, R-Md., would eliminate percentage restrictions on federal employees' TSP contributions altogether. Morella's bill would allow all employees-regardless of income or retirement plan-to make TSP contributions up to the IRS limit.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by eSignLive by VASCO

    Mobile E-Signatures for Government

    Learn 5 key trends that accelerate government demand for mobile signing.

    Download
  • Sponsored by Management Concepts

    SPONSORED: Successful Change Management Practices in the Public Sector

    How governmental agencies implement organizational change management.

    Download
  • Sponsored by Kronos

    Solving the Workforce Compliance Challenge

    Download this eBook to learn how data and automation can help state and local agencies.

    Download

When you download a report, your information may be shared with the underwriters of that document.