Bush signs TSP catch-up contributions bill

President Bush signed a bill last Wednesday that will allow federal workers aged 50 or older to contribute more money to their Thrift Savings Plan accounts.

The Senate passed the legislation on Nov. 13.

The bill, introduced by Rep. Connie Morella, R-Md., who lost her bid for re-election in November, would let older employees in the Federal Employee Retirement System or the Civil Service Retirement System contribute as much as $2,000 a year more to their TSP accounts starting in 2003.

Previously, workers in the Federal Employee Retirement System could contribute up to 13 percent of their paychecks to TSP accounts each year, up to an annual limit of $12,000. Civil Service Retirement System employees could contribute up to 8 percent of their paychecks, also up to a limit of $12,000.

This means that a 50-year-old employee in the Federal Employees Retirement System earning $50,000 a year could have contributed up to $6,500 to his 2003 TSP account, under the old rules. But under H.R. 3340, that employee would be able to deposit up to $8,500 in the account.

The catch-up limit will increase to $3,000 in 2004, $4,000 in 2005 and $5,000 in 2006 and succeeding years.

"The 'over 50 catch-up contribution' provision in the act will allow workers to make up for years when they were not employed, didn't contribute to their plan, or otherwise weren't able to serve," said Sen. Daniel Akaka, D-Hawaii, in a statement. "It is especially beneficial for women who have returned to the workforce after taking time off to raise families."

Higher contributions also allow workers to save money at tax time, since employees make TSP contributions on a pre-tax basis.

The bill also reauthorizes the Merit System Protection Board and the Office of Special Counsel. In addition, it allows some Overseas Private Investment Corporation employees to enroll in the Federal Employee Benefits Program.

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

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

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Federal IT Applications: Assessing Government's Core Drivers

    In order to better understand the current state of external and internal-facing agency workplace applications, Government Business Council (GBC) and Riverbed undertook an in-depth research study of federal employees. Overall, survey findings indicate that federal IT applications still face a gamut of challenges with regard to quality, reliability, and performance management.

  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security


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