Figuring out how much you should contribute to the Thrift Savings Plan each pay period next year will be a lot easier when the Bush administration issues pay schedules for 2002. Officials are waiting for the final White House stamp of approval to issue the schedules. Once the pay schedules come out, federal workers will be able to look at their new pay rates and then calculate their TSP contributions for next year. The end of the TSP open season on Jan. 31 is an important date for many TSP enrollees because the plan's limits on contributions are being raised. In 2002, Federal Employees Retirement System enrollees will be able to contribute as much as 12 percent of their basic pay per pay period, up to the annual IRS limit of $11,000. In 2001, the limit was 10 percent for the first half of the year and 11 percent for the second half of the year. The annual limit was $10,500. Civil Service Retirement System enrollees will be able to contribute as much as 7 percent of their basic pay per pay period, up to the annual IRS limit of $11,000. In 2001, the percentage limit was 5 percent for the first half of the year and 6 percent for the second half of the year. Federal workers have until Jan. 31 to submit TSP Election Forms (TSP-1s) to their personnel offices. Employees use the form to determine how much of their paychecks to set aside in their TSP accounts and can designate either a percentage of their pay or a specific dollar amount to be withheld for TSP contributions each paycheck. Most employees in CSRS can contribute up to 7 percent of their pay without much worry, since they would have to make at least $157,000 in 2002 to hit the annual IRS limit. CSRS enrollees also receive no agency matching contributions to their TSP accounts. Many FERS employees have to think a little bit harder about their contributions because they receive agency matching contributions on the first 5 percent of basic pay that they contribute to the TSP each pay period. If they make more than $91,000 in 2002, then FERS employees have to be careful about how much money they contribute each pay period. Since agency contributions are made on the first 5 percent each pay period, FERS employees have to make sure they don't hit the $11,000 annual limit before the last paycheck of the year to get all the matching contributions they're eligible for. The TSP board has developed a worksheet you can use to calculate your contributions. The worksheet is at http://www.tsp.gov/forms/oc91-13w.pdf. The IRS elective deferral limit mentioned in the worksheet is the $11,000 annual limit. To change your contributions in January, you'll have to get your TSP-1 form into your personnel office by the end of December. Any changes submitted in January will take effect during the next full pay period after they are received. Recordkeeping System Update Many federal employees aren't holding their breath for the new TSP recordkeeping system, which will turn the TSP into a daily valued, share-based program, with transactions processed every day. Since the TSP board fired Fairfax, Va.-based American Management Systems in July, the new contractor, Materials, Communication & Computers Inc. (MATCOM), of Alexandria, Va., has been trying to get the recordkeeping modernization on track. The previous contract with AMS lasted four years and cost $50 million before it was cancelled. The TSP board has promised to pay MATCOM no more than $22 million. The board has yet to commit to a completion date, but a TSP spokesman said MATCOM's work is on schedule. The new contractor has finished going through the computer code that AMS created, and has determined that 96 percent of the code has to be scrapped. The only code that MATCOM will hold on to is the code that will transfer federal employees' account information from the current recordkeeping system to the new recordkeeping system. The spokesman said that MATCOM has virtually completed the "requirements" stage of the contract and is now moving into the "design and development" stage. Meanwhile, the TSP board is appealing a U.S. District Court judge's ruling that the board does not have the authority to sue AMS for damages, and AMS is suing the TSP board for not paying all of its bills. The TSP board says AMS owes $50 million in actual damages-the amount the board paid the contractor-and $300 million in punitive damages. AMS' federal claims court complaint does not say how much money the company still wants from the TSP board. Catch-Up TSP Contributions There isn't any news to report on Maryland Republican Rep. Connie Morella's proposal to allow federal workers over the age of 50 to contribute more money to their TSP accounts each year. Her bill, H.R. 3354, would let over-50 feds make extra TSP contributions of $1,000 in 2002, $2,000 in 2003, $3,000 in 2004, $4,000 in 2005 and $5,000 in 2006 and thereafter. The bill would also require agencies to provide contributions to new employees' TSP accounts as soon as they're hired. Right now, new employees can start up a TSP account as soon as they're hired, but they have to wait up to a year for their agencies' matching contributions. Morella's officially introduced her bill on Nov. 27; it was referred to the House Government Reform Committee. Since then, there hasn't been any official action on the bill, though a Morella spokesman said the congresswoman is working several different angles to move the bill forward. Lost Participants Nearly 15,000 people have left federal service without claiming their TSP accounts. These so-called 'lost' participants, or their beneficiaries, may have a good chunk of change waiting for them in the coffers of the Federal Retirement Thrift Investment Board. The TSP board has set up a database of names of lost participants that can be searched by name, state and employing agency. The database is online at www.tsp.gov/lostpar.
Join us at ELC 2017 - The Premier Conference for Federal IT Leaders
Are you results-driven? Successful in your field? A thought-leader? If so, then join us Oct. 29-31, 2017 in Williamsburg, VA to harness the unprecedented change that is occurring around us to make our federal government more effective, secure and citizen-driven. ELC 2017 is the must-attend government IT event connecting senior government and industry executives with innovative opportunities to engage, learn, and collaborate. Find out more: goo.gl/TpC6FQ