Federal employees will have a chance to enroll in the Thrift Savings Plan or make changes to their existing contributions during the Federal Retirement Thrift Investment Board's TSP open season.
From Nov. 15 until Jan. 31 employees can make changes to their TSP contributions in each of the three funds-the C, F and G funds. Changes made in November or December will take effect the first pay period of 1999. Changes made in January will go into effect the first day of the following pay period after the changes are made.
TSP participants can invest money in three funds: the Government Securities Investment (G) Fund, which is invested in short-term, risk-free U.S. Treasury securities that are specially issued to the TSP; the Common Stock Index Investment (C) Fund, which is invested in a stock index tracking the Standard & Poor's 500 stock index, or the Fixed Income Index Investment (F) Fund, which is invested in a bond index fund tracking the Lehman Brothers Aggregate bond index.
The C Fund gave some investors a scare in August after dropping 14.5 percent, the biggest one-month fall since the creation of the TSP over a decade ago. The steep decline was due to the shaky performance of the stock market. In just one day, Aug. 31, the Dow Jones industrial average dropped 513 points. The C Fund recovered quickly in September, gaining 6.3 percent. Over the last year the C Fund gained 21.86 percent, while the F fund gained 9.36 percent and the G Fund gained 5.92 percent.
If you are covered by the Federal Employment Retirement System, you can contribute up to 10 percent of your basic pay each pay period, up to the IRS limit of $10,000 annually. Your agency matches your contributions dollar for dollar on the first three percent you contribute and 50 cents on the dollar for the next two percent you contribute.
If you are covered by the Civil Service Retirement System, you are able to contribute up to five percent of your basic pay each pay period, up to $10,000 annually. Agencies do not make matching contributions for CSRS employees.
FERS and CSRS employees hired before Jan. 1, 1998 have been eligible for the TSP since the previous open season. Employees hired between Jan. 1 and June 30 become eligible on Nov. 15.
Information on the TSP open season is available in agency personnel offices and from GovExec.com's TSP Guide.
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