Is All ‘Your’ TSP Money Actually Yours

Within your Account the money you invest in the Thrift Savings Plan (TSP) and the agency match is yours immediately and you are therefore vested. However, the agency’s automatic 1% contribution has a few strings attached.

For individuals in the Civil Service Retirement System (CSRS), this is not a concern. CSRS employees may participate in the TSP but are not eligible to receive any matching funds. Nonetheless, it is still a useful tool for deferring taxes and helping to save for retirement. Your Account acts as a supplement for CSRS employees in planning their retirement.

FERS employees on the other hand receive matching funds into their account along with an automatic 1% contribution. FERS employees are eligible to keep the 1% contribution after becoming vested by acquiring tenure of at least 3 years with the Federal Government. FERS employees who work in the Congress and certain other non-career employees need only 2 years to become vested.

If you are participating in the TSP and decide to leave the federal service prior to the 3 year vesting period, the automatic 1% and the earnings from the agency 1% contribution will no longer be yours to keep. However if you die before leaving service you are vested in all the monies in your account.

Your account (see your account here) is a wonderful vehicle for not only managing taxes but helping federal and postal employees save for retirement.

P. S. Always Remember to Share What You Know.

You may also find information on your TSP Funds interesting, or certain Tax implications of your investments

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