Thrift Savings Plan augments retirement

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RANDOLPH AIR FORCE BASE, Texas (AFPN) --  The Thrift Savings Plan's automatic and matching contributions form a key part of the Federal Employees' Retirement System, or FERS, offering federal civilian employees opportunities to increase their retirement income.

FERS civilian Thrift Savings Plan account holders automatically receive a deposit equal to 1 percent of their basic pay each pay period once they are eligible. They also receive matching agency contributions up to 4 percent if they contribute at least 5 percent of their own money.

"These payments into a FERS employee's account along with the Thrift Savings Plan's investment flexibility and fund options make it a potentially valuable part of a retirement nest egg," said Janet Thomas, a human resources specialist at the Air Force Personnel Center here.

The other two parts of the FERS retirement program consist of a basic benefit plan, which considers basic pay, length of service and other factors to determine a monthly annuity and Social Security benefits.

TSP, also open to Civil Service Retirement System federal employees, provides two investment programs for civilians: regular TSP contributions and TSP catch-up contributions for eligible employees age 50 and older.

Some plan highlights for 2006 include:

-- Employees covered by FERS and CSRS may contribute up to $15,000 to a regular TSP account. They may designate any whole percentage of basic pay or a whole dollar amount each pay period. However, if a whole dollar amount is designated and the amount exceeds remaining salary after mandatory and other voluntary deductions that occur ahead of TSP contributions, no TSP contributions will be withheld, and, if FERS, no agency matching contributions will be received.

-- People age 50 or older, in a pay status, and who can certify they have contributed (or will contribute) the full $15,000 maximum to a regular TSP account or other 401(k) plan may contribute an additional $5,000 as catch-up contributions.

-- Eligible individuals may enroll, change, stop or resume catch-up or regular contributions at any time during the year.

-- The last day civilians may submit a catch-up contribution election for calendar year 2006 is Dec. 9. Catch-up contribution enrollment for 2007 will be available beginning Dec 10.

"To maximize agency matching contributions, FERS employees must contribute an amount equal to 5 percent of their basic pay each pay period," Ms. Thomas said. "Early large contribution attempts to maximize earnings usually fall short of the value of lost agency matching contributions."

Air Force-serviced civilians will submit enrollment elections or changes for regular TSP or catch-up contributions via the Employee Benefits Information System Web application or the BEST automated phone system. Instructions on how to access these systems are on the  BEST Web site.

(Courtesy of Air Force Personnel Center News Service)