Elective deferral dollar limit for 2006: $15,000.

Employee Contributions — Beginning in 2006, there are no longer any percentage limits on employee contributions to the TSP.   TSP contributions will be limited only by the restrictions imposed by the Internal Revenue Code.  Elective Deferral Limit (I.R.C. Section 402(g)) — The elective deferral limit for 2007 is $15,500. See the Fact Sheet "Annual Limit on Elective Deferrals." Catch-up Contributions — The limit on catch-up contributions for 2007 is $5,000. If you are at least age 50 (or will become age 50 during the calendar year) and if you have made or will make the maximum amount of employee contributions for the calendar year (e.g., $15,500 in 2007), you may also make catch-up contributions to your TSP account. See the Fact Sheet "Catch-up Contributions."

Remember the IRS annual deferral limit for the 2007 Tax year is $15,500 and remains in effect so FERS employee's making over $100,000 per year that plan on contributing 15% must take action to avoid the cap and missing out on Agency matching contributions.   These employees should explore the fixed dollar amount option and ensure they both; contribute at least 5% AND don't exceed the $15,500 per year (2007) cap.

If you are in the FERS program and exceed the cap ($15,500) before the year ends you will lose Agency Matching Funds.  You may avoid the cap by changing to a fixed dollar amount instead of a percentage, remember you must both: 1) Avoid the CAP ($15,500 for tax year 2007) AND 2) contribute at least 5% per pay check.  You can change your contribution at Employee Express Online You can also get the TSP-1 form to change your contribution at TSP-1 form  You will need to turn the form in to your personnel office and find out the effective date.  You will need Adobe® to view and print this form.  If you do not have a copy of Adobe Acrobat®, you can obtain a free copy by clicking on the Acrobat® icon. .  You can also get the TSP-1 form from your personnel office. You can read more about the matching funds at risk and get a worksheet to do your own calculations here if you have Adobe Acrobat reader®.  If you do not have a copy of Adobe Acrobat®, you can obtain a free copy by clicking on the Acrobat® icon. Address Reminder — If you are currently employed and your address has changed, now is the time to report your new address to your agency personnel office so that your address will be correct when we mail your participant statement in May.  If you are separated from Federal service and your address has changed, you must submit Form TSP-9 to the TSP Service Office.  You can download the form from Forms & Publications or request a copy from the Service Office at (504) 255-6000.

The Earnings year for 2007 begins with pay period 06-01 which begins on December 11, 2005 (paid on January 3, 2006) and ends with pay period 06-26 which ends on December 10, 2005 (paid on December 20, 2005).  There are 26 pay periods.

This is a calculator that can help you figure out if you are going to hit the cap for 2005.  This calculator is designed for those that will exceed the cap and must use a fixed dollar amount.  Use this tool at your own risk and understand you must both contribute at least 5% AND not exceed the 2004 cap of $14,000 in order to avoid losing Agency matching funds.  Contact a tax advisor with any questions.  You should also check out the information below and the TSP site for further details on TSP contributions.

How have the contribution limits changed for the TSP? On December 21, 2000, President Clinton signed the Omnibus Consolidated and Emergency Supplemental Appropriations Act for Fiscal Year 2001.  This law contains a provision that increases incrementally the contributions limits to the Thrift Savings Plan for participants covered by FERS and CSRS.  Beginning with the May 15, 2001, open season with elections, FERS employees may elect to contribute up to 11 percent of their basic pay; CSRS employees may elect to contribute up to 6 percent.  These elections will become effective in July 2001.  Effective January 2002 and each following year, the contribution limits will increase by one percent until January 2006, at which time the limit will be eliminated completely.

The FY2001 Consolidated Appropriations Act (H.R. 4577) was passed by Congress on December 15, 2000 and was signed by President Clinton on Thursday December 21, 2000. This final appropriations package includes the Labor-Education, Treasury-Postal, and Legislative Branch spending measures. Highlights of the package include:

1. A provision to repeal the increase in the retirement contribution paid by federal employees. The 1997 Balance Budget Act temporarily increased the amount federal employees are required to pay into the retirement fund by .5 percent over three years. On January 1, 1999, the retirement contribution rate increased .25 percent, then an additional .15 percent on January 1, 2000, and the rate was scheduled to increase by another .10 percent on January 1, 2001. It is estimated that this rollback to pre-1999 contribution levels will increase the annual take home pay of federal employees by an average $262.

2. A provision to phase-up the percentage limitations on federal thrift savings plan contributions. For FERS employees, the maximum percentage allowable is:

2001..............................................................11

2002..............................................................12

2003..............................................................13

2004..............................................................14

2005..............................................................15

2006 or thereafter.........................................100

For CSRS employees, the maximum percentage allowable is:

2001...............................................................6

2002...............................................................7

2003...............................................................8

2004...............................................................9

2005..............................................................10

2006 or thereafter.........................................100

In addition, for participants who are age 50 or older, there is an IRS limit on the amount of catch-up contributions that a participant can make.   

See the chart below for the IRS and TSP limits for regular and catch-up contributions:

Year	TSP Limits		IRS Limits
	FERS	CSRS	Regular Contributions*	Catch-Up Contributions	Total Contributions
2003	13%	8%	$12,000	$2,000	$14,000
2004	14%	9%	$13,000	$3,000	$16,000
2005	15%	10%	$14,000	$4,000	$18,000
2006 and thereafter	Limits eliminated		$15,000	$5,000**	$20,000
*For uniformed services participants, this includes incentive pay and special pay, including bonus pay. **After 2006, this amount will be subject to increases to reflect inflation.

 

Beginning in July, if you are age 50 or older and you are already contributing the maximum amount of regular TSP contributions for which you are eligible, you may elect to make up to $5,000 in “catch-up” contributions for 2006.  (This limit changes annually.)

Contributions for July elections will begin in August. Civilians should use Form TSP-1-C, Catch-Up Contribution Election; members of the uniformed services should use Form TSP-U-1-C.  For more information, see the Fact Sheet, "Catch-Up Contributions."