As there is no longer a Thrift Savings Plan (TSP) Open Season, you may elect to contribute to TSP or change the amount of your total contributions at any time. Contribution limits remain the same. New dates are shown in the material that follows.
You may elect to make contributions up to $15,500 — the Internal Revenue Service (IRS) annual limit on elective deferrals — during the 2008 calendar year. Your contributions each pay period must not exceed 90 percent of your basic pay.
- If you are covered by the Federal Employees Retirement System (FERS), you will receive Postal Service™ matching contributions. Newly hired employees must first complete a required waiting period, as follows:
- Your elections for 2008 can be effective no earlier than the first pay period in the 2008 calendar year (PP 01-08), which begins December 22, 2008.
- For your elections to be effective during that first pay period, make your election using PostalEASE between Wednesday, December 19, 2007, at 12:01 p.m. CT and Wednesday, January 2, 2008, at 3:59 a.m. CT.
As an employee covered by FERS, you have three parts to your retirement program. Two parts, the FERS Basic Annuity and Social Security, offer future benefits that are funded automatically with deductions from your paychecks and with Postal Service contributions.
TSP, the third part of your retirement program, is not automatic. The decisions you make over time will directly affect the future value of your TSP account. Today is the time to review the booklet Summary of the Thrift Savings Plan, which is available from the Human Resources Shared Services Center (HRSSC) or at www.tsp.gov. It can help you make informed choices about how to use TSP to meet your immediate and long-term financial objectives. You do not want to realize years from now that you missed getting (1) substantial tax benefits, (2) interest earnings, and (3) Postal Service matching contributions to your account.
As a FERS employee, you can double your money by participating in TSP. How? Sign up to contribute 5 percent of your basic pay to TSP each pay period. After the required waiting period for newly hired employees, you will receive a 4 percent matching contribution and a 1 percent automatic contribution from the Postal Service. If you’re contributing 5 percent of your basic pay, 10 percent will go into your TSP account — double your money. If you’re making a contribution above 5 percent, 5 percent of your basic pay will be added to the total contribution going into your TSP account each pay period.
If you’re a newly hired employee in the waiting period for Postal Service contributions, go ahead — sign up today while you’re thinking about it. TSP is still a good deal while you’re waiting. Why?
You receive tax-deferral on TSP contributions and the interest earned in TSP. You get a tax break right now on what you contribute, since you don’t pay income tax now on your TSP contributions. For example, if you’re in the 25 percent federal tax bracket and you make a $100 TSP contribution, your paycheck won’t go down by $100 — it will go down by $75. (You also receive tax deferral on most state income tax, too.) You don’t pay taxes now on the interest that your TSP account earns, either. That’s because you don’t pay taxes on your TSP contributions or on interest you earn until you withdraw your money from TSP, usually after you separate or retire.
For FERS employees, if you’re not contributing at least 5 percent to TSP, you are losing valuable matching agency money that could be a very substantial amount when it’s time to retire. The sooner you contribute and the more you contribute, the more compounding will work for you.
Note: If you have never worked for the Postal Service or the federal government before, then you are a FERS employee. If you do have prior federal or Postal Service employment, and it has been determined that you are covered by the Civil Service Retirement System (CSRS) or CSRS Offset, then you won’t receive automatic and matching Postal Service TSP contributions. You will still have the advantages of tax deferral and compounding described above. When you call PostalEASE, the system will automatically provide instructions for you based on your retirement system of record. If you have any questions about your retirement system coverage, please contact HRSSC.
To prepare to contribute to TSP, before accessing PostalEASE, read the instructions in the TSP materials sent to your address of record and then complete the enclosed worksheet. If you did not receive the mailing, call the Employee Service Line toll-free at 877-477-3273 to reach HRSSC.
You may access PostalEASE on the Employee Web on the Internet at https://liteblue.usps.gov, on the Postal Service Intranet Blue at http://blue.usps.gov, or at an employee self-service kiosk. Using one of these may be easier than using the telephone. Just follow the instructions. Otherwise, call the Employee Service Line toll-free at 877-477-3273 to reach PostalEASE.
You need your USPS PIN. If you do not know it, call the Employee Service Line toll-free at 877-477-3273 to reach PostalEASE, enter the Employee ID (found on your earnings statement), and when prompted to enter your PIN, pause and then press 2. Your PIN will be mailed to your address of record.
If you are enrolling in TSP for the first time, you will not be able to make a choice about which TSP funds to invest in. Your first TSP contributions will automatically go into the Government Securities Investment (G) Fund.
Once TSP has received your first contribution and sent you your TSP PIN number, your TSP account number, and your TSP Web password, you will be able to contact TSP directly, at any time, to allocate your payroll contributions into any of the TSP investment funds or to make interfund transfers. You may choose from five individual investment funds — the C Fund (S&P 500 stocks), S Fund (small cap stocks), I Fund (international stocks), F Fund (bonds), G Fund (securities) — and/or the L Funds (an investment mix of several funds). If you enroll and do not make a fund investment choice, your TSP contributions will continue to be invested in the G Fund.
The TSP PIN is not the same as the USPS PIN you use for PostalEASE. If you do not know your TSP PIN, account number, or Web password, you can obtain all three by calling the ThriftLine toll-free at 877–968–3778 or the TDD toll-free line at 877-847-4385 and following the prompts. The account number and Web password can be mailed to you if you request them by accessing the TSP Web site and selecting Account Access.
To make your investment choices or interfund transfers, use your TSP account number and Web password at the TSP Web site, www.tsp.gov, or call the ThriftLine toll-free at 877-968-3778 and use your TSP PIN and account number. If you are deaf or hard of hearing, you may make TDD calls toll-free to 877-847-4385.
If you simply cannot use the Web site or the telephone, you can obtain, complete, and mail form TSP-50, Investment Allocation, to the following address:
TSP SERVICE OFFICE
PO BOX 385021
BIRMINGHAM AL 35238
TSP-50 forms are available from HRSSC, but not from the TSP Web site. HRSSC cannot accept and cannot process your completed TSP-50 — you must mail it to TSP. If you use TSP-50, your investment choices won’t take effect as quickly as they would if you used the TSP Web site or ThriftLine. Do not mail form TSP-50 before you receive your TSP PIN — your sign that TSP has set up your TSP account.
Enrolling or changing your contribution level after PP 01 — For an election to be effective in any given pay period after PP 01, you must complete your election by 3:59 a.m. CT on the second Wednesday of that pay period.
Maximizing agency matching contributions — FERS employees may lose agency matching contributions if they reach the maximum IRS limit before the last pay period in the calendar year. To evenly distribute your TSP contribution election over all the available pay periods, divide the IRS limit ($15,500) by the available pay periods (26). This equals $597 per pay period (after rounding up to the nearest whole dollar).
Viewing your participant statements — You may view your statements online at www.tsp.gov. The TSP Service Office mails quarterly statements to participants who have elected to receive paper copies.
Withdrawing money — You cannot withdraw money from your TSP account until you separate or retire from Postal Service or federal employment (unless you meet certain financial hardship guidelines or are at least age 59). Money you withdraw before normal retirement age may be subject to the early withdrawal penalty tax and income tax.
Being vested — If you should separate with fewer than 3 years of TSP creditable service, you will not be vested in (be able to keep) the 1 percent automatic Postal Service contributions and the interest earned from them. However, you are always vested in your own contributions, matching Postal Service contributions, and the interest earned from these amounts.
Borrowing against your TSP fund — Make sure to read about the TSP loan program before considering this option. While the main purpose of being enrolled in TSP is to help you save for retirement, you may borrow from your account to buy a home or for other reasons if qualified.
Questions — If you have questions about TSP or PostalEASE, call the Employee Service Line toll-free at 877-477-3273 to reach HRSSC and ask for help.
— Compensation,
Human Resources, 12-6-07
