You may elect to contribute to the Thrift Savings Plan (TSP) or change the amount of your total contributions at any time. New dates and contribution limits are shown in the material that follows.
You may elect to make contributions up to $16,500 — the Internal Revenue Service (IRS) annual limit on elective deferrals — during the 2010 calendar year. Your contributions each pay period must not exceed 90 percent of your basic pay.
n If you are covered by the Federal Employees Retirement System (FERS), you receive a Postal Service™ automatic contribution equal to 1 percent of your basic pay, and if you contribute to TSP you also receive Postal Service matching contributions of up to 4 percent.
n Your elections for 2010 can be effective no earlier than the first pay period in the 2010 calendar year (PP 01-10), which begins December 19, 2009.
n For your elections to be effective during that first pay period, you should make your election using PostalEASE between Wednesday, December 16, 2009, at 4:30 a.m. CT and Wednesday, December 30, 2009, 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 at www.tsp.gov or from the HR Shared Service Center (HRSSC) at 877-477-3273, option 5. 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 (if you are a FERS employee).
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. You will begin receiving a matching contribution equal to 4 percent of your basic pay from the Postal Service, in addition to the 1 percent automatic contribution. 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, the Postal Service will still add an amount equal to 5 percent of your basic pay to the total going into your TSP account each pay period.
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 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 here. When you call PostalEASE, the system will automatically provide TSP instructions for you based on your retirement system of record. If you have any questions about your retirement system coverage, contact the 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 the HRSSC.
You may access PostalEASE on the Employee Web on the Internet at https://liteblue.usps.gov, at an employee self-service kiosk, or on the Postal Service Intranet Blue. 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, go to https://liteblue.usps.gov and click Forget Your PIN? Enter your 8-digit Employee ID (printed at the top of your earnings statement). Choose a new PIN immediately with Self-Service PIN Reset — just follow the instructions. Or, request your PIN from the USPS Intranet Blue or a self-service kiosk — under “Essential Links” , click PostalEASE. Or, call 877-477-3273 and select 1. Enter your Employee ID. When prompted for your PIN, pause, then select 2. Your USPS PIN will be mailed to your address of record the next business day.
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 these 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 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 at www.tsp.gov and select Account Access.
To make your investment choices or interfund transfers, use your TSP account number or custom ID and Web password at the TSP website, 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 cannot use the website 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 the HRSSC, but not from the TSP website. 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 website or ThriftLine. Do not mail Form TSP-50 before you receive your TSP PIN — that’s 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 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 ($16,500) by the available pay periods (26). This equals $635 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 1/2). Money you withdraw before normal retirement age may be subject to the early withdrawal penalty tax and income tax.
Being vested — If you 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 the HRSSC and ask for help.
— Compensation,
Human Resources, 10-22-09
