Misconception About Matching Provision

Some FERS TSP investors believe the best strategy is to invest as much as possible as early as possible in order to force the government to “max out” its contribution. However, the maximum employer contribution of 5 percent is hit when an individual invests 5 percent biweekly and does not rise if the individual invests at a higher rate. Employees will have another opportunity during the TSP open season that starts April 15 to adjust their investments if necessary to continue receiving matching funds through the year.