Other Restrictions Apply

While some federal employees apparently have been saving up money to make catch-up contributions with a check, the contributions will have to be made from payroll withholding. Others apparently have been contemplating designating the entire amount to one of the TSP’s funds in order to rebalance their accounts. However, catch-up contributions will be invested in the participant’s account based on same allocation as the participant’s regular contributions, which is determined the most current contribution allocation on file with the TSP. Also, those wishing to make the contributions in future years – the limit rises to $3,000 next year, to $4,000 in 2005 and $5,000 in 2006 — will have to fill out a new election form each year.