Timing Question Still Up in Air

Although sponsors of the TSP catch-up bill hope to gain enactment soon-either by passing the bill on its own or by attaching it to another bill up for a vote-it’s questionable whether TSP investors would be able to make additional investments of $1000 authorized this year under the 2001 tax reform law. The reason is that catch-up investments would have to be made through payroll withholding; investors could not simply write a check. That means agency payroll systems would have to be changed and coordinated with the TSP, which already is busy with a transition to a new computer system set to launch in September. It may or may not be possible to accomplish such a change before year’s end, depending on when the bill would pass and how fast pay systems could be altered. The measure would allow further catch-up contributions of $2,000 in 2003, $3,000 in 2004, $4,000 in 2005 and $5,000 in 2006, with amounts after that indexed for inflation.