TSP Outlines Catch-Up Policies

The Thrift Savings Plan has issued guidance to carry out a law enacted last year allowing participants age 50 and older to make “catch-up” contributions over and above any percentage of salary or dollar limits applying to them. Elections will be allowed starting in July, with the earliest effective date being the first full pay period of August. The TSP is creating a new form to be used for the purpose, to be called the TSP-1-C, on which eligible persons will be able to elect to make catch-up contributions in whole dollar amounts per pay period, up to the annual limits on catch-ups under the tax law ($2,000 this year, $3,000 next year). Catch-up contributions could be started at any time, not just during one of the twice-yearly open seasons. Catch-ups will have to be made from payroll withholding; the individual cannot write a check and send it to the TSP. Also, those wishing to make the contributions will have to fill out a new election form each year.