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The TSP has previewed changes ahead—although not until calendar year 2021—in the policies regarding “catch-up contributions” which are allowable investments, up to $6,000 this year, above the standard investment limit, $19,000 this year, for those age 50 or older in a year.
Currently, those eligible must make a catch-up election each year, certify that they will meet the annual standard investment limit before the year’s end, “and spend considerable effort figuring out how to time their contributions,” a TSP notice to agencies said. That “has led to some confusion” in which some investors file to make catch-ups even though they are not eligible while others who are eligible miss out on the opportunity.
The TSP said that it will begin a policy of “spillover” in which participants will not have to elect to make catch-up contributions but instead “will keep contributing through their normal payroll deductions up to the catch-up limit. Spillover will also help prevent participants from missing out on the matching they’re already entitled to,” the notice said.