Thrift Savings Plan

The Federal Thrift Savings Plan (TSP) is a retirement savings and investment program for current and former United States Government civilian employees and members of the uniformed services. Modeled after private-sector 401(k) plans, the TSP has grown into one of the largest defined contribution retirement plans in the world, serving millions of participants and managing hundreds of billions of dollars in assets. Investors can read a 30-page Summary of the Thrift Savings Plan or watch the introductory video to the right. -->

The TSP is administered by the Federal Retirement Thrift Investment Board and provides participants with many of the same tax advantages and long-term savings benefits available through traditional 401(k) plans. The value of a participant's account depends on the amount contributed during his or her career, along with the investment earnings generated by those contributions.

Civilian employees covered under the Federal Employees Retirement System (FERS) are eligible to receive automatic government contributions as well as matching contributions based on their own contributions. Under the standard matching formula, eligible employees receive an automatic 1% contribution from their agency regardless of their own participation. In addition, employee contributions are matched dollar-for-dollar on the first 3% contributed and 50 cents on the dollar for the next 2%, allowing participants to receive a maximum government contribution equal to 5% of pay. Employees covered under the Civil Service Retirement System (CSRS) may also participate in the TSP, although they are generally not eligible for matching contributions.

Contribution limits are established by the Internal Revenue Service and are periodically adjusted. While participants may contribute up to the annual IRS limits, government matching contributions remain subject to the 5% maximum outlined above.

The TSP has earned widespread recognition for its low administrative costs, efficient management, and strong institutional oversight. Throughout its history, Congress has consistently supported the Plan and protected it from many of the political and budgetary pressures that affect other government programs. As a result, participants have benefited from exceptionally low expense ratios and a high standard of service.

Participants do not select individual stocks or bonds. Instead, they allocate their assets among professionally managed investment funds that provide exposure to U.S. Treasury securities, fixed-income investments, large-cap U.S. stocks, small- and mid-cap U.S. stocks, and international equities. These funds offer varying levels of risk and return potential. Learn more about the five TSP Funds.

The managers of the TSP investment funds are selected through a competitive bidding process designed to ensure low costs, sound fiduciary practices, and effective index tracking. Potential investment managers are evaluated on objective criteria such as experience, fees, and performance. This institutional approach helps participants benefit from professional management without being subjected to the advertising and marketing often associated with retail investment products.