Federal Employee Retirement Provisions Improve with Passage of TSP Enhancement Act
June 17, 2009
H.R. 1256, which includes the Thrift Savings Plan Enhancement Act of 2009, has passed the U.S. Senate and the U.S. House of Representatives. The White House has indicated that the President will sign the Act into Law.
The Act provides a number of changes to the Thrift Savings Plan (TSP). In particular, this law eliminates the waiting period for employees covered under the Federal Employees’ Retirement System (FERS) (and equivalent Federal retirement systems) to receive Agency Automatic (1%) and Agency Matching Contributions. The Act provides that this specific provision commences immediately upon the signing of the legislation into public law.
?There are two populations affected by this provision:
- All FERS employees who are newly hired or rehired after the Act has been signed; and
- FERS employees who are currently employed and waiting until the second election period to become eligible for agency contributions (i.e., employees hired on or after December 1, 2008).
Under the Act, both groups will immediately be eligible for the Agency Automatic (1%) Contributions. In addition, if the participant is contributing to the TSP, he or she will be eligible for the associated Agency Matching Contributions.
The Federal Retirement Thrift Investment Board (Board) is working with agency HR representatives and payroll offices on the immediate implementation of this provision.
The signing of the Act into law will be announced on the TSP web site (Information for Agency Representatives).