Thrift Savings Plan (TSP) Contribution Limits Remain The Same For 2021 And Announcing The New Tsp “Spillover” Method!

Sat, Nov 7th 2020, 2:44am EST

The following information applies to regular TSP and TSP Catch-up:

Regular TSP – The 2021 IRS annual limit for regular TSP contributions will remain at $19,500.  If you are covered by the Federal Employees Retirement System (FERS, FERS-RAE, or FERS-FRAE), you will lose valuable matching Agency TSP contributions, if you reach the annual limit before the end of the calendar year.  If you want equal contributions deducted over the course of the 2021 calendar year (for 26 pay periods) that will equate to $19,500 for regular TSP, you should contribute $750 each pay period.  If you are currently contributing a lesser or higher bi-weekly amount, you should enter your new election of $750 into myPay between December 6 – December 12, 2020, and your election should be effective on December 20, the first pay period for 2021.  You will see the new deduction reflected on your Leave and Earnings Statement beginning with the January 8th pay date. 

If your election is entered after December 12, you may need to adjust your election amount.  To determine the adjusted amount, use the Elective Deferral Calculator on the TSP website.  When entering your TSP election amount into myPay, you must have enough available pay to cover the contribution amount, or no TSP contribution will be withheld.

TSP Catch-up – In addition to making regular TSP contributions, you may also make TSP Catch-up contributions, if you are age 50 or older (or will be turning age 50 in 2021).  Beginning January 1, 2021, the Federal Retirement Thrift Investment Board (FRTIB) will implement a new method for TSP Catch-up contributions called the “spillover” method.  Spillover will help simplify the TSP Catch-up process.  You will no longer enter a separate TSP Catch-up election.  Instead, you will enter one TSP election into myPay for 2021.

If you are eligible to make catch-up contributions, any contributions beyond the elective deferral limit of $19,500 for regular TSP will automatically start counting toward the Catch-up contribution limit. These additional contributions will “spillover” until you meet the catch-up limit.  The 2021 IRS annual limit for Catch-up contributions remains at $6,500. 

To contribute the 2021 maximum annual amount for both regular TSP and TSP Catch-up for a combined total of $26,000, you should enter one election amount of $1,000 (for each pay period) into myPay between December 6 – December 12, 2020, and your election should be effective on December 20, the first pay period for 2021.  You will see the new deduction reflected on your Leave and Earnings Statement beginning with the January 8th pay date. 

If your election is entered after December 12, you may need to adjust your election amount.  To determine the adjusted amount, use the Elective Deferral Calculator on the TSP website.  When entering your TSP election amount into myPay, you must have enough available pay to cover the contribution amount, or no TSP contribution will be withheld.  

It is very important that you carefully enter your elections accurately into myPay because the Retirement and Employee Benefits Branch cannot stop or change elections that you have entered into myPay. Only one TSP election can be entered into myPay during a pay period.

After an election is entered into myPay, it will be effective at the beginning of the next pay period, but it will take 1-2 pay periods before it is visible in myPay and on your Leave and Earnings Statement (LES). To see the pay periods for 2021, view the HHS Payroll Calendar

If you have questions, refer them to your Benefits Contact or AskBenefits@nih.gov.

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