The Thrift Savings Plan posted a short bulletin today which explains the effect the retroactive pay raise will have on TSP contributions. The memo provides important information for agency payroll offices.
A copy of the memo is included below.
Effect of the retroactive pay increase on the Thrift Savings Plan
April 4, 2019
On February 15, 2019, President Donald J. Trump signed Public Law 116-6, “The Consolidated Appropriations Act, 2019”, which authorizes appropriations to fund the operation of a number of agencies in the federal government through September 30, 2019. This legislation mandates a 1.9 percent average pay increase for most federal civilian employees retroactive to January 1, 2019. President Trump signed Executive Order on Adjustments of Certain Rates of Pay on March 28, 2019, setting forth the pay rate schedules.
This bulletin is to inform agency payroll offices that although this pay increase will be retroactive to the first pay period in January, it is not considered a late contribution under 5 CFR § 1605.15, a missed contribution under 5 CFR § 1605.11, or a retroactive pay adjustment under 5 CFR § 1605.13. If you need to submit contributions associated with the retroactive pay increase, you should submit these contributions to the TSP recordkeeper on current payment records (12 or 16-Record) using the current pay date, not the as of date. Using the as of date for these contributions could result in breakage.
If you have any questions regarding the above, please contact Agency Technical Services at 1-888-802-0179.
Director, Office of Participant Services
Office of Participant Services
Update: On April 10, the TSP posted this follow up announcement to the memo above:
Clarification of TSP Bulletin 19-1, Effect of the retroactive pay increase on the Thrift Savings Plan – In the guidance we provided in Bulletin 19-1, we indicated that if you need to submit contributions associated with the retroactive pay increase, you should do so on current payment records (12 or 16-Record) using the current pay date. We have been notified by some agencies that certain limitations may prevent them from submitting the contributions in this way. If it is not possible for you to submit these contributions on current payment records using the current pay date, you may use the “as of” date instead. But note that using the “as of” date for these contributions could result in breakage. Payroll offices can contact Agency Technical Services (ATS) for clarification or with questions.