The Automatic Enrollment Percentage in the TSP is Increasing

The automatic enrollment percentage in the TSP is going to be increasing in 2020.

The Federal Retirement Thrift Investment Board, the agency that administers the Thrift Savings Plan, announced recently that the automatic enrollment percentage in the TSP is going to be increasing next year from 3% to 5%.

The TSP said in a new bulletin:

The Federal Retirement Thrift Investment Board (FRTIB), the agency that administers the Thrift Savings Plan (TSP), will increase the automatic enrollment percentage from 3% to 5% of pay for all participants who are automatically enrolled in the TSP on or after October 1, 2020. The Thrift Savings Plan Enhancement Act of 2009 grants us the authority for this change. This change will not affect the contribution rates in place for those participants who were enrolled in the TSP prior to October 1, 2020.

This bulletin is to notify agency payroll offices and HR personnel of this upcoming change so that agencies can take appropriate actions to ensure an efficient transition to the 5% automatic enrollment rate. We will issue a new bulletin formalizing the change after we publish the TSP regulations regarding the automatic enrollment percentage increase.

The change is significant because 5% is the amount federal employees need to contribute to take full advantage of the government’s match. Failing to do so means missing out on free money, which if invested well inside of the TSP can add up to some serious retirement savings over the course of a federal employee’s career.

According to the TSP, this is how matching contributions work for eligible employees:

Agency/Service Matching Contributions – If you’re a FERS or eligible BRS participant, you receive Agency/ Service Matching Contributions on the first 5% of pay you contribute every pay period. The first 3% is matched dollar-for-dollar by your agency or service; the next 2% is matched at 50 cents on the dollar. This means that when you contribute 5% of your basic pay, your agency or service contributes an amount equal to 4% of your basic pay to your TSP account. Together with the Agency/Service Automatic (1%) Contribution you get, your agency/service puts in a total of 5%. Keep in mind, though, that if you stop your employee contributions, your Agency/Service Matching Contributions will also stop, but Agency/Service Automatic (1%) Contributions continue to go into your account. You can contribute more than 5%, but your agency/service only matches the first 5% you contribute.

CSRS and non-BRS participants do not receive matching contributions.

About the Author

Ian Smith is one of the co-founders of He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.