Senate Bill Brings "Catch-Up" Contributions to Federal Plan

November 15, 2002 ( - The US Senate has approved legislation allowing some older federal employees and members of the armed forces to make catch-up contributions to the Thrift Savings Plan (TSP) in line with EGTRRA provisions.

The legislation now headed for the White House for President Bush’s consideration, is sponsored by Senators Daniel Akaka (D-Hawaii) and John Warner (R-Virginia.) and Representative Constance Morella (R-Maryland), according to a Washington Post report. It would permit TSP participants at least 50 years old to contribute additional tax-deferred money toward their retirement.

The measure brings the TSP in line with recent changes in tax law that enabled private-sector workers 50 and older to make “catch-up” contributions to their 401(k) retirement plans. The changes will allow eligible workers to exceed the regular limit on contributions ($12,000 next year) by $2,000 in 2003, $3,000 in 2004, $4,000 in 2005 and $5,000 in 2006.

“The ‘over-50 catch-up contribution’ provision . . . will allow workers to make up for years when they were not employed, didn’t contribute to their plan or otherwise weren’t able to save. It is especially beneficial for women who have returned to the workforce after taking time off to raise families,” Akaka said, according to the Post.