CORRECTION: TSP Maximum Contribution For 2012
Thursday, November 03, 2011
A correction to some important information that we released to you earlier this week: The maximum elective deferral limit for 2012 will be $17,000, a $500 increase over 2011. The 2012 Catch-Up amount for ages 50 and beyond will remain at $5,500 for 2012. Therefore, the total that a member age 50 and beyond any day in 2012 could contribute on a tax deferred basis will be $22,500. Only the $17,000 receives any government match, therefore it is important to contribute every single pay period otherwise the member would be giving up 'free money'. There are 26 pay periods, therefore members should contribute no more than $654 per pay period in order to get the matching every pay period.
When the annual limit is reached the TSP system will not accept any additional contribution in the standard contribution for the rest of the year, therefore, the Agency Matching Contributions are also suspended when the annual limit has been reached. Agency matching contributions are based upon the amount of employee contributions that the member makes each pay period. If there are no employee contributions in a pay period, there can be no Agency Matching Contributions.
On the issue of the leave year: Please note that 2011 is an unusual year in that the leave year for most Federal employees ends on the same day as the calendar year--December 31, 2011.
As required in the U. S. Office of Personnel Management's regulations, an employee must schedule his or her annual leave by the third pay period prior to the end of the leave year (i.e., November 19, 2011 for most Federal employees) to avoid forfeiture of excess annual leave. It is extremely important for Civil Service Retirement System or Offset CSRS employees who plan to retire on Jan 1, 2, or 3 of 2012, to schedule their "use or lose" annual leave to avoid forfeiture. For example, if an employee's "use or lose" annual leave (any leave above the employee's leave ceiling - e.g., 240, 360 or 720 hours are the common leave ceiling categories) is not used prior to December 31, 2011, the annual leave will be forfeited and does not meet the requirements for restoration, it will not be included in the employee's lump-sum payment for annual leave.
In 2012 the leave year begins January 1, 2012 and ends January12, 2013. Therefore, the date to schedule excess annual leave in 2012 is December 1, 2012, since the year for leave purposes ends January 13, 2013.