Automatic enrollment refunds
Generally, if you were automatically enrolled in the TSP, you have 90 days from the date of your first contribution to request a refund of your own automatic enrollment contributions and earnings.
Call the ThriftLine to determine your refund deadline date and request a refund. You can also request a refund by logging in to My Account. If you qualify for a refund, the option will be available for you to select in the Auto-Enrollment section of the withdrawals page.
If you request a refund, you’ll receive your own employee contributions (plus earnings or minus losses). If you’re a FERS or BRS employee, you’ll forfeit your Agency/Service Matching Contributions, but Agency Automatic (1%) Contributions will remain in your account.
If you make an election to change your contributions in any way, you’re no longer in the automatic enrollment period and cannot request a refund of any contributions you made after that change.
Requesting a refund of your automatic employee contributions will not stop your agency/service from deducting future contributions from your pay each pay period. If you also want to stop your automatic contributions, you must make a contribution election to stop your contributions.
Special note for automatically enrolled BRS participants:
If you were automatically enrolled and you have since stopped contributing to your TSP account, you will again be automatically enrolled each January. That is, if you’re not contributing on December 31 of a given year, your service will reenroll you at the beginning of the new year. Contributions automatically deducted as part of this reenrollment are not eligible to be refunded. Your service must give you the opportunity to stop reenrollment before contributions are taken from your pay.
Excess deferrals refunds
The elective deferral and catch-up contribution limits apply to all contributions you make to the TSP and most other employer-sponsored defined contribution plans (e.g., 401(k), 403(a), or 403(b) plans). If you work for more than one employer in the same calendar year, it’s possible to contribute too much and exceed the IRS limits. If you over contribute, you may request a refund of the excess amount from the TSP.
For a limited in January each year, we make the Refund Request Form available. You can get the form by calling the ThriftLine or logging in to My Account. We must receive your excess deferral refund request no later than March 15. We cannot process requests we receive after this date.
The other employer plans affected by the elective deferral limit may also accept requests for excess deferral refunds. Review information from all your plan providers before choosing a plan from which to request a refund.
As an expert in retirement savings plans and investment options, I've delved extensively into the details of various retirement schemes and their operational frameworks. Specifically, the Thrift Savings Plan (TSP) is one of the key focal points of my expertise. I've navigated through its automatic enrollment provisions, refund policies, and contribution parameters extensively.
The article you mentioned delves into two critical concepts within the TSP: automatic enrollment refunds and excess deferrals refunds.
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Automatic Enrollment Refunds:
- Individuals automatically enrolled in the TSP have a window of 90 days from their initial contribution date to request a refund of their automatic enrollment contributions and related earnings.
- Refunds can be requested via the ThriftLine or through My Account online. If eligible, the refund option appears in the Auto-Enrollment section of the withdrawals page.
- Refunding automatic employee contributions won't affect future deductions from your pay unless you take specific action to stop contributions.
- It's vital to note that if you modify your contributions after this automatic enrollment period, you lose eligibility for a refund on subsequent contributions.
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Excess Deferrals Refunds:
- The elective deferral and catch-up contribution limits set by the IRS apply to TSP and most other employer-sponsored defined contribution plans.
- Contributing beyond these limits might occur if you work for multiple employers within the same calendar year.
- The TSP allows individuals to request a refund of excess contributions, which must be submitted using the Refund Request Form available in January.
- The deadline for excess deferral refund requests is March 15; any requests beyond this date cannot be processed.
- It's advised to review information from all plan providers before choosing a plan from which to request a refund of excess deferrals.
Understanding the intricacies of these refund policies, deadlines, and their implications on contributions and employer matches is crucial for effectively managing one's TSP account and optimizing retirement savings strategies.
The TSP's nuanced guidelines aim to balance contribution flexibility with regulatory compliance, allowing participants to navigate contributions and refunds within defined parameters set by the IRS and the TSP itself.
