Current Participants - increased contribution percentages and two new funds have been approved for the upcoming open season!

You also saw a TV ad recently about investing and saving - you're not so sure you really need to do this right now, but you decide to take the money you'd normally use to play the lottery and buy coffee or a snack - $3.84 a day - and invest it instead. This amounts to about $1,400 per year or 5 percent of your 28K annual salary. By using Employee Express, you start contributing during "open season" to your TSP account and have your savings automatically withheld from your pay and barely notice it. Amazingly, having your savings taken right off the top may, over time, build you considerable wealth especially as your income goes up and you decide to contribute more than 5 percent into TSP.

Five years later you look back and realize that your decision to start saving through TSP proved to be one of the best financial moves you ever made or may ever make.

So how much money could I accumulate by investing $3.84 a day in my TSP account?
Look at the 5-year point in the table below under the 7 percent rate of return. By this time, you will have personally contributed $1,400 each year, totaling $7,000, but your money has grown to $16,800 in only 5 years! This remarkable doubling of your money occurs because, as a FERS employee, the government also contributes 5 percent (1 percent automatically and 4 percent matching) or $1,400 more each year for you. That's another $7K right there, for a total of $14K in contributions. At a 7 percent rate of return, you also would have earned $2,800 for a total of $16,800.

$1,400 Annual Contribution ($3.84 per day) Account Balance at Assumed Annual Rates of Return (Compounded Monthly) Account Balance After: 4% Return 7% Return 10% Return 5 Years $15,400 $16,800 $18,200 10 Years $34,440 $40,320 $47,880 15 Years $57,400 $74,200 $96,880 20 Years $85,680 $121,800 $177,520 25 Years $120,120 $189,280 $310,240 30 Years $162,120 $285,040 $528,640 Source: TSP Web site (www.tsp.gov)

Looking down the years column, you say to yourself, "Not bad. For about four bucks a day, I can do this."

That $1/2 million in the 10 percent return column catches your eye - here's where it comes from. You invested $1,400 a year for 30 years - that amounts to $42K - and the government kicked in another $42K for a total of $84K. Add the $444,640 from compounded earnings over the 30 years, and if your average return was 10 percent, you'd make it to $528,640! This is like winning the lottery, but it's happening one day at a time and depending on your investment choices from among the available funds, you can do it with minimum risk.

How do "agency matching contributions" work?   Your Percentage Contribution Government's Percentage Contribution Total Percentage Contributed         FERS 1% 2% (1% automatic + 1% matching) 3% 2% 3% (1% automatic + 2% matching) 5% 3% 4% (1% automatic + 3% matching) 7% 4% 4.5% (1% automatic + 3.5% matching) 8.5% 5% 5% (1% automatic + 4% matching) 10% 6-11%* 5% (1% automatic + 4% matching) 11-16% CSRS 1-6*% No matching 1-6% *The employee contribution maximum increases by 1% beginning with the May 15, 2001, TSP Open Season; there are no changes to the Agency Automatic 1% contribution or to Agency Matching Contributions for FERS employees. The IRS annual tax deferral limit for 2001 is $10,500.

What changes have been approved for the next TSP Open Season?
Through the TSP, federal employees benefit from retirement savings and deferred taxes similar to those that are offered to private sector employees under "401K" plans. Beginning with the May 15, 2001, TSP Open Season, as a FERS employee, you may elect to contribute up to 11 percent of your basic pay with contributions matched as you see in Figure 2. Civil Service Retirement System (CSRS) employees may elect to contribute up to 6 percent of basic pay. Although there are no matching TSP contributions for CSRS employees, it's also an excellent investment opportunity for these employees. Effective January 2002 and each following year, the contribution limits will increase by one percent until January 2006. Beginning in 2006, your TSP contributions will be limited only by the IRS deferral limit.

Currently, there are three investment funds to choose from: Government Securities Investment Fund (G), Fixed Income Index Investment Fund (F), and the Common Stock Index Investment Fund (C). During the May 15, 2001 - July 31, 2001 TSP Open Season, two new investment funds will be offered: the Small Capitalization Stock Index Investment Fund (S) and the International Stock Index Investment Fund (I). Detailed information on the five investment funds is available on the TSP web site at www.tsp.gov.

What does "tax-deferred" mean?
You defer, that is, postpone, paying taxes on both the money you contribute and the money you earn through the TSP. Your annual contribution is not currently taxable, so you pay less in taxes now; and since you don't pay taxes on your TSP earnings each year, your savings accumulate faster. You don't have to pay taxes until you begin withdrawing the money from your account, usually when you retire.

How do I start contributing to my TSP account? Use Employee Express If eligible, you can start contributing to TSP during the upcoming May 15 - July 31, 2001, TSP Open Season. You must use Employee Express to do this, which you access by calling (800) 827-6290, (478) 757-3085, or TDD (478) 757-3117, or by visiting the web site at http://www.employeeexpress.gov. You'll need your Employee Express Personal Identification Number (PIN) and social security number to start the process. If you don't have a PIN number or have lost it, you can get another in about one week by contacting the OPM Help Desk at (478) 757-3030. How do I check on my account and make various changes after I've started contributing? Use Employee Express to change your contribution rate or allocation among the 5 funds during an open season or stop your contributions at any time. Use the automated TSP ThriftLine (504) 255-8777 or http://www.tsp.gov to check your account balance, rates of return, and status of a loan, and to make interfund transfers. To access your account through TSP, you'll need your social security number and separate TSP PIN. If you don't have a TSP PIN or have lost it, you can request one from the TSP ThriftLine or their web site.

Excused absence for the 2001 World Police and Fire Games The 2001 Games will be held in Indianapolis, Ind. from June 8-16. For more information concerning the event, please contact: 2001 World Police and Fire Games 39 Jackson Place, Suite 300 Indianapolis, Indiana 46225 Phone: (317) 327-2001 Toll-free Number: (888) 542-2001 Fax: (317) 327-1555 E-mail: 2001wpfg@iquest.net Questions pertaining to participation and excused absence for this year's Games should be directed in writing to Bert Knitter, Director, Customs Health Enhancement Program, via e-mail or phone at (202) 927-5671. Registration deadlines: Thursday, March 1, 2001 - World Police and Fire Games Office; Friday, March 30 - Customs Health Enhancement Program Office.