Agency Automatic Contributions

AAA

DEFINITION of 'Agency Automatic Contributions'

A benefit that federal government employees receive for participating in the thrift savings plan. More specifically, this benefit refers to how the government agency in which the individual works will automatically make contributions that equal 1% of the individual's pay, regardless of whether the individual elects to make  his or her own contribution.

INVESTOPEDIA EXPLAINS 'Agency Automatic Contributions'

For example, if a federal employee elects to make a 5% contribution toward his or her thrift savings plan, he or she will receive an equivalent amount from the government (assuming that you add the 1% contribution automatically gained from the agency automatic contributions to the 4% gained from the agency matching contributions).

These government contributions are not added to taxable income for the current year's income taxes.

RELATED TERMS
  1. Salary Reduction Contribution

    A cash- or deferred-contribution arrangement of an employer-sponsored ...
  2. Opt-Out Plan

    A type of 401(k) plan that automatically enrolls the employees ...
  3. Federal Employee Retirement System ...

    A system that became effective in 1987 and replaced the Civil ...
  4. Thrift Savings Plan - TSP

    A retirement savings plan created by the Federal Employee's Retirement ...
  5. Taxable Income

    The amount of income that is used to calculate an individual's ...
  6. Cash Bonus

    A lump sum of money awarded to an employee, either occasionally ...
RELATED FAQS
  1. What is Substantial Gainful Activity (SGA) and why is it important?

    Substantial gainful activity (SGA) is what the Social Security Administration (SSA) measures to determine work, income and ... Read Full Answer >>
  2. How does the Affordable Care Act affect moral hazard in the health insurance industry?

    To see how the Patient Protection and Affordable Care Act, or "Obamacare," affects moral hazard in the health insurance industry, ... Read Full Answer >>
  3. What is fiduciary liability insurance, and what are its benefits?

    Under the Employee Retirement Income Security Act (ERISA), any individual who manages a employee benefit or pension plan ... Read Full Answer >>
  4. What's the average hourly wage of waiters and bartenders before tips

    As of 2015, the federal minimum average hourly wage for waiters and bartenders is $2.13 per hour before tip income is included. ... Read Full Answer >>
  5. What does a merger or acquisition mean for the target company's employees?

    Suppose one sporting goods manufacturer merges with or acquires another sporting goods manufacturer. Before the merger and ... Read Full Answer >>
  6. What are some ways employers can reduce employee turn over?

    Employers can reduce employee turnover through the use of certain hiring practices, management methods, compensation, benefits ... Read Full Answer >>
Related Articles
  1. Savings

    Retire In Style

    Set your sights on the golden years and get there sooner.
  2. Options & Futures

    Retirement Planning Basics

    Realizing your post-work goals need not be daunting. We'll tell you everything you need to know to get - and stay - on track.
  3. Personal Finance

    The Most Competitive Industries For New Graduates

    Graduating from college is an exciting yet uncertain time for many students, as the overall job market is becoming more complex as time goes on.
  4. Economics

    Top 10 Cities For Grads To Get Jobs

    A look at latest employment stats.
  5. Personal Finance

    What Is The Average Salary For An MBA Graduate?

    An MBA is often described as a surefire way to increase one's salary. It turns out that compensation for MBA graduates is actually more complicated.
  6. Personal Finance

    Which Is Better: A Salary or Hourly Wages?

    A salary may be the more prestigious option – but you could take home more being paid by the hour.
  7. Stock Analysis

    3 Things I Learned From The Container Store's 10K

    Since going public at the end of 2013, The Container Store's shares have fallen by roughly half their value. But not all is not lost.
  8. Insurance

    Is Your Employer-Provided Life Insurance Coverage Enough?

    Learn about the several potential problems involved with obtaining life insurance through your employer.
  9. Retirement

    5 Lesser-Known Retirement And Benefit Plans

    These plans aren't widely used, but they fill a specific niche for employees in certain situations.
  10. Retirement

    Job Hunting: Higher Pay Vs. Better Benefits

    Focusing on salary may be a mistake. Find out which benefits have the highest long-run payoff.

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center