Agency Automatic Contributions

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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.

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