Agency Matching Contributions

AAA

DEFINITION of 'Agency Matching Contributions'

A benefit that federal government employees receive under the thrift savings plan. More specifically, this refers to how the agency for which the individual is working will match 100% of the individual's contributions up to the initial 3% of his or her pay and a contribution of $0.50 for every dollar from the next subsequent 2% of pay used toward contributing to the thrift savings plan.

INVESTOPEDIA EXPLAINS 'Agency Matching Contributions'

For example, a federal government employee working for the Department of Labor earns $1,500 each pay period and contributes 5% (or $75) into the thrift savings plan. The Department of Labor will then contribute a total of $60 (or 3% of $1,500 + (0.5 x 2%) of $1,500) toward his retirement in additional to his $75, which creates a total contribution per pay period of $135.

Federal government employees that are able to contribute to a thrift savings plan should take advantage of the agency matching contribution.

RELATED TERMS
  1. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  2. Salary Reduction Contribution

    A cash- or deferred-contribution arrangement of an employer-sponsored ...
  3. Thrift Savings Plan - TSP

    A retirement savings plan created by the Federal Employee's Retirement ...
  4. Performance Appraisal

    An annual review of an employee’s overall contributions ...
  5. Golden Bungee

    A benefit conferred to select top executives that is a combination ...
  6. Income

    Money that an individual or business receives in exchange for ...
Related Articles
  1. New Retirement Plan Limits For 2011
    Taxes

    New Retirement Plan Limits For 2011

  2. Retire In Style
    Savings

    Retire In Style

  3. When Your Employer Cuts Your 401(k) ...
    Options & Futures

    When Your Employer Cuts Your 401(k) ...

  4. Is Your Employer-Provided Life Insurance ...
    Insurance

    Is Your Employer-Provided Life Insurance ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center