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. Salary Reduction Contribution

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

    A type of retirement plan, usually tax exempt, wherein an employer ...
  3. Thrift Savings Plan - TSP

    A retirement savings plan created by the Federal Employee's Retirement ...
  4. Back Pay

    The amount of salary and other benefits that an employee claims ...
  5. Contingent Commission

    A commission with a value dependent on an event occurring, and ...
  6. Collection Commission

    The percentage of premiums that an agent is owed for collecting ...
Related Articles
  1. Taxes

    New Retirement Plan Limits For 2011

    New changes to the law can have a huge impact on your nest egg.
  2. Savings

    Retire In Style

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

    When Your Employer Cuts Your 401(k) Match

    In hard times, companies may stop matching your 401(k) contribution, but there are ways to offset the hit.
  4. Insurance

    Is Your Employer-Provided Life Insurance Coverage Enough?

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

    Pages From The Bad CEO Playbook

    Excess compensation, golden parachutes, tunneling and IPO spinning make these bad executives even worse.
  6. 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.
  7. Insurance

    Trending Toward Asset-Based Management

    Will charging fees instead of commission increase your client base?
  8. Investing Basics

    Beware Of Company Stock In Qualified Plans

    While this strategy does have a few advantages, it can also pose some substantial risks to employees.
  9. 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.
  10. Personal Finance

    America's Compensation Gap Shows No Signs Of Slowing

    The gap between the rich and the poor and middle classes is rapidly increasing in America. Historically this is not a good sign, as a strong middle class has been the backbone of the U.S. economy ...

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center