Agency Matching Contributions

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.

BREAKING DOWN '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. Agency Automatic Contributions

    A benefit that federal government employees receive for participating ...
  2. Thrift Savings Plan - TSP

    A retirement savings plan created by the Federal Employee's Retirement ...
  3. Thrift

    Thrifts are savings and loans associations. Thrifts also refer ...
  4. Employee Contribution Plan

    A company-sponsored retirement plan where employees may elect ...
  5. Thrift Bank

    A financial institution focusing on taking deposits and originating ...
  6. Matching Contribution

    A type of contribution an employer chooses to make to his or ...
Related Articles
  1. Retirement

    What's a Defined Contribution Plan?

    A defined contribution plan is a company retirement plan that specifies the amount of money contributed to it.
  2. Retirement

    How 401(k) Matching Works

    Find out how employer matching of your 401(k) contributions works, including how employer contributions are calculated and annual contribution limits.
  3. Retirement

    401(k) Contribution Limits in 2016

    Find out what the contribution limits are for 401(k) retirement savings plans in 2016, including individual, employer and aggregate limits.
  4. Retirement

    Why are 401(k) contributions limited?

    Find out why contributions to 401(k) retirement plans are limited, including what the current contribution limits are and how limits encourage participation.
  5. Retirement

    Thrift Savings Plan Helps Federal Workers Retire

    The TSP is key component of retirement savings for U.S. government workers and members of uniformed services.
  6. Retirement

    It’s Never Too Late to Contribute to Your 401(k)

    Find out why it is never the wrong time to start contributing to a 401(k), even in your late 30s, 40s or 50s; discover how to maximize your savings at any age.
  7. Retirement

    Plans The Small-Business Owner Can Establish

    Don't hesitate to adopt a smart plan for you and your employees.
  8. Retirement

    8 Essential Tips For Retirement Saving

    These eight tips can help your retirement savings grow.
  9. Personal Finance

    529 Plan Contribution Limits in 2016

    Learn about the contribution and account balance limits on 529 plan accounts and discover how these contribution limits differ in each state.
  10. Retirement

    Saving For Retirement When You're Not Working

    Lack of full-time employment can make saving for retirement more difficult, but there are some vehicles that can help.
RELATED FAQS
  1. Is a Thrift Savings Plan (TSP) a qualified retirement plan?

    Take advantage of the government's retirement plan for employees with the Thrift Savings Plan. As with a 401(k), contributions ... Read Answer >>
  2. If the employee contributes 6% of compensation plus another 6% for catch up - how ...

    If an employer has a Safe Harbor 401(k) plan that states matching contributions will apply to catch up contributions for ... Read Answer >>
  3. Can catch-up contributions be matched?

    Learn about how the specific terms of your retirement savings plan dictate how and when your employer may match your catch-up ... Read Answer >>
  4. How can an entrepreneur save for retirement?

    Learn about the retirement savings plan options for entrepreneurs and small business owners, including administration and ... Read Answer >>
  5. How do I report Simple IRA contributions on a W2?

    Learn how Savings Incentive Match for Employees, or SIMPLE IRA, contributions are reported for the participant on Form W2 ... Read Answer >>
  6. What are qualified retirement plan types?

    Understand the different types of qualified retirement plans and what they mean in terms of employee and employer contribution ... Read Answer >>
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  5. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
Trading Center