Several thousand participants in the Thrift Savings Plan may be on track to reach their annual contribution limit before the end of the year, potentially causing them to miss out on a full matching contribution from the federal government.

The Federal Retirement Thrift Investment Board, which manages the TSP, has been trying to reach out directly to those who may end up contributing too much, too soon to their retirement accounts. A social science program at the FRTIB has run email campaigns to contact TSP participants and encourage them to adjust their contributions, so they can get the government’s full match for the rest of 2024.

“When you reach the IRS limit, the TSP cannot accept another dollar for the rest of the calendar year,” FRTIB Chief Scientific Advisor Elizabeth Perry said Tuesday during a TSP board meeting. “And when your contributions stop, so does your matching.”

It’s something that happens to a relatively small number of TSP participants in the Federal Employees Retirement System (FERS) each year. In 2023, the board identified close to 8,000 TSP participants who were going to hit the contribution limit before their final pay period. TSP participants who reach the IRS’ contribution limit early can lose out on hundreds of dollars in matching contributions.

Participants can choose how much of their income they’d like to contribute to their TSP account during each biweekly pay period. FERS participants receive a matching contribution from their agencies on the first 5% of pay they set aside during a given pay period. Feds are also now automatically enrolled at a 5% contribution rate for the TSP. Currently, about 88% of FERS participants are contributing enough to receive the full 5% match.

But unless participants contribute to the TSP in every pay period throughout the year, they’ll miss out on at least some of the government’s contributions to their accounts. A TSP participant who reaches the IRS contribution limit before the end of the year would not receive the 5% government match for that year’s remaining pay periods. For 2024, the IRS contribution limit is $23,000 for those under 50 years old. Participants ages 50 and older can make additional catch-up contributions of up to $7,500 for 2024.

It takes several steps for TSP participants to change their contributions and avoid maxing out early, according to the FRTIB.

“They need to check their leave and earnings statement to see how much they’ve contributed, estimate any remaining contributions, use a calculator — and then go back into their payroll system and make an update,” Perry said.

The emails the board sends to affected TSP participants details those steps, aiming to make it a little easier for participants to understand how make the changes, if desired. Federal employees can also use the TSP’s contribution calculator to plan out their contributions.

The social science program, which FRTIB stood up five years ago, communicates with TSP participants about a variety of topics related to retirement savings. The program tracks habits of TSP participants and looks at where it can encourage participants to better prepare and save for retirement.

“This is complicated and challenging work,” Perry said. “People are busy, tired and stressed, and garnering their attention is not easy.”

But in past years, the FRTIB’s email campaigns through the social science program have seen success. After receiving personalized emails from FRTIB, 20.3%, or about one in every five participants who were going to hit the contribution limit early, adjusted their contribution levels and were able to keep the full government match.

“We were very happy with this, considering what’s involved with making that update,” Perry said.

During Tuesday’s board meeting, FRTIB officials also discussed the possibility of asking various government payroll providers to directly notify participants who are on track to hit the contribution limit early. But out of the more than 100 payroll providers that FRTIB work with, there are already a variety of methods used to share this information with federal employees on those payroll systems.

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