Breakage on Late Contributions, Makeup Contributions, and Loan Payments

Key Points

• 1The rule clarifies how investment earnings (or losses) are calculated and credited when employees contribute money late to their federal retirement savings accounts
• 2It applies to three types of delayed payments: regular late contributions, catch-up contributions for people trying to save more as they get older, and loan repayment amounts that arrive after the scheduled date
• 3Participants will have their account balances adjusted to reflect what their money would have earned (or lost) if it had been invested on the original date, ensuring they're not unfairly penalized or rewarded by timing delays
• 4This affects federal employees and retirees who participate in the Thrift Savings Plan (TSP), one of the largest retirement savings programs in the country
• 5The regulation was published in April 2025 and establishes standardized procedures so that all TSP participants are treated consistently when contribution timing issues occur

Key Dates