What does the acronym TSP stand for in payroll management?

The acronym TSP stands for Thrift Savings Plan, which is a federally sponsored retirement savings and investment plan for federal employees and members of the uniformed services. It is similar to 401(k) plans offered in the private sector and allows participants to save a portion of their paycheck for retirement. Contributions can be made on a pre-tax basis, which can help reduce taxable income, and the plan often includes an employer matching contribution component. The Thrift Savings Plan offers various investment funds that participants can choose from to grow their retirement savings over time.

In the context of payroll management, understanding the TSP is crucial for payroll specialists, as they are responsible for managing employee contributions to this plan, ensuring compliance with federal regulations, and accurately reflecting these contributions in payroll processing.