A thermal compensation element which has an inner ring, an outer ring, and a washer. The washer is arranged within the inner ring and the outer ring is mounted over the inner ring, encapsulating the washer, which can be a split wave spring. The inner ring and the outer ring each have retention features to ensure they are retained relative to each other. The thermal compensation, which is positioned between a housing or a shaft, can account for variations in loading and/or temperature that may occur to a bearing and a shaft system when the shaft and an associated component are made of different materials and have different coefficients of thermal expansion by ensuring a proper axial preload is maintained on the bearing.