DoD

April 26, 2012

Thrift Savings Plan to offer new Roth option

Karen Parrish
American Forces Press Service

WASHINGTON – Service members and Defense Department civilian employees who are eligible for the Thrift Savings Plan will soon have a new Roth option for retirement savings under the program, defense finance officials announced today.

The change will allow participants to contribute after-tax dollars to the federal government-sponsored retirement savings and investment plan, according to a Defense Finance and Accounting Service statement released today.

As with traditional and Roth individual retirement accounts, the TSP’s two options will now allow plan participants to invest either before- or after-tax dollars, although limits on annual contributions, catch-up contributions and agency matching funds will remain the same, officials said.

The plan, which is similar to a 401(k), is open to federal civilian employees and military members. For 2012, the maximum contribution is set at $17,000. Catch-up contributions, available to participants 50 or older, are capped at $5,500 over the standard limit.

Only civilian employees are eligible for agency matching contributions. All eligible civilian employees receive one percent in agency matching funds. Eligible plan participants receive a dollar-for-dollar agency matching contribution for the first three percent of pay they contribute, and 50 cents on the dollar for contributions of between three and five percent. Contributions above 5 percent of pay are not matched.

The current plan treats all contributions as pre-tax dollars – participants do not pay taxes on pay they put into the plan, but will pay deferred taxes when they receive those funds in retirement.

The new Roth option will allow contributions that are taxed in the year they are made, but will be tax-free in retirement, TSP officials said.

Greg T. Long, TSP executive director, urged in a letter to participants that they carefully consider whether Roth TSP would be to their advantage.

“As with all tax matters, you should seek the advice of a qualified tax or financial advisor for information pertaining to your specific tax situation,” Long wrote.

He added the plan’s website will soon offer a Roth calculator, and other website content including forms and publications will be updated in May to include information about the Roth feature.

Defense finance officials said the Roth option will be available on a phased basis by military service from June to October. Officials said the schedule will allow service finance employees to complete and thoroughly test the complex changes needed to the various payroll systems.

Defense finance officials said more specific deployment dates on Roth TSP elections will soon be available on www.dfas.mil.

Officials said service members and their families may contact Military OneSource at 800-342-9647 to schedule an appointment with a financial consultant.




All of this week's top headlines to your email every Friday.


 
 

 
(U.S. Air Force photo by Staff Sgt. Courtney Richardson)

Thunderbolt bounces back after belly landingThunderbolt bounces back after belly landing

On the evening of Sept. 30, an A-10 stationed at Davis-Monthan Air Force Base was coming back to base for a routine landing after completing a standard sortie. Just when everything seemed to be going as planned, disaster struck...
 
 
Richardson_pict

Down and out at Dyess: Air Force Assistance Fund to the rescue

It was scary, leaving home and joining an organization such as the United States Air Force. The people, job, and location were all brand new. When I joined the military, I came from a less than honorable home life.  I come fro...
 
 

SrA and below EPR static closeout date to be March 31

JOINT BASE SAN ANTONIO-RANDOLPH, Texas (AFNS) — Enlisted evaluation and promotion changes, announced in July, continue with establishment of a March 31 enlisted performance report static closeout date (SCOD) for Regular Air Force (RegAF) senior airmen and below, Air Force Personnel Center officials said Dec. 5. Additionally, change of reporting official evaluations (CRO) have been...
 

 

Keep holiday sweet tooth in check

LUKE AIR FORCE BASE, Ariz. — Assorted sweets are a big attraction on display in stores and are advertised in television commercials. Despite the effort to escape purchasing them and knowing they’re not healthy, people still tend to crave, buy and gobble them up. On top of the negative impact these treats have on health...
 
 

Master sergeant evaluation board, SNCO promotion changes coming

WASHINGTON (AFNS) — The Air Force continues the phased implementation of its Enlisted Evaluation System and Weighted Airman Promotion System (WAPS) changes with the convening of a master sergeant evaluation board scheduled for May 2015. Evaluation and promotion system changes, scheduled for implementation over the next 16 months for active-duty Airmen, are focused on ensuring job perfor...
 
 

Davis-Monthan EOD detonates WW-II era mortar at Fort Huachuca

An explosive ordnance disposal team from Davis-Monthan Air Force Base, Tucson, safely detonated a World War II-era 81mm mortar on Tuesday at 10:43 a.m. in Area H, Slaughterhouse Wash, at the end of the Libby Army Airfield runway on Fort Huachuca. A rider on horseback reported a sighting of the unexploded ordnance to fort personnel...
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>


Directory powered by Business Directory Plugin