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.


 
 

 
DoD

DoD takes steps to aid absentee voters

WASHINGTON – As the Nov. 4 midterm election nears, Defense Department officials are taking steps to ensure absentee voting is even easier for service members, their families and overseas citizens via FVAP.gov. In coordination with the military services and State Department, Absentee Voting Week begins today, aiming to raise awareness and remind voters of important...
 
 

New EPR challenges status quo

LUKE AIR FORCE BASE, Ariz. – The enlisted performance report is going to drastically change. These changes seek to combat inflated ratings, which have been a prevalent complaint from Airmen over the years. The change is right around the corner and many Airmen are asking themselves, “How will it affect future promotions, and what can I do...
 
 

55th Rescue Squadron returns home

(U.S. Air Force photo by Senior Airman Camilla Elizeu) U.S. Air Force Maj. Stephanie Harley, 355th Aerospace Medicine Squadron Bio Engineering Flight commander, and son welcome home Capt. Colin Harley, 55th Rescue Squadron HH-60 Pavehawk pilot, at Davis-Monthan, Oct. 11. Capt. Harley has just returned from a five-month deployment to Afghanistan.
 

 

AF to implement TDY policy changes

JOINT BASE PEARL HARBOR-HICKAM, Hawaii (AFNS) — Recently, the Air Force started implementing two temporary duty policy changes that will impact travel reimbursements for Airmen. The first change, which took effect Oct. 1, made changes to the Joint Travel Regulations, Reimbursable and Incidental Expense Policy. The second will be a change in long-term TDY per...
 
 

OPSEC: Everyone’s responsibility

NELLIS AIR FORCE BASE, Nev. – Everyone who’s been around the military has heard the term Operations Security, or OPSEC, but do they really know what it means? Many people think OPSEC is all about classified information, when the opposite is true; OPSEC targets critical and sensitive unclassified information. OPSEC is a fundamental principle of the Air...
 




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