WASHINGTON (AFPS) — Beginning Oct. 1, active-duty members of the Army, Navy and Air Force can now contribute to the Roth Thrift Savings Plan as part of their investment planning, Defense Financing and Accounting Service officials have announced.
The after-tax contributions will be electronically deducted from service members’ pay accounts.
Active-duty service members can start their Roth TSP contributions through their online myPay accounts, which offer the fastest, easiest and most secure method to manage both Roth and traditional TSP contributions. The second option open to service members is to submit a TSP-U-1 form to their finance office. Instructions and links are available at the DFAS website, http://www.dfas.mil/militarymembers/rothtspformilitary.html.
Active-duty and reserve Marines and federal civilian employees paid by DFAS were able to begin participating in the program earlier this summer, officials said. Roth TSP participation will be available to other branches of the National Guard and reserves by mid-to-late 2013.
The timeline difference between active-duty and reserve or National Guard service members resulted from an interim solution for reserve-component members that didn’t meet Federal Retirement Thrift Investment Board requirements, DFAS officials said.
While work continues for options that will be available more quickly and satisfy the law and FRTIB requirements at the same time, DFAS officials said, the new schedule will allow time to make systems changes and electronic deductions that meet all requirements.
Before selecting Roth TSP contributions, service members should determine how much of their pay is eligible. A Roth TSP worksheet, also available on the DFAS website can help make the calculations.
Military members are required to contribute a minimum amount equaling 1 percent of their basic pay to begin TSP contributions. For those who are not participating in traditional TSP investments, the initial Roth TSP election must meet this 1 percent requirement. The IRS maximum contribution to Roth TSP is $17,000 per year, DFAS officials said.
Military members can use eligible tax-exempt pay earned in combat zones to contribute to Roth TSP.
Payroll deductions for Roth TSP contributions begin the month following members’ selections via myPay or the TSP-U-1 form submission to their military finance office.