WASHINGTON, D.C. –
The Federal Retirement Thrift Investment Board announced at its quarterly inter-agency meeting of Thrift Savings Plan coordinators that May 7, 2012 will be the day that the TSP will begin to accept Roth TSP contributions.
The Roth TSP will allow Federal civilian employees and members of the uniformed services to contribute after-tax dollars into the TSP for the first time. Both the contributions and their earnings will be tax-free when withdrawn, as long as Internal Revenue Service requirements are met.
According to Greg Long, Federal Retirement Thrift Investment Board executive director, "the Roth TSP option offers an important new tool for Federal civilian employees and uniformed service members in managing their retirement income by providing greater flexibility in the tax treatment of contributions now and in the future."
Long noted that the agency will continue to provide participants and agencies with educational materials to help them understand this new option but, as with all tax matters, participants should seek the advice of their qualified tax or financial advisers for answers to questions pertaining to their specific tax situation.
The agency has been sharing Roth TSP planning bulletins with agency and service payroll and personnel representatives since December 2010, but is aware that not all have completed the technical and programmatic modifications of their payroll systems required to implement Roth TSP. These agencies or services will require additional time to modify their payroll systems and will begin participation in Roth TSP as soon as they are able.
With the addition of the Roth TSP option, participants can choose to invest pre-tax or after-tax dollars in any of the TSP funds, up to the Internal Revenue Code limits. TSP participants can currently invest in ten different funds: the five Lifecycle (L) Funds, the Government Securities (G) Fund and the four broadly diversified stock and bond funds - the Fixed Income Index Investment (F) Fund, the Common Stock Index Investment (C) Fund, the Small Capitalization Index Investment (S) Fund and the International Stock Index Investment (I) Fund.
The TSP is a retirement savings plan for Federal employees. It is similar to the 401(k) plans offered by many private employers. As of March 2012, TSP assets totaled approximately $308 billion, and retirement savings accounts were being maintained for roughly 4.5 million TSP participants. Participants include federal civilian employees in all branches of government, employees of the U.S. Postal Service and members of the uniformed services.
For more information, contact the Finance Office at 226-1851 or visit
www.tsp.gov.