Thrift Savings Plan
INDIANAPOLIS (April 13, 2012) - The Defense Finance and Accounting Service (DFAS) will begin processing Roth TSP elections for its civilian and military customers using a phased approach beginning in June and continuing through October 2012.
As a new choice for retirement investment planning, the Roth TSP, will give civilian employees and military service members the option to contribute after-tax wages into TSP for the first time. Both the contributions and the earnings will be tax free when withdrawn, as long as IRS requirements are met.
The phased implementation will ensure each customer's taxable wages and TSP contributions are computed accurately. According to DFAS officials, the schedule will provide time to complete and thoroughly test the complex changes needed to the various civilian, active duty military, and reserve component payroll systems. The complex changes address the unique and multiple pay types in the pay systems including the different requirements of the Army, Navy and Air Force; and the active duty and reserve component requirements. Implementation will begin with Marine Corps service members in June 2012; all DoD civilians, as well as other civilians serviced by DFAS in July 2012; to be followed by the Army, Navy and Air Force military service members in October 2012.