Active Duty Military: Important Changes Coming to TSP Roth Account Contributions
Are you active duty military? Do you direct your TSP contributions to a Roth account? If so, you need to ready yourself for action. Changes to the Defense Finance and Accounting Service (DFAS) pay system will stop your contributions to your Roth TSP, unless you change those contributions from a dollar amount to a percentage of your pay by January 31, 2015.
Beginning in January 2015, service members who wish to sign up for, or continue contributing to, a Roth TSP account must update their TSP elections in myPay to designate Roth contributions as a percentage of pay (rather than a dollar amount). The system will no longer process dollar amounts. The “percentage of pay” model is the same one used for contributions to a traditional TSP account.
This change affects active duty Army, Air Force and Navy members, and some Navy Reserve members1.
- Learn how your election requirements will change. Starting January 1, 2015, a change in myPay will require you to designate your Roth contributions as a percentage of your pay, not a dollar amount. If you don’t comply with this change, then DFAS will not be able to process your Roth contributions. This change affects your Roth contributions only; your traditional contributions are already designated as a percentage of pay.
- Know when the change will take place. The new requirement will take effect January 1, 2015. You will have 30 days to change your Roth election from a dollar amount to a percentage of your pay. If your new Roth election is not received by January 31, 2015, then DFAS will not be able to process your Roth contributions until you update them.
- Make the change. Log into myPay starting January 1, 2015. You’ll see a special TSP section called “Traditional TSP and Roth TSP”—click there. Then, in the “Contribution from Roth TSP” section, you can enter the percentage of your pay that you’d like to contribute (10 percent, for example). Finally, click “Save” at the bottom of the screen.
1 Navy Reserve who serve more than 30 days on active duty.