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Member Action Needed Due to New System Improvements for Roth Thrift Savings Plan (TSP)

ATTENTION -- Important Notice for Army, Navy or Air Force active component members and Navy reserve component member serving more than 30 days on active duty who elect to contribute to Roth TSP:

If you elect Roth TSP and wish to continue those contributions, you must submit a new Roth TSP election on myPay or submit a TSP election form to your finance office during the time period January 1 – 31, 2015.  Otherwise, your Roth TSP contributions will stop after January 2015.  

This requirement is due to pay system improvements that will more fully automate processing and provide better customer service to you.

Currently, you may elect Roth or traditional TSP contributions, or both.  If Roth is elected, the election must be in a dollar amount that includes your combined elections (basic pay, incentive pay and special pay; and a separate dollar amount election for bonuses).  The main change will be that you will be able to elect separate basic pay, incentive pay, special pay and bonus percentage elections for Roth TSP.  As with traditional TSP, any elections for pays not currently received will be maintained on your account and applied if you receive those pays.

Elections for Roth contributions for February 2015 will be accepted January 1 to 31, 2015.  You may enroll online with myPay or submit the paper election form, TSP-U-1, available on www.tsp.gov to your finance office.

myPay's updated Roth TSP election function will go live Jan. 1, 2015. The updated TSP form (TSP-U-1) will also be available on that date. Check back later for up-to-date information and links.

Existing Roth TSP Contributions

Due to this system improvement, if you currently elect Roth TSP, which is a specific dollar amount, you will need to submit new elections in percentages of pay; for basic pay, special pay, incentive pay and bonus contributions.  These contributions will be effective beginning February 2015.  The final dollar amount Roth contribution will be deducted from the January 2015 end of month pay on January 30th.  The first percentage Roth contribution will be deducted from the February end of month pay on February 27th.

Starting TSP Contributions

Because Roth TSP is calculated based on gross pay but deducted from net pay, you need to do the math to make sure you have sufficient net pay for the Roth contributions.  Traditional TSP also has a number of other deductions taken first, so you will need to make sure you have sufficient pay for traditional TSP also.

If you wish to make a Roth election (or add a traditional election to a Roth election), you will need to use the Roth election worksheet (adding the traditional election to the Roth election could result in insufficient net pay available for the Roth election).  Use the worksheet for Roth contributions from basic pay, special pay and incentive pay and a separate worksheet for Roth contributions from bonuses and one-time special pay.

Please see the combined maximum percentage charts if you plan on having both a traditional and Roth election (myPay has system checks for combined maximum percentages that will assist you with this). Choose the chart matching your situation: Have Traditional TSP and adding Roth TSP or Have Roth TSP and additing Traditional TSP. It is important to use these tools to avoid having insufficient net pay to cover the contributions.

If you wish to make a traditional TSP only election, you will need to use the traditional election worksheet for basic pay, incentive pay and special pay.  For traditional TSP only, you will not need to use a worksheet for bonus and other one-time special pays, since the only deductions for those pays are taxes, and traditional TSP is tax deferred.

Catch-Up Contributions 

If you are 50 or over (or will turn 50 during the calendar year in which you make the election) and plan to contribute the maximum elective deferral amount to traditional and/or Roth TSP or an equivalent employer plan, you may be eligible to make additional contributions to TSP, called ‘catch-up contributions’.  Starting in January 2015, you may start Roth or traditional catch-up on myPay. To stop or change the amount of your current monthly catch-up contributions, you will be able to submit a TSP-U-1-C form to your finance office as you do now.  That form will also be available to start catch-up elections if you do not have access to myPay.

Read this Federal Retirement Thrift Investment Board fact sheet on catch-up contributions 

Page updated Nov. 21, 2014