R 181142Z MAY 12

ALCOAST 248/12
COMDTNOTE 7200
SUBJ: INTRODUCTION OF THRIFT SAVINGS PLAN (TSP) ROTH OPTION
1. The Thrift Savings Plan Enhancement Act of 2009, Public Law
111-31, authorized the TSP to add a Roth feature to the plan.  The
Roth feature allows participants to contribute on an after tax basis
to their TSP accounts.  Earnings are tax free when the funds are
withdrawn, as long as participants are at least age 59 and a half and
the withdrawals are  made at least five years after the beginning of
the year in which their first Roth contribution were made.  This new
feature is available to civilian employees on 14 May 2012 (pay period
10) and to military personnel (active duty and Selected Reserve)
starting immediately (elections submitted in May will take effect on
1 June 2012).
2. Roth contributions are made in addition to or in lieu of
traditional contributions.  The Roth contributions are subject to the
Internal Revenue Service 2012 elective deferral limit of 17,000
dollars and are combined with any traditional TSP contributions to
determine if the limit has been met.
3. Participants who turn 50 years of age or older in 2012 may elect
to make Roth catch up contributions in addition to or in lieu of
traditional catch up contributions.  All catch up contributions are
contributed from basic pay.  The total contribution must not exceed
the 2012 catch up limit of 5,500 dollars.  Participants electing
catch up contributions are required to certify that they expect to
reach the elective deferral limit for the year.
4. Agency automatic and matching contributions available to Federal
Employees Retirement System (FERS) employees are always treated as
traditional contributions.  Their earnings are tax deferred.  Roth
contributions are added to traditional contributions when determining
the percentage of pay contributed for purposes of the agency matching
contribution formula.
5. Civilian participants may designate any whole percentage or whole
dollar amount of basic pay as Roth contributions.  This election is
in addition to, or in lieu of, an election to make traditional
contributions.  For example, a civilian participant could elect to
contribute 5 percent of basic pay as a Roth contribution and 25
dollars as a traditional contribution (or vice versa). Military
participants may only elect to designate whole percentages, not whole
dollar amounts. These contributions can also be made in addition to,
or in lieu of, an election to make traditional contributions.
6. Participants can take loans, in service withdrawals and partial
withdrawals from their accounts as before.  Money is disbursed on a
pro rata basis with a proportional amount from the participants
traditional and Roth balances.
7. Money already in participants TSP accounts when they begin making
Roth contributions remains part of the traditional balance.
Participants can not convert the funds to Roth.
8. To make a Roth TSP contribution election:
    a. Civilian employees must use My Employee Personal Page (MyEPP)
at https://www.nfc.usda.gov/personal.  For website assistance,
contact the National Finance Center (NFC) at customers(at)usda.gov or
telephone NFC on 504-255-5230.  For enrollment questions, contact
your Employee Benefits Specialist at benefits(at)uscg.mil.
    b. Military members must submit a TSP-U-1 Election form (5/2012)
or TSP-U-1C Catch-up Contribution form (5/2012) to PPC for
processing.  The forms can be found at the TSP website:
https://www.tsp.gov/forms/uniformedServicesForms.shtml.  For
enrollment questions, contact PPC Customer Care at (toll-free)
1-866-772-8724.
9. For more information on TSP Roth contributions, visit
https://www.tsp.gov/whatsnew/roth/index.shtml.
10. Mr. Curtis B. Odom, Acting Assistant Commandant for Human
Resources, sends.
11. Internet release authorized.