R 311752Z MAY 12
UNCLASSIFIED//
MARADMIN 295/12
MSGID/GENADMIN/CMC WASHINGTON DC MRA MP//
SUBJ/NEW ROTH THRIFT SAVINGS PLAN (TSP) OPTION//
REF/A/DOC/TSP/YMD:20120411//
REF/B/DOC/TSP/YMD:20120411//
REF/C/DOC/DFAS/YMD:20120413//
NARR/REF A IS THE FEDERAL RETIREMENT THRIFT INVESTMENT BOARD BULLETIN 12-U-8, IMPLEMENTATION GUIDANCE FOR THE ROTH THRIFT SAVINGS PLAN CONTRIBUTION.  REF B IS THE FEDERAL RETIREMENT THRIFT INVESTMENT BOARD MEMORANANDUM ANNOUNCING THE LAUNCH DATE FOR THE NEW ROTH TSP OPTION.  REF C IS THE DEFENSE FINANCE AND ACCOUNTING SERVICE NEWS RELEASE ON THE DFAS PHASES IN ROTH TSP CONTRIBUTIONS FOR CIVILIAN AND MILITARY PAY CUSTOMERS//
POC/-/UNIT:CMC(RFF)/-/TEL:COM 703-614-3548:DSN 224-3471//
POC/-/UNIT:CMC(MPO)/-/TEL:COM 703-784-9386:DSN 278-9386//
POC/-/UNIT:CMC(MFR-1)/-/TEL: COM 703-784-9550:DSN 278-9550//
GENTEXT/REMARKS/1.  PURPOSE.  TO ANNOUNCE THE NEW ROTH TSP OPTION, PROVIDE ADMINISTRATIVE GUIDANCE, AND PROVIDE INFORMATION ON AVAILABLE RESOURCES.
2.  BACKGROUND.  PER THE REFERENCES, THE THRIFT SAVINGS PLAN ENHANCEMENT ACT OF 2009, PUBLIC LAW 111-31, AUTHORIZED THE THRIFT SAVINGS PLAN (TSP) TO ADD A ROTH OPTION TO THE PLAN.  AS AN ALTERNATIVE TAX STRATEGY, THE TSP IS OFFERING MARINES THE OPTION TO DESIGNATE SOME OR ALL OF A MARINE'S CONTRIBUTIONS AS ROTH AFTER-TAX CONTRIBUTIONS.  BOTH THE CONTRIBUTIONS AND THE EARNINGS ACCRUED WILL BE TAX FREE WHEN WITHDRAWN, AS LONG AS IRS REQUIREMENTS ARE MET.  WHEREAS, THE TRADITIONAL TSP CONTRIBUTIONS ARE MADE ON A PRE-TAX BASIS AND TAXES ARE OWED WHEN MONEY IS WITHDRAWN. 
3.  ROTH TSP CONTRIBUTIONS.
  A.  EFFECTIVE 1 JUNE 2012, MARINES MAY ELECT THE ROTH TSP OPTION.  MARINES MAY DESIGNATE ANY WHOLE PERCENTAGE OF BASIC, INCENTIVE, SPECIAL, OR BONUS PAY AS A ROTH TSP CONTRIBUTION.  THIS ELECTION MAY BE IN ADDITION TO, OR IN LIEU OF, A TRADITIONAL CONTRIBUTION. 
  B.  ROTH TSP CONTRIBUTIONS ARE MADE ON AN AFTER-TAX BASIS AND MARINES MUST CONTRIBUTE A PERCENTAGE OF THEIR BASIC PAY IN ORDER TO ELECT CONTRIBUTIONS OF INCENTIVE, SPECIAL AND BONUS PAYS. 
  C.  ROTH TSP CONTRIBUTIONS CAN BE INVESTED IN ANY OF THE TSP FUNDS.  ALL ROTH CONTRIBUTIONS ARE CONSIDERED ELECTIVE DEFERRALS AND ARE SUBJECT TO THE ELECTIVE DEFERRAL LIMIT.  THIS INCLUDES ROTH CONTRIBUTIONS DEDUCTED FROM PAY SUBJECT TO COMBAT ZONE TAX EXCLUSION (CZTE).  THIS IS A SIGNIFICANT DIFFERENCE BETWEEN ROTH AND TRADITIONAL TAX-EXEMPT CONTRIBUTIONS BECAUSE THE LATTER ARE NOT INCLUDED IN THE ELECTIVE DEFERRAL CALCULATION.
  D.  MARINES AGE 50 OR OVER MAY ELECT TO MAKE ROTH CATCH-UP CONTRIBUTIONS FROM BASIC PAY.  UNLIKE TRADITIONAL CATCH-UP CONTRIBUTIONS, ROTH CATCH-UP CONTRIBUTIONS MAY BE MADE FROM TAXABLE BASIC PAY AS WELL AS BASIC PAY SUBJECT TO THE CZTE.  ALL TRADITIONAL CATCH-UP CONTRIBUTIONS AND ROTH CATCH-UP CONTRIBUTIONS COUNT AGAINST THE CATCH-UP CONTRIBUTION LIMIT.  ROTH CATCH-UP CONTRIBUTIONS MUST BE IN WHOLE DOLLAR AMOUNTS AND MAY BE IN ADDITION TO, OR IN LIEU OF, TRADITIONAL CATCH-UP CONTRIBUTIONS.
4.  ADMINISTRATIVE GUIDANCE
  A.  MYPAY CAPABILITIES TO START, STOP OR CHANGE ROTH ELECTIONS WILL NOT BE AVAILABLE UNTIL JULY OR AUGUST 2012.  IN THE MEANTIME, MARINES CAN START, STOP OR CHANGE ROTH ELECTIONS BY SUBMITTING A TSP ELECTION FORM (TSP-U-1) TO THEIR SERVICING ADMINISTRATION CENTER.  TSP-U-1 IS AVAILABLE AT WWW.TSP.GOV, THROUGH THE FORMS LINK.  MARINES WILL BE NOTIFIED WHEN MYPAY IS READY TO SUPPORT ROTH ELECTIONS. 
  B.  WITH THE IMPLEMENTATION OF SOFTWARE RELEASE 1-12 (APRIL 21, 2012), MCTFS NO LONGER STARTS TSP SYSTEMICALLY BASED ON AN ELECTION FROM A PRIOR PERIOD OF ACTIVE DUTY SERVICE (I.E. IADT, ADOS, MOBILIZATION).  A MARINE WANTING TO CONTINUE TO CONTRIBUTE IN A SUBSEQUENT ACTIVE DUTY PERIOD MUST MAKE A NEW ELECTION VIA MYPAY FOR TRADITIONAL TSP OR BY SUBMITTING A TSP-U-1 FORM TO THEIR SERVICING ADMINISTRATION CENTER FOR ROTH TSP. 
5.  INFORMATION.  THERE ARE SEVERAL FINANCIAL INVESTMENT OPPORTUNITIES AVAILABLE TO MARINES ON BOTH A PRE-TAXED OR AFTER-TAXED BASIS.  FOR INVESTMENT QUESTIONS, MARINES ARE ENCOURAGED TO CONTACT A MARINE CORPS COMMUNITY SERVICES (MCCS) PERSONAL FINANCIAL MANAGEMENT SPECIALIST (PFMS) AT THEIR INSTALLATIONS FOR AN EXPLANATION OF THE ROTH TSP AND OTHER INVESTMENT PLANS.  MARINES CAN ALSO VISIT THEIR INVESTMENT ADVISORS TO DEVELOP RETIREMENT PLANNING STRATEGIES. INFORMATION ON HOW TO SELECT AN INVESTMENT ADVISOR MAY BE FOUND BY CONTACTING A PFMS OR BY GOING TO WWW.FINRA.ORG.  FINANCIAL FITNESS IS IMPORTANT, MARINES AND THEIR FAMILIES SHOULD BE AWARE OF THE IMPORTANCE OF MANAGING PERSONAL FINANCES AND INVESTING IN THEIR FUTURES.  FOR SPECIFIC INFORMATION REGARDING ROTH TSP INVESTMENTS AND OTHER TSP INVESTMENTS VISIT WWW.DFAS.MIL OR WWW.TSP.GOV.
6. THIS MARADMIN IS APPLICABLE TO THE TOTAL FORCE.  
7. RELEASE AUTHORIZED BY (SES) M.F.APPLEGATE, DIRECTOR, MANPOWER PLANS AND POLICY DIVISION.//