Thrift Savings Plan open season begins Oct. 15
by Master Sgt. Randy L. Mitchell
Air Force Personnel Center Public Affairs
10/8/2004 - RANDOLPH AIR FORCE BASE, Texas (AFPN) -- Civilian and military employees can sign up for, or change, their Thrift Savings Plan contribution amounts during the "open season" Oct. 15 to Dec. 31.
"TSP is a long-term retirement savings plan, which everyone should consider," said Senior Master Sgt. Felipe Ortiz, superintendent of the Air Force Personnel Contact Center here. "It's a great supplement to military and civilian retirement plans.
"It's also important to note that TSP is not limited to investing in stocks," he said. "People can choose safer government securities as well."
This open season applies only to regular TSP contributions. It does not include TSP catch-up contributions, as they are not tied to open seasons, said Janet Thomas, of AFPC's civilian benefits and entitlements service team.
TSP offers investors the chance for lower taxes each year they contribute, while not having to pay taxes on earnings until they reach retirement.
"Eligible employees can take out loans and make in-service withdrawals from their TSP accounts," Ms. Thomas said. "And you can keep your account, even if you leave military or federal civilian service."
Investment money is deposited directly from each paycheck "so you never have to think about it," Sergeant Ortiz said. "That makes it easy to 'pay yourself first' while only investing what you deem appropriate."
The five TSP funds are: the Government Securities Investment (G) Fund; the Common Stock Index Investment (C) Fund; the Fixed Income Index Investment (F) Fund; the Small Capitalization Stock Index Investment (S) Fund; and the International Stock Index Investment (I) Fund.
"As with any individual retirement account, the sooner you begin contributing, the better," Ms. Thomas said.
Contribution elections or changes made between Oct. 15 and Dec. 11 will take effect Dec. 12, for both military and civilian employees. Changes made on or after Dec. 12 will become effective at the beginning of the pay period following the one in which the election is made for civilians and the following month for military.
Some of the specifics of the program include:
Military
-- Military members can contribute up to 10 percent of their base pay, as long as the annual total of tax-deferred investment does not exceed $14,000 for 2005. Airmen also have the ability to invest all or part of their bonuses or special pay.
-- Those serving in tax-free combat zones are allowed up to $41,000 in annual contributions.
-- Servicemembers can enroll through the Defense Finance and Accounting Service Web site at www.dfas.mil/emss/. They can also enroll by filling out a TSP-U-1 form at local military personnel flights, finance offices or family support centers.
-- Contribution allocations (how an employee chooses to invest money among the five funds) can be made by calling the TSP automated ThriftLine, (877) 968-3778 for employees in the 50 States, Virgin Islands, Puerto Rico, Guam, American Samoa and Canada; (504) 255-8777 for employees elsewhere, or on the TSP Web site at www.tsp.gov/.
-- For general questions, call the AFPC contact center at (800) 616-3775. Specific TSP information is available for Airmen at www.afpc.randolph.af.mil/mpf/TSP/thrift_savings_plan.htm.
Civilian
-- Contribution limits for this open season are based on which retirement system an employee has.
-- Federal Employees' Retirement System employees may contribute up to 15 percent of basic pay each pay period. Once eligible, the government provides matching funds of up to 4 percent as well as an automatic 1 percent each pay period, whether the employee contributes or not, making the government's contribution 5 percent.
-- Employees covered by the Civil Service Retirement System may contribute up to 10 percent of basic pay, but they do not receive any agency contributions.
-- Beginning the next open season, Oct. 15, 2005, to Dec. 31, 2005, there will no longer be percentage limits on how much either retirement system’s employees may contribute, Ms. Thomas said. Contributions will be restricted only by the Internal Revenue Code's annual limit, which is currently $13,000 for 2004 and $14,000 for 2005. In 2006, the limit will be $15,000, and after 2006 increases will be indexed to the annual cost-of-living adjustment referred to in the tax code.
-- Specific information is available for civilian employees from the Thrift Savings Plan Web site and the BEST homepage at www.afpc.randolph.af.mil/dpc/BEST/menu.htm.
-- All Air Force-serviced civilian employees will make their TSP contribution elections or changes electronically through the Web-based Employee Benefits Information System at www.afpc.randolph.af.mil/dpc/BEST_GRB/EBIS.htm or through the BEST automated phone system at (800) 616-3775. Hearing impaired employees may contact BEST by calling TDD (800) 382-0893 or commercial (210) 565-2276 within San Antonio. Overseas employees will dial the direct-access number for the country they are calling from and then enter (800) 997-2378. Counselors are available weekdays 7 a.m. to 6 p.m. CDT.
-- Contribution allocations (how an employee chooses to invest their money among the five funds) are made via the "Account Access" section of the TSP Web site, or by calling the ThriftLine.
More information about the Thrift Savings Plan can be found in the booklet "Summary of the Thrift Savings Plan" on the home page under civilian or uniformed services TSP Forms and Publications. (Courtesy of AFPC News Service)
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