The board proposed rules for military participation in the TSP, which begins this winter. Military personnel will be able to sign up for the TSP beginning Oct. 9 and start contributing to their accounts in January. The TSP will be open to the 2.5 million members of the Army, Navy, Air Force, Marine Corps, Coast Guard, Public Health Service and National Oceanic and Atmospheric Administration commissioned corps, and members of the National Guard and Ready Reserves of those services. The 2001 Defense Authorization Act is responsible for the expansion of the TSP to the uniformed services, potentially doubling the size of the nation s largest employer-sponsored retirement savings program. Under the proposed rules, uniformed personnel could contribute to their TSP accounts from basic, incentive and special pay, including bonuses and money not subject to federal income taxation.
Civilian employees can only contribute from basic pay subject to federal income taxation.
The rules also explain that military personnel could contribute 7 percent of basic pay per pay period in 2002. Military personnel would not automatically get matching contributions from their services. Civilian employees in the Federal Employees Retirement System do get matching contributions. However, the head of each uniformed service would be allowed to authorize matching contributions. The board explained that civilian employees who also serve in uniform would be able to open two accounts, one civilian and one military.