Air Force announces Thrift Savings Plan open season

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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 April 15 to June 30.

"TSP is a long-term retirement savings plan which everyone should consider," said Senior Master Sgt. Felipe Ortiz, superintendent of the Air Force Personnel Center 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," Sergeant Ortiz said. "People can choose safer government securities as well."

This open season applies only to regular contributions. It does not include catch-up contributions, as they are not tied to open seasons, said Janet Thomas, of AFPC's civilian benefits and entitlements service team.

The plan 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 plan’s five 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/changes made between April 15 and June 12 take effect June 13, for both military and civilian people. Changes made on or after June 13 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

-- Airmen can contribute up to 9 percent of their base pay, as long as the annual total of tax-deferred investment does not exceed $13,000 for 2004. 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.

-- Airmen can enroll through the Defense Finance and Accounting Service Web site at www.dfas.mil/emss/. They can also enroll by filling out a form TSP-U-1 at local military personnel flights, finance offices and family support centers.

-- Contribution allocations (how an employee chooses to invest money among the five funds) can be made by calling the automated ThriftLine at (504) 255-8777 or on the Web at www.tsp.gov/. For general questions, call the Air Force 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.

For civilians, contribution limits are based on which retirement system an employee has. For the current open season, the following contribution rates apply:

-- Federal Employees' Retirement System employees may contribute up to 14 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 9 percent of basic pay, but they do not receive any agency contributions.

-- The percentage civilian employees may contribute will be restricted by the Internal Revenue Service's annual limit of $13,000 this year, Ms. Thomas said.

-- Specific information is available for civilian employees on the TSP Web site at www.tsp.gov/ or the BEST home page at www.afpc.randolph.af.mil/dpc/BEST/menu.htm.

-- All Air Force civilian employees can make their TSP contribution elections or changes through the BEST automated phone system at (800) 616-3775 or the Employee Benefits Information System Web application at www.afpc.randolph.af.mil/dpc/BEST_GRB/EBIS.htm. Hearing impaired employees can contact BEST by calling TDD (800) 382-0893 or commercial 565-2276 within San Antonio. Overseas employees enter 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 money among the five funds) are made by calling the automated ThriftLine at (504) 255-8777 or on the TSP Web site.

Thrift Savings Plan officials have announced several changes to the loan program effective July 1. They are:

-- A $50 fee will be deducted from the amount of each new loan.

-- Participants will no longer be able to have two general-purpose loans at the same time; however, participants will still be able to have one general-purpose and one residential loan.

-- When participants pay off one loan, they will not be eligible to apply for another loan for 60 days.

More information about TSP can be found in the booklet "Summary of the Thrift Savings Plan" on the TSP home page under civilian or uniformed services TSP Forms and Publications. (Courtesy of AFPC News Service)