Roth TSP contributions must now be a percentage

shutterstock_141190603Active duty service members who make dollar-amount Roth contributions to a Thrift Savings Plan account should know that these deductions will stop on Jan. 31, unless action is taken.

An upcoming change in myPay will require service members to designate Roth contributions as a percentage of pay, not a dollar amount. Noncompliance means that Roth contributions will not be processed by the Defense Finance and Accounting Service.

This change affects Roth contributions only; traditional contributions are already designated as a percentage of pay.

The new requirement will take effect Jan. 1, 2015. Service members will have 30 days to change the Roth election from a dollar amount to a percentage of pay. If the new Roth election is not received by Jan. 31, then DFAS cannot process Roth contributions until they are updated.

To make the change, log into myPay. Click on the TSP section titled “Traditional TSP and Roth TSP.” Next, in the “Contribution from Roth TSP” section, enter the percentage of pay to contribute (10 percent, for example). Finally, click “Save” at the bottom of the screen.