TSP mulls investment conversion option

Thinkstock

The Thrift Savings Plan is weighing whether to let enrollees to convert their traditional investments to a Roth account, according to the board that oversees the retirement program.

The fiscal cliff law signed earlier this month allows the TSP and other plans to give enrollees the option to switch accounts. Participants would pay taxes on the amount converted to a Roth account. “We are currently waiting for tax reporting guidance from the [Internal Revenue Service] and will be studying the actions required to offer a conversion option,” according to a news update on TSP’s website. “After that review, we will make decisions on whether to proceed.”

The TSP Roth option, unveiled in May 2012, allows beneficiaries to invest money that already has been taxed and is not taxed again upon withdrawal, unlike traditional TSP investments. With Roth’s addition, participants now can invest pretax or after-tax dollars in any of TSP’s offerings as long as their total contributions are within the IRS limits. The IRS increased the cap on annual individual TSP contributions in 2013 from $17,000 to $17,500. Employees age 50 and older can contribute an additional $5,500 a year in catch-up contributions as long as their regular contributions for 2013 are expected to reach the $17,500 limit.

The pool of Roth participants is smaller than those with traditional investments, but it’s growing in popularity. As of December 2012, the TSP had nearly $100 million in Roth assets. The amount of money in the Roth pool doubled between September and the end of November, the board reported. “The pick up on Roth continues to be strong,” said Renee Wilder, director of the board’s Office of Enterprise Planning, during a December meeting. There are 73,041 enrollees with Roth balances, up from about 40,000 in August.

The TSP just launched an online calculator which allows enrollees to compare current and future Roth and traditional investments.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.