Service members begin countdown to TSP
There's only seven weeks left until military service members can begin participating in the Thrift Savings Plan. Beginning Oct. 9, military service members can choose to contribute a percentage of their pay to the military's thrift savings and investment program as part of building a nest egg for retirement. The TSP, administered by the Federal Retirement Thrift Investment Board, previously has been available only to federal civilian employees. The fiscal 2001 Floyd D. Spence National Defense Authorization Act extended TSP participation to active duty and reserve component members of the Army, Air Force, Marine Corps, Navy and Coast Guard, and uniformed members of the Public Health Service and the National Oceanic and Atmospheric Administration. TSP is separate from and in addition to the military retirement system, which is based on years of service and rank. The first enrollment window for persons who entered military service on or before Dec. 8, 2001, is from Oct. 9, 2001, to Jan. 31, 2002. Persons who enroll during this period will see TSP contributions deducted each month from their pay starting in January 2002. Persons who join the uniformed services after Dec. 8, 2001, will have 60 days after entering service to enroll in the TSP. After the special first enrollment period, service members may use two "open seasons" each year to join, quit or change the amount of their contributions. Currently, these periods are May 15 through July 31 and Nov. 15 through Jan. 31. Military members enroll in TSP by completing a TSP election form and submitting it through their local service branch finance office. Enrollment forms are available for download on the TSP Web site, http://www.tsp.gov, or can be obtained at local military finance offices. Participants can invest any whole percentage of up to 7 percent of their base pay in any or all of five TSP funds:
- The conservative G Fund consists exclusively of investments in short-term, nonmarketable U.S. Treasury securities specially issued to TSP. Since 1991, the fund has earned an annual average of 6.74 percent.
- The F Fund is TSP's bond market index fund. Since 1991, the fund has earned an annual average of 7.87 percent -- and 12.78 percent in the past 12 months ending July 31.
- The C Fund is TSP's large-company U.S. stock index fund. Since 1991, the fund has earned an annual average of 17.43 percent, but it has reported a 14.3 percent loss in the past 12 months ending July 31.
- The S Fund is TSP's medium and small company stock index fund. The I Fund is its international stock index fund. Both funds opened in May, so neither has a long-term track record.