Roth TSP rollout delayed for DoD, other agencies

Friday - 4/13/2012, 8:31pm EDT

The Roth option for the Thrift Savings Plan, which was announced earlier this week, will be delayed for employees in the Defense Department and other agencies.

The Federal Retirement Thrift Investment Board (FRTIB) announced Wednesday that the Roth option, which taxes retirement contributions before it is put into savings rather than when it is withdrawn, would be available on May 7.

But on Friday, the Defense Finance and Accounting Service (DFAS), said it planned to "phase in" the option for the employees it serves. In June, the Roth TSP will be available to members of the Marine Corps. In July, it will be available to employees in the Department of Veterans Affairs and civilians working for the DoD. Army, Navy and Air Force members will have to wait until October.

Tom LeRock, spokesman for DFAS, blamed the delay on the complicated pay structure in the DoD, which includes civilian, active duty military and reserve component payroll systems.

"The phased implementation will ensure each customer's taxable wages and TSP contributions are computed accurately...The schedule will provide time to complete and thoroughly test the complex changes needed," LeRock said.

The delays have not been confined just to the DoD — employees in the Department of Health and Human Services, Executive Office of the President, Environmental Protection Agency and the Broadcasting Board of Governors will also have to wait until July to pick the Roth option.

A spokesman for the Interior Department said it would be ready for the May 7 rollout. Other agencies did not respond to requests for comment. Kim Weaver, a spokeswoman for the investment board, said her agency has not received an official count of which agencies will and will not experience delays.