TSP officials say the option, which would permit federal-military investors to put after-tax money into the TSP, might not be rolled out until sometime in mid-2011. That's because of the complexity of the changeover to a system that takes in both pre-tax and after-tax monies via payroll deduction, and getting out information to the TSP's 4 million plus investors.

The Roth option means that people can invest up to $16,500 without any restrictions on income.

Currently worth about $213 billion, the TSP is the largest 401(k) type plan in the world. Its investors include current federal and military personnel, and many former or retired feds continue to keep their money in the TSP because of its low administrative fees and the G-fund which is unique to the TSP. The G-fund is invested in special U.S. Treasury securities that have never posted a loss.

While the Roth option is what interests most people, a number of other changes, approved as part of the totally unrelated Tobacco Bill, will take place sooner. Here's the timetable based on our talk yesterday on "Your Turn with Mike Causey" with the TSP's Tom Trabucco (click here to hear the show).

• The first changeover will be immediate government matching contributions to employee accounts. Currently there is a waiting period of 6 months to a year before Uncle Sam starts making matching contributions to the TSP accounts of FERS employees.

• Coming very soon is a changeover that will automatically enroll new federal hires into the TSP. The enrollment means they will put 3 percent of their own money into the G-fund unless they raise or lower the amount, elect to put it into a different fund or funds, or opt out completely. The government with match their contributions, in effect giving them a tax-deferred pay raise, of up to 5 percent.

• A union-prompted change that will permit the survivors of feds/retirees with TSP accounts to keep their money in the federal 401(k) plan. Under current rules they must move that money out of the TSP into funds that charge higher administrative fees and do not offer the safety of the G-fund.

• Authorizes the Federal Retirement Thrift Investment Board, which oversees the TSP, to allow investors to put TSP account balances into a mutual fund outside of the TSP. In effect this will allow feds to invest in a TSP-selected mutual fund provider. This will be a complex procedure.

• Finally, the big enchilada, the one most people have been waiting for: the TSP will permit investors to put after-tax money into a Roth option within the TSP. Unlike the current investment, which is in pre-tax dollars, with the Roth all the taxes are paid up front. That means when you finally withdraw money from the Roth portion of your TSP it will be entirely tax-free (unless of course some Congress or President down the line tries to change the rules). The Roth after-tax investment option could be offered to federal and military investors sometime in 2011.

Nearly Useless Factoid
by Suzanne Kubota

According to the Consumerist, the secret ingredient in KFC's new grilled chicken is beef. Mike is not surprised, and hasn't been surprised by anything in his food since he found out Soylent Green is people.

To reach me: mcausey@federalnewsradio.com