Final Roth Rules Issued, Option Begins

The TSP started accepting Roth-type investments effective on Monday. However, most of the federal workforce remains ineligible to actually make the contributions because the largest payroll service, the Defense Finance and Accounting Service, won't be ready to distinguish between traditional and Roth investing until July. In addition to DoD employees, DFAS also provides payroll services for VA, HHS, Energy, EPA and several small agencies—about 60 percent of the federal workforce. Meanwhile TSP published in the May 4 Federal Register final rules to carry out that investment alternative. The rules track proposed rules published earlier. Most of those who commented on the proposed rules suggested changes—such as making Roth investments exempt from mandatory minimum withdrawals under certain circumstances or allowing traditional investments to be converted to Roth status—that the TSP said aren't allowed by law.