ARLINGTON, Va. — Defense Department Thrift Savings Plan participants over the age of 50 will have to wait until September to begin making the new “catch-up” contributions that can boost their tax-deferred savings to as much as $14,000 in 2003.

The TSP is the federal government’s retirement and investment savings program that began in 1987 and was expanded to the military community in 2002.

Employees who participate in the plan allow the government to deduct a portion of their basic pay before taxes and invest the money on the employee’s behalf. Earnings from the savings plan are tax-deferred until the servicemember withdraws money from the plan after retirement, when he or she usually is in a lower tax bracket.

Employees covered by the Federal Employees Retirement System can contribute up to 13 percent of their basic pay to the TSP, while employees covered by the Civil Service Retirement System can contribute up to 8 percent. The annual contribution limit is $12,000.

But catch-up contributions, which President Bush signed into law Nov. 27, allow older TSP investors to shelter up to $2,000 more from their basic pay in 2003. The maximum catch-up contribution will change every year.

Some restrictions apply to catch-up contributions, most notably that individuals must be investing the maximum allowable percentage of their salary, or at a rate that would bring them to the annual $12,000 limit in 2003.

Except for DOD, federal agencies are on track to begin catch-up payroll deductions in August, according to Thomas Trabucco, a spokesman for the Thrift Savings Board.

But the DOD payroll system won’t be ready to begin the deductions until September, Defense Finance and Accounting Service spokesman Roger Still said in a Monday telephone interview.

The delay “is a result of the way the defense civilian computer system is set up,” Still said. “The system is extremely good, and it takes time to [make necessary changes] right.”

However, military and civilian TSP participants eligible for catch-up can sign up now so that their deductions will begin just as soon as the system is up and running, Still said.

For more information on the TSP and catch-up contribution sign-up forms, go to For specific information on catch-up contributions, go the bulletin at

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