by Brendon Drew
DFAS has struggled to accurately implement the new pay plan, and most physicians notice the impact on their LES. What most don’t realize, though, is that the errors may have also impacted their Thrift Savings Plan (TSP) investments. If you contribute to the TSP with any of your medical specialty pays, you should thoroughly investigate your LES and your TSP statements. Here’s an example of what can happen.
I was transitioned off of the legacy pay in February 2017:
When DFAS completed the retroactive pay changes, $785.93 was removed from my 2017 TSP contribution total:
While that may not seem like much, consider that my TSP earned 27% in 2017, the money grows tax-free in a Roth account, and I plan on having that account for another 30-40 years.
Since the involuntary withdrawal occurred in calendar year 2018 but went back into calendar year 2017, I was unable to provide “catch up” contributions in 2018.
I recommend that you review your LES carefully. In the month(s) you are transitioned from the legacy system, look for a negative VSP and/or BCP entitlement. If you see one of these, go pull your TSP statements from the corresponding period and you may find that money was taken out of your retirement account and given back to you as cash.
If you have questions about this, feel free to email me on the global address book. Make sure you have access to your LES and prior TSP statements.