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Thread: Matching Funds for some recruits now available

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    Thumbs up Matching Funds for some recruits now available

    April 14, 2006 - Army News Service
    Thrift Savings Plan offers tax benefits, matching funds for critical Army job

    The Army’s Thrift Savings Plan is now offering matching funds to new recruits willing to fill critical job specialties within the Army as part of a pilot program that runs to Sept. 30.

    All non-prior service enlistees who elect to serve five or more years on active duty in a critical specialty designated by the Secretary of the Army will receive matching funds on the first five percent of pay contributed from each pay period during their initial enlistment term. The first three percent of pay that is contributed will be matched dollar for dollar, and the remaining two percent will be matched at 50 cents on the dollar. Only those who sign up during the recruitment process and make regular contributions into their TSP account will receive the matching funds.

    This incentive is only one part of a new campaign to increase enrollment in the TSP program, Army officials stress. The TSP is a government-sponsored savings and investment program that offers tax-deferred opportunities similar to the civilian sector’s 401 (k) plan. All Soldiers have the opportunity to participate in TSP at any time.

    Following this pilot test, using matching-funds incentives for recruitment will be studied with the possibility of making it a more permanent part of the Army’s recruitment policies.

    Currently, a Soldier can elect to contribute any percentage from their basic pay, incentive, special or bonus pay up to the IRS annual tax-deferred limit of $15,000. A Soldier pays no taxes on this money until it’s withdrawn. A special feature of TSP is that money contributed while in a combat zone will never be taxed, even if it is withdrawn early out of the account. The only taxes paid on combat-zone contributions are on the earnings, rather than the balance.


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    Default Re: Matching Funds for some recruits now available

    New recruits in critical specialties eligible for matching TSP funds
    WASHINGTON (Army News Service, April 17, 2006) – The Army announced April 14 that new recruits who are willing to fill critical specialties may receive matching funds when enrolling in the Thrift Savings Plan.

    The pilot program runs through Sept. 30, at which time the results of the recruitment incentive will then be studied to determine whether the program should become a permanent part of the Army’s recruiting policies.

    The incentive is available to all non-prior service enlistees electing to serve five or more years on active duty in critical specialties. Critical specialties are based on the needs of the Army, are subject to change and will be designated by the Secretary of the Army.

    Matching funds will be made on the first five percent of pay contributed each pay period of the Soldier’s initial term. The first three percent of contributions will be matched dollar for dollar, the remaining two percent will be matched 50 cents on the dollar.

    The Thrift Savings Plan is a government sponsored savings and investment program. It provides Soldiers a vehicle to invest their salary while offering tax deferred advantages similar to 401 (k) plans in the civilian sector.

    “It’s never too late to start saving, but when you have time on your side, you have the ability to take that time and use it to your advantage. That’s where you truly reap the significant benefits of compounding interest,” said Giselle Goethe, education program manager for the Federal Retirement Thrift Investment Board.

    Currently, Soldiers may contribute any percentage of their basic pay, incentives, special or bonus pay up to the IRS annual tax-deferred limit of $15,000. Soldiers pay no taxes on the money until it is withdrawn.

    A special feature of TSP is that money contributed while in a combat zone will never be taxed, even if it is withdrawn early. Additionally, the only taxes paid on combat zone contributions are on the earnings rather than the balance.

    Soldiers who serve short terms may reinvest or transfer their TSP contributions and earnings to retirement programs offered by private sector employers.

    “What TSP is really about is taking care of Soldiers,” said John P. McLaurin III, deputy assistant secretary for the Army for Human Resources.

    (Editor's note: Information provided by the Army G1 Public Affairs Office.)

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  5. #3

    Default Re: Matching Funds for some recruits now available

    Though short on specifics, this to articles have verified that the "matching funds" doors are now open. It is unfortunate, that the Army cannot reward loyalty (I am do to REUP soon) with the same benefit.

    Now what are my chances of talking a new recruit into maxing his/her TSP?

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  7. #4

    Red face Re: Matching Funds for some recruits now available

    The Army isn't going to have to put up a lot of money for this pilot program. They're matching 5% of a private's pay.

    If they were matching 5% of your pay, I'd venture to say that it would be a more sizable investment. I'd love to see it happen though. Unfortunately, investment minded people are quite the minority. I think they were spot on when they did the analysis and said that bonuses are viewed as a better incentive than TSP matching. You can show people all the numbers you want, but they can't go out and buy an Escalade with their TSP match when they re-enlist.

    To answer your question, I think it would be a fairly easy sell to get new recruits to do at least 5% TSP to get the full match. Even though they could do it, it would be hard to get them to do the max 15K. They'd sure be setting themselves up well, though.

    d3

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