Many Service Members' Feb. 27 Paychecks Will Be Smaller

Thousands of service members will see less money in their next paycheck because of a processing error at the Defense Finance and Accounting Service.

Members of the military enrolled in the Thrift Savings Plan’s Roth option will have 100 percent of their monthly deduction taken out of their Feb. 27 paycheck instead of the typical 50 percent because of a computer glitch that DFAS is trying to fix, according to a post on the agency’s Facebook page.

The error resulted in active-duty Roth participants receiving more money in their Feb. 13 paycheck because the system failed to deduct half of their contribution at that time. Half of service members’ Roth TSP contributions are deducted from their mid-month paychecks, and another half at the end of the month when they are paid.

DFAS blamed the error on a change in how deductions are calculated. Before this month, Roth TSP participants specified their contribution amount in dollars, but now they have to submit new elections based on percentage of pay for basic pay, special pay, incentive pay and bonus contributions. The change affects only Roth contributions since traditional TSP contributions are already designated as a percentage of pay.

Service members had to make the change in their myPay account before Jan. 31, or DFAS would be unable to process their Roth contributions. Turns out that happened anyway, at least for the Feb. 13 paycheck.

“We believed that the programming was ready for this coming payday,” DFAS said in Feb. 17 Facebook post. “While tests showed that the system was ready, we subsequently found that it was unable to include the Roth TSP computations in processing the upcoming mid-month pay.” DFAS also notified affected service members in an email.

The glitch should not affect any potential earnings on contributions since DFAS typically sends the information to the Federal Retirement Thrift Investment Board at the end of the month after the full deduction is made.

The TSP Roth option, unveiled in May 2012, allows beneficiaries to invest money that already has been taxed and is not taxed again upon withdrawal, unlike traditional TSP savings. With Roth’s addition, participants can invest pretax or after-tax dollars in any of TSP’s offerings as long as their total contributions are within the IRS limits. The Roth option has proved popular among civilian federal workers and service members. As of January 31, 2015, there were 243,564 uniformed services’ participants with Roth accounts, according to the TSP board.

(Image via Andrey Burmakin / Shutterstock.com)