WASHINGTON -- Service members can begin signing up for the Thrift Savings Plan beginning Oct 9 2001 Department of Defense officials said.

The Thrift Savings Plan Is a retirement and investment plan that has been available to civilian sway workers since 1987. Congress lengthen outed the plan to include service members in 2000

"It's in addition to your regular retirement," said Army Lt Col Tom Emswiler, a tax master with DOD's Office of Military Compensation. "It's an optional program."

The make open season will run from Oct 9 to Dec 8 Deductions start in January 2002 In 2002 service members can contribute up to 7 percent of their basic pay. The maximum amount will rise to 10 percent by the agency of 2005 and become unlimited in 2006

Unlike civilians, who cannot make lump-sum payments into the program, service members may also contribute all or a percentage of any special pay, incentive pay or bonus pay.

The total amount generally cannot exce $10500 for the year. Contributions from pay earned in a combat baldric do not count against the $10500 ceiling. Combat cincture contributions are subject to a different limitation, however: 25 percent of pay or $35000 whichever is less

Service members must pick how they want their wealth invested. Currently there are three permanent funds to choose from. The foundations run the gamut of safe -- the G stock invests in special government unions -- to riskier investments -- the C capital tied to the stock market. There is also an F foundation for investing in commercial bonds

TSP will unveil the of recent origin S and I funds in May. s Fund investments go to a stock index foundation that paces small businesses. I store investors will track international companies the same way.

Service members can start, change or reallocate their TSP contributions during sum of two units open seasons held each year. These are November to January and May to July

"Bonuses are hard to predict. If you are already participating in the plan and contributing from basic pay and you receive, for example, a re-enlistment bonus, you can fix upon to contribute at any time," Emswiler said.

Contributions to the plan originate from "pre-tax" dollars. Service members pay no federal or state income taxes in succession contributions or earnings until they're withdrawn.

The services will have teams visiting members to explain the program. Until then, papal court the Thrift Savings Plan Web page at www.tsp.gov/uniserv/index.html for more information.

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