The military retirement system does not end with the pension and the survivor benefit plan. Not to be overlooked is the third deferred compensation attribute to the system, the Thrift Savings Plan (TSP). This can be a valuable asset in property division, potentially containing tens of thousands of dollars of marital funds.
Current contributions to a TSP are shown on the individual’s leave-and-earnings-statement (LES). A servicemember can contribute all or a percentage of base pay and any special pay, incentive pay or bonus pay received, up to a total of $18,000 annually, as of 2015.
While the servicemember receives no direct tax benefit from contributing pay to the TSP that has been excluded from gross income, the earnings on those contributions are tax-deferred.
Contributions to the TSP come from pre-tax dollars. Service members do not pay federal or state income taxes on contributions or earnings until they are withdrawn.
A service member’s TSP account can be divided by means of a court decree of divorce.
Spouses of Service members may access certain TSP account information pursuant to federal law. Upon a written, TSP will provide to the spouse (and his or her attorney) account information including the account balance of the participant, any loan balance on the account, a transaction history, and quarterly or annual statements.
Should you be in the midst of a military divorce or contemplating divorce, contact the Law Offices of Renee Lazar, an attorney with experience in military divorce law, either through email or telephone 978-844-4095 to schedule a free one hour no obligation consultation.