The federal government plans to begin automatically enrolling new employees in the Thrift Savings Plan in August, the board governing the plan said Tuesday.

Once in place, new employees will begin contributing 3 percent of their paychecks to the TSP's government securities-backed G Fund. Their agencies will match that 3 percent, and contribute another 1 percent on top of that.

New employees can opt out of TSP within 90 days and receive a full refund without suffering an early withdrawal penalty.

Military service members will not be automatically enrolled.

The Federal Retirement Thrift Investment Board last year had hoped to begin automatic enrollment this spring. But the program requires a complicated overhaul of the TSP and federal agencies' computer systems. Automatic enrollment is one of three changes made to the TSP that are included in the 2009 Thrift Savings Plan Enhancement Act.

TSP participants also will gain a Roth option, most likely in January 2012. That option will allow participants to make taxable contributions to a retirement account and then make tax-free withdrawals in retirement. Under the current system, participants make tax-free investments and then pay taxes when they withdraw money.

A Roth option is expected to benefit mostly uniformed service members and select groups of federal civilian employees, such as federal judges. Most federal employees are likely to have lower incomes and lower taxes in retirement than they do while working and making contributions, and would not benefit from a Roth investment option.

Adding the Roth option is expected to cost as much as $13 million. It will require numerous upgrades to TSP's recordkeeping and accounting systems, as well as its Web site and call centers.

Executive Director Gregory Long said the board wants to bring in a contractor to help it educate participants on whether a Roth option makes sense for them. Long expects the board will issue a request for proposal in two months.

The board also plans to have set up accounts for surviving spouses of deceased federal employees by December. These accounts would let a widow or widower maintain a spouse's TSP account, instead of having to liquidate it within 60 days of the spouse's death.

The board last December outlined interim procedures to let widows or widowers hold on to a spouse's TSP account.