To amend titles 5 and 37 of the United States Code to allow members of the armed forces to participate in the Thrift Savings Plan.

Allows members of the armed forces to elect to participate in the Thrift Savings Plan (TSP) by way of contributions from basic pay. Allows such election to be made only during the TSP open enrollment periods, with an exception. Prohibits such contributions from exceeding five percent of basic pay. Prohibits for such members the one percent Federal contribution to an individual's TSP.

Adds to the Employees Thrift Advisory Council one member to represent such military participants.

Considers as a separation from service, for purposes of entitlement to TSP benefits, a member's release from active service, transfer to inactive status, or transfer to a retired list.