Administration to press for new TSP benefits
Newly hired federal employees could begin investing immediately in the Thrift Savings Plan and employees could roll over funds from private sector retirement plans into their TSP accounts, under a proposal President Clinton plans to include in his fiscal 2001 budget request.
Under current rules, new employees must wait a year before they can contribute to the TSP and there is no rollover provision.
Last year, the House passed a bill, H.R. 208, that would implement the changes the administration is endorsing in its fiscal 2001 budget proposal. The bill would offset the costs of the plan by requiring agencies to allocate more money to the civil service retirement fund.
"It's good policy, but it needs to be paid for," said Garry Ewing, staff director at the House Government Reform Subcommittee on the Civil Service.
As of December 1999, nearly $100 billion had been invested in the TSP by civilian federal employees. The TSP contains three funds: the C Fund (common stocks); the F Fund (fixed-income bonds); and the G Fund (government securities). The bulk of investments are in the C Fund.
A new computer system scheduled to debut later this year will give employees two additional investment options. If H.R. 208 is passed before October, it will take effect Oct. 1, the same day the new system is scheduled to come online.
In addition to the TSP proposal, the administration's 2001 budget proposal will include a 3.7 percent pay increase for federal employees and provisions allowing employees to pay their health insurance premiums out of pre-tax wages.