Automatic enrollment boosts TSP participation

The Thrift Savings Plan's new automatic enrollment program has succeeded in encouraging federal employees to save for retirement, officials said Monday during a monthly Federal Retirement Thrift Investment Board meeting.

On Aug. 1, TSP launched a program to automatically sign up all new civilian hires to contribute 3 percent of their basic pay to the government securities (G) fund, unless they choose to terminate their contributions or change the amount. Participants also will receive a 3 percent match and a 1 percent contribution from their agencies. If employees leave the enrollment program, they no longer will be eligible for the 3 percent match. The G Fund is the most stable investment of the TSP options.

During the board meeting, Renee Wilder, director of research and strategic planning, said 33,663 newly hired federal employees who did not initially elect to participate have been auto-enrolled in the TSP since Aug. 1 and have continued their investments.

"These are people who likely would not be participating [otherwise]," said TSP Director Greg Long. "We're making progress. This is a success. The number of people actually choosing to opt out is small."

Only 1,641 eligible employees chose not to participate during that same time period, Wilder said.

Military personnel are not eligible for auto-enrollment. The number of active-duty participants in the TSP increased slightly from 550,271 in October to 551,552 in November, boosting the participation rate from 37.6 percent to 37.7 percent. Ready reserve participation remained stable at 14.8 percent. The overall participation rate for Federal Employees Retirement System enrollees is 83.5 percent.

The board in January 2011 plans to review an interactive DVD that will provide a thorough introduction to TSP for recently enrolled participants. The board also plans to launch its Roth option, which will allow employees to invest income that already has been taxed and therefore would not be taxed upon withdrawal, in early 2012, said External Affairs Director Thomas Trabucco. Legislation allowing participants to make contributions from their terminal annual leave won't come up during Congress' lame-duck session, he added. The Congressional Budget Office determined such an option would cost $317 million.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    View
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    View
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    View
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    View
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    View
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    View
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    View

When you download a report, your information may be shared with the underwriters of that document.