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.