The Thrift Savings Plan board on Thursday moved federal workers placed in the wrong retirement system over the last two decades one step closer to a solution. Since the switch from the old Civil Service Retirement System (CSRS) to the new Federal Employees Retirement System (FERS) began in 1984, federal human resources offices have accidentally placed as many as 20,000 employees in the wrong retirement system. Until recently, agencies were required to move employees into the correct system as soon as an error was discovered. That could have an adverse effect on an employee's retirement funds. For example, employees incorrectly placed for years in CSRS might have contributed no money to the Thrift Savings Plan during that time. When their agencies switched them into FERS, they might not have had enough time left before retirement to make up contributions to the thrift plan that they could have made. The thrift plan is intended to replace much of the CSRS' more generous pension, so the employees' retirement could end up being much less comfortable. In September, President Clinton signed a law, H.R. 4040, allowing employees who were placed in the wrong retirement system to choose whether to be covered by FERS or by CSRS offset, a hybrid plan that was created during the transition to FERS between 1984 and 1987. The Office of Personnel Management is primarily responsible for helping employees make a choice, but the Thrift Savings Plan board also needed to issue procedures for its portion of the retirement corrections. The TSP board issued proposed rules in the April 19 Federal Register that outline procedures for changing the TSP portion of the retirement corrections. See the Federal Retirement Thrift Investment Board's section of the issue for details.
Want to contribute to this story? Share your addition in comments.
Join us at ELC 2017 - The Premier Conference for Federal IT Leaders
Are you results-driven? Successful in your field? A thought-leader? If so, then join us Oct. 29-31, 2017 in Williamsburg, VA to harness the unprecedented change that is occurring around us to make our federal government more effective, secure and citizen-driven. ELC 2017 is the must-attend government IT event connecting senior government and industry executives with innovative opportunities to engage, learn, and collaborate. Find out more: goo.gl/TpC6FQ