The Senate passed legislation Tuesday that would allow federal employees to enroll in or make changes to their Thrift Savings Plan accounts at any time. The bill now awaits President Bush's signature.
The 2004 Thrift Savings Plan Open Elections Act (H.R. 4324), introduced by House Government Reform Chairman Tom Davis, R-Va., was approved by House lawmakers on Nov. 19.
Open seasons have been used since the inception of the 401(k)-style federal retirement savings plan to restrict TSP participants from altering their contributions too often. This year, federal workers could adjust their retirement contributions during two periods, the first ended June 30 while the second began on Oct. 15 and ends on Dec. 31.
"Today is a great day for federal employees," Davis said on the House floor Tuesday. "Every day, federal employees across the nation and around the globe perform critical duties that keep this nation running smoothly. Away from work, they experience all of life's events -- births or deaths in the family, new homes, new jobs, salary adjustments and so on."
According to Davis, once H.R. 4324 is enacted, "TSP participants can adapt their retirement savings to meet their changing circumstances."
The bill also includes a section devoted to enhancing financial literacy for federal employees. According to a Senate Governmental Affairs staffer, the financial literacy provision requires the Thrift Board to periodically evaluate the tools plan participants need to evaluate and compare financial products and services. The board must also report annually to the Senate Governmental Affairs and House Government Reform Committees on its TSP education efforts, and requires OPM to develop and implement a retirement financial literacy and education strategy for federal employees.
"As for all Americans, financial literacy education is essential for federal employees to develop a base of knowledge so that they can participate effectively in the modern economy," Sen. Daniel Akaka, D-Hawaii, said following the bill's passage. "I believe that provisions in this bill will give federal employees the tools needed to empower them to make informed decisions regarding their retirement and financial security."