TSP launches campaign to boost employee participation
"Our total participation rate is growing, and that's an enormous victory," said Greg Long, TSP's executive director. "Now we want to communicate to everybody so they start deferring their own money."
The TSP has seen total participation rise significantly since the agency began implementing automatic agency contributions. Previously, employees had to wait six or 12 months, depending on where they worked, for their agencies to begin making contributions to their TSP accounts. As of the June 21 payroll cycle, agencies began making contributions equivalent to 1 percent of employees' salaries to TSP accounts in their names, whether employees were making their own contributions or not.
Between May and July, the number of TSP participants rose 100,000, a jump TSP leaders attributed at least in part to accounts established when agencies began making their automatic contributions. The number has continued to rise, increasing by 17,000 between August and September, and by 16,000 from September to October.
Pamela-Jeanne Moran, deputy director of external affairs for the Federal Retirement Thrift Investment Board, which oversees the TSP, said the agency will send a targeted mailing in late November and early December to new employees who are benefiting from agency contributions but have not yet elected to make contributions from their salaries into their TSP accounts. Making such contributions would trigger additional matching contributions from the agencies. The mailing and a poster the TSP will distribute to agencies are "designed to tell them they've got free money they're leaving on the table," Moran said.
The TSP anticipates that by June 2010, it will have fully implemented a program that will automatically enroll employees in the plan, and put 3 percent of their salaries into an account invested in the G, or government securities, fund. Employees will be able to opt out of that allocation or change their enrollments to invest in different funds.
That increase in participants and fund contributions has kept the TSP with a fairly high cash flow, despite fluctuations in the market that resulted in losses in most of the plan's funds in October, Long said. Tracey Ray, the TSP's chief investment officer, said most of those funds had recouped already their October losses in November.