All Americans should have access to the same retirement savings plan as federal employees, according to a Republican lawmaker. But a spokeswoman for the plan said opening it to the general public might not be in the best interest of current participants.
Sen. Marco Rubio, R-Fla., on Tuesday unveiled a proposal to overhaul the nation’s retirement system, including a provision to give any American without employer-sponsored defined contribution retirement benefits access to the Thrift Savings Plan. The plan is similar to one proposed by President Obama in his most recent State of the Union address, which would give all Americans access to the TSP’s government securities (G) fund.
Rubio called the TSP “one of the most efficient savings plans in America,” because it charges a fraction of the fees its private-sector equivalents charge.
“So the twisted irony is that members of Congress -- who are employees of the citizens of the United States -- have access to a superior savings plan, while many of their employers -- the American people -- are often left with access to no plan at all,” Rubio said during a speech in Washington, D.C., to announce his proposals.
Giving the American people access to the TSP would allow millions of people to maintain a “secure, comfortable and independent retirement,” he added.
The agency that administers the TSP, however, expressed significant concern with the plan.
By granting access to the TSP to non-federal workers, “we would be greatly diluting our focus on our participants,” Federal Retirement Thrift Investment Board spokeswoman Kim Weaver told Government Executive. She added getting the necessary data from millions of private employers across the country would “require a completely different set of operational capabilities” than the agency currently possesses.
Weaver said the board is still awaiting the details of Rubio’s proposal.
“The FRTIB's responsibility is to act solely in the interest of our participants and beneficiaries,” she said. “That is the standard by which we will evaluate the proposal put forward by the senator.”
Rubio also suggested eliminating the payroll tax for working Americans older than 65 years, jettisoning the retirement earnings test and raising the retirement age for those currently less than 55 years old. He also advocated for reforming Medicare into a “premium support” system, similar to that advocated by Rep. Paul Ryan, R-Wis.