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Compliance March 13, 2009
Bill Would Add Auto-Enrollment Feature to TSP
Legislative changes to the Federal Thrift Savings Plan (TSP) are tacked onto a U.S. House bill aimed at regulating tobacco products.
Reported by Rebecca Moore
A news report on FedSmith.com said the Family Smoking Prevention and Tobacco Control Act (HR 1256) would provide for automatic enrollment in the TSP, with employees able to opt out of participating. The bill also directs the TSP to provide for qualified Roth 401(k) contributions.
According to the news report, the bill would give the TSP the option of setting up a “self-directed investment window,” with restrictions limiting these investment options to:
low-cost, passively managed index funds that offer diversification benefits
other investment options, if the board determines the options to be appropriate retirement investment vehicles for participants.
The changes were first recommended in the House in May (see “House Panel OKs Auto Enrolling New Fed Workers’). The House Oversight and Government Reform Committee previously approved the addition of the automatic enrollment feature (see “Legislation Targets Employers Without Retirement Plans’).
FedSmith.com also reported that other legislation tacked on to the tobacco measure would provide for unused sick leave to be counted toward the computation of the retirement benefits for federal employees under the Federal Employees’ Retirement System (FERS) as it is for employees under the Civil Service Retirement System (CSRS).