House Panel OKs Auto Enrolling New Fed Workers

A House Committee approved a measure to auto enroll new federal workers in the Thrift Savings Plan with a 3% deferral.

The bill approved by the House Oversight and Government Reform Committee would also designate the TSP’s Government Securities Fund, known as the G Fund, as the default investment option. As is typically the case in auto enrollment, federal workers would have the opportunity to opt out of the plan.

Chairman Henry Waxman (D-California) sponsored the Thrift Savings Plan Enhancement Act (H.R. 6500), which also provides for a Roth IRA option within the TSP and gives the Federal Retirement Investment Board the authority to add new investment options without additional Congressional approval.

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Some board members have contended they would prefer the historical checks-and-balances arrangement with required prior approval by Congress.

In addition, the measure would require the TSP to include a Roth Individual Retirement Account option.

At a June 30 joint meeting of the board and the Employee Thrift Advisory Council (ETAC), participants expressed support for automatic enrollment of new federal employees into the TSP.

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