The TSP is still considering another change in its investment policies, so-called “automatic escalation” of investments that newly hired employees make by default. The idea is another response to the TSP’s concern that many employees pay little attention to their accounts, and allow the default provisions to remain in effect indefinitely. Currently, default investment levels are 3 percent of salary, designed to capture the dollar for dollar employer matching contributions under the FERS system. The TSP board has considered raising that to 5 percent of salary on hiring, or by keeping the starting rate at 3 percent and raising it 1 percentage point over the two years following hiring; personal investing at 5 percent captures the full employer contribution available under FERS. However, that change would require legislation and the board has made no commitment to seeking such a change for now. The TSP recently put into effect a law passed last year changing the default fund for investors who do not choose a fund for those investments to be directed into. Effective for those hired after September 5, the default fund is the lifecycle fund most appropriate for the person’s age, rather than the government securities G fund applying by default to those hired before that date since default investing started five years ago. Participants may change fund elections, or their investment levels, at any time.
|TSP||G Fund||F Fund||C Fund||S Fund||I Fund|