FEDweek

Wait and See Attitude on

The TSPs executive director, Gregory Long, said at a recent House hearing that the TSP continues to have a wait and see attitude toward another potential change to the program, introducing a "Roth" feature, as was proposed in recently introduced legislation (HR-5797). In a Roth arrangement, money goes in after tax but comes out along with its earnings tax-free, a reversal of the TSP’s design. "While Roth accounts may be viewed as beneficial by a number of participants, the scope, impact and costs to participants for this project would be huge. As of now, I am not convinced that this feature would have broad appeal, and it is not clear how participants would react to the educational efforts needed for complex tax planning issues," Long said in his prepared remarks. He said the TSP is monitoring what private sector retirement savings plans are doing, will survey TSP participants, and will revisit the issue in mid-2009.