Automatic Enrollment also Considered

The TSP also is considering requiring that newly hired employees invest some of their own money unless they opt out of the program. Under current policy, newly hired employees must opt in, and large numbers of them don’t. They continue to get the automatic 1 percent of salary contribution from their agencies that FERS employees get, but they miss out on matching contributions from investing their own money, plus tax-free earnings. Under the plan under consideration, newly hired employees would have 3 percent of their pay invested in the TSP automatically unless they chose a different amount. The TSP also is considering making the lifecycle funds the default investment fund for those who do not designate a fund, rather than the current default of the government securities (G) fund. Those changes also would require legislation.