Publisher's Perspective

Imagine you’re running a company—say, a mutual fund family—and your customers consistently tell you you’re lacking in one key area—say, customer service. What would you do?

Most likely you would turn your attention to that issue, right? But it seems you wouldn’t, if you’re the TSP. Because it hasn’t.

The TSP is valuable and cherished in many ways, as was highlighted once again recently by results of a participant survey. While the survey was taken last fall, the results were only recently published, under a contract the TSP issued to the Aon Hewitt consulting firm.

Here’s how the report put it: “Overall, federal employees and uniformed services participants are quite satisfied with the TSP and its competitiveness compared to similar private sector plans. Over four-fifths (87%) of respondents are satisfied. Ninety-five percent rate the TSP as competitive or better compared to other employers’ savings plans; further, well over half (58%) say the TSP is above or well above others, significantly higher than private sector ratings in this regard (28%).

“Similar to 2011 results, satisfaction is also strong for the TSP website, annual statements, and the ThriftLine, with over 80% indicating being satisfied or very satisfied with important characteristics of these channels,” it said. “Most respondents are satisfied with their ability to take a loan (69%), ways to withdraw money after separation (61%), and their ability to transfer money into the TSP from other retirement vehicles (57%).”

While such happiness would be cause for celebration in many settings, with the TSP those responses should be taken pretty much as a given. The results of a survey taken two years earlier were about the same.

Simply put, the TSP is a good deal—and its participants know it—in key areas such as low administrative fees, the employer match (for FERS investors) and overall trustworthiness in its holding of retirement savings. (The one exception in those areas might be the government’s repeated tapping of the G fund when the debt ceiling approaches, but that’s something out of the TSP’s control and there is no practical impact on investments in any case.)

What participants want, though, is for the TSP to be more than a safe mayonnaise jar hidden under the porch. Large majorities, around four-fifths in each case, want it to help them in deciding how to optimize their withdrawals, how much money they will need in retirement, and in general retirement income planning. Large majorities would like planning advice in the forms of forums, conferences, webinars and so on, and most would be willing to pay an additional fee for individualized assistance.

The survey showed that participants need such help. For example, over two-thirds said they do not have a specific financial goal for retirement, either in terms of a dollar amount or a percentage of their current income.

However, the TSP’s philosophy always has been, and continues to be, that it provides information but not advice. It will tell you what the options are, but when it comes to making a decision, you’re on your own.