TSP

fedweek.com: april is financial awareness month

John Grobe, Federal Career Experts

In a couple of months April will be upon us, with winter storms and polar vortexes in the rear view. It’ll be time for the proverbial April showers which will bring May flowers. April has been designated everything from “the cruelest month…” by poet T. S. Eliot in his poem The Waste Land, to National Humor Month by humorist Larry Wilde. Other subjects for which April serves as a “Month” are: Amateur Radio, Distracted Driving Awareness, Fresh Florida Tomatoes (or is it tomatos? Where’s Dan Quayle when I need him?), Canine Fitness, Jazz Appreciation, Straw Hats and Financial Awareness.

Financial awareness is important to us for our own good (e.g., we save for important events like retirement, our children’s education, etc.) and for the good of all the other employees in our agencies.

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Even OPM recognizes the importance of financial awareness, though they refer to it as “financial education”. Benefits Administration Letter 11-104 instructs agency human resource professionals on what would constitute an “Agency Retirement Financial Education Plan”. In 2015, a Government Accountability Office (GAO) forum suggested that employers include education in such areas as everyday budgeting and money management to their financial education menus.

Many federal agencies have been providing financial education to their employees in the form of pre-retirement seminars for many years. When I began working for the Department of Treasury in 1980, they had a long-standing requirement (reflected both in the agency’s manual and in the negotiated labor agreement) that a pre-retirement seminar must be offered annually to all employees who were within five years of retirement.

Such a requirement is a good starting point but, to be realistic, financial education needs to begin much earlier in an employee’s career. This is especially true with the FERS retirement system and the importance of the Thrift Savings Plan; it’s almost impossible to have a satisfying retirement without the money provided by the TSP, and, if you don’t start saving early, you’re at a disadvantage.

In a 2015 report, OPM stated that 97.5% of agencies that submitted a report to OPM on their financial education plans (39 of the 40 respondents) conducted pre-retirement seminars of some type for their employees. What if your agency does not provide financial literacy education? Contact your Human Resources office and inquire what types of education they do provide in this area. Suggest to them that April would be a great time to kick off a financial literacy initiative; there’s still plenty of time to plan.

OPM does suggest that any retirement educators (e.g., financial planners, estate planners, etc.) be prohibited from any sales related behavior, such as offering “free consultations’ or “retirement analysis”. OPM specifically states that outside speakers not be allowed to promote products or services, distribute any business cards or similar information, or claim that they are endorsed by the agency or the federal government in general.

All of you who are reading this article are to be commended for taking extra steps to improve your level of financial and retirement knowledge. Keep going and sign up for FEDweek’s TSP Investor’s Report, the Retirement and Financial Planning Report and, of course, the original FEDweek newsletter.

FERS Retirement Planning Guide 2020