TSP contribution window opens?
- By Judi Hasson
- Nov 21, 2004
Note: This is a corrected version of this story. The original version published on Nov. 22, 2004 incorrectly described the bill's status in the House at the time.
Federal employees would have a greater opportunity to direct their investments in the Thrift Savings Plan under legislation being considered by the House.
Under the bill, approved earlier by the Senate, federal employees would be able to make changes at any time to the amount of the money they contribute from their paychecks toward their retirement account. Until now, savings could be changed only twice a year.
The legislation, sponsored by Rep. Tom Davis (R-Va.), permits participants to begin, alter or stop contributions to the TSP at any time, and changes would take effect "on the earliest date after the change is made."
Davis said the change allows 3.3 million TSP participants to adapt their retirement savings to meet changing circumstances in their 401(k)-style account. At the last minute, the provision failed to make it into the final piece of spending legislation that Congress approved this past weekend. However, it may see final passage before Congress adjourns for the year.
"Every day, federal employees across the nation and around the globe perform critical duties that keep this nation running smoothly," Davis said on the House floor. "Away from work, they experience all of life's events — births or deaths in the family, new homes, new jobs, salary adjustments and so on."
The measure would not change when matching contributions from agencies take effect. Employees must wait until the second open season following their start of federal service to receive matching contributions of up to 5 percent of their salary, meaning some employees receive agency matching funds after seven months, and some have to wait nearly a year. Davis said he intends to introduce legislation next year to change that.