May 17, 2012 (PLANSPONSOR.com) - U.S. Senator Daniel Akaka (D-Hawaii) introduced a bill to build on efforts to incorporate private sector best practices into the Thrift Savings Plan (TSP) for federal employees.
The Save More Tomorrow Act of 2012 builds on the Thrift Savings Plan Enhancement Act of 2009, which provided that new federal employees are automatically enrolled in the TSP unless they opt out. Employees are automatically enrolled at a 3% deferral rate. The Save More Tomorrow Act of 2012 would increase the contribution rate by 1% per year to at least 5%. The act promotes a goal Congress previously established of encouraging workers in the Federal Employees' Retirement System to save at least 5% of their pay in the TSP.
In a news release, Senator Akaka said: "The Save More Tomorrow Act will make it easier for new TSP participants to save for retirement. Pairing automatic enrollment with automatic escalation in 401(k) plans has proven effective in increasing private sector savings rates. Congress should incorporate this best practice into the TSP."