Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.
Benefits January 17, 2007
Federal Workers Support Thrift Plan Changes
January 17, 2007 (PLANSPONSOR.com) - Federal
employees generally favor changes to the Thrift Savings Plan
(TSP) that the board is considering requesting from the new
Congress, such as implementing automatic enrollment, adding a
Roth 401(k) feature, and increasing the number of investment
options.
Reported by Rebecca Moore
A survey conducted by Watson Wyatt Worldwide on behalf of the Federal Retirement Thrift Investment Board (FRTIB) found 66% of participants surveyed from the Federal Employee Retirement System (FERS), Civil Service Retirement System (CSRS) and Uniformed Services agreed automatic enrollment of federal employees into the TSP is a good idea. Additionally, 50% of respondents were in favor of making the Lifecycle (L) funds the default investment for participants who do not make investment elections, while only 26% were in favor of keeping the Governments Securities (G) Fund as the default investment.
In October, the board said it was considering requests to Congress for these changes as well as the addition of a Roth 401(k) feature, additional loan restrictions, and additional investment plan investment choices (See TSP Considers Switch to Auto Enrollment ). Sixty-eight percent of respondents favored the addition of the Roth feature, while less than half (46%) were in support of adding investment choices.
When asked about specific investment options for addition to the plan, the survey found participants were concerned about costs and said funds should only be added if their costs were about the same as the costs for current funds offered in the plan. Keeping costs the same, respondents were more in favor of adding a Treasury Inflation Protected Securities Fund (59%), followed by an International Bond Fund and Emerging Markets Bond Fund (both at 57%).
In addition to support for plan changes, the survey found federal workers to be generally satisfied with the TSP and its administration. There is a higher level of participation in the TSP than for private sector 401(k) plans in general. TSP participants rank it as a key element of their financial plan in retirement.
The complete survey report is here .