Military to Study Matching Contributions as a Recruiting Aid

January 11, 2006 ( - Congress has directed the Army to set up a pilot program to study whether matching contributions to the federal Thrift Savings Plan (TSP) will boost recruiting efforts.

The Washington Post reports that, according to the fiscal 2006 defense bill that authorized the pilot, during the pilot program the Army will also try to steer soldiers, during their initial enlistment, toward “habits of financial responsibility.”

Congress opened the TSP, the 401(k)-type retirement program for civil service and postal employees, to the military three years ago, according to the Post. As of October, more than 480,000 active-duty and military reserve personnel were investing a portion of their pay in the TSP.

However, unlike many others covered by the TSP, military personnel do not receive a match contribution from their employer, the Department of Defense. The department has generally felt that bonuses were more effective in recruiting and retaining soldiers.

Congress now is allowing the military to use matching contributions as a perk that can be offered first-time recruits who agree to serve longer than two years.

The Defense Department will report back results of the pilot program to the House and Senate Armed Services committees in February 2007, providing data on the number of participants in the program and the level of contributions they made. The report will also include the views of officers, senior enlisted personnel and field recruiters on whether matching contributions enhanced recruiting, according to the legislation.

A recent survey of government workers, conducted by the Office of Personnel Management, showed that the TSP is one of the most popular benefits provided through federal employment (See Survey: Federal Workers Happy with Benefits ). For the armed forces, the Navy has the highest participation rate, at nearly 44% of active-duty personnel enrolled.