Gregory Long, who took the reins from Gary Amelio (See Report: TSP’s Amelio Steps Down for Union Job), asked for feedback at a board meeting on Tuesday from federal employees and agencies on possible changes to the plan.Long said he is weighing whether the extra administrative burden and other drawbacks of adding the new features will be worth their implementation.
According to Govexec.com, he said auto enrollment and a Roth IRA option would mean more work for payroll offices.
Auto enrollment would require the offices tonotify new employees of the policy at orientation and remind them that if they did not opt out within 60 days, they will automatically be enrolled. Once a 90-day window is up, agencies would need to start withholding 3% of basic pay for anyone who did not select a different deferral rate. They also would need to process refunds requested within 90 days of the first contribution.
The Roth IRA option would require employees choosing the option to begin making after-tax contributions, whereas they now make pre-tax contributions. This means agencies would need to find a way to track both pre- and after-tax contributions, since government regulations are different for each.
In an effort to mimic the provisions of the Pension Protection Act, the TSP announced in October 2006 that it would consider adopting automatic enrollment (See TSP Considers Switch to Auto Enrollment ).
Govexec.com also reported that Long indicated the TSP is considering changing the default fund for participants who make no investment choice from government securities to lifecycle funds, which have already proven to be popular among federal government employees (See TSP Lifecycle Funds a Big Hit ).