Shows & Panels
- Accelerate and Streamline for Better Customer Service
- Ask the CIO
- The Big Data Dilemma
- Carrying On with Continuity of Operations
- Client Virtualization Solutions
- Data Protection in a Virtual World
- Expert Voices
- Federal Executive Forum
- Federal IT Challenge
- Federal Tech Talk
- Feds in the Cloud
- Health IT: A Policy Change Agent
- Improving Healthcare Outcomes through IT Policy
- IT Innovation in the New Era of Government
- Making Dollars And Sense Out of Data Center Consolidation
- Navigating the Private Cloud
- One Step to the Cloud, Two Steps Toward Innovation
- Path to FDCCI Compliance
- Take Command of Your Mobility Initiative
Shows & Panels
TSP notes: TSP Roth launch 'on time'
Monday - 1/23/2012, 6:42pm EST
"Roth continues to be on time and we will begin sending out materials ... along with the 2011 participant statements to all 4.5 million participants to let them know what to expect from Roth," he told In Depth with Francis Rose.
The Roth plan, which the board has been planning since 2009, will allow federal employees to invest already taxed income so it can be withdrawn without being taxed again. The original launch date was January 2012, which was delayed last year.
TSP officials said last year the plan was back on track to launch by the second quarter of this year.
Returns and participation
Participation in the TSP in 2011 continued to grow, Trabucco said. It took in $25 billion in new contributions last year, alone, he added.
However, the participation rate for FERS employees dropped from 85.2 percent to 84.6 percent. Trabucco said the decline can be explained by three factors: an increase in the number of separations, an increase in the number of employees who reached their contribution limits and "a little nick up" in the number of employees opting out of FERS — from 2.7 percent to 2.8 percent.
However, Trabucco said the increase in the number of employees contributing the maximum amount to the TSP in 2011 is attention-grabbing.
In 2010 there were 189,392 TSP participants who contributed the maximum amount allowed — $16,500. In 2011, 205,113 people contributed the maximum amount.
"People are continuing to push ... And they're looking to their future and their future retirement security, and that's a good thing," Trabucco said.
Federal employees' retirement rests on a three-legged stool: Social Security, their pension and the Thrift Savings Plan savings, Trabucco explained.
While many federal employees may think the current three-tiered structure has been around since time immemorial, it has a relatively short existence.
The Federal Employee Retirement System was only enacted in 1986 Trabucco said. Before that feds were covered by the Civil Service Retirement System, which meant they were not covered at all by Social Security.
CSRS was a "full retirement system," Trabucco said, which predated social security and "provided an adequate level of benefits for everyone."
However, he said, it did not include the "other insurance aspects" that Social Security provides, particularly for federal employees in lower grades.
"This switch actually broadened the benefits that people get from their employment with the federal government," he said.
Trabucco also discussed the retirement-savings calculator, operated by the Office of Personnel Management. It allows federal employees to estimate how much they should be saving. The calculator provides a "ballpark estimate" to provide employees with more concrete information and stop guessing.
More TSP news