White House Budget Plan Praises the TSP, Then Cuts It

Although President Trump’s fiscal 2019 budget request touts the popularity and success of the federal government’s 401(k)-style retirement savings program, policies in the fiscal roadmap would significantly reduce the Thrift Savings Plan’s effectiveness.

Among other proposals to change federal employee pay and benefits, the White House plans to study whether offering a retirement package consisting solely of the TSP—with no defined benefit program—would improve agencies’ ability to recruit young people.

“The TSP, one of the largest defined contribution plans in the world, is popular among federal employees, who appreciate having a pre-tax investment vehicle with low administrative costs and employer matching contributions,” officials wrote in the budget documents. “[The] TSP is a particularly attractive benefit to young, mobile workers not intending to make a career of federal service. The budget, therefore, funds a study to explore the potential benefits, including the recruitment benefit, of creating a defined-contribution only annuity benefit for new federal workers, and those desiring to transfer out of the existing hybrid system.”


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Alvin Hubbard


John F Merrick

I knew many in gov svc who wanted to leave after6 or more years but felt trapped by their investment of time in the retirement system (golden handcuffs) and wound up being disgruntled workers the rest of their careers. A beefed up TSP only that stays with you no matter where you go would be much more versatile.

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