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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