Closing Open Seasons
House subcommittee takes a step toward getting rid of Thrift Savings Plan open seasons, which restrict participant changes to certain times of the year.
Following a public appeal from the Federal Retirement Thrift Investment Board, the House Government Reform Subcommittee on Civil Service and Agency Organization voted to eliminate open seasons in the Thrift Savings Plan.
"Today's bill contains a sensible change to the Thrift Savings Plan rules to eliminate open seasons," subcommittee Chairwoman Jo Ann Davis, R-Va., said Tuesday. "I am a firm believer that federal employees should be permitted to manage their own money. This provision allows employees to make changes in the TSP allotments throughout the year instead of just two specified open seasons."
The subcommittee approved the elimination as part of an amendment to The Federal Workforce Flexibility Act, which is designed to improve the government's ability to recruit and retain top-performing employees. The Senate already has passed the legislation but did not include any language to end the open seasons. The open season language must clear the full House and the House-Senate conference before it is signed into law.
If the measure is ultimately approved, TSP participants would be able to adjust their contribution throughout the year, and new employees would be allowed to join the 401(k)-style savings plan and begin receiving matching contributions from their agencies shortly after joining the federal workforce.
Now, plan members must wait until an open season to make these moves. The TSP holds two open seasons annually. The current one began on April 15 and is scheduled to run through June 30. The second one will be from Oct. 15 through Dec. 31.
In March, Thrift Board officials said the open season is an anachronism that was put in place at the plan's inception to provide "structure" and limit the administrative burden on the fledgling agency.
"They are no longer useful in a daily-valued plan environment," Thrift Board Chairman Andrew Saul said. "Indeed, they restrict the opportunity for employees to make contribution elections."
Outside experts agreed with Saul and TSP Executive Director Gary Amelio.
"Open seasons made sense when the FRTIB was a new agency just getting started, and lacked the administrative capability to quickly enroll participants and to implement investment elections on a real-time basis," said James Sauber, chairman of the Employee Thrift Advisory Council.
Davis said the personnel legislation will "in general make the federal government an employer of choice."
"My hope," she added, "is to see this bill move quickly through the House on its way to final passage."