Senators push bill to eliminate TSP open seasons

A bipartisan pair of senators introduced legislation last week to eliminate open seasons at the Thrift Savings Plan and allow changes in investment choices at any time.

Under the current system at the 401(k)-style savings plan, participants can adjust their retirement contributions only during two periods a year. If new federal employees do not begin contributing immediately, they must wait for an open season to join and begin receiving matching contributions from their agencies. The current open season began on April 15 and will end on June 30. The second one will be from Oct. 15 through Dec. 31.

Sen. Susan Collins, R-Maine, the chairwoman of the Governmental Affairs Committee, introduced the Thrift Savings Plan Open Elections Act of 2004 on Friday, with the support of Sen. Daniel Akaka, D-Hawaii, and federal employees' interest groups. The Senate bill came a few days after a House subcommittee included similar language as part of an amendment to a federal workforce flexibility bill.

The Senate bill has been referred to Collins' panel. A Senate aide said differences between the two bills could be ironed out in a Governmental Affairs markup session in early June.

"Open seasons were practical during the early years when the Thrift Savings Plan was just getting started and lacked the administrative capability to quickly enroll participants and to implement investment elections on a real-time basis," Collins said. "With introduction of the automatic record-keeping system, however, the program has outgrown its existing framework."

Akaka also pushed for the inclusion of language in the bill requiring the TSP board to provide more financial information to plan participants.

The bill directs the board "to enhance the tools available to TSP participants so that they will be better able to understand, evaluate and compare financial products, services and opportunities," Akaka said. "The provisions in this bill will give federal employees the tools needed to empower them to make informed decisions regarding their retirement and financial security."

The legislation has received the support of the National Treasury Employees Union, the American Federal of Government Employees and the National Association of Retired Federal Employees.

Ending the open season "will foster expanded participant access and encourage greater participation in this important element of federal retirement compensation," said NARFE President Charles Fallis.

In March, Thrift Board officials appealed to Congress to end the open season restrictions.