Statements on Introduced Bills and Joint Resolutions - S. 2479

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Ms. COLLINS (for herself, Mr. AKAKA, Mr. FITZGERALD, Mr. LIEBERMAN, and Mr. VOINOVICH):

S. 2479. A bill to amend chapter 84 of title 5, United States Code, to provide for Federal employees to make elections to make, modify, and terminate contributions to the Thrift Savings Fund at any time, and for other purposes; to the Committee on Governmental Affairs.

Ms. COLLINS. Mr. President, today, I am pleased to be joined by my colleagues, Senators AKAKA, FITZGERALD, LIEBERMAN, and VOINOVICH in introducing the Thrift Savings Plan Open Elections Act of 2004. This legislation would provide Federal employees with maximum flexibility to tailor their investment decisions by eliminating the current restrictions on when employee contributions to the Thrift Savings Plan can begin or be modified.

Since its inception in 1987, the Thrift Savings Plan has provided Federal employees with the opportunity to participate in a retirement savings plan similar to the 401(k) plans offered by many private companies. The open seasons were created to encourage Federal employees to contribute money toward their retirement. 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. With the introduction of the automatic record-keeping system, however, the program has outgrown its existing framework.

Under current law, newly hired employees can sign up to contribute to the Thrift Savings Plan during an initial 60-day eligibility period. If an employee chooses not to make an election, he or she must wait until an open season to do so. Further, if an employee stops contributing to the Thrift Savings Plan outside of an open season, he or she must wait until the second open season after contributions stop before contributions can resume. These restrictions can unfairly penalize employees and discourage their participation. But allowing employees to initiate, modify, or terminate contributions to the TSP in any period, provided the amount does not exceed existing limits for contributions, the legislation ensures that Federal employees' investment decisions will no longer be restricted by the open season requirement.

In testimony before the Congress, Andrew Saul, Chairman of the Federal Retirement Thrift Investment Board, stated that the Board supports the elimination of the open season requirement because it would expand participant access and simplify the administration of the Thrift Savings Plan. Jim Sauber, Chairman of the Employee Thrift Advisory Council, testified in March 2004 that eliminating the TSP open season is perhaps the single best way to reach the 13 percent of employees in the Federal Employees Retirement System who still do not make contributions to the TSP.

In addition to the support by the Federal Retirement Thrift Investment Board and the Employee Thrift Advisory Council, the legislation is supported by the American Federation of Government Employees, the National Treasury Employees Union, the National Association of Retired Federal Employees, the Federal Managers Association, and the Senior Executives Association.

I urge my colleagues to support this important legislation.