The House’s Pre-Recess Gift to Federal Workers

It looks as though, prior to their summer vacation (read: fundraisers), our good friends in the U.S. House of Representatives have snuck in a subtle yet important piece of legislation for Federal employees. The House passed HR 1108 last week, which, while mostly about Tobacco regulation, contains changes to the Federal Thrift Savings Plan and makes it automatic for all Fed employees.

Under the bill, new Federal employees will be automatically enrolled into the TSP at a default rate of 3% of base pay unless they decide to opt-out or make changes. Read more here.

This being my maiden voyage onto the Ladder, I would like to stipulate that any time the words “automatic” and “enrollment” come in the same sentence as “retirement plan,” I will give my full-throated support. These are the types of subtle changes that have broad implications on how lower and middle income folks save. And lest we forget, the TSP’s participation extends to our men and women in uniform.