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Should Employees be Automatically Enrolled in the TSP?

By John Grobe

Monday, October 1, 2007

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John Grobe is a retired federal employee with over 25 years of experience in federal human resources and President of Federal Career Experts, a training and consulting firm that specializes in federal employee retirement and career transition issues.

A couple of weeks ago, I asked readers to send me their thoughts on whether new employees should be automatically enrolled in the TSP.  The response was underwhelming. 

A total of 43 individuals sent me emails in response to my question.  Some answers were short and some were quite detailed.  The final tally had 37 of the respondents favoring automatic enrollment and only 6 opposing it.  The six made up in strength of their opinions what they did not have in absolute numbers.  The phrase "nanny state" was used a few times.

Among those who favored automatic enrollment, the L fund was the top choice of the fund to which the contributions should be allocated.  Respondents felt that the L fund allowed for an age appropriate investment.   G and C also got votes.  No one suggested either S or I.
 

© 2008 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

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Readers' Comments

  • If the idea of making TSP enrollment mandatory, there ought not be an option to opt out. The idea is to prepare government FERS employees for retirement so let's take the bull by the horn and do it right. Mandatory enrollment up the the government's five percent by adding one percent a year is rea...
    Posted: October 31, 2007 10:17 AM
  • Make the enrollment automatic at hire. The employee can sign a waiver and opt out. If he doesn't opt out then a percentage, (perhaps the amount that is matched,) automatically is deducted and added to a lifecycle fund tied to the age of the new employee. That leaves opportunity for anyone who h...
    Posted: October 30, 2007 11:16 AM
  • Yes. I believe mandatory TSP enrollment should be part of employees' enlightenment because most of them do not have the foresight to understand the implications of not investing. I support the "Ron-the-it-Guy" idea of making it mandatory participation up to the agency's matching percentage. Anoth...
    Posted: October 22, 2007 11:13 AM

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