FRTIB Plans to Raise Automatic Enrollment in TSP to 5%

A proposed rule in the Federal Register would increase the automatic enrollment percentage in the TSP from 3% to 5% later this year.

The automatic enrollment percentage in the Thrift Savings Plan would go from 3% to 5% in the fall according to a proposed rule published in the Federal Register.

The rule was published by the Federal Retirement Thrift Investment Board and has an open comment period until April 20, 2020. The FRTIB had previously announced the change last year.

The proposal would increase the automatic enrollment rate to 5% for all TSP participants hired on or after October 1, 2020. Participants who are automatically enrolled in the TSP as of September 30, 2020 will not be affected by the automatic enrollment rate increase.

The 5% figure is key because that is the amount federal employees have to contribute to get the full agency matching portion. The FRTIB wrote in the proposed rule:

The TSP’s goal is to help federal employees and members of the uniformed services retire with dignity. As of December 31, 2018, 26 percent of TSP participants were contributing less than 5 percent to their accounts, which means they were not receiving the full amount of Agency/Service Matching Contributions they are entitled to.

Increasing the rate to 5 percent not only increases the amount that a participant saves from his or her basic pay, but also ensures that that participant receives the full amount of Agency/Service Matching Contributions he or she is entitled to, both of which will allow the participant, everything else being equal, to achieve significantly greater retirement savings.

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Ian Smith is one of the co-founders of He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.