TSP Expected to Double in Size in Coming Years
February 22, 2016
The Thrift Savings Plan will double in size over the next eight years, the board governing federal employees' retirement investment program estimated on Monday.
The Federal Retirement Thrift Investment Board is gearing up for a huge increase in participation in 2018, its leaders said at a monthly board meeting, when members of the military will be defaulted into TSP accounts for the first time. FRTIB has created a project team to prepare for the increase, and the team has been meeting weekly since default military enrollment was codified in the 2016 National Defense Authorization Act.
In addition to the new military enrollees, FRTIB reported an all-time high TSP participation rate among Federal Employees Retirement System workers in January of 88.9 percent. That figure outperformed the agency's expectations, said Renee Wilder Guerin, FRTIB's acting director for the participant operations and policy office, and puts the rate on track to surpass the goal of 90 percent participation in the near future. Those factors, in addition to the expected market growth, would double the total assets in the TSP -- currently at more than $450 billion -- by 2024.
"We're already the biggest plan in the world," FRTIB Executive Director Greg Long said. "We'll be going from massive to even more massive."
The increase in enrollees will present challenges for the agency, such as working with the Defense Department to educate military members on their options and beefing up call centers to be able to handle more volume. FRTIB is already falling behind on many of its goals, however.
The agency has set the goal of processing 95 percent of withdrawals in five days. In the fourth quarter of fiscal 2015, FRTIB successfully did so more than 98 percent of the time. In the first quarter of fiscal 2016, it completed the task within five days just 89 percent of the time. It also hoped to respond to written requests for information in the same timespan 90 percent of the time, but managed to do so with just 81 percent of requests.
While FRTIB set out to keep account information online for participants 100 percent of the time, it experienced two outages last quarter. The agency also sought to boost the rate of employees who leave federal service but retain their TSPs for at least one full year to 41 percent of separated workers; instead, just 33 percent continued their enrollment. Long said the data on that metric were not completely trustworthy.
Still, FRTIB Chairman Michael Kennedy voiced concern with the agency's performance last quarter, calling it "kind of glaring."
Long responded that he was "not concerned," saying growing pains are to be expected as the TSP updates its infrastructure and takes on more participants.
"There are going to be bumps in the night," Long said.
(Image via blackboard1965 / Shutterstock.com)
February 22, 2016
http://www.govexec.com/pay-benefits/2016/02/tsp-expected-double-size-coming-years/126106/
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