H.R. 2514--Federal Retirement Thrift Savings Plan
T-GGD-89-35: Published: Jul 25, 1989. Publicly Released: Jul 25, 1989.
- Full Report:
GAO discussed H.R. 2514, a bill that would amend the Federal Employees' Retirement System Act of 1986 to: (1) authorize federal agencies to pay lost earnings to employees' thrift savings accounts caused by employing agencies' administrative errors; and (2) remove restrictions on certain plan participant investments. GAO found that: (1) about 120,000 federal employees covered by two retirement systems had thrift savings accounts; (2) the Federal Retirement Thrift Investment Board implemented regulations to accept agency payments representing lost interest due to administrative errors if the agency had the authority to spend funds for that purpose; (3) barring an explicit congressional mandate, there was no statutory basis for making such payments from appropriated funds even when the loss resulted directly from agency error; (4) investment restrictions were no longer necessary, since the federal budget did not include the Thrift Savings Fund and did not reflect its expenditures as budget outlays; (5) employees would benefit from restriction removal, since it would give employees full control over their investments; (6) although about 800,000 employees had thrift accounts because of the automatic 1-percent government contribution, less than half contributed more and received matching government contributions; and (7) factors causing low participation rates included the long month waiting period for new employees eligibility, and lack of employee orientation. GAO believes that agencies and the Board should target special meetings for those organizations with low participation rates.