The TSP, Skunks and Lovers

Most of us have had one of those “If-I-Knew-Then-What-I-Know-Now!” moments. Sometimes more than one, about more than one thing.

The futile wish for retroactive experience usually comes in encounters with the opposite sex, when a friend asks you to babysit his pet skunk for a month, or when you are reviewing your past investments for retirement – as in looking at your participation in and track record with your Thrift Savings Plan.

Many feds discover, too late, that they should have invested sooner, and invested more, in their Thrift Savings Plan. While the majority of federal and postal workers are investing something biweekly in the TSP, tens of thousands aren’t putting any of their own money into the federal 401(k) plan. And their 1 percent automatic match from the government goes into the super-safe treasury securities G-fund. The G-fund is safe but most financial planners say it’s not the place for all, or even most, investments. Especially for younger workers who have decades to go before they retire and start withdrawing from their TSP accounts.

To help them avoid the otherwise inevitable If-I-Knew-Then-What-I-Know-Now moment, the folks who run the TSP want Congress to authorize a new system that would automatically enroll workers for a 3 percent contribution to the TSP and make one of the Lifecycle (L-Funds) the default option if workers fail to pick a fund or funds of their own. Workers could opt out of either. They could reduce, increase or eliminate their own contributions. And they could leave the L-fund for any or all of the other funds. But the thinking is that once new investors saw what was happening to their accounts they would have a better understanding of the purpose of long-range investing.

Each Lifecycle Fund is actually a fund-of-funds with a target date. They are rebalanced regularly to maintain a mix many experts believe is appropriate for an individual’s age and target date for withdrawal. Under the TSP plan, which Congress must okay, new feds would be automatically enrolled, unless they opted out, at a 3 percent contribution rate (which entitles them to a matching tax-free contribution from the government) and in the L-fund whose target date (2020, 2030, 2040) is closest to their 65th birthday.

If it works as envisioned it would be a good thing for feds of the future. And it might get people, who have been in government awhile but haven’t paid much attention to the TSP, to thinking too.

GEICO’s Fab Five

Five top-notch working feds were honored last night with the 2007 GEICO public service awards. The winners (and family members) got an all-expense paid trip to D.C., a Nationals Game and VIP tour of the city and Mount Vernon. It was topped off last night with a special after-hours ceremony at the National Archives. The winners are: Joseph W. Hafner, Fort Bragg; Gloria Jean Prince, a fed based in Korea; Heen Wong, Hawaii; Jennie Allies, a physical rehab specialst in Montana; and Joseph R. Baker, a firefighter at Fort Campbell.

Nearly Useless Factoid

Most watch and clock ads in print feature timekeepers set to 10:08 or 10:10. After an exhaustive search of the internet (okay, four or five sites), it seems there are two reasons for this. One, the hands nicely frame the maker’s logo on the face, and two, it seems to make a smiley face. All the time is happy time.

To reach me: mcausey@federalnewsradio.com

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