The Senate Governmental Affairs Committee approved bills yesterday that would lift a key restriction on investing in the Thrift Savings Plan and would revamp operations at the U.S. Postal Service.
The proposed change in the TSP, which would allow government employees to join the plan at any time and to adjust how much they contribute, was approved on a voice vote and with little discussion.
The measure to overhaul the Postal Service was approved unanimously in hopes that the bipartisan support would help build momentum in Congress to enact postal reform this year. Sen. Susan Collins (R-Maine), a chief sponsor, called the bill "the most sweeping overhaul of the Postal Service in more than 30 years."
The committee, which Collins chairs, also took up several other measures, but delayed a vote on a bill that would broaden protections for federal employees against retaliation when they blow the whistle on waste, fraud and mismanagement inside the government. The committee will probably take up the measure in the summer, Collins indicated.
The TSP bill seeks to update the retirement savings program by eliminating a requirement for "open seasons," which were initially set up by Congress as a way to help government workers sort through their options in the 401(k)-type plan.
But the open seasons -- currently April 15 through June 30 and Oct. 15 through Dec. 31 -- are viewed as outdated by the TSP board, which has advocated their elimination. Currently, newly hired employees have 60 days to enroll in the TSP and if they fail to do so must wait until the next open season. Employees who stop their TSP contributions must wait until the second open season, which can mean a delay of close to a year.
Collins, when she introduced the bill, said the restrictions "can unfairly penalize employees and discourage their participation."
The TSP bill also would direct the Federal Retirement Thrift Investment Board and the Office of Personnel Management to better educate employees in "financial literacy" and to provide information that helps employees better prepare for retirement.
The committee spent most of its time on the postal bill. Sen. Joseph I. Lieberman (D-Conn.) offered an amendment, which was accepted, that would limit to four years certain discounts offered mailers who presort mail.
The bill would simplify the process for setting postal rates, relieve the Postal Service of the obligation to pay toward retirement benefits for the military service time of its retirees, and encourage injured postal workers, upon reaching 65, to switch to disability retirement rather than remain in the workers' compensation program.
A version of the postal bill has been approved by the House Government Reform Committee, and a counterpart to the TSP bill has cleared the House civil service subcommittee.
TSP Loan Reminder
Don't forget that the TSP will be changing its loan policy on July 1.
There are three big changes for loan applicants: a $50 fee for taking out a loan; a limit of one general purpose loan and one residential loan at the same time; and a 60-day waiting period to get a new loan of the same type after paying off a loan.
During a discussion on Federal Diary Live at www.washingtonpost.com yesterday, Gary A. Amelio, executive director of the thrift board, said the $50 fee is being imposed to ensure that loan applicants bear the cost of administering the program.
"An analysis of the plan revealed very high administrative costs attributed to the loan program," Amelio said. "Twenty percent of participants hold almost a million loans, which are valued at under 4 percent of plan assets. The cost of administering this program was being underwritten by 80 percent of the plan's participants who use the plan as it was intended, for retirement purposes. It is appropriate that they not bear such cost."
Postal carriers collected 70.9 million pounds of donated food for the 12th annual "Stamp Out Hunger" drive, an increase of more than 10 million pounds from last year, the National Association of Letter Carriers announced yesterday.
The union's Buffalo/Western New York Branch 3 collected 1.75 million pounds of non-perishable food -- the most of any NALC branch.
Diary associate Eric Yoder contributed to this report.