The Thrift Savings Plan is taking steps to operate more efficiently, steps that should lead to lower fees for the plan's 3.3 million participants, officials said yesterday. On average, investors in 2006 will save an estimated $3.84 annually on the TSP's administrative costs.

That may sound like small change, but low fees are a key to TSP's popularity with government employees. Over the last decade, TSP has charged its participants much less in management and investment fees than major mutual funds charge in the private sector.

The average TSP participant this year will pay an estimated $30.25 in administrative fees. Participant cost will drop to $26.41 in 2006, according to projections released yesterday.

The projections also showed that the TSP, a 401(k)-type plan for civil service, postal and military personnel, continues to grow at an ever-faster rate as government employees put away money for their retirement. TSP's assets should swell to $141 billion by year's end, increasing to more than $200 billion in 2006, officials estimated.

The estimates were part of a presentation to the Federal Retirement Thrift Investment Board by its executive director, Gary A. Amelio, showing that the TSP will come in about $6 million under budget this year and will attempt to cut operating costs by about $11 million between fiscal 2005 and 2006.

The TSP plans to spend $100.9 million in fiscal 2004 and has drawn up budget proposals that would reduce spending to $94.9 million in fiscal 2005 and $84.2 million in 2006, Amelio said.

The projected decreases grow out of decisions to set up a new TSP database, shift software maintenance from the Agriculture Department's National Finance Center to a contractor and to lower costs for answering telephone calls and printing forms.

Next week, the TSP plans to move its database from New Orleans, home of the National Finance Center, to Reston, where TSP will operate a new mainframe computer. The $2 million computer will allow TSP representatives to find answers more quickly to questions about accounts from telephone callers, said Lawrence E. Stiffler, director of automated systems at TSP.

As soon as the mainframe is up and running, Stiffler said, TSP will begin a search for a disaster recovery site to permit quick turnarounds in the event that bad weather or some other catastrophe forced the Reston center to shut down. Last week, TSP participants were without access to their accounts for three days after the National Finance Center was closed because of the threat to New Orleans from Hurricane Ivan.

In fiscal 2005, the TSP plans to spend about $10 million for a major communications effort announcing "lifecycle funds," which are designed for participants who do not have the time or knowledge to manage their accounts.

Under the proposal, participants would be asked to predict when they will start withdrawing retirement savings. For employees far from retirement, the investment strategy would be heavily weighted toward stocks. As an employee's "draw down" date approached, the strategy would become more conservative, or tilted toward fixed-income investments.

E-Gov Scores

The first E-Government Citizen Satisfaction Summit, sponsored by the Treasury Department's Federal Consulting Group, will be held today at the George Washington University conference center.

At the forum, which is free to government employees, Larry Freed, president of ForeSee Results Inc., will discuss the latest e-government scores from the American Customer Satisfaction Index. The index, produced by the University of Michigan in partnership with three other organizations, measures the performance of companies and government agencies.

Overall, federal Web sites scored 71.2 out of a possible 100, slightly below the 74.4 average scored by private industry in a comparable index, Freed said.

But Freed said the index shows the government might be having trouble meeting the public's expectations. About a third of the 54 federal Web sites showed an increase in customer satisfaction scores, but 41 percent had lower scores this quarter than last, he said.

Freed said budget and staff constraints could be preventing some agencies from improving their Web sites, leading to lower scores. The presidential campaign also might be influencing scores by creating more negative perceptions about government services, he suggested.

E-mail: barrs@washpost.com