T wo bills -- and a billion dollars' worth of difference in them. That's the bottom line on efforts to revamp how the Thrift Savings Plan works.
Legislation in the House and Senate would change TSP rules, allowing federal employees and military personnel to start or change their TSP contributions at any time instead of just during the "open seasons" held twice each year.
But the House and Senate bills have one major difference. The House bill also would allow automatic contributions by agencies to begin as soon as an employee is deemed eligible to join the TSP and would start matching contributions as soon as employee began investing. Under current practices, which would be extended under the Senate bill, agency contributions do not begin until six months to a year after an employee has been hired.
The Congressional Budget Office, in analyzing the costs of the bills, found that the House version, primarily because of the earlier agency contributions, would cost $1.1 billion over 10 years. The Senate bill, which does not change agency contribution rules, would cost much less -- $30 million over the 10-year period.
The CBO assumed that changing the rules "would generally lead participants to increase their contributions slightly sooner than they would have otherwise."
The CBO also estimated that, because income taxes are deferred on TSP contributions, the House bill would reduce tax revenue more than the Senate bill.
The Senate approved its TSP bill, sponsored by Sens. Susan Collins (R-Maine), Daniel K. Akaka (D-Hawaii) and others, in mid-July. The House version of the TSP bill, sponsored by Rep. Thomas M. Davis III (R-Va.) and others, also was approved by the House Government Reform Committee that month.
Because of the lower price tag on the Senate bill, some congressional aides have predicted that the House may opt to take up the Senate version. But a House Government Reform Committee spokesman indicated that Davis wants to see the House bill passed.
"Congressman Davis's goal is the elimination of open seasons for TSP," spokesman Drew Crockett said. "Obviously, there are budgetary concerns with our legislation, but our hope is to continue working with the Senate to reach a bill that can pass out of both houses."
Time is a factor, to some extent. Congress plans to go on recess at week's end and not return until mid-November for a lame-duck session focused on completion of appropriations bills. The TSP bill could come up at that time, or it could be carried over to next year.
Current rules impose waiting periods on agency contributions for newly hired federal employees and permits employees to increase their contributions only during open seasons, which are held April 15 to June 30 and Oct. 15 to Dec. 31.
Employees who are covered by the Federal Employees Retirement System are eligible to receive contributions from their agency. (Employees in the old Civil Service Retirement System do not get any employer contribution.)
At this time, military personnel do not get government contributions, although the law allows the Pentagon to make them if it wishes. A Pentagon spokeswoman said the Defense Department would probably make contributions only if officials determined they were necessary to boost recruitment and retention.
On Tuesday, the House approved a "sense of Congress" provision that urges the executive branch to consider "improving the benefits and matching contributions provided under the Thrift Savings Plan to members of the armed forces." The provision was part of a bill, sponsored by Rep. Max Burns (R-Ga.), that would crack down on the sale of questionable insurance and investment products to military personnel.
New President at PMA
Thomas R. Burger is the new president and executive director of the Professional Managers Association, which serves as a voice for federal managers before Congress and in the executive branch.
Since 1994, Burger has been program manager for the office of employment tax at the Internal Revenue Service. He has 30 years of experience in headquarters and field activities and has worked as an IRS manager for 23 of those years.
Burger replaces Ray Woolner, who retired from federal service in September. Woolner had been president of the association since 1997.