Rep. Darrell Issa wants to change the TSP default fund for new hires. (Drew Angerer / Getty Images)
New federal employees using the Thrift Savings Plan would be automatically enrolled in an “age-appropriate” retirement fund under a bill that Wednesday cleared the House Oversight and Government Reform Committe. .
Rep. Darrell Issa, R-Calif, sponsored the bill, called the Smart Savings Act. The bill would require new hires to choose the G Fund, rather than be enrolled into it by default. The G fund, comprised of government securities, is stable, while the L funds -- the default fund under the bill -- are designed to diversify retirement investments for greater earnings potential.
The G fund carries no risk of loss, according to Financial Planner Mike Miles. The G fund “is like cash that pays a high rate of interest,” he wrote in a Federal Times column Feb. 10. The proposed new default election, however, invests the employee’s contributions in a range of stocks and bonds, managed over time to produce declining risk and greater stability as the employee ages and nears retirement. Employees are always free to designate their own chosen allocations.
Other bills the committee passed Wednesday by voice vote:
■ The Whistleblower Pilot Extension Act would extend for three additional years a pilot program that allows federal whistleblower appeals to be made outside of the Federal Circuit.
■ The Government Reports Elimination Act would eliminate 170 executive agency reports to Congress that the Office of Management and Budget and House committees have been deemed unnecessary or duplicative.
■ The Federal Register Modernization Act would remove requirements to physically print the Federal Register and provide multiple copies of agency submissions to the Federal Register.
■ The Safe and Secure Federal Websites Act of 2013 would require certification for functionality and security of new agency websites that collect personally identifiable information.
■ Alaska Bypass Modernization Act of 2014 would revamp the Alaska bypass mail delivery program to increase efficiency and reduce the cost to the Postal Service.