Federal Thrift Savings Plan, Washington, could gain as much as $317 million over 10 years under a House proposal that would allow federal employees to invest the value of their unused annual leave into the $302 billion defined contribution plan.
The proposal, backed by Rep. Stephen Lynch, D-Mass., was included as an amendment to pension legislation approved Tuesday by the House Oversight and Government Reform Committee that calls for all current government workers to contribute 2.3% of pay toward the Federal Employees Retirement System, also in Washington, a $411.9 billion defined benefit plan for federal government workers. The current DB contribution is 0.8%. Also, new hires would contribute 4% of their salary.
Both proposals are now part of a transportation funding bill scheduled for a House vote next week.
Federal employees currently contribute to the TSP through payroll deductions, and lump-sum contributions are not allowed except when transferred from similar private-sector plans. Mr. Lynch's amendment would allow for unused leave payments, typically made when employees leave or retire, to be part of an employee's annual contribution, which is capped at $17,000 per year.
The additional $317 million is based on a Congressional Budget Office estimate.