The Federal Retirement Thrift Investment Board, Washington, announced an increase in the Thrift Savings Plan's automatic enrollment percentage — to 5% from 3% for new enrollees starting Oct. 1, 2020.
The change will not affect the contribution rates in place for those participants who were enrolled in the TSP prior to Oct. 1, 2020, according to a June 6 bulletin.
The $590.8 billion TSP is the retirement plan for 5.6 million federal employees and members of the uniformed services.
The board is making the change because a 5% contribution gets participants the full employer match, said Kim Weaver, director of external affairs, in an email. Currently, roughly 76% of participants are contributing 5% and receiving the full match, she added.
"Auto enrolling new participants at 5% will help them save for retirement in a more effective way earlier in their careers and they won't be leaving free money on the table," Ms. Weaver said.
Eligible participants' first 3% contribution is matched dollar-for-dollar by their agency or service; the next 2% is matched at 50 cents on the dollar.