The Federal Retirement Thrift Investment Board, Washington, is raising the default contribution rate for new federal workers and uniformed service members.
Under a final rule published Wednesday, federal workers who start on or after Oct. 1 will automatically contribute 5% to their Thrift Savings Plan accounts, up from 3%. Also, beginning Jan. 1, uniformed service members in the Blended Retirement System will do the same.
The National Defense Authorization Act for Fiscal Year 2016, which was passed in 2015, created a Blended Retirement System within the TSP for all uniformed services members who enter service Jan. 1, 2018, or later. The BRS offers service members a defined contribution option as part of the TSP, as well as a reduced pension should they serve at least 20 years.
The board, which administers the $663.3 billion Thrift Savings Plan, the retirement system for 5.9 million federal employees and members of the uniformed services, originally announced the increased contribution rate in June 2019 and proposed the rule in February.