[Congressional Record Volume 143, Number 128 (Tuesday, September 23, 1997)]
[Extensions of Remarks]
[Page E1829]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 INTRODUCTION OF THE FEDERAL EMPLOYEE THRIFT SAVINGS PLAN ENHANCEMENT 
                                  ACT

                                 ______
                                 

                       HON. CONSTANCE A. MORELLA

                              of maryland

                    in the house of representatives

                      Tuesday, September 23, 1997

  Mrs. MORELLA. Mr. Speaker, today I am introducing legislation, the 
Federal Employee Thrift Savings Plan Enhancement Act of 1997, to allow 
Federal employees to increase their retirement savings. This 
legislation would bolster a critical component of Federal employee's 
retirement benefits--the Thrift Savings Plan--at no cost to taxpayers.
  The Thrift Savings Plan [TSP] is a retirement savings and investment 
plan for Federal and postal employees. It offers the same type of 
savings and tax benefits that many private corporations offer their 
employees under 401(k) plans. The TSP is critical for all Federal 
employees, but it is particularly important for those employees hired 
in the last decade who, under the Federal Employees Retirement System, 
receive smaller civil service benefits and need to invest more to 
enhance their retirement income.
  Last year, the Congress passed legislation I introduced that added 
two new funds to the Thrift Savings Plan. Before my bill was enacted, 
Federal employees were limited to three investment funds: The 
Government Securities Investment (G) Fund, the Common Stock Index 
Investment (C) Fund, and the Fixed Income Investment (F) Fund, where 82 
percent of the largest corporations offer four or more investment 
options in their defined contribution plans, and 50 percent offer five 
or more options. This legislation, however, gave Federal workers two 
new investment options under the Thrift Savings Plan: a Small 
Capitalization Stock Index Investment Fund and International Stock 
Index Fund. These funds offer a long-term investment strategy 
comparable to private pension plans.
  The Congress did not pass, however, the most important component of 
the bill: a provision to allow Federal employees to invest more of 
their own money in the TSP. The bill I am introducing today would allow 
employees to invest up to the IRS limit, $9,500, to the TSP without 
changing the Government contribution. Currently, FERS employees can put 
in up to 10 percent of their salary with a Government match up to 5 
percent, and CSRS employees can invest up to 5 percent of their salary. 
America has one of the lowest saving rates among industrialized 
countries. It has fallen steadily over the last 20 years, seriously 
jeopardizing Americans' security during what is supposed to be their 
golden years. Even though Americans recognize that they should be 
saving more, half of all family heads in their late fifties possess 
less than $10,000 in net financial assets. With the retirement of 
America's baby boomers approaching, Congress is beginning to consider 
how we can encourage Americans to save more. This legislation is a 
sensible way to encourage Federal employees to increase their savings 
for retirement.
  This legislation would also allow employees entering the Federal 
Government to ``roll-in'' money from a private sector 401(k) to the 
TSP, and it would allow those employees entering Federal Service to 
begin contributing to the TSP immediately, instead of waiting anywhere 
from 6 to 12 months to begin to save for their retirement. As under 
current law, the Government's contribution would not begin until the 
second open season.
  Federal employees face uncertainty caused by Federal downsizing, and 
they are increasingly insecure about their retirement. Please join me 
in supporting this legislation to enable Federal employees to bolster 
their retirement benefits.

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