[Congressional Record Volume 147, Number 161 (Tuesday, November 27, 2001)]
[Extensions of Remarks]
[Pages E2135-E2136]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  THRIFT SAVINGS PLAN ENHANCEMENT ACT

                                 ______
                                 

                       HON. CONSTANCE A. MORELLA

                              of maryland

                    in the house of representatives

                       Tuesday, November 27, 2001

  Mrs. MORELLA. Mr. Speaker, I rise today to introduce the Thrift 
Savings Plan Enhancement Act. This bill will amend title 5 to allow

[[Page E2136]]

all Thrift Savings Plan (TSP), participants who are over 50 to take 
advantage of ``catch-up'' contributions. It will also eliminate the 6-
to-12 month waiting period which currently governs eligibility for 
Agency Automatic (1%) and Agency Matching Contributions.
  The first section of the bill is necessary because recent changes in 
tax law (Public Law No. 107-16) permit 401(a) plans and others, like 
the TSP, to accept additional contributions from those age 50 and over, 
but this new law does not change the terms of any plan to provide the 
benefit, in fact, plans are not required to make the benefit available 
to participants. Instead, plans that choose to do so must take steps to 
amend their plan documents before such contributions may be accepted. 
Similarly, FERSA--the plan document for the TSP--must be amended before 
the TSP may accept additional contributions. Only Congress may amend 
FERSA. Thus, before the TSP can accept catch-up contributions in excess 
of the current limits, Congress must change the law. My legislation 
will make the requisite change in title 5 and allow all age 50 and over 
TSP participants to contribute more to their pension.
  The catch-up provision is particularly justifiable for the Federal 
plan since the TSP was not created by law until 1986. The ``catch-up'' 
contributions will allow workers to make-up for years when they weren't 
employed, didn't contribute to their plan or otherwise weren't able to 
save. It is also particularly beneficial for women who have returned to 
the workforce after taking time away to raise families.
  The second section of the bill would eliminate the confusing 
situation that now exists whereby employees may immediately contribute 
to the TSP but must wait between 6 and 12 months before any matching 
contributions are deposited. In 2000, Congress passed legislation that 
I sponsored which eliminated a similar waiting period for employee 
contributions. The change proposed in my new bill would make the timing 
of eligibility for employer contributions consistent with that 
governing employee contributions. This bill would eliminate all waiting 
periods for employer contributions to the TSP for new hires and 
rehires--employees who are hired or rehired would be received matching 
funds as soon as they join the TSP.
  It is essential that we in Congress do as much as we can to foster 
improved savings by enhancing private and public sector pension plans. 
America has one of the lowest national 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 must help 
encourage Americans to save more.
  Mr. Speaker, the Thrift Savings Plan Enhancement Act would be a very 
effective tool in encouraging Americans to save more and I urge my 
colleagues to support it.

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