Groups urge Congress to declare TSP off-limits

The 15 unions and organizations that make up the labor council that advises the Federal Retirement Thrift Investment Board are calling on Congress to keep its hands off the Thrift Savings Plan.

In a letter to House and Senate leadership, the members of the council whose members represent 4.9 million TSP account holders warned the lawmakers that proposals to make changes to the TSP, such as a proposal to change the rate of return on the conservative G Fund, signal to federal employees and retirees that their investments are subject to political tinkering.

"The issue is simple,” wrote ETAC Chairman Clifford Dailing. "Just the suggestion of a change to the TSP indicates to the employees we represent that the TSP can be manipulated by Congress that their funds could be used to pay for other programs.It indicates that the TSP is no longer a secure place to put their retirement money. Since 1987, participants have been told that the governing board, the Federal Retirement Thrift Investment Board, decides what happens with the TSP, and the board has a fiduciary duty to consider, first and foremost, what is best for is participants. When Congress considers changes to the TSP opposed by the TSP fiduciaries, employee confidence in the fund is shaken.”

While ETAC said it was not suggesting that Congress was not empowered to change the TSP, it noted that in fiscal 1989, Congress and the Office of Management and Budget agreed that the TSP should not be part of the budget.

Tony Reardon, national president of National Treasury Employees Union, one of the ETAC member groups, reiterated the council's position that Congress must reassure employees by declaring that "the TSP is off-limits as a source of revenue.”

"Federal employees and retirees have long been promised that Congress will not siphon money away from the TSP for other government programs,” Reardon said in a Sept. 9 statement. "Any talk that even hints at the possibility of that promise being broken sends an unwelcome message that the TSP is not a safe retirement option. Tapping the personal retirement savings of federal employees, retirees and members of the military to offset spending is simply unacceptable.”