For Immediate Release: Wednesday, July 15 2015
Washington, D.C.—The head of the National Treasury Employees Union (NTEU) urged Congress this week to reject proposals to weaken the federal Thrift Saving Plan’s (TSP) G Fund. Congress is reportedly considering tapping the personal retirement savings of federal employees, retirees and members of the military to offset the Highway bill.
Nearly 92 percent—4.3 million—of the 4.7 million TSP participants have money in the G fund, which has $193 billion in assets. Many retirees or those approaching the end of their federal careers have all of their retirement savings tied up in that one fund, NTEU National President Colleen M. Kelley said in a letter to U.S. senators.
One proposal floated by House Republicans would lower the G Fund rate of return to 0.02 percent from the current rate of 2.25 percent.
Another calls for lowering the rate by 10 percent. President Kelley underscored that the Federal Retirement Thrift Investment Board, which runs the TSP, opposes the proposals.
“Any change to the G Fund would send a signal to the federal employees, retirees, and military personnel that the Thrift Savings Plan is no longer free from manipulation,” she wrote.
The NTEU leader dismissed the notion that G Fund savings could shore up the Highway Trust Fund, which pays for road, bridge and transit projects nationwide. NTEU also joined a Employee Thrift Advisory Council (ETAC) letter expressing its opposition and is signing on to a Federal-Postal Coalition letter.
“A federal employee needs the TSP to achieve a retirement income that is enough to live on. How can Congress change the rules that employees and retirees have relied on for decades in responsibly planning for their retirement in order to fund a highway bill?” Kelley wrote, warning that tinkering with the G Fund “would be a serious mistake, one not easily undone.”
The NTEU president noted that federal employees have already sacrificed through pay freezes and two pension contribution increases on new hires.
“Federal employees have already contributed over $159 billion to deficit reduction. … Federal employee and military personnel benefits cannot continue to be used as the source to finance non-related government programs and operations,” she stated.
NTEU is the largest independent federal union, representing 150,000 employees in 31 agencies and departments.