Federal Reserve Building, Washington DC, USA. Credit:tanarch/Adobe Stock
As federal workers face mass terminations at various government agencies, under the Trump administration’s new DOGE unit run by Elon Musk, many have been participants in the federal Thrift Savings Plan, the defined contribution retirement system for federal workers that had a "record year" in 2024.
Now, the plan has posted a fact sheet on the TSP.gov website, Information for TSP Participant Leaving Federal Employment, letting them know that they “can stay with the TSP even if you leave your federal job” and to answer questions about managing their account.
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The tax-deferred TSP operates similarly to a 401(k) plan that allows federal employees and some members of the military to make contributions that are matched by government agencies. While former employees can no longer contribute to the plan, they can still transfer money into their account online, through the app or over the phone.
The Federal Retirement Thrift Investment Board, which administers the TSP, reported in 2024 that the plan had a "record year," with $986 billion in assets under management and approximately 7 million participants, according to the TSP governing board. Congress established TSP in the Federal Employees’ Retirement System Act of 1986.
Congress has long hoped to help more private sector Americans save for retirement similarly to the TSP, with proposed legislation called the Retirement Savings for Americans Act (RSAA), first introduced in Congress in 2023. The bill would “help low- and middle-income Americans build wealth and save for retirement,” said economist Kevin Hassett, who is the new Director of the White House National Economic Council.
Hassett co-wrote the Economic Innovation Group’s white paper, Inclusive Wealth-Building Initiative, which was the basis for the RSAA legislation that would give private sector workers access to a portable, tax-advantaged retirement plan.
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The RSAA “would likely change investor savings behavior and plan sponsor behavior," said Spencer Look, associate director of retirement studies at the Morningstar Center for Retirement & Policy Studies.
“For example, employers would be less likely to offer a plan because the proposal's federal match tax credit would effectively subsidize some portion of the employer's contributions. This impacts retirement-income adequacy because savings rates in defined contribution plans are a lot higher than the bill's 3% default rate. This is also true for lower-income workers.”
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
