A new line item in the Trump administration’s fiscal 2020 budget request this year would establish a new retirement program for some federal workers, Government Executive has confirmed. Under the new program, those workers would be enrolled in the Thrift Savings Plan, which operates similarly to a private sector 401(k) retirement plan, but would not be eligible for a federal pension.
When the initial budget document was released Monday, one seemingly vague proposal raised eyebrows among federal employee groups and observers. Among a series of ideas that would cut federal employee retirement benefits was one provision that would increase spending: “Implement defined contribution system for term employees.”
A senior administration official confirmed to Government Executive Friday that the proposal would set up a new retirement system consisting solely of enrollment in the Thrift Savings Plan—a defined contribution plan—for all new hires through term appointments, positions with set contracts between one and four years, although in many cases those agreements can be extended or renewed.