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Old 01-29-2016, 08:27 AM
 
Location: Central Massachusetts
4,800 posts, read 4,847,776 times
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New Retirement Proposal For American Workers Modeled After TSP


I have said this in other posts and I have been hoping for this to happen. I felt that the "myra" was the start of that and here is an idication of that. I get a newsletter from Government Exec and I do not know if the link will allow everyone to access it but I will quote the small article here for those who do not want to click on the link. There are embedded links that supplement the information I hope come with it.

Quote:

American workers could benefit more from a retirement program modeled on the Thrift Savings Plan, which is available to federal employees, rather than typical private sector 401(k) options, according to a new proposal from a Washington organization.

The Center for American Progress Action Fund, a sister group to the Center for American Progress, outlined on Thursday its idea for creating a National Savings Plan that workers without access to a retirement account would be automatically enrolled in, and which would adjust investment levels based on the person’s proximity to retirement, similar to how the TSP works. The TSP has approximately 4.7 million participants, including lawmakers and military service members.

TSP launched a program in August 2010 that automatically signs up all new civilian hires to allocate 3 percent of their basic pay to the G (government securities) fund, unless they choose to end their contributions or change the amount. In December 2014, President Obama signed into law the Smart Savings Act which changes the default enrollment fund in the Thrift Savings Plan for new hires from the G Fund to the lifecycle (L) funds, designed to move investors to less risky portfolios as they near retirement.

The architects of a National Savings Plan envision a similar structure for a new program available to workers outside of the federal government who don’t have access to a defined contribution plan at work. “The TSP offers simple, easy-to-understand, and sensible investment options and low fees,” said David Madland, senior fellow at CAP’s Action Fund, and senior adviser to CAP Action’s American Worker Project. The NSP “would automatically escalate its initial default salary deferral rate of 3 percent by 1 percentage point per year until reaching an initial cap of 6 percent,” according to the proposal. The analysis assumes an enrollee saves 12 percent of her annual income from age 30 to 67.

Sen. Jeff Merkley, D-Ore., on Thursday introduced legislation that creates a new system based on the CAP Action Fund idea to help workers who don’t have access to an employer-sponsored annuity plan save for retirement.

“This plan helps millions of American workers to save easily and automatically for retirement with tax benefits, rock-bottom fees and the same types of high-quality investment options already enjoyed by federal workers and members of Congress,” said Merkley.

The CAP Action Fund proposal suggested that the savings plan could be run either by the Federal Retirement Thrift Investment Board, which administers the TSP, “or a new sister organization modeled after it—the head of which would be a board of retirement professionals required by law to manage the plan solely in the interests of participants and their beneficiaries.”
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Old 01-29-2016, 01:32 PM
 
Location: Great State of Texas
86,093 posts, read 72,507,006 times
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I find it quite interesting that the financial backers of this plan are mostly unions which have retirement plans.
Makes you wonder why these groups are pushing for a national plan.

As always..it's follow the money.

https://www.americanprogressaction.o...ur-supporters/
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Old 01-29-2016, 03:28 PM
 
13,909 posts, read 7,405,593 times
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I think most people are really lousy at managing their financial affairs. I think we should have a portable privately run defined benefit pension system. Unlike Social Security which is redistributive, this one would be 100% tied to what the employee contributes and matched by their employer. It's basically what union and public sector workers have always gotten.
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Old 01-29-2016, 04:05 PM
 
Location: Ohio
19,910 posts, read 14,235,190 times
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Quote:
Originally Posted by GeoffD View Post
I think most people are really lousy at managing their financial affairs.
But, of course, they are!

I think most people are lousy as an NFL quarterback.

Not everyone can be a Wall Street Wizard™, just as not everyone can be an NFL quarterback.

All the reason to have more options available for workers and non-workers alike.

I just opposed to a "national savings plan."

Quote:
Originally Posted by GeoffD View Post
Unlike Social Security which is redistributive,...
Social Security is Insurance designed and intended to supplement either your employer-based retirement plan, or your own personal private investments/savings or both.

Social Security was never intended to be a retirement plan, or savings plan, or thrift plan, or defined pension benefit or anything. It is insurance plain and simple.
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Old 01-29-2016, 08:02 PM
 
Location: Eastern UP of Michigan
1,202 posts, read 682,631 times
Reputation: 1271
TSP has a couple of glitches in it that make it less convenient to withdraw from upon retirement but............. if the idea follows the same idea it is good concept.


Many people will scoff and say its socialism, the government whatever. That is their option, but I would have welcomed a better 401k plan than I had at either employer.


My present employers 401k, prior to their closing it down, had a very high cost basis. Virtually all their employer match/contributions were sucked up by expenses in crappy funds and administrative costs associated with it being such a small group.

Golfingdou-- as you now I like the myRA and TSP
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Old 01-29-2016, 10:52 PM
 
33,046 posts, read 22,057,675 times
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Quote:
Originally Posted by Mircea View Post
But, of course, they are!

I think most people are lousy as an NFL quarterback.

Not everyone can be a Wall Street Wizard™, just as not everyone can be an NFL quarterback.

All the reason to have more options available for workers and non-workers alike.

I just opposed to a "national savings plan."



Social Security is Insurance designed and intended to supplement either your employer-based retirement plan, or your own personal private investments/savings or both.

Social Security was never intended to be a retirement plan, or savings plan, or thrift plan, or defined pension benefit or anything. It is insurance plain and simple.

https://en.wikipedia.org/wiki/Paper_Lion
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Old 01-29-2016, 10:54 PM
 
33,046 posts, read 22,057,675 times
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They should just leave low-wage workers (under, say, $10 per hour). I'd be offended if government tried to "automatically enroll" me.
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Old 01-29-2016, 11:40 PM
 
2,038 posts, read 1,947,995 times
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Many 401k programs rip future retirees off with high expense ratio funds, at least the TSP has rock bottom fees which would help people keep more of their money out of the hands of Wall Street.
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Old 01-30-2016, 03:35 AM
 
1,789 posts, read 1,449,666 times
Reputation: 3680
This and myra are total redundant and uneeded. Anyone can open an IRA acount and save for retirement. I think this is just a step to setup another bureaucratic machine that will cost us lots of money and in the end after it gains some power it will start thinking it needs to make our decisions for us, and the push to force everyones IRA/401Ks into it will commence.
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Old 01-30-2016, 05:47 AM
 
Location: Central Massachusetts
4,800 posts, read 4,847,776 times
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Quote:
Originally Posted by justanokie View Post
This and myra are total redundant and uneeded. Anyone can open an IRA acount and save for retirement. I think this is just a step to setup another bureaucratic machine that will cost us lots of money and in the end after it gains some power it will start thinking it needs to make our decisions for us, and the push to force everyones IRA/401Ks into it will commence.
For what it is worth there are major differences with myra. First myra has a set maximum amount that can be in the account, Two myra has only one option.

You have heard a few here talk about the TSP. I have been in TSP almost from inception way back in the day. It has done many people well not going guns to the wall but giving a steady growth over the years. It has a low maintenance fee and because of that investors keep more of their investment.

So far I am quite astonished at some of the comments here about it. HappyTexan I am surprised that you are so cynical about it. The proposal does not mean they will get their hands on it. Even if they do and they are the ones that have been working TSP I can't say that they have done badly.

freemkt I would think that low income wage earners would be glad to get the chance to put at least a little something. Still I didn't see anything in the proposal that would mandate the contribution. All I saw was that they are proposing an agency fashioned after the TSP or even the TSP folks themselves running the program. Knowing that they could take or rather carry that fund over to another employer should be very attractive to a great many people. As I said earlier in this post MYRA is limited in investments and in the amount that can be in the account.

Truthfully I can see the reason for hesitation. I also understand the thoughts that here we go again making another agency that might end up costing us more. Well instead of just saying it is a good idea with a flaw. It would be better to work with the idea and repair the flaws.
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