Thrift Savings Plan or TSP has gained a lot of popularity over the years. The primary benefit of the Thrift Savings Plan is its low cost. If you have been a fan of this plan that you may want to know that a new system is about to be considered that will be just like TSP. This system is proposed in The American Savings Act that is yet to be approved by the Congress.
What’s the new system that imitates TSP?
The new system proposed as a part of The American Savings Act will be created to support Americans who do not have the facility of getting to be a part of a retirement through their company. The TSP is only for federal employees so most of the Americans (over 70 million is the current estimate) cannot benefit from it. This new system will certainly impact all the investment organizations and can even be a strong competitor if it removes all its hurdles.
Why is the new system a bad idea?
This new system is not a good idea according to various reports. Why? It is so because the system aims to keep its costs as low as the TSP but it will not be possible simply due to the manpower and resources required to offer services to so many people. The key resources that may be a cause of worry for people who will be in charge of this system are the requirement of a huge computer system that will contain all the data of its members, a call center that will resolve their queries and address the customer issues and the costs of creating a website that can handle tons of data consistently without failing much.
Clearly, if the new system provides excellent support to millions of Americans the systems and human resources needed to do the same will inflate the fee that is to be paid by each member. If the fee is too high, it is unlikely that the new system would be as popular as the TSP. Most people agree that though the new system seems like a good idea, its implementation would be a real hitch. There have also been some assumptions that the chances of this bill taking the form of a law immediately are also very low at this time.