Retirement Readiness NOW Financial Literacy Leadership Conference

October 2012

Ray Kirk

U.S. Office of Personnel Management

• Manage retirement system for Federal civilian employees

• Approximately 2.6 million active employees

• Approximately 2.5 million annuitants and survivors

• Pay $70 Billion annually in retirement benefits

• Thrift Savings Plan assets - $316 Billion

Financial Education Strategy

• Thrift Savings Plan Open Elections Act of 2004 required OPM develop and implement financial education strategy

• Educate Federal employees on the need for retirement savings and investment

• Provide information on how to plan for retirement and how to calculate the retirement investment needed to meet their retirement goals

Financial Education Model

• Based on a broad holistic approach• Shift focus from “near retirement” to

career-long process• Make informed retirement planning

decisions• Include employer-provided benefits and

broader financial education needs• Include changing needs as a person

moves through his or her career

Networking

Overall Health

Wealth Planning

Retirement Readiness NOW

Late-Career

Mid-Career

Early-Career

Readiness Based on Life Stage

• OPM• Capacity Builder• Coordinator• Catalyst

• Agencies• Develop Agency Plans• Delivery and Support to Employees

• Employees• Commitment to Learn• Take Action

Strategy Responsibilities

Progress

• Federal Ballpark E$timate• Average 20,000 unique visitors per

month• About half complete an estimate• Average 1 ½ scenarios

• Agency level plans

• Resource database

Challenge – TSP Participation Patterns

• Ariel/Aon Hewitt studies found African Americans and Hispanics participate in 401k Plans at lower levels than Whites

• OPM analyzed 2007 TSP participation data to compare minority vs. non-minority and female vs. male participation

• Federal minorities lagged behind Federal non-minorities on all measures

• Participate at a lower level (82.5% vs. 87.8%)

• Lower deferral rate (8.1% vs. 9.8%)

• Lower TSP balances ($54,430 vs. $81,152)

Challenge – TSP Participation Patterns

• Federal females under participate

• Slightly higher participation rate than males (86.4% vs. 85.8%)

• Lower deferral rate than males (8.8% vs. 9.7%)

• Greater G Fund participation (LT 5 yrs: 55.7% vs. 45.2%)(5-10 yrs: 36.9% vs. 31.8%)

• Lower TSP balances than males ($62,527 vs. $79,819)

Challenge – TSP Participation Patterns

Contact Information

For more information

Ray Kirk

202.606.0792

Raymond.Kirk@opm.gov