H.R. 4193, the Smart Savings Act

H.R. 4193

Smart Savings Act

July 14, 2014 (113th Congress, 2nd Session)

Staff Contact

Floor Situation

On Monday, July 14, 2014, the House will consider H.R. 4193, the Smart Savings Act, under suspension of the rules.  H.R. 4193 was introduced on March 11, 2014 by Rep. Darrell Issa (R-CA) and was referred to the House Oversight and Government Reform Committee.  The bill was marked up on March 12, 2014 and was ordered reported by voice vote.[1]

[1] House Committee Report 113-507.

Bill Summary

H.R. 4193 changes the default investment fund for new Thrift Savings Plan (TSP) participants to an age-appropriate target date asset allocation investment fund.  For members of the Armed Services, H.R. 4193 sets the Government Securities Investment Fund as the default investment fund.  H.R. 4193 does not change the ability of an individual to elect to invest in another TSP fund instead.


“The TSP is a tax-deferred defined contribution plan available to federal workers, administered by the [Federal Retirement Thrift Investment Board (FRTIB)].  The TSP is the Nation’s largest pension program, with more than 4.6 million participants and assets of more than $400 billion.”[2] Participants can choose from a range of investment options,  “including 5 core funds: the Government Securities Investment Fund (G Fund), the Fixed Income Index Investment Fund (F Fund), the Common Stock Index Investment Fund (C Fund), the Small Cap Stock Index Investment Fund (S Fund), and the International Stock Index Investment Fund (I Fund).  Participants may also invest in the Lifecycle Funds (L Funds), which are tied to a target withdrawal date and invested exclusively in the G, F, C, S, and I Funds.”[3]  Employees covered by the Federal Employee Retirement System (FERS) receive contributions from their employer, including matching contributions up to a certain percent of their base pay.[4]

Legislation enacted in 2009 provided for auto-enrollment in TSP for new civilian employees, with funds going by default into the G Fund unless the individual designated otherwise.[5]  Yet, “enrolling new workers in an age-appropriate L Fund would allow their contributions to be allocated across equity and bond markets, providing the sort of age-appropriate asset diversification recommended by most retirement experts . . . .  According to the FRTIB Executive Director, had the L Funds been the default investment option since the beginning of automatic enrollment, participants would have achieved greater returns than by investing solely in the G Fund.  Lifecycle funds are increasingly popular among private sector defined contribution plans, and are often used by such plans as default investments.  On December 16, 2013, the FRTIB adopted a motion, without objection, directing its Executive Director to pursue legislation to make an age-appropriate L Fund the default option for TSP contributions by FERS participants.”[6]   H.R. 4193 implements the recommendation.

[2] Id. at 2.
[3] Id.
[4] Id.
[5] Id.
[6] Id.


According to CBO estimates, implementing H.R. 4193 would not affect direct spending and any impact on revenues would be negligible.

Additional Information

For questions or further information contact the GOP Conference at 5-5107.