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Retirement Readiness NOW Financial Literacy Leadership Conference October 2012 Ray Kirk

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

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Retirement Readiness NOW Financial Literacy Leadership Conference October 2012 Ray Kirk

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  1. Retirement Readiness NOW Financial Literacy Leadership Conference October 2012 Ray Kirk

  2. 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

  3. 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

  4. 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

  5. Retirement Readiness NOW Networking Overall Health Wealth Planning

  6. Readiness Based on Life Stage Early-Career Mid-Career Late-Career

  7. Strategy Responsibilities • OPM • Capacity Builder • Coordinator • Catalyst • Agencies • Develop Agency Plans • Delivery and Support to Employees • Employees • Commitment to Learn • Take Action

  8. 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

  9. 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

  10. Challenge – TSP Participation Patterns • 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)

  11. 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)

  12. Contact Information For more information Ray Kirk 202.606.0792 Raymond.Kirk@opm.gov

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