Kelley Letter To OPM Director James Urges Employee Communications On Use Of TSP Funds

Press Release March 28, 2002

Washington, D.C.—In a letter to the government’s chief personnel officer, the head of the nation’s largest independent union of federal workers sharply criticized the administration’s silence on its plan for “borrowing” the savings of federal workers and retirees “to tide it over” until the government receives additional revenues in April.

And President Colleen M. Kelley of the National Treasury Employees Union (NTEU) also criticized the reason for the “borrowing”—the failure of Congress to act on raising the national debt ceiling prior to taking a two-week recess. The present debt ceiling of $5.95 trillion likely will be reached by the end of March.

President Kelley wrote to Office of Personnel Management (OPM) Director Kay Coles James that “federal employees and retirees deserve to know what plans the administration has to borrow their hard-earned money without their permission.” With regard to action “to dip into retirement funds to cover impending shortfalls,” she wrote to Director James, “silence is unacceptable.”

It “appears exceedingly likely,” Kelley said, that the administration is planning to shift some $40 billion from the Thrift Savings Plan (TSP) funds that form a substantial portion of the retirement savings of federal employees.

As she did two weeks ago, when the issue first surfaced, the NTEU leader repeated her strong objection to such action, calling it an “outrage.” She also noted that the handling of the matter underscores that “communication between this administration’s top officials and front line workers has been minimal, at best.”

In her letter, President Kelley urged Director James, “as the person with the most direct authority for federal employee and retiree issues in this administration,” to ensure that workers and their representatives

are briefed on any plans to tap into retirement funds, and updated on any actions taken that affect those funds.

Under present law, any monies shifted from the TSP must be repaid in full, with interest. Still, Kelley said, “this money belong to federal employees and retirees. They deserve to know the circumstances and consequences of the administration’s intentions in this regard.”

NTEU is the largest independent federal union, representing some 150,000 employees in 25 agencies and departments.

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