A cost-benefit analysis of a Military Thrift Savings plan
Publisher: Naval Postgraduate School; Available from National Technical Information Service
Published: 2000
Place of publication: Monterey, Calif; Springfield, Va
Language: eng
Number of pages: 108
Description: The transition from defined benefit to defined contribution retirement plans represents the most significant change in both the private sector and civil service employee retirement systems in the last twenty years. The Thrift Savings Plan (TSP), a tax-deferred, defined contribution plan for federal civilian employees, was established in 1986 as part of the Federal Employee Retirement System. This thesis discusses the costs and benefits of a TSP plan for the uniformed services. The objective of the research addresses the costs of a military TSP. Government studies, periodicals, and the Internet were examined to identify the strengths and weaknesses of the federal TSP. Next, a probabilistic spreadsheet model using Monte Carlo simulation was developed to forecast deferred tax revenue, which represents the most significant cost associated with a military TSP. An analysis of the results indicates that the simulations come within 2.6 percent of the initial Department of Defense's forecast. On October 30, 2000, the National Defense Authorization Act for fiscal year 2001 was enacted. This act included a military TSP called the Uniformed Services Payroll Savings Plan. It is recommended that future cost estimates use probabilistic spreadsheet modeling to provide more relevant information to the decision making process.
Notes: Thesis advisors, John E. Mutty, Shu S. Liao.

Thesis (M.S. in Management) Naval Postgraduate School, Dec. 2000.

Includes bibliographical references (p. 103-106)

Also available online.

System requirements: Adobe Acrobat reader.

dk/dk cc:9116 4/20/01