PREFACE The FY2000 National Defense Authorization Act provided authority to

members of the armed services to participate in the federal thrift savings plan (TSP). The structure of the TSP for service members would be similar to the one that covers civil service personnel who participate in the Civil Service Retirement System. Members would be able to contribute up to 5 percent of their basic pay, but there would be no government contributions. The one difference from the TSP that covers civil service personnel is that military members would be able to contribute their special and incentive pays. The Federal Thrift Retirement Investment Board conducted a cost analysis and concluded that extending TSP participation to members of the part-time Ready Reserve would be wasteful and a bad idea because the cost of administering a large number of small accounts would be extraordinarily high. The Board recommended that part-time reservists be excluded from participation. The Office of the Secretary of Defense (Reserve Affairs and Compensation, jointly) requested that the analysts working as part of the 9th Quadrennial Review of Military Compensation (QRMC) study this issue. This briefing summarizes our analysis in response to that request. The analysis was conducted within a short time-frame and uses available data sources to estimate the number of part-time reserve participants and their annual expected account contribution. The briefing concludes by offering several policy options