GOP Senators Issue Demand that the TSP Delay Mutual Fund Window

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With just a week before the federal government’s 401(k)-style retirement savings program begins offering mutual funds to its participants, some lawmakers warned it could lead to federal employees investing in China.

A group of six Republican senators this week urged the federal government’s 401(k)-style retirement savings program to cancel implementation of a mutual fund window over fears that it could lead to federal workers unwittingly investing in Chinese corporations.

But there is just one issue with the request: it came as the Thrift Savings Plan had already begun the transition to a new service provider that would enable the mutual fund window, and just a week before the new system and its features, which also include a mobile app and other innovations, is scheduled to come online.

Beginning June 1, TSP participants will be able to invest a portion of their retirement savings in one of at least 5,000 mutual funds, including those that are focused on environmental, social and corporate governance issues. Most elements of the TSP’s website are currently in the midst of a blackout as the transition to a new recordkeeper occurs. Follow link to read more: https://bit.ly/3wZG06j

TSP’s Modernization Project Set to Launch June 1 After Transition Period

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After a year and a half working on a system modernization project, the agency that manages the Thrift Savings plan is just about ready for the program’s new features to go live.

Before participants can access new features on the TSP’s first-ever mobile app, the Federal Retirement Thrift Investment Board is gearing up for the second phase of a transition period starting May 26.

Over the next week, participants will not be able to make any changes to their current investments. That’s after the FRTIB took some initial functions offline starting May 16.

During the downtime, all TSP savings will remain invested and payroll contributions will continue.
After the transition period, Thrift Savings Plan participants will see a more secure, streamlined version of TSP, called Converge, starting on June 1.

When services go back online, participants should expect longer than normal wait times, Director of Participant Services Tee Ramos said at the board’s May 24 meeting.

“Given the excitement around the myriad of new services we are offering and the necessity to reestablish online access, we expect that there will be some delays during the first week,” Ramos said. “We’re doing everything we can in preparation to support participants, but expect much higher than normal volume the first few days beyond go-live and appreciate your patience.”

The update will give users modernized service options, including flexibility in how to access “My Account,” more ways to contact TSP representatives for help and smoother and more secure online transactions, the board wrote in an April 19 announcement. Follow link to read more. https://federalnewsnetwork.com/tsp/2022/05/tsps-modernization-project-set-to-launch-june-1-after-transition-period/

TSP to Implement the Long-Awaited Mutual Fund Window… But What are the Costs?

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The new TSP mutual fund window has been a long time coming. What are the costs associated with using it?

In a world of microwavable meals, lightning-fast computers, immediate access to numerous facts on your phone, and instant oatmeal, intensely embraced old-school bureaucracy can sure be frustrating.

For nearly 13 years, many federal employees (and advisors working closely with Feds) have been waiting for additional Thrift Savings Plan (TSP) investment options. This is what we might call being rushed along at the Speed of Bureaucracy.

Five index funds (although there could be some argument about the accuracy of calling the G Fund an index fund) have always seemed to be a bit thin in providing investment options. Even with the addition of pre-allocated blends of Lifecycle (L) funds (varying mixtures of the same five index funds), the choices were lean.

Timeline of the development of the TSP Mutual Fund Window (MFW)

2009 

An important date to the enhanced individualized structuring of federal retirement savings was June 22nd, 2009. The Thrift Savings Plan Enhancement Act of 2009 (the Act) 111-31 was signed into law. Specifically, the Federal Retirement Reform Act of 2009, Sec. 104, Authority to establish mutual fund window.

2015

Tic-Toc, Tic-Toc, SIX YEARS LATER, the TSP board approved the enhancement proposal.

2020

Eleven years after the aforementioned “Thrift Savings Plan Enhancement Act of 2009,” the FRTIB contracted with a “recordkeeper,” thus crossing a major hurdle in allowing for the detailed planning and implementation of the MFW.

2022

If you have been anxiously awaiting augmented investment alternatives, your wishes will be answered this coming June. Follow link to learn more: TSP To Implement The Long-Awaited Mutual Fund Window… But What Are The Costs? | FedSmith.com

FERS OPM Medical Retirement: Falling Through the Cracks

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Where did that phrase originate from? It often refers to small things slipping through without getting noticed because of their insignificance, whether because of size or lack of notoriety. Children who lack popularity are often thought to be in danger of falling through the cracks — of not being given their due attention; of being ignored; of failing to be noticed. The amazing thing is that we ever even notice it at all; for, by and large, most of us fall into the category of enforced anonymity — of being in danger of falling through the cracks. Whether you are the “star” of the class or the “appointed one” whose every move is ooh-ed and ahhh-ed — most everyone else is of the ordinary ilk, unnoticed, ignored or otherwise already having fallen through the cracks.

Federal employees who suffer from a medical condition fall into that category — of either having fallen through the cracks, or about to fall through the cracks. This is because the medical condition itself relegates the Federal and Postal employee into the category of the “outcast” — of those who have fallen through the cracks. Contact an attorney who specializes in Federal Disability Retirement Law, and see whether or not you might qualify to fall through the cracks of the U.S. Office of Personnel Management and land upon the other side where you can become a Federal Disability Retirement annuitant, where falling through the cracks will allow you to prioritize your life and focus upon the more important elements of a life of health and well-being
Citation:.Robert R. McGill/Lawyers.com

TSP G-Fund: Nag or Derby Winner?

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With inflation running at 8.3% year-to-year many federal-military Thrift Savings Plan investors are looking for a safer haven both for their current account balance and future purchases.

After a record long run, the stock market has been acting funny. A European war, worldwide pandemic and broken supply chain will do that. Both to stock markets and our mental wellness.

The price-at-the-pump, which the media and politicians love to track, has never been higher. And an 80-1 odds late starter won the Kentucky Derby. Go figure!

Each time there is an economic bump in the road, and this one is more like a sink hole, some people panic. And feel they need to do something. Anything, but something. And sometimes they are correct. Which is where the super-safe, never-has-a-bad-day G fund comes in. Of all the options in the TSP, it is the only one that doesn’t have a government guarantee that it will not lose money. While stock indexed funds like the C, S and I options have by far the best track record, they can and do tank — and currently have. So in that sense the G fund looks good to many with its recently increased 3% guaranteed return. The highest in decades. It fits the definition of a safe haven.

Many financial planners say that depends on what the definition of safe is. If it’s not losing money, bingo! But if it is also not keeping pace with inflation that also means that overtime your nest egg will shrink in value. A 3% return, over time, isn’t much comfort if your available funds shrink in value. Federal CSRS retirees get full inflation adjustments each January, like Social Security. But for FERS retirees, which includes most current workers, there is a diet COLA feature. Over times of high (3% or more) inflation that diet offset can reduce the buying power of retirees dramatically. So I asked Arthur Stein, a well-known Washington area financial planner for his thoughts on the G-fund. Most of his clients are active or retired feds. Several are TSP millionaires. And he’s a frequent guest on FNNs Your Turn radio show on Wednesdays. Here’s what he said:

There are two advantages to the G Fund: Zero volatility and all holdings are guaranteed by the government.

However, G (and F) Fund investors need to recognize that, historically, long-term investments in the G and F Funds lost purchasing power. G Fund annual returns have gradually declined since it was introduced in April of 1987. In 2021, the return was 1.4%, 84% lower than in 1988. The cost of living (inflation) more than doubled over this period. Follow link to read more: TSP’s G-fund: Nag or derby winner? | Federal News Network