The TSP is making long-term plans that include an expectation that it will allow investments in funds other than the five basic funds and the five blended lifecycle funds it offers directly—the so-called investment window. That has been authorized since 2009 but sat on a back burner until recent months, when the TSP started a detailed study of how that might be carried out. That study is projected to be finished this summer, with details to be worked out including what types of fees would be charged for outside investing, whether there would be limits on how much of an account could be steered outside, standards for choosing what other funds would be made available, and more. Putting the new option in place would take a projected two years even if formally approved by the TSP’s board, however. Officials also said at a board meeting this week that they are exploring new withdrawal options, including for example an option to take multiple partial withdrawals after retirement. Currently, only one partial withdrawal is allowed—and even that only if the investor did not make an in-service withdrawal after age 59 1/2—and a second withdrawal decision must apply to the remainder of the account balance. The TSP is considering those changes and others as part of a broader long-range plan to improve its offerings and customer service.
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