New TSP Fund Bill Debated Again

The House federal workforce subcommittee has held another hearing on a bill, HR-1578, to add a real estate investment trust fund to the TSP, which if ultimately enacted could open the way for other sector-related funds in the program. Backers of the bill argue that the TSP compares poorly to 401(k) plans in the range of investment choices it offers and note that REITs have outperformed broader stock indexes in recent years. However, the TSP itself has been cool toward the idea, arguing that performance of REITs already is reflected in its broader indexes and that consideration of any new funds should wait for the results of a TSP-ordered study, not expected to be finished until late this year, of the program’s current and potential investment offerings. Sponsors are hoping to move the bill to passage this year but waiting for results of the study could make that difficult, if not impossible.