Categories: Fedweek

No New TSP Offerings Recommended

A consultant hired by the TSP has recommended against adding any new investment funds, concluding that the program’s offerings are about comparable to those of private sector 401(k) plans. The report likely lowers the chances of the TSP expanding beyond its current ten funds—three stock oriented, one bond fund, one government securities fund, and five lifecycle funds that mix investments in those funds. Legislation has been proposed to add a real estate investment trust fund, what could be the first of potentially many sector-oriented funds, should the TSP break away from its tradition of using only broad funds. The TSP always has been cool to the REIT idea, though. The consultant’s report took the same position, saying that investors already are exposed to smaller market sectors through the broad funds and expressing concern about the potential impact on a market segment from large shifts of money by TSP investors, whose account balances now stand at more than $200 billion.

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