Other Provisions Also Included

Further, the bill authorizes the TSP to create an investment "window" through which investors could direct some of their money to outside mutual funds, although at the cost of an additional fee. The Senate version that ultimately was adopted dropped House language favoring indexed, passively-managed funds, instead leaving the choice to the TSP governing board. Choosing a vendor and setting up such a system also would take many months at least, even if the board—which so far has been split on the idea—agrees to do so; the board in the past has been neutral on the idea. The language further would require that newly hired employees invest some of their own money, presumably 3 percent of salary, unless they opt out, a requirement that also would trigger rule-making and the need to change payroll systems. Another provision, added by the Senate, would allow surviving spouses to keep TSP accounts in place rather than be required to transfer the money into a similar account. Surviving spouses would have the same withdrawal options as other account holders but could not add to the account through investments or transfers. That change likely could be achieved more quickly since it is only a matter of the TSP’s own policies.