TSP Cool to REIT Fund Idea

Thrift Savings Plan officials as expected have resisted a congressional proposal to add a real estate investment trust index fund to the program, arguing that adding such a fund would be relatively costly in terms of start-up and the needed educational effort, and that it would detract attention from the new lifecycle (L fund) options it plans to introduce in the coming months. In testimony before the House federal workforce subcommittee, TSP board chairman Andrew Saul and executive director Gary Amelio said that TSP investors already effectively have more than $1 billion invested in such trusts since stocks of those trusts are reflected in the common stock (C) and small capitalization stock (S) funds. They also raised concerns about offering only slices of the market versus the broad measures that the current TSP funds reflect. Despite that reluctance, members of the subcommittee of both parties indicated that they back the REIT fund idea and that they want to move the proposal forward.