The Thrift Board recently announced that they will be selecting new managers for the F and I Funds. Back in November the Board issued a request for proposals (RFP) for a new manager for the F Fund and hopes to have a decision to announce in the near future.
The RFP for a new manager for the I Fund hasn’t yet been issued, but the Board plans on issuing it later this year. One thing the new I Fund manager will have to contend with is the change in the index that the I Fund tracks. Currently the I Fund tracks the MSCI EAFE index; an index that tracks only developed economies, primarily in Europe and the Far East. The Thrift Board recently decided to switch the index for the I Fund to the MSCI All World index; an index that pretty much covers the entire world with the exception of the United States. It is expected that the switch in indices will take place in early 2019.
L Fund changes are also on track. The Board will soon engage in its annual review of the allocation of each of the five L Funds. This yearly exercise usually results in a slight change of the asset mix in one or more of the L Funds. For example, a change in the L Income Fund a few years ago resulted in a shift of less than 1% between the three stock funds; the G and F Fund allocations were not affected.
The biggest change to the L Funds is still on track for implementation in 2020. In that year, the L Funds will switch to five year intervals, as opposed to the current ten years. The Board chose to make this change because most private sector “target date” funds have five year intervals, which allow for more precise targeting of the individuals investment mix.
BRS: The implementation of the new Blended Retirement System (BRS) for the uniformed services continues. The Thrift Board recently reminded uniformed service members that, if they opt in to BRS, they need to have a TSP account (sounds logical). Service members who already had a TSP account at the time they opted in to BRS will have the government matching contributions go into that account. For the many members who didn’t have a TSP account at the time of opting in, they will have to establish one.
TSP Modernization Act: The TSP still has a big change on its plate, the implementation of the TSP Modernization Act. They remain committed to having the changes in place prior to the two-year deadline that was imposed upon them by the legislation, signed last November.