GovernmentExecutive.com

The Thrift Savings Plan's equity funds showed positive returns in April for the first time since October 2007, reported Chief Investment Officer Tracey Ray on Monday. The Federal Retirement Thrift Investment Board also discussed congressional proposals to update the plan at its monthly meeting.

"Those people who stuck it out [and did not made withdrawals], they probably have come back to pretty much flat," FRTIB Chairman Andrew Saul said, suggesting that positive returns could begin to compensate for the market's decline earlier in the year.

In April, the G Fund rose 0.24 percent, the C Fund increased 4.94 percent, the S Fund climbed 5.30 percent, and the I Fund rose 5.55 percent. The F Fund fell 0.16 percent.

Trading in all funds dropped in March and April when the TSP sent out warning letters to frequent traders and finalized its new interfund restrictions, limiting participants to two transfers per month with unlimited transfers into the G Fund. Those limits took effect on May 1.

TSP Executive Director Gregory Long acknowledged that the transition to the new rules was not without dissent, but that it was proceeding well.

"There was some flack from the people who gave us flack before, but no new flack," he said.

TSP participation by members of the active-duty armed forces, which the board has made a priority, rose from 35.8 percent in March to 36.1 percent in April. Overall participation rose 0.1 percent.

In addition to discussing returns and trading, the board made its first foray into draft legislation released by House Oversight and Government Reform Committee Chairman Henry Waxman, D-Calif., ranking member Tom Davis, R-Va., and Federal Workforce Subcommittee Chairman Danny K. Davis, D-Ill.

"We regard the TSP as the premier retirement savings program in the nation," the lawmakers wrote in a May 16 letter. "But we also recognize that the law creating the TSP was enacted over 20 years ago and has been only infrequently updated."

That bill contains proposals, backed by the board, to automatically enroll new federal employees in the TSP when they start federal service, and to default their investments to the L Fund.

"Saving is so important," Saul said. "You can opt out; there are no handcuffs, but it's so important to force the issue."

Less clear is how the board will respond to proposals that it create a Roth IRA option for TSP participants, which Long said is popular among members of the military, and would allow participants to pay an extra fee to enroll in specialized funds like those that exclude investments in Sudan, focus on socially responsible investing or concentrate on certain types of companies.

Tom Trabucco, TSP director of external relations, said the board is reviewing the viability of a Roth option, and research should be completed by mid-2009.

But Saul said ongoing upgrades to the TSP's electronic infrastructure effectively foreclosed immediate implementation of a Roth IRA.

"In the next 12 to 18 months, we couldn't put it in even if we wanted to, because it's a whole different bookkeeping and accounting system," he said.

As part of those upgrades, the TSP is conducting a survey to learn more about how fund participants view its Web site.

Long said he expected calls for specialized funds to continue. "We are going to get requests forever from people who want their particular fund to be in the TSP," he said.

COMMENTS

• Dear GovExec.Com This story is specifically timed specially crafted propaganda. The whole thing angers government employees while delaying appropriate action, and allowing $100 Trillion Dollars to be stolen from the treasury. Guess who's going to pay for that? Phil Posted June 9, 2008 4:31 AM
• As Guy Quiggle said, requesting input on the appearance and options of the TSP web site when input on proposed TSP changes could be gathered does seem ignorant to the point of the ridiculous. While I am thankful the board has FINALLY asked this population ANYTHING, it would be nice if that something was actually significant. Perhaps questions like the following could have been asked: 1. How do you feel about a ROTH investment option? 2. How do you feel about multiple IFTs per month? 3. Would you be willing to pay a fee for fee-based services? Even if they didn’t like the answers, at least they would know what we think and want. Not asking only continues the feeling of their omnipotent egos. If they were concerned that a minority could tip the scales of any survey, multiple voting could be controlled via the log-in requirement (one each, folks!!) Once more, I would congratulate the TSP board on finally waking to the potential of this media; but implore them to have faith in folks who have volunteered to support our nation in peace and war. As I raised my son to believe; if a man or woman can vote, die for their country, raise a family, and sign contracts; they are officially grown up and entitled to determine their own fate within the boundaries of the law. Tip off Posted June 2, 2008 3:26 PM
• The day-traders' gripes about being strait-jacketed into two mutual fund swaps per period is a lot of hooey. Even mutual fund companies charge investors who flip funds on a short-term basis. And if you did the same with your privately-held stocks, you can bet that your brokerage house isn't going to let you buy and sell stocks for free, even though it's "your" money. RLW Posted May 23, 2008 11:05 AM