Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • Consultants
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • SECURE 2.0
    • Special Reports
    • Washington
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2023
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • 2023 ESG Investing Conference
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2023 Defined Contribution East Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
Breadcrumb
  1. Home
  2. DEFINED CONTRIBUTION
February 04, 2019 12:00 AM

For largest U.S. retirement fund, the sky's the limit

Recent laws mean plan, up 8.9% for the year, will continue to add assets

Brian Croce
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Ravindra Deo pays special attention to the BRS and expanded withdrawal options.

    The nation's largest retirement plan is only getting larger.

    The Thrift Savings Plan, Washington, the retirement system for 5.4 million federal employees and members of the uniformed services, saw its assets climb 8.9% year-over-year to $578.8 billion as of Sept. 30. That's up from $375.1 billion in 2013 and $210.6 billion in 2008.

    Two recent pieces of legislation likely will ensure that growth continues.

    The National Defense Authorization Act for Fiscal Year 2016, which was passed in 2015, created a Blended Retirement System within the TSP for all uniformed services members who enter service on Jan. 1, 2018, or later. As of Jan. 23, the BRS has more than 408,000 participants, according to Kim Weaver, director of external affairs.

    Moreover, following the passage of the TSP Modernization Act in 2017, the Federal Retirement Thrift Investment Board, which administers the TSP, will implement what Ms. Weaver called its "additional withdrawals project" in September.

    The new withdrawal policies will give participants more options for how and when they can access money from their TSP accounts.

    While the bill was being discussed, it was estimated that $9 billion is transferred out of the TSP every year into higher-fee accounts when employees leave the federal government. This legislation aims to stem that.

    Established in 1986

    Established by Congress in 1986, the TSP, a defined contribution plan, offers participants five investment funds: four index funds managed by BlackRock Inc. and one fund made up of specially issued Treasury securities that is managed internally by the board.

    Ravindra Deo took over as the board's executive director in 2017 after initially serving as its chief investment officer.

    In a statement, Mr. Deo said that since starting his new role, he has focused on the BRS and expanding withdrawal options for all TSP participants, but those aren't the only changes coming to the TSP.

    By the end of 2019, the board will issue a request for proposal seeking two investment managers to manage a portion of each of the index funds, according to Ms. Weaver.

    "We're doing that, not because we have any concerns whatsoever with BlackRock, but it is more of a risk mitigation strategy," Ms. Weaver said. BlackRock is eligible to submit a bid once the RFP goes out and a decision will be reached sometime in 2020, she added.

    Once the managers are selected, a change will be made to the TSP's I Fund — one of the index funds that invests in international equities — to incorporate emerging markets, Ms. Weaver said. After looking at making the change to its investment lineup five years ago, the board now feels there's sufficient liquidity in emerging markets to move forward, Ms. Weaver added.

    Additionally, the new withdrawal policies that go into effect in September will give participants more options for how and when they can access money from their TSP accounts.

    For example, currently, participants receiving monthly payments can only change the amount of those payments during an open season between Oct. 1 and Dec. 15. The new policy will allow participants to change the amount and frequency (monthly, quarterly, annually) of their installment payments at any time throughout the year. Also, participants will soon be able to take partial withdrawals while receiving post-separation installment payments.

    "It's been an enormous lift for us," Ms. Weaver said of implementing the withdrawal policy.

    Blended offer

    One of the biggest changes to hit the TSP went into effect on Jan. 1, 2018.

    With the creation of the Blended Retirement System, new service members are automatically enrolled in the plan, while those with less than 12 years of service as of Jan. 1, 2018, were eligible to join the BRS. Previously, members of the uniformed services had access to a defined benefit plan but had to serve at least 20 years to receive the annuity.

    The payment amount was determined by their years of service and the average of their highest 36 months of basic pay.

    Only a small portion of service members reached the 20-year plateau and the Department of Defense was concerned its employees weren't properly saving for retirement, Ms. Weaver said. The BRS offers service members a defined contribution option as part of the TSP as well as a reduced pension should they hit the 20-year mark.

    And the number of separated participants — those who no longer work for the federal government but have elected to keep their money in the TSP — has also climbed in recent years to 1.46 million as of Sept. 30 from 1.11 million five years prior.

    "We're low-cost, we're efficient, I think they're comfortable with us because they deal with us throughout their entire careers and we care about them and we try and show that," Ms. Weaver said of the TSP's 5.4 million participants.

    Related Articles
    Largest funds top $11 trillion; assets up 6.4%
    Older companies, not upstarts, will take lead on innovative changes
    Fixed income still prized in asset mix of corporate funds
    Assets rise 10% on 3 booming quarters of gains in equities
    Largest funds top $11 trillion; assets up 6.4%
    How the data were compiled
    Recommended for You
    Calculator
    U.K. defined contribution sponsors resist ESG, private markets over fees
    401k_Jar_i.jpg
    Younger workers more likely to take 401(k) plan loans as their balances grow – study
    Colorado_Maine_Combo_i.jpg
    Nation's first retirement savings interstate pact opens pathway for more state auto-IRA programs
    Multiple Tailwinds Propel Private Credit
    Sponsored Content: Multiple Tailwinds Propel Private Credit
    Sponsored
    White Papers
    2023 Hot Topics in Retirement and Financial Wellbeing
    Bonds: Shaken, but Not Stirred
    Today’s rate cycle and US equities in target date portfolios
    A Study of Allocations to Alternative Investments by Institutions and Financial…
    Unlocking Hidden Value in Japan
    The Art of the Possible in Data Automation for Institutional Investors
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • Consultants
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • SECURE 2.0
      • Special Reports
      • Washington
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2023
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • 2023 ESG Investing Conference
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2023 Defined Contribution East Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars