Michael D. Kennedy, chairman of the Federal Retirement Thrift Investment Board, Washington, is stepping down effective June 30, he said in a letter of resignation Friday sent to President Donald Trump.
He will pursue "another opportunity," according to a statement, but a board spokeswoman could not provide more information.
The announcement comes on the heels of Mr. Trump's May 4 nomination of three people to the five-member board, which oversees the $612 billion Thrift Savings Plan, the retirement system for 5.9 million federal employees and members of the uniformed services.
Mr. Kennedy is one of the board members to be replaced by Mr. Trump's nominees, who each need to go through a Senate confirmation process.
In his resignation letter, Mr. Kennedy said to "facilitate a smooth transition," he's spoken to the three nominees — John M. Barger, Christopher Bancroft Burnham and Frank Dunlevy. "Our conversations were very productive, and I wish these new board members all the best in their important service to the Thrift Savings Plan's participants and beneficiaries."
The board will continue to have a quorum and be able to conduct any necessary business. Member David Jones will serve as acting chairman until new board members are confirmed by the Senate, the board said in a statement. Mr. Jones will also be replaced by a Mr. Trump nominee.
Mr. Trump and lawmakers on Capitol Hill have criticized the board in recent months for a 2017 decision to shift billions of dollars in retirement assets to an index fund that includes Chinese companies.
In 2017, the board decided to shift TSP's I Fund benchmark to the MSCI ACWI ex-U.S. Investible Market index from the MSCI EAFE index. The new index was made up of about 8% Chinese companies, as of Sept. 30, according to an Aon Hewitt Investment Consulting study presented to the board in October. Aon recommended the board switch to the MSCI ACWI ex-U.S. IMI index in 2017 and reiterated that recommendation last fall.
Despite mounting pressure, the board reaffirmed its decision in November, saying the move was in the best interest of participants.
But following two letters from Trump administration officials on May 11 urging it to reverse course, the board paused the planned I Fund shift, which was slated to begin June 1, and left the decision to the next board, despite uncertainty as to when the board seats will be filled.
In his letter, Mr. Kennedy said it's been an honor to serve as board chairman, adding that he's most proud of the board's efforts in leading improvements to the TSP's cybersecurity and infrastructure, and adding significant plan enhancements such as additional withdrawal options and the blended retirement program for members of the uniformed services.
"With its low cost structure, simplicity and singular focus on acting in the interest of the TSP's participants, the FRTIB serves as an example of effective federal governance and efficient operations," he said.
