Six new lifecycle funds will be available July 1 to Thrift Savings Plan participants as a way to offer more options and help participants better target their individual time horizons.
Following a Federal Retirement Thrift Investment Board, Washington, decision in 2017, the $612 billion TSP is adding target dates in five-year increments to the suite of 10-year options currently available. Starting July 1, 10 L funds will be available, including six additions — L 2065, L 2060, L 2055, L 2045, L 2035 and L 2025 — and four existing funds — L Income, L 2030, L2040 and L 2050.
The L funds invest in an appropriate mix of the G, F, C, S and I funds, with allocations becoming more conservative as respective target retirement dates approach. The G Fund invests in government securities, F is a fixed-income index fund, C is a common stock index fund, S is a small-cap stock index fund and I is an international stock index fund. Each fund is managed by BlackRock except the G Fund, which is managed internally. The board is in the process of adding a second manager to pair with BlackRock so that each will manage a portion of the four index funds. An announcement on the second manager is expected this summer, said Kim Weaver, the board's director of external affairs, in an email.
The TSP is the retirement system for 5.9 million federal employees and members of the uniformed services. As of Dec. 31, TSP's L Fund had $136.5 billion in assets.
The L 2020 Fund will be retired and any participant assets will be rolled over into the L Income fund on June 30, said Sahr N. Nyandemoh, portfolio project manager with the FRTIB, during a remote board meeting Monday. Those participants will have the option to transfer out of the L Income Fund and into any other L funds on July 1, he added.
As of June 19, the L 2020 Fund had $21.4 billion in assets and the L Income Fund had $10.2 billion in assets, Ms. Weaver said.
