US Gov't Employee Thrift Savings Plan Changes

[jazz4cash]

Curious to know what others think about the expansion of the TSP to optionally include an expansive selection of mutual funds. TSP expense ratios have been rising dramatically lately and I think they have a new contractor to co-manage the plan so I see this as a means to make the plan more profitable for the plan managers. It is very good that they have put some fees in place to shelter the participants that do not partake of the new mutual fund options. Overall the costs seem exorbitant to me.

Coming this June: the mutual fund window option
The mutual fund window is designed for TSP participants who are interested in greater investment flexibility. If your account meets certain eligibility criteria, you can choose to access a selection of more than 5,000 mutual funds. As with most mutual funds, this flexibility comes with fees:

$55 annual administrative fee to ensure that use of the mutual fund window does not indirectly increase TSP administrative expenses for TSP participants who choose not to use the mutual fund window
$95 annual maintenance fee
$28.75 per trade fee
Other fees and expenses specific to chosen mutual funds
If you choose to invest through the mutual fund window, your initial investment must be at least $10,000, and you may not invest more than 25% of your total account in the mutual fund window.

 

[Lakedog]

I really don't see the need for the changes allowing access to mutual funds. Those fees do appear excessive but won't matter to me since I primarily use the TSP for the G fund -- was nice to see the rate creep up to 2.5% this month.

I assume they are trying to keep money from leaving the TSP by way of transfer to IRAs at Fidelity, Schwab, Vanguard, etc. If I did not want access to the G fund, I would transfer my TSP balance to an IRA since the TSP no longer has the lowest fees and has never been very user friendly. I will likely transfer at some point in order to do QCDs (when I have to take RMDs).

 

[FLSUnFIRE]

Wow! I knew it was coming and don't care.. happy with my C,S, and I funds. That does look expensive but since it is self-funding they need to cover costs somewhere (and allow for a profit for the contractor) I am glad that they are structuring the costs so that us boring investors are no subsidizing the trades of those that want to play with their money. There may also be an intent to dissuade excessive trading by having a pretty high trading fee -in addition to limiting the amount allowed to be invested through the window.

 

[RE2Boys]

Don't care, very unlikely to ever use the mutual fund portal.

 

[Dreamer]

I am not planning on using it either. I am happy with where my funds are now.

 

[yakers]

Happy with the G Fund, no change for me.

 

[jazz4cash]

Ok, all these plugs for the G Fund make me wanna promote my favorite which is Lifestyle Income. I have no desire whatsoever to use the new options for DW’s TSP.

 

[zesty]

That would make it a lot easier to balance the tilts in my portfolio! But alas, no TSP for me.

 

[NomDeER]

I don't plan on using it, either. It helps that I have retirement funds outside of the TSP. So far, I haven't decided whether I will transfer any funds out of my TSP or how much. I do like having the G Fund.

 

[W2R]

I really don't see the need for the changes allowing access to mutual funds. Those fees do appear excessive but won't matter to me since I primarily use the TSP for the G fund -- was nice to see the rate creep up to 2.5% this month.

+1

Happy with the G Fund, no change for me.

+1

Mine is 100% G Fund and I like it that way. My stocks are in taxable (edited to add: in Vanguard).

 

[aboatguy]

I'd like to have different allocations for my ROTH and Pretax balances. However, I don't see a need for more investment options I'm happy with CSI and a little G

 

[FLSUnFIRE]

People here love the G fund but ~2% when inflation is ~8% doesn't excite me as a place to invest. Not bad for short term cash but the TSP isn't exactly convenient for easily available cash (especially for me at 47). Heck, at current inflation, buying non perishables early-to-need provides a better return than the G fund.

 

[mz44]

I really don't see the need for the changes allowing access to mutual funds. Those fees do appear excessive but won't matter to me since I primarily use the TSP for the G fund -- was nice to see the rate creep up to 2.5% this month.

I assume they are trying to keep money from leaving the TSP by way of transfer to IRAs at Fidelity, Schwab, Vanguard, etc. If I did not want access to the G fund, I would transfer my TSP balance to an IRA since the TSP no longer has the lowest fees and has never been very user friendly. I will likely transfer at some point in order to do QCDs (when I have to take RMDs).

I think Black rock is the new manager of the TSP, so they need to get their cut.

Personally I won't be using the window. Too expensive and I have other accounts to use.

 

[teej1985]

It will be interesting to see how many people actually use the fund window. I certainly won't be. At least the new administrator should upgrade some of the prior archaic processes.

 

[RE2Boys]

People here love the G fund but ~2% when inflation is ~8% doesn't excite me as a place to invest. Not bad for short term cash but the TSP isn't exactly convenient for easily available cash (especially for me at 47). Heck, at current inflation, buying non perishables early-to-need provides a better return than the G fund.

I use the G Fund (100%)as the bond component of my retirement savings as it can never go down in value regardless of what interest changes occur. And super safe though conservative investment. In my case (72 year old), also have a TIRA that is my equity component of my RMD eligible savings. the TIRA is 100% in VTI total stock market. Use the G for its strength, other investments to fill in other components of a total savings strategy. Looking ath the G funds history, it won't stay at 2%. See: https://www.tspfolio.com/tspgfundinterestrate#:~:text=The G Fund has earned,-year return is 1.57%.

I also have a fist full of I bonds that I've collected since 2001

 

[jazz4cash]

I think Black rock is the new manager of the TSP, so they need to get their cut.
.

I think Blackrock has managed TSP funds for a long time but they have added State Street to co-manage. Additionally they hired a new Fund administrator Accenture (which sounds like more cooks in the kitchen raising expenses).

https://federalnewsnetwork.com/tsp/...endor-to-take-the-plan-into-the-21st-century/

 

[Out of Steam]

Ok, all these plugs for the G Fund make me wanna promote my favorite which is Lifestyle Income.

TSP Lifecycle Income was too conservative in the past, only 20% stock. It is moving over ten years to a more realistic allocation of 30%. Even for my conservative inclination, that's still a little low.

 

[yakers]

TSP Lifecycle Income was too conservative in the past, only 20% stock. It is moving over ten years to a more realistic allocation of 30%. Even for my conservative inclination, that's still a little low.

It depends if this is ones only or major fund. I have other IRA and taxable assets so the G Fund is where I hold a major part of my fixed income. If the TSP were my only funds the G Fund would only be part of my holdings, not sure what I would hold but I would be near my 60/40AA.

 

[Out of Steam]

It depends if this is ones only or major fund. I have other IRA and taxable assets so the G Fund is where I hold a major part of my fixed income.

True, the TSP is my major fund, but not my only one. Important to look at the overall picture.

Because one of my goals for non-TSP savings is to fill in things not available from the TSP, anyone looking at my non-TSP account would find it unusual.

 

[Amethyst]

I see no reason to pay extra fees in TSP for the same MF purchases that I already do in my Vanguard IRAs. I hope expenses for the C, I, and S funds won't rise.

 

[GRR1865]

I know over the years there have been calls for access to additional funds. I thing this is there “fine if you want them, here they are” solution that doesn’t actually do anything.

 

[jazz4cash]

TSP Lifecycle Income was too conservative in the past, only 20% stock. It is moving over ten years to a more realistic allocation of 30%. Even for my conservative inclination, that's still a little low.

Too conservative for what? I was only plugging Lifecycle Income as an alternative to the G fund which some participants use instead of bonds but its more like a money market. I’m not aware of any adjustments to the allocation. Its currently 70% G fund, 6% F fund and ~24% stocks. G fund is great because it is zero risk but if you can tolerate a bit of risk Lifecycle I is worth considering.

 

[jazz4cash]

--- was nice to see the rate creep up to 2.5% this month.

.

Where do you find that rate of performance and what is the time period? I see .44% YTD thru March and 1.56 over 12 months.

 

[Lakedog]

Where do you find that rate of performance and what is the time period? I see .44% YTD thru March and 1.56 over 12 months.

2.5% is for the current month. When logged into your account, if you look at the loan rate it is the same as the current month G fund rate.

Also, this site shows the current G fund rate (and for the previous 12 months):

https://www.tspfolio.com/tspgfundinterestrate

 

[Out of Steam]

I hope expenses for the C, I, and S funds won't rise.

Their information claims that they will not transfer expenses for the mutual fund window to participants who do not use that feature.