New era for TSP "I" Fund?

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stan1
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Re: New era for TSP "I" Fund?

Post by stan1 » Mon Apr 15, 2019 8:42 pm

gtwhitegold wrote:
Mon Apr 15, 2019 4:14 pm
Tdubs wrote:
Sun Apr 14, 2019 3:34 pm

I just got asked today!
2 Factor Authentication is supposed to be available now. I can try to validate and report back later.
Got an email this morning saying 2FA was available (by email or text message). Tonight the TSP website is down for maintenance. I'll try again in a bit. Ten minutes later and I now have 2FA enabled (finally).

FedGuy
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Re: New era for TSP "I" Fund?

Post by FedGuy » Mon Apr 15, 2019 9:09 pm

I saw that my most recent statement said that 2FA would be available this spring. I received the email today telling me that it was available, and made a point of signing up as soon as I got home. I got the confirmation that I've enabled 2FA but haven't actually tested it yet.

I'm a little surprised that the method is that when you log in they'll send a code to either your email address or by text to your cell phone. I had been expecting a soft token by app or something similar. Still, I'll take it.

gtwhitegold
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Re: New era for TSP "I" Fund?

Post by gtwhitegold » Tue Apr 16, 2019 6:30 am

stan1 wrote:
Mon Apr 15, 2019 8:42 pm
gtwhitegold wrote:
Mon Apr 15, 2019 4:14 pm
Tdubs wrote:
Sun Apr 14, 2019 3:34 pm

I just got asked today!
2 Factor Authentication is supposed to be available now. I can try to validate and report back later.
Got an email this morning saying 2FA was available (by email or text message). Tonight the TSP website is down for maintenance. I'll try again in a bit. Ten minutes later and I now have 2FA enabled (finally).
I also was able to enable 2FA. I'm just waiting for them to enable fob based 2FA now.

outwash
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Re: New era for TSP "I" Fund?

Post by outwash » Wed Apr 17, 2019 3:06 pm

MnD wrote:
Wed Feb 13, 2019 9:51 am
gtwhitegold wrote:
Tue Feb 12, 2019 8:42 pm
It looks like the TSP may not award the contract until 2020 and will start the I Fund transition after that. Also of note, the TSP will be split between 2 different investment managers in the new contract.

https://www.pionline.com/article/201902 ... -the-limit
So the new index for the I fund is linked to the new award for the I fund and the RFP will be out be end of 2019. It seems that the TSP is now able to make meaningful changes (for a couple decades that even that seemed like a bridge too far) but can only do one thing at a time, with the withdrawals project consuming most/all of 2019.

Historically its been 3 to 6 months from the issuance of the RFP for a TSP fund manager to the award date. So figure March to June 2020 until the award for the new I fund, and then a timeline for the transition and transition index from EAFE to ACWI-IMI ex-US which won't happen overnight. End of 2020 perhaps until the TSP I fund is at or close to tracking ACWI-IMI ex-US.

That works for me because I have the ACWI-IMI ex-US replicated with a mix of I fund and other holdings in various accounts, and having 2020 and even early 2021 perhaps to unwind the EM and small cap international funds elsewhere will be a bit cleaner and easier to manage.
So does anybody know where we are in transaction from EAFE to ACWI-IMI ex-US. Has it not started? or we halfway there? or are we mostly done? Just curious as to whether there are emerging markets in my I fund right now and if it is still dominated by Japan?

Search the internet and there seems to be almost no up to date information on this.

Thanks

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Ketawa
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Re: New era for TSP "I" Fund?

Post by Ketawa » Wed Apr 17, 2019 3:46 pm

outwash wrote:
Wed Apr 17, 2019 3:06 pm
So does anybody know where we are in transaction from EAFE to ACWI-IMI ex-US. Has it not started? or we halfway there? or are we mostly done? Just curious as to whether there are emerging markets in my I fund right now and if it is still dominated by Japan?

Search the internet and there seems to be almost no up to date information on this.

Thanks
See this post earlier in the thread.

outwash
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Re: New era for TSP "I" Fund?

Post by outwash » Thu Apr 25, 2019 9:39 am

OK. September 2020 is still the best guess. It seems kind of odd that they announced much earlier dates before. Shouldn't they have known when they made the original plan.and.dates that this new management scenario would be slowing things down?

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LinusP
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Re: New era for TSP "I" Fund?

Post by LinusP » Tue May 14, 2019 2:24 pm

MnD wrote:
Wed Feb 13, 2019 10:13 am
Here we go - December 2018 FRTIB minutes.
15 month timeline for award of the new fund management contracts including the I fund (possibly sooner). So 15 months would be March 2020.
The transition to the I fund index should be concluded within 6 months of the award of the I fund contract. So sometime in 2nd half of 2020 until I fund is tracking MSCI ACWI ex-US IMI. If you take the 15 months + 6 months at face value I fund should be tracking new index by around September 2020.

https://www.frtib.gov/MeetingMinutes/2018/2018Dec.pdf
Mr. Mccaffrey provided an update on the use of external investment managers, which included plans to implement the Board's directive to hire two managers across each of the externally managed Funds. Mr. McCaffrey indicated his team will assemble and release a Request for Proposals for this requirement, and has drafted an approximately fifteen month schedule for the Agency to have the contracts awarded, though, the goal is to award them sooner if possible.

Lastly, Mr. Mccaffrey stated the multi-manager effort, as it is known, includes the I Fund. This means two things: 1) FRTIB will suspend previously
announced plans for the re-competition of the I Fund on a single manager basis because that effort will be bundled with the multi-manager initiative. 2) The second issue is that the planned transition of the I Fund benchmark from the MSCI EAFE Index to the MSCI ACWI ex-US IMI Index was intended to be assigned with the new I fund manager contract. That benchmark change will continue to await the assignment of a new primary manager for the I Fund. As a result, the benchmark transition should be concluded within 6 months of the new contract award, meaning the second half of 2020.
So if we have market-weighted positions in emerging markets and ex-US small caps, it would be best to plan to wind those positions down to $0 in 2020 (March through September, if current projects hold)? I've been using Approximating total international stock market in the wiki, but it looks like those numbers are getting pretty out of date.

MnD
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Re: New era for TSP "I" Fund?

Post by MnD » Tue May 14, 2019 6:11 pm

LinusP wrote:
Tue May 14, 2019 2:24 pm
MnD wrote:
Wed Feb 13, 2019 10:13 am
Here we go - December 2018 FRTIB minutes.
15 month timeline for award of the new fund management contracts including the I fund (possibly sooner). So 15 months would be March 2020.
The transition to the I fund index should be concluded within 6 months of the award of the I fund contract. So sometime in 2nd half of 2020 until I fund is tracking MSCI ACWI ex-US IMI. If you take the 15 months + 6 months at face value I fund should be tracking new index by around September 2020.

https://www.frtib.gov/MeetingMinutes/2018/2018Dec.pdf
Mr. Mccaffrey provided an update on the use of external investment managers, which included plans to implement the Board's directive to hire two managers across each of the externally managed Funds. Mr. McCaffrey indicated his team will assemble and release a Request for Proposals for this requirement, and has drafted an approximately fifteen month schedule for the Agency to have the contracts awarded, though, the goal is to award them sooner if possible.

Lastly, Mr. Mccaffrey stated the multi-manager effort, as it is known, includes the I Fund. This means two things: 1) FRTIB will suspend previously
announced plans for the re-competition of the I Fund on a single manager basis because that effort will be bundled with the multi-manager initiative. 2) The second issue is that the planned transition of the I Fund benchmark from the MSCI EAFE Index to the MSCI ACWI ex-US IMI Index was intended to be assigned with the new I fund manager contract. That benchmark change will continue to await the assignment of a new primary manager for the I Fund. As a result, the benchmark transition should be concluded within 6 months of the new contract award, meaning the second half of 2020.
So if we have market-weighted positions in emerging markets and ex-US small caps, it would be best to plan to wind those positions down to $0 in 2020 (March through September, if current projects hold)? I've been using Approximating total international stock market in the wiki, but it looks like those numbers are getting pretty out of date.
Yes, given the info we have to date that sounds like a plan if you can unwind EM and small cap ex-US without tax consequences.
I have about half of those positions in taxable so my plan is to spend from those when spending from taxable (am retired and withdrawing), do not reinvest their dividends, and I may end up purchasing large cap non-emerging international in other accounts (like SCHF) to end up with an overall total international position outside of TSP when TSP moved to a total international. Not ideal, but unfortunately unwinding all my EM and ex-US small cap in 6 months would be quite a tax wallop. :annoyed

pdavi21
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Re: New era for TSP "I" Fund?

Post by pdavi21 » Wed May 15, 2019 5:57 pm

MnD wrote:
Tue May 14, 2019 6:11 pm
Yes, given the info we have to date that sounds like a plan if you can unwind EM and small cap ex-US without tax consequences.
I have about half of those positions in taxable so my plan is to spend from those when spending from taxable (am retired and withdrawing), do not reinvest their dividends, and I may end up purchasing large cap non-emerging international in other accounts (like SCHF) to end up with an overall total international position outside of TSP when TSP moved to a total international. Not ideal, but unfortunately unwinding all my EM and ex-US small cap in 6 months would be quite a tax wallop. :annoyed
Maybe you could roll funds out of TSP to an IRA and buy a Large Cap Developed Market Fund.
"We spend a great deal of time studying history, which, let's face it, is mostly the history of stupidity." -Stephen Hawking

MnD
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Re: New era for TSP "I" Fund?

Post by MnD » Thu May 16, 2019 8:13 am

pdavi21 wrote:
Wed May 15, 2019 5:57 pm
MnD wrote:
Tue May 14, 2019 6:11 pm
Yes, given the info we have to date that sounds like a plan if you can unwind EM and small cap ex-US without tax consequences.
I have about half of those positions in taxable so my plan is to spend from those when spending from taxable (am retired and withdrawing), do not reinvest their dividends, and I may end up purchasing large cap non-emerging international in other accounts (like SCHF) to end up with an overall total international position outside of TSP when TSP moved to a total international. Not ideal, but unfortunately unwinding all my EM and ex-US small cap in 6 months would be quite a tax wallop. :annoyed
Maybe you could roll funds out of TSP to an IRA and buy a Large Cap Developed Market Fund.
I have enough in IRA's now to maintain a global market cap position overall by selling EM and small cap ex-US in those accounts and buying ex-US developed if needed when the TSP makes the change. So no need for a roll-out in my case. If someone had just TSP and just taxable stuffed with EM and small cap ex-US with cap gains, then what you suggested might certainly be warranted.

It will just take quite a while to unwind the EM and small cap in taxable by targeting planned SWR's to those funds. Or I might live with a modest overall tilt on just the ex-US side to small cap and EM for X years. No big deal either way.

gtwhitegold
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Re: New era for TSP "I" Fund?

Post by gtwhitegold » Thu May 23, 2019 7:40 pm

MnD wrote:
Thu May 16, 2019 8:13 am
pdavi21 wrote:
Wed May 15, 2019 5:57 pm
MnD wrote:
Tue May 14, 2019 6:11 pm
Yes, given the info we have to date that sounds like a plan if you can unwind EM and small cap ex-US without tax consequences.
I have about half of those positions in taxable so my plan is to spend from those when spending from taxable (am retired and withdrawing), do not reinvest their dividends, and I may end up purchasing large cap non-emerging international in other accounts (like SCHF) to end up with an overall total international position outside of TSP when TSP moved to a total international. Not ideal, but unfortunately unwinding all my EM and ex-US small cap in 6 months would be quite a tax wallop. :annoyed
Maybe you could roll funds out of TSP to an IRA and buy a Large Cap Developed Market Fund.
I have enough in IRA's now to maintain a global market cap position overall by selling EM and small cap ex-US in those accounts and buying ex-US developed if needed when the TSP makes the change. So no need for a roll-out in my case. If someone had just TSP and just taxable stuffed with EM and small cap ex-US with cap gains, then what you suggested might certainly be warranted.

It will just take quite a while to unwind the EM and small cap in taxable by targeting planned SWR's to those funds. Or I might live with a modest overall tilt on just the ex-US side to small cap and EM for X years. No big deal either way.
I have the exact opposite problem. I'm trying to overweight Emerging Markets and International Small Caps, but I too much in the TSP to balance it out in my IRAs now, so the change is definitely welcomed by me. It should also be welcomed by almost anyone who is primarily invested in the TSP.

Iorek
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Re: New era for TSP "I" Fund?

Post by Iorek » Mon Oct 28, 2019 7:24 am

NY Times has an article saying that shift will occur in mid-2020 (although I would hesitate to rely on that info, as it could easily be the start or end date of an extended transition or otherwise garbled).

More interesting is a bipartisan group of Senators have recently asked TSP to reverse the change on the ground it will lead to greater investment in Chinese companies.

stan1
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Re: New era for TSP "I" Fund?

Post by stan1 » Mon Oct 28, 2019 7:32 am

Iorek wrote:
Mon Oct 28, 2019 7:24 am
More interesting is a bipartisan group of Senators have recently asked TSP to reverse the change on the ground it will lead to greater investment in Chinese companies.
Yes, the Thrift Board had to have considered this as a risk when they decided to change the index. They have been able to stave off Congressional special interests in the past (such as adding sector funds to benefit industry groups like real estate). We'll just have to wait and see what happens.

Hypothetically If US were to go to war with any country even let's say Germany or Japan in 30 years time there likely would be legislation to disinvest from that country and TSP would have to find (or have created) an index that excludes that country.

MnD
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Re: New era for TSP "I" Fund?

Post by MnD » Mon Oct 28, 2019 9:36 am

When the I fund was on-track for rollout in 2001 there was vocal criticism and calls from congress to not establish the fund.
Main criticism was that it was "un-american" for federal workers to be able to invest outside the US thru the govt retirement savings system.
I'm global market cap overall thanks to small cap ex-US and EM funds outside the TSP and will simply wait until the I fund composition actually starts changing before making any offsetting changes.

stan1
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Re: New era for TSP "I" Fund?

Post by stan1 » Tue Oct 29, 2019 8:21 pm

Here's an article about the meeting on Monday.

https://www.govexec.com/pay-benefits/20 ... nd/160943/

Summary? Indignation from the consultants, shoulder shrugs and hail mary's from the board members (EM ex China???), and they will discuss again next month. Beer or popcorn?

junior
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Re: New era for TSP "I" Fund?

Post by junior » Wed Oct 30, 2019 11:19 am

stan1 wrote:
Tue Oct 29, 2019 8:21 pm
Here's an article about the meeting on Monday.

https://www.govexec.com/pay-benefits/20 ... nd/160943/

Summary? Indignation from the consultants, shoulder shrugs and hail mary's from the board members (EM ex China???), and they will discuss again next month. Beer or popcorn?
I was under the impression that Emerging Markets were fairly dubious investments because there is scamming going on by managers of emerging market countries in order to grift foreign investors. I personally would just as well prefer they do not include Emerging Markets, but this quote from that article gives me pause
"Aon Hewitt Partner Bill Ryan said that in fact, even taking into account issues regarding Chinese financial transparency, the returns for the new index outperform the existing index, both in strong global markets and weak ones."
I guess that's the consensus here, that we'd be better off overall even if we let foreign companies in emerging markets grift us a little?

02nz
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Re: New era for TSP "I" Fund?

Post by 02nz » Wed Oct 30, 2019 11:41 am

I don’t see why it’s any business of politicians how federal employees invest their own money, of course within rules that apply to everyone else.

RanchHand
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Re: New era for TSP "I" Fund?

Post by RanchHand » Tue Nov 12, 2019 2:32 pm

02nz wrote:
Wed Oct 30, 2019 11:41 am
I don’t see why it’s any business of politicians how federal employees invest their own money, of course within rules that apply to everyone else.
Some federal employees have a lot of rules and restrictions that don't apply to everyone else.

02nz
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Re: New era for TSP "I" Fund?

Post by 02nz » Wed Nov 13, 2019 10:40 am

RanchHand wrote:
Tue Nov 12, 2019 2:32 pm
02nz wrote:
Wed Oct 30, 2019 11:41 am
I don’t see why it’s any business of politicians how federal employees invest their own money, of course within rules that apply to everyone else.
Some federal employees have a lot of rules and restrictions that don't apply to everyone else.
Not sure what point you're trying to make. There are particular rules that some federal employees are subject to, e.g., security clearances or financial disclosures by senior government officials. That has nothing to do with politicians telling ALL federal employees how they can or cannot invest their own money.

RanchHand
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Re: New era for TSP "I" Fund?

Post by RanchHand » Wed Nov 13, 2019 1:54 pm

02nz wrote:
Wed Nov 13, 2019 10:40 am
RanchHand wrote:
Tue Nov 12, 2019 2:32 pm
02nz wrote:
Wed Oct 30, 2019 11:41 am
I don’t see why it’s any business of politicians how federal employees invest their own money, of course within rules that apply to everyone else.
Some federal employees have a lot of rules and restrictions that don't apply to everyone else.
Not sure what point you're trying to make. There are particular rules that some federal employees are subject to, e.g., security clearances or financial disclosures by senior government officials. That has nothing to do with politicians telling ALL federal employees how they can or cannot invest their own money.
Just that I'm not surprised that the government would make a restriction on certain investments.

stan1
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Re: New era for TSP "I" Fund?

Post by stan1 » Wed Nov 13, 2019 6:00 pm

The FRTIB met today and reaffirmed their decision to convert the I Fund to an All World Ex US index.

https://www.govexec.com/pay-benefits/20 ... -secondary
Board Chairman Michael Kennedy said the senators’ demands are simply outside the purview of what the TSP board is supposed to consider.

“When I think about it, this all goes back to the role of the board in terms of what we’re responsible for as fiduciaries,” he said. “Congress was very intentional in providing guard rails around this so that we as a board make decisions solely for our beneficiaries and participants. Over the years, people have talked about adding funds based on [environmental, social and governance principles] and other things, but we’ve always maintained our focus on P(articipant)s and B(eneficiarie)s.”

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Darwin
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Re: New era for TSP "I" Fund?

Post by Darwin » Sat Nov 16, 2019 1:14 am

MnD wrote:
Mon Oct 28, 2019 9:36 am
When the I fund was on-track for rollout in 2001 there was vocal criticism and calls from congress to not establish the fund.
Main criticism was that it was "un-american" for federal workers to be able to invest outside the US thru the govt retirement savings system.
I'm global market cap overall thanks to small cap ex-US and EM funds outside the TSP and will simply wait until the I fund composition actually starts changing before making any offsetting changes.
+1
No planet, no business. Earth bats last.

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fortyofforty
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Re: New era for TSP "I" Fund?

Post by fortyofforty » Sat Nov 16, 2019 6:03 pm

02nz wrote:
Wed Oct 30, 2019 11:41 am
I don’t see why it’s any business of politicians how federal employees invest their own money, of course within rules that apply to everyone else.
I sat through a presentation by a representative from the Federal Retirement Thrift Investment Board. After he finished, several federal employees asked if the board would increase the scope of fund choices available. Suggestions included Real Estate, Precious Metals, and Commodities.
Indexing works, not because of magic, but because of math. | Diligentia. Vis. Celeritas. - Jeff Cooper | Original Vanguard Diehard

Engineer250
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Re: New era for TSP "I" Fund?

Post by Engineer250 » Fri Dec 06, 2019 12:49 pm

Anyone know more than I do about a timeline for implementation of this? Every time I try to search for news on it I only find months-old information; the latest that Congress opposed certain investments but the TSP board President said it was still moving forward- however, no timeline was provided.
Where the tides of fortune take us, no man can know.

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hoppy08520
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Re: New era for TSP "I" Fund?

Post by hoppy08520 » Fri Dec 06, 2019 1:05 pm

Engineer250 wrote:
Fri Dec 06, 2019 12:49 pm
Anyone know more than I do about a timeline for implementation of this? Every time I try to search for news on it I only find months-old information; the latest that Congress opposed certain investments but the TSP board President said it was still moving forward- however, no timeline was provided.
AFAIK, September 2020 is still the best guess:
MnD wrote:
Wed Feb 13, 2019 10:13 am
Here we go - December 2018 FRTIB minutes.
15 month timeline for award of the new fund management contracts including the I fund (possibly sooner). So 15 months would be March 2020.
The transition to the I fund index should be concluded within 6 months of the award of the I fund contract. So sometime in 2nd half of 2020 until I fund is tracking MSCI ACWI ex-US IMI. If you take the 15 months + 6 months at face value I fund should be tracking new index by around September 2020.

https://www.frtib.gov/MeetingMinutes/2018/2018Dec.pdf
Mr. Mccaffrey provided an update on the use of external investment
managers, which included plans to implement the Board's directive to hire two
managers across each of the externally managed Funds. Mr. McCaffrey indicated his
team will assemble and release a Request for Proposals for this requirement, and has
drafted an approximately fifteen month schedule for the Agency to have the contracts
awarded, though, the goal is to award them sooner if possible.

Lastly, Mr. Mccaffrey stated the multi-manager effort, as it is known,
includes the I Fund. This means two things: 1) FRTIB will suspend previously
announced plans for the re-competition of the I Fund on a single manager basis
because that effort will be bundled with the multi-manager initiative. 2) The second
issue is that the planned transition of the I Fund benchmark from the MSCI EAFE Index
to the MSCI ACWI ex-US IMI Index was intended to be assigned with the new I fund
manager contract. That benchmark change will continue to await the assignment of a
new primary manager for the I Fund. As a result, the benchmark transition should be
concluded within 6 months of the new contract award, meaning the second half of 2020.

MnD
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Re: New era for TSP "I" Fund?

Post by MnD » Fri Dec 06, 2019 4:45 pm

Engineer250 wrote:
Fri Dec 06, 2019 12:49 pm
Anyone know more than I do about a timeline for implementation of this? Every time I try to search for news on it I only find months-old information; the latest that Congress opposed certain investments but the TSP board President said it was still moving forward- however, no timeline was provided.
Per a May 31, 2019 press release (link below) , the announcement of the award of multiple managers for the various investment funds including the I fund is expected this month (December 2019). I would speculate that any info on the I fund transition timetable is going to be embargoed until the award of the fund management contracts. A March 2020 to September 2020 transition for the I fund index still sounds reasonable if the awards are announced at the end of this year.
https://www.frtib.gov/ReadingRoom/Press ... y-2019.pdf

Since this action appears to be designed to break the monopoly of BlackRock fund management of TSP C, S, F and I funds, I'll be curious if Schwab, Fidelity, or Vanguard bid for a portion of the fund management. My money is on Schwab because they really need an all-country all cap total international fund and this would provide the scale to do that.

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