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 »

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 »

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 »

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 »

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 »

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 »

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 »

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 »

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

Post by pdavi21 »

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 »

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.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
gtwhitegold
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Re: New era for TSP "I" Fund?

Post by gtwhitegold »

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 »

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 »

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

Post by MnD »

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.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
stan1
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Re: New era for TSP "I" Fund?

Post by stan1 »

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 »

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 »

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 »

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

Post by 02nz »

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

Post by RanchHand »

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 »

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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Re: New era for TSP "I" Fund?

Post by Darwin »

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

Post by fortyofforty »

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

Post by Engineer250 »

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

Post by hoppy08520 »

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 »

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.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
MnD
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Re: New era for TSP "I" Fund?

Post by MnD »

https://www.frtib.gov/MeetingMinutes/2019/2019Oct.pdf
Latest board meeting minutes (October 2019) detail a lengthy discussion about the I fund index change but indicate no changes to the planned transition. Zero information on detailed timing that I could pick out on a quick read.

Something I hadn't noted before - the Chairman of the Board indicated a mutual fund window is planned for the TSP by 2022! :beer
Probably bad news for the typical investor but good news for Bogleheads in the TSP.
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stan1
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Re: New era for TSP "I" Fund?

Post by stan1 »

MnD wrote: Sat Dec 07, 2019 9:54 am https://www.frtib.gov/MeetingMinutes/2019/2019Oct.pdf
Latest board meeting minutes (October 2019) detail a lengthy discussion about the I fund index change but indicate no changes to the planned transition. Zero information on detailed timing that I could pick out on a quick read.

Something I hadn't noted before - the Chairman of the Board indicated a mutual fund window is planned for the TSP by 2022! :beer
Probably bad news for the typical investor but good news for Bogleheads in the TSP.
I was going to post the link as well. One of the most detailed sets of FRTIB minutes I've seen.

As for the mutual fund (?) window this is the first I've seen a date (2022). Mutual fund window is not a brokerage window which one board member seemed to be pushing for. I'm a little worried on how it gets implemented. What fees will there be? Will low cost Vanguard Admiral funds be available or will the contract be with a single plan administrator that selects high expense funds with a kickback to offset costs? I'd be very surprised if it is anything useful.
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Re: New era for TSP "I" Fund?

Post by 02nz »

FRTIB chair Kennedy and the employee advisory council chair Clifford Dailing published a piece in Government Executive: Let’s Keep a Level Playing Field for TSP Investors. Basically makes the point that this is employees' own money to invest - subject to the same restrictions, no more or less - as any other investor. https://www.govexec.com/pay-benefits/20 ... rs/161524/

To me this is exactly right. And if members of Congress want to put on further restrictions, they can do so at any time through legislation duly passed by both chambers and signed by the president. But pressuring FRTIB or even insinuating that investing in China or whatever country is bad because of human rights or geopolitics or whatever, well that's just what members of Congress do when they know they don't have the votes for legislation.
Walkure
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Re: New era for TSP "I" Fund?

Post by Walkure »

MnD wrote: 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.
This came out at the end of February; not exactly surprising to anyone that BlackRock was reselected as one of the two managers for the funds. Remains to be seen who the other half of the duopoly will be:
https://www.frtib.gov/ReadingRoom/Press ... ntract.pdf
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Re: New era for TSP "I" Fund?

Post by MnD »

Walkure wrote: Thu Apr 02, 2020 1:51 pm
MnD wrote: 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.
This came out at the end of February; not exactly surprising to anyone that BlackRock was reselected as one of the two managers for the funds. Remains to be seen who the other half of the duopoly will be:
https://www.frtib.gov/ReadingRoom/Press ... ntract.pdf
I'll throw out Schwab. That would give them the asset base to support an all-cap all-country ex-US fund. They already have funds that mirror the other TSP funds.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
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Ketawa
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Re: New era for TSP "I" Fund?

Post by Ketawa »

What a disgrace.

ETA - no longer makes sense out of context.
Last edited by Ketawa on Sun May 10, 2020 4:24 pm, edited 1 time in total.
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nps
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Re: New era for TSP "I" Fund?

Post by nps »

Keep in mind that the current I fund already forms the bulk of a more complete total international index (about 2/3rds). It can be supplemented by emerging market, international small, and Canada/Korea (if desired) funds in an IRA or other non-TSP account to effectively provide a total international index exposure regardless of what happens with the TSP. A little more complicated though than just owning a single index.

As for the politics, there's not much that can be discussed on this forum.
Iorek
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Re: New era for TSP "I" Fund?

Post by Iorek »

Think it will be interesting to see if the current board will try/can finish implementation of the new I fund.
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Re: New era for TSP "I" Fund?

Post by tea_pirate »

nps wrote: Sat May 09, 2020 8:40 am Keep in mind that the current I fund already forms the bulk of a more complete total international index (about 2/3rds). It can be supplemented by emerging market, international small, and Canada/Korea (if desired) funds in an IRA or other non-TSP account to effectively provide a total international index exposure regardless of what happens with the TSP. A little more complicated though than just owning a single index.

As for the politics, there's not much that can be discussed on this forum.
I have a spreadsheet that tells me how much international small and emerging markets I need to hold to approximate total world, but it's more annoyance to do than I'd like. I actually dropped international small during a TLH simply because I had full faith in this I Fund transition going through, until now. Time to dust off that spreadsheet again, I guess.

This solution also presents difficulties for those in the position that maxing out their TSP represents most of their savings. Up until last year I didn't have enough assets outside of the TSP to hold as much international small and emerging markets as would be required to approximate total world market cap.
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Re: New era for TSP "I" Fund?

Post by MichDad »

Upon retirement (in 2018), I moved all my non-G Fund TSP assets to tIRAs and Roth IRAs with brokerage firms that paid me for the privilege of holding these assets. I moved them into very low cost, widely-diversified US and international index funds. My international equities holdings are now in funds more widely diversified than the TSP's I Fund. They include emerging markets, including China.

I'm more worried about what the reconstituted TSP board might do, if anything, with the G Fund. That is something I'll be watching carefully.

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

Post by Mako »

MichDad wrote: Sat May 09, 2020 9:43 am I'm more worried about what the reconstituted TSP board might do, if anything, with the G Fund. That is something I'll be watching carefully.

MichDad
Fortunately the rate is set by statute (5 USC 8438(e)(2)) so I imagine there’s not a whole lot they can do in that regard without Congress.
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Re: New era for TSP "I" Fund?

Post by LadyGeek »

This is a "no politics" forum. I removed several posts linking to a Washington post article regarding the White House's attempt to control the Federal Retirement Thrift Investment Board's investments in China. As a reminder, see: Politics and Religion
In order to avoid the inevitable frictions that arise from these topics, political or religious posts and comments are prohibited. The only exceptions to this rule are:
  • Common religious expressions such as sending your prayers to an ailing member.
  • Usage of factual and non-derogatory political labels when necessary to the discussion at hand.
  • Discussions about enacted laws or regulations that affect the individual investor. Note that discussions of proposed legislation are prohibited.
  • Proposed regulations that are directly related to investing may be discussed if and when they are published for public comments.
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MichDad
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Re: New era for TSP "I" Fund?

Post by MichDad »

I just received this Federal Register notice. The Federal Retirement Thrift Investment Board will meet this morning at 10:00 am eastern time to discuss "Investment Policy Review." There's no more information about the subject other than those three words. Perhaps it will be about the future of the TSP's I Fund? Anyone can listen in on the FRTIB's meeting by dialing 877-446-3914 and then using Access Code 3037482.

Here's the link to the Federal Register notice:

https://www.govinfo.gov/content/pkg/FR- ... dium=email

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

Post by stan1 »

The Labor Secretary Monday morning directed the FRTIB in writing to stop the move to an index that includes China. Directed to do something is not proposed so this should not be a prohibited political post. If this results in a lawsuit then we are back to a prohibited topic.

Guessing FRTIB will go into closed session with their attorneys soon after convening.
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Re: New era for TSP "I" Fund?

Post by MichDad »

stan1 wrote: Wed May 13, 2020 8:17 am The Labor Secretary Monday morning directed the FRTIB in writing to stop the move to an index that includes China. Directed to do something is not proposed so this should not be a prohibited political post. If this results in a lawsuit then we are back to a prohibited topic.

Guessing FRTIB will go into closed session with their attorneys soon after convening.
The Federal Register notice states that it will be an "Open Session." In past instances, when they planned to hold an "Executive Session" I think they stated that in their Federal Register notices. So, I think this discussion should be available to the public. We'll see.

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Re: New era for TSP "I" Fund?

Post by stan1 »

MichDad wrote: Wed May 13, 2020 8:25 am
The Federal Register notice states that it will be an "Open Session." In past instances, when they planned to hold an "Executive Session" I think they stated that in their Federal Register notices. So, I think this discussion should be available to the public. We'll see.

MichDad
MichDad, if I remember right you are now retired, correct? You've probably posted this in other threads but I'm curious why you haven't rolled over to an IRA account? A five year CD is probably a better better interest rate bet than the G Fund right now and has been for the better part of a decade. Is there a reason other than the G Fund that you are keeping a TSP account?
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Re: New era for TSP "I" Fund?

Post by MichDad »

stan1 wrote: Wed May 13, 2020 8:36 am
MichDad, if I remember right you are now retired, correct? You've probably posted this in other threads but I'm curious why you haven't rolled over to an IRA account? A five year CD is probably a better better interest rate bet than the G Fund right now. Is there a reason other than the G Fund that you are keeping a TSP account?
Yes, Stan, I'm retired. Last year, I moved a large portion of my TSP account to brokerage firms that paid me bonuses. I still maintain a large G Fund account. You're right that I could likely earn a better interest rate outside the G Fund right now. It's certainly something to consider for the short term but I think for the medium to long term, I want to stay with the G Fund.

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Re: New era for TSP "I" Fund?

Post by federal dinosaur »

Thanks to all for the updates.

It's always good to keep in mind that the FRTIB frequently moves at a pace that is slower than can be believed or accurately described.

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

Post by tea_pirate »

MichDad wrote: Wed May 13, 2020 7:57 am I just received this Federal Register notice. The Federal Retirement Thrift Investment Board will meet this morning at 10:00 am eastern time to discuss "Investment Policy Review." There's no more information about the subject other than those three words. Perhaps it will be about the future of the TSP's I Fund? Anyone can listen in on the FRTIB's meeting by dialing 877-446-3914 and then using Access Code 3037482.

Here's the link to the Federal Register notice:

https://www.govinfo.gov/content/pkg/FR- ... dium=email

MichDad
Thanks for sharing, I was able to listen in. I'm hoping these posts don't get removed too. This is not political, and is not a proposed legislation as it's now an official motion passed by the FRTIB.

Major takeaways:

- The transition was slated to start June 1, and take about 90 days. (This was sooner than I expected)

- Chairman recommended a pause for now in the I Fund transition due to 2 factors. The first being coronavirus (noted quote "we don't know what the effect will be on emerging markets for the next 2-3 years". Second being they want to delay until the new board members are confirmed so they don't inherit it in the middle of the process.

- The exiting board members confirmed that they still believe transitioning to the total world index was the best decision, however supported a pause for the reasons above. There was a lot of talk that they hope their replacements will continue to steer the FRTIB independently, with fiduciary responsibility, and in a non-partisan manner moving forward. A lot of emphasis and repetition from the members on that point.

- New board members will want to "conduct their own due diligence" (who knows how long this will take)

- One board member (maybe his name was Ron?) stated that he was always opposed to the change, and still is. He proposed a motion to delay the I Fund transition which was passed unanimously.
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Re: New era for TSP "I" Fund?

Post by rkhusky »

federal dinosaur wrote: Wed May 13, 2020 8:55 am Thanks to all for the updates.

It's always good to keep in mind that the FRTIB frequently moves at a pace that is slower than can be believed or accurately described.

fd
Which is why you don’t want to act before changes are actually implemented. (And also why you don’t want to act on proposed legislation) As an example look at how long it is going to take the TSP to make the changes to its target date funds. And how long it took to get the more flexible withdrawal options.
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Re: New era for TSP "I" Fund?

Post by MichDad »

Tea Pirate, above, provided a good summary of the call, which I also listened to. Thanks.

The biggest remaining issue for me with respect to the TSP is its continued refusal to allow participants and beneficiaries to make in-plan Roth conversions as most private 401(k) plans permit. This prohibition has caused me to withdraw hundreds of thousands of dollars from my TSP account and it will likely cause me to withdraw even more in about two or three years, when I've completed my tIRA conversions to Roth IRAs.

According to the below linked 2020 study, 87.1 percent of defined contribution plans offer a Roth option and 66.7 percent of those plans allow participants to make in-plan Roth conversions. If I’ve done my math correctly, 67.7 percent of 87.1 percent = 58.3 percent. This means that 58.3 percent of all defined contribution plans permit in-plan Roth conversions. The study also noted that these percentages have been increasing over time.

https://www.callan.com/wp-content/uploa ... Survey.pdf See page 17.

FRTIB staff have informed me that they do not need legislation to implement a Roth conversion option for the TSP. They simply say it would require too much administrative work, record keeping, and effort to educate participants and beneficiaries of the advantages and disadvantages of traditional versus Roth assets.

MichDad
azanon
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Re: New era for TSP "I" Fund?

Post by azanon »

What a disappointment that my TSP will continue to lack full international diversification for the foreseeable future.
MichDad
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Re: New era for TSP "I" Fund?

Post by MichDad »

azanon wrote: Wed May 13, 2020 11:27 am What a disappointment that my TSP will continue to lack full international diversification for the foreseeable future.
I agree with you. My solution was to move and hold all my international equities in tIRAs and Roth IRAs outside the TSP. I no longer hold the TSP's I Fund.

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Re: New era for TSP "I" Fund?

Post by junior »

Isn't owning international in taxable just as tax efficient as in the TSP? If so why do you all care? You can easily buy some emerging market etfs to supplement the Tsp, right? Or just buy international outside the TSP in a taxable account?

Help me out in understanding why this matters.
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