Federal Retirement Thrift Investment Board: Managing The Tsp

The Federal Retirement Thrift Investment Board (FRTIB) is an independent agency of the United States government. It was established by the Federal Employees Retirement System Act of 1986 to administer the Thrift Savings Plan (TSP), a tax-deferred retirement account similar to a 401(k) plan. The FRTIB helps current and former civilian employees and members of the uniformed services prepare for retirement through the TSP. As of August 2021, the board manages billions in assets on behalf of millions of participants. The board members are nominated by the president and confirmed by the Senate. The FRTIB's mission is to improve retirement outcomes, provide top-tier defined contribution service, function as a high-performing agency, and transition to a managed services operating model.

The Federal Retirement Thrift Investment Board administers the Thrift Savings Plan (TSP)

The Federal Retirement Thrift Investment Board (FRTIB) administers the Thrift Savings Plan (TSP), a tax-deferred retirement account similar to a 401(k). The TSP is a retirement savings and investment plan for federal employees and members of the uniformed services, including the Ready Reserve. It is one of the three parts of the Federal Employees Retirement System and is the largest defined contribution plan in the world. As of August 2021, the FRTIB manages $794.7 billion in assets on behalf of 6.4 million participants.

The FRTIB is an independent agency of the United States government established by the Federal Employees Retirement System Act of 1986. The Act vests responsibility for the agency in six named fiduciaries: the five Board members and the Executive Director. The five members of the Board, one of whom is designated as Chairman, are appointed by the President with the advice and consent of the Senate and serve on a part-time basis. The members appoint the Executive Director, who is responsible for the management of the agency and the Plan.

The FRTIB's mission is to help current and former civilian employees and members of the uniformed services prepare for their retirement years through the TSP. The Board is charged by law to administer the TSP solely in the interest of the participants and beneficiaries. The FRTIB seeks to improve participant retirement outcomes, provide top-tier defined contribution service to participants, function as a high-performing agency, and transition successfully to a managed services operating model.

The TSP offers federal employees the opportunity to save for additional retirement security. Employees participating in the Federal Employees Retirement System (FERS) accumulate savings through the TSP and combine those savings with retirement income from two other components: Social Security benefits and the FERS Annuity. Employees participating in the Civil Service Retirement System (CSRS) and members of the uniformed services can also take advantage of the TSP to supplement their annuities.

TSP is a tax-deferred retirement account similar to a 401(k)

The Federal Retirement Thrift Investment Board (FRTIB) is an independent agency of the United States government that was established by the Federal Employees Retirement System Act of 1986. The FRTIB's mission is to help current and former civilian employees and members of the uniformed services prepare for their retirement years via the Thrift Savings Plan (TSP).

The TSP is a tax-deferred retirement account similar to a 401(k). It is a defined-contribution retirement plan for federal employees and uniformed service members. The TSP was modelled on the 401(k), so the two plans have many similarities, but there are some important differences.

The TSP has the same contribution limits and early withdrawal penalties as a 401(k). Both plans offer traditional and Roth versions. With a traditional TSP or 401(k), contributions are tax-deductible and tax-deferred. This means that while your money is invested, you don't have to pay taxes on any gains. However, you will pay ordinary income tax on any money that you withdraw after age 59 1/2.

With a Roth 401(k) or Roth TSP, contributions are made after tax, so they will not reduce your taxable income. However, your money grows on a tax-deferred basis, and you can make withdrawals without paying tax or early withdrawal fees as long as you have had the account for at least five years and are age 59 1/2 or older.

Both plans have identical employee contribution limits, which are revised annually. For 2024, employees can contribute up to $23,000 to either a 401(k) or a TSP. If you are age 50 or older, you can contribute an additional $7,500.

One of the main differences between the two plans is the choice of investments. With a 401(k), employees typically have around 28 investment options to choose from, including mutual funds, stable-value funds, and target-date funds. A TSP, on the other hand, offers fewer fund options, including several target-date funds and five individual index funds. TSP participants also benefit from lower fees compared to most 401(k) plans.

In summary, the TSP is a tax-deferred retirement account similar to a 401(k) but with some key differences in investment options, fees, and employer contributions.

The board has 270 employees and is an independent agency of the US government

The Federal Retirement Thrift Investment Board (FRTIB) is an independent agency of the US government, established by the Federal Employees Retirement System Act of 1986. The FRTIB has approximately 270 employees and is responsible for administering the Thrift Savings Plan (TSP), a tax-deferred retirement account for federal employees and members of the uniformed services. The TSP is similar to a private sector 401(k) plan and is one of the three parts of the Federal Employees Retirement System.

The FRTIB's mission is to help current and former civilian employees and members of the uniformed services prepare for their retirement years through the TSP. The board is charged by law to administer the TSP solely in the interest of the participants and beneficiaries. The FRTIB seeks to improve retirement outcomes, provide top-tier defined contribution service, function as a high-performing agency, and successfully transition to a managed services operating model.

The FRTIB is governed by a five-person, part-time board of presidential appointees and a full-time executive director selected by those appointees. The board members collectively establish the policies under which the TSP operates and provide oversight. The executive director carries out the policies established by the board and acts as the full-time chief executive of the agency. The board and executive director meet monthly in meetings that are open to the public to review policies, practices, and performance.

The FRTIB operates the TSP and manages the investments of the Thrift Savings Fund for the benefit of participants and their beneficiaries. The FRTIB's responsibilities include maintaining accounts, making loans, purchasing annuity contracts, and providing for the payment of benefits. The FRTIB also has a unique status as a self-funded federal agency with independent budgetary authority, allowing it to make decisions in the best interest of TSP participants and beneficiaries.

The board members are nominated by the president and confirmed by the US Senate

The Federal Retirement Thrift Investment Board (FRTIB) is an independent agency of the United States government, established by the Federal Employees Retirement System Act of 1986. The FRTIB administers the Thrift Savings Plan (TSP), a tax-deferred retirement account similar to a 401(k) plan. The TSP is a retirement savings and investment plan for federal employees and members of the uniformed services, including the Ready Reserve. The FRTIB's mission is to help current and former civilian employees and members of the uniformed services prepare for their retirement years via the TSP.

The FRTIB is governed by a five-person, part-time board of presidential appointees and a full-time executive director selected by those appointees. The board members and its chairman are nominated by the president and confirmed by the US Senate. Of the five appointees, three members are appointed solely by the President without other considerations, with one of them designated as Chairman. The President also appoints the remaining two members, taking into account recommendations from the Speaker of the House and the Senate Majority Leader, in consultation with their respective minority leaders. Each board member is required to have substantial experience, training, and expertise in the management of financial investments and pension benefit plans.

The board members collectively establish the policies under which the TSP operates and provide general oversight. They meet monthly in public sessions to review policies, practices, and performance. The executive director, appointed by the board members, is responsible for carrying out the policies established by the board and acting as the full-time chief executive of the agency. The executive director oversees the agency and manages the Thrift Savings Fund in accordance with the investment policies and guidelines set by the board.

The board was criticised for a 2017 decision to mirror an index that invests in unaudited Chinese companies

The Federal Retirement Thrift Investment Board (FRTIB) is an independent agency of the United States government. It was established by the Federal Employees Retirement System Act of 1986 to administer the Thrift Savings Plan (TSP). The TSP is a retirement savings and investment plan for federal employees and members of the uniformed services, including the Ready Reserve. It is similar to a private sector 401(k) plan.

The FRTIB has faced criticism for its decision in 2017 to mirror an index that invests in unaudited Chinese companies. Despite scrutiny from the US Senate, the Board voted to continue investing in an index that included stocks of unaudited companies in the People's Republic of China. This decision sparked concerns about the lack of financial transparency and potential risks associated with investing in companies that are not subject to the same regulatory oversight as US-based companies.

In response to this controversy, Senators Marco Rubio and Jeanne Shaheen introduced the Taxpayers and Savers Protection Act in November 2019. This legislation aimed to force the FRTIB to divest from unaudited Chinese companies. The Act was a direct response to the Board's decision and sought to address national security concerns and protect the retirement savings of federal employees. The Act also reflected the belief that the US government should not indirectly support or legitimise companies that do not adhere to US regulatory standards.

The controversy surrounding the FRTIB's decision also highlighted the complex nature of global investment. While some criticised the Board's decision, others defended it, arguing that investing in China, one of the world's largest economies, offered financial benefits. They argued that excluding Chinese stocks may limit investment opportunities and negatively impact the growth of federal employees' retirement savings.

The debate over the FRTIB's decision to mirror an index investing in unaudited Chinese companies underscored the importance of balancing financial opportunities with national security interests and ethical considerations. It also prompted a broader discussion about the role of government-affiliated investment boards and their responsibility to align their investment strategies with the country's strategic objectives and values.

Frequently asked questions