Federal Retirement Thrift Investment Board (FRTIB)

This document is an investment option review conducted for the Federal Retirement Thrift Investment Board (FRTIB) regarding its Thrift Savings Plan (TSP). The review evaluates the appropriateness of the existing investment lineup and assesses potential new fund additions. Key areas of focus include analyzing current circumstances against peer plans, establishing criteria for fund alternatives, and applying these criteria to various asset classes such as U.S. and non-U.S. stocks, REITs, bonds, emerging market debt, and commodities. The primary recommendation is to maintain the current simplified and efficient core investment structure, while considering broadening the coverage of the International Stock Fund (I Fund) and expanding the Lifecycle Funds (L-Funds) to 5-year asset allocation solutions to better meet participant needs.

This Open Data Plan outlines the Federal Retirement Thrift Investment Board's (FRTIB) commitment to open government data, aligning with OMB's Open Data Policy and the OPEN Government Data Act. The plan's purpose is to enhance transparency, accountability, and government operational efficiency by making appropriate data sets publicly available. Key priorities include proactive data release based on public interest, availability, export capability, and privacy considerations. The plan identifies publicly available datasets such as financial statements, share price data, participant survey reports, demographic reports, and FOIA information, while also emphasizing robust privacy protections and records management. The FRTIB commits to regularly reviewing and updating the plan.

The meeting included the approval of the minutes from the June 25, 2024, session, followed by remarks noting that Thrift Savings Plan (TSP) assets surpassed $900 billion in June. Key discussions included the monthly Participant Activity Report, confirming the readiness of the L 2070 Fund launch and preparations for SECURE Act 2.0 compliance. The legislative update covered appropriations bills and the status of the Fiscal Year 2025 National Defense Authorization Act. Quarterly reports featured investment reviews, noting that while most funds performed in line with benchmarks in June, the I Fund lagged slightly; the I Fund benchmark transition is currently underway. Budget review showed execution through June at $400.5 million against a $476.1 million budget. The audit status indicated 10 of 13 external audits were in progress. The Office of Investments provided its annual review, highlighting efforts toward operational excellence, the benchmark transition for the I Fund, and the introduction of the new L 2070 Fund, with plans to retire the L 2025 Fund next year.

The meeting addressed several items, beginning with the monthly Participant Activity Report, noting high FERS participation and contribution match rates. The Legislative Report indicated Congress was back in session with a focus on the debt ceiling, which does not affect the TSP. Quarterly reports covered the Budget Review, showing spending alignment and low administrative expense ratios compared to the private sector. The Audit Status report detailed that 12 of 13 planned external audits were in progress, with a focus on closing open recommendations related to legacy system decommissioning. The Investment Report reviewed March 2023 performance, noting strong I Fund performance for both BlackRock and State Street due to fair value pricing amidst banking volatility; year-to-date performance and L Fund growth were also discussed, along with activity regarding class action settlements. The Office of Investments presented its annual review, detailing work on investment policies, L Fund glidepath strategies (including new L Funds and shifted terminal points), and the successful mitigation of asset manager concentration risk. Finally, the Enterprise Risk Management update summarized the closure of several 2022 risk treatment plans, with cybersecurity and supply chain risks remaining medium-high, and introduced a new risk: reputational risk of TSP operations and customer experience for the 2023 profile.

This Annual Report from the Federal Retirement Thrift Investment Board details the status and implementation of the Thrift Savings Plan (TSP), including the mutual fund window, participant statistics, and investment manager diversity demographics. It provides an in-depth analysis of TSP participant behavior and demographics from 2018 to 2022, covering participation rates, deferral rates, investment allocation trends (G Fund and Lifecycle Funds), and loan and hardship withdrawal usage across various age and salary cohorts.