It looks like the mutual fund industry may have to wait a little longer for mutual funds to be available through the Federal Thrift Savings Plan
. Government Executive
's Alex Parker reports
that TSP executive director Greg Long
says he won't implement a mutual fund window in the giant defined contribution plan until the Employee Thrift Advisory Council
and the Federal Retirement Thrift Investment Board
Barclays Global Investors
(soon-to-be part of BlackRock
) and the TSP board itself currently manage the plan's assets. The TSP is the largest DC plan in the country.
A provision allowing the TSP's board to add such a window was tacked on to the "Family Smoking Prevention and Tobacco Control Act" of 2009, which President Obama signed into law on June 22. Yet the bill does not require the TSP's board to add the option, and in April Long told the Federal Times
that the board would "never do it," claiming that it would cost $3 million to update the TSP's plan communications and its recordkeeping system.
On Tuesday, the House Subcommittee on the Federal Workforce, Postal Service and the District of Columbia held a hearing on possible TSP changes, like adding the mutual fund window. According to the Government Executive report, J. David Cox
from the American Federation of Government Employees
, Representative Gerry Connolly
(D-Virginia) and Representative Stephen Lynch
(D-Massachusetts) all came down against the window, to some degree.
"I know some of this sounds paternalistic," Lynch said, according to Government Executive. "But it's not just participants moving out through the window, it's retirees being bombarded with marketing information that's more driven by profit."
Parker also reported that the ETAC and the FRTIB are both split on adding the option, while the National Treasury Employee Union seems cautiously in favor of it.
Neil Anderson, Managing Editor
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