Changes to the Thrift Savings Plan Lifecycle Fund Increments

Jun 7, 2017

fund

The panel overseeing the Thrift Savings Plan unanimously approved offering lifecycle funds targeted to within 5 years of the participants’ expected retirement date rather than the current 10-year increments. It was recommended that TSP investment options follow a trend from private 401k providers and offer lifecycle funds. These would move investors to a more conservative portfolio as they near their retirement date, on a 5-year basis.

TSP will begin implementing the new Lifecycle fund increments in 2020.

It was also recommended that the TSP’s I fund, made up of international stocks and bonds, be diversified to include stocks in Canada, emerging markets, and international small-cap markets.

A financial consultant told the Federal Retirement Thrift Investment Board, “These are large markets to which we have no exposure. By adding these, we would improve the risk portfolio for participants, as well as improve outcomes on a forward-looking basis.”

The board further approved the examination of expanding the I fund’s portfolio. The deputy chief investment officer for the FRTIB said this could be done by this fall.

Blended Military System

TSP officials also briefed the board on their progress with preparing for the onset of the blended retirement system for the military, scheduled for January 2018. Under this system, new troops would automatically be enrolled in the TSP and receive a matching contribution from the government. The government will contribute 1-5 percent of the service members’ salary toward their TSP, depending on what they contribute themselves. Although, they will default into 3 percent of their paychecks. Their TSP account will begin 60 days into their service. Those who stay in the military for 20 years and are entitled to a retirement pension, would receive a smaller calculation of their annuity.

This new system automatically affects new service members starting January 1, 2018. Current service members are grandfathered into the existing system but can opt into the new one. The online opt-in website launched in April of this year and over 163,000 have already signed up.

Message us & find out if you qualify today!

  • This field is for validation purposes and should be left unchanged.

Recent Articles

5 Common Myths about Federal Disability Retirement, Debunked

Navigating the complex landscape of Federal Disability Retirement can be a daunting task, and many federal employees have misconceptions that deter them from pursuing the federal benefits they deserve. We're cutting through the confusion of the top 5 myths to give you...

Federal Employee Resources

Our ever growing library of federal employee resources give you the knowledge you need to make smart choices about your future.

FAQs

Frequently Asked Questions

Get the answers you need on-demand, from a team of federal employee benefits professionals.

View FAQ
Webinars

Federal Benefit Webinars

Twice per month we host webinars to help federal employees better understand their benefits and answer their questions LIVE.

See Webinar Schedule
Guides

Benefit Guides

From guides to detailed charts, these educational resources will help clarify confusing federal employee benefits topics.

See our resources