Do the TSP and politics mix? Historically, they aren’t supposed to, and the Federal Retirement Thrift Investment Board was created independently in the 1980s. Though Congress generally doesn’t pay too much attention to the TSP, it’s fair to say their focus has been grabbed recently. For example, one member spoke out about plans to pause the international fund.
In case you haven’t noticed, a whole war has been raging over the future of the I fund. Initially, the plan was to move across to an ’emerging markets’ benchmark (including China). After the White House openly wrote against the plans, the board listened and stopped almost immediately. Now, it seems people aren’t content with the explanations given – including House Oversight and Reform Subcommittee chairman, Gerry Connolly (D-Va.).
In another letter, sent to Eugene Scalia, the Labor Secretary who wrote to the board with the recommendations from the White House, Connolly stated that the independent board had been ‘politicized.’ He went further and asked to ‘keep President Trump away from the retirement plans of federal employees and service members.’
According to the board, there were two reasons for the decision:
• The volatile economy and uncertainty arising from the COVID-19 pandemic.
• The fact that the new FRTIB nominees could have a solution for the I fund.
For Connolly, it was nothing but an exercise of power from the administration. The FRTIB is legally the only party able to manage and administer the TSP, and the guidelines are laid out in the Federal Employees’ Retirement System Act. But did the administration cross these lines?
At the moment, it’s an uncertain time for the board with old members possibly leaving and new members on the way. In the last ten years alone, the plan has received two million more participants, and the TSP recently acknowledged the board’s accomplishments. During the same ten years, there has been a 140% increase in assets.
A Return to Normality
Over the past couple of months, the stock market has been volatile (to say the least). As we approach the start of summer, many TSP participants are sensing a return to normality with their financial activities. From the end of March to now, withdrawals were frequent, and there were more inter-fund transfers than ever before.
After a busy March and April, the TSP revealed that May was much quieter, with 33% fewer hardship withdrawals and loans. What’s more, participants are starting to reverse their inter-fund transfers.
Back in April, over $5 billion was moved across to various TSP options from the G fund; the most common destination was the S and C funds. In the weeks before March 17, the opposite was true, and around $21 billion was moved into the G fund. As each week passes, IFTs are slowing, and we seem to get closer to some form of normality.
This being said, it’s worth exploring the record-breaking April we all experienced. At the end of April, 2.5 million people were invested in one or more of the L funds, a new record. Let us know- have you made changes during the pandemic? Are you anticipating a return to normal soon? Contacting a Financial Advisor might be the best route for everyone.
Contact Information:
Email: [email protected]
Phone: 3604642979
Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely withhelping them pursue the most comfortable financial life possible.Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.Aaron can help you and your family to create, preserve and protect your legacy.That’s making a difference.
Disclosure:
Disclosure:Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.Confidential Notice and Disclosure: Electronic mail sent over the internet is not secure and could be intercepted by a third party. For your protection, avoid sending confidential identifying information, such as account and social security numbers. Further, do not send time-sensitive, action-oriented messages, such as transaction orders, fund transfer instructions, or check stop payments, as it is our policy not to accept such items electronically. All e-mail sent to or from this address will be received or otherwise recorded by the sender’s corporate e-mail system and is subject to archival, monitoring or review by, and/or disclosure to, someone other than the recipient as permitted and required by the Securities and Exchange Commission. Please contact your advisor if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. Additionally, if you change your address or fail to receive account statements from your account custodian, please contact our office at [email protected] or 800-779-4183.
