What could change with the TSP under this administration?
The President of the United States can influence changes to the Thrift Savings Plan (TSP) indirectly through legislative action or by signing bills passed by Congress. However, direct authority to make changes to the TSP rests with the Federal Retirement Thrift Investment Board (FRTIB), which administers the TSP, and with Congress, which can pass laws affecting the plan.
Here’s how changes can occur:
- Legislation: Congress can pass laws that modify the TSP.
- Executive Actions: Although less common, the President could potentially influence changes through executive actions by directing federal agencies or by appointing individuals to the FRTIB who might advocate for specific changes. However, these actions would still need to comply with existing laws and regulations.
- Regulatory Changes: The FRTIB has the authority to make regulatory changes to the TSP within the framework of existing legislation. For example, they can adjust policies concerning withdrawals, investments, or participant services.
Can the government access or borrow from the TSP?
Congress cannot directly access funds from the Thrift Savings Plan (TSP) for its own use; however, the U.S. government has borrowed from the Government Securities Investment (G) Fund in the past to manage cash flow issues related to the federal debt ceiling.
The G fund would be one of the most significant pots of money the Treasury Department could borrow from. To further complicate matters, the securities inside the G fund are not tradeable on the open market, so interest is not credited to the G fund during the borrowing period. By law, these funds would be paid back, with interest, if Congress raises the debt limit. In the past, federal employees and retirees have been unaffected by the temporary borrowing measures, but there are no guarantees for the future.
Could there be limits on withdrawals from the TSP?
Yes. The FRTIB has the ability to adjust policies that could limit withdrawals in the future. Particularly concerning for many federal employees is the fact that so many might be separating from service around the same time, either through retirement, resignation, or being forced out. TSP does not currently have the resources to process that many potential withdrawals in a reasonable amount of time.
How will NTEU Influence Potential Changes?
The FRTIB has an advisory council (Employee Thrift Advisory Council) that provides advice on matters relating to TSP investment policies and plan administration, and NTEU has 1 of the 14 positions on this council. NTEU can also continue to lobby members of Congress and encourage them to protect employees’ funds inside TSP.
What can employees do to protect themselves?
- Continue to contribute at least 5% for matching contributions.
- Consider transferring to an IRA if age 59.5 or separated from service.
- Open an IRA or ROTH IRA outside of TSP
- Consider other investments outside of TSP.
United Benefits has a Wealth Management division with registered fiduciaries that can offer advice and assistance on investments inside and outside the TSP. They can even open IRAs and other investment accounts for you and manage the investments. There is no cost to NTEU members to meet with their financial advisors.
Investment advisory services offered through Alphastar Capital Management, LLC, a SEC-registered investment adviser. SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the adviser has attained a particular level of skill or ability. Fixed insurance products are offered through UB Wealth Management, and Alphastar Capital Management is not involved in the offer, recommendation, sale or management of commission-based fixed Insurance products. Alphastar Capital Management and UB Wealth Management are separate and independent entities. This is for informational purposes only and is not intended as legal, tax or investment advice or a recommendation of any particular security, investment product or investment strategy.