TSP Provides Peek into Investment ‘Window’ – FEDweek

The TSP expects to begin offering in mid-2022 the long-awaited investment “window” along with several other enhanced features of the program, the agency recently told an advisory board of federal employee unions and other organizations.

Of changes tied to a new record-keeping system that is on schedule to launch at that time, the investment window is the most prominent, since it reflects long-standing interest in account holders in having additional investment options. The TSP always has offered only passively-managed index funds tied to stocks, bonds and government securities, and lifecycle funds with mixes of those underlying funds in differing rations depending on when withdrawals are expected to begin.

Officials said the new platform will allow access to some 5,000 outside funds which will cover a wide gamut of investment approaches. Among them, they said, will be funds that allow investors to avoid certain companies or certain industries in their investments if they wish to, for whatever reason.

That could relieve some of the pressure that has existed for years for the TSP to offer individual funds that for example specialize in “socially responsible” investing or that exclude stocks of certain countries. That is not possible through broad index-based investing and the TSP always has resisted proposals from Congress and elsewhere to offer specific funds—even at the cost of political clashes. The system will allow investors to search for funds meeting their desired standards, officials said.

Further details will be upcoming early in 2022. Among issues not addressed at the meeting were whether investors would be limited in how much they could invest through the window—on a dollar or percentage of account basis—whether there would be additional fees for using it, whether loans and withdrawals would be taken proportionately from inside and outside investing, and more.

However, the TSP did list several other features that will become available under the new system, including a mobile app for account access, an online artificial “virtual assistant” that will be available at all times, online chat with a live agent during normal business hours, and additional security requirements for accessing accounts.