Beyond 2011, the TSP will see changes from two final provisions in the Thrift Savings Plan Enhancement Act of 2009. One, the introduction of a Roth option, will be implemented in the first quarter of 2012, Trabucco said.
The other, a mutual fund window, has been authorized but no timeline has been set yet, he said. This option would give participants a window to invest in “more narrow or exotic investments” where the cost will not be borne by other participants, Trabucco said.
“The way we expect it would work is we would come up with a contractual arrangement with an investment firm that offers its platform and its array of various investments, and then what you could do is take some funds out of TSP and send it to that platform for investment,” Trabucco said.
As the new Congress meets for the first time Wednesday, Trabucco said it is unclear what the agenda will be for federal employee retirement benefits.
Under the last Congress, a bipartisan proposal was introduced to allow contributions from terminal, unused annual leave into the TSP, similar to plans in the private sector, Trabucco said. This proposal had an estimated cost of $317 million, and a cost-offset was not identified during the last Congress, he said.
“But it’s still an issue that’s out there,” Trabucco said.