FERS and YOU
By Bob Davidson II of Palomar Chapter
455 (September 2017)
Well my friends, we are more than half way through the year and for the most
part our TSP funds have been on the plus side! Hopefully you have been a bit aggressive in your investments and have benefitted
from this Trump/Bull Market. Things could change with the North Korea issues but don't panic and be ready to make changes
if the markets tank over a longer time frame than a couple of days, ride the rollercoaster.
Below is some more information
on possible changes regarding our TSP and for the most part a positive for all of us.
Proposed Changes to the TSP
Ian Smith August
A number of changes have been proposed to the Thrift Savings Plan (TSP) recently. Here is a roundup of the
proposals and what they mean for TSP participants.
One recommendation now being considered is expanding the existing I Fund (international stocks) to include emerging
market equities. Also, Canadian stocks will be considered for inclusion in the I fund to expand the number of stocks from
developed stock markets.
There is also the likelihood of including non-U.S. small-cap equities in the I fund as well.
Currently, the I Fund
invests in a stock index fund that fully replicates the MSCI EAFE (Europe, Australasia, Far East) Index.
The FRTIB is
looking at creating a 5-year band instead of a 10-year band to categorize the L Funds. This would provide investors with a
fund selection that more closely matches their projected retirement time frame. Plans are in place to implement this by 2020.
TSP Change Legislation
Bills have recently been introduced in both the House and the Senate to “modernize” the TSP. Lawmakers
in both branches of Congress said revising plan regulations would allow federal employees to keep their money inside of the
TSP after retirement to take advantage of the program’s low fees.
The House bill (H.R. 3031) would
make these changes:
Make multiple age-based
and post-separation withdrawals
Elect to combine
partial withdrawals or an annuity with periodic payments
· Eliminate automatic annuities as a default option in the
absence of an election by participants
It has been reported out of Committee and will now be considered
by the full House.
The Senate bill (S. 873) is similar to the House bill, but offers these changes to the TSP:
• Allows multiple age-based withdrawals and subsequent
post-separation partial withdrawals
Allows multiple partial post-separation withdrawals
• Allows a schedule of quarterly or annual withdrawal payments and also let participants change the payment amounts
at any time
• Eliminates the withdrawal
election deadline which currently requires TSP participants to make a post-separation withdrawal election by April 1 of the
year following the year in which they turn 70 1/2 and are separated from federal service
The Senate bill also just recently
reported out of Committee and will now go before the full Senate for consideration.
above info is from FedSmith.com and this website has great information on TSP and other financial info for the federal worker
and retiree. I highly recommend you subscribe to it.
As always - Live Long and Prosper!