This is an article about the Federal Government’s Thrift Savings Plan, basically a 401(k) for federal employees. It starts out by ridiculing a board member for poor attendance, which I think is probably deserved, this member has clearly not executed his fiduciary responsibilities, however we haven’t heard his side of the story and attending meetings doesn’t neccesarily mean you aren’t providing oversight. In addition, a $22,000 stipend doesn’t exactly endear someone to spend hours and hours on oversight – clearly some board reform is needed.
The rest of the story applauds the board for their great oversight and for bringing about great changes during a time of tremendous growth. It talks about the low fees and advancement of a “daily valuation platform”. It also talks about employees being forced out because of their beliefs on certain legal issues.
My take on the TSP is that it is a very cheap plan that is just O.K. If you’ve been to the website you’ll understand when I use the term “underwhelming”. For a plan with $200 billion in assets it is a disgrace. The plan may be a “daily valued” plan, but it is difficult to navigate through, provides little education, doesn’t even download in QIF format and the investment options don’t provide enough asset class diversification. If you don’t believe me just talk to the people who lived through 2000 – 2002 in the C Common Fund.
This plan is a disaster and needs some major reform, even if it means raising the fees from .03% to .05%.
Scott Dauenhauer, CFP, MSFP, AIF