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Administration September 3, 2006
Federal Employee Groups Strongly Against REIT in TSP
March 9, 2006 (PLANSPONSOR.com) - Representatives
from 15 major federal employee groups have passed a
resolution to formally oppose the addition of a Real Estate
Investment Trust (REIT) as a fund option in the federal
Thrift Savings Plan (TSP).
Reported by Rebecca Moore
Govexec.com reports that special interest groups have been lobbying hard to get a fund that invests in real estate into the TSP, and a House bill to add a REIT fund option has 148 co-sponsors.
TSP administrators, however, have delayed requesting plan changes from Congress for fear of the unwelcome addition of a REIT fund (See TSP Board Wants Plan Changes ). They have hired an outside consultant to review possible fund choices (See Federal Government on the Mark with Plan Investment Indices).
The resolution adopted by the Employee Thrift Advisory Council says that “any development of a new fund should come from an independent process developed by the plan’s fiduciary that promotes the integrity of investments of federal employee retirement funds,” according to Govexec.com.
Council members condemned the lobbyists’ approach of going to Congress instead of letting the TSP board decide on the fund addition. They said the ad hoc addition of numerous funds in this manner would create confusion among employees, which could cause participation rates to drop. They said simplicity in the TSP contributes to its strong participation rates.
The resolution has no formal weight. Congress can approve the addition of the fund, but it would be against the will of employee stakeholders.
The Employee Thrift Advisory Council is composed of representatives from federal employee unions including the American Federation of Government Employees, the National Treasury Employees Union and the American Postal Workers Union, and non-bargaining employee groups such as the National Association of Retired Federal Employees, Federally Employed Women, the Federal Managers Association and the Senior Executives Association.