TSP participants ‘need not be concerned’ about pause in investment changes | Federal News Network
After an almost broad reduction in the austerity plan in April, participants will see a few more weeks of change for TSP.
All TSP transactions will be temporarily unavailable between May 26 and the first week of June as the Federal Pension Service updates its database and adds a mobile app for users.
Arthur Stein, a financial planner for the District of Columbia, said participants "don't have to worry about downtime."
“New inflows will be invested in accordance with current principles, and money already in TSP will continue to bring in money. They will not be subject to sanctions in any way, ”Stein said in an interview with the Federal News Network.
Stein said there is no reason to make any changes due to the future transition. However, participants wishing to make changes should do so by the scheduled downtime.
“The only thing that can cause concern is when someone thinks they would like to trade because they are worried that stock and bond markets will increase or decrease significantly in the future,” Stein said.
The Federal Office of Pension Schemes, which is responsible for TSP, announced in a May 2 press release that the transition period will begin on May 16 and end in the first week of June, but downtime will only occur in the second week. half of this period. TSP’s current investments will remain active during the transition.
"If you do not change your investment decisions, your current investment options in TSP will remain the same for future contributions and current appropriations," the FRTIB said. "Most TSP participants don't need to take any steps to prepare for the transition."
Kim Weaver, FRTIB’s director of external relations, told the Federal News Network what to expect before the transition and how participants should prepare.
“Let’s say you plan to retreat with a specific purpose. We want to make sure that people know that there is a deadline for this, "Weaver said." If they are considering taking out a loan, May 16 is the last day for it.
Changes to the TSP during the transition period include a new mobile app, an updated My Account interface, a 24/7 virtual assistant, and electronic signature settings. For an additional fee, FRTIB also adds the ability to invest part of TSP’s savings in a mutual fund window, an account that gives users access to a choice of more than 5,000 mutual funds.
TSP participants should assess whether this transition period will affect their retirement savings, and review their current investment options to make sure they continue to meet individual retirement goals, FRTIB said.
“For retirees who regularly receive money from their TSP account, any payments they receive during downtime are actually made up to downtime,” Stein said.
Weaver said FRTIB plans to reopen on June 1, but participants should plan for the transition to potentially continue throughout the first week of June.
The move to a new registry manager as part of the TSP update is a big incentive, Weaver said. Upon transfer, all TSP participant data is transferred, including name, account number, address, contributions, income, employer contributions, loans and withdrawals.
“We need to clear the line. May 16 gives us enough time to process any outstanding loans and withdrawals, distribute funds, and then move on to a new registrar with a new list, ”he said.
At the end of the transition period, participants will need to create an account in the new system to access all new features, according to FRTIB.
“You will need to follow a few steps to set up a new login for the new My Account once the transition is complete in June. We will let you know what you need to do when your new My Account becomes available, ”FRTIB said.