The federal government’s $454 billion Thrift Savings Plan is considering a plan to transform itself over the next five years, including the addition of “consultive” services.
According to a report in the Washington Post, the TSP’s governing board is considering offering phone-based financial consultation to its 4.7 million participants, which it does not now do. “Right now we are built to facilitate transactions. What we are not built to do is engage in conversations around goals,” TSP Executive Director Gregory T. Long told the board May 18.
The TSP currently provides information to participants in printed form and at www.tsp.gov. But “the reality is that not everyone is going to absorb information in that way,” Long told the board. “We want to take advantage of life moments when you’re receptive to information.”
Services could include contact initiated by the TSP at key career points, including at hiring and one year later, and upon moving to another agency, entering or leaving Reserve service, reaching certain ages, and at retirement — as well as other opportunities that arise when a participant contacts the TSP about taking a hardship withdrawal or doing an IRA rollover after retirement.
Some elements of the plan would need approval from the governing board and changes in law, Long noted, citing an assumption that the TSP will open an investment window through which account holders could direct money to investment funds other than those offered by the TSP.
Face-to-face interaction with a financial advisor is not currently under consideration. “Our phone reps are doing exactly what we are asking them to do, transaction support,” Long said. “What I’m advocating here is a different posture for our one on one conversations.”
Long acknowledged the “very meaningful and important line between consultation and advice. Where you cross the line is when you say what someone should do. Are we thinking about it? Absolutely.”
