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This provision gives the Thrift Savings Board the authority to add new investment options to the Thrift Savings Plan. Currently the Board may only offer investment options that are low-cost, diversified, passively managed index funds. The TSP web site has fact sheets on the current investment options.
The Board will nowbe able to add other investment options that the Board deems “appropriate retirement investment vehicles for participants.” These new options do not carry the same requirements as the current options. That means the new investment vehicles are not limited to low-cost, diversified index funds.
The new benefit options are available only if participants choose to invest their money in such options. The accounts of automatically enrolled participants who have not selected any investment options will not be invested in these new options. The administrative expenses of the new investment options will be borne solely by the participants invested in the options.
Read Section 404 of H.R. 1256.
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