Are regular mutual funds about to gain access to the Federal Thrift Savings Plan? The jury is still out. The Federal Times' Tim Kauffman and Markie Harwood report that the House has already passed a bill authorizing the Federal Retirement Thrift Investment Board to include regular mutual funds in the plan, and a TSP official told the paper that the Senate is set to vote on the bill before Memorial Day. But the Senate's stamp of approval may not be enough.

The TSP board itself manages the Government Securities Fund (i.e. G Fund), while Barclays Global Investors manages the remaining non-lifecycle options in the plan. (The lifecycle "L Funds" simply invest in the different options already in the plan.) Consulting firm Ennis Knupp has worked with the TSP's board.

According to the Times, two TSP board members endorsed a different, self-directed brokerage account-type mutual fund option and two voted against it. And since the House bill doesn't actually require that mutual funds be included (it simply allows the board to choose to include them), TSP executive director Gregory Long told the Times that the TSP would "never do it," noting that it would cost $1 million to update the TSP's recordkeeping system accordingly and another $2 million to update plan communications.

The bill under consideration also includes two other proposals that were endorsed by the TSP's board: adding a Roth 401(k) option to the plan (allowing after-tax contributions that would then be tax-free while accumulating, growing and being withdrawn) and adding a survivor benefit for TSP participants' spouses. 

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