Legislation that would add a real estate investment trust (REIT) option to the Thrift Savings Plan will be introduced today, three House members announced yesterday.
Reps. Jon Porter (R-Nev.), chairman of the House subcommittee on the federal workforce; Chris Van Hollen (D-Md.), a subcommittee member, and Thomas M. Davis III (R-Va.), chairman of the House Government Reform Committee, said their proposal would provide government employees with greater choice when they invest for retirement.
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Davis predicted that the bill would win prompt House approval. "This is going to happen," he said.
The bill, however, seems likely to draw opposition from the Federal Retirement Thrift Investment Board, which sets TSP policy. TSP staff members contend that the plan's stock index funds include REIT holdings and that the TSP would be better served by a comprehensive review of all investment options that could be added rather than just one possibility.
A TSP spokesman declined to comment on the proposed bill until after thrift board members, who are appointees of President Bush, have had the opportunity to testify on the House bill. An aide to Porter said a TSP hearing has been scheduled for April 19.
Sen. George V. Voinovich (R-Ohio) will examine a REIT option if the House acts, Senate aides said. They said the views of the thrift board on the issue are important, in part because Congress usually defers to the board on which policies are in the best interest of TSP participants.
REITs are publicly traded companies that own and usually operate commercial real estate, such as office buildings and shopping centers. They provide a way to invest in an array of commercial properties without having to buy them directly.
Porter said a REIT fund would give government workers an enhanced opportunity to diversify their savings for retirement. From 2000 to 2003, he said, REITs produced a rate of return of about 20 percent while TSP stock funds lost value.
Van Hollen said the bill would provide government employees with an investment option that is available in many private-sector 401(k) programs. Davis said he believed a REIT option would benefit employees nearing retirement who wanted a hedge against a downturn in stock funds.
The TSP offers three stock index funds, a bond index and a government securities fund. The index funds operate at low cost and mirror the performance of Wall Street markets. The securities fund, or G Fund, is available only to TSP participants and has been designed to never lose money.
Last year, the typical 401(k) plan offered about 16 investment choices, said David L. Wray, president of the Profit Sharing/401k Council of America. Some studies, he said, have found that 401(k) plans offering more than a dozen choices discourage employee participation.
Public Administration Awards
Lee H. Hamilton, head of the Woodrow Wilson International Center for Scholars and vice chairman of the Sept. 11 commission, will deliver this year's Medina Lecture at the annual awards ceremony April 20 of the National Capital Area Chapter of the American Society for Public Administration.
The lecture on public service is named for the late William A. Medina, a former president of the ASPA chapter and an assistant secretary of housing and urban development from 1977 to 1981.
The chapter will present a special achievement award to the Sept. 11 commission staff, which investigated the 2001 terrorist attacks and prepared the report of the National Commission on Terrorist Attacks Upon the United States. Philip Zelikow, the commission's executive director, will accept the award on behalf of the staff.
Other chapter awards will go to John J. Kelly Jr., deputy undersecretary of commerce for oceans and atmosphere; Alberta Frost, director of the Food and Nutrition Service's office of analysis; and Rep. Davis, the Government Reform chairman.
For information on the event, go to www.ncacaspa.org.
Diary Live
J. Ward Morrow, assistant general counsel at the American Federation of Government Employees, will discuss civil service changes at the Defense Department at noon tomorrow on Federal Diary Live at www.washingtonpost.com. Please join us.
E-mail: barrs@washpost.com
