Federal workers planning to invest in the thrift savings plan's international stock fund or small-capitalization stock fund will have to wait until October.
The Federal Retirement Thrift Investment Board said yesterday that it is delaying until Oct. 1 a new record-keeping system originally scheduled to begin in May. The delay is pushing back the introduction of the two new funds and other changes in the thrift savings plan, the government's 401(K) plan.
Roger W. Mehle, executive director of the board that oversees the savings plan, said that there are "no apparent problems" with the new system but that testing is not complete and will require additional time. More than 2.4 million current and retired federal and postal workers have $95 billion invested in savings plan accounts.
Once the new system is operating, savings plan transactions--such as loans, hardship withdrawals and interfund transfers, all of which now take two to six weeks--will be processed each business day. Currently, the savings plan is a monthly valuation system. With the change, it will become a daily valuation system.
Savings plan investors also will have an expanded menu of investment options. Currently, employees (and eligible retirees) can invest in the C-fund, a stock index fund that tracks the Standard & Poor's 500; the F-fund, a bond index fund; and the G-fund, which invests in Treasury securities not available to the general public.
(Last year, the C-fund returned 20.95 percent; the F-fund lost 0.85 percent; and the G-fund returned 5.99 percent.)
The two funds that will become available in October are considered high-risk, high-reward. They are the I-fund, an international stock index fund that will be managed by Barclay's Global Investors, and the S-fund, a small-capitalization fund that will track the Wilshire 4500 stock index. Investors can put money in any of the five funds beginning in October. Until then, they are limited to investing in the C-, F- and G-funds.
401(k) Rollover Option The House last year passed legislation that would allow federal and postal workers to roll over money from a previous employer's 401(k) plan--but not an individual retirement account--into the thrift savings plan. The legislation had bipartisan support in the House.
The bill, sponsored by Rep. Constance A. Morella (R-Md.), also would let new employees join the savings plan immediately. Now they must wait six months to a year before signing up.
Insiders say that given the legislation's smooth sailing in the House, it is likely the Senate will pass it this year. The effective date of the bill is Oct. 1, which would coincide with the implementation of the savings plan's daily valuation system. But even if the bill doesn't become law, the new system and the two new funds will become available Oct. 1.
Thanksgiving Revisited One of the cardinal rules of daily journalism is that in attempting to correct an error, the good-deed-doer will often make another mistake. Call me living proof!
Yesterday's column attempted to correct an error in Sunday's annual leave chart, which showed Thanksgiving as taking place on a Friday. We all know Thanksgiving is Thursday. But I foolishly added that Thanksgiving takes place on the third Thursday of November. It is at such times that you learn you have 101 proofreaders.
Calls and e-mails came in from all over. Richard G. Smith, of Indianapolis, suggested we get a new proofreader. Suggestion rejected!
Brenda O'Connor, with an independent cable association, asked, "Did the feds do something I missed?" No!
Carol L. Hudson asked, "Have you ever noticed when you make one minor mistake, it begins to snowball?" Answer: Yes. She did, however, wish us a happy Thanksgiving 2000.
John E. Brewer got technical, saying that because it is always the fourth Thursday of November, Thanksgiving "can fall no earlier than the 22nd and no later than the 28th." (Somebody will probably challenge that.)
Richard Opp caught the mistake and added that this year has 27 federal pay periods. Demarius V. Miller also corrected us, but he said he would continue to read the column on his lunch hour.
Brian W. Manwiller made the most sense. Although I got the week wrong, he said, "you're still batting .500, 'cause you got the Nov. 23 date correct!" What a guy!
Not to weasel out of anything, but consider this: Cal Ripken would kill to have a .500 batting average.
Mike Causey's e-mail address is email@example.com
Wednesday, Jan. 12, 2000