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The Thrift Savings Plan might be gaining a real estate fund option, according to legislation that will be introduced Monday by two members of the House Government Reform Committee.

Rep. Jon Porter, R-Nev., chairman of the House Government Reform Subcommittee on the Federal Workforce and Agency Organization, and Rep. Chris Van Hollen, D-Md., announced Friday that they will introduce a bill to add a real estate investment trust fund option to the Thrift Savings Plan. In January, the Federal Retirement Thrift Investment Board discussed that option and decided they were against the introduction of a real estate fund.

The TSP, a 401(k)-style plan for federal employees, currently has five available fund options. The Thrift Board is also developing a sixth - the life-cycle fund, an automatically diversified collection of existing funds.

During a January meeting, the Thrift Board was told that lobbyists from the National Association of Real Estate Investment Trusts were on Capitol Hill pushing for a real estate fund in the TSP. Several board members - including Chairman Andrew Saul - said they were against the idea. No one spoke in favor. TSP Executive Director Gary Amelio noted that the Thrift plan already would be the 13th largest real estate mutual fund in the country, based on holdings in the five existing funds. Thrift officials were not immediately available Friday afternoon to comment on the proposed bill.

Congressional staffers said they are aware of the Thrift Board's position and have discussed the issue with Amelio.

"We met with them, and we've had back-and-forth correspondence, and we still think it's a great option," said Porter spokesman Chad Bungard.

According to Bungard, Amelio said that a real estate fund would be a logical choice for a sixth fund, but the TSP chief is opposed to the addition of any funds at all.

"We have been talking with Gary Amelio," Bungard said. "He's trying to keep it simple."

House Government Reform Committee Chairman Tom Davis, R-Va., is scheduled to appear with Porter and Van Hollen on Monday to introduce the bill.

"There were other opinions that contradicted the Thrift Board," said a Democratic staffer who asked not to be identified. "It's just an option; it's elective. It's very similar to what is available in 401(k)s. Federal employees should have the same option."

COMMENTS

• So that is the reasoning behind the subtle media reporting of the dismantling of the Fannie Mae and Freddie Mac agencies. So the administration can leverage those two organizations and their funds into more privatized units than before. GovExec.com reader Posted April 12, 2005 7:25 PM
• Now that the real estate bubble is getting ready to pop, TSP wants to set up a REIT fund. . . Just in time for hapless civil service employees to be sheared like lambs. You have to admit the TSP retirement program is a great management tool. Cut defined benifits, sucker the employees into the stock market casino, so they can be fleeced by the likes of Ken Lay and Bernie Ebbers. Meanwhile when the employees do the math they realize that TSP will not give enough to retire on with its paltry 4.5% Met Life annuity which has no inflation protection. Briliant concept - cut retirement benefits and let the employees do the math to realize that they can't afford to retire anyway. In the meanwhile roll out the new Social Security "reform", with its TSP clone private savings account. Saw another leg off of the FERS retirement system while you are at it. To cap it off, establish "pay for performance" which allows the government to shift payroll accounts from must fund to discretionary accounts. Next time a weapon system has a cost overrun, cover it with employee salary dollars. The final straw - tell the employees that it is their own fault that their living standard is falling, because they haven't worked hard enough! GovExec.com reader Posted April 12, 2005 9:44 PM
• I am living in my real estate fund! Give me some secure retirement rather than hand our tax-deferred salary to some hustlers. One of the reasons that there is a G Fund is to protect us. This could be the camels nose under the tent for letting G Fund invest in junk like this. That said, let's see how we fare when we are forced by executive order to participate in "personal" social security accounts. The fund managers will be getting more commission for dumping our money into lousy investments that any of us will ever see no matter how long we live. GovExec.com reader Posted April 11, 2005 8:02 PM