Officials overseeing the Thrift Savings Plan have met with a member of President-elect Barack Obama's transition team to discuss leadership issues as well as future changes to the plan, the TSP's legislative director said on Monday.
At a monthly meeting on Dec. 15, TSP Legislative Director Thomas Trabucco said he talked with an Obama representative last week and advised him that all the terms of the Federal Retirement Thrift Investment Board's five members have expired. They are serving as holdovers, but can be replaced at any time.
"Our enabling legislation set up staggered terms to support policy continuity and ongoing institutional knowledge through overlapping service at the board level," he said. "These goals are being frustrated at this time."
On a nonpartisan basis, the White House nominates three board members, while the House and Senate each nominate one person. Of the current board, two members' terms have been expired since 2006; the remaining three terms expired in 2007 and earlier this year.
Three of the board's officials -- Alejandro Sanchez, Andrew Saul and Gordon Whiting -- received bipartisan approval from the Senate Homeland Security and Governmental Affairs Committee in May, but the Senate leadership pulled the nominations just before the Memorial Day recess, Trabucco said.
The fact that all five board members are currently in holdover status stymies the appointment overlap designed to provide continuity and maintain institutional knowledge of TSP oversight, especially through presidential transitions. With all members in holdover status, the board could experience complete turnover if the nominations are not confirmed by the end of this congressional session.
Trabucco noted that during the last presidential transition from Clinton to Bush, when only two members were serving terms, Clinton made two additional recess appointments on Jan. 3, 2001. "That brought the number of members serving in staggered terms to four during that transition," he said.
TSP officials have apprised Senate leadership and the Bush administration of their concern, according to Trabucco. Members of the Employee Thrift Advisory Council, which consists of labor unions and other federal employee groups, also have written the Senate leadership and the Obama transition teams of their support for the pending board nominees, he said.
"Although the hour is late," he said, "it is my hope that this situation can be addressed in the next few weeks."
Trabucco said TSP officials also advised the Obama representative of legislation that passed the House in July that would have allowed automatic employee enrollment and changed the default fund for indecisive investors. Officials expressed support for those provisions, and he said they were still examining the possibility of adding a Roth option to the TSP.
TSP officials also will be meeting with the new leadership of the House Oversight and Government Reform Committee early next year "to get a sense of what their interests are going to be … and what we've got on our plates for the 111th Congress," Trabucco said. Last week, House Democrats elected Rep. Edolphus Towns of New York to replace Rep. Henry Waxman of California as chairman of the committee, while Republicans voted to confirm Rep. Darrell Issa of California to replace retiring Rep. Tom Davis of Virginia as ranking member.
Meanwhile, officials noted that investments in the TSP fell to $198 billion in November, down from a high of $234 billion in May. "This is not the way we'd like to see things go," said Renee Wilder, director of the TSP's Office of Research and Strategic Planning.
Wilder also said TSP participation dipped in November to 84.4 percent, down from 85 percent in October and a high of 86 percent in May. The participation rate is at its lowest since September 1997, she added.
The number of loans and withdrawals were lower in November than TSP officials anticipated, Wilder said, but still were running slightly higher than in 2007.
"It's a tough time for anybody to be an investor," said Gregory Long, executive director of the plan. "But we are doing our best to communicate with our participants and get through this challenge."
Long added that the board will provide a demonstration of its new Web site redesign at a board meeting in May 2009. Officials said they also plan to examine the financial health of its annuity provider -- Metropolitan Life Insurance Co. -- to determine whether it is licensed in all 50 states. Such licenses would ensure financial protection by state insurance funds, officials said.