Trump-tinted change is coming soon to the world’s largest defined contribution plan, the U.S. federal government’s Thrift Savings Plan.
Five appointed members of the Federal Retirement Thrift Investment Board (FRTIB), together with an executive director, all administer the TSP on behalf of the plan’s 5.9 million participants.
President Trump recently nominated three new board members to replace members whose terms had expired, including Frank Dunlevy, who, if confirmed, would replace the board’s current chairman Michael Kennedy.
Kennedy recently announced he will resign at the end of June after a nearly a decade at the helm of federal employees’ 401k-style retirement program.
The news comes a month after President Trump nominated replacements for Kennedy and two other members of the FRTIB, as the Trump Administration leaned on the board to halt a controversial plan to transfer billions of dollars in its international fund to a new index fund that invests in emerging markets that happens to include some Chinese state-owned military and intelligence companies.
While Kennedy will depart at the end of the month, the other two members with replacements named, David Jones and Ronald McCray, have agreed to remain on the board so that it has a quorum until the new nominees can be confirmed by the Senate. Jones will serve as Acting Chairman until the new Board Members are confirmed.
All five current members of the FRTIB’s four-year terms have expired. FRTIB members can serve past their nominated four-year terms, and Federal News Network notes that unlike other agencies, there’s no provision in the board’s governing statute that sets one-year holdover terms limits for the appointees.
Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Nancy Pelosi (D-CA) have not acted to replace those serving in the two seats they control.
President Trump’s nominations came after Sens. Marco Rubio (R-FL) and Rick Scott (R-FL) urged Trump in December to replace the three presidentially appointed board members in an effort to reverse the board’s decision to transfer International (I) Fund assets to the Morgan Stanley Capital International All Country World Ex-U.S. Investable Market Index.
According to the Federal News Network, President Trump nominated Barger, a current member of the Postal Service Board of Governors, to replace David Jones. Barger is also the managing director of NorthernCross Partners, an advisory and investment firm, and he served for three years as chairman of several boards for the Los Angeles County Employees Retirement Association.
The president nominated Burnham, who co-founded and leads the Cambridge Global Capital consulting firm, to replace Ron McCray. Burnham was a political appointee in the State Department during the George W. Bush administration and served on Trump’s transition team.
Dunlevy, a long-time investment banker, currently holds two leadership positions at the U.S. International Development Fund, formerly known as the Overseas Private Investment Corporation.
Kennedy proud of his efforts as chairman
Kennedy oversaw several major initiatives during his tenure, including implementing an employer match for military service members through the blended retirement system and making it easier for participants to access their money, reports Government Executive.
Kennedy was first appointed to the FRTIB in June 2010 by President Obama, and was named its chairman in 2011.
“During my time as chairman, I have been most proud of the board’s efforts in leading improvements to the Thrift Savings Plan’s cybersecurity and infrastructure and adding significant plan enhancements such as additional withdrawal options and the blended retirement system for members of the uniformed services,” Kennedy wrote in his resignation letter. “With its low-cost structure, simplicity, and singular focus on acting in the interest of the TSP’s participants, the FRTIB serves as an example of effective federal governance and efficient operations.”
Government Executive said Kennedy hoped stepping aside now would “facilitate a smooth transition” for new board members John Barger, Christopher Burnham and Dunlevy.
“Our conversations were very productive, and I wish these new board members all the best in their important service to the Thrift Savings Plan’s participants and beneficiaries.”
Under its new makeup, the FRTIB is not expected to move forward with the “delayed” plan for the I Fund to invest in the MSCI index.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
