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FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

MINUTES OF THE MEETING OF THE BOARD MEMBERS 

July 26, 2022

Michael Gerber, Chair of the Federal Retirement Thrift Investment Board, 

convened a meeting of the Board members on July 26, 2022, at 10:00 a.m., Eastern 

Daylight Time. The meeting was held at the Board’s offices at 77K Street NE and was 

open to the public via video teleconference. In attendance were Dana K. Bilyeu of 

Oregon, member (by telephone); Leona Bridges of California, member; David Jones of 

Connecticut, member; Stacie Olivares of California (by telephone); Ravindra Deo, 

Executive Director; Dharmesh Vashee, General Counsel and Secretary; Susan 

Crowder, Chief Financial Officer (by telephone); Kimberly A. Weaver, Director, Office of 

External Affairs; Gisile Goethe, Director, Office of Resource Management; James 

Courtney, Director, Office of Communications and Education; Tee Ramos, Director, 

Office of Participant Services; Sean McCaffrey, Chief investment Officer; Vijay Desai, 

Chief Technology Officer; and Thomas Brandt, Chief Risk Officer.

Welcome and Introductions.

Chair Gerber called to order the monthly meeting of the Federal 

Retirement Thrift Investment Board (FRTIB or Agency) at 10:00 a.m. Chair Gerber 

noted that this is the first in-person board meeting since February of 2020. He went on 

to express gratitude for the current and former Board members and for the Agency’s 

staff.

1. Approval of the Minutes of the June 28, 2022 Board Meeting.

Chair Gerber entertained a motion for approval of the minutes of the June 

28, 2022, Board meeting, with one correction. The following motion was made, 

seconded, and adopted without objection:

MOTION: That the minutes of the Board meeting held on June 28, 2022, 

be approved.

2. Monthly Reports.

Mr. Deo gave opening remarks, including a brief summary of the agenda 

for the meeting.

a. Participant Activity Report

Mr. Ramos reviewed the monthly Participant Activity Report. See “Thrift 

Savings Fund Statistics June 2022” (attached). He stated that June marks the first 

month of Converge operations reporting. Participant interactions increased for the 
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month particularly around the areas of loans, withdrawals, and account setup. The 

increases around loans and withdrawals were likely due to pent up demand from the 

blackout period as well as the availability of a newly added second general-purpose 

loan. Court order and death benefits processing volumes decreased for the month due 

to the new vendor working through validation requirements. These volumes should 

increase in July.

Mr. Ramos indicated that over 1.1 million participants successfully logged 

into their accounts in June and most participant interactions took place over the internet, 

mobile app, and through chat. However, the contact centers encountered significant 

delays. The Plan processed 1,967 loans per day in June, up from an average of 1,000 

loans a day in 2021. In 2021, the Plan averaged 13,000 withdrawals daily. In June

2022, there was a 12 percent increase with 14,465 withdrawals processed daily. Mr.

Ramos expects these volumes to normalize into July and August. The Plan processed 

867 inbound payroll files during the month, and all payroll providers were able to 

process at least one contribution into the Plan.

Mr. Ramos explained that the contact center delays were due to very high 

call volumes. The contact center averaged 34,000 calls daily in June and averaged 

42,000 calls daily in the first two weeks after transition. During June, the contact centers 

received just under a million calls as compared to 181,000 calls in June of 2021. In the 

first 45 days since go-live, the contact centers received 1.2 million phone calls as 

compared to 2.5 million calls in all of 2021. Immediately after transition, hold times were 

a little over two hours, but as of last week, they are down to 15 minutes on average.

While hold times are still longer than is expected, the contact centers are currently 

answering the highest volume of calls in Plan history.

Immediately after go-live, most calls were related to login issues. To 

remedy this, the vendor adjusted the account login process. Now, 90 percent of 

participants can log into the system without issue, which is the target percentage to 

prevent bad actors from accessing participant accounts. In June, the vendor added 550 

new agents and will add an additional 500 by the end of July. The vendor also made 

changes to its contact center management team, which led to an improvement in call 

response rates.

In response to a question from Member Jones regarding how long it will 

take for call wait times to normalize, Mr. Ramos indicated that optimistically this should 

occur by mid-August. Mr. Ramos further stated that the numbers as of last week show 

the abandonment rate is returning to normal, but to ensure these changes are 

sustainable, he would need to see more data. However, Mr. Ramos expects that the 

wait times should return to normal levels by the end of August at the latest.

b. Legislative Report

Ms. Weaver reported that the House of Representatives passed the 

Department of Defense authorization bill last week. The bill did not have any TSPrelated provisions affecting the Plan. The House is planning to recess at the end of the
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week and will return after Labor Day. The Senate is planning to be out of session by the 

end of the first week of August and will also return after Labor Day.

Ms. Weaver stated that Congresswomen Eleanor Holmes Norton, Abigail 

Spanberger, and Jennifer Wexton along with Congressmen Gerald Connolly, Jamie 

Raskin, and Donald Beyer, Jr. sent a letter to the Government Accountability Office 

(GAO) requesting an investigation into the Converge transition. Ms. Weaver indicated 

that while the GAO does not always respond to investigation requests, given the 

number of Congressional representatives on the request and the high-profile nature of 

the transition, the GAO may choose to respond and investigate.

3. Quarterly Reports.

a. Investment Report

Mr. McCaffrey reviewed the monthly investment performance report. See 

“June 2022 Performance Review – G, F, C, S, I, and L Funds” (attached). Mr.

McCaffrey reported that for the month of June, BlackRock’s performance for the F Fund 

exceeded the Fixed Income Index’s return by six basis points, primarily due to securities 

lending. Its performance for the C Fund was in line with the Large Cap Index. For the S 

Fund, BlackRock outperformed the Small Mid Cap Index by four basis points, primarily 

due to securities lending. Its performance for the I Fund was ahead of the International 

Index by 38 basis points, primarily due to fair value pricing.

Mr. McCaffrey stated that State Street’s performance for the F and C 

Funds was in line with the Funds’ respective indices for the month of June. For the S 

Fund, State Street outperformed the Small Mid Cap Index by five basis points, primarily 

due to securities lending.

As a result of the TSP’s recordkeeping transition at the end of May, 

market movements from the last two trading days in May are reflected in the June 

returns of the Funds discussed above, but not in the returns of the benchmark indices. 

This explains the larger-than-normal tracking errors between the Funds and their 

benchmark indices for the month.

Year-to-date, BlackRock’s performance for the F Fund was ahead of the 

Fixed Income Index by 37 basis points, primarily due to securities lending. Its 

performance for the C Fund was in line with the Large Cap Index. For the S Fund, 

BlackRock outperformed the Small Mid Cap Index by 20 basis points, primarily resulting 

from securities lending. Its performance for the I Fund was ahead of the International 

Index by 65 basis points, primarily due to fair value pricing.

Year-to-date, State Street’s performance for the F and C Funds was in line 

with the Funds’ respective indices. For the S Fund, State Street outperformed the Small 

Mid Cap Index by 17 basis points, primarily due to securities lending.
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For the current month through Monday, July 25, all Funds are showing 

gains. The C Fund is ahead 4.87 percent, the S Fund has gained 6.44 percent, and the 

I Fund is up 2.34 percent. The F Fund has gained 1.53 percent and the G Fund has 

earned 0.21 percent.

L Fund participation continued to increase in June due in large part to 

automatic enrollment. Net Interfund transfers for June into the G Fund from the other 

funds were over $4 billion as some participants changed their allocations likely as a 

result of the volatility in the markets. As usual, however, the vast majority of participants 

left their funds untouched.

Next, Mr. McCaffrey reviewed the quarterly proxy voting and class action 

settlement reports. An audit of BlackRock’s proxy voting conducted by ISS found no 

exceptions to BlackRock’s established guidelines during the first quarter of 2022.

Likewise, an audit of State Street’s proxy voting conducted by ISS found no exceptions 

to State Street’s established guidelines during the first quarter of 2022.

In class action settlements, BlackRock began the first quarter with 75 

open claims. During the quarter, the C Fund had seven claims opened. Seventeen 

claims were opened in the S Fund. Overall, seven claims were settled for a total of 

3,257,108 dollars. Of these, three claims in the C Fund were settled for 3,001,423 

dollars, and four claims in the S Fund were settled for 255,685 dollars. Two claims in 

the S Fund and one claim in the C Fund were rejected, bringing total claims closed 

during the quarter to ten. Additionally, residual payments from three previously closed S 

Fund claims yielded 1,115 dollars. Eighty-nine claims remained open at BlackRock at 

the end of the quarter.

State Street began the first quarter with three open claims, all in the S 

Fund. During the quarter, two more claims were opened in the S Fund. As no claims 

were settled or closed, five claims remained open for State Street at the end of the 

quarter.

b. Budget Review

Ms. Crowder provided the Third Quarter Budget Review. See “FY22 3rd 

Quarter Budget Review” (attached). Budget execution of 397.8 million dollars was in 

alignment with the Agency’s spend plan projections. Of the 397.8 million dollars 

executed, 74 percent or 294.8 million dollars supported both the current and prior 

recordkeeping operations as the Agency transitioned to the new recordkeeping system 

and new recordkeeper.

Ms. Crowder provided an overview of the Agency’s budget versus average 

assets. At the end of the third quarter, the plan had 755 billion dollars in average assets 

under management and the total approved plan budget for fiscal year 2022 was 

approximately 497 million dollars. The Agency measures its administrative expenses on 

a calendar year basis. At this time last year, the Agency estimated that for calendar year
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2021 that the administrative expense ratio would be no higher than 6.8 basis points, but 

due to the market rate of return and the Agency’s prudent use of budgetary resources, 

the actual gross and net administrative expense ratios were 5.3 and 4.3, respectively.

The current calendar year 2022 projection for administrative expense ratio is 6.6 basis 

points.

c. Audit Status

Ms. Crowder provided the audit remediation and status update for the third 

quarter. See “Quarterly External Audit and Remediation Status” (attached). Over the 

past six years, there have been as many as twenty external audits in fiscal year 2019 

and as few as seven in fiscal year 2020. There are nine external audits planned for

fiscal year 2022.

The mid-year financial audit for calendar year 2022 will be performed by 

CliftonLarsonAllen (CLA). This audit is currently in its planning phase and will begin in 

early August. The fiscal year 2022 Federal Information Security Modernization Act 

(FISMA) audit is nearing completion and is the only audit currently ongoing. It is 

managed by the Agency’s Chief Audit Executive, Barbara Holmes and is performed by 

the Williams Adley auditing firm. During the third quarter, five external audits were 

completed, bringing the total number of audits completed to seven out of the nine 

planned for the 2022 fiscal year. Ms. Crowder reminded the Board that CLA presented 

the year-end financial audit to the Board at the April meeting. Ms. Crowder briefly 

presented the other four audit reports finalized in the quarter, three related to the 

transition to the new recordkeeping vendor, none of which resulted in any 

recommendations from the auditors.

Ms. Crowder then provided an update on audit remediation status. The 

Agency began fiscal year 2022 with a goal to close 29 recommendations by the end of 

the third Quarter. Thus far, the Agency has closed 45 recommendations. The Agency is 

currently closing recommendations faster than the auditors are issuing new ones, 

reflecting the Agency’s audit maturity. There are currently 80 open audit 

recommendations. They are being addressed and prioritized based on their associated 

risk rankings.

4. Internal Audit Update.

Barbara Holmes, Chief Audit Executive, provided an update on internal 

audits, and other internal audit activities. See “Internal Audit Update” (attached). Ms. 

Holmes began by summarizing the calendar year 2022 internal audit plan and the 

current stage of each audit.

The Office of Management and Budget (OMB) moved the reporting 

timeframe for the annual FISMA audit to the end of July from the end of the October. 

The Agency added a new internal audit assessing the decommissioning of legacy 

assets. There is an ongoing effort to review the shared drive file plans for the FRTIB
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offices, which started in 2021 and is a precursor to the records management audit 

planned for 2023. The review is currently in progress with two offices completed. Ms. 

Holmes’ team conducted an audit of the Multi-Asset Manager Program with a scope 

period of calendar year 2021, which resulted in no recommendations.

Ms. Holmes reviewed the status of internal audit findings. Since 2015, 

there have been 108 internal audit findings and 99 have been closed. Internal audit is 

also preparing for the remining audits for the year, including a vendor management 

audit, and is reviewing remediation efforts by program offices on several Notices of 

Findings and Recommendations (NFRs).

5. Adjourn.

On a vote taken by Chair Gerber, the members closed the 

meeting at 10:38 a.m. for executive session.

At 11:26 a.m., upon completion of the executive session, the members 

reconvened the open portion of the meeting.

Whereupon, there being no further business, the following motion was 

made, seconded, and adopted without objection and Chair Gerber adjourned the 

meeting at 11:26 a.m.

MOTION: That this meeting be adjourned.

Dharmesh Vashee

General Counsel and Secretary

Attachments

1. Thrift Savings Fund Statistics June 2022

2. June 2022 Performance Review – G, F, C, S, I, and L Funds

3. FY22 3rd Quarter Budget Review

4. Quarterly External Audit and Remediation Status

5. Internal Audit Update