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FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

MINUTES OF THE MEETING OF THE BOARD MEMBERS 

February 23, 2022 

David A. Jones, Acting Chairperson of the Federal Retirement Thrift Investment 

Board, convened a meeting of the Board members on February 23, 2022, at 10:00 a.m., 

Eastern Standard Time. The meeting was held telephonically and open to the public. In 

attendance were Dana K. Bilyeu of Oregon, member; William S. Jasien of South 

Carolina, member; Ravindra Deo, Executive Director; Dharmesh Vashee, General 

Counsel and Secretary; Suzanne Tosini, Chief Operating Officer and Deputy Executive 

Director; Kimberly A. Weaver, Director, Office of External Affairs; Susan Crowder, Chief 

Financial Officer; 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; Thomas Brandt, Chief Risk Officer; and Ernest Witherspoon, 

Executive Advisor to the Executive Director. 

Welcome and Introductions. 

Acting Chairperson Jones called to order the monthly meeting of the 

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

welcomed everyone present to the meeting. 

 

1. Approval of the Minutes of the January 24, 2022 Board Meeting. 

Acting Chairperson Jones entertained a motion for approval of the minutes 

of the January 24, 2022 Board meeting. The following motion was made, seconded, and 

adopted without objection: 

MOTION: That the minutes of the Board meeting held on January 24, 

2022 be approved. 

2. State Street Global Advisors Report. 

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

for the meeting, and welcomed Rocky Granahan and her colleagues from State Street

Global Advisors (“State Street”). 

Ms. Granahan is head of Institutional Relationship Management for 

Americas at State Street. Ms. Granahan introduced Cyrus Taraporevala, State Street’s 

President and CEO, and her colleagues from the investment team and securities 

finance. She also provided a brief overview of the agenda for State Street’s 

presentation. 
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a. Cyrus Taraporevala, President and CEO

Mr. Taraporevala was honored by State Street’s selection as one of the 

asset managers for the TSP and remarked that it was inspiring to observe the collective 

teams of State Street and the TSP working closely together during last year’s smooth 

transition of assets into the TSP C, S, and F Funds while managing the challenges of 

COVID-19. He stated that State Street is committed to achieving that same level of 

diligence in the day-to-day management of the plan. He also noted that State Street has 

its best people in technology operations and investment staying focused on providing 

TSP with the best service possible.

Mr. Taraporevala then provided an overview of State Street’s history in the 

asset management industry. State Street’s mission is to invest responsibly to enable 

economic prosperity and social progress. State Street manages over 4 trillion dollars in 

assets and has over 2,500 employees across 30 offices globally. He explained that 

State Street Global Advisors is the asset management side of State Street Corporation, 

one of the largest global custodian banks with over 43 trillion dollars of assets under 

custody. 

Mr. Taraporevala concluded by announcing his plan to retire in 2022 after 

his successor is on board and a smooth transition has occurred. 

b. Lori Heinel, Chief Investment Officer

Ms. Heinel provided an overview of State Street’s global market outlook, 

including a general overview of the U.S. and global economies and the various factors 

that may impact 2022’s economic recovery. See “FRTIB_SSGA Board Meeting” 

(attached). 

c. Brendan Curran, Head of U.S. Investment Strategy for Defined 

Contributions

Mr. Curran provided his perspective on plan design trends based on State 

Street’s broader defined contribution business. He discussed target date funds and 

how they work well for many investors who are too busy to check their allocations and 

rebalance as their time horizon shortens. Over time, these funds have delivered higher 

median returns with lower levels of volatility when compared to participants who

construct their defined contribution portfolios with standalone options. Mr. Curran also 

discussed next generation challenges such as participants living and working longer, 

the employer shift from defined benefit plans to defined contribution plans, and 

sponsors looking for in-plan retirement income solutions to maintain assets in the plan 

to keep costs down. He also mentioned that many participants are looking to their 

employer for assistance in the decumulation phase. 

d. Axel Hester, Director of Securities Lending
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Mr. Hester provided an overview of State Street’s experience and 

commitment to securities lending as a core product offering. He stated that State Street 

manages 5.4 trillion dollars in lendable assets and cash collateral advance through 

State Street’s cash management business. State Street’s lending program focuses on 

balancing risk and returns while adapting to the characteristics of the FRTIB’s lending 

program and its participants. He noted that, overall, State Street believes that the

launch of the TSP lending program with State Street was successful, and 2022 is 

starting off well.

e. Marc Dicosimo, Senior Portfolio Manager

Mr. Dicosimo provided an overview of the F Fund, a passively-managed 

portfolio whose objective is to track the Bloomberg U.S. aggregate index. He reported 

that the fund is tracking appropriately, and since State Street began management in 

June of 2021, the Fund has had a positive tracking error of 1 basis point.

f. Karl Schneider, Senior Portfolio Manager

Mr. Schneider discussed the performance for the S Fund and the C Fund

in 2021. He stated that the C Fund matched its benchmark in each period, while the S 

Fund was slightly ahead of its benchmark in each period. He noted that the S Fund has 

outperformed its benchmark by close to seven basis points with approximately six basis 

points coming from the securities lending program. 

g. Closing Remarks

Ms. Granahan gave a few closing remarks and opened the floor for 

questions. In response to a question from Member Jasien about the geopolitical 

activities around the globe and their effects on the market, Ms. Heinel explained that 

there are some concerns about liquidity, particularly in local markets and especially in 

the bond markets, where spreads have widened quite dramatically, and trading activity 

has grown to a halt. She said that State Street is carefully watching developments in 

Ukraine. 

Member Jasien, echoed by Member Bilyeu and Acting Chairman Jones, 

requested that State Street continue to provide information relating to decumulation 

strategies as more individuals reach retirement with only a defined contribution plan. 

Mr. Curran agreed that the decrease in defined benefit plans has presented challenges 

in this area and he is happy to share more information going forward. 

 

3. Monthly Reports. 

a. Participant Activity Report

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

Savings Fund Statistics January 2022” (attached). He reported that the FERS and 
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active-duty uniformed services participation rates increased in January, setting all-time 

highs of 94.9 percent and 81.3 percent, respectively. He also reported that an additional 

3,400 separated participants began receiving monthly payments in February, adding to 

the 241,642 participants who are already receiving monthly payments. Mr. Ramos

stated that, as he reported last month, national labor supply and COVID-related

absences have negatively affected the Agency’s ability to maintain sufficient staffing at 

the contact centers. The Agency’s hiring and training pipeline in February should better 

position the Agency to be back on track in March. In response to a question from 

Member Jasien regarding staffing, Mr. Ramos shared that the Agency’s vendors have 

had several campaigns to recruit previously terminated employees and through contract 

negotiations have raised the prevailing rates to be more competitive with local markets. 

He admitted that the situation is still challenging, but they are doing a better job. He 

explained that sizable classes that were hired in January and early February are getting

through the training program and will be ready to begin answering calls in March. He 

acknowledged that the high turnover rate continues to be a problem. Member Jasien 

asked for the attrition rate, and Mr. Ramos responded around 94 percent. 

b. Legislative Report

Ms. Weaver began by noting that the House of Representatives and the 

Senate are out this week. She mentioned that Congress passed a three-week extension 

of the Continuing Resolution, which expires March 11th, and they are working to make 

sure the remainder of the fiscal year is funded. 

c. Investment Performance

Mr. McCaffrey reviewed the monthly investment performance report. See 

"January 2022 Performance Review – G, F, C, S, I, and L Funds” (attached).

 

For the month of January, BlackRock’s performance for the F Fund 

exceeded the Fixed Income Index by nine basis points, primarily due to a difference in 

the timing of pricing by BlackRock and by the index provider on December 31, 2021. 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 three basis points, primarily

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

International Index by 88 basis points, largely due to a fair value pricing event on the 

last trading day of January.

State Street’s performance for the F and C Funds was in line with the 

Funds’ Fixed Income and Large Cap indices respectively for the month. Its performance 

for the S Fund exceeded the return of the Small Mid Cap Index by five basis points, 

primarily due to securities sampling.

 

The Federal Reserve left its target short-term interest rate range 

unchanged, noting that economic growth continues to depend on the course of the 

pandemic. However, it also acknowledged that inflationary pressures may soon require 
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that rate to rise. Markets were turbulent as investors prepared for the removal of 

monetary stimulus. Higher longer-term interest rates contributed to a loss for the F 

Fund. The C, S, and I Funds also posted losses, with the latter’s decline attributable in 

part to a stronger U.S. dollar. All the L Funds experienced losses for January. 

 

Mr. McCaffrey noted that there is no separate year-to-date performance 

reporting and commentary for this meeting because those returns would match 

January’s returns. 

 

Mr. McCaffrey provided the current month’s performance through

Tuesday, February 22, 2022. The C Fund is down 4.56 percent. The S Fund’s loss is 

3.59 percent. The I Fund has lost 1.60 percent. The F Fund has fallen 1.61 percent. The 

G Fund is ahead by 0.11 percent. 

 

Net interfund transfers for the Funds picked up significantly for January 

because of what were probably flight-to-safety trades that led some participants to exit 

the equity Funds and buy the G Fund. About 2.46 percent of participants in the TSP

chose to do an interfund transfer. Mr. McCaffrey noted that looking at it another way, 

about 97.54 percent of participants chose not to do an exchange, in keeping with the 

theme that most participants do not execute an interfund transfer in a given month.

d. Investment Policy Approval Frequency.

Mr. McCaffrey gave a presentation to explore the appropriate frequency 

for proposing resolutions to the Board for review and affirmation of the TSP Funds’ 

investment policies. See “Investment Policy Approval Frequency” (attached). He 

explained that the Federal Employees’ Retirement System Act (FERSA) requires the 

Board to establish investment policies, but it does not specify the frequency of their

review. The current practice is that the Executive Director proposes a resolution to the

Board for the approval of the TSP's investment policies for the G, F, C, S, and I Funds 

on a quarterly basis.

The Office of Investments recently commissioned a study by RVK, one of 

the TSP’s investment consultants, regarding best practices with respect to the 

frequency of Board review and approval of investment policies. Mr. McCaffrey gave a 

brief overview of RVK's study and its findings. Based on a review of the findings in 

RVK’s study and consideration of the nature of TSP’s investment policies, Mr.

McCaffrey noted that annual reviews are most consistent with the long-term nature of 

the TSP’s investment policy.

Mr. McCaffrey presented a proposal that the resolution on investment

policy be moved to an annual basis with exceptions for special circumstances that may 

arise. Additionally, the most recently approved resolution during the Board meeting of

January 2022 should serve for all of the calendar year 2022, so the next resolution 

would be submitted in January 2023. 
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In response to a question from Member Jasien regarding how the 

quarterly approval practice began, Mr. Deo and Mr. McCaffrey both stated that their 

understanding is that it was set up as quarterly since the plan's inception.

Acting Chairperson Jones entertained a motion for approval of the 

resolution. 

WHEREAS the Federal Employees’ Retirement System Act of 1986, as 

amended (5 U.S.C. § 8401 et seq.) provides the Board members shall 

establish policies for the investment and management of the Thrift 

Savings Fund (5 U.S.C. § 8472(f) (1) and (2)); and 

WHEREAS the C, F, S, I and G Funds are created by statute and are 

long-term investments; and 

WHEREAS the Board currently reviews the TSP funds’ investment 

policies on a quarterly basis; and

WHEREAS the Board’s due diligence suggests that fiduciaries of similar 

plans review investment policies on an annual basis; 

NOW THEREFORE BE IT RESOLVED that the Board will review the 

TSP’s investment policies going forward on an annual basis.

The following motion was made, seconded, and adopted without objection:

MOTION: That the Board will review the TSP’s investment policies going 

forward on an annual basis.

4. Quarterly Metrics Report. 

Dennis McNulty from the Office of Planning and Risk provided the first 

quarter key performance indicator results. See “FY22Q1 Board Report” (attached). Mr. 

McNulty briefed from Strategic Goal A: Improve participant retirement outcome and 

Goal D: Transition successfully to a managed services operating model. 

Regarding Strategic Goal A, Mr. McNulty reported that the Agency fell 

below the desired target for the Blended Retirement System (BRS) full matching 

contribution rate. Mr. McNulty reported that the missed target was driven mainly by 

auto-enrollees who were enrolled prior to the increase of the default contribution rate. 

He explained that the first quarter was the first time deferral rates for both BRS autoenrollees and BRS opt-ins were combined into a single metric. Mr. McNulty stated that 

based on a review of historical data that shows steady increases over the past year in 

the full matching rate for the BRS population, he expects this metric to continue to 

increase going forward due to the impact of the five percent deferral rate.
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Regarding Strategic Goal D, Mr. McNulty reported that the Agency missed 

its target for the phone call response rate due to the impact of COVID variants as well 

as other labor market issues on staffing. He stated that contact center providers are 

aggressively recruiting to increase staffing.

5. Converge Update. 

Tanner Nohe, Converge Program Manager, provided a brief overview of 

the Converge functional areas and then provided updates on data readiness, payroll 

and security readiness, service readiness, and participant communications. See

“Converge Update for February 2022” (attached).

Regarding data readiness, Mr. Nohe reported that the testing of the third 

round of data was completed in early February as planned, and all the essential data for 

day-to-day operations was successfully converted on the Accenture Federal Services 

(AFS) side and validated. They continue to work on the integrations between the new 

record-keeping system and the data lake, which will eventually support the processes 

for historical data. At the end of February, they are preparing the fourth and final round 

of conversion test data. 

Mr. Nohe reported that they continue to make great progress in preparing 

the payroll offices for conversion. All of the draft interconnection security agreements

(ISAs) have been reviewed, and over half of the ISAs have been signed and fully 

executed. 

The remaining ISAs are on track, and the target is to have them all 

finalized by the end of February. The secure connection testing for the payroll agencies 

that have a direct link to submit their payroll files is 95 percent completed, with the 

remainder expected by the end of February. Mr. Nohe noted that strategically, a lot of 

things are scheduled to be completed by the end of February to align with the plan to 

begin performance testing at the beginning of March.

Mr. Nohe stated that they are finalizing the Memorandum of 

Understanding and currently credentialing those payroll agencies that will use the new 

payroll portal to submit their payroll files. Ninety percent of those users have been 

identified and are being credentialed. They are in the process of training these users on 

the new system, which will continue through mid-March.

Regarding security, Mr. Nohe reported that they are still on track to issue 

the full Authorization to Operate at the end of February. 

Mr. Nohe reported that the functional testing around service readiness that 

was previously behind schedule has now been completed on schedule. Hands-on User 

Acceptance Testing (UAT) wrapped up in January. Multiple areas of functionality across 

75 different topics were tested, and the feedback from that UAT has been shared with 

AFS. Performance testing will begin in March.
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Mr. Nohe highlighted that participant communications have officially kicked 

off with the Executive Director’s letter that was sent out with annual statements in early 

February, which was the start of the first campaign, "Get Excited." More 

communications will continue to be sent out over the next few weeks. Additional 

campaigns will follow: the "Get Ready" campaign in March, and the "It's Here" campaign 

upon go-live. Mr. Nohe noted that they are also preparing contingency communications 

as a precaution. 

Finally, in reviewing Converge milestones, Mr. Nohe highlighted that the 

recordkeeping conversion round three milestone has been met, and he expects to meet

the next milestone by granting the Authorization to Operate by February 28. He 

concluded that the Agency is on track to hit the target go-live date later this year.

6. Agency Recognition. 

Mr. Courtney announced that the Agency will be recognized with two Eddy 

awards at an upcoming Pensions and Investments conference. See “Agency 

Recognition” (attached).

One award is for the implementation of "Spillover" and the other award is 

for the "To Retirement and Beyond" training. Mr. Courtney explained that "Spillover" is 

the TSP’s “easy button” solution to making catch-up contributions for those turning 50

and over. The Agency’s social scientist, Elizabeth Perry, identified the need for 

"Spillover" and helped lead the project team responsible for its implementation.

"To Retirement and Beyond" is a class the training team teaches to 

participants planning to retire within 10 years and addresses many of the factors to be

considered in that transition. Stuart Kaplan and his colleagues presented this course 25 

times last year to a total of more than 16,000 participants. 

7. Adjourn. 

On a vote taken by the Acting Chairperson, the members closed the 

meeting at 11:27 a.m. for executive session.

At 12:00 p.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 Acting Chairperson Jones

adjourned the meeting at 12:00 p.m.

MOTION: That this meeting be adjourned.

 
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Dharmesh Vashee

General Counsel and Secretary

Attachments

1. FRTIB SSGA Board Meeting

2. Thrift Savings Fund Statistics January 2022

3. January 2022 Performance Review – G, F, C, S, I, and L Funds

4. IPS Approval Frequency

5. FY22Q1 Board Metrics Report

6. Converge Update for February 2022

7. Agency Recognition