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FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

MINUTES OF THE MEETING OF THE BOARD MEMBERS 

April 26, 2022 

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

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

Eastern Daylight 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; and Thomas Brandt, Chief Risk Officer. 

 

 

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 March 24, 2022 Board Meeting. 

Acting Chairperson Jones entertained a motion for approval of the minutes 

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

adopted without objection: 

 

MOTION: That the minutes of the Board meeting held on March 24, 2022,

be approved. 

2. Investment Manager Annual Service Review - BlackRock. 

 

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

for the meeting, and welcomed Kim Klenk Howells and colleagues from BlackRock. 

Ms. Klenk Howells is head of Relationship Management at BlackRock. 

She provided an introduction and a brief overview of the agenda for BlackRock’s 

presentation. She then introduced Larry Fink, Chief Executive Officer, and Mr. Fink’s 

BlackRock colleagues.
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i. Comments from Mr. Fink

 Mr. Fink provided a general overview of BlackRock’s work with the TSP

and an outlook of the U.S. and global economies. He discussed the role that Russia’s 

war on Ukraine has had on global economic activities as well as the economic recovery 

of various sectors impacted by the pandemic. Mr. Fink also mentioned the role digital 

currency is poised to play in BlackRock’s activities sometime in the future. In response 

to Board member questions about participant retirement needs and decumulation, Mr. 

Fink mentioned BlackRock’s new no-load annuity plan. 

ii. BlackRock overview 

 Ms. Klenk Howells presented a review of assets under management by 

BlackRock. See “Investment Manager Annual Service Review” (attached). She noted 

that BlackRock manages approximately 445 billion dollars in TSP participant assets 

across the C, S, I, and F Funds. 

 Ms. Klenk Howells then introduced Paul Whitehead, Managing Director of 

BlackRock, to present additional information about the management of the C, S, and I 

Funds. Mr. Whitehead noted that the C fund is positively tracking up two basis points

due to securities lending. He also noted that the S Fund overperformed its benchmark 

primarily due to securities lending and securities sampling, while the I Fund has positive 

tracking as a result of tax advantage and some negative tracking for the last three 

months from fair value pricing.

 Mr. Whitehead next introduced James Mauro, Managing Director of 

BlackRock. Mr. Mauro provided an overview of F Fund management. Mr. Mauro stated 

that the F Fund is tracking its benchmark, despite the supply chain disruptions due to 

the pandemic and the war in Ukraine, as well as inflation and rising interest rates. 

 Mr. Mauro next introduced Jason Strofs, Global Head of Product

Strategy, Trading and Liquidity Strategies, of BlackRock to deliver remarks on securities 

lending. Mr. Strofs provided an overview of securities lending and discussed three areas 

of securities lending that BlackRock is focusing on: data science and artificial 

intelligence, platform improvements, and market structure. He then discussed the C, S, 

I, and F funds and noted that 2021 was a good year for revenue opportunities. He 

mentioned that twenty percent of income for the C fund and about fifteen percent of 

revenue for the S fund came from the IT sector, while the revenue for the I Fund comes 

from a variety of corporate actions and two-thirds from French securities. Mr. Strofs also 

noted that F fund income was due to the demand for U.S. treasuries, which saw an 

influx of cash into the system due to fiscal stimulus and Federal action as a result of the 

pandemic. 
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3. Monthly Reports. 

a. Participant Activity Report

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

Savings Fund Statistics March 2022” (attached). He reported that March saw the 

highest dollar amount of roll-ins in the last two years and increased by more than 11 

million dollars over the previous March. Post-separation hardship withdrawals were up 

higher than in previous years and the staff levels at contact centers have risen to 

overcome the previous deficit. In response to a question from Member Bilyeu about the 

increase in roll-in volume, Mr. Ramos attributed the rise to the work of the 

communications team and mailings that are sent out and the fact that the TSP is the 

best DC plan in the world.

b. Legislative Report

Ms. Weaver began by noting that four out of the five Board member

nominees were referred for floor action by the Senate Homeland Security and 

Government Affairs Committee on March 30th. There is no additional information 

regarding the timeline of floor action. She also noted that currently there is no legislation 

her team is monitoring that would impact the TSP. 

4. Quarterly Reports.

a. Investment Report

Mr. McCaffrey reviewed the quarterly investment performance report. See

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

month of March, Mr. McCaffrey noted that BlackRock’s performance for the F Fund 

exceeded the Fixed Income Index by seven basis points primarily due to securities 

lending. Blackrock’s performance for the C Fund was in line with the Large Cap Index 

returns. It outperformed the Small-Mid Cap index for the S Fund by six basis points, 

primarily due to securities lending. BlackRock’s performance for the I Fund was behind

the International Index by 97 points, mainly due to fair value pricing. State Street’s 

performance for the F, C, and S Funds was in line with the respective indices.

In the markets, despite growing economic uncertainties due to the war in 

Ukraine, the C and S Funds gained as investors renewed their interest in U.S. equities.

The I Fund posted a small loss, due in part to fair value pricing. The Federal Open 

Market Committee raised its target range for the federal funds rate and indicated that 

additional increases were likely to be required to ensure price stability. Longer-term 

interest rates rose, contributing to the F Fund ending the month with a loss. All L Funds 

posted gains by the end of the month. 

BlackRock’s year-to-date performance for the F fund exceeded the 

benchmark returns by 20 basis points, primarily due to securities lending. Performance 
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for the C Fund was in line with the Large Cap Index. For the S Fund, BlackRock 

outperformed the respective benchmark by 13 basis points, primarily due to securities 

lending and a difference in the timing of pricing by BlackRock and the index provider on 

December 31, 2021. Its performance for the I Fund was behind by 85 basis points, 

primarily due to fair value pricing. 

State Street’s year-to-date performance for the F and C Funds tracked in 

line with their respective indices. For the S Fund, State Street outperformed the Small 

Mid Cap Index by eight basis points, primarily due to securities lending.

For the current month through April 25, the C Fund is down by 5.10

percent, the S Fund is down 6.16 percent, and the I Fund is also down 4.67 percent. 

The F Fund had a loss of 3.24 percent, while the G Fund gained 0.17 percent. 

Participation in the L Funds continued to climb in March, with 50 percent 

of participants, over 3.2 million, investing at least one dollar in an L Fund. Growth was 

driven largely by automatic enrollment of new participants.

Interfund transfers dipped slightly below the median of 2 percent during 

the month of March to 1.73 percent. Mr. McCaffrey noted that there was nothing 

alarming about the numbers. 

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

settlement reports. An audit of proxy voting found no exceptions to established 

guidelines during the fourth quarter of 2021 for both BlackRock and State Street.

For the fourth quarter class action report, BlackRock reported that it began 

the quarter with 69 open claims. The C and F Funds each had one claim opened during 

the quarter, and the S Fund had 19. Overall, 13 claims were settled for over 2.5 million 

dollars, including nine claims in the S Fund and four claims in the C Fund. Residual 

payments for four previously closed S Fund claims paid out about 96 thousand dollars. 

Two claims in the S Fund were closed due to administrator action, bringing the total 

closed claims for the quarter to 15. Across the four Funds, 75 claims remained open at 

the end of the quarter. 

For State Street, there were no open claims at the start of the fourth 

quarter. However, three claims were opened in the S fund and no claims were settled.

State Street ended the quarter with three open claims.

b. Budget Review

Ms. Crowder reported on the second quarter budget review for Fiscal Year 

2022. See “Quarterly Budget Review” (attached). The Agency executed approximately 

68 percent of the second quarter targeted spending plan. As of the second quarter, the 

Agency executed roughly 55 percent, or 274.4 million dollars, against the overall budget 
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of 496.8 million dollars. Out of the 274.4 million dollars executed, 74 percent was 

executed to support recordkeeping operations, maintenance, and transition to the new 

recordkeeping system. 

Ms. Crowder reviewed the five-year annual net and gross administrative

expense ratio and estimated the gross expense ratio for calendar year 2022 would be 

approximately 6.2 basis points or less. The budget-to-asset ratio in calendar year 2021 

was 6.8 basis points; however, the Agency did not spend 100 percent of the budget in 

calendar year 2021. The actual gross administrative expense fee for 2020 was 5.3 basis 

points. In response to a question from Member Jasien, Ms. Crowder confirmed that 

asset growth would also have been a key contributor to the reduction in expense ratios.

c. Audit Status

Ms. Crowder provided an overview of the Agency’s audit status. See 

“Audit Status/Security and Remediation Status” (attached). She reported that there are 

nine audits planned for the fiscal year, two of which have been completed as of March 

31, five in various stages of progress, and the last two in the planning phase. Ms. 

Crowder then discussed the new guidance from the Office of Management and Budget 

concerning FISMA audits.

Mr. Deo provided an update on audit remediation status, reporting that the 

Agency closed five audit findings this last quarter, down from the projected seven

closures. He noted that, instead of the 29 audit finding closures projected for all of FY 

2022, the Agency has closed 35 and plans to close more. The Agency will continue to 

remediate audit findings based on risk when it can. As of quarter-end, the Agency has 

remediated three of three critical findings and 13 of 19 high findings reducing their risk. 

Mr. Deo concluded his discussion by showing the open vulnerabilities over time 

resulting from external scans. The Agency has no critical or high vulnerabilities and 

works to remediate medium vulnerabilities as they arise.

Annual Financial Audit - CLA. 

Ms. Crowder introduced Michele Chalmers, CliftonLarsonAllen (CLA) 

engagement principal, who discussed the 2021 annual financial statement audit. See

“Federal Retirement Thrift Investment Board-Thrift Savings Fund” (attached). Ms. 

Chalmers reported that CLA issued an unmodified, “clean” opinion. There were no

material weaknesses or significant deficiencies reported in the internal control letter. 

Ms. Chalmers discussed four best practices and noted that they will be addressed with 

the new Converge recordkeeping system. There were no changes in scope, accounting 

policy or significant disclosures. Ms. Chalmers noted that there will not be significant 

testing on the Converge system change during the June review. That will happen during 

the annual audit. Ms. Chalmers concluded her presentation by confirming with the

Board members that CLA will be paying close attention to the Converge process. 
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5. Department of Labor Presentation. 

Ms. Crowder introduced Michael Auerbach of the Department of Labor 

Employee Benefits Security Administration (EBSA). Mr. Auerbach presented an 

overview of the fiscal year 2022 fiduciary oversight program and then introduced Derek 

Thomas of KPMG LLP, who presented highlights of the overall audit assessment from 

May 2021 to April 2022. Mr. Thomas also noted considerations for the Board related to 

the Converge transition. See “U.S. Department of Labor Employee Benefits Security 

Administration Fiscal Year (FY) 2022 Thrift Savings Plan Fiduciary Oversight Program” 

(attached). EBSA finalized seven audits, reporting no material instances of noncompliance. They closed 34 agency recommendations and issued 15 new ones, 12 of 

which are related to fundamental controls. 

Mr. Thomas noted that EBSA closed 64 percent of the prior 

recommendations reviewed during the IT audits, as well as 75 percent of IT 

recommendations reviewed during process audits. Regarding the trend of closed and 

new recommendations over the past five years, Mr. Thomas explained that the number 

of new recommendations continues to fall below the number of closed 

recommendations for the year. Mr. Thomas noted a continued focus on IT-related 

recommendations as 72 percent of the new recommendations are IT-related and new 

findings continue to be issued. The number of findings decreased from 74 to 63. The 

participant support and board staff audits continue to have the largest number of open 

recommendations. Overall, outstanding recommendations are down to 119 from 153 

from the last year. Mr. Thomas mentioned that 87 percent of those open 

recommendations are related to IT audits.

Next, Mr. Thomas discussed the actions KPMG has taken to prepare for 

the Agency move to the new recordkeeping system. He noted that they conducted

three performance audits as part of a pre-implementation review and KPMG is now 

moving to the reporting phases for those audits. There were no findings. Mr. Thomas 

clarified that KPMG would review the open IT recommendations as they relate to the 

transition to the new system and encouraged the Agency to continue to assess those 

recommendations. 

Finally, Mr. Thomas highlighted the importance of close collaboration 

between EBSA and the Agency to determine what new or updated documentation and 

other details will be needed to determine the scope of audits going forward. 

6. Converge Update. 

Tanner Nohe, Converge Program Manager, provided an update on

Converge. See “Converge Program Update for April 2022” (attached). Mr. Nohe gave a 

brief overview of the functional areas and then provided updates on data readiness, 

payroll and security readiness, service readiness, and participant communications. Mr. 

Nohe mentioned that all phases are on track for the roll out. 
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Mr. Nohe began by noting that, since March, the focus has been on 

testing. He summarized that the fourth round of testing was sent over to AFS midFebruary, ran for three weeks, and was divided into three phases. Data analysis and 

correction that had been part of test round three continue to be proven out and 

additional processes and systems continue to be identified. A final rehearsal will be run 

by the end of April.

 Next, Mr. Nohe mentioned that payroll office and service readiness 

efforts remain on track, with 94 percent of interconnection security agreements signed

to date. Testing and training were separated into two phases. Phase one, computerbased training for Agency users, had a 94 percent participation rate. Phase two, handson training and data testing, are about halfway complete and are expected to be 

finished in late May. Mr. Nohe did not foresee any issues with the roll out. Mr. Nohe 

also reported that the Converge team began performance testing on March first and will 

continue testing for 90 days. These tests will simulate what the end-to-end process will 

resemble once live. Testing is on track.

The three campaigns to communicate changes to participants 

communications continue to go well. Campaign number one is complete. Campaign 

number two is in progress and notification emails and mailings regarding service 

changes and planned downtime to participants and beneficiaries were sent out on 

March 29th. Additional emails will continue to go out until go-live. Mr. Nohe noted that 

the TSP website has been updated to reflect transition details and that training teams 

have updated their presentations with the information. A notice with a timeline of key 

dates was also sent to participants. Mr. Nohe mentioned that April 29th is the last day 

for participants to request any paper materials via the ThriftLine and that May 16th is the 

date when certain transactions will be temporarily unavailable. On May 26th, all 

transactions will be temporarily unavailable to participants. Mr. Nohe expects full 

access to be restored by June 1st. 

Finally, Mr. Nohe shared that only two milestones are left for the transition: 

performance targets and the actual go-live. Mr. Nohe mentioned that the Converge 

team has completed the business continuity exercise and data conversion for round four 

and he expects to meet the performance targets by the end of May. He reiterated that 

the milestone for go-live will be reached in the first week of June.

7. Adjourn. 

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

meeting at 12:12 p.m. for executive session.

At 1:03 p.m., upon completion of the executive session, the members 

reconvened the open portion of the meeting.
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 Whereupon there being no further business, the following motion was 

made, seconded, and adopted without objection and Acting Chairperson Jones 

adjourned the meeting at 1:03 p.m.

MOTION: That this meeting be adjourned.

 

 

 Dharmesh Vashee

General Counsel and Secretary

Attachments

1. Investment Manager Annual Service Review - BlackRock 

2. Thrift Savings Fund Statistics March 2022

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

4. FRTIB FY 2022 2nd Quarter Budget Review 

5. Audit Status/Security & Remediation Status

6. Annual Financial Audit – CLA Federal Retirement Thrift Investment Board-Thrift 

Savings Fund

7. U.S. Department of Labor Employee Benefits Security Administration- Fiscal 

Year 2022 Thrift Savings Plan Fiduciary Oversight Program

8. Converge Program Update