FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

Facts about the TSP’s Mutual Fund Window 

 

 June 2022

On June 1, 2022, the Federal Retirement Thrift Investment Board launched a mutual fund window (MFW) 

for Thrift Savings Plan (TSP) participants. 

Highlights:

• The use of the MFW is entirely voluntary. TSP participants will remain invested in the same five

core Funds and the 10 target date funds that the TSP currently offers unless they choose to 

invest in a mutual fund through the MFW. 

• The MFW offers roughly 5,000 mutual funds in roughly 300 mutual fund families, including those 

offered by Fidelity, T. Rowe Price, and Vanguard. For funds with multiple classes, the lowest 

expense ratio class is offered.

• To exercise this option, participants must log into their TSP account and then open a MFW 

account before they can transfer money from their TSP account through the MFW and select the 

mutual fund(s) in which they choose to invest. 

• All the mutual funds on the platform comply with all applicable U.S. laws and regulations,

including those promulgated by the Securities and Exchange Commission (SEC) and the Office 

of Foreign Assets Control (OFAC). The mutual funds on the TSP MFW platform will follow the 

same rules applicable to any other mutual fund offered in any other public or private retirement 

plan in the United States. 

• The mutual funds available on the MFW platform have not been reviewed by TSP fiduciaries to 

determine whether they are wise investments for any individual TSP participant. This means that 

participants must carefully review the prospectus for each mutual fund and decide which ones will 

meet their investment goals, as they would if choosing a mutual fund outside the MFW.

• TSP participants who choose to avail themselves of the MFW will be able to use a Morningstardeveloped search tool to find mutual funds that meet their specific investment interests. They will 

be able, and in fact encouraged, to review any mutual fund’s prospectus before investing to have 

a thorough understanding of the fund’s goals and investments. 

• In accordance with the statutory requirement that TSP participants using the MFW bear the cost 

of the MFW, all TSP participants electing to invest in the MFW would incur additional fees: an 

administrative fee of $55 annually; an annual maintenance fee of $95; a per trade fee of $28.75; 

and any fees and expenses imposed by the specific mutual fund(s) in which they invest. 

• To be eligible to invest in the MFW, a participant’s minimum initial transfer must be $10,000 and 

the investments through the window can equal no more than 25% of the participant’s TSP 

account value.

• The funds that a federal employee or member of the uniform services uses to invest in the TSP or 

the MFW are personal property, not federal funds. Once a Federal employee or member of the 

uniformed services deposits their paycheck in the bank, it is theirs and not subject to Federal 

control. Money from TSP participants’ paychecks invested in the TSP is exactly the same; it is 

their personal property and they have property rights under the law.

• Any Federal employee or member of the uniformed services can, and has always been able to,

invest in any mutual fund outside of their TSP account through any mutual fund provider. 
Background: 

• In 2009, Congress authorized the FRTIB to offer a mutual fund window to TSP participants as a 

means of providing optional investment choices for our participants. Congress explained its 

rationale for this decision:

The bill would authorize the Board to create additional self-directed investment options, 

including additional index funds, provided that the costs of such options are borne solely 

by the participants who use such options and after consultation with affected employee 

organizations. 

The Committee believes the authority to add self-directed investment options under the 

Thrift Savings Plan will enable the Board to serve the best interests of participants by 

making available low cost index funds that offer important diversification benefits. Since it 

is unlikely any fixed asset allocation or fixed set of asset classes will satisfy the 

requirements of every investor, the authority to add appropriate self-directed investment 

options may enable participants to access the full set of core asset classes optimal in 

their own financial circumstances. 

The Committee recognizes some investors today have sophisticated or specialized 

investment needs. Participants may want added diversity by investing in funds comprised 

of real estate investment trusts, emerging markets, or inflation-protected bonds. Other 

participants may want to align their portfolio with their personal convictions by investing in 

socially responsible funds. The self-directed investment options are intended to provide a 

vehicle for meeting these needs of plan participants without complicating the basic 

structure of the Thrift Savings Plan.

Thrift Savings Plan Enhancement Act of 2009, H. Rept. 111–58 Part 2, P.L. 111-31, 

Division B

• The FRTIB and the Employee Thrift Advisory Council debated the mutual fund window in 2009 

and 2015, and the Board approved the addition of a MFW in 2015.

• The Board issued a solicitation for a new recordkeeper that could also provide a mutual fund 

window in June 2018. In November of 2020, the FRTIB awarded a contract for a new 

recordkeeper; that contract included a MFW that would be offered to TSP participants. 

• On January 26, 2022, the FRTIB published draft regulations in the Federal Register regarding the 

MFW; the comment period was open for sixty days. The FRTIB received 100 comments from 

TSP participants and stakeholders. The final regulations were published on May 10, 2022.

• The mutual funds on the platform are subject to the same rules and regs as all other investments. 

Specifically, to the extent that a comprehensive ban on investing in one or more countries or 

companies is issued by OFAC, that country or company would be ineligible for trading by any US 

person, and thereby, eliminated from every U.S. mutual fund. In addition, no U.S. investor could 

invest in those countries or companies. To the extent any Chinese company’s stock is present in 

any U.S. person’s portfolio, whether in a SEC registered mutual fund or an individual investor’s 

account, it is because OFAC has not designated that company as ineligible.

o The OFAC, located with the Department of the Treasury, enforces economic and trade 

sanctions based on US foreign policy and national security goals against targeted foreign 

countries and regimes, terrorists, international narcotics traffickers, those engaged in 

activities related to the proliferation of weapons of mass destruction, and other threats to 

the national security, foreign policy or economy of the United States.