FEDERAL RETIREMENT THRIFT INVESTMENT BOARD 

77 K Street, NE Washington, DC 20002 

MINUTES OF THE MEETING OF THE BOARD MEMBERS 

February 28, 2023 

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

convened a meeting of the Board members on February 28, 2023, at 10:08 a.m., 

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

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

Oregon, member; Leona M. Bridges of California, member; Stacie Olivares of California 

(by telephone), 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 Participant Experience; Sean McCaffrey, Chief Investment 

Officer; Vijay Desai, Chief Information 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 10:08 a.m. and welcomed 

everyone present to the meeting. 

1. Approval of the Minutes of the January 24, 2023, Board Meeting. 

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

January 24, 2023, Board meeting. The following motion was made, seconded, and 

adopted without objection: 

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

2023, be approved. 

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

2. Investment Manager Annual Service Review – State Street Global 

Advisors. 

Mr. McCaffrey welcomed and introduced Rocky Granahan, relationship 

manager, and colleagues from State Street Global Advisors (SSGA). Ms. Granahan 

provided an introduction and brief overview of the agenda for SSGA’s presentation. She 

then introduced Yie-Hsin Hung, President and CEO of SSGA, and her SSGA 

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Ms. Hung began by describing SSGA as a client-centric organization with 

tremendous expertise and a collegial, collaborative environment. She explained that 

SSGA was one of the earliest pioneers of index investing, active quantitative investing 

approaches, and exchange-traded funds (ETFs), among other areas. She expressed 

her gratitude for the partnership with FRTIB, then introduced Lori Heinel, Executive Vice 

President and Global Chief Investment Officer at SSGA. 

Ms. Heinel provided an overview of SSGA’s annual service review. See 

“Investment Manager Annual Service Review (State Street Global Advisors)” (attached). 

Ms. Heinel began by noting that 2023 is a continuation of 2022 where central bankers 

will continue trying to get inflationary pressures under control against the backdrop of 

subpar growth due to the exhaustion of post-COVID impulses that is putting a damper 

on economic activity. 

Ms. Heinel suggested that we are currently in a growth recession, in which 

we are unlikely to see negative economic activity, but neither the world nor the U.S. is 

likely to grow at potential. If global economic activity is at approximately 3.5 percent in 

equilibrium, we are likely to have slower economic growth than any period other than 

during the global financial crisis and the height of COVID. The U.S. is forecasted at 

about 0.4 percent growth for 2023, and the Eurozone is forecasted at about 0.3 percent 

growth. The one economy likely to experience above-trend growth is China, due to their 

post-COVID reopening. 

Ms. Heinel also suggested that central bankers have already put in the 

necessary work and that a disinflationary episode is likely near. This may lead to central 

bankers, including the Federal Reserve (Fed), cutting rates by the end of 2023. During 

the last couple years, inflationary impulses were demand-driven but also very much 

supply-driven. However, many of the supply issues have abated. Industrial production 

has normalized, and housing prices and owners’ equivalent rents have started to come 

down. 

Ms. Heinel also forecasted that the period of strength for the U.S. dollar 

may be nearing an end and looking beyond U.S. investments over the next couple of 

years may be attractive for investors. Right now, the U.S. dollar is around 30 percent 

overvalued. 

Ms. Heinel noted that secular forces, such as demographics, are currently 

driving the decline of long-term growth, but those forces are slowing globally. U.S. 10-

year yields are thus attractive from a long-term return perspective. In terms of fixedincome assets, buying longer-term assets is more attractive right now. SSGA prefers 

investment grade or government to high-yield. 

Ms. Heinel explained that there are risks on both sides in terms of what 

the Fed does. On one hand, if the Fed overtightens, that could create major economic 

challenges for the U.S. However, if inflation doesn’t come under control, that would 

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have serious consequences as well. Due to those dual risks, confidence in SSGA’s core 

forecast is lower than usual. 

Ms. Heinel opined that investment grade credit is in an attractive spot as 

corporate balance sheets remain healthy. However, high-yield is less attractive as the 

relative spreads aren’t commensurate with the default rate or the composition of the 

index. This is due in part to the degradation of the quality of the index. 

Finally, Ms. Heinel reported that SSGA’s posture toward over- and 

underweighting equities has been more volatile over the last year or so than would be 

typical; that has been in response to substantial market volatility. However, what is 

consistent is that the more attractive equities opportunities are outside the U.S. right 

now. SSGA favors Europe and value-oriented companies as driven by relative 

valuation. However, SSGA remains relatively unenthusiastic about emerging markets. 

In summary, Ms. Heinel concluded that 2023 will be a tricky year to 

navigate, and that diligence in tracking the evolution of issues such as central bankers’ 

ability to tame inflation, economies’ ability to weather the tightening period, and overall 

volatility will be critical. 

Ms. Granahan then introduced Karl Schneider, Portfolio Manager for the C 

and S Funds. Mr. Schneider noted that the C Fund has matched the S&P 500 

benchmark over each time-period since inception, as SSGA manages it in a fully 

replicated fashion. Meanwhile, the S Fund has outperformed its benchmark over nearly 

every time-period since its inception. SSGA manages this Fund in an optimized fashion, 

meaning not every name is owned at its exact index weight but rather they utilize a risk 

model to match as nearly as possible the risk and return of the Dow Jones U.S. 

Completion Index. The main driver of positive tracking is the Securities Lending 

Program, which has contributed plus 24 basis points in 2022. Additional positive 

tracking came from futures and security misweights. 

Mr. Schneider then introduced Amy Cheng, Senior Portfolio Manager. Ms. 

Cheng reported that the inception date of the I Fund was December 9, 2022. Around 12 

billion dollars was transferred smoothly; securities were transferred in-kind or inspecies, which avoided trading costs and stamp duty taxes. This also avoided time out 

of market between the buy and sell sides. For the partial December period, the I Fund 

outperformed its benchmark by 42 basis points, primarily due to fair value pricing. 

Ms. Cheng then introduced Marc DiCosimo, Portfolio Manager on the 

Fixed Income Indexing Team. Mr. DiCosimo stated that the F Fund is benchmarked to 

the Bloomberg U.S. Aggregate Index. While the F Fund typically tracks appropriately, 

one month resulted in negative 21 basis points of performance relative to the index due 

to a timing discrepancy in pricing on the last day of the month. Once the timing 

discrepancy is removed, performance for the year resulted in positive 11 basis points of 

performance relative to the index, attributable to securities lending. 

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Mr. DiCosimo then introduced Axel Hester, who oversees securities 

lending. Mr. Hester noted that the functions of execution of the lending program and the 

program’s design and oversight are separate. A lending agent actually executes the 

program, and SSGA handles design and oversight. There is also an additional level of 

committee oversight. In terms of the market, equity has been hit with several factors 

increasing volatility, which benefits securities lending. The demand and supply in 

securities lending markets for fixed income and treasuries specifically has remained 

robust. Demand for corporate bonds has increased slightly, especially in high yield. 

Cash collateral reinvestment opened 2022 very strong, but as Fed tightening caught up, 

reinvestment spreads declined. By the end of 2022, reinvestment spreads were virtually 

zero. A large portion of G Fund assets were moved into a cash equivalents account in 

order to preserve return on funds and maintain liquidity. The C Fund is still composed of 

S&P 500 securities, which are in excess supply, so demand is not high. The S Fund, 

however, has seen significant demand. The F Fund did see a significant increase in 

general collateral balances by midyear, but those disappeared by the end of the year 

due to reinvestment spreads declining. Finally, the I Fund is nearly out of its posttransition ramp up phase. 

In response to questions from Member Bridges, Mr. Hester clarified that 

SSGA’s 450 dedicated securities lending staff were assigned to the overall program, not 

specifically the TSP; that the program maintains 150 borrower relationships which may 

be with affiliated entities; that its 9 offices are around the world in different time zones; 

and that new banking regulations may change the amount of capital lending dedicated 

to indemnification of the TSP against borrower default loss. 

3. Recordkeeper Service Review – Accenture Federal Services. 

Mr. Courtney welcomed and introduced Elaine Beeman and Owen Davies, 

the two most senior members from Accenture Federal Services (AFS) on the FRTIB 

recordkeeper program, to present an overview of AFS’s service review. See 

“Recordkeeper Service Review (Accenture Federal Services)” (attached). 

Ms. Beeman began by noting that the Converge program is emerging from 

an extended burn-in period, and that AFS has been working through the kinks of 

operating in a new environment. Ms. Beeman then introduced Mr. Davies to provide an 

update on AFS’s progress on previously identified areas for improvement. 

Mr. Davies first provided that AFS has improved the installment process 

so that participants can change their installment payment with just one call to the 

ThriftLine, which was previously a source of dissatisfaction. AFS also addressed and 

resolved the 25-dollar minimum installment issue, and the ability to change installments 

via My Account is coming in the spring. In addition, AFS is expecting to have historical 

statements from 2021 and 2022 available to participants in My Account by the second 

week of March. AFS has also made improvements to the virtual agent AVA, such as the 

addition of My Account at a Glance and the ability to change your PIN. 

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Mr. Davies also noted that one of the areas of dissatisfaction was the 

participants’ ability to get to their investment summary quickly inside My Account. AFS 

has updated the My Account home page to make access easier, with additional 

improvements planned, such as more direct access to where money is being invested 

and how it is performing. Also, AFS worked to make it easier for participants to get to 

the agent with the skill they need, including assistance with year-end services such as 

tax documents and annual statements. Additionally, every service representative took 

refresher training to make sure they were current on 1099s and annual statements, as 

well as any new issues identified since August. 

Mr. Davies highlighted that AFS has worked with FRTIB communications 

to promote new features and online channels and that TSP participants are generally 

responsive to this outreach. Mr. Davies also noted that there are operational issues 

being addressed, but that the number of issues is shrinking, as is the duration. 

Providing an overall snapshot of the program, Mr. Davies stated that as of 

February 28, 2023, 3.4 million people have established their new online account log-in; 

4.1 million people had done so via the prior platform. In response to a question from 

Member Bilyeu, Mr. Davies anticipated being close to 4.1 million by June or July of 

2023. Mr. Davies reported that call volume around loans and withdrawals remains high, 

and AFS has taken steps to improve the call center experience. Mr. Davies stated AFS 

is experimenting with many things to see what works and what does not. In response to 

a question from Member Bilyeu seeking an example of something that did not work, Mr. 

Davies stated that AFS set up a voicemail box for participants to leave a message for 

an expert team to research and call back; however, the volume on that solution has 

been low, so AFS will make adjustments to promote it better, as well as include 

additional services. 

Mr. Davies further noted that AFS is, generally, continuing to achieve 

contract performance measures, and that operational processes are improving. AFS 

has cleared some backlogs that previously existed and is now achieving work in the 

planned timeframes. 

Mr. Davies provided that AFS has seen a continued trend where nearly 90 

percent of all participant interactions are happening through digital, self-service 

channels. Virtual agent sessions are not occurring as frequently as expected, but out of 

the 3.4 million people who have established their online accounts, 600,000 have 

downloaded the mobile app and nearly 750,000 are using e-signature. AFS is 

processing 15 to 18 thousand more loans each month than pre-transition, and the 

volume of withdrawals has increased by about 20 thousand per month. In response to a 

question from Member Bilyeu, Mr. Courtney and Mr. Brandt explained that the uptick in 

loan and withdrawal activity is consistent with the 401(k) industry trends, and that it 

additionally may be tied to the ability to take out a second TSP general purpose loan. 

Mr. Deo added that the number of residential loans has gone down, possibly in part as 

people instead opt for a second general purpose loan, which has a lower fee. 

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Mr. Davies reported that record-high call volume began to taper after 

August but picked back up at year end. Despite this, participant satisfaction for the 

ThriftLine has remained high, just short of the goal of 90 percent. For February, AFS is 

handling about 13,000 calls per day, the average wait time is 38 seconds, the average 

call duration is 11 and a half minutes, and approximately 80 percent of calls are 

answered in 20 seconds. However, 35 percent of callers are repeat callers. AFS is 

taking a more proactive stance to reach out to repeat callers to resolve their problems 

and reduce future call volumes. 

Mr. Davies highlighted that, for the week after President’s Day – which is 

typically the heaviest volume of the year – the wait time was down to 10 seconds, call 

duration was down by 45 seconds to a minute, and 90 percent of calls were answered 

in less than 20 seconds. In response to a question from Chair Gerber, Member Bilyeu, 

Mr. Davies, and Mr. Brandt noted that the week after President’s Day is busy because 

participants are filing their taxes and have recently received TSP annual statements. 

Ms. Beeman then reminded the Board that one of the challenges previously identified 

was being properly staffed for forecasted volumes, and this week, in particular, was a 

good demonstration of adequate preparation. 

Mr. Davies then explained that there are two areas where AFS 

performance is not where it should be: participant satisfaction and responsive 

participant support. While call center participant satisfaction is generally good and 

approaching the goal of 90 percent, satisfaction with the website, mobile app, and 

virtual agent are not as high. AFS is reviewing detailed data, including participant 

feedback, about what is not working. As for responsive participant support, AFS has 

met its general goals over the last 6 months but has not achieved 80 percent of calls 

answered in 20 seconds or less every month. 

Finally, Ms. Beeman discussed that AFS is supporting year-end activities 

and trying to address operational items affecting participant services and satisfaction. 

This involves continuous analysis of data and participant feedback. In response to 

questions from Member Bilyeu, Mr. Davies noted that there are certain topics that 

participants frequently call in about, and AFS seeks to identify and address those 

frequent topics first. There are people dedicated to researching cases identified as long 

duration, which can depend on the type and complexity of the case. The cases that 

have been open the longest are the ones getting attention first. 

In response to questions from Chair Gerber, Mr. Davies noted that the 

varying participant demographics explain why the call center will never be replaced with 

digital options. However, a number of factors can go into why participants are having 

challenges. Some relate to services not working properly, some relate to new options 

such as the second general purpose loan, and many cases are atypical processing 

issues. AFS has engaged its supervisors to encourage service representatives to 

transfer calls to the supervisor and is making more expertise readily available. 

Additionally, now that some backlogs have been resolved, fewer participants should be 

reaching out through other channels to get their issues resolved. 

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In response to a question from Member Bilyeu, Mr. Davies indicated that 

there had not been discussion about standing up a customer advocacy group or 

customer relations group, but that he would take the suggestion back for discussion. 

In response to questions from Member Bridges, Mr. Davies noted that call 

center staffing needs fluctuate throughout the year, and in three months AFS will have 

overseen a full annual cycle. This experience will have AFS better prepared for cyclical 

peaks and valleys in the future. Additionally, the staff on hand is fully trained, with most 

agents able to handle most types of call and specialty agents for certain topics such as 

loans and withdrawals. If an employee’s deviation from quality expectations is great 

enough, AFS administers remedial training, ultimately replacing the employee when 

necessary. 

In response to questions from Member Bilyeu, Mr. Davies and Mr. 

Courtney explained that call volume spikes in April and May are largely due to the 

quarterly statement that goes out in April, participants who continue to need tax-related 

information beyond April 15, as well as the seasonal workload of participants interested 

in rolling qualified money into the TSP. Mr. Davies further clarified that roll-ins can be 

either simple or complicated, and that a concierge service is available to help 

participants through the process. 

4. Monthly Reports. 

a. Participant Activity Report 

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

Savings Fund Statistics January 2023” (attached). He reported that for tax year 2022, 

the recordkeeper issued more than one million 1099-Rs. It also issued statements to all 

participants reflecting activity from the end of May 2022 to the end of the calendar year. 

Mr. Courtney also reported that the recordkeeper made changes to the 

installment payment process in February that allow participants to start, stop, or change 

their installment payment with one call to the ThriftLine. The minimum amount for 

installment payments is 25 dollars. 

Mr. Courtney provided an update on the unexpected shutdown of a key 

Treasury system on January 14, 2023. That shutdown did not affect the TSP’s ability to 

issue disbursements to participants; however, the shutdown did impact the ability to 

help participants calling about the status of their disbursements or requesting reissues. 

The backlog of payment reissues grew during this time from more than 400 to over 

1,400 by January 31, when Treasury restored service. Mr. Courtney reported that 

backlog has been cleared. 

b. Investment Report 

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Mr. McCaffrey reviewed the monthly investment performance report. See 

“January 2023 Investment Program Review” (attached). For the month of January 2023, 

BlackRock’s performance for the F Fund exceeded the Fixed Income Index by 17 basis 

points, primarily due to a difference in the timing of pricing by the index provider and by 

the manager that occurred on December’s last trading day. Its performance for the C 

Fund matched the Large Cap Index; its performance for the S Fund was ahead of the 

Small Mid Cap Index by three basis points, mostly due to securities lending; and for the 

I Fund, BlackRock outperformed the International Index by 30 basis points, primarily 

due to fair value pricing. 

Next, Mr. McCaffrey provided that State Street’s performance for the F 

Fund for the month of January outperformed the Fixed Income Index by 20 basis points, 

also primarily due to a difference in the timing of pricing by the index provider and by the 

manager on the final trading day of December. Its performance for the C and S Funds 

was in line with their respective benchmarks, and its performance for the I Fund was 

better than the International Index by 50 basis points, primarily due to fair value pricing. 

Mr. McCaffrey then reported that January’s market focus continued to be 

on the path of future Fed policy changes, hopes for lower inflation, and possibilities for a 

future economic slowdown. Stocks and bonds rallied significantly as treasury bond 

yields fell and many investors returned to risk taking. As a result, all of the TSP’s core 

equity Funds showed substantial gains, as did the F Fund and the entire L Funds lineup. 

Mr. McCaffrey also reported that stocks and bonds are losing ground so 

far in February as interest rates have continued to move higher. Through Monday, 

February 27, the C Fund has lost 2.15 percent, the S Fund has lost 1.65 percent, the I 

Fund is down 2.33 percent, the F Fund is behind by 2.65 percent, and the G Fund has 

earned a positive 0.27 percent. 

Finally, Mr. McCaffrey shared that L Fund participation continued to grow 

in January by a little over 14,000 participants. This development was expected, as the L 

Funds are the default investment option for new enrollees. Inter-fund transfers (IFTs) 

remained at a relatively low level. Approximately 1.9 percent of participants moved 

money between funds, which is slightly below the historical median. This means 

participants are sticking with their investment programs. 

In response to a question from Chair Gerber, Mr. McCaffrey noted that the 

2055, 2060, and 2065 L Funds were seeing the largest growth due to automatic 

enrollment of new, younger employees. 

c. Legislative Report 

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

Senate have named the subcommittees that would have oversight over the TSP. The 

House subcommittee is named House Government Operations and the Federal 

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Workforce, chaired by Representative Pete Sessions from Texas with ranking member 

Representative Kweisi Mfume from Maryland, and the Senate subcommittee is named 

Government Operations and Border Management, chaired by Senator Kyrsten Sinema 

from Arizona with ranking member Senator James Lankford from Oklahoma. 

Ms. Weaver also reported that the House would begin debating a bill that 

would prevent the Department of Labor from enforcing its new regulation allowing 

fiduciaries to consider Environmental, Social, and Governance (ESG) issues when 

making investment decisions on behalf of clients. She expects the bill to pass. The 

Senate is tentatively scheduled to vote on a similar bill on March 1, 2023, and while it is 

very possible that bill will pass, neither House would have enough votes to overturn a 

possible veto. This bill would not impact the TSP, as it would apply only to ERISA plans. 

Finally, Ms. Weaver reported that the Treasury Department invoked its 

authority to employ emergency measures, meaning it is unable to fully invest in the G 

Fund due to the debt ceiling. Information has been posted to tsp.gov to inform 

participants, and the Agency’s Office of the Chief Financial Officer is engaged with 

Treasury daily to monitor the situation. 

5. Quarterly Metrics Report. 

Dennis McNulty, Branch Chief for Strategic Performance in the Office of 

Planning and Risk, provided the key performance indicators for the first quarter of Fiscal 

Year 2023 (FY23). See “FRTIB Performance Metrics 1st Quarter FY23” (attached). Mr. 

McNulty first noted that, due to the transition to Converge, FY22 metrics were extended 

one quarter to allow additional time to establish FY23 metrics, making this the final 

report on FY22 metrics. 

Mr. McNulty reported that the Agency is below the desired target of 80 

percent for the Blended Retirement System (BRS) full matching contribution rate for the 

full quarter. However, the full matching rate continues to increase, and the Agency 

expects it to keep trending upward due to the five percent automatic enrollment deferral 

rate. 

Mr. McNulty also reported that on December 16, 2022, the Agency 

received a trade confirmation eight minutes late due to connectivity issues with State 

Street. Neither the actual investments nor participants were impacted, but as a result, 

the Agency missed its target of performing the daily investment of the F, C, S, and I 

Funds by 2 PM Eastern time every day. 

6. Adjourn. 

Whereupon there being no further business, the following motion was 

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

meeting at 12:03 p.m. 

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MOTION: That this meeting be adjourned. 

Dharmesh Vashee 

General Counsel and Secretary 

Attachments 

1. Investment Manager Annual Service Review (State Street Global Advisors) 

2. Recordkeeper Service Review (Accenture Federal Services) 

3. Thrift Savings Fund Statistics January 2023 

4. January 2023 Investment Program Review 

5. FRTIB Performance Metrics 1st Quarter FY23 

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