TSP sticks with Barclays to run funds

The Thrift Savings Plan Board selected Barclays Global Investors once again to run four funds in the $186 billion federal employee retirement savings plan.

The competitive process was the first time the TSP Board accepted bids for all four funds concurrently. Those funds are the common stocks (C) fund, the small and mid-size companies (S) fund, the international (I) fund and the fixed-income (F) fund. The plan's fifth basic fund -- the government securities (G) fund - is a risk-free, low earning fund administered through the Treasury Department.

Board members accepted bids for the four funds at the same time for a more robust competition. Barclays received a five-year contract, with a three-year base and two one-year optional extensions. There is no set monetary figure attached to the contract because the amount will depend on fees generated through the TSP.

"I was most impressed and gratified by the strong competition for this business by many very qualified vendors," said TSP Executive Director Gary Amelio. "This assures that our participants, who pay for the costs of TSP administration, will receive exceptional value in return."

Starting at its inception in 1986, the TSP contracted with Barclays to manage the C and F funds. Later, the firm took on the S and I funds too. According to a spokesman for the plan, Barclays is the largest manager of institutional assets in the world, with more than $1.6 trillion in assets under its management.

The board also announced a contract for a TSP participant survey, awarded to Watson Wyatt for $215,124.

"This survey capability provides a more scientific process to identify participant concerns," Amelio said. "It also begins establishing a long-term process to record the evolution of participant attitudes. This will be very helpful in identifying trends and preparing to meet future needs."

The TSP Board has been under pressure from Congress to start a Real Estate Investment Trust fund, but has resisted. Both Congress and board members have said they know what employees want. This survey will be the first concrete evidence.