Why Every Unspent Dollar Makes TSP Stronger: Inside the Thrift Plan’s Budget Discipline

August 4, 2025

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Jim Kaplan, Director of External Affairs at the Federal Retirement Thrift Investment Board, joins Francis to share how the Thrift Savings Plan (TSP) continues to prioritize smart, participant-focused financial stewardship. Unlike many federal agencies that rush to spend remaining funds at the end of the fiscal year, Kaplan explains that TSP operates under a fiduciary responsibility to preserve and grow the retirement savings of federal employees and retirees. “Every dollar we don’t spend is a dollar that remains invested in our participants’ accounts,” Kaplan says, repeating a guiding principle often shared by the TSP’s Chief Financial Officer.

Kaplan notes that TSP has consistently executed below budget for the past five years. For fiscal year 2025, the agency plans to spend $465 million out of a $500 million budget. Looking ahead, TSP’s budget requests for the next three years remain flat or slightly reduced—an unusual move in the federal space. This budget discipline reflects TSP’s strategic mindset: if an expense isn’t necessary, they simply don’t make it.

TSP’s cost savings are not accidental. The agency finds efficiencies through smarter processes and smarter communication. For instance, Kaplan shares how they’ve expanded electronic delivery of statements and notices, saving on postage and printing while still offering mail delivery for those who prefer it. Strategic technology upgrades are also built into the plan—like upcoming in-plan Roth transfers—ensuring TSP remains modern without overspending.

But Kaplan emphasizes that saving money doesn’t come at the expense of participant experience. On the contrary, TSP is investing in smarter customer service. One example is their focus on resolving participant issues more quickly by identifying repeat callers and routing them directly to specialized help. The agency is also using artificial intelligence to transcribe call center notes, freeing representatives to spend more time directly helping you and less time on paperwork. These efforts pay off: participant satisfaction with TSP interactions now exceeds 93% and has stayed high for over a year.

Cybersecurity remains a top priority. Kaplan proudly states that TSP scores “green across the board” in FISMA assessments—an achievement that stems from years of focused improvement. This security focus is part of a broader five-year strategic plan that emphasizes trust, workforce support, participant readiness, and operational excellence. TSP is already preparing the next version of this plan with input from staff at every level.

Kaplan also touches on TSP loan trends. While general purpose loans rose slightly in June, they are down for the year. He interprets this as a potentially positive sign that participants are relying less on short-term borrowing, preserving their long-term investment growth. He also addresses the surprising fact that about 15% of participants combine L Funds with other individual investments, even though L Funds are designed to be a balanced, one-stop option. Kaplan offers thoughtful insight into why some people might be intentionally taking slightly more risk with a portion of their account.