Thrift Savings Plan Might Take Longer to Add Private Investment Capability

Private market investments may soon take a greater stake in defined contribution plans, but the nation’s largest plan might remain off limits—for now.

The federal Thrift Savings Plan, the nation’s largest, is required by law to have five specific funds: a government securities investment fund; a fixed-income investment fund; a common stock investment fund; a small-cap stock index investment fund; and an international stock index investment fund, along with a mutual fund option.

President Donald Trump signed an executive order last month that will encourage regulatory changes to make private investments more accessible in defined contribution plans, but the current TSP investment options are “required by law and no others are permitted, [so] the TSP will not change how it invests based on recent policy changes,” a spokesperson for the Federal Retirement Thrift Investment Board, which manages the TSP, said.

Congress would almost certainly need to amend the TSP’s current governing statute to add investments that include exposure to private investments.

Even if the $895 billion of retirement assets and approximately 7 million participants in the TSP remains off limits to private equity firms and other alternative asset managers eager to get a slice of the vast pool of DC assets, that is unlikely to significantly impact the adoption of private investments in DC plans overall.

“The conversation in the broader market is not going to shift one way or other in regard to how long the TSP process takes,” says Lew Minsky, president and CEO of the Defined Contribution Institutional Investment Association.

To be sure, private investments in DC plans existed before the executive order, but few plans currently offer them. Only 3.9% of plans included alternative investments such as private equity in 2024—up from 2.2% the year before—according to the 2025 PLANSPONSOR DC Plan Benchmarking Report.

Matt Petersen, executive director of the National Association of Government Defined Contribution Administrators, an organization that supports public employer-sponsored deferred compensation and defined contribution plan administrators, says the TSP will have a different time horizon than every other DC plan.

“They are so large that they do their own thing,” he says. “Their rules and their constraints are so different from most of our members that the timeline of implementation for something like this wouldn’t be very similar for them as it would for most of our members.”