For TSP investments, most play it safe

Tom Trabucco, director of external affairs, Federal Retirement Thrift Investment Board

wfedstaff |

Most federal employees are playing it safe with their Thrift Savings Plan fund investments.

In tough economic times, “a lot more people are going to remain cautious for a longer period of time,” Tom Trabucco, director of external affairs for the Federal Retirement Thrift Investment Board, said in an interview with the DorobekINSIDER.

In September, the Thrift Saving Fund was at an all-time high of $264 billion, with two-thirds of the investment in the G and C Funds ($116 billion in the G Fund and $61 billion in the C Fund).

The newer S and I Funds are “well-received,” Trabucco said, but don’t come close to the G and C. The S Fund has $18 billion and the I has $17 billion.

Automatic enrollment results
Starting in August, all new hires were automatically enrolled in the TSP’s G Fund at a three percent contribution rate.

More than 18,200 participants were enrolled under the new automatic enrollment, and 5,400 signed up on their own.

About 7,000 were automatically enrolled but either opted out of automatic enrollment because they wanted to switch from the G Fund to another fund, or they wanted to increase their contribution.

The agency puts in a 1 percent contribution and will match an employee contribution up to 3 percent. At 4 and 5 percent employee contribution, the agency matches 50 cents to the dollar. Therefore, an employee who puts in 5 percent will get a 5 percent match from their agency.

Uniformed services enrollment lower than FERS
Overall, 29 percent of uniformed services are enrolled in TSP, compared to more than 83 percent for FERS employees.

There are two main reasons for the lower rates for uniformed services: The military was not allowed to enroll until 2002, and these departments do not receive the matching contribution, Trabucco said.

“It’s not an integral part of their retirement program as it is to FERS employees. What it is is an add-on,” he said.

Active-duty sailors are “leading the pack,” enrolling at more than 57 percent. The Navy was an early backer of TSP for its members, Trabucco said.

TSP

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THRIFT SAVINGS PLAN TICKER

May 14, 2021 Close Change YTD*
L Income 22.8205 0.092 2.39%
L 2025 11.6927 0.0945 4.76%
L 2030 41.1018 0.4273 6.01%
L 2035 12.3241 0.1406 6.56%
L 2040 46.5644 0.5777 7.12%
L 2045 12.7395 0.1694 7.60%
L 2050 27.8739 0.3945 8.10%
L 2055 13.6430 0.2304 10.05%
L 2060 13.6429 0.2305 10.05%
L 2065 13.6427 0.2305 10.05%
G Fund 16.5839 0.0007 0.40%
F Fund 20.6395 0.0427 -2.55%
C Fund 62.4643 0.9226 11.83%
S Fund 80.5153 2.0505 12.34%
I Fund 38.2575 0.6353 6.73%
Closing price updated at approx 6pm ET each business day. More at tsp.gov
* YTD data is updated on the last day of the month.