Thrift Savings Plans see Changes in October, November

What are the Changes To Thrift Savings Plans?

Federal Retirees and employees can breathe a small sigh of relief as each of the Thrift Savings Plan funds were in the black last a month, a first since August and September’s less than stellar numbers. The C Fund showed the biggest gains with an increase of 8.45 percent and the I Fund jumped just over 7 percent. Smaller companies also did well last month with S Funds rising 5.61 percent.

The G fund had small increases with a 0.17 rise and the F fund only budged about 0.2 percent. While these increases are small compared to the others, both of these funds were already in the black at the end of September, the only two funds in the TSP to do so.

L Funds Posted Positive Returns

New federal employees are likely a little relieved after the lifecycle offers (L Funds) finally posted positive returns. In September, L funds were down causing some retirees concern. L Income rose 1.64 percent, the L 2020 was up 3.72 percent, L 2030 rose 4.88 percent, L 20540 increased 5.58 percent and the L 2050 went up 6.31 percent. Despite scary rates in September, year-to-date rates were all in the black at the end of October.

Thrift Savings Plans were faced with a potential issue when Congress could not find a way to extend the nation’s debt limit. Congress faced a deadline of October 30. If they failed to find a way to extend the debt limit, the Treasury would have had to stop investing in the Thrift Savings Plan’s G fund to help save money until November 3, when the Treasury would have reached their debt limit.

Congress eventually voted to raise the debt ceiling, much to the dismay of several members of the government. Despite dismay at the nation’s increasing debt, the National President spoke out about the debt ceiling saying, “A vote to raise the debt ceiling isn’t a vote to increase our debt. It is about paying the bills that Congress has already approved … Every American is expected to pay his or her bills on time. Congress needs to do the same thing.”

G Fund Slowed Down in March

In anticipation of meeting the debt ceiling, the Treasury slowed down their investments into the Fund back in March. This move was to help preserve additional funds. Federal employees and retirees who invest in the G fund would not notice any difference if the suspension had taken place and none noticed changes during the slower investment period as G fund earnings are guaranteed by the make-whole provision that protected investors in the event of a debt crisis.

The debt ceiling raise only gives Congress until December 11 to come up with 2016 fiscal spending bills. Congress can pass spending bills on their own or create an omnibus package, which would combine all of the spending bills into one larger bill. If government officials cannot find a way to create a budget, the country could face another government shutdown.