TOPICS
TOPICS
January a tough month for TSP returns
The three riskier funds in the Thrift Savings Plan funds experienced significant setbacks in January.
The international investments represented in the 401(k)-style federal employee retirement plan's I Fund experienced the most losses for the month, falling 8.52 percent. But the fund experienced 12-month returns of 0.62 percent.
The S Fund, which invests in small- and mid-sized companies by tracking the Dow Jones Wilshire 4500 Index, dropped 6.27 percent in January. The fund also posted losses of 4.13 percent for the year.
The C Fund, composed of common stocks on the Standard & Poor's 500 Index of the largest domestic companies, fell 5.98 percent. It has dropped a total of 2.26 percent over the past 12 months.
The F Fund, which invests in fixed-income bonds, posted the largest gains for January, growing 1.76 percent. The fund also posted the biggest long-term gains, earning 8.98 percent over 12 months.
The G Fund, which is made up of short-term Treasury securities specially issued to provide a higher return than inflation without any serious risk from market fluctuations, grew 0.33 percent last month. Its 12-month gains were 4.76 percent.
The TSP also has life-cycle (L) options, which are a blend of the five basic funds that automatically grows more conservative as investors near retirement.
All of the five L Funds experienced losses for January.
L 2040, intended for employees with a target retirement date around the year 2040, dropped 5.37 percent; L 2030 fell 4.71 percent; L 2020 lost 3.90 percent; and L 2010 went down 2.07 percent. The L Income Fund, designed for employees with planned retirements in the very near future, lost 0.97 percent in January.
All the L funds posted gains for the year, however. The L 2040 Fund experienced the slowest long-term growth, coming in at 0.06 percent over 12 months. L 2030 grew 0.67 percent in that time, L 2020 gained 1.46 percent, L 2010 earned 3.27 percent and L Income made 3.89 percent.
COMMENTS
- Reference statement: “… it is not proper or ethical for the huge majority of employees using it as it was designed to have their costs run up and the system abused by a few mavericks with a day trading mentality.” Wrong, the TSP computer system we paid at least $83 million dollars for was specifically designed to enable us to make at least one trade per day. It is not right for us to pay TWICE for a system that functions as advertised but be denied the use of. From the 16 June, 2003 GovExec article: “The new record-keeping system has been in the works since May 1997 when the TSP board awarded American Management Systems a $30 million contract to install a computer system that would allow federal employees to more easily control their accounts. The board fired the company in July 2001 after frequent delays and a tripling of the project's estimated cost. The board paid AMS $51 million for the failed project before firing the contractor and lodging a lawsuit against it for $350 million. AMS sued the board for breach of contract. The lawsuits are pending. Board officials brought in a new company, Materials, Communication & Computers Inc., to get the system up and running, spending another $32 million and another two years before finally starting the system up Monday afternoon.” That AMS contract was later settled out of court; i.e. dropped. For the TSP board to pay TWICE for a system with specific capabilities and to subsequently deny us the use of said capabilities constitutes fraud; worse it once more encourages the sense of incompetence the TSP participants have of their governing board. Also from June 2003, “When the system first went live, it processed 100,000 transactions a day, Ray said. After improvements, it processed 813,000 transactions on July 21. The old system processed as many as 500,000 transactions only on one day of its life, Amelio said. Now it can handle 60,000 transactions per hour, 10,000 more than it was designed for. ” The patriarchal/parental/omnipotent attitude of the TSP board does not make fiscal sense. If the problem is cost, then the transaction cost should be taken from each and every transaction. We pay them anyway, why not upfront? User fees (which is what they would be) reduce overall costs billed at the end of the cycle. Tip off Posted February 7, 2008 10:36 AM
- I am waiting for you to offer ROTH accounts for us. This would save the TSP customers money not paying taxes when we take our money out of the TSP instead of wanting to charge us more for transferring OUR funds. We are giving our life to our jobs whats the problem giving us something in return? Marion Hoffner Posted February 6, 2008 1:05 PM
- Thank you Brittany R. Ballenstedt for this information. I would like thank the TSP staff for the use of online maintenance. I doubled my money in 3 years using the online system. Henry Zapata Posted February 6, 2008 11:12 AM
