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Assets in the Thrift Savings Plan grew $6.4 billion in September, the largest increase this year, officials with the retirement savings program said Monday.

At a monthly Federal Retirement Thrift Investment Board meeting, officials overseeing the 401(k)-style plan said last month's growth brought total assets to $231 billion. September's growth was comparable to that of the top 20 private sector 401(k) plans, said Gregory Long, the plan's executive director.

"Over $5 billion [of the growth] was made because of the increase in participants' investments," said Andrew Saul, chairman of the board. "That's huge."

In February, the board predicted that the plan's assets could grow to $300 billion in three years. Since then, the plan's investments have increased by $25 billion.

TSP Executive Director Gregory Long said for the year to date, the TSP cost participants one basis point, or one cent for every $100 invested. Comparable private sector plans can cost 50 to 80 basis points. Come December, however, the plan's cost will likely increase to two basis points, Long said.

Tracey Ray, chief investment officer for the TSP, said there was an increase in transfers last month, specifically with $2.7 billion transferred out of the fixed income bonds (F) fund. Over a 12-month period, participants transferred the most money out of the international (I) fund, moving $19 billion.

Ray cautioned against transferring among funds, noting that increased volatility in the markets in August caused many participants to move out of the plan's three equity funds -- the common stocks (C), small- and mid-sized companies (S) and international (I) funds. As a result, many participants missed out on a great deal of growth in September and October, Ray said.

Long said plan officials expect to release a report at next month's meeting that highlights the causes and costs of increased transfers among funds.

Meanwhile, TSP Legislative Director Tom Trabucco said the Congressional Budget Office is developing a cost estimate for two legislative proposals that plan officials sent to Congress in late August. The proposals would allow automatic employee enrollment and change the default fund for indecisive investors.

"Hopefully the cost estimate will be low, which will be good in terms of getting the legislation through this Congress," Trabucco said.

Officials also noted that last week's move to replace participants' Social Security numbers with new account numbers was successful, adding that they had anticipated the large number of calls from participants saying they did not receive or had lost their new numbers. Pamela Jeanne Moran, TSP's director of participant services, said the plan has reissued 99,000 account numbers to participants.

"There have been some complaints," Long said. "People now have a 13-digit number that they have to remember. But that's the way of the world."

COMMENTS

• The board overseeing the federal employee Thrift Savings Plan on Monday backed a 24 percent increase in the 401(k)-style program's budget for fiscal 2008, largely to support a massive modernization of systems for processing transactions. Board members approved a budget of $108.4 million for the fiscal year that starts Oct. 1, marking an increase of $20.8 million over the $87.6 million approved for fiscal 2007. The TSP's budget has declined for the past three years even as assets have grown. But plan officials told board members that investments in new technology are necessary to ensure the program is secure and capable of weathering events ranging from a plunge in the market to a terrorist attack or natural disaster. Double talk! Civilian Worker Posted October 22, 2007 10:24 AM
• Okay, I will readily agree that the 13 digit account number seems excessive and counter security since almost all of us will have to have access to that either physically or electronically (I.e. carry it around since we can not remember it) and I will also admit that Mr. Long’s remark seemed a little flippant; but I must note that: 1. The job of TSP board member is not the sole occupation for most of those same board members. 2. The TSP board recently steered us through some incredibly murky waters with excessive pressure to adopt a REIT. (Please read the Reader’s Digest article "Real Estate Ripoff" by Michael Crowley (February 07)). Please consider how much that would have cost us now! Numbers Man said it well. I do not believe our system to be a perfect one, but I worry when my fellow participants and readers suggest changing management over to “the likes of a Fidelity, TRowe Price or Vanguard account”. I truly do not think I, nor most of the TSP participants, will substantially gain in my/our accounts by turning them over to such commercial management and taking the cost factor from 1 – 3 basis point (and I’ve seen estimates within that entire range) to 50 – 80 basis points. Bob is right. While there are no guarantees of return, it behooves each and every investor to look after their own interest; because despite the most altruistic of motives, no one knows your best interests better than you. No one knows your level of risk or comfort like you do. Statistics show that most folks will actually lose money being trend-chasers. All of us probably try that in the beginning; I know I did. But you try and learn and, under this system, can really blame no one but yourself in the long term. I like options and while I am neither a day trader nor a trend follower, I’ve beat all but the I Fund over an extended period of time. Would you take that from me? I should hope not. Tip off Posted October 22, 2007 9:49 AM
• This plan is run like a monopoly that does not care what the customer thinks. What private sector business would refuse to give you information about your account over the phone or by secure web base posted emails? Only TSP. I hate this plan and with I could move my money to the private sector were the customer is treated like a customer and not a subject. Stephen Bell Posted October 22, 2007 6:31 AM