GovernmentExecutive.com

It's the start of a new month, which means it's time to check up on your Thrift Savings Plan investments.

October was a solid month for the $194 billion federal employee 401(k)-style retirement plan. The S Fund earned 4.99 percent from investments in small- and mid-sized American companies.

The I Fund, composed of international stocks, brought in 3.87 percent. It has been the plan's star performer for months now and boasts 12-month earnings of 27.54 percent. The C Fund, invested in large domestic companies, gained a solid 3.27 percent in October.

None of the TSP funds lost ground last month. The F Fund, invested in fixed-income bonds, earned 0.73 percent, and the ever-reliable G Fund delivered 0.43 percent from its government securities.

Learn More, Earn More?

Thanks to a 2003 policy switch, TSP participants don't have to wait for the end of the month, quarter, or year to inspect their earnings or change investments. The TSP now does daily transactions and it's open season all year for switching fund allocations.

That flexibility has spawned a batch of privately run Web sites that offer advice and investment strategies.

TspTalk.com is run by Tom Crowley, a computer programmer at the Internal Revenue Service who makes a hobby of investing. Crowley displays his own TSP allocation for everyone to see. Right now, he has everything invested in the G Fund. But on Aug. 3, he had his savings evenly allocated among the I, S, C and F funds, and didn't have a penny in the G Fund.

Crowley offers daily ruminations on the market, an e-mail alert so his 11,000 subscribers will know when he moves his money, a message board where about 2,500 registered TSP participants share thoughts and a paid service from a hedge fund manager who dispenses aggressive investment advice.

"The thing I've found out is people were starving for something like this, because there was nothing," Crowley said. "I don't think the government was responsible for telling people how to invest their money. It was our responsibility to do that."

To be sure, the federal employees who run the TSP and the politically appointed board members who make policy decisions on a part-time basis purposefully steer clear of telling employees how to invest. But the board did begin offering life-cycle funds last summer, which automatically determine and adjust TSP fund allocations based on a projected retirement date. TSP officials launched the funds in part to discourage over-investment in the G Fund.

Many are stepping in to fill the space left over. Government Executive does not endorse any of these services, but Pay and Benefits Watch readers may find them useful. In addition to TspTalk, there are:

• Tspadvisory.com, which offers an allocation model for subscribers.

• Thrifttrading.com, a paid service that tries to beat the market.

• Thetspreport.com, a paid monthly report that offers model portfolios and analysis of the market.

• Tspgo.com, a free site that offers projections of fund returns.

• Tspmax.com, a subscription service that uses an algorithm to signal buy or sell for each of the funds.

• Tspmoney.com, which offers software for download to track investments.

• TspPilot.com, which offers fund management for standard or aggressive investors.

The Sky's Not the Limit

TSP officials also announced in recent weeks that the IRS contribution limit for all tax-exempt retirement plans in 2007 is $15,500. For employees 50 years old or older: In 2007, you can also contribute up to $5,000 in catch-up contributions once you hit the $15,500 ceiling.

They're TSP, Too

TSP Web sites may be proliferating, but it's not only thanks to the new daily transactions. Though the Thrift Savings Plan is worth almost $200 billion, that doesn't buy it the sole rights to the TSP acronym. TSP is also an abbreviation for:

• The Traveling Salesman Problem, a famous mathematical problem

• Textured Soy Protein, a meat substitute

• The Tajikistan Support Project, a Dutch foundation that supports health care in Tajikistan

• And of course, teaspoon

COMMENTS

• Next up -- TSP Talk. It has a very nice visual layout, easy maneuvering, with access to “expert” opinions without the bombastic self-praise. What most impressed me was the excellent spreadsheet tool available for down load. It, combined with the TSP’s evolving ability to provide historical data over the network, enabled me to track and graph all the price data from June 2003 (transition date for the TSP’s transition to price-per-share); my allocation percentages and totals, and a detailed performance for the past two years. It took some time, and the running total percentile calculation didn’t support a sufficient number of data point entries for my taste, but it was easily adapted. I liked the various forums and reader input. The Web site manager was responsive to an inquiry. Now, we all have our opinions, but I would choose his long-term strategy over his listed actual allocations. Just check the returns. Still, I like the frank discussions that those postings prompt. To be quite honest, I would like to see the official TSP to make available something similar to the spreadsheet tool that could be updated automatically and daily, showing each participant’s running percentile return. Moving on. Tip off. GovExec.com reader Posted December 27, 2006 8:52 AM
• Hmmm. I just got the opportunity to check them out. First up is “TSP Pilot.” And I quote, “while the TSP C Fund, which mimics the S&P 500 index, returned just 11.6 percent over the same last 17 years! That's nearly double the performance of the C Fund and nearly 15 times its risk/reward ratio.” I think they intended to compare the C Fund to the G Fund, but that is just a supposition. And, “In the 17 years since 1989 the passive, unmanaged and conservative TSP 2010 "Lifecycle Fund" produced an average annualized return of 9.5 percent with a maximum draw down risk (Mdd) of 15 percent while The TSP PILOT account was up over 19 ½ percent per year with a max draw down of only 7.8 percent! ” I wonder, how could the TSP 2010 Fund produce anything for 17 years? Perhaps they mean they did a comparison with the sliding ratios specific to the 2010 Fund and the historical data versus their software/opinion. I’m just not sure. Regardless, when I see someone almost breaking their arm trying to pat themselves on the back and but failing to proof read their own claims, I doubt they posses the fiscal insight I want guiding my retirement plan. I’ll be back with more opinions. (Heaven forbid.) If anyone else out there has input, I would greatly appreciate it. Tip off. GovExec.com reader Posted December 27, 2006 8:10 AM