Federal employees will be able to check their Thrift Savings Plan account balances daily beginning in May 2000, according to the Federal Retirement Thrift Investment Board.
Employees will also be able to move money around among funds as often as every day, after the board that runs the TSP program completes work on a new computer system. The new system will also expand federal employees' investment options from three funds to five, allowing employees to invest in two more volatile-but potentially more lucrative-stock funds.
The changes to the TSP program, which will add features that are common among private sector 401(k) investment programs, will take effect in May 2000, if the new computer system's development stays on track. The Federal Retirement Thrift Investment Board, which runs the TSP, plans to officially announce the upcoming changes this May. The board will educate federal employees about the changes over the next year.
The TSP's current computer system updates employees' individual TSP account balances monthly. The system also allows employees to transfer money among funds only once a month. By contrast, many private sector employees' 401(k) programs allow participants to check their balances and transfer funds daily.
The TSP has three funds in which federal employees can invest their money: the C Fund (common stocks), the F Fund (fixed-income bonds) and the G Fund (government securities).
Two new funds will be available next year to TSP investors. The I Fund will track an index of international stocks. The S Fund will track an index of small U.S. companies. The indexes that the I and S Funds will follow are historically more volatile than the C, F and G funds, but they have also shown higher returns than any of the current TSP funds.
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