Tracking the TSP

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If you keep a close eye on your retirement nest egg, then you've probably educated yourself on the differences among the three investment funds available under the Thrift Savings Plan (TSP).

The 401(k)-style TSP offers three investment options to federal employees: the G Fund, F Fund and C Fund.

The G Fund, which is invested in special issues of U.S. Treasury securities, is the most conservative; monthly returns steadily come in at around 0.5 percent. The F Fund is invested in bonds. Its monthly returns fluctuate more than the G Fund, but the F Fund's returns have historically been between -2.0 percent and +3.0 percent, usually on the plus side.

The C Fund, meanwhile, is invested in stocks. More specifically, the C Fund is invested primarily in the Barclays Equity Index Fund, which tracks the Standard & Poor's 500 (S&P 500) stock index. The Barclays Fund holds common stocks of all the companies represented in the S&P 500 index, so it attempts to track as closely as possible the performance of the S&P 500.

Thus, tracking the performance of the S&P 500 index (which you can now do on the front page of GovExec.com every day), is a good way to keep an eye on the portion of your nest egg invested in the C Fund. The Federal Thrift Retirement Investment Board, which manages the TSP, only updates C Fund returns monthly.

There are, of course, caveats. The C Fund can vary slightly from the Barclays Fund, and therefore the S&P 500, for three reasons:

  • Administrative expenses, investment management fees and trading costs are deducted before the C Fund monthly returns are released.
  • Money flows into the C Fund throughout the month. Thus, C Fund monthly returns are influenced more by the stock market returns toward the end of each month than at the beginning, since there is more money in the fund toward the end.
  • C Fund contributions awaiting investment in the Barclays Fund are invested in the G Fund and other short-term investments, so the interest on those short-term investments have a slight affect on the C Fund monthly returns.

The bottom line, however, is you can use the S&P 500 index to generally track the C Fund on a daily basis, in between the monthly returns published by the TSP board (which are posted on GovExec.com each month at www.govexec.com/careers/thrift/tspfunds.htm).

You can also go to the TSP board's Web site to review and make changes to your TSP account at www.tsp.gov/account/index.html. The twice-annual TSP open season began May 15 and runs through July 31, so you can move funds around among accounts, up your contribution levels, or begin participating for the first time.

When the TSP board completes work on a new computer system in May 2000, federal employees will be able to check their personal TSP account balances every day. Employees will also be able to move money around among funds as often as every day.

As long as the new computer system's development stays on track, the TSP will also have two additional investment options. The new I Fund will track an index of international stocks. The S Fund will track an index of small U.S. companies.

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