The Treasury Department and the Federal Retirement Thrift Investment Board have ended a 15-day suspension of investments into federal employees’ pensions, following Friday’s increase of the debt ceiling by $1.2 trillion, as required by last summer’s Budget Control Act.
Treasury suspended investments into the Thrift Savings Plan’s G Fund twice this year. The G Fund is considered the most stable offering in the TSP’s portfolio and is comprised of interest-bearing government bonds.
The fund was made whole Monday, including the $16,944,892 that accrued during suspension, as required by law, according to Tom Trabucco, director of external affairs for the Federal Retirement Thrift Investment Board. Federal law (Sections 8348 and 8438 of U.S. Code Title 5) requires the Treasury secretary to refill the coffers of the G Fund and the Civil Service Retirement Fund once the issue of the debt ceiling is resolved, and to make up for any interest lost on those investments during the suspension.
Treasury suspended the investments in May 2011 after the government hit its debt ceiling of $14.3 trillion, until Congress increased the limit in August. The department paid roughly $378 in interest on the G Fund from May 16 through Aug. 2, when President Obama signed the 2011 Budget Control Act into law, raising the debt ceiling to $15.2 trillion. The payments were suspended again earlier this month pending another raise in the debt ceiling. On Friday, Treasury raised the ceiling again to $16.39 trillion. Federal employees were not affected by the move, according to the department.