February continued a solid growth streak for the Thrift Savings Plan, with all of its funds ending the month in the black. Common stocks in the C Fund were the top performers for the month, increasing 3.97 percent. They were up 5.95 percent for 2017.
Here are the details for the other funds:
- The small and midsize companies represented in the S Fund were the second-highest earners last month, growing 2.45 percent. They were up 4.66 percent for the year to date. International stocks in the I Fund grew 1.44 percent in February and 4.37 percent for 2017.
- The more stable but lower growth fixed income bonds in the F Fund gained 0.71 percent last month and 0.94 percent for this year, while the government securities in the G Fund ended February up 0.18 percent. The G Fund has grown 0.38 percent for the year so far.
- TSP’s lifecycle (L) funds -- which move investors to a less risky portfolio as they near retirement -- had a similarly strong performance in February. L Income, for those who have already started withdrawing money, increased 0.77 percent; L 2020 was up 1.36 percent; L 2030 grew 1.96 percent; L2040, 2.25 percent; and L 2050, 2.51 percent.
- L Income increased 1.39 percent for 2017; L 2020, 2.42 percent; L 2030, 3.47 percent; L 2040, 3.99 percent; and L 2050, 4.47 percent.
A bullish stock market may account for increased interest in the military’s new blended retirement system, which begins enrolling new service members on Jan. 1, 2018. The new retirement system moves away from the military’s current 20-year, all-or-nothing pension system that benefits only the 17 percent of troops who serve for a full career.
As Eric Katz reported last month, “under the system, new troops would automatically be enrolled in the Thrift Savings Plan and receive a matching contribution from the government.” Current service members are grandfathered into the existing system, but many will be eligible to opt in to the blended retirement system if they want.
According to the First Command Financial Behaviors Index, 44 percent of military families (commissioned officers and senior NCOs in pay grades E-5 and above with household incomes of at least $50,000) say they want to opt in to the new system, up from just 8 percent in August.
Scott Spiker, CEO of First Command Financial Services, said the blended retirement option may not be the best bet for current service members who plan to serve out a full military career. “The guarantees and lifetime financial security offered by the traditional military pension makes it a powerful choice for the vast majority of current service members,” he said in a statement.
Politicians love to praise the men and women who serve in law enforcement, but for about 30,000 federal police officers, the words ring a little hollow. That’s because a legal loophole prevents them from receiving the same level of benefits as other law enforcement officers.
Sens. Cory Booker, D-N.J., and Rob Portman, R-Ohio, have re-introduced the Law Enforcement Officers' Equity Act in a bid to change that inequity (a similar bill failed last year).
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“Due to the high level of training required for their job and the ever-present danger in their profession, Congress determined that Federal law enforcement officers should receive higher salaries and enhanced benefits compared to other Federal employees,” Booker said when introducing S.424, adding:
“Unfortunately, due to a technical error, nearly 30,000 Federal law enforcement officers classified as G5-0083 police officers do not receive enhanced benefits under the United States Code. As a result, certain officers who work for Federal agencies -- such as the Department of Defense, Department of Veterans Affairs, Federal Bureau of Investigation, U.S. Postal Service, U.S. Mint, National Institute of Health and many more -- receive lower pensions as compared to other law enforcement officers with similar responsibilities. It makes no sense that postal police officers or any other Federal law enforcement officers receive less benefits even though they have the similar duties and functions as other law enforcement officers.”
The bill would expand the definition of “law enforcement officer'' for retirement purposes to include employees authorized to carry a firearm and whose duties include the investigation or apprehension of suspected criminals; IRS employees who collect delinquent taxes; Postal Inspection Service employees; and Veterans Affairs Department police officers.
“These officers face the same risks and challenges as the men and women currently classified properly under Federal law,” Booker said.
The legislation is supported by the Fraternal Order of police, the Federal Law Enforcement Officers' Association, and the Law Enforcement Action Network.
Another legislative proposal that would benefit all retirees was put forward by Rep. John Garamendi, D-Calif., who introduced the CPI-E Act of 2017. The bill would require that the Cost of Living Adjustment (COLA) methodology be based on the Consumer Price Index for the Elderly as opposed to the Consumer Price Index for Urban Wage Earners and Clerical Workers, which is calculated monthly by the Bureau of Labor Statistics.
The National Active and Retired Federal Employees Association, which represents five million federal employees, retirees, and families, has long argued for the adjustment, which more accurately reflects the rising healthcare costs experienced by older Americans.