The retirement plan will be made whole, Secretary Lew says.
The Treasury Department has suspended investments into the government securities G Fund, using the most stable of the federal employee pension funds to delay hitting the government’s debt ceiling.
Suspending investments into the Thrift Savings Plan’s G fund -- which collects on interest-bearing Treasury bonds that make up the public debt -- has become a common tactic in recent years, serving as a component of “extraordinary measures” the federal government takes to stave off default.
Treasury Secretary Jack Lew said in a letter sent to Congress on Friday that by law, “the G Fund will be made whole once the debt limit is increased.”
The move was an expected part of a plan Lew laid out several weeks ago.
“Federal retirees and employees will be unaffected by this action,” Lew wrote in the Friday letter.
In February, Treasury reinvested $28 billion back into the G fund to reimburse the account from the previous temporary suspension. At a recent Federal Retirement Thrift Investment Board meeting, officials emphasized the fund will once again be made whole.
The measures will enable Treasury to pay its bills through Labor Day -- Sept. 2 -- Lew has said.
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