View the Spotsylvania County community page

Thrift funds are hurting

Hard times for Thrift Savings Plan investments

Date published: 7/6/2008

AS IF YOU DIDN'T know it already, the Thrift Savings Plan folks are saying that the majority of the funds tanked or took serious dips during June.

This, of course, is directly related to the state of the stock market and has those former frequent traders itching to make changes to their accounts.

Speaking of that group, I haven't heard how many former frequent traders, if any, took their money and left the TSP system. I suspect there weren't very many. However, I'm sure, with the current state of the market, they are carefully planning what they are going to do next to shield their accounts from this downturn.

Generally speaking, the only fund that posted a gain during the last six months was the G Fund and that was just 1.79 percent. The C Fund was the biggest loser, showing an overall drop for the period of 11.9 percent.

Of course, the first reaction for many investors in the TSP would be to move their money to another fund. However, as history has shown, most downturns in the market are followed by substantial gains in the near future.

The TSP fund is designed to be a long-term investment, and most experts recommend riding out the storm without making significant changes to individual accounts.

Even though times may be tough right now, that doesn't stop the Federal Retirement Thrift Investment Board from working on several new issues. These include moving ahead with technology improvements that would ensure that operations continue, even in emergency situations.

This was addressed by moving operations to two centers, the primary center in Reston and a backup located in Pittsburgh, ensuring that the system continues to run if something disastrous should happen at Reston. The move also ensures that, even under emergency situations, no more than 59 minutes of data would be lost.

Other areas of concern include a draft bill from the House Oversight and Government Reform Committee that would automatically enroll new federal employees in the TSP system, putting them in a life-cycle fund.

The concern is that new employees who don't know anything about the TSP system could lose money if these funds don't perform well.

There doesn't seem to be widespread support for this idea, but I'm sure a lot more debate and discussion will occur before it moves anywhere for a vote.

I will keep my eye on these important topics and report back if there are any significant advancements made.

Michael Kole of Spotsylvania County is a career federal employee. Write c/o Federal Feedback, The Free Lance-Star, 616 Amelia St., Fredericksburg, Va. 22401; e-mail news
Email: room@freelancestar.com.

Follow us on

Date published: 7/6/2008