The Federal Government has reached the debt ceiling. That isn’t news for most federal employees by itself because it happens on a regular basis.
But what may get your attention is that the government has suspended payments to the G fund of the Thrift Savings Plan. What does that have to do with the debt ceiling?
Suspending the payments to your G fund will keep the government from breaking through the debt ceiling until Congress can raise the limit.
This has happened before too. Some readers will recall that it happened last year. Before getting concerned about losing retirement income, here’s the good news: Treasury Secretary John Snow has promised the government will make up the payments and lost income–just as it did last year–once the debt ceiling problem has been resolved.
So the situation will probably be temporary, as it has in the past. Keep in mind this is an election year. So when Congress returns for a “lame-duck” session after the election, it will raise the debt ceiling. At that point, any overdue contributions to the pension fund will be paid, with interest.
In effect, whether you like it or not, your retirement funds are being manipulated (temporarily) to help Uncle Sam get out of a temporary jam.