TSP Bounces Back for Federal Workers

The TSP is providing positive returns for investors in May as people are going back to work and the economy may start turning around.

According to the latest data from the Thrift Savings Plan (TSP), as of the end of April the FERS participation rate is now up to 93%. The active duty participation rate for Uniformed Services personnel has increased to 71%.

Also, the volume of withdrawals from the TSP, including loans and hardship withdrawals, decreased by an average of 33% from last month.

Interfund Transfers

In March, TSP investors transferred more than $15 billion into the G Fund. How much of this $15 billion was transferred into the G Fund before and after the low point reached on March 23rd, we do not know. Based on past history of how investors reacted in significant stock downturns, it is likely that a significant portion of the $15 billion was transferred around March 23rd.

In April, there was a turnaround. About $5.2 billion was transferred out of the G Fund. Most of this money appears to have gone into the TSP’s stock funds. More than $2.9 billion was transferred into the C Fund. Another $1.4 billion went into the S Fund and $346 million was transferred into the Lifecycle Funds.

So, while the amount transferred out of stock funds and into the G Fund in March was very high, a number of TSP participants thought that jumping back into the stock funds was a good move.

L Fund Participants Increase

The number of L Fund participants also went up in April. In March, there were 2,536,837 L Fund participants. At the end of April, there were 2,573,760 L Fund participants.

The total TSP plan balance was over $601 billion at the end of February. By the end of March, the plan balance had gone down to just over $557 billion. By the end of April, the total was headed up again reaching close to $594 billion.

Average TSP Balance for FERS

April also saw an increase in the average TSP balance for those under FERS. At the end of April, the average balance was $141,048. At the end of March, the average balance for FERS members was $133,183.

C Fund Bouncing Back

We also know that the C Fund, which is the most popular stock fund in the Thrift Savings Plan, was up almost 13% in April. The C Fund was still down more than 9% in 2020 by the end of April. At the end of April, the C Fund also had a positive return over the past 12 months though with a return of 0.77%.

By the end of May, the positive return over the past 12 months will most likely have gone up since the end of April because, as of this writing, the market is up more than 3% for the month.

The final TSP returns for May will be published on Monday, June 1st. Check back for the final results.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47