Latest TSP News: New High Matching Rate Percentage for FERS and BRS Participants
The full government matching rate for Thrift Savings Plan (TSP) participants was up to 88.1% in September. This is the first time the rate has been above 88%.
The full matching rate for those under the FERS system is 5% of basic pay. When a federal employee is eligible for matching government payments, the employing agency contributes 5% of an employee’s pay into the TSP—matching the employee’s contribution of 5%.
For military service members in the Blended Retirement System (BRS), the full matching rate also hit a new high of 87.9%.
TSP participants eligible for the government “match” of up to 5% of their basic pay can substantially increase their future retirement income. A federal employee who does not contribute 5% of pay into the TSP forfeits the extra money the federal government provides toward their future retirement.
More than 4,300 TSP participants rolled money into the TSP in September from other plans qualified for rolling over into the TSP. This is nine percent more than the same month one year ago. Rollovers into the TSP are up 44% year over year.
Total TSP Accounts and Average TSP Balances
At the end of September 2024, total TSP assets were $954 billion. Roth assets were $68 billion. Here are the number of accounts and the average balance for FERS and CSRS participants.
| Number of Accounts | Average Balance | Number of Roth Accounts | Average Roth Balance | |
| FERS | 4,152,139 | $193,648 | 1,099,340 | $31,786 |
| CSRS | 240,500 | $219,534 | 9,138 | $39,623 |
| BRS | 1,454,273 | $16,674 | 886,721 | $14,264 |
Favorable TSP Returns Continue in October and 2024
| Fund | Month-do-Date | Year-to-Date |
|---|---|---|
| G Fund | 0.22% | 3.54% |
| F Fund | -2.04% | 2.39% |
| C Fund | 1.66% | 24.06% |
| S Fund | 2.03% | 13.95% |
| I Fund | -2.44% | 10.41% |
| L Income | 0.11% | 7.13% |
| L 2025 | 0.11% | 8.13% |
| L 2030 | 0.12% | 12.04% |
| L 2035 | 0.10% | 12.87% |
| L 2040 | 0.09% | 13.69% |
| L 2045 | 0.09% | 14.40% |
| L 2050 | 0.09% | 15.12% |
| L 2055 | 0.25% | 17.70% |
| L 2060 | 0.25% | 17.70% |
| L 2065 | 0.25% | 17.70% |
| L 2070 | 0.25% | N/A |
TSP Return Rates Over 10 Years
The Thrift Savings Plan has been providing high returns for those participating in this program for years. According to the TSP, here are the rates of return for the TSP stock funds over the last ten years:
| Fund | 10-Year Return | 5-Year | 3-Year | 1-Year | Since Inception |
| G Fund | 2.47% | 2.66% | 3.63% | 4.56% | 4.65% |
| C Fund | 13.37% | 15.93% | 11.88% | 36.29% | 11.18% |
| S Fund | 9.72% | 10.74% | 1.29% | 28.57% | 9.22% |
| I Fund | 6.04% | 8.50% | 5.78% | 25.28% | 5.44% |
The G Fund started in 1987. The C Fund started in 1988. The S and I Funds were created in 2001.
These rates of return are excellent. This means that many TSP investors have not yet gone through a significant downturn in the market. Here is an observation from Marketwatch:
Stocks have been on a terrific run over the past decade. But the years ahead might not be quite so spectacular.
A rising chorus of market watchers has recently sounded the alarm about the possibility that investors could be on the cusp of a “lost decade” — one where performance falls far short of what they have come to expect over the past 15 years.
What Happens Next? Investors Beware!
A report from one analyst notes the S&P 500 index “could be poised for what would be among its weakest stretches of returns over the past century.” This is the index on which the C Fund is based. The comment is derived from the current value of the index compared to expected earnings over the next 12 months. A report also notes that “dismal returns’ could be with us for the next 10 years.
This is because when stock returns are high compared to the historical average, there are often lower returns in the future.
In other words, we have had a number of years of outstanding returns in the stock market. There is no guarantee this good fortune will continue.
Full Steam Ahead: An Optimistic View of Stock Returns
A recent article in Barron’s notes that the current bull market in stocks has been running for two years. Since the stock market bottomed out on October 12, 2022, the S&P 500 index was up 62% as of October 12, 2024.
Barron’s notes that the average bull market has run about 5.5 years. The stock market run ended in 2000 and had lasted for 12 years.
Of course, stocks may continue to go up but at a much slower rate.
Will the stock market’s bull run continue for the foreseeable future? No one can predict the future. Typically, investors nearing retirement will cut back on the percentage of their assets in stocks. Younger investors will have a longer time to recover when the stock market drops and will often have a higher percentage of their investment dollars in stocks.
The TSP offers federal employees and retirees the opportunity to make their own predictions about the future of the stock market. Those who do not want to make a prediction and, instead, rely on the TSP to make their allocation decisions can invest in the lifecycle funds instead of the TSP core stock funds.
According to the latest TSP data, 24.9% of TSP dollars are now invested in the Lifecycle Funds.
