TSP Participants Move Out of Stock Funds Right Before Record Highs

By August 31, 2020Benefits, Federal Pay, Retirement, TSP

The participation rate in the Thrift Savings Plan (TSP) for federal employees has leveled off in the last several months. That is a normal change for this time of year.

The TSP notes that participation in the TSP for federal employees under the Federal Employees Retirement System (FERS) is still up two percentage points above last year.

Implementing the CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was signed on March 27, 2020. The Federal Retirement Thrift Investment Board (FRTIB) created the CARES Act project to implement key provisions of the law. The project included four key provisions to enable TSP participants and beneficiaries to respond to their financial management needs during the COVID-19 pandemic.

These four provisions were:

  • Changes in 2020 Required Minimum Distributions
  • Loan Payment Suspensions
  • An increase in the maximum loan amount to $100,000
  • CARES Act withdrawal provisions.

CARES Act Loans, Suspensions and Withdrawals

CARES Loans

DateCountAmount
June, 20202,462$61,429,570.22
July, 20204,990$115,588,460.67
MTD – Aug 12, 20201,704$37,803,631.74

CARES Loans Over $50,000

CountAmount
499$37,018,575.68
825$61,766,534.20
267$19,935,382.67

CARES Loan Suspensions

DateCountAmount
June, 2020245$ 12,514,932.41
July, 2020354$ 16,419,035.09
MTD – Aug 12, 202041$ 1,958,857.50

CARES Withdrawals

DateCountAmount
July, 202021,296$ 554,831,990.61
MTD – Aug 12, 202011,621$ 277,567,169.17

TSP Participants Move into Bonds

In July, many TSP participants decided to transfer money from stock funds and into the TSP’s G and F Funds.

The G Fund took in more than $1.1 billion dollars in transfers in July and the F Fund took in more than $1.6 billion. The Lifecycle Funds received more than $933 million in transfers in July.

Also during July, more than $2 billion was transferred out of the C Fund and almost $1.7 billion from the S Fund.

After the transfers into the G and F Funds, the asset allocation in funds for TSP participants breaks out in this way:

FundAllocation Percentage
G Fund33.3%
F Fund4.6%
C Fund28.5%
S Fund9.3%
I Fund3.5%
L Funds20.9%

The latest month shows a change in direction for TSP investors. As of December 30, 2019, 30.7% of asset allocation was in the G Fund, 29.7% was in the C Fund, 3.8% was in the F Fund and 21.6% was in the L Funds. In effect, participants are moving away from stocks and putting more of their assets into the bond funds.

If you would like some help navigating your TSP, or some safe options with your TSP, you can use our Contact Us form and someone will be in touch with you.

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