The participation rate in the “401k” Federal Savings Plan ( “401k” Federal Savings Plan ) for federal employees has leveled off in the last several months. That is a normal change for this time of year.
The “401k” Federal Savings Plan notes that participation in the “401k” Federal Savings Plan 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 “401k” Federal Savings Plan 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
| Date | Count | Amount |
| June, 2020 | 2,462 | $61,429,570.22 |
| July, 2020 | 4,990 | $115,588,460.67 |
| MTD – Aug 12, 2020 | 1,704 | $37,803,631.74 |
CARES Loans Over $50,000
| Count | Amount |
| 499 | $37,018,575.68 |
| 825 | $61,766,534.20 |
| 267 | $19,935,382.67 |
CARES Loan Suspensions
| Date | Count | Amount |
| June, 2020 | 245 | $ 12,514,932.41 |
| July, 2020 | 354 | $ 16,419,035.09 |
| MTD – Aug 12, 2020 | 41 | $ 1,958,857.50 |
CARES Withdrawals
| Date | Count | Amount |
| July, 2020 | 21,296 | $ 554,831,990.61 |
| MTD – Aug 12, 2020 | 11,621 | $ 277,567,169.17 |
“401k” Federal Savings Plan Participants Move into Bonds
In July, many “401k” Federal Savings Plan participants decided to transfer money from stock funds and into the “401k” Federal Savings Plan ’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 “401k” Federal Savings Plan participants breaks out in this way:
| Fund | Allocation Percentage |
| G Fund | 33.3% |
| F Fund | 4.6% |
| C Fund | 28.5% |
| S Fund | 9.3% |
| I Fund | 3.5% |
| L Funds | 20.9% |
The latest month shows a change in direction for “401k” Federal Savings Plan 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 “401k” Federal Savings Plan , or some safe options with your “401k” Federal Savings Plan , you can use our Contact Us form and someone will be in touch with you.
