TSP participants look for safe investment choices

Participants in the government's Thrift Savings Plan continue to seek safety in their investment options, but the funds appear to be turning around after months of poor performances.

During a monthly meeting of the Federal Retirement Thrift Investment Board, staff reported that more and more TSP enrollees were moving their money to the stable government securities in the G Fund, as well as the F Fund, which invests in fixed-income bonds. Nearly 54 percent of all assets were in these accounts in September, up 4 percentage points since July, said Renee Wilder, director of research and strategic planning at TSP. Loan activity has increased but still falls behind other private sector plans at just over 18 percent, she added.

All but two of the investment options in the plan posted losses in September for the fifth month in a row, with each month bringing successively worse returns. According to Chief Investment Officer Tracey Ray, the TSP equity funds showed a "precipitous decline" and hit their lows for the year just a few days into October. All are back in the black for the month, however, she said.

Ray also said interfund transfers declined by more than 50 percent in September. Participants changed their investments in earlier months and are waiting it out, she said.

At the same time, TSP has continued to see growth in participation. The plan now has more than 4.5 million participants -- 85.5 percent of those eligible to contribute -- and is capturing 97.3 percent of new government hires through its automatic enrollment process.

"We continue to grow although markets continue to be difficult," TSP Executive Director Greg Long said.