Treasury Secretary Steven Mnuchin told congressional leaders "extraordinary measures" would be necessary to avoid a default until they raised the debt ceiling. Pablo Martinez Monsivais/AP
Thrift Savings Plan G Fund Investments Suspended As Debt Ceiling Is Reached
Participants in the retirement plan should rest assured that their account balances will not be affected, TSP officials said.
The federal employee Thrift Savings Plan has officially suspended investments into its government securities (G) fund to help keep the United States from defaulting on its debts until Congress raises the debt ceiling.
The debt limit had been statutorily suspended through Wednesday. “Beginning on Thursday, March 16, 2017, the outstanding debt of the United States will be at the statutory limit,” wrote Treasury Secretary Steven Mnuchin in a March 8 letter to congressional leaders. “At that time, Treasury anticipates that it will need to start taking certain extraordinary measures in order to temporarily prevent the United States from defaulting on its obligations.”
TSP officials issued an announcement Thursday confirming that the suspension of G Fund investments was among those measures and reassuring participants that the step was not that unusual and would not hurt their savings in the long run.
“G Fund investors remain fully protected and G Fund earnings are fully guaranteed by the federal government,” TSP stated. “This statutory guarantee has effectively protected G Fund investors many times over the past 25 years. G Fund account balances will continue to accrue earnings and will be updated each business day, and loans and withdrawals will be unaffected.”
It’s unclear when Congress will act on the debt limit, but lawmakers are expected to raise it in time to avoid a default. Analysts have said the extraordinary measures will stave off a default until this fall.
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