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Tracking Your Investments

By Mike Causey
Washington Post Staff Writer
Wednesday, March 26 1997; Page B02

The savings plan Web site is at http://www.tsp.gov. It has answers to commonly asked questions, current information and rates of return, and forms and publications. There also is a calculator to help investors project future account balances.

Most federal workers, including 80 percent of the people hired since 1983 under the "new" private-sector-style pension program, are investing in the stock, bond or Treasury funds of their $47 billion thrift savings plan. The plan is the government's in-house, tax-deferred 401(k).

Like most private retirement plans, the retirement system that covers most feds requires them to invest regularly to guarantee a good to potentially very, very good retirement.

Moving with the times, the Federal Retirement Thrift Investment Board has created a Web site where feds can track rates of return and even do estimates of their future account balances.

When the savings plan was established, it was expected to provide about a third of the retirement income of people under the Federal Employees Retirement System. That takes in nearly everybody hired after 1983. But because of the good (so far) returns of the stock fund, many experts say they believe that the plan could provide more than half the money FERS employees have in retirement, assuming they invest wisely.

Last year, the C-fund (stock index) returned 22.85 percent. The year before, it returned 37.41 percent. The F-fund (bond index) returned 3.66 percent last year and 18.31 percent in 1995. The fail-safe G-fund (guaranteed Treasury securities) returned 6.76 percent last year and 7.03 percent in 1995.

Nearly half the money in the savings plan now is in the C-fund. That represents a shift in payroll contributions from employees and also the rapid growth of the stock fund compared with the two other funds.

Investing in the plan is important for workers under the old Civil Service Retirement System, but it is critical for those under the FERS program. Most feds are under the FERS plan, but most workers at or close to retirement age still are under the CSRS plan.

CSRS employees generally get a more generous government pension. They are allowed to invest as much as 5 percent of their salaries in the savings plan's stock, bond or Treasury funds. CSRS employees are not entitled to a government match.

People under the newer FERS system get a less generous government pension. But to offset that they are allowed to put as much as 10 percent of their pay in the savings plan (up to an annual maximum contribution of $9,500). Those who contribute nothing still get a 1 percent contribution to their accounts from the government. Employees who contribute 5 percent or more get a total government match of 5 percent, which also is tax-deferred. In effect, it amounts to a tax-deferred pay raise.

Copyright 1997 The Washington Post Co.

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