THRIFT SAVINGS PLAN

The Thrift Savings Plan (TSP) is a retirement savings and investment plan for federal employees and members of the uniformed services, including the Ready Reserve. It was established by Congress in the Federal Employees' Retirement Act of 1986, and provides the same types of savings and tax benefits that many private corporations offer their employees under 401(K) plans. The TSP is a defined contribution plan, meaning that the retirement income you receive from your TSP account will depend on how much you (and your agency, if you are eligible to receive agency contributions) put into your account during your working years and the earnings accumulated over that time.

Below is a comparison of the available TSP funds.

G Fund

  • Description of Investments: Government securities (specifically issued to the TSP)
  • Objective of Fund: Interest income without risk of loss of principal
  • Risk: Inflation
  • Volatility: Low
  • Types of Earnings: Interest
  • 2010 Administrative Expenses: .025%
  • Inception Date: 4/1/87

F Fund*

  • Description of Investments: Government, corporate, and mortgage-backed bonds
  • Objective of Fund: To match the performance of the Barclays Capital U.S. Aggregate Bond index
  • Risk: Market, credit, prepayment, inflation
  • Volatility: Low to moderate
  • Types of Earnings: Change in market prices interest
  • 2010 Administrative Expenses: .025%
  • Inception Date: 1/29/88

C Fund*

  • Description of Investments: Stocks of large- and medium-sized U.S. companies
  • Objective of Fund: To match the performance of the Standard & Poor's 500 (S&P 500) Index
  • Risk: Market, inflation
  • Volatility: Moderate
  • Types of Earnings: Change in market prices dividends
  • 2010 Administrative Expenses: .025%
  • Inception Date: 1/29/88

S Fund

  • Description of Investments: Stocks of small- to medium-sized U.S. companies (not included in the C Fund)
  • Objective of Fund: To match the performance of the Dow Jones U.S. Completion TSM Index
  • Risk: market, inflation
  • Volatility: Moderate to high; historically, more volatile than C Fund dividends
  • Types of Earnings: Change in market prices dividends
  • 2010 Administrative Expenses: .024%
  • Inception Date: 5/1/01

I Fund

  • Description of Investments: International stocks of 21 developed countries
  • Objective of Fund: To match the performance of the Morgan Stanley Capital International EAFE (Europe, Australasia, Far East) Index
  • Risk: Market, currency, inflation
  • Types of Earnings: Change in market prices
  • 2010 Administrative Expenses: .025%
  • Inception Date: 5/1/01

L Funds

  • Description of Investments: Invested in the G, F, C, S, and I Funds
  • Objective of Fund: To provide professionally diversified portfolios based on various time horizons, using the G, F, C, S, and I Funds
  • Risk: Exposed to all the types of risk to which the individual TSP funds are exposed, though total risk is reduced through diversification among the 5 individual funds
  • Types of Earnings: Composite of earnings in the underlying funds
  • 2010 Administrative Expenses: .025%
  • Inception Date: 8/1/05

* Source: www.tsp.gov

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