2013 was banner year for Thrift Savings Plan

By BenefitsPro

By Dan Berman

Nearly all the investment funds of the Thrift Savings Plan, the defined contribution system for federal employees, increased last year, with two of them posting gains of more than 30 percent.

The C (common stocks) and S (small and midsize companies) funds, gained about 32 percent and 38 percent, respectively, The I Fund, which is centered on international equities, rose 22 percent.

The G Fund, which is made up of government securities saw gains of 1.89 percent.

A series of less risky L funds for those getting closer to retirement, all posted gains. The L Income Fund, for those already retired, was up 7 percent; the L 2020, 16 percent; L 2030 20 percent; and L 2040, 26 percent.

Only the fixed income, or F Fund, had a losing year, ending 2013 down 0.56 percent.

In December, Thrift Savings Plan officials warned participants about being too heavily invested in the riskier stocks funds. They also noted that participation in the retirement system had fallen to 85.2 percent of all federal employees. There are currently 4 million participants in the plan.

The budget passed by Congress in December called for new federal employees to pay a higher percentage of their income to help fund the retirement plan.

Military personnel are part of the Thrift Savings Plan. The budget also included cuts to service members’ traditional pension plan. Veterans groups and some members of Congress have vowed to fight to restore those cuts.

Originally published on BenefitsPro.com