TSP Lifecycle Funds a Big Hit

Less than a year after the L Funds were launched, 9% of the thrift plan’s participants have opted for them, according to data from the Federal Retirement Thrift Investment Board (FRTIB), the Washington Post reported. Officials expected a 5% lifecycle fund participation rate in the first 24 months.

The participation rate has “blown the doors off our wildest expectations,” said TSP Executive Director Gary Amelio. As of last month, about 329,000 government employees had invested $11.6 billion in the L Funds or about 6% of the plan’s assets, according to the Post.

According to the news report, the most popular L Funds are the 2020 for employees covered by the Federal Employees Retirement System, 2010 for employees in the older Civil Service Retirement System and 2030 for the military and other uniformed personnel, according to TSP data.

The L Funds have posted gains from 5% to 8.98% since its inception on August 1, 2005. The G Fund has posted a 4.38% rate of return and the C Fund has gained 4.59%.

According to the TSP data, about 215,000 participants took several million dollars out of international and domestic stock funds and a bond index fund last month. They transferred $134 million into the L Funds and $1.66 billion into the G Fund, which allows federal employees to earn interest rates similar to those of long-term government securities without risk of losing principal and with little volatility in earnings.

Overall, the TSP has more than $185 billion in assets and more than 3.6 million participants.