Changes

Both traditional and Roth TSP accounts are available for employee contributions; however, agency automatic and agency matching contributions are automatically deposited into a traditional account as they are tax-deferred contributions.  In addition the TSP allows, in some cases, rollovers from other employer defined contribution plans (but rollovers from IRA's are not allowed).

Both traditional and Roth TSP accounts are available for employee contributions; however, agency automatic and agency matching contributions are automatically deposited into a traditional account as they are tax-deferred contributions.  In addition the TSP allows, in some cases, rollovers from other employer defined contribution plans (but rollovers from IRA's are not allowed).

The TSP offers 15 fund options, five of which operate like traditional index [[mutual fund]]s and five are "Lifecycle" (target-date) funds:

The TSP offers various fund options, some of which operate like traditional index [[mutual fund]]s while others operate like target-date funds:

*G (Government) Fund—invests in special government securities not offered to the general public; the return is specified by law as the weighted average yield of Government securities having at least four years until maturity.  This is the only fund where a positive return on investment (though not necessarily enough to keep up with inflation) is guaranteed as the securities are guaranteed by the "full faith and credit" of the US Government (all other funds require the employee to affirmatively acknowledge the potential risk of loss in the investment).<ref>From time to time G Fund securities issuance is suspended when the overall Federal debt ceiling is reached; in those cases, amounts are credited to the account as if activity was continuing; once the debt ceiling is lifted all amounts due plus accrued interest are paid.</ref>

*G (Government) Fund—invests in special government securities not offered to the general public; the return is specified by law as the weighted average yield of Government securities having at least four years until maturity.  This is the only fund where a positive return on investment (though not necessarily enough to keep up with inflation) is guaranteed as the securities are guaranteed by the "full faith and credit" of the US Government (all other funds require the employee to affirmatively acknowledge the potential risk of loss in the investment).<ref>From time to time G Fund securities issuance is suspended when the overall Federal debt ceiling is reached; in those cases, amounts are credited to the account as if activity was continuing; once the debt ceiling is lifted all amounts due plus accrued interest are paid.</ref>

*C (Common Stock) Fund—invests in the [[BlackRock]] Equity Index Fund, which attempts to match the total return version of the S&P 500.

*C (Common Stock) Fund—invests in the [[BlackRock]] Equity Index Fund, which attempts to match the total return version of the S&P 500.

*I (International Stock) Fund—invests in the BlackRock EAFE Index Fund, which attempts to track the net version of the MSCI EAFE index.

*I (International Stock) Fund—invests in the BlackRock EAFE Index Fund, which attempts to track the net version of the MSCI EAFE index.

*L (Lifecycle) Funds—invests in a specified mix of the five traditional funds.  Those funds with target years in the distant future have higher percentages of investments in the C, I, and S Funds, and as the target year approaches the percentages shift to investments with higher percentages in the G and F Funds.  As of 2020 there are 11 such Lifecycle funds established, the L Income Fund (primarily for retired employees who are withdrawing from TSP, though any TSP participant may invest) and nine funds for future retirees (named in five year increments, with the fund named for the upcoming year designed for employees close to retirement, and the fund named for the most-distant year designed for newer, younger employees; the current names range from L2030 to L2075).  Each fund for future retirees is designed for retirees planning to retire in that year, or two years on either side.  Every five years, in years ending in 0 and 5, the fund for that target year is merged into the L Income fund (with its assets shifted to those of the L Income Fund), and a new fund established with its name taking on the year 50 years after its establishment (e.g. in 2030 a new fund will be established which will be called the L2080 Fund, and the L2025 Fund will be merged into the L Income Fund).

*L (Lifecycle) Funds—invests in a specified mix of the five traditional funds.  Those funds with target years in the distant future have higher percentages of investments in the C, I, and S Funds, and as the target year approaches the percentages shift to investments with higher percentages in the G and F Funds.  As of 2020 there are 11 such Lifecycle funds established, the L Income Fund (primarily for retired employees who are withdrawing from TSP, though any TSP participant may invest) and nine funds for future retirees (named in five year increments, with the fund named for the upcoming year designed for employees close to retirement, and the fund named for the most-distant year designed for newer, younger employees; the current names range from L2030 to L2075).  Each fund for future retirees is designed for retirees planning to retire in that year, or two years on either side.  Every five years, in years ending in 0 and 5, the fund for that target year is merged into the L Income fund (with its assets shifted to those of the L Income Fund), and a new fund established with its name taking on the year 50 years after its establishment (e.g. in 2030 a new fund will be established which will be called the L2080 Fund, and the L2025 Fund will be merged into the L Income Fund).

*Beginning in mid-2022, participants have also been offered a "mutual fund index window" which will allow a part (but not all) of contributions to be invested in mutual funds offered by the private sector (it is estimated that around 5,000 such offerings are available).  The FRTIB has been uniformly opposed to politically motivated changes in how TSP's investments are handled (whether they be left-wing proposals to divest from fossil fuel companies, or right-wing proposals to divest from Chinese companies), taking its fiduciary responsibility seriously; the mutual fund window would allow participants greater options such as "green" funds or funds without Chinese investments.  However, only a portion of a participant's account may be invested within the window, and the fees are structured to be very steep so as to discourage investment outside the traditional offerings (as well as to preclude non-participants from subsidizing those costs).<ref>https://www.fedsmith.com/2022/01/27/tsp-mutual-fund-window-more-options-risk-expenses/</ref>

Beginning in mid-2022, participants have also been offered a "mutual fund index window" which will allow a part (but not all) of contributions to be invested in mutual funds offered by the private sector (it is estimated that around 5,000 such offerings are available).  The FRTIB has been uniformly opposed to politically motivated changes in how TSP's investments are handled (whether they be left-wing proposals to divest from fossil fuel companies, or right-wing proposals to divest from Chinese companies), taking its fiduciary responsibility seriously; the mutual fund window would allow participants greater options such as "green" funds or funds without Chinese investments.  However, only a portion of a participant's account may be invested within the window, and the fees are structured to be very steep so as to discourage investment outside the traditional offerings (as well as to preclude non-participants from subsidizing those costs).<ref>https://www.fedsmith.com/2022/01/27/tsp-mutual-fund-window-more-options-risk-expenses/</ref>

Unless an employee or service member chooses a different fund upon entering Federal or military service, civilian employees will automatically have their contributions established in an L fund based on an expected retirement date of 63, while members of the uniformed services will automatically have their contributions established in the G Fund.  Employees may move their existing and future contributions (each are handled separately) between funds.  In any calendar month the contributions may be moved as twice to whatever fund(s) are desired, but after that all movements are into the G Fund only.

Unless an employee or service member chooses a different fund upon entering Federal or military service, civilian employees will automatically have their contributions established in an L fund based on an expected retirement date of 63, while members of the uniformed services will automatically have their contributions established in the G Fund.  Employees may move their existing and future contributions (each are handled separately) between funds.  In any calendar month the contributions may be moved as twice to whatever fund(s) are desired, but after that all movements are into the G Fund only.