Frixxxx
Moderator
Letter released yesterday:
TSP Director Confirms Potential Deferral of G Fund Payments - FedSmith.com
TSP Director Confirms Potential Deferral of G Fund Payments - FedSmith.com
A Message from the TSP’s Executive Director
Dear Participants:
As we await legislation on raising the Federal debt limit, I would like to address your concerns about the possible suspension of issued securities to the Government Securities Investment (G) Fund. In the event that the U.S. Government reaches the statutory Federal debt limit, the Federal Government may temporarily be unable to issue new securities to the G Fund because to do so would exceed the present debt limit. However, G Fund investors are always fully protected and G Fund earnings are fully guaranteed by the Federal Government due to statutory protections in the Thrift Savings Plan Investment Act of 1987. This protection, known as the “make-whole” provision, will work to ensure that G Fund investors are completely unaffected by the limitation on securities issued by the U.S. Treasury. G Fund account balances will continue to accrue earnings and be updated each business day, and loans and withdrawals will be unaffected.
The Government Accountability Office has published a report which explains the full protection provided to G Fund investors when the U.S. Government reaches the statutory Federal debt limit.
The report can be found here: U.S. GAO - Debt Limit: Analysis of 2011-2012 Actions Taken and Effect of Delayed Increase on Borrowing Costs
If you have any additional questions, please call the toll-free ThriftLine at 1-877-968-3778 and speak to a
Participant Service Representative.
Greg T. Long
Executive Director
Dear Participants:
As we await legislation on raising the Federal debt limit, I would like to address your concerns about the possible suspension of issued securities to the Government Securities Investment (G) Fund. In the event that the U.S. Government reaches the statutory Federal debt limit, the Federal Government may temporarily be unable to issue new securities to the G Fund because to do so would exceed the present debt limit. However, G Fund investors are always fully protected and G Fund earnings are fully guaranteed by the Federal Government due to statutory protections in the Thrift Savings Plan Investment Act of 1987. This protection, known as the “make-whole” provision, will work to ensure that G Fund investors are completely unaffected by the limitation on securities issued by the U.S. Treasury. G Fund account balances will continue to accrue earnings and be updated each business day, and loans and withdrawals will be unaffected.
The Government Accountability Office has published a report which explains the full protection provided to G Fund investors when the U.S. Government reaches the statutory Federal debt limit.
The report can be found here: U.S. GAO - Debt Limit: Analysis of 2011-2012 Actions Taken and Effect of Delayed Increase on Borrowing Costs
If you have any additional questions, please call the toll-free ThriftLine at 1-877-968-3778 and speak to a
Participant Service Representative.
Greg T. Long
Executive Director
