My understanding is that the TSP PIP includes your contributions. If your PIP shows 0% for the year and you put in 7% of your retirement fund amount, you have really lost 7% in the market (-7%).
This has driven me to distraction as well, so I track my performance in a spreadsheet on a monthly and yearly simple and contibution exclusion calculation.
The simple rate of return includes the contributions and is verified with the TSP PIP. The contribution exclusion calculation just subtracts the contributions out of the equation on a monthly basis (there will be a slight error due to the timing of when the contributions are included in the TSP amount and therefore contribute to the % increase/decrease. This is a very small error when the contribution is less that 10% of the total TSP fund. I also reset this error when I get my real money value every month from TSP.).
example equation for the yearly Simple rate of return :
{[(total $ on Jan 1,2009) - (total $ on Jan 1,2008)]/(total $ on Jan 1,2008)} * 100 = PIP
You can change this for any 12 month period which is what the PIP does (i.e., Aug 2008 to Aug 2009).
Excluding the contributions rate of return (yearly basis) :
{[((total $ on Jan 1,2009) - (total contributions for the year)) - (total $ on Jan 1,2008)]/(total $ on Jan 1,2008)} * 100 = true market performance
For 2007, my PIP was 7%, but I contributed 7% to my account that year, which means that my true market performance was 0%. Just to be clear, this is a simplified method that gets you very close to the real value that TSP calculates using their cash flow method. Since I track my fund amount on the 1st of every month by logging into the TSP account, I get a true indication from monthly and yearly changes only.
I hope this helps.
Malyla
:nuts:
