Federal Employee Pension Funds Hold $837 Billion in Treasury Securities, and the Thrift Savings Plan Holds Another $194 Billion
Fun Fact: Federal employees own $1 trillion of U.S. debt
April 6, 2015Federal Times - If federal employees were a foreign country they would rank only behind China and Japan as holders of U.S. Treasury securities, according to federal data.
The Civil Service Retirement System and the Federal Employee Retirement System hold a combined $837 billion in Treasury securities, and the Thrift Savings Plan holds another $194 billion. In combination they rank only behind the Social Security Trust Fund, China and Japan as holders of public debt.
While federal employees do not directly control the pension system portion of the public debt, federal employee retirement funds constitute about 6 percent of the $18 trillion in debt the Treasury Department is currently financing.
This fact is made sharper by the recent debt limit standoffs in Congress, as one of America's major creditors are its own federal workers.
On March 16 the Treasury Department notified Congress that it was once again at its statutory limits and would have to begin various measures to juggle debt payments until Congress raises the debt limit.
On March 17, Treasury Secretary Jacob Lew sent a letter to Congress notifying them that one of the "extraordinary measures" the agency can take to stay under the debt limit is to suspend the investment of the G fund – the securities investment fund of the TSP – and the federal pension funds as well.
"By law, the G Fund will be made whole once the debt limit is increased. Federal retirees and employees will be unaffected by this action," Lew wrote.In October 2008, when plummeting stocks were decimating federal employees' retirement savings, federal employees responding in large numbers by pulling their remaining money out of the Thrift Savings Plan's stock-based funds and putting them into the safer G Fund pegged to U.S. Treasury securities.
According to the Federal Times on October 11, 2008:
The G Fund is the most secure of the five individual TSP funds — payment of principal and interest is guaranteed — although it typically yields TSP's lowest return.
But not lately. Throughout this year — and especially in recent weeks — the G Fund has emerged to millions of TSP participants as a safe harbor from the worsening financial turmoil.
In September alone, TSP retirement accounts lost almost $10 billion — from $228 billion to $218 billion, the lowest level since March 2007. Also last month, TSP participants transferred $3.5 billion of their savings from other funds into the G Fund — the largest shift of TSP money since January, when participants moved $4.4 billion into the G Fund. January was when global stock markets first started dropping sharply because of concerns over the subprime mortgage crisis.
Federal Employee 'Thrift Savings Plan'
From www.TSP.gov
Fund Management
The FRTIB Executive Director currently allocates the selection, purchase, investment, and management of the assets contained in the F, C, S, and I Funds to BlackRock Institutional Trust Company, N.A.
G Fund
F,C,S, and I Funds
The F, C, S, and I Funds are index funds, each of which is invested in order to replicate the risk and return characteristics of its appropriate benchmark index. For example, the C Fund is invested in a stock index fund that fully replicates the Standard and Poor's 500 (S&P 500) Index, a broad market index made up of the stocks of 500 large to medium-sized U.S. companies. The C Fund's objective is to match the performance of the S&P 500. The F, C, S, and I Funds remain invested regardless of the performance of the securities markets or the overall economy.
L Funds
Expense Ratio
- The costs of operating and maintaining the TSP's recordkeeping system,
- The cost of providing participant services, and
- The printing and mailing of notices, statements, and publications.
For 2014, the average net expense was $0.29* per $1,000 invested.
The net TSP expense ratio represents the amount that participants' investment returns were reduced by TSP administrative expenses.
Expense ratios may also be expressed in basis points. One basis point is 1/100th of one percent, or .01%. Therefore, the 2014 TSP net expense ratio* of .029% is 2.9 basis points. Expressed either way, this means that expenses charged to each TSP account in 2014 were approximately 29 cents per $1,000 of investment.
Top 10 Largest U.S. Pension Funds
December 12, 2012Llenrock Blog - Based on the most recent data I could find, from Pensions & Investments and this PDF, here are the Top 10 Largest Pension Funds in the U.S.:
10. New York State Teachers (total assets in billions: $80.3)
9. IBM (83)
8. Texas Teachers (100.2)
7. General Motors (101.5)
6. New York City Retirement (115.2)
5. Florida State Board (123.4)
4. New York State Common (133)
3. California State Teachers (138.9)
2. California Public Employees (214.4)
1. Federal Retirement Thrift (264)
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