The dollar amount of withdrawals to purchase an annuity already has matched the total of 2022, likely due to higher interest rates. Image: dezign56/Shutterstock.com
By: FEDweek StaffThe large company stock C fund regained its status as the largest in the TSP last month, passing the government securities G fund which had held that position since May of last year.
As of the end of June, the C fund held $246.3 billion of investor assets, or 30.9 percent, compared with the G fund’s $237.1 billion, or 29.8 percent, according to materials presented at the July meeting of the TSP governing board. Counting their shares in the Lifecycle L funds, those numbers are $307.8 billion, 38.7 percent, and $294.1 billion, 37 percent.
Positive stock market returns have accounted for most of the change, although in June investors moved some $5 billion out of the G fund and $3.7 billion into the C fund, on a net basis. Negative stock returns early last year had knocked the TSP out of the top position which it had held for the 12 previous months.
Total assets in the TSP as of the end of June were $796 billion, up from $726 billion at year-end 2022 but still below the peak of $812 billion at year-end 2021. Market returns accounted for most of that difference as well, since the TSP has received a net new investment of only about $1.4 billion over withdrawals year to date.
Other notable recent developments, the presentation said, are that: the dollar amount of withdrawals to purchase an annuity already has matched the total of 2022, with higher interest rates producing a higher return “likely responsible”; and hardship withdrawals are up, which it said also has been the pattern in the private sector.
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