In dollar terms, the L funds together held some $214 billion, nearly 25 percent, of the $872 billion in the TSP as of the end of April. Image: Dilok Klaisataporn/Shutterstock.com
By: FEDweek StaffA target date 2070 lifecycle fund is to be launched in July, while next year the current the 2025 fund will be merged with the Income fund, with a 2075 fund then beginning, according to a presentation at the most recent TSP board meeting.
The new funds will have the same investment profile as the 2055, 2060 and 2065 funds: 99 percent in the three stock-oriented funds collectively, with the large company stock C fund accounting for about 51 percent, the international stock I fund about 35 percent and the small company stock S fund about 13 percent. The other 1 percent is split between the bond F and government securities G funds in slightly varying ratios.
Data presented at the meeting meanwhile underscored the growth of the L funds since those funds were first introduced in 2005. Of the more than 7 million account holders, 54 percent have money in at least one of them and 38 percent have all of their money in one or more.
Those percentages have grown sharply over the last 10 years since newly hired federal employees began making investments by default in the L fund appropriate for the person’s age; a similar policy later was applied to new military personnel. Account holders are free to change their allotments at any time, but many don’t.
In dollar terms, the L funds together held some $214 billion, nearly 25 percent, of the $872 billion in the TSP as of the end of April. The 2030 fund is the largest, with nearly $55 billion, followed by the 2040 and 2050 funds. The 2050 fund has the most account holders, just below 1.3 million, followed by the 2040, 2065 and 2030 funds.
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