Retirement Funds Tapped Again

With the government once again close to its debt limit, the Treasury Department once again has resorted to financial maneuvers involving the civil service retirement fund and the Thrift Savings Plan’s government securities (G) fund in order to stave off default. During such periods of “disinvestment,” the government stops issuing the debt securities that make up the funds. Although law requires that any interest lost to the funds be restored after such maneuvers-as was done when the government bumped up against the ceiling last month as well as several times in past years-many employee find use of the funds for the government’s short-term financial purposes highly objectionable. It’s expected that the debt ceiling will have to be raised by late June at the latest, at which time the lost interest will be restored.