The collective value of TSP accounts dropped by nearly $105 billion in the first six months of the year, dragged down by steep declines in all three stock-based TSP investment funds and by a lesser decline in the bond F fund.
The total amount on investment as of the end of June was $706.9 billion, compared to the $811.7 billion as of year-end 2021. That essentially wiped out the nearly equivalent gain last year over the 2020 year-end total of $709.6 billion.
That drop occurred even though the number of account holders rose by some 127,000 to above 6.6 million, and the TSP experiences a net inflow of about $1 billion monthly in new investments and loan repayments over withdrawals and loans.
The average account balance for FERS investors fell, in round numbers to $159,000 from about $181,000 and the average for CSRS investors from $195,000 to $174,000.
Due to those losses and some shift of money away from stock-based funds to the ever-gaining government securities G fund, that fund in May had passed the common stock C fund as the program’s largest. The shift of money continued in June, with a net $4.2 billion transferred in most of that from the three stock-based funds and almost all of the rest from the lifecycle L funds.
A summary presented at this week’s monthly meeting of the TSP board also showed increases in loan and withdrawal requests in June, with the number of loan requests double the average rate of 2021. It said the increases were “likely due to pent up demand from the black-out period prior to the transition” to the new operating system and increased interest loans now that account holders can have two general purpose loans at one time.
It added that the contact center still “is encountering backlogs and delayed response times” despite the addition of agents by the contractor. The center averaged 34,000 calls a day in June compared with the 9,000 daily average for 2021 as many investors sought help with problems with creating new personal online accounts, which the new system requires.
Other common issues have included missing beneficiary designation information, some of which the TSP purposely did not migrate into the new system citing technical reasons (although it since has said that the information still is on file and those choices would be honored); and a change in amounts of life-expectancy based withdrawals.
Six House members this week asked GAO to “conduct a comprehensive examination” of the new system including its “planning, contract award and implementation” and oversight by the governing board. “Our offices have heard from constituents about widespread problems, including account access, account balances, missing or incomplete information in their accounts and hours-long wait times to reach customer service,” they wrote.