The negative cash flow likely reflects that many long-time TSP account holders are moving into retirement and withdrawing funds. Image: cunaplus/Shutterstock.com
The TSP’s cash flow has turned negative in the early months of this year as withdrawals and loans that take money out of investor accounts have outpaced new investments and loan repayments, according to data presented at the latest meeting of the TSP governing board.
The net outflow through March was $730 million in a program with $895 billion in assets through that month, despite a growth in the number of account holders by more than 30,000 to 7,033,000 in that time. That resulted from a $13.73 billion outflow outpacing a $13 billion inflow.
In contrast, in 2023 there was a net inflow of $4 billion as new investments and loan repayments of $44.4 billion outpaced withdrawals and new loans of $40.4 billion. That included a net inflow of $607 million through March of that year.
Last month the TSP once again hit all-time highs of FERS employees making personal investments, 95.7 percent, and the percentage of them investing at least 5 percent of salary, 87.6 percent, and capturing the maximum agency contribution (there is no agency contribution under CSRS).
The negative cash flow likely reflects that many long-time TSP account holders—the program began in the late 1980s—are moving into retirement and withdrawing their money, in whole or in part.
The data show 246,000 account holders are under CSRS while a recent report from the Congressional Research Service showed only 44,000 currently employed under CSRS, meaning more than four-fifths are retired or otherwise separated. Similarly, of just above 4 million accounts under FERS, about 30 percent are retired or otherwise separated.
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