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The third quarter of calendar year 2020 is now upon us and, with it, come changes to the Thrift Savings Plan’s L funds. The TSP announced some time ago that it would make certain changes to the L Funds in the third quarter and, just recently, they told us that the changes would take place on July 1st.

The L Funds were introduced 15 years ago in 2005. The introduction was on August 1st, which is in the third quarter. When introduced they consisted of L Income, L 2010, L 2020, L 2030 and L 2040. They changed in 2010 when the L 2010 Fund was merged into the L Income Fund and the L 2050 Fund was introduced. The L funds are made up of the five basic TSP funds (G, F, C, I and F) in differing proportions, with the plan of gradually shifting a participant’s TSP position to a more conservative allocation by the time that they need to access the money in retirement. The L Funds are a “set it and forget it” allocation tool, identical to what private sector plans call “target date funds”.


The Thrift Board has already made one recent change to the L Funds, changing the “glide path” of the funds so that their allocation wouldn’t be quite as heavy in fixed income (particularly G) by the time a participant hits the point where their investments would be in the L Income Fund.

On July 1, the L 2020 fund was merged into the L Income Fund – after all, it is 2020. But they made an additional change as well. The L Funds were also switched to 5-year intervals in the third quarter. We’ll still have the L Income Fund, but the numbered funds will run from 2025 to 2065. This will let those who choose to be invested in the L Funds be a little more precise in their timing. It also brings the TSP into step with private sector target date funds which primarily come in 5-year increments.

You can find information about how each L Fund is allocated on the TSP website at. https://www.tsp.gov/InvestmentFunds/FundOptions/index.html. This information was updated July 1 to show the allocation of the newly introduced funds. Historical return information can be found at https://www.tsp.gov/InvestmentFunds/FundPerformance/annualReturns.html. There is, obviously, no information on the returns of the new funds, as they have no history.

Keep reading the TSP Investment Report to stay abreast on changes in the Thrift Savings Plan.

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