Investments in the Federal Thrift Savings Plan’s $119.4 billion Government Securities Investment Fund, which were halted in May when the federal government reached its $14.3 trillion debt ceiling, have continued to accrue interest for the past two months, said Thomas Trabucco, director of external affairs at the TSP.
The so-called G Fund is one of the options in the federal employees’ $289.3 billion defined contribution plan.
Mr. Trabucco said in a telephone interview that during a debt issuance suspension period, the Treasury Department determines the value of securities that may be issued to the so-called G Fund each day without breaching the debt limit. Officials at the Treasury and the Thrift Savings Plan carefully track the amount daily, and The Thrift Savings Plan Investment Act of 1987 states that the Treasury will repay the interest “on the first business day after the expiration of any debt issuance suspension period.”
The balance of the fund, the issuance “that can’t be invested, accrues earnings at the same rate as if they had been issued,” Mr. Trabucco said.