U.S. government payments into the Federal Thrift Savings Plan's largest fund resumed Friday after being put on hold when the federal government hit its debt ceiling 10 days earlier.
The previous $15.194 trillion debt limit was raised Friday in the absence of congressional action, freeing the U.S. Treasury to resume issuing securities for the $138.2 billion G Fund.
The G Fund is the largest fund in the $291.8 billion Washington-based plan, with 45% of its assets. It invests in government securities and is managed internally.
When the government reached the debt limit on Jan. 17, Treasury Secretary Timothy F. Geithner announced he was suspending a scheduled transfer of securities into the G Fund. That debt ceiling was automatically raised Friday by $1.2 trillion to $16.394 trillion under an agreement made last summer between members of Congress and the Obama administration, which allowed for the increase unless Congress took further action.
In a letter to G Fund participants, Greg T. Long, the plan's executive director, noted that a statutory guarantee of earnings “has effectively protected G Fund investors many times over the past 25 years” and investors “are completely unaffected.”
Thomas Trabucco, director of external affairs for TSP, said in a telephone interview that no interest was lost during the 10-day hiatus.
“The debt limit has been raised at least 30 times since TSP was created in 1987, and the suspension period has kicked in about a dozen times,” Mr. Trabucco said.