About T-bills and the F fund

A Reader Writes:

What can be done to legally prevent the commandeering of the Thrift Savings Plan G fund, which is being appropriated by the Treasury Department for the foreseeable future?

I don't believe people intended to pay for an undeclared or declared war when they invested in Treasury notes/bonds. They chose the safest, lowest-risk investment and now our money is going to be at risk because there is no reason to believe or expect that the universe is going to make it easy as pie on the U.S. economy.

Bush is pretending it will all work out and we will be paid in due course. Well, in this case we are talking about the continued inability of the U.S. economy to induce investors, like Arabs who have been big on T-bills and who might desert the Treasury auctions.

What do you think we could do to protect our investment? I realize there is only a small chance that the U.S. economy will imitate Russia and Brazil, but it is not zero. I didn't sign up to support incompetence.

I guess I am going to have to move my money out of the G fund even though the alternative is not as secure as the G fund was formerly. I am 60. I can't afford to risk my money on cowboy Ponzi schemes.

Milt Replies:

The G fund — short for the Government Securities Investment Fund — is invested in short-term U.S. Treasury securities guaranteed by the full faith and credit of the U.S. government. Your money is as safe as in a T-bill. What's safer?

A Reader Writes: How do you invest in the Thrift Savings Plan (TSP) F fund if you are not in the government? If you can't, is there a nongovernment employee equivalent?

Milt Replies:

The F Fund — short for Fixed Income Index Investment — is the TSP's bond market fund. It is invested in the Barclays U.S. Debt Index Fund, which tracks the Lehman Brothers U.S. Aggregate (LBA) bond index.

The F fund's objective is to match as closely as possible the returns of the LBA index, which represents a large and diversified group of U.S. government, corporate and mortgage-backed securities. Look for a fund that also uses the LBA index as its benchmark.

Zall is a retired federal employee who since 1987 has written the Bureaucratus column for Federal Computer Week. He can be reached at [email protected]


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