- The Washington Times - Monday, February 20, 2006

About half of the billions of dollars that federal, postal and military personnel have in the Thrift Savings Plan, their in-house 401(k), is in the super-safe G Fund. It is a special, never-has-a-bad-day fund made up of guaranteed U.S. Treasury securities. The G Fund is not available to people outside government, and there is nothing like it in the private sector.

So with half of their retirement cash tied up in the G Fund, many civil servants get a tad nervous when they hear that the Treasury is “borrowing” from the fund because the legal debt ceiling has been reached.

Most feds don’t pay any attention when the G Fund piggy bank is tapped to help Uncle Sam pay his bills. But others see it as a sleight of hand that will cost them money — a government cover-up or the like.

The situation is a little less grim: This happens all the time. It happened during the Clinton administration several times. It happened last year, and the year before. And it’s with us again. The bottom line — thanks to what is called “make whole” legislation that anticipated this very thing — is that nobody loses a nickel, according to both the Congressional Research Service and the Government Accountability Office.

Bear in mind that while most members of the House and Senate as well as their staffs have their optional retirement cash in the Thrift Savings Plan (TSP), the employees of the CRS and the GAO, which monitor the status and health of the federal TSP, do too. In fact it could be argued that the TSP is the most monitored investment option on Earth.

Thanks to the Thrift Savings Fund Investment Act of 1987, “the make-whole provision means that TSP participants who have invested in the G Fund will not lose anything,” according to the Federal Retirement Thrift Investment Board, which runs the TSP program. Once Congress raises the debt limit, “the G Fund account balances would be exactly the same from day to day as if they were invested in Treasury securities.”

Bottom line: The G Fund is probably the safest investment in the nation — not the best-paying, but the safest.

Pay for performance

Everybody’s doing it, or at least most federal agencies are. They hope to have a pay-punish-reward system in place within the next couple of years.

The State Department is the latest to announce plans for a new kind of merit raise system with a target date of April 2008. It would be set up along the lines of the pay-for-performance program established for members of the Senior Foreign Service system, which covers top-paid career people.

The Defense and Homeland Security departments are proceeding with pay-for-performance plans, despite some in-house delays and some ordered by federal courts. The Government Accountability Office and other agencies also have pay-for-performance plans. Outsiders, including some critical union observers, say the highest marks seem to go to the GAO.

Why GAO? For one thing, it is a relatively small federal agency that works for Congress. It has a high percentage of professionals and technical people on its staff and a defined mission: poking around the executive branch for the Congress. The head of the agency, Comptroller General David M. Walker, is serving a 15-year term (the average political appointee lasts less than two years) and is, in the words of one top staffer, “obsessed” with making it work.

So can the GAO success story be expanded to other agencies?

“Absolutely,” says a normally hypercritical union official. “All you need is a very small, very professional agency, which has the trust of Congress, which Congress needs and which has a boss committed to the program and who has a long-term, say about 15 years, appointment to make it happen.”

How many other federal agencies fit that profile? Roughly, none.

Mike Causey, senior editor at Federal News Radio AM 1050, can be reached at 202/895-5132 or [email protected]

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide