In July 2024, the TSP will introduce the new L 2070 Fund.
The Lifecycle (L) Funds are designed to provide participants with an easy, convenient way of investing their Thrift Savings Plan (TSP) accounts among the five individual TSP funds based on when the participants will need the money in retirement. One of the principal characteristics of the funds is that their investment mixes become progressively more conservative as they approach their target date. Ultimately, each of the funds will “roll down” into the L Income Fund. When this happens, the fund will be retired and a new L Fund with a time horizon (target date) later than the existing funds will be established.
July 2024 changes include:
- Introduction of the new L 2070 Fund.
- Changes to the Date of Birth (DOB) ranges used to determine the appropriate default fund for automatic enrollment to align with the current industry standard:
- The L Income Fund will be the default for birth dates before January 1, 1960 (previously birth dates before January 1, 1958).
- The L 2025 Fund will be the default for birth dates between January 1, 1960 – December 31, 1964 (previously birth dates between January 1, 1958 – December 31, 1964).
- Note: The investment elections to the applicable default fund are set the very first time a participant’s data record is sent to the TSP from the agencies. Therefore, current participants will not see a change in where their future contributions are invested nor will existing balances be moved as a result of the change in default birth years.
Key dates:
- The L 2070 Fund will appear as an investment option in My Account at 12 pm eastern time on July 25, 2024 (7/26 trading day).
- The DOB logic changes for the L Income Fund and L 2025 Fund will be active on July 24, 2024.
This bulletin describes the activities associated with these L Fund changes, and how these changes impact agencies, services, and payroll offices.
Introduction of the L 2070 Fund
The L 2070 Fund will open at an initial share price of $10. Participants can begin making investment elections and fund transfers into the L 2070 Fund beginning at 12 pm eastern time on July 25, 2024. These elections will become effective on July 26, 2024.
As of July 25, 2024, participants have the option to invest in the following L funds, with the defaults set as described below:
| Default Fund | For those born in years |
|---|---|
| L Income | 1959 or earlier |
| L 2025 | 1960 – 1964 |
| L 2030 | 1965 – 1969 |
| L 2035 | 1970 – 1974 |
| L 2040 | 1975 – 1979 |
| L 2045 | 1980 – 1984 |
| L 2050 | 1985 – 1989 |
| L 2055 | 1990 – 1994 |
| L 2060 | 1995 – 1999 |
| L 2065 | 2000 – 2004 |
| L 2070 | 2005 and later |
Impact on the agencies, services, and payroll offices
The agencies, services, and their servicing payroll offices should not experience any major impact as a result of these changes. Aside from being able to explain that the L 2070 Fund was introduced, there will only be minor changes to the format of one ad hoc report the TSP provides to the payroll offices through the Agency Portal.
A column for the new L 2070 Fund has been added to the following ad hoc report:
- TSP 5013, Benefits Extract Report
This report is a benefit extract that provides active participants’ total balances by fund, source, and plan as of an effective date.
No other reports were affected by these L Fund changes. Once the L 2070 Fund is in production, any report that references the funds will automatically pull in the L 2070 if the participant has it as part of their investments.