THRIFT SAVINGS FUND 

Washington, DC 

FINANCIAL STATEMENTS 

December 31, 2015 and 2014 
TABLE OF CONTENTS 

PAGE 

INDEPENDENT AUDITORS’ REPORT .........................................................................................1 

FINANCIAL STATEMENTS.............................................................................................................3

Statements of Net Assets Available for Benefits .............................................................................4

Statements of Changes in Net Assets Available for Benefits ..........................................................5 

Notes to Financial Statements ..........................................................................................................6 

Appendix 1 ...............................................................................................................................14 

Appendix 2 ...............................................................................................................................15 
1

INDEPENDENT AUDITORS’ REPORT

Members of the Board and Executive Director 

Federal Retirement Thrift Investment Board 

Washington, DC 

Report on the Financial Statements

We have audited the accompanying financial statements of Thrift Savings Fund (the “Fund”), which 

comprise the statements of net assets available for benefits as of December 31, 2015 and 2014, and 

the related statements of changes in net assets available for benefits for the years then ended, and the 

related notes to the financial statements. 

Management's Responsibility for the Financial Statements

Fund management is responsible for the preparation and fair presentation of these financial 

statements in accordance with accounting principles generally accepted in the United States of 

America; this includes the design, implementation, and maintenance of internal control relevant to 

the preparation and fair presentation of financial statements that are free from material misstatement, 

whether due to fraud or error. 

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We 

conducted our audits in accordance with auditing standards generally accepted in the United States 

of America. Those standards require that we plan and perform the audit to obtain reasonable 

assurance about whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures 

in the financial statements. The procedures selected depend on the auditors’ judgment, including the 

assessment of the risks of material misstatement of the financial statements, whether due to fraud or 

error. In making those risk assessments, the auditor considers internal control relevant to the Fund's 

preparation and fair presentation of the financial statements in order to design audit procedures that 

are appropriate in the circumstances, but not for the purpose of expressing an opinion on the 

effectiveness of the Fund's internal control. Accordingly, we express no such opinion. An audit also 

includes evaluating the appropriateness of accounting policies used and the reasonableness of 

significant accounting estimates made by management, as well as evaluating the overall presentation 

of the financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis 

for our audit opinion.

CliftonLarsonAllen LLP 

www.CLAconnect.com 

An independent member of Nexia International
2 

Opinion 

In our opinion, the financial statements referred to above present fairly, in all material respects, 

the net assets available for benefits of the Fund as of December 31, 2015 and 2014, and the 

changes in its net assets available for benefits for the years then ended in accordance with 

accounting principles generally a

a 

ccepted in the United States of America. 

Baltimore, Maryland 

April 18, 2016 
3 

FINANCIAL STATEMENTS 
4 

2015 2014

ASSETS:

 Investments, at fair value: $458,272,351 $439,670,217

 Receivables:

 Employer contributions 316,816 301,512 

 Participant contributions 813,580 779,770 

 Notes receivable from participants (loans) 8, 8,800,389 822,149 

 Due for securities sold 42,870 72,965 

 Total receivables 9, 9,954,636 995,415 

 Fixed assets: 

 Furniture, equipment, and leasehold improvements,

 net of accumulated depreciation and amortization

 of $30,414 in 2015 and $26,752 in 2014 7,406 10,288 

 Data processing software, net of accumulated

 amortization of $56,444 in 2015 and $55,407 in 2014 2,087 2,221 

 Total fixed assets 9,493 12,509 

 Other assets 6 54 

 Total assets 468,277,265 449,637,416 

LIABILITIES:

 Accounts payable 13,207 22,808 

 Accrued payroll and benefits 2,783 2,505 

 Benefits and participant loans payable 127,226 131,546 

 Deferred rent and lease credits 8,601 8,693 

 Due for securities purchased 152,899 121,586 

 Cash collateral payable 24,799,000 21,274,000 

 Total liabilities 25, 21,561,138 103,716 

FUNDS RESTRICTED FOR THE PURCHASE OF FIDUCIARY 

INSURANCE (3,629) (3,702) 

NET ASSETS AVAILABLE FOR BENEFITS $443,169,920 $428,072,576

See notes to financial statements and Independent Auditors' Report.

THRIFT SAVINGS FUND

Statements of Net Assets Available for Benefits

As of December 31, 2015 and 2014

(In thousands)
5 

2015 2014

ADDITIONS: 

 Investment income:

 Interest $3,611,195 $3,830,072

 Net appreciation of investments 559,387 20,022,204 

 Net investment income 4,170,582 23,852,276 

 Contributions:

 Participant 19,494,789 18,515,415 

 Employer 8,336,905 7,869,460 

 Total contributions 27,831,694 26,384,875 

 Loan administrative fees 13,479 13,384 

 Interest income on notes receivable from participants (loans) 179,960 184,185 

 Total additions 32,199,940 50,430,495 

DEDUCTIONS:

 Benefits paid to participants 16,598,747 16,382,504 

 Administrative expenses 185,578 166,572 

 Notes receivable from participants declared taxable distributions 318,344 319,560 

 Total deductions 17,102,669 16,868,636 

CHANGE IN FUNDS RESTRICTED FOR THE

 PURCHASE OF FIDUCIARY INSURANCE 73 295 

 Net increase 15,097,344 33,562,154 

NET ASSETS AVAILABLE FOR BENEFITS:

 Beginning of period 428,072,576 394,510,422 

 End of period $443,169,920 $428,072,576

See notes to financial statements and Independent Auditors' Report.

THRIFT SAVINGS FUND

Statements of Changes in Net Assets Available for Benefits

Years Ended December 31, 2015 and 2014

(In thousands)
6 

THRIFT SAVINGS FUND 

NOTES TO FINANCIAL STATEMENTS 

 FOR YEARS ENDING DECEMBER 31, 2015 AND 2014 

1. PLAN DESCRIPTION 

The following description is provided for general information purposes. Participants should refer to the 

Summary of the Thrift Savings Plan, www.tsp.gov, and applicable legislation and regulations for more 

complete information. 

General—The Thrift Savings Plan (the Plan or the TSP) is a retirement savings and investment plan for 

Federal employees and members of the uniformed services. It was authorized by the United States Congress 

in the Federal Employees’ Retirement System Act of 1986 (FERSA). The Plan provides Federal employees 

and members of the uniformed services with a savings and tax benefit similar to what many private sector 

employers offer their employees under 401(k) plans. The Plan was primarily designed to be a key part of the 

retirement package (along with a basic annuity benefit and Social Security) for employees who are covered by 

the Federal Employees’ Retirement System (FERS). 

The Plan is administered by an independent Government agency, the Federal Retirement Thrift Investment 

Board (the Agency), which is charged with operating the Plan prudently and solely in the interest of the 

participants and their beneficiaries. Assets of the Plan are maintained in the Thrift Savings Fund (the Fund). 

Federal employees, who are participants in FERS, in the Civil Service Retirement System (CSRS), or in 

equivalent retirement systems (as provided by statute) and members of the uniformed services, are eligible to 

join the Plan immediately upon being hired. Generally, FERS employees are those employees hired on or 

after January 1, 1984, while CSRS employees are employees hired before January 1, 1984, who have not 

elected to convert to FERS. Each group has different rules that govern contributions. As of December 31, 

2015, there were approximately 4.8 million participants in the Plan, with approximately 3.3 million 

contributing their own money. As of December 31, 2014, there were approximately 4.7 million participants in 

the Plan, with approximately 2.9 million contributing their own money. 

Contributions—The Plan is a defined contribution plan and, as such, the law specifies how much an employee 

may contribute and how much the employing agency must contribute to each FERS employee’s account. No 

participant under age 50 could contribute more than the Internal Revenue Service (IRS) elective deferral limit 

of $18,000 in 2015 and $17,500 in 2014.1 Participants age 50 and older who are already contributing the

maximum amount of contributions for which they are eligible may make supplemental tax-deferred catch-up 

contributions (up to $6,000 in 2015 and $5,500 in 2014) from their basic pay. FERS participants are entitled 

to receive agency matching contributions on the first 5 percent of basic pay that they contribute each pay 

period, according to a formula prescribed by FERSA (5 United States Code (U.S.C.) § 8432(c)). For FERS 

employees, their employing agencies also contribute an agency automatic contribution equal to 1 percent of 

each employee’s basic pay each pay period, as prescribed by FERSA (5 U.S.C. § 8432(c)). Uniformed 

services members may also contribute up to 100% of designated special pay, incentive pay, and bonuses. The 

Federal Government or uniformed services does not match amounts contributed by CSRS employees or 

uniformed services members.2 Civilian Federal Agencies are required to automatically enroll newly hired (and 

rehired) eligible employees unless the employee makes an affirmative election not to participate in the Plan or 

to participate at other than the default rate of three percent. 

 

1 Members of the uniformed services who are serving in a combat zone earn tax-exempt pay. Contributions from tax-exempt pay 

do not count towards this elective deferral limit. 

2 The Army ran a small test matching program for soldiers who agreed to enlist for five years or more. This program is no longer 

open to new soldiers. However, soldiers who took part in the test program and who are still serving their initial term of 

enlistment continue to receive matching contributions.
7 

Participants may also transfer funds from traditional individual retirement accounts (IRAs) or other eligible 

employer plans into the Plan. The Plan also allows for qualified Roth contributions and transfers from 

qualified Roth plans. 

Investments—Pursuant to FERSA (5 U.S.C. § 8438), Plan participants are offered five investment funds: the 

Government Securities Investment Fund (G Fund), the Fixed Income Index Investment Fund (F Fund), the 

Common Stock Index Investment Fund (C Fund), the Small Capitalization Stock Index Investment Fund (S 

Fund), and the International Stock Index Investment Fund (I Fund). The Agency has contracted with 

BlackRock to act as investment manager and securities lending agent for the C, F, S, and I Fund accounts. 

The TSP Lifecycle Funds are asset allocation portfolios that use the Plan’s existing investment funds and 

target the mix based on the time horizon when the participant intends to withdraw the funds. As described in 

the TSP L Funds Information Sheet on the TSP website (www.tsp.gov), the L2020 Fund, the L2030 Fund and 

the L2040 Fund are designed for participants who will withdraw their accounts five years before or after the 

year in the title of the account. The L Income Fund was designed to produce current income for the 

participants who are already receiving money from their accounts through monthly payments. The L2050 

Fund is designed for participants who will withdraw their accounts in 2045 or later. The asset allocations are 

based on economic assumptions regarding future investment returns, inflation, economic growth, and interest 

rates. These asset allocations are adjusted quarterly, moving to a more conservative mix over time. Between 

quarterly adjustments, the asset allocations of each fund are maintained through daily rebalancing to that 

fund’s target allocation. The Agency, with the help of Mercer Investment Consulting, Inc. reviews the 

assumptions underlying the asset allocations at least annually.

Participants may allocate any portion of their contributions among the five individual investment funds and the 

five TSP Lifecycle Funds. Also, participants may reallocate their account balance among the individual 

investment funds and the TSP Lifecycle Funds through the interfund transfer process. The Agency restricts 

the number of interfund transfers a participant can make per month in order to curb frequent trading and its 

associated costs to all TSP participants. The first two interfund transfers per calendar month are unrestricted. 

After that, participants may move money only from the F, C, S, and I Funds and the TSP Lifecycle Funds to 

the G Fund.

Vesting—Plan participants are immediately vested in all of their own contributions and attributable earnings. 

Participants are also immediately vested in any agency matching contributions and attributable earnings. In 

order to be vested in the agency automatic (1%) contributions, a FERS employee must have either 2 or 3 years 

of service as described in section 8432(g) of FERSA. FERS employees who are not vested and who separate 

from the Federal Government forfeit all agency automatic contributions and attributable earnings. 

Forfeitures—Forfeited funds, consisting primarily of statutory forfeitures (pursuant to 5 U.S.C. §8432(g)) and 

agency contributions forfeited due to retirement coverage corrections made under the Federal Erroneous 

Retirement Coverage Correction Act (FERCCA), totaled $44,816,728 as of December 31, 2015, and 

$36,290,097 as of December 31, 2014. Under FERCCA, when a participant’s retirement coverage is corrected 

from FERS to CSRS, any excess agency contributions are forfeited to the Plan. All forfeitures are used by the 

Plan daily to offset accrued administrative expenses. If the forfeited funds (along with participant loan fees) 

are not sufficient to meet all administrative expenses, earnings on investments are then charged. 

Individual Accounts—An individual account is maintained for each Plan participant. As applicable, each 

participant’s account is credited with the participant’s contributions, agency automatic and matching 

contributions, and loan repayments and charged with loans and withdrawals. The value of the participant’s 

account reflects the number of shares and the daily share prices of the funds in which the participant is 

invested. Administrative expenses are a component of the share price calculation. The benefit to which a 

participant is entitled is the amount of the participant’s vested account balance. 
8 

Notes Receivable From Participants (Loans)—Participants may apply for loans from their accounts. There 

are two types of Plan loans: general purpose and residential. General purpose loans can be obtained for any 

purpose, with a repayment period from 1 to 5 years. Residential loans can be obtained for the purpose of 

purchasing a primary residence, with a repayment period from 1 to 15 years. Participant loans may only be 

taken from participant contributions and attributable earnings. The minimum loan amount is $1,000 and the 

maximum loan amount is $50,000. A $50 fee is deducted from the proceeds of the loan. During the twelve 

months ending December 31, 2015 and 2014, loan fees of $13,478,800 and $13,384,050, were used to offset 

administrative expenses, respectively. 

The interest rate for loans is the G Fund rate at the time the loan agreement is issued. The rate is fixed at this 

level for the life of each loan. Participant loans are valued at their unpaid balances. Interest earned on loans is 

allocated to the participant account as loan payments are made to that account. 

By IRS regulation, the Agency must identify each calendar quarter any participant loan that is in default. The 

participant then has until the end of the following calendar quarter to pay the overdue amount. If not paid, a 

taxable distribution of the unpaid loan balance, plus accrued interest, will be declared. Taxable loan 

distributions also occur when a participant separates from service and does not repay an outstanding loan 

balance. Participants should refer to the booklet, TSP Loans, for more information. 

Payment of Benefits—After leaving service, participants may elect benefit withdrawals in the form of a 

partial withdrawal or they may choose a full withdrawal as a single payment, a series of monthly payments, or 

a life annuity. Participants may choose to combine any two or all three of the available full withdrawal 

options. Participants should refer to the booklet, Withdrawing Your TSP Account After Leaving Federal 

Service, for more complete information. 

Participants should refer to the booklet, TSP In-Service Withdrawals, for information on withdrawal options 

while employed in Federal service. 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

Basis of Accounting—The accompanying financial statements have been prepared in accordance with 

accounting principles generally accepted in the United States of America. Revenue is recognized when earned 

and expenses are recognized when incurred. Benefits and participant loans payable for the last three trade 

dates of each month are recorded when withdrawn from participants’ accounts. 

Investments—All investments are stated at fair value, based upon the quoted market values of the underlying 

securities at the end of each period. The Agency invests in (or redeems from) the Thrift Savings Fund 

investment funds each business day. Purchases and sales of securities are recorded on a trade-date basis. 

The Plan offers its participants various investment funds that are exposed to different types and amounts of 

risk, including interest rate, credit, and market risk. The funds (except for the G Fund, which is invested in a 

way to avoid losses) can be expected to experience greater or lesser volatility over time, depending upon each 

fund’s individual risk profile, thus affecting the fund balances from one period to the next. 

During the twelve-month periods ended December 31, 2015 and December 31, 2014, the Plan’s investment 

funds consisted of the following (objectives of the investment funds are described in the various TSP Fund 

Information Sheets, available on www.tsp.gov): 

The G Fund invests in short-term nonmarketable U.S. Treasury securities specially issued to the Thrift Savings 

Plan. All investments in the G Fund earned interest at a rate that is equal, by law, to the weighted average 

yield on outstanding U.S. Treasury marketable securities with 4 or more years to maturity. The interest rate is 

set every month based on the data as of the last business day of the previous month. 

The F Fund invests in a separate account that is passively managed and tracks the Barclays Capital U.S. 

Aggregate Bond Index. The F Fund uses sampling to attempt to replicate the characteristics of the Barclays 
9 

Index. As of December 31, 2015, the separate account held 6,580 securities totaling $24.8 billion. As of 

December 31, 2014, the separate account held 6,343 securities totaling $24.0 billion. 

The C Fund invests in a separate account that is passively managed and tracks the S&P 500 Index. The C Fund 

separate account holds stocks of all the companies represented in the S&P 500 Index in virtually the same 

weights as they are represented in the S&P 500 Index. As of December 31, 2015, the separate account held 

$142.4 billion of securities. As of December 31, 2014, the separate account held $140.7 billion of securities. 

The S Fund invests in a separate account that is passively managed and tracks the Dow Jones U.S. Completion 

Total Stock Market Index by holding most of the stocks with larger capitalizations in virtually the same 

weights as they are represented in the index and by holding a representative sample of the remaining stocks in 

the index. As of December 31, 2015, the separate account held $50.2 billion of securities. As of December 31, 

2014, the separate account held $50.6 billion of securities. 

Before September 2014, the S Fund invested primarily in the BlackRock Extended Equity Market Index Fund 

“E,” which in turn held shares of the Extended Equity Market Master Fund. Both the BlackRock Extended 

Market Index Fund “E” and the Master Fund were passively managed commingled funds. 

The I Fund invests in a separate account that is passively managed and tracks the MSCI EAFE Index. As of 

December 31, 2015, the separate account held $34.0 billion of securities. As of December 31, 2014, the 

I Fund held $33.1 billion of securities. 

Fair Market Valuations—The Plan follows the FASB’s ASC 820-10, which provides a comprehensive 

framework for measuring fair value and expands disclosures which are required about fair value 

measurements. Specifically, FASB ASC 820-10 sets forth a definition of fair value and establishes a 

hierarchy prioritizing the inputs to valuation techniques. 

Under FASB ASC 820-10, the fair value hierarchy prioritizes inputs to valuation techniques used to measure 

fair value into four broad levels: Level I, Level II, and Level III. Inputs may be based on independent market 

data (“observable inputs”) or they may be internally developed (“unobservable inputs”). The hierarchy gives 

the highest priority to quoted prices in active markets for identical assets (Level I) and the lowest priority to 

unobservable inputs (Level III). 

An “independent market quotation” for a security or other asset is defined as a quoted price in an active 

market for an identical security or asset (a “Level I Price”). 

As a general principle, the current “fair market value” of a security or other asset is the amount that a Fund 

might reasonably expect to: (i) receive upon the sale of the security or asset; or (ii) pay to transfer the liability 

associated with the security or asset in an orderly transaction between market participants on the date on which 

the security or asset is being valued. In the event that a Level I Price is not readily available for a given type 

of security or asset, the fair value of the security or other asset is determined by using pricing inputs that are 

either directly or indirectly observable on the valuation date for the security or asset, which may include the 

use of models or other valuation methodologies (a “Level II Price”). 

Level I Prices and Level II Prices are provided by broker dealers or by pricing providers, services, and vendors 

(together, “pricing sources”) approved by the BlackRock Global Pricing Committee or its delegates. The 

pricing sources approved by the BlackRock Global Pricing Committee vary according to security or asset type 

and include, but are not limited to, Reuters, Bloomberg, IDC, and Mark-it Partners. 

The separate accounts have a readily determinable fair value as these securities transact on a daily bases 

without restrictions. The readily determinable fair value is used to determine net asset value per share. The net 

asset value is based upon the fair value of the underlying investments. 

The table at Appendix 1 sets forth by level, within the fair value hierarchy and at net asset value, the Plan’s 

assets at fair value for the years ended December 31, 2015 and December 31, 2014. 
10 

The F Fund, C Fund, S Fund, and I Fund include temporary investments in the same U.S. Treasury securities 

held by the G Fund pending daily purchase of shares in their respective index funds and to cover liquidity 

needs, such as loans and withdrawals from the Thrift Savings Fund.

The separate accounts incurred an investment management fee for the separate account program management 

for the prior twelve months as follows: the C Fund ($5.2 million and $3.9 million as of December 31, 2015 

and 2014, respectively), the F Fund ($4.0 million and $3.9 million as of December 31, 2015 and 2014, 

respectively), the I Fund ($5.3 million and $5.8 million as of December 31, 2015 and 2014, respectively), and 

the S Fund ($19.6 million and $9.7 million as of December 31, 2015 and 2014, respectively). 

The separate accounts in which the C, S, and I Funds are invested may invest in futures contracts and other 

derivatives to the extent contemplated by the fund guidelines. As part of the investment strategies, derivative 

instruments may be used to provide liquidity for daily investments or to manage currency, interest, and other 

exposures. 

The F, C, S, and I Funds also participate in securities lending activities, under agreements between BlackRock 

and third parties to lend debt and equity securities in exchange for collateral. The collateral received, which is 

required to equal 102% of the value of the domestic securities lent and 105% of the value of international 

securities, is marked to market each day, and may be invested in cash collateral funds managed by BlackRock, 

which in turn invest in money market securities and instruments. A portion of the cash collateral for securities 

lending by the C Fund ($8.1 billion and $6.6 billion as of December 31, 2015 and 2014, respectively), the F 

Fund ($5.4 billion and $5.1 billion as of December 31, 2015 and 2014, respectively), the I Fund ($0.8 billion 

and $0.6 billion as of December 31, 2015 and 2014, respectively) and the S Fund ($10.5 billion and $9.0 

billion as of December 31, 2015 and 2014, respectively), is invested in the G Fund, and is shown on the 

Statement of Net Assets as “Investments” and the corresponding cash collateral payable. 

The major source of risk in any securities lending program is that the securities and instruments in which the 

cash collateral received (against security loans) is invested may decline in value. BlackRock’s responsibilities 

include performing appropriate borrower and collateral investment credit analysis, demanding adequate types 

and levels of collateral and complying with applicable Department of Labor and Federal Financial Institutions 

Examiner Council regulations regarding securities lending. 

The tables at Appendix 2 show how the participants’ account balances in the various investment options are 

allocated among the core TSP Funds as of and for the years ended December 31, 2015, and 2014, respectively. 

Change in Accounting Principle— In July 2015, the Financial Accounting Standards Board (FASB) issued 

Accounting Standards Update 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined 

Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully 

Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date 

Practical Expedient. Part I eliminates the requirements to measure the fair value of fully benefit-responsive 

investment contracts and provide certain disclosures. Contract value is the only required measurement for fully 

benefit-responsive investment contracts. Part II eliminates the requirements to disclose individual investments 

that represent 5 percent or more of net assets available for benefits and the net appreciation or depreciation in 

fair value of investments by general type. Part II also simplifies the level of disaggregation of investments that 

are measured at fair value. Plans will continue to disaggregate investments that are measured at fair value by 

general type; however, plans are no longer required to also disaggregate investments by nature, characteristics, 

and risks. Further, the disclosure of information about fair value measurements should be provided by general 

type of plan asset. Part I and III is not applicable to the Plan. The ASU is effective for fiscal years beginning 

after December 15, 2015, with early adoption permitted. Part II is to be applied retrospectively. The Plan has 

elected to early adopt Part II. 

Securities Lending Income—Securities lending income represents the income earned from the investment of 

the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to the securities 

lending agent. During the term of the loan, the Fund earns dividend or interest income on the securities loaned 

but does not receive interest income on any securities received as collateral. Loans of securities are terminable 

at any time and the borrower, after notice, is required to return borrowed securities within the standard time 
11 

period for settlement of securities transactions. In the event that the borrower defaults on its obligation to 

return borrowed securities because of insolvency or for any other reason, the Fund could experience delays 

and costs in gaining access to the collateral. The Fund also could suffer a loss if the value of an investment 

purchased with cash collateral falls below the market value of loaned securities or if the value of an 

investment purchased with cash collateral falls below the value of the original cash collateral received. 

Fixed Assets—All fixed assets were recorded at cost and are depreciated on a straight-line basis over their 

estimated useful lives, which range as follows: 

Furniture and Equipment 3 to 10 years

Leasehold Improvements 10 years

Data Processing Software 3 to 10 years

Depreciation and amortization expense was approximately $4.7 million and $4.0 million for the years ended 

December 31, 2015 and 2014, respectively. 

Earnings Allocation—Net earnings are used to calculate the daily share price of each investment fund as 

defined in regulations issued by the Agency (5 Code of Federal Regulations (CFR) Part 1645). 

Contributions Receivable—Contributions receivable are estimated as the amount of contributions recorded 

through the first 2 weeks of the month following the date of the financial statements and represent both 

participant and employer portions of contributions. 

Estimates—The preparation of financial statements in conformity with accounting principles generally 

accepted in the United States of America requires management to make estimates and assumptions that affect 

the reported amounts of net assets available for benefits and changes therein. Actual results could differ from 

those estimates. 

Thrift Savings Plan Enhancement Act of 2009—On June 22, 2009, the Thrift Savings Plan Enhancement Act 

(the Act or P.L. 111-31) was signed into law by President Obama. The Act provides for immediate agency 

automatic (1%) and matching contributions for FERS employees (implemented in August 2009). The Act also 

requires civilian Federal agencies to automatically enroll newly hired (and rehired) eligible employees unless 

the employee makes an affirmative election not to participate in the Fund or elect a deferral rate other than the 

deferral rate of 3 percent (implemented in August 2010). The Act also allows the Agency to establish 

accounts for the surviving spouses of TSP participants (implemented December 2010). In addition, the Act 

also gives the Federal Retirement Thrift Investment Board the authority to establish a qualified Roth 

contribution program (implemented in May 2012) and the authority to establish a mutual fund window. 

Smart Saving Act of 2014—On December 18, 2014, the Smart Savings Act (the Act or P.L.113-225) was 

signed into law by President Obama. The Act requires the TSP to invest the contributions of automatically 

enrolled civilian employees in an “age-appropriate target date asset allocation investment fund” no later than 

nine months after enactment (implemented September 2015). 

Service Members Retirement Improvement Act 2015— On November 25, 2015, the FY 2016 National 

Defense Authorization Act (Public Law 114-92) was signed into law by President Obama. The Act creates a 

new “blended” retirement system for all Armed Forces Personnel who enter service beginning January 1, 

2018. The Act provides for immediate Service automatic (1 percent) and matching contributions for new 

uniformed service members. The Act also requires the Services to automatically enroll new service members 

in the Plan. The Act also provides service members with less than 12 years of service as of January 1, 2018, 

with the opportunity to elect retirement coverage under the new “blended” system. The TSP expects 

enrollment to climb substantially as a result of the impending automatic enrollment of new service members 

into the TSP.

Reclassification – Certain amounts in the 2014 financial statements have been reclassified to conform with the 

2015 presentation. These reclassifications do not affect net assets available for benefits as previously reported. 
12 

3. INCOME TAX STATUS 

FERSA (5 U.S.C. § 8440(a)(1)) states that the Thrift Savings Fund shall be treated as a trust described in 

section 401(a) of the Internal Revenue Code (I.R.C. or Code), which is exempt from taxation under section 

501(a) of the Code. This status was reaffirmed in the Tax Reform Act of 1986, Section 1147 (codified at 

I.R.C. § 7701(j)). It is not necessary for the Plan to apply for a tax status determination letter as it is qualified 

by statute. 

4. COMMITMENTS AND CONTINGENCIES 

Effective January 31, 2014, the Agency ended two of its support services contracts with Serco Systems, Inc. 

(Serco) that handled TSP software maintenance and development, systems operations, data center operations, 

and recordkeeping. Effective February 1st, 2014, the Agency transitioned to a contract with Science 

Applications International Corporation (SAIC) to provide a broad range of IT and IT-related recordkeeping 

support services, including Program management and Cross Functional Services, Infrastructure and 

Operations (data center, data network, service desk, voice network, end user services), Applications Services, 

and Recordkeeping. The annual cost of all recordkeeping systems and operations support is approximately 

$79.3 million and $85 million for calendar year 2015 and 2014, respectively.

The Agency continues to maintain contracts with Serco to provide a call center in Virginia and with The 

Active Network, Inc. to provide a call center in Maryland. The term of the Serco call center contract is one 

year with an one-year option. The term of The Active Network contract is three years with three one-year 

options renewable at the Agency’s discretion. The Serco call center contract value for calendar year 2015 and 

2014 is approximately $5.7 million. The Active Network contract value for calendar year 2015 and 2014 is 

approximately $3.9 million and $5.2 million, respectively. 

The Agency leases the office space it occupies in Washington, DC, the call center space in Virginia, and the 

Agency’s business continuity space in northern Virginia, under operating leases. The current Washington, DC 

operating lease ends September 2026. Monthly base rental payments under the current lease range from 

approximately $361,000 to $488,000. 

The Agency subleases office space in the same building it occupies in Washington, D.C. The current sublease 

ends in March 2023. Monthly base rental payments under current sublease range from $39,568 to $49,970. 

The call center operating lease ended in August 2015, with an option to extend for a five-year period. This 

option is currently in negotiations with monthly base rental payments of $12,548. The business continuity space 

is an annual obligation and monthly rental payments are $7,075. 

Future minimum lease commitments (through calendar year 2026) under the operating leases are: 

Calendar 

Year Amount 

2016 $5,201,647 

2017 5,310,435

2018 5,439,753

2019 5,433,800

 Thereafter 38,479,811 

Total $59,865,447

Rent expense is recorded on a straight-line basis over the lease terms. Rent expense under the leases was 

approximately $5.8 million and $5.6 million for the years ended December 31, 2015 and December 31, 2014, 

respectively. 
13 

5. FIDUCIARY INSURANCE 

FERSA (5 U.S.C. § 8479(b)(1)) provides that the Executive Director may assess Federal agencies for the 

purpose of buying fiduciary insurance. The Agency’s Executive Director exercised this authority in 1987 and 

required agencies to submit an amount equal to 1 percent of their agency automatic contributions. Such sums 

were collected during 1987 and 1988 and are invested to the extent not currently required to purchase fiduciary 

insurance. In February 1988, the Executive Director instructed agencies to discontinue the 1 percent fiduciary 

insurance contributions. The balance of funds available for the purchase of fiduciary insurance for the years 

ended December 31, 2015 and 2014 was $3,629,051 and $3,702,276, respectively. These funds are invested in 

the same securities held by the G Fund and are included in total investments on the accompanying statements 

of net assets available for benefits, with a corresponding reduction in the net assets available for benefits. By 

statute, such amounts cannot be allocated to participants’ accounts. The Agency has determined that the 

current insurance reserve is adequate to fund coverage needs for the foreseeable future. 

6. SUBSEQUENT EVENTS 

Agency management evaluated subsequent events through April 18, 2016, the date the financial statements 

were available to be issued. Events or transactions occurring after December 31, 2015 but prior to April 18, 

2016, that provided additional evidence about conditions that existed at December 31, 2015, have been 

recognized in the financial statements for the twelve-month period ending December 31, 2015. Events or 

transactions that provided evidence about conditions that did not exist at December 31, 2015, but arose before 

the financial statements were available to be issued, have not been recognized in the financial statements for 

the twelve-month period ended December 31, 2015 

****** 

 
14 

Appendix 1 

Quoted Prices in 

Active Markets 

for Identical 

Assets

Significant 

Other 

Observable 

Inputs 

Significant 

Unobservable 

Inputs 

Description (Level 1) (Level 2) (Level 3) Total

U.S. Government Securities 

Investment Account $206,929,770 $ - $ - $206,929,770

TSP F Fund – U.S. Debt 

Index Account - 24,788,942 - 24,788,942

TSP C Fund - Equity Index 

Account - 142,406,460 - 142,406,460

TSP I Fund- EAFE Equity 

Index Account - 33,985,423 - 33,985,423

TSP S Fund- Extended 

Equity Index Account - 50,161,756 - 50,161,756

Total assets at fair value $206,929,770 $251,342,581 $ - $458,272,351

Fair Value Measurements as of December 31, 2015

(in thousands)

Quoted Prices in 

Active Markets for 

Identical Assets

Significant 

Other 

Observable 

Inputs 

Significant 

Unobservable 

Inputs 

Description (Level 1) (Level 2) (Level 3) Total

U.S. Government Securities 

Investment Account $191,268,871 $ - $ - $191,268,871

TSP F Fund – U.S. Debt 

Index Account - 24,021,924 - 24,021,924

TSP C Fund - Equity Index 

Account - 140,706,024 - 140,706,024

TSP I Fund- EAFE Equity 

Index Account - 33,067,810 - 33,067,810

TSP S Fund- Extended 

Equity Index Account - 50,605,588 - 50,605,588

Total assets at fair value $191,268,871 $248,401,346 $ - $439,670,217

Fair Value Measurements as of December 31, 2014

(in thousands)

 
15 

 Appendix 2 

Investment 

O ptions

G Fund 

Investment

F Fund 

Investment

C Fund 

Investment

S Fund 

Investment

I Fund 

Investment Total 

G Fund $155,598,726 - - - - $155,598,726

F Fund - $20,156,858 - - - 20,156,858

C Fund - - $118,877,103 - - 118,877,103

S Fund - - - $41,625,500 - 41,625,500

I Fund - - - - $20,985,506 20,985,506

L Income 5,001,222 406,201 803,385 201,171 333,436 6,745,415

L 2020 10,582,605 1,340,174 6,018,718 1,779,831 3,311,611 23,032,939

L 2030 6,728,049 1,443,002 7,733,840 2,725,658 4,305,061 22,935,610

L 2040 3,303,690 1,130,678 6,590,248 2,769,256 3,628,616 17,422,488

L 2050 560,874 315,137 2,382,680 1,022,398 1,410,808 5,691,897

Differences (*) 25,154,604 (3,108) 486 37,942 10,385 25,200,309 

Statement of 

Net Assets $206,929,770 $24,788,942 $142,406,460 $50,161,756 $33,985,423 $458,272,351

Investment Summary by Fund as of December 31, 2015

(in thousands)

(*) Differences are a result of timing differences, including investment transactions not settled as of December 31, 2015. These 

differences may not be allocated down to the L Funds until the following business day. The differences in the G, C, F, S and I Funds are 

largely due to the securities lending program for the C, F, S and I Funds.

Investment 

O ptions

G Fund 

Investment

F Fund 

Investment

C Fund 

Investment

S Fund 

Investment

I Fund 

Investment Total 

G Fund $145,375,551 - - - - $145,375,551

F Fund - $20,196,715 - - - 20,196,715

C Fund - - $118,514,176 - - 118,514,176

S Fund - - - $42,494,258 - 42,494,258

I Fund - - - - $20,735,782 20,735,782

L Income 4,969,894 403,514 797,611 199,959 332,864 6,703,842

L 2020 9,922,650 1,187,976 6,189,793 1,872,055 3,446,734 22,619,208

L 2030 6,085,132 1,185,961 7,204,712 2,590,845 4,028,844 21,095,494

L 2040 2,986,707 873,178 6,031,231 2,550,315 3,359,512 15,800,943

L 2050 475,176 176,148 1,912,654 822,978 1,145,794 4,532,750

Differences (*) 21,453,761 (1,568) 55,847 75,178 18,280 21,601,498

Statement of Net 

Assets $191,268,871 $24,021,924 $140,706,024 $50,605,588 $33,067,810 $439,670,217

Investment Summary by Fund as of December 31, 2014

(in thousands)

(*) Differences are a result of timing differences, including investment transactions not settled as of December 31, 2014. These 

differences may not be allocated down to the L Funds until the following business day. The differences in the G, C, F, S and I Funds 

are largely due to the securities lending program for the C, F, S and I Funds.

This information is an integral part of the accompanying financial statements.