Federal Employees News Digest

Federal Benefits Q&A

Question: I've had various mutual funds over the years, and at the end of the year they sell off shares, the price drops (usually) and then I get a dividend in the form of additional shares. But, I don't see where I get additional shares in the TSP. My uniformed services TSP has not seen a nickel go into to in quite some time and the number of shares doesn't seem to change. The value of those shares has increased (for the most part) but not the number. Do the TSP funds operate in a completely different manner from ordinary mutual funds?

Answer: The TSP funds are classified as index funds. As such, the funds rarely pay dividends and capital gains but rather the funds increase or decrease according to their share price (net asset value) which changes from day to day.

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