The TSP expenses are the costs of administering the TSP. The gross expenses include:
- The costs of operating and maintaining the TSP's recordkeeping system,
- The cost of providing participant services, and
- The printing and mailing of notices, statements, and publications.
Expenses are offset by the forfeitures of Agency Automatic (1%) Contributions of FERS employees who leave Federal service before they are vested, other forfeitures, and loan fees. Because these amounts are not sufficient to cover all of the TSP's expenses, TSP participants share in the remainder of the costs.
For 2014, the average net expense was $0.29* per $1,000 invested.
The net TSP expense ratio represents the amount that participants' investment returns were reduced by TSP administrative expenses.
Expense ratios may also be expressed in basis points. One basis point is 1/100th of one percent, or .01%. Therefore, the 2014 TSP net expense ratio* of .029% is 2.9 basis points. Expressed either way, this means that expenses charged to each TSP account in 2014 were approximately 29 cents per $1,000 of investment.
* Fees associated with securities lending are not included in 2014 administrative expenses. Consistent with standard practice in the industry, they are charged in addition to administrative expenses. Other expenses are disclosed in the financial statements and will be available in the April 2015 Highlights.