The TSP expenses are the costs of administering the TSP. The expenses include:
- The management fees for each investment fund,
- The costs of operating and maintaining the TSP's record keeping 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.
The chart below illustrates the TSP expense ratios since 1999.
The TSP expense ratio represents the amount that participants' investment returns were reduced by TSP administrative expenses, net of forfeitures.
Expense ratios may also be expressed in basis points. One basis point is 1/100th of one percent, or .01%. Therefore, the 2012 expense ratio of .027% is 2.7 basis points. Expressed either way, this means that expenses charged to each TSP account in 2012 were approximately 27 cents per $1,000 of investment.