Thrift Savings Plan allocations to the G Fund — the safest of TSP's five funds — hit record highs during February's stock market declines.

Employees in the Federal Employees Retirement System had 56 percent of their savings in the G Fund, Civil Service Retirement System employees had 62 percent in the G Fund, and military service members had 53 percent of their savings in the G Fund, the Federal Retirement Thrift Investment Board reported today.

The G Fund, invested in government securities, typically yields small returns — 0.21 percent in February —though it does not decline. Many TSP participants have sheltered their investments in the G Fund over the last year as the stock market has dropped further and further.

Nearly $109 billion, or 57 percent, of TSP's $191 billion balance is now invested in the G Fund. In comparison, 38 percent of TSP funds were invested in the G Fund in February 2008.

Participants moved $2 billion to the G Fund from riskier funds in February. And the shift appears to be continuing this month — Tracey Ray, the board's chief investment officer, said that participants have moved $1.8 billion into the G Fund so far in March.

The TSP's stock-based C, S and I funds' returns each dropped by more than 10 percent last month.

"It was another bloody month," Ray said. "You can't really sugarcoat this — it was just terrible."

The declining stock market has also dragged down the L Funds, mixes of the TSP's five stock, bond and government securities funds that vary based on when employees expect to start making withdrawals. The number of participants with L Funds declined in February for the second time in the fund's four-year history. Participants in the L Funds dropped by 5,000 to about 580,600 in February. The only other L Fund decline was in November, when participation dropped by 8,400 enrollees.

The L Funds' declines lead some to see them as risky. For example, the TSP board wants to automatically enroll new federal employees and military service members in the L Funds to encourage them to save for retirement. But last month, the Employee Thrift Advisory Council, a group of union and management association representatives that advises the TSP board, started leaning toward automatic enrollment in the G Fund because of the stock market's poor performance.

Ray said that March is so far showing better results. As of Monday morning, the C Fund was up 3.1 percent and the S Fund was up 2 percent since the beginning of March, she said. The I Fund's international stocks were down slightly, Ray said.