Q. I think I have heard that the Thrift Savings Plan annuity rate index for calculating monthly annuity amounts is tied to the 10-year treasury rate. For the past five months, the annuity rate has held at 2.125 percent while the 10-year treasury rate has fallen substantially below this. Can you help me understand the relationship between the two rates? Is there a “floor” in the annuity rate agreement with MetLife?
A. The TSP annuity rate index is an eight-week moving average of the 10-year interest rate swaps, which are published by the Federal Reserve in statistical release H.15. You can find statistical release H.15 at www.federalreserve.gov/releases/h15/data.htm.