Federal employees with money in the Thrift Savings Plan (TSP) had plenty to cheer about in 2025, especially those invested overseas.

The TSP I Fund, which tracks international stocks, was the best-performing of the three TSP stock funds in 2025. The fund was up more than 32 percent on the year, and gained three percent in December, the only TSP stock fund to post a gain of more than one percent in December. International stocks were boosted by higher growth overseas and currency effects boosting dollar-based returns. 

Here’s the performance of other funds for the 2025 calendar year:

  • C Fund (large cap stocks) – 18 percent gain  

  • S Fund (small cap stocks) – 11.4 percent gain

  • F Fund (bonds) – 7.2 percent gain

  • G Fund (bonds) – 4.4 percent gain

Lifecycle Funds

The TSP’s lifecycle funds, which shift allocation as they get closer to target retirement dates, were strong performers across the board. The L 2055, L 2060, L 2065, and L 2070 all posted gains of nearly 22 percent. The L Income fund meanwhile delivered nearly 10 percent return, practically risk-free.  

The TSP performance tracked gains in the broader markets which benefited from easing inflation, solid earnings expectations and a view that central banks are winding down tightening cycles.

Retirement Backlog Update

Meanwhile, the Office of Personnel Management (OPM) reported its retirement backlog grew to more than 50,500 claims in December. That’s up from 48,400 in November.

The average processing time in December was 67 days for all claims. Digital processing times were faster and averaged about 40 days in December.

The retirement backlog, which stood at just over 13,000 in December 2024, exploded over the past year as thousands of federal employees retired or left via the Deferred Resignation Program (DRP). 

OPM Director Scott Kupor said the administration is working diligently to whittle down those claims, urging retirees to apply via its new Online Retirement Application (ORA). The director also blamed outdated technology, and not staffing, for fueling the backlog. 

“The main issues with federal HR, we have found, are not low staffing levels, but inefficient and outdated technology and antiquated, cumbersome regulations and processes,” Director Kupor wrote in a letter to House Democrats questioning the processing delays. “OPM under the Trump administration has done in a matter of months what the government failed to do for multiple generations: modernize the paper-based federal retirement system.”

Democrats, however, see it differently. 

“This surge of applications caused by the administration’s policies has now overwhelmed agency HR offices and payroll providers before many cases even reach OPM, a bottleneck the administration should have anticipated and planned for if it were serious about efficiency,” stated their letter.