The Thrift Savings Plan has become the cornerstone of George W Bush’s plan to revamp the Social Security System. The plan now available only to federal government employees is presented as a better version of the 401(k) retirement program that can provide future retirees with better returns while simultaneously offering them protection from extreme market swings.

"People are not going to be allowed to take their own money for their retirement account and take it to Vegas to shoot dice," President Bush said last week. Any investment accounts, he added, would be "similar to the thrift savings plans that we federal employees have available to us now." US Treasury Secretary John Snow backed the plans describing them as “safe investment vehicles."

Analysts however insist that TSP is no more safe than any other investment plan. Research of investing trends for those using TSPs shows that investors tend to move out of stocks when the economy is in recession, while 2000 saw a massive flow of funds to equity funds right before the bubble burst.

A net of $427 million was transferred to the TSP’s S&P 500-stock index fund in December 1999, three months ahead of the peak of the stock bubble. $276 million of funds was moved out of the bond portfolio and $151 million came from the bond index fund. In January 2000 $728 million more was shifted to the stock fund.

The TSP was formed in 1986 and currently has 3.4 million participants with over $147 billion in assets.

The TSP is known for its scarce assortment of investment options offered limited at the moment to five funds. Four of those are index funds managed by Barclays Global Investors, a subsidiary of British banking giant Barclays PLC.

The advantage of TSP is the low cost. Investors paid a meagre $6 in fees on every $10,000 invested in TSP in 2004, as compared to the $78, average cost of the index fund.