ekatteng's Account Talk

[msls6]

Unfortunately, we will need a different system when the TSP limits IFTs to only twice per month.

 

[benitocj]

Unfortunately, we will need a different system when the TSP limits IFTs to only twice per month.

And when is that going to happen?! Any reliable source for that information?

 

[ekatteng]

msls6, NOT A PROBLEM... We will adjust the neural system accordinly... However, is it a final that the TSP will limit IFTs to only twice per week ?
Where are you getting your info from ?

Unfortunately, we will need a different system when the TSP limits IFTs to only twice per month.

 

[ekatteng]

Ben, we can adjust accordinly... not a problem... but rumors sometimes are true and sometimes are not... China is going to the moon with back ink...
to paint the moon... made in China...

And when is that going to happen?! Any reliable source for that information?

 

[ekatteng]

Here Are Some Ideas If The TSP Limits Ift To Twice A Month...
1. We Will Adjust The Neural Network Artificial Intelligence System Accordinly.... We May Need to Mantain Two Parallel Systems...
One Daily For The EFA I-Share Daily Investors And Another For The Twice Per Month IFTs For The TSP Account....
2. Write Your Congressman Requesting Unlimited IFTs....
3. Write The TSP Board Requesting Unlimited IFTs...
4. Limit Your Contribution To 5%... Re-direct As Much As Possible To Your (IRA) instead.
5. Open A Traditional Individual Retirement Account (IRA) One For You And One For Your Spouse On Any Brokeage Trading Firm... As Shcwab... And Trade Tax Deffered The EFA I-Shares Unlimited... As I Said It Is Tax Deffered And Better Trading Fees That TSP "Fair Valuation" FV
6. Put Max Contribution Into Your IRA Account Including Your Age Additional Contribution... Tax Deffer Also...
7.Consider Up To $50,000 Loan From Your TSP Account To Open Your IRA Traditional Account One For You And Another For Your Spouse... You Got Till April 15th For Previous Year Contributions So You Really Can Put Up To $10,000 Into The IRA Account Before April 15th For You And Another $10,000 For Your Spouse...

 

[Eldritch Flatus]

Hmmmm.... sounds good for the young'uns EK. But I'm KMA status and just working to avoid the 5% a year early Social Insecurity hit and the csrs offset hit to said social insecurity 2yrs, 7mos and a few days.:nuts: I think us old farts need a sllightly different strategy. Anyway its CP for me, while trying to skim a little gravy.:notrust:

 

[Birchtree]

Recently more financial pros have begun to realize that because retirements that once lasted years can now easily go for decades, you can't give up the potentially higher growth that stocks offer. Similarly, brain scans show that people in their twenties get much more upset than older folks do when they expect to lose money. It turns out that investors in their sixties and beyond are considerably better at withstanding the mental stresses of a bear market than young investors are. The trader wants to cash out at the top, grabbing profits on everything and sitting back with a clean slate; the investor understands the value of patience, knowing the truly big money is made in the long cycles. Snort.

 

[ekatteng]

http://www.govexec.com/story_page.cfm?articleid=38616&dcn=todays_most_po
pular

TSP to restrict interfund transfersBy Brittany R. Ballenstedt bballenstedt@govexec.com November 19, 2007
Citing escalating trading costs, officials overseeing the Thrift Savings Plan are preparing to restrict the number of interfund transfers that participants can conduct each month.
At the monthly Federal Retirement Thrift Investment Board meeting on Monday, officials overseeing the 401(k)-style plan said they would begin allowing participants only two interfund transfers per month. Thereafter, additional transfers would be allowed only into the government securities (G) fund.
The change is a result of a recent analysis by TSP officials of the impact of trading activity on fund management and transaction expenses. Officials studied the fund with the highest costs, the international (I) fund, and found that in September and October, the average daily trade amount was $224 million, far above the daily trade amounts of $49 million in 2006 and $27 million in 2005.
Even more compelling, officials noted, was that 63 percent of the $224 million was attributable to participants who had traded eight or more times in the previous 60 days. And 48 percent was attributable to participants who had traded 12 or more times in the previous 60 days.
"Trade volume is up significantly, and the majority of this increased volume is attributable to less than 3,000 TSP participants engaged in frequent trading," said Tracey Ray, chief investment officer of the plan. TSP has more than 3.6 million participants.
Ray noted that on Oct. 19, $371 million was transferred into the I Fund. Three days later, she said, $391 million was transferred back out of the I Fund, and 2,018 of the participants transferring out were ones who had transferred in on Oct. 19. Additionally, in the previous 60 days, 323 of the 2,018 traders had completed 5,804 exchanges of the I Fund for a total trade amount of $1.9 billion.
"What we have here is a small group of people who are making an awful lot of transactions, destructing the ability to manage the fund and creating expenses," said TSP Executive Director Gregory Long.
As a result, the Federal Retirement Thrift Investment Board voted unanimously to limit the number of monthly transactions. Officials plan to announce the new restrictions in a letter that accompanies the annual statement to participants, which is scheduled to be mailed in early February. Implementation will occur in March or April, officials said.
In the interim, however, officials said they would mail letters to the 3,000 participants who are frequent traders, requiring them to stop their activity or face being restricted to requesting interfund transfers via mail until the automated curbs take effect.
These restrictions are in line with what most large mutual funds have enforced since a trading scandal in 2002, officials said. Some companies have elected to curb frequent trading by creating financial penalties for such behavior, charging redemption fees for shares held less than 30, 60 or 90 days, officials said.
But Long said charging redemption fees for excessive trading is not in the plans for TSP, noting that officials are not trying to punish participants or generate revenue. The goal, Long said, is to reduce transaction costs to the benefit of all.
"Those 3,000 participants will not be happy," Long said. "But my job is to take care of all participants, and this is clearly in the interest of all participants."
Long said the TSP will discuss the plan with the Employee Thrift Advisory Council before moving forward.
Meanwhile, officials are still in talks with lawmakers over the potential implications of two legislative proposals the TSP sent to Congress in late August. They would allow automatic employee enrollment and change the default fund for indecisive investors.
Legislative Director Thomas Trabucco said TSP is working with lawmakers to determine the indirect tax implications of the automatic enrollment proposal. Legislators have expressed concern that higher employee contributions would mean an increase in tax-deferred money, thus resulting in less money in the tax base, he said.
Officials plan to continue to work with the joint committee on taxation, the Congressional Budget Office and the House and Senate committees that hold jurisdiction over the TSP to determine a solution, Trabucco said.

 

[James48843]

Yes Ek- we've been aware of this since last week. You are missing all the fun.

See the thread to address this at:

http://www.tsptalk.com/mb/showthread.php?t=5143

And the thread on how YOU can fight back, located at:
http://www.tsptalk.com/mb/showthread.php?t=5162

We are organizing oppostion to this decision.

 

[ekatteng]

James, Who "We" are organizing opposition to this decision ?
Do we have any chance... or just adjust our system to play their new rules of the game...

Yes Ek- we've been aware of this since last week. You are missing all the fun.

See the thread to address this at:

http://www.tsptalk.com/mb/showthread.php?t=5143

And the thread on how YOU can fight back, located at:
http://www.tsptalk.com/mb/showthread.php?t=5162

We are organizing oppostion to this decision.

 

[ekatteng]

The daily IFT's of the half million participants on the L 2040, L 2030, L 2020,
L2010, L Income (L-Funds) are the ones who are causing the funds management cost increase and not the "3000" members who do IFTs to protect their investments and increase their retirement account. Please put the blame where it belongs and do not use the "3000" as a scape-goats to clear the smoke of your mistake of opening so many L - Funds

 

[Steadygain]

The daily IFT's of the half million participants on the L 2040, L 2030, L 2020, L2010, L Income (L-Funds) are the ones who are causing the funds management cost increase and not the "3000" members who do IFTs to protect their investments and increase their retirement account. Please put the blame where it belongs and do not use the "3000" as a scape-goats to clear the smoke of your mistake of opening so many L - Funds

This sounds believable - however - you need to show us either the the minutes of their meeting or some other form of hard evidence or it will appear you are making a scapegoat of the "500,000" or are simply making something up.

 

[presskh]

The daily IFT's of the half million participants on the L 2040, L 2030, L 2020,
L2010, L Income (L-Funds) are the ones who are causing the funds management cost increase and not the "3000" members who do IFTs to protect their investments and increase their retirement account. Please put the blame where it belongs and do not use the "3000" as a scape-goats to clear the smoke of your mistake of opening so many L - Funds

It would be interesting to see the costs to everyone in the TSP for these "L" funds, compared with the costs for the "3000" frequent traders. Perhaps participants in these funds should be charged a daily fee for rebalancing, since it is unfair to others who do not use these funds. I actually wouldn't mind paying a reasonable fee for transfers (no free transfers - period), but those using the "L" funds should also pony up their fair share of the extra expenses.

 

[presskh]

I saw this article yesterday. According to Miles, the 3000 or so investors would be required to pay entirely for setting up a system allowing frequent trades on a fee basis. It would also be interesting to see who paid for the software changes to set up the "L" funds, i.e, we all did, even though probably the majority of investors do not use them.

 

[ayla]

I wonder if they are limiting (somehow, who knows) the rebalancing of the L-Funds because of this problem. As a result, if they limit those of us not in the L-Funds, they have more left to use in rebalancing/trading the L-Funds for what they hope will be higher gains?

As has already been said/implied, this issue is not about extra costs of those of us frequently trading but it is about their desire to control rather than let us control.

I am already investigating my options since I don't plan to change my style. Luckily I'm retired so I do have options. I just don't know how long I should be patient hoping they will change their mind about the limits.

I'm one of those who don't have a problem with their charging for extra transactions but $500 per transaction is not based in reality but is only an attempt to intimidate us IMO.

Real question is how long will it take them to realize that this decision is bad for their business, i.e will reduce contributions and for those retirees like myself, will run us off. I don't trust them to be competent enough to realize this very quickly.

 

[Steadygain]

Thanks Gail, I knew the 3,000 were being attacked and I sincerely appreciate you posting this - but I don't see anything reflecting the 500,000 ITF costs of the L Funds. If these costs outweigh the 3,000 it would be a very significant argument. I personally would find it hard to believe that L Fund investors are making frequent changes from 1 fund to another. The percentages in the various 5 Funds remain unchanged and therefore L Fund investors are ultimately the buy and hold variety.

 

[presskh]

Thanks Gail, I knew the 3,000 were being attacked and I sincerely appreciate you posting this - but I don't see anything reflecting the 500,000 ITF costs of the L Funds. If these costs outweigh the 3,000 it would be a very significant argument. I personally would find it hard to believe that L Fund investors are making frequent changes from 1 fund to another. The percentages in the various 5 Funds remain unchanged and therefore L Fund investors are ultimately the buy and hold variety.

True, they may stay in the L funds, but their accounts are rebalanced each night so that the fund percentages in their accounts match the target L fund percentage for that month. This is, effectively, an interfund transfer for each account. I believe the L fund target percentage of each underlying fund is changed each month to reflect a slightly more conservative strategy.

 

[kaitlinsnana]

I saw this article yesterday. According to Miles, the 3000 or so investors would be required to pay entirely for setting up a system allowing frequent trades on a fee basis. It would also be interesting to see who paid for the software changes to set up the "L" funds, i.e, we all did, even though probably the majority of investors do not use them.

Exactly right. This irritates me most. ... and if they currently have an operating cost of $4 a year per participant, common sense would be to just leave it alone. Maybe they want a scapegoat for the upgrade they already planned. $100, $200 or even $500 per transaction just makes my blood boil.

I'd certainly want to be part of a class action against them.

 

[ekatteng]

Steadygain, the L funds (L2040, L2030, L2020, L2010, L-Income) are percentage of C, S and I funds which they change daily... so in order to maintain the percentage of each L fund... the fund managements need to do a huge IFTs everyday for all the 500,000 to maintain their account balances correct and that is a huge management cost... they the ones responsible for increasing the cost not the "3000"... About the article it is my opinion that the TSP board made a huge mistake of miscalculating the administration cost when they created all the L-Funds (L2040, L2030, L2020, L 2010, L Income). They do have to balance on a daily basis all IFTs transactions of all the half millions L Fund participants accounts and it is eating everybody lunch. They the ones responsible and causing all the administration cost and the holdings of the 250 millions they need to balance all the L funds. The TSP board need to dissipate the heat of their mistake and they need escape-goats... The "3000" of us who do IFTs to protect our retirement investments and trying to increase our TSP accounts.

We will adjust our Neural Network Artificial Intelligence System to whatever new rules they imposed on us. However, we should learn our lesson and work to prevent future aggressions.

We do not elect the TSP board nor we have voice who represent us.
1. Perhaps the civil service unions coalitions may help us to fight as they are doing with the NSPS pay system.

2. The Fair Valuation FV is not FAIR at all. It is costing us huge among of money.

3. The spouse annuity mandatory wave for them to rollover our savings into IRA account at retirement is another bad technicality.

4. The one time in service partial transfer into the IRA account is another no no...

I may continue the list of other issues you may already know about it.

Somehow we need to elect the board or nominate their members... and have a voice who represent us.

Thanks Gail, I knew the 3,000 were being attacked and I sincerely appreciate you posting this - but I don't see anything reflecting the 500,000 ITF costs of the L Funds. If these costs outweigh the 3,000 it would be a very significant argument. I personally would find it hard to believe that L Fund investors are making frequent changes from 1 fund to another. The percentages in the various 5 Funds remain unchanged and therefore L Fund investors are ultimately the buy and hold variety.

 

[ekatteng]

presskh, You are totally correct... the daily IFTs they need to made every day on all the 500 million accounts are huge administration cost and holding $250 millions... The TSP board made a mistake miscalculate when the create all the L funds and now is costing a lot and they need to blame some one else. They should put the blame where it belongs... and terminate or fire the responsibles for their mistakes... Shame on them... They should resign from the TSP board...

True, they may stay in the L funds, but their accounts are rebalanced each night so that the fund percentages in their accounts match the target L fund percentage for that month. This is, effectively, an interfund transfer for each account. I believe the L fund target percentage of each underlying fund is changed each month to reflect a slightly more conservative strategy.