My money, our TSP fund, and the 2008 TSP IFT Rule.

Does anyone think the Self Directed IRA option thru TSP will ever be implemented? Will it take 8 years or something absurdly long time to do it?
 
nsurf9 said:
You haven't seen my best effort, yet.
Click to expand...

Again thanks for everything you have done so far.

It really does appear that the "self-directed IRA" (now to be known as SDIRA) would solve most of the issues brought up because of the restrictions of our current TSP. Most said they would be willing to pay a small fee to have extra moves per month, SDIRA offers that and more (you can make multiple moves per day if you want to pay for them). Some wanted to be able to wait until closer to the closing bell to make a decision, SDIRA offers that. SDIRA also offers more venues than the current funds we have in our TSP. Anyway at first blush it looks like this may be what a bunch of us where asking for.
 
This is the end of this thread and its purpose - to research TSP pertinent law to seek judicial IFT restriction relief. A new thread will be created to support a Roth and modified traditional, self-directed IRA window-thru TSP option.

Thanks you, very much, for the support and encouragement - especially to those that committed to an "I'M IN." Sincerely, NSurf9.

My conclusion from appointments with attorney Josh Rose and past President of the Arlington County Bar Association, attorney William Hassan, and my reading and research of the pertinent law, reports and information is that, once ETAC consented to the rule change as our representative council, and the 2008 IFT restriction rule was published for the requisite period of time in the Federal Registry, TSP’s negotiated legislative rulemaking authority made the 2008 IFT rule restriction very strong – and it will likely withstand a judicial constitutional challenge in United Stated District Court.
 
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nada said:
you said it rejoinder. I'm with you on this issue! this arrangement needs to be changed. and also, why does IFT have to be done before noon, markets are closed not until 4? It seems tsp board doesn't want to see its members doing well financially.

folks, below is the address of the TSP board. please spare a few moment of your time to write a few lines to the board on the current IFT rule. we need to form a collective voice, so the issue can get on the board meeting agenda.


FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
1250 H Street, NW Washington, DC 20005


[it's some board. doesn't even have an email address in this information superhighway age to communicate with its members].

Also, below is the monthly meeting minutes of the board. they even had a bill to introduce a mutual fund into TSP, but it was voted down. we don't need any more financial products. all we need is making TSP operated better. get rid of that IFT limit or at least the 12 o'clock deadline !!!!

FRTIB: Board Minutes, Most Current Years ; 2012 Mar 22
Click to expand...

Nada, thanks for posting this, I had to re-read the minutes to get the flavor and get the names of the players the mutual fund window proposed rule.

http://www.frtib.gov/pdf/minutes/2011Aug.pdf


Mr. Trabucco also reported to the Board that Mr. Long testified at
a hearing before the House Subcommittee on Federal Workforce, U.S. Postal
Service, and Labor Policy on July 2. Mr. Trabucco said there were two notable
topics of discussion during the hearing. First, Congressman Lynch expressed to Mr.
Long that he remains interested in seeing the TSP offer a mutual fund window, as
authorized by the Thrift Savings Plan Enhancement Act of 2009. Mr. Trabucco
reminded the Board that the vote was 2 to 2 (with one Board member absent) the
last time the Board considered a mutual fund window and that ETAC members were
similarly divergent in their opinions. Mr. Long added that Clifford Dailing, who
represents the National Rural Letter Carriers Association, indicated that he might like
to see ETAC and the Board revisit discussions about a TSP mutual fund window.

The answer is:

TSP Executive Director Greg Long defended the mutual fund window option as a way to meet the demands of a small group of participants without changing the overall nature of the TSP. He noted that he had no plans to implement it until the ETAC and FRTIB agreed to the plan.

http://www.govexec.com/pay-benefits/2009/11/critics-call-tsp-mutual-fund-option-risky/30279/

Now, a semi-self-directed IRA window, investing in ETFs would be inherently less risky, lower in costs that a mutual fund, and would allow TSP members to invest more proactively in more funds - all-in-all, it would solve everyone's problem - Congress, the unions, ETAC, and even us here at TSP Talk. In principal, in Gregory Long's own words, might be agreeable, if the Unions and FRTIB agreed.

You gotta love this - we may have been fighting the wrong people here all along.
 
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1. Defense Civilian Personnel Management Service on TSP, with USC, CFR statutory references
http://www.cpms.osd.mil/ASSETS/DF5D1F2918D546FEB4138C0412C59E4B/tsp.pdf
2. The Thrift Saving Plan.Gov official internet site.
3. https://www.tsp.gov/index.shtml
4. TSP Talk – a strategy internet site where members have made commitment to fund legal cause
TSP Talk - Thrift Savings Plan
5. Fantasy TSP – another strategy internet site (There’s some overlap of members on the two sites, but in total represents several thousand federal employees. I was active on that site as well, but found one board was enough. If we can put a convincing case together with a convincing likelihood of success – I’m confident the legal fees, thru a trial, would be covered.
http://*********.com/fantasyTSP.php
6. TPS Board case rejected for use outside counsel, instead of Justice Department, in DC US District Court for breach of contract/performance on vendor doing work on its internet based system
Court rejects TSP board
7. Matcom’s Lou Ray (correcting my assertion that Tracy Ray of TSP made statement) "In the old system, you could move money from one account to another once a month. Now you can do it every day," $26m to Matcom for system (write off was $41m, paid by members).
TSP retirement system work complete -- Washington Technology
8. U.S. GAO - Thrift Savings Plan Delayed Allocation of Failed System Development Costs to Participant Accounts.
U.S. GAO - Thrift Savings Plan: Delayed Allocation of Failed System Development Costs to Participant Accounts
9. TSP Board’s Rebuttal - Trading Restrictions Federal Register Notice April 24, 2008
http://www.soa.org/library/research...y-of-actuaries/1988/january/tsa88v40pt119.pdf
10. Reasons for 2008 IFT Restrictions - Federal Register, Volume 73 Issue 47 (Monday, March 10, 2008)
Federal Register, Volume 73 Issue 47 (Monday, March 10, 2008)
11. My Federal Retirement publications on 2008 IFT restrictions
TSP Trading Restrictions: Federal Register Notice April 24, 2008
12. TSP expense ratio ironically goes up after 2008 Rule effected in May
https://www.tsp.gov/investmentfunds/fundsoverview/expenseRatio.shtml
13. 5 USC § 8477 – Code section authorizing action against TSP Board by its Members - Fiduciary responsibilities; liability and penalties - Legal Information Institute
5 USC § 8477 - Fiduciary responsibilities; liability and penalties | LII / Legal Information Institute
14. ETAC Federal employee union leader found dead at 47 - Pay & Benefits - GovExec.com – A member of TSP Talk, that had a 4000 signature petition in 2008 regarding the TSP Limits, had exchanged several email with Mr. Brown. ETAC is the agency voice for its federal employees.
Federal employee union leader found dead at 47 - Pay & Benefits - GovExec.com
15. Matcom’s Lou Ray, correcting assertion of Tracy Ray’s statement - after TSP write down of $41M for internet system – publically states members can make a Trade (IFT) every day -- Washington Technology – same policy is effected into the internet system.
TSP retirement system work complete -- Washington Technology
16. Federal Register, Volume 73 Issue 47 (Monday, March 10, 2008) – ruling make process step to effect agency change
Federal Register, Volume 73 Issue 47 (Monday, March 10, 2008)
17. FRTIB Board Minutes, Most Current Years ; 2012 Mar 22 – on FRTIB web site (see its Homepage at bottom)
FRTIB: Board Minutes, Most Current Years ; 2012 Mar 22
18. House Oversight Meeting Video - The Congressional, TSP and ETAC main players (video)
The Thrift Savings Plan: Helping Federal Employees Achieve Retirement Security : House Oversight : Free Download & Streaming : Internet Archive
 
This is a little more housekeeping.

I’m still waiting to get back to the Virginia attorney and I plan to talk to Jose Rose one more time.

The below set out paragraph is what we are up against and the links below are to most of my research on the TSP related restriction matter and on agency Administrative Procedure Act.

The snag is that the separation of legislative, judicial and executive powers doctrine is less of an issue with an agency’s rulemaking authority that its judicial, and executive functions. An agency’s legislative rulemaking is given a lot more leeway in court because, as a product of a consensus, “it is much more like the legislative process reserved for Congress in Article II.” The courts' main role here is ensuring agency rules line up with the Constitution and with agency's statutory commands from Congress. Thus, even if a court finds a rule unwise, it will stand as long as it is not patently "arbitrary and capricious, an abuse of discretion, or otherwise not in accordance with the law." Administrative Procedure Act: Definition from Answers.com

For the vast majority of federal employees – the ones that would rather have ultra-low cost, indexed, passive investment vehicle, however, the current TSP structure and monthly restrictions are probably - just fine. However, for the at least 4-5 thousand of us that know how, and why, better – the “window” may be our best bet and, at the same time, in our best interests (the foremost consideration of the 1986 Federal Employees’ Retirement Act).

Back in 2008, the TSP Board did tell the truth – the “exact” cost of an IFT probably cannot be calculated. I submit the “exact” cost of any future transaction cannot be “exactly” calculated. Back in 2008, ETAC should have more closely questioned the TSP Board. Personally, I believe that are many half-truths and self-serving truths to TSP’s comments that were made contemporaneously with the enforcement of 2008 IFT restrictions; whether 1 or 2 more IFTs with a fee would, or would, not be fair and reasonable; and what other mutual funds restrict, or do not restrict. The problem that many of us have is, we know that in a highly volatility market and next to nothing coming from the G fund - - even with a $500 fee, the cost of being straight-jacketed to effectively one roundtrip into equities will cost many members more than ten-fold that $500 fee. Most importantly, however, to me, and I believe to most of us is: I want my retirement fund to actually be and feel more like it is was when I put my money in - MINE.

If you still really want a 4pm transfer deadline; unrestricted transfers; and, the ability to effectively and proactively manage your retirement investment – I believe it is still possible. To get Josh Rose, Esq. to thoroughly examine the law and write a lawyerly type “memorandum of law” on the matter, at 65 commitments, $2500 comes down to about $38.46 each. That would not include bringing and arguing the complaint, but, if it produced a compellingly viable argument, I believe we could muster all the funds necessary to fund the effort. As an addition note, my reading indicates in the court’s discretion, a prevailing party(s) could be reimbursed for attorney fees and costs.

As a separate note, Rose stated he did not want to be a donation point and suggested a 501(3)(c) Exemption Requirements - Section 501(c)(3) Organizations
non-profit corporation formation. To incorporate would be a couple of hundred bucks and an IRS non-profit fee of $400 for up to $10k donations, should our effort get that far.

Unfortunately, back in 2008, ETAC let us down. My guess is, they are probably not financial experts and the fact is they knew well that there are 4+ million members who are perfectly happy not moving any funds anywhere; sitting in the G fund for years putting absolutely no effort forth to grow their retirement; and, incurring absolutely the lowest possible cost, is the perfect strategy for them.

My impression from the appointment with Josh Rose and my reading of the pertinent law is that once ETAC consented to the rule change as our representative council, and the 2008 IFT restriction rule was published for the requisite period of time in the Federal Registry, TSP’s legislative rulemaking authority became very strong – and it will likely stand.

Nonetheless, it appears that the soft spot to the 2008 rulemaking restriction isn’t a spot at all, but a window. A window thru TSP to invest your individual funds in a tax deferred retirement vehicle, apart from TSP. Best of all - Congress has already suggested the mutual fund window as an alternative thru the TSP investment structure; and further, even codified it in Title 5 of the United States Code. The catch is that the Code section requires approval of the TSP Board. What a terrific wrinkle for 4-5 thousand unhappy TSP members. The trick here seems not to break down the door with a rule challenge, but slide-open a window that Congress, in its collective wisdom, has already so gracious provided.

A self-directed IRA, as opposed to a mutual fund, would seem be the vehicle of choice as it would have little or no restrictions or time deadlines, except for the 4pm market close. You could even invest in parallel to what your familiar with. the TSP funds in form of ETFs, if you so choose, and lots, lots more.

If you’ve read this far, post a thought to this thread.

Sincerely, NSurf9
 
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As you have probably guessed, Josh Rose did not say "bingo" let go get 'em. I am dragging my feet. This area of law is new to me, but if there is a hole, of soft spot in the TSP restriction rule - I plan to find it

I'm still researching the Federal Employees Act of 1986, but it appears we are not in Kansas violation of fiduciary duty anymore - we're in the land of the "Administrative Procedure Act of 1946" and Title 5 of the USC. Its link is setout below.

Apparently, the bad news is, under its legislative rulemaking process (as opposed to judical finding), agencies are given wider latitude and less apt for judicial court review. The reasoning is that a new rule is presumably the product of a concensus of interested parties.

I'm still not ready to give a full report of Mr. Rose's initial impression, but if we are willing to pay for a written memorandum of law review and through survey of a theory of relief of the 2008 IFT restriction, he'll do it for $2-3K. Title 5 does, at the court's discretion, provide for an award of attorney fees and costs to complaints (us) - but not monitary awards.

A couple of notes: it was not Tracy Ray that stated TSP members could now make trades every day - it was a Mr. Ray of the second vendor that completed the TSP internet site who made this statement. My mistake, they have the same last name. Nonetheless, the subsequent published TSP booklets state this permission. Also, with respect to TSP's statement on Vanguard mutual fund "60 day probition," I spoke to Vanguard, the fact is it costs nothing to make transfers and there are are so many fund, the prohibition has very little effect. I'm a curious as to what other half-truths we spoken about the cost and restriction on the other mutual funds cited in TSP support for the 2008 rule and rebuttal comments, i.e. the exact cost of an IFT doesn't need to be found if member paid substantially more than an estimated cost. Additionally, Congress has already suggested the option in Title 5 of the Act that a window through TSP could be opened (... to highly dissatified federal employees who want to feel more like they still own their own money and want to actually be successfully pro-active with the retirement they will ultimately be left with...) and option out.



U.S. Code Title 5, Sections 500-596 (2004) (2000 Edition and Supplement IV)


CHAPTER 7 - JUDICIAL REVIEW


SHORT TITLE

The provisions of sections 551 to 559 of this title and this chapter were originally enacted by act June 11, 1946, ch. 423, 60 Stat. 237, popularly known as the "Administrative Procedure Act". That Act was repealed as part of the general revision of this title by Pub. L. 89-554 and its provisions incorporated into sections 551 to 559 of this title and this chapter.



--------------------------------------------------------------------------------

CITE: 5 USC Sec. 706 (2004)

Sec. 706. Scope of review

To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall -
(1) compel agency action unlawfully withheld or unreasonably delayed; and
(2) hold unlawful and set aside agency action, findings, and conclusions found to be -
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or
(F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.
In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error.
 
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This is a little house-keeping - moving copying IFT restriction from nsurf9 thread to My money ... thread - for the record.

I meet with Josh Rose, the Washington DC administrative law trial attorney, yesterday, 4/11/12. I am still gathering my thoughs and want talk the Virginia attorney before posting something of substance on the message board. Right now, I can only say it was a long, uphill walk, and metro ride, back to my car.
 
nsurf9 said:
I spoke with Josh Rose today with regard to setting up a funding vehicle for the IFT restriction relief effort and, again, generally about the law and facts.

I have an appointment with the Rose attorneys next week, Wed. 4/11/12, to meet them in person and consider starting the IFT relief-ball rolling, in earnest.
Click to expand...

Thanks for the update. Checkbook at the ready.
 
I spoke with Josh Rose today with regard to setting up a funding vehicle for the IFT restriction relief effort and, again, generally about the law and facts.

I have an appointment with the Rose attorneys next week, Wed. 4/11/12, to meet them in person and consider starting the IFT relief-ball rolling, in earnest.
 
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