News From GovExec on TSP

swsop

Member
DAILY BRIEFING January 17, 2006

Consultants advise TSP not to change investment mix

By Karen Rutzick

An outside consulting firm on Tuesday advised Thrift Savings Plan administrators to stay the course with all investments.

The TSP, which is a 401(k)-style retirement savings plan for federal employees with assets of almost $175 billion, hired Chicago-based consulting firm Ennis Knupp & Associates to perform the first-ever external review of the plan's investment practices.

The consultants presented the first of what will be four recommendations to the TSP Board at a monthly meeting Tuesday. The initial review focused on the indexes that the TSP tracks for its common stocks (C), small- and mid-size companies (S), fixed income securities (F) and international stocks (I) funds.

The TSP is managed passively, meaning its holdings simply mirror indexes as opposed to using mutual fund managers to attempt to beat the market. For each of the four funds reviewed, the consultants told the board its current indexes remain the best choice.

The TSP board subsequently passed a resolution to retain the indexes.

The C Fund, which follows the S&P 500 Index of the top 500 stocks, and the S Fund, which tracks the Dow Jones Wilshire 4500 Index of the next 4,500 stocks, cover the universe of domestic stocks for TSP participants, consultants said.

Ennis Knupp advisers Russell Ivinjack and Neeraj Baxi told the board this combination is optimal for investors because the indexes are widely-followed and provide access to all U.S. markets.

The consultants also said switching to the next-best option, the Russell 1000 and Russell 2000 for the C and S funds respectively, would cost about $225 million.

For the F Fund, Ennis Knupp recommended sticking with the Lehman Brothers Aggregate Bond Index. The consultants noted that it is the most widely accepted index and provided the most diversification. Switching to another index would cost about $15 million, they said.

The I Fund was perhaps the toughest decision for the board and its consultants. The current index used -- the Morgan Stanley Capital International Europe, Australasia, Far East Index -- does not include Canada or emerging markets like Latin America.

"In the theoretical world, the all-inclusive fund is better because it is more diversified," TSP Executive Director Gary Amelio said.

But a number of factors stand in the way of switching to an index that includes stocks from these countries. The current index is valued daily, as are all of the other TSP funds, allowing participants to change the makeup of their holdings on a daily basis. But indexes which include emerging markets and Canada are valued monthly. Switching to monthly valuation of the I fund would require a change in policy and could create confusion and inconvenience for investors.

Also, the current index is the largest, and the board favors larger indexes so that nonfederal investors can carry the weight if TSP participants move their billions of dollars around dramatically.

Once indexes with emerging markets and Canada become daily-valued and grow larger, the board will reconsider the I Fund's index, TSP Board Chairman Andrew Saul said. The growing economies of China, India and other countries eventually will be too valuable of an investment opportunity for TSP participants to miss out, he said.

"We're going to have to look at this thing," Saul said. "I think we'd be remiss not to."

Future presentations from Ennis Knupp will cover potential changes in asset management, which is currently performed by Barclays Global Investors.

The consultants also will review the possibility of adding funds such as a real estate investment trust, which is an option some lawmakers are advocating. Amelio said key staffers on the House Government Reform Committee called a meeting Friday to discuss progress on the REIT option.

The TSP also announced at Tuesday's meeting that it is retaining the Metropolitan Life Insurance Co. to provide annuities for TSP participants. TSP participants have the option, upon retirement, of converting their savings into a stable annuity. About 11,000 retirees now have such annuities, officials said.

swsop
 
DAILY BRIEFING, February 21, 2006

International stocks gain in popularity among TSP investors

By Karen Rutzick


Thrift Savings Plan participants are moving their money into international stocks as that option outperforms others, TSP statistics show.


The TSP, federal employees' version of a 401(k) retirement savings plan, offers five basic funds. For the 12 months through January 2006, the international (I) fund performed best, earning a 22.91 percent return.


Participants took notice. In that same time period, employees in the older Civil Service Retirement System went from having 4 percent of all TSP investments in the I Fund to placing 6 percent there.


Over the same time period, employees in the newer Federal Employees Retirement System moved from allocating 5 percent of investments to the I Fund to 8 percent.


The I Fund percentages increased even as a new sixth option, the lifecycle (L) funds, drew out 5 percent of investments for both CSRS and FERS employees. The L funds blend the stand-alone funds based on expected retirement dates, with the mix automatically becoming more conservative as participants near that date.


The movement is plainly illustrated by interfund transfers, which are shifts of money already in the TSP between funds. In January, participants added $753 million to the I Fund through interfund transfers. The I Fund was the only stand-alone fund to increase. By contrast, participants removed $1.2 billion from the C Fund, which invests in the stocks of the 500 largest domestic companies and had a 12-month growth of 10.4 percent.


Interfund transfers are representative of TSP participants who actively manage their investments. But TSP officials said participants who jump on market trends may not fare better in the end than employees who ride out the market.


"I'm sorry to see the herd following the I Fund," TSP Board member Alejandro Sanchez said at a monthly board meeting Tuesday.


Gary Amelio, executive director of the TSP, said "it's a sliding scale" for investors who aggressively manage their accounts, on how they perform compared with the L funds, which at times will do better than the market and at times will do worse.


TSP Chief Investment Officer Tracey Ray noted a $1.3 million trading cost for the I Fund in the month of January. That number was significantly higher than the next highest fund in trading costs, which was the S Fund at about $200,000.


Ray said the costs came because participants moving into the I Fund are "buying into an up-market, which is going to make it more expensive."
 
swsop DAILY BRIEFING January 17, 2006

"I'm sorry to see the herd following the I Fund," TSP Board member Alejandro Sanchez said at a monthly board meeting Tuesday.
So now WE are the herd !!! Where does he want us to put our money??

TSP Chief Investment Officer Tracey Ray noted a $1.3 million trading cost for the I Fund in the month of January. That number was significantly higher than the next highest fund in trading costs, which was the S Fund at about $200,000.
Ray said the costs came because participants moving into the I Fund are "buying into an up-market, which is going to make it more expensive."
Is he saying it cost TSP 1.3 mil for TSPers to move into the I ?? ...that it costs TSP money for us to make money? I'vew gotten lost here somewhere - it sounds like he is saying that the folks that were NOT in I are putting up the money to pay the gains for those who were......:confused: ??
 
Mr. Sanchez thought a few more players would jump on board the L funds that they started. People will buy the up fund because it is human nature. I believe the cost may be higher but return is much higher also. As any board meeting they have to have something to talk about to justify the meeting. Maybe it is his I fund regulators that are costing the money?
 
March 20, 2006

TSP officials say few plan members fell for 'phishing' scam
By Jenny Mandel
jmandel@govexec.com

Thrift Savings Plan officials said Monday that they think few people were taken in by an e-mail hoax.......The scam first came to plan administrators' attention last Thursday, when calls began arriving around 2 p.m........
About 500 people called TSP Thursday about the suspicious e-mails.......

For more info:
http://govexec.com/story_page.cfm?articleid=33636&dcn=todaysnews
 
TSP board balks at Congress' push for real estate fund
By Karen Rutzick

The Thrift Savings Plan board is digging in its heels against a plan to add a real estate investment option that is gaining momentum in Congress.

The TSP, federal employees' version of a 401(k) retirement savings plan, invests participants' $180 billion in five basic funds and life-cycle options blending those funds based on anticipated retirement dates. But 163 members of Congress have signed on as co-sponsors of a bill to add a Real Estate Investment Trust fund.

The House Government Reform Subcommittee on the Federal Workforce and Agency Organization will hold a hearing April 26 on the REIT fund option and will mark up the bill immediately following the hearing.

swsop

Full story: http://www.govexec.com/story_page.cfm?articleid=33856&dcn=e_gvet

Return
 
TSP funds make small gains in September

The five basic funds making up the Thrift Savings Plan made incremental gains in September.

None lost any ground, but only one gained more than 1 percent. The C Fund, composed of common stocks on the Standard & Poor's 500 Index of the largest domestic companies, earned 2.58 percent last month. That gain brings the C Fund's 12-month earnings to 10.78 percent.

The TSP is a 401(k)-style retirement savings plan for federal employees and some members of the military. At last count, it had $191 billion in its funds.

Full story: http://www.govexec.com/story_page.cfm?articleid=35171&dcn=e_gvet

SWSOP :) :)
 
TSP investments grow steadily in November

December 1, 2006

TSP investments grow steadily in November
by Karen Rutzick
krutzick@govexec.com
http://govexec.com/story_page.cfm?articleid=35583&dcn=todaysnews

Each of the five basic funds in the Thrift Savings Plan posted solid gains in November.



The 401(k)-style retirement savings plan for federal employees, now worth more than $200 billion, made the biggest strides last month in investments in small- and mid-sized domestic companies. The S Fund, which invests in these companies by tracking the Dow Jones Wilshire 4500 Index, earned 3.54 percent in November for a 12-month total return of 15.61 percent.
 
I surf the Internet as Guest and I already deactivated NetBios way before. :D

...
Cookies, File Encryption, and Erasing Files.
Not really security as such, but privacy. Cookies are often discussed as a bad thing that steals your information. Well, here's the scoop. Cookies are given to your computer browser when it visits a web site. When you check "remember me next time I log in", the cookie is what remembers that. Now there are ways to modify a local cookie and use it to do bad things on the server, but that's outside the scope of this tutorial. For the most part, don't worry about cookies. However, a type of cookie can also be issued to you that will collect more data than you wish, but here's the kicker: you have to visi a website run by unethical individuals. So avoid sites that offer free copies of Microsoft Office and other things that seem too good to be true. “There's no such thing as a free lunch”. ‘Twas true before the Internet, will be true after the Internet. The most important thing to remember about cookies is that they can be deleted. If you're reading this from a public computer – don't forget to clear your browser's cache!

Ports and Services.
So you’re trying to find out how to “secure” your PC and everything you read says turn off all unnecessary services and close unused ports. Yea RIGHT, what's a port? Where are these services and how do I turn them off? Do this, give your PC the good ‘ol three finger salute – CTRL+ALT+DELETE (hold down the three keys at once). Now click on the Task Manager Button. Now click the Processes tab. You see all of those weird names listed in the box? Those are services, well at least some are. The majority of the Processes end with .exe, and control how you computer works. For example, see the services.exe process. services.exe is a part of the Microsoft Windows Operating System and manages the operation of starting and stopping other services. This process also deals with the automatic starting of services during the computers boot-up and the stopping of services during shut-down. Google or www.liutilities.com is a great resource for finding out what all of these services do. Be warned - if a virus ever used any of these services, that will be noted. Don’t freak out thinking you have a virus. I know of at least 50 viruses that infected or used the services.exe program.

Now before I get to showing you how, I have to explain what is known as TCP. This is not an exact description – but just a loose definition. The terminology is something you will need to research yourself as you get further along and become more comfortable with networking. I have put the keywords for your search in bold.
For devices (network cards, modems, even cell phones) to communicate with each other they must speak the same language. Computer programs communicate over the web with a protocol called TCP or UDP (a kind of language that all Operating Systems understand). Now, each program or application on your computer distinguishes itself from other applications they're communicating with by reserving and using a port number. This makes the flow of data easier. If we didn’t have different ports it would be like going to a major football stadium and there were only one door to enter and exit. When communicating over the internet, a destination and source port are opened between two computers and then data starts flowing back and forth through the two open ports. Many servers, like email servers, always listen on the same well-known port number. The actual port number is arbitrary, but is fixed by tradition and by an official allocation or "assignment" of the number by the Internet Assigned Numbers Authority (IANA). Now to prevent some bad person from connecting to your computer via an open port, let's take a look at one that's open by default. File and Print Sharing - NetBIOS over TCP/IP uses ports 137-139. Now then, there are several default shares set up on your computer: C$, AMDIN$ and IPC$. These are hidden shares (hidden in the sense that Windows Explorer will not display them) and can be connected to remotely. Turning off File and Print Sharing “closes” ports 137-139 and removes the above hidden shares. Here's how:
Control Panel > Network and Internet connections > Network Connections > Local Area Connection
Right click > Properties
Select Internet Protocol (TCP/IP) > Properties
On the General tab select Advanced
Next you will have 4 tabs IP Settings/DNS/WINS/Options
On the WINS tab disable Netbios over TCP/IP
So you just learned how to close a port and stop an unwanted process. But wait, there's more! Don't get into the trap of thinking things are secure if you do this and unsecure if you don’t. TCP was designed to make communication between computers possible, as was NetBIOS.
Your best bet for security is using, and understanding, a firewall. Now, the one you have is on by default in XP Service Pack 2. If you are not on Service Pack 2, well then we need to have a chat about updating Windows. Anyway, here's the link to Microsoft's Firewall
http://www.microsoft.com/windowsxp/using/security/internet/sp2_wfintro.mspx

You don't have to use Microsoft's - there are many others. My preference is to use a hardware firewall. I use the firewall function built into my Linksys wireless router. In any event – you must have a firewall.
Let's take a look at computing from a behavioral science point of view, for a moment. People just want things to work and believe that their antivirus “suite” of tools - Virus Protection, Firewall and whatever else they're putting in there these days - keeps them completely safe. Wrong! Let's say for a moment that you have a fully patched and locked down PC with an updated Antivirus and a properly configured firewall; an internet connection and Instant Messenger (IM), perhaps a web camera, and, of course, email. You are using applications that open a connection to your PC. As you now know, when you check your email, you open a port. When you Instant Message your buddy, you open a port. Now, even with the all the preventative measures in place, someone can still take control of your PC remotely. When chatting online, using either IRC or IM, the program you use to chat opens up a port on your computer and the “chat server” - you know this. What you don't know is when you fire up that web camera so you can see who you're chatting with or download a picture from who ever it is you're chatting with, another port is opened. But this time it’s not between you and the server, it's between you and the computer owned by the person you're chatting with. Yup, that's right, there is a direct connection between your computer and your buddy's computer. And as far as the firewall goes, it's a legitimate connection because you started the conversation. This is all fine and good unless it's not your buddy, rather some anonymous person you met on the internet.
For example, you have been chatting with someone of the opposite sex for a few months and feel you know this person really well. So you ask for a picture. A few moments later a popup or something notifies you that so and so is sending you a file. The moment you accept that file, the person sending can send ANYTHING they want along with that picture. Anything from keyloggers and Trojans to malware and scumware.
Another way to get yourself into trouble is Email. There are 419 scams all over the place. One of the best ones I've seen is an email stating that "your order has been processed and thanks for the $1,250.98 credit card payment. Please click here to check the status or to contact us." At this point, if the site is still up, there will be a form you can fill out where you enter your credit card and/or social security number to verify the fake transaction. Once you do this, your money is GONE! Or perhaps, if you're running Microsoft's Internet Explorer, a little program gets installed that looks for financial data and then sends that data to the bad guys. The point here is to know who you are doing business with on the web. If it's too good to be true, IT IS!

Running Windows as an Administrator
If you took your PC out of the box, plugged it in and turned it on, you're logged on to that computer with the user name of Owner. This user has Admin Rights under Windows XP - you need to do two things. Create a new user in Windows XP with limited rights and Update Windows. Windows Update is on the Start menu - just follow the steps.
Next thing to know is that the Administrator account for Windows XP does not have a password by default. So, please change the Administrator password in Windows XP. In Windows XP Professional, from the Start menu, right click on the My Computer icon. Choose Manage. Expand "Local Users and Groups" and highlight "Users". In the right pane, right click on the user Administrator and choose "Set password..." The password should have at least one special character (like @, $, %, &, etc) and one number. Use a paraphrase to help you remember like: My Silly 12th Grade Teacher Had 1 Fine @ss So the password would be MS12GTH1F@
You get the drift.
...

http://tazforum.thetazzone.com/viewtopic.php?t=3335
 
GovExec.com

DAILY BRIEFING
January 24, 2007
Thrift Savings Plan executive director resigns

By Karen Rutzick
krutzick@govexec.com

Gary Amelio is leaving his post as executive director of the Thrift Savings Plan for a private firm, plan officials announced Wednesday.

Amelio, who came to the TSP in 2003 and oversaw the 401(k)-style retirement savings vehicle's growth to $206 billion, will become president of retirement services for ULLICO, Inc., which provides insurance and investments for union members.

The TSP has already hired executive search firm Heidrick & Struggles to find a replacement for Amelio.

Amelio's most significant accomplishment was the introduction of lifecycle funds to the TSP in August 2005. The funds automatically shift money from a mix of riskier to more conservative investments as participants age. The TSP has five standard funds.

TSP Board Chairman Andrew Saul, one of five part-time political appointees who hired Amelio in 2003, said the director fulfilled expectations.

"The board members and I knew that Gary's private sector retirement services experience was just the right recipe for leading the already successful TSP to the next level," Saul said in a statement. "We were not disappointed."

Before coming to the TSP, Amelio was senior vice president of the retirement division of PNC Bank in Pittsburgh.

Amelio reduced the TSP's budget to make the plan cheaper for participants. TSP participants pay 30 cents for every thousand dollars in the plan, by far the lowest rate of any 401(k)-style plan.

During his tenure, Amelio clashed with some members of Congress who wanted the TSP to add a Real Estate Investment Trust fund option to the plan. Amelio bristled at the idea that politics would play a role in determining which funds to add, and has so far stalled the addition of such a fund.

This document is located at http://www.govexec.com/dailyfed/0107/012407r1.htm
 
From today's GOVEXEC.COM:


TSP officials see 'huge growth' in plan

By Brittany R. Ballenstedt
bballenstedt@govexec.com



Officials of the Thrift Savings Plan on Wednesday said the plan's already low cost to participants could drop even more in the future.


Board officials also predicted that investments in the plan, which currently stand at $206 billion, could grow to $300 billion in three years.


"Going forward, we must be cognizant of the huge growth this plan is going to undergo in the next three or four years and in the future," said board Chairman Andrew Saul at a special biannual meeting of the Employee Thrift Advisory Council

(more: http://govexec.com/story_page.cfm?articleid=36083&dcn=todaysnews )
 
TSP officials see 'huge growth' in plan

By Brittany R. Ballenstedt
bballenstedt@govexec.com

Officials of the Thrift Savings Plan on Wednesday said the plan's already low cost to participants could drop even more in the future.
I don't know how many times people told me that TSP will raise their fees because of our "irresponsible, active" approach. This proves otherwise. If anything we've should be thanked for increasing the popularity and awareness of the TSP which seems to be the reason for the lowered fees. We'll never hear anybody say that though.
 
Auditors stress importance of data security to TSP officials

By Brittany R. Ballenstedt
bballenstedt@govexec.com

Data security should continue to be an ongoing concern for Thrift Savings Plan officials, according to Labor Department auditors.

Reviewers from Labor's Employee Benefits Security Administration told TSP officials during a monthly meeting Tuesday that there were no instances in fiscal 2006 of "material noncompliance" with the Federal Employees' Retirement System Act, the law that authorized the TSP in 1986. But they said plan officials should focus on updating and approving TSP's security strategy, based upon the most recent risk assessment.

( More at http://govexec.com/story_page.cfm?articleid=36163&dcn=todaysnews
 
The full article:

Auditors stress importance of data security to TSP officials

By Brittany R. Ballenstedt
bballenstedt@govexec.com

Data security should continue to be an ongoing concern for Thrift Savings Plan officials, according to Labor Department auditors.

Reviewers from Labor's Employee Benefits Security Administration told TSP officials during a monthly meeting Tuesday that there were no instances in fiscal 2006 of "material noncompliance" with the Federal Employees' Retirement System Act, the law that authorized the TSP in 1986. But they said plan officials should focus on updating and approving TSP's security strategy, based upon the most recent risk assessment.

"There is always going to be a need for ongoing security upgrades, and it is always going to be a part of our focus here at the board," said James Petrick, TSP's chief financial officer, in his response to the audit.

EBSA is responsible for regularly auditing TSP and determining its level of compliance with the requirements of the 1986 law.

Data security concerns have increased after hackers breached the accounts of some TSP participants in late December and stole $35,000. Outgoing TSP Executive Director Gary Amelio reacted to the breach at a special TSP meeting last month, noting: "We've become so efficient with technology that technology is destroying us."

TSP houses names, Social Security numbers and addresses on about 3.6 million current and former federal employees who have invested more than $180 billion in retirement savings through the system. Mark Hagerty, the plan's chief information officer, said in June 2006 that he wanted to expand TSP's security measures by enabling participants to switch to using account numbers, rather than Social Security numbers, to access their TSP accounts online. But that change has yet to be made.

EBSA auditors also highlighted a recent report that assessed TSP's plan for disaster recovery, stressing the need for an improved ability to continue operations in the event of an emergency. They recommended that a risk assessment be conducted at the TSP's disaster-recovery site in Pittsburgh, and noted this is the next audit they have planned this year.

The auditors outlined other plans for 2007, including investigating the full scope of computer access security and initiating a special project on data security vulnerability.

Meanwhile, TSP officials and Labor auditors stressed the need to beef up efforts to promote the TSP to the military services. Audit reports indicate that members of the Marine Corps and the Army have the lowest rates of participation in the plan.

Pamela Jeanne Moran, TSP's director of participant services, attributed the results to the fact that the country is at war, with soldiers and Marines focusing their attention on the mission at hand rather than benefits issues.

Auditors recommended that TSP strengthen its procedures for training personnel responsible for educating service members about the benefits of the plan.

During the Tuesday meeting, TSP officials also said their farewells to Amelio, who came to the plan in 2003 and oversaw the 401(k)-style retirement savings program's growth to $206 billion. He left TSP to become president of retirement services for ULLICO Inc., which provides insurance and investment products and services for union members.

http://govexec.com/story_page.cfm?articleid=36163&dcn=todaysnews
 
GovExec.com

DAILY BRIEFING
February 28, 2007
TSP activity increases following stock market plunge

By Amelia Gruber
agruber@govexec.com

Investors in the government's 401(k)-style retirement savings plan showed some signs of shaky nerves after the steep drop in the Dow Jones industrial average Tuesday.

The Thrift Savings Plan Web site experienced increased traffic as participants checked their accounts, and the number of transfers among funds processed Tuesday night reached the fourth-highest level so far this year, said TSP spokesman Tom Trabucco.

The TSP processed 12,627 interfund transfers overnight, Trabucco said. Though that is well short of the highest number of transfers in 2007 -- 16,393 on Jan. 3 -- it is still a "pretty big number," he said, noting that there tend to be more transfers at the beginning of the year, because it is a standard time for participants to reallocate their investments.

Most of the transfers Tuesday night represented movement out of the three basic TSP stock funds and into the less risky G and F funds, which invest in government securities and fixed-income bonds.

Participants took $200 million out of the I Fund, which invests in international stocks. The fund closed at $22.67 Tuesday, down $0.74 from the previous close and up 0.71 percent for the month. Investors took about $109 million out of the C Fund, which tracks the Standard & Poor's 500 Index of stocks in the largest domestic companies. It closed at $15.53 Tuesday, down $0.55 from the day before and 2.51 percent for the month.

They also transferred about $109 million out of the S Fund, which invests in small- and mid-sized companies by tracking the Dow Jones Wilshire 4500 Index. It finished Tuesday at $19.24, down $0.65 from the previous day and 0.57 for the month.

Of the total amount moved out of these funds, about $370 million went to the G Fund, which did not change Tuesday and was up 0.34 percent for the month, and about $49 million flowed to the F Fund, which changed very little Tuesday and was up 1.71 percent for the month.

TSP officials, however, recommended against shifting money in response to short-term market fluctuations.

"We always advise participants to have a long-term investment horizon and to stick with that plan over the long term," Trabucco said.

Plan participants who are uncomfortable with the movement in the markets should consider placing their money in the life-cycle (L) funds, which invest in a mix of the basic funds that grows more conservative as employees near retirement age, he said.

Trabucco expects activity to remain elevated Wednesday. He said investors may have trouble logging on to their accounts on the TSP Web site, and if they do, they should try the TSP's toll-free phone number: 877-968-3778.

As of Wednesday afternoon, the markets were rebounding somewhat. The Dow Jones was up about 0.7 percent after a more than 3 percent drop Tuesday, and the S&P 500 was up about 0.8 percent, also on the heels of a more than 3 percent plunge. Tuesday's decline -- the steepest in about four years -- was precipitated by a drop in Chinese stocks.

This document is located at http://www.govexec.com/dailyfed/0207/022807a1.htm
 
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