While reflecting back on 2008, I started to relive the feelings that many of
us had gone through over the IFT Limits. As a result, I sent out the below
email to several Media Executives. Not expecting any results from this action,
it certainly makes me feel better !
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Good Morning,
On April 1st, 2008 the Federal Thrift Retirement Investment Board (FTRIB) placed restrictions on 3.9 Million Federal Employees 401k style retirementment accounts (known as the TSP) by limiting their abilities to move their monies twice per month via Interfund Transfers. They cited that approximately 3000 TSP participants had caused unacceptably high cost by "Frequently Trading" their personal money in and out of the International Fund (the I-Fund). Since the inception of the TSP, Federal Employees enjoyed the ability to move their retirement money at any time and without restrictions. Barclays Group Investments (BGI) manages the (I) Fund. Since the Limits were imposed and according to the minutes of their Monthly Meetings (published on the FRTIB website) related fund costs actualy shyrocketed. The FTRIB and the Thrift Savings Plan websites went on a campaign over the summer to "educate" it's 3.9 million participants that a Buy and Hold Strategy was a time proven method of recovering from the dips that the Stock Market experiences.
In January of 2008 the FRTIB sent out Certified Letters which "suggested in strong terms" that the Interfund Transfers significantly slow down or stop all togather. Approximately 500 participants opted to wait until new procedures went through the Federal Registry and then became official rules which all participants would be required to follow. In February, those still practicing the "insideous behavior" of managing their money through Interfund Transfers were forced on Mail Restrictions by the FRTIB come March of 2008. I must remind you that this wasn't even an Official Rule yet and the Mail Restrictions forced the Defiant 500 to wait several weeks each time they wanted to move their monies as they were required to do so via the United States Postal Service. Software updates (costing millions) were made at the TSP to ensure on April 1st, 2008 the 2 per month Interfund Transfer Limits could be enforced electronically.
Just recently, disclaimers have been updated which reemphisizes the fact that the United States Federal Government will not be responsible for any losses that participants may experience within the TSP's Risk Funds. One might question the timing. Billions of dollars have been lost in this nations Retirement Accounts and Pension Funds over the last few month. What the FRTIB did to the Federal Employees in 2008 has been filled with smoke and mirrors, distorted facts and heavy handedness. Many believe that Barclays liquidity problems and their impending Financial Crisis may have been a big part of some of the concerns I've addressed within this email.
In conclusion, I happen to be one of the lucky ones. I'm just shy of double digit percent losses for the year. Heck, that simply means that I lost every penny of my 2008 Contributions towards my impending retirement through payroll deductions. I am where I started at in January and certainly feel blessed that I am on a financial level. As a Federal Employee, it simply means being in harms way just that much longer. The 2 per month Limits need to be abolished and the Thrift Savings Board needs to be investigated. I don't know which frightens me more. One thing is for certain, they've both cost me additional loses, over and above our current Financial and Mortgage Crisis.
:toung:
Dave
