The Govt is monkeying with our savings again

[nasa1974]

The plan now being discussed won't wait until the next election.

They are talking now- seriously-about doing it BEFORE THE DEBT CEILING IS LIFTED. And yes, BOTH a high-five plan, and the 6% FERS deduction, are seriously being pushed by the right-wingers and being negotiated right now in D.C. as we speak.

I just had a retirement briefing and the women from HR said that quite a few employees at NASA Headquarters have their papers ready just in case our retirement is changed to a high 5. If it does go to a high 5 I will retire before the end of the year. I also heard that if it goes to a high 5 the unions are going to sue because current employees hired under the high 3 program.

 

[Atarrin]

I have a question about the math of the proposal. I am not trying to prove a point one way or the other; it is just a serious question.

My current understanding of how FERS contributions work is that the employee pays .8% of his salary into it and that the Government pays ~12% of the employee's salary into it. My understanding of the proposal is that FERS employees would be required to pay an increase of 5.2% of total salary for a total of 6% of their salary into FERS.

First, is that correct?

Second, under the proposal, what % of an employee's salary would the federal government pay into FERS each pay period? (Would it be 6% of salary by each?)

 

[hessian]

A couple articles - I heard news on Friday (~11:00 am) that the Gov, wants to "lock up" our TSP accounts. :suspicious: I tried to find articles toaday that would support what I thought I heard, but so far not - but here's a couple related...

http://www.wral.com/golo/blogpost/3813642/

http://www.dailypaul.com/162209/next-ira-401k-confiscation-meeting-obama-needs-our-401ks

I think what I heard was on channel CNBCHD on Friday, so I'm going there now, maybe I, or someone, can find more. Sorry, but its too important to ignore.
Did I hear this wrong?? Arrgghh.
VR
Maybe heard something like this... but I thought it was re: Gov TSP?
http://mcauleysworld.wordpress.com/...cash-investors-being-denied-cash-withdrawals/

 

[nnuut]

How Would Failure to Raise Debt Limit Affect the TSP?
July 11, 2011

In response to questions from federal employees and retirees on how a failure of Congress to raise the national debt ceiling would affect the Thrift Savings Plan, the TSP issued this statement:​

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"Absent legislation by Congress to raise the Federal debt limit, the Secretary of the Treasury may determine that portions of the monies in the G Fund cannot be reinvested in Treasury securities because to do so would exceed the present Federal debt limit. However, all of the G Fund monies would still be on account with the Treasury, and the interest which would accrue if the G Fund were fully invested would still be credited to the G Fund.
Some published reports have mischaracterized the actions which may be taken by the Treasury, which are authorized under the law. G Fund investments are safe and will continue, by law, to accrue earnings. The integrity of the G Fund would not be compromised. TSP participants' accounts would not be affected as a result of any suspension of issuance of Treasury securities to the G Fund. This is possible because of the "make-whole" provision contained in the relevant section of the Thrift Savings Fund Investment Act of 1987 (P.L. 100-43), 5 U.S.C. § 8438(g)(4), covering this very situation (i.e., a suspension of Treasury securities issuance because of the debt ceiling). The make-whole provision means that TSP participants who have invested in the G Fund will not lose anything. The G Fund account balances would be exactly the same from day to day as if they were invested in Treasury securities. Furthermore, disbursements of TSP loans and withdrawals would not be delayed, nor would the amounts of those payments be reduced.

http://www.myfederalretirement.com/public/917.cfm

 

[Texarkandy]

I've been trying to wrap my mind around this.

Since monies in the G-Fund are loaned to the government in the form of special issue Treasury securities ... how can the government borrow money already loaned to them?

And in terms of new contributions ... how can the government borrow those contributions before it is loaned to them?

 

[James48843]

I've been trying to wrap my mind around this.

Since monies in the G-Fund are loaned to the government in the form of special issue Treasury securities ... how can the government borrow money already loaned to them?

Here now- Not so fast- Stop looking behind that curtain.

PAY NO ATTENTION TO THE MAN BEHIND THE CURTAIN...

Move along, move along.

Those aren't the droids you've been looking for.

 

[dannyboy]

I have a question about the math of the proposal. I am not trying to prove a point one way or the other; it is just a serious question.

My current understanding of how FERS contributions work is that the employee pays .8% of his salary into it and that the Government pays ~12% of the employee's salary into it. My understanding of the proposal is that FERS employees would be required to pay an increase of 5.2% of total salary for a total of 6% of their salary into FERS.

First, is that correct?

Second, under the proposal, what % of an employee's salary would the federal government pay into FERS each pay period? (Would it be 6% of salary by each?)

I had thought it was the employee can contribute anywhere up to 15% of his pay,before taxes, into FERS. The feds match $ for $ up to 5%? Then all your contribution is at the hands of the market funds return selected, they will make or lose money.
I am unsure of exactly how the proposals will affect the FERS, but I'm sure it is just to take more $'s away from us?
additional clarifications requested
DB

 

[James48843]

I have a question about the math of the proposal. I am not trying to prove a point one way or the other; it is just a serious question.

My current understanding of how FERS contributions work is that the employee pays .8% of his salary into it and that the Government pays ~12% of the employee's salary into it. My understanding of the proposal is that FERS employees would be required to pay an increase of 5.2% of total salary for a total of 6% of their salary into FERS.

First, is that correct?

Second, under the proposal, what % of an employee's salary would the federal government pay into FERS each pay period? (Would it be 6% of salary by each?)

Close-

It was my understanding that the employee share would be 6%, and the employer's share would be 5.8%.

But that isn't a formal done-deal yet, and could change.


And- to Dannyboy- we are not talking about TSP and employee contributions- we are talking about FERS, and the right-wing proposal to make employees pay 6% more into FERS, ---OR--- the discussion by some on the right to do away with FERS altogether, and only have a TSP fund with no FERS component. That was being discussed by several republican members of Congress.

 

[Texarkandy]

Close-

.... OR--- the discussion by some on the right to do away with FERS altogether, and only have a TSP fund with no FERS component. That was being discussed by several republican members of Congress.

All I can say to that is.... you get what you pay for.

 

[nnuut]

All I can say is "I hope you like SEX". Voted for OBAMA, You will love it!:laugh:

 

[nnuut]

How Would Failure to Raise Debt Limit Affect the TSP?
July 11, 2011

In response to questions from federal employees and retirees on how a failure of Congress to raise the national debt ceiling would affect the Thrift Savings Plan, the TSP issued this statement:
http://www.myfederalretirement.com/public/917.cfm[TABLE="align: left"]
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[Vnc1701]

I have two questions re our current state of affairs...What would be the impact on the G Fund be if the US defaults? And what would the impact be on treasuries if the US is downgraded?Thanks for all who contribute here.Vnc1701 in DC

 

[nasa1974]

I have two questions re our current state of affairs...What would be the impact on the G Fund be if the US defaults? And what would the impact be on treasuries if the US is downgraded?Thanks for all who contribute here.Vnc1701 in DC

Vnc1701, tough first post. This is the place to get some answers. Welcome aboard.

 

[tsptalk]

I have two questions re our current state of affairs...What would be the impact on the G Fund be if the US defaults? And what would the impact be on treasuries if the US is downgraded?Thanks for all who contribute here.Vnc1701 in DC

Welcome! I think it's the uncertainty that is the problem. Not many people know what to expect from a default except probably higher interest rates. I don't have any real answers. It would hurt likely stock and bond prices, but I'm not sure what they'll do to the G-fund.

 

[Vnc1701]

Hopefully nothing of the sort happens but if it does it seems like laws regarding these funds would have to be amended since my understanding is that investments made re G have to be AAA.. I have my fingers crossed

 

[Boghie]

Treasury:

Treasury Secretary Timothy Geithner warned Congress on Wednesday that the nation will hit its debt ceiling on New Year’s Eve — but that the administration will again take a series of so-called extraordinary measures to hold off default.

The 'extraordinary measure' is the process of borrowing against your 'G Fund' assets - yuk, yuk. Borrowing using existing debt as collateral. Only in the government.

By the way, how many of us are going to loan them the cash with our 'G Fund' holdings?

I'm thinking of holding my assets in the 'G Fund' and seeing if I am able to IFT assets out. Don't like any of our funds right now - so I guess that means I like the 'G Fund' the best. It would be interesting if we all agreed to yank 10% from the 'G Fund' and place it somewhere else when the Treasury plays this game. It might make them sit up and take notice. Wonder if they will freeze the IFTs

 

[burrocrat]

the letter from treasury linked in your article was rather disturbing. it said the assets of G fund are 156 billion dollars imediately freed up to pay the bills. i don't think it matters if we all transfered everything out of the G fund it would just be a ledger entry wink/nod on blackrock's book. in fact, i think they would prefer we transfer out in that scenario because if the market tanks that's less they don't have to pay back.

i had to go to a mainstream media website to figure out what the letter was really saying. http://cnnmoney.mobi/primary/articl...son/2012/12/26/news/economy/debt-ceiling.json

the third paragraph was interesting, it seems to indicate that also the contributions to our pensions (not tsp) are subject to the same. so it comes out of your check on january 10 but doesn't go into the pension 'lockbox'.

luckily payments to existing retirees will not stop as they will be paid from the new investor's deposots coming in. sniff, sniff, yep smells like ponzi.

oh well, possession is nine tenths of the law as they say. it appears my three-legged stool is really just a plank. maybe i can use it for a paddle since i'm up crap creek.

 

[nnuut]

Buy GOLD!

 

[nnuut]

I said this last year, now I'm really not that sure. http://www.tsptalk.com/mb/g-fund/2664-govt-monkeing-our-savings-again-4.html#post314985

 

[Kaufmanrider]

the letter from treasury linked in your article was rather disturbing. it said the assets of G fund are 156 billion dollars imediately freed up to pay the bills. i don't think it matters if we all transfered everything out of the G fund it would just be a ledger entry wink/nod on blackrock's book. in fact, i think they would prefer we transfer out in that scenario because if the market tanks that's less they don't have to pay back.

When I retire, probably Jan 2014 the way things are going, I am moving all my TSP into my Schwab IRA. At least I'll know my money is real and not an IOU from the gobernment. And I'll have far more investment opportunities.