TSP board to limit interfund transfers

[Show-me]

Everyone- read the thread on "Things you can do to fight back"

Then do them.

First, before you do that. Dial this number.

Tonight. And again tomorrow:

1-877-968-3778

That is the TSP Thrift Line.
Burn up the phone lines, and tell them you do NOT want them to limit trades.

One voice is not enough.

EVERYONE must do it.

EVERYONE.

YOU MUST DO IT.

MAKE YOUR VOICE HEARD.

Now.

Pick up the phone, and dail: 1-877-968-3778

Take the time and do it or your "Board" will try to save you from yourself.

Another note: It is wonderful to have friends to take up the torch like James and Griffin have. Thank you guys cuz a ol Missouri boy don't have skills like the two of you have.

That being said, lets not let this work go to waste. Call the Thriftline and write those letters.

 

[RAE]

Mr. Losey - I read your follow-up article on the FRTIB proposal to restrict
IFT's to two per month, and quite frankly, I am very disappointed with it.
You spend a large part of the article quoting a Mr. Miles from your Federal
Times staff, about how it is not smart to try to time the market, etc..
That is his opinion, but it is clearly paternalistic and patronizing, and
has nothing to do with the central question here, which is - is this
so-called frequent trading by about 3,000 people causing any problems that TSP needs to be concerned about? It would have been nice if you had made an effort to dig into FRTIB's claims that this trading by 3,000 individuals is causing TSP expenses to escalate.....had you done so, I believe you would have found that these claims are mostly bogus. They cite increases in expenses without mentioning that the size of TSP itself (in terms of assets) has mushroomed in recent years, so of course there will be some increase in expenses!! (but very little, if any, in percentage terms).

Today it costs less than 1 basis point per year to manage the TSP, except for the S and I funds, which run around 6 to 8 basis points. This year, the TOTAL of all funds should come out to between 2 and 3 basis points.

To compare to your average mutual fund, those run around 60 basis points per year. We are 1/20th of the cost of a typical mutual fund. Does that sound like runaway costs to you?


Also,had you dug into their accounting records, as I have done, you would see that one of the larger expenses recently was a contract for preparation and distribution of an educational DVD, which was mailed to all 3.8 million TSP participants. Did we really need this expense, and who authorized it, and why?

I hope that you do a follow-up article that goes into more detail on these
important points. Skip the paternalistic, patronizing comments from so-called experts who think federal employees need to be told what to do with their money,and stick to the central question - what problems is this trading causing for the TSP (if any), and what is the evidence for those claims?

And if there is a problem (which has not yet been established), what alternatives are available to address it? (other than simply shoving this new IFT restriction down our throats, and mailing nasty-grams to the 3,000 folks who are only doing what is currently
permitted by the TSP!!).

By the way, I am also very disappointed that you did not mention the Code of Federal Regulations that governs the operation of TSP, and how that is apparently being ignored by FRTIB. That document, as you know, clearly spells out that TSP participants shall be allowed "an unlimited number of interfund transfers per month". CFR's have the full force and effect of the statute they are implementing.

I look forward to more discussion of these important points in any future
articles you write on this subject.

RAE

 

[James48843]

Pelosi letter is not true. It's an Urban Hoax.

http://www.snopes.com/politics/soapbox/pelosi.asp

 

[James48843]

By the way- regarding the CFR's requireing "unlimited trading".

Board member Tracey Ray (hope I spelled her name write) says they are following the CFR. She says until they get the CFR changed, someone CAN make unlimited trades. ONLY they will have to MAIL THEM IN, not do them on-line.

She says that allows them, the "3000", to have Unlimited trades, via the U.S. Mail system.

(*This is not meant to be a slam on my wonderful U.S. Postal Service faithful men and women, who do wonders for moving our mail.)

 

[James48843]

Everyone- read the thread on "Things you can do to fight back"

Then do them.

First, before you do that. Dial this number.

Tonight. And again tomorrow:

1-877-968-3778

That is the TSP Thrift Line.
Burn up the phone lines, and tell them you do NOT want them to limit trades.

One voice is not enough.

EVERYONE must do it.

EVERYONE.

YOU MUST DO IT.

MAKE YOUR VOICE HEARD.

Now.

Pick up the phone, and dail: 1-877-968-3778

It's working.

Phone lines are jammed right now. Can't get through.

Keep up the pressure, folks.

Make the call.

Keep the line filled. Let them start counting the numbers of people objecting. We CAN win!

NEVER, NEVER, NEVER GIVE UP!

 

[FordMan]

Justices Hear 401(k) Case

Barring Individuals
From Filing Suits
On Losses Is at Issue
By MARK H. ANDERSON
November 27, 2007

WASHINGTON -- Supreme Court justices hearing a case of alleged retirement fund mismanagement seemed uncomfortable with barring employees from suing over certain losses to an individual's retirement account.
The high court considered arguments in a case brought by a South Carolina man who alleged his employer, DeWolff, Boberg & Associates Inc., mismanaged his 401(k) plan. He charged that requested investment changes were never made and as a result his retirement account lost $150,000.
At issue in the case is whether federal pension law, which allows lawsuits by a group of employees, prohibits a suit over an individual account loss. Legal experts believe the outcome could be an important development in retirement law because of the shift from defined pension plans to 401(k) contribution plans. The case could also affect lawsuits over individual company stock funds, such as those at issue in employee losses from accounting-fraud debacles such as Enron Corp.
MORE

• Law Blog: Erisa on Stage at High Court
• LaRue v. DeWolff: Argument transcript | Court filing


Justice Stephen Breyer, summing up concerns expressed by several justices, asked why it mattered if "that one diamond came from a big vault or from one little safe-deposit box with the participant's label on it." He indicated he wasn't sure he saw how federal pension law allows the group lawsuit while barring the individual case. Justices expressing similar concerns included Ruth Bader Ginsburg, David Souter, Antonin Scalia and Samuel Alito.
The federal government, appearing at the arguments in favor of the plaintiff, believes the law clearly allows employees to seek recovery of losses for individual retirement account mismanagement.
Federal law governing benefits "authorizes a participant in a defined-contribution plan to sue to recover losses to the plan caused by a fiduciary breach," said Matthew Roberts, an assistant in the U.S. Solicitor General's Office.
The plaintiff in the case, James LaRue, seeks to recover losses he alleges occurred because the company's plan didn't act on instructions he made in 2001 and 2002. After he sued, a federal trial court and the Fourth U.S. Circuit Court of Appeals in Richmond, Va., ruled the case, in its initial stages, wasn't allowed under federal pension laws.
Mr. LaRue has since moved his funds out of the retirement account. If the Supreme Court rules in his favor, however, the case is likely to be revived where a court would determine if his allegations amounted to a fiduciary breach that allows him to recover his alleged losses.
The case is LaRue v. DeWolff, Boberg & Associates Inc., 06-856. A decision will be handed down by July.
Write to Mark H. Anderson at mark.anderson@dowjones.com

 

[FordMan]

Justices Hear 401(k) Case

Barring Individuals
From Filing Suits
On Losses Is at Issue
By MARK H. ANDERSON
November 27, 2007

WASHINGTON -- Supreme Court justices hearing a case of alleged retirement fund mismanagement seemed uncomfortable with barring employees from suing over certain losses to an individual's retirement account.
The high court considered arguments in a case brought by a South Carolina man who alleged his employer, DeWolff, Boberg & Associates Inc., mismanaged his 401(k) plan. He charged that requested investment changes were never made and as a result his retirement account lost $150,000.
At issue in the case is whether federal pension law, which allows lawsuits by a group of employees, prohibits a suit over an individual account loss. Legal experts believe the outcome could be an important development in retirement law because of the shift from defined pension plans to 401(k) contribution plans. The case could also affect lawsuits over individual company stock funds, such as those at issue in employee losses from accounting-fraud debacles such as Enron Corp.
MORE

• Law Blog: Erisa on Stage at High Court
• LaRue v. DeWolff: Argument transcript | Court filing


Justice Stephen Breyer, summing up concerns expressed by several justices, asked why it mattered if "that one diamond came from a big vault or from one little safe-deposit box with the participant's label on it." He indicated he wasn't sure he saw how federal pension law allows the group lawsuit while barring the individual case. Justices expressing similar concerns included Ruth Bader Ginsburg, David Souter, Antonin Scalia and Samuel Alito.
The federal government, appearing at the arguments in favor of the plaintiff, believes the law clearly allows employees to seek recovery of losses for individual retirement account mismanagement.
Federal law governing benefits "authorizes a participant in a defined-contribution plan to sue to recover losses to the plan caused by a fiduciary breach," said Matthew Roberts, an assistant in the U.S. Solicitor General's Office.
The plaintiff in the case, James LaRue, seeks to recover losses he alleges occurred because the company's plan didn't act on instructions he made in 2001 and 2002. After he sued, a federal trial court and the Fourth U.S. Circuit Court of Appeals in Richmond, Va., ruled the case, in its initial stages, wasn't allowed under federal pension laws.
Mr. LaRue has since moved his funds out of the retirement account. If the Supreme Court rules in his favor, however, the case is likely to be revived where a court would determine if his allegations amounted to a fiduciary breach that allows him to recover his alleged losses.
The case is LaRue v. DeWolff, Boberg & Associates Inc., 06-856. A decision will be handed down by July.
Write to Mark H. Anderson at [EMAIL="mark.anderson@dowjones.com"]mark.anderson@dowjones.com[/EMAIL]

This case will wind up as a precedent for any legal action against the TSP board. Unfortunately, we'll have to wait a year to see how it turns out.

 

[Barney]

This case will wind up as a precedent for any legal action against the TSP board. Unfortunately, we'll have to wait a year to see how it turns out.

Is this article writen to come out tomorrow?

 

[James48843]

Qwert-

As explained yesterday, while it is an interesting case, it has no direct bearing on the TSP.

The TSP is not regulated by the SEC. The law in question applies to private pension plans only.

Here is the thread on that topic:
http://www.tsptalk.com/mb/showthread.php?p=134147#post134147

 

[RAE]

By the way- regarding the CFR's requireing "unlimited trading".

Board member Tracey Ray (hope I spelled her name write) says they are following the CFR. She says until they get the CFR changed, someone CAN make unlimited trades. ONLY they will have to MAIL THEM IN, not do them on-line.

She says that allows them, the "3000", to have Unlimited trades, via the U.S. Mail system.

(*This is not meant to be a slam on my wonderful U.S. Postal Service faithful men and women, who do wonders for moving our mail.)

James - based on this then, I assume they do plan to follow the normal procedure for changing the CFR's between now and March? (posting a notice of the proposal in Federal Register, having a comment period, considering comments received, and then posting the final decision in Fed. Register). If that is so, we need to find out when the proposal is posted in the Fed. Register, and FLOOD THEM WITH COMMENTS! If everyone reading this board who is opposed to this new restriction would send in a comment expressing strong opposition to this (and cc your Congressman and the Employee Thrift Advisory Council at the same time), I think they would have a hard time justifying the change, when it came time to post a final decision. We need to find out when they plan to post this proposal (does anyone monitor the Fed. Register?), and get the word out to everyone when that occurs!

 

[ekatteng]

The half million participants of the L2040, L2030, L2020, L2010, and L Income (L Funds) are the responsibles for increasing the funds management cost with all their daily IFTs and balancing of their daily accounts. The IFTs of the "3000" members trying to protect their investments and maximize their retirement account are NOT the responsibles for such huge funds management cost increases. TSP board needs to put the blame of the fund management cost increases where it belongs and not to blame the "3000" nor use them as scape-goats to clean the smoke of its mistake of opening so many L -Funds. However, the government will do as please and we will be ending adjusting our systems to the new rules of the game. Any opposition from us may be good so the TSP board re-thinks future changes in these regards. EK

 

[saturneptune]

The half million participants of the L2040, L2030, L2020, L2010, and L Income (L Funds) are the responsibles for increasing the funds management cost with all their daily IFTs and balancing of their daily accounts. The IFTs of the "3000" members trying to protect their investments and maximize their retirement account are NOT the responsibles for such huge funds management cost increases. TSP board needs to put the blame of the fund management cost increases where it belongs and not to blame the "3000" nor use them as scape-goats to clean the smoke of its mistake of opening so many L -Funds. However, the government will do as please and we will be ending adjusting our systems to the new rules of the game. Any opposition from us may be good so the TSP board re-thinks future changes in these regards. EK

I wish there was a way to do a rollover to a private firm such as AG Edwards and build a retirement there. The rules do not allow that, which would put these people out of business. Short of that, we could reduce our contributions to 5% to get the matching funds, and use the rest on a ROTH or another IRA.

 

[The_Technician]

I have another comment about the ethics of limiting trades.

It is detrimental in nature to impose to TSP'rs in limiting trades in their retirement fund. It does dis-service to the TSP'rs and exposes excess risks to losing their retirements. Basically, it is a step backwards to servicing the customer. More like shafting the customer. Instead of limiting trades, they should find other ways to enhance trades for the benefit of the TSP'rs and the government alike. In my view, the board has a BIG BLACK FLAG waving on their side of this issue.

I believe that the TSP board should continue giving its customer base adequate protection from losing money with flexibility in daily trades as it was intended.

I think a review of their findings is necessary, the L funds have to have the excessive expenses.

 

[DayLate]

I know I am new here ,but I think I have the perfect solution to the IFT problem. According to the L fund information sheet on TSP.gov's website "The L Funds are rebalanced to their target allocations each business day. The investment mix of each fund adjusts quarterly to more conservative investments as the fund’s time horizon shortens." So all we have to do is have the powers that be change the website to read REBALANCE FUNDS instead of INTERFUND TRANSFER. That should lower the cost of the so called "day traders" since the L fund has had no direct impact on the trading cost. Seems logical enough don't you think?

 

[tsptalk]

Trader Fred's input:

A suggestion would be that someone contact the ACLU
head office in Washington, D.C. to see if this is all
legal. The other thing that would help online TSP web
sites is if the G Fund and F Fund could both be
transferred into as many times as needed. That would
really help the online TSP web sites when the market
changes over to a recessionary mode.

 

[qibovin]

The half million participants of the L2040, L2030, L2020, L2010, and L Income (L Funds) are the responsibles for increasing the funds management cost with all their daily IFTs and balancing of their daily accounts. The IFTs of the "3000" members trying to protect their investments and maximize their retirement account are NOT the responsibles for such huge funds management cost increases. TSP board needs to put the blame of the fund management cost increases where it belongs and not to blame the "3000" nor use them as scape-goats to clean the smoke of its mistake of opening so many L -Funds. However, the government will do as please and we will be ending adjusting our systems to the new rules of the game. Any opposition from us may be good so the TSP board re-thinks future changes in these regards. EK

I think all the L-funder buy-and-holds should get a "letter."

 

[qibovin]

Trader Fred's input:

A suggestion would be that someone contact the ACLU head office in Washington, D.C. to see if this is all legal.

:laugh::nuts:
ACLU?
Oh that'd be a first.
You're assuming that they could pull themselves away from vandalizing religious symbols on public properties, defending an entire culture of in-utero infant sacrifice, and relentlessly persecuting religious values for long enough to do something useful. I doubt that our trades fall into their definition of "civil liberties." Thankfully this organization is NOT our only recourse (or we'd be ₣µ©&€Δ).

 

[Bingos]

James - based on this then, I assume they do plan to follow the normal procedure for changing the CFR's between now and March? (posting a notice of the proposal in Federal Register, having a comment period, considering comments received, and then posting the final decision in Fed. Register). If that is so, we need to find out when the proposal is posted in the Fed. Register, and FLOOD THEM WITH COMMENTS! If everyone reading this board who is opposed to this new restriction would send in a comment expressing strong opposition to this (and cc your Congressman and the Employee Thrift Advisory Council at the same time), I think they would have a hard time justifying the change, when it came time to post a final decision. We need to find out when they plan to post this proposal (does anyone monitor the Fed. Register?), and get the word out to everyone when that occurs!

Never monitored the Fed Reg before, but I am now. With the boards ability to "time" the market, I suspect they will let loose their little present very near the holidays. The thirty day window for comments will go fast during this time. I established an email alert (hopefully got it filtered correctly) from the Fed Reg, to monitor for any "rule changes. I'd be more comfortable if a few others did the same thing, as I am a newbie to gov research. Thanks to all the very informative exchanges on this site, your talent is truly awesome. I think with this caliber of leadership, we will convince them of their error.

 

[budnipper1]

I think all the L-funder buy-and-holds should get a "letter."

Me too...maybe I'll get both letters. View attachment 2697​

 

[tsptalk]

Sharing an email I received....

Hi.
I have a suggestion on handling this recent news about trading limits. I tried to post this in the msg board but I just registered and was having problems posting.


A couple years ago we all saw how a small group of people affected what we see on TV and hear on the radio. This was done by a group who posted a form letter that was then sent to elected officials and the Federal Communications Commission (FCC).


I suggest that we post a form letter (drafted by a true word smith) on this website that can then be emailed or snail mailed to our elected officials and the TSP Board. This may work simply because it would be easy. Most of us do not have the time and skill to draft a good letter to our elected officials and/or the TSP Board but do have the time to forward an email or place a stamp on an envelope. Plus most do not know how to contact those officials. The form letter would have to address the lack of options for active investors, the fact that the Lfunds were designed for less active investors, there has not been trading limits since TSP became share based, and the fact that we do not need protected from ourselves. The to protect us from accidentally going over the limits of trades by hitting the wrong button is BULL. If you do not know which buttons to hit - chances are you are not an active trader and would not incur the fee. Also, it would be very simple to provide a pop-up window warning the person that by completing this action they will exceed their monthly trade limit and will incur a $5 fee. Just as easy would be a window reminding you how many trades you have made this month. But hey, I guess there are stupid people everywhere that need that warning on cup of McDonalds coffee too.


The TSP Board and Barclays opened the door by going share based, introducing the L-Funds and updating prices daily. Did they seriously not expect us to take advantage of a good thing when they basically endorsed it?


Hope you like the idea.
Thanks for hearing me out.
- Jesse