TSP board to limit interfund transfers

[fabijo]

The letter to Greg Long from the Investment Officer gave dollar amounts to show the increase in expenses one year over the next. He failed to note that the total dollar amount within TSP also increased year over year. He also failed to quote what is readily available on the meeting minutes - that the trading costs are actually less than last year if looking at the percentage of each fund. Last year, the trading costs were about .02% of each fund's holdings. This year, it is looking like it will be .01% of each fund's holdings, which is EXACTLY the same as the costs of running each L Fund.

 

[Hardcorps]

http://www.federalnewsradio.com/index.php?sid=1295720&nid=250

 

[Show-me]

IMO, it is not about keeping fees lower. It is about preserving the fixed profit margin for the company that has the contract to manage the account. Ta da!!! We are killing their bottom line on this contract, IMO.

 

[Hardcorps]

Since my kids go to private school,would the government mind lowering my property taxes.Raise the taxes on those that use the public schools.I'll be waiting for my letter next month.

 

[Frixxxx]

IMO, it is not about keeping fees lower. It is about preserving the fixed profit margin for the company that has the contract to manage the account. Ta da!!! We are killing their bottom line on this contract, IMO.

You are absolutely correct. THEIR bottom line! Now let me pose this little nasty for everyone:

If 3000 (we should take on the Persians) are causing this, what percentage of the 3.8 million are doing absolutely nothing with their accounts and the contract is recieving "free" administration charges.

Anyone?

 

[jayhawker]

TheGreatBear:

Trades cannot be made effective instantly for the TSP. It's against the law!

It's not just the TSP that's affected by this law. It's all exchange funds and mutuals funds. This law will never change.

There is no way to value every stock instantly to determine the value of a fund that owns all of those stocks. ALL mutual funds are traded this way.

I suggest you revise your letter and stick to the point.

 

[The_Technician]

http://www.tsp.gov/features/chapter10.html states the daily transfer available to TSP'ers....there is no regulation of trades in the original retirement fund setup. So why the beef now.....L funds and individual trade costs should have been planned from the get go initially ( and I'm sure were) or was there a presumption of minimal trading in the planning stages....or else there is another motive from Causey and company....something in which I speculate.

 

[qibovin]

If they are still sending out snail mail replies, I can see why it costs too much. I definately can see a $1.00 fee for snail mail reply. We as users can help the situation by entering an email address when we request an interfund transfer.

Why don't they just add a block when someone submits an IFT without an email address that offers them a choice of entering an email address, not receiving a response (other than the confirmation screen on the website) or paying $1 for a snail mail confirmation.

 

[qibovin]

i'm for unlimited trading in TSP... but maybe we could all live with 5 or 6trades a month if it came down to a comprimise. Or, They need to give us more funds to chose from if they're comparing TSP to Vanguard and the likes.

One per week would be reasonable (and allow for play of the Sentiment Survey!)

 

[DrFaustus]

I haven't received a snail mail confirmation on my trades for several years now. All of my confirmations are done electronically - I receive an email. I think there is a box you can check somewhere but I don't remember where it is.

 

[jayhawker]

Why don't they just add a block when someone submits an IFT without an email address that offers them a choice of entering an email address, not receiving a response (other than the confirmation screen on the website) or paying $1 for a snail mail confirmation.

Because they aren't set up to deduct that $1. The same with charging for each IFT. No doubt it would cost them another $70 million to make such a complicated change in the system. :blink:

(Watch out - I'm very testy today.) :suspicious:

 

[qibovin]

IMO, it is not about keeping fees lower. It is about preserving the fixed profit margin for the company that has the contract to manage the account. Ta da!!! We are killing their bottom line on this contract, IMO.

BINGO.

Perhaps we should be directing our emails, letters and calls to Barclay's who is no doubt strongarming the board for this. Perhaps presented with other reasonable alternatives (profitable to them) they would bring them to the board for "consideration."

 

[DrFaustus]

If 3000 (we should take on the Persians) are causing this, what percentage of the 3.8 million are doing absolutely nothing with their accounts and the contract is recieving "free" administration charges.

Anyone?

Traders! Prepare for GLORY!! lol

 

[qibovin]

Since my kids go to private school,would the government mind lowering my property taxes.Raise the taxes on those that use the public schools.I'll be waiting for my letter next month.

Amen to that, Brother!

 

[DayLate]

Ok, I am new to all this so just as an interesting read.
http://www.govexec.com/story_page.cfm?articleid=37813&ref=rellink
http://www.govexec.com/story_page.cfm?articleid=38051&ref=rellink
Then of course today's.
http://www.govexec.com/story_page.cfm?articleid=38616&dcn=todaysnews

 

[troxel]

Board Meeting Minutes

How does one find out the names of the boards members and to obtain the minutes of the Board meeting?

 

[Aviator_Guy]

I agree that it’s in your best interest to let your reps in DC land know that limiting TSP trades to only twice a month is a really bad idea. That limitation would cost me a lot of money. But, if their data is true and I’m HIGHLY skeptical that it is, excessive trades do cost money and someone must pay for those transactions. If a very small percentage of TSP investors are making daily trades, then why must the majority of our participants pay?

I have been with the TSP since day one. In the past, limited to one trade per month that was really tough. The current system works extremely well and I hope they don’t change it. But if they do change, I would prefer a pay per trade system. This would be fair for everyone and would allow the participant the freedom to move their funds around as they wish. The disadvantage would be to the new employees. The fees would ding them a lot harder than the older ones who have large account balances.

 

[saturneptune]

Because they aren't set up to deduct that $1. The same with charging for each IFT. No doubt it would cost them another $70 million to make such a complicated change in the system. :blink:

(Watch out - I'm very testy today.) :suspicious:

Two questions come to mind.
1. Can we transfer our entire TSP to a private broker, such as AG Edwards if we still are working?
2. If we can, would we have to wait until 59 1/2 to withdraw. Now we can the year we turn 55 if retired?

Any response would be appreciated.

The best weapon would be to put these clowns out of business.

 

[tsptalk]

I wanted to share a well written letter to the Thrift Board from one of our readers.

RE: November 6, 2007 Memorandum “Frequent Trading”

I have just learned of your intention to impose a restriction on Thrift Savings Plan (TSP) trading activity, specifically limiting participants to no more than two (2) transfers per month. I believe this will have a serious, negative impact on my ability to maximize my retirement account, which in turn lowers my quality of life in retirement. This is incongruent with the philosophy of the TSP program.

As a career federal employee faced with the challenge of ensuring I have put aside adequate funds for my retirement, the TSP is an excellent investment option. Through my active participation, my returns have been much greater than they would have been if the number of transfers was restricted, as you are recommending.

Based on the September 18, 2006 Government Executive article, “Cost of running TSP lower than anticipated”, the September 17, 2007 “Minutes of the Meeting of the Board Members”, the “Federal Retirement Thrift Investment Board Budget”, and numerous other resources, the cost of administering the TSP is and has been under budget, specifically for years 2003, 2004, 2005, 2006, and the increase in 2007 is not entirely due to increased trading costs, but most likely due to “Other contractual services”, and the production of a DVD for participants who don’t read the available material.

As justification for the transfer limitations, you cite Federal Employees' Retirement System Act of 1986 (FERSA) sec. 8475 which directs the board to “develop investment policies…which provide for…low administrative costs.” However, in 5 CFR Ch. VI, Subpart D “Contribution Allocations and Interfund Transfer Requests”, §1601.32(4)(b) “Limit. There is no limit on the number of contribution allocations or interfund transfer requests that may be made by a participant.”

To allow my continued active participation in securing adequate retirement income, I would be more than willing to pay an off-setting fee to TSP for the increased transaction costs. Therefore, I ask that you give further consideration to imposing restrictions on TSP trading activity.

 

[sugarandspice]

3,800,000 enrollees in the TSP. Minus the 3000 enrollees who are making it such a financial burden on the system. That leaves 3,797,000 people who are making less IFT's than the rest of us? Please! If these 3,797,000 are just letting their money sit, then TSP really doesn't want members doing anything with their accounts. And money sitting around is their true goal. And where is that money sitting? In a closet? Under a mattress? Im sure it is collecting some sort of interest rate in a nice account somewhere.