TSP board to limit interfund transfers

[Talltimber]

Is it OK to be a TSP board member and a partisan politician (democratic, GOP, independent, whatever). Seems like federal employees get dismissed for that quite regularly.

I hope the letter is suitable for framing.

Lets find out who that spokesperson was. I have observed fake news interviews and they carry the same softball tone of voice. The latest being the infamous FEMA interview on how well thing went in the California wildfires. "Do you think FEMA did a good job?"

Where can we contribute to a class action suit?

 

[James48843]

RAE:

There was a more recent change than that public law- the change was in a bill sponsored by Maine Senator Olypia Snow, and allowed the end of "open seasons", and also daily trading. I think it was in 2003 or 2004, but not sure exactly. That is the law I am looking for. Will keep searching.

You re right- it is illegal for them to change a CFR without doing a federal register notice, and soliciting public comment.

But then again, torture is illegal too, and this TSP board IS a majority appointed by our current President.

Thanks for the help.

 

[RAE]

You're right, Kam, they haven't actually changed anything yet, but in order to have a change effective in March, they would still need to start the formal process of publishing this proposed change in the Fed. Register, starting the formal comment period, etc. (this stuff takes time) - and I see no indication that they are planning to do any of that (at least there was no mention of it in anything they have put out so far). As a minimum, we should all keep the pressure on and monitor them to see if they do this stuff or not.

I agree with you that we need to find out who gave them "permission" to even take the interim steps they plan to take. Whoever that is, I have a feeling someone is exceeding their authority here, and bypassing the normal process again.

We need a senator or congressman, or perhaps a Union rep., to help us dig into this and get some answers. I also wrote to the chairman and vice-chairman of the Employee Thrift Advisory Council (ETAC) today - Sauber (Letter Carriers Union) and Brown (NFFE). Paladin had posted earlier that the FRTIB needs to run these proposed changes by the ETAC before they are approved. So, you would think that these guys would be interested in hearing from their membership as to how we feel about these proposed changes. I can post the addresses for these gentlemen in another post if folks are interested, or you can easily find them by doing a Google search.

 

[James48843]

Here is a post Griffin posted, and should also be posted in this thread:

From Griffin:
====================================================

The following excerpts are drawn from the FRTIB meeting minutes and I think they shed light on what the FRTIB is thinking and their motivation behind setting the maximum.

I didn't include the text that reveals that the TSP purchases the I-fund share the next morning AFTER they do the FV. The expectation is that by applying the FV correctly, they priced the fund for the actual cost they are going to pay the following day, and if they mess it up - the participants pay the price.

Here's a link to the full text:

http://www.frtib.gov/FOIA/minutes-board-member-meetings_2007Aug.pdf

http://www.frtib.gov/FOIA/minutes-board-member-meetings_2007Sep.pdf

Compare what they said in August in pink to what they said in September in pink and then do the same for the blue sentances. Finally check out what they said in red.

FRTIB Minutes August 20

She noted that the tracking error for the I Fund was 89 basis points because it was fair valued on July 31st. The year-to-date tracking error for the small-mid cap fund was 18 basis points due to the fund's sampling technique. The I Fund is only down 77 basis points year-to-date rather than 89 basis points due to the Fund's tax benefits.

Year-to-date trading costs for the I Fund are only $3 million compared to $13 million for all of last year. Last Thursday, $730 million was transferred out of the I Fund. The overseas markets opened down on Friday and the trades were executed at these lower prices. Consequently, transaction costs for that one day were $9.5 million. We also had $307 million in transfers out of the S Fund and $404 million out of the C Fund. This compares to March 5th, our biggest day of interfund activity, where we had a $862 million transferred out of the I Fund, $421 million out of the S Fund, and $440 million out of the C-Fund.

FRTIB Minutes September 17

In August, $3.2 billion was traded in the I Fund which is second only to March, when $3.4 billion was traded. For the year, $14 billion has been traded in the I Fund, which is a 50 percent increase over the amount traded in the same period last year. The trading cost associated with the I Fund in August were 33 basis points, which resulted in $10.5 million being charged to plan participants.

August was the first month of interfund transfer activity out of the L funds: $36 million was transferred out of the 2040 Fund, and $17 million was transferred out of the 2020 Fund. On the other hand, $5 million was transferred into the income fund. This reflects a pattern similar to the other funds. That is, when the markets are turbulent, participants switch from equity funds to income funds. With the L funds, participants switch from the most aggressive L Funds to the most conservative L Funds. Chairman Saul remarked that this was important because it shows that this is a plan of individual choice. Our role is to educate the participants but not to advise them. The participants must make the decisions they are comfortable with. Chairman Saul then asked about fund performance during the month of September.

If I am not mistaken, what they are saying is that the costs to the participants that they are using to justify the two IFT transfer - are NOT fees applied by Barclay's but ARE the costs to participants for those that IFT on a day when TSP messes up their FV guesstimation process. So if they screw up the FV - it's not a big deal if no one transferred, but because these big FV's occur on critical volatile days, if they help those that moved out, then it hurt those that stayed in. That's why the want to limit us on our IFTs. However, as you can see from their own text, the big costs come on these critical days so limiting us to two IFTs is probably going to have little effect on their problem.

Let me know if you think I have this is right - because I thought the 15 million they were referring to in their statement was a fee being leveled by Barclay. If I have this wrong, I want to know.
__________________
Griffin's Account, Griffin's Account Talk
'Houston, we've had a problem. We've had a main B bus undervolt.', James Lovell

 

[James48843]

...I also wrote to the chairman and vice-chairman of the Employee Thrift Advisory Council (ETAC) today - Sauber (Letter Carriers Union) and Brown (NFFE). Paladin had posted earlier that the FRTIB needs to run these proposed changes by the ETAC before they are approved. So, you would think that these guys would be interested in hearing from their membership as to how we feel about these proposed changes. I can post the addresses for these gentlemen in another post if folks are interested, or you can easily find them by doing a Google search.

Please post their names, addresses, and phone/fax numbers if you can find them. We need that info here, to help locate info in one place.

thanks

 

[James48843]

Someone brought up a VERY interesting point.

Saul is a Presidential Appointee.

Can you say "Hatch Act"?

It is applicable?

[FONT=Arial, Helvetica][FONT=Arial, Helvetica]Source: http://www.opensecrets.org[/FONT][/FONT]


NEW YORK 19th:

[FONT=Arial, Helvetica][FONT=Arial, Helvetica]Andrew Marshall Saul (R) [/FONT]

[FONT=Arial, Helvetica][FONT=Arial, Helvetica]Raised: [/FONT][FONT=Arial, Helvetica]$782,060 [/FONT][/FONT]
[FONT=Arial, Helvetica][FONT=Arial, Helvetica]Spent:[/FONT][FONT=Arial, Helvetica] $330,023 [/FONT][/FONT]
[FONT=Arial, Helvetica][FONT=Arial, Helvetica]Cash on hand: [/FONT][FONT=Arial, Helvetica]$452,036 [/FONT][/FONT]

[FONT=Arial, Helvetica][FONT=Arial, Helvetica]Last Report: [/FONT][FONT=Arial, Helvetica]9/30/2007 [/FONT]

[/FONT]


[FONT=Arial, Helvetica][FONT=Arial, Helvetica]PACs:[/FONT][FONT=Arial, Helvetica]$0[/FONT][FONT=Arial, Helvetica]-[/FONT][/FONT]
[FONT=Arial, Helvetica][FONT=Arial, Helvetica]Individuals:[/FONT][FONT=Arial, Helvetica]$681,738[/FONT][FONT=Arial, Helvetica](87%)[/FONT][/FONT]
[FONT=Arial, Helvetica][FONT=Arial, Helvetica]Candidate:[/FONT][FONT=Arial, Helvetica]$100,000[/FONT][FONT=Arial, Helvetica](13%)[/FONT][/FONT]
[FONT=Arial, Helvetica][FONT=Arial, Helvetica]Other:[/FONT][FONT=Arial, Helvetica]$322[/FONT][FONT=Arial, Helvetica](0%)[/FONT]
[/FONT][/FONT]

 

[James48843]

Telephone and FAX numbers for the main office of the Thrift Investment Board:

Tel: 202-942-1630
FAX: 202-942-1676

I highly suggest we light up the switchboard starting on Friday, and fill up the fax machine.

JUST SAY NO!

 

[James48843]

Originally Posted by RAE
James and Kam - I believe this is the title and number of the law which originally set up the TSP:

(2) Federal Employees' Retirement System Act of 1986, Pub. L. No. 99-335, 100 Stat. 514 (1986) (codified at 5 U.S.C. [section][section] 8431-8840 (2000)).

Regarding the actual law:

I found what I was looking for.

The law WAS changed in the 106th congress, and again in the 107th, but neither change specifically referred to the new record keeping system allowing daily trades. That must have been done simply by Executive Director and Board action, then a change to the CFR. The U.S.C. does not contain any specific references to daily trades. In fact, the U.S.C. says we must have at least two times PER YEAR the ability to move funds.

The CFR is now the only thing which requires daily trading with no limit, so we'll have to do a full-court press on the Federal Register Notice when it comes out, and get lawmakers involved to try and get the law changed as well.

 

[Talltimber]

Friday will be a good day for my first ever call to TSP.

 

[troxel]

One question: Is there TSP constituency (ie participant) representation on the board? If not why not?

 

[FordMan]

Who's money is it anyway? I trade (one of the 3000?) by moving in increments of 5-10% which unfortunately generates frequent trades, but it is NOT a day trading strategy. I emailed the system to CAUSEY and explained that I try to capture the long term up or down trends when the market is moving (sorry EBB). I consider this a conservative strategy that has now been handcuffed. I've been harmed, who do I sue? Something's truly rotten in Denmark?

 

[FordMan]

My first thought is, when I'm eligible to retire I'll show them by transferring my $600K to Merrill Lynch or Schwab. But then i wondered, isn't that possibly what's at work here? Brokers see all these retiring hoardes of FEDS with huge TSP accounts, AND THEY WANT THE ACTION? By making our plan worse, theirs just got comparatively BETTER!

 

[RAE]

Here is the contact information for the chairman (Sauber) and vice-chairman (Brown) of the Employee Thrift Advisory Council. The ETAC is a 14-member group, consisting of union and management representatives, that advises the FRTIB on matters related to the TSP. Gregory Long, Executive Director of FRTIB, was quoted as saying they (FRTIB) would need to discuss the proposed IFT restrictions with ETAC before it was finalized. Therefore, I think we really need to flood these two gentlemen with our calls and e-mails!

Richard Brown, President

National Federation of Federal Employees

805 15Th Street , NW Suite 500 ,
Washington, DC 20005
USA
Website: www.nffe.orgPhone: (202) 216-4420Fax: (202) 898-1861


James Sauber
National Association of Letter Carriers
100 Indiana Avenue NW
Washington, DC 20001-2144
USA

Website: www.nalc.org
Phone: (202) 393-4695

 

[airlift]

To all of you good people in this website:

HAPPY THANKSGIVING!!

On a very serious note, I am convinced that we are on the right track and that we should be able to overturn any preliminary administrative decision to control daily trades. Provided, that a concerted and intensive effort is maintained. The procedures for approval and implementation of a Federal Regulation have already been explained here. There is still time to overturn and reach a favorable alternative to a total ban on daily IFTs. Raise Hell Guys, TIME and the LAW are on our side!

 

[kam]

Is it OK to be a TSP board member and a partisan politician (democratic, GOP, independent, whatever). Seems like federal employees get dismissed for that quite regularly.

I hope the letter is suitable for framing.

Lets find out who that spokesperson was. I have observed fake news interviews and they carry the same softball tone of voice. The latest being the infamous FEMA interview on how well thing went in the California wildfires. "Do you think FEMA did a good job?"

Where can we contribute to a class action suit?

Tracey Ray is responsible for the second mp3, though her introduction is not in the recording.

http://www.federalnewsradio.com/index.php?nid=364&sid=1296071

TSP Tweaks

Some changes are coming to yourThrift Savings Plan! Tracey Ray, the Director of Investments at the TSP, tells us about the board's decision to limit the number of interfund trades that people can make per month. Click here for the interview.

The interview:
http://www.federalnewsradio.com/emedia/99888.wma

 

[Talltimber]

Going from 2 trades a year to unlimited trades was an improvement. It was imperfect, and the board and staff FAILED to foresee the consequences of the move. (These are the same guys who know better than us how to handle our money according to them, that steams me every time).

Going to 2 trades a month would not be an improvement and should not be done. (At this point never mind the lousy way they went about it and the arrogant wrongheadedness of their thinking, we can address that also).

The thing to do is improve the system. WE HAVE A PAID BOARD AND STAFF TO DO THIS. When they built the existing system they had no idea that someone would actually use it, It take a little thought to see that might happen.

The action of the TSP board and TSP staff required is this:
Determine the faults of the current system
Consider alternate systems
Determine the benefits and disadvantages to the individual TSP member of each alternative.
Determine the benefits and disadvantages to the TSP members as a whole of each alternative.

Consider the legal and ethical ramifications of each alternative.
Get feedback from TSP's customers; the TSP share holder.

Follow the proper channels and execute the best option.

This early December sneak attack on our retiremnt savings is beyond the pale. Please lets make the system better, or leave it alone.

I am looking forward to better performance and service from the TSP board and staff in the future. The future board members the president appoints and new TSP Staff management team have a great opportunity to build a world leading organization.

Happy Thanksgiving!

 

[Hardcorps]

http://www.tsptalk.com/mb/newreply.php?do=newreply&p=133773
From tsp.gov site.If you want read whole thing.Follow these instructions[link will not come up.
Go to Tsp.gov site
Click on What's new
Click on press releases
Click year 2007
Click last entry[Results of survey]
Go to page 43.

 

[Talltimber]

Thanks Hardcorps, good link. What I see missing is a differing adnim/management charge for each fund. No doubt G and F cost less to operate than Ls, C and S which is less than I. They are all charged 4 mills.

Each fund should have a different cost of ownership.

Also if you trade often the account costs more to admin/manage, so a trading cost should be incorporated.

TSP is buying new powerful computers so the necessary calculating power has been purchased.

 

[FordMan]

Im curious what the unions will think of this move. It seems they have been mysteriously absent from all this conversation.

Haven't you been following the Mike CAUSEY columns? I've posted frequently on this subject but have been shouted down by those who think that active trading is somehow illegal, immoral or fattening.

They think WE have an entitlement mentality while I think it's pretty obvious that THEY are the ones causing the harm.

Let's face it, scams are nothing new on Wall Street, and this is just the latest version---aimed square at Fed Emps.

Personally, I think legal action may be necessary, and oh man, there goes any cost savings the TSP Board promised.

 

[FordMan]

MOST importantly, it's MY money. How come nobody seems to care what I think? It appears that the decisions were made, not for a cost savings, but to punish those who might be turbocharging/accelerating their returns. What's un-American about using the brains G-d gave us? Besides, I, solely, am the one taking ALL of the risk.

Haven't you been following the Mike CAUSEY columns? I've posted frequently on this subject but have been shouted down by those who think that active trading is somehow illegal, immoral or fattening.

They think WE have an entitlement mentality while I think it's pretty obvious that THEY are the ones causing the harm.

Let's face it, scams are nothing new on Wall Street, and this is just the latest version---aimed square at Fed Emps.

Personally, I think legal action may be necessary, and oh man, there goes any cost savings the TSP Board promised.