Lady -
I agree that additional IFT's should be available on a per-cost basis. Do you, or anyone else, know what the industry average would be in terms of cost per trade?
Additionally, what options do you (Lady) have relative to rolling your entire balance over to an IRA? Would it be worth it to you to transfer your funds, even if penalties were involved?
OBgibby:
You ask "Do you know what the industry average would be in terms of cost per trade?"
The answer to that is- it should have nothing to do with "industry average". It should be based on actual costs instead.
For example- the TSP has an annual cost of about 3 basis points to manage all of the more than $200 billion dollars. That includes costs for trades, costs for administration, the call center, employees, etc.
That cost has been heading down since the plan's inception.
The industry average is, on the other hand, more like 65 to 80 basis points for administrative fees. So, you see, comparing the costs in TSP to "industry average" to set prices is not valid.
Now, when you look at actual costs, it's on the order of around $6 per trade. That's from the TSP Thrift Board's own data. The cost for trading the I fund is higher than the others, because some countries (notably ireland, at 1%) impose a transfer tax on each stock trade. However, the C fund (S&P 500) has exceptionally low costs-- pennies on the trade. So, anyway, it averages out to less than $6 a trade overall.
Now, should people be allowed to manage their own money? Absolutely. Since we put the burden on people to control their own retirement when CSRS was changed, we owe each employee: 1. Educational opportunities, so that they understand how the system works, and 2. A free market in which to exercise their own values, education, and goals.
Sure, some people are "buy and hold". If they know what they are doing, and are making a conscious decision to be "buy and holders", then more power to them.
On the other hand, if someone wishes to take a different amount of risk, then they should be allowed to use the full power of the TSP system to their own benefit.
You ask "Would it be worth it to transfer your funds, even if penalties are involved?"
The answer to that is- it depends. For someone who has successfully amassed a significant balance, and who is able to move funds regularly in a new account, then yes, it very well may be.
Except under TSP, the only way to be able to move funds away from the TSP is to separate from your job. And many are now considering doing that, just to have that freedom to invest as they see fit.
The total cost of all trades in 2007 was on the order of 23 million dollars. That's on tens of billions moved. If they had a $5 fee, they would be able to easily cover the costs involved, and everyone I know who used to manage their own money would not object to a $5 fee.
Except that is beyond the thinking of the Thrift Board, and Tracy Ray's mentality of "buy and hold".
You asked "What did we do before the website for trades?"
The answer is- we only could trade once per month.
Then we invested hundreds of millions of our dollars- TSP member dollars- to build a system that provided for a daily valuation and execution of trades.
and then the Thrift Board negated that hundreds of million dollar investment, by turning the clock backwards and locking us out.