TSP officials eye limits on trades

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Seems to me it shouldn't cost TSP much if anything to handle our IFT's each day. Seems like it is all handled electronically anyway. Most brokers charge the same to trade 100 shares as 50,000 shares.
 
SkyPilot said:
When was the last time a "financial planner" ever encouraged anyone to do anything but give them your money? :nuts:
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Yes, and many financial planners quote Peter Lynch as the great buy and holder. Yet, at the height of his career his portfolio turnover was around 300 percent.
 
There have developed a multitude of other internet sites that are all proponents of a timing mechanism in dealing with the TSP. The regulators are possibly considering a pre-emptive strike to reign in potential growth before it explodes. They are concerned about their fiduciary responsibilities and don't feel most employees, especially if they are Donkey affiliated, are capable of managing their own retirement - that's politics. Best to keep the Elephants in power because they espouse confidence in the individual to handle their own situations.
 
Birchtree said:
They are concerned about their fiduciary responsibilities and don't feel most employees, especially if they are Donkey affiliated, are capable of managing their own retirement - that's politics. Best to keep the Elephants in power because they espouse confidence in the individual to handle their own situations.
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Well said.
 
Seemed that the FedSmith article was a bit slanted and biased against trading to me...

ps:
Wow, you should read the "comments" now! Lot's of people posting excellent comments and questions regarding the actual costs of trades and pointing out the daily L fund trading...

I don't think this is what FedSmith had in mind...
 
SkyPilot said:
Seemed that the FedSmith article was a bit slanted and biased against trading to me...
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That's not surprising since the people who don't trade are thinking they are paying for the transactions of those who do. But it's interesting to hear their attitude of trading as bad, or undisciplined, wreckless, etc. They fear the unknown.
 
When this was brought up a few days ago, my initial thought was of who would benefit and first is obviously the managers of our assets. But beyond that I have a suspicion that this is more of a market manipulation of our assets. One of the reasons that TSP and was created was to add to market liquidity. It wouldn't do the powers that be much good if we were able to play with that liquidity. Hopefully there will be organized opposition to this plan. Otherwise, maybe there can be lobbying for more liberal in-service withdrawals to an IRA.
 
Now is the time to start calling your Senators and Representatives. I have called mine, will you call yours?

Maybe it's time for the Congressional Budget Office to audit the FTRIB for waste, fraud and abuse, and evaluate these new proposals?

Even a few hundred inquiries will cause there to be a notice, and anyone has had to respond to a Congressional Inquiry knows that this gets the attention of any agency who receives one. It's easy, just call and ask.

Your Congress person wants to make you (their constituency) feel like they have been heard.
 
I've noticed a lot of people saying it would be o.k., with them if there was so many free trades per year and then a small fee for trades after that. I think TSP won't consult us about what the fees should be. What if they institute something like Fidelity has? It's free to trade out of a fund if you've owned it for six months. Otherwise it will cost you $75. And if you buy and sell funds too many times in a year they charge you $75 to buy and $75 to sell. It would be pretty painful to trade the ebbchart system when you're paying $150-$300 in fees per week.

Granted, TSP fees would probably be lower than Fidelity's. It's still a scary thought.:(
 
I don't think it can be demonstrated that there is an expense for IFTs greater than the cost of rebalancing the L funds (if there is any appreciable cost at all).

If the L fund does sustain a cost, should not the L fund participants then be charged those fees, as is being proposed for other IFTs?

Why should all TSP participants have to shoulder the burden of L fund rebalancing, (if IFTs have an actual cost) unless all participants have the continued same daily option of IFTs?

L fund participants should not be given "special class" status apart from all TSP participants.

It is my understanding that any fees charged must only be assessed to offset actual costs. I don't believe that the FTRIB is allowed to create a system that would create a positive cash flow of fees and assessments. If that is case, IFT's could likely only justify a few cents per transfer, if any at all.
 
It isn't the trading cost that are causing the problem. It is the FV! They have GUESSed poorly again and it cost them a bunch of money. I went back and looked at the minutes. They blame the I-fund. They don't say anything about S or C. The reason is that the I-fund has the FV. There should be a better way for them to solve the problem the FV is causing. They could purchase futures at COB on the next mornings open for the foriegn stock exchanges or the could move the time of day for the settle from COB to 11:00 am. At 11:00 am, they would have most markets open and only Far East closed.

The administrative cost to run TSP has been dropping by a basis point every year for the past 3 years. It isn't trading cost. The real cost is the FV.
 
Haven't read the minutes but are they leaning towards advocating fees for all trades or only for those "in" and "out" of the I fund?
 
We won't see the minutes for the last meeting for awhile. FedSmith probably sends a reporter to the meeting and that is where they got their info. i'm basing what I said off of the minutes for March, April, and June of 2007. They discussed the February drop and admin cost.
 
Example:
View attachment 2069
If you read what they are saying, the trading cost are associated with having the overseas markets closed and having to buy the next morning. That is FV cost NOT trading cost.

Notice how far ahead they are in terms of cost for the I-fund? The made 11.8 basis points in April! They were up 3.0 basis points for the year.
 
They could easily place a seven day turn around time on the I fund. That would relieve some of the pressure and reduce costs. I could live with that type of restrained round trip.
 
Nice post FundSurfer. I was trying to go back through all that stuff too just to get some ammo for my posts and ultimately for a letter of protest ( I guess) and you put it nicely in black and white. Thank you very much.

Now how exactly will they overcome the L fund rebalancing cost with the very minimal I fund FV costs?
 
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