What would you ask TSP if you had the chance?

[Chaser]

I am going to a half day workshop at the end of the month by the Federal Retirement Thrift Investment Board, the government agency that administers the Thrift Savings Plan.

If you had the opportunity, what questions would you ask?

Here are a few I have:

What are the circumstances when the federal government has withdrawn funds from the TSP in the past and how was it repaid?

What are the chances that the TSP deadline could be moved closer to the end of the trading deadline or closer to the beginning of the next day's trading open?

Who has access to information about the members' trading moves as a whole between the TSP daily deadline and the end of the trading day?

Is there a possibility that policy will change and my surviving spouse can stay in the TSP and not be required to cash out after I die?

 

[Callme_CO]

I'm curious if they will make a tsp roth ira. I know they've been talking about it...but as my grandfather used to say "want in one hand, crap in another...see which fills up first."

 

[Jackbnimble]

Roth Roth..I am with CO. We need a Roth.
I can answer a few of your questions.

1.The federal govenment with some fuzzy accounting can't go above the debt ceiling. When it gets close to this ceiling it takes steps like borrowing from the TSP and such. They always pay it back with the interest that would have been earned on it in the fund. They pay it back with borrowed money once the debt ceiling is raised. :blink:
The real question is, & this is limited by my little knowledge.They only borrow from the G fund and the G fund is as I understand it invested in government securities. Would them borrowing from the G fund, which is already loaned to them once, be like having 2 100% loan value mortgages on your house?

2. I predict they will not move the deadline for transfers since they don't really like "market timers".

 

[sdouglas3]

Please ask why the TSP board does not act like a mutual fund company in regards to being able to make a change to an account by 2:00pm rather than 11:00 CST. This would be benificial to all of us.

Now, I would assume the change to account is automated? If it is, then it shouldn't matter. If there is something manual that needs to be done then I can see why. But, I would hope everything is automated. If they come back and say, this is how they keep the fees reduced. Then I would ask what is the cost difference? and make a proposal to move the time frame to the afternoon. The beneifits for us are greater than the cost of missing a trade or position in the long run.

Thank you very much.

Steve Douglas

 

[DrFaustus]

The TSP Board has always, at least so far as I can remember, discouraged market timing but then they switched over to daily valuation - which to me is sort of like wanting to have your cake and eating it too.

It would be nice if they created a trading deadline that is based upon local time - but I dont think they'll do that because it would give members in the west an unfair advantage. Since the market opens at 9:30 Eastern, everybody gets to see how it is behaving for 2.5 hours before making a decision. If they were to push the deadline to, say, 2pm local time, then traders on the east coast would have to make trades before the market closed while traders on the west coast would be able to make trades afterwards.

 

[BeaverState]

Why do they think a TSP/Roth is a bad idea when the rest of the country is moving towards 401K/Roth's?

 

[BeaverState]

True there are many pros and cons when comparing Roth 401k's vs. traditional 401k's. You can read about some of them here http://www.roth401k-center.com/index_best.htm or on wikipedia. I would contribute to both if that was a TSP option. That would allow you to effectively choose your tax rate for each year of retirement, or per event.

For example, say I'm retired and the wife wants to spend Christmas in Hawaii. Say it's going to cost me $3000. I could withdraw the amount from the Roth 401K and that would be it. If I withdrew it from the traditional 401K I would have to pay and additional $840 in taxes. (Assuming a 28 % tax rate)

As far as costs go, TSP could charge the extra amount it costs in setting up the program to the participants that choose to take the ROTH TSP option. Once it is programed in, it shouldn't cost any more to administrate.

 

[SkyPilot]

True there are many pros and cons when comparing Roth 401k's vs. traditional 401k's. You can read about some of them here http://www.roth401k-center.com/index_best.htm or on wikipedia. I would contribute to both if that was a TSP option. That would allow you to effectively choose your tax rate for each year of retirement, or per event.

For example, say I'm retired and the wife wants to spend Christmas in Hawaii. Say it's going to cost me $3000. I could withdraw the amount from the Roth 401K and that would be it. If I withdrew it from the traditional 401K I would have to pay and additional $840 in taxes. (Assuming a 28 % tax rate)

As far as costs go, TSP could charge the extra amount it costs in setting up the program to the participants that choose to take the ROTH TSP option. Once it is programed in, it shouldn't cost any more to administrate.

However, you can set up your own Roth account now (and many have done so). There seems to be little additional advantage (and substantial start up cost to TSP participants) having TSP involved in setting up an entire system for what is already quite easily and inexpensively available.

 

[BeaverState]

Why doesn't TSP offer a value fund option? Even better, a large cap value fund and a small cap value fund.

 

[Spaf]

Index funds contain both growth and value. For comparison go to www.Stockcharts.com "perfChart" and enter the 3 ticker symbols for ETF small caps: IJS (value), IJR (index), and IJT (growth), see how they plot!...

Why doesn't TSP offer a value fund option? Even better, a large cap value fund and a small cap value fund.

 

[BeaverState]

Index funds contain both growth and value.

True. However, TSP did split the total market index into the C & S funds. One could argue that there is value in that. One tends to perform better than the other for several years in a row.

There are ample academic studies (FAMA/FRENCH, etc) that show over long periods of time Value Funds do better than Growth Funds. Again, one tends to outperform the other for several years in a row....

 

[Bullitt]

1. I would glady keep the 12 noon deadline if TSP would upgrade their site. Would you please allow us access to things such as average cost basis and recent contributions in each fund?

2. Is there a way to find the total amount of IFT's in each fund on any particular day in the entire TSP universe?

 

[Fivetears]

I'd trade the FV in the I-Fund & the 12:00EST IFT deadline...
for a 14 day IFT lock on funds moving in & out of the I-Fund.

No FV and a 3:00pmEST IFT Deadline would be fair enough.

 

[Gilligan]

I would be glad to pay $10 a trade if we had real time trading. The last time that I bought into the S fund it was down 2% before the deadline only to rally in the afternoon, I felt that I was robbed of 2% and that’s a lot of money in my account.

 

[IrishBill]

Not sure this is the right location for this question but here goes.

Could a change be made to our TSP accounts which would allow CSRS folks to withdraw funds to pay off or pay down on our home mortgages without any penalties? I don't mean withdraw funds due to a hardship case or even take a loan out. These examples currently exist. I'm talking about a penalty free withdrawal due to the current hard economic times. I only mention CSRS folks because FERS folks have the government contribute (match) up to 5% of employee contributions. The CSRS folks don't have any government matching.

 

[Scout333]

Irish, Even without penalty you would have to pay tax on the withdrawal amount. Not sure the economics works on this one. i.e. earnings on G fund vs mortgage interest(net of tax benefit)? You could, I suppose, reduce your TSP contributions and use the money to pay extra on the principal. Probably not wise in this environment however, would want to increase contributions to take advantage of cheap share prices? Don't know what your interest rates are on your mortgage but refinancing may be an option since rates are pretty low right now. You could take the reduction in payment due to the interest rate decrease and pay down the principal? Just a thought. Good luck

 

[Frixxxx]

Not sure this is the right location for this question but here goes.

Could a change be made to our TSP accounts which would allow CSRS folks to withdraw funds to pay off or pay down on our home mortgages without any penalties? I don't mean withdraw funds due to a hardship case or even take a loan out. These examples currently exist. I'm talking about a penalty free withdrawal due to the current hard economic times. I only mention CSRS folks because FERS folks have the government contribute (match) up to 5% of employee contributions. The CSRS folks don't have any government matching.

That's more of an IRS question. Penalties and taxes are based on the outdated...er I mean tax laws, not TSP.


But here's mine: Now that we have a new administration that promises change, can the board retire so that we can get some new blood in the overseers offices????

 

[momacs]

I read somewhere that all of the board members terms have expired and they all need to be replaced. My hope is they put in new board members and get rid of whoever it was in charge that made the changes. Then at least there'd be a chance we could go back in time to before the limits were started. And possibly have the cut off time to make IFT's changed to later in the day.
Does anyone know who appoints the board members? Is it the president?
Now might be a very good time to get the new policy overturned with the new administration. :nuts:

 

[turbo23dog]

Sure hope someone other than me noticed that this is a thread that's been dead since Sep 2007...

 

[Frixxxx]

Not dead yet!