What YOU can do to fight back - IFT limit

Go get them James! I'm ready to support litigation. I'm ready to write my comment letter when they publish their Federal Registry notice. Thank you for all your work on this!
 
FundSurfer said:
What needs to happen right now? Do we need to send out more letters? Is there any looming meetings? I've lost track. Or, are we waiting on the Federal Register posting to comment there?
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At the moment, I think we continue to try and shed daylight on the fact that Greg Long ( or more directly, Tracey Ray) are manufacturing a crisis where one does not exist. However, we have to work where we can to EDUCATE people that this is the case. THAT is the big problem now. How do we EDUCATE the reporters, the people, etc. How do we get someone who will be considered an expert on this to listen? (Obviously the ETAC are not experts, or they would have figured it out, or at lest would have asked the right questions, like "How does this compare with private industy"?



Also, I noticed the TSPshareholders donation thingy has been reset? James, did you get enough money for the trip to lobby? Thanks.
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I have enough money to make the trip- I'll be in DC the first week of March. Thanks to all who pitched in, I've got enough for the plane ticket and 2 nights in a DC hotel.
I HOPE to be able to meet with some ETAC members, although I have not yet been successful in scheduling any meetings- and the TSP office won't give me an appointment- they say I should "write a letter".

So I may end up doing a press conference on the steps of the TSP building office. I'll let you know how it turns out.
 
So how does a 100% "turnover", as described by Greg Long as something bad, compare when you do an apple to apples comparison to Mutual funds?​

Here is a chart- from Lipper, back in 2004:​


It turns out that a 100% turnover over the course of a year puts us right abount in the middle of the pack as far as the funds studied by this Lipper analyst as far as trading goes- between the 4th and 5th "decile" . But then note the costs- the average is between 29.5 basis points, and 28 basis points. TSP's I fund is just 8 basis points - or WAY BELOW average in costs.​


The whole report from Lipper on the costs and turnover of the Mutual fund universe this one analyst was able to compile back in 2004 is located here:

http://pdf.forbes.com/media/pdfs/2005/0105funds.pdf
 
FundSurfer said:
How about a summary of where we are right now.
OK- well, were here. And we're still alive. But there is not a lot of ammunition in the box at the moment.

To summarize some recent data- it's like this:

They held the meeting in January, but did not release the December's board meeting minutes until last week- about three weeks later than usual. I suspect they are very cognizent of our inspection of the board meeting minutes, in part because we zapped them very well on the last set. So they were very light on hard data this time around.

They did NOT include the data on the number of interfund transfers in November (December's minutes cover November's trading activity). I suspect it was DOWN considerably- and that manifested itself in a negative trading error figure that was pretty substantial. However, I can't PROVE that the reduced trading volume led to the worse tracking errror, because they stopped posted the actual data on the volume of trades.

So in effect one of the best tools to hit them with- the actual data, has been hidden. I also suspect that when December's data comes out, it too will show higher tracking error costs due to reduced trading volume, but I predict that they won't publish the actual volume of trading in the next set of minutes either.

They met this past week, on the 19th, but only a trickle of information has flowed out since then. All the information is is that they are still on track to limit trades, perhaps in late March or sometime in April, and they say they will publish another federal register notice before they actually limit anything. Unfortunately. without more hard data, it will be hard to refute their statements with actual proof.

One thing that showed up is Greg Long's repeated un-understanding (is that a word?) of the volume of turnover. Long said there was 100% turnover, and that simply is not true. But he's comparing I fund interfund transfers ( only a half of one percent- to a one percent at a crack move one way or the other) with "porfolio turnover", which is a completely different beast.

Let me try to explain that.

Because our folks are in and out of the I fund, that last percent or so is being held as liquid capitol. IN fact, that was part of the reason Barclays last fall asked for, and got, permission to use ETF's instead of actual stock shares for some of the I fund holdings. It allows them to trade in and out, (or rather to buy or sell the ETFs) without actually having to hold the shares themselves, with the entailing three day hold period. That way Barclasy can caputre MOST of the gains or losses of the I fund shares, without actually haing to buy or sell the shares themselves. Instead, they trade the VALUE of the shares through an ETF. In such volatile market times, Barclays loses a bit of the luster because of demand flucuations. However, it works out better than the actual buying and selling of shares in more normal times.

In short- it works like this:

Only about 1% of the fund is being held out of shares to do this moving around. The other 99% remains fully invested in I fund stocks. Sop in reality there is only about a 1% "turnover" in stocks.

But Tracey Ray told him 25 billion dollars had been traded. And SHE thinks that means 25 BILLION has been bought and sold. IN reality, it was a half-billion bought and sold fifty times. Big difference, but you can't get Tracey Ray nor Greg to understand the difference.

Now, a fund like Vanguard actually DOES have turnover- and they calculate it much differently.

(more)
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How about a summary of where we are right now. I appologise for not being more active on the message board lately but life and work has a way of getting busy. What needs to happen right now? Do we need to send out more letters? Is there any looming meetings? I've lost track. Or, are we waiting on the Federal Register posting to comment there?

Also, I noticed the TSPshareholders donation thingy has been reset? James, did you get enough money for the trip to lobby? Thanks.
 
anidoc said:
"Meanwhile, officials touted the benefits of the plan's lifecycle funds, which shift investments from risky to more conservative blends as participants grow older. Officials noted that even in January, a volatile month for the markets, the L funds experienced significantly lower losses than the underlying funds. The returns on the L 2040, 2030 and 2020 funds also have surpassed all equity funds besides the international fund since their inception, officials added. "
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That part about surpassing everything EXCEPT THE INTERNATIONAL FUND (which is the one causing all of the hoopla) is interesting as well.
 
Court says 401(k) participants can sue

http://www.businessweek.com/ap/financialnews/D8UU56H80.htm

WASHINGTON - The Supreme Court ruled Wednesday that individual participants in the most common type of retirement plan can sue under a pension protection law to recover their losses.

The unanimous decision has implications for 50 million workers with $2.7 trillion invested in 401(k) retirement plans.

James LaRue of Southlake, Texas, said the value of his stock market holdings plunged $150,000 when administrators at his retirement plan failed to follow his instructions to switch to safer investments.

The issue in the LaRue case was whether the Employee Retirement Income Security Act permits an individual account holder to sue plan administrators for breaching their fiduciary duties.

The language of the law refers to recovering money for the "plan" rather than for an individual, raising the question of whether a participant can sue solely for himself.

Justice John Paul Stevens, in his opinion for the court, said that such lawsuits are allowed. "Fiduciary misconduct need not threaten the solvency of the entire plan to reduce benefits below the amount that participants would otherwise receive," Stevens said.

The decision overturned a ruling by the 4th U.S. Circuit Court of Appeals in Richmond, Va.

Unlike people enrolled in traditional pension plans, employees in 401(k) plans, which have exploded in number in the past two decades, choose from a menu of options on where to invest their money. That puts workers squarely in the middle of decision-making about their pensions and inevitably leads to the kind of disputes LaRue has with his plan's administrators.

"Defined contribution plans dominate the retirement plan scene today," unlike when ERISA was enacted in the mid-1970s, Stevens said.

Many traditional pension plans guaranteeing a fixed monthly benefit have either been frozen or terminated, and 401(k) plans are the main source of retirement income, said the Air Line Pilots Association, which represents 60,000 pilots at 41 air carriers.

The Bush administration argued in support of workers. The government said the appeals court ruling barring LaRue's lawsuit would leave 401(k) participants without a meaningful remedy from any federal, state or local court when plan administrators fail to live up to their duties.

Business groups supported LaRue's employer. They argued that ERISA is aimed at encouraging employers to set up pension plans, while guarding against administrative abuses involving the plan as a whole. The law doesn't permit individual lawsuits like LaRue's, the business groups said.

Congress enacted ERISA after some widely publicized failures by companies and labor unions to pay promised pensions. Workers in class-action lawsuits have long relied on the law, most recently in the scandal-ridden collapses of companies like Enron and its 401(k) plan for workers.

The term 401(k) refers to a section of the Internal Revenue Code.

Participants in 401(k) plans do not know how much money they will receive in retirement. Employees invest a certain amount each month and how much they get back depends on how well their chosen investments have performed.

The case is LaRue v. DeWolff, 06-856.
 
a 24% increase in annual budget ---- no wonder they want to squeese out IFT's --- to keep the bottom line the same. Stealing our rights to pay for their normal operating costs.
 
Check out this Government Executive column. "TSP tech upgrade progressing, officials say" http://www.govexec.com/story_page.cfm?articleid=39322&dcn=e_nextgov

Officials also said they plan to publish in early March interim regulations that would restrict to two the number of TSP transfers participants can conduct each month. The regulations will be available for public comment for 30 days, officials said.

"If there's a better idea out there, we'll modify our approach," said Gregory Long, executive director of the Thrift Savings Plan. "Assuming there is not a significant change, we'll be making this active in April or May."
 
poolman said:
Hello qibovin, Yes. You can see this in the tracker thanks to Ocean. :)
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Thanks. I was trying to look on there, but got tired of clicking on each individual to check their trading history.

I'm thinking of "DCAing" out little, but I'd like to not fear getting back in.:rolleyes:
 
I would really like to send my $500.00 to somebody to start the class-action law suit. If I wasn't overseas, I would run hire the lawyer and then we could all send the money to the law firm. We did this when a group of employees banded together to fight the Army on the "five-year rule." We lost, but the system worked. (Note: Army rarely enforces 5 year rule now due to dollar being bad. etc.)

Any ideas on how to get started? I would be willingly to make daily trades so I can get BANNED so I can show some damage.
 
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anidoc said:
FRTIB needs to read this if they think the proposed limits doesn't impact the military. First of all, our military wants to maximize their returns like everyone else does. Secondly, snail mail takes forever from overseas so they are at even more of a disadvantage than the rest of us. Thirdly, DCA over time is the strategy most recommended by financial advisors. I guess FRTIB came up with the 2 transfers per month because of 2 pay periods per month? I suppose you can DCA the weeks between pay periods to maintain your desired balance.
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Actually, even the twice monthly DCA thing doesn't work as far as I am aware, because I'm on the bimonthly pay system and my TSP contribution only gets deposited once. In fact, the Army actually figures out ahead of time (based on my TSP percent withholding) how much will be going into the TSP, subtracts it from my pay due, cuts that in half to give me half my pay due at mid-month, then waits until the end of the month (which actually winds up being sometime during the first 1-3 days of the next month after processing time) to deposit my TSP contribution. Basically, like Uncle Sam loves to do with income tax withholding, the are taking a 0% interest, 15-day loan on my money every month. Furthermore, they inevitable wait until just after a nice 1-2% rise and/or just before a nice day (like yesterday!) to deposit it. I don't have the time or patience to crunch those numbers, but I sure don't feel like DCAing is working for me like that.:rolleyes:
 
xactly! Seems if you did not IFT 3 or more times in Oct, Nov and Dec 2007, then you did not qualify as a "frequent trader" (their words). What I am wondering is, will I get a letter later on? I IFT'd 8 times in Jan 08. What if I do 4 in Feb? I did not get a letter, so will 4 trigger a flag from them? We shall see! ;)

MaStA said:
From reading the first letter it seems only people who did interfund transfers often received the letter.
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