Rod
Well-known member
Same here...
Perhaps we're not leaving them enough $$$ in (G) to borrow from.
It boils down to their "greed" which has been disguised by their "concern" for the shareholder.
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What YOU can do to fight back - IFT limit
- Thread starter James48843
- Start date
Same here...
Perhaps we're not leaving them enough $$$ in (G) to borrow from.
It boils down to their "greed" which has been disguised by their "concern" for the shareholder.
FundSurfer
Well-known member
I'm changing my tactics somewhat and suggest others do the same.
If you have viewed the Frequent Trading memo that Tracey Ray sent to the FRTIB Director, you will know that they have already addressed many of our arguements against making changes. Tracey Ray has done a very good job of laying out the problem. She will certainly beable to convince those who do not understand what is going on very well that she has documented a problem.
I have decided to concentrate on convincing ETAC members that yes something needs to be done but that trading limits is not the answer. The problem is with the "Market Impact" aspect of the I-fund. This impact caused by OSM being closed when closing prices for the day are set. (We all understand this to be the FV problem.) I am embracing James' suggestion to move the time that closing prices are determined from end of day 5 pm to 8 am the next morning. In this manner we will be able to address the major cost associated with trading cost but still allow members flexibility to trade more than twice a month.
Those of you who are making the L-fund arguement have already had that concern addressed in the memo. You can argue that cost have not gone up, they will be very convincing to the contrary. The best solution is to give an alternative that will achieve reduced cost and preserve trading flexibility.
We can't stick our head in the sand and convince them there is really not problem. We'll loose since we will not be able to counter their arguements in person. I think that we actually were getting too good at timing the FV. Several people were getting very good at making good FV decisions. Over time the FV should even out but that is a very hard concept to get across in a 5 minute phone conversation or couple paragraph letter.
My letter is as follows:
Dear *****,
Recently the Federal Retirement Thrift Investment Board (FRTIB) voted to limit TSP interfund transfers to 2 trades per month. I am not at all happy with the new policy that the FRTIB is proposing to implement. The reason given by the board is to reduce cost of frequent traders who drive up cost of trading associated with the I-fund. This cost of trading is not actually the cost of buying and selling stock, but rather cost associated with international markets being closed when daily fund prices are set and fund managers having to guess at the opening prices of international stocks for the following day. If the guess is off, any +/- amount has to be made up as trading cost or market impact. Recent market volatility has made this occur on a regular basis over the last several months and several bad guesses in a row and we have a large trading cost bill. Over time this +/- should even out. The limit on number of trades is totally unacceptable because the real reason for increased cost is the managers of the funds inability to guess the Fair Valuation of the I-fund correctly. That is what is really driving the cost up. A better solution would be to post the fund closing prices the next morning after overseas markets have opened. This would eliminate the major cost identified by FRTIB and yet preserve trading flexibility for members.The board thinks that the cost is associated with “3000” frequent traders. In February, many more than 3000 people jammed the TSP phone lines moving their money as a reaction to a market drop. That day there was a big FV that turned out to be a bad guess. 3000 people don’t jam phone banks set up for tens of thousands of people. Market volatility will be when even the infrequent trader (right or wrong) will request an interfund transfer. Limiting trades to 2 trades per month will NOT solve this problem.I hope that as a member of the Employee Thrift Advisory Board you will protect the freedom to have "no limit on the number of contribution allocation or interfund transfer requests that may be made by a participant" as per Title 5 Chapter VI Part 1601 Subpart D Sec. 1601.32.b.Title 5 Chapter VI Part 1601 Sec 1601.22 states that I "may make an interfund transfer using the TSP Web site or the ThriftLine". Punishing a individual for making more than two transfers by making them only use the mail would seem to be against the CFR.
There should be another solution to the frequent trader problem other than limiting the number of monthly trades that everyone can make.
Thank you for your time.
Sincerely,
*******
If you have viewed the Frequent Trading memo that Tracey Ray sent to the FRTIB Director, you will know that they have already addressed many of our arguements against making changes. Tracey Ray has done a very good job of laying out the problem. She will certainly beable to convince those who do not understand what is going on very well that she has documented a problem.
I have decided to concentrate on convincing ETAC members that yes something needs to be done but that trading limits is not the answer. The problem is with the "Market Impact" aspect of the I-fund. This impact caused by OSM being closed when closing prices for the day are set. (We all understand this to be the FV problem.) I am embracing James' suggestion to move the time that closing prices are determined from end of day 5 pm to 8 am the next morning. In this manner we will be able to address the major cost associated with trading cost but still allow members flexibility to trade more than twice a month.
Those of you who are making the L-fund arguement have already had that concern addressed in the memo. You can argue that cost have not gone up, they will be very convincing to the contrary. The best solution is to give an alternative that will achieve reduced cost and preserve trading flexibility.
We can't stick our head in the sand and convince them there is really not problem. We'll loose since we will not be able to counter their arguements in person. I think that we actually were getting too good at timing the FV. Several people were getting very good at making good FV decisions. Over time the FV should even out but that is a very hard concept to get across in a 5 minute phone conversation or couple paragraph letter.
My letter is as follows:
Dear *****,
Recently the Federal Retirement Thrift Investment Board (FRTIB) voted to limit TSP interfund transfers to 2 trades per month. I am not at all happy with the new policy that the FRTIB is proposing to implement. The reason given by the board is to reduce cost of frequent traders who drive up cost of trading associated with the I-fund. This cost of trading is not actually the cost of buying and selling stock, but rather cost associated with international markets being closed when daily fund prices are set and fund managers having to guess at the opening prices of international stocks for the following day. If the guess is off, any +/- amount has to be made up as trading cost or market impact. Recent market volatility has made this occur on a regular basis over the last several months and several bad guesses in a row and we have a large trading cost bill. Over time this +/- should even out. The limit on number of trades is totally unacceptable because the real reason for increased cost is the managers of the funds inability to guess the Fair Valuation of the I-fund correctly. That is what is really driving the cost up. A better solution would be to post the fund closing prices the next morning after overseas markets have opened. This would eliminate the major cost identified by FRTIB and yet preserve trading flexibility for members.The board thinks that the cost is associated with “3000” frequent traders. In February, many more than 3000 people jammed the TSP phone lines moving their money as a reaction to a market drop. That day there was a big FV that turned out to be a bad guess. 3000 people don’t jam phone banks set up for tens of thousands of people. Market volatility will be when even the infrequent trader (right or wrong) will request an interfund transfer. Limiting trades to 2 trades per month will NOT solve this problem.I hope that as a member of the Employee Thrift Advisory Board you will protect the freedom to have "no limit on the number of contribution allocation or interfund transfer requests that may be made by a participant" as per Title 5 Chapter VI Part 1601 Subpart D Sec. 1601.32.b.Title 5 Chapter VI Part 1601 Sec 1601.22 states that I "may make an interfund transfer using the TSP Web site or the ThriftLine". Punishing a individual for making more than two transfers by making them only use the mail would seem to be against the CFR.
There should be another solution to the frequent trader problem other than limiting the number of monthly trades that everyone can make.
Thank you for your time.
Sincerely,
*******
jeburnside
New member
I met with Congressman Cliff Stearns (R, Florida)representative yesterday and discussed the current situation regarding TSP. She is a TSP contributor also and was unaware of the most recent events. She expressed that she plans to discuss it with Congressman Stearns and right the wrong that is being planned.
Jimmy
Jimmy
Show-me
Well-known member
Go to www.tspshareholder.com and sign up for the email list. Thank you for all that contributed and a very special thanks to James for all the hard work and time spent of making our voices heard.
One contact a day we all contact.
Todays email:
Our first ETAC member we'd like you to contact is:
Federally Employed Women
Sharon Roydes, Treasurer
1666 K Street, N.W. Suite 440
Washington, DC 20006
Phone: (202) 898-0994
Give her a call, and tell her you are opposed to limits on TSP trades. Tell her what a two trade limit would mean to you. Keep it short, but to the point. Then ASK her to vote no on the two-trade limit.
Please pick up the phone and make the call.
Each day, we will be featuring a different ETAC member. Our goal is to ensure they ALL hear our message- Just say no to TSP Trading limits.
One contact a day we all contact.
Todays email:
Our first ETAC member we'd like you to contact is:
Federally Employed Women
Sharon Roydes, Treasurer
1666 K Street, N.W. Suite 440
Washington, DC 20006
Phone: (202) 898-0994
Give her a call, and tell her you are opposed to limits on TSP trades. Tell her what a two trade limit would mean to you. Keep it short, but to the point. Then ASK her to vote no on the two-trade limit.
Please pick up the phone and make the call.
Each day, we will be featuring a different ETAC member. Our goal is to ensure they ALL hear our message- Just say no to TSP Trading limits.
weatherweenie
Well-known member
I don't know if they'll do anything, but I emailed the National Weather Service Employee Organization(NWSEO), NWS union, in an effort to get them on board with this fight.
Show-me
Well-known member
Look at me signature and click on the link in it. It will take you to the list.
E
ekatteng
Guest
IF the TSP board implements the the rule of just once a month round trip (two inter-fund transfers per month), I may borrow $50,000 to the TSP and open an account at Charles Schwab or Fidelity or Ameri-Trade to be able to perform as many IFT's as need it to maximize opportunities from the EFA (iShares) moves.
If everyone does the same, you may imaging the lesson for the TSP Board.
We will be withdrawing almost 200 billions... I doubt they could effort it.
If everyone does the same, you may imaging the lesson for the TSP Board.
We will be withdrawing almost 200 billions... I doubt they could effort it.
kaitlinsnana
Member
Where are the member addresses. Looks like you've unearthed a possible advocate. Good man.
Are the individual names and addresses listed on this site?
Gail
IMHO, comparing L funds to active trading is not really the same animal. The L fund expenses are institionalized, automated, and anticipated by Barclay’s ( I believe they are the fund managers). Likewise, I do not believe the funds are re-allocated on a daily basis, as is the potential for an IFT.
At the end of the day Barclays is a for profit firm. The Board has worked hard to both reduce fees and improve our platform over the years. Surely, The Board fears active trading is a threat to those fees. Having negotiated such low fees, I am sure the board does not want Barclays, et al to walk or renegotiate higher fees at the conclusion of the contract period. I personally believe The Board is attempting to act in our best interests. Likewise, they are the decision makers. This is not a democracy. And even if it was, the vast majority of TSP investors would choose low fees over active trading. We can fault them for being naive. However, as I am reminded each election, naive votes count as much as informed votes.
Barclays is not an Ameritrade. I am not sure an intuitional investment firm even has the automated platform to charge for trades, etc. Intuitional firms make their money from management fees, while Ameritrade’s bread and butter is trading fees. Two entirely separate business models. To develop such a platform, it would need to be paid exclusively by the small percentage of active traders. These costs would be in the $100’s per each trade, not $10. We must be flexible, and realize we must shoulder our own costs. Therefore, I propose another alternative for us to consider. Instead of charging for individual trades, TSP enrollees who wish to have the ability to make multiple trades must prepay a set fee each month or quarter. Realistically, this fee could be well over $100 a month. However, it overcomes the platform issue I have read is a concern. And the fees could come directly out of our pay checks, which also removes the hurdle of trying to automate the withdraw of funds from our 401k accounts to cover trade fees.
At the end of the day Barclays is a for profit firm. The Board has worked hard to both reduce fees and improve our platform over the years. Surely, The Board fears active trading is a threat to those fees. Having negotiated such low fees, I am sure the board does not want Barclays, et al to walk or renegotiate higher fees at the conclusion of the contract period. I personally believe The Board is attempting to act in our best interests. Likewise, they are the decision makers. This is not a democracy. And even if it was, the vast majority of TSP investors would choose low fees over active trading. We can fault them for being naive. However, as I am reminded each election, naive votes count as much as informed votes.
Barclays is not an Ameritrade. I am not sure an intuitional investment firm even has the automated platform to charge for trades, etc. Intuitional firms make their money from management fees, while Ameritrade’s bread and butter is trading fees. Two entirely separate business models. To develop such a platform, it would need to be paid exclusively by the small percentage of active traders. These costs would be in the $100’s per each trade, not $10. We must be flexible, and realize we must shoulder our own costs. Therefore, I propose another alternative for us to consider. Instead of charging for individual trades, TSP enrollees who wish to have the ability to make multiple trades must prepay a set fee each month or quarter. Realistically, this fee could be well over $100 a month. However, it overcomes the platform issue I have read is a concern. And the fees could come directly out of our pay checks, which also removes the hurdle of trying to automate the withdraw of funds from our 401k accounts to cover trade fees.
cptkirk333
New member
I asked this several times - not in this forum - but still have not received a reply. Hard data is what I want. What is the cost of transactions, broken down, prior to the L funds and then after the L funds. If I'm not mistaken 2006 was when the L funds came into existence. The comments of the funds transactions being low in 2006 would probably be for a prior to 2006 time. So now all of a sudden a jump in cost for transactions - presuming say the time period of 1/2 of 2006 and 2007? Where is the data to pinpoint the cause in the jump? I want data TSP and of course none forth coming.
Show-me
Well-known member
Remember to tell all your coworkers about it too and tell them about www.tspshareholder.org. Spread the word!
Thank you!!!
Thank you!!!
Show-me
Well-known member
www.tspshareholder.org
Quote form tsp.gov Q&A:
"After receiving input from the employee unions, organizations, and others, we plan to place limits on interfund transfers early in 2008. The process of establishing limits will include normal public rule-making under the Administrative Procedures Act. Proposed regulations will be published in the Federal Register and comments will be welcome."
Comments anyone? I have a list of people that may not want to hear them, but will have to listen to them.
I propose the December 17 we do a mass call, fax, and email to all Employee Thrift Advisory Council(ETAC) members. Light'em up two days before the meeting so that it is fresh in their minds that we want the FRTIB to not limit us to two interfund transfers and talk about alternatives.
Quote form tsp.gov Q&A:
"After receiving input from the employee unions, organizations, and others, we plan to place limits on interfund transfers early in 2008. The process of establishing limits will include normal public rule-making under the Administrative Procedures Act. Proposed regulations will be published in the Federal Register and comments will be welcome."
Comments anyone? I have a list of people that may not want to hear them, but will have to listen to them.
I propose the December 17 we do a mass call, fax, and email to all Employee Thrift Advisory Council(ETAC) members. Light'em up two days before the meeting so that it is fresh in their minds that we want the FRTIB to not limit us to two interfund transfers and talk about alternatives.
Frixxxx
Moderator
I'm back...thanks for the contact lists and information Show-me. I agree 100%. I have twenty years left to build my account and move from the meek to the independently wealthy. If I wait for someone to do it for me, I may be at thirty years.
Show-me
Well-known member
FedSmith posted another proFRTIB article to which I wrote:
That is because 99% or 3,762,000 of participants are not managing their account actively. That leave only 1% or 38,000 that do. Not even close to the 3000 mentioned by the FRTIB or 0.079%.
The same 99% or 3,762,000 of participant do not know who the Employee Thrift Advisory Council is, what they do, or how to contact them. Do you? Wait, that number is probably closer to 99.9999%.
A extremely large number of the same 99% or 3,762,000 probably do not even look at their accounts and rebalance yearly as recommended by any financial adviser.
If those 99% or 3,762,000 want to sit on their butts doing nothing, let them, but do not hinder my ability to make investment choices.
That is because 99% or 3,762,000 of participants are not managing their account actively. That leave only 1% or 38,000 that do. Not even close to the 3000 mentioned by the FRTIB or 0.079%.
The same 99% or 3,762,000 of participant do not know who the Employee Thrift Advisory Council is, what they do, or how to contact them. Do you? Wait, that number is probably closer to 99.9999%.
A extremely large number of the same 99% or 3,762,000 probably do not even look at their accounts and rebalance yearly as recommended by any financial adviser.
If those 99% or 3,762,000 want to sit on their butts doing nothing, let them, but do not hinder my ability to make investment choices.
I got an e-mail reply back today from one of the ETAC members that I had written to (first reply I've received). It is from Mr. Dale Goff, of NAPUS. I expressed my displeasure with the recent proposal to restrict IFT's and asked him to oppose it at the upcoming meeting between ETAC and FRTIB. His reply was brief, but encouraging:
I agree and at our meeting on the 19th I will bring forward your concerns and the many others that have emailed me.
Dale Goff
