What YOU can do to fight back - IFT limit

[James48843]

New TSPSHAREHOLDER.ORG newsletter tonight.

Posted now on-line for anyone who is not a subscriber- here is the link:

http://tspshareholder.org/newsletters/Vol2_No7.html

Please FAX your comments in NOW.

Thank you.

 

[James48843]

I have no other information at this time.

 

[hessian]

Hi James,
Finally some fair news!
Any word on whether any Retirement Orgs/Unions were at this meeting, or as yet even aware what the TSP/Board pushing? These groups lobby/power is awesome>2nd to none!
VR

 

[James48843]

Note:

My sources say that Monday of this week, a meeting was held between a number of Unions and Federal Organizations. I do NOT have a complete list of who attended, but it included many major Unions and Organizations, including a number of Postal unions as well.

Jim Sauber presented the TSP's case to these groups, and gave them the party line why it was necessary to invoke limits, including the song and dance that TSP was "never intended to allow people to move money around like this", and that "costs were higher than they would be otherwise".

My sources tell me NTEU spoke out against the limits, and the Federal Manager's Association also spoke out against the limits. However, most of the Union's present said they were not even aware of it, and that none of their members had called their Washington D.C. HQ's to complain, so it must not be a big deal.

That's all the info I have at the moment, still trying to get more data.

NTEU and Federal Managers Association on record in this meeting opposing limits. All other unions and associations present either in favor of, or think it's no big deal.

Oh, one more thing-

It was stated at this meeting that as of Monday this week, not a single Congressional person had made any contact whatsoever with anyone over at TSP.

Not one.

TSP is very concerned that some congressman or senator would inquire.

But so far, not a single one has done so much as send a letter or have a staffer come over and ask any questions.

Not a single one.

 

[James48843]

I initially thought this was a great idea. And then I started thinking ...

If you change the calculation time of the FV to 7am the next morning, when would you update member balances? Ideally, you want to do this around midnight, so you'd have to have the FV in hand by then.

You mean in the real TSP accounts?

You could move the update balance on the accounts to between between 7 a.m. and 8 a.m. each day. You'd know your balance shortly after 8 a.m.

It now takes less than 30 minutes to actually perform the 3.8 million
acocunt updates. TSP doesn't do it now at 7 pm., they don't run the update until about midnight to 1 a.m., and then they don't release the server for public use until around 2 a.m., many days it's not until later. Sometimes they forget to bump it back on line until the morning shift comes in around 7 a.m. There are multiple servers, that tie to one another. There is a command prompt that must be done manually to tell all of them to sync and come back up on-line in the morning.

When accounts were valued once per month, it took about a full day to do. (late 80's, early 90's.)

Back when they first did daily valuation, it took a little over four hours to run the computers and make all the calculations.


Now it takes less than 30 minutes to run 3.8 million accounts, do a verification program, and then release the info into "production" mode.

When they do the next computer upgrade in 2009 or 2010, I expect we'll be down to minutes.


With the technology they have right now, if they do the I fund value calculation at 7.a.m. the next morning, you'll be able to see your account balance by 8 or 8:30 at the latest, there will be no longer a need for "Fair Value" calculations, and the cists associated with I fund transactions would be reduced by around 70%.


I don't mind not seeing what my account balance is, if I have hours before the noon cutoff to determine whether or not to place an order. Besides, personally, I usually know at least a couple of days beforehand when we are approaching a point that I would want to make a shift. I always would still have enough time to either get to a computer, or, in worst case, call in on the thriftline and make a move before the noon cutoff. Even with a 7 a.m. valuation, you still would get at least four hours to look at your position, and decide if you need to move.

 

[DrFaustus]

1. Change I fund's calcualtion time to 7a.m. the next morning, thereby reducing approximately 70% of the IFT costs associated with I.

I initially thought this was a great idea. And then I started thinking ...

If you change the calculation time of the FV to 7am the next morning, when would you update member balances? Ideally, you want to do this around midnight, so you'd have to have the FV in hand by then.

 

[James48843]

Another thought. It's been noted that "settlement of funds" is part of the problem for Barclay - it takes 3 days. That being the case, limiting transfers isn't going to help, because we could still make 3 (or more) back-to-back transfers over a 3-4 day period, for example:
Monday=I fund>C/S fund; Tuesday=C/S>F fund; Wednesday F fund>G fund. Also could do it this way: I fund>C/S fund>50%C/50%G>25%C>G. Just 2 examples.

That's part of the issue. You won't get away from the three day settlement issue no matter what you do- that is simply Barclays following generally accepted SEC rules for settlement- that those whom barclays trades with have to deal with the three day rule because they are bound by it.

that is why Barclays had to ask for an overall increase in the Float, as reported in the previous minutes (i think it was december's minutes, but I could be wrong, when Barclays asked to increase the float from 750 million to 950 million, or something along those lines).

Reducing the amount of float is what the TSP Board wants to do, because sitting in "float" status does nothing but earn T bill rate interest, rather than use the power of the markets.

That gets us back to the first choices again.

1. Change I fund's calcualtion time to 7a.m. the next morning, thereby reducing approximately 70% of the IFT costs associated with I.

 

[James48843]

Thank you Scout for that update.

I met with Cathy Ball, at the Legislative person at NTEU, in my trip three weeks ago to to Washington.

She gets it. And it appears she successfully gave this message to Colleen, who has filed this with the comments.

Let's hope all other Unions out there begin to "get it".

Folks- I said it before, and I'll say it again.

Drop whatever you are doing today, and do TWO THINGS.

1. If you are represented by a Union, ANY UNION, call their Washington D.C. office today, and ask to speak with whoever is their legislative person. Demand that the Union fight against TSP interfund transfer limits. Tell them it's not necessary, and you feel this will harm employees. Lay out the case for them that it's just not right, and THEY need to do everything they can to stop it.

2. Write a note, a letter, a few words. Whatever you can, and FAX it today to the Thrift Board. The fax phone number is at the bottom of this message. There are sample draft letters in this thread if you need help writing what to say. Print out a darn TSPSHAREHOLDER.ORG newsletter, and fax that to them too. Tell them that you are a shareholder, you are opposed, and you want them to withdraw their proposal.

And then, do it again tomorrow.

And then, do it again the day after that.

We only have until April 9th to stop this train- and ...


YES....WE.......CAN....!

IF YOU HELP!

 

[Scout333]

I have been pursuing the Union angle with several emails, etc as I assume others have been. Our Union has a representative on the ETAC Board. We received the following letter from Coleen Kelley our NTEU President.

March 24, 2008


M E M O R A N D U M


TO: Chapter Presidents and Legislative Coordinators

RE: NTEU Comments on Thrift Board Regulations

SUMMARY: NTEU has submitted comments to the Federal Retirement Thrift Investment Board regarding its March 10 submission to the Federal Register proposing to amend the interfund transfer regulations to limit the number of interfund transfer requests to two per month.


On March 19, 2008, I sent the attached letter to the General Counsel at the Federal Retirement Thrift Investment Board, asking that the proposed regulations not be enacted. As I noted in my letter, the problems caused by those participants who were engaged in daily trading appears to have been greatly reduced by the actions of the Board so far. Numbers provided by the Board to the Employee Thrift Advisory Council members (ETAC), of which NTEU is a member, show that daily trades have been significantly reduced – the largest number in January was 40,000. The largest number in February was a little over 11,000.

I urged the Board to leave unrestricted the number of trades available per month, but to keep an eye on frequent trading so we can control it and put restrictions in when, and if, they become necessary. I suggested that, if restrictions do become necessary, a revised policy of two free trades per month coupled with a fee imposed on subsequent trades would be a more equitable solution. In addition, at any time participants could transfer to the G Fund at no charge.

If you have any questions on this subject, please call Cathy Ball in the Legislation Department at 202-572-5500, ext.8067.




Colleen M. Kelley
National President

Attachment


NTEU The National Treasury Employees Union
March 19,2008
Mr. Thomas K. Emswiler
General Counsel
Federal Retirement Thrift Investment Board
1250 H Street, N. W.
Washington, D.C. 20005
Dear Mr. Emswiler:
Please accept the following comments fiom the National Treasury Employees Union (NTEU) in
regard to the regulations published on March 10,2008, proposing to amend the interfund transfer
regulations to limit the number of interfund transfer requests to two per month.
NTEU continues to believe that while maintaining low costs for participants is critical, going from
the present unrestricted number of transfers to a restricted number of transfers is unnecessary at this time.
The Board itself states that the change will affect "a very small number of TSP participants" (see proposed
TSP solution in the regulations). Less Draconian methods adopted by the Board - letters to participants
and publicity about the costs of 3,000 participants trading frequently - has resulted in what appears to be
an almost 72 percent reduction in the amount of daily trades (letter to the Employee Thrift Advisory
Council, March 7,2008.) Those 547 participants who persist in "daily trading" and have chosen to ignore
the consequences of their actions are being dealt with already in a letter to be sent at the end of March.
I propose that we make no changes at this time. As was stated in the regulations, "the hallmark of
the TSP is simplicity." I agree. We should keep it simple. It seems to us that the problem has been greatly
reduced and may be completely resolved in the near future. If for some reason, the Board feels it is
necessary to act now to change the system, then NTEU proposes a revision to the Board's plan: allow two
transfers per month and after two transfers (if other than to the G Fund), attach a fee for servicing the
transfer. While it may be "impossib1e to correctly assign the exact costs," we can follow the leads of other
such funds in arriving at a figure. In addition, we would need to make
clear that at any time participants could transfer to the G Fund at no charge. We agree that the safe harbor
of the G Fund must always be available.
In conclusion, it appears that the Board has done its usual excellent work in addressing what could
have been a serious problem. Certainly it is prudent to watch this area, and if we find that frequent trading
harms the Fund in the future, we can talk about putting some restrictions in place. I do not think this action
is called for at the present time. ci ,&
Colleen M. Kelley
National President
cc: ETAC Members
1750 H Street, N.W. Washington, D.C. 20006 (202) 572-5500

While this response isn't perfect (i.e. with regard to the 547 being penalized unfairly) it appears to be a step in the right direction!

 

[hessian]

Hessian, just as with the AMS lawsuit, costs to fight a lawsuit against FRTIB will be paid by OUR TSP fund. FRTIB Board members are not, by law, personally liable for costs and we can't get any money out of them. WE will be paying THEIR lawyers to fight OURSELVES.

Filing for a temporary injunction to tie things up might work, and this has been said before. You will have to show how the proposed rule will injure you, or "the class." Why don't you take that on? Just a suggestion. I'm sure you will get plenty of support from other MB members.

IMO, forget about suing for "damages". Just file for treatment different from other TSP members! - after all nothing the "3000" did was contrary to any law! Anybody can file a lawsuit - don't need a lawyer - don't even need to fight the case - just filing it, stops the implementation/finalization - by burden of proof being then on them the explain their reasons to the judge - we just sit back and watch!!

IMO, I think to have affirmative grounds to sue, whomever, will actually have to have been blocked/electronically.
-Without this the court/judge could say refusal to IFT has been voluntary/merely complied via their request.

Currently, I don't have standing to file a lawsuit.
- so far I've held to their "requested" 3/mo limit (hurts bigtime).
My point is, as yet I haven't gotten the certified letter/electronic block.

 

[Boxkicker]

Class action suit? 4 million members? Can't get everyone, of course...

 

[nnuut]

Why won't someone just file a lawsuit? Just file it? Simple, cheap. Just do it to tie up the final decision in the courts?
What is the difficulty??

Winning isn't as important as getting "certified letters" started - back at them!!! - it will get the fear of God back into their cold-blooded souls.
- they'll also start realizing their costs in making a defense!!

Simply hiring a lawyer to make the legal filing doesn't cost that much! - just someone make 1 / file yours!
Ask your lawyer what else might be tried/filed!

IMO, "comments" will do NOTHING!!

If it is that easy, why don't you file one?

 

[Guest2]

NEVER MIND, FAXING TSP-50's ARE PROBABLY
NOT GOING TO BE ALLOW. ANYONE WITH A
DIFFERENT VIEW, PLEASE "PM",,,,,THANKS

 

[hessian]

Why won't someone just file a lawsuit? Just file it? Simple, cheap. Just do it to tie up the final decision in the courts?
What is the difficulty??

Winning isn't as important as getting "certified letters" started - back at them!!! - it will get the fear of God back into their cold-blooded souls.
- they'll also start realizing their costs in making a defense!!

Simply hiring a lawyer to make the legal filing doesn't cost that much! - just someone make 1 / file yours!
Ask your lawyer what else might be tried/filed!

IMO, "comments" will do NOTHING!!

 

[RAE]

Re: we already have unlimited ITF's, why accept less?

I need to go home - but I am going to second Braveheart's motion to remain solid on the purpose:

unlimited ITF's

no costs/trade

The TSP sold a bill of goods then changed the rules. I put in my maximum catchup contribution last year and this in expectation of being able to manage my money. This money has to perform and I need the ability to make unlimited ITF's (or not, as I so choose), to make it perform.

The facts are on our side. There is no need to negotiate truth with the TSP anymore than a bar of soap; neither will listen.

I agree with amoeba and braveheart. Proposing a fee per IFT (such as $10) basically negates our argument that there is no need to restrict IFTs or charge fees of any kind, because overall TSP costs have gone DOWN in recent years, not up. Why would I agree to pay $10/IFT when it is now only costing each TSP participant less than 4 bucks/year for unlimited IFTs? (and probably less than that next year, as costs continue to trend downward). Nope, I say we stick to our guns (and the truth), and not make any concessions here, when none are needed. They have not proven their case that there is any problem here that needs addressing through changes in the IFT rules.

 

[amoeba]

I got a new one. If TSP thinks they should be compared to a mutual fund company - well, maybe they should give us the option of taking all of our money and putting it with whatever mutual fund company I choose instead of them. So I contacted Fidelity, which has what is it - 1,400 NTF's (no transaction-fee funds) - to see what their limits are (none stated on the web prospectus). I told them I'm a Federal employee, one of 4 million with assets of 230 billion in TSP, and ummmm, yahhh, I'm personally not real happy with the new presto/chango TSP restrictions, and looking for somewhere else to put my money.

I included TSP's crap they put out comparing themselves to mutual fund restrictions - I copied it and sent it to them, asked them to verify what restrictions they have on their NTF's (if any), and maybe we can do business. I will let you know if I hear anything.

Who needs the TSP?:toung:

 

[BlueMax]

Re: we already have unlimited ITF's, why accept less?

I need to go home - but I am going to second Braveheart's motion to remain solid on the purpose:

unlimited ITF's

no costs/trade

The TSP sold a bill of goods then changed the rules. I put in my maximum catchup contribution last year and this in expectation of being able to manage my money. This money has to perform and I need the ability to make unlimited ITF's (or not, as I so choose), to make it perform.

The facts are on our side. There is no need to negotiate truth with the TSP anymore than a bar of soap; neither will listen.

Is that bar of soap as in Steven Barr?

 

[amoeba]

we already have unlimited ITF's, why accept less?

I need to go home - but I am going to second Braveheart's motion to remain solid on the purpose:

unlimited ITF's

no costs/trade

The TSP sold a bill of goods then changed the rules. I put in my maximum catchup contribution last year and this in expectation of being able to manage my money. This money has to perform and I need the ability to make unlimited ITF's (or not, as I so choose), to make it perform.

The facts are on our side. There is no need to negotiate truth with the TSP anymore than a bar of soap; neither will listen.

 

[Braveheart]

However, we need to be realistic, that if we also offer, as an alternative, a flat $10 fee per IFT, that that proposal cannot be overlooked. A flat $10 fee would generate $28 MILLION dollars- far more than the costs involved. Those who never trade would pay nothing. Those who IFT a lot would pay more than those who IFT nothing.

Great Post James!!!

$10.00 per IFT??? I agree with you, except I would gladly pay $100.00 per IFT as long as I could have unlimited IFT’s. You mentioned your account went up 12K yesterday, mine went up 16K. YTD, I also reduced my IFT’s and it’s really going to be tough and it will cost my retirement fund in a negative way.

I read an interesting article by Scott Burns on the TSP. The article was written about a year ago and he stated it’s a model 401K plan. The TSP board is taking us back to what we had in the 1980’s, basically one IFT per month!!! Anyway, I really enjoyed reading your post and agree with you 100%.

No No No that is nuts no one in their right mind suggest we pay per IFT. I stated last month that the TSP was going to look for that but I didn't make a trade for 17 years then I want all that money back for not making an IFT see how that works both ways. It was a given right and they the TSP need money PLEASE they lost 100 Million of our money on waste.

They want to save money then start with the removal of the TSP Board. How about the members have a say in who we want on the Board ? What makes anyone of them qualified except they knew someone and was appointed to that position. I want to know why the L Funds are in place when they can't be used since they are not set up or managed properly.

You never concede or give up a right that we earned so we must be UNITED the FETSP wants a DIVIDED group and then their real agenda is missed and you will lose more rights. We are only as strong as our weakest link and if Mr. Long had his way he would say no IFT's and you have an option to pay for them... Sorry but this is a Thrift Retirement Savings Plan not a Retirement Donation Plan.

 

[Aviator_Guy]

However, we need to be realistic, that if we also offer, as an alternative, a flat $10 fee per IFT, that that proposal cannot be overlooked. A flat $10 fee would generate $28 MILLION dollars- far more than the costs involved. Those who never trade would pay nothing. Those who IFT a lot would pay more than those who IFT nothing.

Great Post James!!!

$10.00 per IFT??? I agree with you, except I would gladly pay $100.00 per IFT as long as I could have unlimited IFT’s. You mentioned your account went up 12K yesterday, mine went up 16K. YTD, I also reduced my IFT’s and it’s really going to be tough and it will cost my retirement fund in a negative way.

I read an interesting article by Scott Burns on the TSP. The article was written about a year ago and he stated it’s a model 401K plan. The TSP board is taking us back to what we had in the 1980’s, basically one IFT per month!!! Anyway, I really enjoyed reading your post and agree with you 100%.