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What YOU can do to fight back - IFT limit
- Thread starter James48843
- Start date
Great letter James! Keep hammering away. They keep telling us it will be fine. Two transfers are more than enough and they're doing us a favor by allowing such a generous number of transfers. The problem with two transfers is that the market is so volatile and unpredictable (as the TSP Board has pointed out in their arguments). One of the better methods of dealing with the volatility is to move your money in phases instead of all at once. May take as many as five or six IFTs to enter or exit the market using a more conservative approach. They are in effect forcing us to take more risk instead of less. Thanks again for your efforts! Its just wrong!!!
James48843
Well-known member
TSP's Executive Director Greg Long talks to a reporter from Federal News Radio in this interview:
MP3 version:
http://federalnewsradio.com/emedia/104488.mp3
Microsoft Player version:
http://federalnewsradio.com/emedia/104461.wma
Greg tells Federal Radio News what is included in the TSP's Administrative costs. She asks a little about expenses, and Greg explains about adminstrative costs being seperate from interfund transfer costs.
(At least they are starting to ask questions about fees and costs).
MP3 version:
http://federalnewsradio.com/emedia/104488.mp3
Microsoft Player version:
http://federalnewsradio.com/emedia/104461.wma
Greg tells Federal Radio News what is included in the TSP's Administrative costs. She asks a little about expenses, and Greg explains about adminstrative costs being seperate from interfund transfer costs.
(At least they are starting to ask questions about fees and costs).
12%ayear
Well-known member
sorry if this was posted already.. http://www.planadviser.com/education/article.php/1655
JonesH2O
New member
Just read the following on http://finance.groups.yahoo.com/group/TSP_Strategy/message/7806. Looks like TSPKey has given up and is going along with the other sheep . . .
TSPKey's Plan for the New Restrictions on Allocations In November 2007,
the TSP went public with a plan to restrict interfund transfers (IFTs).
The new policy only allows two IFTs per month. Once two IFTs are made,
participants are only allowed to transfer into the G Fund. In response,
we've introduced three systems <http://www.tspkey.com/NewSystems.html>
that comply with the upcoming restrictions.
The policy is tentatively scheduled to begin in March or April 2008.
Before then, "frequent traders" may receive a letter requesting that
they reduce IFTs. If they don't comply, they'll be forced to "snail
mail" IFTs.
While we don't support the new restrictions, the move doesn't surprise
us. As TSP administrators have noted, similar--and more
restrictive--limitations are common for private sector retirement plans.
Those who manage such plans believe cost effectiveness is a primary
fiduciary responsibility. Limiting transactions helps them achieve this
goal. In addition, most plan administrators subscribe to the
"buy-and-hold" theory of investing, and think frequent or flexible
trading privileges are harmful to most participants.
TSPKey's Plan for the New Restrictions on Allocations In November 2007,
the TSP went public with a plan to restrict interfund transfers (IFTs).
The new policy only allows two IFTs per month. Once two IFTs are made,
participants are only allowed to transfer into the G Fund. In response,
we've introduced three systems <http://www.tspkey.com/NewSystems.html>
that comply with the upcoming restrictions.
The policy is tentatively scheduled to begin in March or April 2008.
Before then, "frequent traders" may receive a letter requesting that
they reduce IFTs. If they don't comply, they'll be forced to "snail
mail" IFTs.
While we don't support the new restrictions, the move doesn't surprise
us. As TSP administrators have noted, similar--and more
restrictive--limitations are common for private sector retirement plans.
Those who manage such plans believe cost effectiveness is a primary
fiduciary responsibility. Limiting transactions helps them achieve this
goal. In addition, most plan administrators subscribe to the
"buy-and-hold" theory of investing, and think frequent or flexible
trading privileges are harmful to most participants.
oreo
Member
I was just thinking today that if there was ever a good week to write a protest letter or email to your elected representative, it would be this week.
The congresspeople as well as their staff all have tsp accounts and if ever the impact of limiting the accounts would felt in their own wallets, it would be now. Maybe this downturn will remind them to look at their own accounts and realize that this is important and do something.
JMHO.
The congresspeople as well as their staff all have tsp accounts and if ever the impact of limiting the accounts would felt in their own wallets, it would be now. Maybe this downturn will remind them to look at their own accounts and realize that this is important and do something.
JMHO.
"Staff Told to Protect Thrift Savings Plan's Assets"
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/22/AR2008012203066_pf.html
Are they talking about costs our OUR ASSESTS?
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/22/AR2008012203066_pf.html
Are they talking about costs our OUR ASSESTS?
Dear Frequent Trader:
As explained below, you have been identified as a frequent trader in the Thrift Savings Plan. Unless you reduce your trading activity to no more than 3 interfund transfers per month, we may require you to request interfund transfers by mail only.
Since the Thrift Savings Plan introduced daily valuation of participant accounts in 2003, it has not restricted the number or frequenct of participant-iniated interfund transfers. However, recently, the frequent trading activity of a small number of participants is resulting in higher transaction costs and reduced return for all participants in the affected TSP Funds - including long term investors who do not generate these costs. Frequent trading is also creating greater risk of performance deviation from the TSP Funds benchmark indexes.
By law, the Federal Retirement Thrift Investment Board (which administers the TSP) is required to develop investment policies which replicate the performance of the indexes selected for investment and provide for low expenses. Because frequent IFT activity diminishes the achievement of these goals, the Board is addressing the problem in two ways - (1) Structural changes to the TSP system to implement restrictions on the number of interfund transfers that can be executed per calandar month, and (2) intermin measures designed to lower trade volume in the meantime.
In November 2007, the Board approved a policy initiative that would permit two IFTs per calander month, with subsequent unlimited IFTs into the Government Securities Investment Fund. When compared to the more restrictive limits adopted by private sector defined contribution plans, record keepers, and/or investment fund managersm, this approach provides investment flexibility, administrative simplicity, and control over excessive trading.
Further, based on current behavior, approximately 99% of participants will not be affected by the proposed restrictions. We will soon publish proposed implementing regulations for public comment. The Federal Register notice will include a description of the problem, the restrictions established by other funds/plans, and our proposed solution. We will consider comments as we move towards resolution o this matter in the Spring of 2008. We are also notifying all participants of the proposed changes when we send the annual TSP participant statements in February, 2008.
Our immediate concern, however, and the reason for this letter to you, is the reduction of trading activity among those participants who trade most frequently. Based on the authority granted to the Executive Director to take appropriate action to restrict frequent interfund transfers, we are contacting those participants who have made frequent IFTs and asking them to voluntarily change their investment strategies.
Because in October, Novermber and December 2007, you made more than three IFTs each month, you fall within this frequent trading group. Therfore, unless you reduce your IFTs to no more than three per month (starting in February) we may notify you that you will be required to request your IFTs by mail until the permanent restrictions have been implemented. This proceedure is authorized by Federal Regulation 72 Fed, Reg. 73,251 (Dec 27, 2007) (to be codified at 5CFR 1601.32). We are asking for your cooperation in this matter.
We have posted a set of Questions and Answers about the frequent trading activity, as well as the November 6, 2007 memorandum to the Board, and it's accompanying presentation, under "Information about Interfund Transfer Restrictions" on the TSP Web site's Home page (www.tsp.gov). Links to the regulation cited above can be found at www.frtib.gov and www.tsp.gov ("What's New" or "Information about the Interfund Transfer Restrictions"). We will also post a link to the proposed regulations regarding the structural restrictions when that issuance is published in the Federal Register.
We strongly encourage you to read these materials so you understand the impact of your frequent trading activities and the reason we are taking these actions. If you have any questions regarding this letter, you may contact the TSP at 202-942-1460.
Sincerly,
Gregory T. Long
Executive Director
As explained below, you have been identified as a frequent trader in the Thrift Savings Plan. Unless you reduce your trading activity to no more than 3 interfund transfers per month, we may require you to request interfund transfers by mail only.
Since the Thrift Savings Plan introduced daily valuation of participant accounts in 2003, it has not restricted the number or frequenct of participant-iniated interfund transfers. However, recently, the frequent trading activity of a small number of participants is resulting in higher transaction costs and reduced return for all participants in the affected TSP Funds - including long term investors who do not generate these costs. Frequent trading is also creating greater risk of performance deviation from the TSP Funds benchmark indexes.
By law, the Federal Retirement Thrift Investment Board (which administers the TSP) is required to develop investment policies which replicate the performance of the indexes selected for investment and provide for low expenses. Because frequent IFT activity diminishes the achievement of these goals, the Board is addressing the problem in two ways - (1) Structural changes to the TSP system to implement restrictions on the number of interfund transfers that can be executed per calandar month, and (2) intermin measures designed to lower trade volume in the meantime.
In November 2007, the Board approved a policy initiative that would permit two IFTs per calander month, with subsequent unlimited IFTs into the Government Securities Investment Fund. When compared to the more restrictive limits adopted by private sector defined contribution plans, record keepers, and/or investment fund managersm, this approach provides investment flexibility, administrative simplicity, and control over excessive trading.
Further, based on current behavior, approximately 99% of participants will not be affected by the proposed restrictions. We will soon publish proposed implementing regulations for public comment. The Federal Register notice will include a description of the problem, the restrictions established by other funds/plans, and our proposed solution. We will consider comments as we move towards resolution o this matter in the Spring of 2008. We are also notifying all participants of the proposed changes when we send the annual TSP participant statements in February, 2008.
Our immediate concern, however, and the reason for this letter to you, is the reduction of trading activity among those participants who trade most frequently. Based on the authority granted to the Executive Director to take appropriate action to restrict frequent interfund transfers, we are contacting those participants who have made frequent IFTs and asking them to voluntarily change their investment strategies.
Because in October, Novermber and December 2007, you made more than three IFTs each month, you fall within this frequent trading group. Therfore, unless you reduce your IFTs to no more than three per month (starting in February) we may notify you that you will be required to request your IFTs by mail until the permanent restrictions have been implemented. This proceedure is authorized by Federal Regulation 72 Fed, Reg. 73,251 (Dec 27, 2007) (to be codified at 5CFR 1601.32). We are asking for your cooperation in this matter.
We have posted a set of Questions and Answers about the frequent trading activity, as well as the November 6, 2007 memorandum to the Board, and it's accompanying presentation, under "Information about Interfund Transfer Restrictions" on the TSP Web site's Home page (www.tsp.gov). Links to the regulation cited above can be found at www.frtib.gov and www.tsp.gov ("What's New" or "Information about the Interfund Transfer Restrictions"). We will also post a link to the proposed regulations regarding the structural restrictions when that issuance is published in the Federal Register.
We strongly encourage you to read these materials so you understand the impact of your frequent trading activities and the reason we are taking these actions. If you have any questions regarding this letter, you may contact the TSP at 202-942-1460.
Sincerly,
Gregory T. Long
Executive Director
Intrepid_Timer
Well-known member
Hitting your boss might work. 
Where did the three Interfund Transfer per month idea in Mr. Long's letter come from? I thought it was going to be 2 unconditional Interfund Transfers per month, then unlimited Interfund Transfers to the G fund only. Does anyone know if I still get unlimited Interfund Transfers to the G fund after I use up my 3 unconditional Interfund Transfers? Guess I'll find out in February!
jeburnside
New member
I got my letter from Mr. Long yesterday as well. I'm not changing what I'm doing. They can try to limit me through the court system, and if I win, I'll fund a new IRA with the monies.
Jimmy
Jimmy
qibovin
Member
That's the problem with their "plan." It appears to be too vague to enforce. You won't find out in February, because you probably won't know if your activity was "acceptable" until they put you on snail mail (or not) in March (or whenever they get around to it).
I would like to suggest that if anybody does get snail slimed, they start sending in daily IFTs (whether they were IFTing that frequently before or not) just to show them how assinine a plan this is. Just move 1% back and forth between the I and F since those are the most costly supposedly. Remember, they can't actually limit the number of IFTs (until further steps are taken).
Silverbird
Well-known member
http://www.frtib.gov/pdf/FOIA/TSP-Regs_IFT-Dec2007.pdf
Fed register notice on Frequent trade
Federal Register
"....The Agency desires to stop this excessive trading immediately and also, after continued analysis, to design an interfund transfer policy that provides for administrative efficiency, investment flexibility, retirement security, as well as reduced trading costs. To that end, in the near term, the Agency is adopting a regulation to grant the Executive Director the authority to notify the small percentage of participants who are driving up costs through their excessive trading and request that they cease their practicesOtherwise, these participants will be required to request interfund transfersby mail. It is the Agency’s hope that thisswift and direct action will inform suchparticipants of the unreasonable expenses associated with their trading and persuade them to voluntarily curbtheir trading, thereby curtailing the excessive trading costs borne by all participants who hold the C, F, S, I, and L Funds
Further, upon continued inquiry including an analysis of the actions that can be taken on an automated basis, the Agency likely will amend its regulations (via a separate publication in the Federal Register to permit two interfund transfers per calendar month with subsequent unlimited interfund transfers only into the G Fund. The[/font Agency believes this policy, when compared to others adopted in the private sector, provides the desired level of administrative simplicity, investment flexibility and security, and control over excessive trading.
Fed register notice on Frequent trade
Federal Register
Vol. 72, No. 247
Thursday, December 27, 2007
FEDERAL RETIREMENT THRIFT
INVESTMENT BOARD
5 CFR Part 1601
Participants’ Choices of TSP FundsINVESTMENT BOARD
5 CFR Part 1601
"....The Agency desires to stop this excessive trading immediately and also, after continued analysis, to design an interfund transfer policy that provides for administrative efficiency, investment flexibility, retirement security, as well as reduced trading costs. To that end, in the near term, the Agency is adopting a regulation to grant the Executive Director the authority to notify the small percentage of participants who are driving up costs through their excessive trading and request that they cease their practicesOtherwise, these participants will be required to request interfund transfersby mail. It is the Agency’s hope that thisswift and direct action will inform suchparticipants of the unreasonable expenses associated with their trading and persuade them to voluntarily curbtheir trading, thereby curtailing the excessive trading costs borne by all participants who hold the C, F, S, I, and L Funds
Further, upon continued inquiry including an analysis of the actions that can be taken on an automated basis, the Agency likely will amend its regulations (via a separate publication in the Federal Register to permit two interfund transfers per calendar month with subsequent unlimited interfund transfers only into the G Fund. The[/font Agency believes this policy, when compared to others adopted in the private sector, provides the desired level of administrative simplicity, investment flexibility and security, and control over excessive trading.
Last edited by a moderator:
Thank you for contacting me regarding a regulation proposed by the Federal Retirement Thrift Investment Board (FRTIB). I appreciate hearing from you on this matter.
As you know, the FRTIB has issued a proposal that would allow Thrift Savings Plan (TSP) participants to make no more than two interfund transfers per month. Under this regulation, participants would still be allowed to transfer money to the G Fund at any point, even if they have reached their maximum amount of interfund transfers. The FRTIB has stated that the increased number of excessive interfund transfers by a small number of TSP participants has caused a “detrimental effect on fund performance and transaction costs.”
According to the FRTIB, the process of establishing this regulation will include a public rule-making under the Administrative Procedures Act. The regulation will be published in the Federal Register and will be open for public comment.
If you have not already done so, I encourage you to send your comments to the FRTIB on this issue. You may send your comments to the following address:
Federal Retirement Thrift Investment
Board, 1250 H Street, NW., Washington,
DC 20005.
Again, thank you for sharing your thoughts with me. Please feel free to contact me if I may be of further assistance.
Sincerely,
Carl Levin
As you know, the FRTIB has issued a proposal that would allow Thrift Savings Plan (TSP) participants to make no more than two interfund transfers per month. Under this regulation, participants would still be allowed to transfer money to the G Fund at any point, even if they have reached their maximum amount of interfund transfers. The FRTIB has stated that the increased number of excessive interfund transfers by a small number of TSP participants has caused a “detrimental effect on fund performance and transaction costs.”
According to the FRTIB, the process of establishing this regulation will include a public rule-making under the Administrative Procedures Act. The regulation will be published in the Federal Register and will be open for public comment.
If you have not already done so, I encourage you to send your comments to the FRTIB on this issue. You may send your comments to the following address:
Federal Retirement Thrift Investment
Board, 1250 H Street, NW., Washington,
DC 20005.
Again, thank you for sharing your thoughts with me. Please feel free to contact me if I may be of further assistance.
Sincerely,
Carl Levin
I got my letter from Mr. Long yesterday as well. I'm not changing what I'm doing. They can try to limit me through the court system, and if I win, I'll fund a new IRA with the monies.
Jimmy
Good thinking Jimmy. I don't know why we just don't start collecting money for a class action law suit. I'll throw in the first $500.00. Long and his staff have been negligent in their duties. The proper way to have handled all of this was to educate the customers, explain the problem and ask for help. They could have put banners on the web site directing attention to the issue since the frequesnt IFT folks have to go to the web site anyway. I believe most employees would have cut back. I for one did not know it was an issue. Instead they have alienenated a lot of people and will eventually get sued and will eventually have stricter oversight.
In view of the sub prime mess, the Soc. Gen. bank scandal, etc, I am now writing letters (again) to the Secretary of Labor and the Chairman of the House and Senate Government Affairs Committees to have regular annual and continuous oversight of this important program. Right now there is no scheduled oversight. That needs to change. They want strict rules, so let's have Congrees and DOL checking on them and giving them proper adult supervision. :cheesy:
Jimmy
Good thinking Jimmy. I don't know why we just don't start collecting money for a class action law suit. I'll throw in the first $500.00. Long and his staff have been negligent in their duties. The proper way to have handled all of this was to educate the customers, explain the problem and ask for help. They could have put banners on the web site directing attention to the issue since the frequesnt IFT folks have to go to the web site anyway. I believe most employees would have cut back. I for one did not know it was an issue. Instead they have alienenated a lot of people and will eventually get sued and will eventually have stricter oversight.
In view of the sub prime mess, the Soc. Gen. bank scandal, etc, I am now writing letters (again) to the Secretary of Labor and the Chairman of the House and Senate Government Affairs Committees to have regular annual and continuous oversight of this important program. Right now there is no scheduled oversight. That needs to change. They want strict rules, so let's have Congrees and DOL checking on them and giving them proper adult supervision. :cheesy:
TSP Badboy Letter said:
Ya I just got my letter.
Just what does the above sentence mean? Can this claim be substantiated? They make it sound like we are children who need to be protected from ourselves. (BTW I made 17% last year actively managing my money versus their stupid dumb downed L funds).
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