GovernmentExecutive.com

Return to Article: January a tough month for TSP returns

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  Reference statement: "... it is not proper or ethical for the huge majority of employees using it as it was designed to have their costs run up and the system abused by a few mavericks with a day trading mentality."

  Wrong, the TSP computer system we paid at least $83 million dollars for was specifically designed to enable us to make at least one trade per day. It is not right for us to pay TWICE for a system that functions as advertised but be denied the use of. From the 16 June, 2003 GovExec article:

  "The new record-keeping system has been in the works since May 1997 when the TSP board awarded American Management Systems a $30 million contract to install a computer system that would allow federal employees to more easily control their accounts. The board fired the company in July 2001 after frequent delays and a tripling of the project's estimated cost. The board paid AMS $51 million for the failed project before firing the contractor and lodging a lawsuit against it for $350 million. AMS sued the board for breach of contract. The lawsuits are pending. Board officials brought in a new company, Materials, Communication & Computers Inc., to get the system up and running, spending another $32 million and another two years before finally starting the system up Monday afternoon." That AMS contract was later settled out of court; i.e. dropped. For the TSP board to pay TWICE for a system with specific capabilities and to subsequently deny us the use of said capabilities constitutes fraud; worse it once more encourages the sense of incompetence the TSP participants have of their governing board. Also from June 2003, "When the system first went live, it processed 100,000 transactions a day, Ray said. After improvements, it processed 813,000 transactions on July 21. The old system processed as many as 500,000 transactions only on one day of its life, Amelio said. Now it can handle 60,000 transactions per hour, 10,000 more than it was designed for. " The patriarchal/parental/omnipotent attitude of the TSP board does not make fiscal sense. If the problem is cost, then the transaction cost should be taken from each and every transaction. We pay them anyway, why not upfront? User fees (which is what they would be) reduce overall costs billed at the end of the cycle.

  Tip off Posted February 7, 2008 10:36 AM
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  I am waiting for you to offer ROTH accounts for us. This would save the TSP customers money not paying taxes when we take our money out of the TSP instead of wanting to charge us more for transferring OUR funds. We are giving our life to our jobs whats the problem giving us something in return?

  Marion Hoffner Posted February 6, 2008 1:05 PM
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  Thank you Brittany R. Ballenstedt for this information. I would like thank the TSP staff for the use of online maintenance. I doubled my money in 3 years using the online system.

  Henry Zapata Posted February 6, 2008 11:12 AM
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  Initially, TSP marketed the Web-based system as an easy way to transfer and manage your funds from one account to another on a daily, weekly, or monthly basis. Now it appears they are back peddling and villifying those who took them at their word.

  Dee W. Posted February 5, 2008 10:08 AM
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  I congratulate the TSP Board for limiting internet trades to 2 per month!!! The TSP is an indexed based retirement investment vehicle with a long term investment strategy whose returns are boosted by low operating and trading costs, and it is not proper or ethical for the huge majority of employees using it as it was designed to have their costs run up and the system abused by a few mavericks with a daytrading mentality.

  There are plenty of self directed stock trading accounts, as well as nondeductible and Roth IRA vehicles, which have a philosophy and clientel who would be not only more appropriate, but welcoming to anyone interested in playing such "games" with their future. If you are so inclined, I encourage you to "go for it!", and sincerely wish you much luck in your gambling. As for me, I wish to depend on the TSP's low operating costs to boost my earnings and I welcome these trading limits, which will make me think twice before adjusting my distribution to accomodate only major market shifts as I deem appropriate. Thank you TSP for looking out for my future!!!!!

  Guy Calafato Posted February 4, 2008 2:49 PM
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  Easy fix - Charge the requestor a fee for each and every transaction.

  With a fee in place there would be no reason to limit trades.

  If you want to play then you have to pay!

  Klaus Posted February 4, 2008 2:42 PM
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  Frequent traders increase TSP costs which hurts returns on everyone else's accounts. If frequent trading is allowed, there should be an extra charge to offset what it costs the rest of us. That would be consistent with most mutual funds which also restrict frequent trading &/or charge extra for it.

  DJ Posted February 4, 2008 2:22 PM
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  Why won't they let us invest in mutual funds? I'm sure I could have found one that did better than this.

  tony Posted February 4, 2008 1:08 PM
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  I'd like to recommend that these monthly summaries also include a paragraph on the monthly change in broad indexes such as S&P 500 and NASDAQ. I know this information is widely available, but including it in your story would help to give a little more context on TSP performance.

  Program Analyst Posted February 4, 2008 9:27 AM
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  The TSP has begun sending out letters to those who have done three or more interfund transfers, threatening them with limiting to "mail only". Except there is a small problem- the TSP doesn't have ANY of the TSP-50 mail interfund transfer request forms.

  Seems they stopped printing them when we went to internet trading. And they are "out of stock".

  TSP did not prepare properly for this action.

  Just say NO to TSP Trade Limits- it's YOUR money.

  Jim Posted February 1, 2008 5:56 PM