Return to Article: TSP finalizes rules on fund transfer restrictions
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49738
My comments are in regard to this paragraph:
"The regulation took particularly sharp aim at investors who transfer their investments to their G Funds on days when that fund produces its largest amount of return. The rule referred to the practice as "mercenary" and pointed to a message board on the Web site TSP Talk as evidence that the practice was organized and widespread. More than 4,000 TSP participants signed a petition on the Web site objecting to the transfer restrictions. "
First off, the petition was on tspshareholder.org, and not tsptalk.com. Let's give credit where credit is due. They worked hard on that site.
Second, the G fund "mercenaries" are just being smart investors (and I seriously doubt if there are more than a few dozen who do it, if the message board is any indication). If Macy's has a sale on Saturday, you don't do your shopping on Friday.
It is no surprise that people are going to look for an edge. When your retirement savings determines when, and how comfortable your retirement will be, you look for opportunities to maximize your gains. If they spread the gains of the G fund out as they should have originally, this "problem" would not exist. But they didn't, and some people are smart enough to realize that.
Whatever rules they make, there will be better ways to do it. I think that is how all inventons and ideas come about. It's the American, capitalistic way.
Stop treating these people like they are criminals. They are some of the brightest people we have working for the government and military today.
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49684
There were over 4,200 comments opposing the change submitted to the NPRM. And 30 comments in favor.
And when they asked thousands to reduce the number of trades, the number of trades fell by half in February.
And THAT- REDUCING TRADES- caused the tracking error to zoom to 211 basis points, up from just 6 basis points.
People- look at the facts- not the hype. You have just been "Enroned" by the FTRIB.
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49678
One way to protest is to roll a majority of your money out of TSP. A customer friendly public 401K will serve you better.
Only leave enough money in the TSP for full matching percentage each month. Then roll out the overages as needed.
Do not close your account or you will lose your vesting. Read the fine print of the TSP Plan.
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49598
I should have the choice to move my money and suffer the consequences of possible loss of money. The board should not limit me and, consequently, lose my money. If you calculate that loss vs savings on taxes etc. by investing in the TSP, it might be time to reconsider.
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49584
There is a simple compromise to this. Of course, it won't be offered because then the TSP board would have to let people control their own finances.
Let people who want to trade frequently roll their TSP money into a private IRA; for example, Fidelity, or any of the other thousands of private institutions.
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49552
we all know this was a done deal - plenty has been written against this and "they" voted to restrict it anyway. Why are contractors managing government employee pension money and are they getting a cut? Seems like they are! Very, very sad.
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49547
The Thrift Board hassles us and calls it service.
When I retire in two years I am taking my money (~$450k) to Dain Rauscher in St Paul where I will receive actual customer service -- no fees at all for accounts over $250k, checking account on the side w/VISA card, they pay all my bills, personal attention from a knowledgable specialist, etc.
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49542
I find the actions of the board objectionable to the free choice of the TSP members. The board seems to be saying, "the purpose of the funds are to loose money like the rest of the population". I would like to know how much the board makes in the administration of the TSP funds. Perhaps it's time to consider a change in the management if the job is becoming too annoying for them.
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49536
I think it is ridiculous that these rules are changing because of the actions of a few people. Don't treat us like children. If people want to trade more than twice, then make them pay a penalty for it. They can either take it or leave it. Don't punish everyone for the actions of a select few.
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49534
Again the litte guy losses and the Fat Cats get fatter. How about a pre May 1 transfer spree to express our gratitude!
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49528
Interesting that this is in the Fund Sheet facts for the I, C, and S funds; based on the changing of rules shouldn't this reserved portion be reduced so we can all benefit:
"A portion of Equity Index Fund assets is reserved to meet the needs of daily client activity."
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49503
We are being limited so that the elite can steal our money. It's really that simple. How reactive have the TSP been to our complaints. We were ignored. There's your answer. Corruption, Propaganda (via fascist media), Outright Lies, and Chaos. You will never regain control. Start tossing these OATH OF OFFICE BREAKING leaders in Jail with Chains if you want to restore government by the people for the people.
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49494
For those sheep who just can't get enough of the pap that the TSP board is spewing you should know that the administrative costs for each account averages about 4 dollars per year. That's less than 2 CENTS per day. Now what part of that huge fortune did those nasty frequent traders cost you? The TSP board won't tell you, because then everyone one would see slight of hand. Your a fool if you think the board is protecting you. Get out, pull your money out and take it to professionals with no hidden agenda.
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49491
First off, read Title 5 (that explains the TSP) then read the Federal Register so you understand what is really going on. WE the members of the TSP where given, by the FRTIB, a no limit IFT (inter fund transfer). If you wanted to transfer your money daily, weekly, monthly, not at all or anywhere in-between you had that option and ability. Just because some people chose to use their right to perform a daily IFT does not make them abusers nor does it fall in the realm of excessive. WE, all of us, had that right given to us by the FRTIB. We are being told that the TSP is for long term investment and I truly believe this. But why not have the opportunity to enhance your retirement fund over a short term. Take advantage of increasing your account to make retirement more comfortable. I have been in TSP since the beginning and deposited 5-7% every pay for the first 19 years. I believed in the system. That first 19 years I had less than 70K invested. Not a lot of money to retire on. Since 2004 I have been able to more than double my TSP because I realized I had that ability to do so. By no means am I a day trader and I do not think I could be. However, I had the opportunity given to me by the FRTIB to perform IFT's on a more frequent basis. Maybe I would do an IFT every couple of days. Sometimes I would sit for a week or two and not do any IFT's at all. I had that ability. Now we the members of the TSP are being restricted in our moves and our ability to improve our retirement fund. The real questions are: Why did the FRTIB feel that some members where abusing the system? What was the real cost to all of us? Why where a select few chosen to be made examples of before the system was officially changed? and finally Who or what is the FRTIB really trying to protect? Just because the TSP is a long term investment doesn't mean you should blindly sit back and do nothing. If I would have continued to sit back and let the FRTIB invest my TSP fund, I would be retiring in 4 years with very little in the bank.
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49476
Every "pre-retirement" seminar that my agency sends us to constantly preaches that "we" must manage our TSP accounts to make the most of it. By the TSP Board placing limits and restrictions on the members, that seems like just the opposite of what we are being taught. If you just place your hard earned money in the TSP and leave it without managing it, you can and most likely will lose alot of money. I will probably just change my contributions to the agency 1% and take the rest and invest in a Roth IRA...sure, you pay taxes on the money first, but in the long run when you take the money out at retirement age, you won't be paying taxes on it then. With the TSP, you don't pay taxes on it now, but when you retire and start drawing from it, you pay taxes on what you paid in to it, plus every dollar that it has earned in value. (example: your total out-of-pocket investment is 100,000 pre-tax, when you retire your account is $500,000...you are going to pay the taxes on the $500,000...then ask yourself the question, who is getting my tax money???)
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49475
The TSP is designed as a long-term investment vehicle for retirement savings, not as a way to make quick profits on short-term fluctuations in the financial markets. Those who wish to make money doing multiple trades have a right to do so, but on their own dime, not mine. The TSP model simply will not accommodate the quick traders. I suggest quick traders take their own money outside of TSP and open their own day trading accounts. I wish them good luck.
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49472
I have enjoyed reading the comments. Some very misinformed people. First off, read Title 5 (that explains the TSP) and read the Federal Register so you understand what is really going on. We the members of the TSP where given, by the FRTIB, a no limit IFT (inter fund transfer). If you wanted to transfer your money daily, weekly, monthly, not at all or anywhere in-between you had that option and ability. Just because some people chose to use their right to perform a daily IFT does not make them abusers nor does it fall in the realm of excessive. WE, all of us, had that right given to us by the FRTIB. We are being told that the TSP is for long term investment and I truly believe this. But why not have the opportunity to enhance your retirement fund over a short term. Take advantage of increasing your account to make retirement more comfortable. I have been in TSP since the beginning and deposited 5-7% every pay for the first 19 years. I believed in the system. That first 19 years I had less than 70K invested. Not a lot of money to retire on. Since 2004 I have been able to more than double my TSP because I realized I had that ability to do so. By no means am I a day trader and I do not think I could be. However, I had the opportunity given to me by the FRTIB to perform IFT's on a more frequent basis. Maybe I would do an IFT every couple of days. Sometimes I would sit for a week or two and not do any IFT's at all. I had that ability. Now we the members of the TSP are being restricted in our moves and our ability to improve our retirement fund. The real questions are: Why did the FRTIB feel that some members where abusing the system? What was the real cost to all of us? Why where a select few chosen to be made examples of before the system was officially changed? and finally Who or what is the FRTIB really trying to protect? Just because the TSP is a long term investment doesn't mean you should blindly sit back and do nothing. If I would have continued to sit back and let the FRTIB invest my TSP fund, I would be retiring in 4 years with very little in the bank. That's my opinion and you can take for what it is worth.
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49464
There are much concern on both side, weather to agree or disagree with the Federal Retirement Thrift Investment Board (Agency) on how many Interfund Transfer (IFT) is cost effective and beneficial to all TSP members. The Agency has a job to do, and all of the members of TSP also have an individual responsibility to manage their TSP account as needed, for best optimum results, for our future retirement. What is the solution to the "Final Ruling" contingent to the Rules and Regulations of the Agency? I would suggest one solution; focus on your ability to increase your "Over All" gain in your TSP account, compounding yearly, as I have done (27.51%), following, TSPFunds.com daily. We are not able to "beat them, the Agency", so, let's join them, by utilizing their 2 IFT-moves per month, and increase our gains. Peace out..., with more accumulative gains in 2008.
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49463
To all of you that think the TSP just saved you a ton of cash for your retirement, think again and wake up to smell your Starbucks Latte!! The TSP administrative costs for all of 2007 were about $4.00 per account! Thant's right - $4.00 for your account for the entire year!!
Wow, I cant wait for the increased savings now! Maybe I'll be able to buy one more Starbucks Latte each year in retirement! But probably not, by how much I will lose by reverting back to the infancy of the TSP and the ability to transfer funds twice a month. Better get out the Ouija board again! Face it everyone, the TSP Board had alternative motives here, and they don't want you to know what they really are. Probably trying to save Barclays' (donkey).
If anyone thinks this was for the better for all of us - you better take another wiff of you Peppermint Mocha and go back to sleep until you can retire - with your large TSP supplement. Good Luck with that!
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49460
Just wait until your "excellent vehicle to supplement/provide for retirement with low costs with many investment options" is limited to automatic enrollment in the age-appropriate L FUND with no opt-out. You might be happy with them deciding what to do with your money. I prefer to make my own decisions.
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49458
I got a question. The TSP has operated for years without limitations. Ok, times have changed and costs for Oct.Nov.Dec. may have gone up significantly enough for the Board to feel a change was needed. Instead of informing the TSP Participants that they intended to submit to the Federal Registry a rule change and it would be open for comment. They sent out letters first and told frequent traders to stop or be placed on Mail Restrictions for doing something which was totaly legal at the time. When 547 decided to wait for the rule to be finalized. That must have enraged the Board so much that they penalized the 547 by placing them on Mail Restrictions. Now that type of retaliation, being a non emergency, is down right illegal. To disguise it as a "interim rule" leads one to believe that the change was needed immediately. Or was it the fact that BGI (Barclays) was knee deep in the Credit Crisis with liquidity issues and Billions in Writedowns? I find it most interesting that the focus was on 4000 TSP Participants and not whether our money was safe within Barclays hands to begin with.
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49456
I approve of the plan to restrict frequent traders, thus lowering the cost to the rest of us, but I have to say that I think Mr. Long comments indicate that he is not responsive to his customers' needs. First of all, his apparently disgusted comment that traders moving their money into the G fund to increase their returns was "mercenary" made me laugh. The whole point of these retirement funds is to increase our net worths. Of course we're all hoping for mercenary gains. Secondly, his whining that calculating a cost for frequent trading is variable and can't be done is ridiculous. He should be able to take last year's cost, divide by the number of trades, figure out an average cost, perhaps boost that average cost, and charge it to people who exceed their monthly limit. If he is really, really worried, he can figure out the most expensive trades of the year and use that as a cost basis. Once a per-trade chage is determined, he can review the data at the end of the year to see if the charge plan is covering the cost of the surplus trades. This is a fairly simple process, and his refusal to consider it demonstrates a lack of responsiveness to his customers. I have never used more than two trades in a month, but the opportunity should be there.
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49454
Rick - I liked the rules as they were which is why I invested in TSP. To change the rules midstream is really unfair. Why don't those who did not like the rules go somewhere else? I bet the costs would be lower if they didn't spend millions upgrading the system to something we cannot now use. What a waste!!!
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49452
For those who appear to be enamored with the 'buy and hold' philosophy promulgated by the FRTIB, I suggest one word: PRAY.
PRAY that world leaders are all sane and intellegent (good luck on that one).
PRAY that world financial markets are not manipulated.
PRAY that your nest egg isn't borrowed by Congress to fund something you don't want or need.
PRAY for a long bull market just before you retire that continues until you die (you're going to need it when Social Security tanks)
PRAY that you have an interfund transfer available to avoid financial disaster.
PRAY that you have an interfund transfer available to take advantage of an improving market.
PRAY that you don't lose anymore of your freedoms (you just lost a big one even if you never used it).
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49450
To Rick: Believe me, we're doing exactly that. Reducing our contributions to matching only, and putting the extra $20K where we can actively manage it. Unfortunately, IRS and TSP law doesn't allow for in-service withdrawal of funds unless you are 59-1/2 or older. So we're stuck with it...for now. Retirees, on the other hand, CAN pull theirs out, and I know several who ARE. You think these limits are such a good thing, and want us gone? Re-read the rule. The TSP is a POOLED trust fund. With us gone, the total value is LESS, which means YOU earn less. Think about THAT.
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49438
I have a suggestion for the individuals complaining about their lack of ability to constantly trade into and out of various funds of the TSP. Stop your contributions to TSP, withdraw your money and join and contribute to a private mutual fund family or investment firm that allows such activity. The TSP is an excellent vehicle to supplement/provide for retirement with low costs with many investment options. Let's keep it that way. If you don't like the rules, go somewhere else.
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49433
Mr. Long and the FRTIB have NEVER proved their case that such draconian limitations on TSP participants were necessary. TSP administrative costs have actually gone DOWN in recent years, as evidenced by their own cost figures. Further, Mr. Long illegally stopped many TSP participants from making interfund transfers via the tsp website, as allowed by the rules, BEFORE a decision had been made on this proposal. This was clearly illegal, and needs to be challenged in court. FRTIB has now severely restricted my ability to manage my retirement funds, and for NO REASON, other than Mr. Long's desire to punish certain individuals for not agreeing with him. Wake up folks, you just lost more of your rights!!
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49432
Good for the TSP Board!! If people want to day trade, let them take their money OUT of the TSP and put it in a private fund where they can trade their little hearts away without impacting MY money. Kudo's to the Board for doing exactly what they are supposed to do - safeguard our investments for the long term.
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49431
Our Big Brother, the TSP Board, revealed their true view of their investors when they said in response to other suggested plans to cover or reduce costs. The TSP Board said "Such plans still allow participants to transfer funds frequently during market fluctuations". It is not about costs. They simply do not want you to be able to transfer your own money. They have decided that the best decision for you is to ride out market fluctuations. Their crystal ball has told them that the next 30 years of market action will be exactly like the last 20 years. They know what is best for you. In their view, you should just check your balance at the end of 30 years. If you do not have enough,no worries, the TSP Board will be retired by then. I wonder whether they just bought and held?
It is time to seriously consider having the TSP function run by a large mutual fund company that knows what it is doing, like Vanguard or Fidelity. We would get many more investment options and much better service.
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49423
Good. Day Traders can take their addiction for trading elsewhere. I am tired of paying for their folly.
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49422
Ahhh, I for one feel much better...clearly Big Brother and TSP know best...can't give the masses too much control over their own futures. Maybe TSP can start a passbook savings fund, good for about .o4% per annum. It would be wonderfully stable and would have very few transactional costs. Then to prevent too much activity, TSP could make us send it in once a year to be updated.
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49421
Put the TSP board in jail for grand theft. They wasted hundreds of millions of our dollars on a computerized system to permit us to move our TSP funds and now they pass a rule to prevent us from using it. I call that fraud, waste and abuse on a grand scale.
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49417
Why did the TSP spend tens of millions of dollars years ago to install a massive electronic trading platform, of which a primary feature was the minimization of the time lag for participants moving their money, and now to deny participants the opportunity to use it effectively? Most, if not all frequent traders would gladly pay a much higher fee that would subsidize all of the infrequent trading participants for the continued privilege of trading when they desired. This would be a win win solution but it makes too much sense for the impractical bureaucrats that make these decisions. It also displays the knew jerk reaction of these same bureaucrats to ensure mediocrity and sameness in the annaul gains realized. Punish the really smart who understand the financial mkts. Sorta like public education...
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49413
TSP should never have written "Ability to make trades daily" in their by laws. Chuck Wamack was correct, they had their minds madeup already irreguardless of what anyone comented to the register or to anyone else they were going to limit the ability to make unlimited inter fund transfers, thus preventing members of TSP from attempting to increase their retirement funds. I still ask one question , How much is the maintenance fee for an account held by any member in TSP. They can't tell you, that is scary. Especially when you need the information for your income tax as a deduction. They are all full of s___t !!!!!!!!!!!
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49411
You're a fool if you send anything more than the minimum necessary to collect the matching funds. If you want to be a sheep and send more, then be prepared for congress to grab that cash and give you a promise to pay. It's happend to every large body of capital they have control over. This is nothing more than a means to make it easier to grab the pot.
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49409
When the limited transfer was first approached I believed that TSP would not proceed with the plan but simply limit those who by TSP standards abused the "system". Now that I see how wrong I am I can't help but wonder if it is in fact the TSP board who invested our money in failing entities as did every other financial company - putting the small investor like us in jeopardy. Is TSP being forced to quietly recoup our losses? How can every other financial company today take hugh losses and hits and TSP not? I hope my fears are just that - fears and not something that will prove positive.
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49400
I support limits on amounts of transfers allowed in one month. I think it's ridiculous that the few who do this cost the majority of us our hard earned money, money we count on for our retirements. Aren't these people supposed to be doing their jobs? If they insist on being day traders, there are other venues available to them but TSP is NOT one of them. Thank you.
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