FROM TSPSHAREHOLDER.ORG

TSPSHAREHOLDER.ORG

Vol 2. No. 3 Representing Shareholders of the TSP Nationwide January 28, 2008

"In the work ahead, we must be guided by the philosophy that made our nation great. As Americans, we believe in the power of individuals to determine their destiny and shape the course of history. We believe that the most reliable guide for our country is the collective wisdom of ordinary citizens.

So in all we do, we must trust in the ability of free people to make wise decisions, and empower them to improve their lives and their futures.

To build a prosperous future, we must trust people with their own money and empower them to grow our economy."

"..We trust Americans with their own money.."

G.W. Bush, State of the Union Message, January 28, 2008

THRIFT BOARD SENDS OUT LETTERS

BUT THE MATH IS WRONG

The Thrft Board's Decision is wrong, and must be changed

This week, the TSP Thrift Board began sending letters to thousands of TSP Shareholders. The letter warns them that they MUST STOP CONTROLLING THEIR OWN MONEY, and instead must allow BEAR MARKET DOWNTURNS to eat up their account savings.

But the worse part is, TSP THRIFT BOARD GOT THE MATH WRONG.

Here is part of the letter now being sent out to TSP Shareholders who have made interfund transfers at least three times in each of October, November and December.

"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 calendar month, and (2) interim measures designed to lower trade volume in the meantime."

What the TSP Board has done wrong here:

1. This letter assumes that interfund transfers reduce the performance of the return of the funds. This is simply not true. As explained in the LAST ISSUE of TSPSHAREHOLDER.ORG, interfund transfers actually INCREASE return for the buy-and-hold crowd. In October alone, Interfund Transfers resulted in a NET PROFIT FOR BUY-AND-HOLD shareholders of nearly $152 MILLION DOLLARS!
Interfund transfers do not HARM buy-and-hold shareholder. Interfund transfers HELP buy-and-hold shareholders by increasing their return above and beyond the returns of the Index alone.

2. The Thrift Board states they must develop policies which replicate the performances of the indexes selected for investment, and provide for low expenses.

YET THE THRIFT BOARD PUBLISHED FIGURES ALREADY SHOW THAT THE TSP IS BEATING THE INDEXES THEY REPRESENT, and that COSTS ARE TEN TIMES LOWER THAN ANY PRIVATELY AVAILABLE MUTUAL FUND.

Simply put, the TSP Board is trying to fix a problem that doesn't exist, by terminating the rights of Americans to invest their own money as they see fit.

FACTS:

In the period from January to October 2007, ( the latest data that is publicly available), EACH FUND BEAT THE INDEX:

TSP FUND RETURN:         Related INDEX           TSP BEAT THE INDEX BY:

F Fund   4.85%                      4.78%                              0.07%

C Fund  10.90%                     10.87%                            0.03%

S Fund   12.20%                    12.19%                            0.01%

I Fund    18.46%                     17.60%                           0.86%

The funds are ALREADY BEATING THE INDEXES- there is no "problem" to solve.

OCTOBER RESULTS:

Here are the actual results from the I Fund in October, 2007, as a result of the increase in interfund transfer activity:

Total amount held in the I Fund as of Oct. 31, 2007: $ 27,375,000,000

I Fund:

Total Amount Interfund Transfered: $ 4, 339,906,198

Cost to execute all I fund transfers: $1,316,786 (.0003%)

Tracking Error Profits to other I fund Holders: $ 153,300,000 (.0056%)

Net Profits to Buy and Hold "I" fund Share Holders: $ 151,983,214

S Fund:

Total Amount of Interfund transfers: $ 4,169,502,400

Costs to execute all S fund transfers: $ -4, 850, 368

(That's not a misprint-

TSP MADE nearly 5 million dollars profit BECAUSE of interfund transfers in October alone. )

Source Link:

November 9, 2007 Memorandum to Executive Director Greg Long

MORE THAN 3,160 PEOPLE HAVE SIGNED THE PETITION

Our petition against imposing TSP Interfund Transfer limits continues to grow. More than 3,160 Federal Employees, U.S. Military military members, and retirees have already signed the petition to reverse the decision of the Thrift Board to limit Interfund Transfers.

From Florida, to Alaska, to California, around the worlds, and everywhere in between, those who hold shares in the TSP are voicing objections to the proposed limits. THEY ARE SIMPLY NOT NEEDED, AND ARE THE WRONG THING TO DO!

Here is a sample of what people are saying:

Jan 28, 2008,Christian J Ferraro , Florida
We should be able to manage our accounts in the same manner as any other IRA type account. Our transfers should not be limited and the transfer should be as fast trading in and out of mutual funds in a regular stock IRA account.

Jan 28, 2008,Paul Cummins , Oklahoma
I have stopped contributing the max amount to my TSP. In investing, flexibility is paramount. Sorry (oh wise and ominscient Thrift Savings board) for the inconvonience of wanting some control over MY money.

Jan 26, 2008,M. Kirkpatrick , Virginia
A limit of two trades per month is entirely inappropriate.

Jan 26, 2008,Erik Pegg , California
We are already limited to a very few funds to chose from, please do not increase the restrictions on an already limited retirement plan!

Jan 26, 2008,Troy Mueller , Virginia
I believe it is completely unsatifactory for the Board to make this change without any notification or input from Federal employees. We should be alllowed to make changes at any time. I would certainly pay a fee if needed to cover costs beyond a certain number of trades a month, similar to other 401Ks with private industry.

Jan 25, 2008,Colin Kirk , Maryland
It's MY money, right? So why can't I control how it's spread out over the funds? If a fund is going downhill, I should be able to take action & cut my losses. I AM in favor of a small transaction fee to keep unlimited transactions in place. The Board is making the absolute WRONG decision in limiting our transactions.

Jan 25, 2008,Anonymous , Georgia
We need the freedom to manage our retirement accounts as WE see fit. The board has made the wrong decision on limiting the transfer of OUR funds to two per month.

Jan 24, 2008,Zahida Samad , Texas
With the recent upheaval on wall street one stands to loose a lot with restriction of only two interfund transfer per month. When the old civil retirement system was changed to the FERS in 1984 with contribution to social security the FERS pension[one of the 3 tiers] was not as generous as the old one. However one of the rationale or consolation was the tsp with its matching contributions and option of being in the stock market with possible unlimited gains for retirement nest egg. If the daily one interfund transfer is so burdensome to management and financially less beneficial to less active rest of tsp participants why did they allow it in 2004 and what was the thinking behind it that has changed now.

Jan 24, 2008,MARK HARRINGTON , Virginia
Limiting the number of trades is one thing; but locking us out of opportunities to reinvest shares in a climbing market is WRONG!! This is our retirement funds and such action should be legally challenged in court. Reverse the policy!!

Jan 24, 2008,Paul Dean , Florida
The TSP was designed to serve, not limit retirement options for participants: take off the handcuffs please!

Jan 24, 2008,Anonymous , Maryland
The TSP just mailed over 150,000 people the 3rd quarter statement (2nd copy) instead of the 4th quarter statement so guess who will pay for this mistake. We need to make some real changes to the TSP Board!

Jan 24, 2008,Maureen MacWilliams , Indiana
Please don't limit our ability to achieve financial independence when we retire. I personally do not make that many changes, but if some people prefer to manage their money that way they should be allowed to do it. Thank you.

Jan 24, 2008,Richard Jones , Washington
PLEASE do not restrict the access to MY money!!! I am near retirement and cannot recover from a buy-and-hold restriction in a Bear market!!!

Jan 24, 2008,Kathryn Simons , Texas
I feel I should have the right to change my shares as often as I choose, so that I might take advantage of current market trends.

Jan 24, 2008,Michael Meier , Virginia
This is my retirement program and it was setup for me to invest for the future. Let me do that.

YOU can sign the petition, and YOU can ask your coworkers to sign the petition, at this web address: http://tspshareholder.org

Know of someone who is still in the dark? Help them learn the truth. Send them a message- that you would like them to learn more BEFORE their rights are taken away.

Educate them.

Ask them to learn more.

You can forward this e-mail to a friend by clicking here:

You can tell your Union or your organization that you want THEM to weigh in against setting artificially low limits on TSP Interfund Transfers.

Your freedom, and your retirement income, will depend on ALL of us stepping up to speak out.

�

DON'T

BUY

INTO

THEIR PLAN

The proposal to limit trades makes no sense, when you actually put together the math.

YOU can help stop this grab of your rights.

Copy this e-mail, or forward to a friend by clicking here: .

Ask them to sign the petition at http://tspshareholder.org .

YOU can stop this mistake. But YOU have to act now.

Learn more. Be informed. Learn the truth.

Friends don't let friends buy into misinformation. Don't let it go unchallenged. Learn. Read. Listen, Contribute your ideas.

http://TSPSHAREHOLDER.ORG

YOU can help.

YOU can make a difference.

HELP SPREAD THE WORD

We are asking you to help spread the word. This is wrong, and more people need to know about the issue.

We ask you to tell three friends this week. Help educate them about the misguided decision to limit the retirement options of federal employees and U.S. Service members, and how employee rights need to be secured.

Ask them to sign the petition, and ask them to sign up for the newsletter. And then ask them to tell others as well.

Ask them to sign up for the FREE TSPSHAREHOLDER NEWSLETTERS, and go READ PAST ISSUES TOO.

TSPSHAREHOLDER.ORG NEEDS YOUR HELP TO SPREAD THE WORD.