FOR IMMEDIATE RELEASE: MARCH 12, 2008
CONTACT: STAFF@TSPSHAREHOLDER.ORG
NEW FIGURES SHOW 2007 TSP TRADING COSTS ARE LESS THAN PREVIOUS YEAR
The Thrift Savings Board released new figures on Tuesday, which show the cost of Interfund Transfers actually decreased, rather than increased, over the year before.
While the number of TSP Participants increased from 3.68 million to 3.9 million, the actual cost of trading per TSP shareholder declined in the year ending December 31, 2007.
Total interfund transfer (IFT) trading costs were $ 4.15 per TSP shareholder in 2006.
In 2007, they dropped to just $3.55 per person.
"We've been trying to tell the TSP Board all along that their numbers don't show a problem, and now we have the data to prove it", said Jim Pratt, a Federal Union Representative, and founder of TSPSHAREHOLDER.ORG, a Thrift Savings advocacy group. "Now that the data shows that costs are actually declining, it's time for the Thrift Board to rethink their efforts to restrict employee's control of their own money."
The new data was released Tuesday, when the Thrift Board published their January Board meeting minutes.
Included in the minutes was data that showed that over the entire year, the costs of interfund trading decreased from $15,229,242 in 2006, to just $13,880,098 in 2007. Previously, the Thrift Board's Chief Investment Officer Tracey Ray warned Board Members that action was needed, because she projected that 2007 trading costs would rise. She told the Board in October that expenses would be higher in 2007, saying she projected frequent trading activity would cause costs to rise by 70%.
Instead, trading costs have actually decreased by more than 10%. This is in part because of increased interfund transfer activity, and an exemption from SEC regulations that the fund's agent, Barclays' Bank, obtained in August. The exemption allows Barclays to borrow shares, and trade Exchange traded Funds (ETF's) rather than strictly buying and selling shares.
"The data is out there for anyone to see. The attempt to restrict interfund transfers, where they will retrict people control their own money, especialy in these turbulent markets, is an idea that needs to go back to the drawing board. Federal Employees need to understand the risk that the Thrift Board's proposal to restrict their access means." Pratt said.
On Monday, the Thrift Savings Board issued proposed new regulations in the Federal Register to restrict Federal Employees from accessing and moving their funds. Under the proposal, employees would only be allowed to touch their money twice a month. Employees have had unlimited access to make interfund transfers since 2005, when the current daily access system was finally unveiled. The daily access system allows Federal Employees to make interfund transfers once per day. The daily access system came into being after the original Fairfax, Va.-based contactor, American Management Systems, was fired by the Thrift Board in 2001, and the Board subsequently sued AMS for $50 million in actual damages, and $300 million for punitive damages. The lawsuit eventually was dropped, and TSP Share holders had to pick up the cost of the daily system. It's been working as a daily system since June 2005.
"It would be a shame if the hundreds of millions of dollars invested to allow employees daily access were suddenly turned off, and this new data proves there is no need to limit interfund transfers, and waste the hard work the previous boards have done". Pratt said.
Pratt's group has started an on-line petition against the proposed Interfund Transfer Limits, and has already gained over 3,500 signatures against the proposed limits. The website is http://tspshareholder.org
The cost data for all of 2007's TSP interfund trading is contained in the January Thrift Board meeting minutes, and is available in the electronic reading room of the Federal Thrift Investment Board.
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CONTACT: staff@tspshareholder.org
Comparing years:
It cost the average TSPSHAREHOLDER 58 cents LESS in 2007 for all TSP Trades than it did in 2006.
2007- January through December
F- Amount traded over the year: $8,735,859,214
Cost for the year for all trades: $1,085,881 1.2 basis points.
C - Amount traded over the year: $11,118,101,427
Cost for the year for all trades: $605,434 0.5 basis points
S- Amount traded over the year: $13,693,147,225
Cost for the year for all trades: $ -4,324,671 -3.2 basis points
(yes, that's a NEGATIVE trading cost of four million dollars to trade 13 BILLION dollars over the year )
I- Amount traded over the year: $26,732,802,960
Cost for the year for I fund trades: $16,513,454 , or 6.2 basis points.
Total combined costs for ALL trading in 2007:
F+C+S+I= $13,880,098
Total number of TSP Shareholders in 2007: 3,900,000
Cost per TSP Shareholder for all trading in 2007: $3.55
Prior year:
2006- January thru December
F Fund:
Amount traded: $2,389,469,901
Cost for the year for all trades: $234,658 or 1.0 basis points.
C Fund:
Amount traded: $ 7,954, 599,207
Cost for the year for all trades in 2006: $ - 27,387 or -0.003 basis point
S Fund:
Amount traded: $ 6,086,286,346
Cost for the year for all trades: $ 1, 154,212 or 1.9 basis points
I Fund:
Amount trades: $ 12,306,380,288
Cost for the year for all trades: $ 13,867, 759 or 11.3 basis points.
Total trading costs For ALL trades in 2006:
F+C+S+I= $15,229,242
Total number of TSP Participants in 2006= 3,680,000
Cost per TSP Shareholder for all trading in 2006: $4.13
Source: TSP Thrift Board meeting minutes, January 2006, and January 2007, available at the FTRIB Electronic Reading Room: http://www.frtib.gov/FOIA/index.html
MARCH 12, 2008
