Subject: News on TSP-April 7
TSPSHAREHOLDER.ORG  April 7, 2008 |
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DEADLINE LOOMS
TIME FOR COMMENTS ALMOST OVER
The Federal Register Notice on Limits to TSP Transfers is now out. The period for comments is almost over. Write in now!
The deadline for comments is WEDNESDAY, APRIL 9th.
The tremendous proposed change in making the TSP a two per month transfer limited savings plan is a huge change. We've provided data over the last few months showing that the change in not needed, that costs are actually falling, not rising. Each issue of our newsletter has outlined the various reasons why people need to look at the actual data. We believe that when people have the facts on TSP costs, they can not support the Draconian limits to freedom being proposed.
Ask hard questions. Do the math yourself. Read each of the last year's TSP Thrift Board Meeting minutes, and check the numbers. When you do, you'll agree--that limits are the wrong thing to do.
YOUR VOICE is important now. File your opinion via FAX by Wednesday this week. The number is shown below.
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| MORE THAN
500 TSP SHAEHOLDERS
ARE ALREADY LOCKED OUT
The comment period on the Notice of Proposed Rulemaking has not yet closed, but the TSP is already forcing the disabling of internet transfers for many.
The revocation of internet transfer ability for a limited number of TSP SHAREHOLDERS- the 549 banned by the TSP Board from making internet transfers-- has devastated the accounts of many of them.
Despite the current federal regulation which specifically says "You may make unlimited transfers", these 549 have been singled out, and locked out from moving their own money via the internet. Here is what one of them said yesterday:
"I been have shut out completely for the month of April. I thought I was making money, but when I checked my TSP account, all my money was still in the G fund and I hadn't made a cent. I was told I would be able to trade on April 1st by the TSP operator. There was no warning telling me the transaction to change my allotments hadn't gone though. I was also given incorrect information more than once by the TSP operators. I lost out on at least $5000., maybe more. It's my money and I feel I should have control over it, not TSP. I have written my senators and called Washington, but this seems like a losing battle. Is the current administration involved in this and who gains from these actions? I'm happy to have at least someone representing us in this idiotic restriction."
And this- from a currently deployed soldier. When the TSP issued its notice of proposed rulemaking, it gave only a very short time for comments- just 30 days. We believe the majority of TSP Shareholders don't even know yet.
Comments are due April 9th.
We heard today from a soldier to just learned about the restriction that has been put on his account. He never received the registered letter- no letter made it to his military unit on a combat zone.
"I am current deployed and snail mail may take awhile if I were to send a letter. Besides I don't have a lot of internet time to come up with a letter BUT if anyone wants to help me write one, I would appreciate it.", the young soldier writes. | |
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HAVE YOU SUBMITTED YOUR COMMENTS YET?
Comments are due to be turned in NO LATER THAN APRIL 9th.
If you need ideas on what to write, see this link for some sample letters:
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| Then, write your OWN personal comment, and fax it in.
The TSP Federal Register Notice Comment FAX Number is:
FAX: (202) 942-1676
FAX IN YOUR COMMENT TODAY!
http://TSPSHAREHOLDER.ORG encourages you to request that the rule be changed. Here is what we believe are better alternatives:
1. Change the time of day the I fund is calculated, to 7 a.m. the next morning. Doing so will reduce trading costs by an estimated 70%. If you do that, you've reduced the costs so low, there will never be a need to restrict moves.
2. If you must limit, limit ONLY the I fund. TSP data shows the other funds are much less expensive to transfers.
3. If you must create any limit, do it by the use of a fee, not a bar to moving. Research shows that a simple $10 per IFT move would generate $25 to $28 MILLION dollars per year, far above the reported cost of $13 million per year that trading currently costs. Those who never move won't pay a thing. Those who move more often will pay more. If there is money left over at the end of the year after paying all associated transfer costs, credit the balance back to ALL participants equally as a reward.
WRITE YOUR COMMENTS AND FAX THEM IN TODAY!
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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 $ 4.13 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 there 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 money."
The new data was released March 10, 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 as much as 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 2007. The exemption allows Barclays to borrow shares, and use 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 people control their own money in a turbulent market, is an idea that needs to go back to the drawing board, and Federal Employees need to understand the risk that the Thrift Board's proposal to restrict their access to their own money means," Pratt said.
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 contractor, 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 3,750 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
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THRIFT BOARD ISSUES NOTICE
THE THRIFT BOARDHAS ISSUED IT'S PROPOSED NOTICE OF RULEMAKING IN THE FEDERAL REGISTER!
Please take the time to fully read, and digest the Federal Register Notice at this hotlink web address:
THEN FAX YOUR OPPOSITION COMMENTS TO: (202) 942-1676 |
MORE THAN 3,900 FEDERAL EMPLOYEES, MILITARY MEMBERS, AND RETIREES HAVE ALREADY SIGNED!
TSPSHAREHOLDER.ORG believes limits are not necessary, and will adversely impact ALL TSP Shareholders. Learn the facts, and see what why we are against these proposed limits.
We are having on-line discussions, and welcome your input. Visit us at:
http://tsptalk.com, in the message boards, for ways you can assist in fighting back against interfund transfer limits.
WE ARE ASKING FOR YOUR HELP.
We've already obtained more than
3,900 SIGNATURES
on our on-line petition
but we need more.
We need YOUR help in this action!
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FOURTY THOUSAND TSP SHAREHOLDERS MOVE TO SAFETY AND AVOID STOCK MARKET LOSSES IN JANUARY
The data from January is in.
$5,737,000,000 was moved into the protection of the G and F fund in the month of January.
$5,338,000,000 came OUT of C, S and I funds to do it.
ACTIVE INVESTORS--- 40,000 OF THEM--THOSE TSP SHAREHOLDERS WHO MONITORED THE MARKETS, DECIDED TO MOVE TO SAFETY IN JANUARY,
THEY TRADED THEIR STOCKS IN FOR BONDS AND GOVERNMENT SECURITIES.
THESE PEOPLE DID NOT FOLLOW THE TSP's ADVICE TO "JUST PEAK AT YOUR PORTFOLIO TWO OR THREE TIMES A YEAR".
INSTEAD, THESE PEOPLE ACTIVELY MONITOR THEIR RETIREMENT INVESTMENT, AND, AFTER CAREFUL CONSIDERATION, MADE A WELL THOUGHT OUT MOVE --A CONCIOUS DECISION--TO MOVE OUT OF STOCKS AND INTO BONDS AND G FUND.
THESE GOVERNMENT EMPLOYEES, WHO CONTROL THEIR OWN TSP ACCOUNTS, SAVED AND PROTECTED OVER $5 BILLION DOLLARS FROM LOSSES IN JANUARY ALONE
BY BEING ACTIVE TSP SHAREHOLDERS.
OVER $ 5 BILLION DOLLARS MOVED TO SAFETY --
BY FOURTY THOUSAND INDIVIDUALS.
FOURTY THOUSAND PEOPLE SMART ENOUGH
TO CHECK THEIR INVESTMENTS REGULARLY, WATCH THE MARKETS,
AND MOVE TO SAFETY, INSTEAD
OF SIMPLY "LETTING IT RIDE".
At a cost of just $133,000 total dollars in interfund transfer costs
to the TSP.
THINK ABOUT THAT.
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Can you believe it?
TSP is advising people to just
"Peek at your portfolio two or three times a year???"
Recently, on FEDERALNEWSRADIO.COM, TSP's director of external affairs Thomas J.Trabbuco did just that. He told people to "just peek at your portfolio two or three times a year".
http://www.federalnewsradio.com/emedia/112572.wma
When the radio interviewer asks Trabbuco about the recent large declines in the market place, she wanted to know - should she stay in the market and take the losses, or should she move to the safety of the sidelines- and wait for the market to bottom?
Her exact words were: "Can you provide some more reassurance those folks who are having a hard time holding steady...I just checked my own 401K and I've lost two thousand dollars in like two months..."
Tomas Trabbuco's answer is incredible: "Rule number one is 'Don't check'," Trabbuco said.
Radio host: "Then why do they send me those things in the mail?"
Trabbuco: "You know, we recommend that people look periodically, a couple, three times a year is all that I look, really, because what I am looking for is the long term growth. If you look every day and it worries you it will drive you nuts. Remember, you are in it for the long haul, even past your retirement, in the case of many feds, who have a defined benefit as well. This really is long term savings and investment. "
OPINION
To us, hearing a "fiduciary responsible agent" of the Federal Thrift Investment Board staff - the group controlling access to your money, make a statement that "rule number one is don't check" borders on criminal behavior.
There are many theories of investing. Buy and hold is one theory. For some, they may be perfectly happy subscribing to that theory.
There is also the theory of dollar cost averaging- buying a little at a time when prices are low, and selling a little at a time when prices are high. That's another theory. And if TSP gets it's way in limiting employees options, then this theory will be illegal under their proposed rules.
In fact, there are as many different approaches to investing as there are different people- with different circumstances. That's why it is important to provide the best system, at a reasonably low cost, that allows individual investors to make their own decisions.
That's what the TSP needs to do.
The TSP Index funds meet or beat the indexes they track. That is the key metric that TSP needs to be concerned about. Success in an index system is when you can say you've met the index exactly- after expenses. No Mutual fund can match the TSP's low costs, and ability to match the indexes, even taking all trading expenses into account. None. That's the beauty of the TSP.
If it can do that-meet the Index it tracks- and it DOES do that, consistently, then it doesn't matter if individual investors move once or ten times in a month.
We believe education is the answer. The role of the TSP Board is simply to provide the mechanisms for people to make their own educated decisions about where to put their own money.
And we believe advice like "Rule Number one is Don't Check" is the worst advice of all.
We advise you DO check where your investments are. And we advise you to talk with an investment professional, and make a plan. We advise you LEARN AS MUCH AS YOU CAN- because the TSP and FERS retirement systems make YOU responsible for your own future.
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There is a better way
Visit http://tsptalk.com to learn more about other alternatives.
See our messages boards for ideas and sample letters to file.
And then visit http://TSPSHAREHOLDER.ORG to subscirbe to the newsletter, or to sign the on-line petition.
Please ask your coworkers to subscribe to our newsletter, and to sign the on-line petition. You'll find it at:
Failing to act now could cost you THOUSANDS in lost gains in the future.
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TSPSHAREHOLDER IS A FREE SUBSCRIPTION SITE- ALL WE ASK IS THAT YOU SHARE THE INFORMATION WITH OTHERS, AND LET THEM KNOW THAT THEIR RETIREMENT NEST EGG IS AT RISK. THEY MUST LEARN MORE, AND FIGHT BACK! |
| THE FEDERAL REGISTER NOTICE IS NOW OPEN. IT'S TIME TO REGISTER YOUR PROTEST. http://tspshareholder.org/docs/FRTIB.pdf
FILE YOUR COMMENT HERE:
Comments may be sent to Thomas K. Emswiler, General Counsel, Federal Retirement Thrift Investment Board, 1250 H Street, NW., Washington, DC 20005.
SEND YOUR COMMENTS IN VIA FAX:
The Thrift Board's Fax number is (202) 942-1676.
DEADLINE IS APRIL 9th! |
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TSPSHAREHOLDER.ORG | 46036 Michigan Avenue | Canton, | MI | 48188
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