The Govt is monkeying with our savings again

[Zofja1]

Read in the Stephen Barr column of the Washington Post, that the government is borrowing from our funds again. He said, if I understand correctly, that they are not investing all the money, but, they claim that it will not hurt us. That always makes me uncomfortable. Some years ago a NY senator (now deceased, whose name escapes me) made a big stink about it, but, nothing was changed. Grrr::

[Wimpy]

Treasury Dept. Moves to Avoid Debt Limit
By MARTIN CRUTSINGER
The Associated Press
Monday, March 6, 2006; 11:29 AM
WASHINGTON -- Treasury Secretary John Snow notified Congress on Monday that the administration has now taken "all prudent and legal actions," including tapping certain government retirement funds, to keep from hitting the $8.2 trillion national debt limit.
http://www.washingtonpost.com/wp-dyn/content/article/2006/03/06/AR2006030600635_pf.html (http://www.washingtonpost.com/wp-dyn/content/article/2006/03/06/AR2006030600635_pf.html)

--------

I wonder if the raid on and ultimate bankruptcy of Social Security began in the same manner. The only thing keeping the U.S. from hitting this debt ceiling earlier was the fact the expense of the Iraqi War was not factored into the budget.

BOHICA!

[saturneptune]

How often does this happen? Is this just the G fund? Does it get paid back? Is there anything we can do about it? Never heard of this one before. The politicians have really made the federal budget a mess. It would be really nice if they kept their hands off our TSP.

[Wimpy]

This is the second time they've done it that I'm aware of and to my knowledge it just involved the G-Fund. I agree...hands off should be the operative word.

[cowboy]

My thought on this is if you don't want the government to use the G fund then why should they give you an interest rate. Basically that is what the fund is it is the cost of the government to use the fund when needed providing you the very safe interest rate with one of the most stable governments in the world. If you don't want the government to use your money maybe one of the other funds is your cats meow.

[Griffin]

This is the second time they've done it that I'm aware of ....


Wimpy,

In the past, has this been transparent to the TSP investor? (i.e. will the fund continue to recieve it's periodic penny and function normally?)

[Oaktree]

As long as they repay the fund with the interest included what is the problem?

[SkyPilot]

The problem is that it "feels uncomfortable". :confused:

[Cortez]

Bernanke will just whip out the printing press and pay the G fund back. Any interest will be low since the government has an unofficial policy of refusing to recognize inflation.

[Mike]

While the idea of the government raiding our retirement funds is troubling, the fact of the matter is that as long as the rate of return is unaffected and the funds are available for withdrawal, we really have nothing to complain about.

If we start seeing stories of TSP participants being unable to take distributions due to the funds being unavailable (since the government already borrowed / spent them), then we have a major problem.

[Wimpy]

I think Cortez hit at the underlying aspect of what seems troubling with this arrangement when he said, “Bernanke will just whip out the printing press and pay the G fund back.” In essence, that is what happens when our money is first deposited into our TSP accounts in the G-Fund. It is loaned to the government (when the trustee purchases treasuries on our behalf) at the going interest rate. Much of both interest and principal is paid with printing press money as the deficit clearly indicates.

By the government ‘raiding’ of this fund, by suspending the issuance of these treasuries in trade for our payroll deductions to the G-Fund, they are establishing a dangerous precedent of ‘under funding’ these accounts as they did with Social Security. I believe Social Security was, at one time, fully funded and now is under funded or bankrupt. Many corporate pensions, once fully funded, are NOW bankrupt…and legally so.

As sheeple become conditioned to the concept of these ‘raids’ being harmless, it is not much of a leap to convince the sheeple the TSP can function in exactly the same manner as Social Security. In other words, instead of being fully funded it will be funded by New Blood whose salaries are also paid by ‘counterfeit money’. If there is not enough New Blood to support the TSP payouts, the shortfall will be…you guessed it…‘counterfeited’. TSP participation (employee payroll deductions) would no longer be optional in this scenario…they would be mandatory.

How would you feel about your neighbor taking out a home equity loan to buy a matching set of BMWs and then paying the home equity off with their credit cards and when the credit card statement comes in the mail box, instead of paying it off with something tangible, your neighbor goes into the basement and prints that money to pay off the credit card bills?They’ve essentially ‘counterfeited’ and added paper fiat to the monetary system that was ‘unearned’ or not connected in any fashion to GDP. This devalues the existing currency in circulation causing inflation and the prices YOU pay for consumer goods to rise. You’ve basically subsidized his luxury car purchase. You begin fashioning a hangman’s noose and cry out for justice without even considering the government does the same thing a billion times a day, and in a much more leveraged fashion, when they print paper fiat currency, in excess of GDP, to pay for pork they can’t afford. They are committing the same fraud the guy in the basement is committing. The guy in the basement will go to jail, if caught, while the guys and gals at the FED and treasury will get a bonus…that they better spend very fast.

The bottom line: You ARE NOT getting back exactly what was stolen (that taken without your consent) the second time around. Matter of fact, you are not getting it back on the first go either, but at least you contractually agreed to that arrangement by depositing your money there. I suppose one could say, with this latest precedent being established, one has agreed to it, by default, for future deposits we give without a corresponding treasury being issued.

It works for Social Security, why not the TSP, one might ask? Social Security is bankrupt and is totally dependent upon New Blood coming into the system to pay current retirement obligations. These obligations will be increasing several times over in the next two decades. In my mind, this is why the immigration flood gates, legal or otherwise, have been opened up.

The U.S. is in technical bankruptcy and spending beyond its means. Our TSP accounts, our 401ks, our IRAs, and our pensions have ALL become cash cows, with a gigantic BULLS-EYE painted on them, to these D.C. Desperadoes who will milk them dry in one form or another. Inflation (printing away the debt owed) is one form of milking. Out right confiscation is another. We may very well see both forms of milking before the Triple Deficits are reined in and balanced.

The greatest wealth transfer in all of history is taking place in front of our very eyes but most of those eyes are glazed over and dulled. They are too busy maintaining their delicate balance inside the financial hamster wheel to even notice they are sucking wind and going nowhere. Through clenched teeth and flared nostrils they say those funds are protected by law. Patriot Act III, IV, V, or VI or some executive order could end the legal protections ‘the law’ currently provides against outright confiscation and all in the name of ‘national security’. But, they don’t need a new Patriot Act to steal your funds via inflation, do they?

Ultimately, as private sector pensioners are currently learning first hand, the individual investor is responsible for the outcome of their financial decisions. No one has as much of a vested interest in those funds as the individual investor does and it would be extremely unwise to pretend otherwise. If the U.S. Gov’t is unable to protect private sector pensioners, one would be awful arrogant to assume their TSP funds have any absolute guarantee. At best, the math may work out, but in terms of what those funds will actually purchase will most likely leave one on that hamster wheel a few more years than originally anticipated…especially if all one’s financial eggs are in a basket with a humongous bulls-eye painted on it.

If you currently don’t have any gold to protect yourself from the ravages of inflation, but are holding out for the TSP trustee to add a precious metals fund…don’t hold your breath. There will be a precious metals fund eventually…at the top of the market…but you will buying in at the top…not a good plan.

There is a way to use your TSP to fund a gold position to insure your remaining funds against the fraud of inflation. Simply take out a TSP loan of 10% of your total TSP assets and go buy some gold. If what I say comes true, your gold will off-set the devaluation of your remaining TSP funds. With insurance you don’t profit from a loss, but simply hope to break even minus the original premium paid. But you really don’t have a whole lot of time…the fuse is very short and is already lit.

If you believe in gold not only as insurance against inflation, but also believe in gold as a viable investment…increase your gold position NOT with a TSP loan, but rather with cash saved or garnered from selling depreciating assets such as extra and/or expensive cars, snowmobiles, and boats. Cut your overhead and use the extra funds to protect yourself and profit from the marauders who are drooling all over your thrift.

[tsptalk]

Very good post Wimpy!

[Birchtree]

Tom,

Are you being facetious?

Dennis

[tsptalk]

No, not facetious. I am not saying whether I agree or not. It was simply a well written and well thought out post. I wish I could write like that. :)

[Wimpy]

Tom,

Thanks for the kind words!

Wimpy

[FUTURESTRADER]

[. Simply take out a TSP loan of 10% of your total TSP assets and go buy some gold. If what I say comes true, your gold will off-set the devaluation of your remaining TSP funds. With insurance you don’t profit from a loss, but simply hope to break even minus the original premium paid. But you really don’t have a whole lot of time…the fuse is very short and is already lit.[/SIZE][/FONT]

If you believe in gold not only as insurance against inflation, but also believe in gold as a viable investment…increase your gold position NOT with a TSP loan, but rather with cash saved or garnered from selling depreciating assets such as extra and/or expensive cars, snowmobiles, and boats. Cut your overhead and use the extra funds to protect yourself and profit from the marauders who are drooling all over your thrift.[/QUOTE]

gold ETF = (GLD) or open a futures account :) btw, silver etf and msci EFA futures coming soon to a broker near you. 'The new CME E-mini® MSCI EAFE futures contract will be listed for trading at 5:00 p.m., Central Time, on Sunday, March 19, 2006, and will trade exclusively on the CME® Globex® electronic trading platform.'..what effect???

[Wimpy]

Thanks for mentioning the ETF.

Gold held for insurance should probably be held very close at hand, in physical form. Gold held/traded for investment purposes needs the liquidity of more sophisticated financial exchanges, such as an ETF.

Individual gold and silver stocks also provide tremendous leverage to the price of precious metals and can be purchased via online brokerage accounts.

[Jackbnimble]

Wimpy,
I will gladly pay you Tuesday for some gold today.......

It was very well written, but I could see you were going to the gold argument in about the 3rd or 4th paragraph.

With gold prices like they are wouldn't a current investment in gold be "buying in at the top"?

[Army Invester]

If this is all so obvious and Ron Paul preaches it from the roof tops, how come the public remains total ignorant? Could it be that when we graduate from high school we don't even know how to manage a checking account, much less live in a captialist society?

[James48843]

Back to the start of this thread-

I heard another rumor that we are closing in on the debt cap again, and they may be using our "G" fund to finance the government again soon. (see first article in this thread).

Anyone got a link to the latest saga of the debt ceiling and the "G" fund? When do they expect to hit the cap and need to start playing with OUR money?

[Show-me]

http://www.forbes.com/markets/feeds/afx/2007/07/30/afx3967902.html

Paulson asks Congress to raise debt ceiling again in October
07.30.07, 5:15 PM ET

WASHINGTON (Thomson Financial) - The US Treasury Department asked Congress today to raise the US debt ceiling, anticipating that the current cap on federal debt will be reached this fall.

In a letter to Senate Majority Leader Harry Reid of Nevada, Treasury Secretary Henry Paulson said the current ceiling of 8.965 trln usd would be reached in early October, and that Congress should raise the ceiling 'as soon as possible.'

[Jackbnimble]

At Risk? Maybe you should take your money out of the TSP if you believe it is truely at risk Chicken Little.

[qibovin]

Are we talking about ALL TSP moneys or just those in the G-fund? It is my understanding that the reason the G-fund can pay a (relatively)constant rate of return with "no risk" of loss is that it is essentially a loan to the US Gov't (with which they can do whatsoever they darn well please). I agree that there is a risk, but the risk is that the gov't will default on this "loan." If that happens, we've got a lot bigger problems to worry about that our TSP account balances!

[nelsonal]

The G fund invests fully in US government debt, just like Treasuries, except they are special T-Bills that don't pay normal tbill rates, they pay a T Note or T Bond rate set each month.

[logdoc]

I didn't know that the Gov't was tapping out the G fund as well as the Social Security Fund. Holy #%@^*&^%?^!B!!!X!!@.
I had hoped to put about 50% of my pile of money into the G fund. So my nice fat retirement which starts this summer and is relying on my TSP account to cover about 30% of my income my be milked to death by the Beltway bandits. I wonder how many Senators and Representatives know that this is happening to their retirement programs as well. Son of a B..................

[Jackbnimble]

"Just two months ago the the US Treasury reported that the debt had passed the $9 trillion mark for the first time, the announcement coming just a few weeks after Congress had agreed to raise the 'debt ceiling' to $9.8 trillion. Given the rate at which the president has squandered his projected surplus it is possible that the figure will rise above $10 trillion before he leaves office. "

I think they know... They passed the law to approve it.

We need to clean house up there, from congress to the White House and none of the options we currently have are exciting me.

[nelsonal]

You can't have it both ways. How is the government supposed to invest the G (Government Securities) fund in government debt without borrowing the money?

[Elgallo]

Now you know why you can do unlimited transfers INTO the G fund but not any other fund.

Oh and BTW those unlimited G fund transfer are not free either!!

[nnuut]

I plan to roll my TSP into an IRA or other fund that I can manage as I choose as soon as I retire, if not before. We are allowed to make an in-service penalty-free withdrawal and I just might do that. The country is bankrupt and our "trust funds" are nothing but IOU's on paper. China holds a larger share of US debt than the trust funds and if it and other usual buyers choose not to buy more, the trust funds are in trouble. Debt auctions are already failing with more to come.

Congress has an entirely SEPARATE retirement "fund" that is truly untouchable - it is not counted in the budget nor is it tapped like the "trust funds." They are entitled to it as soon as they are elected, whether they serve out their term or not. They are not covered by FERS as they are elected/appointed, not "hired" career servants like the rest of us. They can contribute to TSP but they do NOT get matching funds (sort of like CSRS employees).
This seems to be the REAL info on this subject?
http://www.senate.gov/reference/common/faq/retirement_for_members.shtml
Report on their Retirement Plan
http://www.senate.gov/reference/resources/pdf/RL30631.pdf

[Boghie]

Question...

When the Gubmint shuts down in early March because 'The One' needs a $16 Trillion dollar debt ceiling (and we were whining about an $9 Trillion ceiling in 2006 and a $10 Trillion ceiling in 2008) how does that affect:

OUR ABILITY TO TRANFER ASSETS OUT OF THE 'G FUND' AND INTO THE OTHER FUNDS...

Yowser,

Did anyone try that the last time the Federal Treasury went a'Vikinging...

[anthony]

James and others have talked about G Fund access options by the government as a budget tool in the past, and I think most folks know it's out there, but I saw this article this morning. Adds a little to the ongoing discussion/debate:

"U.S. Treasury's tools to delay hitting debt limit (http://www.reuters.com/article/2011/04/04/usa-debt-limit-idUSN0211689720110404)" (Lawder and Younglai, Reuters, 4 April 11)

"In a letter to Congress, Geithner repeated that the Treasury could take extraordinary measures to postpone a potential default on government obligations. But he warned that these measures would only last about eight weeks."

"GOVERNMENT SECURITIES INVESTMENT FUND: To free up cash, the Treasury can halt reinvestment of another federal employee pension fund known as the G-Fund, which had net assets of about $125 billion at the end of 2010 invested in special short-term Treasury securities with maturities of one to four days. Normally, maturing assets in the G-Fund are reinvested daily. But the Treasury has statutory authority to retain a portion of the fund, as long as it provides proper notification and reimbursement for any lost earnings from the move. Such a move could temporarily claw back $122.3 billion in borrowing capacity."

[Texarkandy]

It's all just 1's & 0's in a computer anyway. It's not like they have your G-Fund monies denominated in gold eagles & buried in a mason jar with your name on it in the backyard of the white house, waiting for you to retire so they can dig it up for you.
(at least I hope not! :eek: )

[James48843]

Question...

When the Gubmint shuts down in early March because 'The One' needs a $16 Trillion dollar debt ceiling (and we were whining about an $9 Trillion ceiling in 2006 and a $10 Trillion ceiling in 2008) how does that affect:

OUR ABILITY TO TRANFER ASSETS OUT OF THE 'G FUND' AND INTO THE OTHER FUNDS...

Yowser,

Did anyone try that the last time the Federal Treasury went a'Vikinging...

It has NO EFFECT on the ability to move accounts.

At least, that's always been the case in the past. It simply means that instead of giving you cash (federal reserve notes??) into your account, they replace the federal reserve notes temporarily with I.O.U's. (*How about that- IOU's for IOUs...)


One can still move from one account to the others even when the treasury is taking the G fund money.

[Myemal]

The Washington Post reports today that the Treasury will begin borrowing money "from a pension fund from federal workers" starting May 6th. This move, along with a few more, helps the Treasury move the debt ceiling date into the first week of August.

[burrocrat]

Can anyone tell me when is the last day to move my TSP money into the equity funds before Turbo Timmy starts playing fast and loose with my G fund collateral?

[SkyPilot]

It has NO EFFECT on the ability to move accounts.

At least, that's always been the case in the past. It simply means that instead of giving you cash (federal reserve notes??) into your account, they replace the federal reserve notes temporarily with I.O.U's. (*How about that- IOU's for IOUs...)


One can still move from one account to the others even when the treasury is taking the G fund money.

That's what concerns me... just because it hasn't happened is no guarantee in itself that it cannot.

Does anyone know what legal provision allows the Treasury to do this?

[nnuut]

Cool down, they have done this before and had No Effect on the TSP. If by some chance it does that means the dollar is insolvent and our money would be worth nothing anyway, fat chance! You don't have to move anything.:)

[Afishegg]

Yeah but wanna know where all this leads?, just look at SS ! Once they get their grubby hands in their then they think they can just keep on doing it again and again, then these current politicians leave and not have to worry about it, and then the whole process starts over. This is, I assure you, only the beginning folks!

[Silverbird]

By law they have to restore whatever temporary monkeying they do, and G returns can never be negative.

Something has to get done before August (if not the economy is in for a real mess); so unless you are planning to transfer out of TSP before then your TSP money should be fine.

It may be only the beginning, but not for the TSP funds. Don't be surprised if we get the 5 year average for FERS, however, that they CAN play with.

[James48843]

...
Does anyone know what legal provision allows the Treasury to do this?

Yes. It's in the law which established the TSP in the first place.

[James48843]

It's in Title 5 USC Section 8438, which states, in part:



(g)(1) Notwithstanding subsection (e) of this section, the
Secretary of the Treasury may suspend the issuance of additional
amounts of obligations of the United States, if such issuances
could not be made without causing the public debt of the United
States to exceed the public debt limit, as determined by the
Secretary of the Treasury.

(2) Any issuances of obligations to the Government Securities
Investment Fund which, solely by reason of the public debt limit
are not issued, shall be issued under subsection (e) by the
Secretary of the Treasury as soon as such issuances can be issued
without exceeding the public debt limit.

(3) Upon expiration of the debt issuance suspension period, the
Secretary of the Treasury shall immediately issue to the Government
Securities Investment Fund obligations under chapter 31 of title 31
that (notwithstanding subsection (e)(2) of this section) bear such
interest rates and maturity dates as are necessary to ensure that,
after such obligations are issued, the holdings of obligations of
the United States by the Government Securities Investment Fund will
replicate the obligations that would then be held by the Government
Securities Investment Fund under the procedure set forth in
paragraph (5), if the suspension of issuances under paragraph (1)
of this subsection had not occurred.

(4) On the first business day after the expiration of any debt
issuance suspension period, the Secretary of the Treasury shall pay
to the Government Securities Investment Fund, from amounts in the
general fund of the Treasury of the United States not otherwise
appropriated, an amount equal to the excess of the net amount of
interest that would have been earned by the Government Securities
Investment Fund from obligations of the United States during such
debt issuance suspension period if -

(A) amounts in the Government Securities Investment Fund that
were available for investment in obligations of the United States
and were not invested during such debt issuance suspension period
solely by reason of the public debt limit had been invested under
the procedure set forth in paragraph (5), over
(B) the net amount of interest actually earned by the
Government Securities Investment Fund from obligations of the
United States during such debt issuance suspension period.


(5) On each business day during the debt limit suspension period,
the Executive Director shall notify the Secretary of the Treasury
of the amounts, by maturity, that would have been invested or
redeemed each day had the debt issuance suspension period not
occurred.

(6) For purposes of this subsection and subsection (h) of this
section -
(A) the term "public debt limit" means the limitation imposed
by section 3101(b) of title 31; and
(B) the term "debt issuance suspension period" means any period
for which the Secretary of the Treasury determines for purposes
of this subsection that the issuance of obligations of the United
States may not be made without exceeding the public debt limit.
(h)(1) The Secretary of the Treasury shall report to Congress on
the operation and status of the Thrift Savings Fund during each
debt issuance suspension period for which the Secretary is required
to take action under paragraph (3) or (4) of subsection (g) of this
section. The report shall be submitted as soon as possible after
the expiration of such period, but not later than 30 days after the
first business day after the expiration of such period. The
Secretary shall concurrently transmit a copy of such report to the
Executive Director.
(2) Whenever the Secretary of the Treasury determines that, by
reason of the public debt limit, the Secretary will be unable to
fully comply with the requirements of subsection (e) of this
section, the Secretary shall immediately notify Congress and the
Executive Director of the determination. The notification shall be
made in writing.

[James48843]

By the way- if they did this in private industry,
it would be illegal and cause the plan administrator to go to jail.


Good thing we work for Uncle Sam.

[Afishegg]

Ok? So what does all that mean? They can take from the g fund? But more specifically, do they take "our" money ie money i have paid into, or is all that stuff just saying that they will just stop matching their contributions? Some here at work seem to think they will just stop putting in their part and that's where they'll get the money. Is this correct?

[James48843]

Ok? So what does all that mean?

In reality? Nothing. You'll still get your money, and it should be transparent to you.




They can take from the g fund?

Just enjoy it. Pretend like the Congress didn't write the language which allows them to create a totally separate class of government obligation note backed by nothing but air. Smile. You'll feel better.


But more specifically, do they take "our" money ie money i have paid into, or is all that stuff just saying that they will just stop matching their contributions? Some here at work seem to think they will just stop putting in their part and that's where they'll get the money. Is this correct?

The law as written says they create a whole "out of thin air" class of debt obligation, to substitute from the Treasury note (itself nothing more than a piece of paper, of course).

Don't worry.

Be happy.

All will be well.

Those aren't the droids you are looking for.


http://www.youtube.com/watch?v=5bNE-5TVAmg

[burrocrat]

You'll still get your money, and it should be transparent to you.

It's worth so little now, it's practically transparent already.

Maybe that explains why we'll be lucky to ever see it.

[FundSurfer]

They are just replacing one IOU with a different IOU. Either way, it is still an IOU. I just hope they stick to just the G-fund. If they start trying to expand to other funds, they could actually start affecting the market negatively.

[Myemal]

Can anyone tell me when is the last day to move my TSP money into the equity funds before Turbo Timmy starts playing fast and loose with my G fund collateral?

It started on May 6th. See the prior post.

[James48843]

It's official now.

We are now officially out of money.
http://welcometothedarkside.files.wordpress.com/2009/07/iou.jpg?w=250&h=314


The Treasury is now offically playing ping-pong with our retirement funds.

http://www.npr.org/blogs/thetwo-way/2011/05/16/136356437/debt-limit-reached-treasury-to-stop-investing-in-pension-plans

[hessian]

Hi James,
In all seriousness, do you think it a good idea to roll out our TSP to a brokerage - like ASAP???
I'm retired so I can't afford any "monkey business!" :suspicious:
Please provide your best asessment/guess.
(I used to think the Gov was the safest place to keep our 401k funds.)
Much Thanks :o
VVR!

[tsptalk]

From tsp.gov:

https://www.tsp.gov/whatsnew/messages/specialMessage.shtml (https://www.tsp.gov/whatsnew/messages/specialMessage.shtml)

The Effect of the Suspension of Issuance of Treasury Securities
to the Government Securities Investment (G) Fund

Absent legislation by Congress to raise the Federal debt limit, the Secretary of the Treasury may determine that portions of the monies in the G Fund cannot be reinvested in Treasury securities because to do so would exceed the present Federal debt limit. However, all of the G Fund monies would still be on account with the Treasury, and the interest which would accrue if the G Fund were fully invested would still be credited to the G Fund.

Some published reports have mischaracterized the actions which may be taken by the Treasury, which are authorized under the law. G Fund investments are safe and will continue, by law, to accrue earnings. The integrity of the G Fund would not be compromised. TSP participants’ accounts would not be affected as a result of any suspension of issuance of Treasury securities to the G Fund.

This is possible because of the “make-whole” provision contained in the relevant section of the Thrift Savings Fund Investment Act of 1987 (P.L. 100-43), 5 U.S.C. § 8438(g)(4), covering this very situation (i.e., a suspension of Treasury securities issuance because of the debt ceiling). The make-whole provision means that TSP participants who have invested in the G Fund will not lose anything. The G Fund account balances would be exactly the same from day to day as if they were invested in Treasury securities. Furthermore, disbursements of TSP loans and withdrawals would not be delayed, nor would the amounts of those payments be reduced.

A Congressional Research Service memorandumhttps://www.tsp.gov/resources/images/icon_pdf_tiny.gif (https://www.tsp.gov/PDF/formspubs/CRS-Memorandum-3-20-2002.pdf) explaining the use of Federal retirement funds during debt issuance suspension periods was issued on March 20, 2002. This report accurately describes the actions which may be taken by the Secretary of the Treasury and the complete protection of TSP participants’ G Fund accounts afforded by the make-whole provision. The General Accounting Office issued a report on August 30, 1996, (AIMD-96-130https://www.tsp.gov/resources/images/icon_pdf_tiny.gif (https://www.tsp.gov/PDF/formspubs/GAO-AIMD-96-130.pdf)) confirming that the statutory make-whole protection (which remains in effect) was properly implemented when it was used in 1995-96.

[James48843]

Hi James,
In all seriousness, do you think it a good idea to roll out our TSP to a brokerage - like ASAP???
I'm retired so I can't afford any "monkey business!" :suspicious:
Please provide your best asessment/guess.
(I used to think the Gov was the safest place to keep our 401k funds.)
Much Thanks :o
VVR!

My honest opinion is- pretend like it isn't happening at all, because there really isn't anything you can do anyway.

It doesn't matter.

If you could convert your money instantly into gold, my answer would be different- but you can't.

You must believe in the intergrity of the U.S. dollar, and the ability of the U.S. govenrment to pay it's bills.

As Tom (and the TSP) point out- there is a "make whole" provision in the law. They can't issue you Treasury notes, but the law says they have to pretend like they are going to , and they have to pay you anyway. Period.

So there really is NO difference if they do or do not have a debt ceiling, to you and to me.

Either you believe that the U.S. govenrment will pay their bills (and the full faith and credit of the U.S. government backs up that law), or they won't. I don't care to think about what happens to our nation if they don't.

So they will. They will pay. The law says so. No sweat.

Allocate your account as you best see fit, but for me, there is NO CHANGE WHATSOEVER as to how I plan to handle my account.

Yes, it's stupid.

Yes, it would be illegal if a private sector employer was doing it.

But yes, the Congress does mess with things every once in a while. No biggie. It is what it is.

Enough said.

[Boghie]

Folks,

It is ONLY your 'G Fund' holdings that are at risk. And, as James states, the risk should be zero.

F/C/S/I cannot be touched by the Treasury.

The 'G Fund' portion of the Lifecycle funds can be touched.

Personally, it is starting to look like a great time to invest in the C/S/I funds. I have a bit (20%) in the 'G Fund'. I am kinda experimenting - eh. Going to wait a bit till the Treasury is deep in my pocket and move the money out of it. That way I will know if the assets are liquid. That may be important at a later date. As a side, it might be interesting if all us TSPTalk types moved our assets out of the 'G Fund' tomorrow:nuts:

[nnuut]

Cool down, they have done this before and had No Effect on the TSP. If by some chance it does that means the dollar is insolvent and our money would be worth nothing anyway, fat chance! You don't have to move anything.:):)
Cool It!:cool:

[James48843]

If you are concerned at all, the best thing you could do is call your House of Representative Congressmen.

They are the ones who must initiate legislation.

[nnuut]

I think if they're going to CUT Government workers benefits, Retirement and Wages we should CUT OFF their credit line to OUR MONEY! NOW!:nuts:

[FAB1]

Were Doomed!!!

well maybe not but I was glad to get that off my chest. Gnite!

[nnuut]

They are trying to do the same thing to our Retirement Funds that they did to Social Security, use the funds for other purposes and leave just a promise to pay it back, then when it becomes insolvent increase TAXES to pay it back. Should be against the law. NO BRAINER!:nuts:

[hessian]

Quote:Originally Posted by nnuut http://www.tsptalk.com/mb/images/buttons/viewpost.gif (http://www.tsptalk.com/mb/showthread.php?p=314985#post314985)
Cool down, they have done this before and had No Effect on the TSP. If by some chance it does that means the dollar is insolvent and our money would be worth nothing anyway, fat chance! You don't have to move anything.:)
Cool It :)

Thanks All,
Tom for your excellent research & reply, re: "G-fund's" stability.
James for confirming some of Tom's and adding more reassurance.
Bogie, for your reply (and I almost did make the 100% "F" trade). :laugh:
And Nnutt, and just all, for your input.
All said and done, personally, I suppose "I'm Cool" with it.
Must say though it still damages my "trust and faith" in our Gov
- something I didn't think possible after working for 17 yrs in DC! :rolleyes: :cool:

[mick504]

Years ago the Feds discussed changing the retirement annuity based on the highest 3 to 5 years; thereby reducing one's annunity. After the next election...this could be a real possibility. Since I'm retired that will not affect me, however recent talk about increasing the employee's or retiree's contribution from about 7% to 12.5% for CSRS and I think about <1% to 6%m 7% or 8.75% (might have been) for FERS, sure got my attention. That's a real hit for us whether working or retired...that was apparently planned or discussed by Wisconsin Senator Paul Ryan....

[James48843]

Years ago the Feds discussed changing the retirement annuity based on the highest 3 to 5 years; thereby reducing one's annunity. After the next election...this could be a real possibility. Since I'm retired that will not affect me, however recent talk about increasing the employee's or retiree's contribution from about 7% to 12.5% for CSRS and I think about <1% to 6%m 7% or 8.75% (might have been) for FERS, sure got my attention. That's a real hit for us whether working or retired...that was apparently planned or discussed by Wisconsin Senator Paul Ryan....

The plan now being discussed won't wait until the next election.

They are talking now- seriously-about doing it BEFORE THE DEBT CEILING IS LIFTED. And yes, BOTH a high-five plan, and the 6% FERS deduction, are seriously being pushed by the right-wingers and being negotiated right now in D.C. as we speak.

[nasa1974]

The plan now being discussed won't wait until the next election.

They are talking now- seriously-about doing it BEFORE THE DEBT CEILING IS LIFTED. And yes, BOTH a high-five plan, and the 6% FERS deduction, are seriously being pushed by the right-wingers and being negotiated right now in D.C. as we speak.

I just had a retirement briefing and the women from HR said that quite a few employees at NASA Headquarters have their papers ready just in case our retirement is changed to a high 5. If it does go to a high 5 I will retire before the end of the year. I also heard that if it goes to a high 5 the unions are going to sue because current employees hired under the high 3 program.

[Atarrin]

I have a question about the math of the proposal. I am not trying to prove a point one way or the other; it is just a serious question.

My current understanding of how FERS contributions work is that the employee pays .8% of his salary into it and that the Government pays ~12% of the employee's salary into it. My understanding of the proposal is that FERS employees would be required to pay an increase of 5.2% of total salary for a total of 6% of their salary into FERS.

First, is that correct?

Second, under the proposal, what % of an employee's salary would the federal government pay into FERS each pay period? (Would it be 6% of salary by each?)

[hessian]

A couple articles - I heard news on Friday (~11:00 am) that the Gov, wants to "lock up" our TSP accounts. :suspicious: I tried to find articles toaday that would support what I thought I heard, but so far not - but here's a couple related...

http://www.wral.com/golo/blogpost/3813642/

http://www.dailypaul.com/162209/next-ira-401k-confiscation-meeting-obama-needs-our-401ks

I think what I heard was on channel CNBCHD on Friday, so I'm going there now, maybe I, or someone, can find more. Sorry, but its too important to ignore.
Did I hear this wrong?? Arrgghh.
VR
Maybe heard something like this... but I thought it was re: Gov TSP?
http://mcauleysworld.wordpress.com/2009/05/11/has-your-401k-locked-up-your-cash-investors-being-denied-cash-withdrawals/

[nnuut]

How Would Failure to Raise Debt Limit Affect the TSP?
July 11, 2011




In response to questions from federal employees and retirees on how a failure of Congress to raise the national debt ceiling would affect the Thrift Savings Plan, the TSP issued this statement:





"Absent legislation by Congress to raise the Federal debt limit, the Secretary of the Treasury may determine that portions of the monies in the G Fund cannot be reinvested in Treasury securities because to do so would exceed the present Federal debt limit. However, all of the G Fund monies would still be on account with the Treasury, and the interest which would accrue if the G Fund were fully invested would still be credited to the G Fund.
Some published reports have mischaracterized the actions which may be taken by the Treasury, which are authorized under the law. G Fund investments are safe and will continue, by law, to accrue earnings. The integrity of the G Fund would not be compromised. TSP participants' accounts would not be affected as a result of any suspension of issuance of Treasury securities to the G Fund. This is possible because of the "make-whole" provision contained in the relevant section of the Thrift Savings Fund Investment Act of 1987 (P.L. 100-43), 5 U.S.C. § 8438(g)(4), covering this very situation (i.e., a suspension of Treasury securities issuance because of the debt ceiling). The make-whole provision means that TSP participants who have invested in the G Fund will not lose anything. The G Fund account balances would be exactly the same from day to day as if they were invested in Treasury securities. Furthermore, disbursements of TSP loans and withdrawals would not be delayed, nor would the amounts of those payments be reduced.

http://www.myfederalretirement.com/public/917.cfm

[Texarkandy]

I've been trying to wrap my mind around this.

Since monies in the G-Fund are loaned to the government in the form of special issue Treasury securities ... how can the government borrow money already loaned to them?

And in terms of new contributions ... how can the government borrow those contributions before it is loaned to them?

[James48843]

I've been trying to wrap my mind around this.

Since monies in the G-Fund are loaned to the government in the form of special issue Treasury securities ... how can the government borrow money already loaned to them?



Here now- Not so fast- Stop looking behind that curtain.

PAY NO ATTENTION TO THE MAN BEHIND THE CURTAIN...

http://www.youtube.com/watch?v=NZR64EF3OpA




Move along, move along.

Those aren't the droids you've been looking for.

[dannyboy]

I have a question about the math of the proposal. I am not trying to prove a point one way or the other; it is just a serious question.

My current understanding of how FERS contributions work is that the employee pays .8% of his salary into it and that the Government pays ~12% of the employee's salary into it. My understanding of the proposal is that FERS employees would be required to pay an increase of 5.2% of total salary for a total of 6% of their salary into FERS.

First, is that correct?

Second, under the proposal, what % of an employee's salary would the federal government pay into FERS each pay period? (Would it be 6% of salary by each?)

I had thought it was the employee can contribute anywhere up to 15% of his pay,before taxes, into FERS. The feds match $ for $ up to 5%? Then all your contribution is at the hands of the market funds return selected, they will make or lose money.
I am unsure of exactly how the proposals will affect the FERS, but I'm sure it is just to take more $'s away from us?
additional clarifications requested
DB

[James48843]

I have a question about the math of the proposal. I am not trying to prove a point one way or the other; it is just a serious question.

My current understanding of how FERS contributions work is that the employee pays .8% of his salary into it and that the Government pays ~12% of the employee's salary into it. My understanding of the proposal is that FERS employees would be required to pay an increase of 5.2% of total salary for a total of 6% of their salary into FERS.

First, is that correct?

Second, under the proposal, what % of an employee's salary would the federal government pay into FERS each pay period? (Would it be 6% of salary by each?)


Close-

It was my understanding that the employee share would be 6%, and the employer's share would be 5.8%.

But that isn't a formal done-deal yet, and could change.


And- to Dannyboy- we are not talking about TSP and employee contributions- we are talking about FERS, and the right-wing proposal to make employees pay 6% more into FERS, ---OR--- the discussion by some on the right to do away with FERS altogether, and only have a TSP fund with no FERS component. That was being discussed by several republican members of Congress.

[Texarkandy]

Close-

.... OR--- the discussion by some on the right to do away with FERS altogether, and only have a TSP fund with no FERS component. That was being discussed by several republican members of Congress.

All I can say to that is.... you get what you pay for.

[nnuut]

All I can say is "I hope you like SEX". Voted for OBAMA, You will love it!:laugh:

[nnuut]

How Would Failure to Raise Debt Limit Affect the TSP?
July 11, 2011

In response to questions from federal employees and retirees on how a failure of Congress to raise the national debt ceiling would affect the Thrift Savings Plan, the TSP issued this statement:
http://www.myfederalretirement.com/public/917.cfm

[Vnc1701]

I have two questions re our current state of affairs...What would be the impact on the G Fund be if the US defaults? And what would the impact be on treasuries if the US is downgraded?Thanks for all who contribute here.Vnc1701 in DC

[nasa1974]

I have two questions re our current state of affairs...What would be the impact on the G Fund be if the US defaults? And what would the impact be on treasuries if the US is downgraded?Thanks for all who contribute here.Vnc1701 in DC

Vnc1701, tough first post. This is the place to get some answers. Welcome aboard.

[tsptalk]

I have two questions re our current state of affairs...What would be the impact on the G Fund be if the US defaults? And what would the impact be on treasuries if the US is downgraded?Thanks for all who contribute here.Vnc1701 in DC
Welcome! I think it's the uncertainty that is the problem. Not many people know what to expect from a default except probably higher interest rates. I don't have any real answers. It would hurt likely stock and bond prices, but I'm not sure what they'll do to the G-fund.

[Vnc1701]

Hopefully nothing of the sort happens but if it does it seems like laws regarding these funds would have to be amended since my understanding is that investments made re G have to be AAA.. I have my fingers crossed

[Boghie]

Treasury:


Treasury Secretary Timothy Geithner warned Congress on Wednesday that the nation will hit its debt ceiling on New Year’s Eve — but that the administration will again take a series of so-called extraordinary measures to hold off default. (http://www.politico.com/story/2012/12/treasury-tim-geithner-us-will-hit-debt-limit-new-years-eve-85508.html?hp=t2_3)
The 'extraordinary measure' is the process of borrowing against your 'G Fund' assets - yuk, yuk. Borrowing using existing debt as collateral. Only in the government.

By the way, how many of us are going to loan them the cash with our 'G Fund' holdings?

I'm thinking of holding my assets in the 'G Fund' and seeing if I am able to IFT assets out. Don't like any of our funds right now - so I guess that means I like the 'G Fund' the best. It would be interesting if we all agreed to yank 10% from the 'G Fund' and place it somewhere else when the Treasury plays this game. It might make them sit up and take notice. Wonder if they will freeze the IFTs:mad:

[burrocrat]

the letter from treasury linked in your article was rather disturbing. it said the assets of G fund are 156 billion dollars imediately freed up to pay the bills. i don't think it matters if we all transfered everything out of the G fund it would just be a ledger entry wink/nod on blackrock's book. in fact, i think they would prefer we transfer out in that scenario because if the market tanks that's less they don't have to pay back.

i had to go to a mainstream media website to figure out what the letter was really saying. http://cnnmoney.mobi/primary/article?url=http://money.cnn.com/mobile/json/2012/12/26/news/economy/debt-ceiling.json

the third paragraph was interesting, it seems to indicate that also the contributions to our pensions (not tsp) are subject to the same. so it comes out of your check on january 10 but doesn't go into the pension 'lockbox'.

luckily payments to existing retirees will not stop as they will be paid from the new investor's deposots coming in. sniff, sniff, yep smells like ponzi.

oh well, possession is nine tenths of the law as they say. it appears my three-legged stool is really just a plank. maybe i can use it for a paddle since i'm up crap creek.

[nnuut]

Buy GOLD! 21636

[nnuut]

I said this last year, now I'm really not that sure. http://www.tsptalk.com/mb/g-fund/2664-govt-monkeing-our-savings-again-4.html#post314985

[Kaufmanrider]

the letter from treasury linked in your article was rather disturbing. it said the assets of G fund are 156 billion dollars imediately freed up to pay the bills. i don't think it matters if we all transfered everything out of the G fund it would just be a ledger entry wink/nod on blackrock's book. in fact, i think they would prefer we transfer out in that scenario because if the market tanks that's less they don't have to pay back.

When I retire, probably Jan 2014 the way things are going, I am moving all my TSP into my Schwab IRA. At least I'll know my money is real and not an IOU from the gobernment. And I'll have far more investment opportunities.

[burrocrat]

When I retire, probably Jan 2014 the way things are going, I am moving all my TSP into my Schwab IRA. At least I'll know my money is real and not an IOU from the gobernment. And I'll have far more investment opportunities.

well i got a good 20 years to go so i'm not really counting my chickens just yet. i've been drawing a paycheck with fica withheld since age 14, that's 30 years. for the last 10 years i've also had fers retirement and tsp taken out too. needless to say i'm a little disenchanted that folks can just borrow it when they want and none of seems like real money, or like it's mine, or like i'll ever see it.

even more disturbing is with all the feds past and present who have 'money' in the G fund, it only totals 156 billion and can only float our current spending for about six weeks.

i have a schwab ira too but nnuut might be on to something. no matter what the investment choices or trading freedom, if i want to spend it i have to convert it to USD first and the dollar is really just debt owed to the privately owned federal reserve, a note so to speak. and the dollar seems rather heavily indebted at this point. maybe that's why it's value keeps shrinking.

i guess the best i can hope for is this big ole borrow and spend wheel just keeps spinning merrily along. it's good for the economy i hear.

[James48843]

Geitner's letter to Congress- outlining the "Extrodinary Measures" they are doing to avoid bankruptcy during the "debt ceiling" fight.

http://www.treasury.gov/connect/blog/Documents/Appendix%20--%20Extraordinary%20Measures%2012-26-2012.pdf

I am avoiding the "G" fund- they can't take my money while I am invested in stocks.

F' them.


https://www.youtube.com/watch?v=7GSXbgfKFWg

[tsptalk]

I am avoiding the "G" fund- they can't take my money while I am invested in stocks.

F' them.
So you say we should go in the F-fund? :D

[Boghie]

James and I are definitely on the same wavelength!!!

Here they come (http://www.fedsmith.com/2013/01/07/tsp-director-confirms-potential-deferral-of-g-fund-payments/), all dressed in white. Extraordinary Measure every other year!!!

Surprisingly, Frixxxx just noted a 150 basis point in the 'G Fund' interest rate. Interesting, eh. Maybe they need to entice the enticeable. There is a new sucker born every day.


Geitner's letter to Congress- outlining the "Extrodinary Measures" they are doing to avoid bankruptcy during the "debt ceiling" fight.

http://www.treasury.gov/connect/blog/Documents/Appendix%20--%20Extraordinary%20Measures%2012-26-2012.pdf

I am avoiding the "G" fund- they can't take my money while I am invested in stocks.

F' them.


https://www.youtube.com/watch?v=7GSXbgfKFWg

[Boghie]

This time too, they are promising to repay it;) (http://money.cnn.com/2013/05/16/news/economy/debt-ceiling/index.html?section=money_news_economy&utm_source=feedly&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_news_economy+(Eco nomy+News))

How scheduled the unexpected has become. Kinda like the ordinary extraordinary. Kinda looks like business as usual for Obama, eh...

[James48843]

Just a reminder- once again the government has run out of "debt limit" and is using the "G" fund to finance the entire government right now.





G Fund and the Debt Limit — (March 18, 2015) As of yesterday, March 17, the U.S. Treasury was unable to fully invest the Government Securities Investment (G) Fund due to the statutory ceiling on the Federal debt. However, G Fund investors remain fully protected, and G Fund earnings are fully guaranteed by the Federal Government. This statutory guarantee has effectively protected G Fund investors many times over the past 25 years. G Fund account balances will continue to accrue earnings and will be updated each business day, and loans and withdrawals will be unaffected. To learn more, visit “The G Fund and the Debt Limit (https://www.tsp.gov/investmentfunds/fundsheets/fundPerformance_G.shtml#debtLimit).”



Are you feeling safe and secure?

(Congress, get your act together and pass a debt limit increase...)

[Lakebound]

Just a reminder- once again the government has run out of "debt limit" and is using the "G" fund to finance the entire government right now.




Are you feeling safe and secure?

(Congress, get your act together and pass a debt limit increase...)


[/FONT]

So, by heaping more debt on younger Americans, this is saving all of us? I'm with you on the point of keeping their hands off of G fund. However, I'm not a fan of raising the debt ceiling. Take a look at your personal checkbook and your personal budget (if you have one). When you run out of money in your account, does the bank keep putting money into it?

No, it doesn't.

Frank

[userque]

So, by heaping more debt on younger Americans, this is saving all of us? I'm with you on the point of keeping their hands off of G fund. However, I'm not a fan of raising the debt ceiling. Take a look at your personal checkbook and your personal budget (if you have one). When you run out of money in your account, does the bank keep putting mney into it?

No, it doesn't.

Frank

Ok, that's fine and dandy going forward. Where we are now: No money.

What do you suggest for right now if no increase?

[RealMoneyIssues]

(Congress, get your act together and pass a debt limit increase...)

Wish USAA would do that so I can upgrade my plane tickets to Portland to First Class and everyone else could pay for it [emoji3]


Sent from my (Daughter forcing me to use an) iPhone using Tapatalk...

[Lakebound]

Ok, that's fine and dandy going forward. Where we are now: No money.

What do you suggest for right now if no increase?

My suggestion would be either to allow more IFT's Paid or free, real time IFT's paid or free or for the TSP Board to find another suitable investment vehicle. Perhaps change TSP partially to allow the purchase of other investments.

But raising the debt ceiling (again?), how many times are we going to go to that well before you hit dust? And if that happens, you can kiss all of your TSP and investments goodbye because they will take it all.

You would think that they would want us to make money in retirement. That way they could sell their idea of forcing newer employees to contribute more to their own pensions. It would make TSP more appealing IMO.

Frank

[userque]

My suggestion would be either to allow more IFT's Paid or free, real time IFT's paid or free or for the TSP Board to find another suitable investment vehicle. Perhaps change TSP partially to allow the purchase of other investments.

But raising the debt ceiling (again?), how many times are we going to go to that well before you hit dust? And if that happens, you can kiss all of your TSP and investments goodbye because they will take it all.

You would think that they would want us to make money in retirement. That way they could sell their idea of forcing newer employees to contribute more to their own pensions. It would make TSP more appealing IMO.

Frank

?

This will address the current and immediate debt/looming-gov't-shutdown issue?

[Lakebound]

?

This will address the current and immediate debt/looming-gov't-shutdown issue?

Did you ask me to address the so-called "looming government shutdown issue"? I didn't read that. And I fail to see how stealing from my G fund or any other TSP account has anything to do with that issue.

Frank

[userque]

Ok, that's fine and dandy going forward. Where we are now: No money.

What do you suggest for right now if no increase?

'Increase' refers to the debt limit increase someone mentioned...to keep them out of the G-Fund right now.


My suggestion would be either to allow more IFT's Paid or free, real time IFT's paid or free or for the TSP Board to find another suitable investment vehicle. Perhaps change TSP partially to allow the purchase of other investments.

But raising the debt ceiling (again?), how many times are we going to go to that well before you hit dust? And if that happens, you can kiss all of your TSP and investments goodbye because they will take it all.

You would think that they would want us to make money in retirement. That way they could sell their idea of forcing newer employees to contribute more to their own pensions. It would make TSP more appealing IMO.

Frank

As you do again here; you previously answered the 'long term' question, not the 'what do you suggest for right now' question.

But it's not really important.

[Lakebound]

'Increase' refers to the debt limit increase someone mentioned...to keep them out of the G-Fund right now.



As you do again here. You previously answered the 'long term' question, not the 'what do you suggest for right now' question.

But it's not really important.


I think I'm done here. Because if I knew the answer to that question, I wouldn't be worried about 3 IFT's a month and paying for Premium services to help me manage my retirement funds.

Good night,

Frank

[userque]

I think I'm done here. Because if I knew the answer to that question, I wouldn't be worried about 3 IFT's a month and paying for Premium services to help me manage my retirement funds.

Good night,

Frank

uhhh...got it