Thread: Promo to stop TSP withdrawal at retirement

Hmm, might it be that the amount of G-fund borrowing they've been doing, would not be possible if people start doing wholesale withdrawals of their tsp accounts?

The Thrift Savings Plan was established by Congress in the Federal Employees’ Retirement System Act of 1986 for federal employees and members of the uniformed services (including the Ready Reserve). It is administered by the Federal Retirement Thrift Investment Board, which is an independent government agency managed by five board members and an executive director appointed by the president.


being independent, they are not directly funded, I presume. their board members and director are political appointee hacks and they have financial ties to the company/ies that manage the funds. with the two moves a month they make the money the TSP govt employees do not.

The promo I saw just talks about those who leave, not retire.

There's another video about the construct of the FERS retirement.

I just wish they would teach how to plan more for employees.

Well, one thing is obvious from our posts....if they intended to do anything to make TSP work better for Feds, we've all somehow missed it...

I think the system was more than adequate when it was developed 30 years ago but it needs an evolutionary update. I've made my points known to them on several occasions but have never seen any of the things we all want (more Fund options, more IFTs, better time to make IFTs) ever considered and most definitely never supported. I think they are doing a less than adequate job for Feds given todays world.

FS

Originally Posted by FogSailing

Well, one thing is obvious from our posts....if they intended to do anything to make TSP work better for Feds, we've all somehow missed it...

I think the system was more than adequate when it was developed 30 years ago but it needs an evolutionary update. I've made my points known to them on several occasions but have never seen any of the things we all want (more Fund options, more IFTs, better time to make IFTs) ever considered and most definitely never supported. I think they are doing a less than adequate job for Feds given todays world.

FS

The items you mentioned are definitely ones we wanted, and still have not received, for adding to our accounts. But my current concern (since I am getting close to retirement) is on the WITHDRAWAL side of TSP.

I apologize in advance for the length of this post, but thought some others in my situation (approaching retirement and considering whether to take all funds out of TSP and transferring to an IRA) would be interested. Here is my email to TSP, and their response:
To TSP:
"This is in regards to your recent promotion to 'stay in the TSP' after retiring.
I find this to be more of an ad campaign than an informational message. You should give all the info regarding options...benefits AND disadvantages. TSP is NOT a private enterprise, so you should be trying to HELP feds made good decisions rather than try to PERSUADE them to make a decision that may NOT be in their best interest.
Yes, the admin costs are low. But there are outside funds that are low also. Vanguard, for instance, has funds that run the gamut high to low....the low ones typically being funds similar to the TSP. But with WAY more variety and flexibility.
Rather than put out an ad campaign, why not make the TSP better so people recognize the advantages and WANT to stay in? The TSP as it stands is EXCELLENT for putting $$ in, not so much for withdrawal.
IMPORTANT SUGGESTIONS TO IMPROVE TSP WITHDRAWALS:
1. Allow unlimited withdrawals after 59 1/2. Outside accounts allow this, why not TSP? Even if still working!
2. Allow Roth funds to be withdrawn SEPARATE from Traditional funds. Taking them out in equal proportions defeats the benefit of Roth. Need to take out Roth when tax rate is high, Traditional when tax rate is low.
3. Allow separate fund allocations for Roth and Traditional. I prefer to have my Roth funds in more 'risky' investments to attempt to get a higher return than my more 'conservative' Traditional balance.

In conclusion, Thank You for 35 yrs of TSP investing, but as I get ready to retire, as it stands now, there is no question that I will take my (hopefully by that time) $1 Million OUT OF TSP. Unless you can fix the withdrawal situation."

Response from TSP:
"Thank you for writing and providing us with valuable feedback about the features you would like available. Participant feedback helps us refine and improve the TSP participant services.
The Federal Retirement Thrift Investment Board has elected to proceed with a project to adopt changes to withdrawal rules; however, such changes are goals that will require legislation. Congress, in law, has provided the TSP's withdrawal options. Therefore, Congress will need to enact laws to change them. While Congress is generally receptive to recommendations to enhance the TSP, the process can, on occasion, be lengthy.

In 2014, the TSP conducted a study on the merits and methods of allowing in-plan Roth conversions as well as other changes associated with the Roth TSP feature (such as allowing participants to elect to withdraw traditional accounts and Roth accounts separately rather than pro rata as is currently required under TSP rules). The results of that study are under review. However, should the TSP elect to allow in-plan Roth conversions and/or other Roth-related changes, it will require significant reprogramming as well as significant changes to our communication materials. While this will not deter us, the TSP is charged with acting in the best interest of our participants and is always looking for ways to meet the needs of our participants; we likely will not be able to implement any such changes in the near future."

So it looks like nothing will change in time for me. Maybe the younger ones in TSP need to take up the battle now so it will be available to them in time!

so basically the tsp board kicked the can into congress' court, who will the predictably (after a lengthy period of time) kick the can back to the tsp board with orders to conduct a study, which will of course take some time before they actually review the results of the in-house study over another lengthy period of time. then the tsp board will make some recommendations to congress who may or may not do anything. after that, if lucky enough to get some or all of the desired flexibility in the tsp accounts, it will require some programming changes and such. then we will have true freedom to manage our individual monies.

there is a reason tsp.gov is not in the private sector, they would be bankrupt and probably sued for negligence of fidicuary duty for handcuffing investor's access to a reasonable and timely trading platform.

i wonder how fast they moved when deciding to limit trades to two per month? shouldn't the money pipeline flow just as quickly in both directions?

Thanks uscfan for keeping the dissatisfaction on the TSP board radar. Not saying that others are not doing that or others have not tried before or since. Might be saying some have given up beating the dead horse to try to get it to do something. Thanks to everyone who is trying to get FRTIB to listen.

PO

I want to know...how much TSP SHAREHOLDER MONEY is being spent trying to convince people, (who make their own informed choices,) NOT to move their money out where they have more flexibility.

Am I paying for that crap advertising?

Originally Posted by James48843

I want to know...how much TSP SHAREHOLDER MONEY is being spent trying to convince people, (who make their own informed choices,) NOT to move their money out where they have more flexibility.

Am I paying for that crap advertising?

Oh, I am sure they are being paid out of the 'low administrative costs' of TSP!

But I believe most TSP'ers will continue to take their funds out of TSP when they retire. So at least we will be voting with our $$.

I like alevin's note about the FEDs probably wanting the $$ to stay in TSP so they can tap the G fund when they need to (like EVERY YEAR!).

Originally Posted by James48843

Am I paying for that crap advertising?

yes. tsp is a self-supported entity. tsp recieves no net money from taxpayers. funding comes from participants who pay administrative fees. currently greg long and the tsp board have decided to have blackrock administer the tsp, for a fee. i would be curious to know how often greg long and the tsp board meet with blackrock and get their lunch gratuitously paid for. that could probably be accomplished by looking at their official calendar. but that information is probably kept in msoutlook email, which is probably stored on a private server, which is probably kept in a political appointee's basement. pffft, at this point, what difference does it make, the dollar has already been destroyed?

Originally Posted by burrocrat

yes. tsp is a self-supported entity. tsp recieves no net money from taxpayers. funding comes from participants who pay administrative fees. currently greg long and the tsp board have decided to have blackrock administer the tsp, for a fee. i would be curious to know how often greg long and the tsp board meet with blackrock and get their lunch gratuitously paid for. that could probably be accomplished by looking at their official calendar. but that information is probably kept in msoutlook email, which is probably stored on a private server, which is probably kept in a political appointee's basement. pffft, at this point, what difference does it make, the dollar has already been destroyed?

FRTIB: Board Members

I wish that they would not pencil whip Mr. Long's position. TSP needs a change.