401K Question

[mlk_man]

One of the 401K's I'm managing for a friend has had a transaction pending since Jan. 17th. I've been able to freely make transactions for almost 2 years before this. She hasn't received any correspondence saying she couldn't make frequent transactions. Now I'm wondering if perhaps it's because her money is now in a Govt. Securities fund and the govt. is holding it because of the debt ceiling?

I know we should call them but that's usually a pain.

Any input would be appreciated.

M_M

[Birchtree]

Most non-governmental 401K have some form of activity restriction as a result of all the mutual fund after hours trading scandles and any assortment of other infractions. They want and need the public trust and they don't necessarily want Roy Rogers pistol shooting their way to prosperity but at the same time running up costs to other shareholders. TSP holders so far have averted the lime light scrutiny - but there are peepers and keepers looking - maybe the reason there was a comment regarding expenses of the I fund - restrictions will be forth coming. Until, just shoot the hell out of the saloon ceiling.

[oldschool]

Vanguard generally doesn't want you out and then back in to the same fund w/in 60 days - that policy seems to have been put in place Oct. 2005. Fidelity policy seems to presume 90 days would be ok. Still, some fund complexes are structured for folks who move $ frequently - Rydex for example.

And unless things have changed up North, I think there aren't many limits on what you do trading wise with the Canadian 401k equivalent, the RRSP or some such.

[mlk_man]

This particular policy is with American National Insurance Company (https://401k.anico.com/redirecthttp.aspx?URL=www.anico.com).

[oldschool]

MM,

They seem to work through a wholly owned brokerage called SM&R.

Here's a section from the SM&R funds prospectus as filed with the SEC 12/29/05

The following policies apply to all fund shareholders:

- Investors of the funds, directly or indirectly, can make only one "round
trip" involving the same fund within any 120-day period. A "round trip"
can be either (i) one purchase and one sale or one sale and one purchase
or (ii) an investor exchange from one fund to another fund and back to
the original fund.


Here's the link

http://www.sec.gov/Archives/edgar/data/881166/000104746905028734/a2166285z485bpos.txt


Once at the link, just do a word search for "market timing" and you get to the section that discusses it. Also says they can change their policies on this subject any old time they like.

Hope this of some use,

Regards,

oldschool

[oldschool]

Also, it's only the G fund securities the gov't can use to help it with the debt ceiling problems it runs into from time to time. The theory is G pays a better rate than it should for its average maturity - in return, the gov't keeps the right to borrow the money and delay payment of interest now and then.

Sort of like some of the gov't claims on some ships, airplanes. It helps some airline and shipping companies get better loan rates on their purchases of equipment, but reserves the right to use that equipment for things like transporting troops to the first gulf war. Surpised some of the airlines and shipping companies though when the gov't exercised it rights and their planes/ships disappeared for a bit.

If the gov't does ever stop paying on the more widely available treasuries - look out!

[mlk_man]

Thanks oldschool, found the info. Mighty nice of ya! Thanks!!!

Guess I'll have to use my long term strategy with it.

M_M