Show-me
10-26-2006, 01:39 PM
Here is a tidbit that caught my eye for some reason.
What happens to the agency match if you separate from the Federal Government prior to the vesting period?
From the TSP Financial Statements:
"Forfeited funds, consisting primarily of monies forfeited pursuant to 8432(g), totaled $13,439,000 in 2005 and $10,822,000 in 2004 and, by law, are used by the Plan to pay accrued administrative expenses. If the forfeited funds are not sufficient to meet all administrative expenses, earnings on investments are then charged."
This is great in two ways.
Free lunch for us. Instead of that money going back to the Agencies, it pays to keep our administrative cost down. (Shhhh, don’t tell the taxpayers.) Could this be why we have such a low expense ratio?
The higher the return you make, the more (percentage wise) you pay to the administrative expenses beings it is taken from “earnings on investments”. So if your beating the equity funds your footing more of the bill for those who are not doing as well return wise.
What happens to the agency match if you separate from the Federal Government prior to the vesting period?
From the TSP Financial Statements:
"Forfeited funds, consisting primarily of monies forfeited pursuant to 8432(g), totaled $13,439,000 in 2005 and $10,822,000 in 2004 and, by law, are used by the Plan to pay accrued administrative expenses. If the forfeited funds are not sufficient to meet all administrative expenses, earnings on investments are then charged."
This is great in two ways.
Free lunch for us. Instead of that money going back to the Agencies, it pays to keep our administrative cost down. (Shhhh, don’t tell the taxpayers.) Could this be why we have such a low expense ratio?
The higher the return you make, the more (percentage wise) you pay to the administrative expenses beings it is taken from “earnings on investments”. So if your beating the equity funds your footing more of the bill for those who are not doing as well return wise.