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View Full Version : Privatize TSP?



troxel
11-27-2007, 09:03 PM
Maybe this is a simplistic question but why not privatize the TSP function?

Why can't we roll our 401k accounts to approved outside brokerage service providers that follow the same rules that TSP follows?

Economic theory and history informs that competition will encourage better more flexible services at ever greater efficiencies and lower cost. Our society is built on this notion. Even If TSP had some form of competition we could be guaranteed better services and they would might even solicit input from their customers on occasions!

In addition, privatizing TSP would allow those who want 1-trade a year and ultralow expenses to find a broker with that offering; and those who want and need more flexibility can find a broker with a wider range of services and investment options.

If privatization is not possible then why not at least representation? Why are the TSP board member appointed instead of being voted in by the members? We are the stake holders and we have no voice.

nnuut
11-27-2007, 09:16 PM
Hello troxel, welcome to the board.
Really, I don't think Uncle Sam will let this one go. They borrow money from the "G" fund occasionally to support the government, usually prior to the budget being approved. We run the USA with our savings, Nice!:D

James48843
11-27-2007, 09:52 PM
Sorry Troxel, "privatization" , if that is your word for it, is not the answer. nnuut is right. the government would not know what to do if they could not tap into our retirement funds to float them a loan from time to time. They won't let that go.

Privatize only costs more, not less. TSP runs at 2 basis points per year overall. Most mutal funds run 60 basis points. Which is better, cost wise? You tell me. Even the trading in the I fund numbers they put in the monthly meeting minutes is only around 6 basis points in expenses.

Better. Cheaper. That is what TSP is now.

No vote for privatization from me.

Talltimber
11-28-2007, 08:44 PM
Is F fund available for the Government to borrow? I wonder what would happen if 80% of the people in G fund went to F fund for a month.

nnuut
11-28-2007, 08:58 PM
The timing would have to be perfect, but worth a try. Time it when the new budget is being voted in and they have a lock down, everyone transfer out of the "G" and listen to them SQUEAL!!! :D 2713