G-fund under attack from the government...

[zoeb]

I'm sort of new here in that I haven't posted...still trying to figure out this economic stuff but I enjoy reading everyone's ideas on investments. I came a across a story on the Internet today that has me concerned. I'm even thinking about reducing my TSP contribution and looking for other ways to save...maybe a Roth IRA, mutual funds...I don't know yet what I'm going to do. My question is do we have any guarantee that the money we put in the TSP will be there when we need it and this stupid administration won't continue to raid it?

The original story came from a posting in Rural carriers usenet. I did a yahoo search and it also had a similar storyabout Sec. John Snow.

>US President George Bush's administration has weathered a pre-election
>mauling by announcing emergency measures to skirt a $7.38-trillion
>debt limit.
>Treasury Secretary John Snow said he would use pension money to keep the
>government running. In a letter to US Senate majority leader Bill Frist on
>Thursday, Snow said he was immediately suspending payments to a federal
>employees' retirement scheme, the Government Securities Investment Fund (G-Fund). The missing money would be repaid in full later, with no net effect on the
>fund or retirees (#), he promised.

I think we had the same promise on social security too....:X

[tsptalk]

Welcome zoeb!

I saw that too. Scary.

Thanks.

[Mike]

How exactly is that legal?

I guess from now on, I'll just be putting money in F, C,S, and I. :shock:

Then again, if they can tap into G fund, they can tap into any of them - but I'd imagine they started with G since most federal employees stupidly dump their money into that one and leave it there.

[Show-me]

From what I understand its a paper shuffle. They track your contributions and gains. Hold them until the debt ceiling problem is resolved and then the Treasury pays you back.This is all done while they use your money tooperate the gov't. You don't loose anythingbut I also do not like the way its done.

[Mike]

I don't trust them. I'm avoiding G from now on- until they pass through this "debt crisis" anyway.

[zoeb]

I also got this message from a political sight I posted on:

Several years ago The Thrift Savings Plan for Federal employees contracted with a private company to upgrade and modernize the record keeping procedures. The company charged millions but failed to meet their deadlines and do the work on the system that they had promised. The millions paid for these promised enhancements came from the federal employees funds. When the Thrift's administrators tried to take legal action to get back money that they had paid the contractor, their attempts were blocked by the Justice Department.

Guess what, the company had close ties to Bush & Co. and got to keep their overcharges. The last I heard the Thrift fund administrators who raised hell about what was done, still had not gotten any satisfaction in recovering the money so the employees rates of return on their investments were reduced accordingly.

This stuff just makes me nervous to know that it can take hits like this and there aren't laws protecting the funds...or there doesn't seem to be anything prohibiting this. :X