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luv2read
07-31-2008, 07:15 AM
I haven't researched it yet, but I vaguely remember something about it being illegal for government agencies to stifle competition from the private sector. It seems that this action falls into that category. They contract OUR jobs out to their buddies in the name of cost savings but when it comes to us actually MAKING money they stifle competition because it would pull money out of the slush fund (TSP). I'm quite interested in the proposed legislation requiring 401(k)'s to disclose all fees since TSP does NOT. The proposed TSP legislation (not the same bill) adding automatic enrollment (and other things) requires TSP to do so.

Moving Out
Meanwhile, you may have noticed some recent advertisements (http://www.aging.senate.gov/letters/fidelityad2.pdf) encouraging you to move your retirement savings out of the TSP and into private sector 401(k) plans or Individual Retirement Accounts. But Sen. Herb Kohl, D-Wis., chairman of the Senate Special Committee on Aging, is urging federal employees and retirees to ignore such claims.
In July 15 letters (http://www.aging.senate.gov/letters/fidelityadletter.pdf) to TIAA-CREF and Fidelity, the two companies running the advertisements, Kohl called the campaigns "a disservice to hard-working public servants," and urged the companies to pull the ads.
"With consumer education as a priority, I have become increasingly concerned by advertisements promoting rollovers that are misleading or do not provide consumers with all the facts," Kohl wrote.
At a July 16 hearing before the Aging Committee, Gregory Long, executive director of the TSP, expressed concern over the ads. "People who leave the federal service are welcome to leave their retirement funds with us," he said, "and we actually encourage them to do so because the TSP has one very big advantage over virtually all private sector plans [and] that is a tremendously attractive fee structure."
Long also said that in 2007, the TSP accepted more than $478 million in funds being rolled over into the plan from private sector 401(k) and IRA accounts.
Kohl said his concern with the ads stems from the high, and often hidden, fees many private sector plans charge their participants, which can significantly reduce the amount of savings Americans have when they retire. In October 2007, Kohl and Sen. Tom Harkin, D-Iowa, introduced legislation that would require 401(k) plan providers to disclose all fees so workers saving for retirement can make informed decisions about which plan is right for them.
TIAA-CREF responded (http://www.aging.senate.gov/letters/tiaacrefresponse.pdf) to Kohl's letter on July 16, agreeing to stop circulating the advertisements. But Fidelity indicated in a July 26 letter (http://www.aging.senate.gov/letters/fidelityresponse.pdf) that it would continue the ad campaign, which characterizes TSP accounts as "old" and encourages participants to roll over into a Fidelity IRA.
Long said at the hearing that the TSP was "still young and vigorous" even after 21 years, largely because of its tracking of broad market performance while adding value for participants via low administrative expenses.
"Participants who would like to transfer their retirement savings from the TSP to an IRA are welcome to do so," he said. "But no one should move their funds from the TSP out of a concern that the TSP is old or retired."

Guest2
07-31-2008, 07:49 AM
"Participants who would like to transfer their retirement savings from the TSP to an IRA are welcome to do so," he said. "But no one should move their funds from the TSP out of a concern that the TSP is old or retired." .

How about poorly run and limited. Now there's a pretty good reason. :mad: