EEK! 5 YEARS TO GO!
08-05-2008, 10:40 PM
This is from the July TSP Highlights. I hope you read the other thread about HR1108, the new TSP provisions recently passed by the House. I find it outrageous that a government agency discourages competition from the private sector while at the same time getting a law passed that gives it unilateral authority to develop "self-directed investment funds" to compete with the private sector; in that same law relieves it of all legal liability (read ACCOUNTABILITY) for TSP members participation in those funds; and gives the agency the authority to allow or deny members access to those funds at will.
http://tsp.gov/forms/index-highlights.html
Have you seen or heard ads encouraging you to move the money in your TSP account to a private sector Individual Retirement Account (IRA)? How about similar suggestions at a financial planning seminar? Financial services companies have figured out that there are almost four million of
you using the TSP to save for your retirement, and they’re vying for the money in your accounts! They know that when you leave Federal service, you can transfer your account to a traditional or Roth IRA (as well as leave the money with the TSP or take one of the other withdrawal options). And, of course, they want you to think of them. That’s the American way.
But before you make a move, think first. Remember, the TSP is not in the business of turning a profit. It was established with the sole objective of helping you save (and therefore pay) for your retirement. It’s a simple, low-cost plan without a lot of frills — but then, do you need frills when you’re investing?
I see at least three contradictions in the bolded section. Let's break that down.
1. The TSP is not in the business of turning a profit. True, FRTIB is not in the business of turning a profit. Barclays, the fund manager, is. FRTIB has changed the rules to enhance and protect Barclays profit to the detriment of TSP members.
2. Profit. FRTIB has a fiduciary responsibility to the members to act in their best interests, not the fund manager's best interests. Is it in our best interests to change the rules to benefit the fund manager while at the same time reducing our potential to maximize our returns and "pay for our retirement"?
3. TSP was established with the sole objective of helping you save (and therefore pay) for your retirement. It’s a simple, low-cost plan without a lot of frills — but then, do you need frills when you’re investing? Is the goal saving, or investing, or both? One of the reasons for changing the rules is FRTIB's repeated statement that TSP is supposed to be a passive vehicle and certain members were too active in managing their TSP "investment." If it's an investment, shouldn't we be actively managing it?
http://tsp.gov/forms/index-highlights.html
Have you seen or heard ads encouraging you to move the money in your TSP account to a private sector Individual Retirement Account (IRA)? How about similar suggestions at a financial planning seminar? Financial services companies have figured out that there are almost four million of
you using the TSP to save for your retirement, and they’re vying for the money in your accounts! They know that when you leave Federal service, you can transfer your account to a traditional or Roth IRA (as well as leave the money with the TSP or take one of the other withdrawal options). And, of course, they want you to think of them. That’s the American way.
But before you make a move, think first. Remember, the TSP is not in the business of turning a profit. It was established with the sole objective of helping you save (and therefore pay) for your retirement. It’s a simple, low-cost plan without a lot of frills — but then, do you need frills when you’re investing?
I see at least three contradictions in the bolded section. Let's break that down.
1. The TSP is not in the business of turning a profit. True, FRTIB is not in the business of turning a profit. Barclays, the fund manager, is. FRTIB has changed the rules to enhance and protect Barclays profit to the detriment of TSP members.
2. Profit. FRTIB has a fiduciary responsibility to the members to act in their best interests, not the fund manager's best interests. Is it in our best interests to change the rules to benefit the fund manager while at the same time reducing our potential to maximize our returns and "pay for our retirement"?
3. TSP was established with the sole objective of helping you save (and therefore pay) for your retirement. It’s a simple, low-cost plan without a lot of frills — but then, do you need frills when you’re investing? Is the goal saving, or investing, or both? One of the reasons for changing the rules is FRTIB's repeated statement that TSP is supposed to be a passive vehicle and certain members were too active in managing their TSP "investment." If it's an investment, shouldn't we be actively managing it?