TSP System Error

[TSPIntel]

If you did make an IFT yesterday into the S-Fund you may want to check the dollars you did have before the IFT, the S-Fund price per share and calculate if the amount of shares are correct. You may notice the four digit wrong. I did an IFT yesterday and the number of shares credited to my account should it be XX.XXX.538136 which rounded should it read XX.XXX.5381 BUT they only credited to my account XX.XXX5378. I called to the TSP today and they recognized the error but nothing they can do right away because it is a System Error. They asked me to write to: TSP Services Office, P. O. Box 385021, Birmingham, AL 35238-5021 and or Fax to 1-866-817-5023 and explaining the issue. So they may evaluated and fix it. Even the amount seems insignificant, it may get big during the years and specially if it applies to all the TSP participants. :confused:

[James48843]

If you did make an IFT yesterday into the S-Fund you may want to check the dollars you did have before the IFT, the S-Fund price per share and calculate if the amount of shares are correct. You may notice the four digit wrong. I did an IFT yesterday and the number of shares credited to my account should it be XX.XXX.538136 which rounded should it read XX.XXX.5381 BUT they only credited to my account XX.XXX5378. I called to the TSP today and they recognized the error but nothing they can do right away because it is a System Error. They asked me to write to: TSP Services Office, P. O. Box 385021, Birmingham, AL 35238-5021 and or Fax to 1-866-817-5023 and explaining the issue. So they may evaluated and fix it. Even the amount seems insignificant, it may get big during the years and specially if it applies to all the TSP participants. :confused:


And so it begins. Not satisfied with simply stealing money by rounding off to the cent (two decimals) on share price, and by utilizing the slush fund of the three day clearing period (we previously discussed this at length), it appears now they've found another way to skim money off the top.


There once was a bank accountant, who found a way to clip three cents off each end-of-month account statement at a major bank in the United States. It was only three cents, and, for most people, the added monthly interest covered up the tracks. This guy developed a software that clipped three cents off each account, and sent the money to another account. After a few years, a Federal Government accounting review found just over four million dollars in the account that those three cents were being sent automatically to. Hmmmm.

He was not charged, as the prosecutor said "How am I going to find witnesses to file complaints and even notice that they were missing three cents?"


If TSP's contracted accounting people are rounding off three one-thousand's of a share in their software, you can bet someone set the software up like that.

Check it, people. Check your math each day you make a move.

Good catch TSPIntel- thanks for the heads up.

[Murphys_Law]

Thanks Intel. I must admit, I never followed my full transfers all that closely other than to ensure i was in the right fund. It makes me think about what I might have missed. Live and learn.

[TSPIntel]

I calculate that if this .067 of a cent lost happens to me everytime I do an IFT; it would turn to be about $5,000 in lost at the end of my career.:mad::mad::mad:

[Monty]

I did an exchange with the S fund on 5/17/2011. I checked results this morning with spreadsheet and found no error. The figures came out to the penny, and I was dealing with a substantial exchange. Maybe they have fixed the problem.

(That's not to say a few pennies were not shaved by the market makers.)

[TSPIntel]

I did an exchange with the S fund on 5/17/2011. I checked results this morning with spreadsheet and found no error. The figures came out to the penny, and I was dealing with a substantial exchange. Maybe they have fixed the problem.

(That's not to say a few pennies were not shaved by the market makers.)
Monty: Did you divide the amount before the exchange into the price per share and check if the numbers of shares they credited you were correct to the fourth decimal digit? Would you please double check it one more time to be sure they already fixed it. Thanks.

[Monty]

Dividing the cost per share into the dollar amount to get the shares will never quite work out . . . especially when dealing with large figures. In the TSP your shares always stay the same from the time of purchase (or exchange) to the next purchase (or exchange).

You will find rounding errors both ways when making exchanges, but it is best to attribute these to the price. I've been surprised only slightly -- both up and down -- in regard to price. Again your shares stay the same.

If you are tracking in Quicken, I especially recommend you track shares and the total cost of the transaction . . . and let the price fluctuate the amount of the rounding error.

I'll be interested in what you find if you look at several transactions. It has been my experience that the price I received was sometimes very slightly up or down, but in general the calculation has been on target. . . BUT it always pays to keep on eye on folks managing your funds.

************************************************
Here is a real-world example from my funds. In order to keep my options more flexible, I make several 1% exchanges from time to time. (If the market changes direction, I can add to each of those so long as it is under the "1% rule" [see that discussion elsewhere] even if I have used both non-G exchanges).

So . . . yesterday, I made several 1% exchanges.

Even though each was 1%, the actual percentage (therefore the cost of the transaction) varies. As it turns out, it is difficult to get the exact amounts.

Below are two of the 1% exchanges. The actual percentages carried to 7 decimals shows the rounding effect:
0.9999967%
1.0000029%
****************************

Just for grins, I totalled all the percentages out to 9 decimals. Even though it looks like (because rounding error), based the percentages, I ended up a winner:
100.000000121%
The actual dollar figure was correct to the penny--before and after.

[TSPIntel]

Dividing the cost per share into the dollar amount to get the shares will never quite work out . . . especially when dealing with large figures. In the TSP your shares always stay the same from the time of purchase (or exchange) to the next purchase (or exchange).

You will find rounding errors both ways when making exchanges, but it is best to attribute these to the price. I've been surprised only slightly -- both up and down -- in regard to price. Again your shares stay the same.

If you are tracking in Quicken, I especially recommend you track shares and the total cost of the transaction . . . and let the price fluctuate the amount of the rounding error.

I'll be interested in what you find if you look at several transactions. It has been my experience that the price I received was sometimes very slightly up or down, but in general the calculation has been on target. . . BUT it always pays to keep on eye on folks managing your funds.

************************************************
Here is a real-world example from my funds. In order to keep my options more flexible, I make several 1% exchanges from time to time. (If the market changes direction, I can add to each of those so long as it is under the "1% rule" [see that discussion elsewhere] even if I have used both non-G exchanges).

So . . . yesterday, I made several 1% exchanges.

Even though each was 1%, the actual percentage (therefore the cost of the transaction) varies. As it turns out, it is difficult to get the exact amounts.

Below are two of the 1% exchanges. The actual percentages carried to 7 decimals shows the rounding effect:
0.9999967%
1.0000029%
****************************

Just for grins, I totalled all the percentages out to 9 decimals. Even though it looks like (because rounding error), based the percentages, I ended up a winner:
100.000000121%
The actual dollar figure was correct to the penny--before and after.
Mr Monty: I really appreciate the time you took to explain me about the IFT roundings. I guess all will balance at the end and wash out. It caught my attention to see the $5,000 lost due to 0.067 cents difference in my $11.3 millions calculation.

[James48843]

Mr Monty: I really appreciate the time you took to explain me about the IFT roundings. I guess all will balance at the end and wash out. It caught my attention to see the $5,000 lost due to 0.067 cents difference in my $11.3 millions calculation.

You are going to have $11.3 million dollars at retirement?

Cool. Can I live in your basement?

[law87]

Mr Monty: I really appreciate the time you took to explain me about the IFT roundings. I guess all will balance at the end and wash out. It caught my attention to see the $5,000 lost due to 0.067 cents difference in my $11.3 millions calculation.

good lord! you and birch need to adopt me. i dont ask for much just a porsche 911

[TSPIntel]

You are going to have $11.3 million dollars at retirement?

Cool. Can I live in your basement? James: Hope it would be more than $11.3M I also hope you may retired at the skyscraper :)

[TSPIntel]

good lord! you and birch need to adopt me. i dont ask for much just a porsche 911 law87: Is that the car Grandma drive? :)

[jpcavin]

James: Hope it would be more than $11.3M I also hope you may retired at the skyscraper :)

I guess BT needs to follow your strategy. 11108

[Birchtree]

Make that a 1969 Porsche 911S model - real hot.

[TSPIntel]

Make that a 1969 Porsche 911S model - real hot. Grandma already drives that :)
http://www.tsptalk.com/mb/image.php?u=529&dateline=1136860309

[TSPIntel]

I guess BT needs to follow your strategy. 11108 I am following BT :) http://www.tsptalk.com/mb/attachment.php?attachmentid=11108&d=1305831298

[law87]

law87: Is that the car Grandma drive? :)


lol whoah there you must own a Bugatti veyron :laugh: