Seriously though unlimited to two IFT's?

[Appatite]

When they made this move I didn't much care as I was a buy and hold person. Now, it really matters cuz I understand it a bit more. So how the hell did it happen that the compromise went from 30/31 ift's per month to 2? What knucklehead was in charge of bargaining for us/our side? How do we get this IFT up to say 4? Is there any way we can push this or are we dead in the water here? 2 is NOT enough to get you out of trouble without then screwing yourself later in the month.

[Show-me]

Greg Long and Tracy Ray of TSP and the FRTIB wacko's. You can thank the jackasses that rep. the employee's too, about 12 or 14 of them. They don't give a **** about us they just want sheep.

[nnuut]

We were raising hell, writing our congressmen, writing letters, signing petitions, had a web site to support TSP participants, our repersentives went to Washington for meetings, they wouldn't listen and did it anyway. They were threatening government workers that complained. We fought the good fight and lost.

[jkenjohnson]

I wrote the TSP about 1 year ago and asked about the possibility of changing the number of IFT's from 2 to 4 per month. About 6 months later, I received a response stating that "Congress had made it a law that the TSP investors would be limited to 2 IFT's per month to keep administrative costs low". I never tried to verify if it was a law or not and dropped it. I don't think there is a chance of getting it changed.

[nnuut]

I wrote the TSP about 1 year ago and asked about the possibility of changing the number of IFT's from 2 to 4 per month. About 6 months later, I received a response stating that "Congress had made it a law that the TSP investors would be limited to 2 IFT's per month to keep administrative costs low". I never tried to verify if it was a law or not and dropped it. I don't think there is a chance of getting it changed.
Actually the price of business went up as a result of limiting IFTs, they don't care, Big Banks making Big MONEY!

[James48843]

I wrote the TSP about 1 year ago and asked about the possibility of changing the number of IFT's from 2 to 4 per month. About 6 months later, I received a response stating that "Congress had made it a law that the TSP investors would be limited to 2 IFT's per month to keep administrative costs low". I never tried to verify if it was a law or not and dropped it. I don't think there is a chance of getting it changed.

Seriously? You got that in writing? ? ?


I WOULD LOVE to see that in writing.

No, Congress never put anything like that in law. If they said that Congress is to blame, they are lying.

[FundSurfer]

Actually the price of business went up as a result of limiting IFTs....

That's what really jerks a knot in my cord. The main reason that Greg Long and Tracy Ray used to convince the FRTIB to make the change to limit the number of trades allowed was to reduce cost for everyone else. Their contention was that a few feds were daytrading the TSP and that was driving up the cost for everyone else. Their logic was flawed from the very beginning. I know that I and others sent letters telling them that exactly the opposite would occur. The flawed logic goes like this, occasionally the market makes big moves, when that happens many people move money. Because of the way that they have to do the accounting, they will sometimes guess at what the cost of trading the next morning will be is. On big move days, if they make a mistake, the make up money becomes an administrative cost. Ray pointed the board to several big move days when they made the wrong guess and admin cost were high. (Funny thing is that sometime the opposite is true and the fund made money but Ray didn't mention that.) Ray said that it was the daytrading crowd causing this problem. The flaw in the logic is that by limiting moves to 2 per month instead of 30, you still have big move days. They still make mistakes and cost of those mistakes are still high. Add to that the fact that if you have some people buying and some people selling every day, the buyers and sellers can sometimes even out and that lowers trading cost because the trade happens on paper. You don't have to buy/sell stock and thus you have lower transaction cost. When you reduce the number of trades, you reduce you own internal volume which RAISES transaction cost. It is amazing to me that a financial accountant would make such an obvious mistake.

Truth is, I don't think a mistake was made. I think that Greg Long wanted to protect us from ourselves. We are too dumb, in his mind, to be able to handle our own financial decisions. We children need to be controlled so that we don't make financial mistakes. Thus he forced this issue through the board under the guise of saving money for everyone. SURPRISE! They have cost us more money yet they are unwilling to admit their mistake.

It is upsetting to me because we have created an environment in wallstreet where large buyers and sellers of stock have learned how to manipulate the system to take equity out of the stock market and put it into their own pockets. It is the buy and hold crowd that the equity is being taken from. Limiting our number of trades hampers our ability to deal with this problem.

I would LOVE to have 4 trades per month. That would be enough trades for me 99% of the time. I'm making 2 work, but I'd rather have more. I don't see it happening.

Oh, and one more thing. Board members were monitoring this board. They figured out who some of us were. They acted on some of what they discovered here.

[JTH]

That's what really jerks a knot in my cord. The main reason that Greg Long and Tracy Ray used to convince the FRTIB to make the change to limit the number of trades allowed was to reduce cost for everyone else. Their contention was that a few feds were daytrading the TSP and that was driving up the cost for everyone else. Their logic was flawed from the very beginning. I know that I and others sent letters telling them that exactly the opposite would occur. The flawed logic goes like this, occasionally the market makes big moves, when that happens many people move money. Because of the way that they have to do the accounting, they will sometimes guess at what the cost of trading the next morning will be is. On big move days, if they make a mistake, the make up money becomes an administrative cost. Ray pointed the board to several big move days when they made the wrong guess and admin cost were high. (Funny thing is that sometime the opposite is true and the fund made money but Ray didn't mention that.) Ray said that it was the daytrading crowd causing this problem. The flaw in the logic is that by limiting moves to 2 per month instead of 30, you still have big move days. They still make mistakes and cost of those mistakes are still high. Add to that the fact that if you have some people buying and some people selling every day, the buyers and sellers can sometimes even out and that lowers trading cost because the trade happens on paper. You don't have to buy/sell stock and thus you have lower transaction cost. When you reduce the number of trades, you reduce you own internal volume which RAISES transaction cost. It is amazing to me that a financial accountant would make such an obvious mistake.

Truth is, I don't think a mistake was made. I think that Greg Long wanted to protect us from ourselves. We are too dumb, in his mind, to be able to handle our own financial decisions. We children need to be controlled so that we don't make financial mistakes. Thus he forced this issue through the board under the guise of saving money for everyone. SURPRISE! They have cost us more money yet they are unwilling to admit their mistake.

It is upsetting to me because we have created an environment in wallstreet where large buyers and sellers of stock have learned how to manipulate the system to take equity out of the stock market and put it into their own pockets. It is the buy and hold crowd that the equity is being taken from. Limiting our number of trades hampers our ability to deal with this problem.

I would LOVE to have 4 trades per month. That would be enough trades for me 99% of the time. I'm making 2 work, but I'd rather have more. I don't see it happening.

Oh, and one more thing. Board members were monitoring this board. They figured out who some of us were. They acted on some of what they discovered here.

One of the (if not the) best post this year.

[nnuut]

Exactly the "I" Fund was the main problem and Barclays was blowing their predictions on a daily basis and costing more money. We suggested that IFT in the "I" Fund be based on the opening price the next day curing the problem and saving money, but Barclays liked the income, I suppose. In my recollection that was the main problem.:cool:

[tsptalk]

The only thing they were worried about was keeping their costs down because that is claim to fame - a low cost program. As others said, that backfired on them - Thanks to James for all his research on this.

Low costs were the only thing they really have over other programs. Their investment options are very limited. The transfer deadline is frustrating.

Greg Long actually called me at work (not sure how he got my number) and we shared a few emails. He was very nice to me but it was obvious that they were not interested in compromises. They made up their mind it was going to be 2, and there was no interest in charging fee for extra transfers.

[Frixxxx]

The only thing they were worried about was keeping their costs down because that is claim to fame - a low cost program. As others said, that backfired on them - Thanks to James for all his research on this.

Low costs were the only thing they really have over other programs. Their investment options are very limited. The transfer deadline is frustrating.

Greg Long actually called me at work (not sure how he got my number) and we shared a few emails. He was very nice to me but it was obvious that they were not interested in compromises. They made up their mind it was going to be 2, and there was no interest in charging fee for extra transfers.

Two things:
1 - There is no administrative cost ceiling on TSP in the US Code. No provision was implemented to say administrative costs would exceed ?%.
2 - Review the last FRTIB meeting minutes and you will see that when they implement the limit of 2 trades per month, costs actually went up. But now, we seemed to have dropped back to the level BEFORE we had limits. I wish to know WHY?!?!? How did this happen? Blackrock vs. Barclay?

I have petitioned my Congressmen to review the information to determine why these glaring disparagies exist.

[Frixxxx]

Administrative Costs since 2000:

14509

S & I Fund numbers for 2000 - 0%

This is NOT trade costs! Just verifying on the overhead.

[Frixxxx]

OK,

I think I figured this out.

I am an investor. I have $10,000 invested in TSP all in the S Fund on July 1, 2011.

I have $10,000/23.1295= 432.3483 shares of S Fund

On July 8th, I feel a change in direction and sell my S Shares and buy G shares (at 11:30 EST).

Sell = 432.3483*$23.4219= $10126.42
Buy = $10126.42/13.6889=739.7541 G Shares

Now, my account reflects the EXACT trade amount, but there were trade charges incurred. Where are these transactions recorded? How are they charged to the TSP?

The answer is that my trade cost $4.00, but I'm not charged that directly. It is dispersed across the funds.

Why this is confusing, is that as individual investors, we would expect it to reflect in our accounts, but it doesn't. It is administratively handled and passed out across the membership.

Now let's say because I traded $10,000 the trading cost was $10.00. This would represent a .1% of the account value.

Now enter in Birchtree (hypothetically)! He executes the same trade, but his account has $2,000,000. Because of the value, his trade cost is higher, let's say $1,000. or .0005%.

Now, Birchtree is laughing all the way to the bank because his account barely got touched (percentage-wise). But I'm like WTF? My trade should have only cost a nickel.

But that's not what happens. The costs are transferred across the member base and it devalues EVERYONE'S account. That's the nature of this beast.

But, you can read here LINK (http://www.myfederalretirement.com/public/253.cfm) and see how they explain reconciling accounts at one price on one day and taking a loss at opening day prices the next.

So, to be "fair" they decided that since this was a group investment tool, the costs would be shared by the group. This 401g plan was never designed to have the fleixbility of the single investor. The only way we could get that freedom, is if they offered a "privatized" solution. That means, instead of depositing our 401g money into TSP, it would go into a commercial 401k account. I might be able to swallow that, then I get the freedom I want minus the FRTIB headache! But I would have to give up on a low management fee.

Make sense? I need to validate my thinking!

[Birchtree]

Count your blessings that I'm not much of a swing trader.

[nasa1974]

I wrote the TSP about 1 year ago and asked about the possibility of changing the number of IFT's from 2 to 4 per month. About 6 months later, I received a response stating that "Congress had made it a law that the TSP investors would be limited to 2 IFT's per month to keep administrative costs low". I never tried to verify if it was a law or not and dropped it. I don't think there is a chance of getting it changed.

I would love to see this in writing also.

I do not have time this weekend, but I will review Title 5 as soon as I can to see if it mentions a 2 IFT limit. Any changes have to be put in the Federal Registar for review, but I do not know what affect Congress has on Title 5.

Frixxxx has the inside track on trading costs but the operating costs have gone up every year.

There were all kinds of excuses given why the FRTIB was forcing us to 2 IFT's. The biggest reason, in my opinion, was Barclay's. If a few of you remember there was that big swing in and out of the I fund over a couple of days and Barclay's almost didn't have enough money to cover the move. That was the beginning of the end of the daily IFT.

[burrocrat]

Frixxxx, your explanation assumes each account is traded and incurs fees individually, similar to a private brokerage account like we own it or something, but that can't be the case because if we individually owned our shares, including the 'G' ones, then Turbo Timmy would have to come ask each of us if he could please borrow it to help keep the wheels greased until August 2nd, and that didn't happen.

So I'm guessing the entire holdings of each fund are actually owned and traded by TSP in big blocks and we are simply shareholders in the operation entitled to a portion of the aggregate holdings commensurate with our contributions and earnings, similar to a co-op.

That makes the whole trading game so easy a caveman with a little spreadsheet experience could do it. Every investor gets a row in the table, with columns corresponding to each fund. The number of shares of each fund is listed and earmarked for you. The number of shares doesn't change unless you trade that particular day (or make a contribution). At the end of the day you simply sum each column and record the net number of shares needed or excess for each fund.

Then you make one big trade on the market per day for each fund, either a buy or a sell depending on if aggregate number of shares increased or decreased, and divy it up internally to the TSP co-op share holders. With that kind of volume we should be getting a pretty good deal on the transaction fees, with plenty of change left over to pay the computer monkeys and a few self-absorbed administrators to baby sit our nest eggs. Too easy.

Even if it doesn't (or couldn't) work that way, I'm not buying that the individual number of IFT's have anything to do with admin costs for everybody, otherwise we've been hanging the wrong scapegoat.

Example, say TSP has 1,000,000 participants, with trading strategies as follows:

500,000 active traders x 4 transactions each (two IFT's and two payroll contributions per month) = 2,000,000 trades
400,000 buy-n-holders x 2 transactions each (two payroll contributions per month) = 800,000 trades
100,000 Lifecycle fund investors x 30 trades each (rebalance everyday to maintain allocation) = 3,000,000 trades

Observations:

In any given month more than 50% of the transactions are made on behalf of people who aren't really trading, just sitting on their thumbs in an autopilot fund. Do you wonder if that is a cash cow for Blackrock, like a way to skim fees or something?

The folks that prefer to trade more often than two almost certainly wouldn't be trading every single day. And it wouldn't matter anyway since each and every TSP fund - all ten of them - must rebalance every day thanks to the Lifecycle funds. So why limit the number of trips the active traders can take when the bus is going that direction anyway and collectively we've already paid for the fuel thanks to the L20something maroons? If anything, the additional number of transactions from the actives should add volume and lower cost per trade for everybody.

That don't make no sense.

[nasa1974]

SUBCHAPTER VII—FEDERAL RETIREMENT THRIFT INVESTMENT MANAGEMENT SYSTEM
Here is the link http://www.law.cornell.edu/uscode/html/uscode05/usc_sup_01_5_10_III_20_G_30_84_40_VII.html

SUBCHAPTER III—THRIFT SAVINGS PLAN
Forgot this one http://www.law.cornell.edu/uscode/html/uscode05/usc_sup_01_5_10_III_20_G_30_84_40_III.html

[Frixxxx]

Frixxxx, your explanation assumes each account is traded and incurs fees individually, similar to a private brokerage account like we own it or something, but that can't be the case because if we individually owned our shares, including the 'G' ones, then Turbo Timmy would have to come ask each of us if he could please borrow it to help keep the wheels greased until August 2nd, and that didn't happen....
That don't make no sense.
The link I provided explained it that way...I'm not saying it's fact or right...just saying....

What I think is weird (example) is that when they close the "I Fund" on one trading day it closes at $23.00 If a million shares traded out that day the pay the accounts $23.00/share. But when the shares are actually traded the next day at market open, let's say $22.50 there is a cost incurred to the fund because they didn't sell what they paid the accounts. $.50*1,000,000=$500,000 shortfall. And of course it worked in reverse.

It is stated by the TSP board that the costs were in the I Fund, not the other ones....so why the sweeping across the board limit?

It makes some sense but it is not the total picture!

[nasa1974]

I took the time and quickly looked through; TITLE 5 (http://www.tsptalk.com/mb/usc_sup_01_5.html) > PART III (http://www.tsptalk.com/mb/usc_sup_01_5_10_III.html) > Subpart G (http://www.tsptalk.com/mb/usc_sup_01_5_10_III_20_G.html) > CHAPTER 84
CHAPTER 84—FEDERAL EMPLOYEES’ RETIREMENT SYSTEM

I found nothing that made any reference to our limit of 2 IFT's a month. However, Title 5 of the US Code as currently published by the US Government reflects the laws passed by Congress as of Jan. 7, 2011.

[burrocrat]

But, you can read here LINK (http://www.myfederalretirement.com/public/253.cfm) and see how they explain reconciling accounts at one price on one day and taking a loss at opening day prices the next.

http://www.myfederalretirement.com/public/253.cfm


it became clear that a small number of TSP participants were pursuing ``market timing'
active investment strategies in the TSP. These activities were diluting
the earnings of the long-term investors, and adversely affecting the
ability of TSP managers to replicate the performance of selected
indexes as required by law.

Wait, wait, wait. The TSP funds are just index funds right? And they just trade the market? And trading the market makes it dificult for TSP managers to replicate the performance of the market? So we gotta quit trading so much because it makes their jobs harder? Boy, would I like to have that job description.

Before I go and say something stupid like 'leave it up to the gubmint to screw up an index fund'... maybe I should ask what are the admin/operating fees for TSP compared to private index funds?

At a online brokerage I pay 0.08 in annual fund operating expenses for a S&P equivalent, and can get in and out as often as I want, and I supposedly actually own the shares.

Oh my, I think I just got it...

The key words in the TSP board's statement is "replicate the performance of selected indexes". Notice they don't say own the shares of, rather replicate the performance of. So when we invest in TSP we're just buying paper? That supposedly copies other paper? Like a derivative? And they charge us how much for the priveledge?

I don't understand why anyone would plug more in that scheme than required to get the 5% free money. Classic double-or-nothing proposition, put in x and get out either 2x or 0, yeehaw! I call tails!

I better put a little more thought into my retirement plans, got to get back to work.

[nasa1974]

Thanks burro. Read the link. Interestingly, less than 4 years later their reasoning doesn't hold up. Just off the top of my head the basis points against each fund is up and operating cost have at least tripled. So where is the savings?

[burrocrat]

So where is the savings?

Maybe because the board was tired from being so busy trying to replicate the market they just read it wrong, and when they got to the 'savings' part they just saw the 'sa' and glossed over the rest thinking it must say 'salary', naturally followed by 'increase' because they've been working so hard to replicate the market and all.

Are they fed employees with publicly available compensation like the rest of us?

Wonder how much those guys get paid. For hanging paper. My paper.

[FAB1]

Maybe because the board was tired from being so busy trying to replicate the market they just read it wrong, and when they got to the 'savings' part they just saw the 'sa' and glossed over the rest thinking it must say 'salary', naturally followed by 'increase' because they've been working so hard to replicate the market and all.

Are they fed employees with publicly available compensation like the rest of us?

Wonder how much those guys get paid. For hanging paper. My paper.

So they read this board. Well I say they are a bunch of liars (liars all burn in hell dont they?) - they are lazy too and overpaid.
Stupid liars get caught in their stupid lies and then act like nothings wrong. ha.

[burrocrat]

So they read this board. Well I say they are a bunch of liars (liars all burn in hell dont they?) - they are lazy too and overpaid.
Stupid liars get caught in their stupid lies and then act like nothings wrong. ha.

Whew, thanks FAB1.

After my last rant I was a little paranoid they might come after me, but now I'm pretty sure they coming for you.

[nasa1974]

What are they going to do? Deny our TSP?

[Buster]

Oh, and one more thing. Board members were monitoring this board. They figured out who some of us were. They acted on some of what they discovered here.This is a fact..I had to change my name and cleanse my TSPtalk account because those assholes Greg Long and Tracy Ray were threatening to contact my employer at the time, they quoted posts I had made in a certified letter sent to my home address..Ironicly, the money they spent on all that bullshit could have afforded everyone at least 6 IFTs a month, but they decided to waste money playing dirty pool and wasting our funds to monitor this board..so be careful with what you say....Now that I'm retired and not a member of TSP anymore, I can freely tell them to kiss my ass!

[Appatite]

What is this, the age of macarthyism?Well, I call em like I see em. Bunch of assholes screwed us.Let em come after me. Not much they could do.

[nasa1974]

This is a fact..I had to change my name and cleanse my TSPtalk account because those assholes Greg Long and Tracy Ray were threatening to contact my employer at the time, they quoted posts I had made in a certified letter sent to my home address..Ironicly, the money they spent on all that bullshit could have afforded everyone at least 6 IFTs a month, but they decided to waste money playing dirty pool and wasting our funds to monitor this board..so be careful with what you say....Now that I'm retired and not a member of TSP anymore, I can freely tell them to kiss my ass!

Wow. I would have been talking to my legal folks and the FBI. Threatening a federal employee when he or she is doing nothing wrong. Did they legally or illegally get your information, and how?

[James48843]

The legal guy at the Thrift Board (Not Greg Long, but whoever the guy was who was the senior legal counsel guy. I can't even remember his name) submitted a formal allegation against me to my employer, which resulted in me being investigated at work, and subjected to hours and hours of intense questioning.

The allegation of the Thirft Board was that I had "Disparaged a senior executive of the United States Government,", and "Used words unbecoming of a United States Employee", when I posted one day the following words on TSPTALK.

I had been very critical of Ms. Tracey Ray, when I said that Ms. Ray was totally incompetent, had no business serving in the capacity she was, that she was causing a great deal of harm to shareholders, and that people were being screwed by her total incompetency. I said that she was incapable of figuring out where the costs were, and that her recommendation to the full board was plainly wrong, and that anyone who had a clue could figure out that what she was saying was incorrect.

The specific words that I was charged with by the Senior Legal counsel was a comment I posted, AFTER the Board approved Ray's recommendation to limit TSP trades to no more than 2 month- which I pointed out would harm employees. My exact wrote was "Tracey Does Dallas".

Apparently Ms. Ray and the senior executives didn't like that, and attempted to cause me to be fired.

I suddenly had my Agency's security service show up at my office one morning, take my computer, spend 48 hours analyzing my work computer, then spend a full day interrogating me.

I showed the Security Investigator (A GS-14, by the way) exactly what I had posted, how TSPTALK had changed my ability to grow my TSP, how HE could do the same, IF they had unlimited trades, and how Tracey Ray's actions would cost all TSP shareholders MORE in administrative costs, than leaving it with unlimited TSP transfers.

After weeks of a formal investigation, it turned out that truth was a very valid defense.


The truth will set you free.

Always.

[burrocrat]

"Disparaged a senior executive of the United States Government,", and "Used words unbecoming of a United States Employee"

The truth will set you free.

"disparaged" I have no problem with that, if it is true.

"words unbecoming" Yep you're definately guilty.

Any way, you're still free, true dat.

[nnuut]

Like my Dad used to say "CAREFUL the Walls have Ears". 14521