[Federal Register: April 24, 2008 (Volume 73, Number 80)]
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
Rules and Regulations
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
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FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
5 CFR Part 1601
Participants’ Choices of TSP Funds
AGENCY: Federal Retirement Thrift Investment Board.
ACTION: Final rule.
SUMMARY: The Federal Retirement Thrift Investment Board (Agency) amends
its interfund transfer (IFT) regulations to limit the number of
interfund transfer requests to two per calendar month. After a
participant has made two interfund transfers in a calendar month, the
participant may make additional interfund transfers only into the
Government Securities Investment (G) Fund until the first day of the
next calendar month.
DATES: This rule is effective on May 1, 2008.
FOR FURTHER INFORMATION CONTACT: Megan Graziano, 202-942-1644.
Under the Federal Employees’ Retirement System Act of 1986, the
Thrift Savings Plan (TSP) was created to offer passive long-term
investments designed to improve the retirement security of Federal
employees. As a result of analysis performed in 2007, 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.
The Chief Investment Officer reported these findings to the
Executive Director on November 6, 2007. The Executive Director
presented the information to the Federal Retirement Thrift Investment
Board members at their public monthly meeting on November 19. Subject
to the input from the Employee Thrift Advisory Council (ETAC), the
Board authorized the Executive Director to put in place both interim
and structural restrictions on frequent interfund transfer activity.
The 15 members of the ETAC were advised that same day and presented
with the information developed by Agency staff. Under longstanding
custom, ETAC members were also provided an advance copy of the Agency’s
interim proposed rule. Two ETAC member organizations voiced some
concerns, and the Agency decided to withhold publication of the
proposed interim rule until a public meeting of the ETAC and the
Executive Director could be conducted on December 19. After extensive
discussion at the meeting, no ETAC member objected to the Agency’s
implementation of its interim plan. The proposed interim rule was
forwarded to the Federal Register on December 21, where it was
published on December 27. The rule took effect on January 7, 2008.
On January 24, 2008, under the interim rule, the Executive Director
sent letters to 3,775 TSP participants who had been identified as
frequently requesting IFTs. The letters explained the need to reduce
this activity and asked recipients to voluntarily reduce their IFT
requests. The letters also warned each individual that a failure to
practice self-restraint could result in the imposition of restrictions.
Eighty-five percent of those who received a letter voluntarily
complied. However, 549 individuals continued their frequent IFT
activity during February. These individuals were subsequently notified
by certified mail that they would be restricted to requesting IFTs by
mail, effective April 1, 2008. Their option to request IFTs via the TSP
Web site or over the Thriftline was suspended until plan-wide
structural restrictions are implemented. However, some have appealed
their restrictions, and, in appropriate cases, the Agency has approved
On March 10, 2008, the Agency published a proposed rule with
request for comments in the Federal Register (73 FR 12665, March 10,
2008). The Agency received comments from three Federal employees’
unions and from 354 TSP participants. One comment purported to include
the views of over 4,000 participants. Additionally, the Agency received
and reviewed 110 comments prior to the Agency’s publication of its
January 7, 2008 interim regulation; these comments were reconsidered as
a part of this rulemaking process.
Commenters raised a number of issues and a detailed response to
each one is provided below. By way of summary, those individual
respondents who have personally made frequent interfund transfers and
oppose the proposed limits display a fundamental misunderstanding of
the statutory TSP design. They also present two overarching arguments
which deserve discussion at the outset, because they obscure the damage
which their frequent IFTs inflict on other plan participants.
By misappropriating language used in the capital markets (buys,
sells, trades), some TSP participants give the impression that their
frequent interfund transfers are trades in and out of the markets which
affect only their own funds. This is incorrect. All TSP assets are in a
pooled investment which is designated by statute as the Thrift Savings
In this regard the TSP funds are like mutual funds regulated by the
Securities and Exchange Commission (SEC). In 2005 the SEC took steps to
reduce activity in mutual funds. It did so after finding that:
“Excessive trading in mutual funds occurs at the expense of long-term
investors, diluting the value of their shares. It may disrupt the
management of a fund’s portfolio and raise the fund’s transaction cost
because the fund manager must either hold extra cash or sell
investments at inopportune times to meet redemptions.”
Congress established the Thrift Savings Fund as a long-term,
passive investment. The legislative history shows that active
investments were considered, but rejected. The Federal Retirement
Thrift Investment Board is required by law to develop policies under
which four Thrift Savings Fund offerings–commonly known as the C, S,
I, and F Funds–are invested to “replicate” the performance of
market indexes at a low cost. Through careful and diligent management,
these goals have been achieved for more than twenty years.
Each day the Agency and its contractors tally new contributions,
loan activities, disbursements, and IFTs to arrive at net amounts
available for investment in each of the Thrift Savings Fund offerings
that day. A similar netting process occurs in the TSP asset manager’s
commingled investment funds, which include the assets of many other
institutional investors. Predictable cash flows and offsets due to
netting minimize trading costs.
This carefully designed structure, which optimizes achievement of
the statutory goals, has been challenged over the past year by a
noticeable increase of IFTs by a small group of participants. The
Agency’s analysis has demonstrated that fewer than 1 percent of TSP
participants are engaging in this activity to the detriment of more
than 99 percent of participants who are long-term investors (those who
requested 12 or fewer IFTs in calendar year 2007).
The actions by the small group have become less random, which
suggests coordination and leads to fewer opportunities for cost savings
due to offsets. The deleterious consequences of these activities in the
TSP are the same as those which the SEC found occurring in mutual
funds. Importantly, the clear intent of this activity–to “beat” the
market indexes–fundamentally conflicts with statutory mandates that
the Board provide passive investments which replicate the performance
of market indexes.
Claim That Frequent Interfund Transfers Do Not Significantly Increase
Costs Is Misleading
Commenters who oppose restrictions cite the very low TSP
administrative expenses as evidence that their actions are harmless.
Some concede additional costs, but argue that those additional costs
are de minimus and only amount to $4 per year, per participant.
While we neither accept this number nor the process by which it is
derived, the view that exceptional costs generated by 1 percent of
participants should be viewed as inconsequential if they can be charged
off to 100 percent of plan participants is troubling. The resulting
small average cost obscures a significant problem, i.e., the cost to
other individual participants can be very high depending on how funds
are invested on a particular day. This issue is discussed further
Moreover, the Agency rejects the argument that $16 million in
trading costs is small. The entire budget for the TSP in 2007 was just
$87 million. In the context of how the TSP fiduciaries run the TSP,
this additional $16 million is a very large number.
Costs remain low in the TSP because the Board, exercising due
diligence, looks behind broad averages. Indeed, diligent examination
led to the discovery last summer of frequent interfund transfer
activity by this very small but determined cohort of participants.
As noted above, individual TSP interfund transfers are not
“trades” and transferees are not “traders.” However, frequent IFTs
can and do generate expenses which include trading costs at the Fund
level. The Agency and its asset manager endeavor to minimize trading
costs through offsets, netting, and cost free “cross-trading.”
Ultimately, if the asset manager must go to the market to buy or sell
securities, the associated transaction costs (including commissions
paid to the brokers, transfer taxes, and market impact) are borne by
all participants in the Fund. These costs are not reflected in the
highly publicized and very low TSP expense ratio. Further discussion of
transaction costs is featured below.
Recommendation That Interfund Transfer Restrictions Apply Only to the I
Fund Obscures Significant Abuse
A number of commenters acknowledge that the analysis presented by
the Agency staff makes a compelling case to restrict interfund
transfers in the I Fund. However, they argue that the analysis is not
as compelling for the other TSP funds. The Agency has decided to apply
the restrictions to all TSP offerings for two reasons:
First, the Agency’s analysis does demonstrate measurable and
growing adverse effects of frequent IFT activity in the S Fund.
Moreover, since the analysis was performed, interfund activity in the F
Fund increased as well.
Second, the G Fund has been subjected to a frequent transfer/market
timing practice that is particularly insidious.
The G Fund is invested in specially-issued Treasury securities
which provide a fixed rate of return established monthly. It is
considered the TSP “stable value” fund, and is especially important
to those cautious investors who seek security of principle and
Some of the frequent interfund transferors have determined that by
making one-day round trips in and out of the G Fund three to five times
each month, they are able to effectively collect a full month’s worth
of G Fund earnings for just three to five days of actual G Fund
investment. The windfall they secure comes at the direct expense of
long-term G Fund investors who never anticipated that their safe
retirement investment would be subjected to such mercenary treatment by
their fellow TSP participants.
Practitioners visit a Web site in order to compare notes and
calculations to assist each other in the execution of this scheme. They
congregate at a message board which they have aptly titled “G Fund
Payday.” Indeed, like ghost workers, these individuals only show up in
the G Fund on the days when their calculations show that G Fund shares
will increase in value. With a finite amount of earnings to be
allocated, these individuals unquestionably dilute G Fund value at the
expense of long-term investors.
This indefensible practice will be severely curtailed by the limit
on interfund transfers. Additionally, the Agency will make a structural
change beyond the purview of this rulemaking which will totally
eradicate this particularly abusive form of frequent interfund transfer
The Agency received three comments from Federal employees’ unions.
All acknowledged that frequent IFT activity is detrimental to the
performance of the funds and that some action to restrict it is
One union supports the regulation as written.
One union commented that changes that have already been made
address the frequent transfer problem and no further changes are
needed. This union is referring to the interim regulation implemented
by the TSP in January 2008, whereby the Executive Director identified
3,775 participants who were making excessive IFT requests, thus driving
up costs for the participants who are using the TSP in the way it was
intended, as a long-term retirement vehicle. Letters were sent to those
participants requesting that they voluntarily restrict their IFTs to
fewer than four in the month of February. The letter noted that, if the
participant did not voluntarily comply, s(he) could be limited to
making IFT requests by mail only. This limitation would remain in
effect until the Agency implemented structural changes that would
automatically apply to all participants.
Thus, the Agency’s actions so far were only approved as a temporary
measure, to deal with an immediate problem, until the longer-term
solution could be put in place. It was an extremely labor-intensive
process to identify these individuals, notify them by mail,
identify those who did not voluntarily comply, send them certified
letters, restrict their online access, and handle their appeals.
Additionally, in all fairness to those individuals, the Agency
would have to continue to apply that same labor-intensive process to
all participants on a monthly basis.
With this final regulation, the Agency will implement a structural,
automated process. While the union asserted that the interim measure
was less “Draconian” than the proposed regulation, the Agency sees it
as the opposite. Under the interim regulation, affected participants
must submit IFT requests by mail and, as the Agency processes mail
requests in the order received (not necessarily in the order mailed),
participants have reduced control over what order their IFTs are
executed. (One participant commented against the union proposal and
noted that the interim regulation is “Draconian.”)
This union also suggested that if a change is necessary, it should
be “to allow two transfers per month and after two transfers (if other
than the G Fund), attach a fee for servicing the transfer.” “While it
may be `impossible to correctly assign the exact costs,’ we can follow
the leads of other such funds in arriving at a figure.”
In its research, the TSP found no mutual fund or defined
contribution plan which allows participants to make a certain number of
free transfers and then charges a fee for additional transfers. In
fact, fund managers who use trading limitations and fees, do so as a
double deterrent, not as a way to accommodate more transfer activity.
In recommending this approach at an ETAC meeting, the union noted that
TIAA-CREF pursued a similar policy. The Agency contacted TIAA-CREF, and
its policy is: A participant who transfers from any fund, transfers
back, and then sells it within 60 days may not repurchase that fund for
90 days and, if the transaction involves the international (similar to
I Fund), high yield, or small-cap (similar to S Fund) funds, a 2
percent fee is assessed. The TSP regulation is far less restrictive.
The TSP also looked to Vanguard, the largest mutual fund index
manager in the country. Holders who redeem shares in any Vanguard
mutual fund must wait 60 days before repurchase. For some funds,
including the fund that is similar to the TSP’s I Fund, if the
shareholder redeems a fund that has not been held for 60 days, the
shareholder cannot repurchase the fund for 60 days, and must pay a
redemption fee, which would be 2 percent for the international fund.
Again, the TSP regulation is far less restrictive.
The third union suggested two proposals. The first was addressed in
the preceding paragraph. Alternatively, it proposed four instead of two
unrestricted IFTs per month. TSP studies showed that allowing four IFTs
per month would not result in any meaningful reduction in the dollar
amount of the daily trades. Allowing three IFTs per month would result
in a 31 percent reduction in the dollar value and two per month would
result in a 53 percent reduction. Thus, the TSP is expecting a
reduction in dollar value of between 31 percent and 53 percent, after
factoring in some activity related to unlimited transfers to the safe
harbor of the G Fund. TSP research has shown that less than 1 percent
of participants make more than 12 IFTs per year. Therefore, the
regulation will not affect 99 percent of participants. It will allow
participants to rebalance their accounts twice per month, which, in the
view of the Plan’s two investment consultants, is more than adequate.
Support for Proposed Regulation
Thirty participants supported the regulation.
Opposition to Proposed Regulation
Some participants suggested there should be a certain number of
“free” IFTs per month and then a fee per transaction. This proposal
was addressed under the union comments discussed above.
Many participants commented that TSP expenses are already very low
or that costs are going down. Some noted that TSP Funds are already
outperforming their underlying indexes.
TSP expenses are very low. The TSP’s enabling legislation requires
the Board to develop investment policies which provide for low
administrative costs. 5 U.S.C. 8475. Due to efforts by the Board, the
net expense ratio for the TSP Funds declined to 1.5 (0.00015%) basis
points last year.
However, the Funds also incur transaction costs, which are directly
related to the dollar amount of IFTs requested by participants. These
transaction costs are investment expenses that reduce investment income
before deductions for administrative expenses and are not included in
the expense ratio.
TSP net administrative expenses in 2007 were reduced to
$31,392,286. However, costs from trading activity were an additional
$13,880,098. Although more than 99 percent of participants made 12 or
fewer IFTs last year, all participants shared the full cost of
executing the interfund transfers generated by those who made numerous
Numerous IFTs increase the dollar amounts of the orders that are
given to the investment manager on a daily basis. The investment
manager must therefore hold more cash to meet potential redemptions,
leading to a greater chance of differences in performance from the
indexes tracked by the funds. This difference (tracking error) can be
positive or negative, but the TSP is charged by statute to keep this
tracking error as low as possible since the funds must, by law,
“replicate” their respective indexes. 5 U.S.C. 8438. It is
indisputable that reducing the dollar amount of IFTs will lower
transaction costs and the amount of cash the investment manager must
hold and will, therefore, reduce tracking error.
Several participants noted that “there is no problem;” that
trading costs are going down; that trading costs the average
participant $3, $3.55, $3.56, $4, or $4.60. They asked “Why does it
cost $240 to trade a $300,000 account?” “Why can’t you determine the
exact cost and charge participants accordingly?”
The TSP has avoided using averages when averaging can obscure
important distinctions. For example, over the years, some have
suggested that the Agency develop an average cost per participant. One
could devise a simple calculation, i.e., in 2007, net administrative
expenses at approximately $32 million spread over approximately four
million participants would yield an average annual cost of $8 per
However, this is misleading because costs are borne pro-rata, and
increase based on account size. So in order to be precise, the Agency
expresses costs in terms of basis points. Thus, with last year’s net
expense ratio of 1.5 basis points, a new participant with $1,000 on
account can easily determine that his cost was 15 cents, while a
veteran participant with $1 million on account can quickly know that
her share of these expenses was $1,500.
With regard to IFTs, because there are several moving parts each
day, an average would obscure important distinctions. For example, on
August 16, 2007, participants redeemed 22,219,762 shares of the I Fund.
The price they received was $22.48 based on a 4 p.m. market pricing.
When the securities were sold at the opening of the foreign markets
later that evening and the following morning, they were sold for
$9,554,497 less than the prices used to determine the $22.48 share
equates to a $0.43 per share trading cost. That is, if the Agency could
have determined this in advance, the share price would have been only
$22.05. Instead, the $9,554,497 difference was charged to the remaining
holders of the I Fund. That is in one DAY, not in one year.
Each day is unique, and the timing of participants’ redemptions
affects how much of the cost is borne by any given participant. A
participant who would have redeemed the day before would not have been
impacted at all by this transaction. One who transferred funds into the
I Fund just before August 16 and transferred out just after would have
experienced the full effect.
On August 16, almost half of the dollar amount of the trade was
from participants who were requesting frequent IFTs. The Agency knows
from its analysis that a large number of the participants who make
frequent interfund transfers were moving $250,000 or more. Each
participant who redeemed $250,000 on that day would have sold 11,121
shares, and therefore would have made an extra $4,782. (11,121 shares
sold multiplied by $0.43 per share trading cost.) These “extra” funds
did not come from the market. Rather, they came from the accounts of
other participants who remained in the I Fund. When examined this way,
it becomes clear why frequent IFTers would prefer to express this cost
as an annual average spread over all participants.
Additionally, because the investment manager’s liquidity pool had
been depleted on August 16, $452 million of that trade settled on
August 21 instead of August 17. That cost the G Fund $235,000 in
The Agency also cannot measure the cost to participants that
results from increased tracking error because the investment manager
has to keep a larger liquidity pool to meet frequent redemptions.
Every day is different, and different participants are impacted in
different ways depending on the timing of their interfund transfer
activity. Stating an average cost per participant would be misleading.
The goal of this regulation is to reduce IFT activity in order to
control the costs borne by the other participants, costs which are
different for every participant depending on what days they may be
invested in, or not invested in, any particular fund and that are
impossible to determine in advance.
Several participants noted that money could be saved by eliminating
mailed IFT confirmations and that the DVD for the L Funds was very
expensive. Those costs are reflected in the already low expense ratio,
which is assigned pro rata to all TSP participants. The trading
expenses are not borne pro rata. In fact, a participant, who transfers
out of a fund on a day when the cost to complete that trade is very
high, bears none of the cost of that trade, while those who remain in
the fund bear it all. It is the inequity of the allocation of the
trading expenses which the TSP seeks to address, and which, as
discussed in the proposed regulation (73 FR 12667, March 10, 2008), the
SEC has identified as a problem for mutual funds.
Several participants said (incorrectly) that the L Funds are
responsible for the transactions costs and that these funds should also
be limited. The dollar amount of trade activity attributable to the L
Funds, especially when compared to the dollar amount of trading
activity attributable to participants making frequent IFT requests, is
very small. For example, in the I Fund, for September and October 2007,
the average daily dollar amount attributable to the L Funds’
rebalancing accounted for just 7 percent of the total daily trade,
while the average daily dollar amount attributable to those making
frequent IFTs (defined in this instance as participants who made IFTs
into or out of the I Fund eight or more times in the prior 60 days) was
63 percent. The impact of the L Funds’ rebalancing is demonstrably
minimal. The Agency monitors the L Funds, as it does all its funds,
and, in the unlikely event that the dollar volume of the L Funds’
rebalancing becomes costly, the Agency can take steps to reduce the
frequency or amount of the rebalancings.
Many participants requested that a fee be charged instead of
limiting the number of IFT requests. Some of these participants
recommended a “$10 flat fee.” Others noted that the Agency charges a
fee for loans, and therefore, should be able to charge a fee for
interfund IFTs. This comment was addressed in the proposed regulation
as explained below:
Many fund families charge redemption fees for shares which are
redeemed within 30, 60, or 90 days of purchase. T. Rowe Price, for
example, levies fees on 27 funds, including a 2 percent redemption fee
on shares of its International Index Fund (similar to the I Fund) and a
0.5 percent fee on shares of its Equity Index 500 (similar to the C
Fund) and Extended Equity Market Index Funds (similar to the S Fund),
if they are sold within 90 days of purchase. TIAA-CREF (with $400
billion of assets under management and 3 million participants) charges
a redemption fee of 2 percent on shares of its International Equity,
International Equity Index, High Yield II, Small-Cap Equity, Small-Cap
Growth Index, Small-Cap Value Index or Small-Cap Blend Index Funds
redeemed within 60 days of purchase. We noted particularly that the fee
is a percentage of the dollar amount transacted, not a flat processing
When brokerage firms charge $10 to execute a stock trade, they know
how much it costs them to make that transaction. Mutual fund managers
(and the TSP) cannot determine the exact amount of costs to the plan
from IFT activity for the following reasons. First, each day, a price
for each fund is determined based on closing stock prices for that day.
However, the fund manager does not execute every stock trade at that
closing price. Any difference is market impact and is charged or
credited to the fund, thus impacting the returns of the long-term
holders. Second, to accommodate the large trades which result from
frequent IFT activity, managers must keep a larger liquidity pool,
which causes performance to deviate from that of the index. Lastly, for
the TSP, when the liquidity pool is depleted as a result of a number of
large trades in a row, cash due to the TSP is not received for up to
three days, costing participants foregone interest. None of these three
costs is calculable in advance, and all three are different every
single day. Because it is impossible to determine how much to charge
for each transaction, mutual fund families assess a percentage of the
dollar amount transacted, which is then credited back to the Fund.
Many fund families employ trading restrictions similar to
Vanguard’s whereby an investor may not repurchase any fund within 60
days after a redemption.
We would also note that both TIAA-CREF and Vanguard, among others,
use a double-barreled approach by charging a fee on top of the trading
restrictions for some funds. For example, if an investor sells the
Vanguard Developed Markets Index Fund (similar to the TSP’s I Fund)
within 60 days of purchasing it, that investor is charged a 2 percent
fee and cannot repurchase the fund for 60 days.
In developing its recommendation, the Agency chose not to pursue
redemption fees because it is impossible to correctly assign the exact
costs to those who are making IFTs. Additionally, imposing a percentage
fee would deny our participants the ability to go to the safe harbor of
the G Fund at any time for no charge. The Agency considers that
capability to be of paramount importance. A fee-based system would
especially punish an
infrequent trader who may wish to redeem within 30, 60, or 90 days
(depending on the policy) because the market is declining. In this
situation, the participant could face losing 2 percent of his/her
investment in addition to the market decline, a worst case scenario.
The FRTIB is implementing a procedure to reduce costs to
participants. The SEC recommends that all mutual funds take such
actions, and according to a 2007 study by Hewitt and Associates, 73
percent of defined contribution plans have adopted policies designed to
minimize transaction activities in their funds.
Several participants expressed wanting more than two (e.g., three,
four, or more) IFTs per month. Others noted that the Agency should
gradually implement its policy (e.g., have a “trial period”) and
start with a limit greater than two. Further, several participants
asked “why two” trades and stated that the number seemed
“arbitrary.” According to data compiled by the Agency, limits of four
IFTs per month will have very little impact on the dollar volume of
daily trades, three IFTs would reduce volume by just 31 percent while
two IFTs would reduce volume by approximately half. The Funds in the
Plan are index funds. Therefore, the Agency examined the trading
policies of the largest index fund manager, Vanguard, and of numerous
other mutual fund managers and defined contribution plans. An investor
in any Vanguard fund who redeems shares of a Vanguard fund may not
purchase any shares of that fund for 60 days. Additionally, in
Vanguard’s Developed Markets Index Fund (similar to the TSP’s I Fund),
if the redeemed shares have not been held for 60 days, the investor is
charged a 2 percent redemption fee. Thus the approach of two IFTs per
month, with unlimited redemptions to the G Fund, is demonstrably more
liberal than that provided by the largest provider of index funds.
Some participants expressed a desire to have 24 (or, as suggested
by one participant, 12) trades available across the year, as opposed to
two per month. The purpose of the regulation is to reduce costs to TSP
participants. Transaction costs are highest when the markets are the
most volatile. The Agency is seeking to minimize the dollar volume of
trades, especially during those times. TIAA-CREF, a very large defined
contribution plan provider, tried allowing a certain number of
transactions per year and found that it experienced a “bunching” of
trades during volatile times, precisely the opposite of the intention
of the transfer restrictions. That provider then amended its policy to
read, “A participant who transfers from ANY fund, transfers back, and
then sells it within 60 days may not repurchase that fund for 90
days,” and, if the transaction involves the international, high yield,
or small-cap funds, a 2 percent fee will be assessed.
Some participants commented that it is their money in the TSP and,
therefore, the Agency can’t limit their activities. Some contend that
the policy will prevent them from maximizing their retirement income.
Others stated that the TSP is changing the rules mid-course. Some felt
it is unfair to younger TSP participants, they assert, who need to be
more aggressive; some felt it was unfair to TSP participants who are
close to retirement and, they assert, need to be more aggressive. The
SEC and 73 percent of defined contribution plans (according to the 2007
Hewitt Associates study) have acknowledged that market timing (frequent
IFT) activity is harmful to the performance of funds. The SEC found
that this activity “dilutes” value for all investors, and has
mandated that mutual funds take action to discourage or eliminate such
activity. Additionally, 73 percent of defined contribution plans have
taken actions to reduce this activity. The Agency’s research has
indicated that its proposed limits are more liberal than those of many
mutual funds and defined contribution plans. For example, the Thrift
Plan for the Employees of the Federal Reserve System does not allow
participants to redeem shares of any fund for 14 days after purchase.
Several participants commented that the proposed change would
prevent them from engaging in dollar cost averaging. Dollar cost
averaging is spending a fixed amount at regular intervals (e.g.,
monthly) on a particular investment regardless of share price. Dollar
cost averaging is, by definition, not driven by the level of the
market. A participant can most certainly employ a systematic investment
plan, making IFTs every two weeks regardless of the performance of the
market, just as dollar cost averaging is intended. In fact, this would
essentially be the same frequency of dollar cost averaging into the TSP
via withholding from biweekly paychecks.
Several participants stated that, if the Agency changes its IFT
policy, they should be allowed to take their money out of the Plan.
Congress has established the circumstances under which a participant
may withdraw money from his/her account. According to a survey by
Hewitt Associates, 73 percent of defined contribution plans have
implemented policies to discourage market timing activities because
such activities are detrimental to the performance of the plans. None
of the affected participants was permitted a special withdrawal of
funds from these plans. Further, the Agency is confident that its
proposal is more liberal than most and furthers the TSP’s status as a
world class retirement vehicle.
Some participants wrote that the new rule should apply to new
participants only; current participants should remain under current
rules. The Agency’s objective in promulgating this regulation was to
reduce the impact of frequent IFT activity. Allowing current
participants to rebalance using current rules would likely mean that
IFT requests would remain at high levels. Thus, this would not reduce
the impact of market trading activities and would also be very
difficult to program and administer.
Several participants stated that there is no evidence that frequent
IFT activity in the C, S, and F Funds has any measurable impact on
participants as a whole and that the Agency should restrict only the I
Fund. Further still, a handful of participants stated that frequent IFT
activity benefits shareholders. While the I Fund transaction costs were
the highest, at $16.5 million, the F and C Funds incurred measurable
costs of $1.1 million and $605,000, respectively, in 2007. Moreover,
the Agency is committed to eradicating the abusive frequent transfer
activity in and out of the G fund by which some participants extract
earnings which rightfully belong to long-term G fund investors.
As noted above, the TSP cannot determine the exact amount of costs
to the plan from IFT activity for the following reasons. First, each
day, a price for each fund is determined based on closing stock prices
for that day. However, the fund manager does not execute every stock
trade at that closing price. Any difference is market impact and is
charged or credited to the fund, thus impacting the returns of the
long-term holders. Second, to accommodate the large trades which result
from frequent IFT activity, managers must keep a larger liquidity pool,
which causes performance to deviate from that of the index. Lastly, for
the TSP, when the liquidity pool is depleted as a result of a number of
large trades in a row, cash due to the TSP is not received for up to
three days, costing participants foregone interest. None of those three
costs is calculable in advance, and all three are different every
Note from above that trading costs may actually be credits. In
fact, trading costs in the S Fund in 2007 did benefit
the Fund by $4.3 million. However, it is extremely important to
highlight that that number could just as easily have been a cost. There
is no way for the Agency to control the size of such costs or whether
they are costs versus credits. It can only work to minimize the
exposure of the TSP to the potential costs by reducing the dollar
amount of the trade. The manager of the S Fund did need to increase the
liquidity pool for the Fund, and there were several times during the
year that the TSP and its participants lost interest income because
cash payment was delayed. Due to these uncertainties, the restrictions
must be applied to the TSP Funds as a whole.
Many participants suggested changing the time that the I Fund is
priced. By statute, the I Fund must be designed to replicate the
performance of an international index (5 U.S.C. 8438(b)(4)(B)). The
index is priced at 4 p.m. Eastern Time. Therefore, the I Fund must be
priced at 4 p.m.
Some participants commented that fair valuation of the I Fund is
increasing costs. On the contrary, costs would be even higher without
fair valuation. All of the TSP stock funds are priced at 4 p.m. Eastern
Time. For the C and S Funds, the prices used are the 4 p.m. closing
prices of the stocks. The I Fund comprises international stocks in
countries such as Japan and England. Although the I Fund is priced at 4
p.m., the Japanese market actually closed 13 hours earlier, at 3 a.m.
Eastern Time, and the British market closed four and half hours earlier
at 11:30 a.m. On most days, those closing prices are used to price the
I Fund. However, in times of market turbulence, it can become obvious
that if the securities had still been trading at 4 p.m. Eastern Time,
the prices would be materially different. Fair value pricing is a
process (recommended by the SEC) to update those “stale” prices to
make them a more accurate reflection of the current market environment.
When the investment manager receives the daily trade order from the
TSP, the foreign markets are closed. The investment manager cannot
process the order until the markets reopen, and any differences in the
opening stock prices from the closing stock prices (market impact) are
charged back to the I Fund, affecting its performance. Since fair
valuation updates the prices, it brings them closer to where the trades
are actually executed, thereby lowering the cost to the Fund. Without
fair valuation, the exposure to market impact costs would be greater.
Fair valuation is an estimate of prices at 4 p.m. It is not meant to be
an estimation of where the foreign markets will open.
Some participants said it was misleading to compare the TSP to a
mutual fund. Others said TSP funds are more like electronically (the
Agency assumes the participant meant exchange) traded indexed funds (or
ETFs) that are traded through brokers. Others noted the TSP should not
be compared to private sector funds because they have active managers.
While the TSP Funds are not mutual funds, they are invested in
collective trust funds (CTFs) which are virtually identical to mutual
funds in the way they are priced and the way that trades are executed.
Collective trusts differ from mutual funds in the following ways. In
general, only eligible, tax-exempt assets such as a 401(k) or defined
benefit plan can invest in a CTF. CTFs are regulated by the Comptroller
of the Currency, not the SEC and Financial Industry Regulatory
Authority (FINRA) (which oversee mutual funds). CTFs do not need to
provide prospectuses to investors. Management fees tend to be lower
with CTFs. This is in part because CTFs, as the preferred institutional
account structure, can offer significant scale advantages to the
investment manager. CTFs offer absolute fee transparency. There is a
single management fee, unlike the multiple layers of fees associated
with mutual funds.
There is a marked trend towards using CTFs in the 401(k) industry,
particularly among large plans. Furthermore, low-cost transparent
vehicles are entirely consistent with the spirit of the Pension
Protection Act of 2006. Unlike commingled funds and mutual funds, ETFs
can be bought or sold on an exchange throughout the trading day. They
can also be shorted. The TSP Funds have an entirely different structure
from that of ETFs. While it is true that ETFs track indexes, the first
actively-managed ETF was introduced on March 25, 2008. While it is true
that there are actively-managed mutual funds, there are also passively-
managed mutual funds which track index performance. Like mutual funds,
the TSP Funds are priced once per day, and unlike ETFs, they are not
traded on an exchange throughout the day.
Hence, the Agency looks to 401(k) plans, the SEC, and the best
practices of mutual fund managers when developing policy. The Agency
cited figures from passively-managed index funds whenever possible
since these most closely resemble the TSP.
Some participants commented that individual retirement accounts
(IRAs) do not have trading restrictions. The TSP is not an IRA and is
not similar in structure to an IRA.
The Agency received a number of comments about the rulemaking
process. Some participants stated that the Agency’s notice of proposed
rulemaking was deficient because it stated it would not affect either
small business entities or members of the uniformed services. This
comment is unfounded. The Executive Director certified that “this
regulation will not have a significant economic impact on a substantial
number of small entities” but that it could affect “members of the
uniformed services.” 73 FR 12668, March 10, 2008. He further certified
the regulation would affect “an insubstantial number of financial
advisors who may provide advice in connection with the Fund.” Id.
Some participants asked “aren’t individual shareholders considered
small entities.” They are not. Small entities are defined at 5 U.S.C.
601(6) as a “small business,” a “small organization,” and a “small
Some participants commented that the Agency’s notice of proposed
rulemaking was deficient because the proposed regulation is a major
rule. A major rule is one that is likely to result in: (A) An annual
effect on the economy of $100,000,000 or more; (B) a major increase in
costs or prices for consumers, individual industries, Federal, State,
or local government agencies, or geographic regions; or (C) significant
adverse effects on competition, employment, investment, productivity,
innovation, or on the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic and export markets.
5 U.S.C. 804(2). The proposed rule is not a major rule under this
Some participants asked how the Agency could impose IFT
restrictions on some participants when the regulation was still
proposed. The interim IFT restrictions are based on a regulation which
took effect on January 7, 2008. 72 FR 73251, December 27, 2007. Other
participants asked how the interim regulation could be enforced against
frequent requestors of IFTs when the comments from the interim
regulation had not been posted or considered. The Agency’s Executive
Director did consider comments submitted in connection with the interim
regulation. Additionally, the proposed regulation notes “[c]omments
submitted in response to the interim regulation need not be
resubmitted; they will be considered as part of this rulemaking
process.” 73 FR 12665,
March 10, 2008. The Agency is not required to post comments in
connection with an interim regulation.
One participant commented that the proposed regulation should be
published at “regulations.gov.” The proposed regulation was published
at www.regulations.gov and also published at www.gpoaccess.gov,
www.tsp.gov, and www.frtib.gov. This participant also noted that the
Agency should participate in the Federal Docket Management System
(FDMS) functionality provided at regulations.gov. Because the Agency is
cost-conscience (Agency research indicates a fee may be associated with
the FDMS starting in 2010) and also because the Agency publishes
regulations relatively infrequently, the Agency has not analyzed
whether this optional functionality would benefit the Agency. However,
the Agency may inquire into this functionality in the future.
Regardless of these issues, as each participant was individually
notified (in the Executive Director’s February 2008 letter) regarding
this regulation change, and as the Agency received hundreds of
comments, the Agency does not believe participating in this optional
functionality impacted the rulemaking process.
Some participants commented that the Agency sent out its regulation
during a quiet time so that no one would notice. This comment likely
refers to the Agency’s interim regulation, which was published in the
Federal Register on December 27, 2007. On November 19, 2007, at an open
Board meeting, the Agency’s Board heard a presentation from the
Agency’s Chief Investment Officer. In response, the Board approved a
policy to limit interfund transfers. The Board’s decision was the
subject of extensive press coverage. Additionally, not long after this
November 2007 meeting, the Chief Investment Officer’s PowerPoint
presentation and policy memorandum and the minutes of this meeting were
posted on the Agency’s Web site. Further, on November 27, 2007, links
to additional information about the interfund transfer restrictions
were prominently displayed on the TSP website. Before adopting the
Board’s policy, the Agency sought the advice of the Employee Thrift
Advisory Counsel (ETAC) and on December 19, 2007 held an open meeting
with the representatives to discuss the proposed approach of using an
initial interim regulation followed by a structural limit. This meeting
was also subject to extensive press coverage. As soon as practicable
after the ETAC meeting, the Agency submitted its interim regulation to
the Federal Register which published the interim rule on December 27,
2007. The Agency also forwarded a copy of the interim rule to the
President of the Senate, the Speaker of the House of Representatives,
the Government Accountability Office, and the U.S. Small Business
Administration. Continuing with this spirit of openness, the Agency’s
Executive Director notified every participant about the proposed
regulation in his letter that accompanied the annual participant
statement mailed in February of 2008.
Some participants questioned whether this regulation was consistent
with the Board’s fiduciary obligation. The Board’s IFT policy decision
is completely consistent with, and, more accurately, mandated by, its
fiduciary duty. By law, the Board must adopt investment policies that
provide for low administrative costs. 5 U.S.C. 8475. The Board’s IFT
decision helps it to keep costs low.
A few participants stated that the costs explained in the proposed
regulation were not persuasive and suggested that the Agency hire an
outside company to do an audit. Some participants also challenged the
experience and motivations of the Agency’s Chief Investment Officer,
Tracey Ray. Ms. Ray graduated summa cum laude from Washington College.
She was immediately hired by Merrill Lynch and worked there as an
account executive for six years, providing investment advice about
stocks, bonds, options and mutual funds to clients. After her tenure at
Merrill Lynch, she spent 16 years in the investment department of USF&G
Corporation, a Baltimore-based Fortune 500 insurance company, which was
purchased by St. Paul Companies in 1998. While there, she served as a
Vice President, portfolio manager and trader for stock, bond, option
and short-term cash portfolios, and was responsible for the derivatives
program. She also completed the program to earn the designation of
Chartered Financial Analyst. She left St. Paul Companies in 2001 to
take the position of Deputy Chief Investment Officer for the State of
Maryland Pension Fund, where she spent four years evaluating, hiring
and firing active money managers until she was hired by the Thrift
Savings Plan in 2005. She also serves on the Advisory Committee for the
Virginia Retirement System’s Defined Contribution Plans.
While Ms. Ray’s credentials are impeccable, and her study of the
problem facing the TSP was diligent, thoughtful, and thorough, it is
important to note that the decision to move forward with IFT
restrictions was made by the Board members, after careful consideration
and acting in their capacity as fiduciaries for the TSP. The Agency, in
its notice of proposed rulemaking, explained in great detail the
adverse effects of frequent IFT activity. The Agency also made
available, on the TSP Web site, the memorandum and presentation that
led its Board to adopt such a policy. Since these comments neither
critique the Agency’s methodology nor make substantive challenges to
the accuracy of its conclusion, the Agency determined it would not be
prudent to spend TSP money to have an outside auditor verify its
Several participants wrote that, as of March 31, the Agency will be
effectively discriminating against a select group of TSP members and
that all TSP members should be treated equally under the current TSP
rules. Others wrote that it discriminated against members of the
military (many of whom are stationed overseas where mail service takes
longer). This comment is directed at the interim regulation which
allowed the Executive Director to require those participants who
engaged in excessive trading to request IFTs by mail only. Pursuant to
the interim regulation, the Agency analyzed the trading activity of all
participants in October, November, and December 2007. In January, the
Agency sent a letter to all participants who made more than three IFTs
each month. The letter warned that if they made more than three IFTs in
February, or the following months, the Agency could require them to
request IFTs by mail only. Thus, it is not accurate to state that the
Agency is discriminating against a select group. The Agency scanned the
IFT activity of all participants and warned those who made four or more
IFTs in three consecutive months that they must stop. Only those
participants who failed to heed the warning have been restricted.
Although the Investment Allocation form used for IFTs is not generally
available on the TSP Web site, restricted participants are able to
access it via the TSP Web site; the Agency has also mailed a copy of
the IFT transfer form to participants and they can reproduce it as
necessary (or call the ThriftLine to obtain more copies).
Several participants mentioned that the proposed regulation is
against the Agency’s policy of encouraging participants to make their
own retirement decisions. For example, some characterized the
regulation as “paternalistic” or “patronizing.” Further, several
participants stated that this move takes away employees’ control over
their retirement and cited
the Thrift Savings Plan Open Elections Act of 2004 (Act). This Act
allowed Federal employees and members of the uniformed services to
begin or alter their TSP contributions at any time instead of limiting
such changes to biannual open-season periods. The Act did not alter the
requirement in 5 U.S.C. 8438(d) that the Executive Director prescribe
regulations allowing at least two interfund transfers per year. This
regulation affords participants many more opportunities to make IFTs
than the minimum Congress determined necessary and, further, does not
change the Agency’s continuing policy of educating its participants so
that they can control their own retirement.
Several participants commented that the proposed regulation was
contrary to an existing Federal regulation. Section 1601.32(b) of title
5, Code of Federal Regulations does currently provide that there is no
limit on the number of IFT requests that may be made by a participant.
In 2003, the Executive Director published this regulation pursuant to
his authority to prescribe such regulations as may be necessary to
administer the Thrift Savings Plan. 5 U.S.C. 8474(b)(5). The Executive
Director has determined that, in order to effectively administer the
TSP, it is necessary to amend this regulation in order to address the
impact of frequent transfers on the TSP.
Several participants stated that the TSP spent millions of dollars
upgrading its systems to handle daily interfund transfers, and wasting
that investment is inconsistent with the Board’s fiduciary duty. The
Agency did not move to a daily-valued record-keeping platform in order
to facilitate frequent IFTs. This upgrade improved efficiency by
spreading the volume of IFTs over the course of a full month, rather
than requiring a one-time “batch-process” at month’s end. This
upgrade also eliminated the previous 15-day waiting period between IFT
requests and execution. The daily-valued platform also enabled
participants to have immediate account information access on the Web
site and reduced paper statement costs (thus saving the participants
over $3 million per year). Thus, the enhancement to the record-keeping
system was not intended to facilitate frequent IFTs. In fact, the
Agency’s Executive Director and Board have expressed concern over the
potential for misuse of the daily-valued platform both before and since
In 2004, Agency staff reviewed the TSP’s IFT records to determine
if the newly enhanced system was being misused. The level of frequent
IFT activity was de minimus at the time and there was no need to put
restrictions in place.
Since fielding the daily-valued platform, the Agency has added
toll-free telephone service, reduced processing and transaction timing,
added dual/simultaneous call centers with extended hours, enhanced
participant education materials, added a back-up state-of-the-art data
center, and implemented the lifecycle funds. During this four-year
period, the Agency’s budget actually decreased on an annual basis.
In short, the Board takes its fiduciary duty very seriously. It has
improved service while decreasing costs. It has adopted this IFT policy
because the costs associated with frequent transfers have harmed TSP
participants. By law, the Board must adopt investment policies that
provide for low administrative costs. 5 U.S.C. 8475. The Board’s IFT
policy decision is completely consistent with this duty.
One participant wrote that the frequent transferors must be making
money or else Congress would have stepped in to prevent these people
from harming their retirement accounts. The Board, not Congress, has
the statutory authority and duty to act solely in the interest of the
Plan’s participants and beneficiaries. 5 U.S.C. 8477(b)(1). Although
the Agency advised the Congress of its plan to limit IFTs, Agency
fiduciaries were solely responsible for this decision.
A participant asked if rebalancing a portfolio which may include
adjusting the balances of 10 funds constitutes a single IFT. The answer
A participant suggested that the TSP “should buy the EFA index
which can be bought and sold with a low fee.” The Agency believes this
participant meant the exchange-traded fund (ETF) which tracks the
Europe, Australia and Far East (EAFE) Index and has a stock symbol
“EFA.” EFA is actually not a low cost alternative as it has an
expense ratio of 34 basis points versus the TSP’s expense ratio of 1.5
A participant noted that comparison to other funds is
“meaningless” as the TSP had unlimited transfers. Other funds also
had unlimited transfers prior to 73 percent of them implementing curbs
to reduce market timing activity.
A participant noted that Barclay’s should make more use of EAFE
futures to offset I Fund transactions. Barclays does make use of EAFE
and country futures to offset a portion of I Fund transactions. The
same participant noted that the Agency should balance out IFT requests
to a single order to buy or sell. The Agency does that. That same
participant noted that the Agency needs to evaluate whether total I
Fund transactions in 2007 produced net positive or net negative trading
costs, on what days and in what amounts. The Agency has that
information for each day. The total cost for 2007 was $16,513,454.
Several participants commented they thought the G Fund should not
be favored because it is not a good investment and does not keep up
with inflation. The Agency is allowing unlimited redemptions to the G
Fund to provide a safe harbor for participants who may wish to exit the
stock market during times of financial distress. The Agency would also
like to note that, by virtue of the fact that the G Fund rate adjusts
every month and is based on longer-term Treasury rates, the G Fund is
an inflation hedge because interest rates generally rise when inflation
Several participants commented that the TSP should have more
investment options. In 2006, the TSP hired an investment consultant to
review the TSP’s investment choices. The conclusion of that study was
that participants were well served by the current fund lineup. The TSP
will conduct similar reviews periodically in the future.
Some participants suggested that Agency comparisons to Fidelity, T.
Rowe Price, and Vanguard (among others) are imperfect because these
plans offer more diverse investment vehicles and that they are for-
profit organizations. It is true that those fund families do offer more
choices than the TSP, but defined contribution plans do not offer all
available Fidelity, Vanguard, or T. Rowe Price funds. In 2006, the
Board hired an investment consultant, Ennis Knupp and Associates, to
review the plan. The consultant noted that 70 percent of defined
contribution plans with more than 5,000 participants offer 15 or fewer
investment options. Additionally, as cited before, over 73 percent of
defined contribution plans have some type of trading restrictions.
Mutual fund families are for-profit organizations, but all redemption
fees are credited back to the funds, not to the profits of the
companies. Additionally, why would a profit-oriented company, such as
Vanguard, prohibit shareholders from repurchasing funds for 60 days
unless it truly believed that market timing was detrimental to fund
performance? It does so because the company is attempting to maximize
performance of the funds by minimizing costs due to market timing
Based on several comments, there seems to be a misconception that
when a participant requests an IFT that his or
her entire account is sold and repurchased to reflect the new
percentages. In fact only the difference between the original
percentage and the new percentage is traded, and that is netted against
all other participant activity. The investment manager is then given a
single dollar amount for each fund each day.
Some participants commented that there is a problem with the
contract with Barclays, the investment manager, or that the fund should
be managed by a firm better able to control the fees. The Barclays
contract is extremely competitive. All of the costs related to the
administration of that contract are included in the TSP’s 1.5 basis
point net administrative expense ratio. Every manager, who participated
in the request for proposal process to manage the Funds of the TSP,
charges trading costs back to their clients’ funds, just as Barclays
does for the TSP Funds.
A participant noted that he could not find information on the
Vanguard Web site that Vanguard funds could not be repurchased within
60 days of redemption. On the site, in the search function, typing
“frequent trading policy” will display that information.
The Agency appreciated the opportunity to review and respond to
comments from participants who take an active interest in the TSP and
wish to offer suggestions. The comment process allowed the Agency to
address any misunderstandings about the proposed interfund transfer
change, to learn if there are unanticipated legal or policy impediments
to the proposed change, and to hear suggestions about how better to
implement the proposed change. Although the comments received did not
cause the Executive Director to make any changes to the proposed
interfund transfer rule, he did carefully consider all comments
received. Therefore, the Agency is publishing the proposed rule as
final without change.
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities. It will affect only
Thrift Savings Plan participants and beneficiaries. To the extent that
limiting interfund transfers is necessary to curb excessive trading,
very few, if any, “small entities,” as defined in 5 U.S.C. 601(6),
will be affected by the final rule. This is because the Thrift Savings
Plan is sponsored by the U.S. Government and because the interfund
transfer limitations are likely to affect primarily Federal employees,
members of the uniformed services, and an insubstantial number of
financial advisors who may provide advice in connection with the TSP.
Paperwork Reduction Act
I certify that these regulations do not require additional
reporting under the criteria of the Paperwork Reduction Act.
Unfunded Mandates Reform Act of 1995
Pursuant to the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 602,
632, 653, 1501-1571, the effects of this regulation on state, local,
and tribal governments and the private sector have been assessed. This
regulation will not compel the expenditure in any one year of $100
million or more by state, local, and tribal governments, in the
aggregate, or by the private sector. Therefore, a statement under Sec.
1532 is not required.
Submission to Congress and the Government Accountability Office
Pursuant to 5 U.S.C. 810(a)(1)(A), the Agency submitted a report
containing this rule and other required information to the U.S. Senate,
the U.S. House of Representatives, and the Comptroller General of the
United States before publication of this rule in the Federal Register.
This rule is not a major rule as defined at 5 U.S.C. 804(2).
List of Subjects in 5 CFR Part 1601
Government employees, Pensions, Retirement.
Gregory T. Long,
Executive Director, Federal Retirement Thrift Investment Board.
For the reasons set forth in the preamble, the Agency is amending 5
CFR chapter VI as follows:
PART 1601–PARTICIPANTS’ CHOICES OF TSP FUNDS
1. The authority citation for part 1601 continues to read as follows:
Authority: 5 U.S.C. 8351, 8438, 8474(b)(5) and (c)(1).
2. Amend Sec. 1601.32, by revising paragraph (b) to read as follows:
Sec. 1601.32 Timing and posting dates.
* * * * *
(b) Limit. There is no limit on the number of contribution
allocation requests. A participant may make two unrestricted interfund
transfers (account rebalancings) per account (e.g., civilian or
uniformed services), per calendar month. An interfund transfer will
count toward the monthly total on the date posted by the TSP and not on
the date requested by a participant. After a participant has made two
interfund transfers in a calendar month, the participant may make
additional interfund transfers only into the G Fund until the first day
of the next calendar month.
[FR Doc. E8-8957 Filed 4-23-08; 8:45 am]
BILLING CODE 6760-01-P