Readers' Comments
Total Comments: 35
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Trading TSP Funds: Should There Be a Fee When Investors Trade?
Total Comments: 35
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| Close | Change | YTD | |
| G | $13.2114 | +0.0012 | +0.70% |
| F | $13.6201 | -0.0062 | +2.14% |
| C | $13.8116 | -0.0706 | +4.49% |
| S | $17.9282 | -0.1903 | +8.91% |
| I | $18.5079 | -0.0782 | -0.16% |
| Close | Change | YTD | |
| L 2040 | $16.1968 | -0.0789 | +3.59% |
| L 2030 | $15.9593 | -0.0673 | +3.23% |
| L 2020 | $15.7365 | -0.0532 | +2.72% |
| L 2010 | $15.4595 | -0.0197 | +1.57% |
| L Income | $14.0856 | -0.0155 | +1.48% |
March 20, 2010
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Fair, is fair!
Social Security Admin
Mon Sep 17, 2007 8:12 AM
Post Reply
Some may not like it, but it can never be wrong to pay for what you get or to pay the costs that you incur by your transactions. But it can most certainly be wrong to make others pay for it.
There is not a more fair and simple way to permanently resolve this than for everyone to pay exactly what it costs the system - the rest of us - to transact YOUR business, regardless of how the system works.
Most importantly, on the day that I begin paying the full costs of my own transactions, then everyone else's opinion immediately becomes irrelevant. It is then no one's business how many transactions I make or whether my financial actions conform to their's or the government's philosophy of retirement investment.
It just doesn't get any more simple, or fair.
Dave E
Re: Fair, is fair!
DoD
Wed Sep 26, 2007 8:33 AM
The issue is not TSP and fees, but the way the fed gov’t keeps trying to reduce our pay and benefits, and make us pay for more! And, now the fed has everyone arguing over how we should pay more to support the TSP. The fed should pay – not us.
Remember, the TPS was set up as an integral part of FERS, and not as an optional 401K plan. FERS employees must reply on the TSP as one of three pillars for their retirement (TSP, SS, and a fed benefit). To have the same retirement as CSRS, FERS employees must participate fully, it is not an option. And, this means less take-home pay as TSP contributions come out of your pocket. None of us (especially FERS employees) should have to pay any fees for actively managing our gov’t retirement program.
For CSRS, TSP was added later as an optional benefit, it is not an intergal part of CSRS upon which they will depend.
No more fees!
Paying for what?
DoD
Mon Sep 17, 2007 9:07 AM
Post Reply
If I'm transferring between funds on-line, why would there be any fee involved? If I'm transferring by phone/fax/etc, then there's a personnel cost involved and a fee should be charged.
Do your homework!
USDA
Mon Sep 17, 2007 9:55 AM
Post Reply
Read the FRTIB (TSP Board) minutes. The cost that the board is concerned about is NOT due to trading cost associated with frequent trading. You are insinuating that frequent traders are costing everybody a lot of money which is NOT the case. Our TSP administrative cost have gone DOWN from 6 basis points to 3 basis points over the last 5 years.
The real cost is the "Fair Valuation" associated with the I-fund. This is caused in a volitile market when the closing price of the I-fund and the opening prices in overseas markets differ significantly. This is caused by overseas markets being closed when TSP interfund transfers are settled at the end of the day. This volitility will even itself out over time (as has already happened this year). Back in March the TSP had a big surplus when markets overseas opened lower than expected after a highly volitile day. Then in June-July the pendulum swung back the other way. Remember: The L-fund rebalances DAILY. That's a lot of trades.
Fees For TSP Interfund Transfers
National Weather Service
Mon Sep 17, 2007 11:23 AM
Post Reply
If they institute trading fees, they should also make them effective instantly. Allow the usual noon deadline to stand for free trades, and allow a pay-option for an instant trade.
Remember, the L-funds rebalance daily. Should this remain free? Or should there be higher fees for those of us in the L-funds due to the daily IFT?
Re: Fees For TSP Interfund Transfers
DoD
Mon Sep 17, 2007 3:50 PM
Re: Fees For TSP Interfund Transfers
Social Security Admin
Mon Sep 17, 2007 10:33 PM
With regard to those arguing which transactions actually incur costs, I don't have any idea myself. My point is that, IF there is an identified additional cost associated with the way I or others individually manage or desire to manage our funds, then we should have to pay those individual costs.
Then we can all discuss ideas and opinions on how best to manage TSP funds without anyone having a personal stake in another's choice.
Re: Fees For TSP Interfund Transfers
DoD
Tue Sep 18, 2007 10:58 AM
IF (and that's a big if) you get the law changed, do you realize just how expensive it would be to instantly calculate the value of every single stock (hundreds or maybe thousands depending on the fund) in a TSP fund at a given point during the day for every account holder who wants to make an instantaneous trade??
Re: Fees For TSP Interfund Transfers
DON
Tue Sep 18, 2007 3:42 PM
There is no way to value every stock instantly to determine the value of a fund that owns all of those stocks.
ALL mutual funds are traded this way.
Re: Fees For TSP Interfund Transfers
dhs
Tue Sep 18, 2007 5:04 PM
What is the cost of this benefit?
Navy, Keyport, WA
Mon Sep 17, 2007 2:56 PM
Post Reply
I am curious if anyone at TSP has identified the true operational cost of the current interfund transfer system. With the web-site and powerful computer systems, I seriously doubt that the cost is significant enough to take away this benefit. With the current change ability, one can feel fairly comfortable and somewhat in control with their TSP investment, making changes in accordance with their research and comfort level. Hence in my opinion, we have a significant benefit over an insignificant cost.
Same as title above
USACE
Tue Sep 18, 2007 7:35 AM
Post Reply
Everytime I look around you're looking for a way to take some of the money I work hard for. It is true that the TSP, if not the best, is one of the best investment/nest-egg options for us out there. Having to contend with just the maintenance fee is one of the reasons why TSP has this reputation.
Now, like contracting our federal jobs, You're tying to charge other fees. I just don't get it. People stay with their federal jobs because of the many perks you're trying to do away with.
Might as well go to the private sector, knowing what to expect there...
Re: Same as title above
TSO
Tue Sep 18, 2007 11:46 AM
It's shortcomings are that there is no exposure to international bonds, no dedicated international small cap option (EAFE index is overall looking but weighted towards large cap because of capitalization amount), no dedicated emerging market option, no option to allocate more towards short term or long term bonds.
TSP additional charges
CBP
Tue Sep 18, 2007 7:42 AM
Post Reply
I read the article and was impressed with several of the individuals that made comments. Seeing that the TSP is computer driven, I don't understand how it could cost more just because you decide to move from one fund to the other. If I understand trading between idexes, everything is conducted via the computer. Its not like we are purchasing individual stocks we are going into a different indez. Computer generated... No additional costs... Sounds as if people haven't quite understood the age of computers.