TSP Investors: Roaring or Purring?

Do federal-postal-military investors want/need more options in their investing-for-retirement Thrift Savings Plan?

Would giving the 3 million-plus account holders more high-risk/high-reward investment options (like a real estate fund, a gold fund, a green fund, etc.) be doing them a favor?

Monday’s column reported that many mutual funds (and their backers in Congress) would like a piece of the $2 Billion (with a B) investors pump into the TSP each month. And how, if more funds are offered, that might work.

Here’s what some of your colleagues say are the pros and cons of added investment options:

• “If they have a ‘socially responsible’ fund, they will need to have the opposite too. My brother invests in some type of anti-social fund that is cigarettes, guns, etc. My brother always was a rebel.” Paul of the IRS.
• “I continue to be disappointed in the TSP Board and their failure to offer us more choices. Their argument that what they offer covers the full range of opportunities is a very poor one. Mixing everything together does not result in a superior investment product when certain segments are out performing. I would like to add that it is not their job to protect me from myself. In addition, I would be happy to pay more for more choices – after all one of the things that makes our country great is the wealth of choices that we have.” Len of the Bureau of Engraving & Printing.
• “Most Federal employees/retirees have neither the skills nor the inclination to maintain appropriate asset allocations. The Lifecycle funds are the best choice for them. It would increase risk and costs to expand the TSP investments to a larger number of funds (particularly through outside mutual fund companies). Employees/retirees who wish to expand their choices can invest a portion of their retirement savings in the TSP and an additional amount in an IRA. However, after several years, I think most people will find that the TSP investments have provided a better rate of return.” Suzanne Walker.
• “The TSP funds do not invest in the stocks my broker always recommends to me: a slide rule manufacturer, one who makes buggy whips and the San Francisco-Honolulu Railroad. We are off the Gold Standard and our dollar bills no longer say ‘silver certificate’ on them. I think we are on the aluminum foil standard and heading for the rubber band standard.” Stanley F.
• “I too was one who wanted a real estate fund. Upon further reflection, I still think this is a good idea. Where the TSP needs to do more work is in the C Fund. It needs to create a CE fund which is the C Fund but with the portfolio members all be weighed equally.

  “As far as mutual funds go, the board should consider ETFs instead. Mostly lower costs with certain exceptions.” Charles A. Sarahan II

• “I don’t usually comment on articles but this TSP business reminds me of monkey-business. We need to be cautious about ‘opening up’ TSP for more risky type investments . . . we would not want to ‘tempt’ Congress to ‘borrow’ our funds for its own business. We know where that can go-need I say Social Security. We need to remind Congress that TSP funds are federal employees’ PERSONAL funds, which should be untouchable. About offering more types of investments, folks don’t have to put their entire amount into TSP-let the ones who think the grass is greener go off on their own with a private investment company. I’d rather keep TSP the way it is . . . it’s a safer place to save. And why risk our very low fees? The last thing we need to do is allow a few folks who want to get rich quick to upset the balance of TSP. Leave it alone! Long-Time DoD Fed
• “Everybody says how great TSP is with all its options and with low fees, but it is not user friendly to this retiree. I periodically could use a grand or two for a special purchase or vacation but TSP won’t let me make a periodic withdrawal…so I haven’t been on vacation in two years since my last COLA. Guess I’m not helping the economy much.” Stan Ginsberg Gaithersburg, MD

Feds In Trouble

Congressional pay cuts, furloughs for feds, and a 2011federal pay freeze are among the items the lame duck congress may (or may not) consider. So how close are you to the bullseye? Today at 10 a.m., we’ll talk with attorney Bill Bransford. He’s an expert on what’s happening on Capitol Hill where you’re involved. He wears several hats, including general counsel of the Senior Executives Association. Listen to Your Turn with Mike Causey today (10 a.m. EDT) at www.federalnewsradio.com

If you have questions call us at 202.465.3080 and/or email me at: mcausey@federalnewsradio.com

Nearly Useless Factoid
by Suzanne Kubota

Four Australian women nabbed the world record for the fastest relay race in stiletto heels on Tuesday. The team covered a 300-foot course in about one minute and four seconds while wearing 3-inch stilettos.

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