Mike Causey

Twice A Month: Can You Handle It?

Effective today federal and military personnel will be limited to do it only twice a month. For some that will be fine, but Senior Correspondent Mike Causey say...

Federal News Network Staff

May 1, 2008 4:00 am

3 min read

Depending on what you are talking about, and who you are talking too, telling someone they can only do it twice a month can be liberating. Or limiting. Heaven or hell.

Take the new twice monthly trading limits for the federal Thrift Savings Plan. For most of the TSP’s 3.9 million account holders today is the start of the merry month of May. Period. It’s Mayday.

But for several thousand activists, known as frequent traders, this is dark day. If it would help, they’d send out the Mayday, Mayday, Mayday international distress call.

Since the mid-1920s, the word Mayday, repeated three times broadcast over the radio means you are sinking, on fire,under attack or otherwise in really bad shape. As in help-get-me-out-of-this!

Effective today, new rules go into effect limiting the number of times investors in Uncle Sam’s 401(k) plan can make electronic transfers. That is moving money from one account to another in hopes of making more money, or avoiding losses, by moving in and out of the stock market.

Over the past year the number of feds designated as “frequent traders” has gone up. So has the amount of money transferred, mostly out of the international stock-index I fund, the small-cap S-fund and the S&P 500 C fund, into the safe haven of the Treasury securities G-fund. But traders have also anticipated market changes and moved money between those funds, or back into those funds from the G-fund.

The folks who run the TSP said even the small number of frequent traders (about 3,000 in all) either had or would drive up the administrative costs of the TSP for each of the nearly 4 million account holders. The TSP’s administrative fees are lower than the lowest charged in the private sector (Vanguard). Low administrative fees, according to experts like Vanguard founder John Bogle, and financial columinist Alan Roth, can boost the amount of money in a 401(k) account by tens of thousands of dollars.

In his blog for the Federal Employees News Digest, Edward A. Zurndorfer explains the new limits like this:

For each calendar month a TSP participant can make only two interfund transfers; after those two interfund transfers the participant may only move into the G-fund. The TSP will count the interfund transfer based on its process date, not the date the interfund transfer is requested.
There are no interfund transfer limits that apply to contribution allocation requests (in other words, a TSP participant can continue to change fund allocation requests with no limitations with respect to new contributions via payroll deduction.)

For more on the new rule, click here.

Want To Meet An Astronaut?

You can if you head down to the National Mall next week to take in Public Service Recognition Week. It’s a time when Uncle Sam’s civilian and military sides get to strut their stuff to show members of the public what the government is doing, how and why. In addition to astronauts there will be many military, law enforcement and public health exhibits. Remember, the first man on the Moon was a fed. For details on PSRW, click here.

Nearly Useless Factoid

Got rhythm? ScienceDaily reports that people who score high on intelligence tests are also good at keeping time. New Swedish research shows there’s a correlation between general intelligence and the ability to tap out a simple regular rhythm. This may explain why I have trouble tap dancing and doing calculus at the same time.

To reach me: mcausey@federalnewsradio.com