TSP News: New Limits on Interfund Transfers
One of the many benefits of saving for retirement through the federal Thrift Savings Program is that you have a variety of investment choices—including:
- Government Securities Investment (G) Fund,
- Fixed Income Index Investment (F) Fund,
- Common Stock Index Investment (C) Fund,
- Small Capitalization Stock Index Investment (S) Fund,
- International Stock Index Investment (I) Fund, and
- Lifecycle (L) Funds.
As an added bonus, the TSP gives you the ability to move some or all of your balances from one fund to another fund—or to a combination of funds—through a transaction known as an "interfund transfer."
Until recently, TSP participants could make an unlimited number of interfund transfers each month. As of May 1, 2008, new TSP rules limit interfund transfers as follows:
- During each calendar month, you can conduct up to two interfund transfers to redistribute the money in your account among any or all of the TSP Funds.
- After those first two transfers, any additional transfers during the remainder of the month can only be used to move money into the G Fund.
The new rules attempt to rein in frequent trading by a very small number of TSP participants and will have an impact on only a tiny percentage of TSP participants—less than 1 percent. Frequent trading in a fund can lead to higher costs for everyone who owns shares of the fund and also can impact the fund's performance.
For more information about the new rules and the reasons behind them, please visit the TSP's Web site.
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