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May 21, 2002
Federal Workers to Get Faster Access to Benefits Info
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Though participants can move their money among the TSP's five funds on a monthly basis now, it can take six weeks to complete some transactions. Many TSP employees have complained that the monthly system puts them at a disadvantage when making investment decisions, according to the Washington Post.
In addition to processing transactions each business day, the new system will show account balances in dollar amounts, shares and share prices. It also will offer a greater number of withdrawal options and provide online service via the Internet for loans and withdrawals, the Post reports.
Paul A. Yurachek, a financial planner who follows the TSP, cautioned federal employees to avoid getting caught up in day-trader mentality once the daily valuation system starts.
"What's good about it is what's bad about it," he told the Post. "The ability to move your money when you want to move it and check on your balance when you wish is great. However, a lot of people are not sophisticated investors."
The monthly system "prohibited market timing" and the temptation to jump in and out of the stock market on violate days, he said. "Showing daily balances will cause people to worry and get excited more than they should."
The transition to the new system has been delayed for about two years because of a disagreement between the board that oversees the TSP and a contractor. The Federal Retirement Thrift Investment Board fired the contractor, American Management Systems Inc. of Fairfax, last year and hired a replacement.
To read the Washington Post article, click here.
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