TSP Proposes Rules on Interfund Transfers

The TSP has formally proposed a rule change it has been indicating for some time that it intends to pursue, limiting the number of interfund transfers that investors may make to two a month, with a third allowed only for transfers into the government securities (G) fund. The proposed rules in the March 10 Federal Register repeat the TSP’s often stated concerns that a small number of investors are making especially frequent transactions under the current system, where transfers can be made as often as every business day, driving up costs for all investors. The notice said it is not practical for the TSP to charge investors a fee for making transfers and said that many mutual funds impose even greater restrictions on transactions than the TSP is proposing, in some cases limiting investors to only four a year. The TSP indicated that it intends to finalize the policy quickly, setting April 8 as the deadline for comments.