The TSP is a huge plan with $235 billion in assets. Why are transaction costs of $15 million a problem?
As indicated in Question 8, transfer costs affect the returns of the funds. For example, the I Fund’s transaction costs in 2006 decreased the I Fund’s return by 8 basis points or .08%. The cost of administering the TSP program was only 3 basis points (.03%) in 2006. The Board is charged with keeping TSP expenses low for all participants. We have determined that trading restrictions will result in a significant expense reduction for TSP participants.
