December 2015

 

From the LGIP Administrator

What’s New…..

 

LGIP Daily Earnings Factor

Historically, LGIP participants have been given an anticipated gross earnings rate for the current month. This was done to give participants an estimate of the gross earnings rate for the month to allow participants to make comparisons with other investment options. This made sense because until March 2013 the LGIP return was calculated based on the earnings received during the entire month. However, in March 2013 the LGIP started operating with a daily factor and participants were credited with interest on a daily basis, based on the actual earnings for that day. Because the Fed has held the targeted fed funds rate between 0.00% and 0.25% since December 2008 there has been little volatility in the LGIP return and OST continued to provide an anticipated rate for the month, even though the LGIP was operating with a daily factor. However, since the Fed is in a period of adjusting the targeted fed funds rate the daily return of the LGIP portfolio could change quite a bit from the beginning of the month to the end of the month. Since the LGIP is operating with a daily factor the monthly rate would become less helpful to participants as they are making their investment decisions.

The Office of the State Treasurer (OST) will start reporting the LGIP Daily Yield. This will provide participants with more current data to assist them in making their investment decisions. OST will provide this information on the TMS online system daily and update the LGIP website on a weekly basis. Below is an example of the TMS Online information on the home page.

LGIP Daily Earnings Factor

All participants are welcome to sign up for the TMS online system for the LGIP Account. The TMS online access gives the participant access to daily yield data, transaction entry for withdraws and deposits, account balances, participant information, and reporting. LGIP Forms

Please contact me with any questions you may have:

Staci Ashe
LGIP Administrator
360-902-9017
1-800-331-3284
Staci.Ashe@tre.wa.gov