It would be reasonable to assume this has been a rough few weeks for the Thrift Savings Plan (TSP). The planning, research and implementation goals for the recent changes introduced on June 1, 2022, have been planned over a 6-year period. In the midst of the significant changes, the Senate confirmed new members for the FRTIB board.
FedSmith has received numerous comments from readers expressing frustration with the changes to the new TSP website and a number of articles have been published outlining some of these problems.
The monthly meeting of the Federal Retirement Thrift Investment Board (FRTIB) focused largely on how the process started, what it hoped to achieve, obstacles that have been encountered with the new system, and steps being taken to resolve problems.
For the benefit of our readers, here is a summary of what the FRTIB hoped to accomplish with these major changes to the TSP and how the implementation is progressing. The changes to the system are significant and impact all TSP investors. It may ease some of the frustration and answer some questions posed by readers to understand the most significant changes and why the decision was made to undertake these major changes to underlying structure of the existing TSP program.
Fundamental Change to TSP Structure
Many readers had not focused on how much the structure of the TSP was about to change. Most of the publicity in the press focused on the mutual fund window. That is clearly a major change and will benefit at least some active investors.
However, there are other changes that are significant for the TSP system. This is a quick summary from the FRTIB.
Previously, the TSP provided recordkeeping for its investors. The FRTIB:
- Developed processes and procedures
- Owned and maintained the computer systems and applications
- Managed vendors providing labor resources to accomplish the work to be done.
- FRTIB spent much of its time and effort focused on delivering infrastructure to support recordkeeping services.
The decision was made to change the existing system by outsourcing much of the work. This was done to create a system that would be easier to change and move to newer technology to provide more services to participants. The FRTIB wanted to provide:
- More focus on retirement outcomes with a single vendor providing recordkeeping services and offering more services and tools to TSP participants.
- Providing top-tier participant services through a vendor that would be on a par with leading retirement providers.
- Eliminate the FRTIB owning and operating its technology infrastructure.
- Focusing agency resources on improving TSP investor experiences and executing the FRTIB’s core mission instead of focusing on recordkeeping.
Status of Conversion Process
According to the FRTIB, this is what has been accomplished in the conversion process from the agency’s perspective.
- Successful data conversion during the blackout weekend
- Migration of contributions from payroll to the new system
- Implementing new daily transaction processing and investments
- Implementing enhanced features such as eSignature, document upload, and mobile push notifications
- TSP Mobile App Launch and virtual agency launch
- Participant access to the Mutual Fund Window
- More modern and secure recordkeeping platform
New Features of the TSP System
The are several new features in the TSP’s system that are now operational. These are:
- Multiple options for secure online access
- The “My Account” segment has been redesigned
- A new mobile app is now available along with new self-service tools
- A mutual fund window is now available to TSP investors.
Status of Transition to New System
As of June 24th, 90% of participants accessing the system have successfully set up a new login. Some participants did experience problems. And, in a system with more than 6.6 million participants, this means that there are people who experienced problems.
The new login system was designed in response to a surge in cybercrime. According to the FRTIB, the goal was to make a safe investment system even safer for participants.
More than one million accounts have now been set up. There have been more than three million “logins” to the “my account” feature through June 24th.
Changes were made to the underlying program to eliminate the problems of those trying to create a new login while also maintaining a secure system.
There has been an increase of 66% in the number of representatives in TSP call centers. There was obviously a severe problem in the projected number of people who would be calling into the TSP centers and the agency has been rapidly adding new people to reduce the wait times for callers. An additional 100 new customer service agents will be added in the next week.
A number of TSP participants are now using the new features. Some of the data cited at the monthly meeting are:
- 126,000 downloads of the TSP mobile app
- 81,543 transactions completed with eSignature feature
- 305,000 withdrawals totaling over $1.8 billion processed, including 249,000 installment transactions that took place on June 15th
- 47,967 electronic withdrawals and payments
- 107,000 fund transfers and reallocations were completed through June 24th
- $47 million moved to the mutual fund window with 879 funded accounts
- More than 46,000 beneficiary designations were handled through June 23rd
- 35,000 loans totaling over $373 million processed through June 24th
Challenges and Problems With the New System
As many readers know, there are problems that have been encountered with implementing the new system. These problems include:
- Number of calls to the call centers
- Vendor staffing projections
- Waiting time for callers
- Login processing problems
- Software defects
There have been improvements since the initial introduction. Specifically:
- 95% of participants now trying to setup their new accounts are successful.
- The participant inquiries are declining and the problems that are being encountered are diminishing
- Wait time for callers are continuing to decline
- Number of callers abandoning their calls are declining
- The logins and transaction volumes indicate services are now being delivered for participants
- Software and enhancements to the system have been completed.
In short, the implementation process has had problems. The FRTIB indicates cleaning up the problems is a major priority and they are working to eliminate the problems that do occur. Many of the initial problems are being resolved or have been resolved.