Lawmaker calls for competition on TSP administrative contract
The Thrift Savings Plan's relationship with the National Finance Center took another hit Monday when a lawmaker called for the agency's $52 million administrative services contract to be opened for competition.
"I have long been a proponent of competitive bidding," said Sen. Peter Fitzgerald, R-Ill., chairman of the subcommittee with oversight of the TSP. Fitzgerald called a hearing Monday to discuss the federal retirement savings program. "It is my view that the TSP could save significant funds if this contract were opened to competition, which would directly benefit the plan's 3.2 million participants."
During a meeting of the TSP board earlier this month, TSP officials sharply criticized the NFC's installation of a mainframe computer system that was designed to improve TSP customer service. The mainframe was scheduled to be installed by January, but that deadline has been pushed back to May or June. Thrift plan officials blame the delay on a lack of cooperation from the NFC. Some TSP board members suggested that their relationship with the finance center might be fatally flawed.
The NFC, an Agriculture Department agency based in New Orleans, operates several administrative facilities for the savings plan, including a call center and a mail-handling site. More than 400 NFC employees are assigned to TSP projects. Almost 45 percent of the $110 million annual TSP budget is wrapped up in the NFC contract. The cost of managing the investment funds represents about 3 percent of the total TSP budget. NFC Director Jerry Lohfink could not be reached for comment Monday. The Times-Picayune in New Orleans reported last week that Lohfink was scheduled to meet with TSP officials to discuss the dispute. Thrift board chairman Andrew Saul testified that the savings plan is soliciting bids for a vendor to house the mainframe and conduct related software support. He said that much of the TSP's operations at the finance center could not be opened for bidding until recently, when the savings plan upgraded its recordkeeping system. "The new system is much more transportable," Saul said. Saul made a point of saying, however, that the TSP has enjoyed a historically good relationship with the finance center. He said that the board must keep administrative costs low, but also must "be careful with reliability and service." TSP Executive Director Gary Amelio told lawmakers that as the savings plan has grown, the NFC has charged more for each TSP investor. In the early 1990s, Amelio said, the finance center charged about $6 per TSP member per year. The NFC now charges $18 per TSP member. "Instead of getting an economy of scale, we're getting the reverse with the National Finance Center," Fitzgerald said.
COMMENTS
- Our money. Isn't (wasn't?) Social Security "our" money that big daddy Uncle Sam was watching over for us? Looks like our elected officials are starting to sniff around the TSP coffers - you don't suppose they will borrow from TSP a'la Social Security, do you? Okay Ladies & Gentlemen, place your bets - seven come eleven..... For sure bet five percent of your salary on TSP as you will double your money (at least on paper) but NO MORE. Save your retirement money in after tax dollars in any vehicle that has absolutely no federal government connection(s)... at least then all these jackals (Amelio, assorted Senators, Congressmen/women, or other Presidential cronies) cannot readily steal it from you with slight-of-hand or other empty promises. Oh they could still take it, but ast least they would have to show themeselves for the lying, thieving cheats they are! GovExec.com reader Posted March 8, 2004 11:40 AM
- The TSP is money that belongs to federal workers. Please don't let a private company, such as Halliburton get near it! That is a frightening thought! GovExec.com reader Posted March 5, 2004 12:20 PM
- It does not surprise me that Senator Fitzgerald, being a Republican, would take such a position; however, may I remind Senator Fitzgerald and everyone else reading your column, the TSP Fund is not Senator Fitzgerald's money nor the US Government's money, although they choose to use it at their whim as such. It is the money saved by 3.2 million federal workers, which they have elected to put aside for their retirement. Personally I am reluctant to have a private entity handle my retirement account based up the past performance I have seen from the private sector in the past three decades. Has everyone already forgotten the scandals related to the deregulation of banking industry during the 1970s, or the Savings and Loan failures of the 1980s, or the waterhole inflation of stocks during the 1990s? Why would anyone believe the savings of millions of federal workers would be better off handed by the lowest bidder, but in reality a Halliburton of the investment industry. Do I have issues with the Nation Finance Center? Yes I do, but for any government official to start making arbitrary statements to the press or anyone else about my money does not set well with me. As a federal worker who has contributed to the Thrift Savings Plan since its beginning I take exception to an individual making statements to outside interest before consulting the investors in the TSP program first. Privacy is another concern I have with a non-government entity handling my TSP account. I am 52 years old; it is my intention to retire in four more years at age 56. I plan on using my TSP account to pay off my home and the remainder to subsidize my retirement income. What I do not need in the final years of my life is barraged of salesmen and junk mail seeking to relieve me of it by selling me new cars, replacement windows, vinyl siding and providing me with credit cards all because of their awareness of my investment in the TSP Program. If the National Finance Center's rising costs for administrating the TSP Program are a problem, then by all means lets resolve the problem rather than putting 3.2 million federal workers' retirement savings at risk. GovExec.com reader Posted March 3, 2004 12:06 PM
