TSP computer system slated to debut in June

Participants in the 401k-style Thrift Savings Plan should be able to access their balances and other information online by mid-June, according to TSP officials.

Testing to verify that the much-delayed new system can handle large numbers of TSP transactions simultaneously is complete, and an aggressive training and implementation plan has been drafted, Lawrence Stiffler, director of TSP's Office of Automated Systems, told TSP board members Monday.

"There are some minor, cosmetic bugs, but barring any unforeseen problems with the software, the system will be ready to launch in June," Stiffler said. "I don't see any problems at this point."

Once up and running, the new system would give the more than 3 million TSP members more control over their accounts by offering more ways for participants to withdraw money and providing online service for loans and withdrawals. The new system would also show account balances in shares as well as dollars. Under the current system, the value of TSP accounts is updated monthly rather than daily, and some transactions take several weeks to process.

The TSP board spends $1 million on postage per mailing, and anticipates saving money once TSP members are able to opt for online and, eventually, electronic statements rather than paper statements.

The June launch date is the seventh debut date for the new system, which underwent numerous delays and an escalating budget over the last six years. The board hired American Management Systems in 1997 to modernize the computer system and give federal employees more tools to manage their 401k-style retirement accounts. The $30 million project was supposed to be completed by May 2000, but when the implementation date was moved back four times and the budget tripled, the board fired AMS in July 2001. The board sued the Fairfax, Va.-based company for $350 million in damages and AMS has filed a breach of contract suit against the board. The lawsuits are pending.

While the legal battles rage on, the board has held off on assessing TSP member accounts for $41 million in expenses from the AMS contract. Board officials plan to use proceeds from the lawsuit to offset the $41 million, rather than charge the debt to TSP members. On Monday, Ernst & Young, TSP's auditor, told board officials their actions in regard to assessing the accounts were reasonable. Labor Department officials have questioned the board's decision not to assess member accounts.

TSP officials will send participants a statement with information about the changes once the new system is ready to go online.