Thrift Savings Plan hacker attack prompts extra precautions
Hackers breached the accounts of some Thrift Savings Plan participants in late December, stealing $35,000 and prompting officials to encourage extra safeguards.
Officials with the 401(k)-style retirement savings plan for federal employees said every participant who was affected by the theft have been notified. Computers of about 25 participants were infected with software that allowed hackers to record their keystrokes and find their TSP personal identification numbers.
TSP officials are working with the Secret Service to find the perpetrators. Speaking at a TSP Board meeting Tuesday, Executive Director Gary Amelio encouraged participants to install a protective program on their computers to block unwanted spyware and to log off of the TSP Web site when finished accessing their accounts.
"We urge you to do this," Amelio said.
Amelio stressed that the TSP system itself was not breached. TSP officials posted two announcements on the Web site that must be read before participants can access their accounts. One details the security breach and the other is a warning that only TSP participants can use the site in order, Amelio said, to inflict stronger legal penalties on hackers.
When TSP officials became aware of the theft, they temporarily blocked electronic transfers out of the plan, because the criminals electronically sent the money to their own accounts.
Amelio spoke out about the breach on the same day that his staff released full results from the first survey of TSP participants since 1991. The survey revealed that participants prefer using the Internet to access their accounts. Forty-nine percent access their accounts online at home and 39 percent access them online at work.
In addition, survey respondents indicated they would like more choices in the plan. Sixty percent of respondents said they agreed that the TSP would be better if there was a Roth 401(k) option, which would allow investors to pay taxes at the time of investment instead of when they take their money out upon retirement. Only 11 percent disagreed, and 16 percent were neutral.
Many respondents also said the plan would be better if there were more investment options to supplement the six funds that exist now. Forty-six percent of respondents said they agreed that the plan would be better with more funds, while 19 percent disagreed and 24 percent were neutral.
But when TSP participants were asked if they wanted more options even if it would cost them more, the numbers went down. Right now, TSP participants only pay administrative costs of $4 for every $10,000 they have in their accounts, much lower than the costs of similar plans.
Board members recently hired outside consulting firm Ennis Knupp & Associates of Chicago for advice on whether the plan should have more funds. In November, the firm recommended against doing so. Board members also have been in a legislative battle to block a heavily lobbied bill to add a Real Estate Investment Trust fund to the plan. The bill has not yet been reintroduced in the 110th Congress.
More than half of survey respondents said they would want the REIT fund if costs stayed the same and about 25 percent said they wanted the fund even if it would cost more. About 20 percent of respondents said they did not want the extra fund.
Amelio and board members said they will examine the survey results as they decide upon next steps for the plan, but they said the TSP is not a democracy.