TSP Officials Say They Might Need to Ask for More Money

The entity that oversees federal employees’ retirement plans already has obligated nearly 70 percent of its fiscal 2016 budget – mostly for cybersecurity needs.

The agency that administers the Thrift Savings Plan already has obligated nearly 70 percent of its fiscal 2016 budget, and might have to ask for more money, officials said on Monday.

The Federal Retirement Thrift Investment Board’s budget allocation for fiscal 2016 is $220 million, and by the end of the fiscal year’s second quarter, $151 million of it had been pledged mostly for cybersecurity upgrades, according to documents handed out during the board’s monthly meeting in Washington. Gregory Long, FRTIB’s executive director, told board members and others gathered for the public portion of the meeting that the agency needs to “do a little homework,” and figure out if it needs more money. Depending on that review, the agency “may need to come back to the board for additional funds,” Long said.

Participant fees from TSP enrollees, rather than congressional appropriations, fund the agency’s annual budget, which board members must approve. Long on Monday couldn't estimate how much the agency might need. 

It’s possible that the Federal Retirement Thrift Investment Board won’t need any more money for fiscal 2016, which is why the review is necessary, said Kim Weaver, director of external affairs at the FRTIB. TSP officials are "aiming to come back to the board if we need more money next month," Weaver said.  

“Sometimes money can be obligated and then not actually spent, so it’s de-obligated and put back into the mix,” she noted. “We want to make sure we really need additional money, if we need to ask for it.”

Weaver said such requests for additional budget increases within the same fiscal year are pretty rare. “This hasn’t happened in the four years I’ve been here, but I understand it has happened very infrequently in the past.” The fiscal year’s third quarter runs from April through June. The end of the fiscal year is Sept. 30.

Even if the TSP does need more money, participant fees won't necessarily rise. "Our budget is so small compared to the fund that a small increase doesn’t automatically lead to an increase to the participant fees," Weaver said. 

Data show that the FRTIB has committed most of the $151 million so far – about $113 million – to what it categorizes as record-keeping. That includes hardware, software, and benefits operations, as well as other information technology needs.

The agency has been working on shoring up its cybersecurity to protect TSP enrollees’ financial information, as hackers increasingly target federal agencies and the personal data of the government workforce. The hack on the Office of Personnel Management, which surfaced last year and exposed millions of current and former federal employees’ personal data, did not affect TSP accounts. But auditors for the FRTIB repeatedly have warned about IT security vulnerabilities. Accounting firm CliftonLarsonAllen gave the agency a clean audit for 2015, but mentioned two significant deficiencies: the security program, which included “systems authorizations and continuous monitoring” and configuration management, which included “unsupported operating systems.” In 2011, a TSP contractor’s computer system was hacked, putting information at risk.

Long said on Monday that the agency has “made meaningful progress on security authorization,” but acknowledged that “there is a lot of work left to do.”

The FRTIB’s budget has grown over the last few years; its fiscal 2015 budget was $207 million, up from $201 million in fiscal 2014.  

The portfolio that the FRTIB manages continues to grow. The agency oversees the retirement investment plans for more than 4.8 million participants with more than $463 billion in total assets. Nearly 90 percent of enrollees in the Federal Employees Retirement System contribute to the TSP, and the participation rate among active-duty service members is now up to 44 percent.

One of the TSP’s major priorities over the next year and a half is to work on successfully auto-enrolling new service members into the TSP beginning in January 2018. The change was part of the fiscal 2016 National Defense Authorization Act, which included several reforms to the military’s retirement system. TSP successfully launched a program in August 2010 that automatically signed up all new civilian hires.