Members of the Federal Retirement Thrift Investment Board approved a nearly 18 percent increase in the agency’s budget for the coming fiscal year that will help lay the groundwork for a wholesale overhaul of the Thrift Savings Plan participant experience, board officials say.
The board authorized $201 million for fiscal 2014 — a 17.9 percent increase above current-year levels.
It’s the second year in a row the board has agreed to a substantial budget hike for the agency — which oversees federal employees’ 401(k)-style TSP accounts.
The agency’s budget is funded by participant fees — spread out across more than 4.6 million TSP participants — and bypasses the congressional appropriations process.
The single, new initiative included in the 2014 budget is the first in a series of steps built around redesigning the entire participant experience, the board’s executive director, Greg Long, told board members. For now, that means determining benchmarks for how the board currently operates and communicates with participants and how the TSP compares to private-sector retirement plans.
In addition, the board is looking at ways to collect more data on TSP participants.
“There’s an awful lot about participants that we do not know,” Long said, such as salary, marital status, and email and phone numbers. The solution is enhanced information sharing between the federal payroll offices, the Office of Personnel Management and the board.
This foundation “is essential to eventually being able to move to the participant experience of the future, where we really know our participants and we act to anticipate their needs,” Long said.
The board approved an initial $2.3 million in fiscal 2014 for the project.
“In the end, what this is about, is getting smarter, and we have work to do,” Long said.
Funding ongoing operations and maintenance — “steady-state” funding — takes up the bulk of the board’s budget.
The board approved $193 million for such projects in the coming fiscal year — more than $27 million above current-year levels. The “primary driver” of the budget increase is technology, Long told board members.
This includes additional funding for the agency’s Technology and Enterprise Support Services (TESS) contract for record-keeping, IT infrastructure support and information security. The board awarded SAIC the five-year, $224.5 million contract last month, and work is slated to begin Feb. 1.
The board initially boosted IT spending last year to support the development of the TESS contract, following a cyber breach of the contractor responsible for maintaining the agency’s data centers that compromised the information of about 123,000 TSP participants.
TSP loans, withdrawals down from July spike
At its monthly meeting Monday, the board also received an update on key TSP metrics.
Hardship withdrawals and loans, which spiked in July, returned to a more typical level, according to statistics presented by the board.
There were more than 14,300 hardship withdrawals and more than 30,100 loan transactions in July, board officials said, likely due to the impact of furloughs felt by federal employees earlier this summer. However, those number declined to about 12,600 and 26,300, respectively — in August, which is normal for this time of year.
Earlier this year, the board declined to add an extra loan option for furloughed federal employees, because board officials said it would be too complicated to update the regulations. Currently, TSP participants are able to take out one general loan at a time that can be used for any reason.
The board is also keeping an eye on postal reform legislation currently making its way through the Senate. The bill, as currently written, would allow the financially ailing Postal Service to negotiate with its unions over changes to the defined benefit offered by the Federal Employees Retirement System as well as the employer contribution to the TSP. The board is concerned its costs to administer the TSP would likely increase under such a proposal.