TSP board amends rules on account errors and back pay

Participants in the government's Thrift Savings Plan must quickly notify the board that runs the TSP of any errors in the way funds are allocated in their accounts, under new rules announced Thursday. The board also announced changes in the rules governing awards of TSP benefits in back pay cases.

The Federal Retirement Thrift Investment Board is planning to shift to a new computer system in October to keep TSP records. Between now and then, if employees discover that their TSP contributions are invested in the wrong funds, they must contact their agency or the TSP board within 30 days of discovering an error in a TSP statement or transaction confirmation.

"The board will implement a new record-keeping system on Oct. 1, 2000, and, inasmuch as pre-conversion contribution allocation errors will be extremely difficult to correct, the board must insist on compliance with the 30-day limit," the board said in an April 13 Federal Register announcement.

For certain errors, such as those relating to the amount or timeliness of contributions, elections to withdraw funds from a TSP account or the distribution of death benefits, an employee will have six months to file a correction request to be guaranteed that the error will be fixed. For other errors, the 30-day limit will apply.

"While participants are therefore required to be diligent in discovering errors in their accounts, the board considers this to be reasonable, particularly in the daily transaction environment forthcoming on October 1, 2000," the board said.

The TSP computer modernization will allow employees to reallocate funds every day and provide two new investment options, the Small Capitalization Index Investment (S) Fund and the International Stock Index Investment (I) Fund.

The board's new rules on back pay cases would change current regulations, under which TSP benefits awarded to employees in such cases are calculated at the return rate for the G Fund, which is invested in government securities. The new rules would allow employees to collect TSP benefits at other rates, such as the return rate for the C Fund (invested in common stocks), if a court or other tribunal orders such an award.

The TSP board is taking comments on the proposals through May 15.