Employees must catch TSP errors, new rule says

Federal employees are responsible for catching errors in their Thrift Savings Plan accounts, a new rule for the 401k-style investment plan reminds employees. The Federal Retirement Thrift Investment Board, which runs the TSP, issued a final regulation on Monday reminding employees that the onus is on them to spot errors that affect how their money is invested. The regulation adjusts some procedures and the time-frames for fixing errors. "Just as users of commercial services are expected to review statements recording transactions in their accounts and to assert their rights in the event of an error, so are TSP participants," the board's regulation said. Errors can happen when employees shift their money among the TSP's three investment options, a transaction known as an interfund transfer, or when employees change the way future TSP contributions are allocated among the three options, known as a contribution allocation. When employees make either of those changes, they receive a notice confirming that the transaction took place. Employees also get regular statements of account activity, which can tip employees off to mistakes in interfund transfers and contribution allocations. Employees should review confirmation notices and statements as soon as possible for such errors. They have 30 days from the date they receive the notice or statement to file a correction request, under the new regulation. "Application of a 30-day time limit for [mandatory] correction will require a participant to be vigilant in assuring his or her instructions have been carried out correctly; it will also prevent a participant from using extended hindsight to decide whether to request a correction," the regulation says. Employees have more time to demand a correction if their agency should put the wrong amount of money in their TSP accounts. In such cases, the regulation gives employees six months to file a correction request. The regulation gives the TSP board and agencies discretion to extend the deadline. Agencies and the board could use that discretion when employees are out of the country or on sick leave for a long time, for example. The new regulation appeared in the Federal Retirement Thrift Investment Board's section of the March 12 Federal Register.