New TSP system set for September
The $102 billion Thrift Savings Plan will have a new computer system in September that will update the value of federal workers’ and military personnel’s 401k-style retirement accounts every day, the TSP board announced Friday.
The $102 billion Thrift Savings Plan will have a new computer system in September that will provide daily updates of the value of the 401k-style retirement accounts held by federal workers and military personnel, the TSP board announced Friday.
The TSP's 2.9 million participants will also be able to move their money among investment options at any time under the new system.
The announcement marks the fourth time in three years that the TSP board has promised to unveil the new system, which will make the TSP more like private sector 401k systems. Such systems have long provided participants with daily valuation and the ability to update accounts at any time.
After three delays in 2000 and 2001, the TSP board in July 2001 fired Fairfax, Va.-based American Management Systems, the original contractor overseeing the TSP's computer modernization. The board hired Alexandria, Va.-based Materials, Communication & Computers Inc. (MATCOM), to take over the contract. While MATCOM has been working on the contract, the Thrift Savings Plan board and American Management Systems have been locked in a legal battle over who is to blame for their failed contract.
TSP officials say MATCOM scrapped the work done by American Management Systems and started over.
TSP board officials plan to close out the current computer system at the end of August and bring the new system into operation on Sept. 16. There will be some limits on participants' account transactions during the transition.
The chart below shows the major changes that TSP participants will see if the new system works as expected in September.
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Now
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From Sept. 16, 2002 onward
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In General
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| The TSP is a monthly valued plan. Transactions are processed once a month. | The TSP will be a daily valued plan. Transactions will be processed each business day. |
| Account balances and transactions are processed and shown in dollar amounts. | Account balances and transactions will be processed and shown in dollar amounts, shares, and share prices. |
| Married FERS and uniformed services participants must obtain their spouses' waiver or consent for all withdrawal requests (except the prescribed TSP annuity). | For any withdrawal requiring a spouse's waiver or consent, a FERS or uniformed services participant must have his or her spouse's signature notarized. |
| TSP open season dates are Nov. 15 - Jan. 31 and May 15 - July 31. | TSP open season dates will be Oct. 15 - Dec. 31 and April 15 - June 30. |
| The TSP issues participant statements twice a year, for the periods ending April 30 and Oct. 31. | Beginning in January 2003, the TSP will issue quarterly statements for the periods ending March 31, June 30, Sept. 30, and Dec. 31. |
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Loans and Withdrawals
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| If you have a loan, you receive quarterly loan statements. | Loan information will be included on your quarterly participant statements, rather than on separate loan statements. |
| You must repay a general purpose loan within four years. | You will be able to take up to five years to repay a general purpose loan. |
| You can reamortize your loan only once. | You can reamortize your loan without limit. |
| You can repay a TSP loan at any time, but only in full with guaranteed funds. (Personal checks are not accepted.) | In addition to repaying your TSP loan through regular payroll deductions, you will also be able to repay all or part of it at any time and do so with personal checks. |
| Only monthly withdrawal payments can be electronically deposited into your checking or savings account. | You will be able to have loan or withdrawal payments deposited electronically into your checking or savings account. |
| Withdrawals after separation from service must be for your entire TSP account balance. | After you separate, you may also be able to make a one-time partial withdrawal (if you have not made an age-based in-service withdrawal). |
| You can make a post-employment withdrawal as either a single payment, monthly payments, or a life annuity. | You can use any combination of these same options to make a post-employment full withdrawal. |
| You can elect to receive monthly payments for a fixed dollar amount or for a fixed number of months, or you can have the TSP compute your payments based on your life expectancy. You cannot change your election. | You will be able to receive monthly payments for a fixed dollar amount or have the TSP compute your payments based on life expectancy. You will be able to make a one-time change from TSP-computed payments to fixed-dollar-amount payments. Once a year, you will be able to change the monthly fixed dollar amount you are receiving. |
| After you separate from service, you will receive an automatic cashout if your account balance is $3,500 or less, unless you choose another withdrawal option. | After you separate from service, you will receive an automatic cashout if your account balance is less than $200. No other withdrawal options will be available. |
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Web site and the ThriftLine
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| Both the TSP Web site and the ThriftLine provide general Plan information and allow you to check your (monthly) account balance; make an interfund transfer; allocate future contributions among the five funds; change (or request) a PIN; find out the current loan interest rate; and learn the amount available to you for a loan. | On both the TSP Web site and the ThriftLine, you will also be able to find out your daily account balance and daily share prices. On the ThriftLine, you will be able to find out your outstanding loan balance and loan prepayment amount. You will also be able to request that certain TSP forms and publications be mailed or faxed to you |
| On the Web site, you can download TSP forms and materials and find out your outstanding loan balance and prepayment amount. You can also use interactive calculators to project a future account balance; to estimate annuity payments and loan payments; and to find out how much you can contribute per pay period without exceeding the elective deferral limit before the end of the year. | On the Web site, you will also be able to begin (and in some cases, complete) a loan or withdrawal request and refinance a loan. You will be able either to estimate the number of monthly payments you will receive if you choose to withdraw your account in monthly payments of a specified amount, or to estimate the amount of your monthly payment if you choose to have monthly payments computed based on IRS life expectancy tables. If you are separated from service, you will also be able to update your name and address. |