Thrift savings skinny

The automated record keeping system for the Thrift Savings Plan may finally be ready to roll in June.

During a TSP board meeting Monday, Lawrence Stiffler, director of TSP's Office of Automated Systems, said mid-June looked "pretty good" for the new system to be ready for operation.

If the system is launched in June, it will end six years of stops and starts in the board's attempt to create a program that would show account balances in shares as well as dollars, offer more ways for participants to withdraw money and provide online service for loans and withdrawals. It would also allow participants to check the value of their funds daily. Currently, the value of TSP accounts is updated monthly rather than daily, and some transactions take several weeks to process. Nearly 3 million civilian and military participants have about $100 billion invested in the TSP.

The thrift board is still embroiled in a lawsuit with its previous contractor, American Management Systems, which was fired in 2001 after four years of work on the automated system and numerous delays. The AMS price tag grew from $29 million to nearly $90 million over four years and, in its lawsuit, the thrift board asked for $350 million in damages. Alexandria, Va.-based Materials, Communication & Computers Inc., took over the project in July 2001 and has led a team of subcontractors to develop the system for about $22 million.

At a meeting in February, thrift board members agreed to commit another $994,000 to the project to help pay for a parallel testing phase, to ensure the new system can handle the TSP's high volume and complex transactions. Last October the system's launch was delayed indefinitely because the new system couldn't handle large numbers of TSP transactions at once.

Employees at the National Finance Center in New Orleans are testing the project and pending successful testing, the board could set a launch date at its April 28 meeting, according to spokesman Tom Trabucco.

TSP Open Season

The spring TSP open season begins on April 15 and runs to June 30. During open season, civilian and military employees can enroll in the 401k-style program or current participants can change their contribution amounts. Employees under the Federal Employees Retirement System can contribute up to 13 percent of their basic pay each pay period to the TSP, up to an annual limit of $12,000 for 2003. Employees under the Civil Service Retirement System will be able to contribute up to 8 percent of their basic pay each pay period up to the annual limit in 2003. In July, TSP participants who are aged 50 and older, and who are already contributing the maximum amount to the TSP without exceeding the $12,000 IRS limit, will be able to start signing up to make "catch-up" contributions of up to an additional $2,000 in 2003.

Pay Compression Bill

On Wednesday Sen. George Voinovich, R-Ohio, and Rep. Jo Ann Davis, R-Va., held a press conference to highlight several pieces of human capital reform legislation, including a bill that would end pay compression in the Senior Executive Service. Two other pieces of legislation would reduce the number of presidentially appointed positions and eliminate the tax on money agencies give to employees to pay off school loan debts. The "Federal Workforce Flexibility Act of 2003" would increase the use of demonstration projects that experiment with paybanding, performance bonuses and other changes to the traditional General Schedule pay scale.

"Of all the things in which the government can invest, resources dedicated to human capital bring the greatest return," said Voinovich, who serves as chairman of the Senate Governmental Affairs Subcommittee on Oversight of Government Management, Restructuring and the District of Columbia.

"The Senior Executive Reform Act of 2003" would change the pay range to a salary band that starts at $102,000 and caps out at $154,700. Political appointees could set executives' salaries at any amount within that range. Under the current system, executive salaries are set at predetermined rates on a six-step salary schedule, which limits political bosses' control over SES pay.

"The bill will inject the principle of performance-based pay into the Senior Executive Service with raises based on performance, rather than passage of time," Voinovich said.

Davis, who heads the House Government Reform Subcommittee on Civil Service and Agency Organization, said she thought the SES bill would be relatively easy to push through Congress.

"I think we have the senior executive folks with us on most of the bill," said Davis, who held a hearing on pay reform proposals Tuesday. "They aren't crazy about some parts of pay for performance, but I think we can work something out with them."

The two legislators said governmentwide changes to the aging civil service system would happen slowly and come in small doses.

"We want to bring all the parties to the table," Davis said. "You're never going to get a bill that everyone loves, but I think if everyone feels they had a part in the process it will be easier to do."