TSP leaders face Hill criticism over new computer system

The board chairman and executive director of the Federal Retirement Thrift Investment Board went to Capitol Hill Thursday in an attempt to restore confidence in the troubled TSP automated record keeping system launched in June.

On Thursday, TSP Board Chairman Andrew Saul conceded that project managers did not foresee some of the problems faced by participants when the new system was launched.

"One area where we did not anticipate poor performance, but which initially reduced the opportunity for participants to enjoy the advantages of the new system, is Web access," Saul explained. "It took more time than we would have liked to identify and solve this problem."

According to Saul, the Web problem is now corrected and other efforts are under way to get the system running at full speed. The TSP has hired additional staff to help with a backlog of data entry work and has installed extra telephone lines to handle the volume of calls from participants who want to conduct transactions by telephone.

In 1997, TSP officials decided to upgrade the record keeping system to allow the plan's 3 million participants to get account balance updates each day, transfer money from one fund to another and change the amount of their monthly payouts after they retire-many of the benefits offered by private sector retirement plans. Two contractors and millions of dollars later the system was launched on June 16-only to stumble when a Web glitch prevented some participants from accessing the system. TSP officials worked on the problem and advised participants to access the system by telephone, but soon the phone system was overwhelmed. Last week a TSP spokesman acknowledged that a large backlog of data entry work was causing problems with loan repayment checks, paper loan applications, and paper withdrawal applications.

For the past five weeks, many TSP participants have been unable to access the new record keeping system online or by telephone and complained that they were told paper applications and correspondence hadn't been received by the TSP. After receiving numerous complaints from participants, House Government Reform Chairman Tom Davis, R-Va., called a hearing Thursday to discuss the situation.

"Our committee has received numerous calls from federal employees and retirees who have complained that they have been unable to get loans processed, withdraw money, or transfer funds," Davis said as the hearing began. "As a result, according to these individuals, home purchases have been delayed or ruined, and transactions have been misplaced, credited to the wrong fund, or deposited into a different person's account."

Committee members criticized Saul and TSP Executive Director Gary Amelio, reading plaintive letters from constituents and questioning the effectiveness of the testing phase and short-sightedness of completely eliminating the old system when the new system was launched.

"I can accept that a system is not failproof," Rep. Jim Moran, D-Va., said. "But the magnitude and gravity behind these problems reflects a much more pervasive problem with the TSP."

Adding fuel to the fire, a staffer dispatched by Rep. Jo Ann, Davis, R-Va., during the hearing to log on to the system through the Web site received an error message and was denied access.

"The current situation is simply not acceptable," Davis said. "TSP customers ought to have immediate account access, as they were promised. Our public servants deserve much better."

In her testimony, Michelle Corridon, co-chair of the Federal Managers Association's Agriculture Department Conference, listed various ways in which the problems encountered at TSP might have been avoided, such as more testing before the full system was launched, maintaining the old system, providing status updates, boosting staffing levels and providing more detailed contact information participants could use to submit complaints or report problems.

"Regularly informing the masses about the latest status of the system would have at least mitigated the anger and frustration our members and other participants are experiencing," Corridon said.

Saul pointed to some of the new system's successes, including as many as 50,000 Web transactions an hour, as well as 12,000 loan disbursements and 32,000 withdrawal payments as of July 15.

"We are processing transactions via the Web and are working through the operation issues that are affecting loans," Saul testified. "We expect to have these issues substantially resolved in a matter of weeks and are confident that the new system will provide many years of solid service to all participants."