TSP

The federal contractor behind the years-long Thrift Savings Plan modernization project apologized for the troublesome transition, several months after the Converge update went live.

Accenture Federal Services (AFS) said despite initial challenges in the new recordkeeping program, there has been significant positive progress to resolve the many frustrations of TSP participants.

“I personally wanted to start with an apology,” said Elaine Beeman, AFS’ senior managing director and civilian portfolio lead, at the Federal Retirement Thrift Investment Board’s Aug. 24 meeting. “In the early days of the program go-live, the call center experience was just not up to standards. It was not up to the standards of the FRTIB [and] it was not up to our standards. It was certainly not the experience that the participants and beneficiaries of the [TSP] deserve. The good news is, we’ve been working night and day to fix it.”

The update to TSP’s recordkeeper added several new features, including a mobile app, a live chat window, enhanced security features and a new interface for participants using the MyAccount platform.

“It wasn’t just a website change,” said AFS Managing Director Owen Davies at the board meeting. “We changed almost everything about TSP delivery when we went live. We changed the platform, so all the underlying technologies completely changed. We changed the processes [and] the way we actually go about delivering the specifics of the plans. We changed all the people who deliver those processes and operate those platforms. It was a wholesale change.”

When the major update, years in the making, went live on June 1, TSP participants experienced a vast range of challenges and frustrations. Many participants still continue to share their concerns and frustrations with Federal News Network.

At the Aug. 24 board meeting, AFS representatives shared details on what exactly went wrong, which initial challenges have subsided and what further improvements are coming to the new system.

Prior to the go-live date, Davies said AFS anticipated the volume of calls to ThriftLine, TSP’s customer service center, would be about twice as high as FRTIB’s previous call record. To prepare for the update, AFS added more call center staff based on that prediction. But when the update launched, the call center received six times the previous call record.

“We were just not prepared for that. We weren’t staffed for it. And as a result, we had the really unfortunate, horrible experience for participants,” Davies said.

Another decision Davies said caused a lot of frustration for TSP participants was requiring all users to set up a new login for MyAccount.

“We made that process really cumbersome, it was very hard for a vast number of users,” Davies said. “We made it overly complex. We over-indexed on some of the protection things. Those two [factors] in combination created a really bad situation, and everybody felt it.”

AFS was able to remediate a lot of the initial issues within the first couple of weeks, Davies said, which helped relieve some of the pressure that participants felt. But, he added, by that time much of the damage was already done. The blackout period prior to the launch, as well as high uncertainty in the stock market, also contributed to the frustrations from participants.

“Since then, we’ve seen really good performance. People have been able to claim their accounts and do it in a protected way,” he said.

Currently, the average call wait time for customer service is 24 seconds, down from two hours on June 1. More than two million participants have set up new accounts. ThriftLine is receiving roughly 21,000 calls per day, and that number is trending downward. Satisfaction with customer service is at 82%.

AFS is still working to reach more goals for TSP, Davies said. For one, he said AFS wants to bring customer satisfaction up to 90%. And, despite a large move to participants’ use of digital services, now at 85%, the goal is to raise that even higher, by getting more participants to download the mobile app and use self-service help options, like the live chat window and the new virtual assistant, AVA. AFS also plans to conduct refresher training courses for call center staff, to try to better help those who call for assistance.

“This program is terribly important to us,” Beeman said. “It’s an imperative to us to get this right. So we welcome an ongoing dialogue with [the board] and ongoing transparency into what we’re doing.”

 

What does a Las Vegas gambling expedition have in common with timing the stock (or bond) markets? Often the same thing: In many/most cases people let their emotions rule whether at a casino or home monitoring Wall Street. Nervous folk zig when they should have zagged. They were lost before they left the starting gate.

So how should you handle what counts most — your retirement nest egg, the TSP — during these, uh, interesting times? A time period of unknown duration. A series of situations, from the war in Ukraine to record inflation and rising gas prices, are likely to get worse before they get better. Maybe lots worse! And for most feds, their TSP account is most vulnerable in troubled times. Remember, it could provide anywhere from one-third to one-half of the money you have to spend in retirement. And the bigger the amount, and the later you start spending it, the better.

The 100,000-plus TSP millionaires (as of December, 2021) had a couple of things in common:

• Most, except for some politicians, political appointees and federal judges, were NOT already millionaires.
• Most spent an average of just under 30 years investing regularly in the TSP’s stock funds, especially in hard times (2008-9) when the markets were down. Market timers sold low, as it turned out, while those steady-as-she-goes investors bought stocks at bargain prices.

Many investors know the conventional thing to do, when times are good. But when things go south, which they do regularly, the fight-or-flight instinct kicks in. Times like now. So we asked D.C. area financial planner Arthur Stein what he’s telling active and retired clients these days. Several of them are self-made TSP millionaires, which is a very good sign. He’s going to be my guest today at 10 a.m. (EDT) on our Your Turn radio show. That’s 1500 AM locally or on our home page. So you can listen live today or catch it later. As usual we asked him to write-up a sneak preview of today’s show which he did. Here goes:

The TSP Has a double dose of down

By Arthur Stein, CFP©

All the TSP funds — except G — fluctuate in value. That means down as well as up. And last quarter was a double dose of down as both the stock and bond funds — except G — declined.

How bad was it? Here are the first quarter returns for the five traditional funds:

Also, all L Funds declined in the first quarter, including L Income.

According to the April 1, 2022 Wall Street Journal, bond markets declined at a rate not seen in over 40 years and stocks suffered their worst quarter in two years. Reasons include:

• Interest rate tightening by the Federal Reserve,
• Inflation surging to its highest level in forty years,
• Russia’s invasion of Ukraine, and
• A slowdown in the Chinese economy.

Both bond and stock markets continued declining during the first week of April.

So that’s scary. But what does it mean for TSP participants?

It means that participants need to concentrate on longer-term returns for funds they will need to spend five years and more in the future. Past performance is no guarantee of future performance but longer-term returns for the U.S. stock funds strongly outperformed bonds and international stocks.

For employees who are not near retirement, the declines are a reminder of two investment risks: volatility and market declines. But the declines are also an opportunity to “buy low” with bi-weekly contributions.

Retirees withdrawing from the TSP to supplement their Annuity and Social Security payments should try to withdraw from their G Fund balances until the other funds recover. Unfortunately, the TSP does not allow participants to withdraw from just one of the funds where they are currently invested. Withdrawals are made from each of the funds a participant owns, in the same proportion as their current allocation. If you have 50% in G and 50% in C, half of a withdrawal is coming from G and half from C.

There are several workarounds to this, which I will discuss on the show.

Nearly Useless Factoid

By Daisy Thornton

Wheel of Fortune hostess Vanna White clapped an estimated 3,721,446 times across 32 seasons.

Source: Guinness World Records

 

It’s been nearly three months since the Federal Retirement Thrift Investment Board rolled over millions of Thrift Savings Plan accounts to a new recordkeeping system, and after a rocky start, the board has made some notable improvements.

On the user end, the system update, coined “Converge,” brought participants a TSP mobile app, 5,000 new mutual fund options, a live chat window and new security functions, but along with the new features came a host of issues, too.

When the update went live, many participants struggled to access their information, take out loans or change their investments, ultimately flooding ThriftLine, the board’s customer service call center. The record-high call influx caused wait times to skyrocket.

Although starting out at an average wait time of two hours at the beginning of June, the number has since dropped off significantly. Kim Weaver, FRTIB’s director of external affairs, told Federal News Network the average time it takes now to reach a customer service representative is 45 seconds. That means you’d be waiting about the same amount of time as it takes to make your bed, or pour a fresh cup of coffee.

Here are a few other recent numbers from TSP:

More than 2 million participants have successfully set up new logins for TSP’s updated MyAccount.

Over 300,000 participants have downloaded the TSP mobile app.

Since June 1, TSP has processed about 95,700 loans and about 680,000 withdrawals.

Just over 170,000 participants have designated a beneficiary in the new MyAccount system.

Despite the board overcoming some initial challenges, many participants are still sharing frustrations with the system as a whole — particularly over the interface of the new MyAccount website itself.

“My biggest frustration is the lack of sophistication and flexibility that we had in the old software, which proved itself to be more than adequate for several years,” one TSP participant wrote in an email to Federal News Network.

“They replaced a fully functional website with a shiny paperweight,” another participant wrote.

“If the site and correspondence was accurate, it would be great. The new site is not user friendly. Information is confusing,” a third participant wrote.

Another significant part of the update — the mutual fund window — so far has 4,295 TSP enrollees. Of those who have enrolled, 2,140 participants have transferred roughly $92.3 million into mutual funds, Weaver said.

“Based on the usage in private sector plans, we believe eventually roughly 2% of TSP participants will use the mutual fund window,” Weaver said.

On Capitol Hill, though, Sen. Marco Rubio (R-Fla.) recently called on the board to “reconsider, reverse or amend” TSP investments in Chinese companies, with the concerns centering on the 5,000 mutual fund options now available to participants.

And other frustrations with TSP are gaining more Congressional attention, too. Del. Eleanor Holmes Norton (D-D.C.) and Rep. Abigail Spanberger (D-Va.) wrote to the Government Accountability Office, requesting a “comprehensive review,” of the major TSP update.

“The members requested the review after hearing from constituents about problems with the system, including difficulties accessing accounts, discrepancies in account balances, missing or incomplete information and hours-long wait times to reach customer service,” an Aug. 8 press release stated. “The GAO review will examine the planning, contract award and implementation, as well as oversight by the FRTIB.”

GAO quickly agreed to look into the problems. Agency staff will be able to start the investigation this November, said A. Nicole Clowers, GAO’s managing director for Congressional relations, in an Aug. 3 letter to Norton and Spanberger.

“We look forward to working with the GAO,” Weaver told Federal News Network.

Later this week, TSP’s board members will hear directly from Accenture, the contractor behind the major update, at its monthly board meeting.

TSP millionaires report

If you’re looking to reach TSP millionaire status, the odds might not be in your favor. FRTIB reported on Aug. 8 that the number of TSP participants with accounts totaling over $1 million dropped significantly since December 2021. Federal News Network’s Mike Causey predicted the plunge in late July.

So-called “TSP millionaires” now make up just 1.7% of TSP accounts, compared with about 3% last year. Currently, there are about 72,000 TSP millionaires, down nearly 36%, from roughly 112,000 in December.

Weaver told Federal News Network that the market is the main reason behind that dip.

“The stock market fell during quarter two of calendar year 2023,” she said. “That’s what drives our participants’ account balances. If the market is down, generally account balances fall.”

Nearly Useless Factoid

By Robert O’Shaughnessy

Source: Smithsonian Institution

 

 

There are lots of ways to become a millionaire. Some of them are even legal. You can invent something, like fire, Scrabble or potatoes, although those have been taken. Or you can write a book, then buy TV airtime, then teach seminars telling other people how they can make a million in the market. If enough people buy it, you will become a millionaire without taking all that time and effort investing.

Or you can get a good steady job. Pick an outfit that is going to be around a long time and has an excellent 401(k) plan. Very important. Uncle Sam is a good example. And make sure that your employer is willing to kick in money to match your contributions. The government matches 5% for 99.5% of its employees. Many private companies have no match. Which is huge. That 5% tax-deferred contribution is a head start that keeps on going. Then invest for the long haul in stocks, through good and especially bad times, like the C, S and I funds of the federal TSP. There is no guarantee of earnings and great performance, but so far, so good.

If you choose the invest-for-the-long haul course you may, as 112,000 rank-and-file federal and postal workers have done, become a TSP millionaire. Maybe with $2-3 million which, along with your steady federal annuity and inflation-indexed Social Security will guarantee you a better retirement. As in much better.

But the keys are long-term investing and doing what the proven winners have already done. Like Abraham Grungold. He’s a long-time fed who has found a good financial coach: himself. He’s been practicing what he preached to some others. And its worked. He’s our guest today on Your Turn (10am EST) here on FederalNewsNetwork.com or in the DC area at 1500 AM.

He’s going to talk about his “simple” 5-step recipe for becoming a TSP millionaire. This is one you can’t afford to miss. Tell a friend. If you miss the show, or want to hear it again, it will be archived on our home page. Meantime, here’s a sneak preview which he calls:

The Simple Recipe to become a TSP Millionaire

“There are approximately 4.5 million federal employees and approximately 2% of them, 112,880, are Thrift Savings Plan millionaires. These are the employees who contributed to the TSP their entire federal career and invested aggressively. They weathered every financial storm and crisis. They lived through the COVID-19 pandemic and showed no fear.

It is an elite club. And this club welcomes new members.

What does it take to become a TSP millionaire? What is the recipe? It takes a few basic ingredients and several important steps.

1. Contributions: Put in as much as you can afford.
2. Investing: Invest your account aggressively.
3. Time: Let your account grow for 30 years.
4. Ignore every financial crisis.
5. Ignore everyone who is not a TSP millionaire.

To become a TSP millionaire or a TSP multi-millionaire, it has nothing to do with skill or luck. Investing in any of the TSP funds is not gambling. But if you are jumping from fund to fund trying to time the markets’ fluctuation, that is simply a recipe for disaster. An old fed friend of mine who is also a successful TSP member would say to me “Just Let It Ride.”

I started in the TSP from the beginning, in 1987. There was no computer technology for checking your daily balance. Making a simple interfund transfer took several weeks to accomplish. It was all done manually by mailing the forms and receiving your statements through the mail. And for employees with less than three years of federal service there were restrictions on which funds you could invest in.

So what does it take to be a TSP multi-millionaire? Well, my story is not just about making contributions and investing aggressively.

My story was about making the sacrifice to contribute the maximum every day of my federal career. I invested the maximum for 35 years. During the first twelve years of my federal service, I did not earn more than $50,000 per year. I worked a second job so I could maximize my contributions. I did not deny myself the pleasures of life. I still traveled and played golf but I lived on a budget so I could pay my living expenses. Also, during my career, I had four TSP loans, two personal loans and two residential loans.

I reached my first million in May 2014. It took me 27 years. My second million was achieved in February 2020. So why did it only take six years to do that? Well, I was contributing the IRS maximum including the over-age-50 contribution and the stock market grew rapidly during 2016 through 2019. My third million came in December 2021. So how could it have been accomplished in just 22 months? Due to the COVID-19 pandemic, I saw my account drop in 2020 but it bounced back and skyrocketed in 2021. Also, I kept buying shares when the market experienced any setbacks. Looking at my account now seems so surreal. Looking back, I made some sacrifices, but they certainly paid off.

I have many clients who are TSP millionaires and many who want to be TSP millionaires. I always ask them how much risk and sacrifice are you willing to make to achieve your goals? The key to be a TSP millionaire is making those important contributions and investing aggressively.

Financial success can easily be achieved; it only takes a little effort.”

Any questions or comments, please contact me at Abraham Grungold – AG Financial Services or my Facebook page at FERS Federal Employees

Nearly Useless Factoid

By Daisy Thornton

Source: SciNews

 

 

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• Some Senate Republicans are revitalizing concerns over Chinese investments in the Thrift Savings Plan. Sen. Marco Rubio (R-Fla.) called on the Federal Retirement Thrift Investment Board to “reconsider, reverse or amend” TSP investments in Chinese companies. The concerns are over 5,000 new mutual fund options for TSP participants. Rubio previously urged the board to cancel or postpone the launch of the mutual fund window until ensuring no TSP funds had Chinese investments. The board opened the optional mutual fund window on time, and has said investment choices belong only to TSP participants.

•  Starting on Aug. 24, companies with employees who have security clearances will be able to upload in bulk their reports about workers who have traveled to a foreign country. The Defense Counterintelligence and Security Agency (DCSA) said the new tool will help contractors meet the requirements of Security Executive Agent Directive 3. Contractors who choose to take advantage of the bulk upload tool will submit foreign travel of cleared employees at least every 30 days. At the same time, cleared employees are still required to report foreign travel to their facility security officers. DCSA said there are more than 1 million cleared contractor workers at more than 12,000 sites nationwide.

• The Postal Service pulled the plug on prior impact studies as new consolidation plans came into focus. USPS said that it is ending “all activity” related to 57 open Area Mail Processing (AMP) studies. The AMP studies are meant to determine whether it makes sense for USPS to relocate or shutter mail processing plants. USPS said it will now “reassess the role of all processing facilities” as part of its 10-year reform plan. Postmaster General Louis DeJoy announced last month that USPS expects to consolidate 500 facilities that USPS processes and moves mail through down to about 65 to 75 regional hubs. (Federal News Network)

• The Patent and Trademark Office (PTO) is working with its union to encourage feds to start early to adopt a new IT system. The office is collaborating with the National Treasury Employees Union to offer rewards to early adopters of a new IT system at the agency. The employee incentives include website recognition and a happy hour with senior leaders. Since the update in June, PTO employees now perform 55% of work in the new system. The deadline for full adoption of the system is Dec. 1.

• A top artificial intelligence expert in the Trump and Biden administrations is leaving government. Deputy U.S. Chief Technology Officer Lynne Parker, also the director of the White House’s National AI Initiative Office, is returning to academia after six years of federal service. Parker helped stand up the National AI Initiative Office last year to oversee work on a national AI strategy and serve as a research and policy hub between federal agencies, industry and universities.

• A new report from the Nuclear Regulatory Commission’s Inspector General’s office found that informal, nonpublic interactions with external stakeholders reduce transparency and that the NRC needs to develop guidelines. Drop-in meetings are closed to the public and are exempted from certain requirements of public meetings.

• Circular A-11 is updated so let the 2024 budget development process pick up speed. The Office of Management and Budget offered few new requirements in its latest version of Circular A-11. The annual update released yesterday comes as agencies put the final touches on their fiscal 2024 budget requests. OMB set a Sept. 12 deadline for the submissions. One change requires agencies to report more details on any funding received through the Technology Modernization Fund. Another requires agencies to report solutions-level data about IT investments. This information focuses on the applications, products and services for the business and mission areas.

• The Labor Department looked to improve compliance with federal wage requirements among contractors. Next month, the department will host seminars targeted at federal contractors, contracting agencies, unions and workers to make sure they’re all familiar with the Davis-Bacon and Service Contract Acts. These govern how contractors pay their employees, and stipulate that they must be paid no less than the locally prevailing wages.

• The Pentagon has published its first-ever policy on how military public affairs offices should use their official social media accounts. In issuing the overarching guidance, officials said they saw a need to make sure all of DoD’s official accounts meet high ethical and professional standards.

• The Coast Guard is looking to train its next group of certified diversity and inclusion “change agents.” Change agents lead training and coach leaders on the meaning of diversity, equity and inclusion and how they relate to privilege, oppression and identity. They also teach leaders how to create safe spaces to discuss topics like race, ethnicity, gender, disability and class. Anyone who is active duty, a reservist, a civilian or auxiliarist can apply to the six-month program to become a Coast Guard change agent.

• Service members now have a one-stop-shop for all the information they need about abortion care after the latest Supreme Court ruling. The question-and-answer page tries to inform service members about any questions they might have now that Roe vs. Wade is no longer applicable. The document tells service members who are eligible for abortions at military treatment facilities, what abortions are covered by TRICARE and what protections medical providers have. The page also tells service members where they can find free contraceptives.