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ARLINGTON, Va. — Officials at the Thrift Savings Board have narrowed to a couple of thousand the number of investors experiencing snags with the federal savings program, down for some 15,000 to 20,000 a few months ago, an official said.

TSP leaders brought in more workers to clear an enormous backlog of paperwork, the main culprit to the experienced delays, said Executive Director Gary A. Amelio. But some problems started with a system change in June, which gave clients daily access to their accounts via the Internet or a phone call, instead of updates only every quarter.

With that changeover came problems.

“The goal was to make the TSP operate more like private sector plans by offering features such as online loan applications and daily … account transactions. However, software glitches have caused the new system to be slow and difficult to access,” Rep. Tom Davis, R-Va., said in his opening remarks at a July 24 hearing held by the House Committee on Government Reform to probe problems with TSP.

“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. 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.”

The TSP board has received two or three requests for compensation for lost earnings as a result, and the agency is investigating the filed claims, Amelio said. As far as reports of foreclosures and similar claims, those are deemed “consequential damage.”

“We are not responsible for consequential damage, and I’m not aware of any similar private institution that would be,” he said.

The TSP is the federal government’s employee retirement and investment savings plan, much like a 401(k) program in the civilian workforce. Participants have the government invest pre-taxed dollars deducted from their paychecks.

“We have three million participants, and I would venture to say since the start of this, about 15,000 to 20,000 have been inconvenienced in some way,” Amelio said. “Folks were inconvenienced, and we’re sorry. It can happen any time you have a major change over in systems.”

Leaders decided to not implement a “blackout period,” in which all clients’ accounts would have been frozen in order to test the system, which could have taken months, he said. “We had that alternative, but even there, there are no guarantees. … But had we had a blackout period, we would have inconvenienced 3 million participants.”

TSP employees and contractors daily are sifting through the remaining few thousand or so accounts in “conflict or suspense” status, he said.

Some of the problems stem from clients who have more than one outstanding loan, submitted incorrect paperwork, submitted illegible paperwork, or because TSP employees are waiting for a payroll code from the clients’ employers, he said, citing some examples.

“If you can use the Web site, it’s a lot faster, a lot more accurate and less likely to end up in suspense account,” he said. “The Web is moving a lot faster than before.” Clients still might experience delays when calling the non-toll free thrift line at (504) 255-8777.

The call is not toll-free because when it was set up, federal agencies allowed employees to call from work or go to a personnel office. “Having said that, we have a lot of retirees and military personnel … who are running up long distance calls and we’re looking into whether we should establish a [toll-free] 800 line,” Amelio said.

Another possible change is the abolishment of the twice-a-year open-season period, a change that must be approved by Congress, said Amelio, who began work at the board on July 7.

“Congress has asked us for our position as the professional agency and our professional position is that we support it,” he said. “We support it and we’re prepared for it.”

Abolishing the open season means clients could join the program or withdraw their funds at any time instead of twice a year.

— For more information, go to www.tsp.gov

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