Federal government needs better oversight of TSP's records system
A GAO report found that the Federal Retirement Thrift Investment Board did not ensure that acquisition management practices were fully enforced when it modernized the system that oversees its 401(k)-style retirement savings program.
The agency that manages the Thrift Savings Program needs to take more oversight in the operation of the systems contract managing the program, the Government Accountability Office said on Aug. 1.
The government watchdog said in a report that because the Federal Retirement Thrift Investment Board did not adequately oversee the contract performance of the system managing the $895 billion, 401(k)-style retirement savings program, some federal employees were unable to access their accounts, complete transactions, receive benefits and faced other problems.
"Specifically, in planning for the TSP acquisition, FRTIB initially lacked policies and procedures for acquiring managed services and developed them while in the acquisition process," the report said. "FRTIB also defined high-level requirements for the services it desired but did not ensure the TSP recordkeeping system was consistent with these requirements before the system was launched."
The challenges date back to a June 2022 modernization of the TSP recordkeeping system. Prior to the update, the FRTIB integrated and owned the system's hardware and software, but it lacked modern capabilities and was not able to scale to meet demand.
In November 2020, the agency awarded Accenture Federal Services and 39 other companies a potential 12-year contract to build and operate a new recordkeeping system, alongside a host of other services ranging from human resource services, background investigation services, contact center and support and other services.
But once the recordkeeping system deployed in June 2022, FRTIB began facing demand challenges, with 120,000 received calls on the first day and wait times from 35 minutes on the first day to two hours two days later.
Accenture Federal Services executives later apologized for the challenges and long wait times that users faced with the updated system.
GAO noted that while FRTIB and Accenture Federal Services made adjustments to address the challenges, some of the fixes to months to resolve.
Among the problems the report points to, FRTIB established overall needs and high-level requirements for the new recordkeeping system, but did not always ensure the completed system was consistent with those needs.
For example, the GAO said that the system did not correctly process loan repayments, and court-ordered benefits and was not in compliance with accessibility laws.
In the system, initial loan payments for certain participants were due prior to the 60-day grace period established by federal statute because Accenture Federal Services didn't have visibility into payroll schedules and there was a misinterpretation of the regulation. The report said 352 participants did not receive their 60-day grace period as a result of the issue.
The system also provided incorrect court-ordered retirement benefits due to it not calculating those payments as stipulated in federal regulations. The report said that "according to a log AFS maintains on system issues, the method of calculation was verbally discussed with FRTIB but never documented."
FRTIB plans to have amended regulations to better meet the system's calculations by the third quarter of this year, after which it will adjust the earnings calculations of recipients whose benefits were calculated under the previous regulation.
The system was also not initially compliant with Section 508 of the Rehabilitation Act of 1973, which requires agencies to offer comparable access for individuals with disabilities to electronic information. The GAO said that many of those issues have since been remediated.
The report also pointed to FRTIB for not consistently documenting whether the system met desired outcomes through testing or whether the contract hit scheduled performance milestones.
The report included seven recommendations, including that the FRTIB ensure that TSP system requirements are consistent with its objectives and federal requirements, that a testing documentation review process be put into place, that a milestone-related documentation review be put into place, that FRTIB negotiates with the contractor to ensure all pertinent data for contract oversight is provided, that negotiations with the contractor include information and updates of new staff added, that third party contractors provide transactional data needed for oversight and that contract's Performance Related Compensation Adjustment framework be adjusted "to focus on areas with the largest financial impact to participants, including issue resolution and timeliness and accuracy of transactions processing."
The FRTIB agreed with the recommendations and detailed some of the efforts to address them.
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