A group of seven participants in the federal government’s 401(k)-style retirement savings plan last week took on thrifty savings plans and two federal contractors over troubles when the agency transitioned to a new records-keeping vendor last year. filed a class action lawsuit.
Last June, TSP transitioned to a new record-keeping system operated by Accenture Financial Services, upgrading many back-end features and adding new publishing features such as a mobile app, virtual assistants, and the ability to sign documents and send rollovers. was promised. Issue checks electronically and access nearly 5,000 new investment options through mutual fund tellers. Accenture partnered with another contractor, Alight, to support its new records-keeping system.
However, participants struggled to set up new login credentials to access their accounts online, and previously beneficiary reports did not survive the transition to the new system. I ran into a problem with this switch. Compounding the problem was the fact that Accenture had grossly underestimated the volume of help requests through TSP’s ThriftLine customer service center, and was correspondingly understaffed at the call center.
By February, Accenture and TSP officials reported significantly improved customer service. but, lawsuit In a lawsuit filed last week in the United States District Court for the District of Columbia against TSP, Accenture, and Aright, seven TSP participants took months to receive their funds, even in difficult withdrawals or loans. He mentioned even worse difficulties, such as waiting.
“Despite the public assurances of the defendants, [Accenture] And even though Alight became the TSP recordkeeper in 2022, TSP participants who have applied for and been approved for TSP loans have not received their funds within three days, and in some cases within three months. ‘” the lawsuit states. “Certainly, TSP participants, including plaintiffs, [Alvaro] with Rodriguez [Thelma] Watson and others reported that funds were deducted from their accounts but they did not receive any proceeds. “
For Rodriguez, a retired Army professional, he applied for a loan in June 2022, shortly after the transition. The loan was approved in July, at which time TSP deducted approximately $4,000 from his account. But he never received the money, even though he called TSP’s ThriftLine a dozen times until Dec. 29.
“Plaintiff Rodriguez did not receive any proceeds from the TSP Loan for 166 days, during which time, on October 3, 2022, TSP sent a message to Plaintiff Rodriguez informing him that he failed to make “two or more payments” on the TSP Loan. I have notified you. hadn’t received it yet. TSP said that if plaintiff Rodriguez fails to pay the TSP loan, he will default. “
The lawsuit alleges that as a result of the six-month delay in loan payments, Rodriguez had to withdraw hard-to-find funds and instead take out a personal loan from the Navy Federal Credit Union at a much higher interest rate.
In addition, Cynthia Jesse, the spouse of a TSP participant, submitted her husband’s death certificate and other documents to the TSP 13 times through fax, email, and the U.S. Postal Service after her husband’s death last August. claimed to have had to. She had two months to receive her death benefit. She credits the office of Rep. Eleanor Holmes Norton, DD.C., who conducted an investigation on her behalf last November, to finally process her benefits.
“It was not until Rep. Norton’s intervention that the TSP finally settled plaintiff Jesse’s death benefit claim the next day or the day after, on or about November 1, 2022,” the complaint reads. ing. “As a direct and direct result of TSP’s delay, Plaintiff Jesse was charged approximately 400 in postage, overnight mail, fax, etc. that he did not have to pay to resend death benefit documents to TSP 13 times. Paid $.In addition, [she] I paid about $2,000 in interest, fees, taxes, etc. because my mortgage payment was delayed because I didn’t receive a death benefit. Without Rep. Norton and his team, she would have lost her home, having already lost her husband. “
TSP spokeswoman Kim Weaver declined to comment on the allegations, citing the agency’s policy not to discuss pending lawsuits.
Joseph Sauder, an attorney at one of the four law firms cooperating in the case, said the difficulties associated with the TSP’s recordkeeping transition have real implications for many federal employees and retirees. said that
“All of our customers are current or former military or federal employees and are suffering significant financial hardship due to the Thrifty Savings Plan system that went into effect in June 2022,” he said. . “In many cases they were simply trying to get their money out of the TSP. We look forward to filing a lawsuit in this matter on their behalf.”
