TSP participants have filed a class action lawsuit again the Thrift Savings Plan (TSP) and two federal contractors.
In June of last year, the TSP underwent a massive renovation that saw the implementation of a mobile app, a new virtual assistant or chatbot, a shift to electronic signatures for processing requests, and a mutual fund window that opened up around 5000 additional investment options for eligible feds. The recordkeeping responsibilities were also transitioned to Accenture Financial Services, a federal contractor.
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This transition did not go well, to put it lightly. The leaders involved with administering the transition even formally apologized. The most common headaches that TSP account owners faced included beneficiary information getting lost in the switch from the old system and the log-in process, which was described as arduous, subsequently leaving thousands of participants unable to access their account online. Then to compound the problem, call centers were staggeringly unprepared for the onslaught of calls that came after the change, leaving frustrated callers on hold for over 2 hours in some cases.
Lawsuit Filed Against TSP
According to class action lawsuit recently filed in a federal district court by seven TSP participants, the problems for some were much worse. The plaintiffs in the case claim it took over three months to receive a TSP loan, hardship withdrawals, or survivor benefits. The legal complaint details that one TSP accountholder had a loan deducted from his account in June 2022 but didn’t actually receive the money until the end of December. Before that, in October, TSP notified him he was late on two loan payments (for a loan he had yet to receive) and was about to default.
For another individual, it took two months to receive death benefits from her recently deceased husband’s TSP account. After faxing, emailing, and sending his death certificate to TSP on multiple occasions, her matter wasn’t resolved until Eleanor H. Norton, the Congressional delegate for DC, intervened on the widow’s behalf. The defendants in the lawsuit are Accenture, another contractor called Alight, and the TSP itself.
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**Written by Benjamin Derge, Financial Planner, ChFEBC℠ The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.
