Retirement woes

The Federal Retirement Thrift Investment Board tells us that the Thrift Savings Plan's (TSP) long-awaited new recordkeeping system will be introduced in September. The wait may be nearly over, but some of the associated problems may not be.

The new system will permit feds and military personnel to obtain daily updates of their account values and conduct account transfers and other transactions on a daily basis either by telephone or computer. It also will offer a greater number of withdrawal options and provide online service via the Internet for loans and withdrawals.

But, if you're planning to switch back and forth between the various investment options in the TSP, my advice is don't do it.

The money that you place in the TSP is a long-term investment for your retirement. It's been reported that many TSP participants have complained that the current monthly system puts them at a disadvantage when making investment decisions. Who are they kidding? Switching back and forth between accounts is a big mistake and a prescription for disaster.

Even if you think you're smart enough to time the market, set up a separate trading account for that purpose — don't mess around with your retirement money. This feature is totally unnecessary and a waste of your money. They should use the money for other enhancements. You don't need your account value everyday.

Meanwhile, the board seems to anticipate some glitches when the new system goes online. In a recent mailing to TSP participants, the board tells them they will receive a final statement for their account as of Aug. 31. The board says to "keep this statement." The mailing then instructs participants to report any discrepancies immediately to their TSP service office. Telling participants to hold on to paper records at a time when an online system is being launched hardly inspires confidence.

In its current mailing to plan participants, the board goes into a lengthy discourse concerning its dispute with the previous contractor, American Management Systems Inc., claiming that the contractor made numerous misrepresentations to the board and it's work was "useless." Can you think of a reason why is it necessary for the board to go into this level of detail in a routine mailing to TSP participants? It's not. It's an exercise of poor judgment and it's unprofessional.

The board also tells participants that a blow-by-blow account of its dispute with AMS, which was fired a year ago, can be found on its Web site. Again the question is, why is the board providing this information to plan participants? Who asked for it?

I can only surmise that the board is laying the groundwork for another challenge in the event that the present contractor doesn't deliver on schedule. I may be wrong about this but can't think of any legitimate reason for providing plan participants with this level of detail.

Zall is a retired federal employee who since 1987 has written the Bureaucratus column for Federal Computer Week. He can be reached at milt.zall@verizon.net.