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THRIFT INVESTMENT BOARD ANNOUNCES CHANGE IN SCHEDULE; AIMS FOR TRANSITION IN NOVEMBER TO NEW RECORD KEEPING SYSTEM
Washington, D.C. (August 20, 2002) — The Federal Retirement Thrift Investment Board today announced that it is aiming for transition to its newly developed record keeping system for the Thrift Savings Plan (TSP) in November, instead of September 2002 as announced earlier. The Board will firm up the schedule over the next month based on the results of ongoing data conversion and system testing.
The new system was developed on time and within budget, but its implementation is being delayed in order to ensure that all of its functions are fully tested in parallel with the operation of the current record keeping system, using actual participant data submissions. This "parallel testing" has not yet been conducted because the conversion of TSP participant records created since the Plan's inception in 1987, a prerequisite for such testing and ultimately for implementation, has taken longer than expected.
The initial conversion of the participant records was completed on August 17, 2002. An analysis of the records to confirm that they were accurately and completely converted is now underway. With that assurance, parallel testing can begin.
The record conversion is being conducted by SunGard Data Systems Inc., a member of the team led by Materials, Communication & Computers, Inc. (MATCOM), of Alexandria, Virginia. SunGard Employee Benefit Systems developed the commercial off-the-shelf (COTS) record keeping system known as “OmniPlus,” which is the software that forms the core of the new TSP system. The OmniPlus system is in widespread use in the private sector, and SunGard has successfully managed hundreds of record conversions into this system. None of them, however, has been as large as the one required for the almost two billion TSP records that comprise the TSP database.
Parallel testing will validate the results of the more limited system testing that has been performed to date — testing to demonstrate that the various modules of the new system function properly. Parallel testing will also confirm the system’s capacity to handle the high volume of daily transactions from the TSP's nearly three million civilian and uniformed services participants.
The Board’s Executive Director, Roger W. Mehle, stated that, “Although data conversion is expected soon to be validated, the compression caused by its delay dictates an adjustment to our implementation schedule to accommodate parallel testing. I have stated previously that we will make a transition to the new OmniPlus system only when we are completely satisfied of its reliability. Parallel testing will ascertain this.”
In general, the new system will allow for daily valuation of accounts and daily processing of transactions. It also will report account balances in shares as well as dollars; offer a greater number of withdrawal options; and provide on-line service via the Web site for loans and withdrawals. A summary of these and other operational improvements is provided in a leaflet entitled “How the TSP Is Changing,” which is available on the TSP Web site, www.tsp.gov.
The Board originally contracted with American Management Systems, Inc. (AMS), to develop the new system, but after four years of AMS's unsatisfactory performance, the Board terminated AMS's contract for default and brought suit against it for fraud and breach of contract in U.S. District Court. (The suit is pending appeal on jurisdictional grounds in the U.S. Court of Appeals for the D.C. Circuit.) In contrast, MATCOM and its team have required only one year to complete essentially the same system development for which AMS still had no completion schedule at the time of its termination.
The TSP is a retirement savings plan for Federal employees, including members of the uniformed services, that is similar to the 401(k) plans offered by many private sector employers. It was created by the Federal Employees’ Retirement System Act of 1986. As of July 31, 2002, TSP fund balances totaled approximately $98 billion.
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