ATLANTA — More than 6 million Americans, including tens of thousands of them here in Georgia, have their retirement savings in the federal Thrift Savings Plan.
It’s essentially the 401K for federal workers.
But for months, many plan participants have had trouble accessing their accounts and even had money deducted or transferred incorrectly.
Channel 2 consumer investigator Justin Gray found this is all tied to problems with a major IT transition
From retirees unable to access their savings to current federal employees who had wages garnished for loans they never received -- these are big problems.
And when people tried to call TSP for help, they often couldn’t get through to anyone.
One of those people was Michael Pointer, who retired in 2014 after being a letter carrier for 30 years.
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He had a simple request for a simple family legal matter: a letter saying that he has zero dollars in Thrift Savings Plan.
“I have called them approximately 18 times,” Pointer told Gray. “They said, ‘Well since we can’t find your account, we can’t supply you with any information whatsoever.’”
Pointer is one of the thousands of federal employees and retirees unable to access or having trouble making money transfers from their thrift savings accounts.
The problems are so big that Congress ordered the federal government’s internal auditors at the Government Accountability Office to get involved.
“There was just a cascade of complaints and widespread issues,” said Jennifer Franks with the GAO.
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The GAO normally doesn’t speak publicly about their investigations until they are over, but GAO’s Jennifer Franks told Gray that in this case, they took the rare step of issuing an alert about TSP problems tied to a new online portal and computer system TSP launched in June 2022.
“A year is a long time. A month when it’s your money,” Franks said.
“It’s really unbelievable what they’ve done and how they refused to lift a finger to correct their mistake. They just refuse,” said Steven Karsh, whose brother died in September 2021.
Karsh was listed as the sole beneficiary and tried for months to get the retirement savings rolled out of the TSP account into an IRA.
“I got different answers every time I called -- all incorrect and misleading,” Karsh said.
Eventually, TSP cut a check made out to the estate, not Karsh, and with taxes taken out instead of being rolled into the IRA.
“I can’t even cash the check because it’s not written to the legal beneficiary. It’s written to the estate,” Karsha said.
TSP now tells Channel 2 Action News that their customer service staff gave Karsh the wrong information, that the account was never eligible for rollover.
If you look a Reddit thread and you see many others with similar complaints.
“I have lost over $4k based on my hard copy statement that was mailed to me,” one person wrote.
GAO found some federal employees even had wages garnished for loans that were never disbursed.
“They’re getting notifications that their funds are actually transferred, but their funds are actually never transferred into their accounts,” Franks said.
There’s even been a class action lawsuit filed on behalf of federal employees and retirees about the TSP problems.
“I have been on hold 45 minutes, an hour and 15 minutes, 20 minutes. It is a continuing situation that just creates chaos,” Pointer said.
“And nobody can help you?” Gray asked Pointer.
“Nobody can help. No,” Pointer said.
TSP acknowledges that their phone lines were overwhelmed for months but told Channel 2 Action News that they are now down to calls being answered in under 20 seconds.
In a statement, a spokesperson said:
“TSP strives to provide excellent customer service to our participants. We are continually evaluating participant feedback and adjust to better meet participants’ needs.
“Mr. Pointer closed his TSP account in 2014. The TSP does not maintain zero balance account information in its customer service application. To maintain that ‘live’ information is very costly and one that would be borne by current TSP participants. On June 30, the TSP informed Mr. Pointer that we located the 9-year-old statement reflecting his loan closure and total withdrawal. That information will be provided to Mr. Pointer.”
“They just don’t know what they’re doing,” Karsh said.
“It’s a mess. It’s a total mess,” Pointer said.
As for Pointer’s case, TSP claims they don’t keep information on former plan participants. That it would be quote very costly.
But, after nearly a year of Pointer’s calls, the day TSP sent Gray their response to our questions, they also sent Pointer a letter with that basic information he had been asking for: a letter confirming his zero balance.
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