FEBA

Thrift Savings Plan Participants Bring Class Action Suit Against FRTIB

You may have already heard by now, but in case you haven't; the Thrift Savings Plan is being sued by federal employees.  The TSP is a retirement savings plan for federal employees, including members of the uniformed services. It is governed by the Federal Retirement Thrift Investment Board (FRTIB) and administered by the FRTIB's executive director and staff. The 97-page class action complaint, Case 1:23-cv-01568 was filed in the United State District Court for the District of Columbia, against the Federal Retirement Thrift Investment Board (FRTIB).  

Military and civilian users of the federal government’s Thrift Savings Plan, the popular tax-deferred retirement savings program for millions of government employees, filed a lawsuit alleging that they lost access to their funds following the modernization of its system. Following the roll-out of the "new and improved" TSP website in June of 2022, there were massive and numerous problems.  Many TSP participants were dealing with lost checks (some as high as $600k+), very long hold times (sometimes more than 9 hours), randomly dropped calls after being on hold for hours, frustratingly inconvenient TSP website navigation, difficult-to-read statements, and trouble creating new login information The primary reason for the class-action lawsuit: extremely slow withdrawals.  Congress ultimately had to step in and assist some federal employees with some of these issues.

What is Included in the TSP/FRTIB Class Action Lawsuit?

Below is an excerpt from the FRTIB lawsuit and a link.

https://www.sauderschelkopf.com/wp-content/uploads/2023/06/TSP-Class-Action-Complaint-6.1.23.pdf

“Defendants' failure to ensure the timely payment of Hardship Withdrawals, NonHardship Active Withdrawals, Out of Service Withdrawals, Death Benefits, and TSP Loan proceeds is not a one-off situation but instead is caused by systemic flaws in TSP’s system. TSP hired Accenture and Alight to make several improvements to the TSP system aimed at improving its cybersecurity, IT infrastructure, and customer service, and providing new and improved services to its participants, including the processing of Hardship Withdrawals, Non-Hardship Active Withdrawals, Out of Service Withdrawals, Death Benefits, and TSP Loans. AFS and Alight touted to TSP participants that they would vastly improve the usability and efficiency of TSP’s system.”

If you are a federal employee nearing retirement, and now the TSP is facing litigation for major ineptitude, what should you do? TSP has a very limited and restrictive lineup of fund options for you to choose from and only one real conservative option that guarantees against losses (G Fund).  This fund also averages about 2% historically and is not currently keeping pace with inflation.  Your other 4 options (stocks & bonds) offer tremendous downside risk: all 4 funds were down 12%-26% last year.

There has never been a more compelling reason for eligible federal retirees to consider transferring to a far superior retirement account option.  We at FEBA  have always advocated for folks entering the retirement horizon of age 59.5+ to transfer their funds out of the TSP and into a private sector IRA/Roth IRA.  There are no taxes nor penalties to do so when transferring to a qualified account. 

The expert team of Federal Retirement ConsultantsSM at FEBA would be happy to provide you with you some information and show you performance data on the leading conservative retirement account which GUARANTEES NO LOSSES, has a very high average rate of return (exceeding inflation), and offers a 5%-10% up-front cash match!

Feel free to contact our expert team of Federal Retirement Consultants℠ for a complimentary consultation to learn more about this great alternative to TSP.  We will show you the historical performance of the top 3 available funds & provide you with ample studies, data, & articles to help you learn more.  There is finally a way to protect your TSP funds while providing real opportunities for growth while exceeding inflation!

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