Some TSP Investors Escaped Paying for Lawsuit Debacle

Because the board running the Thrift Savings Plan delayed applying a $41 million loss from its unsuccessful suit against the company chosen to perform the fund’s star-crossed computer system overhaul, current and new plan participants had to pay for the loss, the General Accounting Office has concluded. Those who cashed out of the system at the time the loss was reported escaped paying anything for the administrative loss, GAO said. Though the amount that would have been lost by those affected by the Federal Retirement Thrift Investment board’s mishandling of the comprehensive computer system would have been “minimal,” said GAO, the loss should have been applied at the time it was recognized. How much of a potential loss? GAO said that it would have ranged from “virtually nothing” for employees hired since to “roughly $400 for an account of $1 million.” There were about 3 million TSP participants with $102.3 billion in assets as of December 31, 2002, said GAO.