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You will hardly find any sector that has not been adversely impacted by COVID-19. So, the same is the case with the TSP (Thrift Savings Plan). There is no single plan which didn’t go down in the meantime. So, considering the situation, in this post, we are going to present a critical analysis of the common effect of COVID-19 on the TSP.
Introduction
COVID-19 has a global economic effect, which is getting more and more aggravated with every passing day. Of course, the package of $2 trillion would help people in coping with this problem, but the effect can be minimized only and not eliminated. Moreover, according to the Washington Post, a huge number of Americans will be expelled from their jobs in the wake of COVID-19.
Similarly, whether it is about the annuities, life insurance, or the TSP, all of these are facing adversities because of COVID-19, as COVID-19 has its outsized bad impacts on every aspect of life. Most of the participants and circumstances can endorse the veracity of the statement that the Thrift Savings Plan is also not different from other things.
According to the Federal Investment Thrift Savings Board
Different departments are carrying out research to determine the bad impact of coronavirus on the TSP, and the same kind of study has been presented by the Federal Retirement Thrift Investment Board (FRTIB) that is extending its research on three fronts.
Ravi Deo, the executive director of the FRTIB, expressed his view with the TSP board on Monday in these words: “We are monitoring the impact on the TSP funds and our participant accounts. Along with this, we are also monitoring the impact on our ability to service the participants and ensure the running of the TSP. And of course, we are monitoring the impact on the health and well-being of our employees and contractors. We have created teams that are looking at all three aspects above. The teams meet regularly and make recommendations to Suzanne [Tosini], our chief operating officer, and me.”
According to the board, there have been many differences in the activities of participants of the TSP, and they’re not very positive. The adverse impacts of COVID-19 have started becoming visible, and they will get even worse with every passing day unless this recession is over.
The same situation had been faced by TSP plan holders earlier in the times of 2008-2009, but, unfortunately, people truly learned very little from that event and are still committing the same mistakes. If we compare the withdrawals of 2019 and 2020 from the savings plans, we will come to know that since the first of March of 2020 up till now, more than 25 million people have withdrawn money from their TSP. On the other hand, this number was much less in the year 2019.
Meanwhile, the inter-fund transfer (IFT) is also at its peak. In this time, when the market is highly volatile, most of the TSP holders have shifted their plans from other funds to the G fund, which has excellent stability if compared with the additional funds. The shifting of the plans from one fund to the G fund can be estimated by the fact that from the 24th of February to the 17th of March, $21 billion in funds were transferred to the G fund by the participants.
Sean McCaffrey, the chief investment officer of the TSP, expressed his view in the following words: “This movement into the G fund corresponded to net flows out of the C, S, I, and L funds. Moreover, this represents the highest volume of IFT activity both on an absolute basis and as a percentage of assets for any three weeks since the TSP implemented a limit on IFTs in May 2008.”
TSP service centers are open for service, for now
Despite having severe health and economic emergencies, TSP service centers are still open for the service of TSP plan holders. Ravi Deo propagated his statement in the following words over this issue: “The contact centers are dealing with a higher than normal volume of calls,” Deo said. “Those calls tend to spike at certain points during the day. We are still answering the vast majority of calls in less than 20 seconds. Still, the situation may get worse, and we have to reduce staffing and allow service levels to slip in order to ensure safety for all employees at the contact centers.”
Meanwhile, the Federal Retirement Thrift Investment Board (FRTIB) is planning to expand the telework capabilities for contact center staffers. Albeit, the employees associated with the agencies may face difficulty in taking and making the calls from the participants of the TSP. In this regard, Ravi Deo shared the success of their department in the following words: “We’re working through the issues with telework,” Deo said. “The goal is to have all the contractors have the ability to telework in the not-too-distant future.”
In short, the department is extending its full ventures to make sure that TSP service centers are working with their total efficiency, where they could resolve the public problems either related to the systematic withdrawals or inter-funds transfer through the online channel.
Yes, still, there are issues related to the TSP operations that require mailed confirmations, as most of the staff members are unable to join their duties, as they are either in the areas that are affected by the pandemic or absent due to being unfit from illness.
Moreover, Ravi Deo said that the department was working to make the previously planned project active for adding in the convenience of the people of having their TSP forms downloaded electronically. This act will reduce the anguish of the people visiting and making calls to the TSP service centers repeatedly.
All FRTIB employees are teleworking
As it has been made sure that TSP service centers will remain open to entertain the queries of the TSP plan holders, employees will work according to the routine. In the same way, employees of the FRTIB department are also present in their headquarters in Washington, D.C.
An endeavor was made one month before in which more than 750 FRTIB employees have successfully connected with the TSP’s virtual private network. So, according to Deo, the FRTIB is not going to leave any page unturned in the service of the people who are concerned about their TSP.
Final words
You should be well-convinced over the statement that the TSP has been equally targeted by COVID-19, as any other sector was targeted. People are moving towards G funds by adopting the policy of inter-funds transfers, as G funds are less volatile and more stable than additional funds. Meanwhile, TSP service centers and FRTIB departments are doing their best to facilitate people in their queries.[/vc_column_text][/vc_column][/vc_row]
