The board governing the Thrift Savings Plan on Monday approved a minimum 19 percent budget increase for fiscal 2013 to help it handle increasing retirements from baby boomers and to improve its cybersecurity.
The Federal Retirement Thrift Investment Board voted unanimously to budget at least $170.5 million next year — a $27.4 million increase over fiscal 2012. Greg Long, the board’s executive director, said that as growing numbers of aging federal employees retire and start withdrawing their savings in the next few years, the TSP is going to face a greatly increased workload.
“We are moving into a time in which we are going to have — largely because of the boomers — more and more labor-intensive transactions,” Long told the board.
TSP must also start preparing next year for a major new systems upgrade that will come in fiscal 2014, Long said. And he said TSP must start tackling a significant backlog of projects deferred in recent years while it concentrated on rolling out its new Roth option.
TSP is critically understaffed, Long said, and needs to start hiring more employees — particularly information technology workers — next year. TSP now has 143 full-time workers, and Long wants to have 165 on staff by the end of 2013.
“The agency has been under-resourced for several years, and effects of deficient support are becoming more apparent,” Long wrote in a Sept. 17 memo to the board.
Long said tackling those issues alone would require a $166 million budget next year. But the board also approved another $4.5 million to pay for two new projects he said were mission-critical: improving the TSP’s cybersecurity and human capital management.
The board also gave itself flexibility to further increase the 2013 budget to as much as the full $175.5 million Long requested to pay for other new projects, such as developing new acquisition and risk management strategies, creating a new IT architecture, and creating a new media strategy. The board could vote for that additional increase next spring, if its total assets keep growing.
The approved 19 percent increase is more than double the nearly 9 percent budget hike approved for 2012, but it is not the largest percentage increase ever for the TSP. External affairs director Kim Weaver said the board approved a 24 percent budget increase for 2008, and a 34 percent increase for 2000.
TSP’s operating funds come from money that federal employees contribute to the plan. But TSP’s administrative expenses are a fraction — about 0.045 percent — of its overall fund balance. The board said it wants that ratio to grow no higher than 0.05 percent.