TSP retirement system work complete
- By Gail Repsher Emery
- Jun 16, 2003
A new computer system for managing the government's retirement system went live today, 23 months after Matcom International Corp. took over the troubled project.
The Federal Retirement Thrift Investment Board hired Matcom after firing American Management Systems Inc., who had worked on the project for four years without launching it.
The Thrift Savings Plan is a retirement savings plan, similar to a 401(k) plan, for civilian and military government employees.
The new system will allow the government to process employee transactions and value the five TSP retirement funds daily, rather than monthly, said Lou Ray, Matcom's president and chief executive officer. It also will report account balances in shares as well as dollars and offer a greater number of withdrawal options.
"In the old system, you could move money from one account to another once a month. Now you can do it every day," Ray said. Investors will be able to log on to the TSP Web site and see the value of their accounts as of the close of the previous business day.
Matcom's contract with FRTIB is worth about $26 million, according to the board.
TSP has the largest daily transaction volume of any 401(k)-type plan in the world. It has 3 million accounts worth $109 billion as of April 30, according to the board. Every day, the system will handle 10,000 to 1 million payroll transactions, 130,000 Web transactions and 10,000 call center transactions, Ray said.
The system has a six-hour window to process those transactions after the stock markets close and before they reopen again the next business day. Matcom had built an operational system by last fall as planned, but it could not complete the processing within six hours, Ray said. Matcom staff solved the problem by moving from one concurrent central processing unit to five, cutting processing time.
"Now, even if we have a problem, we can rerun it inside the processing window," Ray said.
Building the system was a collaborative undertaking, Ray said.
"This is a large, complex effort," he said. "[The board] had to teach us all the peculiarities of their system, check and double check all the work we did and ensure all the security requirements for handling sensitive employee data were adhered to. They had to hold up their schedules on reviewing and signing off on our work. These are joint efforts. You can't do it yourself."
Matcom's team included Centech Group Inc., Computer Sciences Corp., Keane Inc.'s Federal Systems unit, Savantage Financial Services Inc. and SunGard Data Systems Inc.
The board terminated its contract with AMS in July 2001 for default and sued the Fairfax, Va., company for fraud and breach of contract in the U.S. District Court for the District of Columbia. The suit seeks to recover actual damages of approximately $50 million and punitive damages of $300 million. The suit is pending appeal on jurisdictional grounds in the U.S. Court of Appeals for the D.C. Circuit.
In October 2001, AMS filed suit in the U.S. Court of Federal Claims, alleging that the board improperly terminated its contract. The Department of Justice has asked that the case be dismissed, according to the TSP Annual Audit Report, published March 19.
Matcom employs more than 600 people and had $70 million in revenue in fiscal 2003.