According to Govexec.com, several functions of the TSP – which oversees the $180 billion 401(k)-style retirement savings plan for millions of federal employees – are housed in The National Finance Center (NFC), an agricultural department. The NFC recently announced a one-year outsourcing contract of its duties to SI International as of June 9, circumventing a normal competitive bidding process.
The TSP board already has moved toward contracting out about 500 positions that were once held by NFC staff to save money, reported govexec.com, with fewer than 100 federal employees still remaining in TSP-related jobs at the NFC, many of which are accounting positions.
NFC employees have, in the past, also processed forms for options including rollovers and withdrawals, operated call centers to answer participant questions and coordinated the plan with agencies’ payrolls.
According to the news service, outsourcing of these remaing functions to SI International is the “last step in divorcing ourselves from the NFC,” TSP Board Chairman Andrew Saul said – a move he said will lower administrative costs. TSP costs are already known to be the lowest among government-sponsored and privately run 401(k) plans. Its budget has plummeted from $101.5 million in 2004 to $76.8 million in 2007.
SI International already runs a call center in Clintwood, Virginia, that handles functions previously performed by the NFC, and the hand over of the remaining work is expected to increase automation processes for the TSP, which includes processing death benefits.