:embarrest:At Thrift Savings Plan, a Major Upgrade:worried:
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By Stephen Barr
Tuesday, September 18, 2007; Page D04
The Thrift Savings Plan hopes to get faster and better.
The TSP board yesterday signed off on a two-year project to buy computers and technology for tracking the millions of dollars in stock and bond trades made every month by government workers.
The project calls for spending about $15 million to modernize the agency's primary data center and a backup center for emergencies. Two mainframes, with more memory and faster processing times, will be installed, probably by year's end.
The project also will replace data storage systems and ensure that TSP operations are ready for the next generation of Internet protocols.
Most of the TSP's computers are nearing the end of their life spans, and a technology upgrade will enable the TSP to "skate ahead of the puck," Mark A. Hagerty, the TSP's chief technology officer, told the Federal Retirement Thrift Investment Board, which oversees the 401(k)-type savings program.
To pay for the upgrade, the board approved a $108.4 million budget for fiscal 2008, about $20 million more than this year's budget. It was the first budget increase for the TSP in three years.
Gregory T. Long, the board's executive director, called the additional spending a "prudent expenditure" that would lead to improved services at the TSP, which expects to see an increase in telephone calls and withdrawals as baby boomers retire and tap into their savings over the next few years.
Hagerty and his deputy, Roy Friend, told the board that the TSP needs a "business assurance" approach that will maintain record-keeping systems in the event of a natural disaster, power failure, communication disruption, cyber attack or terrorist attack.
Current mainframes, based in Northern Virginia and Pennsylvania, use technology from 2000 and do not have sufficient processing capacity for the testing necessary to make improvements. Most of the TSP's network servers are seven years old and outdated. Most data storage systems are nearing capacity, and the mainframes often wait for them to relay data, slowing operations. TSP also has trouble encrypting data in those systems.
Although the systems are in no danger of collapsing, Hagerty said that as the TSP enrolls more participants, the time it takes to process their stock and bond transactions will take longer, perhaps putting the TSP at risk of missing its trading deadlines.
Outside consultants were brought in to analyze TSP technology operations and review plans for the modernization effort, Hagerty told the board.
Technology issues are a sensitive subject at the board, which inherited a failed computer project when it took office at the start of the Bush administration. A Senate committee investigation determined that the TSP wasted several million dollars in developing the current record-keeping system because of poor planning and cost overruns.
The board, chaired by Andrew M. Saul, has moved to strengthen internal oversight of TSP operations and to improve services. Yesterday, Saul and board member Alejandro M. Sanchez supported the extra spending for new technology but cautioned Long to reduce spending in subsequent years.
According to data released yesterday, the TSP had more than $224 billion in accounts held by about 3.8 million participants at the end of August.
Civil service and postal employees and members of the armed forces may save for their retirement through contributions to stock, bond and Treasury securities funds. The TSP also offers "life cycle funds," or L Funds, that can be selected based on a projected retirement date and that move from aggressive to conservative investments as the employee nears the time to withdraw savings.
In August, when stock markets were especially turbulent, some TSP participants pulled money out of the L Funds, the first time that has happened since they were started in 2005.
About $25 million was transferred out of the L Funds, a relatively small amount compared with other interfund transfers by participants. More than $2 billion was shifted out of two funds -- the large common stock fund and the international fund -- and into lower-risk funds, government securities and bonds.
__
By Stephen Barr
Tuesday, September 18, 2007; Page D04
The Thrift Savings Plan hopes to get faster and better.
The TSP board yesterday signed off on a two-year project to buy computers and technology for tracking the millions of dollars in stock and bond trades made every month by government workers.
The project calls for spending about $15 million to modernize the agency's primary data center and a backup center for emergencies. Two mainframes, with more memory and faster processing times, will be installed, probably by year's end.
The project also will replace data storage systems and ensure that TSP operations are ready for the next generation of Internet protocols.
Most of the TSP's computers are nearing the end of their life spans, and a technology upgrade will enable the TSP to "skate ahead of the puck," Mark A. Hagerty, the TSP's chief technology officer, told the Federal Retirement Thrift Investment Board, which oversees the 401(k)-type savings program.
To pay for the upgrade, the board approved a $108.4 million budget for fiscal 2008, about $20 million more than this year's budget. It was the first budget increase for the TSP in three years.
Gregory T. Long, the board's executive director, called the additional spending a "prudent expenditure" that would lead to improved services at the TSP, which expects to see an increase in telephone calls and withdrawals as baby boomers retire and tap into their savings over the next few years.
Hagerty and his deputy, Roy Friend, told the board that the TSP needs a "business assurance" approach that will maintain record-keeping systems in the event of a natural disaster, power failure, communication disruption, cyber attack or terrorist attack.
Current mainframes, based in Northern Virginia and Pennsylvania, use technology from 2000 and do not have sufficient processing capacity for the testing necessary to make improvements. Most of the TSP's network servers are seven years old and outdated. Most data storage systems are nearing capacity, and the mainframes often wait for them to relay data, slowing operations. TSP also has trouble encrypting data in those systems.
Although the systems are in no danger of collapsing, Hagerty said that as the TSP enrolls more participants, the time it takes to process their stock and bond transactions will take longer, perhaps putting the TSP at risk of missing its trading deadlines.
Outside consultants were brought in to analyze TSP technology operations and review plans for the modernization effort, Hagerty told the board.
Technology issues are a sensitive subject at the board, which inherited a failed computer project when it took office at the start of the Bush administration. A Senate committee investigation determined that the TSP wasted several million dollars in developing the current record-keeping system because of poor planning and cost overruns.
The board, chaired by Andrew M. Saul, has moved to strengthen internal oversight of TSP operations and to improve services. Yesterday, Saul and board member Alejandro M. Sanchez supported the extra spending for new technology but cautioned Long to reduce spending in subsequent years.
According to data released yesterday, the TSP had more than $224 billion in accounts held by about 3.8 million participants at the end of August.
Civil service and postal employees and members of the armed forces may save for their retirement through contributions to stock, bond and Treasury securities funds. The TSP also offers "life cycle funds," or L Funds, that can be selected based on a projected retirement date and that move from aggressive to conservative investments as the employee nears the time to withdraw savings.
In August, when stock markets were especially turbulent, some TSP participants pulled money out of the L Funds, the first time that has happened since they were started in 2005.
About $25 million was transferred out of the L Funds, a relatively small amount compared with other interfund transfers by participants. More than $2 billion was shifted out of two funds -- the large common stock fund and the international fund -- and into lower-risk funds, government securities and bonds.
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