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Praise For The Thrift Savings Plan

Joe Davidson | The Washington Post via YellowBrix

November 04, 2009

During these highly partisan and contentious times, it’s not every day that Democrats and Republicans, labor and management, and workers and retirees find themselves on the same side of an issue. But that was generally the situation Tuesday when the Thrift Savings Plan for federal workers was mostly praised during a House subcommittee hearing.

The TSP operates like a 401(k) retirement plan for Frankie and Flo Fed, but it’s better than many in the private sector. As Rep. Elijah E. Cummings (D-Md.) told the House Committee on Oversight and Government Reform panel in his opening statement, the TSP is “one of the best retirement plans offered by any employer . . . this is an excellent program that many of our federal employees benefit from greatly.”

One point of mild debate concerned the TSP’s authority to sell non-program mutual funds in the future. Interestingly, rather than asking the government to provide greater services, as is often the case at congressional hearings, some employee representatives used their testimony to say that they did not want the program to offer outside mutual funds to their members.

J. David Cox Sr., secretary-treasurer of the American Federation of Government Employees, told the House subcommittee on the federal workforce, Postal Service and the District of Columbia, that his union opposes “the mutual fund window because we firmly believe that the current collection of investment options within the program is close to optimal. We believe that in almost every case, federal employees who would choose to utilize this mutual fund window would lower their overall rate of return on their savings, not only by exposing themselves to unnecessary risk, but also by paying the large fees and ‘load’ charges that mutual funds impose on investors.”

While the TSP was widely praised for its low administrative costs, there’s one place where it could really stand to spend more money — its Web site. has plenty of useful information, but it’s deadly dull.

“In a video game world, your Web site is Pong,” the subcommittee chairman, Stephen F. Lynch (D-Mass.), told Gregory T. Long, executive director of the Federal Retirement Thrift Investment Board, which oversees the Thrift Savings Plan.

Pong, for the uninitiated, was an early video game that now seems terribly unsophisticated. A long-overdue updating of the Web site is part of the board’s “ambitious agenda to improve the TSP,” Long told the panel.

Potential hiring fix

The Office of Personnel Management announcement on Saturday that it will open the administrative law judge examination was a ho-hum moment. But what follows that announcement may have important implications for a potential fix to the broken federal hiring process.

One proposal for repairing it would create a centralized register for occupations that cross agency lines. Many agencies, for example, hire accountants and lawyers. With a central register, applicants for government accounting gigs would send one application to OPM rather than multiple submissions to a variety of agencies.

The idea, meant to speed and simplify the federal hiring process, has been advanced by the current OPM director, John Berry, and former director Linda Springer. But it is not problem-free.

Under the central register plan, OPM staff members would vet the job-seekers, check their qualifications, maybe put them through a test or two and conduct initial interviews. Those who were able to jump through those hoops would make it to the central register. Officials from agencies in need of bean counters then could do their own set of interviews of those on the list. Individual agencies would do the hiring.

That’s essentially the way administrative law judges, who serve as arbiters at regulatory and benefit-granting agencies, still are hired. Centralized registers once were widely used, but now ALJs are the only occupational group hired that way, according to John Palguta, a vice president of the Partnership for Public Service and a former official with the now-defunct federal Civil Service Commission.

Years ago, Palguta ran a register for scientists and engineers seeking jobs in western states. He and his staff members accepted applications, rated candidates and placed them on a list from which agency officials could pick and choose.

But Palguta and his people weren’t scientists and engineers, and they sometimes cleared people not to the liking of agency officials. They had complaints like “these are not good matches for our engineering jobs,” he recalled. And when they did hire from the register, the hiring officials did not feel a sense of ownership of the new hire’s success.

Palguta isn’t against central registers. He says they provide economies of scale for Uncle Sam and certainly are easier for applicants. But he does urge OPM to learn from the problems of the past.

“You’ve got to be aware of the pitfalls,” he said. “It’s not a slam dunk.”

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