TSP Takes 88 days to process a Rollover(?)

As avid readers know, I recently semi-retired from the private sector (following my first ‘retirement’ – resigning from employment as a Fed in 2013 with a FERS Deferred Retirement).

Because I like the TSP G Fund and I desire to simplify the number of retirement accounts I need to track, I chose to roll my private sector employer Roth 401k and Traditional 401k balances in to TSP.

Sounds pretty simple, right?

Well, not so for TSP. TSP had so many account glitches involved with the 2022 cutover to their new plan administrator and website that I suspect they took the eye off of the ball regarding bread-and-butter TSP transactions (like rollovers). TSP were too busy scaling up customer call center staff to take care or urgent issues (like unlocking account access for their customers).

Long story short, it took me 88 days to get TSP to acknowledge and document completion of processing the Roth and Traditional IRA rollover checks. Both checks were issued as ‘Trustee-to-Trustee Transfer’ checks from my former private sector employer plan- Empower Retirement (Btw, kudos to Empower for cutting and mailing me the checks within 3 business days). TSP took more than 2 weeks to acknowledge receipt of the checks from the USPS-confirmed delivery date, but then appeared to dump both rollover checks (Roth and Traditional) in my ‘Traditional’ TSP account. OOPS!

TSP took so long to acknowledge and process both rollover checks that I began to panic at the 60-day point (60 days is the typical time interval the IRS allows you to perform a 401k or IRA rollover to a new custodian). I was worried that TSP had made a ‘re-characterization’ of the Roth rollover check in to the Traditional TSP and that I would have a food fight between TSP and IRS to look forward to.

Over the course of 2 months I spent more than 5 hours on hold trying to get a human being at TSP to answer my question, “What did you do with the Roth rollover check”? I could not get a human to provide me with an answer so I decided to use the Nuclear Option – I filed a complaint at my congressman’s Constituent Service Office (CSO).

This got the attention of TSP and I received a callback from the Federal Retirement Thrift Investment Board (the oversight board of TSP) FORTY FOUR DAYS after submitting the CSO complaint. I finally received a call back from a human from FRTIB/TSP and the issue was resolved…. EIGHTY EIGHT DAYS after TSP confirmed receipt/custody of the 401k rollover checks. TSP confirmed that there was no ‘operator error’ on my part and that this was simply a delay on their end.

Bottom Line: Based on my personal experience (and the GAO inquiry driven by the experience of thousands of other TSP participants), TSP severely underestimated the complexity of migrating TSP Participant accounts to a new plan administrator and new website. At the time of this writing, TSP is struggling to complete the most basic of tasks- like a 401k Rollover- in a timely fashion.

Shameful. Schwab, Fidelity, and Vanguard can execute the same 401k rollover in less than 3 business days. Unfortunately, Feds and Veterans should expect similar delays and poor customer service from TSP until the dust settles on the TSP administrator cutover.