Federal Thrift Savings Plan:

Customer Service Practices Adopted by Private Sector Plan Managers Should Be Considered

GAO-05-38: Published: Jan 18, 2005. Publicly Released: Feb 18, 2005.

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Intended to resemble private sector 401(k) pension plans, the federal government's Thrift Savings Plan (TSP) held more than $128 billion in retirement assets for over 3 million participants at the end of 2003. Customer service-related difficulties during the Federal Retirement Thrift Investment Board's (TSP's governing body) record-keeping system conversion in 2003 led the Chairman of a Senate Committee to ask GAO to examine the customer service provided to TSP participants. This review describes (1) customer service provisions within TSP and those offered by private sector managers and (2) customer service practices used by private sector plan managers that could be considered for use in TSP.

TSP managers and private managers (servicing multiple pension plans) enable participants to select their preferred means of customer service from a similar range of options--such as telephone, Web sites, and on-site representatives--but each emphasizes different approaches. Both TSP and private plan managers provide customer service through automated telephone assistance as well as live representatives located at call centers. Both TSP and private managers also use standards to measure the efficiency and effectiveness of their call centers. However, TSP managers emphasize the efficiency of call centers based on quantifiable standards, such as the time it takes to respond to incoming calls, while private plan managers place a greater emphasis on the policy of satisfying each customer's needs in one call. Both TSP and private sector plan managers also use Web sites to deliver plan information and allow participants to conduct personal transactions, and private plan managers emphasize the use of their Web sites as the primary vehicles for delivering retirement education and information to participants. Finally, while TSP managers said that agency representatives serve as the initial contact points for TSP employees to learn about TSP and receive counseling, private plan managers use on-site representatives less to supplement services provided by call center representatives and Web-based resources. Private sector plan managers we contacted have adopted various other practices that are not featured within TSP, such as regularly assessing customer satisfaction and using regularly updated technology to improve customer service. These managers gather participant feedback on their voice response system via short, automated surveys at the end of participants' calls and use short, on-the-spot surveys to gather information on participants' experience with their Web site. These plan managers emphasized the importance of incorporating participant feedback into their customer service delivery model in order to better meet the needs of their participants. Although TSP managers have surveyed participants in the past, they do not have a systematic approach to assess whether their customer service meets participants' needs. TSP managers rely largely on indirect feedback from customer service staff, agency coordinators, and others who respond to complaints or requests for assistance from participants. The privately managed plans we studied also appear to utilize more up-to-date technologies to provide customer service, such as allowing participants to create account statements for any period of time or offering seminars over the Web on different plan topics that participants can access anytime. The TSP Web site provides fewer options and relies more on basic features.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To help ensure that federal workers have the options needed to effectively plan and to encourage them to save for retirement, TSP managers should continually seek new ways to improve their customer service operations. Both the potential costs and benefits should be weighed in making decisions about changes to service. Therefore, the Federal Retirement Thrift Investment Board should direct the Executive Director to develop and implement an evaluation effort to systematically assess the level of customer satisfaction and to identify, as needed, areas of potential improvement for the ThriftLine, caller assistance center, Web-based transaction system, and TSP coordinator program. It should consider a variety of different approaches, including traditional methods such as surveying participants annually through the mail or telephone to assess their overall level of satisfaction with the services provided, supplemented by other approaches, such as exploring the use of Web-based and automated telephone call evaluation tools to randomly survey TSP participants.

    Agency Affected: Federal Retirement Thrift Investment Board

    Status: Closed - Implemented

    Comments: The Federal Retirement Thrift Investment Board (FRTIB) contracted with an independent consultant, which conducted a survey of a random sample of federal workers and uniformed service members in November 2006. When the results were reported to the Board at its January meeting, one member stated the importance of continuing to survey the participants to ensure that the plan is providing the highest quality service, which is consistent with our recommendation that the evaluation effort be systematic. However, the board took no further actions in that regard.

    Recommendation: To help ensure that federal workers have the options needed to effectively plan and to encourage them to save for retirement, TSP managers should continually seek new ways to improve their customer service operations. Both the potential costs and benefits should be weighed in making decisions about changes to service. Therefore, the Federal Retirement Thrift Investment Board should direct the Executive Director to institutionalize the routine collection of information from the largest private sector plan managers to keep up with current industry trends and assess whether the new and existing practices used by private managers would prove advantageous and cost-effective to TSP.

    Agency Affected: Federal Retirement Thrift Investment Board

    Status: Closed - Not Implemented

    Comments: The Federal Retirement Thrift Investment Board disagreed with the recommendation and indicated that it had no plans to take any action to implement it. While the Board has recently initiated efforts to "track investment, plan design, and customer service features of the 20 largest 401(k) plans," this information appears to be limited to plan features, such as the types of investment options offered, auto-enrollment features, and plan withdrawal policies. At this time, it does not appear to include information to assess the potential advantages and cost-effectiveness to the Thrift Savings Plan of customer service practices used by private managers.

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