Thousands of federal workers lost May interest payments on money they put in the new thrift investment plan because computer tapes with their payroll deduction designations didn't arrive on time at the New Orleans center that handles the tax-deferred savings program.
Department of Health and Human Services officials confirmed Friday that all 20,600 of its thrift plan enrollees lost interest payments for the two pay periods last month. The department has about 120,000 employes, including more than 28,000 here and about twice that number -- mostly with the Social Security Administration and Health Care Financing Administraton -- in Baltimore.
For the typical thrift plan enrollee making $25,000 a year, HHS officials estimated the May interest loss at 55 to 60 cents. During May, HHS workers invested about $2.1 million, and the government put in $435 million to their accounts.
Officials of the Federal Retirement Thrift Investment Board in Washington, which manages the investments, said that some other agencies had been "delinquent" in getting tapes on time to the Agriculture Department payment center that is handling the giant federal investment program. They said they would know soon the number of employes and agencies who lost interest because tapes arrived after the deadline.
The National Treasury Employees Union, which spotlighted the glitch in the thrift investment program, said that even if the losses to employes are minimal, it is "astounding and disturbing" that any such problems exist.
The thrift investment program began in April. Although it is part of the new Federal Employees Retirement System, it is open to almost all of the government's 2.7 million workers, whether they are covered by FERS or are under the old civil service pension program. Between April and the first of June, the investment fund grew to $259 million, and it is increasing at the rate of more than $1 million each day.
Workers under the FERS system (almost everyone hired since the start of 1984) can invest up to 10 percent of their salary -- or a maximum of $7,000 this year -- in the plan. Depending on their contributions, employes can get matching contributions from the government ranging from 1 to 5 percent this year. Workers hired before 1984 can put in 5 percent, but get no government match. All the investments are tax-deferred and are invested in Treasury securities, which in May were paying an interest rate of 8 3/8 percent. The interest rate for June is 8 5/8 percent.
Because the program got a late start this year (April rather than January), employes have been allowed to exceed normal contribution levels and the government has had a special double-match contribution in effect. Thrift board officials said none of those benefits were affected by the payroll problems.
An NTEU spokesman said that "even if the losses to employes are minimal, this is a disgrace. We think it is a good program and we want it to work . . . . We just want all the agencies to get their act together." The union, which represents some HHS employes, is gearing up for a major fight with the American Federation of Government Employees, which now has exclusive bargaining rights for HHS's largest agency, the Social Security Administration.
A thrift board spokesman said "we cannot invest money that we don't have." He said the computer center in New Orleans had stayed open during the last weekend in May to process late-arriving computer tapes, but that some agencies missed even the extended deadlines.