Federal Thrift Savings Plan: Customer Service Practices Adopted  
by Private Sector Plan Managers Should Be Considered (18-JAN-05, 
GAO-05-38).							 
                                                                 
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.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-38						        
    ACCNO:   A15756						        
  TITLE:     Federal Thrift Savings Plan: Customer Service Practices  
Adopted by Private Sector Plan Managers Should Be Considered	 
     DATE:   01/18/2005 
  SUBJECT:   Federal employees					 
	     Retirement benefits				 
	     Retirement pensions				 
	     Customer service					 
	     Private sector					 
	     Private sector practices				 
	     Comparative analysis				 
	     Quality assurance					 
	     Federal Thrift Savings Plan			 

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GAO-05-38

United States Government Accountability Office

  GAO	Report to the Chairman, Committee on Homeland Security and Governmental
                              Affairs, U.S. Senate

January 2005

FEDERAL THRIFT SAVINGS PLAN

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

GAO-05-38

[IMG]

January 2005

FEDERAL THRIFT SAVINGS PLAN

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

  What GAO Found

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.

                 United States Government Accountability Office

Contents 	

  Letter

Results in Brief	Background	TSP and Private Sector Plan Managers Provide a
Similar Range of	

Customer Service Options but Emphasize Different Approaches Private Sector
Plan Managers Have Adopted Various Practices That

TSP Managers Could Consider to Improve Customer Service Conclusions
Recommendations for Executive Action Agency Comments and Our Evaluation

                                       1

                                      3 5

                                       7

15 19 20 21

Appendix I Scope and Methodology

Appendix II	Comments from the Federal Retirement Thrift Investment Board

  Figure

                    Figure 1: Plan Service Provision Options

Abbreviations

ETAC Employee Thrift Advisory Council	FERSA Federal Employees' Retirement
System Act 	NFC National Finance Center	OPM Office of Personnel
Management	PSR Participant Service Representative	TSP Thrift Savings Plan
   	

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
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separately.

United States Government Accountability Office Washington, DC 20548

January 18, 2005 	

The Honorable Susan M. Collins 	Chairman 	Committee on Homeland Security
and Governmental Affairs 	U. S. Senate	

Dear Chairman Collins: 	

Since its inception in 1986, the federal government's Thrift Savings Plan
   	(TSP) has become a central component of federal employees' retirement
   	savings. Intended to resemble private sector 401(k) pension plans, TSP
   	held more than $128 billion in retirement assets for about 3.2
million	participants and has become one of the largest retirement plans in
the 	United States.1 TSP resembles private sector 401(k) pension plans in
that 	both allow employees to contribute a portion of their
current	compensation through payroll salary deductions and invest their
account	balances among a menu of investment options selected by the
employer.2	Under pressure to provide plan features and customer service
that are 	more consistent with those of large private sector plan
managers,3 in 2003 	TSP managers launched a new record-keeping system
designed to allow 	improved service to plan participants.4 After
experiencing problems with 	

1Assets and participants are as of December 31, 2003.

2As provided under 26 U.S.C. 401(k) of the Internal Revenue Code, certain
defined contribution plans allow employees to reduce a portion of their
current compensation via a contribution, on a pretax basis, to a qualified
retirement account. Generally, there are two types of pension plans:
defined benefit plans and defined contribution plans. A defined benefit
plan promises a benefit that is generally based on an employee's salary
and years of service. The employer is responsible for funding the benefit,
investing and managing plan assets, and bearing the investment risk. In
contrast, under a defined contribution plan, benefits are based on the
contributions to and investment returns on individual accounts, and the
employee bears the investment risk.

3Customer service for many private and public sector defined contribution
plans is delivered by a private sector "plan manager" that is hired by the
company that is offering the defined contribution plan to its employees
(the plan sponsor). These private sector managers typically handle all of
the plan's customer service-related activities in addition to the plan's
record-keeping activities. Most private sector plan managers provide
services to several different plan sponsors.

4Record keeping includes, but is not limited to, activities such as
posting contributions to participant accounts, adjusting account balances
for gains and losses, and processing loans and withdrawals.

system access, customer assistance, and transaction processing during
implementation of this new system, TSP managers have reported that the
plan now processes more transactions more efficiently and with more
participant control than in the past.5 However, the difficulties of
implementing the new record-keeping system and the problems that ensued
led plan participants and members of Congress to raise questions about the
overall level of customer service at TSP. In light of these questions, the
Chairman of the Senate Committee on Homeland Security and Governmental
Affairs asked 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 used to
improve TSP's service.

To describe customer service in TSP, we interviewed officials from TSP and
the National Finance Center (NFC), reviewed documentation governing TSP's
customer service operations, and observed TSP operations.6 To describe how
private sector plan managers provide customer service and identify
practices that might prove useful to TSP, we interviewed five managers of
plans representing an average of 4.9 million participants and an average
of $169.8 billion in plan assets,7 observed the managers' customer service
operations, and obtained documentation of their operations where
possible.8 We conducted our work between December 2003 and December 2004
in accordance with generally accepted government auditing standards.
Appendix I describes the scope and methodology of our work in greater
detail.

5Federal Retirement Thrift Investment Board, TSP's governing body, still
seeks to offer new features. For example, TSP managers reported that they
began providing toll-free telephone service in July 2004, to enable TSP
participants and beneficiaries to obtain account or transaction
information via the ThriftLine's automated telephone service 24 hours a
day, 7 days a week.

6The Department of Agriculture's National Finance Center has been the
major contractor for account maintenance and participant support since TSP
began operations in 1987.

7We selected 4 of the top 10 private sector plan managers and one of the
top three local government agency plans based on total plan assets under
management as of December 31, 2002. See appendix I for more detail.

8Most of the private sector plan managers that we spoke with serviced from
several hundred plans to several thousand different plans. We also
interviewed the managers of one large self-managed public sector plan. See
appendix I for more detail.

  Results in Brief

TSP and private sector plan managers 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 use the telephone
to provide customer service through automated telephone assistance as well
as live representatives located at call centers. TSP and private plan
managers also both 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.9 Finally, while both TSP and private sector
plan managers use on-site coordinators to provide plan information, this
customer service function is more heavily emphasized in TSP. TSP managers
said that agency representatives serve as the initial contact points for
actively employed TSP participants to learn about TSP and receive
counseling. Private sector plan managers use on-site representatives less
and do so 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 systems via short, automated surveys at the end of
participants' calls and provide links on their Web sites 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 models in order to better meet the
needs of their participants. Although TSP managers have surveyed
participants, they have not done so since the early 1990s and do

9In the federal retirement system, the Office of Personnel Management
(OPM), rather than TSP, is required to establish a training program for
all retirement counselors. However, the Board has responsibility for
providing information to plan participants to facilitate informed decision
making with respect to what level of contribution to make and how to
invest those contributions. See GAO, Thrift Savings Plan, HEHS-96-66R
(Washington, D.C.: Nov. 14, 1995).

not have a systematic approach to assess whether their customer service
meets participants' needs. TSP managers rely largely on indirect feedback
from NFC and TSP staff and others who respond to complaints or requests
for assistance from participants, such as agency coordinators. 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.

This report contains recommendations to the Federal Retirement Thrift
Investment Board (the Board) concerning actions needed to identify
potential areas of improvement in the customer service provided to TSP
participants by developing and implementing an evaluation effort to assess
the level of customer satisfaction and routinely surveying the largest
private sector plan managers to keep up with current industry trends. We
recommended that the Board (1) develop a systematic evaluation effort,
including broad survey methods that are supplemented by other efforts to
randomly survey TSP participants, to assess their overall level of
satisfaction with the services provided and (2) institutionalize the
routine collection of information to regularly and systematically assess
trends and innovations in the defined contribution industry. The Board
disagreed with our first recommendation because it had previously
announced its intention to survey TSP participants on a variety of topics,
including client satisfaction. However, in its February 2004 monthly
meeting, the Board said that such a survey would not be conducted for at
least another 2 years. As we state in this report, the private sector plan
managers that we spoke with believe that direct, ongoing participant
feedback is needed to respond to the changing needs of plan participants.
Without obtaining more frequent feedback from participants, TSP managers
cannot determine what improvements would best satisfy participants' needs.
Therefore, we continue to believe that the Board needs to develop and
implement an ongoing evaluation effort that includes different types of
surveys to systematically assess the level of customer satisfaction. The
Board also disagreed with our second recommendation because it has
conducted and will continue to conduct on-site reviews of the largest
private plan managers to determine the services they provide and the
technological capabilities they plan for the future. While the Board's
recent visits to such plan managers are a positive step, we continue to
believe that a routine and systematic effort to collect information on the
practices used in the private sector customer service industry and assess
their potential for use in TSP should be institutionalized as a regular
aspect of TSP's operations.

Background

The Federal Employees' Retirement System Act of 1986 (FERSA)10 created the
Thrift Savings Plan as one of the basic elements of a new retirement
system for federal workers to, among other purposes, provide options for
retirement planning and encourage personal retirement savings among the
federal workforce.11 Most federal workers are allowed to participate in
TSP, which is available to federal and postal employees, members of
Congress and congressional employees, members of the uniformed services,
and members of the judicial branch. Eligibility depends upon coverage
under the Federal Employees' Retirement System or the Civil Service
Retirement System and civilian or military status.12

Eligible federal employees are able to contribute up to a fixed percentage
of their annual base pay or a flat amount subject to IRS limits.
Additionally, certain participants are eligible for automatic 1 percent
contributions and limited matching contributions from the employing
federal agency. TSP provides federal (and in certain cases, state) income
tax deferral on employee contributions and their related earnings, similar
to those offered by many private sector 401(k)-type pension plans.13 As
with a 401(k) plan, participants are able to contribute a portion of their
basic salary into an individual tax-deferred account. Participants have
the ability to manage their accounts and conduct a variety of transactions

10Pub. L. No. 99-335, June 6, 1986.

11FERSA created the Federal Employees' Retirement System (FERS), a
three-part retirement system for federal employees, including enrollment
in Social Security, a defined benefit plan, and TSP, a defined
contribution plan.

12Civil Service Retirement System (CSRS) is a retirement plan for federal
employees and covers employees hired prior to January 1, 1984. It is a
defined benefit plan, a plan that specifies the benefit to be received at
retirement by the participant.

13Participants may allocate their contributions and any associated
earnings among five investment fund options: the G Fund, F Fund, C Fund, S
Fund, and I Fund. The G Fund, managed by the Board is comprised of
short-term nonmarketable government securities issued exclusively for the
Thrift Savings Fund. The remaining four funds are managed by Barclays
Global Investors and are structured to track large index funds, which are
debt or equity portfolios comprised of bonds or stocks of a large number
of different companies. The first of these funds, the Fixed Income Index
Investment Fund, or F fund, is a bond market fund primarily invested in
the Barclays U.S. Debt Index designed to track the Lehman Brothers U.S.
Aggregate Index. The second fund, the C Fund, is TSP's largecompany stock
fund. It is invested in the Barclays Equity Index Fund and tracks the
Standard & Poor's 500. The Small Capitalization Stock Index Investment
Fund, or S Fund, is invested in Barclays Extended Market Index Fund and is
managed to track the Wilshire 4500. The I Fund is the TSP's international
stock index fund and is invested in Barclays EAFE Index Fund (Europe,
Australasia, and Far East) and holds shares of major companies and
industries in the European, Australian, and Asian stock markets.

similar to those available to 401(k) participants, such as reallocating
contributions, borrowing from the account, making withdrawals, or
purchasing annuities.

Administration of TSP falls under the purview of the Federal Retirement
Thrift Investment Board, an independent agency in the executive branch
established by Congress under FERSA. This five-member, presidentially
appointed Board's primary responsibilities include establishing policies
for the investment and management of TSP. In addition, the Board must
manage the Thrift Savings Fund solely in the interest of the participants
and beneficiaries of TSP, as well as create administrative policies for
the TSP. In addition to assigning these broad duties, FERSA also charges
the Board with appointing an Executive Director and an Employee Thrift
Advisory Council (ETAC).14 The Executive Director and staff are
responsible for implementing the Board's policies and managing the
dayto-day operations of TSP, prescribing regulations to administer FERSA,
and other duties. The Employee Thrift Advisory Council advises the Board
and Executive Director on matters relating to the investment and

15

administration of TSP.

While the Executive Director has responsibility for establishing and
maintaining TSP participant accounts, these account record-keeping
services are currently performed primarily by the U.S. Department of
Agriculture's National Finance Center under a contractual agreement with
the Board. Through this agreement, the TSP service office of NFC is
responsible for updating participants' accounts based on data provided by
agency payroll offices, processing participant account transactions, and
providing customer service support related to these functions.

Federal agency payroll and personnel offices also play a role in the
administration and customer service activities of TSP. These offices are

145 U.S.C. 8474 (a)(1) and 5 U.S.C. 8473 (a).

15The Employee Thrift Advisory Council is comprised of 15 federal
employees and consists of four members representing the four largest labor
unions; six representing labor, managerial, and supervisory organizations
in the U.S. Postal Service; one representing employee organizations having
the purpose of promoting the interests of women in government service; one
from the organization with individuals receiving the largest number of
annuities under FERS or CSRS; one from the organization representing the
largest number of supervisors and management officials; one representing
the agency with the largest number of members of the Senior Executive
Service; and one from the uniformed services. (5 U.S.C. 8473 (b)).

  TSP and Private Sector Plan Managers Provide a Similar Range of Customer
  Service Options but Emphasize Different Approaches

responsible for helping new employees enroll in TSP when they are hired
and assisting existing employees make changes during designated semiannual
seasons called open enrollment periods. They also retain control of
administrative functions affecting employee payroll deductions, such as
the election and alteration of contribution percentages. Additionally,
FERSA requires TSP to provide information to employees participating in
TSP and requires the Office of Personnel Management to establish a
training program for all retirement counselors of federal agencies.16

Though they emphasize different approaches, TSP and private sector plan
managers enable customers to select their preferred means of service from
a similar range of service options-including telephone, Internet, and
onsite assistance (fig. 1). Both TSP and private plan managers give
customers the option of obtaining assistance through automated telephone
systems as well as live representatives located at call centers, although
they emphasize different standards when evaluating the assistance
provided. In addition, both TSP and private managers provide Web sites
that deliver plan information and allow participants to conduct personal
transactions, but private plan managers emphasize the use of their Web
sites as the primary vehicles for delivering retirement education and
information to participants. Finally, while both TSP and private managers
use on-site coordinators to provide plan information, this customer
service function is more heavily used by TSP. Whereas TSP managers said
that agency representatives serve as the initial contact points for
actively employed TSP participants to learn about TSP, private managers
use on-site representatives less and do so to supplement call center
representatives and Web-based resources.

165 U.S.C. 8432; 5 U.S.C. 8432(b); and 5 U.S.C. 8350.

Figure 1: Plan Service Provision Options

aOnly actively employed Thrift Savings Plan participants have access to
on-site agency representatives. Also, not all private plan managers offer
on-site representatives.

    Call Centers Are Used to Provide Customer Service by Both TSP and Private
    Sector Plan Managers

TSP managers provide an automated, toll-free telephone system and call
center staff that help answer participants' questions, and TSP managers
measure the efficiency of the call centers based on quantifiable
standards, such as the time it takes to respond to incoming calls. TSP's
automated telephone system, known as the ThriftLine and operated by the
National Finance Center, allows participants to access general plan
information, including share prices, rates of return, current loan
interest rates, current annuity interest rates, and plan news.17 In
addition to obtaining general

17According to TSP managers, the ThriftLine receives an average of about
17,000 phone calls per day.

plan information, participants can gain access to the ThriftLine system to
get personal account information, such as their account balance and how
they are allocating their contributions, or to manage their account, such
as by making interfund transfers or withdrawals. Participants can also use
the ThriftLine system to reach a TSP call center representative.

TSP managers also maintain a call center where participants can reach
service representatives; these representatives answer participants'
questions and can also help them make changes to their accounts. About 155
call center representatives field incoming telephone calls and answer
participants' questions about loans, allocation changes, interfund
transfers, and withdrawals.18 In addition to answering participants'
questions, these call center staff also register requests for assistance
and complaints in a record-keeping system, which allows supervisors or
lead analysts to review such comments and respond to participants to help
them resolve problems. Call center staff said participants most commonly
call to ask questions about loans or withdrawals. The staff also indicated
that in the past participants with loans were more likely than others to
call back seeking more help.

Recently, the Board has taken a number of steps to improve telephone
service to TSP participants. These included establishing an additional
call center to reduce service interruptions and providing toll-free
telephone service to facilitate participant access to service
representatives. The new call center, located in Cumberland, Maryland,
opened in July 2004 to complement the center located in New Orleans,
Louisiana, during normal operations and provide backup during
weather-related or other local events that could otherwise interrupt
service. Also in July 2004, the Board began providing toll-free telephone
service to TSP participants where participants will be able to obtain TSP
account or transaction information via the automated telephone service 24
hours a day, 7 days a week.

TSP managers emphasized the efficiency of call centers based on
quantifiable standards-such as the percentage of calls that are answered
within a specified time frame-and pointed to their performance on these
measures as evidence of call center productivity. For example, the TSP

18TSP has two call centers. The call center located in New Orleans,
Louisiana, receives approximately 8,500 telephone calls per day from TSP
participants and has about 100 call center representatives answering calls
daily. The new call center located in Cumberland, Maryland, which is
operated by Spherix Inc., has about 55 call center representatives
answering calls daily.

call center tries to answer at least 90 percent of calls within 20 seconds
of a participant calling. TSP was meeting this standard in 2003 prior to
the implementation of the new record-keeping system and has since begun
meeting it again.19 However, TSP failed to meet this standard for about a
10-month period (May of 2003 through February 2004), when it was
experiencing an increase in the volume of calls received prompted by the
implementation of the new record-keeping system. Finally, TSP also closely
monitors the percentage of callers who hang up before receiving service
(known as the call abandonment rate) and the average call length as a
measure of service, and each call center representative is required to
help an average of at least 50 participants per day.20 TSP managers said
that resolving the participant's concern on the first call is also a goal,
and they have enlisted the help of a private sector contractor to make
changes to improve the quality of their call center processes and are
developing new standards for call center representatives.

Private sector plan managers also provide caller assistance through
automated toll-free telephone systems and live service representatives.
Some of these managers have more than one defined contribution plan under
their management and provide unique toll-free numbers for each plan.
Participants complete a log-in process that routes them to an automated
menu unique to their particular plan-a system similar to that provided by
the ThriftLine. From this menu, participants can then check their account
balances, get price quotes, receive plan information, and process account
transactions. These automated customer service lines also give
participants the option of speaking to a live call center representative
who can provide assistance with transactions or answer their questions. In
addition to providing basic assistance, service representatives use the
call as an opportunity to direct participants to educational and plan
materials available on their Web site.

While private managers used similar means as TSP to provide caller
assistance, they emphasized different types of standards than TSP when
evaluating the success of their call centers. Private managers told us
that they downplayed the importance of quantitative measures and instead
focused on ensuring that service representatives fully satisfied each

19We did not assess the reliability of the call center data. See the
section on scope and methodology in appendix I.

20Calls averaged about 3 minutes and 21 seconds plus about 1 minute and 45
seconds for service center representatives to record their notes.

customer's needs efficiently and politely in one call. Specifically,
private sector managers emphasized this policy of first-call resolution as
an overriding goal and said they viewed quantitative measures, such as
those emphasized by TSP, as secondary or, in some cases, an inaccurate
measure of call center performance. For example, while TSP keeps close
watch on the call abandonment rate, private managers we spoke with placed
little emphasis on this measure. In fact, one plan manager told us he
believed the call abandonment rate to be an inaccurate measure of
productivity, as some participants terminate calls after opting to visit
the Web site in response to the telephone recording they hear while on
hold. Furthermore, unlike TSP managers, who evaluate service
representative utilization by representatives' ability to answer a minimum
number of calls each shift, private managers we spoke with did not have
required call minimums, instead stressing that service representatives
should fully resolve each participant's needs, regardless of the time
required. Finally, although private managers had requirements-such as
answering 90 percent of calls within 20 seconds-specified in the contracts
with their clients, they did not use such measures as the primary standard
for evaluating service representatives or call center
effectiveness.However, we did not attempt to assess the possible impact of
these differences on the quality of customer service.

    Web Sites Are Provided by Both TSP and Private Plans, but Private Plan
    Managers Tend to Use Them for Broader Purposes

TSP managers also provide customer service through their Web-based
transaction system. TSP's Web site is maintained and operated by TSP staff
and according to TSP managers has received an average of about 15.7
million hits per month and processed an average of 216,696 transactions
per month during the first 8 months of 2004. Participants can use the Web
site for functions such as accessing plan information, making loan
requests, downloading forms, transferring funds, changing allocations
between funds, and accessing account balances, among other things.
Participants can also conduct many of these transactions over the phone,
but by using the Web site, participants can also make a loan request and
can submit the form online for quicker processing.

According to TSP managers, the Web site has to a great extent replaced
paper forms for processing transactions and providing information. For
example, 93 percent of interfund transfers were conducted through the Web
site during the first 8 months of 2004. TSP managers also said that they
have eliminated paper versions of forms, statements, and bulletins that
have traditionally been provided through the mail or sent to agency
coordinators because most of these documents can be obtained through

the Web site. TSP managers stated that their goal in doing so is to
improve their level of service while decreasing costs.21

Private sector plan managers that we spoke with said that in addition to
providing a means for participants to process transactions, they also
intend their Web sites to be the primary vehicles for delivering
retirement education and information to their participants. Like TSP
managers, private managers said they allow participants to conduct
different transactions, check account balances, and receive plan
information electronically. One plan manager that we spoke with said that
his Web site processed approximately 9 million transactions per month in
2003.

In addition, we found that private sector Web sites provided a range of
resources for participants, from Web-broadcast seminars to downloadable
brochures and general investment information, and most private plan
managers underscored the importance of the Web site as a tool that allows
participants to access information on their own. One manager told us that
his goal is not only to educate participants but also to influence
participant behavior by strategically placing educational information on
the Web site so as to link such educational materials to the topic or
transaction a participant is pursuing. For example, the plan manager said
that research has found that most participants visited the site for
information on their account balance or personal rate of return, not to
seek out educational materials. In response to findings about participant
Web usage, the plan manager redesigned the site so that educational
materials are embedded in relevant pages of the site, rather than isolated
on a separate page. In contrast, TSP separates all plan and retirement
information from account and transaction access.

21In the past, TSP managers automatically mailed paper statements to 3.25
million participants four times per year. To reduce costs, in 2003, TSP
managers announced that they would send paper statements only if
participants requested them. Since then, only 473,000 participants have
requested to continue receiving paper statements, saving $3.3 million
dollars per year in administrative costs.

    Agency Coordinators Serve as the Front Line of Customer Service Operations
    for TSP, but Managers of Similar Private Sector Plans Rely on Such On-site
    Representatives Less Frequently

Designated by their federal agencies as liaisons with TSP managers, agency
coordinators provide customer service to participants within their
particular agencies. Agency coordinators, who are typically located in
their agencies' personnel or benefits offices, are the primary contacts
for actively employed TSP participants. Generally, agency coordinators are
expected to inform eligible employees of TSP options and benefits;
maintain supplies of TSP forms and informational materials; collect,
process, and submit TSP election forms to agency payroll offices; and
respond to inquiries from active employees.22 For some agencies, the
coordinator's responsibilities are combined with those of the agency
retirement counselor.23 FERSA authorizes agencies to designate retirement
counselors who are responsible for providing employees with benefits
information and mandates that OPM establish a training program for these
retirement counselors.24 Agencies, however, have primary responsibility
for designing and implementing their programs according to agencyspecific
needs.

TSP managers said that the coordinators are the front line of TSP's
customer service operations. However, they also said that they lack the
authority to monitor how frequently, at what point, and for what purpose
coordinators contact participants. TSP managers view their role in
providing customer service through agency coordinators as limited
primarily to assisting these coordinators by distributing information and
answering questions as they perform their TSP-related duties. The agency
coordinators we spoke with said they were responsible for providing
information on TSP to new employees, providing employees information on
open season enrollment, conducting retirement seminars, helping with
payroll issues, and answering any questions that employees may have about
TSP.

We found that the information and assistance provided to employees by
coordinators in different agencies varied. For example, when we spoke with
nine agency coordinators from large and small agencies, three

22Department of Labor's audit guidelines, Nov. 1, 2001. Section 8477(g) of
FERSA, directs the Secretary of Labor to establish a program to carry out
audits to determine the level of compliance with the act's fiduciary
standards. To guide the auditors, the department has developed a fiduciary
oversight program that uses detailed guides to test for compliance.

23Agencies generally refer to retirement counselors and other retirement
education staff as benefits officers, according to 5 U.S.C. 8350.

245 U.S.C. 8350.

coordinators told us that they had requested TSP staff to conduct seminars
at their agencies to provide information on TSP and retirement planning.
Of the six other coordinators that we spoke with, all but one said they
conducted their own seminars or used an outside contractor. The agency
coordinators said they also distribute information electronically or
through posted bulletins, informational meetings, orientation sessions,
and fliers in office mail. Several coordinators indicated that they refer
participants to the TSP Web site or the ThriftLine to obtain plan
information or to conduct transactions. The coordinators themselves
receive guidance and new information on TSP from TSP managers by attending
optional quarterly meetings and coordinator training sessions that are
offered monthly and reading TSP bulletins-monthly publications that
provide recent information on the TSP and are available to agency
coordinators through the TSP Web site and the mail. The agency
coordinators we spoke with indicated that they had other responsibilities
in addition to their TSP-related duties.

Private sector plan managers rely on on-site representatives less and tend
to deliver educational and transaction resources directly to participants.
As a result, plan managers view call center representatives, automated
telephone services, and Web sites as their front line of customer service
operations. This emphasis on self-service results in these managers
providing all available plan information and retirement education through
one or more of these service delivery methods and using on-site
representatives only as a backup measure or not at all. Private sector
companies have been moving away from face-to-face service delivery
approaches and toward live telephone assistance to meet consumers'
expectations for fast and convenient service and to provide this service
more cost-effectively.

Additionally, by allowing participants to conduct all transactions-
including making changes to contribution percentages-through the Web site
or telephone services, plan managers also rely less on employers to
provide services. One plan manager we spoke with described the use of
on-site representatives as flawed, because information provided by
different on-site representatives may vary. By providing all information
through a Web site or centralized contact center, the manager told us, the
plan could ensure consistency of service. Despite this, some plan managers
we spoke with did use on-site representatives in a limited capacity. One
plan manager provided limited on-site support for its state government and
school district clients, but the arrangement was specific to the plan
sponsor and the plan manager did not have a companywide practice for
utilizing such representatives. Specifically, the number,

  Private Sector Plan Managers Have Adopted Various Practices That TSP Managers
  Could Consider to Improve Customer Service

location, and function of representatives provided to a client varied from
plan sponsor to plan sponsor. For its state government and school district
clients, the plan manager only provided on-site service when the plan
sponsor specifically requested a representative or during specified times,
such as open enrollment periods.

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. Private managers frequently assess their performance by
gathering participant feedback on the services provided and use this
information to improve their customer service delivery. Although TSP
managers have surveyed participants, they have not done so since the early
1990s and currently have no systematic approach to assess whether the
plans customer service meets participants' needs. In addition, private
managers that we spoke with appear to utilize more up-to-date technologies
to provide customer service than do TSP managers.

    Private Sector Plan Managers Frequently Assess Their Performance by
    Gathering Participant Feedback on the Services Provided

Private sector plan managers regularly gather participant feedback and use
the feedback received to improve their customer service. Since most
private plan managers deliver customer service through multiple methods,
they use a number of mechanisms to gather participant feedback. These
mechanisms are customized to gather information specific to the service
method the participant used. For example, some plan managers we spoke with
provide a link on their Web site to a survey that allows participants to
share their impressions of and experiences with the service provided
through the site. Some managers also use short on-the-spot surveys to
gather feedback about a participant's experience on the plan manager's Web
site.25

These plan managers also survey participants after they have interacted
with the plan's contact center and voice response telephone system through
short, automated surveys at the end of a call. Managing officials told us
that these surveys include questions regarding the service method's

25Unlike pop-up advertisements that may be unwelcome to Internet users,
the surveys provide participants the opportunity to give feedback through
a convenient method according to plan managers, especially if participants
were having difficulty with the Web site or if they had suggestions for
improving the functionality of the site. The on-the-spot surveys that we
observed appeared to be short and easy to fill out.

ease of use, whether or not the participant was able to complete the
intended transaction, and sometimes ask whether the participant has
suggestions as to how the service method or transaction process could be
improved. Traditional survey methods are also used, such as an annual mail
or telephone survey to randomly sample participants and assess their
overall level of satisfaction with the services provided. However, plan
managers said that these surveys take longer and are more costly to
administer than other methods.

All of the plan managers we spoke with emphasized the importance of
incorporating participant feedback into their customer service delivery
models in order to better meet the needs of their participants. They told
us that it is important to determine what is working and what is not by
regularly gathering participant feedback. For example, one plan manager
told us that his plan had been mailing participant statements to the
employer for distribution for several years. He thought that this method
of distribution would be more convenient and cost-effective for the plan
and that since no participants were complaining, it must be working
efficiently. However, when participants were surveyed, they made it known
that the statements were usually not distributed by their employer in a
timely manner, if at all, and as a result, statements are now mailed
directly to participants. Another plan manager said that his plan had
redesigned its entire Web site and added features based primarily on
feedback from their participants.

TSP managers said that they have not surveyed participants since the early
1990s because they were waiting for a new record-keeping system to be
developed, and they said it would not have made sense to survey
participants until after the transition issues were resolved and
participants had some experience under the new system. Rather than survey
participants shortly after the new system was implemented, in 2003, TSP
managers have since decided to wait until a new investment option is added
to the existing selection of five funds. The Board anticipates
implementing the new option in mid-2005. Although the Board has a system
for addressing participant complaints, TSP has no systematic mechanism in
place for soliciting participant views about the quality of the service
they are receiving. Instead, TSP managers rely largely on indirect
feedback from NFC and TSP staff and others, such as agency coordinators,
who respond to complaints or requests for assistance from participants.
Agency coordinators and the call center representatives at NFC provide
some feedback to TSP managers regarding areas of potential improvement.
TSP managers are also responsible for gathering participant feedback
through the Employee Thrift Advisory Council, as required by

FERSA. However, while some ETAC representatives provide TSP managers with
feedback on draft TSP publications, legislative initiatives, and other
issues, ETAC representatives do not systemically solicit feedback from
their constituents. Some ETAC representatives may receive sporadic
feedback from participants, but ETAC does not conduct surveys of plan
participants. As a result, TSP managers are dependent on call center
representatives or agency coordinators to forward any feedback they
receive from participants. Also, the executive director of ETAC said that
TSP participants might be more likely to raise customer service issues
with their local representatives, such as union representatives, rather
than elevate issues to the national level. Therefore, the extent to which
participants within the represented agencies and employee organizations
provide feedback to their ETAC representative is unclear.

Because TSP relies on customer complaints as an indicator of participant
satisfaction, its managers do not have the information necessary to
determine the degree to which participants are satisfied with the
services. A TSP official said that because participant complaints have
decreased significantly and leveled off since the record-keeping system
conversion in June 2003, participants are probably satisfied with the
services that TSP is providing. However, TSP managers' reliance on
complaints does not take into account participants who are dissatisfied
and have not complained or do not know where to complain about the
services they received. In other instances, participants have to send
letters to TSP managers or the TSP call center, or contact their member of
Congress with problems or concerns they have had with the services they
received.

    Privately Managed Plans Use More Up-to-date Technology in Delivering
    Customer Service than TSP Does

Private sector plan managers that we spoke with also utilize more
up-todate technologies to improve customer service than TSP does. We found
that the privately managed plans' Web sites provided participants more
flexibility and options for managing and learning about their retirement
accounts than did the TSP Web site. Private plan managers also told us
that one part of providing the best possible customer service is allowing
participants to serve themselves in an easy and convenient manner, and
they have found that the more up-to-date technology that they have
incorporated into their customer service delivery models helps facilitate
participant self-service. For example, one plan manager's Web site allowed
participants to instantly create and print account statements for any
period of time. This allows participants to easily determine how much they
earned, lost, or contributed for any given period of time. Plan managers
said that such information helps participants make decisions about how to
allocate their funds and about retirement planning. Conversely, the TSP

Web site only makes statements available for calendar year quarters, and
the participant must wait approximately 2 weeks after the close of the
quarter to obtain the statement.

Privately managed plans also use their Web sites to help participants
understand their retirement plan and the options available to them within
the plan. For example, one plan manager we spoke with provided access to
prerecorded seminars on the Web sites that cover current accountrelated
topics and features. Participants may view these seminars at any time as
an alternative to the printed literature that was also available through
the Web site if desired. Conversely, the TSP Web site only offers print
copies of its general plan information brochure, available in hard copy or
for viewing online, and the brochure on general plan information has not
been updated since mid-2001.

The private plan managers that we spoke with also utilized more
sophisticated calculators on their Web sites than does TSP. For example,
one plan manager's Web site provided a calculator that would project a
participant's account balance given certain hypothetical parameters, such
as number of years before retirement, that the participant can select. The
calculator is securely linked to the participant's account, and certain
items, such as the participant's account balance and historical rate of
return on assets, are automatically entered into the calculator,
simplifying the process for the participant. TSP also offers an account
projection calculator, but the calculators they offer are not on a secure
server and all parameters must be specified manually, and the participant
may not know what assumptions, like the estimated rate of return, are
reasonable to specify. The plan managers that we spoke with told us that
participants are more likely to use and benefit from tools such as the
retirement income projector if they are convenient and easy to use.

All of the private plan managers that we spoke with emphasized the
importance of keeping abreast of the latest technology and industry trends
in order to provide participants with the highest possible level of
customer service. For example, two plan managers told us that they
regularly and systematically review not only their competitors' Web sites
for new ideas and innovations, but they also study the Web sites of other
companies, such as Yahoo and Amazon, to keep abreast of the latest
technological developments. Because TSP managers are not taking full
advantage of such technology, TSP participants may not receive the
benefits it offers. As plan managers have continually updated their Web
sites to incorporate more sophisticated features, they have simultaneously
experienced increased Web usage and decreased calls to service
representatives by

Conclusions

participants. Another manager stated that certain Web features could
reduce mailing costs by allowing plan managers to provide some information
electronically.

Although TSP managers have a simple and functional Web site available for
participant use, the site does not offer the flexibility and convenience
of the Web sites provided by the private plan managers that we reviewed.
Although TSP managers told us that they have recently taken steps to learn
about industry innovations-including talking to and occasionally visiting
private sector plan managers, viewing private sector Web sites, and
reviewing the literature from researchers in the field, they have not yet
institutionalized the routine collection of information to regularly and
systematically assess trends and innovations in the defined contribution
industry. 26

TSP has become one of the largest retirement savings plans in the United
States, and it must provide customer support and record keeping for
millions of participants across many federal agencies throughout the
United States and, in some instances, the world. TSP must exchange
information with multiple federal agency payroll, personnel, and
dataprocessing representatives and handle millions of participant
transactions every month. In addition, TSP relies on other federal
agencies to provide participants' benefit information, including
educational and other information, on TSP. Because these characteristics
make TSP unique, its approach to customer service is naturally somewhat
different from that of other pension plans. Nonetheless, some aspects of
private sector practices seem appropriate for TSP managers to consider.
For example, as TSP managers continue to modernize their customer service
operations, they should look for opportunities to use participant feedback
to identify broader innovations to improve their services, in addition to
focusing on individual participants' specific concerns. The practices of
private sector plan managers suggest that direct, ongoing participant
feedback is invaluable in responding to the changing needs of plan
participants. Without obtaining more frequent and representative feedback
from participants, TSP managers cannot determine what improvements would
best satisfy participants' needs.

26At the September 20, 2004, TSP Board meeting, the Executive Director
announced his intention to visit the operations of a few select private
sector plan managers.

While recognizing the recent improvements made to TSP's customer
service-such as the new record-keeping system, the additional call center,
and toll-free telephone service-we conclude that TSP could benefit from
additional measures that could enhance customer service further. For
example, the innovative, technological, and operational practices that
have become commonplace in the private sector customer service industry
might be means to continual customer service improvements at TSP. Also,
TSP could benefit from regular and sustained examination of private sector
customer service practices. As TSP participants become more familiar with
online financial transactions and the services provided by private plan
managers, participants may come to expect services not currently provided
by TSP. However, the costs of making changes to TSP's services would have
to be balanced against the potential benefits such changes could provide
to participants and the plans themselves.

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, we recommend that the
Federal Retirement Thrift Investment Board direct the Executive Director
to take the following actions:

  Recommendations for Executive Action

o  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.

o  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 Comments 	and Our Evaluation 	

We obtained written comments on a draft of this report from the Federal
Retirement Thrift Investment Board and made changes to the report as
appropriate. The full text of these comments is reproduced in appendix II.
In response to the Board's comments, we added information regarding its
plans for surveying participants. We also added information regarding the
Board's recent announcements that it will review the service provided by
private plan managers. The Department of Labor was also provided a draft
of this report for review and advised us that it had no comments.

In its written comments, the Board disagreed with our recommendation
regarding the implementation of an evaluation effort to assess the level
of customer satisfaction. The Board stated that our recommendation was
moot because the Board had previously announced its intention to survey
TSP participants on a variety of topics, including client satisfaction.
However, in its February 2004 monthly meeting, the Board said that such a
survey would not be conducted for at least another 2 years. As we state in
our report, the private sector plan managers that we spoke with believe
that direct, ongoing participant feedback is needed to respond to the
changing needs of plan participants. Without obtaining more frequent
feedback from participants, TSP managers cannot determine what
improvements would best satisfy participants' needs. The Board also
suggested that certain aspects of plan performance indicate increased
participant satisfaction. In particular, the board stated that TSP's high
participation rate, increased number of transactions, and low account
withdrawal rate among inactive participants, such as retirees or former
employees, imply a high level of participant satisfaction. Although such
performance measures provide an indication of participant satisfaction,
more sophisticated efforts, such as participant surveys, are needed to
provide direct information on the changing needs of plan participants and
what improvements would best satisfy those needs. We recognize that these
efforts may require substantial resources, which is why other means, such
as exploring the use of Web-based and automated telephone call evaluation
tools to randomly survey TSP participants, are needed as supplementary
efforts. Without a systematic effort to obtain feedback from participants,
the Board is not in the best position to determine participant
satisfaction.

The Board also disagreed with our recommendation that it should routinely
solicit information from the largest private plan managers to assess
whether their practices would be advantageous and cost-effective if
adopted by TSP. The Board said that it has conducted and will continue to
conduct on-site reviews of the largest private plan managers to determine
the services they provide and the technological capabilities they plan for

the future. While the Board's recent visits to such plan managers are a
positive step, we believe that a routine and systematic effort to survey
practices used in the private sector customer service industry should be
institutionalized as a regular aspect of TSP's operations. Further, in
considering which new practices to adopt, the Board would need to weigh
the costs of making changes to TSP's services against the potential
benefits to participants and the plans themselves. Conducting such cost/
benefit analyses is a management function and would be inappropriate for
GAO to initiate.

The Board suggested that the section of our report on customer service
options questions the federal government's reliance on agency retirement
counselors for the delivery of TSP information and service. This section
of the report was descriptive, illustrating the different ways in which
private sector entities and TSP managers provide customer service. While
we noted that some federal agencies use on-site coordinators, we observed
that, in general, the private sector tended to rely less on coordinators
and more on call center representatives, automated telephone services, and
Web sites to deliver informational and transactional resources to the
participants. The Board stated that it rejects the suggestion that the
focus of retirement education be shifted away from retirement counselors.
We are not suggesting that the agencies move away from retirement
counselors, but we emphasize that providing retirement information through
the use of retirement counselors does not preempt TSP managers from also
providing such information through call centers and Web sites.

The Board questioned the feasibility and value of implementing several
customer service features used as examples in the draft report. For
example, we included a discussion about a private sector Web site that
could display a graph of the projected growth rate of a participant's
account at the current contribution rate as well as at a slightly higher
hypothetical rate to demonstrate the effect of higher contributions. This
example was used only to illustrate the type of educational features used
by the private sector and was not necessarily intended as a specific
recommendation to be implemented. However, we maintain that the private
sector offers a range of Web features, particularly those concerning
education and retirement information, that are not available to TSP
participants. Similarly, other examples, including on-the-spot participant
surveys and more flexible options for statement preparation, were intended
to illustrate the types of advanced tools private sector plan managers
provide to their participants rather than as specific recommendations to
be implemented.

The Board also stated that the draft ignored TSP's superior performance
results as measured by key standards that demonstrate that TSP
significantly outperforms the private sector. In response, we noted that
TSP had generally met its standard for call center performance
measurement, such as the percentage of all calls answered within 20
seconds, except for a period of about 10 months of increased caller volume
as the Board implemented its new record-keeping system. However, as
presented in the draft, private managers told us that they downplayed the
importance of quantitative measures and instead focused on ensuring that
service representatives fully satisfied each customer's needs efficiently
and politely in one call. Specifically, private sector managers emphasized
this policy of first-call resolution as an overriding goal and viewed the
quantitative measures, such as those emphasized by TSP, as secondary or,
in some cases, an inaccurate measure of call center performance.

Finally, the Board stated that the draft failed to address three of the
five areas of interest to the committee. At the conclusion of the design
phase of our study, GAO and the committee staff agreed to the objectives
stated at the beginning of this report. We eliminated the other areas of
interest largely because they overlapped with the scope of an ongoing
audit by the Department of Labor of TSP's customer service.

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after its issue date. At that time, we will send copies of this report to
the Secretary of Labor, the Federal Retirement Thrift Investment Board,
appropriate congressional committees, and other interested parties. In
addition, we will make copies of this report available at no charge on
GAO's Web site at http://www.gao.gov/.

If you have any questions concerning this report, please contact me at
(202) 512-7215 or Tamara Cross at (202) 512-4890. Other major contributors
include Daniel Alspaugh, Amy Buck, Richard Burkard, Erin Daugherty,
Malcolm Drewery, Michael Morris, Corinna Nicolaou, and Roger Thomas.

Sincerely yours,

Barbara D. Bovbjerg Director, Education, Workforce, and Income Security
Issues

                      Appendix I: Scope and Methodology 	

To describe how Thrift Savings Plan (TSP) managers provide customer
service, we interviewed TSP managers at the Federal Retirement Thrift
Investment Board headquarters in Washington, D.C., and officials at the
Department of Agriculture's National Finance Center (NFC), which has been
the major contractor for account maintenance and participant support since
TSP began operations in 1987. In addition, we reviewed documentation
governing TSP's customer service operations, attended monthly Board
meetings, and interviewed officials at the Department of Labor and the
Employee Thrift Advisory Council (ETAC). Specifically, to describe the
customer service operations of the ThriftLine and call center, we also
observed center operations at the NFC in New Orleans, Louisiana, including
customer service representatives taking telephone calls from TSP
participants; we also collected and reviewed information on the number of
calls made to the ThriftLine, the percentage of calls answered within
specified time frames, and the number and duration of calls referred to a
customer service representative. To describe the customer service
operation of the TSP Web site, we also observed and documented the
information and features available on the Web site through our personal
computers at GAO and obtained information from TSP managers on the number
of visits made and transactions conducted over the TSP Web site. We also
interviewed TSP managers and NFC officials regarding the reliability of
their call center or Web site data, such as the number of calls received
or the number of interfund transfers transacted through the Web site.
However, they were unable to provide information about any reliability
tests that might have been performed. Call center and Web site data are
presented here for illustrative purposes. Because these data are not
central to the findings, conclusions, or recommendations of this report we
did not assess their reliability. To describe the role of the agency
coordinator, we also interviewed nine TSP coordinators, selected on the
basis of a nonrandom sample of federal agencies with 5,000 or more
employees (U.S. Postal Service, Department of Defense, Social Security
Administration, and General Services Administration) and federal agencies
with fewer than 5,000 employees (Government Accountability Office, Federal
Trade Commission, Office of Personnel Management, Small Business
Administration, and the Railroad Retirement Board). We also reviewed the
Federal Employees' Retirement System Act and Department of Labor guidance
on responsibilities of the federal agencies participating in TSP.

To describe how private sector plan managers provide customer service
through call center representatives, automated telephone systems, Web
sites, and on-site representatives, we visited managers of other large
defined contribution plans, conducted interviews, observed their customer

Appendix I: Scope and Methodology

service operations, and in some cases obtained documentation on their
operations. Specifically regarding private call center representatives and
automated telephone systems, we obtained information regarding their
customer service philosophies, use of call center benchmarks, call center
staff training and evaluation policies, call center technology, and call
volume management. In some cases, we obtained call center representative
training manuals and call center statistics. We also listened to live
calls with call center representatives and observed the software tools
used by these representatives to assist callers at some of the plan
managers that we visited. We also observed their Web site pages and
features, such as their retirement calculators and education materials and
discussed how often they update their Web sites and how they determine
what to include on their sites with management and information technology
specialists.

To identify customer service practices used by private sector plan
managers that TSP managers could consider to improve its services, we also
obtained copies of both online and printed customer service-related survey
instruments and, in some cases, survey results, and discussed with plan
managers how they used this information to determine what changes would be
made to their customer service delivery.

To select managers of similar defined contribution plans for comparison,
we selected 4 of the top 10 private sector plan managers and 1 of the top
3 state and local government agency plans based on total plan assets under
management as of December 31, 2002, as reported by Pensions & Investments
and Plan Sponsor Magazine. The five plan managers that we spoke with had
an average of $169.8 billion under management and serviced an average of
4.8 million participants. They ranged in size from $9.8 billion to $282.0
billion under management and from 150,000 to 10.3 million participants. We
also spoke with private and public pension industry groups such as the
Profit Sharing Council of America and the National Association of
Government Defined Contribution Administrators about our selection
methods.

Appendix II: Comments from the Federal Retirement Thrift Investment Board

Appendix II: Comments from the Federal Retirement Thrift Investment Board

Appendix II: Comments from the Federal Retirement Thrift Investment Board

Appendix II: Comments from the Federal Retirement Thrift Investment Board

Appendix II: Comments from the Federal Retirement Thrift Investment Board

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