Designed obsolescence or in-built incompetence?
Which is it? (TSP and Bigger Government)
Our chosen form of Government is a beautiful thing. It can harness an impressive array of powers and abilities to address the most challenging and precarious of scenarios. It can put a man on the moon or mobilize the nation to fight off international threats and regulate commerce between states. But, it does none of this quickly. By design, the Government’s decision and action processes are constrained. With a bi-cameral legislative body and the balance of powers between three branches of Government, decisions have to be thoughtful and receive general approval before implementation.
This is a time consuming, prudent measure to ensure we don’t enact self-destructive policies through ‘knee-jerk’ reactions in times of crises and emotionally clouded circumstances. But, is it necessary to be so constrained for routine, bureaucratic processes? Did our founders build this into the system so the citizens would hold their Government’s bureaucratic efforts with a high degree of disdainful impatience and learn to rely on themselves instead? I hope so because the alternative too dreadful to contemplate.
While in the Service, I invested in the Thrift Savings Plan (TSP). Over the years this had become the principal ‘nest egg’ of our retirement funds. When the market plummeted in Feb/Mar, I decided to move a portion of this investment out of the Government controlled TSP program and into a privately managed portfolio. This downturn in the market offered lucrative opportunities during the eventual upturn, if managed closely. With modern technology and information that can move at the speed of an electron, you would think this would be easy. I worked for the Government for 31 years, I should have known better.
It took a week after they received the necessary paperwork for the administrators of the TSP office to send communications to the Treasury to disburse my money. Then, it took a few days longer for the Treasury to print a check and send it by general mail. Yup, that’s right. In 2020 our Treasury still uses checks and unregistered mail to disburse funds. The Government requires its employees to have bank accounts so they can ‘direct deposit’ their monthly paychecks. To me, that means that they have the capacity to ‘wire’ checks…., which usually takes a day or three. Apparently, they cannot do this when disbursing funds from the TSP. I received no explanation for this other than, ‘nope, the Treasury mails all its checks!”
It takes an average of 10-14 business days to receive the check. At the 10 day mark (15 actual days after the funds were deducted from the investment account), I called the TSP office seeking assistance to find the money – my investment institution had not received it. The first ‘representative’ told me that actually, it was 10 days after the Treasury sent the check, which in this case, was four days after TSP deducted my funds. But as I was within the window to cancel the check and have a second issued, she could do it if that’s my wish.
She advised it might take an additional week, on top of the typical 10-14 business days. The Feds wouldn’t print a new check until they confirmed the funds were back within the Treasury. I elected to wait another couple of days in the forlorn hope that the check was just delayed in the mail system.
I called the following week, about 25 days after the funds were deducted from my investment account. The second ‘representative’ advised that I’d have to wait until 30 days after the check was cut before I could cancel it. This was new, quite different from the instructions the previous Representative provided us. Additionally, I informed her that I had received a partial distribution in my mailbox for a very small ‘tax-free’ segment of the distribution. This was explicitly contrary to the instructions I provided them. She re-read my original request for disbursement and agreed this should not have happened, although she couldn’t offer any insights on why it did. I asked to speak to a ‘Manager.’
The ‘Manager’ was solicitous to my plight of lost investment and graciously offered to ‘smooth’ the way by sending a note to the Treasury to get ready to print a new check, after the 30 days. He then informed me that TSP had to send me a letter that I had to fill out and return to confirm I did not cash the check. Again, new information not shared by the previous two. The Manager acknowledged that the second Representative had already confirmed that the check was not cashed, yet he stated this letter was a TSP requirement. I asked if the release of the new check was contingent upon receipt of this new document from me. He responded yes and sheepishly agreed with me when I pointed out that his ‘smoothing’ the way with the Treasury would have absolutely no effect in expediting this process.
I also discovered that I could not cancel this transaction (even-though the funds haven’t really moved – right, it’s only a paper check that has not been cashed). The only way I could get the funds back into the TSP account was for my financial institution to receive the check and wire the funds directly back to TSP. It’s quite incongruous how they can accept wire transactions to quickly receive money, just not promptly return them. Either way, there was no way I could capture the investment growth over the period they deducted my funds. It’s all a loss to me.
All the TSP Representatives were very courteous, solicitous to my plight and all equally constrained from doing anything at all that would quickly solve this problem. All of them offered different information on what had to be done to solve the problem and, of course, different timelines to when this could eventually happen.
The Bottom Line?
So, the bottom line is that the Government that regulates banking rules; prints money; manages billions annually; can, within days, put hundreds of millions of dollars in cash on a pallet and fly it to a foreign nation, cannot transfer one of its former employee’s their money in an assured manner. Nor when it identifies a problem (of their making), does it enable its representatives with the requisite training or tools to competently solve the problem in a reasonable time.
What’s the real take away from this experience? Is it is naively foolish and irresponsible to transfer responsibilities to a government so inept in the basic management of transactions to manage anything beyond the most rudimentary of government services? Nationalized Health Care, industrial production, Social Aid programs, Really? Do people really see turning critical aspects of our lives over to a government that will not even wire personal funds to a financial institution in 2020? It’s beyond my rational powers of understanding to understand this desire. Is this deranged thinking from faulty, personal, critical reasoning processes? What’s even more dysfunctional is to believe that a government so big, responsible for so much, could actually perform better. I think our founders had it right; limit the Federal Government’s responsibilities to those few necessary activities enumerated in the founding document.
Update – At 32 days, I had signed their letter and faxed it back and received a fax confirmation number. That afternoon I called to confirm receipt and that they were processing the action. They couldn’t confirm receipt but assured me if I had the fax confirmation that they would process it by the next day.
You see how this game is played! I called back two days later, and my 4th Representative confirmed receipt of my letter and proudly announced that they would take action on it by close of business the next day.
So, I’m calling back next week, just to see if it happened and what new set of timelines I could expect to follow (The fourth Rep gave me different information from the previous three).
In sum, I filled out a few forms, spent several hours speaking with four representatives over 37 days, and my money is still nowhere to be found. But I am assured that I should receive a new check within the next 17 business days.
Again, this begs the question, am I missing something that many others see when they want to turn more and more of our critical needs over to a centralized government? Am I wrong in thinking this is a dreadful idea and that these others just misplace their wishful thinking?
OK, that’s my screed for the day…actually, it’s been a very long time since I’ve been sufficiently ‘motivated’ to bitch about anything!
If any of you have an insights on why my thought process is wrong, please drop a note in the comments section.
About 53 days after the initial transaction. I still have not received my money from the Treasury, but this week holds high prospects. I called the TSP Office again on May 12,, a week later than I planned. My 6th Representative confirmed that they processed my request for a re-issued check and that the Treasury made another ‘manual payment’ on May 7.
Today is May 17, and we have yet to see the check. But, because it’s only been 6 ‘business days’ since they sent it, I shouldn’t get too excited about this one has been lost as well. Apparently, the standard in 2020 to receive mail from the Government through the government-run postal service is up to 10 business days. Again, this will be a check in a Treasury marked envelop with a window showing anybody who looks at it that it contains a check. This is sent without registration or tracking.
My Dwindling Nest Egg
This envelope contains a good portion of my ‘Nest Egg.’ I’m excited about the prospects of getting my retirement investment back in the market after one of the most prominent drops in US history. I’m not sure how much investment growth opportunity I’ve lost since I asked TSP to send me some of my money. I suspect because I missed the market’s ‘up-tick’, it may take decades to make up for the lost time resulting from this ~50+ day transaction.
I’m beginning to question the sanity of leaving the remaining balance with TSP. But I am too afraid to try to take it out for fear I’ll lose everything to bureaucratic inefficiencies. I guess I could lose it all in the mail or just wait until the Government gives every TSP account a ‘Haircut’ as they try to recoup the billions they just printed to pass out like candy to our new civilization of drunk shut-ins.
Update 3 (Final)
‘Happy days are here again the skies above are clear again!’. This afternoon I received a call from my financial Institution – Yes! The check arrived. The office is in a celebratory mood, as am I. My nest egg is safe,,,but I’m not sure how sound it is. I tried to transfer the funds from one account to another. When I started the move the Dow was hovering around 20,704. Today it’s around 24,612 about a 16% increase. Because of the delays, I’ve lost the opportunity to recover about 16% of my losses from the days when the market crashed. That’s probably a couple of years growth for a conservative, retirement investment. What is one to think, am I just one of the few unlucky guys that fate dumped on or is this the norm for a government that may be too big to succeed?
- See our other Musings posts
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