A class action lawsuit filed Thursday alleges that federal employees and uniformed service members suffered substantial financial hardship due to a botched transition to a new system for a savings and investment plan for federal government employees that the plaintiffs say has serious flaws.
Seven plaintiffs who are participants of or eligible for benefits from the Thrift Savings Plan (TSP) – a Federal Government-sponsored retirement savings and investment plan similar to 401(k) plans – joined together to file a class-action lawsuit against Accenture Federal Services (AFS), Alight Solutions and the five members of the Federal Retirement Thrift Investment Board in the U.S. District Court for the District of Columbia.
“AFS and Alight completely botched the migration of TSP’s services due to an array of technological and staffing shortfalls that have virtually brought the services offered by TSP to participants to a screeching halt,” the plaintiffs state in the class actions suit.
“Defendants’ failure to ensure the timely payment of Hardship Withdrawals, Non- Hardship Active Withdrawals, Out of Service Withdrawals, Death Benefits, and TSP Loan proceeds is not a one-off situation but instead is caused by systemic flaws in TSP’s system,” the lawsuit states.
The lawsuit alleges that the TSP program’s delay and failure to disburse funds within the program to beneficiaries has forced military personnel, veterans, and federal employees who use TSP to be forced to procure high interest consumer loans as alternatives so they are able to pay their bills and avoid home foreclosures, repossessions, and other hardships.
TSP serves as a tax-deferred retirement savings plan for approximately 6.5 million members of the uniformed services and other federal employees, similar to 401K plans offered to private-sector employees and manages more than $838 billion in assets.
The plaintiffs are seeking relief from the defendants to immediately disburse proceeds for all approved TSP loans and withdrawals as well as appropriate damages for plaintiffs and class members’ losses.
The suit also requests a declaration that defendants are financially responsible for all notice and relief and requires that the defendants pay both pre- and post-judgment interest on any amounts awarded as well as attorneys’ fees as permitted by law.
The plaintiffs are demanding a trial by jury on all issues.