IBM Servers to Run Federal 401K Plan Web Site
Nearly 2.5 Million People to Manage Funds using IBM S/390 and RS/6000 servers
Somers, N.Y (December 14, 1999) – The USDA National Finance Center has selected IBM S/390 and RS/6000 servers to run its new Thrift Savings Plan System, the 401K plan for all federal government employees. With nearly 2.5 million people enrolled in the program, the Thrift Savings Plan represents more than $85 billion worth of investments.
The new Thrift Savings Plan System will allow participants more freedom to manage their portfolios by allowing them to move money daily between funds online. The previous system only permitted participants to make changes to their portfolios on a monthly basis and participants had limited Internet service.
“We want to provide our participants with a service that is as competitive as other 401K plans, and that means Internet service,” said Ed McManus, Thrift Savings Plan Conversion Manager. “With more than one billion records to manage, and in order to provide our participants with the ability to move money amongst the funds at any time, we need servers that can handle large volumes of transactions. We chose IBM because of the incredible reliability of the S/390 and RS/6000 combination.”
With the new system, participants will also be able to choose from two additional funds that will be included in the system when it goes live in May 2000.
“Businesses and institutions that put services on the Web need to be confident they can deliver those services in a trusted, reliable environment in order to delight their customers,” said Rich Lechner, director for e-business, IBM S/390. “IBM’s powerful servers feature industry-leading security, availabilty and scalabilty to handle unpredictable volumes of inquiries and transactions. Solutions like this one, allowing people to manage their retirement savings, are having a dramatic affect on society and we are excited to be part of it.”
The new system offers several other features that will further improve customer service as well as save the participants administrative costs.
The RS/6000 and S/390 servers are incorporating digital imaging in the processing of documents. Members will now be able to view more of their account information online. In most instances, the National Finance Center previously had to mail documents to participants when they had account inquires or to process loans or withdrawals. The National Finance Center also will be able to consolidate all statements onto one printed document, thereby reducing costs associated with mailings to its 2.48 million participants. As a result, participants will be given quarterly consolidated statements.
The National Finance Center is the official custodian for all of the Thrift Savings Plan records. It also administers payroll for 450,000 federal employees biweekly, which includes all of the USDA as well as more than 100 other Federal departments and agencies including the Department of Treasury and the Department of Commerce. The National Finance Center dispersed more than $35 billion, collected more than $10 billion, and processed more than 30 million transactions in fiscal year 1998.
Source: IBM