Andrew Saul - Federal Thrift Retirement Investment Board

Federal Thrift Retirement Investment Board

Saul was nominated by President George W. Bush and confirmed by the United States Senate in 2002 as chairman of the Federal Retirement Thrift Investment Board, the agency which manages the Thrift Savings Plan for employees of Federal Government agencies, and soldiers in the Army, Navy, Air Force, and Marines, providing retirement security for more than 3.7 million participants. He was confirmed unanimously by the Senate, which was controlled by the Democrats. Saul replaced James H. Atkins of Arkansas, who had been nominated to a third term by President Bill Clinton in a recess appointment. Since being appointed by President Bush, Saul has pushed for more rigorous audits of TSP operations. The General Accounting Office concurred with Saul's efforts in a 2003 report, urging Congress to set up procedures that would keep it better informed about the operations and policy decisions at the federal employee retirement program, suggesting that Congress could "establish a formal process by which the Secretary of Labor can report to the Congress issues of critical concern associated with the actions of the TSP board and executive director."

During his confirmation hearing, Senator Daniel Akaka told Saul he would be facing a difficult situation, as the outgoing Executive Director had taken a number of actions before his sudden departure which led to "demoralization of the TSP staff, expensive lawsuits, investigations, rancorous battles with other agencies, along with the costs of a failed record keeping system project" that were all eventually dealt with by the FRTIB. Shortly after Saul assumed office, TSP Executive Director James Petrick resigned. It has been alleged by former FRTIB Chairman and Executive Director Roger Mehle that this occurred when Petrick wished to pursue a lawsuit against the contractor for the record keeping system which led to a conflict with the Justice Department over whether the board had standing to sue. Saul pursued a settlement and dropped the lawsuit. In 2007, Mehle launched his own lawsuit against Saul and the board which alleges that the board violated its fiduciary duty to TSP participants by forcing out Petrick in order to settle the lawsuit against the contractor.

Saul and his executive director Gary Amelio inherited a mishandled computer project for a new record-keeping system, which had been started in 1997 and wasted $36 million. The system was eventually brought online in 2003. Under the direction of Saul and Amelio, a new mainframe computer was installed that runs ten times faster than the old system, with an emergency backup computer that can be used in the event of a disaster in the Washington DC area. The agency also acquired its first toll-free line, opened two new call centers, and extended hours for customer service. On May 3, 2007, President George W. Bush renominated Saul to two more consecutive terms on the board expiring September 25, 2012. Following the resignation of Gary Amelio in 2007, Saul appointed Gregory T. Long as executive director for the Thrift Savings Plan, who was previously the director of product development for the TSP.

In June 2007, the Federal Thrift Retirement Investment Board approved a resolution to prohibit Congress from proposing that companies that do business in Iran or Sudan be removed from the Thrift Savings Plan, in order to reduce support for Iran's oil and gas industry or to reprimand the Sudanese government for its role in the Darfur conflict. Saul said such changes would not be in the TSP participants' best interest since the changes would go against past precedent that the TSP not interfere in social or political matters. Members of Congress including Reps. Tom Davis, Jon Porter, Henry Waxman, and Danny Davis, wrote Saul in July 2005 claiming that they wanted to have an independent professional investment consultant examine whether new investment choices would benefit TSP participants, which led to a conflict between Congress and the board regarding Real estate investment trust funds.

Saul and other board members have discussed several future options for the TSP, including asking Congress to require automatic enrollment in the TSP for new hires, as Government employees now must sign up for a payroll deduction. Other proposals have included asking Congress whether to designate a new default fund for FERS employees who do not enroll but receive a mandatory agency contribution of 1 percent of salary, since that money now goes into the government securities fund, but TSP officials think the L Funds would be a more appropriate, long-term investment. Saul has also suggested adding Roth 401(k)-style feature to the TSP that is similar to Roth individual savings accounts, by allowing participants to make contributions with money that has been taxed, with the contributions growing tax-free and account balances being withdrawn tax-free. Employees now contribute pre-tax dollars to the TSP and pay taxes when they withdraw their savings. President Bush likened his social security privatization plan to the TSP, although it was never adopted. Bush believed that the TSP could serve as a model for his proposed personal accounts.

Under the Saul's stewardship, the board tightened the rules for the TSP loan program in 2004, imposing a waiting period for new loans and charging a loan-processing fee, which dropped the number of loans issued from about 1,800 loans per day to an average of 534 per day. Currently, TSP participants may hold two loans at the same time and pay them back through payroll deductions, and may pay off a loan early and immediately request a new loan. The board felt the loan program was partially responsible for the slowdown during the launch of the new-record keeping system. The board also felt that participants are asked to absorb the cost of a loan program that they rarely use use, and that the borrowers were also tying up the TSP's limited staff resources, leading to the changes. During a 2005 audit called for by Saul, representatives of Deloitte & Touche gave the TSP a clean audit and said they found no major problems with TSP's internal financial controls.