Federal Retirement Thrift Investment Board terminated American Management Systems as record keeper for the $100 billion Thrift Savings Plan and filed a lawsuit against AMS in U.S. District Court in Washington. The lawsuit seeks $50 million in actual damages and $300 million in punitive damages on behalf of plan participants for breach of contract and fraud.
AMS had been under contract with the board since 1997 to develop a new record-keeping system for the plan, which the board administers. However, the suit claims, AMS repeatedly failed to adhere to its schedule for delivering the new system, while misleading the board and ultimately delivering an inferior product.
The company, in a news release, said the lawsuit intends "to shift the focus from the boards own deficiencies in performance and contract breaches. AMS said it remains fully committed to the successful completion of the record-keeping system for the Thrift Savings Plan.