Government affairs

On June 23, the Thrift Savings Plan Modernization Act of 2017 (H.R. 3031) was introduced by House Oversight and Government Reform Committee Government Operations Subcommittee Chairman Mark Meadows (R-NC) and Ranking Member Elijah Cummings (D-MD).

H.R. 3031 is a companion to a similar bill introduced in the Senate in April that calls for loosening what is characterized as “overly restrictive withdrawal rules.” If enacted into law, H.R. 3031 would eliminate restrictions on age-based withdrawals allowing for active federal employees older than 59-1/2 to make multiple age-based withdrawals while still working, and for retirees to make multiple, partial post-separation withdrawals. It would also allow participants to stop quarterly or annual payments, permit periodic withdrawals to be changed at any point during the year, and save the option to purchase an annuity while recovering monthly benefits.

“Ultimately, this bill comes down to one simple principle: providing greater flexibility for federal employees,” Meadows said. “It will give TSP recipients more access to their own funds, and, over the long term, allow them the opportunity to continue taking advantage of benefits similar to those available throughout the private sector after federal service.”

Each year, more than $9 billion is transferred from the government retirement fund to higher-fee accounts, due partially to TSP’s limits on withdrawals.

So far, the bill has been referred to the House Oversight and Government Reform Committee, while the companion bill in the Senate has been read in the Homeland Security and Government Affairs Committee, but no vote has been scheduled.