The bill, H.R. 3031, introduced by Representative Elijah Cummings (D-MD) and cosponsored by Representative Mark Meadows (R-NC), would allow active federal employees to make multiple, age-based withdrawals from their Thrift Savings Plan (TSP) accounts and to remain eligible for partial withdrawals once they leave the government as well. Individuals who have left government service would be able to make multiple, partial post-separation withdrawals. The bill also would allow those receiving monthly payments to change the amount of their payment at any time—instead of only once per year—and they could change the frequency of payments as well. In addition, the bill eliminates the imposition of an automatic annuity if a participant has not made an election.
The TSP’s withdrawal rules have not changed since the TSP was established in 1986, and as most of you are aware, have long been outdated. Under current statute, federal employees who wish to make age-based withdrawals can only do so while they are employed, and then they cannot make a partial withdrawal once they leave government. Those who have left the government and haven’t made any age-based withdrawals can make one partial post-separation withdrawal, but then must move to full withdrawal options. As a member of the TSP’s Employee Thrift Advisory Board, NTEU has championed these flexibilities for TSP participants, and strongly supports this legislation.
A companion, bipartisan bill in the Senate, S. 873, has been advanced by the Senate Homeland Security and Governmental Affairs Committee, but a Senate floor vote has not yet taken place. NTEU will promote Senate action on this bill, and will keep you updated on further developments.