After the government shutdown in January, the agency responsible for the TSP, the Federal Retirement Thrift Investment Board (FRTIB), is now looking for ways to protect investors should another shutdown occur. In most recent reports, they want to allow all federal employees to take loans against their savings regardless of the lapse in appropriations.
With hundreds of thousands of people experiencing money troubles during this shutdown, the FRTIB want those working without pay and those furloughed to have access to much-needed funds in future situations. Before the introduction of this new rule, loans could only be taken in ‘non-pay status’ for 30 days, and this led to lots of confusion during the shutdown.
With the 35-day drama unfolding on an almost hourly basis, employees and agencies alike were confused as to whether TSP loans were available for those without pay. According to TSP officials, a 5% increase in TSP loans was experienced during the lapse in appropriations. However, withdrawals increased by over 26% which normally leads to a penalty; employees are prevented from contributing for six months while also paying a 10% tax fee.
According to the FRTIB, they wanted a quick resolution to the many questions that have arisen since the beginning of the shutdown. According to the rule now implemented on an ‘interim’ basis, it will apply to anybody either furloughed or working without pay (excepted from furlough) where pay is delayed until the authorization of appropriations.
Rather than automated systems, manual workarounds have been designed which should allow the rule to apply with immediate effect just in case another government shutdown is to follow the first; the swift action from the FRTIB could be important considering there’s still no resolution over President Trump’s call for funds for the wall.
If a second shutdown were to occur, employees would have further leeway as a stop to loan payments can now be requested. While this prevents defaulting on the loan, the FRTIB is also considering an assessment of the loan application process when federal employees are in various forms of the non-pay status.
For example, participants might be missing work due to a voluntary leave of absence, administrative furlough, disciplinary suspension, seasonal work, or just a sabbatical. Under current rules, loans aren’t available for these circumstances, but participants may now be allowed to request them during government shutdowns depending on the outcome of the final rule.
Office of Personnel Management Adjustments
Elsewhere, as part of the Federal Employees Health Benefits (FEHB) program, the Office of Personnel Management (OPM) is thought to be considering changes to how federal workers choose their insurance plan. After issuing a Request for Information, the OPM is pushing for a ‘one-stop shop’ for all employees so they can compare and then enroll in the best plan for their own situation.
Currently, employees can compare FEHB plans, but the enrollment process itself is spread across several agencies. As well as a more centralized system, the OPM has also suggested support for the decision-making process. Additionally, the portal could include advanced data collection, reporting, and processing.
After the government shutdown disrupted the annual charity giving effort, the Combined Federal Campaign deadline has also been extended. Normally, payroll deductions allow for donations but CFC pledges were either not made due to the shutdown or they weren’t processed properly. Despite this extension, the charities will still receive money on the originally planned date of April 1st.
With these plans for both the FEHB and the TSP, government agencies are clearly determined to avoid the same problems for federal workers should another shutdown occur.
