Eliminating TSP Withdrawal Penalties for Certain Federal Employee Participants
On June 29, 2015, the President of the United States, Barack Obama, signed a bill that would prevent the penalization of public safety employees who must retire under mandatory age guidelines, many as young as age 50 or before. Federal firefighters, law enforcement officers (LEOs), air traffic controllers and border protection officers most of who leave the public sector or their job classification by the time they turn 50 or shortly thereafter suffered a 10% early withdrawal penalty from the Thrift Saving Plan (TSP) before enactment of the law.
The bill, Defending Public Safety Employees’ Retirement Act, amends the Internal Revenue Service Code and allows those employees falling into the above category to make early withdrawals from the TSP without incurring the 10% penalty when a TSP participant is 50 years old or less.
The Thrift is still reviewing the law and its impact on TSP accounts. The Thirft Savings Plan intends to publish information on the TSP website before the law’s effective date set for December 31, 2015. Roll-out of the bill is a great after Christmas gift for these public safety employees who put their lives on the line to protect the federal workforce everyday.
P. S. Always Remember to Share What You Know.