A Thrift Savings Plan (TSP) Bill that is about to become law will allow federal public safety officials to make penalty-free withdrawals from the Thrift Savings Plan at age 50.
The TSP Bill (Defending Public Safety Employees’ Retirement Act – H.R. 2146) was unanimously passed by the U.S. Senate and sent to the House, which has now passed it and sent it back to the Senate as an amendment attached to the Trade Promotion Authority (TPA) proposal.
So the TPA and TSP bills are now about to be passed by Congress and will soon be sent to the President’s desk to be signed into law by President Obama.
It will provide significant relief for a large number of public safety workers who wanted an early retirement but were unable to access their TSP funds without being penalized.
Federal safety officials including law enforcement personnel, air-traffic controllers and firefighters have the flexibility to retire before 55. However, under current law, TSP withdrawals before this age trigger a 10 percent penalty.
The change in law to allow Thrift Savings Plan withdrawals by federal safety employees at age 50 gives them the same early retirement benefits that were already available to state and local safety officials.
H.R. 2146, originally introduced in the House by U.S. Congressman Dave Reichert (WA-8), was first passed by the House during National Police Week. But the Senate then passed an amended version and sent it back to the House.
With the House now having approved it on a vote of 218 to 208 and packaged it as part of the TPA proposal, the TSP bill is almost certain to pass and become law very soon.
Rep. Reichert issued a statement after the House passed the bill. He notes in the statement that “I spent 33 years in law enforcement, and I know how hard these men and women work to keep us safe. This is a common-sense thing we can do to say ‘thank you’. It is critical that we quickly send this legislation to the President’s desk.”