Feds Furloughed By Shutdown Cannot Contribute to Retirement Fund


Federal employees forced onto unpaid leave due to a government shutdown must cease payments into their federal retirement plan accounts upon entering non-pay status.

Employee contributions into the Thrift Savings Plan must come from payroll deductions, meaning employees on furlough cannot make payments into their plans. Agencies are also prohibited from matching contributions into their employees’ plans during this time.   

Those contributions could be retroactively paid, however, should Congress decide to issue back pay to furloughed employees. Excepted employees, whose work is deemed necessary during a shutdown as it protects human lives or property, are guaranteed back pay by federal statute, and therefore their personal and agency TSP contributions would also be deducted and paid retroactively. Those contributions would be made after Congress passes a continuing resolution or appropriations bill and the shutdown is brought to an end.

Federal workers in non-pay status are also barred from taking out loans on their TSP accounts, as the payments on those loans must also come from payroll deductions.  Employees who have already taken out TSP loans can suspend payments on them, however, for up to one year while on non-pay status. The payments would not be suspended automatically and employees would have to ask their agencies to send relevant information and forms to TSP.

Furloughed employees could receive some financial relief by withdrawing funds from their TSP accounts. The plan allows federal workers experiencing “financial hardship” -- meaning negative monthly cash flow or an extraordinary new expense, such as medical or legal bills -- to take money from their retirement account. The withdrawal must be at least $1,000 but is limited to the “amount of your financial need.” When employees make a financial hardship withdrawal, they are banned from contributing to their accounts -- and will also lose agency matching contributions -- for six months.

Employees applying for a hardship withdrawal do not need to provide any documentation, but must “certify, under penalty of perjury, [they] have a genuine financial hardship,” according to Kim Weaver, a TSP spokeswoman. 

(Image via Kenishirotie/Shutterstock.com)

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.


When you download a report, your information may be shared with the underwriters of that document.