Bipartisan legislation introduced this week in the House would allow federal law enforcement officers and firefighters to access money in their Thrift Savings Plan accounts without penalty when they are eligible to retire.
The bill, H.R. 4634, would reform the tax code so that federal law enforcement officers and firefighters, who are eligible to retire earlier than many other federal employees, aren’t subject to the 10 percent tax penalty on TSP retirement funds and other 401(k)-type plans tapped before the age of 59 and a half. Federal law enforcement employees and firefighters are eligible to retire after 20 years of service at age 50; that group also is subject to mandatory retirement at age 57 because of the physical demands and hazardous nature of their jobs. Border protection and customs officers would also be exempt from the tax penalty under the bill.
State and local public safety officers have been exempt from the 10 percent tax penalty since 2006; H.R. 4634 would extend that exemption to qualified federal public safety employees.
“There is no reason that federal public safety officials must wait, in some cases, nine and a half years to access the full retirement benefits they have earned and are entitled to,” said Rep. Dave Reichert, R-Wash., a sponsor of the bill. “This is a straightforward measure to make an obvious fix to our tax code and treat our public safety officials with the respect they deserve.” Rep. Bill Pascrell, D-N.J., is sponsoring the legislation with Reichert.
Jon Adler, national president of the Federal Law Enforcement Officers Association, praised the lawmakers for introducing the bill. “This is about fairness,” Adler said. “It is about bringing equity to the brave men and women who fill the ranks of the federal law enforcement agencies and who sacrifice themselves each and every day in carrying out their sworn duty to protect and serve our fellow citizens.”
The organization lobbied for the introduction of the bill to amend the current law to include federal law enforcement officers and firefighters.