Lawmakers are considering as many as five bills that would make it easier for federal employees to access their Thrift Savings Plan accounts during a government shutdown.
Officials with the federal government’s 401(k)-style retirement savings program said they expect that Congress will hold a vote on a measure to make it easier for federal employees impacted by a government shutdown to take money out of their accounts.
Early this year, lawmakers introduced five different pieces of legislation to allow federal workers who are furloughed or forced to work without pay to withdraw money from their Thrift Savings Plan accounts without penalty during a lapse in appropriations.
Currently, TSP participants can take out loans during a shutdown, provided it is expected to last fewer than 30 days, but outright withdrawals come with a hefty tax penalty, and often force those employees to suspend their TSP contributions for six months.
TSP spokeswoman Kim Weaver said Monday at a meeting of the Federal Retirement Thrift Investment Board, which administers the program, that she anticipates at least one of the bills will get a vote in either the House or Senate.
“As we talked about [during the shutdown], there was a lot of work going on with those five bills,” Weaver said. “They all got a review by the [Office of General Counsel, Operations and the Office of External Affairs], trying to do quick turnarounds and making sure the legislative language was vetted and that we got comments back to the staffs. In almost every respect there were things that we wanted to tweak . . . I am still expecting one or more of the furlough bills to move, although I’m not sure what vehicle they will go on or whether it will be as a standalone bill.”
Following the 35-day partial government shutdown, TSP officials reported a sharp uptick in participants taking out hardship withdrawals, which come with a 10 percent tax penalty.
On the Senate side, Sen. Tim Kaine, D-Va., introduced the Emergency Relief for Federal Workers Act (S. 204), which would allow federal workers to make withdrawals from their TSP tax-free, provided that the shutdown lasts at least 14 days and they pay it back within 120 days.
In the House, Rep. Elaine Luria, D-Va., introduced a similar measure, the Shutdown Relief Act (H.R. 673), which would set the deadline for paying money back at 180 days. Rep. Garret Graves, R-La., has another bill (H.R. 766) which would also include contractors who participate in the TSP, and Rep. Pete Olson, R-Texas, introduced legislation (H.R. 545) that, among other things, prescribes that furloughed feds can take $4,000 out of their TSP accounts every two weeks until a shutdown ends.
Rep. Mark Meadows, R-N.C., has introduced a narrower bill (H.R. 338), extending the eligibility for tax-free TSP withdrawals only to federal employees forced to work without pay during a lapse in appropriations.