Government affairs

Legislative Updates

House approves TSP modernization bill

On Oct. 13, the House of Representatives passed the Thrift Savings Plan (TSP) Modernization Act of 2017 (H.R. 3031) by a voice vote.

The bill was introduced in June by the Rep. Mark Meadows (R-NC), chairman of the House Oversight and Government Reform’s Subcommittee on Government Operations, and by Oversight Committee Ranking Member Elijah Cummings (D-MD).

The legislation calls for eliminating restrictions on age-based TSP withdrawals, allowing for active federal employees older than 59-1/2 to make multiple age-based withdrawals while still working. It also would allow retirees to make multiple, partial post-separation withdrawals. Further, it would allow participants to stop quarterly or annual payments, permit periodic withdrawals to be changed at any point during the year, and save the option to purchase an annuity while recovering monthly benefits.

“[H.R. 3031] will go a long way in facilitating needed updates to the Thrift Savings Plan program, providing more flexibility for retirees and allowing TSP recipients to keep taking advantage of benefits,” Meadows said.

“Providing more flexibility will allow federal employees and retirees to more easily access their retirement savings to address emergencies or life events and encourage them to retain their assets in the TSP which has one of the lowest administrative fees in the industry,” Cummings added.

The Senate’s companion bill, S. 873, was introduced by Sens. Rob Portman (R-OH) and Tom Carper (D-DE) in April. It still has not been taken up by the Senate Homeland Security and Government Affairs Committee. NALC will continue to closely monitor both bills’ progress.

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