Alexandria, VA – The National Active and Retired Federal Employees Association (NARFE) applauds passage of the TSP Modernization Act of 2017, H.R. 3031, by the House of Representatives today. The legislation would provide much needed and long overdue flexible withdrawal options for Thrift Savings Plan (TSP) participants. NARFE President Richard G. Thissen issued the following statement in response:
“This bill will provide the proud men and women who serve this nation in the civil service and in the military greater control over their own retirement savings and the ability to plan responsibly for their future.
“The current restrictive TSP withdrawal options are one of the leading reasons why participants transfer their money out of the TSP, despite the fact that the TSP provides sound investment options at a low cost. The withdrawal options provided in this bill will create opportunities for participants before and during retirement, provide greater financial independence and encourage participants to keep their money in the TSP.
“NARFE applauds the House of Representatives for moving this commonsense, bipartisan measure forward, and I call on the Senate to swiftly follow the House’s lead.”
The House of Representatives passed H.R. 3031 today, which was introduced by Reps. Elijah E. Cummings, D-MD, and Mark Meadows, R-NC. The legislation would allow multiple, partial post-separation withdrawals, which participants can time to their individual needs, and would provide multiple, age-based withdrawals for participants who are still working and are older than age 59-1/2. The TSP Modernization Act also would provide greater flexibility by allowing the election of quarterly or annual payments and permitting periodic withdrawals that can be changed at any point during the year. Payments could be stopped while leaving the account balance in the TSP. Finally, the bill would eliminate the withdrawal election deadline.
The TSP provides individual retirement accounts for federal employees and retirees, as well as members of the military. It is the federal workforce equivalent of private-sector 401(k) and Roth 401(k) plans.