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There is potential good news on the horizon for federal employees who plan to retire with a large annual leave balance. The news relates to the ability to contribute their annual leave balance to the Thrift Savings Plan.
Currently, federal employees, unlike their private sector counterparts, cannot contribute the cash value of their A/L to the TSP. If HR 4865 is passed and signed into law, federal employees will be able to take that A/L balance and contribute it to the TSP, as long as their annual contributions do not exceed the annual elective deferral limit. That limit is $16,500 for 2010.
The bill is sponsored by Representatives Stephen Lynch (D-MA) and Jason Chaffetz (R-UT). In addition to the fact that the sponsors are from different parties (how unusual), President Obama indicated a few months ago that he would sign such legislation if it crosses his desk.
HR 4865 is called The Federal Employees and Uniformed Services Retirement Equity Act of 2010. If the spirit moves you, contact your representative and ask him or her to support the bill.
John Grobe is a retired federal employee with over 25 years of experience in federal human resources and President of Federal Career Experts, a training and consulting firm that specializes in federal employee retirement and career transition issues.