The American Federation of Government Employees (AFGE) persuaded United States Senators Patrick Toomey (R-PA) and Michael Bennet (D-CO) to introduce legislation that would make federal Correctional Officers exempt from the 10% early withdrawal penalty that applies when a federal law enforcement officer retires before the age of 55 and withdraws money from their Thrift Savings Plan (TSP) account. If this legislation is passed, federal Correctional Officers will no longer have to jump through the hoops of following IRS rule 72(t) in order to avoid the penalty.
To follow 72(t) you must take a series of substantially equal monthly payments (SOSEPP) for the longer of five years or until you reach the age of 59 ½, whichever is longer, in order to avoid the early withdrawal penalty.
Correctional Officers are an important part of the federal law enforcement community and deserve this exemption. But, (Hey AFGE!) what about CBP Agents, FBI Agents, those who work for the IG’s office in numerous agencies and all other federal LEOs? Are they chopped liver?
Well, all is not lost!
The Federal Law Enforcement Officers’ Association (FLEOA) introduced a bill in the last session of Congress (HR-4634) to exempt all federal law enforcement officers from the early withdrawal penalty. They will be re-introducing the same bill in this session of Congress with bi-partisan support. One bill that covers all federal law enforcement officers makes more sense than a separate bill for each agency’s LEOs. You can find out the status of FLEOA’s effort at http://www.fleoa.org/news-story.aspx?id=4277.
John Grobe’s latest book, The Answer Book on Your Federal Employee Benefits, has just been released by LRP Publications. The book is written in an easy to understand question and answer format and covers all areas of federal benefits from the perspective of an employee at various stages of their career. Order your copy at shoplrp.com.